Volume 709 Week 29 - Thursday 24 September 2015Text is incorporated into the Bound VolumeVolume 709 Week 29 - Thursday 24 September 2015[Sitting date: 24 September 2015. Volume:709;Page:7057. Text is incorporated into the Bound Volume.]Thursday 24 September 2015Mr Speaker took the Chair at 2 p.m.Prayers.Business StatementHon GERRY BROWNLEE (Leader of the House): Next week the House begins a 2-week adjournment when members of the House will be able to spend more time in their electorates and on select committee business. When the House resumes on Tuesday 13 October the Government will progress a number of first readings on the Order Paper including the Environment Canterbury (Transitional Governance Arrangements) Bill the Taxation (Transformation: First Phase Simplification and Other Measures) Bill and the Health (Home Carers) Bill. Wednesday of that week will be a members’ day.GRANT ROBERTSON (Labour—Wellington Central): Can I ask the Leader of the House whether he has any plans to ask for a delay in the return of the brightline test bill to the House which got a truncated report-back date?Hon GERRY BROWNLEE (Leader of the House): That would be a matter for the Minister responsible for the bill to take up with the Business Committee.Points of OrderWritten Questions—Overdue RepliesGRANT ROBERTSON (Labour—Wellington Central): I raise a point of order Mr Speaker. I was waiting to see whether you were going to respond to my point of order of yesterday regarding the failure of the Minister of Education to respond to written questions within the deadline stated by Standing Order 382(4). Those replies have not been received. It does relate to a ruling you gave in this House on 10 September.Mr SPEAKER: I am still awaiting further advice from the Clerk on that matter.GRANT ROBERTSON (Labour—Wellington Central): I raise a point of order Mr Speaker.Mr SPEAKER: A fresh point of order?GRANT ROBERTSON: I am sure you will allow this additional comment. This is the last day of the House before a 2-week adjournment and I would ask that we do not wait until the House returns for you to follow the matter up.Mr SPEAKER: No I am already looking at the matter.Questions to MinistersHealth Services—Access1.Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Health: What responsibility if any does he take for a lack of access to health services for New Zealanders?Hon Dr JONATHAN COLEMAN (Minister of Health): The member’s question is very broad. When she asks about access to services is she referring to the increase of 50000 operations a year the increase of 110000 specialist appointments a year or maybe the fact that we have improved cancer treatment such that no patients are flying to Australia—in contrast to her 761 patients—or maybe it is about the extra 400000-plus children getting free doctors visits and prescriptions? What I know that I am not responsible for is the cut of 1000 surgeries at Capital and Coast District Health Board between 2000 and 2005 on the member’s watch.Hon Annette King: When he takes responsibility for children receiving free doctors visits does he also take responsibility for the 93 children who were waiting in Northland in June up from 48 in January for surgery for rotting and abscessed teeth?Hon Dr JONATHAN COLEMAN: As the member knows that is not my delegation. But what I can say—[Interruption] You know that that it is not my delegation. You have actually addressed that question to the wrong Minister. What I can say is that in all dimensions across health we have increased services for New Zealanders. If you look at the global picture more New Zealanders are getting more services all the time. This is a big change from her failed reign as health Minister.Simon O’Connor: What recent reports has he received in relation to individual cases raised in question time?Hon Dr JONATHAN COLEMAN: Last Thursday in question time Mrs King raised the case of a woman called Catherine from Whangarei who she claimed had had her home support cut. I went and followed up on that case and asked for a report from Northland District Health Board. It turns out that actually the district health board did not cut the support for this person. In fact the individual had requested the support to stop. The district health board then followed up on this request with the patient who has since agreed to 5½ hours a fortnight of home management and support. [Interruption]Mr SPEAKER: Order! The House will settle. I have heard most of the answer until now. I want to hear a bit more.Hon Dr JONATHAN COLEMAN: This is yet another example of this member getting her facts wrong just as she did when claiming 22 of 26 GP clinics were not giving free under-13 doctors visits. It is no wonder I question the cases that she brings before the House because when we check up they seem to be wrong. [Interruption]Mr SPEAKER: Order! [Interruption] Order! A point of order has been raised. [Interruption] Order! Can I just advise the Minister that I am calling for him to present a point of order. There is no need to have a conversation.Hon Dr JONATHAN COLEMAN: I seek leave to table a report from Northland District Health Board detailing what really happened with Catherine from Whangarei.Mr SPEAKER: Leave is sought to table that particular report. Is there any objection? There is none. It can be tabled.Document by leave laid on the Table of the House.Hon Annette King: When he takes—[Interruption] What is that Gerry?Mr SPEAKER: Order! [Interruption] Order! Right only one warning to Mr Brownlee today so consider that he has had it. We will now continue with supplementary questions.Hon Annette King: When he takes responsibility for more operations does he also take responsibility for the anger and the frustration of the specialist who wrote to the GP last week saying: “Although your patient had a significant invasive tumour removed without a significant increase in resourcing we cannot provide reconstructive plastic surgery to him or many other patients.”?Hon Dr JONATHAN COLEMAN: Once again it is hard to comment. There is no name no detail and no district health board. In terms of anger and frustration the only person I know in that category is the person who is coming second to “don’t know don’t care” in the Labour deputy—Mr SPEAKER: Order! There is no ministerial responsibility there. [Interruption] Order! I might have to issue another warning very shortly.Hon Annette King: When he takes responsibility for more doctors and nurses does he also take responsibility for the looming oral health workforce crisis reported 3 weeks ago stating a bleak outlook for kids’ dental treatment over the next 5 to 10 years because of the ageing workforce with the Canterbury area alone having 77 percent of its workforce over 50?Hon Dr JONATHAN COLEMAN: I know that member was a dental nurse but I also expect her to know who has got the delegation for oral health. What I can say is that there is work going on around the medical workforce right across all aspects of the portfolio. We look at this strategically. As I said before we are doing more and more for more New Zealanders all the time and actually oral health will be part of that.Hon Annette King: When he takes responsibility for funding Herceptin does he also take responsibility for failing to increase Pharmac’s budget sufficiently this year to allow other cancer patients to access modern biologic drugs to help prolong their lives?Hon Dr JONATHAN COLEMAN: We have talked about this in the House before but in actual fact an extra 70000 New Zealanders gained the benefits of new medicines and new designations in the last year. There were more medicines introduced and actually unlike that member we are able to make better use of the money available to provide more services more drugs and better care for all New Zealanders.Hon Annette King: I seek leave to table a pay-walled article from the New Zealand Medical Journal dated 15 June 2007 showing that Herceptin was funded in New Zealand from July 2007—Mr SPEAKER: Order! The document has now been more than adequately described. I will put the leave. Leave is sought to table that particular article. Is there any objection? There is none. It can be tabled.Document by leave laid on the Table of the House.Hon Annette King: When he takes responsibility for faster cancer services does he also take responsibility for the 1999 cancer report to the incoming Government that stated that cancer treatment barely met demand that there were chronic staff shortages that services were under resourced and that patients faced delays which led to patients being sent to Australia?Hon Dr JONATHAN COLEMAN: Well I know that Annette King was around in 1999. In fact she was aroundin 1981 I think it was. But look this is going back a long way. I mean how on earth could I be held responsible for a 1999 report? This is going back 17 years—it is ancient history just like the member—Mr SPEAKER: Order! That part will not help the order of the House. [Interruption] Order! This is a point of order.Hon Annette King: I seek leave to table the Working Party report New Zealand radiation oncology treatment services 1999-2004 withheld by the Minister who said he did not have it.Mr SPEAKER: On the basis that this is a report from quite a long time ago I will put the leave. It may be of interest—[Interruption] Order! It may be of interest to members. Leave is sought to table that particular report dated 1999. Is there any objection? There is none.Document by leave laid on the Table of the House.Hon Annette King: I seek leave to table an Official Information Act request dated 1 September from the Northland District Health Board showing that 93 children are waiting for extractions.Mr SPEAKER: Leave is sought to table that particular Official Information Act request—[Interruption] Order! I am putting the leave. Leave is sought to table that particular report. Is there any objection? There is none.Document by leave laid on the Table of the House.Hon Dr Jonathan Coleman: I seek leave to table an Official Information Act response to the office of the Leader of the Opposition detailing the cuts to appointments and operations under Labour from the period of 1999 through to 2008.Mr SPEAKER: Leave is sought to table that particular Official Information Act report. Is there any objection? There is—[Interruption] Order! When I am putting the leave I do not expect the conversation to carry on. Leave is sought to table that document. Is there any objection? There appears to be none. It can be tabled.Document by leave laid on the Table of the House.Economy—Employment2.IAN McKELVIE (National—Rangitīkei) to the Minister of Finance: How many more jobs have been created in New Zealand since the economy started recovering from the global financial crisis?Hon PAULA BENNETT (Associate Minister of Finance): on behalf of theMinister of Finance: Economic growth is the best way of delivering more jobs and higher incomes to New Zealanders. Since the start of 2011 New Zealand has had 18 consecutive quarters of economic growth the economy has expanded 12.6 percent after inflation and there are 199000 more jobs in the economy. Recent forecasts show continuing moderate growth of 2 to 2.5 percent over the next 2 years with an outlook for continuing job growth.Ian McKelvie: In the last year how has employment growth tracked and how does New Zealand’s employment rate compare with other countries?Hon PAULA BENNETT: Over the last year we have seen 68000 jobs added to the economy including 24000 additional jobs in the manufacturing sector. Over that period the labour force has expanded by 79000 people driven in part of course by a higher labour market participation rate which is now at 69.3 percent the third-highest rate on record. The number of unemployed has increased from 5.7 percent to 5.9 percent but that is a product of people coming into the labour market faster than jobs are being created. New Zealand’s employment rate—that is the share of the working-age population in employment—is 65.3 percent one of the highest rates in the OECD.Ian McKelvie: What trends have been evident in wage growth across the economy over the last 4 years?Hon PAULA BENNETT: In addition to growing employment what we are also seeing of course is higher wages. The average wage is now over $57000. That is $10000 more than when National came into office—[Interruption]—or as those members would like to hear 22 percent higher than that time. After-tax incomes have increased by 29 percent since 2008 and that is 29 percent more money in the pockets of New Zealanders.Defence Force—Funding and Tender Processes3.Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Defence: Does he regard all expenditure within Defence as being of high value?Hon GERRY BROWNLEE (Minister of Defence): Overall defence expenditure in 2015-16 will be around some $3.2 billion and it has been at that level for some time. So the answer to the member’s question would need a line-by-line analysis which I have not been able to achieve in the time since the question was lodged.Rt Hon Winston Peters: Why did the Government sell the 10 Iriquois helicopters plus parts to a US company at enormous disadvantage to New Zealand companies dealing in helicopters and parts and at a loss to New Zealand’s economy and jobs?Hon GERRY BROWNLEE: It might interest the questioner to know that the original proposal was to give the helicopters away. I suggested that they might go to a public tender to see what might be realised on behalf of the taxpayer. The details of the tender were published on the Government Electronic Tenders Service website certainly from January of this year and it was a very open tender process. The Minister does not decide who wins a tender. There are always restrictions on whom products can be sold to at the time they are bought. Those restrictions would have been put on during the 1960s. All of that would have been followed through the tender process and New Zealand companies had as much opportunity as anybody else to bid into that tender process.Rt Hon Winston Peters: Why should New Zealand businesses dealing with Iriquois helicopters and parts now have to buy those commodities at a seriously inflated price as a consequence of his Government’s decision?Hon GERRY BROWNLEE: The tender process is a proper process. It delivers a result in accordance with Government disposal rules and the persons who win the contract eventually are able to buy it. What they choose to do with those helicopters is their business clearly stated inside the tender intentions.Rt Hon Winston Peters: In this photograph of the Minister visiting our troops in Taji was he wearing a flak jacket off the shelf or one that was custom-made and more expensive than a normal New Zealand serviceman’s flak jacket?Hon GERRY BROWNLEE: I do not know but anybody taking a bit of a glance would know that off-the-shelf is not something I regularly purchase. But what I would say is that there are big flak jackets and there are small flak jackets and then there are flak jackets that are not required. A man of the member’s stature probably does not require one—so small such a little target. Therefore between him and me we balance it out.Rt Hon Winston Peters: Is it not true that for this one visit he had a special jacket custom-made costing four times the price of a normal serviceman’s jacket and why does he not save the taxpayers money and just visit troops in a suitable flak jacket namely a tank?Mr SPEAKER: The Hon Gerry Brownlee—either of those two supplementary questions.Hon GERRY BROWNLEE: The first point is that the member may be a little surprised to learn that he is not the arbiter of how long my career as Minister of Defence is;nor is he therefore the determiner of how often I might visit those troops. But if he would like to come with me next time and not wear a flak jacket then I will welcome him to stand at the front of the parade every day we are there.Rt Hon Winston Peters: I seek leave to table a paper that was handed to us on 23 September online and not published until 25 September showing all the places around this country in respect of defence that the Minister Mr Brownlee has never visited. That is the list there.Mr SPEAKER: No I am not even going to—[Interruption] I will hear from the Hon Gerry Brownlee.Hon GERRY BROWNLEE: I would be very pleased to get hold of that because I will guarantee that a lot of that is just empty sections and you never know what we might be able to put on them by way of social housing.Mr SPEAKER: I will hear from the Rt Hon Winston Peters.Rt Hon Winston Peters: I would love for him to have a chance to get hold of it because his department wrote it.Mr SPEAKER: If the member is so keen to have it tabled and it appears that Mr Brownlee is also keen to see it on that basis I will put the leave and it is over to the House. Leave is sought to table that particular information. Is there any objection? There is objection.Youth Justice—Privatisation of Services4.JAN LOGIE (Green) to the Minister for Social Development: Does she stand by her answer to written question 10747 (2015) that “Neither the Ministry nor myself are aware of Serco staff ever visiting any Child Youth and Family site”?Hon ANNE TOLLEY (Minister for Social Development): I have been advised this morning by Child Youth and Family that case managers from the Serco-managed Auckland South Corrections Facility visited Korowai Manaaki Youth Justice North on 4 May 2015. I have also been made aware that case managers from the Serco-managed site have visited other Child Youth and Family sites to discuss the relationship between the prison and Child Youth and Family and/or the transition and management of young people from youth justice into adult corrections systems. I make the point that Korowai Manaaki and Auckland South Corrections Facility are next door to each other. I answered written question No. 10747 on the advice I was provided by the Ministry of Social Development. This advice was incorrect and I apologise to the member.Jan Logie: Given that so many other MPs on this side of the House knew about those visits does the Minister really expect us to believe that she did not know—Mr SPEAKER: Order! [Interruption] Order! That question is completely out of order. It is questioning the integrity of a member of this House. Does the member have further supplementary questions?Jan Logie: I do Mr Speaker.Mr SPEAKER: Good. We will hear them.Jan Logie: Is the Minister satisfied with the relationship she has with her staff in the ministry—that she was not aware of those visits when so many of us in this House were?Hon ANNE TOLLEY: I am very disappointed that I got incorrect information to answer a written question of course. But I would point out that in the management of young people from youth justice into the prison system it is absolutely essential and I would expect nothing less that there was a good relationship to manage that transition. That is a normal operational activity and I would be surprised at anything less than that.Jan Logie: Is the Minister assuming a transition from youth justice to adult prison? I thought that this Government was seeking to break that relationship.Mr SPEAKER: The first part of the question is in order.Hon ANNE TOLLEY: For the member’s education there are occasionally young people who are on indictable charges and it is very obvious that they will be transferred into the prison service from a youth justice facility where they may well be on remand or they may well be awaiting sentencing. In those cases of course there needs to be a well-managed transition for the sake of those young people.Jan Logie: Given the stories that this House is well aware of of the standard of care within Serco prisons is that the aspiration she has for the care of those young people currently in youth justice services?Hon ANNE TOLLEY: No Minister has any ability to overrule a sentence handed down by a court.Jan Logie: Why is the Minister also expecting philanthropic trusts to fund child advocacy a core component of the new proposed care model which will effectively outsource this core Government responsibility?Hon ANNE TOLLEY: It is a hang of a long way away from the primary question but I am very happy to answer it—because in fact the young people themselves have asked for it. I would have thought that any advocacy on behalf of young people in care needs to be independent from the Government. I have stated publicly that I support independent advocacy for them. I have indicated that there may well be some services that the Government may wish to contract from them looking at overseas models. But I think it is exceptionally important that they are able to act and advocate for young people in care completely independently from the Government.Jan Logie: Does her decision not to fund the child advocacy service and the circling interest of Serco indicate an underlying agenda of privatising childcare services?Hon ANNE TOLLEY: The member needs to take her tin hat off. The two are completely different and I would say—if the member reads the report that I released today—no decisions have been made about what to fund or what not to fund. So stop looking for secret agendas and welcome the fact that this Government is actively supporting and the expert panel are recommending and philanthropic organisations are very interested in funding an independent advocacy group for young people in care.Carmel Sepuloni: When I asked written question No. 10310—“How many times if any have staff members from the Ministry of Social Development met with staff from the private company Serco in the last 12 months …”—why did she reply on 20 August that she had had no discussions with Serco about the provision of services in the social sector given all I wanted to know was whether they had met?Hon ANNE TOLLEY: Because my answer to the question was absolutely correct. [Interruption]Mr SPEAKER: Order! If I am going to call a member—[Interruption] Order!Carmel Sepuloni: Given that she has been asked the same question twice and answered incorrectly both times how can we and the general public be assured that she is providing accurate advice?Hon ANNE TOLLEY: Because I have had two different answers. [Interruption] The answer that I gave—Hon Members: It was wrong.Hon ANNE TOLLEY: