Volume 691 Week 47 - Tuesday 2 July 2013(continued on Wednesday 3 July 2013 )Text is incorporated into the Bound VolumeVolume 691 Week 47 - Tuesday 2 July 2013(continued on Wednesday 3 July 2013 )[Sitting date: 02 July 2013. Volume:691;Page:11495. Text is incorporated into the Bound Volume.]Tuesday 2 July 2013(continued on Wednesday 3 July 2013 )Business of the HouseHon GERRY BROWNLEE (Leader of the House):I seek leave for there to be a question time at 2 p.m. on Wednesday 3 July 2013 and on Thursday 4 July 2013 and for questions to be lodged in the normal manner pursuant to Standing Order 378.The ASSISTANT SPEAKER (Lindsay Tisch): Leave is sought for that purpose. Is there any objection?Hon TREVOR MALLARD (Labour—Hutt South):Just before we say that we do not object I want to make it clear that those are calendar days not parliamentary days because they will not exist otherwise.Hon GERRY BROWNLEE (Leader of the House):Mr Speaker you will notice that I had my head down very carefully reading the words provided to me by the Clerk of the House to give effect to this agreed position.The ASSISTANT SPEAKER (Lindsay Tisch): I think it is very clear. Leave has been sought for that purpose. Is there any objection? There is no objection.Families Commission Amendment BillSecond ReadingDebate resumed.DENISE ROCHE (Green):Our main opposition to the Families Commission Amendment Bill is that it takes away the likelihood of independent and thorough research into families and issues that concern families. We will be opposing this bill. We do not believe it is good for New Zealand. We do not believe that it is good for New Zealand families. We will be voting against it.MELISSA LEE (National):Tēnā koe e te Matua Kaikaranga. Huri noa i te Whare i runga i te reo karanga o Te Wiki o Te Reo Māori. Tēnā hoki tātou katoa. It says: “Greetings Mr Speaker and my colleagues in the House. I acknowledge you in Te Reo in celebration of Māori Language Week. Greetings one and all.”It is a great pleasure to rise to speak on the second reading of the Families Commission Amendment Bill. The well-being of families is crucial to our society. The family passes on culture and we all come from very different cultures. In New Zealand we have more than 200 ethnicities with the values that those different ethnicities bring and the knowledge that the family is at the very heart of our community. We are going to make a difference for the families in New Zealand that are struggling. We need to be able to invest in interventions that we know will actually work.The Families Commission Amendment Bill is about streamlining the Families Commission’s core activities through a learned and more focused structure. It will remain an autonomous Crown entity but it will be more streamlined with a single Families Commissioner which is down from the original seven. This will put the commissioner on the same footing as most other Crown entities and the structure will be more focused. The board will be made up of members from the public sector and academic and philanthropic representatives and there will be scope for the appointment of a member other than the Families Commissioner to be the chair of the board.These are significant changes for the Families Commission in terms of its structural arrangements work programmes capability requirements and size. Functions will be introduced such as independent monitoring and evaluation to drive quality services for families. So I am a little bit confused as to why Denise Roche actually said what shesaid just before saying that she feels that the independence will be taken away in terms of research. The new functions will definitely provide for more independent monitoring and evaluation of the functioning of the Families Commission.A social science experts panel will be created. This panel will complement the work of the commission’s board. It will provide guidance and academic peer review of research done by the commission which to me says that it is definitely independent. The commission will prepare and publish an annual families status report which will measure how New Zealand’s families are getting on. I think that it is very very important at any point in time that we look at the way our families function. Over the years the functions of families have sort of changed because we have come from very extended families to more nuclear families—we have fewer children and fewer people living in one household—and the way we operate has also actually changed. But the fact is the core value system of families has not really changed and the ways we nurture our children have not really changed.The Families Commission currently receives $8 million in funding each year which equates to $32 million over 4 years. We are prioritising $4 million over 4 years into parenting programmes. We have identified in different bills that have actually gone through this House that we have a major issue with parenting. We need to teach our young people how to parent. For some reason they do not seem to be getting that kind of nurturing to find out how to best become parents. When I became a parent I guess I did not really know what a good mother or a good father should be. I guess the only role models we have are our own parents and we do not really get that kind of education at school. I think learning how to look after our children is actually a good thing.Relationship education and youth mental health initiatives are also very important and $14 million over 4 years will be reprioritised into the Social Policy Evaluation and Research Unit because if we want to make a difference to families we have to make informed decisions about programmes that will actually work for our families.The Social Services Committee considered 11 submissions on the Families Commission Amendment Bill and many including the Salvation Army the National Council of Women and the IHC supported the changed services. This is a great bill. I commend it to the House.BARBARA STEWART (NZ First):I rise on behalf of New Zealand First to speak to the Families Commission Amendment Bill. Yet again we have been left totally disappointed by this bill. The Social Services Committee failed to make any changes that would change our position on this particular bill. New Zealand First opposes this bill because it has failed to make any worthwhile difference to families in New Zealand. Again we are very surprised that the Hon Peter Dunne has not ensured that the commission which he advocated for with the Labour Government back in 2002-03 has been left to wallow and fall into this level of disarray. Where was his support to ensure that it remained a vibrant worthwhile successful operation that could produce the results that were required to ensure that it remained operational?In our minority report we also stated that we believe that these changes are detrimental to the well-being of New Zealand families and