Volume 652 Week 5 - Tuesday 3 March 2009 
Volume 652 Week 5 - Tuesday 3 March 2009 
[Volume:652;Page:1525] 
Tuesday 3 March 2009 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Questions to Ministers 
Accident Compensation—Public Finance Act Disclosure 
1. CRAIG FOSS (National—Tukituki) 
 to the  
Minister of Finance 
: Has he seen any recent reports relating to the Public Finance Act 1989? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes I have. A ministerial inquiry around the disclosure of funding shortfalls in the accident compensation non-earners account has found that under the Public Finance Act the previous Labour-led Government should have revealed a projected $300 million a year shortfall in the account in the run-up to last year’s election. The report found that the shortfall was known to the ACC the Department of Labour Treasury the previous Minister for ACC Maryan Street and the previous finance Minister Michael Cullen. 
Craig Foss 
: According to the report for how long did previous Government Ministers know about the shortfall? 
Hon BILL ENGLISH 
: Evidence presented in the report shows that on 14 April 2008 the chairperson of the Accident Compensation Corporation (ACC) board met with the Minister of Finance to discuss the issue of non-earners account funding. On 22 April 2008 an ACC board paper warned the Department of Labour that it would need to look carefully at that given that ACC was anticipating a significant deficit in the next year. That deficit which requires the Government to put in $300 million before the end of this financial year to keep the account going has now grown to $384 million. 
Hon David Cunliffe 
: Has the Minister seen reports from Treasury accepting responsibility for this error does he accept that admission and does he accept the report’s finding that the reason for the information not being disclosed at the pre-election fiscal update can be attributed to Treasury’s interpretation of the Public Finance Act? Does he further accept that as at the October pre-election fiscal update the Department of Labour had also failed to provide Ministers with a recommendation on whether to accept ACC’s numbers? 
Hon BILL ENGLISH 
: Yes I do accept that Treasury has admitted its part in this debacle by acknowledging— 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. I am concerned that the Minister is misrepresenting Treasury. I have a copy of its press release— 
Mr SPEAKER 
: The member is an experienced member. That is not a point of order and the House does not have to suffer that behaviour. 
Hon BILL ENGLISH 
: I accept that Treasury has taken responsibility for the error that it had made in not including this issue in the pre-election fiscal update. However the pre-election fiscal update is signed by the Government and the Labour Government knew 6 months before the election that there would be a significant shortfall in the non-earners account which is the accident compensation account that provides for the care of the most vulnerable New Zealanders. The previous Government did not care enough to fix the problem or tell the public about it. 
Hon David Cunliffe 
: Does the Minister agree that if any adverse finding against either Minister had been proposed by the experienced independent reviewers at Martin Jenkins and Associates natural justice would have required them to discuss that with the Ministers concerned; and as there was no consultation nor interview with either Minister and as no Official Information Act requests were granted does he now accept that both Ministers must have been exonerated? 
Hon BILL ENGLISH 
: What the paper trail shows is that accident compensation was regarded as a political plaything by the Labour Government which actively worked to hide a deteriorating performance with the effect that the incoming Government now has to find $384 million before 30 June and a further $1.2 billion over the next 3 years to fill the hole that the previous Government left behind and hid. 
Hon Sir Roger Douglas 
: Does the Minister intend to refer the previous Minister of Finance and Treasury to the police for what can only be described as a blatant breach of the Public Finance Act; if not why not? 
Hon BILL ENGLISH 
: It is now clear that this $384 million should have appeared in the pre-election fiscal update. However I have to say that the issues with regard to accident compensation are now very significant with the liability growing rapidly and it has now been revealed that the accident compensation scheme’s performance has been deteriorating significantly for the last 3 or 4 years. That is much more important than a theoretical constitutional discussion about whether previous Ministers can be prosecuted. 
Hon Sir Roger Douglas 
: How given the $9 billion growth in accident compensation liabilities to 2009 and the increase in employer premia of over 50 percent can the Government not take action? 
Hon BILL ENGLISH 
: The Government will be taking action because we must correct quite quickly the debacle that was the Labour Government’s stewardship of the accident compensation scheme. Liabilities are blowing out rehabilitation rates are dropping claims costs are out of control and levies are going through the roof and that will continue unless we make significant changes. 
Hon David Cunliffe 
: Will the new-found acolyte for the former Minister Mr Douglas confirm— 
Mr SPEAKER 
: The honourable member knows the question should be framed a little more carefully than that. Please start again. 
Hon David Cunliffe 
: Will the Minister confirm that the real reason this political charade is going on is that he is softening accident compensation up for privatisation on the grounds of an international equity slide that— 
Hon Gerry Brownlee 
: I raise a point of order Mr Speaker. Even with all that theatrical sort of addition there was no question from the Minister. 
Hon Members 
: There was. 
Hon Gerry Brownlee 
: No there was not. A question should not contain a supposition. I ask that you require the member to simply ask the question. 
Hon Dr Michael Cullen 
: This case could be described as the  
Triumph of the Will 
! The question started with the word “will”. 
Mr SPEAKER 
: I noted that myself. The member will repeat his question please. 
Hon David Cunliffe 
: Will the Minister confirm that the real reason for this political charade is that he is softening accident compensation up for privatisation on the back of an international equity slide that has affected every comparable institution? 
Hon Bill English 
: I wish the facts presented to the new Government were not true but unfortunately it is the case that between now and 30 June this Government has to find $384 million to put into the non-earners account because if we do not accident compensation will be unable to pay for the care of the most vulnerable people in our community. The record shows that as early as 18 April and as late as 15 August 2008 former Ministers knew exactly— 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. I expect that you already know what the point of order is. The member has not sought to address the question of privatisation; he is simply reading out elements from the report telling us what everybody knows— 
Mr SPEAKER 
: The member has made his point. The question was a somewhat political question; it got a somewhat political answer. 
Craig Foss 
: What actions is the Government taking to ensure greater transparency in the disclosure of financial risks? 
Hon BILL ENGLISH 
: Systems were put in place under the Public Finance Act to ensure transparency in the position of a Government in the run-up to an election but in this case for various reasons they did not work. The Government is committed to implementing the report’s recommendations in full in order to ensure there is no repeat of a situation where a significant risk in the Government’s books and a major risk to New Zealand households is concealed from the public in the run-up to an election. 
Climate Change—Treasury Report Australia 
2.  
JEANETTE FITZSIMONS (Co-Leader—Green) 
 to the  
Prime Minister 
: Did he discuss with Kevin Rudd the report from the Australian Treasury entitled  
Australia’s Low Pollution Future: the Economics of Climate Change Mitigation 
 that says “economies that defer action face higher long-term costs as global investment is redirected to early movers”; if so what implications does he see for New Zealand? 
Hon BILL ENGLISH (Deputy Prime Minister)  
on behalf of the 
 Prime Minister 
: 
 No the Prime Minister did not discuss that report with the Prime Minister of Australia. 
Jeanette Fitzsimons 
: Why is it that although the Australian Treasury now understands that acting promptly to address climate change brings prosperity and a host of Green New Deal jobs the Prime Minister has given into pressure to set up a time-wasting review with terms of reference that question whether we should act at all and has created yet another year of business uncertainty and lack of investment in solutions? 
Hon BILL ENGLISH 
: Mr Key did discuss with Prime Minister Rudd the importance of a successful Copenhagen climate change conference in December to decide on the post-Kyoto framework and they also discussed the desirability of harmonising to the greatest extent possible the emissions reduction regimes in both countries. 
Charles Chauvel 
: Is not the real reason for the foot-dragging by the Prime Minister’s Government on climate change policy revealed by the Prime Minister’s reference in an interview with Mr Ian Wishart in this month’s  
Investigate 
 magazine to the need to “have flexibility so that if the science deteriorates and the climate change sceptics are right we have an ability to alter the impact on our economy”? 
Hon BILL ENGLISH 
: I think the member can understand how much uncertainty there is around the climate change policy process. The Australian Government is not exactly clear where it is going the world carbon price is very difficult to predict and the effect of recession on carbon emissions is also very difficult to predict. The Prime Minister is wisely making sure that people understand that the Government retains the flexibility to adapt to those circumstances. 
Charles Chauvel 
: I raise a point of order Mr Speaker. My supplementary question was very clearly directed to a quote that the Prime Minister gave about whether the science deteriorates and the climate change sceptics are right. The answer had nothing to do with the science and everything to do with the economics. I ask you to ask the Minister to answer the question. 
Mr SPEAKER 
: As I heard the honourable member’s question it was seeking an opinion. Often when members seek an opinion they may not get the exact answer they are seeking. 
Jeanette Fitzsimons 
: Will he—[ 
Interruption 
] 
Mr SPEAKER 
: The member will show a senior member of the House some courtesy as she seeks to ask a question. Thank you. 
Jeanette Fitzsimons 
: Will the Prime Minister instruct officials working on the cost-benefit analysis of New Zealand’s emissions trading scheme to take into account the methodology and the conclusions of the Australian Treasury report or will oversight of that analysis be left entirely to those in his Government with extremist views on climate change? 
Hon BILL ENGLISH 
: My understanding is that the cost-benefit analysis that the member is referring to has been commissioned by the select committee so it will be subject to the committee’s oversight. I would imagine that any such analysis would draw on credible sources. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. In a somewhat jocular way I probably inappropriately interjected before but can I ask you to clarify the ruling you have just made as to whether a Minister holds a view previously expressed is a matter of opinion for that Minister or just a matter of fact. I think when Government policies— 
Mr SPEAKER 
: The honourable member knows that a member who asks a question does not necessarily get the answer he or she might want. That has been very clear for many years in this House. When Ministers are asked their view about a statement members are seeking an opinion and they cannot be too prescriptive about the answer. 
Hon Trevor Mallard 
: It’s their statement not someone else’s. 
Mr SPEAKER 
: I think that matter has been dealt with. 
Hon BILL ENGLISH 
: I raise a point of order Mr Speaker. On advice from the Minister responsible for Climate Change Issues I will correct an aspect of my last answer: the cost-benefit analysis has in fact been commissioned by the Government for the select committee. But the same direction applies—that is the analysis should look to credible sources. 
Jeanette Fitzsimons 
: Is the Prime Minister satisfied with the Job Summit not mentioning in its proposals the benefits of investing in emissions reduction through energy efficiency and renewable energy despite worldwide evidence that they are job-rich and cost-effective? Is it not time New Zealand embraced a Green New Deal that tackles the economic recession and climate change together? 
Hon BILL ENGLISH 
: No the Prime Minister is not disappointed about the Job Summit not prioritising that particular policy proposal because the summit put up a number of other quite constructive proposals that the Government will work through. But that does not prevent the Government from investigating the kinds of stimulatory activities the member is referring to. 
Jeanette Fitzsimons 
: Has the Prime Minister studied the economic stimulus packages of the United States France Germany Denmark Spain Australia South Korea China or Mexico—some of which are actually called a Green New Deal—and when will he orient New Zealand’s economic stimulus packages to tackle the triple crises of oil depletion climate change and economic recession as those other countries are doing? 
Hon BILL ENGLISH 
: Yes the Government has studied those packages and the Government has included that orientation in its own package. For instance it announced $500 million of infrastructure spending a month or so ago that includes significant upgrades of the insulation of State houses. The Government has signalled an interest in the same kind of package for non-State houses. 
Tax Cuts—Implementation 
3.  
Hon PHIL GOFF (Leader of the Opposition) 
 to the  
Prime Minister 
: Does he stand by his response last week when asked whether the next two rounds of tax cuts legislated for last year will go ahead: “We live in dynamic times but I wouldn’t jump to conclusions on that. It is my expectation they will go ahead.”? 
Hon BILL ENGLISH (Deputy Prime Minister) 
: 
 on behalf of the  
Prime Minister 
: Yes. 
Hon Phil Goff 
: Does the Prime Minister agree with Air New Zealand’s chief executive Rob Fyfe that “We need to stimulate this economy and there are more effective ways than broad-brushed tax cuts.”; if not why not? 
Hon BILL ENGLISH 
: Mr Fyfe along with anyone else is entitled to his own views about the right balance of Government efforts to stimulate the economy. I note that the travel and tourism industry relies on households having discretionary spending and Mr Fyfe’s company will benefit from New Zealanders who decide they can afford to travel because they are receiving tax cuts. 
Hon Phil Goff 
: Does the Prime Minister agree with economists Brian Gaynor and Gareth Morgan and the Deputy Governor of the Reserve Bank Grant Spencer that tax cuts for those on higher incomes tend to get saved rather than spent—or perhaps used on overseas trips as the Minister said—and therefore do not meet the most important criterion in the current circumstances of being cost-effective in preserving and creating jobs? 
Hon BILL ENGLISH 
: The Government has been attempting to strike a balance between the short-term need to cushion people from the sharper edges of recession and the long-term need to lift our growth prospects. As the Government has always said it will not try to tell people how to use the money. Those who have high debt or high credit card debt will use tax cut proceeds to reduce that debt and they probably should do that. Others who do not have high levels of debt will spend it. We believe that it is up to them to make that decision. 
Hon Phil Goff 
: Why did the Prime Minister even bother holding the Job Summit if he intended to ignore the views of key participants such as Rob Fyfe and Stephen Tindall that the tax cuts needed to be properly targeted as Labour’s were to achieve the best outcome in preserving and creating jobs or did he believe that $50 million for a cycle track was more important than the $4.5 billion available for tax cuts that properly targeted would have created tens of thousands of jobs? 
Hon BILL ENGLISH 
: One of the benefits of the summit was that it gave a number of people the opportunity to express views and some of those views were different from the Government’s views; we were listening. One thing I never heard them say even when they disagreed with the Government was that they wished Labour were back. 
Hon Phil Goff 
: Can the Prime Minister tell the House one thing that came out of last Friday’s Job Summit that will help the 160 Sealord workers who lost their jobs yesterday whom I will visit this afternoon or the 120 Irwin Industrial Tools workers at Wellsford who are likewise likely to lose their jobs this week? 
Hon BILL ENGLISH 
: I think what did come out of the Job Summit was a strong resolve by everyone who participated regardless of whether he or she supports the Government to do everything he or she can to give those people the confidence that they will be able to get another job. We all realise what a big and difficult challenge that is but the Government and the participants at the summit are strongly committed to it. 
Hon Phil Goff 
: I raise a point of order Mr Speaker. My question was very straightforward; it asked the Prime Minister to tell the House one thing that the summit would do and the Minister has not mentioned one thing. 
Mr SPEAKER 
: The Minister in answering the question on behalf of the Prime Minister did say what the summit set out to do. He may not have said the one thing the member might have wanted him to say but he did set out what the summit sought to do. I believe that to that extent the question was answered. 
Question No. 2 to Minister 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 In relation to question No. 2 I seek leave to table a document. It is the executive summary of the report of the Australian Treasury from October 2008 which states: “The Treasury’s modelling demonstrates that early global action is less expensive than later action; that a market-based approach allows robust economic growth into the future even as emissions fall; and that many”— 
Mr SPEAKER 
: I think we have a reasonable description of the document. Is there any objection to that document being tabled? There is none. 
Document by leave laid on the Table of the House. 
Question No. 3 to Minister 
Hon PHIL GOFF (Leader of the Opposition) 
: 
 I seek leave of the House to table a document. I will just mention the different parts of it in one go rather than take several bites at it. They are comments from Rob Fyfe Fran O’Sullivan Brian Gaynor Grant Spencer and Gareth Morgan and are sourced from various areas including transcripts from Radio New Zealand and news media. 
Mr SPEAKER 
: Could I just be clear that this is a composite document the member has prepared from press releases. 
Hon PHIL GOFF 
: It is a document. In each case the source is given and in each case the person quoted says that the Government was on the wrong track— 
Mr SPEAKER 
: I thank the honourable Leader of the Opposition. Leave is sought to table a composite document made up of a set of press releases. Is there any objection to that? There is objection. 
Job Summit—Objectives and Outcomes 
4.  
DAVID BENNETT (National—Hamilton East) 
 to the  
Prime Minister 
: What were the objectives of the Prime Minister’s recent Job Summit and is he satisfied that it was a successful event? 
Hon BILL ENGLISH (Deputy Prime Minister) 
 on behalf of the  
Prime Minister 
: The Prime Minister’s Job Summit was designed to be a forum for generating new ideas for maintaining and creating jobs during this recession. The event was a success. It brought together more than 200 representatives from businesses unions local authorities community organisations and Government. The participants demonstrated a serious commitment to working together to protect and create jobs. The result of their working session was a list of ideas out of which the summit selected its top 20. 
David Bennett 
: How will the Government respond to the ideas generated by the Job Summit? 
Hon BILL ENGLISH 
: The Government will respond positively. We are looking very thoroughly at the 20 ideas that the summit chose fleshing them out looking at whether those ideas can be properly costed and implemented and weighing them up against other Budget proposals. We have committed to continuing discussion about these ideas with those who proposed them. 
Hon David Cunliffe 
: What was the net number of jobs created in the week of the Job Summit and since then given the 180 jobs lost at Sealord the 120 jobs lost at Irwin Industrial Tools in Wellsford the 70 jobs lost at GE Money and the 29 jobs lost at CWF Hamilton; and can the Prime Minister confirm how many job losses have been announced in the 3 days since the Job Summit? 
Mr SPEAKER 
: The Hon Bill English may answer one of those questions. 
Hon BILL ENGLISH 
: The member seems to misunderstand how an economy works. A discussion about what the Government can do to prevent the loss of jobs and to create new jobs does not automatically head off decisions that may have already been made before the summit. I think just about everybody there recognised the huge challenge of dealing with sharply rising unemployment in New Zealand. The member can go around saying that the summit should have stopped this or that but the best thing we can do for all those people who have actually now lost their jobs is take every possible step to give them confidence that at some stage they will be able to get another job. 
David Bennett 
: What reports has the Prime Minister received about participants’ views on the Job Summit? 
Hon BILL ENGLISH 
: I have received one report from a former member of the House one Ms Laila Harré— 
Hon Darren Hughes 
: Hon Laila Harré. 
Hon BILL ENGLISH 
: The Hon Laila Harré from the National Distribution Union said: “I think it will certainly achieve something; I think it already has. It’s brought a sort of new approach to looking at what is a fast-moving and changing environment … sitting through the summit I found it difficult to imagine the Labour Party under Helen Clark really taking a risk like that which was to give a group of people an open brief in a very public way to propose some ideas and solutions.” 
Hon David Cunliffe 
: Speaking of former members I ask what the Government will do to ensure that banks play their role in helping households and businesses through the recession as outlined by Dr Alan Bollard when he stated: “… they have profited from good times in this economy and we expect them to be there for the tough times too.” Is he concerned about reports from the New Zealand business community that it is finding it more difficult to obtain commercial credit than previously and will potentially find it more difficult than its Australian competitors? 
Hon BILL ENGLISH 
: Yes the Prime Minister is concerned about any reports that credit could be more difficult to obtain. At the Job Summit there was a vigorous public discussion between banks and others interested in their policies and the banks—to their credit—have made some proposals about how they can work with the Government to alleviate a situation that could be potentially quite damaging in New Zealand. But as the member will know in a recession some businesses are just less creditworthy and that is one reason they may find it harder to get credit. 
Hon Jim Anderton 
: Is the Government seriously considering a cycleway as a strategic answer to the greatest financial crisis the world has faced since the Great Depression; if so has it given consideration given its disinvestment in rail to turning the railway system in New Zealand into a cycle track so that everyone can join in? 
Hon BILL ENGLISH 
: No. We had hoped to be able to make use of that member’s jobs machine but it failed to produce jobs even in a period when the economy was growing. 
Non-governmental Organisations—Funding 
5.  
Hon ANNETTE KING (Deputy Leader—Labour) 
 to the  
Minister for Social Development and Employment 
: Can she confirm whether her Government still plans to fully fund the essential services of non-governmental organisations by 2012; if not why not? 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 We are currently working through the Budget process. In these tough economic times and with a number of unfunded promises from the previous Government we have to set priorities. 
Hon Annette King 
: Does she agree with the Federation of Voluntary Welfare Organisations which stated that the money allocated by the Labour Government through the Pathways to Partnership scheme would have provided a major boost to its on-the-ground services and helped with managing the impact of the recession on communities; if so why does she not stop hiding behind reviews and give those services the money they need now because people need help now? 
Hon PAULA BENNETT 
: We are currently working through the Budget process. Nothing is in and nothing is out and the sector will be consulted. 
Hon Annette King 
: Why then did the COmVOiceS network of leading community organisations describe the Government as failing to engage with the sector about how to deal with the recession? Was it because the Government did not invite them or many other representatives from the non-profit sector to its Job Summit last week? 
Hon PAULA BENNETT 
: I do value the sector’s views. In fact yesterday I wrote to sector representatives to invite them to join an unprecedented dialogue with the Government. We are inviting them to sit alongside us as we enter Budget negotiations and to have direct input into the process. For all Labour’s rhetoric about being close to the sector it would never have given those representatives a seat at the table. 
Hon Annette King 
: Will the Minister honour the commitment made by John Key and Judith Collins during the election campaign to provide additional funding of $5 million for health camps; if so when? 
Hon PAULA BENNETT 
: We are currently working through the Budget process. Nothing is necessarily in and most certainly nothing is necessarily out. That will be part of our discussions. 
Sealord Plant Nelson—Job Losses 
6.  
RAHUI KATENE (Maori Party—Te Tai Tonga) 
 to the  
Minister for Social Development and Employment 
: What assistance will be available to help the affected workers and communities as a result of the decision to lay off as many as 180 jobs from Sealord’s processing plant in Nelson? 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 Work and Income has a longstanding relationship with Sealord. With the local MP Dr Nick Smith Work and Income is already working alongside Sealord to mitigate the effects of the lay-offs. Work and Income is meeting with Sealord this week to provide on-site individualised support. It is coordinating support and services with other agencies helping staff find other jobs offering help with CV preparation and upskilling and providing information about the income support that is available including this Government’s ReStart package. 
Rahui Katene 
: Has the Minister seen the statement from the Service and Food Workers Union that suggests that Sealord may introduce a $70-a-week cut in wages across the board for workers who would otherwise face dismissal; and what action can the Government take to provide other options for Sealord? 
Hon PAULA BENNETT 
: In the short term Work and Income will be on-site on Friday having further discussions on how it can best support these workers. Work and Income will work to ensure that people are receiving any income assistance that they are entitled to. For example they may be entitled to accommodation assistance or Working for Families assistance. 
Hon Annette King 
: Can the Minister confirm that many of the workers who are losing their jobs are women who are supplementing their families’ incomes just to keep their heads above water; if so will she support a policy of providing a job seekers allowance to second-income earners who are made redundant but are unable to get a benefit until they get back to work? 
Hon PAULA BENNETT 
: We are in unprecedented tough times. We certainly acknowledge that women who are in that position are in for tough times. I encourage them to go to Work and Income to check their partners’ income to check how it works against them and to check whether they are eligible for some sort of assistance. 
Rahui Katene 
: Is the Minister aware that the Maori shareholders of Sealord attended the Prime Minister’s Job Summit last Friday and what plans does the Government have for working with companies to make them responsible employers? 
Hon PAULA BENNETT 
: Yes I am aware that they were there. I am not in the business of telling businesses how to run their businesses. What I am here to do is support those workers and those employees who need that assistance via Work and Income. 
Police—Superintendent Graham Thomas Briefing 
7.  
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
 to the  
Minister of Police 
: Was she briefed on the issues surrounding allegations in respect of Superintendent Graham Thomas; if so what was the date and content of the briefing? 
Hon JUDITH COLLINS (Minister of Police) 
: 
 Yes; I was verbally briefed by police on 27 December 2008. I was informed that there had been an incident involving a senior member of the police and that it was being investigated. I was later advised that in accordance with the requirements of the police code of conduct once it became clear there was insufficient evidence to proceed with a criminal case of drink-driving police moved swiftly to institute employment-related processes. 
Hon Clayton Cosgrove 
: Has the Minister received an assurance that the correct procedure was followed in respect of investigating this matter so as to ensure that the officer in question was treated no differently from the way any member of the public would be; if so does she accept that assurance? 
Hon JUDITH COLLINS 
: The police have made it very plain to me that they are following procedures absolutely to the book in all matters in relation to this. 
Hon Clayton Cosgrove 
: How could she accept an assurance that correct procedures were followed to ensure that the officer in question was treated no differently from any member of the public when police human resources manager Wayne Annan has stated publicly that specific information about the incident would not be provided because it “does not exist”? That quote comes from the 
 Herald on Sunday 
 of 1 March this year. 
Hon JUDITH COLLINS 
: I note for the member’s benefit that departmental responses to Official Information Act requests are the responsibility of the police. I am advised that the police answered the specific questions from the journalists correctly but that does not mean to say that the police answered them to the extent that perhaps they should have. 
Hon Clayton Cosgrove 
: Does the Minister not accept that she has a duty to assure the public that proper processes have been followed in respect of this police officer who as national prosecution manager is responsible for decisions to prosecute members of the public; or is the best assurance she can give New Zealanders the one she gave to journalists as late as a few hours ago when she said: “This is not a good look.”? 
Hon JUDITH COLLINS 
: I actually agree with Mr Cosgrove when he stated—as he was quoted today in the  
Dominion Post 
—that continuing speculation about the case damaged public trust in police and undermined their good work. Certainly I know that he will have the opportunity tomorrow during the select committee process to make more detailed questions available to the Commissioner of Police because this is actually an employment matter that the Commissioner of Police may be able to answer. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. I do not quite know where that answer was going. I asked the Minister as per your rulings a specific question. I asked her whether she accepts that it is her duty to take a number of actions in this case to reassure the public. In no way did she even address or answer that question. Was it her duty? 
Hon Gerry Brownlee 
: Mr Speaker when you read the  
Hansard  
you will find that the Minister actually said she agreed with Mr Cosgrove’s comments about the need to reassure the public. Now surely that is a clear answer to his particular question. 
Hon Clayton Cosgrove 
: I think that was an own goal. I did not ask the Minister whether she agreed with me. I asked the Minister whether she accepts that she has a duty to reassure the public—not whether she agrees with me or any other member of the House. It was a specific question: does she accept she has a duty? 
Mr SPEAKER 
: I have heard sufficient. 
Hon Gerry Brownlee 
: Mr Cosgrove’s statements were in fact about reassuring the public and I am sure that when the public hear Mr Cosgrove speak as they often do they are greatly reassured by their choice last November. 
Mr SPEAKER 
: This is quite a difficult question because there are constraints around what the Minister can say in respect of this matter as there are issues of privacy in employment matters etc. as the Minister has explained. However I invite the member to repeat his question in respect of assurances to the public and I will listen. I want to satisfy myself that I have heard the question properly and then I will let the Minister answer it. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. During the last point of order some comments were made to you by the Hon Gerry Brownlee. I think that if they had been made in the frivolous and facetious way they were by someone on this side of the House we would have been admonished. You did not admonish him. 
Mr SPEAKER 
: I obviously did not hear it. I thank the member for his attention. I did not pick up on what he is concerned about and therefore I could not take action. I have invited the honourable member to repeat his question. Let us listen to it very carefully and then the Minister where she can will answer it. 
Hon Clayton Cosgrove 
: Does she not accept that she has a duty to reassure the public that proper processes have been followed in respect of this police officer who as the national prosecution manager is responsible for decisions to prosecute members of the public; or is the best assurance she can give the one she gave journalists as late as a few hours ago today when she said: “This is not a good look.”? 
Hon JUDITH COLLINS 
: I have already answered that question. I have said that it is important—and I have said that the police commissioner has assured me that processes have been completely followed according to the book. If the member did not remember that answer I am quite happy to provide it again. Police have given me those assurances. I think it is very important that the public have confidence in the police and I am surprised that that member keeps wanting to undermine them all the time. 
Hon Clayton Cosgrove 
: Is her silence on this matter—[ 
Interruption 
] 
Mr SPEAKER 
: The member has a right to ask his question. 
Hon Clayton Cosgrove 
: Thank you Mr Speaker. Is her silence on this matter over the last week as a result of advice that she has received from the Minister of Corrections on how not to handle employment matters? 
Hon JUDITH COLLINS 
: Obviously I cannot have been silent otherwise that member could not have quoted me. 
Auckland District Health Boards—Proposed Surgical Super-centre 
8.  
Dr PAUL HUTCHISON (National—Hunua) 
 to the  
Minister of Health 
: Did he meet with the three Auckland district health boards earlier this year to discuss a proposal for a four-theatre elective super-centre; if so why? 
Hon TONY RYALL (Minister of Health) 
: 
 Yes I met with them to deal with a major problem inherited from the previous Government: despite a doubling of the health budget on a population basis fewer New Zealanders have access to elective surgery after 8 years of the previous Government. It failed to increase elective discharges at the rate of population growth let alone of population ageing and that is why it resorted to culling thousands of New Zealanders from waiting lists. The best way to address this elective failure is to build capacity—hence National’s commitment to build dedicated elective surgery theatres separating emergency and planned surgery. The district health boards have responded with the first joint regional proposal which will see the first elective surgery super-centre built at Greenlane. 
Dr Paul Hutchison 
: What contribution would the proposed super-theatre complex make to delivering extra elective surgery? 
Hon TONY RYALL 
: The proposed Greenlane elective surgery –super-centre would on its own deliver an estimated additional 5000 people a year with surgery. This will be a step change in the elective surgery services we are providing in Auckland. To put that figure in context I say Ministry of Health reports reveal that under the previous Government the average increase was 1432 people a year lower than the rate of population growth. The Greenlane super-centre alone will deliver more than triple that increase. 