No it was absolutely correct. I have had no discussions with Serco because if the member cares to read the answer that I gave to the written question—Carmel Sepuloni: I read out the answer. Wrong.Hon ANNE TOLLEY: If the member stops talking and listens—Carmel Sepuloni: Give us something worth listening to.Mr SPEAKER: Order! I suspect there is not much point in carrying on the answer if the member does not want to hear it.Tax Reform—Property Speculation and Brightline Test5.GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Revenue: Does he agree with the New Zealand Law Society that “This bright line test is a bad idea and shouldn’t be enacted as in our view it will be ineffective in meeting the stated policy objective”?Hon PAUL GOLDSMITH (Minister of Commerce and Consumer Affairs) on behalf of theMinister of Revenue: No.Grant Robertson: Why was Mr Tomlinson from the New Zealand Law Society wrong when he described the brightline test legislation as “incoherent” and rather than capture speculators it will capture those who are forced to sell their properties within 2 years including those who are involved in mortgagee sales?Hon PAUL GOLDSMITH: The brightline test exempts the sale of the person’s main home and it also exempts inherited properties and properties transferred under the Property (Relationships) Act and we believe that is an appropriate arrangement.Grant Robertson: I raise a point of order Mr Speaker. I do not believe that did address the question that I asked.Mr SPEAKER: No I think in this case it definitely does. The question asked effectively why Mr Tomlinson was wrong. That gave a very wide ambit for the Minister to respond.Grant Robertson: Supplementary question—Hon Gerry Brownlee: Ask your own question. Stop asking other people’s questions.Grant Robertson: How about you answer Gerry? How about that? That would be—Mr SPEAKER: Order! Grant Robertson supplementary question.Grant Robertson: Why was Peter Vial New Zealand leader at Chartered Accountants Australia and New Zealand also wrong when he described the brightline test legislation as “not sound tax policy” “arbitrary” “unfair” and “blunt”?Hon PAUL GOLDSMITH: I am sure there are wide varieties of views on all tax legislation brought before the House and that is his opinion. But the point I would make is that the member has a habit of complaining endlessly about a problem—in this case housing affordability—and he also complains endlessly about any efforts to do anything about the problem. This Government is concerned about getting on with the problem.Hon Gerry Brownlee: Does the Minister consider it strange that a party that is proposing a capital gains tax is now mounting an attack against a capital gains tax on behalf of those who do not like the capital gains tax?Mr SPEAKER: Order! There is no ministerial responsibility there whatsoever. [Interruption] Order! I have not called the member yet. [Interruption] Order!Grant Robertson: Why was David Snell executive director at Government administration Ernst and Young wrong when he said that the brightline test legislation was “unclear” and “overly complex” and that as someone who does tax accounting for a living he found himself “professionally confused” by the Government’s approach?Hon PAUL GOLDSMITH: I cannot explain why that particular gentleman is professionally confused but I would say that the brightline test will catch property speculators who buy and sell property quickly. That is the object. It will help to ensure that property speculators pay their fair share of tax and I am surprised that the member’s party is not supporting that.Grant Robertson: In light of that answer is it correct that Treasury advised Ministers that a short brightline test of less than 5 years would be easily planned around and would not work and that there should not be retrospective legislation—both of which are pieces of advice that the Government ignored?Hon PAUL GOLDSMITH: The point I would make in relation to that is that property speculators should already be caught under the current tax rules for land sales and the brightline test primarily serves to make sure that there is no uncertainty as to what the intention is of the property developer.Grant Robertson: I raise a point of order Mr Speaker. My question asked—Mr SPEAKER: Order! I am going to allow the member to repeat that question. I do not think it was addressed.Grant Robertson: Is it correct that Treasury—Hon Gerry Brownlee: I raise a point of order Mr Speaker.Mr SPEAKER: Order! I hope the member is not at all questioning a decision I have just made because that would be very serious.Hon Gerry Brownlee: Well I do not mean to challenge you in any way at all—Mr SPEAKER: Well then I would advise the member to resume his seat.Hon Gerry Brownlee: Well then all I would say is that Mr Robertson always says that his question is not answered properly. The Minister on that occasion did point out to him that there was an opinion.Mr SPEAKER: I think the member is on dangerous ground. There are—[Interruption] No I do not need any assistance—Grant Robertson: No I am not—I am going to ask—Mr SPEAKER: Order! Grant Robertson has twice in this question asked whether his question had been addressed. I warned him on the first occasion that it was. On the second occasion I listened very carefully to the answer. I acknowledged that I might have missed something. I did not believe it was addressed. That is the end of the matter. I am allowing the member to ask the question again.Grant Robertson: Is it correct that Treasury advised Ministers that a short brightline test of less than 5 years would be easily planned around and would not work and that there should not be retrospective legislation—both of which are pieces of advice that the Government ignored?Hon PAUL GOLDSMITH: I do not have that information in front of me.Grant Robertson: Is it not the truth that rather than Treasury the Law Society the Chartered Accountants of Australia and New Zealand Ernst and Young KPMG and Chapman Tripp all being wrong the brightline test is in fact deeply flawed because it was a rushed last-minute political response to the very real problem of housing speculation which the Government has totally failed to address?Hon PAUL GOLDSMITH: No I do not agree with that assessment of the situation at all. What the brightline test is about is this Government rapidly addressing a very important issue that is of great importance to particularly Aucklanders who are concerned about housing speculation. And I am surprised that that party is not supporting us in this effort.Child Youth and Family—Expert Advisory Panel Report6.Dr PARMJEET PARMAR (National) to the Minister for Social Development: What recent reports has she received regarding the state of Child Youth and Family?Hon ANNE TOLLEY (Minister for Social Development): Today I released the expert advisory panel’s report into Child Youth and Family. The report builds on the Children’s Commissioner’s recent state of care report and shows that New Zealand’s child protection system is not delivering effectively for vulnerable children and young people and that transformational change is required. The key findings from the report are that there has been a high and growing proportion of repeat notifications and that there are concerning levels of revictimisation amongst children in care. The panel also found high levels of complex needs among many of the families of children coming to the attention of Child Youth and Family; an overrepresentation of Māori children in the system; and poor long-term outcomes for children in State care despite significant fiscal expenditure. The panel has now started work on a detailed business case and future operating model which it will provide to the Government by the end of the year.Dr Parmjeet Parmar: What steps is the panel taking to develop a detailed business case?Hon ANNE TOLLEY: In its interim report the expert panel has set out four key areas that will underpin the new operating model. Firstly the system must be child centred. Secondly an investment approach must be taken where data and evidence on what works are used to target earlier intervention. Thirdly an effective professional framework must be established to allow staff to use their professional judgment rather than focus on rules compliance and time-driven practice. Finally the model needs to engage all New Zealanders and communities to provide loving stable homes for vulnerable children and to support them in their communities. A feasibility study on the use of an actuarial valuation to support that investment approach is already under way and the panel is engaging with the philanthropic sector to develop a new child advocacy service and a plan to better engage all New Zealanders to build an understanding of what role they can play.Rules Reduction Taskforce—Building and Construction Industry7.PHIL TWYFORD (Labour—Te Atatū) to the Minister of Local Government: How much has been spent on the Rules Reduction Taskforce in total?Hon PAULA BENNETT (Minister of Local Government): The cost of the task force—the most up-to-date number I have got is from 31 August 2015 when $727241 had been spent.Phil Twyford: Why does she think that it is a good idea to let builders certify their own work when there is so much poor-quality building going on in Auckland that the council has set up an investigations unit to crack down on rogue builders and has laid 22 complaints with another 39 pending?Hon PAULA BENNETT: I do not necessarily. What it says in the report quite clearly is that there are quite a few issues to work through particularly with the licensed building practitioner scheme. So it is about—[Interruption] No it says we have got a mixed picture of the industry—[Interruption] No keep going. Done? Right. So we have got a mixed picture of the industry. We have got a whole lot of cowboys who quite frankly should not be but we have also got a whole lot of people who are really quite excellent and probably could. We have got electricians who currently do their own work; we have got gasfitters who do. For some builders who are at a certain competency and have been licensed—maybe we need to look at that.Phil Twyford: Does she agree with Nick Smith who said that it is worth considering allowing builders just to get on with the job without needing a building consent in light of today’s revelation that a Christchurch family used newspaper to plug the gaps in their leaky home after a shoddy Earthquake Commission rebuild?Mr SPEAKER: Either of those two supplementary questions the Hon Paula Bennett.Hon PAULA BENNETT: First of all get us the name and address because I just heard the Minister say that he would like to look into that. But more important there are most definitely some builders who should not be certifying their work themselves. There are others—particularly if we tighten up the licensed building practitioner scheme if we make sure that we have them at a certain level of excellence and if they are actually insured as well for their own work and are under an association—for whom maybe as the Minister has said the idea is worth exploring and that is what we are saying.Phil Twyford: Why does she think the country has moved on from the leaky homes disaster given that the National Government’s last experiment with deregulating the building industry continues even now to curse homeowners with untold cost and misery; or does she just think it has been forgotten?Mr SPEAKER: Again either of those two supplementary questions.Hon PAULA BENNETT: As someone who actually owned a leaky home I had extreme sympathy for others who were in that situation and I still do. Under no circumstances will we be going back to that nor do we want to see that same kind of building happening. We also need to recognise though the additional costs that are involved and take a common-sense approach that if they are licensed and insured we should at least be exploring it and making sure that we can. There are different products now.Phil Twyford: When she went on television in May raising examples of red tape like the banning of lolly scrambles or the requirement to wear a harness when using a stepladder did she know then that they were myths or did she need to spend $700000 of taxpayers’ money on her task force to tell her that they were myths; and does this not show that this is yet—Mr SPEAKER: Order! The question has been asked.Hon PAULA BENNETT: There were more than 2000 submissions and it is actually a case of listening to people who are experiencing things. What I will say is that as much as I love tradies—and I even married one—they are the greatest ones for having one experience and then sitting in the lunchroom and saying that that is gospel and the rules that are out there. Often they are not true. We can actually do more for costs and we can do more for efficiencies if we break down some of those myths as well and that is a big part of it.Health Services—First Specialist Assessments and Elective Surgery8.SIMON O’CONNOR (National—Tāmaki) to the Minister of Health: Can he confirm that a record 542000 patients received a first specialist assessment in the last 12 months and that a record 167000 patients received an elective surgery operation?Hon Dr JONATHAN COLEMAN (Minister of Health): Yes I can. The number of first specialist assessments and the number of elective surgery operations have increased year on year since this Government came into office. We are now delivering more services to more patients in our public health system than we have ever done before and we are keeping ahead of population growth. This increased level of hospital service is supported by the 5500 more doctors and nurses faster cancer care and free GP visits and prescriptions for 750000 children.Hon Annette King: I seek leave to table a letter from the consultant plastic surgeon of Hutt Valley District Health Board to a GP dated 1 September stating that they needed increased resources to be able to carry out the work needed for this gentleman.Mr SPEAKER: Leave is sought to table that particular letter. Is there any objection? There is none.Document by leave laid on the Table of the House.Hon Annette King: I seek leave to table three emails from Catherine of Whangarei the first dated 8 September where she said—Mr SPEAKER: Order! Just list all the emails and I will put the leave.Hon Annette King: The second one is from the 14 November saying there had been no action and the third one is from the 22 September saying that nothing had been done.Mr SPEAKER: Leave is sought to table those particular three emails. Is there any objection? [Interruption] Order! There is no objection. [Interruption]Document by leave laid on the Table of the House.Mr SPEAKER: Order! [Interruption] Order! If the Hon Annette King and the Hon Jonathan Coleman wish to continue their conversation I could assist by asking them both to leave the Chamber. Is that their wish?Hon Dr JONATHAN COLEMAN: No I did that last week.Mr SPEAKER: Yes you did. So I suggest that if you want to have your conversation leave voluntarily but if you need to continue the conversation I will assist by making it a compulsory situation.Youth Justice—South Auckland Youth Justice FacilityDARROCH BALL (NZ First): To the Minister for Social Development. Did Serco visit the South Auckland Youth Justice facility Korowai Manaaki—[Interruption]Mr SPEAKER: Order! The level of interjection has still not ceased. I invite the member to start his question again.9.DARROCH BALL (NZ First) to the Minister for Social Development: Did Serco visit the South Auckland Youth Justice facility Korowai Manaaki due to any issues identified at that residence?Hon ANNE TOLLEY (Minister for Social Development): I am advised by Child Youth and Family that representatives from Serco have not visited Korowai Manaaki due to any issues identified at that residence. As I said in my answer to question No. 4 nine case managers from Auckland South Corrections Facility visited Korowai Manaaki on 4 May 2015 and the purpose of that visit was to build relationships given that the sites are next door to one another.Darroch Ball: What is she doing now to address the current and serious issues in youth justice facilities given that her Government has had the capacity to make changes for 7 years and that all we have got so far is an interim report that states the obvious?Hon ANNE TOLLEY: As I outlined earlier I have released that interim report from the expert panel and the accompanying Cabinet paper so that people can see there is a clear path ahead. I have said publicly that I am not going to be rushed into making patched-up changes. That has happened 14 times to Child Youth and Family over various Governments and we are going to do it properly this time so that we get good outcomes for young New Zealanders in State care.Darroch Ball: Is the Minister comfortable with continuing to wait for her panel’s business case to begin addressing reported issues occurring at Korowai Manaaki Youth Justice North including secure cells being left unlocked; RT radios being smuggled out; cellphones SIM cards and chargers being smuggled in; a unit cellphone being stolen by youth to make a 111 call on 6 September; and intimidation of staff by youth; if not what is she going to do about it?Mr SPEAKER: Either of those supplementary questions.Hon ANNE TOLLEY: Well I think it is important to realise—in fact it is one of the issues that I have raised with the panel and one of my concerns about the youth justice residences—that they are increasingly being used for remand. In fact when you look at the 20 beds that are available you can see that 17 or 18 of them are being used for remand. Young people can be staying 1 or 2 nights—sometimes up to a week—and in fact the only sentenced young people there could be as few as two or three. I think that is of great concern. It is a security concern especially when you see that despite that large number being in custody in remand less than 75 percent of them are given custodial sentences when they come before the Youth Court. So as the panel in the report shows we do need to have a close look at a better way of dealing with young offenders and we will do that.Darroch Ball: I raise a point of order Mr Speaker. There is no way that the Minister addressed that question in any way.Mr SPEAKER: As I recall the start of the question was “Is the Minister concerned …” or words to that effect. It has without doubt been addressed according to the Standing Orders.Darroch Ball: Is the Minister comfortable with continuing to wait for her panel’s business case to begin addressing reported issues occurring at Korowai Manaaki Youth Justice North including staff bringing in KFC MP3 players and TVs for some youth; staff bringing in R18 movies like Fifty Shades of Grey for minors to watch; multiple assaults including a serious assault on a staff member just last week; under-reporting of—Mr SPEAKER: Order! [Interruption] Order! The question has been asked. It was too long anyway.Hon ANNE TOLLEY: What I would say to that member is that if he does have concerns of the nature that he is outlining I am very happy that he brings them to me and I will investigate them.Darroch Ball: I seek leave to table a redacted internal letter from Korowai Manaaki dated 20 July 2015 detailing issues at that facility.Mr SPEAKER: Leave is sought to table that particular letter. Is there any objection? There is objection.Question No. 10—Mojo Mathers. [Interruption] Order! I am seeking silence for the—[Interruption]. Order! Mr Brownlee! Order! I am requesting silence for this question.Captioning—Rugby World Cup10.MOJO MATHERS (Green) to the Minister of Broadcasting: Does she think it’s acceptable that hundreds of thousands of New Zealanders who live with hearing loss are unable to access the TV commentary for any Rugby World Cup games because we do not have mandatory captioning requirements in this country?Hon NIKKI KAYE (Acting Minister of Broadcasting): I think we are doing a good job in terms of improving captioning in this country but we can do better. I am advised that there are technical limitations that prevent captioning of the Rugby World Cup games. In terms of mandatory captioning requirements in the past decade we have seen a tripling of New Zealand’s level of captioning for free-to-air television. As such we do not have plans to introduce mandatory requirements at this time.Mojo Mathers: Does the Minister accept that the fact that something of such significance as the Rugby World Cup is not being captioned shows that the current model of relying on public funding rather than making captioning mandatory is not working?Hon NIKKI KAYE: I repeat what I said before which was that we thinkthat overall we are moving in the right direction. We have seen a tripling of captioning content in the last 10 years. We have increased the budget from $2.4 million to $2.8 million. We know that we can improve. We are going to work with Sky TV and Prime Television to ensure they have the technical capability in the future but we do not think that mandatory captioning is the way to go.Mojo Mathers: Does the Minister realise that the All Blacks game against Argentina was screened live with captions in Australia England Wales Scotland Ireland France and other nations with mandatory captioning but not in New Zealand and does she consider that acceptable?Hon NIKKI KAYE: As I said before we are aware that other countries do have mandatory requirements here. But the point that I would make to you is that the organisation that won the rights to broadcast does not have the technical capability. We are aware of that and we are working with Sky TV and Prime Television. We have increased the investment in this area but they are not technically capable at the moment.Mojo Mathers: Does the Minister think that it is a sign of a fair and decent society that thousands of New Zealanders are unable to fully experience the excitement of following our national team play our national game because we do not have mandatory TV captioning?Hon NIKKI KAYE: We believe that in a fair and decent society it is important to improve captioning. That is why we have gone from $2.4 million to $2.8 million of funding. We have also ensured that I think under our watch