whānau and that reducing the number of commissioners from seven to one will negatively affect the work that the commission carries out. If the complication of the projected budget that will be invested into the Social Policy Evaluation and Research Unit is added the situation gets disorganised and issues will inevitably rise to the surface regarding accountability. So we have got a lot of questions about this revised Families Commission.We also question whether or not this Families Commission organisation is worthwhile when it does very much the same research as that carried out by the Ministry of Social Development. We believe that the Families Commission can nolonger be justified. It is time really that we worked towards protecting the family unit rather than making steps that would be detrimental or provide no added value for it. We believe that this amended bill has actually undermined the efforts to protect the family unit and children. The proposed changes do not really do any good whatsoever. These alterations will be more harmful than good.Although we realise that it may be economically and politically desirable to minimise the number of commissioners that we currently have that number should not be pared to just one. That is far too small. We fail to see when seven were not doing the job properly how one person can actually pick up all of that slack and improve the lives of families in New Zealand.What we are actually seeing here is a major revamp of the role of the Families Commission. One has to ask whether this revamp really goes far enough and whether we really need the Families Commission any more. We in New Zealand First do not think that we do. We know that hard economic times are upon us and research in these hard economic times must be forward thinking and very very focused and the money could be better spent towards research in some other area.In New Zealand First we think that the Families Commission has got a long way to go to improve—far further than what this bill actually stipulates. We know that the commission reports directly to the Minister for Social Development the Hon Paula Bennett who justifies the amount that is actually being invested into the research unit. However there is a lack of consideration of the fact that the issues and the themes on which the research unit will be focused are interrelated and they cross many social sector boundaries. For example the White Paper for Vulnerable Children that the ministry and the research unit produced last year contains issues and themes that are directly related to the work that the commission carries out. These kinds of underlying problems will surface again and again and basically complicate the work that the commission administers especially now that it will have just one commissioner overseeing the entire organisation. This will inevitably have dire consequences and we believe that Parliament will most likely be re-evaluating the work of the commissioner in the future.What we are seeing here is that version 1 did not really work out in 2003 so we now have version 2 which is more focused and leaner. Our best hope is that the new version 2 of the Families Commission will be carefully monitored on a regular basis to ensure the best-possible output. There is a definite limit on how many versions of the commission there can be before people actually lose confidence in it totally and version 2 almost reaches that limit.Greater emphasis needs to be placed on promoting and carrying out more groundwork that creates better understanding and fosters better outcomes for all New Zealand families. We know that New Zealand families are already experiencing economic and social hardship. Changing the governance of the Families Commission and reprioritising its budget will do nothing to help in this particular instance. In fact we believe that it will just produce further barriers to their development. Paying for a group of professionals and academics through the social science experts panel will only emphasise on paper all of the problems that New Zealand families are facing on a daily basis. Research and groundwork are needed to work simultaneously and in conjunction with one another.New Zealand First would have liked to see something that would be useful to New Zealand families for the money that is spent. We are going to be carefully monitoring the outputs and ensuring that the money is not spent on consultants to travel around New Zealand and overseas at the expense of families. It is for these reasons that New Zealand First opposes this bill.MIKE SABIN (National—Northland):It is good to hear a member of the House talk about the sort of fiscal prudence that this National Government has become known for. The Better Public Services that this Government has committed to is a very very important part of changing the economic fortunes of this nation through some very tough times with the global financial crisis and the Canterbury earthquakes. The Better Public Services model can once again be seen in the work that is being done in this bill the Families Commission Amendment Bill. The programme of work has seen through the select committee process very little in the way of consequence or issue brought to the table because I think it is quite clear from the manner that we have gone about reorganising these sorts of structures that what it is about is delivering better outcomes. It is not necessarily about the structure or how much money is thrown at the issue; it is about the structure that sets about achieving the resolutions and the outcomes that are required.The Families Commission moves from having seven commissioners down to having one and it introduces the new function in a research monitoring and evaluation setting. I take note of the comments made with some scepticism by the member who has just resumed her seat Barbara Stewart about this sort of function. The whole point is that what we have arrived at here is a leaner more functional model that has some very clear targets. We have found through other work in the Better Public Services efforts that we have made that when you set some clear expectations and when you have a structure that supports that—when you are driven towards outcomes—you are far more likely to achieve those. You can achieve those—sorry not you obviously although I am sure you will be contributing markedly to those. We can achieve those by ensuring that we get better bang for buck in the way we go about business—so removing the title of commissioner from six and leaving the single commissioner and requiring the Families Commission to develop an annual families status report goes to the heart of those sorts of outcomes ensuring that there is a more deliberate and accountable structure.There will be new functions as I mentioned that include the independent monitoring and evaluation. I will look very closely at that to see just how