Hon Ruth Dyson 
: Can the Minister confirm that he will match Labour’s record of opening and funding 20 new operating theatres; or is he satisfied just with receiving a proposal for four new ones that if built will be funded from within the existing health budget? 
Hon TONY RYALL 
: I find it remarkable that the Opposition spokeswoman would dare to ask questions about Vote Health money and services because just prior to the general election Labour stealthily cut $50 million out of Vote Health for next year and $100 million for the next year—a total of $150 million cut from Vote Health. 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. We had a lot of play-acting previously from Mr English about the Public Finance Act. Given that the money referred to by the Minister was in the pre-election fiscal update I am not sure how he managed to arrive at some— 
Mr SPEAKER 
: What is not clear to me—[ 
Interruption 
]—and members will know that points of order are meant to be heard in silence is what remedy the member is seeking. 
Hon Dr Michael Cullen 
: Basically to smack him on the wrist if that is at all possible. 
Mr SPEAKER 
: That was an abuse of the point of order system. 
Hon Ruth Dyson 
: I raise a point of order Mr Speaker. The Minister did not address the question. I seek your support in asking him to at least attempt to address the question. 
Mr SPEAKER 
: The member raises an interesting point. She asked a question and the answer started with an attack on the questioner. I think it would be helpful if the Minister in answering the question were to give some information before launching an attack on the questioner. I invite the Hon Ruth Dyson to repeat her question. 
Hon Ruth Dyson 
: Can the Minister confirm that he will match Labour’s record of opening and funding 20 new operating theatres or is he satisfied with just receiving a proposal for four new operating theatres which if built will be funded from within the existing health budget? 
Hon TONY RYALL 
: This Government’s record will more than match the previous Government’s behaviour. 
Dr Paul Hutchison 
: What is different in the way this proposal was developed from past proposals? 
Hon TONY RYALL 
: There are a number of special features about how this proposal was created but the two most important features are firstly that in seeking to deliver a very different health system from the increasingly centrally controlled and bureaucratic system we have inherited we have required district health boards to work closely with their neighbouring district health boards and take a joint approach to improved service and secondly we have required them to demonstrate the active engagement of doctors and nurses in the development of the proposals from the earliest stage. This Government means to deliver on its commitment to clinical leadership and improved front-line services. 
Employment Probation Periods—Work and Income Support 
9.  
SUE BRADFORD (Green) 
 to the  
Minister for Social Development and Employment 
: Are those who are offered employment under the 90-day probation law entitled to the same support from Work and Income as those offered employment not under the 90-day probation law? 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
:  
No they are offered more protection. 
Sue Bradford 
: Why then has a Christchurch Work and Income office declined an application for relocation assistance from an unemployed person who had just found a job on the grounds that the job was subject to the 90-day trial and therefore not considered “permanent employment” by Work and Income? 
Hon PAULA BENNETT 
: It must have been yesterday that that information came through because the law came into effect on Sunday. Otherwise it simply cannot be true that the employee was under the 90-day employment trial period. 
Katrina Shanks 
: What impact does the Minister think the legislation will have on beneficiaries’ ability to move into employment? 
Hon PAULA BENNETT 
: This legislation is an incentive for employers to give a beneficiary a go. Most beneficiaries just want a chance to improve their lives and get into paid work. I believe that this 90-day trial period will give them that chance. 
Sue Bradford 
: Can the Minister give an assurance that in future unemployed people who find themselves in jobs that are subject to the 90-day probationary period will have their employment counted as a real job and will be offered the same entitlements as any others who find themselves work—which after all is what the Government so badly wants them to do? 
Hon PAULA BENNETT 
: This Government’s main focus and priorities are on helping people into work and into jobs and there are many individual scenarios when dealing with those people. I would welcome seeing the particular case that has come to the member’s attention because our whole intention is to help people into work wherever possible. 
Dr Rajen Prasad 
: How will the Minister guarantee that Work and Income staff members do not play judge and jury where there is some doubt about who is at fault in cases where workers are fired during the 90-day trial? 
Hon PAULA BENNETT 
: Our intention is that we will look at the individual circumstances of the person and in discussion with both that person and the employer—as is the current practice—we will make decisions on all benefit entitlements. 
Tax Cuts—Effects on Maori Incomes 
10.  
Hon PAREKURA HOROMIA (Labour—Ikaroa-Rawhiti) 
 to the  
Minister of Finance 
: What reports if any has he received on what effect the Government’s tax cut package will have on Maori incomes? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 I have received reports on what effects the Government’s tax cut package might have on Maori incomes. It will increase their after-tax incomes. However I have received another report that the Labour Party has proposed that the Government not proceed with tax cuts. The after-tax incomes of Maori would go down if we followed Labour’s policy. 
Hon Parekura Horomia 
: What is the Minister’s response to the statement from the Minister of Maori Affairs that his Maori Party felt forced to vote in favour of National’s tax cut legislation which does not benefit low and middle income workers even though it did not want to? 
Hon BILL ENGLISH 
: The Maori Party supported the Government’s income tax cuts and I think that now it knows that Labour’s policy is to do away with tax cuts it will be very pleased that it supported National’s policy because it means that the incomes of Maori will go up instead of going down. 
Hon Parekura Horomia 
: Is the Minister of Finance answering questions on Maori issues instead of the Minister of Maori Affairs because the Minister of Finance is worried that Dr Sharples would confirm that he opposes the 1 April tax cuts which leave out low-income workers and the 90-day fire-at-will law or is it because the Minister of Maori Affairs did not want to answer the question? 
Hon BILL ENGLISH 
: The Labour Party needs to work out whether its policy is the one it ran before the election of lower taxes or the one it ran last week of not having lower taxes. A lot of Maori voters would be interested to know that because what they do know is that under National they will get tax cuts on 1 April and they will be better off because of those tax cuts whereas if Labour were in power it would be abandoning the tax cuts and Maori voters would be worse off. 
Electricity—Investment in National Grid 
11.  
JONATHAN YOUNG (National—New Plymouth) 
 to the  
Minister of Energy and Resources 
: What steps has he taken recently to accelerate investment in the national electricity grid? 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 Yesterday I released a new  
Draft Government Policy Statement on Electricity Governance 
 for consultation. The new policy proposes streamlined and simplified processes for transmission investments that are under $20 million in value. The current processes can involve lengthy duplication of engineering and systems planning. Although the work was already in progress I was interested to see that this proposal was a recommendation made at last Friday’s Job Summit. 
Jonathan Young 
: What further steps will the Minister be taking to ensure investment in the national grid? 
Hon GERRY BROWNLEE 
: I am currently working on terms of reference for a ministerial working party to look at disentangling the overlapping roles of the Electricity Commission the Commerce Commission and Transpower. There has been a great deal of criticism of the current regulatory and governance arrangements. The aim of the working party will be to improve those arrangements. 
Young Offenders—Boot Camps 
12.  
JACINDA ARDERN (Labour) 
 to the  
Minister of Youth Affairs 
: Does she agree with the statement by the Principal Youth Court Judge Andrew Becroft that boot camps for young offenders are “arguably the least successful sentence in the Western world”; if not why not? 
Hon PAULA BENNETT (Minister of Youth Affairs) 
: 
 Yes I agree with Judge Becroft. That is why we are not following that model. 
Jacinda Ardern 
: Does the Minister agree then with the statement made by her leader John Key that the Government’s programme would require young people who are serious offenders to take part in military-style activity programmes run by the army using army-type facilities or training methods? And if she does not think that is a boot camp then what is it? 
Hon PAULA BENNETT 
: Yes I do agree with the Prime Minister. In fact I have seen a  
Waikato Times  
editorial that says that National has done its homework on this policy. The editorial states: “A boot camp on its own will achieve nothing but combined with mentoring drug and alcohol rehabilitation and educational programmes it is better than sitting idly by as young thugs turn into older thugs.” 
Simon Bridges 
: What reports has the Minister seen on what works for young offenders? 
Hon PAULA BENNETT 
: We know that the thousand worst offenders that Fresh Start targets need a programme of long-term wraparound care intensive monitoring self-discipline personal responsibility drug and alcohol treatment and parenting skills. 
Jacinda Ardern 
: Does she know what her mentoring programmes for young offenders will involve given they are such an integral part of her Government’s recent bill or does she stand by her statement made at the Rotorua youth planning day that mentoring is “just another fancy word”? 
Hon PAULA BENNETT 
: Yes I do stand by what we need to do as far as mentoring programmes are concerned. We are going to make sure they are truly effective and not just about words but about action. The simple truth is that if we keep doing the same stuff we will get the same results. This Government says that is not good enough. 
Simon Bridges 
: Why is the Minister proposing changes to the Youth Court’s powers? 
Hon PAULA BENNETT 
: We know that the system works for the majority of young people but there are a small group of recidivist serious offenders. We listened to feedback from the judiciary which wanted a wider range of tools to individualise sentences. It also wanted longer sentences to have the chance to make a real difference in those offenders’ lives. That is what we are giving the judiciary. 
Voting 
Correction—Resource Management (Simplifying and Streamlining)  Amendment Bill 
Hon JIM ANDERTON (Leader—Progressive) 
: 
 I seek leave for the votes cast in my name on 19 February on the first reading and subsequent referral of the Resource Management (Simplifying and Streamlining) Amendment Bill to be altered from being recorded with the Noes to being recorded with the Ayes. 
Mr SPEAKER 
: Is there any objection to that course of action being followed? There is no objection. The correct result of the two votes is now Ayes 111 and Noes 9. 
Securities Disclosure and Financial AdvisersAmendment Bill 
First Reading 
Hon SIMON POWER (Minister of Commerce) 
: 
 I move  
That the Securities Disclosure and Financial Advisers Amendment Bill be now read a first time. 
 At the appropriate time I intend to move that the Securities Disclosure and Financial Advisers Amendment Bill be referred to the Commerce Committee for consideration with the committee to report finally to the House on or before 30 April 2009. 
This bill is another part of this Government’s response to the current international financial crisis. The most immediate financial sector issue has been the breakdown in credit markets which has resulted in credit rationing restricting to some extent New Zealand firms’ access to capital. This bill will assist in removing unnecessary impediments to raising capital while continuing to ensure the timely disclosure of relevant information to prospective investors—a balance that is very important to get right. 
Across the OECD Governments are working with financial regulators to shore up financial institutions in response to severe liquidity shortages and a breakdown in lending markets. However any steps to improve access to capital must be balanced against the interests of investors. We must not make the mistake of relaxing the rules to the point that we undermine investor confidence which is already under strain. I would ask the select committee to address this balance directly at the time that it considers submissions. 
In November last year the Capital Market Development Taskforce released an interim report in response to the financial crisis and I acknowledge the work of my predecessor the previous Minister of Commerce the Hon Lianne Dalziel in setting up that task force. That report made a number of recommendations on how securities law could be improved to increase the availability of capital and reduce the compliance costs of raising capital. This bill addresses a number of the task force recommendations requiring legislative change that are considered to be most likely to make immediate differences for firms seeking to raise capital. 
The bill principally provides for “a simplified disclosure prospectus”. It may be used by listed issuers who are already subject to continuous disclosure requirements but who would otherwise be required to produce a separate disclosure document for each offering. This new type of prospectus will enable stock exchange - listed issuers to offer designated debt and equity securities without the need to duplicate information they have already publicly disclosed under their continuous disclosure obligations. The simplified disclosure regime applies only to those securities being offered that rank equally or preferentially to the issuer’s existing listed securities and may not be used for the issue of securities such as units in say a unit trust or managed fund. 
The detail and content of the simplified disclosure prospectus will be contained in regulations to be promulgated under the regulation-making authority of the Securities Act 1978. Information material to the offer that has already been released under continuous disclosure will appear in list form. The simplified prospectus must also include a signed statement from directors to the effect that the issuer has complied with the requirements of continuous disclosure and that they can confirm that all information material to the offer has been disclosed. It is my bet that this matter will receive some attention at the select committee and I look forward to hearing the views put forward and the advice of the committee on that specific point. 
The Securities Commission will monitor and enforce compliance with the simplified disclosure prospectus regime once it is introduced and will have the ability to prohibit an issuer from using the regime. The commission will also have the ability to extend the date of allotment under a simplified disclosure prospectus when the commission thinks it is desirable for an extension order. 
In addition the bill proposes other relatively technical changes to categories of persons who are exempt from the disclosure requirements for offers of securities under the Securities Act. The cumulative effect of these changes will be to make it easier for all businesses listed or unlisted to raise capital. For example changes to the categories of persons who are exempt from the disclosure requirements for offers of securities under the Securities Act will apply to both listed and unlisted companies including small and medium enterprises. This will particularly benefit private companies—which traditionally seek capital by so-called shoulder-tapping of known investors directly—that fall into an existing exemptions category such as when they are well-known to the issuer. Investors will not be disadvantaged by these amendments because exemptions from disclosure requirements apply only to investors who already possess the information necessary to make an assessment of the offer are capable of obtaining the necessary information or indeed have sufficient experience in the market not to need the standard level of disclosure. 
The bill also provides an opportunity to correct an error in the Financial Advisers Act 2008 which was passed by the House in September 2008 and to make a number of other minor tidying-up amendments. 
Let me reiterate that the Government’s primary objective in this bill is to ensure that firms have cost-effective access to capital whilst ensuring that investors receive full accurate and timely disclosure of information. I should also add that I am also considering with some urgency a number of other non-legislative recommendations proposed by the Capital Market Development Taskforce including possible changes to the stock exchange listing rules and the securities disclosure regulations. In the medium term I will undertake a full root and branch review of the Securities Act looking at whether the regulatory scope is sufficiently clear. The review will also consider whether the overall regulatory design is optimal and will examine the efficiency and effectiveness of the institutional arrangements currently employed. Specifically this will include the role of corporate trustees. The Securities Commission itself and the Registrar of Companies will also be part of that review. 
The House can be assured that it is this Government’s intention to provide solutions that not only will minimise the harm to our economy in the short term but also will help to turn the tide over the medium term. These reforms will help to ensure that a well-balanced and strong financial sector emerges from this financial crisis in which regulation is effective competition is encouraged and significantly investors are protected. 
This bill has been developed quickly as part of this Government’s response to the global financial crisis so I invite directly the select committee to consider whether this bill meets the objective of easing capital requirements whilst at the same time significantly balancing the securing of investor protections. It is the Government’s view that it does but we look forward to advice in the report back. I also encourage both the industry and investors to remain actively involved in the development of the bill through the select committee process to ensure that the legislation is workable and effective in achieving its objectives. 
I place on record my appreciation of the work of the Capital Market Development Taskforce in identifying the policy issues that this bill attempts to remedy and I thank the officials of the Ministry of Economic Development for their swift response in drafting this bill. I commend this bill to the House. 
Debate interrupted. 
Ministerial Statements 
Accident Compensation— 
Ministerial Inquiry into Disclosure of Funding Shortfall in ACC Non-earners’ Account 
Hon BILL ENGLISH (Deputy Prime Minister) 
: 
 I wish to make a ministerial statement under Standing Order 347. The Public Finance Act is critical to the credibility of public finance in New Zealand. The Act requires Treasury to produce accounts that accurately set out the state of the Government’s accounts in a run-up to an election. The purpose of this provision is to protect the Government the Opposition and the public. It protects the Government by presenting an independent verification of the Government’s financial position and it protects the Government against anyone claiming that it did not reveal the true financial position. It also protects an Opposition coming into Government from finding problems it did not expect which would compromise its undertakings as an incoming Government. It protects the public from manipulation of the public accounts for political purposes and the resulting cynicism. 
When the National Government took office on 19 November 2008 among the first pieces of advice we received was the advice that the Accident Compensation Corporation (ACC) would need substantial additional Government funding for the non-earners account commencing this financial year. This came as a surprise to the Government because that had been covered neither in the 2008 Budget nor in the Pre-election Economic and Fiscal Update either in the fiscal forecasts or in the fiscal risks. From discussions at that time it became clear that officials and senior Ministers in the previous Government had been aware of the matter but had chosen not to disclose it in the pre-election financial update despite knowing that the item was material to the fiscal and economic outlook. 
I therefore took three steps. First I approved an urgent request for additional funds to go to ACC. This was to ensure that the corporation had the financial resources it needed to properly meet claims in the non-earners account. Secondly I began to work with my colleague the Minister for ACC on options to manage ACC’s costs which are growing at an unsustainable rate. Thirdly I commissioned an urgent review into the circumstances that led to non-disclosure in the pre-election fiscal update. 
Today I am pleased to inform the House of the findings of the  
Ministerial Inquiry into Disclosure of Funding Shortfall in ACC Non-earners’ Account  
report. The detailed inquiry report has been published in full. In summary its main findings are as follows: ACC was facing a funding shortfall arising from a number of general factors. Added to the funding pressures for the non-earners account were the previous Government’s policy decisions to expand cover for treatment injury and to fully fund new claims from 2001 to increase the non-earners account funding for the treatment injury account and to change the basis on which ACC purchased some treatment and rehabilitation services in order to reduce the need for co-payments by claimants. 
On 14 April 2008 the chairperson of the ACC board met with the Minister of Finance to discuss “the issue of non-earners account funding”. On 16 May 2008 the Department of Labour provided a written briefing to the Minister for ACC. That briefing drew the Minister’s attention to the fact that new entitlement claims were above the forecast the 3-month rehabilitation rate was continuing to drop investment returns were below budget and target by $800 million and the adjustment to the outstanding claims liability had added just over $2 billion to ACC’s liability and was likely to affect levy rates and appropriations in the coming year. 
On 14 August 2008 ACC advised the previous Minister for ACC of its intention to seek increased funding. The amount was around $300 million although the exact figure was undecided. The Department of Labour advised the previous Minister for ACC on ACC’s proposals on 15 August 2008 and Treasury advised the then Minister of Finance of this on 1 September 2008 well before the fiscal aspects of the Pre-election Economic and Fiscal Update were finalised on 17 September. The statement of responsibility was signed by the then Minister of Finance on 24 September. 
Because Cabinet had not been presented with proposals to increase Vote ACC non-earners account appropriations by the time of the Pre-election Economic and Fiscal Update there were no agreed changes to appropriations to include in the forecast financial statements. Treasury decided that because the matter was not under active consideration by the Minister of Finance and responsible Ministers as required by the rules it had developed for disclosing fiscal risk the risk to the Crown of funding shortfalls in the non-earners account would not be included in the Pre-election Economic and Fiscal Update. 
The inquiry has found that the Public Finance Act requirements for the disclosure of fiscal risks in economic and fiscal updates are clear and that the risk to the Crown of the funding shortfall should have been included in the pre-election update. This was not done. Furthermore the inquiry has concluded that normal principles and processes relating to Government decision-making in the lead-up to a general election would not have been a constraint on the Government’s ability to consider adjustments to Vote ACC non-earners account appropriations. 
As a result of these findings the inquiry recommends that the current process for updating Vote ACC non-earners account baselines be reviewed; that the current rules used by Treasury to identify fiscal risks be reviewed and amended; and that Treasury review its guidance and training to both its own staff and to officials in Government departments and agencies involved in the update processes to ensure that all know and understand the broader context and requirements of the Public Finance Act as well as Treasury’s own specific requirements and rules. 
Ministers played a part in this failure to disclose because they knew of the problem and did not ensure its disclosure. Treasury accepts that the Ministers made a mistake in not ensuring that the amount was included in the pre-election update. I accept the assurance of the Secretary to the Treasury that he will implement the recommendations of the report. 
There may be an interesting constitutional debate to have about the implications of a potential breach of the Public Finance Act. However the Government intends to focus on the substantial and growing problems with ACC itself. I quote from the report: “Deteriorating trends in scheme costs and rehabilitative outcomes had been evident for some years but any impact on premiums and appropriations had been masked by better than forecast investment returns and an increasing discount rate until 2007. This changed in 2007 when actual investment returns began to deteriorate due to worsening global financial and economic conditions. As investment returns deteriorated pressures on scheme costs flowed through to levy and appropriation proposals in 2008.” 
Since the first revelations the size of the problem with the non-earners account has grown. Firstly we were informed that the Government would have to put $300 million into the non-earners account by 30 June this year in order to keep it solvent. I am now advised that the requirement is $384 million by 30 June with a further $1.15 billion required over the next 3 years. At a time of significant budget constraints this is a large and unwelcome problem. 
Hon Trevor Mallard 
: Unless what? 
Hon BILL ENGLISH 
: I raise a point of order Mr Speaker. There are no interjections during ministerial statements. 
Mr DEPUTY SPEAKER 
: I just remind the member that his time is up so can he please conclude. 
Hon BILL ENGLISH 
: I have one sentence left. We will act to ensure that such a large cost is not hidden again in the run-up to an election. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 The Minister of Finance Bill English should be hanging his head very low today. His attempts to portray the actions of the previous Government’s Ministers as inappropriate in respect of the Accident Compensation Corporation (ACC) have proven to be the political charade that they always were. The previous Minister of Finance Dr Cullen and the previous Minister for ACC the Hon Maryan Street have been exonerated by this report. The report found that officials did not provide the appropriate advice either to Minister Street or to Minister Cullen and it makes recommendations about improving the processes at Treasury the Department of Labour and ACC. 
Quotes from the report are instructive: as well as Treasury’s failure to act “by the date of PREFU in October 2008 … DOL had yet to: complete its detailed scrutiny of ACC’s premium proposals” it had yet to “decide whether or not to recommend to the Minister for ACC support for ACC’s proposals” and it had yet to draft the necessary papers for Cabinet. Because Cabinet had not been presented with those papers Treasury took the view that there were no agreed changes to appropriations to include in the forecast financial statements and it decided it need not conclude the matter because it was not under active consideration with Ministers. As the report goes on to make clear this followed a standard process with officials operating as they had always done. 
The report concludes that that process itself needs to be improved. In no way does it implicate Ministers in the failure of officials to adapt their time line to the electoral cycle. Clearly Treasury in particular failed to properly uphold its responsibilities under the Public Finance Act and we welcome that the Secretary to the Treasury John Whitehead has accepted responsibility for this and is to make the proposed changes. 
It was regrettable that the Minister of Finance repeated in question time today his misrepresentation of Treasury’s apology as being given only “for its part of the error.” On the contrary the secretary’s apologies and regrets were unreserved. Mr English does no credit to himself or more broadly to the Government by attempting to slant this very honourable Treasury response for his own vindictive political purposes. 
Certainly if the report’s author the esteemed consultant Michael Mills had believed that his report made adverse findings against either Minister he would have seen himself bound by natural justice to interview them and seek their input. He did not do so. Those Ministers—both of them—were not interviewed. Neither Minister was interviewed. Dr Cullen’s request to Treasury for his papers was declined by Treasury on Mr English’s personal letterhead for which it has since apologised. In hindsight Mr English is probably regretting the rather shameful refusal to undertake that disclosure. 
Mr English should also be ashamed that having inherited by his own admission to the Finance and Expenditure Committee last week a very favourable set of Crown accounts from his predecessor Dr Cullen he was intent after all of these results on demolishing the reputation of his predecessor who has given three decades of service to this House and a decade as Minister of Finance. Members on this side of the House believe that Dr Cullen deserves better. 
This raises the question of why the charade was undertaken. The answer to that question is probably revealed in the Minister’s own statement to the House this afternoon. ACC was funding a shortfall. It had expanded cover for treatment injury. It had increased the non-earners account funding and the change on the basis of this treatment had left it worse off. It is actually the quantum of the unfunded liability that the Minister is most concerned about. How interesting therefore to discover with a bit of research that the percentage of unfunded liability that the previous National Government passed on to the Labour Government in 1999 was greater than the one it inherited by some 60 percent of the total to some 40 percent. I wish National members had done their research before lambasting the outgoing Government with something that they themselves were more guilty of if it is a sin at all. 
The Labour Opposition concedes that there was a failure of official process. We support the point that that process should be improved to ensure that other Ministers are not left in the position that Labour Ministers were left in near the change of Government. But the real reason for this charade is the Government’s new-found intention to deal to ACC. Let us cast our minds back. This was first alluded to in a brokers’ report by Merrill Lynch. It leaked to the press before the election its certainty that the National Government would privatise ACC. Let National members deny that they are concerned now about its so-called sustainability. Let them take privatisation off the agenda or let them not I tell Dr Smith. If they do not have the courage of their convictions then they should not try to pin the problems on two former Ministers who have worked hard and acted honourably in the service of their country. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Speaker. I did not want to interrupt Mr Cunliffe during his response on behalf of the Opposition but I do want to refer to the ruling you made at the end of Mr English’s speech following his invitation to you to do so and to make it clear that I have reviewed Standing Orders 347(1) and (2) in chapter 7 and also Speakers’ rulings 127/3-5 and 128/1—that is all those that relate to ministerial statements. There has not been either a Standing Order or a Speaker’s ruling in the past that states that ministerial statements should be heard in silence. Before your ruling goes on the record I ask you to contemplate that because it would be a major change. 
Mr DEPUTY SPEAKER 
: Thank you. I will give that matter my consideration. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I stand to respond to the  
Ministerial Inquiry into Disclosure of Funding Shortfall in ACC Non-earners’ Account 
 report. The first thing I will say is that I hope the Government is not thinking about using the results of this important inquiry as a reason to contemplate the privatisation of the Accident Compensation Corporation (ACC). ACC is an incredibly efficient and incredibly successful institution. This report is a very important report and I congratulate the Government on having it done. I think it was the right thing to do but this report is no reason to move towards privatising ACC. ACC is an incredibly successful institution and it is incredibly important to New Zealand workers and New Zealanders in general. 
One of the key things I take out of this report is the uncertainty around the election date and the role that that has played in some of the mistakes that were clearly made over this issue. It strikes me that it is ridiculous that we do not know when the election is to be held. We should have a fixed election date. In terms of having open government in terms of making the Public Finance Act work properly—which is one of the issues here as the Public Finance Act has not been working properly—and in terms of getting the accounts right in relation to the Pre-election Economic and Fiscal Update it would be enormously helpful for the bureaucracy to know when the election was going to be held. It would make it much simpler if there was a fixed election date. It would make it much easier to operate an open transparent and honest government if all officialdom and all of the political parties knew exactly what day the election was to be held on. 
It astonishes me that we have gone as far as this in our democratic history and we still do not have a fixed election date. I tell the Government that one of the great things it could do with this report in order to make it simpler for the bureaucracy to meet the rules of the Public Finance Act and in order to give an accurate Pre-election Economic and Fiscal Update would be to have a fixed election date. 
There is another aspect of this matter that demonstrates one of the weaknesses in our system and that is the system of secret Cabinet meetings. We still have in our society secret Cabinet meetings where these decisions are being made as was the case with some of the earlier decisions that feature in this report. Cabinet meets in secret. Nobody knows what goes on in a Cabinet meeting. Some Cabinet documents become public afterwards but no minutes are published from Cabinet meetings. We as citizens do not know what Cabinet is up to. Some of the information gets published but a lot of it gets held on to. 
Why do we not implement a much more transparent and upfront system for telling the public of New Zealand what goes on inside Cabinet meetings? If people knew what was going on inside Cabinet meetings it would be much easier to take account of and keep a watch on the issues that have been revealed in this report. If we know when the election date is so that officials have a clear date to work towards in the Pre-election Economic and Fiscal Update and if we know exactly what is going on inside Cabinet then it is much easier for citizens to keep the Government accountable in the run-up to an election when there is the greatest pressure on the Government to hide the sorts of big holes in the accounts that have been exposed here. It seems to me that if we were to adopt even just those two simple measures it would help enormously. 
There is I believe exposed in this report a whole reason why we need an open government agenda in New Zealand and why we need to have government in our country that is much more transparent so that it is much easier for people to know in the lead-up to an election what is actually happening in the Government books. As this report demonstrates very clearly it is possible to hide hundreds of millions of dollars. Whether that has been done with intent or whether it was all because of the officials will be up to the interpreters of the report to decide but taxpayers and voters were not aware of a shortfall of hundreds of millions of dollars because they did not have sufficiently strong open government provisions. 
The Greens once again say that this report is a call to open up government to make government much more transparent to have a fixed election date and to open up Cabinet so that people know much more about what goes on inside Cabinet. It would help enormously if people knew the true state of the Government books in the run-up to an election. That would help the Public Finance Act work in the way it is supposed to work in order to provide the kind of information that voters need on voting day. 
Hon Sir ROGER DOUGLAS (ACT) 
: 
 Today it has been revealed that Labour did not heed the reporting requirements placed on a Government. The previous Prime Minister and the previous Minister of Finance were so arrogant that they thought the law did not apply to them. They thought the law did not apply to them. They seem to have been aided and abetted in that by Treasury’s inexcusable incompetence. The previous Prime Minister and previous Minister of Finance knew there was a shortfall in the accounts but they decided they would not declare it despite what the previous Minister of Finance said in the updated statement of fiscal responsibility. He said: “To enable the Treasury to prepare this Update I have ensured that the Secretary to the Treasury has been advised of all Government decisions and other circumstances”—and other circumstances—“as at 17 September 2008 of which I was aware and that had material economic … implications.” 
Hon Trevor Mallard 
: And he had. 
Hon Sir ROGER DOUGLAS 
: No way! The Accident Compensation Corporation (ACC) costs of $1.5 billion were not— 
Hon Tariana Turia 
: I raise a point of order Mr Speaker. I do not think that anybody in the House should have to put up with the barrage that is going on now. 
Mr DEPUTY SPEAKER 
: I thank the member. I ask the member to quieten his comments. 
Hon Trevor Mallard 
: Well for goodness’ sake! Get him to tell the truth. 
Mr DEPUTY SPEAKER 
: The member cannot imply that another member is not telling the truth. These are debating points and I ask that we just stick to the debate. 