there are 265 hours per week of captioning for free-to-air television available 31 hours per week of audio-described free-to-air television is now available 100 percent of prime-time content on Television One and TV2 is captioned and we will be working with Sky TV and Prime Television to try to ensure that this capability exists in the future.Mojo Mathers: In light of the fact that the Minister told the House on 12 August that “watching the All Blacks is something that I think New Zealanders really do regard as being a critical part of being a New Zealander.” will she commit to making TV captioning mandatory in time for the next Rugby World Cup in 2019?Hon NIKKI KAYE: Obviously I am answering on behalf of the Minister of Broadcasting but as I have said before and with regard to the comments that you made all of us believe that rugby is a great part of our society and we want people to have accessible content but it is about how you get there. We actually think that making it mandatory would provide unnecessary cost to certain broadcasters. We think we can get there with voluntary captioning and we are working with a range of organisations to improve captioning. I think we are moving in the right direction. As I have said before we have gone from $2.4 million to $2.8 million and more hours than ever before and we will work with them around that technical capability.Vehicle Registration—Levies and Risk Ratings11.SUE MORONEY (Labour) to the Minister for ACC: Does she stand by her decision to change to the risk rating model for ACC motor vehicle levies that has resulted in 115000 vehicles being reclassified in the first 3 days?Hon NIKKI KAYE (Minister for ACC): Yes I stand by my decision to ensure risk rating is introduced into New Zealand. It is the right thing to do. As a Minister I stand by decisions that I can reasonably control. As the member knows there was a technical error that caused that reclassification and it was only a fraction of the number of cars that were actually impacted. It was not 115000 that were actually impacted.Sue Moroney: Why was the 2011 Kia Sportage more dangerous than the 2012 Kia Sportage when they have the same safety specifications?Hon NIKKI KAYE: As I have said to the member before there are 2.7 million cars. We have said that we are working with the motor vehicle advisory group to look at potential changes in the future. In fact if she reads the press release of the chair of the board of ACC it confirms that next week we will be announcing some things that we will be consulting on as part of ACC’s regular consultation.Sue Moroney: I raise a point of order Mr Speaker. My question was very crystal clear.Mr SPEAKER: I heard your question. What is the point of order?Sue Moroney: My point of order is that I still do not know why one car is more dangerous than the other. I have had no explanation from the Minister.Mr SPEAKER: Order! I am going to invite the member to ask the question again. I suspect the answer could have been a bit clearer as to why.Sue Moroney: Why is the 2011 Kia Sportage more dangerous than the 2012 Kia Sportage when they have the same safety specifications?Hon NIKKI KAYE: As I have said to her before there are 2.7 million cars. We always accepted that when we designed the system there may be some inconsistencies like the one that she mentioned. So there will be changes in the future. But what I can tell the member is that it is unacceptable to this side of the House to continue to have a country where people die on our roads. We can do more when we have systems like this. It costs $2 million per serious injury and we are investing to make sure that we actually get safer cars on the road. That is the right thing to do.Sue Moroney: Why does the fact that the 2003 BMW Z4 has not been involved in enough crashes in its 12 years of existence make it the most dangerous of cars under her risk-rating model?Hon NIKKI KAYE: Again if she is going to read out every single model of car then she is being completely unreasonable because there are hundreds of models of cars. So the point that I would make to her is that actually we are using laboratory crash-testing data and we have been very clear that we do that for a proportion of new cars because real-world crash data is not available. She knows that. The reality is we will be consulting on further changes in terms of the integrity of the data. But at the end of the day she knows that this side of the House is focused on ensuring that we reduce serious injuries. That side of the House—if they want to dump the system in the future they can do that but it is the wrong thing to do. We have to as a country have price signals around those that bear the greatest costs in terms of injury.Sue Moroney: I seek leave to table a copy of an email to me dated 21 September from the owner of a Suzuki Grand Vitara confirming that ACC has given his car a lower rating than the Suzuki Grand Escudo an identical vehicle—Mr SPEAKER: Order! The document has been well and truly described. I will put the leave on this occasion. Leave is sought to table this particular email. Is there any objection? There is none. It can be tabled.Document by leave laid on the Table of the House.Sue Moroney: I seek leave to table a copy of an email sent to me dated 24 September from the owner of a 2011 Nissan—Mr SPEAKER: Order! Again this document has now been described. I will put the leave. Does the member have any others?Sue Moroney: Yes I have several.Mr SPEAKER: Well then we will put them all together. Very quickly just give us the dates of the emails and I will put the leave.Sue Moroney: May I have time to describe them—Mr SPEAKER: No you cannot. It is very doubtful whether we should even be putting the leave. It is not about making a political point. If the member quickly lists the dates I will put the leave.Sue Moroney: There are several of them so I will leave it there and ask a further supplementary question.Mr SPEAKER: Leave is sought to table the particular emails first described. Is there any objection? There is none.Documents by leave laid on the Table of the House.Hon Gerry Brownlee: This is Harry Duynhoven revisited.Sue Moroney: Is that what you are calling your Minister Gerry?Mr SPEAKER: Order! If the member wants a supplementary question I would advise her just to ask it. I know she is responding to an interjection—ask it.Sue Moroney: Why has ACC given up refunding car owners whose vehicles have been wrongly classified under her flawed model telling them instead that they have to put a submission into the ACC levy consultation process which means the error will not be corrected until July 2016?Hon NIKKI KAYE: She is wrong again. As I have said to the member a number of times we are refunding people who have had incorrect classifications as part of this levy round. What we have said is that the levy rates will stand for this year but in the future we will be consulting on changes. But what I can say to the member is that under our watch people are paying a lot lower levies. In fact the average car registration has gone from $330 to $195. It is a good system overall but there is a proportion that we are working through in terms of changes.Sue Moroney: I seek leave to table a copy of an email to me dated 2 July—Mr SPEAKER: Order! Be aware I am not going to put the leave. Leave is sought to inform members. I have been generous in allowing the leave to go forward earlier. It is not about making political points. I am not putting the leave.Sue Moroney: Who came up with the policy of defining risk by compiling Australian and New Zealand data first: was it her with these botched ACC levies or was it Michael Woodhouse with his worm farms?Hon NIKKI KAYE: The vehicle risk rating policy has been in place and was decided on by Cabinet earlier last year and then we signed off obviously on ACC’s implementation so it was not Minister Woodhouse. But what I can say to you is that at the end of the day under this Government we inherited an ACC scheme that was a shambles—$4.8 billion deficit; $10 billion to $31 billion. Motor vehicle registrations—$330 to $195. This is a small proportion of cars—Mr SPEAKER: Order! [Interruption] Order! We are now deviating well past the actual answer to the question.Pest Control—Community Conservation Partnership Fund12.TODD MULLER (National—Bay of Plenty) to the Minister of Conservation: What recent announcements has she made about boosting community pest control?Hon MAGGIE BARRY (Minister of Conservation): Yesterday I opened the Queen Elizabeth the Second National Trust conference where I announced that the fight against introduced predators across New Zealand will receive a further $2.13 million boost through this year’s Community Conservation Partnerships Fund. This will mean that 31 community groups from Whangarei to Fiordland will be able to start new pest control measures expand existing efforts and make plans for the future. As part of the $8.4 million of Community Conservation Partnerships Fund funding this year $918000 will go towards the recently launched War on Weeds and an additional $345000 will be spent on wilding conifer control.Todd Muller: What other Community Conservation Partnerships Fund funding has she recently announced?Hon MAGGIE BARRY: Only this very morning I announced that nearly $570000 of Community Conservation Partnerships Fund funding will go towards six environmental education and outreach programmes to inspire our young people to get involved with protecting New Zealand’s natural world. For example $240000 will be going towards Mountains to Sea Conservation Trust and a further $66000 will go to Kids Restore the Kepler. Contact with nature as Opposition parties might like to note inspires creativity lifts achievement and helps to create lifelong interest in the natural world.Urgent Debates DeclinedChild Youth and Family—Expert Advisory Panel ReportMr SPEAKER: I have received a letter from Carmel Sepuloni seeking to debate under Standing Order 389 the independent expert panel’s interim report on modernising Child Youth and Family. The release of the report is a particular case of recent occurrence involving ministerial responsibility. The report makes concerning findings about the care of children by Child Youth and Family and outlines the nature of changes that the panel considers are required. The report is an interim one that outlines the next stage of work for the panel. Furthermore the operation of Child Youth and Family was extensively debated in an urgent debate on 27 August following the report of the Children’s Commissioner. There will be further opportunities to consider the issues when the final report is presented in December. I am not convinced that the presentation of an interim report warrants the setting aside of the business of the House today.Environmental Reporting BillThird ReadingDebate resumed from 23 September.Hon RUTH DYSON (Labour—Port Hills): Before the debate adjourned for our lunch break I was putting on the record how disappointing it is that the Minister for the Environment was not able to change clause 18 of this legislation which would have enabled all other parties in this Parliament to support it. [Interruption] Mr Brownlee is very upset because he cannot hear me and I am just wondering whether my microphone is not working.Mr SPEAKER: Order! I think the microphone is working but the sound system is on an emergency system. There is a lot of noise as members are leaving. Would they please leave as quietly as they can if they do not wish to remain listening to the Hon Ruth Dyson.Hon RUTH DYSON: I would invite the honourable member to come and sit over here so he would be able to hear me very clearly because I know that would be the highlight of the end of his week I am sure.As I was saying it is very disappointing that the Minister who is now responsible for this bill the Hon Dr Nick Smith was not able to get his Cabinet colleagues to agree to a change in respect of the one and only fundamental disagreement that other parties have had with this bill and that was that we do not agree that ministerial determination of the scope of the reports to be written in this Environmental Reporting Bill is appropriate. We should be able to say without any shadow of doubt that these reports are independent the topics that have been chosen have been chosen independently and we should have confidence in the integrity of the information that we are putting out in these reports. I do not imagine that either the Hon Amy Adams in whose name this bill was when it was first introduced or the Hon Dr Nick Smith have any intention of misleading the country or international commentators on environmental issues but we cannot say for sure that that independence is a given because they are determining the scope of the reports. That was the concern that numerous submitters had.Senior members of our community who have a lot of experience and expertise in this area said: “This is not the best-quality environmental reporting standard because we don’t have political independence.” That is what we asked to have changed and I am very disappointed that the Minister was not able to get his Cabinet colleagues to agree to that change. If he had been able to secure that agreement then every party in this Parliament would have been able to say “We support this legislation.” and what a great message to the rest of the country that would have been. This is a lost opportunity in terms of filling a gap in our legislative regime. This is a gap that needed to be filled but it has been filled inadequately.The other lost opportunity that is also presented in this bill is the fact that in earlier stages my colleague Su’a William Sio suggested that we have environmental reporting not only about decisions made in and affecting New Zealand but also about decisions that are made in New Zealand that affect our brothers and sisters in the Pacific. That would have been a huge gesture of support for us in recognising particularly the impact of climate change on our fellow Pacific Islanders. Again the Government said no to that. There was no explanation as to why. I think it is a lost opportunity.It would have been a delight to have supported this legislation but under the circumstances—perhaps it will not be a permanent situation; there may be an opportunity in the future for it to be amended so that we can support it—it is with regret that we will be opposing this bill.MATT DOOCEY (National—Waimakariri): It is an honour to rise to speak in support of the Environmental Reporting Bill at its third reading. Can I acknowledge the hard work of the Hon Dr Nick Smith and also of the chair of the Local Government and Environment Committee Scott Simpson for all his hard work in steering a very busy select committee.This week marks 1 year since this Government was returned to power and over that year a lot of words have been said in this House. A lot of words are said in politics but it is the actions that count. If you look at this Government’s actions it has delivered free GP care to under-13s it has given the first benefit increase in 43 years and it is now implementing environmental reporting standards. We are the only country in the OECD that does not have an environmental reporting framework and it took this National Government to show leadership in the environmental space. We believe in the environment we believe in New Zealanders and we believe in supporting this environment. Some people on that side of the House will say that only they stick up for the environment but we know it is intrinsic to all New Zealanders to have a clean green environment and that is why I support this bill and commend it to the House.A party vote was called for on the question That the Environmental Reporting Bill be now read a third time.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Bill read a third time.Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment BillThird ReadingHon TIM GROSER (Minister of Trade): I move That the Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill be now read a third time. Before I start to make a few comments on the bill I would like to congratulate on behalf of I hope all the members who supported this bill the two chief negotiators of this agreement and through them their extensive inter-agency teams. I thank Alison Mann who led the negotiation from its inception in 2009 through to 2011 and Martin Harvey who took over her responsibilities. I know it was an extremely difficult negotiation and I want to commend them and through them their teams for their very professional and very consistent effort to bring this agreement home.This is obviously going to play a very important role in strengthening our relationship with the Republic of Korea. I suppose like many many people who have watched the development of Korea over the past 70 years I am enormously impressed by what they have been able to achieve for their people. If you reflect on the fact that culturally they are identical to North Korea and that as recently as 1970 North Korea had a higher per capita income than South Korea—because when the terrible war occurred in 1950 most of the industrial capacity of the country which was then one country was in the north not the south—the fact that they have been able to achieve what they have achieved has been I think one of the most remarkable stories of economic development.Of course what it has done for us and for many countries other than us is it has created huge opportunities for New Zealand exporters.David Seymour: Are you saying free trade is actually good for people?Hon TIM GROSER: It is a very disturbing notion—indeed it is—that trade is actually good for everybody. But there are a few oddballs like us who believe in this theory and clearly 46 million Koreans believe in it. About 18 million in North Korea do not and we can see quite clearly the consequence of that choice. In fact the member who has made this important—although I think rather ideological—point has probably like me seen those photographs taken from space at night that show a complete black space between the 53rd or the 51st parallel—I have forgotten the number of it—and the start of the Chinese border indicating what a wonderful result you get from insisting on your sovereignty and not doing anything with anyone else.Now back to the knitting. We are looking at this bill through the prism of general policy which is under strong debate in this country—quite legitimately of course. I want to acknowledge just how important trade policy has been to securing advantages for New Zealand exporters and no more so than in this very vibrant and exciting market of Korea. If we look back in our history basically in the 1950s we were not trading at all with Korea. So the opportunities we are seeing in the Asia-Pacific region are basically the conjunction of two things. One is a process of economic development to which we may in some cases have made a tiny contribution through our education system which links in with theirs and through our development assistance in earlier days. But fundamentally it is the result of these countries’ efforts and their adoption of pro-growth pro-market policies and then of course the negotiations with those emerging economies to give us access into their markets. The process of economic development while it is transforming the opportunities for our small economy completely for the better is an essential precondition to this shift in trading structures. We still need access to the middle-income consumers and you do not get that automatically.I have often argued in the past that the process of diversification for New Zealand—which started essentially in the 1970s—in a strict economic sense needed not to have happened had we had access to the middle-income consumers of Europe and North America. Therefore the role of trade policy is absolutely central to our own economic future and to maintaining a vibrant economy that can support a First World health system a First World education system and can create opportunities for young ambitious New Zealanders to base their lives and their families’ future in our country and not in a third country. This agreement will absolutely contribute to these broader objectives.On the subject of free-trade areas generally I have been using more recently a statistic that I think is extremely interesting. It is not a rigorous proof because we would need to factor in other considerations that produce this stunning result. If we look back at New Zealand exports in the last 10 years—no sorry between 2008 and 2014 so it is 6 years. What we see is that our exports to countries with which we do not currently have a preferential agreement—let us call it loosely a free-trade - type agreement—have declined every year by an average of 2.6 percent so round it down to 2.5 percent. Every year our exports to countries that we do not have these preferential access agreements withhave declined by 2.5 percent. But to contrast this the countries that we do have agreements with and I believe that the figure with Korea when the agreement with Korea comes into force becomes something like 53 54 percent. The export growth of our exports to those countries has increased every year by an average of 10.4 percent.This is the conjunction of a highly successful trade negotiating strategy pursued both by this Government and the preceding Government. I madeat the Committee stage I think completely justifiably strong words of thanks to the Opposition—well the Labour Party—for its very constructive approach throughout this negotiation and I stand strongly behind those comments. It has been essential for us to target these emerging markets and create these platforms. I think this is a major opportunity for New Zealand. I will repeat another thing that I often say and I am sure others do too and that is that at the end of the day this agreement does not put a new dollar on the table; it creates an opportunity. It will be up to New Zealand business people—and we will strongly support them—to exploit the opportunities of this landmark agreement.The final thing I would say is that in a technical sense what we are doing here is not voting in a technical sense on the free-trade agreement but on the legislation that is necessary for New Zealand to be able to ratify the agreement. It is a proxy for exactly the same thing. In the light of a discussion that I hope this Parliament will have in the not-too-distant future on a certain other rather larger and more controversial trade agreement it will be exactly the same. So although Parliament will not be asked in effect to debate a trade agreement per se unless Parliament passes the necessary legislation to allow a New Zealand Government to ratify it it will not happen. In a very real sense when the moment comes—if it does come—this Parliament will be deciding through proxy whether it wants to advance New Zealand’s interests through this giant free-trade agreement that is still now at a very mature stage.I want to thank all of the people who have worked so hard on this agreement. I want to thank the political parties that have supported its passage through the House. I was speaking I guess only about a week ago to the Korean Minister of Trade and he assured me that the passage of this agreement through their own national assembly is proceeding and although there is a lot of controversy in Seoul around the free-trade agreement with China this looked reasonably promising on the New Zealand front. When we have the passage of this bill through the New Zealand Parliament and we hope in the very near future the corresponding actions through the Korean national assembly we will be able to at that stage I think open a bottle of champagne. Thank you.Hon PHIL GOFF (Labour—Mt Roskill): The Labour Party supports this legislation which is necessary to bring into effect the free-trade agreement between New Zealand and the Republic of Korea. Labour is a free-trade party. In fact you would have to be stupid as an agricultural exporting country not to be free-traders because the whole of the international trading system discriminates against agriculture. For decades our exporters have had to face enormous tariff barriers including in Korea in order to get our product into those markets. Our country by comparison has had low tariffs since the 1980s. We trade freely and we have benefited from that.This agreement has been a long time coming. Way back in 2007 as the Minister of Trade I initiated a study done by the New Zealand Institute of Economic Research and its Korean counterpart to look into the possibilities of a free-trade agreement. That study came to the unanimous opinion—both sides agreed—that a free-trade agreement was both viable and would bring benefits to both of our countries. And it most certainly will. It will not harm New Zealand producers because the tariffs on exports from Korea to New Zealand are both low and few—around 5 percent on things like washing machines and tyres. By contrast when our efficient agricultural producers want to export into Korea we face very significant barriers. If you are a wine-seller from New Zealand—it might be the best wine in the world—there is a 15 percent tariff. If you are a kiwifruit-seller there is a 45 percent tariff. Then consider that our main competitor Chile because it has a free-trade agreement with Korea gets its exports in free. If you look at something like butter it is 89 percent; cheese 36 percent; wood 10 percent; and salmon 20 percent.Those tariffs will be phased out and will be gone within 12 years. That obviously is of benefit to New Zealand. In the first year it will save us $68 million in tariffs paid by exporters alone. By the end of the process we will be saving $229 million a year. It is not just primary produce; it is things like manufacturing—for instance aviation medical devices and precision and marine engineering. They will benefit from this treaty. Services—growing in importance—like education and professional and legal services will benefit.Is Korea an important market for New Zealand? Yes it is. It is our fifth-biggest trading partner. There are 51 million people in Korea—I think; I stand to be corrected Mr Groser—and it is an increasingly affluent society. It is the eighth-largest trading nation in the world and the 13th-largest economy—so yes there are benefits. So that is the positive side and that is why Labour will be supporting this bill.There is however a more negative side I regret to say. Despite the best efforts of the negotiators—Tim Groser has negotiated and in particular Martin Harvey and Alison Mann—and we are still faced with big tariff barriers in some of the areas that we could make no progress on. Out-of-quota milk powder is at a 176 percent tariff rate—176 percent. You cannot trade over that and you cannot trade around it. There are other areas that will not be happy with this agreement. Frozen deer velvet has a 15 percent tariff barrier. This is our major market for frozen deer velvet. If you look at fresh abalone or frozen squid the tariff is 22 percent. Nothing in this agreement reduces or eliminates those tariffs so we have got some way still to go.I would give credit to the Minister and his negotiators for doing their very best on it but there is one area where we have failed and there is no excuse for failure. That is in the area of failing to carve out our freedom as a sovereign nation to limit foreign investment—Korean investment—in residential property. Ironically we have maintained our ability to limit investment in farm land in this agreement but we did not put in our ability to limit investment in residential property.I happen to believe that generally foreign direct investment is good for our country. We go out and we look for it but it is not good in every area and you will never persuade an Aucklander that it is good to have foreign direct investment in existing residential housing. Why not? Because there is a failure of supply of housing over demand and why would we allow demand to be inflated further by encouraging investment in existing residential housing by people who are not resident and who never intend to be resident in New Zealand?As a proud New Zealander I hate to have to admit this but the Australians got it right and we got it wrong. Australia bans foreign investment in existing housing and other countries put a stamp duty on it. When Australia negotiated its free-trade agreement with Korea it put in protections for its right to continue to do so but we did not. My question to the next National Party speaker is: was that a cock-up—I suspect it was a cock-up—or was it was deliberate? That would be even worse—that would be a cock-up with intent.In Auckland we have had 25 percent housing price inflation in the last year. We have got the lowest level of homeownership in 64 years. It makes sense when you are negotiating an agreement for investment that you do not make it worse for Kiwis trying to achieve their dream of owning their own home. Yet this bill will—well this bill will not but the agreement will unfortunately do that. That is the one key criticism that I have of this bill. It was the wrong thing to do. What I want to say with some degree of anger is that John Key has not taken responsibility for this. He knows it is wrong he knows the damage that it does and what does he do? He says it is Labour’s fault.I want to ask Mr Groser a question if he is listening. I admit responsibility for initiating this free-trade negotiation; I do not accept the responsibility for the cock-up of not protecting us against inflationary foreign investment in existing housing. Do you know what Mr Key said? OK he negotiated it—or his Minister negotiated it—but he said that it is Labour’s fault because it put a most favoured nation clause in the agreement with China. Listen to this Mr Groser: a most favoured nation clause. Mr Groser will nod his head when he admits that we put that clause in every agreement right? Yes that is exactly right.We have a most favoured nation agreement in every free-trade agreement and if we did not put that in the New Zealand - China free-trade agreement then that would have been regarded by the Chinese as absolutely discriminatory—and it would have been. But because you have a most favoured nation agreement you negotiate with care knowing that everything that you put in new trade agreement will create a precedent and will be carried over into other free-trade agreements that you have. I do not accept the dishonesty of a Prime Minister who knows that he has got it wrong and tries to transfer the blame. He has been Prime Minister for God’s sake for 7 years. These things are happening under his watch and he needs to take responsibility.Now I want to go back to where I began. We will support this agreement. We will support this agreement because there is a net and real advantage to New Zealanders. We regret that the agreement did not go as far as we would have liked. As Russell McVeagh says anybody expecting this agreement to deliver what was delivered by the New Zealand - China free-trade agreement the Taiwan free-trade agreement or the ASEAN free-trade agreement will be disappointed. And they may be. But the Government did its best in that area. It did its worst in omitting to protect New Zealand in an area where it should have—in terms of foreign investment in existing residential housing.I just want to say one thing about the investor-State dispute settlement process. Some people have used that as a surrogate for the Trans-Pacific Partnership in saying that we will not support this agreement because it has an investor-State dispute settlement agreement in it. I put an investor-State dispute settlement agreement in the China free-trade agreement and I put one in the ASEAN free-trade agreement. Over the years that they have been in existence neither has caused us any problems. They are there to protect New Zealand investors in countries where there is no rule of law and that is why we put it in. Korea does have the rule of law. We did not need it with Korea but Korea insisted on it.What I want to say finally is that what we need to do Mr Groser in the Trans-Pacific Partnership agreement is do a lot better than we have done on dairy in this agreement. I fear from all the reports that I am receiving including from Mr Groser himself that we will not get a good dairy agreement. That is our biggest single export product and we should insist on getting a deal at least as good—Mr DEPUTY SPEAKER: I am sorry to interrupt the member but he has been getting the signal for quite some time to sit down. He continues to discuss an agreement that is not before the House. I call—what is his name; he has been away so long—Mark Mitchell.MARK MITCHELL (National—Rodney): Ten days is all it took. I am very happy to take a call on the Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill. I do want to acknowledge our Minister of Trade the Hon Tim Groser and the negotiating team that negotiated this free-trade agreement. I know that it may be a term that is used too often but we do punch above our weight and we have got a very proud history in New Zealand of being able to negotiate very very good terms in our free-trade agreements. More often than not we have to negotiate and deal with nations that are much bigger than us with much bigger economies and much bigger populations. That does not always provide the easiest of platforms from which to negotiate and operate and yet our Minister of Trade and our negotiators continue to negotiate very very good terms in our free-trade agreements.The Minister made a couple of points that I would like to discuss. Having been a Kiwi growing my business overseas for a decade it became apparent to me very quickly that as a small trading nation down at the bottom of the world there are challenges that we face that the rest of the global economy does not face. Something that we have to be focused on and take seriously as a Government is making sure that we continue to negotiate these types of free-trade agreements that we continue to leverage organisations like New Zealand Trade and Enterprise and that we are able to have a very good programme through our Business Growth Agenda which was initiated by the Hon Steven Joyce and the Ministry of Business Innovation and Employment to ensure that this Government does all that it can to enable the private sector and our business sector to compete with the rest of the world.We are a small country down at the bottom of the world with a relatively small population and if we want to continue to have a First World world-class health system and education system and to be able to invest in our infrastructure it is very important that we are able to continue to trade and grow our trading base globally and offshore. I want to acknowledge the Foreign Affairs Defence and Trade Committee which received this bill and I want to acknowledge Phil Goff and David Shearer who are always excellent to work with on the committee especially when it comes to these free-trade agreements.The comment that the Hon Phil Goff made about them being free-traders is very very true and I accept that. But the comment that he made about the entire Labour Party being free-traders I cannot agree with. I look at people like David Shearer Phil Goff and Clayton Cosgrove who are free-traders but we have seen in this House recently open dissension and challenges coming from the likes of Clare Curran against Clayton Cosgrove when it comes to free trade. I get the strong feeling that guys like Phil Goff David Shearer and Clayton Cosgrove are often having to battle within their own caucus against people who are actually not in favour of free trade.With regard to the Korean free-trade agreement itself I just wanted to quickly go over some of the numbers and what they actually mean for New Zealand and to finish off with just a couple of stakeholder comments around some of the submissions that we heard at the select committee. Some of the numbers—and I know that the House has probably already heard them in previous debates—include the fact that we are going to save $65 million worth of duties for New Zealand exporters and that is in just the first year alone. That is a significant gain right from the get-go. New Zealand has $229 million a year currently paid by our exporters in duty so it is a significant free-trade agreement.The other thing that it does for us—as Australia for example already has a free-trade agreement with Korea—is allow us to get back on to a level playing field in terms of the trade that we are able to engage in with Korea. Korea has 50 million people so it is a significant market. It is a big market that will continue to grow. Another interesting statistic that the Minister raised—I was not aware of this but it is a really interesting statistic—was that in countries that we do not have free-trade agreements with and that we have historically traded with trade appears to be going backwards and is in decline whereas in terms of the countries that we have signed free-trade agreements with we have grown our exports by over 10 percent. That is actually pretty significant for a country like ours. We have got $220 million worth of dairy products being exported to Korea—that was right through to the year ended June 2014—and New Zealand exporters are paying $89 million a year in duties. So again the reduction in tariffs on our dairy is going to be significant.Just very quickly I will sum up by saying that we talk about diversification in our economy outside the dairy sector and there has been a fair bit of public debate about that in the last couple of months. I have just got a comment here from the chief executive of Zespri Lain Jager who made a submission to the committee: “It is hugely satisfying that the industry can focus on building sales in the South Korean market which will benefit both New Zealand and South Korean growers as well as South Korean consumers. With volumes of our new SunGold variety increasing to over 50 million trays by 2018 this gives us a strong platform to build sales in this market.” I will finish on that note. Thank you.DAVID SHEARER (Labour—Mt Albert): Very much in the spirit of the last contribution Labour is supporting this agreement. Just to be very clear about it this is a bill that enables the Korea free-trade agreement to come into operation; it is not actually the free-trade agreement itself. That has already been signed but it does need enabling legislation and that is what we are talking about here.We are pleased to support this because on balance it is a good agreement. It is not perfect but it is a good agreement. New Zealand depends on these agreements as the previous speaker Mark Mitchell was just saying in order to be able to grow our trade. New Zealand is a small country and we do not have the big internal market that the United States and other countries might have. If we do not trade then we will not be able to continue the prosperity that we enjoy today. It is worth noting that in those countries with which we do have free-trade agreements we do better in terms of our trade. We have better access we have better returns and we are able to prosper more.It is worth noting that when we signed the China free-trade agreement in 2008 we had I think about $7 billion in two-way traffic in trade and a little over $3 billion in terms of our exports with China. That figure has now grown to around $10 billion worth of exports to China. There are some people who say that that would have grown anyway but all of the analysis around that that I have read has shown that actually we would not have got those sorts of gains in China if it had not been for the free-trade agreement that we have with it. It was China’s first free-trade agreement I should add and it very much set the bar—it was a high-quality agreement—for other free-trade agreements since then.So when other parties in this Parliament say that we do not need to sign on to this free-trade agreement or that it is not good enough or that there is some sort of problem with it they should just reflect on what that means to our exporters. If you are a kiwifruit exporter sitting there in Tauranga or up in Northland and you want to get access to a growing Korean market it is going to be a very difficult thing to do to compete against the Chilean exporter who pays zero tariffs when we in New Zealand have to pay 45 percent. In other words we will not be able to compete fairly on a playing ground that is not in any way level.So we need this free-trade agreement in order to firstly bring down the tariffs that operate on New Zealand goods going into Korea and secondly to be able to grow that market even more than we have at the moment. Currently Korea is our fifth-largest export market so it is very significant. It is a growing economy. It is just one step behind us in terms of its GDP per capita and it is growing faster than New Zealand overall so it is likely to overtake us. So it is an important market both for what it is now and for what it could likely become. That is the reason we need to be there and have an agreement with Korea.I want to as Mark Mitchell and Phil Goff have mentioned as well compliment both Tim Groser and the negotiators on getting this agreement through. It has been a tough agreement and it has been a tough agreement for a very simple reason. For us Korea is our fifth-largest export market. For Korea New Zealand is their 41st most important export market. In other words it is well down the list of priorities for Korea and it is really high for us. For us after about a 4-year period we will get $229 million in benefits from tariffs being removed. Korea will get $4.5 million. So when you add it up what is in it for Korea? Well actually not a lot. If you were a Korean negotiator out there you would be saying: “We get $4.5 million worth of access into your market and you get $229 million worth of benefits into ours.” To get this agreement across the line was a very good feat and the people who negotiated it deserve our praise. For example $45 million worth of tariffs on beef will come off and our ability to grow our beef exports to Korea will go up. Other examples of tariffs coming off are the 22 percent tariff on lamb the 45 percent tariff on kiwifruit and tariffs on logs and a number of manufactured goods. At the end of 15 years 98 percent of our exports to Korea will have no tariffs attached to them so it is a good deal.We have heard that we certainly did not get what we wanted on milk powder; on frozen deer velvet which is an important market for deer farmers; or for some products of seafood. We did not get everything we wanted. We would have liked a bit more but we did not get it. But we have done very well. We have also included in the agreement provisions on labour standards and environmental standards. Unfortunately they are not sufficient for the Green Party to come aboard and sign up to this. That makes me sort of sad really because you have got to ask: what is the threshold for the Green Party to agree to a free-trade agreement? It is a pretty high bar and when you start narrowing down the countries that would be able to meet that bar it is a very small number of countries and if we had to rely on that smaller group of countries then we would not be trading as we are with many countries around the world and we certainly—certainly—would be poorer. If you are going into this saying you support free trade but you are not signing up to free-trade agreements there is only one conclusion you can come to—that actually you do not support exports and you do not support free trade. There is no other conclusion to come to.I want to just talk very briefly about one of the reservations that Phil Goff mentioned in relation to this free-trade agreement and that is the problem around property investors coming into New Zealand and buying up residential property. I am an Aucklander and I have seen property prices go through the roof in Auckland. We do not want our residential property to be treated like pork bellies on the New York Stock Exchange. We want our residential property to be places where people live and are able to afford to live. By allowing foreign speculators to come into our property market we then open up our property market for speculation that will drive prices up and that is undoubtedly driving prices up right now. This free-trade agreement that we have with Korea will enable speculators to be able to enter our