Hon Sir ROGER DOUGLAS 
: The Labour Government knew the country faced a deficit of $1.5 billion and it decided to ignore that. Labour members ignored it because they knew that was the tip of the iceberg. They knew ACC was essentially bankrupt and they went on to ignore that. The only reason that we can say it was not bankrupt is that that would impose a cost on all of us. 
Hon TARIANA TURIA (Co-Leader—Maori Party) 
: 
 Tena koe Mr Deputy Speaker. The  
National Business Review 
 called the shortfall in accident compensation funding “an A grade scandal”. The scandal is not a new one; it is one that this House has heard once too often: the scandal of failure to disclose. Previous Parliaments have been stigmatised by the improper use of parliamentary funding to purchase pledge cards the improper use of broadcasting spend and subsequent legislation to validate unlawful spending. And here we go again. 
The billion-dollar blowout at the Accident Compensation Corporation (ACC) should concern this House on many levels and the questions around the breach of the Public Finance Act requirements need to be resolved quickly. But my particular concern is the compounding errors that threaten the capacity of the State to provide good government and fiscal stability. The shortfall in the non-earners account was known to ACC the Department of Labour and Treasury; today we hear that the officials are being blamed by members of the previous Government. I read from a statement of responsibility: “I accept overall responsibility for the integrity of the disclosures contained in this Update and the consistency and completeness of the Update information in accordance with the requirements of the Public Finance Act 1989.” I understand that the Hon Dr Michael Cullen signed that statement. 
Last week the Government’s Job Summit agreed to a key recommendation that we must ensure that the Government’s services to Maori deliver effective results. All the data available to ACC in regard to current Government delivery of accident compensation to Maori shows that Maori are not receiving entitlements to care rehabilitation and compensation at a level comparable to the proportion of Maori in the population. 
Hon PETER DUNNE (Leader—United Future) 
: 
 There is only one point substantially arising from this report that will concern New Zealanders and it is the revelation that about $1.5 billion is required to make good the shortfall in the non-earners account of the Accident Compensation Corporation (ACC). The issue that that gives rise to is the question in many people’s minds about the certainty of the services provided by ACC in the future. If we believe in having a universal accident compensation system the questions that this report discloses are how that will be funded into the future and how much certainty and security there is for those people who are non-earners and who become clients of ACC in the years ahead. I would have been interested to hear during the debate this afternoon some consideration being given to how that shortfall problem will be addressed and how the accident compensation scheme will be made viable for the longer term. It is easy to indulge in political name-calling but people who have accidents and rely on the scheme will want to know where the money is coming from how the service is to be funded and what assurance they will get about their care in the future. That is what we need to focus on not on some of the more arcane matters regarding this issue. 
The procedural matters do need to be resolved. I think that the apportioning of blame is rather irrelevant in that process. What is important is the service that we will provide in the future. That is what counts. 
Hon BILL ENGLISH (Deputy Prime Minister) 
: 
 I agree with the member that by far the most important issue the Government now has to deal with is turning round the deteriorating performance of the Accident Compensation Corporation (ACC). I have been appalled in this debate by the ideological blinkers of the Labour members. They still cannot accept the fact that while they were representing to the public that ACC was in great shape its performance was deteriorating rapidly. 
That brings me to the issue of responsibility under the Public Finance Act. Here is the statement of responsibility. It is signed by two people. One is John Whitehead the Secretary to the Treasury who has taken responsibility for the error that Treasury made. He has taken responsibility. He believes that the amount should have been disclosed under the Public Finance Act and it was not. But can members guess who has not taken responsibility? It is the previous Labour Government as represented by Michael Cullen who stated: “I accept overall responsibility for the integrity of the disclosures”. 
Labour members still cannot see that their blinkered ideology about the accident compensation scheme being perfect led them down a path to circumstances where they misled the public about a $1.5 billion problem. Every time those members get up in the next 3 years and ask why the Government is changing this or taking money from that I will remind them that if they had disclosed that risk—and better still had done something about managing it—then we would be in a much better position when facing times of economic restraint because there would have been $1.5 billion more to deal with the situation than there is. Labour failed to take responsibility. 
Securities Disclosure and Financial Advisers  Amendment Bill 
First Reading 
Debate resumed. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I begin my contribution to the debate on the first reading of the Securities Disclosure and Financial Advisers Amendment Bill by simply noting that I am very pleased it was not introduced under urgency. A number of bills were dealt with under urgency during the first 2 parliamentary weeks this year in order to meet the Government’s—what was it called? 
Moana Mackey 
: The 100 days of action. 
Hon LIANNE DALZIEL 
: Yes the action plan. But I do want to make this point seriously because tabling a bill and giving that 3 days’ time for scrutiny is always a preferable course of action when it can be achieved. Obviously because this bill will be referred to a select committee it was able to be achieved and I am very pleased that it could be done. I think this is particularly the case where we talk about securities law reform because confidence lies at the heart of everything that we do in respect of securities law. Therefore it is very important that we get the framework right when we make changes. I listened very carefully to the Minister of Commerce’s comments and as the chair of the Commerce Committee I will certainly undertake to ensure that full scrutiny is applied to this bill—as indeed I would with any bill. 
That being said Labour generally supports the bill. As the Minister said it is designed to provide for the use and regulation of a simplified disclosure prospectus by stock exchange - listed issuers offering certain debt and equity securities. In that regard it does not reduce the information required to be disclosed. In many respects it merely removes the duplication of information already provided pursuant to continuous disclosure obligations. Although the stock exchange has those obligations around continuous disclosure the information that needs to be provided in a prospectus is essentially provided anyway so this bill removes duplication. I guess that is why the Minister is able to say with reasonable confidence that the bill is designed to remove impediments to capital-raising without undermining investor protection. 
I think the Minister’s point though about why it is so important that close scrutiny is applied to this legislation is important because the substance of this particular reform lies within the Review of Financial Products and Providers and it was to be included in the current review of the Securities Act. I am certainly pleased to see that the Government is proceeding with that. In many respects this bill is simply bringing forward something that would have happened otherwise. 
We have already had a number of bills go through this House that have failed their regulatory impact statement requirements. So I will give praise to this Minister for having an excellent regulatory impact statement even though this brings forward something that has not been fully consulted on yet. I will give him 10 out of 10 for this regulatory impact statement. It will be a relief to Rodney Hide I would imagine to— 
Moana Mackey 
: Finally. 
Hon LIANNE DALZIEL 
:—finally have legislation introduced that meets the requirements of the framework that the previous Government put in place around regulatory impact statements. 
What I like about this regulatory impact statement is that it acknowledges that in fact this issue was part-way through a process of consultation because the Capital Market Development Taskforce had suggested a mechanism for bringing this forward in order to improve access to capital under the current conditions. I think that the way it has been presented in this report and undertaken in this consultation beyond that in a very short time frame has been excellent. I take my hat off to the people involved. 
According to the regulatory impact statement the Ministry of Economic Development consulted with a targeted group of industry experts in order to agree technical details to give proper effect to the policy and worked very closely with the Securities Commission in the development of the policy. Given the role of the commission in terms of oversight that it will pick up as a result of this legislation I think the right people have certainly been chosen to meet and discuss this bill. 
The other thing I will comment on is that officials have notified Australian authorities of the proposals in the context of the Agreement Between the Government of Australia and the Government of New Zealand in relation to Mutual Recognition of Securities Offerings. Again this is a vital piece of making the relationship between Australia and New Zealand work and that is to give advance warning of any changes that we make in our legislative framework. Having been the Minister who signed that agreement with the Australians I am very pleased that that has been picked up and that the notification has been made. I know that the Commerce Committee will want to know what the Australian Government’s response to the proposals in the legislation has been because how that mutual agreement works will be very dependent on the answer that is given. 
The other thing the regulatory impact statement does—and it is an excellent approach one that is required by the process that the previous Government put in place—is to set out the alternative options with option 1 being the status quo. That is not an option if we really do have a desire to bring down the barriers to capital-raising. The fact that the regulatory impact statement starts with the words “The world is currently in the midst of the worst financial crisis for many decades. The most immediate and pressing financial sector issue has been the breakdown in credit markets.” really does get to the nub of the problem. I think it is a little bit better than the Job Summit’s cycle track idea which is probably why it came from the Capital Market Development Taskforce. 
The next option was “listed issuers may offer securities with only an investment statement”. The third option was “listed issuers may use a term sheet for debt offerings”. The preferred option was “to provide for a new prospectus that may be issued by listed issuers of designated debt or equity securities who are subject to continuous disclosure requirements and to amend the provisions for exemptions from standard disclosure requirements.” 
As I say the regulatory impact statement does exactly what the regulatory impact process was designed to achieve. It alerts people to all of the options that are available. It critiques each one of them. Then it sets out a preferred path which is based on the information that has been collated from the consultation process. It really is a very good process. So I say 10 out of 10 to the Government for its regulatory impact statement. Given that it got nought out of 10 for all of its other bills this is a marked improvement and I hope to see all of the Government’s subsequent legislation meeting the very high standard that the Hon Simon Power has set for this House. The Labour Opposition will support the referral of the Securities Disclosure and Financial Advisers Amendment Bill to the Commerce Committee. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 I rise to support the Securities Disclosure and Financial Advisers Amendment Bill as well. I am glad that I follow the previous Minister of Commerce and I acknowledge the role she has played in this process. 
I will give a bit of background. We have heard that this bill addresses some of the issues around the global downturn. In my experience in my electorate I know from talking to a number of both large and small businesses—corporates—that one of the big issues facing our business community and workers in our country is the global credit crisis and the problem of gaining access to funds. This bill addresses that by providing for the removal of some of the impediments to capital-raising while acknowledging that the timely disclosure of relevant information to potential and actual investors is still critical to the process of investing in companies. 
Part 1 talks about how we can simplify the prospectuses that are sent out to investors in the form of an investment statement. Having worked on prospectuses myself—from the legal perspective of compiling prospectuses and offer documents for the raising of capital both debt and equity—I do understand how this bill will streamline some of the duplication of the information that is disclosed by companies. One thing that we should be careful to ensure is that investors still get the right type of information on which to make informed and sensible decisions. This bill does not lighten the load on the disclosure of that information but it does try to eliminate some of the duplication that comes out of some of the disclosure documents. 
I am glad that the—she has gone now—previous Minister of Commerce Lianne Dalziel referred to the regulatory impact statement in the explanatory note of the bill. That states quite clearly that the preferred option for some of the amendments relating to listed issuers is to streamline the disclosure requirements and to amend the existing definitions for exemptions from standard disclosure requirements. One of the examples that has been put forward is in terms of the persons who are subject to such requirements. One of them concerns those persons who have made investments in the last 12 months. I think that is a positive and I think the Minister has done very well. 
The issue really is about building up the confidence and trust of our investors. We have seen both here and across the world that the equity markets are really suffering. Last night the Dow Jones plummeted to an all-time low since the US presidential election. I think what we need from our legislators are a sense of purpose and an understanding that a lot of our corporates are suffering because credit is not readily available. I think the Government has done a great job in its first 100 days. Some people would disagree with that but we have tried in a number of different ways and in a number of different areas to make business easier to transact. That has been done through the Resource Management Act reforms through the recently enacted legislation that has put in place a 90-day probationary period of employment and through passing bills like this one which is business-friendly while still acknowledging the roles that workers and businesses play in our communities. 
I support this bill. It recognises that we are in a predicament that we have not been in for a number of years. It is about helping our businesses to raise the requisite capital—not only the working capital that is needed for the day-to-day operations of our corporates but also the type of capital that businesses raise to build plants and machinery and to hire workers. The issue is about growth it is about productivity and it is about jobs. The recent Job Summit which was a success last Friday— 
Nathan Guy 
: Hugely successful. 
PESETA SAM LOTU-IIGA 
: Hugely successful as the chief Government whip would say. It was hugely successful because we brought together a number of different parties from across the political spectrum a number of different parties from across the community the unions business leaders and various other community leaders. It was not dominated by politicians. We need to understand that the job will not be easy. If we are to get out of this recession the right people need to be in place the right Government has to be in place and the right type of legislation has to be in place. That is what this bill is about. It is about protecting investors who need to be protected from corporates—and there are some out there—that are shall we say unsavoury and not very trustworthy. 
But this bill is also about allowing our businesses to grow and develop. Many of the changes we see in the bill are about avoiding double-ups and reducing compliance costs. Businesses are totally run down by compliance costs in terms of overburdening taxes and also the reporting requirements that have been put in place by Governments. We need to free businesses up a little and allow them to do what they do best which is to deliver products and services to New Zealanders and to deliver products and services to foreign countries so that we can reduce an overburdening balance of payments deficit. 
I speak in favour of this bill not because it will save us from the economic recession—it is a small step. The previous Minister of Commerce mentioned that the Securities Act needs to be looked at reviewed and reformed and we will give careful consideration not just here in the House but also in the select committee to producing the type of legislation that promotes growth and businesses and also promotes the interests of our workers who need their jobs to be protected. 
In summary I speak in favour of this bill. I think it is a good bill and I think it will be passed with the generous support of our friends across the House. The bill does need to go through the select committee process where we will refine certain clauses. But the bill is a good start. We have made a good start to our administration and we will move forward with certain legislation. 
CHARLES CHAUVEL (Labour) 
: 
 I rise to speak in support of the Securities Disclosure and Financial Advisers Amendment Bill. I do not intend to repeat at length the reasons why Labour will be supporting this legislation. They have been very ably set out by the previous Minister of Commerce Lianne Dalziel. 
Nathan Guy 
: You support everything nowadays. 
CHARLES CHAUVEL 
: It is great to be able to support legislation that we began and that the National Government has wisely on this occasion adopted. The main proposal in the legislation is to provide for the use and regulation of simplified disclosure prospectuses by stock exchange - listed issuers that offer certain debt and security instruments. As I understand the proposal it does not reduce the information that is already required to be disclosed. Rather it removes duplication requirements for information that is already provided under the continuous disclosure regime that is now in place in our markets. It will also remove unnecessary impediments to capital raising while hopefully—if the balance in the legislation is struck right as we believe it is—not undermining investor protection which certainly we on this side of the House think is a very important part of the armoury that is required in this area. 
The proposal that is set out in the legislation comes from a set of recommendations made in an interim report issued by the Capital Market Development Taskforce at the end of last year in response to the global financial situation. I would like to pay tribute to the task force for the work it did and also to Lianne Dalziel for her foresight back in July last year in setting up the Capital Market Development Taskforce. It was clearly the right thing to do given the work that Labour had done to build up New Zealand’s capital markets for example by encouraging—at that stage—700000 people to join KiwiSaver our business tax package and the changes to the portfolio investment entity regime. All of these played a real and vital role in strengthening capital markets in New Zealand and the work of Rob Cameron and his team on the development task force particularly judging by the interim report in November 2008 took all those steps further by suggesting that a more sensible regulatory regime be put in place. My colleague Stuart Nash is going to talk at further length about the desirability of strong capital markets in New Zealand and about the credibility of the New Zealand Exchange as a result of the regulatory and other reforms put in place over the last 8 years by the Labour Government. 
The substance of the capital market development task force interim report proposal was consulted on as part of the review of financial products and providers. It was intended as I think the Minister said to be included in the current review of the Securities Act. But in that regard clearly the bill just brings forward something that one would expect to be introduced in any event later this year. 
I see that the bill also tidies up rules for exempt persons and people deemed by the Act not to be members of the public for the purposes of disclosure. Clearly that is a sensible technical amendment that ought to be supported. Anything that removes duplicating requirements in this area is to be supported. There are also minor amendments to the Financial Advisers Act—legislation that came before the Finance and Expenditure Committee in the last Parliament when I was chair of that committee and I hope I can say that it is very good legislation. 
It is useful to reflect on the much better regime that now exists in New Zealand in this area as a result of that legislation to which this bill will make a technical amendment. That is also as a result of the Financial Service Providers (Registration and Dispute Resolution) Act which for the first time has put in place a registration requirement for non-bank financial providers to tidy up what was at one stage a real Wild West situation something that really embarrassed New Zealand as far as our international reputation was concerned. 
The other important measure that was a counterpart to the Financial Advisers Act and also to the Financial Service Providers (Registration and Dispute Resolution) Act was the Reserve Bank Amendment Act—legislation that also came before the Finance and Expenditure Committee last year and that had cross-party support. The Reserve Bank Amendment Act in respect of non-bank deposit takers put in place for the first time a proper prudential supervision regime so that people who put their money in credit unions or in other non-bank entities that take money from the public can have the confidence that there is proper oversight of those entities proper oversight of their governance and proper oversight of the deposit levels they must have so that people can have real confidence that if as in many cases they are putting their life-savings with these institutions they are doing so within the framework put in place by the last Government—a much more responsible regime as far as the whole prudential oversight of the market is concerned. This legislation continues in that vein and helps to tidy up this general area of the law. 
I would like to observe that there is probably one area of the law that still needs some tidying up and that is the area of pay day lenders or loan sharks. I have said that the bill before the House will do some good tidying up in its respective area and it will also make the technical amendment that I have mentioned to the Financial Advisers Act. But the one thing that the suite of measures that I have also spoken of—the Financial Advisers Act the Financial Service Providers (Registration and Dispute Resolution) Act and the Reserve Bank Amendment Act—does not do is to regulate the activities of these pay day lenders many of whom are frankly loan sharks. Their activities are going to become of even greater concern as we head into the sort of economic climate described by Lianne Dalziel and by the previous speaker—a very difficult climate particularly for the less well-off in society. 
When those people coming into Wellington City see a sign off the Vivian Street motorway on-ramp that says: “Loans available at only 8 percent” and do not see the “per week” addendum at the bottom of the sign they probably do not realise that “only” 8 percent per week amounts to 5370 percent per annum. That is what so-called “only 8 percent” interest a week means on the sign that people see. This Parliament is one of the few in the Western World that has not yet done anything to regulate the outrageous interest rates charged by pay day lenders in suburbs like Porirua Newtown and in South Auckland. We need to rise to that challenge. 
So I am delighted to use the concluding moments of my speech today to foreshadow that I will at the next opportunity put forward in the ballot a Credit Reforms (Responsible Lending) Bill. One of the things that that legislation will do is allow for the regulation of those usurious rates of interest so that our fellow citizens will not be facing 5370 percent per annum interest charges just because they need a loan to tide them over from pay day to pay day. This legislation that I propose will also amend the Credit (Repossession) Act so that if a lender does not make a proper inquiry about the borrower’s ability to repay then in the event of a default the lender will be required to repay only the principal amount rather than an outrageous set of charges in interest. Once we get the legislation that we are now speaking about through the House it will go through along with that suite of measures that I have mentioned—the Financial Service Providers (Registration and Dispute Resolution) Act the Financial Advisers Act and the Reserve Bank Amendment Act—and we will then be able to hold our heads high and say we do not have a Wild West financial system in this country. 
KEVIN HAGUE (Green) 
: 
 The Green Party will oppose the Securities Disclosure and Financial Advisers Amendment Bill. I spoke earlier in this House in support of the Government’s assistance package for small business but at the same time I expressed frustration at the lack of coherence in the Government’s response to the overall financial crisis. At the same time that small business was being lent a helping hand in the form of relief from taxation and over-regulation an extra obstacle was being put in its place in the form of the withdrawal of the research and development tax credit. I said that the response to the crisis from this Government and indeed from other Governments around the world would in fact stoke the fires that will lead to the next larger financial crisis. An economy based on the paradigm of continuous economic growth through consumerism irrespective of the environmental and resource constraints within which it must operate is doomed to failure. 
It is typical of such paradigm failure that Governments also fail to make important distinctions. Green Parties around the world have been campaigning for the use of more useful indicators of the health of an economy than the GDP. GDP makes no distinction at all between economic activities that are helpful and productive and those that are damaging and destructive. Both count equally towards GDP. It is like using both wellness and sickness indistinguishably to measure someone’s health. Yet that is what our Government does. Any kind of economic activity and any kinds of goods that consumers are persuaded to buy are equally encouraged. 
We see the same failure to make a critical distinction in relation to jobs. In the House the Green Party has asked how many of the jobs the Government hopes to create from its infrastructure package would be green-collar jobs—in other words jobs that would form part of a sustainable economy. The Prime Minister’s response to that indicated that the Government neither knew nor cared; a job is a job as far as it is concerned. There is not time in this speech to really unpack the idea that anything that one person is prepared to pay another to do is of equal value to something else but only a moment’s thought should be sufficient to see that the question goes to the heart of what kind of society we wish to live in let alone what kind of natural environment we want to leave for future generations. It seems extraordinary that the Government does not care about that. 
Once again in this bill we see the Government’s failure to make appropriate value judgments and recognise that a more sophisticated response is needed. Not all deregulation is created equal. Some regulations are more trouble than they are worth and by all means let us get rid of them. That is why we supported the Government’s small-business package. But other regulations serve a useful purpose or as in this case provide an important safeguard for New Zealanders. 
The speculative economy perches vulture-like bloated and flatulent upon the shoulders of the real economy weighing it down. It is failure in that speculative economy that now threatens the real economy in which people actually make products or services that others really need. The succession of burst bubbles in the speculative economy has been fuelled by greed. But the reality is that productive businesses will need capital particularly as it happens because of the withdrawal of Government assistance for research and development. The goal of the bill to remove unnecessary impediments to raising capital is therefore a sound one. 
But given the dynamics that led to the credit crunch we have to wonder whether the Government has been seeking guidance from the Red Queen in  
Alice in Wonderland 
 in bringing this bill forward. Requiring less disclosure to potential investors and providing fewer safeguards are the absolute reverse of what is required. It is important to recognise that giving good businesses access to capital requires a rebuilding of investor confidence. That will not be achieved by providing less information; rather that will require greater transparency greater Government scrutiny and increased regulation. Unsurprisingly that is what most Governments around the world have been doing. I guess we should like the fact that our Government is prepared to think for itself but the outcome in this case is bizarre. 
I want to say a word or two about those special investors the sophisticated habitual investors who are putting in $500000 or more for whom even less disclosure is proposed. My mother used to talk about some people having more money than sense. Perhaps in this case it would be more correct to talk about having had more money than sense. If the unmitigated and still ongoing series of corporate failures arguably starting with Enron and the credit crunch have taught us anything it must surely be that the so-called experts show exactly the same lapses into gullibility and greed that Roosevelt railed against in launching the New Deal. For example how about all the good and the great the experts who have lost their shirts investing in Madoff’s transparent Ponzi scheme? That is just like the aeroplane game and numerous other pyramid-style investment and moneymaking schemes that plagued New Zealand in days gone by. 
The lack of expertise by so-called experts was also demonstrated in the audit and accountability mechanisms in many of those cases and indeed at international level also. As recently as 2006 the International Monetary Fund was pointing to Iceland as one of the absolute stars of the world economy. The most recent number I heard was that at the point of collapse of Iceland’s economy its financial institutions owed six times the entire economic product of the country. 
The point is that the decisions made by those special investors have been proven again and again in recent times to be ill-judged and to have in very large measure shaped the crisis we are now experiencing. Their bad decisions affect us all profoundly. More disclosure and regulation is required not less. Clearly in Iceland’s case a lot changed between 2006 and the present day. Actually the same applies here and with all due respect to the consultation work done by the Ministry of Economic Development which is referred to in the explanatory note of the bill consultation undertaken on these matters in 2006 is almost certainly completely worthless. It seems extraordinary that a Government that was paying attention to international events would apparently be unaware of that. I am drawn to an irony in the fact that the Minister says this bill has been drafted in a hurry in response to the crisis but the Labour members instead talk about the Government having inherited Labour’s bill. I suspect that the latter explanation could be the real one. 
Right now the priority for consultation on how to improve the sector is consultation with the many thousands of New Zealanders who have been victims of the numerous collapses of apparently sound investment and finance companies. When I first started drafting this speech it appeared that there had been 26 of those collapses. More recently I have been informed that the number had grown by yesterday to 45—and counting. It is good that the bill is going to a select committee and I praise the Minister for that. If the bill passes its first reading then I urge the select committee to seek out the views of those investors who have lost their money and if it does not then the Green Party will. 
Ever since the economic crisis first struck the Green Party has been speaking about the need for a Green New Deal: a raft of measures intended to address the crises in the environment and in energy concurrently with the financial crisis moving our economy on to a long-term sustainable basis. To pretend that it is possible to do otherwise is ultimately futile and will condemn New Zealanders to more and more severe consequences for our way of life including bigger and worse financial meltdowns while mortgaging our kids’ future. The Green Party has for example supported the call for a new Bretton Woods agreement. Our central bank needs to be more proactive in supervising our own financial industry. 
We also support the very sensible recommendations of the bank workers’ union FinSec for the reform of the finance industry including the establishment of an independent financial consumer agency establishing a New Zealand code of lending practice establishing a code of responsibility for the finance sector and strengthening the role of the Reserve Bank in licensing and supervising financial institutions’ lending practices. In many cases the interaction between an institution and a person who is borrowing money is similar to that between an institution and a person who is investing. Both transactions require full transparency full disclosure understanding consent and ethical behaviour from both parties with appropriate independent oversight and enforcement. 
The Green Party will be voting against the first reading of the bill. It is an artefact of the past left behind by changed circumstances and it needs to be consigned to the dustbin of history save for the minor amendments to the Financial Advisers Act. The Green Party wants to see investor confidence rebuilt because that is the only way that we will reduce the barriers to raising capital for good sustainable businesses. That will be accomplished only through greater disclosure not less and by a more active role being taken by the Government. 
JOHN BOSCAWEN (ACT) 
: 
 I rise on behalf of the ACT Party to support the first reading of the Securities Disclosure and Financial Advisers Amendment Bill. Unlike the Green Party we will be supporting this bill going to the select committee. However I agree with my colleague Kevin Hague that this country is facing a total failure of investor confidence and that is one of the biggest challenges that we have to rebuild. The Minister said that this bill will be broken into two parts when we reach the Committee of the whole House. The first part will be the Securities Disclosure Amendment Bill and the second part will be the Financial Advisers Amendment Bill. The regulatory impact statement which the Hon Lianne Dalziel referred to earlier states that the world is currently in the midst of the worst financial crisis for many decades. The most important and pressing financial sector issue has been the breakdown in credit markets. This bill seeks to go some way towards building up that confidence in the wholesale investor markets with larger institutions dealing with publicly listed issuers. Although I acknowledge the lack of confidence that Mr Hague referred to our party will be supporting this bill. We think the bill is very important because it takes some small steps towards minimising the cost of regulation and making it easier for companies to raise finance in this current market. 
The part that will become the Securities Disclosure Amendment Bill seeks to make it easier for listed issuers to raise either equity capital or debt capital when it comes to raising money from if you like habitual investors or those investors who have already committed over $500000 to the company in the last 12 months. What it enables the issuer to do is to issue a simplified disclosure prospectus so rather than having to repeat information that is already in the public domain that information is assumed to be there. We do not believe that the concerns the Green Party has in that regard are real and we think this legislation will go some way to minimising the cost of raising capital. 
The part that will become the Financial Advisers Amendment Bill makes a number of technical amendments to the Financial Advisers Act that was passed last year. I thought it was very interesting that in question time earlier this afternoon the Labour Opposition continually referred to the job losses at Sealord Irwin Industrial Tools and GE Money. Although I acknowledge that those potential job losses are very real I think that one of the biggest issues this country has faced has been the absolute devastation of many thousands of families mainly retired families who have invested money over the last 4 or 5 years in finance companies. As Mr Hague says the losses now total 46. That I think has been a disgrace on the previous administration. It concerns me greatly that those losses in some part are still continuing. 
I think what we have to do is address the lack of confidence because we have seen a number of straight outright rorts. Some of the companies concerned are being brought to justice in the courts. I will give an example. What some of the finance companies have done over recent years is to simply create artificial profits. They have lent large sums of money to their client customers they have done it at a market interest rate—for finance companies below the going rate—but they have loaded the loan with large upfront fees. For example a finance company lending a major property development $50 million might charge an upfront fee of $10 million and that immediately allows the finance company to bring that $10 million charge to profit in the current year. It has not received that money in cash but it can book the money as profit and the finance company charges it or capitalises that sum to the loan. 
What then happens is that new money comes in the door of a finance company as cash and because the company is then solvent and has that cash it is able to pay that money out in dividends to its shareholders. What we have seen in the last 2 or 3 years is the collapse of a large number of finance companies which can be put down to one thing and one thing only and that is straight-out fraud. We need to bring the people who perpetrated and initiated those schemes to justice. 
I notice also that Mr Hague referred to the fact that the Government needs to seek out the people who have lost money. He says that if the Government does not do so the Green Party will. I am also very conscious of that and I actually met some investors yesterday. I met Ron Jensen and his wife Kathleen Jensen who invested $200000 supposedly in an apartment to be built by Blue Chip. Mr Jensen was told by the solicitor acting for him that the solicitor could look out of the window and see the building under construction that it was in strong shape and that it was a good and sturdy building. That building does not even exist; it is a car-park. That gentleman Mr Jensen is in his mid-70s and he faces losing the sum of $200000. 
I met Owen and Margaret Dawe yesterday afternoon in Auckland. Their losses could exceed $500000. They were sold an apartment—admittedly their apartment existed—but they were sold two apartments with a guaranteed income. A number of representations were made to them and those representations were false and fraudulent. They have evidence that the document they completed for their application was falsified after they had signed it. 
The measures contained in this bill go some way to making it easier for our listed companies to raise money in the current environment but the biggest challenge we face is restoring the confidence of the smaller investors. Those are people who have worked their entire lives are in their 60s and 70s and have invested money with organisations they deemed to be safe based on representations that have been proved to be fraudulent. What this Government needs to do if it is concerned about the people of this country is to look into those schemes investigate them and bring appropriate legal action. It also needs to put a moratorium on attempts by finance companies to put properties through mortgagee sales particularly when it involves an issue of fraud. Until those cases are brought to court and determined the ACT Party believes there needs to be some sort of moratorium. 