market and from what we can see and certainly in the wise words of Dr Kāwharu from Auckland University it will mean that we will not be able to stop those speculators coming in and speculating in our market. That is a source of concern. Australia in its free-trade agreement with Korea locked in a protection against that but we for some reason did not.Lastly I want to mention the concerns around the investor-State dispute settlement process—the tribunals that are set up where there are disputes in agreements. It is included in this free-trade agreement with Korea. It was included at the behest I understand of the Korean Government. It is mainly because Korea wants to have a uniform set of agreements that include this. We did include it in our free-trade agreement with China at our behest. And why did we do that? It was because we were uncertain and unclear about whether we would get a fair deal in a Chinese court. We do not have that same fear with Korea. I would think that a dispute would not go to an investor-State dispute settlement form of judicial recourse because it would either go to a New Zealand court or a Korean court. We would be able to settle it in those courts because we respect each other’s judiciaries.The bar to get to an investor-State dispute settlement tribunal is incredibly high and if you look at the case law around it you will see that the chance of New Zealand ever getting to an investor-State dispute settlement tribunal is very unlikely. We have not been taken to one before. We have not been taken to a World Trade Organization court before. There have been 350-odd cases that have been taken there and 84 percent of those countries in the OECD that have gone before an investor-State dispute settlements tribunal have won their cases. So I think that when you put this on the ground it is still a very good trade agreement.Dr SHANE RETI (National—Whangarei): I would like to echo the words of the Chamber in congratulating the Minister of Trade on this excellent agreement. I would also like to congratulate the Ministry of Foreign Affairs and Trade officials on the high skills that they have brought to this agreement.We have heard the issue of investor-State dispute settlement provisions raised again today; they have been raised at several of the readings of the Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill as well. Quite simply we need to back ourselves. We need to back ourselves. We have got a really good level of experience in international tribunals as was just mentioned a moment ago. In fact if we detail them even further it will bring back some memories of just how good our team is. In 2007 there was the Australian apple ban in 1999 the US lamb safeguards in 1997 the Canadian dairy subsidies in 1997 EU butter exports and we are currently in a World Trade Organization dispute with Indonesia over agricultural products. We have a lot of experience in international tribunals. We need to back ourselves.The timing here is very important and I would like to acknowledge the Labour Opposition for assisting with the timing. You see what happens here is that if we ratify this the entry-into-force tariff reductions happen immediately and then one calendar year later the next set of reductions come in. Being able to do this now means that on 1 January or thereabouts the year 2 tranche of tariff reductions can come in instead of waiting potentially another whole year. This will benefit buttercup squash methanol food preparation some fisheries dairy spreads milk albumins racehorses and aluminium. Those sectors of the economy will benefit from the timeliness of this agreement.The other comment that I would like to make is around the kiwifruit industry which it has been noted is clearly going to benefit from this. I have had those in the kiwifruit industry have a look at how they would carve out the Northland benefit. What does this look like for Northland? This is important because this is the cost to New Zealand First which is opposing this. This is the cost to New Zealand First of not supporting the Northland kiwifruit industry—Todd Barclay: Not putting New Zealand first.Dr SHANE RETI: —not putting New Zealand first; certainly not putting Northland first. Here is how the kiwifruit figures look for Northland. There are 228 orchards 126 growers 420 hectares with five pack-houses. I am reliably informed that there is one full-time equivalent per 2 hectares of kiwifruit-growing land—that is 210 full-time equivalents working with growers in the kiwifruit industry and I am also informed that that is $25 million into the Northland economy. This is quite clearly a good thing for Northland. This agreement is quite clearly a good thing for New Zealand and I commend it to the House.JAMES SHAW (Co-Leader—Green): I would like to start by acknowledging again the hard work of the public servants and negotiators who have put a lot of time and effort over the last many years into concluding this deal. Regardless of what we think of the deal I think that they all deserve recognition for the hard work that they have done on behalf of the country. Again I also want to acknowledge Mark Mitchell for his role as chair of the Foreign Affairs Defence and Trade Committee. He gave a great deal of time to Opposition concerns most particularly about the investor-State dispute settlement mechanisms and the concerns of the public about those and other concerns to do with that. So I do appreciate the process. For the most part I think it has been a good process that has got us here today.One of the things that I keep coming to is the fact that we have a series of concerns about a number of the measures that are contained—or in fact are not contained—in the Korean free-trade agreement that are in the words of the Minister of Trade earlier in the context of general trade policy and are showing up here in this agreement and also in other agreements; both those that we have already signed and ones that we are currently negotiating.I would like to respond to Mr Shearer’s concern that the Green Party has a high bar for signing trade agreements. It is true that we have high standards for these and that so far we have not yet seen a trade agreement that meets those standards. One of the things that we have a real concern about is that for a number of these agreements although they have language around for example human rights labour standards and environmental standards those conditions are non-binding and unenforceable. For example I think somebody referred to the ASEAN agreement earlier today. That does have some language in it about environmental standards but the commission that is supposed to meet to discuss those has never actually met in the entire time that the ASEAN agreement has been in place—but obviously trade has continued.I want to give an example. We have a free-trade agreement with China and that has led to a huge increase in trade between our two nations. That has led to material benefits to New Zealand and to China although obviously it is a bit of a drop in the bucket for China. In China there is a small city called Baotou which is in Inner Mongolia not terribly far from the country of Mongolia. Near Baotou is a tailings lake that is 11 square kilometres. The background radiation of that lake is three times the normal background radiation which itself is already very high. The lake contains 180 million tonnes of fine waste powder from ore processing. It includes a whole series of different ores but notably cerium oxide and neodymium. Those are rare earth metals that are necessary for a number of things that we hold to be particularly important including batteries lasers and magnets. Magnets are used for a whole series of industrial processes—in particular and notably in wind turbines a clean green technology and also in electric cars which we are hoping to see on our roads before too long. Those metals are also used in catalytic converters. One of the other things that they are used for is the covers on our iPhones—the touch screen glass on our iPhones—so it is incredibly common. Virtually everybody has some of this product in their pockets now as a result of these industrial processes.It is an absolute ecological catastrophe in Baotou. Baotou is only one of a number of tailings lakes throughout China but it is certainly one of the largest ones. In our agreement with China there is some language around environmental standards and so on and yet we are encouraging these industrial processes that cause massive ecological catastrophes and we are not holding ourselves to the standards that we say are already contained inside these agreements. So until the kind of language in these agreements becomes binding and enforceable—where there is some mechanism and where we have some recourse to say “Look we think these are great products. We’re very grateful for this trade. Obviously we like our iPhones. We like them cheap. We like our electric cars. We like our wind turbines but is there a way that we can ensure that the production of the components in all of those things is a great deal cleaner?” what we have to take responsibility for is the fact that when we buy those components in when we buy those iPhones and those electric cars and so on and so forth what we are doing is encouraging a massive ecological catastrophe in the lands that those things have come from. I am not talking about just China—I mean it is particularly bad in China at the moment—but all throughout the world where we have trading relationships or indirect trading relationships through the global supply chains that supply all of these products that we buy in. So these are amongst our concerns and we kind of restate these every time that one of these agreements comes up in front of the House but they never get addressed.One of the things that I am encouraged by is the rumour that the Trans-Pacific Partnership agreement may actually include for the first time ever some binding and enforceable language around environmental and human rights standards. But until we see that we cannot support it. So it is not just about what happens here but also about what happens with our trading partners as well. We completely understand that there are benefits to exporters in the Korean free-trade agreement and in other trade agreements. The problem is that the costs associated with the trade and with these deals are not necessarily borne directly by the ones who receive the benefit. I understand that those exporters who are seeing an increase in trade will be paying their taxes. They will be paying GST and so on and so forth and that comes to Treasury and then Treasury uses that money to do some of the clean-up of some of the environmental damage that is caused through trade and so on but it is a very indirect relationship.Another example is the concern that has not yet been addressed about what the fate of Pharmac will be under the Trans-Pacific Partnership. We understand that it is being protected or that it is likely to be protected but that the cost of medicines will still rise because there are going to have to be some compromises made in order to get that deal over the line. From what the Prime Minister is now saying we understand that the benefit of the Trans-Pacific Partnership agreement in terms of benefits to exporters is going to be reasonably limited but the costs will not be borne by exporters; the costs will be borne by consumers of medicines—particularly very rare medicines that come at a high expense. So when we look at the balance of benefits and costs in these agreements you can say that yes there are some benefits to the country via benefits to exporters but on the costs side you are also saying that the people who are bearing the costs are not necessarily the same people who are receiving the benefits. So they are being borne in differing places. They are not related to each other.We have stated those concerns a number of different times and one of our problems is that although those concerns have been heard at the select committee and so on we have not actually had a response other than for example the warm words: “Oh well we don’t really need to worry about it because we have never been faced with an investor-State dispute provision thing in the past.” But we know that throughout the world there has been an exponential increase in these cases as a result of these agreements. So when Mr Shearer says that we are against trade I reject that notion. We are not against trade; we are as he says for trade with standards—and high standards. But the problem that we have got is that we have not yet had an agreement that includes the standards that we are looking for and in a way that meets our satisfaction. When we look at cases like the Baotou steel group’s tailings mine in China and other numerous examples around the world what we know is that although trade is leading to increased wealth and so on and so forth there are tremendous costs and those costs are not being borne by the people who receive the benefit and they are not being cleaned up. Until the time that agreements include some binding and enforceable standards on human rights labour and the environment I am afraid that we just cannot support them. Thank you.TRACEY MARTIN (NZ First): Kia ora Mr Deputy Speaker. I rise to take a short call on behalf of New Zealand First and my colleague Fletcher Tabuteau. I also want to join with others in the House to acknowledge the members of the negotiating team who have had as all documents tell us a very difficult task to do. I can say only that I think it has probably been made even more difficult by having a Minister of Trade such as Mr Groser who earlier today acknowledged that he has no belief that any country should protect its own sovereignty. I think that was a really interesting contribution from Mr Groser—that he does not believe that any nation should insist on or have as a bottom line keeping the ability to make its own laws and having a Parliament such as this to create its own future for its citizens to decide what laws it would or would not like to put in place. Mr Groser believes that those are a tradable commodity; New Zealand First does not. So New Zealand First will stand with the Green Party in opposing this bill.The Green Party member Mr Shaw I think just expressed exceptionally eloquently as to why the Green Party is not supporting this bill. Certainly I do not believe that New Zealand First would come up with any dispute with the contribution that Mr Shaw made. However the majority of New Zealand First’s opposition is around the investor-State dispute settlement clause. We acknowledge Mr Goff’s and Mr Shearer’s contribution. We also know that they have no alternative but to stand and support this bill because being part of Governments before they have entered into trade agreements where there have been investor-State dispute settlement clauses.I was sitting on the Foreign Affairs Defence and Trade Committee when the negotiators came to brief the select committee on the completed process. I asked the question: what had the South Koreans asked for from New Zealand? All they had asked for was the investor-State dispute settlement clause. It has been stated in this House and I think it was Mr Shearer who stated that he believed that they asked for it only because they like to keep things consistent. That may or may not be the case but that does not mean that New Zealand has to accept it.I think the other thing that is important too is that when we enter into these trade agreements there is one set of criteria when you hit the border. So what we are talking about here is some tariffs. We do note that with regard to milk powder it keeps its 176 percent tariff. So that was not a great win for that particular industry.We do note that once you get past the border there are other barriers that could have been discussed and should have been discussed and that we have not heard anything about. For example there is the $20 billion of subsidy that the South Korean Government gives to agriculture once you get past the border. It is one thing to negotiate a deal and negotiate away your possible sovereignty to actually have a little bit of tariff leverage at the border but it is another thing once you get into the country—if your Government is now all hands-off and patting itself on the back because it is on this incredible race to try to go down in the history books as the Government that got the most trade agreements and not necessarily the most high quality trade agreements. That is one of the reasons why—and the predominant reason why—New Zealand First is actually opposing this bill.I think it is a very good example of why one should be concerned and looking at the fine print and the small details of these sorts of agreements. An excellent example I think is from—let us just talk about it—the procurement policy of Auckland City. The procurement policy of Auckland City when it was first created back in 2011 or whenever was rewritten. The local boards lobbied very very hard for local contractors to be given some form of advantage under the procurement policy of Auckland City. I think that a lot of councils do that. A lot of councils and local government want to make sure that their local contractors have an opportunity to tender and that if the tenders are balanced financially and with regard to the structure and the content of the tender then a local contractor is given that little bit of an edge because councils know there is local employment. It moves around the particular community.With regard to the procurement policy of Auckland City what was most interesting when it was finally written down after all the input from the community local boards and so on was that Singapore and Australia were defined as being local. So Singaporean and Australian companies were defined as local under the procurement policy of Auckland City and would be given the same advantages as any other business inside the boundaries of Auckland. Why was that? It was because they are included in trade agreements. Under the fine print in trade agreements the council could do no other. If we have a Singaporean company an Australian company and a New Zealand company or a company from Auckland putting in a tender for the same piece of work and the content was the same and the pricing was similar and so on and so forth they would have been breaking trade agreements and they would have been breaking laws to give advantage to New Zealanders. That is why New Zealand First stands against these types of agreements and we will continue to stand against them.It is all very well for Mr Reti—and I see that the campaign for Northland has started up. I can see that—[Interruption] Is it not funny how doctors like to be called “Dr” all the time? Righty-o. It is very interesting that Dr Reti has decided that—well obviously he is campaigning for something although I am not quite sure what. But it is interesting that the campaign for Northland has begun already. So Northlanders should be pleased that the moment that Northland elected somebody else who was not a National Party member they got an awful lot of attention coming from this Government. I would suggest that the best bet for the future is to continue to have a member not actually from the Government benches.I come back to the bill. I just want to quote from Mr Tabuteau’s second reading speech: “South Africa Germany and France are all investigating how to remove themselves either from trade agreements entirely that have investor-State dispute settlement provisions in them or to remove the investor-State dispute settlement provision itself from their trade agreements. They understand that this is an … attack on the democracy and the functioning of their Government within their country. They understand that. They have seen the evidence of it and they are desperately now trying to do something about it. The unfortunate reality for them is that they are beginning to discover that it is not that easy to get yourself out of these trade agreements once you have signed up to them. We are talking about 20 to 25 years’ notice in order for those countries to take themselves out of these trade agreements with the likes of the investor-State dispute settlement provisions in them.” It is too difficult to get out and it is too easy to get in.What we have also heard today in people’s contributions to this House—and again interestingly enough from the Labour benches—is that although we have had investor-State dispute settlement clauses we have never been taken to court. We have never had a problem so far. They do however appear to be the thing at the moment. They do however appear to be the cool thing to put into trade agreements. So it is only a matter of time would be what New Zealand First is saying. Just because something has not happened does not mean it will not.The other thing we have heard is that of the number of people who have had to go to tribunals under this 85 percent have won their cases. Nobody has mentioned the cost to those nations to actually go and defend themselves. Nobody has mentioned the cost. Even when they have not been found to be in breach or whatever nobody has tallied up the figures. What we know is that there are some companies in the world that have more money than New Zealand has put together. So what we know is that there are companies out there that can take our country to the cleaners because they have more money to throw at an issue than we have.The question is why we would place ourselves in this situation. The relationship that New Zealand had with South Korea was strong enough—strong enough—to create a trade agreement without selling our sovereignty. Perhaps what we need is a Minister of Trade such as the Rt Hon Winston Peters who actually believes in the sovereignty of the nation who has the capacity to stand his ground for his country and who is respected by all of Asia.DAVID BENNETT (National—Hamilton East): This bill is an important one. It is about free trade which we all know is important for our country going forward.I just want to go over some of the other parties that have spoken here today. With the Green Party at least it is consistent. It is against any free trade. It does not want us to