Finally I would like to comment on one of the issues that the last Government introduced—the Government guarantee of finance companies. Mr Hague referred to the fact that up until yesterday 45 finance companies had collapsed and now there are 46. There is something very special about that 46th company which is called Mascot Finance in that it has collapsed with the benefit of a Government guarantee. What is surprising about that Government guarantee is that Mascot Finance has not raised one single dollar since that guarantee was put in place. That guarantee will guarantee the former investors—and good on them because they may well have been duped by fraud. But no charge has been made to that finance company so essentially what we have is the Government subsidising private companies which enables private companies to offer a guarantee at interest rates that are now well and truly above the market rate. 
Yesterday we saw the collapse of Mascot Finance. Many millions of dollars will need to be reimbursed at cost to the taxpayer and the taxpayer will not get an appropriate return on those funds—on that guarantee. I do not deny that there is a need for a guarantee to shore up confidence but it should be done at a commensurate return to the taxpayer. Yesterday we saw the first loss and I have no doubt there will be many more. We need to ensure that we are not subsidising private business. Thank you Mr Assistant Speaker. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 On the eve of the first reading of the Securities Disclosure and Financial Advisers Amendment Bill the New Zealand dollar plunged to a 6-year low. Anyone trading on our dollar yesterday would have earned a meagre US49c per New Zealand dollar. Suddenly the precarious state of the global financial economy is hitting home in dollars and cents. Then by the end of yesterday came the other shocker: Sealord was planning to lay off 180 workers with further wage cuts imminent. That announcement has particular meaning for our whanau. Many of my nieces nephews and cousins have been working for Sealord for decades. Indeed Sealord provided me with my first pay packet many years ago. We then learnt overnight that not only are there worst-laid plans about discarding workers many of whom are Maori but also there are rumours afoot of a possible $70-a-week cut in wages. 
The signs certainly indicate that we are facing the worst international financial crisis for many years. Desperate situations can strike fear in the hearts of even confident investors who will be nervous that Government interventions may undermine their interests. In this context the Government has moved slowly surely and soundly. While the dollar fell in one direction the Government moved in another yesterday placing Mascot Finance in receivership. It has become the first finance company to benefit from the Government’s retail deposit guarantee. With that move depositors can expect to enjoy a certain confidence that even if an approved financial institution fails their money will be secure. 
But as any reputable financial adviser will know the change needed to address the current credit crisis will not occur from one initiative alone. And so enters the Securities Disclosure and Financial Advisers Amendment Bill. The decision to remove unnecessary impediments to the raising of capital is not a new idea by any means. But as they say if an idea is worth having once it is worth having twice. The bill is a response to a recommendation from the Capital Market Development Taskforce—launched last July—to develop capital markets for New Zealand. The task force which includes Ngati Porou business leader and the chair of the Business Roundtable Rob McLeod had been meeting along with the Ministry of Economic Development Treasury the Reserve Bank and the Inland Revenue Department to find ways to improve businesses’ access to capital. The 10 representatives of the private sector in the task force along with Government officials have been working to develop a simplified disclosure prospectus. But it has not just been a job for the boys or a report written by and for the chosen 10 experts; the bill also reflects recommendations made by the New Zealand Exchange. Furthermore having the Cabinet paper and various related documents available for download from the Ministry of Economic Development website means that the concepts are virtually open to receive the broadest public support. That is how it should be. 
The interest of all parties is about the clarity of the arrangement. The bill seeks to ensure that the rules work better that information is efficient and duplication avoided and that the disclosure documents are simplified. Disclosure statements must be kept up to date and must not be deceptive misleading or confusing. The ultimate goal is that the amendments set out in this bill provide greater certainty to businesses wanting to raise capital in today’s troubled markets. Part 1 makes the simplicity explicit: instead of an investment statement investors will be sent a simplified disclosure prospectus. Before investors are asked or encouraged to subscribe potential investors will be given time to consider all the necessary information. 
The Securities Disclosure and Financial Advisers Amendment Bill is a result of the Government’s decision to act boldly. It ensures that all relevant information is available to prospective investors while at the same time ensuring that any unnecessary barriers are removed. The bill implements ways to improve businesses’ access to capital and reduce the costs of raising capital. It is about making things easier streamlining the raising of capital and making things happen for listed issuers. Instead of duplicating the information faced by many businesses listed on the stock exchange when they make a securities offer there will now be a simpler clearer process. 
We have to be aware however that no matter how successful this bill is in making it easier for all companies—listed and unlisted—to raise capital there are still huge problems with the assumption that exponential growth is an ideal we all want to sign up to. No one can ignore the fact that the global financial system is on the cusp of ultimate failure. The recklessness of some banks in squandering depositors’ funds and the drowning of a market that was already flooded is simply not sustainable on a finite planet. Simply printing more money or assuming that the stock exchange is the all-important vehicle for creating wealth will only exacerbate the problem. Theoretically we may end up with a lot of money and no resources. 
The New Zealand Exchange chief executive Mark Weldon told Maori who were gathered at the Maori economic workshop that the economic crisis posed threats to Maori especially those in low-skilled occupations such as construction. The enormity of this issue must not be trivialised. We are at a turning point where not only must we tackle inflation raise capital and find ways to support the productive sector but also we must ask searching questions about the very nature of the economy and the society we are producing. Central in this must be the question of how well the living standards of New Zealanders are being taken into account. This bill is but one of many strategies that must be taken into account in order to lift living standards for New Zealanders. The Maori Party will support it at the first reading to enable the doors to be opened and new ideas to come in. Thank you. 
JO GOODHEW (National—Rangitata) 
: 
 It is my pleasure to speak today on the first reading of the Securities Disclosure and Financial Advisers Amendment Bill. The bill is part of the National Government’s response to the current economic crisis. I have been very interested to hear previous speakers all traversing parts of the economy at the moment and talking about how they believe this Government should be addressing the current economic crisis. The previous speakers have spoken from their own experience of what is important to the people they know and the businesses they understand. This bill is typical of a National Government that is determined to look at all ways that we can reduce unnecessary impediments within the business world. Not for many decades has this been so important. 
It is probably a good idea to look back at how the problem was identified that necessitated this bill and others as well. In doing so I acknowledge the Capital Market Development Taskforce which was established back in July 2008. It was to produce a plan to develop New Zealand’s capital market and it released a report in response to the financial crisis. It focused primarily on increasing the availability of capital for New Zealand firms and reducing the costs of raising capital. I acknowledge the report which was released in November 2008 and the fact the task force was set up under the previous Labour Government. This bill is part of a process where we are responding to the current economic crisis. 
Today I would like to focus on the aims of the bill as well as more specifically focusing on National’s wider commitments to New Zealand and to New Zealand businesses. The overarching aim of the bill is as I have said to free up available capital for business and ultimately to help business to do business. The Securities Disclosure and Financial Advisers Amendment Bill responds to the current international crisis by removing the unnecessary impediments to capital raising while ensuring at the same time timely disclosure of relevant information to prospective investors. We all know from our own territory within New Zealand where we are the representatives of our local people how nervous New Zealanders are and how nervous businesses are right now. This bill will help to reduce compliance costs and it will help businesses through tough economic times. 
The bill principally provides for the use and regulation of a simplified disclosure prospectus. The new type of prospectus will in connection with regulations that will be made under existing regulation-making powers enable stock exchange - listed issuers to offer certain debt and equity securities but without the need to duplicate information that has already been publicly disclosed under their continuous disclosure obligations. I want to reflect on a couple of words within that description. We actually need to make sure that if there is duplication of information within our business environment we get rid of that. That is just one more of those compliance costs that New Zealand businesses have asked us to look at to make the environment they are working in more simplified and more user-friendly. 
The bill will amend two separate pieces of legislation—the Securities Act 1978 and the Financial Advisers Act 2008. The bill implements changes to simplify the process and reduce the cost of compliance within existing securities legislation. As I have already said the bill is part of the recommendations made by the Capital Market Development Taskforce. It made other non-legislative recommendations that the office of the Minister of Commerce is currently assessing. It is part of an urgent response to the current global financial crisis and it is part of the Government’s plan to actually come through the economic downturn. We want to enable our businesses to forge ahead when the recovery period is upon us. 
The Financial Advisers Act 2008 amendment corrects an error made by the Office of the Clerk when the Financial Advisers Bill was being prepared for Royal assent. It corrects the phrase: “This Act applies to a financial adviser service performed in New Zealand by a person in New Zealand regardless of where the person performing the financial adviser service is resident . . . or carries on business.” It changes that phrase to read: “This Act applies to a financial adviser service performed in New Zealand regardless of where the person performing the financial adviser service is resident . . .or carries on business.” That is an important little alteration. 
As I have said the purpose of the bill is to free up capital for business and to help businesses to do business. National is committed to cutting red tape for businesses and this bill is just part of the many steps that this Government intends on delivering for business. As other speakers before me have done I want to reflect on what is happening out there for business. National has already addressed some of the issues for small to medium enterprises in a package that was widely supported in the House. We know that those small businesses are vital to the New Zealand economy and we believe that that small and medium enterprise package unveiled last month will help to lighten the load on those small and medium sized businesses. They employ a large number of New Zealanders and employment and maintaining employment is of course uppermost in our minds right now. That package has five parts which included tax changes an expansion of the export credit scheme an extension of the jurisdiction of the disputes tribunal the expansion of business advice services and a prompt-payment requirement for Government agencies. It is only fair that Government agencies should be required to pay promptly as do private agencies. 
The package as a whole was aimed at urgently improving the business environment by reducing the impact of taxes on firms’ cash flows and improving firms’ access to credit thus importantly reducing business compliance costs. The reaction I have had in my own electorate of Rangitata has simply been one of people saying “Wow! This is just absolute common sense. This is what we have been waiting”—in some cases they tell us—“9 long years for.” In fact they are just common-sense measures to help our businesses to do business. 
National’s jobs and growth plan is also about keeping the economy running as strongly as possible easing the sharpest impacts of the recession and preparing our economy for future growth. Unlike the previous Government the National Government believes in creating a business-friendly economy. We are taking a hard look at any possible action from any angle to help business; this bill is part of that package. It is all about businesses staying in business and helping New Zealanders to stay in employment. We have seen action from this Government. Times have changed and again many constituents have said to me how wonderful it is to see action. In the first 100 days we have certainly seen this Government deliver on all 27 actions within our 100-day plan. Again we have had congratulations from many that the Government is getting on with the job of Government and adding to the confidence that New Zealanders can feel. 
New Zealand—and in fact the whole world—is in the midst of the worst financial crisis for decades and no one disputes that. Credit markets are in disarray and confidence is low and unfortunately falling. But this bill and other bills that are part of the measures to address what the task force identified as problems will help create some confidence—confidence of investors and confidence so that credit markets can in fact best meet our business needs. 
The bill will address the simplification of the disclosure prospectus that may be used by listed issuers subject to continuous disclosure requirements. The remedy is to amend the existing definitions for exemptions from standard disclosure requirements. This bill is about removing unnecessary impediments to capital raising while—importantly—making sure there is still timely disclosure of relevant information. That is absolutely essential for prospective investors. 
I look forward to participating as a member of the Commerce Committee as we examine this bill and as we hear submissions on it. I commend this bill to the House as others have done before me. I am pleased there is quite a lot of support for this bill and I look forward to seeing it again at the select committee. 
STUART NASH (Labour) 
: 
 I rise to speak in support of the Securities Disclosure and Financial Advisers Amendment Bill for a number of reasons. First and foremost in these difficult economic times the ability of any company to raise capital in a timely manner is imperative in order to stimulate economic development and advance measures that will facilitate employment export revenue business growth and quite possibly business survival. 
Current securities legislation is in place to ensure that all who invest in New Zealand’s capital markets can invest their hard-earned money with confidence in the knowledge that any risk around negligence incompetence and—worse still—unlawful or misleading information is mitigated. Registered prospectuses are a very important part of the capital fundraising process. Not only do they allow the company to ensure that its business planning and financial analysis is sound robust and correct but they provide a legal document that allows any potential investor to fully investigate and undertake an analysis of any offering in a prudent and thoughtful way. 
As the Minister said the provision of relevant information in a timely manner is imperative. I would not in any way support any motion to do away with this investment tool. However in certain circumstances I fully support the recommendation of the Capital Market Development Taskforce—set up by the previous Labour Government with a mandate to identify key constraints and key opportunities for the development of the New Zealand financial system—to identify and debate options to improve the performance of New Zealand’s financial system and to develop a blueprint for the development of New Zealand’s financial system. That is very very important. 
I support any measure that provides security of process to the investing public and that protects New Zealand’s reputation as a safe place to invest whilst also ensuring that companies that seek to raise capital are still subject to the legal rigour and regulatory requirements needed to ensure a robust financial system and robust capital markets. New Zealand needs to be very sure that its regulations governing public and private capital market activity meet not only the international standards expected of New Zealand’s investors but also the criteria of global investors. 
Our stock exchange once had a reputation of being run by cowboys from the Wild West and that was alluded to by Mr Charles Chauvel. I say that having spoken to senior investment strategists and finance people who often travelled offshore to raise capital for New Zealand companies listed on the New Zealand stock exchange. Their anecdotes paint a picture of New Zealand as a place the vast majority of international investors would not touch with a bargepole. I am very pleased to report that now under the direction of the current chief executive and as a result of the regulations and legal environment created by the previous Labour Government our stock exchange has achieved an international reputation for transparency and good governance. We must ensure that that transparency good governance and robustness remain in place if we are to have any chance of developing our capital market—which at this point I think is acknowledged by all as being underdeveloped. 
I also support this bill because I understand that the ability to raise capital through traditional financial institutions like banks has suddenly become extremely difficult in the current economic climate. This situation is not likely to change in the short to medium term as the so-called credit crunch continues to limit the amount of capital available for institutional financing. I also understand that this bill may ensure the survival of certain companies when under current legislation that might not have been the case. Companies therefore do need another avenue or at least a simplified process to raise capital in a timely manner. The simplifying of the prospectus process is therefore welcome at a time when regulation must work to ease the regulatory burden—whilst maintaining the very important transparency we have all talked about—upon the business sector. 
Cost-effective access to capital is essential and important. There are investors who are feeling a little bit burnt under the current environment and we have talked about 43 finance companies that have gone under so I am encouraged that this bill arises out of extensive collaboration with those from both sides of the fence—investors even bankers company representatives and companies that are required to raise capital. I hope further recommendations in the report tabled by the Capital Market Development Taskforce set up by the last Labour Government will appear before this House in an effort to continue to stimulate the investment environment and ease the capital fundraising process thereby removing any real barrier to economic and business growth. 
In conclusion I pass on my congratulations to a previous speaker and former Minister of Commerce my colleague the Hon Lianne Dalziel for without her foresight effort and energy we would not be here debating this excellent legislation. Just to close I would also like to show my support for my colleague Charles Chauvel’s comments on loan sharks. They are truly social parasites in my humble opinion. Mr Chauvel’s member’s bill will be a welcome addition to the continual tidying up and timely revision of the mess that is this insidious industry. Thank you. 
KATRINA SHANKS (National) 
: 
 It is my pleasure to stand here today and talk on the Securities Disclosure and Financial Advisers Amendment Bill. This bill has been needed for quite some time and particularly in the current environment when credit is very hard to get globally and in New Zealand. It is important that this bill comes into place now as it implements changes to simplify the process and reduce the cost of complying with existing securities legislation. 
This bill is based on the recommendations made by the Capital Market Development Taskforce. This task force produced a report at the end of last year and I will quote a couple of pieces of the report: “In large part the impact of the financial crisis on firms and households will depend on how we respond. … Ensuring that capital markets remain well functioning is an important part of that package. … The recommendations set out in Section II of this report concentrate on easing barriers to firms raising capital without undermining investor protection.” 
The last part I will read states: “In this case much of the material in a prospectus is costly duplication and a simpler offer document would contain the relevant information potential investors need without undermining their protections. Some of these proposals draw on practice in Australia so are not out of line with settings in other countries. 
The second principle is that in a number of cases the existing exemptions under which firms are able to issue securities without offer documents can be simplified and clarified. … Given the importance of ensuring that firms can access capital as efficiently as possible in the current economic environment we encourage the Government to consider implementing these recommendations by March 2009 where possible.” 
I found it very interesting when Charles Chauvel stated earlier that under a Labour-led Government this legislation would eventually have come into play near the end of this year anyway. We have to move quickly in the environment we are in if we are serious about getting our economy moving forward and about allowing capital and credit to be freed up in New Zealand. To have legislation like this coming in at the end of this year would not be timely enough. The quick introduction of this legislation shows how focused John Key is on delivering an environment for New Zealand where this country can prosper move forward and not be disadvantaged by red tape and bureaucracy. 
Lianne Dalziel gave 10 out of 10 to the Minister sitting in front of me Simon Power in terms of how good this legislation is. I stand here proudly as a National member of Parliament in support of this legislation at its first reading before it goes to the Commerce Committee. 
We have heard many speakers today talk about many things. We have heard them talk about finance companies loan sharks financial advisers and the securities sector. It was all interesting but the focus of the legislation is not on loan sharks; it is on how we can cut red tape and bureaucracy. What does the bill do? It reduces compliance costs to help New Zealand businesses focus on business rather than on reporting. It is absolutely important that we allow businesses to get on with business instead of having to file reports or prospectuses that are duplicating what has already been done. 
This bill is not about taking away information from investors or hiding things from them; it is about making sure that investors get what they need from a prospectus that they can clearly understand—in simple English. Where a securities company has more than one prospectus it does not have to repeat information over and over again. Exemptions are in place in this legislation as well. 
The provisions in the bill cover both stock market - listed and unlisted businesses which benefits all sectors that are lending money or raising security out there. The bill will free up capital for businesses. This means that there is going to be more capital available out there for businesses to help them get through the crisis we are in and it will also help growth and productivity moving forward. 
We have to remember that credit is not just for right now; there are many people who need credit for their working capital for their businesses. This is where many companies are struggling right now because they cannot get credit for their working capital. The bill not only frees up working capital but also frees up capital for those who are in a growth stage. Believe it or not some sectors out there are absolutely thriving and doing really well at the moment. Although many sectors are struggling some businesses are doing very very well. We have to ensure that they can grow in the economic environment we are in and allow them to be able to get capital more freely. This legislation is also focused on all those types of businesses. 
The bill is about issuing shares and the information that must be provided when shares and security are offered. Currently there are double-ups in the system when shares are provided for offer. The bill’s provisions aim to reduce inefficiencies in reporting processes by reducing that duplication leading to less time and money being taken up without losing information. In effect that sounds really really simple but this is legislation that we have not had in place to be able to allow companies to do that. 
It is really forward thinking in terms of the duplication and bureaucracy in this environment. It will help small medium and large sized enterprises to access capital and investors at all levels are going to be able to understand information more easily. Many investors come along pick up an investment prospectus and see that it is 100 pages long. Not many people can honestly say they read the full 100 pages. The bill will make it easier for those people to understand information but at the same time it will keep transparency there. People will be getting all the important information they need to make decisions when they invest money. 
Part of the Government’s response to the current economic climate will help to ease the credit crunch currently being experienced by all New Zealand businesses across all sectors. That is the good thing about this legislation: it is open to all businesses and all sectors. When we look at this legislation and at the regulatory impact statement we see that it clearly reflects what is in the task force report and what we are trying to achieve as a Government. 
I will read just a little bit. It states: “The world is currently in the midst of the worst financial crisis for many decades. The most immediate and pressing financial sector issue has been the breakdown in credit markets. The preferred option is to provide for a simplified disclosure prospectus that may be used by listed issuers who are subject to continuous disclosure requirements and to amend the existing definitions for exemptions from standard disclosure requirements. These changes should remove unnecessary impediments to capital raising while still securing the timely disclosure of relevant information to prospective investors.”  
That is what the bill is all about. It is about simplifying things for people who are trying to invest money and simplifying the process for those who are issuing money security or shares.  
It is with pleasure that I stand here today and recommend this bill to go to the select committee and we look forward to hearing all the submitters who come in and give their opinions on this bill and the way it stands. I look forward to it coming into the House for a second reading and to discussing it further. I thank the Minister Simon Power for getting this bill ready so quickly because having a bill put forward this quickly is quite incredible. It takes a lot of hard work and commitment to get a bill to this stage. I look forward to seeing it at the select committee. 
RAYMOND HUO (Labour) 
: 
 I rise to support the Securities Disclosure and Financial Advisers Amendment Bill in its first reading. The bill amends both the Securities Act 1978 and the Financial Advisers Act 2008. The explanatory note states that the bill “responds to the current international financial crisis by removing unnecessary impediments to capital raising while ensuring the timely disclosure of relevant information to prospective investors.” It also makes a number of minor tidying-up changes to the Financial Advisers Act. 
From the explanatory note it is clear that the bill will undoubtedly streamline the raising of capital for New Zealand businesses. Central to the bill’s key provisions is the objective of making it easier for businesses to raise capital by introducing a simplified disclosure prospectus regime into the Securities Act 1978 doing away with a lot of duplicated information for New Zealand stock exchange - listed issuers. At the same time the simplified disclosure prospectus aims to ensure that accurate and timely disclosure of information is made to prospective investors. The bill does not reduce the information required to be disclosed; it merely removes the duplication of information already provided pursuant to continuous disclosure obligations. It therefore removes unnecessary impediments to capital raising without undermining investor protection. 
This bill also tidies up the rules for exempt persons and people deemed by the Act not to be members of the public for the purposes of disclosure making it easier for all companies both listed and unlisted to raise capital. The Labour-led Government passed legislation in September last year to toughen up the rules of professional conduct and competence for financial advisers. This bill follows recommendations made by the Capital Market Development Taskforce in November 2008 for steps to respond to current financial conditions which are particularly relevant for listed issuers and also reflect recommendations made by the New Zealand Exchange. The Capital Market Development Taskforce should be applauded for the speed with which it has come up with a series of recommendations in November 2008 that address a number of impediments to capital raising particularly by listed issuers. The measures recommended are practical conceptually sound and will significantly reduce the barriers to capital raising by listed issuers. 
The Capital Market Development Taskforce was established in July 2008 and included members from the Government and the private sector. The objectives of the taskforce were to identify key constraints and opportunities for the development of New Zealand’s financial system identify and debate options to improve the performance of New Zealand’s financial system and develop a blueprint for the development of New Zealand’s financial system. Originally the task force had a year to produce its specific outputs but in response to the global financial situation it produced an interim report in November 2008. It outlined a package of proposals designed to boost access to capital for New Zealand businesses and reduce the cost of raising capital. As a commercial lawyer I recall that on 21 July 2008 both my fellow lawyers and our clients from the financial sector were excited at the news that the Capital Market Development Taskforce which was launched by the then Minister of Commerce the Hon Lianne Dalziel would see the Government and the private sector working together to develop New Zealand’s capital markets. The Hon Lianne Dalziel rightly stated at that time that improving the investment environment was a key part of the former Labour Government’s economic transformation strategy. The Hon Lianne Dalziel went on to say: “To deliver wealth and jobs New Zealand firms need ready access to affordable capital. The taskforce will identify ways to make this happen.” Now this has happened. 
I am delighted that the Government considered and adopted those recommendations by introducing this bill. It is worth reiterating that the Hon Lianne Dalziel in her speech this afternoon gave the regulatory impact statement 10 out of 10. To introduce legislation such as this bill is important particularly at this time when New Zealand along with the rest of the world is in the midst of a financial crisis. In large part the impact of the financial crisis on firms and households will depend on how we will respond. New Zealand will need to adopt a comprehensive package of measures if we are to minimise the costs of the downturn and speed the recovery. Ensuring that capital markets remain well functioning is an important part of that package. Thank you. 
AMY ADAMS (National—Selwyn) 
: 
 I am pleased to rise this afternoon and add my voice in support of the Securities Disclosure and Financial Advisers Amendment Bill. As we have already heard today this bill aims to respond to the current troubled financial climate by removing the unnecessary barriers to capital-raising that exist currently. At the same time the bill seeks to ensure that relevant information is disclosed in a timely manner to prospective investors. In essence what the bill does is provide for a simplified disclosure prospectus allowing certain debt and equity instruments to be issued without the need to duplicate already disclosed information. 
As we have also heard this afternoon the bill arose from the recommendations of the Capital Market Development Taskforce after it completed in November last year its very considered analysis of the technical rules that surround this complex area of law. The point to remember is that the provisions of this bill will make it easier for applicable businesses to raise capital while protecting the timely and accurate disclosure of information to those considering investing. 
The Securities Disclosure and Financial Advisers Amendment Bill will do away with a lot of unnecessary duplication notably for companies listed on the stock exchange and in doing so it will reduce compliance time and costs. In that regard it is one more example of this Government putting getting business done ahead of the value of bureaucracy for bureaucracy’s sake. This Government understands that New Zealand must support the productive commercial sector if we are to navigate our way through the current international crisis and do so with the minimum amount of impact on ordinary New Zealanders. We all know that unfortunately there is nothing we can do to prevent the hard times ahead but we can take steps to soften the hard edges of that crisis and to put New Zealand in a good position for a strong recovery when the time comes. This bill is part of achieving that aim. 
In addition to addressing issues of duplication as we have already heard from the Minister of Commerce the Hon Simon Power the bill also usefully clarifies the law around the category of persons who are exempt from the securities disclosure regimes by adding a further category of exempt persons and it does so through an amendment to section 3(2)(a)(iia) of the Securities Act. Notably this will remove from these strict disclosure regimes only people who already possess all the necessary information or who are very experienced in the business of investing. What it does in this regard in effect is create further safe harbour provisions for those who have already made an investment of $500000 or more in identical securities within the past 12 months. 
We will not of course accept any changes that would undermine investor confidence in the securities market—and now more so than ever—but where unnecessary red tape compliance and double-ups have been identified it is the duty of any prudent Government to remove those unjustified hurdles in favour of a capital market in which businesses can raise funds more easily. 
Although this bill falls outside the National-led Government’s 100-day plan of action it is none the less part of what we are doing to help New Zealand through the economic downturn. It should also be remembered that the existing safeguards within the Securities Act are maintained that a full and complete disclosure of the risks that come with the investment remains compulsory and that in addition the extensive penalties continue to apply. From my experience within this area of law I know that the Securities Commission in conjunction with the Companies Office acts as a particularly vigorous watchdog in this regard. 
In difficult financial times access to capital is fundamental. The importance of this fact is coming into sharp focus for many New Zealand businesses right now. Many businesses that are otherwise strong and should not by reason of any inherent problems fall victim to the worldwide financial crisis may well still fail simply due to issues relating to their ability to access capital. Keeping capital flowing through business communities is vital now more than ever. This bill is a step towards doing this and it is before this House as part of a number of matters including non-legislative matters that are being looked at. 
The Taxation (Business Tax Measures) Bill which we saw previously in the House focused on small to medium sized businesses. The bill before the House now is more relevant to the listed issuers so it is looking at a different sector of our productive economy. But I would also touch on the fact that it will be very relevant to start-up businesses angel investors and those going through initial public offerings. Let us remember that if we want to bring growth and productivity back into the economy then it is important that we support those businesses and not just those that already have a place on our stock exchange and this bill will be a part of doing that. 
Even in these tough times I find it very interesting that several businesses in my electorate of Selwyn have tremendous expansion opportunities ahead of them and when we consider the economic climate in which they are operating that is quite a feat. Some of them have the potential to double their existing operation. The markets are there the willingness is there but the one thing between them and achieving that growth is capital. 
This bill by removing some of the barriers and some of the duplication and excessive cost will help to create that growth and more important it will help to create and keep jobs in our economy—which is the one thing that I think this House agrees is crucial at this time. But it can do that only with capital and that is worth remembering. Freeing up capital markets is therefore a very important part of keeping the growth in the economy. 
The Capital Market Development Taskforce has identified some ways we can assist in that process. Therefore I am very pleased to support this bill. On that point I will just take a moment to agree with the previous speaker Raymond Huo. As a lawyer who has worked in this area of law I agree that the people who practise in this area support these measures. They have been calling out for them. They were very pleased to see the task force brought about and they will be equally pleased to see the measures given effect to. 
I think we can summarise the effect and the importance of the bill by taking a moment to reflect on the first paragraph of the explanatory note of the bill: “The Securities Disclosure and Financial Advisers Amendment Bill responds to the current international financial crisis by removing unnecessary impediments to capital raising while ensuring the timely disclosure of relevant information to prospective investors.” It seeks and achieves that balance of getting rid of unnecessary duplication freeing up red tape and continuing to help the capital flow through to our business sector. 
Finally I should make reference to the fact that the bill also has another objective which is to make technical admittedly but necessary amendments to the Financial Advisers Act 2008. That legislation obviously had errors in it when it was passed through the House last year and taking the opportunity to address those errors is I think timely and I support doing that. This bill is a necessary step towards addressing the current situation. It is not a silver bullet or a panacea but it is a small step in the right direction and for the companies that are affected it will be of particular benefit. I am very pleased to commend this bill to the House. 
A party vote was called for on the question  
That the Securities Disclosure and Financial Advisers Amendment Bill be now read a first time. 
Ayes 113 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Maori Party 5; Progressive 1; United Future 1. 
Noes 9 
Green Party 9. 
Bill read a first time. 
Hon SIMON POWER (Minister of Commerce) 
: 
 I move  
That the Commerce Committee 
 consider the bill and report finally to the House on or before 30 April 2009. 
Motion agreed to. 