be part of the modern world so that is fine. We know that is the Green Party’s position. We know that it does not want trade it does not want us to grow and it does not want us to have that opportunity.But the New Zealand First Party members come into this House and vote against this bill. This is the same party whose members go around New Zealand to all the regions saying “We are going to look after farmers. We are looking after the regions.” and yet they vote against the one thing that can help those people.The one thing that this country can do is get free trade for its farmers so that they have the opportunity to sell their products and New Zealand First votes against it. So anytime you see Winston Peters on TV saying that he is going to be out there batting for the regions and batting for the farmers he is lying. The reality is—The ASSISTANT SPEAKER (Lindsay Tisch): Order! You cannot say that. The member will withdraw that comment.DAVID BENNETT: I withdraw.The ASSISTANT SPEAKER (Lindsay Tisch): Also I would like you to come back and focus. This is a third reading. It is not the general debate. I would like the member to come back to the focus of the third reading.Denis O’Rourke: I raise a point of order Mr Speaker. I take offence at the word used and the member should be required to apologise as well as withdraw.The ASSISTANT SPEAKER (Lindsay Tisch): I will decide the level. I have asked the member to withdraw. He withdrew and that is the end of the matter.DAVID BENNETT: When we look at the free-trade agreement we need free trade for our regions and for our farmers. This is what this bill is about. The New Zealand First Party members are not voting for that.Then we had the Labour Party members over there who are voting for this bill. They are voting for this bill but they do not believe in it. They do not believe in this because they are not going to vote for the Trans-Pacific Partnership agreement. What the Labour Party is trying to do is to say: “We’ve an open approach to free trade but at the same time we’re saying no to the biggest free-trade agreement that possibly could come before this country and before this Parliament.”The Labour Party members have some big issues there in respect of their approach to free trade. It shows the inconsistency of them. It was merely an attempt by members of the Labour Party to go for the mayoralty of Auckland and to talk about housing issues.The ASSISTANT SPEAKER (Lindsay Tisch): Order! I want you to concentrate as I mentioned—this is the second time—on what this is about which is the agreement with South Korea. The Trans-Pacific Partnership agreement is not part of this nor is the Auckland mayoralty nor any other matter. Come back to the focus of the third reading.DAVID BENNETT: The Labour Party members talked about the housing issues because they said that was one of the clauses of the agreement—that it would limit the ability of overseas buyers to come in from South Korea and buy houses.The ASSISTANT SPEAKER (Lindsay Tisch): Look I will not say it again. It does not matter what other people may have said. It is what we are saying now. Focus on the third reading.DAVID BENNETT: This is a good bill for traders in New Zealand. This is something that we accept and look forward to the House passing.The ASSISTANT SPEAKER (Lindsay Tisch): I call Steffan Browning—5 minutes.STEFFAN BROWNING (Green): I rise to take a call on the third reading of the Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill. The Greens are opposing this bill. I spoke on it earlier in the Committee stage and said that we would like to have free trade that is fair trade. There is not fair trade in this bill. There are some advantages for some sectors out of this bill and they will be very very much appreciated. But out of this bill as well there are people in New Zealand—workers businesses and sectors—who will be disadvantaged. [Interruption] Sorry Mr Assistant Speaker—I have been affected by the interjections. I will carry on.The completeness of this agreement for New Zealand does not come through for 15 years when we get 97-odd percent of the different aspects that we are looking at in tariff reductions into Korea. They do not come through for 15 years—all of them come in by then. Some of them come in immediately—cherries for example. Kiwifruit gets a fairly early run. Dairy and beef and a number of other things do not. They come in in stages. But Korea gets carte blanche in 7 years. What is even about that?When I spoke about it last I was pointing out that if we had a better track record with trade with Korea maybe we would have got a better deal. So those on the Government benches who want to mock or consider this should think about the level of pesticide use in New Zealand which nearly cost us our beef market in Korea. We had a ship turned right round and back because of endosulfan contamination and we had another one where we nearly lost it as well. Then it suited our Environmental Protection Authority to remove endosulfan from use in this country even though people had been screaming for it to be removed because of the health risks—to the environment but even more to human health for women because of breast cancer and other things. But it suited that Government and Labour before it to carry on making use of that until it affected trade with Korea. That is when we got rid of endosulfan. People did not want it on their parks. They did not want their kids sliding over it. But it was trade with Korea—no wonder we are so far behind in the fairness of this trade deal when Korea looks at us and thinks we are pesticide city.We need to be getting those things out of that and working to our aspirational goal of a “clean green” “100% Pure” Aotearoa New Zealand which is the best brand. We know that 100% Pure New Zealand is a very good brand; we won an award with that. Is it true? It is not 100 percent true but it is aspirational and if we woke up to that trade deals like this would be better.However there is another aspect that is very concerning. There was another bill that was passed a little while ago. It was the “Anti-dumping bill” we may call it. What it does is create an early warning system for businesses to basically shed their staff and get ready for the fact that they will not have—The ASSISTANT SPEAKER (Lindsay Tisch): Order!STEFFAN BROWNING: —a fair market. Thank you.The ASSISTANT SPEAKER (Lindsay Tisch): I am calling David Seymour—5 minutes.DAVID SEYMOUR (Leader—ACT): Are we not a House of Representatives? I rise on behalf of the ACT Party in support of this bill. The ACT Party has a long and proud tradition of supporting free trade and free-trade agreements. Why? Because free trade—voluntary transactions between countries—is mutually beneficial.Did we not hear today that the Green Party is still the party in this House that wants to let you buy and sell marijuana but will not let you buy and sell anything else especially if foreigners are involved? If you could imagine that there was a policy that was capable of dragging hundreds of millions of people out of poverty around the world and as those people got wealthier they were motivated and able to clean up their environments including the long detour we took to a tailings pond in Mongolia then would you not think that the Green Party would be in favour of that policy that reduces poverty increases human welfare and gives people the means to be better environmental custodians? Would you not think that the Green Party would be in favour of that? But we see that the new refreshed business-friendly Green Party still has a very very long way to go.I thought about rebutting some of the points that New Zealand First made but unfortunately I do not think that its member Tracey Martin actually made any so I will have to move along to my next point.This bill could be ratifying—or at least approving—an agreement that could go much much further. We still have remaining tariffs and we still have safeguard measures. If you truly believe in free trade there is no justification for those. Unilateral free trade is what increases the welfare of New Zealanders and for those of us still stuck in the 1800s mercantilism I can tell you—Denis O’Rourke: Are you? Are you stuck there?DAVID SEYMOUR: Eighteenth century sorry 17th century—the member is correct in reminding me. I can tell you that the welfare of New Zealanders is helped by being able to access goods at an affordable price and that is one thing that has done an enormous amount for reducing poverty in New Zealand as well as overseas.There were some interesting asides from the otherwise excellent free-trade members of the Labour Party suggesting that this bill should allow New Zealand the ability to block Koreans from buying property in Auckland. They said that Australia had this provision. I believe we should make public policy based on the evidence and ask how that is working for the Australians. The truth is that despite the restrictions on buying existing dwellings in Sydney the housing affordability in that city is still worse than it is in Auckland. The policy simply has not worked. You just have to ask yourself why that may be. We do not see speculative bubbles from foreigners in any other area. [Interruption]All right well Mr Assistant Speaker I am addressing points raised earlier by members. If that is not going to be allowed in the debate I will have to move on to the investor-State dispute settlement provision which was part of this free-trade agreement and was addressed by earlier members. Will it be acceptable to address that Mr Assistant Speaker? Thank you.We had a very wise contribution from David Shearer on the threshold that needs to be reached before investor-State dispute settlement provisions are activated. It is true that there has never been one brought against the New Zealand Government. It is very unlikely that there ever will be. But if we expect people to invest in New Zealand from overseas then they will expect to have a mechanism by which they can protect their property rights. I just wish that David Shearer could take those very wise and eloquent words and maybe impart them to the members who sit usually to his left. If only they could take off their tinfoil hats and hear what he has to say.In conclusion free trade is a quintessentially New Zealand policy. No other jurisdiction of only 4 million or 5 million people in the world isolates itself from being able to trade with much larger markets. So it is that I am proud to support this debate and this bill supporting the New Zealand - Korea free-trade agreement and I look forward to the great prosperity it will bring to New Zealand as every other free-trade agreement to date has. Thank you.TODD BARCLAY (National—Clutha-Southland): It gives me pleasure to speak in support of the Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill. I just wanted to address one point that fascinated me. It was made by the previous Green speaker Steffan Browning. He said that we need to have a better track record on trade with Korea before we should do more trade. I have a couple of points. Setting aside pesticide and homeopathy the two points are firstly that that is why we are putting through a free-trade agreement—so we can get better outcomes and results from trade with Korea—and secondly it is already our fifth-largest export market. So there are a couple of points just to think about there.I want to acknowledge the Hon Tim Groser our Minister of Trade who has worked hard and tirelessly over his time in Parliament and before he came into Parliament signing up these deals between New Zealand and our counterparts in order to create better more prosperous outcomes for our businesses and our individuals. Often the work that Minister Groser does overseas is unacknowledged or under-acknowledged and I think that here is a time in the House when we can take the time to appreciate the work he does on behalf of our country.On behalf of Southland and Otago economies and indeed New Zealand we are export-driven economies and this agreement creates new opportunities for New Zealand businesses. We are keen to help them take advantage of these opportunities and hopefully when this bill passes through the House we can get on and help these businesses take advantage of the benefits that this agreement will see for them. We simply cannot get rich by buying and selling to ourselves. We are a party in favour of trade liberalisation unlike some of the members who have spoken previously representing their parties.In closing on behalf of the people of my electorate I would like to once again congratulate the Hon Tim Groser on this agreement and also the negotiations team. I would like to offer my unreserved support for this bill.CLARE CURRAN (Labour—Dunedin South): I certainly agree with the previous speaker Todd Barclay on one point and that is that we certainly cannot generate economic development by buying and selling to ourselves. Therefore our exports and developing our own industries become such an important part—and are such an important part—of our strategy. Unfortunately under this Government the ratio of exports to GDP has fallen to its lowest level since 1997. This Government has failed to meet its own target. It is going backwards and exports are at just 28 percent of GDP on an actual basis down from 32 percent when it came to office. This is I suppose a framing of one of the problems that we have got in this country right now. Labour is speaking in support of this bill because on balance it does meet the tests that a free-trade agreement needs to meet. It is not perfect and I will be mentioning some of the problems that we have with it.One of the problems is that the negotiating skills under this Government in respect of free-trade agreements are certainly not to the high standard of the negotiating skills for the free-trade agreement under the previous Labour Government—the China free-trade agreement being the case in point. [Interruption] Well I rest my point. There is clearly a difference and the difference is the Government. The difference is who is in Government. With regard to our exports we certainly have work to do and we have work to do if we are going to be taking advantage of these agreements and actually ensuring that we are investing in our industries and making sure that there are exports to sell. I will be talking a bit more about this in a minute.I just want to make a few points that my colleague Phil Goff made. He was responsible for the negotiation of the China free-trade agreement under the previous Labour Government on which the current Prime Minister waxes lyrical. Mr Goff made the point in his contribution to the Committee stage that the tariffs that apply to Korea are low and he used the examples of washing machines and car tyres—around 5 percent was the figure that he mentioned. He said that the removal of that tariff will not make a huge impact on industry in New Zealand and that is true. But he also described this agreement—and he would know—as not meeting the definition of being high quality and comprehensive. These words were not just his words; he was quoting Russell McVeagh an expert who has said that this agreement will not achieve a result that is similar to that of the China agreement. I can see that the Government has run out of steam and cannot raise an argument around that one—the loser being milk powder in particular where the tariffs remain particularly high.I also want to reference the comments made also in the Committee stage by my colleague Jenny Salesa who is sitting next to me. She referenced her own electorate of Manukau East and it was quite a powerful statement that she made. Manukau East in South Auckland is at the epicentre of a housing crisis of monumental proportions with thousands of young New Zealanders in low to middle income groups basically tenants in their country. This is relevant to the debate—absolutely relevant—and it is relevant to the debate because it goes to one of the problems that Labour has with this bill which is the flaw around loss of sovereignty: our concerns about the controls on the purchase of New Zealand land by overseas buyers which Labour believes is concerning; the impact that this agreement may have on future New Zealand Governments to establish controls on the purchase of New Zealand residential land by overseas buyers; and its ability to bring in a stamp duty on purchases of land by overseas buyers.This is important it is relevant and it goes to the comments made by the Minister at the beginning of the third reading about future discussions in this House on free-trade agreements and the import of those discussions. This is the only time that the Labour Party and Opposition parties get to debate the impact of free-trade agreements—when we get to have an actual piece of legislation in the House before us. Mr Groser referenced thishimself and he said that there is another agreement that is being negotiated at the moment. Of course we all know that that is the Trans-Pacific Partnership agreement. If there is legislation that comes to the House this will be the only opportunity that the Opposition parties will have to one have a vote and two have an opportunity to have a debate.I would say to Mr Groser that it would be useful if he could actually give an indication to Parliament and to the people of New Zealand of what kind of legislation it is going to be how many pieces of legislation there will be and when New Zealand—The ASSISTANT SPEAKER (Lindsay Tisch): Order!CLARE CURRAN: —might get the opportunity to learn what the topics are because there has been so much secrecy around this. Mr Assistant Speaker this does go to the bottom lines that the New Zealand Labour Party has in its consideration of free-trade agreements and what the importance of free-trade agreements—The ASSISTANT SPEAKER (Lindsay Tisch): Look we are on a third reading of a bill. The Trans-Pacific Partnership is not part of it. It can be referenced but there are a number of Speakers’ Rulings and let me refer you to Speaker’s Ruling 137/1: “On the third reading of a bill a member cannot discuss—(1) Any matter not included in the clauses of the bill”. So I would just ask the member in the time provided to actually focus on what a third reading is about.CLARE CURRAN: Thank you Mr Assistant Speaker. Given that the Minister himself did reference the future agreements—The ASSISTANT SPEAKER (Lindsay Tisch): I do not want you to comment on the ruling that I have just given. I said that you could reference it and you have. So now just focus in the last couple of minutes on the content of the third reading.CLARE CURRAN: Thank you Mr Assistant Speaker. Well in regard to our concerns around the controls on the purchase of New Zealand land Labour has said quite openly that we believe this part of the agreement was botched and that a side letter should be considered for the New Zealand free-trade agreement with the Republic of Korea in order to clarify the effects of those provisions in the free-trade agreement. That is very relevant to this debate.We accept that this free-trade agreement does on balance substantially reduce the tariffs faced by New Zealand exporters. We accept the genuinely held concerns of submitters—which included the New Zealand Medical Association the Council of Trade Unions and academics—about loss of sovereignty and the concerns around investment rules and investor-State dispute settlement provisions. We absolutely accept that there are concerns about that and we know that there are future trade agreements where those issues will become relevant. Our support for this trade agreement does not mean that there will be support for future agreements if they do not meet the bottom lines of the Labour Party. These are important and include the protection of Pharmac that corporations cannot successfully sue the Government for regulation in the public interest that New Zealand retains its right to restrict the sale of farmland and housing to non-resident foreign buyers that the Treaty of Waitangi must be upheld and that meaningful gains must be made for our farmers with tariff reductions and market access. So far the signs do not look that great.PAUL FOSTER-BELL (National): In commending the Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill to the House I just want to congratulate those members of the Opposition who have expressed their support for this valuable measure. It is a very important trading relationship: $4 billion of bilateral trade between Korea and New Zealand; $2 billion each way. There are immediate benefits of around $65 million that will be derived for New Zealand exporters particularly in some of those fruit industries—kiwifruit for instance and wine—but also for New Zealand companies importing from Korea those technical products be they Samsung TVs or smartphones.This is a very positive measure and yet another triumph by our supremely sophisticated Minister of Trade the Hon Tim Groser. In the TV series Yes Minister KCMG meant “Kindly Call Me God”. I think that in future years Mr Groser should be knighted. “Sir Tim Groser” has a nice ring about it. He should get “Kindly Call Me Groser”. Thank you.A party vote was called for on the question That the Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill be now read a third time.Ayes 95New Zealand National 59; New Zealand Labour 32; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 25Green Party 13; New Zealand First 12.Bill read a third time.Gambling Amendment Bill (No 3)In CommitteeDebate resumed from 23 September.Clauses 1 to 3 (continued)ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Tēnā koe Mr Chair. Speaking to the title I think this bill could have easily been called the “Gambling (Venue Payments and Other Matters) Amendment Bill”. We have consistently highlighted the issue of commission payments to venues and submitters who made submissions argued that these payments would incentivise gambling. I want to acknowledge the Hon Peter Dunne for his contribution in the earlier parts of this debate when he gave us some assurance around the kind of model that he was looking to come under the regulation that this bill empowers. I did take some comfort from what he said—that he would not be agreeing to a model that incentivised gambling—and I certainly look forward to the new regulations when they come out. That is why I say that this bill could have been called the “Gambling (Venue Payments and Other Matters) Amendment Bill”.I would also like to refer to the other matters within this bill and they are wide ranging. One of the parts of it is around the grant-making decisions. That is one of the other matters that I would refer to in the title. I reflect on the contribution that was made by my colleague Jenny Salesa who highlighted the number of class 4 pokie machines in her electorate the amount of money that was spent within her electorate and the amount of money subsequently distributed outside her electorate.I guess one could also name the bill the “Gambling (Redistribution of Grants and Other Matters) Bill”. Just to highlight this I understand that there is not a single pokie machine in Remuera but distributions from the funds collected through the pokie machines in South Auckland do end up in suburbs in Auckland that do not have pokie machines. I think that the amendments this bill makes to the Act address that issue. I have got to say that these are funds that come from people and communities that can least afford to have that money go out of their communities. The issues within here which could be described within a new title address that and I am pleased that we see that.Another matter is about strengthening provisions around conflicts of interest. There were some changes that were agreed to in the Government Administration Committee and I would like to in this final part of the Committee stage acknowledge the way that the select committee handled this particular bill. So those provisions that have been strengthened around addressing the issues of conflicts of interest are in my opinion very strong.On the deficit side of this bill we could have a title that included the lack of measures to address harm caused by gambling. That was a feature of the submissions on this bill and it could easily have been included.CLAYTON MITCHELL (NZ First): I have just done everyone a great service back home—that was definitely a waffle. It is great to be standing up here and speaking to clauses 1 to 3 in the final stages of this debate in the Chamber this evening.To be honest New Zealand First is a party that stands very strongly on its principles with regards to both this piece of legislation and all pieces of legislation that are being debated in the House. Although we were very very close to supporting this it came down to what we considered to be something that was fair and reasonable on our Supplementary Order Papers surrounding an amendment to do with the commission-based payments within this bill.I think this bill—because it is about the naming of this bill in this stage—would probably be more aptly named the “Gambling (Financial Responsibility and Transparency) Amendment Bill”. That of course is similar to the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill which of course is a bit of an oxymoron because there is not a lot of transparency in that ACC bill. However with good grace and being in the spirit of a positive Thursday afternoon I think there is a lot of transparency in this bill. It certainly tidies up a lot of the loose ends because prior to it going to the select committee New Zealand First had a number of issues with this Gambling Amendment Bill (No 3).I have to say that the name is a little bit boring because we have just put to bed the Gambling Amendment Bill (No 2). In the proceedings as the debate was going on in the Chamber earlier on I have to say that there were more comments made by the Greens and Labour about harm minimisation which of course does not feature in the Gambling Amendment Bill (No 3). Therefore I think that the name of this bill is somewhat confusing and somewhat ambiguous and that it could be better named. Even calling it the “Doing More For the Community Amendment Bill for Gambling” may actually be a more appropriate name.This bill does three things that I think should be commended and you are going to be saying: “Well if you’re going to commend parts of the bill why don’t you support it?” but unlike our Opposition parties on this side of the benches if something is not right if it is not fit for purpose and if it does not do what it is intended to do then I am sorry we cannot bend ourselves over and take one for the team and go along with this nonsense of the Government. We have to oppose it.The CHAIRPERSON (Hon Trevor Mallard): Order!CLAYTON MITCHELL: Mr Chair—thank you. I have to say that increasing transparency is absolutely fundamental in everything that this Government does or any Government that has been operating in the past and moving on to Governments of the future. I think that that is one of the key things there.Reducing the conflicts of interest is another area that has got some operators—those rogue operators and they are by far a minority group—into some sort of trouble with regard to their conflicts of interest around granting applications to some of those charitable organisations the venue payment operators and of course those people in management positions who are managing those sites whether it be the machine operators themselves and so forth.Again I go back to commend the Government Administration Committee. I think the Hon Ruth Dyson has done a swell job with her team along with Adrian Rurawhe and we have got Mark Mitchell back in the House—congratulations; good effort over there with the Parliamentary Rugby World Cup—Sarah Dowie and Brett Hudson. I have to say that they have done—The CHAIRPERSON (Hon Trevor Mallard): Rurawhe—it is Rurawhe.CLAYTON MITCHELL: Rurawhe—I am sorry. I do apologise. I am not the cunning linguist that I thought I was—[Interruption] Yes it is a bit of a—The CHAIRPERSON (Hon Trevor Mallard): Order! The member will now resume his seat. He has had two pretty gross offences.DENISE ROCHE (Green): I rise to take a call—a serious call—on the first three clauses of the Gambling Amendment Bill (No 3). These three clauses deal with the title the commencement and the principal Act. In preparing what I was going to say in this portion of the Committee of the whole House I went and looked at the principal Act again and I think it is worthwhile to kind of summarise what it says in the Act are the purposes of that Act the Gambling Act 2003. It has got about nine different purposes but I will refer to only about four or five of them. They are as section 3 states to: “(a) control the growth of gambling; and (b) prevent and minimise harm from gambling including problem gambling; and… (d) facilitate responsible gambling; and…(g) ensure that money from gambling benefits the community;”.If we remember the whole point of class 4 gambling is to provide funds for the community funds for charitable purposes and a few other things around racing that New Zealand First got into the legislation previously. However those are the purposes of the original Act and this bill I believe actually cuts right across those purposes because although this bill is called an amendment bill it actually removes a significant portion of the purposes of the original Act and they do not measure up. The removal of the prohibition on paying venue operators on a commission basis from the 2003 Act essentially cuts right across the purposes in the original Act around preventing and minimising harm—including problem gambling—and facilitating responsible gambling and those are two absolutely crucial parts of the 2003 Act.I find it unusual that this provision is even in this amendment bill because we do not really know where it came from. We heard during the submission process from venue operators and from the pokie trusts themselves that they were quite keen to have this and we have heard an assurance in the House from the Minister of Internal Affairs to say that there will be a provision in the regulations around this bill that will restrict the commission-based payment system from being exploited and creating problem gambling. But we do not know what those regulations say and this is an assurance that we have had that actually cuts right across the purpose of the original Act which is to prevent and minimise harm from gambling.In the previous parts of the debate I was pretty disappointed that Supplementary Order Paper 120—my Supplementary Order Paper—around minimising gambling harm by introducing player tracking and pre-commit cards was voted down because that would have been the ideal opportunity for this bill to measure up to the purposes of the original Act. However that is not what we have got here. So I think that leads us to the point where we have to say that this bill has been misnamed. Actually it should not be called the Gambling Amendment Bill (No 3). It really is the “Let’s Have Lots of Pokie Rorts Please Bill” because it expands the opportunities for problem gambling. We know—because we have seen the evidence that was presented to us by the Department of Internal Affairs from its mystery shopper sting—that many of the venue operators in New Zealand who currently have class 4 licences to operate pokie machines on their premises do not comply with the host responsibility requirement that is also outlined in the purposes of the original Act.So when you combine that with the provision in this bill that will allow for commission-based payments you have to ask yourself what the consequences of that are going to be. Given that low rate of compliance with the host responsibility requirement from the new operators you have to say that the consequences will be I believe an increase in problem gambling and more pokie operators rorting the system in order to line their pockets.I guess the other thing that cuts across the purposes of the original Act—and the original Act is named in clause 3 of this bill—is the clause around extending the licences for those venue operators and for those pokie trusts. This worries me because although the Minister has said that this is to be an incentive for good behaviour frankly we have not seen much good behaviour. I see no point in providing the ability in this bill to extend licences for good behaviour when it has not happened. What I would rather have seen and what I am pretty sure the Department of Internal Affairs gambling compliance unit would rather have seen as well is that good behaviour operating first before we changed the law because again if that is outlined in regulations we have no way of deciding now whether it is going to work or not.So on the whole this bill offers an enormous relaxation of the gambling laws to the industry and that enables the industry to practise bad behaviour. The incentivisation of problem gambling in order to increase the commission-based payments to the venue operator is one example. Basically we know that they are not meeting their obligations now in most cases.We do not know where the commission-based payment system came from or who asked for it. We did not see that in any of the information that came through to us and it cuts right across the purposes of the original Act. So we should rename this bill so that when it receives the Royal assent we could have the “Problem Gamblers Enablers’ Act” or the “Venue Operators Make a Mint Act”. I could go on Mr Chair but I will not because you are looking quite glazed. Thank you.CLAYTON MITCHELL (NZ First): I really want to get to where I left off from last time and the points we have talked about so far from New Zealand First including the things that we do actually support in this bill—and there are a number of things that we do support.However there is one major glaring issue that we feel this bill fails to address and is going to cause some issues in the future although with that address I have to acknowledge also that through this Committee stage an amendment that was submitted by the Hon Peter Dunne has enabled commission-based payments to take place.We have heard the umbrage that Labour and the Greens have taken with regard to commission-based payments. However I feel like New Zealand First has quite comfortably outlined the positive nature of that in itself in so far as how it currently works in the Act is that working out what site venue payment an operator receives is done through real actual and necessary costs.That is a very very cumbersome very very clunky way of working it out and it happens a few times throughout the year. The venue operator has to work out the entire size of their premises. They have to work out how large their gaming area is compared with the whole size of their premises. They have to work out what floor coverings they have got what wall coverings they have got and what light fittings they have. They have to work out what the turnover of the bar is and what relationship of wages are paid to the bar versus the—as you can already see I can see people looking down and shaking their heads in disbelief that this is what goes on on a daily basis to work out a site venue payment.What happens in other sectors of the gambling community—and now we talk about the TAB and Lotto—is it is all done on a gross turnover as a commission-based payment.The TAB for example I think gets around about 3 percent of the gross turnover and the Lotteries Commission gets about 1.5 percent of the gross turnover—which is similar to what we have put through on Supplementary Order Paper 95 as an amendment. When we did our initial calculations—because we think commission-based payment is very simple; off the bat you can work out on a weekly and daily basis what your site payment is going to be—it was hardly about maximising your profits to get as much site rental as you can. There is legislation in place that stops any site operator and any organisation from doing that.What our amendment simply does is by looking at your gross turnover rather than your net turnover—which was one of the calculations that we ran through; we looked at 16 percent of net turnover originally—it accounts for the variations and fluctuations in prize money that is paid out on a weekly daily and monthly basis. That variation creates a lot of uncertainty with those site payments that are being paid out. Some weeks you will get far more than in others and some weeks you will get far less than in others. So what we have looked at is a fair and reasonable 1.5 percent of gross turnover for those site operators so that they know where they stand on a weekly basis.We are talking for an average nine-machine site rental around about I would say $1350 to $1470 per week in site rentals—for nine machines on a site that is operating quite strongly—so we are not hardly talking about profiteering.Our concern is that this bill has missed the opportunity to do that and therefore we cannot support this bill moving forward. We certainly acknowledge the positive steps with regard to the direction that this bill has taken from when we had our first reading to where it is now.I also would like to just bring to the attention of the public and the members in the Committee that the contradiction that we see through gambling throughout New Zealand is one that needs to be recognised. When we compare it with the likes of Skycity Casino—which is affected by none of these laws and is nothing to do with what we are talking about here—on average it pays around about $3 million per annum out to its communities with a turnover of around about $500 million. Compare that with the class 4 gambling machines around the country which turn over around about $700 million and return around about $280 million to those communities—those sports clubs community clubs groups organisations and schools that really need that money to get through and survive. So another part of the bill again that we think is great is the simplification of the compliance and the cutting of the red tape to actually enable more money to be returned back to the communities and back to the people who need it the most.We see some positive steps moving in the right direction but unfortunately we cannot support this bill unless there are some major changes with regard to the commission-based payments at 1.5 percent of gross turnover. Thank you.A party vote was called for on the question That clause 1 be agreed to.Ayes 94New Zealand National 59; New Zealand Labour 31; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 25Green Party 13; New Zealand First 12.Clause 1 agreed to.A party vote was called for on the question That clause 2 be agreed to.Ayes 94New Zealand National 59; New Zealand Labour 31; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 25Green Party 13; New Zealand First 12.Clause 2 agreed to.Clause 3 agreed to.Bill to be reported with amendment presently.Construction Contracts Amendment BillIn CommitteeDebate resumed from 22 September.Part 2 Amendments to principal provisions (continued)PHIL TWYFORD (Labour—Te Atatū): We are back into the Construction Contracts Amendment Bill dealing with Part 2 and I am looking forward to some good detailed dialogue with the Minister in the chair the Hon Simon Bridges on this because there are some very meaty parts in this bill particularly around retentions which I am looking forward to getting into. I can see that the Minister is very interested in the subject of retentions.It is a little ironic that in a week when the National Government is proposing to bring back leaky buildings 2.0 in the form of allowing builders to self-certify their work which is one of the more loopy recommendations from Paula Bennett’s Rules Reduction Taskforce we are dealing with the subject of construction projects that go belly up because there is a very strong connection between the many difficulties that the construction industry has faced over the last couple of decades of which leaky homes is probably the biggest and the subject of construction companies that end badly. The example that comes to mind most strongly is Mainzeal Property and Construction of course. It was the second-largest New Zealand construction company which went belly up a couple of years ago taking with it a lot of creditors’ money and leaving many hundreds if not thousands of subcontractors hanging. In fact it was awful to see so many subcontractors who basically lost their tools as a number of worksites around the country were boarded up.So this bill I think is overdue. It has been hanging around for quite some time now and it has been through an interesting process which I think we will want to touch on as we get into this question of retentions in Part 2. We support this bill. We think it is overdue. We wish it had come to the House earlier actually.Clayton Cosgrove the Labour spokesperson on building and construction who could not be with us today actually did some really good work developing policy proposals in the wake of the Mainzeal Property and Construction collapse that I want to talk about. There is a Supplementary Order Paper on the Table from Clayton Cosgrove and another one from Julie Anne Genter. What I would like to do is tease out the content of those Supplementary Order Papers because what has happened in the progress of this bill is that the Minister for Building and Housing Nick Smith started off saying that this bill would not be dealing with the issue of retentions and that it was unnecessary. In fact the report from the Commerce Committee that we have got actually notes under “Retentions” that this is a matter of growing concern in the sector.Perhaps I should perhaps explain a bit more about what retentions are. Retentions are a portion of the contract price that is withheld by a developer or head contractor until the work is completed. The whole idea of them is that they are there to be held on to until the work is completed and found to be free of defects and then the payment is made to the subcontractors. As everybody knows the way we build not only houses but industrial and commercial projects in New Zealand is that there is a principal who is responsible for the whole project there is the head contractor and there is a plethora of subcontractors.So the problem that this bill is setting out to solve—and particularly this issue of retentions—is hugely important for everybody who works in the construction industry. As the select committee noted the issue of retentions was not in the original scope of this bill and the Minister expressed the view that the issue was not necessary but he changed his position. He originally said there was no issue around security of payment and retentions and then he said he was actively exploring remedies—TIM MACINDOE (Senior Whip—National): With the agreement of all the whips in the Committee I seek leave for all parts of the Construction Contracts Amendment Bill to be considered in one debate with the questions to be voted upon separately.The CHAIRPERSON (Hon Trevor Mallard): And the clauses?TIM MACINDOE: And the clauses.The CHAIRPERSON (Hon Trevor Mallard): The remaining parts and clauses—so we are not going to go back to Part 1 are we?TIM MACINDOE: Yes the remaining clauses. Thank you.The CHAIRPERSON (Hon Trevor Mallard): Do people understand that the debate will now go over the rest of the Committee stage of this bill all as one debate but that we will have separate votes afterwards. Is there any objection to that process? There appears to be none.Part 2 (continued)Part 3 schedule and clauses 1 to 3PHIL TWYFORD (Labour—Te Atatū): That seems a very sensible way to move forward. I just want to talk about the work that Clayton Cosgrove did on this after the Mainzeal Property and Construction collapse. He looked at two options for dealing with this issue of retentions: one was contractors’ liens where contractors would be legally required to retain a portion of the money that they owed to the subcontractors and the second option that he worked on was statutory construction trusts. So these would be trusts that are required by law to be set up where money would flow through that trust to ensure that the subcontractor gets paid first in the event of something like a company collapse. That solution that Mr Cosgrove proposed would apply to significant commercial construction projects—projects of a really significant size not your garden-variety standard home construction.The