Corrections Amendment Bill (No 2) 
Third Reading 
Debate resumed from 19 February. 
PHIL TWYFORD (Labour) 
: 
 I rise to complete the call interrupted by the rising of the House just a couple of weeks ago before the adjournment. The Labour Party supports the Corrections Amendment Bill (No 2). Significant progress has been made in this area over the last decade but much still needs to be done. 
I will note some of the progress that has been achieved over the last 10 years under Labour. The number of prison escapes per 100 prisoners was just one-sixth of the number of escapes 10 years ago under the previous National Government. That means a fall of 84 percent in the rate of escapes. Drug taking in prisons is down by 84 percent. Fewer inmates are returning positive drug-tests. Labour made it significantly more difficult for people to escape by putting in 17 kilometres of perimeter fencing. A lot of progress was made in the area of increased security and surveillance against contraband such as new security fences and electronic devices and monitoring. Increased surveillance included a doubling in the number of drug-dog teams to 12. 
All those operational initiatives need support and this bill aims to complement those operational initiatives. It aims to crack down on drug use in prisons eliminate the illicit use of cellphones enhance powers of search in relation to inmates and to those working in prisons and adopt a zero-tolerance approach towards staff who pass contraband to prisoners. Penalties will go up from 3 months to a year in prison and the maximum fine will double to $5000. 
The bill authorises the electronic detection and jamming of all cellphones used within prisons and it extends prison powers to enable inmates’ mail to be screened for unlawful or harmful communications. In doing so the bill makes consistent the ruling that applies to both telephone communications and mail. Finally the bill creates a penalty for publishing unauthorised communications from inmates that may prejudice the interests of victims. 
The men and women of our corrections service do essential work for the community and we rightly expect that our prisons will be secure safe and lawful places. This Corrections Amendment Bill (No 2) will give those in our corrections service more of the tools they need to do their job. It is a good bill it is a practical bill and it was developed by the fifth Labour Government. It was improved in the select committee and was progressed by the current Government to its second and third readings. I call on the House to support this bill. Thank you. 
CHESTER BORROWS (National—Whanganui) 
: 
 I rise in support of the Corrections Amendment Bill (No 2). As the previous speaker Phil Twyford indicated this bill is supported pretty much without contest between parties or across the House. The fact is that this bill raises and deals to a number of issues that have been waiting in the wings for some time and it is good to be able to get around to dealing with them. 
During the course of the select committee process the Law and Order Committee heard evidence in respect of various parts of the bill from not only advisers but also those working within and outside the prison system. I would like to address some of those issues now. One issue was around the carriage of firearms within prison facilities. The legislation expands the ability of prison staff to be able to use firearms in response to sick or injured animals and to put them down for humane reasons. To ensure this is clear the words “sick and injured” were inserted into the bill before the word “animals”. That may seem an unduly precise point to make but it is the case that firearms are also used for pest destruction and those sorts of activities on prison farms and prison property. Those things were not accounted for in the previous legislation because of concerns obviously around firearms and prisoners and around the health and safety of those living in the vicinity. 
It is sad to note though that there needed to be some specific powers around the authority to search property. We have found over recent years that the people who come under the most pressure within the prison system are prison officers particularly from gang members who live within the prison system and who contact gangs on the outside to “get to” prison officers. Unfortunately under the previous administration—not that that is necessarily an issue—we had prison officers bringing contraband into the prisons. They did not have to undergo search procedures as they came to and from work; neither were their staff lockers searched. This bill means that searches can now be made without needing a specifically obtained search warrant of staff quarters and personal areas such as staff lockers during the course of business. It also means that the prison service has the ability to search officers as they come to work to make them go through a screen and to check them for contraband coming into prison. It is as much for the protection of the prison officers as it is for the prevention of contraband items inside prisons. 
Prisoners may be required to submit to drug or alcohol tests. Previously drug testing had been on a fairly predictable sort of a regimen. Although people were subjected to random drug-tests when we scrutinised that we found that the random drug-tests generally happened on a particular day of the week and were fairly predictable. Prisoners could look out the window and see parked outside the drug testers’ vehicles which they recognised and they knew they could acquire in one way or another a little sample that they could put in the bottle when it was their turn from some mate who they knew was clean. 
This means that the sorts of statistics the previous speaker referred to may not necessarily be that believable because of the predictability of the drug-testing regime. Although we have had an 81 percent drop in recorded drug-use inside jails the reason for that may have more to do with who is supplying the sample than with who is taking drugs. If any DNA test was done we might well find that “Prisoner A” was actually supplying 856 samples that went into bottles and that he was paid well for it. 
Hon Steve Chadwick 
: That’s cynical. 
CHESTER BORROWS 
: No it is not cynical. It is actually a fact once we start exploring the possibilities. When someone has 24 hours a day to sit down and think of clever ways of getting around the system that sort of stuff happens and clever they are at it. I say all power to those who can stand back and admire such creativity. If only such prisoners could apply such creativity to lawful purposes. 
In respect of religious and spiritual needs much has been made in a humorous way of inmates’ ability to celebrate the sacrament of Holy Communion with real wine. I guess it is a point to make though that when people are locked up and eventually hear that cell door slam they are confronted with their own inadequacies and they tend to look within to consider their circumstances and what might have been. It is a time when those people who are involved with organisations such as Prison Fellowship New Zealand and our hard-working prison chaplains make some serious inroads into people’s views of themselves and have an impact on the likelihood of future offending by those within the prison system. One of the provisions of the bill allows for the use of alcohol in Holy Communion by those people ministering to people within the prison system and that is as it should be. 
It is true that the prison system in New Zealand has some records that are very good and some that are very bad. It is a shame for instance that we have a very high rate of incarceration of our citizens within the prison system. It is a shame that people want to take a fairly shallow view of the prison system and of how it can be used as a means of addressing reoffending. The fact is that we have a system in this country where people who have been arrested charged and convicted and who find themselves behind prison wire go for a long time without any help or ability to rehabilitate. 
Under the previous Government if someone was in jail for less than 2 years the opportunity for that person to access help in respect of drug and alcohol dependency violent offending or literacy and numeracy problems was very much restrained. I look forward to a time under this Government when having implemented what have largely been seen as fairly punitive measures in the first 100 days we take a closer view of those programmes that will assist prisoners in rehabilitation so that when they leave the prison system they can gain employment more easily and form relationships that will be helpful in their ongoing life outside the wire. Then we will see a tracking down of recidivist rates in those former inmates as they leave their time of incarceration. 
I recall quite clearly attending the Kaitoke prison and speaking to a man who had been convicted of a drug-dealing offence. This was the first time he had ever been to jail. He had received quite rightly a sentence of 8 years’ imprisonment. Having heard that cell door slam he had thought about what he had lost. He had lost not only his illicit job of drug dealing but also his legitimate job. He had lost his family and obviously access to them. He knew that he would be in jail for a period of 8 years and that he would not be able to have the relationship with his children that he wanted because of his circumstances and of what he had done. He immediately recognised what he needed to do and he wanted some help with his drug problem. He was unable to achieve it until he had done two-thirds of his sentence and was unable to even get on to a programme that would help him with his drug dependency. 
I look forward to a time under this Government when we take a far more pragmatic and realistic view of helping people with their problems as they recognise that they need help. They will be able to access those programmes much much earlier and will be able to present before the Parole Board and their families at the end of their sentences as people who are much easier to live with and much less likely to come back before the courts and to find themselves back in prison. I commend this bill to the House. 
CARMEL SEPULONI (Labour) 
: 
 Just like my Labour colleagues who have spoken on the Corrections Amendment Bill (No 2) I wish to congratulate the Government on progressing this bill—a bill that the previous Labour Government introduced. Fortunately we have here a bill that has been appropriately scrutinised by the Law and Order Committee. 
I wish to reinforce what my Labour colleagues have already articulated in relation to this bill in that we will happily support legislation we believe to be in the best interests of New Zealanders. Given that this bill was introduced by Labour it is of course in the best interests of New Zealanders. We support the Corrections Amendment Bill (No 2) wholeheartedly. It is fair to say that Labour is committed to having a modern effective fair and accessible justice system which makes offenders more accountable reduces reoffending helps the victims of crime and in turn strengthens our communities. It is this commitment that drove the significant level of progress made by Labour during its time in Government. 
Let us reflect on that progress. As my colleague Phil Twyford mentioned the number of prison escapes per 100 prisoners was just one-sixth of what it had been 10 years ago under the last National Government. What does that mean? That means that the escape rate fell by 84 percent. The amount of drug taking in prisons was less than half of what it was when the National Government left office in 1999. The Labour-led Government was able to put effective measures into place to lower the number of drugs making their way into our prisons. This is reinforced by the fact that fewer inmates were returning positive drug-tests. 
Under the previous Labour-led Government it was significantly harder for prisoners to escape due to the additional 17 kilometres of perimeter fencing that was constructed. Labour made progress in its fight against contraband through increased security and surveillance. Increasing the surveillance has included doubling the number of drug-dog teams to 12 and setting up regular checkpoints outside prisons to screen visitors and staff. On top of that new security fences electronic security devices and cameras closed-circuit television motion detectors and microwave sensors will be introduced. 
I will say it again: Labour is committed to having a modern effective fair and accessible justice system. It was this commitment that ensured that significant progress could be made in this area under the previous Labour Government. But Labour recognised and continues to recognise that there is always more work to be done and more progress to be made. Labour has never been a party to rest on its laurels which is why the Labour-led Government introduced this bill to the House on 3 December 2007. Labour’s intention was—and continues to be—that this bill would complement all of the operational initiatives that I mentioned earlier. 
The bill aims to crack down on drug use to eliminate the illicit use of cellphones in prisons to enhance powers of search in relation to inmates and for those working in prisons and to adopt a zero-tolerance attitude towards staff who pass contraband to prisoners. Penalties will be increased from 3 months to up to a year in prison and the maximum fine will be doubled to $5000. The bill aims to authorise the electronic detection and jamming of all cellphones used within prisons and to extend prison powers to screen inmates’ mail for unlawful or harmful communications. Mail as well as telephone communications can be subject to surveillance. The bill aims to create a penalty for publishing unauthorised communications from inmates that prejudice the interests of victims. 
As Chester Borrows said there is no contest regarding this bill. There are measures that need to be put into place to further increase the safety for New Zealanders. We want our prisons to be drug-free. We want our prisoners to be prevented from engaging in criminal activity with outsiders while serving their time in jail. All of these things we agree on. So Labour supports this bill wholeheartedly. 
To conclude I say that we will be voting for this bill; we wrote it. This bill meets the public’s expectations in that it has been subject to select committee scrutiny and New Zealanders have been given the democratic right to participate in the process. This bill is in the best interests of New Zealanders and Labour supports it wholeheartedly. Thank you. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I stand to support the Corrections Amendment Bill (No 2). This bill will improve the way our corrections facilities are run—addressing the rules of the house so to speak. The bill provides corrections institutions with increased powers of search and detection—as well as drug testing—in order to remove contraband and increase control of prisoners’ communications with the outside world particularly around the use of cellphones and the screening of mail. 
Although we hear about the previous Labour Government’s commitment to build 17 kilometres of wire fencing technology—with its associated power of miniaturisation—has given us minuscule electronic communication devices that can easily be concealed. The Corrections Amendment Bill (No 2) seeks to update legislation to respond to the increased capability of communications. It also uses such advancements in technology for the detection of contraband. The bill will make it harder for people to bring prohibited items into prisons make it easier to detect such prohibited items and increase the punishment for prisoners and others for bringing in or using such items. 
The bill addresses important issues that the people of New Zealand have great concern about: the protection of citizens from crime and the proliferation of crime from prisons. We understand that one of the primary purposes of our correctional institutions is to protect society. The availability of contraband and unauthorised means of communication through cellphones in particular keeps a prisoner locked into the culture of crime; it keeps feeding crime on the outside. When social and gang networks remain intact they allow a continuation of criminal behaviour undermining the protection of society. An easily accessible means of unauthorised communication can make prison into a pretence of punishment for inmates on the inside and a pretence of protection for citizens on the outside. 
One of the key purposes of our corrections facilities is to remove criminals from society for the protection of that society. A Government’s responsibility is the security of its citizens and this responsibility must be taken seriously. Time and again we hear the plea of victims to be cautious about the release of prisoners when they come up for parole particularly in relation to violent crime because when prisoners are released the victims lose their sense of security and protection. 
On the other side of the issue there are many genuine cases where inmates have made amends and have reintegrated back into society as responsible and contributing citizens. This is the highest aspiration for an inmate and we want to support people in the challenging and oftentimes difficult task of reintegrating. That is why this bill is called the Corrections Amendment Bill (No 2)—we want people to be corrected not just incarcerated. It is blatantly incorrect for an inmate to be able to continue a life of crime from within a corrections facility. 
Although this issue is always a work in progress 10 years of consideration is too long. The bill is a catch-up on those lengthy periods of consideration. The previous Government was too slow in cracking down on crime being run from inside prisons. The current Opposition will claim credit for the fact that it penned this bill while in Government but it may not be so quick to acknowledge the effective work of the National Opposition at the time which goaded it—and some feel even shamed it—into addressing this issue because of the litany of problems plaguing prisons. The previous Government failed to deliver the big hit it promised: preventing contraband from entering prisons which was enabling prisoners to commit crimes from behind bars. Consequently the Corrections Amendment Bill (No 2) languished on the Order Paper under two successive Ministers of Corrections. However this Government is addressing these pressing needs with no such hesitation but with utter determination because public safety is an increasingly dire concern among New Zealanders. As the Minister of Justice Simon Power said in December: “The new Government places public safety above all other issues when it comes to the law and order and justice debate.” 
The Labour Opposition may claim a strong record yet under its watch we saw an alarming increase in crime rates in New Zealand. Crime has increased by over 11 percent during the last year. The number of grievous assaults is up by 11.7 percent serious assaults by 13.7 percent minor assaults by 13.2 percent intimidation and threats by 7 percent and group assemblies by nearly 20 percent. So we have seen large increases. 
This bill will also ensure greater protection for New Zealanders by drastically reducing the ability of inmates to engage in criminal activities outside of prison. But the bill also assists inmates in their rehabilitation and I will speak about that momentarily. Successful rehabilitation is the highest aspiration for inmates in our corrections facilities. We do not want to have to build more facilities year after year. As legislators we must seek to be intent and committed regarding the rehabilitation of inmates to their families their communities and society as a whole. But too often because there is a continuance of their lives in the outside world—through contraband and unauthorised communication—there is very little shift or change from the culture of crime that surrounded them and that often sent them to prison in the first place. 
A strict and stringent prison environment is necessary. It is often the only opportunity inmates have to create distance and separation from their past lifestyle and associations. There is severely decreased opportunity for rehabilitation when associations from the outside world continue inside—and we all know they continue. We all understand the complexity of the criminal environment and the corrections facilities that people live in. Without doubt there are generational issues regarding the continuation of the culture of crime happening in our country. Where are the circuit breakers? What prison does is isolate inmates from continuing their activities in society but it also severely limits inmates’ contact with their past associations. This separation enables greater effectiveness of drug and alcohol programmes by ensuring that access to drugs and alcohol stops. 
The leading edge of this bill protects our society from crime being perpetuated from inside corrections facilities but the hidden edge in this bill gives tools that will stop inmates from being continually surrounded by the culture of crime that sent them to prison in the first place—thus enabling a more effective opportunity for an inmate to rehabilitate. 
We have delivered on our promise to introduce legislation that will enhance police tools crack down on gangs provide greater financial assistance to victims create Fresh Start programmes for young offenders make it harder to get parole bail and home detention and increase penalties for crimes against children. Now we are clamping down on contraband and unauthorised electronic communication—amongst a raft of other measures—to make our corrections facilities even more effective. We want this legislation passed because it contributes to a suite of legislation introduced by the Government that works to bring a combined effect: providing New Zealanders with greater confidence that New Zealand will become a safer place for us today for our children and for our children’s children who are tomorrow’s future. Thank you. 
A party vote was called for on the question  
That the Corrections Amendment Bill (No 2) be now read a third time. 
Ayes 113 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Maori Party 5; Progressive 1; United Future 1. 
Noes 9 
Green Party 9. 
Bill read a third time. 
Criminal Proceeds (Recovery) Bill 
Second Reading 
Debate resumed from 17 February. 
Hon ANNETTE KING (Deputy Leader—Labour) 
: 
 Labour supports the Criminal Proceeds (Recovery) Bill in the second reading and right through to its completion. This was a Labour bill introduced in my name; it was picked up by the current Government which is carrying it on. I congratulate the Government on that. I say to Mr Young that I am big enough to thank National for the work it did on this legislation when in Opposition alongside the Government of the day. In fact a joint approach on the issue of the proceeds of crime has led to this bill being supported by most members in this House. Would it not be nice if just now and then instead of the grandstanding and the written-out speeches there could be some acknowledgment that Labour in Government did a number of very important things in terms of law and order? Unfortunately the total political approach that we often hear from National speakers does not allow that to happen. 
I thank members of the Law and Order Committee who took part in the deliberations on this bill for the work they did and for bringing back to this House a bill that is in better shape than it was when it went to the select committee. That is why we have select committees; that is why they are important and that is why we send legislation to them. We know that in our democracy which is without another House or Upper Chamber to scrutinise legislation the importance of select committees is huge. That is why we send bills to them. This bill was sent to a select committee; it was not introduced and passed under urgency. It went to a select committee the public of New Zealand had a say on it and helped with the changes in it and we now have a bill I believe that will pass by the overwhelming majority vote of this House. 
The truth is that New Zealand like many countries has an organised criminal gang problem. The problem is not unique to New Zealand although sometimes when we hear people speaking about it we would think that New Zealand had invented it and that we are the only country with the problem. Those who have studied this problem and who have taken the time to travel to other countries to talk to people in other jurisdictions tell us that New Zealand like many countries has an organised criminal gang problem. It is a problem that cannot be addressed by quick-fix one-off bills or some sort of smart approach where we take one particular resource and say that it is going to be the panacea. In fact this is a very complex problem indeed and one that will take all our collective wisdom and resources to resolve. 
Let us look back at the history. Perhaps the person who started trying to address this issue was Sir Robert Muldoon. He thought the way to get alongside the gang issue in New Zealand was to get alongside the gangs—to actually work with the gangs to see if their behaviour could be changed. There are those who believe there is some merit in that. But we know that since those days of the 1970s and 1980s gangs in New Zealand today—organised criminal gangs—are highly sophisticated organisations. They are not there for the good of New Zealand; they are there to make money from the misery of other New Zealanders and I deplore the fact that they make their money from the misery of our young people. They make their money out of peddling drugs to young people. They are organised criminals. 
Our approach to this issue has to be one that has many facets to it. In Government Labour looked at what we could do. It was not just to have one piece of legislation— 
Hon Phil Heatley 
: You did nothing! 
Hon ANNETTE KING 
: —it was quite a number of things I say to Mr Heatley. In fact National has picked up by reinstating this bill one of those pieces of legislation. The issue needed to have legislation it needed to have an overall strategy to approach organised criminal gangs and it also needed the police to have the powers to carry out their surveillance and their work. Those three legs of the stool were what Labour put in place to address this problem. As I said it was not a new problem; the previous National Government had had the problem the Labour Government before that had had the problem and we can go back through the decades. So the previous Labour Government put in place an overarching approach to organised criminal gangs in New Zealand—a strategic approach that had with it partners working with us from local government to our police our corrections system our non-governmental organisations and our communities because gangs live within communities and they are intergenerational. We can go into parts of New Zealand today where the third and fourth generations of young people are now in criminal gangs so we needed to have an overall strategic approach to our gang problem. 
We also needed to ensure that the police had the powers they required. That is why we established the Organised and Financial Crime Agency of New Zealand to attack the issues of organised criminal gangs and financial crime in New Zealand; they overlap in fact. The old idea that only white-collar criminals ripped off people is not the case today; in fact many of our organised criminal gangs wear white collars and they have their money laundered through the fronts of businesses and so on. So an agency was put in place that had powers that rested with the police—additional powers—for them to be able to undertake the work they needed to do from surveillance to the tracking of these people and the getting of overseas intelligence so that we could see what they were doing we could see where the precursors to the drug P were coming from and we would be able to follow up in an international sense. That is why the Organised and Financial Crime Agency of New Zealand was put into place. 
The third leg of this approach was legislation—legislation that we believed could be effective not legislation that looks good on the books but is not going to do anything. I believe that a law that just makes patches illegal is not going to do that but this bill will add to the arsenal of legislation to help in that approach with gangs. 
Let us look at what the problem is. Currently the Proceeds of Crime Act 1991 allows the Crown to confiscate the profit made from crimes after someone is convicted of that crime. But the profits of crime can be spread amongst many people not all of whom are able to be convicted of the crime. So they get the proceeds from that crime and they spread it amongst other people but they are not able to be convicted of the crime. Organised gangs are an example of outfits that do just that. That is why this bill will add to the arsenal of legislative approaches that we need to tackle gang problems. 
I also think we need to look at other jurisdictions to see how they have handled this problem. In January this year Phil Goff and I went to South Australia to look at its legislation. That state has put a lot of effort into tackling organised criminal gangs to reduce the harm they are doing in its communities. I believe that we ought to look closely at South Australia’s overarching legislation and the approach that it is taking. There are many lessons for us to learn from that. There are many examples that we can pick up and put in place here in New Zealand to tackle a problem that we all should be concerned about. 
We support this bill firstly because it was our bill and it was part as I said of the arsenal of legislation that we were putting in place and part of an overall approach. We support it because we believe that it will work. It has worked in other places where this sort of legislation exists. In fact it exists in places like Australia Ireland and the United Kingdom. Those countries have passed similar laws to this one. The legislation has already been tried so we believe that it will work. We believe that it will help in the fight against organised criminal gangs. Therefore we will be supporting this bill to its conclusion. 
PAUL QUINN (National) 
: 
 It gives me great pleasure to stand and join the love feast that has been going on this afternoon. Aside from the Greens who for reasons known only to themselves are voting against this very important bill on crime and law and order it is great to see that we are joined as one on these very important issues. I note the previous speaker’s comments about sharing some of the glory. I would be happy to do that but I think in so doing we need to remind ourselves that the previous administration promised in its 2005 manifesto that it would pass into law a civil fortitude regime to allow gangs to be stripped of the proceeds of crime having introduced legislation earlier in that year. It is interesting to note that in July 2006 that bill was dumped without being debated and nothing more was heard of it until March 2007 nearly 18 months after the election when Labour introduced the Criminal Proceeds (Recovery) Bill this bill. 
It is important to note that although acknowledging the words of the Opposition it is actions that count. It gives me great pleasure to be able to stand here and say that this is a Government of action—when it says it is going to do something it actually does it. We are committed to repealing the Proceeds of Crime Act 1991 and replacing it with this legislation which provides not only for the confiscation of property where the owner has been convicted of a criminal offence but also for the confiscation of the property of those people who have tried to distance themselves once removed and send their lackeys on the job. I shall share some important cases with members a little later. 
In pursuing this bill this Government realises that we must hit gangs in the pocket where it will count. The difficulty is that serious criminals who are intent on making large sums of money operate in an environment of extreme violence. They protect their wealth and perceive that they have worked hard to acquire their assets. Therefore sending them to jail for 1 year or 10 years is a badge of honour. It is a flea in their ear. They take a joy trip into jail in the knowledge that when they come out there will be a small fortune waiting for them to sit back and enjoy. The thing that really gets to them is when we start attacking their assets. If we put those assets at risk these criminals become extremely resistant and confrontational. 
One of the aspects of the bill I shall cover a little later which is a major change from the initial bill when it was tabled is the recovery agent. The previous administration had intended that the recovery be done by the Serious Fraud Office. Some members who were members at that time might remember this. I find it interesting of course that they had done a deal with an honourable Minister of the time to do away with the Serious Fraud Office—at the time we were anticipating giving $3 million to fight this. But $3 million against gangs such as the Mongrel Mob NZ Red Necks and Black Power just does not do it for the country. In terms of one of the principal changes which I will talk about a little later on we now have it in the right place and properly resourced for the police. 
The other thing I want to reflect on is that the reason the Government has given this bill high priority is simply that law and order is one of the critical issues that we went to the country on. It gives me great pride to be able to stand and say that we have been able to achieve all of the commitments that we made at the election and that the people voted us in on. Let me go through them for members on the Opposition benches. 
Hon Kate Wilkinson 
: We’d like to hear it. 
PAUL QUINN 
: Members would like to hear it? We introduced legislation to remove the right of the worst repeat violent offenders to be released on parole clamped down on criminal gangs and their drug trade toughened the bail laws to make it harder for criminals awaiting trial to get bail tackled increasing violent youth crime by bolstering the Youth Court with a range of new interventions and sentences required DNA testing for every person arrested—the list is exhaustive—gave police the power to issue on-the-spot protection orders and introduced legislation to compensate victims. The list goes on. It would take too much time to cover all of them. All I can say is that this administration has taken in its stride the responsibilities of governing in contrast to the previous administration. It is like a velvet glove. It has just fitted in. 
I want to focus on the policy objectives. 
Jacqui Dean 
: Repeat that. 
PAUL QUINN 
: The member wants me to repeat that? She would like to hear it again. No after all it is a love feast. We are being kind to each other today. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Bill read a second time. 
Alcohol Advisory Council Amendment Bill 
Second Reading 
Hon ANNE TOLLEY (Minister of Education) 
 on behalf of the  
Minister of Health 
: I move  
That the Alcohol Advisory Council Amendment Bill be now read a second time 
. This bill is a technical amendment to the Alcohol Advisory Council Act 1976 to address problems with the current levy-setting mechanisms by introducing an updated and simple calculation system that reflects the current alcohol market and future-proofs the levy against new types of alcohol products. The amendment bill also provides for regulations to be made by Order in Council to fix the rate of levy payable. This Government has chosen to progress this bill because it proposes a pragmatic improvement to the system that is long overdue. I will outline the rationale for the bill discuss the select committee’s recommendations and note a further very minor change to the bill that will be introduced by a Supplementary Order Paper. 
The Alcohol Advisory Council (ALAC) was established under the Alcohol Advisory Council Act in 1976. ALAC’s primary objective is to encourage and promote moderation in the use of liquor to discourage and reduce the misuse of liquor and to minimise the personal social and economic harm resulting from the misuse of liquor. ALAC’s functions include research dissemination of information educational programmes and innovative treatment programmes designed to achieve its objectives. It is important to acknowledge that ALAC has a significant role in reducing the significant burden of alcohol-related harm in New Zealand and that this bill is not intended to contribute to reducing alcohol-related harm. This Government is very concerned about alcohol-related harm but plans to address the harms through other mechanisms. A technical amendment to simplify the funding of a Crown entity is not the place to debate ways to reduce alcohol-related harm. 
ALAC is funded by a levy on all alcoholic beverages manufactured in and imported into New Zealand. The way the ALAC levy is calculated and apportioned is outlined in the Alcohol Advisory Council Act 1976. The total levy amount for ALAC during the 2007-08 financial year was $12.4 million. This is small in comparison with alcohol excise payable on alcohol manufactured in New Zealand and excise-equivalent duty payable on alcohol imported into New Zealand which was $795 million in the year ended June 2008. 
In 2004 the Ministry of Health reviewed the current levy-setting mechanisms of the Alcohol Advisory Council Act 1976. The review found four major problems with the way the ALAC levy is calculated and apportioned. First the levy-setting mechanism is outdated as it is based on only four classes of liquor. The alcohol market has changed considerably since 1976 and the levy-setting provisions no longer reflect the diversity of alcohol consumed in New Zealand. For instance the emergence of ready-to-drink—RTD—products of around 5 percent alcohol and an increasing number of standard spirits of less than 42 percent alcohol by volume are not readily accommodated by the way that the levy is currently struck. This highlights the need to future-proof the classification system by enabling the easier classification of emerging types of beverage. Second the spirits category requires the calculation of proof letters—a concept that is no longer in use. Since 1986 New Zealand’s Customs Service has measured spirit volumes as litres of alcohol and proof litres are no longer recorded. Third the current levy-setting mechanism is unnecessarily complex when viewed alongside the way excise and excise-equivalent duties are set on the basis of alcohol content. Alcohol importers and producers have often noted that this procedure could be simplified. Fourth section 27 of the Alcohol Advisory Council Act 1976 allows the levy to be set by the Minister of Health by  
Gazette 
 notice. There is no process for Cabinet to be involved in the levy-setting procedure which is inconsistent with more robust approaches to setting levies such as the procedure for the problem-gambling levy. 
This bill seeks to introduce a system of alcohol classification bands—an approach that aligns with the system the New Zealand Customs Service uses to collect alcohol excise duty and excise-equivalent duty. Under this system a dollar amount per litre of beverage for the ALAC levy could be set for each alcoholic beverage according to its deemed alcohol content or average alcohol content. This means that alcoholic beverages with a higher volume of alcohol would contribute a higher proportion to the levy. Two other options were considered: incorporating the levy into excise and replacing the levy with funding through Vote Health. The Government and most stakeholders prefer the chosen option of retaining the levy but aligning it to excise because it will be simpler than the status quo and more transparent and cheaper than the alternatives. 
The new system will not affect the total sum collected for the levy and the effect on price to consumers through shifts in the levy payable between beverage types will not be significant—approximately 2c less for a 750 ml bottle of spirits and a difference of less than 1c for a bottle of wine a six-pack of beer or a four-pack of ready-to-drink beverages. Estimates from the 2006-07 levy round suggest that the beer industry will be affected most by the proposed change to the calculation of the levy due to the high volume of imported and manufactured beer products in New Zealand. The spirit and wine sectors would both contribute a lower proportion of the levy under the proposed system. The change will have minimal impact on those who pay the levy and industry groups are generally supportive of the bill. 
After looking at the bill and considering submissions from six submitters the Health Committee recommended that the bill proceed with two minor amendments. At the time every committee member supported the changes. The first minor amendment is to insert a definition of “rate” to make it clear that it means the percentage figure given in the schedule of the bill. The second minor amendment is a replacement of the table set out in the schedule. The revised table includes a list of the applicable tariff items for each class of beverage. The purpose of this amended schedule is to address the concerns raised by New Zealand Winegrowers by making it clear what rates will be applicable to particular products. This will ensure that the bill continues to be in line with the excise and excise-equivalent regime. 
The Ministry of Health engaged with industry groups prior to making the recommendation to the Health Committee in order to ensure that the recommended approach was easy to understand and accurate from the perspective of industry groups. The Minister of Health intends to propose a Supplementary Order Paper to correct a typographical error in the revised schedule of the bill that was discovered after the Health Committee had reported back to the House. One tariff item was drafted as 22.90.08 rather than the correct format of 2208.90.08. The error relates to the list of class F tariff items under the heading “Legal definition of class”. I recommend that the House supports the passage of this bill to the next stage. 
Hon RUTH DYSON (Labour—Port Hills) 
: 
 First of all I commend the acting Minister Anne Tolley for that extraordinarily well-read speech and I express my slight regret that the Hon Tony Ryall has not been able to join us in this particular part of the debate. 
This Alcohol Advisory Council Amendment Bill was introduced to the House— 
Hon Anne Tolley 
: I raise a point of order Mr Speaker. I am sorry to interrupt the member’s speech but she is an experienced member and she knows that under the Standing Orders she cannot comment on the absence from the House of any particular member. 
Hon RUTH DYSON 
: Speaking to the point of order Mr Assistant Speaker I say that I understand the point the Minister has made but that was not what I said. I said that the Minister of Health was unable to join us in the debate. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: It is a fine point and the member raising the point of order could normally be entitled to draw that conclusion but it is not the only conclusion that could have been drawn. Let us be fair: people have raised these issues before and Ruth Dyson did not specifically say the person was absent from the Chamber. Now that the member has raised a point of order I think that her conclusion was the only conclusion one could have drawn but it was not necessarily so at the time. The member will continue her speech. 
Could I just say there seems to be a bit of confusion on the drill sheet. I should have said to the House before I called the Hon Ruth Dyson that the question is that the motion be agreed to. Just for the sake of precision I mention that that is the question before the House. 
Hon RUTH DYSON 
: Mr Assistant Speaker it gives me great pleasure to speak to the motion that you have just put before the House and it is one that Labour will be supporting strongly because the Alcohol Advisory Council Amendment Bill was introduced to the House by the previous Labour-led Government. I commend my friend and former colleague the Hon Damien O’Connor for introducing this legislation. 
As Minister Anne Tolley indicated this bill is a technical amendment bill. There are no party politics involved in it and as such our speakers will not be taking up the time of the House but we are a little concerned that if we were to do what the public would think appropriate and just say: we do not oppose this bill we agree with the Supplementary Order Paper that is about as technical as it can get; we contributed strongly through the select committee there is cross-party agreement on this; and then sat down I would be very anxious about the health and well-being of the Government whips. I can imagine that Chris Tremain and Nathan Guy would be scrambling around for a bit more work to put on the Order Paper because once again no bills have been introduced into the House. The only issue we are debating tonight is yet another bill that was introduced by the previous Government. Would I wish ill health and the wrath of Gerry Brownlee on those two young men? The answer is no to both of those questions. I wish them good health and an easy life but I fear that despite my good wishes they are not about to get them. 
As I said earlier this bill is primarily technical. It provides for an updated levy system that is fair that is simple to calculate and that everyone understands. Minister Anne Tolley went through the details of that at quite some length as did the Health Committee even though it heard only six submissions. That should be an indication of the fact that the industry the key health players the New Zealand Customs Service and the legal advisers all agreed with the basis—and in fact the legal writing—of this amendment bill. Advice was received from the Ministry of Health the Customs Service and parliamentary counsel in addition to the six submissions. It does not sound to me like it was a very contentious process. 
The report from the select committee outlined the reasons for updating and changing the rating regime: to ensure that the rating fairly reflects the alcohol content and to ensure that the public are supportive of it. This is a very common-sense move introduced by the Hon Damien O’Connor in his capacity as a previous Associate Minister of Health. The then National Opposition supported the first reading of the bill. I am delighted that this bill is one of the many bills introduced by the previous Labour Government that remain on the Order Paper— 
Hon Darren Hughes 
: Time for a change! 
Hon RUTH DYSON 
: I am not sure how much of a breather we will be giving the Leader of the House and those Ministers because this bill is another example of legislation that was introduced under the previous regime. We will continue to support the bill nevertheless and I commend its speedy progress through the House. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 Thank you Mr Assistant Speaker for the opportunity to speak on the Alcohol Advisory Council Amendment Bill. I note that this bill is about simplifying and bringing into line the levy paid to the Alcohol Advisory Council (ALAC) with the excise duties that are otherwise collected. It is interesting after the somewhat partisan contribution from the Hon Ruth Dyson to see that the legislative history began with the introduction of the bill on 11 December 2007—a long time ago. It was quite fascinating to hear Ruth Dyson say that surely this bill is non-contentious and could go through expeditiously. Why did the Labour Government not get this bill through the House if it was to simplify legislation? But no that was not the way of the Labour Government because after all its legacy is one of cementing in an enmeshed and entwined conglomeration of bureaucracy over the last 9 years. 
It is refreshing that a new National Government has come into office taken up this bill in the first few months and is passing it with alacrity as it should have been passed by that somewhat lazy Labour Government over those long 9 years. It is very refreshing that there is bipartisan agreement on this bill because clearly it is sensible and the sector was supportive of it. The sector had concerns of course about various technical aspects but I did note it was generally very supportive and helpful in terms of ensuring that the technical aspects were progressed. 
It is important to make mention that the bill is not intended to contribute to reducing alcohol-related harm but instead it aims to simplify the calculation of the levy. The Government of course is extremely concerned about alcohol-related harm in New Zealand. However this bill is purely a technical amendment to simplify legislation. I note that ALAC does some tremendous work in its role of reducing harm from the use of alcohol and its various other efforts in terms of education and research. The council is dependent on the $12 million that it receives each year and I understand that about a third of it comes from these levies. 
The aim of the bill is to bring the levy-setting regime into line with the excise-setting regime and I think it has done that very comfortably. I note that in the schedule there is now quite a clear description of what percentage of alcohol by volume in most item classes relates to the rate. It is important that the method for determining the variable rates is set out in the schedule for a given financial year. The variable rate for a class is the average alcohol content by volume of all the liquor of that class that was imported into or manufactured in New Zealand in the preceding statistical year. 
Four major problems noted by ALAC were that the levy-setting mechanism was outdated ready-to-drink beverages did not exist at the time the law was introduced proof litres have not been used to measure spirits since 1986 and the current levy-setting mechanism was extremely complex. Although the current Act allows the levy to be set by the Minister of Health by  
Gazette 
 notice there is no process for Cabinet to be involved which is inconsistent with many of the other levy-setting approaches. 
There is no doubt that the proposed regime is up to date and very simple to calculate. There is no doubt— 
Hon Ruth Dyson 
: Why are you filibustering Paul? 
Dr PAUL HUTCHISON 
: It is very important that members opposite realise the virtues of this bill which at last has been taken up by a forward-looking National Government. 
Further the new regime is flexible enough to allow for the emergence of the new types of beverages that do not easily fit into any liquor class in the current system. The definition of “wine” itself was something that was important for the committee to consider because “wine” has many definitions. The  
Oxford Dictionary 
 describes it as an alcoholic drink made from fermented grape juice or as a fermented alcoholic drink made from other fruits. But the verb is slightly different; apparently it is an Indian dance with gyratory movements of the pelvis. Maybe that it is an after-effect of the wine but it is very important that the definition is clearly made. Hence the bill repeals previous definitions and replaces them with one definition that of “wine” which means “the product of the complete or partial fermentation of any fruit (including grapes) vegetable or honey and—(a) includes—(i) cider perry”—if members have not heard of perry it is wine from pears—“and mead; and (ii) fortified wines such as sherry port and fruit or vegetable-based liquors;”. But the definition does not include beer or spirits or any liquor containing more than 1.15 percent volume of alcohol. It was important to make sure that those definitions were clearly incorporated into the bill. 
It is also very important that there is minimal impact on those who pay the levy and indeed the sector has agreed that that is the case. As I said before the sector has been very helpful with the evolution of this bill and very supportive also of ALAC. Price changes will be very small. The estimates are less than 1c for a bottle of wine a six-pack of beer or a four-pack of “RTDs” and less than 2c for a 750 ml— 
Hon Members 
: What’s an “RTD”? 
Dr PAUL HUTCHISON 
: Well I have already told members about “RTDs”. They should remember; they should think back and see whether their attention spans are more than 60 seconds. It is a shame that the members of the previous Labour Government not only failed to pass expeditiously legislation that was necessary but have also lost their retentive memory spans—they are less than 60 seconds. I tell them that “RTD” means ready-to-drink—you know an alcopop. They might not have heard of that either; they should come into the new millennium. But it is important to point out that price changes will be very small—less than 2c for a 750 ml bottle of spirits. 
The new schedule addresses the concerns raised by New Zealand Winegrowers about the clarity of what rates will be applicable to particular products and ALAC will continue to receive the necessary funding to continue its work: research dissemination of information educational programmes and innovative treatment programmes. So it is with much pleasure that I support the second reading of this bill. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I intend to take a very short call on the Alcohol Advisory Council Amendment Bill this evening. 
Hon Ruth Dyson 
: You don’t need to filibuster on a bill we already support. 
IAIN LEES-GALLOWAY 
: Ha ha! I found it quite amusing that the previous speaker decided to start off by having a crack at the previous Government over the length of time taken to progress the bill as far as this reading. I am a young fella and I am just learning my way around this place so I thought I would have a look at its wisdom— 
Paul Quinn 
: Those grey hairs don’t show. 
IAIN LEES-GALLOWAY 
: —its wisdom I tell Mr Quinn. So I thought I would look at the  
Hansard 
 of the first reading. What did I see? I saw that an utter diatribe was given by members on the National benches at that time as well. For reasons known only to themselves the National members have chosen to do that again tonight. I am not sure why that is; I am sure we have other business we can get to tonight. I do not know how many times I read in  
Hansard 
 that the Alcohol Advisory Council (ALAC) was established by an Act of Parliament in 1976. We all know that. We know that this legislation is a technical adjustment; we know that it is about streamlining the funding for ALAC. This is a good bill. It has cross-party support and there is no real need to spend much time on it. 
I will briefly reflect on why we still need ALAC today and why it is important that the funding is sorted out so that it is nice and easy for that body and is not something it has to worry about. There is plenty of other work for ALAC to deal with. We know that New Zealand still has a problem with its drinking culture but cultures can change. We have seen that with the drink-driving culture and we have seen that with the smoking culture although there is still more work to be done on that. Plenty of things need to be done and the issues involve the drinking age the prevalence of cheap booze the act of loss-leading by supermarkets the availability of alcohol the advertising of alcohol the recent invention of alcopops or “RTDs”— 
Hon Ruth Dyson 
: What are “RTDs” again? 
IAIN LEES-GALLOWAY 
: —ready-to-drinks yes—and enforcement issues to do with the Sale of Liquor Act. All of those things need to be seen to and we need an independent body like ALAC to keep us as politicians reminded that those issues need to stay in the forefront of our minds. I am heartened to know that Parliament will be looking at those things later on this year. 
As I said this bill does not require too much talk; there is plenty to get on with. This is a good bill; let us get on with it. I commend the bill to the House. 
MICHAEL WOODHOUSE (National) 
: 
 I rise in support of the Alcohol Advisory Council Amendment Bill. It is yet another example of a good idea spinning round and round in the Labour Party’s spin-dryer. I am sure those members appreciate but do not act on the fact that bills become law only once they are passed. This bill amends an Act that after 33 years of existence is a bit tired and out of date in terms of current needs and indeed drinking habits—something some members of the House may well empathise with. 
Examples of the dated nature of the present legislation can be found in the fact that the Act deals with only beer wine and spirits and clearly there is no accommodation for more modern drinking products including ready-to-drink products or “RTDs” as they are known. There are some quite quaint descriptions in the 1976 Act including this pearl of wisdom about wine which states that grape wine “means wine manufactured . . . from grapes.” One presumes that is as distinct from other wines that are not produced from grapes. Indeed there is a definition of fruit wine which states: “Fruit wine means manufactured in New Zealand from any product other than grapes”. So it is time that the legislation is updated to reflect those current drinking products. 
As my colleague Dr Hutchison pointed out the purpose of this legislation is not to contribute to debates about reducing alcohol harm but it is appropriate I think to reflect on the need for an organisation like the Alcohol Advisory Council and that need is as great now as it ever was. There is a Kiwi culture I think of binge boozing which appears to be more prevalent and more prominent than it was in the past. We have had many examples of this. 
Recently—last Tuesday night—in my home town of Dunedin the freshers’ toga parade which is a traditional event and the contribution of significant quantities of alcohol created a climate of lawlessness in the city. Students frightened bystanders and trashed the main street of the city. People were going about their business in the middle of the throwing of some unseemly and pretty dangerous items frankly. Of course there is a degree of larrikinism in all student behaviour and many of us I am sure have been involved in the odd student prank or two but this was well beyond anything that could have been described as harmless fun. 
There is no doubt that alcohol played a material part in the behaviour that was evident that night and that demonstrates yet again that we as a nation by and large do not have a responsible approach to the consumption of alcohol. There is an immaturity about that approach. It behoves us to continue to support the excellent work that the Alcohol Advisory Council does to make the levy-setting process current with New Zealanders’ drinking habits and to line that process up with the excise duty collection process. 
I support this bill for that purpose. It future-proofs changes in the drinking habits of New Zealanders going forward and it simplifies the calculation of the levy that funds the Alcohol Advisory Council. I support this bill. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
Tena koe Mr Assistant Speaker. Kia ora tatou katoa i tenei po tatou kua hoki mai ki roto i te Whare Paremata. 
[ 
Greetings to you Mr Assistant Speaker and to us all this evening who have returned to Parliament House 
.] 
I am told that today’s Christchurch  
Press  
has all of the reasons why we need to amend the Alcohol Advisory Council Act in relation to the levy imposed on all alcoholic beverages manufactured in or imported into Aotearoa. The paper talked about a study of 12000 young people that found that the onset of drinking “goes up very steeply from age 12” and that children as young as the age of 4 are trying alcohol—4 years old for goodness’ sake. It seems that child’s play now extends to having a drink or a glug of liquor that is meant for adult lips. In response to these shocking headlines Tuari Potiki a spokesperson for the Alcohol Advisory Council (ALAC) confirmed that the age at which people first drink has been steadily decreasing. 
That was not just an isolated headline or a one-off story. On any weekend in most towns in the nation—and Rotorua is no different—we find our young people out drinking themselves to drunkenness to a level where they probably would describe themselves as “wasted”. That is what they call it: getting “wasted”. We say that it is probably more wasted potential. We think it is pretty outrageous that alcohol and drugs are involved to such a large extent in youth crisis situations as has been spoken about and has been written about in newspapers particularly in more recent times. The lowered purchasing age and the prevailing attitude of a society that associates alcohol with fun and freedom are having an impact on our communities. The Maori Party along with our colleagues in the House tonight says that we need to look at and instigate strategies to address matters to do with getting “wasted”. 
The negative consequences associated with under-age drinking especially the pattern of heavy binge drinking that many minors engage in are pretty substantial. The Maori Party has always suggested that there should be a variety of strategies both legislative and non-legislative to reduce the overall supply of alcohol to young people in order to limit their drinking and its associated harms. As other speakers have said we know that in order to stem the tide of this desperate problem of binge drinking by young people we cannot just put up ad hoc proposals in isolation from the overall drinking culture of the nation. We think the Alcohol Advisory Council Amendment Bill is heading in the right direction in terms of putting in place different approaches to address those who have the responsibility of purchasing alcohol and supplying it to our young people. 
The bill proposes to calculate the levy for each product according to an alcohol classification band stream similar to the approach used by the New Zealand Customs Service to collect alcohol excise and excise-equivalent duty. A dollar amount per litre would be set according to the beverage’s alcohol content or deemed alcohol content. Beverages with higher alcohol content will contribute a higher proportion of the levy. It is not a quick fix or a one-stop catch-all to improve industry compliance and responsibility and to put the focus squarely at the feet of alcohol barons and the alcohol industry; in many ways it is just tidying up the regulations and making the new system easier to operate. 
Five years ago the 2004 Ministry of Health review of the levy-setting mechanisms found that the way the levy is calculated and apportioned is outdated and overly complex. The levy calculation system used to be very complex; some levies were calculated by volume in litres and some by the percentage of alcohol per beverage. The purpose of this legislative amendment is to get the levies all calculated on the basis of alcohol by volume in order to achieve a standard measure and a consistent approach applied across all alcoholic beverages. What is good for wine and cider will be good for beer and spirits. It is not about the brand that we are drinking but about the amount of alcoholic content that we are consuming. We believe that these changes are for the good. 
In essence the changes will ensure that alcoholic beverages with a higher volume of alcohol will contribute a higher proportion to the levy but they do little to address 4-year-olds replacing Fresh Up with Lion Red. They do little to address the fact that young people are more than twice as likely to suffer from alcohol-related harm as other age groups. We know that the issues are pretty overwhelming. The drinking behaviour of young people all too frequently ends up with road trauma violence depression suicide disruptive relationships high-risk sexual activity delinquent behaviour decreased productivity at work increased absenteeism and educational failure. Some of the images on TV recently about what young people get up to adds fuel to the fire. Updating and simplifying the current mechanisms for setting ALAC’s levy will not solve all this raft of problems; they cannot be addressed by one solution. They require a multifaceted multi-pronged holistic approach. 
ALAC itself has plenty more ideas to share with the House which we should listen to if we are truly committed to doing something about the complex problems associated with alcohol misuse and abuse. ALAC was established over three decades ago in 1976 following the report of the Royal Commission of Inquiry into the Sale of Liquor. That commission recommended establishing a permanent council to encourage responsible use of alcohol and minimise its misuse—and so it has come to pass. ALAC’s key objectives in all of its activities are to promote moderation in the use of alcohol discourage and reduce the misuse of alcohol and minimise harm resulting from the misuse of alcohol. 
We hope that the amendments recommended by the Health Committee and the new system of alcohol classification bands may have some impact on the range of alcoholic beverages manufactured in or imported into Aotearoa. As we understand it the revised standard provisions for the ALAC levy will not necessarily affect the price that consumers currently pay for alcoholic beverages but the changes may influence the proportion that each type of alcoholic beverage contributes towards the ALAC levy. We in the Maori Party will be interested to hear from the Minister of Health as to exactly what impact—and the scale of the impact—we can expect of the changes introduced today. We intend to continue to talk of the impact that alcohol abuse is having on our communities along with the dreaded P epidemic and of course smoking. 
We believe that significant changes to the Sale of Liquor Act are needed. The Act has a predominantly business focus where alcohol is a mere commodity that can be bought or sold. It is our firm belief in the Maori Party that the Act needs an increased public health focus and a focus on reducing alcohol-related harm—that is addressing the physical and sexual violence accidents crime and arrests that have been mentioned before. 
We note the statement from the Minister of Justice that connects alcohol to the rising tide of crime and we go further and suggest that addressing alcohol misuse and abuse must go across all sectors all portfolios and all age groups. The Maori Party will support changes to the proposed regime but we signal our concern about many other issues such as excess quantities of alcohol being consumed by our young people. We know that fixing the levy is a partial solution; real solutions are likely to be more effective when coordinated across the board with a multilevel approach in society. Real solutions will involve stakeholders at all levels. Most of all real solutions will involve our families and must engage our whanau. We support this bill at the second reading and look forward to a prompt and effective hearing of the wider issues in front of the House. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: Thank you. I just remind members that cellphones are not to be ringing in the Chamber. The usual tariff is morning tea. With 122 members the Clerk’s Office the Hansard reporters and the messengers members could end up with a worryingly large Bellamy’s bill at the end of the month. 
SUE KEDGLEY (Green) 
: 
 The Green Party will be supporting this Alcohol Advisory Council Amendment Bill but without huge enthusiasm. The previous speaker Te Ururoa Flavell asked the rhetorical question of what impact the bill would have on the huge problem of alcohol abuse in New Zealand. The answer is sadly very little if any. It seems ironic that we have a huge and growing problem of alcohol abuse and a culture that absolutely tolerates alcohol in New Zealand yet this Parliament rather than addressing that issue has come up with a bill that does some technical amendments to calculate the levy on alcohol content which frankly will have very little if any impact on the consumption of alcohol in New Zealand. 
I certainly agree with the previous speaker that we have a huge culture of abuse in New Zealand particularly amongst our young. One of the issues we raised when this bill was being considered at the Health Committee was alcopops. Why is this bill not dealing with the issue of alcopops? We know they are drinks that are almost predatory in my view. They are targeted at young New Zealanders. They are very very cheap. Young New Zealanders are made to think that they are drinking just lemonade and soda but in fact they are drinking alcohol. If there was one single thing that we could be doing to try to reduce the amount of binge drinking amongst young people it would be dealing with the issue of alcopops. We tried to get this issue dealt with when we were considering this bill and we were told that it was absolutely outside the scope of the bill and we were not able to deal with it. 
The other issue we should be discussing if we are really serious about addressing the culture of alcohol abuse in New Zealand is the fact that alcohol is on sale virtually everywhere we turn in our society—in every supermarket and dairy in the land. So how can we say we are seriously trying to reduce the amount of consumption of alcohol by young people and wring our hands about the culture of abuse if we are going to have alcohol available advertised and on display in every dairy and supermarket everywhere we turn in New Zealand? These are the issues we ought to be addressing today and I am very very sad to say that frankly we have come up with I think a rather irrelevant bill—a technical amendment. All it does is calculate the levy on alcohol content. It is not going to affect the amount of consumption of alcohol in New Zealand. The Green Party is very sad that we are not able to use the opportunity of legislation on an important issue—alcohol abuse—to actually tackle the real problems and the causes of the problems instead of this rather trivial technical amendment. 
Finally there is no question that if we are concerned about drug abuse in New Zealand then we must accept that alcohol is overwhelmingly the issue we should be concerned about. We have to ask ourselves why we have such a culture of tolerance. Why do we encourage young people to drink this stuff and then all wring our hands and carry on about how terrible it is that they get dressed up in togas and get drunk in the streets down in Dunedin? That is the inevitable consequence of our culture of tolerance and of the fact that alcohol is available everywhere we turn and that everything is encouraging the consumption of alcohol. There is no point in being hypocritical. Until we address the causes there is no point in just wringing our hands about alcohol abuse. What a sad day it is that this Parliament could not deal with the real causes of alcohol abuse rather than with just some technical amendment. Thank you. 
Dr JACKIE BLUE (National) 
: 
 I am pleased to rise to support the second reading of the Alcohol Advisory Council Amendment Bill. This bill amends a 30-year-old Act the Alcohol Advisory Council Act 1976. The bill in front of the House is a technical amendment to the Act. In 2004 the Ministry of Health reviewed the levy-setting mechanisms of the Alcohol Advisory Council Act 1976 and found four major problems which are dealt with by the new bill. 
The first problem was that the levy-setting mechanism is outdated and based on only four classes of liquor. The old Act uses proof litres which have not been used to measure spirits since 1986. The New Zealand Customs Service measures spirit volumes as litres of alcohol. The review also found that the current levy-setting mechanism is unnecessarily complex when compared with the method of setting excise and excise-equivalent duty based on alcohol content. Finally the review noted that although the current Act allows the levy to be set by the Minister of Health by  
Gazette 
 there is no process for Cabinet to be involved. The Ministry of Health review felt that this was inconsistent with other levy-setting approaches. This bill updates and simplifies the current mechanisms for setting the Alcohol Advisory Council (ALAC) levy which is imposed on all alcoholic beverages manufactured or imported into New Zealand. The original bill when it was introduced in the previous Parliament proposed to align the ALAC levy according to alcohol classification bands which is similar to the approach used by the New Zealand Customs Service. In essence this means that higher-volume alcohol drinks would have a greater levy than lower-volume alcohol drinks. 
There is no doubt that the proposed legislation is fairer and modernises current practice. The proposed regime is also simple to calculate and has been worded in such a way that new composition alcohol drinks not yet thought about or designed other than beer wine fortified wine or spirits can be accommodated. Who would have thought back in 1976 that ready to drinks would be one of the biggest growth markets particularly with young people? The new regime is flexible enough to allow for the emergence of new types of beverages that would not easily fit into any liquor class in the current system such as ready to drinks. This is not a contentious bill. It was heard by the Health Committee of which I was a member in the previous Parliament. The Health Committee was sure that this bill would have minimal impact and would be far easier to operate. Indeed it was evident from submissions that industry groups including producers and importers were generally supportive of simplifying the process of calculating the levy. We were told that the price changes would be very small. The estimates were less than 1c per bottle of wine six-pack of beer or four-pack of ready to drinks and 2c for a 750ml bottle of spirits. 
The Health Committee recommended some changes to the original bill. We were concerned that there was inconsistency between the excise and the ALAC levy-collection systems. For example in the original table of the original bill table wine with more than 14 percent alcohol would have incurred a higher ALAC levy than table wine of lower than 14 percent alcohol but under the current excise both would incur the same levy. The Health Committee felt that this was inconsistent. As an example the new table provided ensures that there is consistency between the two systems. For the table wine example I just gave in the new table there are six classes. Class C is for drinks of more than 6 percent alcohol but not more than 9 percent. Class D is for drinks of more than 14 percent alcohol but not more than 23 percent. Retaining the levy but aligning it to excise was the option supported by the Government and most stakeholders as it is simpler than the current method as well as cheaper and more transparent than other alternatives. 
One other change was recommended by the Health Committee. The definition of rate has been inserted into the bill to clarify that it is a percentage figure given in the schedule of the bill. Importantly this bill does not address measures to reduce alcohol-related harm. That is not its intention; that will be for future debate and legislation. This bill aims to simplify the calculation of the levy that funds ALAC which has a significant role in reducing the burden of alcohol-related harm. I acknowledge the important work that ALAC does and it will continue to receive the necessary funding to continue its important work in encouraging responsible consumption of alcohol and minimising abuse. ALAC has existed since 1976 when a royal commission recommended its establishment following an inquiry into the Sale of Liquor Act. Its budget for the 2007-08 year is $12.5 million. 
There is no doubt that in the community there is a growing concern about the effect of alcohol and the community wants to say more. This has been clearly evident in Mount Roskill. Last year the community in Roskill South came together to oppose the imminent opening of a liquor outlet store that was 100 metres from two schools a kindergarten and a church. If the proposal had been successful it would have meant there would be 10 outlets in the Roskill South area. The community was very concerned about the serious and growing incidence of youth crime and violence in the area and it felt that alcohol would only fuel that trend. The community was extremely concerned that the current legislation the Sale of Liquor Act 1989 had no teeth to stop licences being granted where density and location were major concerns. Members of the community were concerned about research that showed a direct link between the number of alcohol outlets in a community and alcohol-related harm and violence. They were very concerned that the local body alcohol strategy the Auckland strategy had no legal status. I was very impressed by their passion and the fact that they were united. 
Rarely has a community come together in such a united way. I am pleased to report to the House that the community was successful and that the proposed outlet did not go ahead. The activism from this small community has given me hope for the future. But my community is not alone. Many communities all over New Zealand are up in arms and are determined to have a say. That will be for the House to consider in future debate and in future legislation. In summary in the second reading of this bill the Government supports this bill and the amendments that have come through after the bill’s consideration by the Health Committee. Thank you. 
STUART NASH (Labour) 
: 
 Like everyone in this House I rise to speak in support of the Alcohol Advisory Council Amendment Bill and like my colleagues before me I welcome the change that this bill will facilitate. Any bill that provides a level of consistency across any form of industry and/or product can be only a positive step in the right direction. 
Even though this bill is technical in nature we must as parliamentarians always work to ensure that all legislation is fair up to date and simple to calculate. Not only this but also we must work to ensure that as far as possible we work to future-proof legislation to take into account possibilities imagined that have not been realised. 
I think we all know that the Alcohol Advisory Council (ALAC) does a magnificent job and is a very important body in the delivery of social outcomes to our diverse communities. ALAC was set up by Norman Kirk’s third Labour Government and is just one of the many examples of how Labour has put in place checks and balances through having workable credible councils to help mitigate the risks of social harms through education advice and counselling. 
When we think about the harm carried out through the excessive consumption of alcohol by those who lose control when under the influence we understand how necessary it is for an organisation such as ALAC to exist. One of the most famous and public falls from grace under the influence of the demon drink was that of the Rt Hon Sir Robert Muldoon when he called a snap election in 1984 while rather inebriated. That was not damaging to the country; in fact the outcome was hugely positive. But one cannot help but wonder what might have happened if Sir Robert had taken the advice and had seen the educational material put out by ALAC. 
We probably should be thankful that Sir Robert did not mothball ALAC as he did Big Norm Kirk’s superannuation scheme which if kept in place would today be worth billions and billions of dollars and we would not have had to debate legislation around capital markets as we did earlier this evening. 