other issue that Mr Cosgrove identified was the need to protect contractors’ tools because there are so many operators in the construction industry who are essentially sole operators. Their tools their vehicle and their goodwill are all they have got and if they lose their tools as happened to many contractors with the Mainzeal Property and Construction collapse then they are between a rock and a hard place. So that was the other really important thing.I know that the Minister has been studying up on the Supplementary Order Paper. Really for the purposes of this debate this afternoon what we have got is a huge rewrite of this bill. It is a massive rewrite and I am not complaining about that. It is good that the Minister has come around because actually I think there is not much space between the Minister’s Supplementary Order Paper 106 and the Supplementary Order Papers that Clayton Cosgrove and Julie Anne Genter brought to the House. But it is that space that I think would be really interesting to explore so I welcome the Minister’s comments on that.So Clayton Cosgrove’s Supplementary Order Paper 439—basically what it does is it requires “retention money for commercial and industrial developments to be held in trust” for the benefit of the contractor entitled to the money. Basically it provides the opportunity for the Governor-General by Order in Council to require retention money for these developments to be held in trust and to require that the head contractor holds the retention money in an independent trust account. So it is quite specific. The money has to be held in an independent trust account. Also it provides for procedures to be followed in connection with the authorisation of payments the keeping of records in relation to that trust account and the resolution of disputes. So that is Clayton Cosgrove’s Supplementary Order Paper.Also Julie Anne Genter has brought to the House Supplementary Order Paper 446. What this does is it amends the bill to deal with the withholding of retention payments and it does so by making it clear that “where a construction contract provides for the provision of retentions these are clearly identified in any payment schedule.” It also proposes a new section that “qualifies the status of retention monies and the basis on which they may be held.” Again it basically provides the power for regulations to be made for this. The problem currently with the current Act is that there is no provision for any reference to the status of retention funds even though they are held against work that is performed by the subcontractor. Often the problem is that they are held far longer than is necessary.It needs to be said as well that the underlying reason for this is that the practice has been rife in the industry that companies’ head contractors have used retentions for their own cash flow. They have used the retentions. Often the money that has been held for subcontractors has been used to leverage other investments and basically to provide the cash flow. So when things are difficult when the market takes a dive—and we all know that the construction industry in this country has a wild roller-coaster boom-and-bust cycle. That I suppose is the other really important part of this.So we have got those two Supplementary Order Papers by Clayton Cosgrove and Julie Anne Genter. What we see in Supplementary Order Paper 106 which the Minister has brought to the Table is I think quite a wholesale incorporation of the material in those two Supplementary Order Papers. It defines the “retention money”. It requires the party to hold that money on trust. It provides that the trust only ends—BRETT HUDSON (National):It was no great surprise that the area of retention payments was going to be traversed quite strongly I think in this debate. So we have our Supplementary Order Paper 106 from the Minister for Building and Housing which is what I will touch upon here. There were some Supplementary Order Papers from other members including the Hon Clayton Cosgrove. Our position on this will be that the measures that the Government is proposing in our Supplementary Order Paper are adequate and in fact are comprehensive in helping to protect the moneys that are owed for those contractors who are doing work—those people in charge of construction work.So if we look into the actual provisions in terms of what will be done section 18A through to section 18H in proposed clause 8BC is really dealing with this notion that moneys that are owed to that contractor or those contractors—and we express them in terms of party A with party A being the construction company or the company owning the construction development—and party B being the contractor providing services and therefore being a creditor to party A. So party A is required to hold moneys that would be owed or retention moneys in a trust for work done that will eventually be due to party B so that they cannot be used as normal cash flow or normal cash resources for party A. They do not have to be held in a separate trust but they must be held for specific purposes.Proposed clause 18E is very very clear that “Party A must not appropriate any retention money to a use other than to remedy defects in the performance of party B’s obligations under the contract.” So they cannot use the moneys they are holding in trust to take away from party B in any other fashion other than where there is an agreement that party B has failed to meet the standard of work—the quality of work or the outcomes—that they were contracted to do. But there is a note that although they cannot use the money for other purposes other than to address the defects and performance of party B the money does not have to be held in a separate trust account and it can in fact be commingled with other moneys in the trust including retentions for other contractors.It is important and it is provided for in proposed clause 18D that not only must party A keep proper accounting records of the retention moneys that are held in that trust they must make those available to party B at all reasonable times and without charge so that party B can have confidence that the moneys that are being held and that will become due to party B in time are still there and available to them when that time comes.Another proposed clause that is extremely important to this whole approach to dealing with retentions relates to the protection of that money. Proposed clause 18H states very clearly that “Retention money—(a) is not available for the payment of debts of any creditor of party A (other than party B):”. So although moneys might be commingled in the trust that which is held for a specific contractor cannot be used to make any other payments to any other creditor including another contractor. It also says: “Retention money— … (b) is not liable to be attached or taken in execution under the order or process of any court at the instance of any creditor of party A (other than party B).” So another creditor of party A cannot have an order to take funds that are held in trust for party B—in this case this particular contractor.So what have we achieved? Well without requiring the extensive compliance and compliance cost that would be accrued under Supplementary Order Paper 439 from the Hon Clayton Cosgrove with separate trusts for all of these contracts we still have the provisions that ensure that the moneys held in a trust can be used or withheld only for performance issues of the work of the specific contractor. It cannot be used to pay the debts to any other creditor and another creditor cannot go to court and get an order to take from that pool of retention moneys money for another contractor. So their money is secured and it is secured against the contractor that is obviously doing the work that they have been contracted to perform and to the standard that is required. So we have achieved that which I think all parties want to achieve with retentions and we have done it in a way that meets the test of ensuring that both parties have the right protections and without the unnecessary enlarged compliance cost that would come if we required every contract to be held in separate trusts. So I will leave it there. Thank you.CLARE CURRAN (Labour—Dunedin South): I want to speak to Part 2 of the bill and in particular to the adjudication clauses. Before I start I have got what I consider to be quite an important question for the Chair who I—The CHAIRPERSON (Hon Trevor Mallard): I think you mean the Minister in the chair.CLARE CURRAN: Sorry not you Mr Chair—although you are welcome to have a go—but the Minister in the chair Simon Bridges who I am sure is not just a pretty face. The officials are actually here. This is a serious question and I hope it can be answered quite easily.The CHAIRPERSON (Hon Trevor Mallard): I am going to interrupt the member now. I have reflected on the comment that she made. There has been a bit of a problem this afternoon with some comments and in respect of the comment she just made about the Minister I think that if she reflected on whether it would have been an appropriate comment if the genders had been reversed she would have taken offence. So I am just going to ask the member to take care.CLARE CURRAN: Well I will apologise for that comment. What I would like to ask the Minister in the chair or the officials though is with regard to the Minister for Building and Housing’s Supplementary Order Paper and to the explanatory note. The most substantial part of this Supplementary Order Paper was around changes to the retentions part of the bill. But it also said that there were other minor and technical changes. When you look at Part 2 particularly with regard to the adjudication of disputes—which runs from proposed clause 10A through to probably around clause 18 or perhaps even beyond that pretty much up to Subpart 4 of that Part 2—there appear to be changes. But because we have not had an opportunity to have a select committee briefing on this what I want to know is whether the changes in that part with regard to the adjudication provisions are just very minor or whether they go to any substantive changes.The reason I am asking is as the officials will be aware that in the select committee there was a lot of discussion around this part of the bill and there were a lot of submissions. We had some private submissions given and there was a lot of discussion and changes that were made during that part of the bill. I just want to draw the Minister’s attention to the reason for this and the problem that was being solved was that—and this goes to enforcement—under the existing provisions in the Act enforcement of a determination about payment is time-consuming and costly. So determinations about rights and obligations disputes have ended up not being able to be enforced and have ended up being reheard in court.The whole purpose of this part of the bill—and in fact when you think about it a lot of the reasoning behind making these changes to the Act in general—has been about trying to tighten up the enforcement part and the adjudication and how that process works in practice. So what I am concerned about is knowing and being reassured as a member of that select committee who took this seriously whether there are any changes in this part. Are they very minor and technical or are there any substantive changes and if so can the Minister tell us what they are? So I am hoping that after I have made my contribution that he at least will be able to give me possibly a yes or no answer.So just quickly to give the Committee an indication of the importance of this—and I think the Minister who was in the chair previously did actually address this the last time we had the discussion at the Committee stage on this which I think was last night or the night before; it all seems a bit of a blur—we talked about ambush claims. One of the other problems we were trying to ensure we did not create so that there were not unintended consequences was that there would be opportunities for ambush claims by people trying to abuse the process. We talked about the way that adjudication works now. Currently the claimants can set adjudication in motion within 1 working day and the respondent is required to reply within 5 working days. Residential owners and smaller contractors are particularly vulnerable to ambush as they are not likely to be familiar with the provisions of the Act. Our recommendations were to add new clauses that changed the time frame for selecting an adjudicator from 2 working days to 5 working days after the notice of adjudication had been served where both the parties cannot agree on the appointment. That was described as being a pause in the process. Even though it is several years ago I do remember there being quite a lot of discussion around how that would work and whether that would work.Then it went through a quite detailed process—and I acknowledge the work the officials did on this because it was quite a detailed process—as to how that would actually play out and how the adjudicator would be appointed and once they had been appointed what process would happen then. Then the eligibility criteria were gone through in terms of who was eligible and who was not eligible what were the rules around that and then the time frames for adjudication. And then the fairness—it is basically all the fairness provisions in this process so that there could be extensions of time and then around cost and the knowledge of the cost so that there were not going to be surprises in this process. We talked quite a lot about pre-adjudication and whether there should be a pre-adjudication conference. I remember there was again a big discussion about that.I do not want to take up the time of the Committee tonight by going into great depth around this but we felt comfortable with this part of the bill. We were not happy about the fact that retentions were not in the bill. But what I do want to be reassured about is whether any changes that have been made by the Minister’s Supplementary Order Paper to this part of the bill are minor and technical without any of the amendments changing the intent of the select committee or is there any greater impact that we should know about? So that is what I am asking the Minister for tonight—his advice to the Committee. Thank you.RINO TIRIKATENE (Labour—Te Tai Tonga): It is a pleasure to take a call in the Committee stage of this Construction Contracts Amendment Bill. We have been covering the issue of retention money which was inserted initially through the good work of our good colleague here on our side the Hon Clayton Cosgrove. He sounded out many in the construction community—particularly subcontractors up and down the country. It was very clear from the business community that subcontractors really needed greater protection in terms of getting paid. Ultimately you would like to think that if you were a subcontractor and put in a hard day’s work you would get a fair day’s pay. This has been a concern because we have seen many developers go out of businessup and down this country—they go broke the money disappears and unfortunately the subcontractorsdo not get paid. Usually it is the subcontractors because typically it can cascade in many many different ways to include many different business people. Ultimately that is a travesty.Mr Cosgrove was attempting—and I think he actually proposed a very good amendment in his Supplementary Order Paper—to alleviate that situation and to provide assurance and protection to subcontractors. But looking at the Supplementary Order Paper put forward by the Minister from my quick cursory read of proposed Subpart 2A on Supplementary Order Paper 106 this retention money part—we have a saying in Māoridom—has more holes in it than a hīnaki. For those of you who do not know a hīnaki is an eel net. There are a mighty lot of holes in that eel net. My whanaunga Peeni Henare will know this very well because they are great catchers of eels up in the north my whanaunga up there. This subpart dealing with retention money has more holes in it than a hīnaki because just from my quick read of this subpart it is illusory still.There is another very very well-known saying—that possession is nine-tenths of the law. What Mr Cosgrove was trying to achieve through his Supplementary Order Paper was: “Let’s put the retention money into a separate trust account that is protected so that if something were to go awry or a dispute were to arise but is ultimately sorted out that money would be paid through to the contractor.” This subpart is illusory still. When you think of developers and when you think of big major construction contractors we are not dealing with boy scouts. We are not necessarily dealing with upstanding individuals; we are dealing with hard-core commercial businessmen. This is not tiddlywinks that they are playing here; it is a very very tough game and head contractors are very sharp businessmen.Here in this subpart I do not really see any protection for subcontractors because just to take an example all retention moneys must be held in trust—must be held in trust OK—for the benefit of the other party. However that money can be cash or it could be liquid assets—liquid assets that could be convertible to cash. Again we are dealing with some sharp business people here. There are many many different ways that you could skin a cat when you are looking through these provisions and there are many ways that you could—oh and there is another requirement about “must keep accounting records”. Well there are many ways that a sharp developer could do this. You could literally drive a truck through these so-called protections and the delivery of retention money—cold hard cash payments—to subcontractors. Actually you do not have to keep cash aside; you can say “Oh OK. I’m holding these” let us say shares in whatever or some other easily liquidated asset that may not actually eventuate. That will not satisfy a subcontractor.The other aspect is that the money does not need to be kept in a separate trust account. So you can just say: “Yes we have this money. It’s in trust and it’s not in cash. It’s in liquid assets and it’s commingled with other liquid assets.” Under the provisions here you can mix it all up and slush it all around with goodness knows what other liquid assets a head developer or head contractor may have in the illusion that that will satisfy payment to this poor subcontractor.I will get back to my point: possession is nine-tenths of the law. Mr Cosgrove said: “Look to ensure payment and to ensure protection to subcontractors let’s ensure that there are these moneys actually set aside in a separate trust account so that it is actually there to be paid out.” That would give confidence to subcontractors. Yes if someone has all their capital invested in their heavy machinery which is doing a lot of work they want to make sure that they are going to get paid and likewise they have all the other subbies underneath them whom they have to pay.There are so many holes in this provision that it is actually sad for the expectant subcontractors who thought that they were going to get something from this legislation. Actually I have no trust in this part. I cannot help but think of a story that was on Campbell Live around about a year ago I think it was about a contractor in Christchurch who was in heavy digging. He was contracted to put together a Countdown carpark. There was a so-called dispute with the head developer and he was not paid. He worked on this for months and he committed a sizable amount of his capital—no doubt he was actually heavily indebted to do this big job. He was strung out and strung out and strung out—basically he was shafted by the head contractor. He was driven to the point where he was so upset that he dug up the carpark. He said: “Well look. If I’m not going to get paid for this carpark what choice do I have?”. He went out there and dug up the carpark.Under the provisions of this bill I can see that situation arising again because there is no real protection that I can see in the provisions of this so-called retention money section. Yes let us keep the trust money separate let us make sure it is there and let us make sure it is actually changeable and readily available for those subcontractors who are business people and family men and women just like everyone up and down the country. They are out there just trying to get ahead pay their way run their businesses and do good for all of our country. Kia ora tātou.The question was put that the amendments set out on Supplementary Order Paper 106 in the name of the Hon Dr Nick Smith to Part 2 be agreed to.Amendments agreed to.The question was put that the amendment set out on Supplementary Order Paper 439 in the name of the Hon Clayton Cosgrove to Part 2 be agreed to.Amendment not agreed to.The question was put that the amendments set out on Supplementary Order Paper 446 in the name of Julie Anne Genter to Part 2 be agreed to.Amendments not agreed to.Part 2 as amended agreed to.The question was put that the amendments set out on Supplementary Order Paper 106 in the name of the Hon Dr Nick Smith to Part 3 be agreed to.Amendments agreed to.Part 3 as amended agreed to.The question was put that the amendments set out on Supplementary Order Paper 106 in the name of the Hon Dr Nick Smith to the schedule be agreed to.Amendments agreed to.Schedule as amended agreed to.Clause 1 agreed to.The question was put that the amendments set out on Supplementary Order Paper 106 in the name of the Hon Dr Nick Smith to clause 2 be agreed to.Amendments agreed to.Clause 2 as amended agreed to.Clause 3 agreed to.Bill to be reported with amendment presently.House resumed.The Chairperson reported the Gambling Amendment Bill (No 3) with amendment the Construction Contracts Amendment Bill with amendment no progress on the Radio New Zealand Amendment Bill and no progress on the Weathertight Homes Resolution Services Amendment Bill.Report adopted.Sittings of the HouseJOANNE HAYES (Third Whip—National): I seek leave for the House to rise early.The ASSISTANT SPEAKER (Hon Trevor Mallard): I presume by that that the member means forthwith. Is there any objection to that? There appears to be no objection.The House adjourned at 5.37 p.m.