Now let us fast forward to the 21st century and leave behind notable alcoholic politicians. Well in fact we cannot go past this serious topic without injecting a note of humour into the debate. The most famous quote from an inebriated politician comes from one Winston Churchill in a conversation with a Mrs Braddock who said: “You are drunk Sir Winston. You are disgustingly drunk.” “Yes Mrs Braddock I am drunk but you Mrs Braddock are ugly. Tomorrow morning I Winston Churchill will be sober.” Perhaps Sir Winston’s New Zealand political namesake who left this Parliament at the previous election took too much notice of that great man’s habits. 
On a more serious note as I was saying let us move into the 21st century. ALAC does a fantastic job with a very limited budget of only about $13 million. As members of Parliament we have all heard stories from victims who have felt and experienced the effects of the misuse of alcohol and from councillors and organisations that are there to deal with the effects of the misuse of alcohol. ALAC’s role is extremely important and will become more so as this economic crisis starts to deepen even further into the bowels of society and for those for whom life has lost its purpose and are tempted to turn to alcohol for solace and company. 
Families suffer communities are polarised and public health services are stretched. It is in times like these—which we will unfortunately experience over the next couple of years—when organisations like ALAC come to the fore. ALAC does a fantastic job in the areas of strategy formulation and implementation around the use of sensible drinking and work to minimise alcohol misuse and abuse. ALAC also undertook valuable research— 
Paul Quinn 
: According to the previous speaker they’re not. 
STUART NASH 
: I ask that member when Louisa Wall is to represent New Zealand rugby in this House. I think she might have played for the All Blacks did she not? Anyway I am sorry about that; I digress. ALAC also undertakes valuable research disseminates information and runs educational programmes and innovative treatments for programmes designed to target those who are at risk. 
Paul Quinn 
: Do you know what rugby is? Have you played the game? 
STUART NASH 
: Louisa Wall was a great rugby player—probably the best rugby player this House has seen since Grahame Thorne. There is still a long way to go however. We as public representatives must not only ensure that ALAC survives but also that it is provided with the resources necessary to make a difference at a time when some people in this House while playing rugby took too many knocks to the head and drank too much alcohol at the after-match function. 
Hon Member 
: Paul was all right. 
STUART NASH 
: Yes he was. But I must admit that it is on that note that I will register my support for the Alcohol Advisory Council Amendment Bill. Thank you very much. 
NICKY WAGNER (National) 
: 
 I rise to support the second reading of the Alcohol Advisory Council Amendment Bill. As we are all aware after tonight’s debate this is only a technical amendment to the Alcohol Advisory Council Act 1976. 
The Greens are disappointed that this bill does not tackle the problems of alcohol in the community. That is not the purpose of this bill and that is not part of the scope of this bill. This amendment is designed to produce an updated streamlined and cheaper calculation system for the levy that funds the Alcohol Advisory Council (ALAC). ALAC was established in 1976. It was set up following a report by the Royal Commission of Inquiry into the Sale of Liquor. The commission recommended the establishment of a permanent council that aimed to encourage the responsible use of alcohol—which is just as relevant today as it was in 1976—and to minimise the misuse of alcohol and ALAC has been doing that useful work ever since. 
This amendment retains the existing levy but it aligns the levy with the separate excise and excise equivalent duties that are also calculated on alcohol. This will make the levy easier to calculate and more transparent. The amendment is also designed to reflect the current alcohol market. For example it repeals four different definitions of wine and replaces them with only one. It is also designed to future-proof the levy calculation process so that it automatically includes future new types of alcohol products—things that we may not have thought about quite yet. It will also catch the present newest products such as ready to drinks—the ready-to-drink alcohol mixes. Yes they have been considered a difficult thing for young people to deal with and they are commonly known as alcopops. They will be caught in this levy as well. 
Operationally the changes will not significantly affect those who pay the levy and the price changes will be minor. They will be less than a cent on a bottle of wine a six-pack of beer or a four-pack of ready to drinks. The changes are all supported by industry groups producers and importers. The levy funds ALAC and ALAC has a significant role in educating New Zealanders to use alcohol sensibly and reduce alcohol-related harm. The money will be used to support ALAC’s work in four different areas: to fund research to help disseminate information to support education programmes and to look into innovative new treatment programmes. ALAC leads research in alcohol and alcohol-related subjects in New Zealand. The ALAC website is a repository of numerous research documents publications and web links. It provides useful guidelines supports training and community groups and provides advice on managing events. 
ALAC is absolutely focused on educating New Zealanders about alcohol and how to manage alcohol. Most members will be aware of ALAC’s controversial binge-drinking advertisements. These advertisements show graphic examples of excessive drinking that leads to harm. The advertisements are so hard-hitting and shocking to the public that they have actually won an award for effective advertising and for cutting through the clutter of the advertising space. The ALAC chair Peter Glensor acknowledges that the commercials are unpleasant but as he says “so are the consequences of binge drinking”. The ads mirror what is unfortunately happening every week around the country and these ads have proved to be enormously high profile. Research shows that 94 percent of adults remember seeing at least one of the ads and many members in the House tonight will also remember them. Members might recall the ads featuring the young woman who gets drunker and drunker over a long evening of drinking in the pub and at clubs or the two men who come to violent ends—one after spending the night round after round in the pub and the other after socialising at a barbecue with family and friends. I do not know about others in the House but I cannot watch the ad that shows a dad playing with his boy. Early in the evening the games are full of fun and laughter but later in the evening the drunkard dad swings his young kid round and smashes the boy against the furniture. There is an absolutely sickening thud as the son hits the sideboard and then of course there is chaos in the family. They are shocking and graphic ads but they are incredibly memorable. 
Again the research tells us that nearly all adults are aware of the “It’s not the drinking. It’s how we’re drinking.” message that accompanies the ads. Interestingly enough over half of the drinkers surveyed reported that after seeing the ads they thought about how much they drank and discussed it with their families or friends or thought about how much they drank and started to drink less. 
ALAC is doing very effective work in our community. We want to see more of it; therefore the Alcohol Advisory Council Amendment Bill will ensure that the levy that underpins ALAC’s work will be collected in the most cost-effective simple and efficient way. I therefore support this bill. 
Hon SHANE JONES (Labour) 
: 
 Kia ora ano tatou. I stand to support the Alcohol Advisory Council Amendment Bill. The word in Maori for alcohol is waipiro—rotten water or nauseating water. Of course we do not need to look at alcohol; we can look at sights around this House to feel nauseated. I feel the need to add some clarity to what Mr Nash said in respect of the current Maori representative in this House of New Zealand rugby. He was asking when that member will stand down and let Louisa Wall a fearless Maori advocate for the Maori All Blacks take his place. That is what he was saying. She has more time and does not have a history of drinking far too much after the game. 
But let us come back to this well-crafted bill. This bill is a timely reminder to parents families and the House that we can never stamp out the drinking of too much alcohol but we must ensure that one area remains heavily regulated. It is what I call the lollipop alcohol drinks. Those drinks have created utter havoc in particular in our own community Te Ao Maori amongst our rangatahi. After Michael Erceg’s sale of his alcohol empire to a private equity company—and boy I bet that company is sweating and wishing it never paid that much for it now—no company can plan to go on selling these lollipop alcohol drinks which create carnage and destruction amongst families etc. without contributing to the need to have our families educated and to challenge our parents our schools ourselves and the community to use alcohol moderately: “Unumia te inu engari kaua e tuku ko te inu hei rangatira mou—drink with pleasure but don’t allow the drink to be the rangatira for you.” 
That is why this bill contains some sensible suggestions why it should go ahead and why it will no doubt be focused on those areas in which alcohol is changing its shape and form although its ability to make the consumer feel very piro has never changed. The bill should go ahead. Kia ora tatou katoa. 
Hon MAURICE WILLIAMSON (Minister for Building and Construction) 
: 
 Thank you Mr Assistant Speaker—[ 
Interruption 
] I thank members of both sides of the House for their warm accolades. I am really happy to take a brief call on the Alcohol Advisory Council Amendment Bill because I think there is some merit to the bill. But I heard some comments while I was in my office that made me come down. As Minister of Customs I am responsible for enforcing some of the excise— 
Hon Annette King 
: What? Are you Minister of Customs? 
Hon MAURICE WILLIAMSON 
: So they tell me I say to Mrs King. I thought tonight I would go through some factual bases to give a counterfactual. I say to members that this is not meant to be rude nor meant to be embarrassingly nasty or anything but I heard Sue Kedgley talking before about the damage that the high number of alcohol outlets can do to our society. 
I hope members will listen to this because it really is from the heart. I will give members two absolutely gospel stories and then let them think about whether this makes a difference. I go back to the year of 1981 when I was working for British Airways. I was seconded to work for Aeroflot Soviet Airlines in Moscow. I went to Moscow under the Brezhnev regime and I arrived one grey very cloudy awful day in the afternoon. As we got into downtown Moscow and were pulling into the hotel I asked my driver: “What is that big queue over there? Is that for the Bolshoi Ballet?”. He said: “No sir. That queue right there?” and I said: “Yeah the one that goes round the corner from that big old concrete building.” He said that it was for the liquor outlet. My ears pricked up and I asked whether the shop had a special on today thinking that could be the only reason for a queue. He said no. I ask members to listen. The only alcohol that people could buy in Moscow was from a Government-owned store that opened from 3 in the afternoon until 6. It was open for only 3 hours. 
There were no ads anywhere in Moscow. People would not see ads on TV on billboards or in the newspaper. The existence of alcohol was not even mentioned. Yet while I was there over the next few months I witnessed the worst level of alcohol abuse and drunkenness I have ever seen. People on the bus coming home from Aeroflot flights some nights were so absolutely blotto and throwing up on the bus that one actually got off the bus and tried to get on another one. In the park across the road from the hotel where I was staying people were on the park benches throwing up. It is no good telling me whether it is right or wrong. This is just a factual statement about the fact that booze was available only from 3 p.m. until 6 p.m. from a Government outlet and I have never seen such abuse of it in my life. 
Thank God I was then transferred to do some work at Airbus in Toulouse. The difference was stunning. As one drove in from the airport into the city of Toulouse there were billboards as far as the eye could see with beautiful ladies draped over the bonnet of a Daimler or a Bentley drinking Rémy Martin Kahlua or Moët et Chandon. Every newspaper one picked up would have adverts. Every magazine had stunning glossy pictures. In every shop in Toulouse the little town where I was living one could buy alcohol. Every family I knew had alcohol available. Even the kids of the French family that I was staying with at Airbus were allowed a glass of wine— 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: I have a point of order. 
Hon MAURICE WILLIAMSON 
: —and there was no alcoholism whatsoever. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: I have called for order. The member heard; he should stop speaking immediately. 
Hon MAURICE WILLIAMSON 
: I did. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: Excuse me; the member did not stop speaking. He should not say he did when he did not. 
Stuart Nash 
: I raise a point of order Mr Speaker. I thought we were talking about the Alcohol Advisory Council Amendment Bill not about Mr Williamson’s overseas travel experiences in Russia. I am just wondering what the relevance to this bill is. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: I just say to the member that it has been quite a friendly and wide-ranging debate. We have heard about football matches. We have heard about representation. We have heard all sorts of things. If we were to take that point we would have done it a lot earlier. Let us continue with the debate please. 
Hon MAURICE WILLIAMSON 
: Thank you Mr Assistant Speaker. I came to the conclusion—and obviously Mr Nash does not like the idea of what the conclusion is—and the conclusion is simply this. In one place alcohol was totally regulated totally controlled limited in access not advertised and not even spoken about and the actual social outcomes were appalling. In the other place it was as freely available as anyone could imagine. It was openly promoted. It was an ordinary everyday product and I never once saw a drunk person in Toulouse—ever. Members can take that story anyway they like. All I am asking is for members to compare those two societies and decide which one they would rather have. 
I know that some of the hard-line lefties on the opposite side of the House still think the Brezhnev regime was great. They still think that Moscow in 1981 with everything locked and regulated was the way to go. I feel sorry that there are still people who think like that in Parliament. But I ask members to think very seriously about that matter. 
The intention of this bill is to get some funding from the excise on alcohol for the Alcohol Advisory Council (ALAC) to do what I think has some merit. Alcohol has a major downside to it—we all know that. While ALAC is involved in promoting harm minimisation in trying to encourage responsible use and in trying to encourage post-intervention and server intervention along with the other programmes it offers I am very willing to sign up to legislation that lets us take a small sum of money as an excise tax from the alcohol being sold and to use that to fund those sensible moderation-type programmes. 
I want members to think about this as a last question. One society—it was not Russia and it was not Toulouse—decided that alcohol was so evil that it would ban it altogether. I want members of this House tonight to give me a score between one and 10 as to how they think prohibition went with one being really awful and shocking and 10 being stunningly successful and the way to go. 
Paul Quinn 
: Zero. 
Hon MAURICE WILLIAMSON 
: I hear my friend Paul Quinn say “zero”. I think that zero is too high. I should not say this about some members of the Labour Party but I do not believe that anybody with half a brain in his or her head thinks that prohibition was a successful way to go. 
Hon Phil Heatley 
: Al Capone. 
Hon MAURICE WILLIAMSON 
: My good friend and colleague and the member from Whangarei Phil Heatley reminds me that some people did think it was a good idea—Al Capone for example. He thought that prohibition was a cracker. My worry about this whole alcohol debate is that some neo-prohibitionists out there believe— 
Grant Robertson 
: Where? 
Hon MAURICE WILLIAMSON 
: I say to Mr “Whatever his name is”—I am hard pressed to give names and electorates for some of the new members; I am not trying to be smart—that there are even some neo-prohibitionists in this Parliament who think that the best thing we could do is to lock up the alcohol and throw away the key and that everything will be all right. 
I say to members of this House that the exact opposite is the truth. The more responsible our attitude is and the more we encourage education server intervention host responsibility and harm minimisation—all the good things associated with the work that ALAC does and I am delighted that it is there and doing that work—then the more likely it is that we can look forward in hope that New Zealanders will have an attitude to alcohol that is sensible and sane. We are more likely to have a good attitude than one of pulling down the blinds going with prohibition and wreaking the worst havoc we can. 
I say again that I support this bill. I think that having the level of excise related to the alcohol content is a sensible way to go. Some alcoholic drinks are very strong and require very small volumes for people to get out of them whatever it is they are seeking. Other drinks have very low volumes of alcohol relative to their volume and I think that such a levy is the right way to go. I repeat just as a counterfactual that if members of this House think this problem will be fixed by locking up the number of outlets and blocking this activity and making it illegal then I ask them to please look at history. It has not ever happened anywhere else. 
Bill read a second time. 
Immigration Bill 
Second Reading 
Hon KATE WILKINSON (Associate Minister of Immigration)  
on behalf of the  
Minister of Immigration 
: I move  
That the Immigration Bill be now read a second time 
. National has supported the review of the Immigration Act and we support this bill because we want New Zealand to have a robust and progressive immigration system. Through our membership on the Transport and Industrial Relations Committee we made a substantial contribution to the bill but it must be made clear that this bill is not a “party bill”; it does have broad support. It is a bill that will enable us to deliver on our campaign promise to create a world-class Immigration Service. 
I thank the members of the Transport and Industrial Relations Committee. It is evident from the changes to the bill that the committee worked tirelessly to review it and to give full consideration to public submissions. I must also give thanks to everyone in the public who made submissions on the bill. The public’s contribution highlights the importance of the Immigration Bill which will rewrite the foundation for our immigration system. 
The select committee has recommended a number of amendments to the bill. The Government supports these amendments because they will improve New Zealand’s immigration system making it fit for purpose now and into the future. I will elaborate on these amendments shortly. I can also advise that the Government plans to make some further changes to this bill as it progresses through its next stage. We will be making a number of minor and technical amendments to ensure that the drafting of the bill is as clear as possible and that it is consistent with the other legislation that has been passed since it was introduced. These changes are not significant but overall they are many. The Supplementary Order Paper will also address a matter raised by the select committee. It will enable a deportation order to be cancelled if appropriate. The Government supports this change as it will allow further flexibility and fairness in the deportation process. 
The bill rewrites the immigration legislation that provides the foundation for New Zealand’s ability to choose who may travel to enter and stay in New Zealand. It is increasingly important that this happens in a way that benefits all New Zealanders especially in this uncertain economic climate. Although the current immigration legislation will work for us until this bill is implemented this bill will help us to take immigration into the future. 
The immigration system manages the movement of people across New Zealand’s borders. Since the Immigration Act 1987 came into force the global movement of people has undergone considerable change. Travel is cheaper and more accessible. The flow of people around the world and to New Zealand has increased. Risks have also increased. The 1987 Act has been amended numerous times. Such amendments have included changes to the removal regime for people unlawfully in New Zealand and have strengthened provisions to prevent people from smuggling and trafficking. Major changes took place in 1999 with the introduction of New Zealand’s now highly regarded refugee status determination process. At that time Section 4A which enables the use of classified security information was also introduced. Further changes took place in 2003 with the introduction of the expression-of-interest approach to the selection of skilled migrants. 
Although all the amendments to the 1987 Act have led to improvements in the way the immigration system works they have been incremental and have resulted in increasingly complex legislation. The Immigration Act review has sought to address the problem of complexity by increasing the transparency of the legislation and future-proofing it so it is fit for purpose now and into the future. A core goal of the 1987 Act review has been to ensure that immigration legislation facilitates the travel entry and stay of the non-citizens that New Zealand wants and needs. It has also been to ensure that the legislation works to protect the security of the border against and facilitate the deportation of those non-citizens whom New Zealand deems to be undesirable. The security or compliance aspects of the bill may be seen to outweigh the human rights or facilitation aspects. This is because the facilitative aspects of the immigration system such as the rules and criteria for the granting of visas found in immigration instructions and settlement-related services provided or supported by the department are not visible in the bill. The Immigration New Zealand operational manual contains the detail of immigration policies and the facilitation aspects of the immigration system; it is available on the immigration website. 
The bill enables the development of immigration policies but does not contain them. The bill does however contain the provisions for responding to those non-citizens who are deemed undesirable or who do not comply with the immigration system. For this reason it is also prescriptive in areas such as deportation review and appeal. The bill is also prescriptive in the areas of compliance enforcement offences and penalties. This is because the Government needs to be clear about the powers that the police customs officers and immigration officers have and the rights of non-citizens in these circumstances. Consequently the immigration legislation may appear to be weighted in favour of compliance. 
The security-related provisions of the bill will not have an impact on New Zealand citizens as they provide an ability to appropriately manage non-citizens who fail to meet their immigration obligations and/or threaten New Zealand security. The security provisions of the bill are designed to enhance the integrity of the immigration system and to allow New Zealand to respond effectively to threats or risks to security. The ability in the bill to more effectively address these threats and risks and to enforce immigration obligations will provide a positive benefit for all New Zealand citizens and non-citizens who are lawfully in New Zealand. Most non-citizens in New Zealand are cooperative and compliant with regard to their immigration obligations. The security-related provisions in the bill will not have an impact on those non-citizens. The provisions are designed to effectively address those non-citizens who do not comply with their immigration-related obligations as well as those who pose a threat or risk to New Zealand security. 
In response to public submissions the select committee has recommended important changes to some provisions in the bill. Those of particular importance relate to the use of classified information and to the refugee and protection system. Comments from submitters indicated concern that the chief executive of any Government agency could certify information as classified information. Because of this concern the ability to do so has now been limited to the chief executives listed in security defence law enforcement and border agencies along with the Ministry of Foreign Affairs and Trade and the Department of Internal Affairs. It is important to understand where classified information may be used in decision making under the provisions of the bill: it is only where the Minister of Immigration determines that it relates to security or criminal conduct. This means that it will be used only where the safety or security of New Zealand or New Zealand’s law may be compromised. It is crucial that immigration refugee and protection decisions can be made on the basis of all available information in these cases. 
The select committee has recommended changes to the bill to give more weight to natural justice when classified information is used. A key change is that a summary of allegations will always be provided to an individual when classified information is used in relation to a residence decision a temporary entry decision about onshore applicants a refugee or protection matter or a deportation decision. The change will allow the individual to be informed of the allegations contained in the classified information prior to a decision being made about his or her status. The select committee has also recommended amending the bill to clarify that its classified information provisions do not rule out the application of the Ombudsmen Act Official Information Act or Privacy Act. 
A number of other changes by the select committee which should be supported by submitters have been made to the classified information system. For example the restriction on a special advocate lodging proceedings on behalf of an appellant has been lifted. There had been some concern over the ability of a special advocate to communicate with the person he or she was representing after the advocate had seen the classified information; at no point does the bill stop written communication between the two parties. 
The select committee received many submissions on the refugee and protection provisions in the bill. These were valuable in ensuring a more appropriate approach to the Convention Against Torture and Other Cruel Inhuman or Degrading Treatment or Punishment and to the International Covenant on Civil and Political Rights. Key changes have been made so that the codification of these obligations is more consistent with the wording of the obligations in these international instruments. The changes to the review and appeal rights— 
Mr DEPUTY SPEAKER 
: I am sorry but the Minister’s time has expired. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 The outbreak of peace across the House continues tonight with the Government speaking in favour of legislation that happened to be in the name of the Hon Clayton Cosgrove because that member was the Minister of Immigration prior to the election when the Immigration Bill was introduced and put to the Transport and Industrial Relations Committee. 
It is probably timely to remind ourselves that the select committee did a lot of work on the legislation. The legislation is significantly amended having come out of the select committee. It is really important to point out that this legislation has passed through a positive Human Rights Act vet. Unlike the “three strikes” legislation this legislation is regarded as being consistent with the human rights legislation in this country which is something we should be pretty pleased with. 
The select committee made a number of changes one of which did not make it into the legislation as reprinted. I heard the Associate Minister of Immigration Kate Wilkinson when she gave her address say there were going to be some minor technical amendments with one of them to do with the deportation order being able to be cancelled where appropriate. That recommendation was made by the select committee but was not put into this draft of the bill so I am glad the Associate Minister picked that up. 
Immigration is always going to be a balance. The immigration laws of this land and other lands are always a balance. Immigration is a positive feature in New Zealand society. It is how we have come from our bicultural beginnings to our multicultural future it is how we engender new blood and new global linkages it is how we have an export education industry and it is why this country now has such a wide range of ethnicities and cultures which is a remarkable feature of our country. 
It is also legislation that is designed to keep out bad people. Bad people might be people who are here pushing drugs or they might be people running a bunch of rackets and coming across our borders to do so. Anyone who has been a Minister of Immigration—I am pleased to say I am not a person who has held that portfolio—is full of war stories of the underside I suppose of human nature. 
It is always going to be a balance. It is also going to be a balance in terms of numbers. The legislation allows for the Government of the day to set quotas in various forms for immigration purposes and those numbers need to be kept under review. Interestingly in very rapidly changing economic times such as this they need to be kept under review on a very regular basis. It is not yet clear to me that this Government is doing that. However National members without a hint of irony advised that this legislation which they can thank the outgoing Labour Government for allowed them to go into the hustings to say they are going to have a world-class immigration system. Let me say to the Associate Minister Kate Wilkinson who made that remark that law does not a world-class immigration system make. Law is a very good start for a world-class immigration system but there needs to be a budget there needs to be attention given to quality of service and there need to be standards of interaction between those who seek to come to New Zealand and those who are dealing with their applications. Onshore and offshore we should be treating people well and politely and that does not always occur. 
I can remember about 10 years ago when some refugees fetched up in my life. They are both now New Zealand citizens but they waited for 21 months for their first interview. During that 21-month period they were not entitled to anything that was available in New Zealand. They were not entitled to anything. They could not work and they could not draw any support from the State. They were allowed to go to English language lessons and that was it. They waited 21 months for their first interview. 
That was a second-class immigration system and it begs the question of whether there is enough funding for immigration even now. The issue back then was one of funding under a previous National Government and one wonders for example whether the removal orders that are drawn up week after week in this land to have people returned whence they came will be able to be actioned or whether the budget for removals has been cut. If the budget for removals has been cut—and some say it has—then the removals will not be able to take place. 
The Associate Minister might like to get one of her colleagues taking call after me to respond to the possibility that there might be some constraint in the removals budget. How would it look if there was a decision to remove someone who was regarded as not a proper person to be in New Zealand and there was no budget to send that person back home? A world-class immigration system requires world-class legislation and it requires more than that. I leave those thoughts with the Associate Minister. 
In general we have legislation that is now simpler. We have a visa system that is simpler. Those of us who have always struggled to work out the difference between a visa and a permit and exemptions to both do not need to worry about it quite as much as we used to. We have a more transparent deportation system. Those of us who have struggled to work out the difference between deportation and removal or revocation of a visa or whatever it might be and have tried to work out the technical differences between them do not need to do that any more because we have one word for that and it means “Be on your way.” 
We have if you will quite a lot of simplification of this system but it is also a system that has some inbuilt security including some stuff that I think some members of this Parliament might find awkward. I am referring to the use of various “biomarkers”. We use photographs as a “biomarker” we use fingerprints as a “biomarker” and we can photograph someone’s iris and use that as a “biomarker”. All three “biomarkers” can be used under this new legislation before us that is being considered today although the only “biomarker” that will be used for New Zealand citizens getting across their own border will be as it always has been just a photograph. 
We have a more robust system in terms of protection and the Associate Minister has gone through the changes that have been made in respect of section 4A of the Immigration Act and the new approach that has been put in place there. 
It is worth noting that the Transport and Industrial Relations Committee changed this bill materially. It did not change it in any way fundamentally but it made a lot of small to medium sized changes and the select committee needs to be given some credit for the time and effort it put into it. I cannot remember who chaired the select committee. I wonder whether it was the Hon Mark Gosche—I think it was—so let us remember his work. He is no longer with us but Mark Gosche was a pretty good chair of a select committee and I think he ran a pretty good ship. I offer my congratulations to him and to other members of this Parliament past and present who sat on the committee and have given us at this second reading stage legislation that the Associate Minister thinks is almost right. Minor technical amendments excepted we think we have got it about right so we should not debate it too much further. 
Hon PANSY WONG (Minister for Ethnic Affairs) 
: 
 It is a pleasure to take a call on the Immigration Bill along with David Bennett my hard-working National colleague—we were both members of the Transport and Industrial Relations Committee in the last Parliament—who will speak shortly. 
The bill has taken a lot of thought. The select committee received 90 submissions and 61 submitters presented a submission that deserved our attention. This legislation has quite a few controversial parts which I want to share with the House. Lots of submitters were concerned about biometric information in respect of the protection of an individual’s privacy and in respect of whether it infringes human rights. How long can an individual’s biometric information be stored and who can retrieve it? The select committee took a very considered and professional approach to that issue. We engaged at length with the Privacy Commissioner and the Chief Human Rights Commissioner and eventually we struck the right balance in the legislation. 
The other provisions that caused a lot of controversy were about classified information. Which chief executives of which departments can provide this information; once again who can access it; and what is the Minister’s authority with regard to it? Once again the select committee took those concerns to heart and had very lengthy discussions. The Chief Human Rights Commissioner and the Privacy Commissioner made return trips to the select committee which is quite unusual. We also authorised the officials to work with the Privacy Commissioner and the Human Rights Commission to make sure that the provision that eventually ended up in the legislation provides the sensible and right balance between an individual’s rights and the rights of New Zealand to protect its border from people who might present a threat to New Zealand. 
I would like to talk about three other matters I have raised some of which have been incorporated into the legislation. First of all a new provision that has been introduced caused quite a lot of concern to employers. Currently employers can rely on the fact that a potential employee would provide a PAYE code to prove that he or she has the right to work. An employer could employ someone if that person had an Inland Revenue Department tax code—the employer could assume that person has the right to work. 
In this legislation that provision has been changed. The provision is about employers having to take reasonable steps to prove that the potential employee at least has a work visa has permanent residence or is a New Zealand citizen. That caused quite a lot of concern to employers. Some of them were concerned that it might be interpreted as racist. I can just imagine the types of potential employees who might be asked for further identification. They could possibly be people who look like me or who speak with an accent. Employers are quite concerned that if they ask certain candidates for a passport or whatever as identification a complaint might be laid with the Human Rights Commission that they are racist. 
We traversed alternative proposals with the Inland Revenue Department and asked whether the department could come up with some solutions to help. Could for example a potential employee have a tax code so that employers can safely say: “Yes from that tax code it looks as though that person has either a work visa or has permanent residence status.”? We were told by the Inland Revenue Department that it was too difficult. I must say a lot of the select committee members did not take that response from the department too kindly. If that was too difficult for a Government department then spare a thought for employers particularly smaller employers. 
We eventually came to a compromise whereby the Immigration Service agreed it would have an online website to ensure that it responded to any inquiries from employers very quickly. We were also assured that some employers already have an interview form that might be extended to include additional requirements that may satisfy the criteria that employers take reasonable steps to ensure that an individual has the right to work. I hope that works out. We want to send a signal to Immigration New Zealand and to the Inland Revenue Department that we want them to cooperate to ensure that the burden on employers has not been made so difficult that they will be put off employing people. 
The other matter I want to raise is the use of limited purpose visas by Immigration New Zealand. Way back in 1998 when National was in Government a limited purpose visa was introduced. The reason it was introduced was to ease the consideration of risk by immigration officers. Immigration officers might take the attitude—possibly correctly—that there was a higher risk that people entering New Zealand from certain countries might become overstayers. They were very reluctant to issue those people with visitor visas work visas and so on. But that posed a lot of problems for people who genuinely had extended family and friends and wanted to come to New Zealand to visit them for special occasions. A limited purpose visa was introduced for that purpose but unfortunately it has not been used in that spirit. 
I realise that a lot of immigration officers use the limited purpose visa as a last resort rather than using it more liberally at the front end to allow people to come in. The reason they should be at ease is that if the protocol is properly introduced by Immigration New Zealand a person who holds a limited purpose visa cannot change to another category. That should give immigration officers peace of mind when giving those people a visitor visa to come to New Zealand. I wanted that provision to be used in a much better way because right now I am sure that all members of Parliament are constantly being approached by their constituents in relation to the difficulty that their friends and family members have when wanting to visit New Zealand. 
I finish my second reading speech by saying that the Hon Pete Hodgson made a point I agree with to a certain extent. He said that a world-class immigration system starts with legislation but does not end there. I can safely say I am glad that this immigration bill will be passed under the National Government. The law had to be updated and changed. I have confidence in the Hon Dr Jonathan Coleman and in the Hon Kate Wilkinson to ensure that immigration policy and the Immigration Service will be run as a first-class system—in contrast with the time Labour was in Government. 
Let us look at the shambles of Labour’s so-called business investor policy. The previous Minister of Immigration introduced a $20 million threshold for the investor category. Can members guess how many applications have been received since its introduction? The answer is a big zero. That policy has been in place for a year but there have been no applicants. It is a waste of the time of the department and it is a waste of New Zealand’s time to advertise ourselves and try to show ourselves as a country that values expertise and financial capital. I am glad to take a call in support of the second reading of this bill. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 My colleague Annette King has just made a very very good point. For the benefit of those who did not hear it I tell them she said there was a nasty little ending to Pansy Wong’s speech—as usual for members from that party. Kate Wilkinson has spoken in this debate. Kate Wilkinson lives in my electorate and every time I challenge her her people write letters to the editor saying I should stop picking on Kate because she cannot hack being challenged in Parliament. Apparently it is a personal attack to challenge a member of the Government. 
I remind Pansy Wong who talked about the single investor category in the policy that the National Government introduced that it became a revolving door policy. The National Government introduced the policy and it encouraged passive investment. For the benefit of those who are listening to or who may be tuning into this debate I can tell them that that means an immigrant could bring in money— 
Hon Pansy Wong 
: Open the door! No one is coming! 
Hon CLAYTON COSGROVE 
: I think there is a squawk or something parrot-like coming from across the Chamber; I cannot quite make it out but the member may want to listen. National introduced a passive investment policy which meant that an immigrant could bring in a sum of money place it in a bank account passively gain residency—gain the status—ultimately gain a passport then send the money out to the next person in a revolving door fashion so that that person could use it as well. That was the legacy of Ms Wong. 
Labour changed that policy to an active investor policy. It may well have been less attractive to someone who wanted to rort the system because it meant that people had to bring investment funds into this country and actively invest them so that there could not be a revolving door policy whereby the funds were recycled over and over and over again and their mates could rort the system get residency get a passport then send the dough out. Of course that revolving door policy was Ms Wong’s legacy. It is the nasty little ending of her speech. 
The Immigration Bill is the biggest rewrite of immigration policy in two decades. In fairness to the Hon Dr Lockwood Smith who is now the Speaker of the House—and I do not want to bring him into the debate inappropriately—I say I was at several forums with him when he was National’s spokesperson on immigration and to be generous I found he took a pretty non-partisan view in respect of this legislation. We all agreed that it was good legislation. He did not stand up and trumpet as Ms Wilkinson did that this bill shows the National Government’s commitment to immigration. Maybe it does but she did not write it her Government did not write it and in the initial stages the National Party opposed many of the facets within it. But I have to give the Hon Dr Lockwood Smith credit because in the latter days of his reign as the Opposition spokesperson on immigration he did indeed come to the party and I commend him for the logical way in which he looked at this legislation. 
Immigration law as always is a bit like the issue of law and order: it becomes a bidding war between the parties. The truth is that we have had parties in this House—some of which are not here now—that used immigration policy to ratchet things up and pick the scab off certain ugly facets of certain folk within New Zealand society. It would be fair to say that the race card has been played by some parties. From time to time normally around elections immigration policy becomes a bidding war between the parties. 
This is very good legislation because it future-proofs the law and brings us up to date with where technology is—with biotechnology. It also streamlines appeal rights—for instance it has a single independent appeals tribunal. But unlike what somebody at the back of the Chamber said when calling it bad legislation I say it does not do away with human rights. It streamlines the process but it does not allow people to abuse our taxpayer dollar and our process by illegitimately dragging the chain. 
For instance it does not degrade human rights to have all issues dealt with at the same time rather than having one appeal having that appeal decided then having another appeal on another ground and having that decided. I think that one could legitimately argue that taxpayers felt that the Zaoui case—and I do not challenge the decision—exhibited many facets of what I have described. This bill does not do away with human rights. It does not degrade the protections for migrants but it streamlines the process whereby they can be dealt with have their day before the tribunal and have their rights examined. 
I have to say though this may be unpalatable to my Green colleague that it is the role of this Parliament and of the Minister of Immigration—of any colour and of any party—to protect the border of New Zealand. The first responsibility of the Minister of Immigration—and I have been one—is to protect the borders of New Zealand. I say to that member and to others who criticise that stance that the only way they will create confidence within our communities is by letting into New Zealand the right the appropriate and the fantastic folks. 
I remember the  
Tampa  
and Helen Clark taking a huge stance on that issue. I remember the criticism she got from some members who are in this Chamber now—and from some who are not in the Chamber—and the race card being played on that issue. I met many of those young people— 
Hon Ruth Dyson 
: Degree-qualified. 
Hon CLAYTON COSGROVE 
: —as have my colleague Ruth Dyson and other colleagues in Christchurch. Those people are now degree-qualified. Sadly one has passed away through a tragedy that we know about. Helen Clark showed a ton of guts in saying we were going to do the right thing as Kiwis always do. She did that in the face of huge criticism some of it ignited by people who still sit in this Chamber which was made for reasons of political expediency. Helen Clark said that we were going to put a stake in the ground; that we were going to be humanitarian and we were going to do our bit as a global citizen. That stance paid off. 
David Bennett 
: Come on! 
Hon CLAYTON COSGROVE 
: From the cue ball opposite we have “Oh come on!”. Well this is a serious issue. I was at the citizenship ceremony of those kids from the  
Tampa 
 and I say they are wonderful citizens. They love being Kiwis and they are very grateful that our country stood by them and allowed them to come in. That is what this bill is about. 
The National members stand up and make comments that remind me a bit of Judith Collins’ comments when she was opening police stations—stations that Labour initiated funded and built. She said those stations were the result of her commitment to law and order. Kate Wilkinson stood up earlier and said this bill shows her Government’s commitment to immigration policy. Well that may be so. I think Lockwood Smith deserves more credit than Kate Wilkinson does; he did more work on it than she ever did. National members say this bill is their commitment to immigration but the test of course will be what they decide to do as their 3-year term progresses: whether they choose a humanitarian stance or otherwise in respect of immigration. I say again the only way we engender confidence in our community that we are letting the right people in is to ensure that the community has confidence that we are keeping the bad guys out. 
I do indeed pick up on Pete Hodgson’s comment. It will be interesting in the Budget round—[ 
Interruption 
] Members opposite laugh and scoff but it will be interesting to see whether the removals budget is contracted cut or suspended and whether those who are charged with removing people have been told not to do so. I know that for our Green brethren it is an unpalatable thought that anybody should be removed from this country but there are people who come out of prison after having broken our laws and committed crimes against our citizens and they should be removed and deported. Though the Green member may not think so it is appropriate to protect our border. But it will be interesting to see whether those in our Immigration Service who are charged with that task which is pretty awful I would think are actually given the resources—it will be interesting to see whether the resources are maintained and not cut. I am told as Mr Hodgson said that certain people believe the removals budget has been cut and that people have been told not to go and catch the bad guys not to go and remove those who abuse our system and make it difficult for those who do not and to suspend what they are doing because we want to save money. 
This is good legislation and I hope as we progress it through the House—and I say this in all sincerity—that we will not go down the road as other parties that are not here now did of picking off the scab and of picking on the most vulnerable people and using them as a target for politics. I think this legislation should be progressed. It does future-proof our Immigration Service and it does further professionalise those good human beings—our public servants—who administer the immigration legislation. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I stand to speak on the Immigration Bill on behalf of my colleague Keith Locke who sat on the Transport and Industrial Relations Committee and unfortunately cannot be here tonight. I do not get up to speak as an expert on immigration law because I am not one but I am someone who has a deep and abiding belief in and commitment to natural justice. 
There are some parts of this bill that to a person who has just a basic understanding of natural justice and how it should work really are quite extraordinary. It seems to me quite remarkable that anyone in this House who says he or she has any commitment to human rights or freedom—on one side we have the pious cries of human rights and on the other side we have the pious cries of freedom—could actually vote for this bill. 
Let us talk about some of the elements of this bill. You can get convicted on the basis of secret information. You can have a case— 
Mr DEPUTY SPEAKER 
: The member cannot bring the Chair into it. The member cannot use the word “you”. 
Dr RUSSEL NORMAN 
: Thank you Mr Deputy Speaker. A person can be convicted on the basis of secret information. Fourteen different Government agencies can have secret information that they keep from the person. The person is not allowed to know what it is. They have this secret information and they can use it against the person who has no idea about it. Fourteen different agencies can do that. It strikes me as quite extraordinary the breadth of power that we are giving to the Government—a conservative Government. It is supposed to be suspicious of State power but it seems to ladle it out in great quantities whenever anyone wants to go hard on refugees some of the most vulnerable people in the whole world. 
The list includes the SIS the Government Communications Security Bureau the New Zealand Police the Department of Corrections the Department of Internal Affairs the Department of Labour the Ministry of Fisheries the Ministry of Agriculture and Forestry the Civil Aviation Authority the Aviation Security Service the Customs Service the Ministry of Foreign Affairs and Trade Maritime New Zealand and the New Zealand Defence Force. These are all State agencies that can have secret information on people. 
They do not tell the person. The person turns up in court and says: “I’d like to defend myself.” They say: “We’ve got this case against you but we’re not going to tell you what it is because it’s secret. But we can appoint a special advocate for you.” So a special advocate is allowed to look at the secret information they have against the person. The special advocate is allowed to go and look at the secret information but once the advocate looks at the secret information he or she is not allowed to talk to the person who is being convicted on the basis of secret information held by all these Government agencies to which the conservatives amongst us want to give lots of power to override basic human rights. Suddenly we are going to give all this power to these State agencies. Goodness knows why. The special advocate can look at the secret information that any of the 14 different agencies has on the person and that is being used to convict the person. The special advocate can communicate to the person in writing only via the tribunal. The advocate can communicate to you in writing only via the tribunal. That is extraordinary. You never get to see the information that you are being convicted on. 
Mr DEPUTY SPEAKER 
: I have reminded the member that he cannot bring the Speaker into the debate. He must use the third person. 
Dr RUSSEL NORMAN 
: Thank you Mr Deputy Speaker. So people being convicted by this secret information are not allowed to see it but they can have a special advocate who sees it on their behalf and then communicates to them in writing. So how are the people against whom the secret information is being used supposed to pull apart this supposedly special information this secret information held against them? How do they challenge this information when the only way that people being convicted on the basis of this information find out about it is when the special advocate who gets to read it writes little notes and sends them to them. How on earth are they supposed to find out and illustrate that in fact that information is false? We know that in the Zaoui case the information that was being given against Zaoui was false and it was on that basis that Zaoui managed to become a genuine refugee. 
This law could be seen as the revenge of the Immigration Service because it lost the Zaoui case. That is actually what it is. The bill is the revenge of the Immigration Service and the SIS because they lost the Zaoui case. They were exposed for providing false and misleading information. So they have decided they are going to stop that because the person being convicted on the basis of this false information will not get to see it any more. So it is revenge because those services lost the Zaoui case. 
Just in case the High Court might consider that it could look at the secret information and determine whether it was true there is another special clause in the legislation. There is another special clause that the Labour and National parties are very happy to have in there which states that the High Court is not allowed to challenge whether or not the information is accurate. The High Court has to assume that the information is accurate. This is the information provided by the SIS and 13 other Government agencies which in the Zaoui case was proven to be completely wrong. But no the High Court is not allowed to look at it and say that it is wrong. No if the SIS says that black is white then the High Court must accept that. That is what this law says—this law that members are so happy to vote for; that those members who say they believe in freedom and who say they believe in human rights are happy to vote for. Something that can be manifestly false must be accepted as true by the High Court because this Parliament is passing a law that says that it has to be considered to be true even when it is not. Under the Zaoui case it was proved to be false. So where is Labour’s commitment to human rights? Where is National’s commitment to freedom? They are willing to vote for a law that says black is white because the SIS the Ministry of Fisheries or 12 other Government agencies say that black is white. If they say it is so the High Court must accept that it is so. 
This House is very happy to pass a law that says to a High Court judge that he or she is forced to accept a piece of information as accurate that the judge knows is false. That is the law we are passing tonight. That is the law this Parliament is so happy to pass. It is a law that says we will convict people on the basis of secret information that they will never see and that they will never be able to challenge no matter how false it is and even when it gets to the High Court the High Court judge will not be able to say that black is black and white is white because if the Government says that black is white it must be so. Do members know what that is called? That is  
Nineteen Eighty-Four 
 when the Government says that black is white and forces the High Court judge to accept that because the court is not allowed to challenge it under the law that is being passed tonight. Under this law when the Government says that black is white the High Court judge has no choice but to accept the Government’s word on the matter even though the High Court judge knows that black is black and white is white. That is the law that you are passing tonight; I hope you feel proud about it. Is this the way we are going to treat the most vulnerable people in the world? Refugees are people who have nowhere else to go and who are in danger of being tortured when they are sent back because they cannot challenge their cases in the High Court because the Government has said you have to accept something that is false— 
Mr DEPUTY SPEAKER 
: I remind the member for the third time that he cannot bring the Speaker into the debate. He must use the third person. 
Dr RUSSEL NORMAN 
: Thank you Mr Deputy Speaker; my apologies. Even when a person is aware that a piece of information is completely false—even when a piece of information is completely false—the High Court will have to accept it. The court will have to accept that it is true. Our so-called Attorney-General is smiling and thinks that this is OK. It is not OK; it is not OK to force the High Court to accept something that is false to say that it must accept that it is true. That is not OK. And the outcome of this manifestly unjust process is that some of the most vulnerable people on the entire planet—refugees—will be sent back to where they came from to be tortured or killed because we cannot possibly allow them to stay in our country. That is totally unacceptable. 
Of course there are some other really choice bits of this law. There is the whole search and seizure without any warrant provision. That is another great commitment to freedom from National and to human rights from Labour. They are passing a law that says a police officer can go into someone’s house without a warrant—without a warrant from a judge—and can just wander in there and grab people. It is just like the dawn raids the good old dawn raids. It is back to the dawn raids. Is that really the kind of law that we as a Parliament should be passing? Should we be passing a law that fundamentally breaches everything that we supposedly stand for as a democracy? I refer to the kinds of things that people represented by all the names on these walls around us here fought for. 
There is also the matter of habeas corpus because this law allows for indefinite detention. This law allows for indefinite detention. Do members of the Labour Party want to vote for that? Great! They can vote for indefinite detention and members of the National Party the party of freedom can vote for indefinite detention. It is my view that this law is completely unjust. 
DAVID BENNETT (National—Hamilton East) 
: 
 It gives us great pleasure to put forward the Immigration Bill which was started under the Labour Government in the previous term of Parliament. I pay due respect to the Hon Mark Gosche who was the Transport and Industrial Relations Committee chair we served under. He did a very good job of taking this legislation through to the stage we are at now. In that process a number of changes were made on the basis of some reforms that both sides of the House thought were applicable and in the best interests of New Zealanders and our New Zealand immigration system. 
It is important to remember that this bill is very much a procedural bill. Although it is one of the largest bills that we would deal with in a normal sitting it is simply procedural. When people talk about immigration they talk about the issues of who comes to New Zealand how many people come to New Zealand and under what criteria they come. This bill is not necessarily about that. It sets out the procedures for immigration cases it sets out some of the visa requirements it sets out some of the appeal processes and it sets out provisions for people to make an appeal against a judgment made in their particular case. So it is not legislation about which one can use the fear tactics of saying that it is about how many people come into New Zealand or who we do not let into this country as the Greens have just said it is. It is not about that. In fact this bill is about procedural aspects; is about making immigration law something that is effective. 
It has been long overdue. Many years have gone by without these kinds of reforms being introduced. Our immigration legislation was a hotchpotch of basic laws that had been put together and amended over time. It was due for a major reform which was started under the previous Government. The National Government has completed it in this term. 
I pay tribute to the Hon Dr Lockwood Smith. He was a very important part of that because as our immigration spokesperson Lockwood had a keen interest in this legislation. We made it quite clear from the first stages of the select committee process that we would work constructively to get a solution that would be in the best interests of all New Zealanders and that would be passed through Parliament whatever the result of the general election. That is why we did not see Labour promote the passage of this legislation before the last general election; its members knew that the bill had cross-party support. There was agreement between the parties that essentially the nuts and bolts of this legislation would be passed at some later date. 
When we look at the legislation we see some key points that need to be highlighted. These are points that the select committee made a numbers of changes to. One point was the use of biometric information in decision making. If people have travelled to America they will know that as soon as people get to the airport they undergo retina scanning which is now common in New Zealand international airports as well. We were a little bit behind the game in terms of that information about individuals. We were not storing the information that some other countries stored. It was a matter of amending our laws to take into account technological advances and how we store information on people who arrive in our country. Biometric information is very important and will be more crucial as we go forward with technological advancements in visa processing entry processes passports and identification. It is a matter of the New Zealand system catching up and of making sure that we have legislation that supports a more robust system of identification of people coming into the country. 
Another big issue in the legislation is classified information which is information that highlights or flags some kind of problem that may be perceived in terms of an individual who is coming into the country. In many cases it is something that other Governments have notified us about or that we see as a potential risk. The issue of classified information was part of the Zaoui case which a Green Party member talked about in the previous speech and it is also related to some of the other changes in the legislation around special advocates and suchlike. Essentially we were looking at a system where that information could still have an element of secrecy so that people would not be able to publicise it widely where there would be some privacy issues involved around how that information is distributed and where anyone who comes into New Zealand in unusual circumstances who has been identified as having a problem is given a fair go. In many cases those problems are very easily sorted out and the individual does not become a problem or go through to further levels of our system. However in some cases they do. In those cases we need to make sure that we have that information in a manner such that it is not necessarily in the public domain so that it cannot be blown out of proportion as has happened in some cases but can be used by the relevant authorities to make decisions based on the facts and what has actually been provided not on the basis of the coverage that a case has got through being publicised in the media. Those are the important changes to clauses 30 to 32 in regard to classified information. 
Another big change was in regard to special advocates. This is where we need to put some realism into what the Green Party has been talking about. The Zaoui case was a very public case in New Zealand and it was probably one of the biggest migration cases that we had seen in recent years from a publicity point of view. It went through a number of court challenges and a quite detailed process. It probably needed the Government to take a firmer hand in the initial stages and to make a decision rather than it allowing it to drag on and be played out through the court system as it was. Mr Zaoui’s lawyers were very active participants in the select committee process. They made numerous submissions and they raised some very important points that were incorporated into this legislation. So people cannot say that this legislation is necessarily detrimental for somebody in Mr Zaoui’s situation. In fact many of the points that his advocates had raised were incorporated into the legislation—not everything but they were looking at it from one extreme. We had the point of view that the Government has to look after its boundaries and borders and to make sure that we have some control over people who come into the country. But we need to do that in a manner that gives everybody the ability to be heard and that is not detrimental to human rights. So the role of special advocate was very important. 
Let us look at another big part of the bill the universal visa system. For a number of years additions have been made to our basic visa system. We have added a couple of new categories of visa over time. Well it really needed to be rationalised. We needed a visa system that was much simpler and could be easily followed by not only those who were entering the country but also those administering the laws through the Immigration Service. Part 3 goes through the visa requirements. It sets up a much simpler system for New Zealand visas so that people coming into this country will be well aware of what their opportunities are and what the visa categories are. Clauses 120 and 121 deal with visa requirements. 
Another big part of the bill deals the appeals process. Through the system having been built up over many years the appeals process was very complicated in that there were a series of different appeal processes. That overcomplication of the system meant that it was very difficult to follow for the appellant and also the Immigration Service found it very difficult to go through the process. We needed a satisfactory result and we have it through the changes made to the appeals process. 
In summary this legislation is a reflection of the need to reform law made over a number of years. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 We have heard a great deal this evening about some of the more contentious elements of the Immigration Bill and I will address those shortly. I start by saying that there are some elements of this bill that I think a lot of people around this country—universally around this country—will certainly welcome which are around the whole issue of simplifying the visa system that we encounter. As a relatively new MP I can say that certainly in my electorate office the overwhelming number of cases I get are around the immigration issue. They are always emotional. They are emotional because we are dealing with people’s lives—with their very existence in many cases—and the fact that they want to be in a country such as New Zealand where they feel safer and more secure. They want their family to join them in many cases because they want their family to continue to stay together and have an existence that is safe. It is always going to be emotional and there are always going to be contentious elements in immigration policy. 
We need to have a balanced immigration policy. We need to have rules that allow flexibility but also uphold rights. It is a very difficult balance and we can see by the work the select committee did that there is an awful lot of material here to work through to ensure that we have that balance right. But it is difficult. We are looking to build a world-class immigration system in this country. In order to do that we have had to have another look at the overall policy settings. A simpler visa system that means that visas permits and exemptions will all be rolled into one system is something that will be welcomed by applicants. 
I would also say it will be welcomed by the public servants who administer this legislation. I know that here as the representative of Wellington Central the public servants in the Department of Labour who work in the immigration section have had a very difficult time in recent years. In general they are people who work extraordinarily hard and they are people who know they are dealing with people who have been in some of the most difficult circumstances we can imagine. It is a very difficult role to play. I pay tribute to some of those immigration officers—both here in New Zealand and overseas—who face that daily challenge of balancing the different elements of protecting New Zealand’s borders but also of working with people from fragile existences people who have severe humanitarian concerns. I think we all as members of Parliament know from our interactions with the immigration system that it is not perfect. It is certainly something that could do with being improved. But the people who work in it have the best interests of New Zealand at heart and indeed of the people who want to come here I hope. 
Another element of the bill that people throughout New Zealand will be happy to see is more flexibility in terms of making positive exceptions to residence policy. One of the most time-consuming things I have seen even in my short time as an electorate MP is people having to go through multiple hoops over and over to get what seems on the surface to be a relatively simple exception granted. I think we can see in this bill that there is now a simpler process for that. We have already heard mentioned tonight the people who came off the  
Tampa 
. I also am working at the moment on behalf of some of those people. As a country we have to be proud of the fact that we have stood up in the past and said we will bear our fair share internationally of those who end up at the margins and fringes of society. We need legislation that can support our ability to respond flexibly but also continues to protect our borders. I say tonight to the National Government that it must continue to take on that responsibility when that time arises. We know that when Helen Clark—as my colleague Clayton Cosgrove said earlier tonight—took the gutsy call to take those people from the  
Tampa 
 into New Zealand there were people in the then Opposition who are now in Government who opposed it. I call on those people today to rethink that to ensure that we can continue to play that role internationally as they now have charge of immigration policy. 
Speaking of international considerations one of the other things the bill does is create a more robust international protection system. That really means that New Zealand is now going to be able to say under things like the Convention Against Torture and Other Cruel Inhuman or Degrading Treatment or Punishment and the International Covenant on Civil and Political Rights that we are acting consistently. This is important because again our immigration policy is part of how we are seen in the world and it is important that we are seen to be upholding those international conventions. I know that the Transport and Industrial Relations Committee dwelt on this area as well and made some changes and that is important. I know again that some of the things that people are asked to prove when they come to New Zealand are very difficult to prove and occasionally have been seen to be inconsistent with international law. This bill brings us into line and improves that situation in a way that will provide a better and more sustainable immigration system going forward. 
Another element that it is important we mention is the single independent appeals tribunal. There were four appeal authorities; they will now be amalgamated into a single Immigration and Protection Tribunal. Again that is vitally important because there are too many hoops too many different processes for people to deal with. They are confusing processes that I think we have managed to simplify here and that is a really important element of this bill. 
There was a huge consultation process around this bill. There were 650 people who submitted before the bill even came into the House 4000 written submissions and 67 oral submissions when the select committee heard the bill. It is important that New Zealanders have had the chance to have that say. We have also heard tonight from the Minister that some amendments will be introduced at the Committee stage and I have no doubt from the speech we heard earlier from Dr Norman that other amendments will be also introduced at the Committee stage. I look forward to debating those because the contentious issues in this bill are contentious as I said before for a reason—these are emotional issues. I will mention briefly the ways in which the select committee has dealt with some of the concerns that have been raised. 
We have heard about the concerns about classified information. It is important that we acknowledge tonight that one of the changes is that a summary of the classified information will now be provided to the person who is the subject of it. That was an important amendment made by the select committee and it is important that we put on the record tonight that it has been made. There will no doubt be further debate about the use of classified information. It is a very difficult area but it is one where the select committee building on the bill has tried to balance how that information is used who has the ability to use it and what the person who is the subject of it knows about it. Biometric information is another area that is contentious and difficult. Again the committee has made some changes. Privacy impact assessments will be done by the Department of Labour they will be publicised on the website and the Department of Labour will consult with the Privacy Commissioner on that biometric information. That again is important because it will give New Zealanders some confidence that safeguards have been built into this legislation. 
At this second reading I can say that there are some elements in this bill that I believe all New Zealanders will like. It is a simpler system—a system that keeps us in line with our commitments internationally. I acknowledge that some other elements are contentious but I think that the select committee has done a good job under Mark Gosche’s leadership in trying to bring some balance into those elements and I look forward to further debate on the bill. 
MICHAEL WOODHOUSE (National) 
: 
 I rise in support of the Immigration Bill. If the Hon Mr Cosgrove thought Pansy Wong’s speech had a nasty little ending to it then perhaps I am to be accused of starting with a nasty little beginning because although I agree with the member for Dunedin North that the law in itself does not make a world-class Immigration Service I believe the failure to pass the necessary legislation that creates the environment for such a service to thrive certainly creates its own problems. I also wonder whom Mr Hodgson looks to as the cause of any problems—if indeed they exist—with the Immigration Service after his having had 9 years on the Treasury benches. But this is not really the time for petty gibes. With the exception of the Greens I think we have pretty much bipartisan support for the passage of this legislation and I think that is as it should be with regard to legislation that is just too important to be treated as a political football. 
I also congratulate the Transport and Industrial Relations Committee of the previous Parliament which had the unenviable task of carefully considering this bill and the very many submissions on it. I have obviously carefully considered all 525 pages of the bill in the time available and I have to say that I admire anybody who has been able to do so with that level of detail. 
These are challenging times for immigration. In the 22 years since the original Act was passed there have been three pretty significant changes. One is that citizens—and in particular New Zealanders—travel in far greater numbers and far more frequently than they have ever travelled before and the second is that the technology available to store and process the information has reached levels of sophistication that we probably did not even imagine in 1987. Thirdly as we all know and as some of us have discussed tonight there are risks posed by organisations and individuals who are a threat and who seek out New Zealand as a safe harbour and as a place from which to carry out their illegal activities. Those risks are ever-present and probably increasing. It is entirely appropriate I think that we bring our legislation into the 21st century and into line with those environmental changes. Of course those changes will continue and the legislation needs to have built into it the necessary nimbleness and flexibility to enable it to be current now and into the future. 
The fundamental roles of good immigration law are firstly—obviously—to protect our country’s citizens and secondly to provide a process for the fair and equitable consideration of applications by people who want to come into our country. Obviously these are not normal times particularly when we talk about risk. Although Dr Norman may not admit it the fact of the matter is that the people who want to do us harm will not be honest. It seems obvious to say that but it really needs to be mentioned. I say that in the context of Dr Norman’s concerns which were shared by people who made submissions to the select committee that some of the provisions around the classification of information might be misused. I think the select committee has come up with a very pragmatic response to that real risk. 
But I think Dr Norman needs to be careful because the implication he makes that the authorities would seek to use the powers accorded them under this legislation to unreasonably remove genuine refugees is frankly an insult to those public servants and is very disappointing. I say that notwithstanding the case involving Mr Zaoui and I think it is also worth considering to some degree what might have happened had Mr Zaoui’s case been considered under this legislation. The fact of the matter is that the outcome might well have been the same as it was but I do not think anybody in this House would argue that the process would have been smoother more efficient and fairer on Mr Zaoui and on the people of this country. 
Just as the member for Wellington Central has said as a new MP the issues of immigration have been a surprisingly material factor in the constituent inquiries that I have had to deal with in my short time as a MP. They are extremely emotional issues. My own perception of the process is that certainly improvements could be made to take some of the stress out of the application process in particular where there are quite obvious grounds for doing the right thing especially in the likes of family residency applications. Those applications presently take between 12 and 18 months to consider which is certainly well outside the time frame for the expiry of visitors’ visas. 
It is also interesting to speculate on the issue of the  
Tampa 
 situation. Personally I would accept that there was quite a serious and legitimate concern about the risks that the  
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 refugees posed and there was obviously a very successful outcome. I see that as a journey on the path to enlightenment but that does not mean those situations are without risk. Therefore there needs to be a very real framework within which those applications can be considered carefully. I might be so cheeky as to suggest that the Prime Minister of the day’s decision to support those refugees was probably as much political as it was humanitarian. She backed a winner on that occasion. 
In summary I would like to support the bill. I do so for the reasons that have been provided by a number of members in the House. I look forward to it providing the necessary natural justice and protection for non-citizens while at the same time protecting our own citizens from the people who seek to do us harm. 
I also want to talk a little about the single Immigration and Protection Tribunal. 
Debate interrupted. 
The House adjourned at 10 p.m.