that sort of monitoring and evaluation function falls into shape. One thing is for sure: the family dynamic in New Zealand—or anywhere for that matter—is quite diverse and there are a number of different challenges that families and communities do face and confront. So I guess the important note here is that for the structure and what we are looking to measure and how we are measuring it the devil will be in the detail but I am sure the Families Commissioner will be taking on that challenge.The Families Commission currently receives $8 million in funding each year which is $32 million over 4 years obviously. We are reprioritising $4 million over 4 years into parenting programmes relationship education and youth mental health initiatives. Youth mental health is something that this country has some significant and severe challenges with and that is intrinsically linked of course to the family. Over 4 years $40 million will be reprioritised into social policy evaluation and research units which are now known as “SuPERU”. These acronyms seem to spring up from nowhere but I think it will stick that one.I have no trouble in commending the work done by the Social Services Committee in this bill. It is about better public services. It is about outcomes. I commend it to the House.MOANA MACKEY (Labour):Ā tēnā koe Mr Speaker. Ngā mihi nui mō Te Wiki o Te Reo Māori.[So salutations to you Mr Speaker and in regards to Māori Language Week a huge one at that. ]The problem with that speech by Mike Sabin who has just resumed his seat is that that is not what the Families Commission Amendment Bill does at all not even vaguely. The disestablishment of the Families Commission is not something that the Labour Party necessarily has a problem with. In fact it was its policy in the last election. It is what you replace it with that is key and what we are replacing the current Families Commission with this watered down weakened Families Commission is not a good step forward for families. It seriously undermines the advocacy role—the independent advocacy role—of the Families Commission and makes it something more akin to a Government department.If that is what the Government wants then it should just roll it into the Ministry of Social Development and put the funding there. But that is not what the Government is doing. It is keeping this fig leaf of a commission this fig leaf of autonomy and yet constantly sprinkled right the way through the bill we see the phrases “on behalf of Government” and “Government’s priorities”—that is not autonomy. That is not autonomy at all. That is simply another Government entity controlled by the Government which is not what the Families Commission was set up to do.We supported the bill going to the Social Services Committee because we wanted to look at what the changes would mean at the role of evaluation and research within the Families Commission and where that would now sit and at the reporting around outcomes. Unfortunately we now have to oppose this bill because it is a step backwards for the Families Commission. The cut in funding for the commission is also going to severely limit the role of the Families Commissioner especially now that they are being required to produce an annual families status report.Well we have to ask ourselves why the Government got rid of producing the social report through the Ministry of Social Development every year and will now be doing that every 3 years. It was a report that was providing good information on how the Government Government departments and all the relevant Government entities were doing in dealing with the issues facing not just families but all of our community. That is gone. It is now only every 3 years and it is now being replaced with this families status report but the funding that would be required to actually do that work in a robust manner is not being provided; in fact the commission’s funding is being halved. There is nothing wrong with parenting courses and more assistance for youth mental health is great. There is nothing wrong with that. But that is just a distraction from what we are actually doing to the Families Commission which is the issue that we are discussing under this bill which is slashing its funding reducing its ability to advocate on behalf of families and limiting its independence.We had seven commissioners before and that number recognised the complexity of the issues facing families. So we had people who covered a broad range of disciplines particularly in the research field all of which were relevant to families and all of which had something to bring to the table in terms of advocating for good policy for families.Well now we have got one commissioner. I am sorry but there is absolutely no way that one commissioner can have the required depth of understanding across the broad range of disciplines that the Families Commission covers which just shows the complete lack of respect for evidence-based policy-making from this National Government. If it did respect good research and having good research underpinning policy for families then it would not be moving from having seven experts to one—seven experts to one.Even our Prime Minister’s Chief Science Advisor Peter Gluckman does not have the experience across all the disciplines that we are talking about that are currently represented. He is a very knowledgable man and very useful to have there but I think even he would acknowledge that the broader the range of disciplines represented thebetter. I note that he is one of the people who are going to be on the social science experts panel; it has mentioned the Prime Minister’s Chief Science Advisor.What if the next Prime Minister’s science adviser has nothing to do with family research? What if the late Sir Paul Callaghan had been the science adviser? With his experience in physics would he still have been on the social science experts panel? So I hope the flexibility is there in case the next science adviser does not have an expertise in the area of families or child development as Sir Peter Gluckman has. I suspect that is how short thinking this bill is—we are not even thinking about what discipline. It might be an astrophysicist. It might be from my discipline—a biochemist—and that would be a wonderful and beautiful thing but perhaps not the best person to sit on the social science experts panel. That just says to me that this has not been thought through properly.You see that again in the very very confused governance structure of this organisation. We are not clear about whether the Families Commissioner will actually be the chair of the board. We do not actually know what the role of the Families Commissioner is. The National Government keeps saying that this is just like all the other commissioners—this is just like bringing it into line with the other commissioners. That is actually not true. Their roles are clearly defined in legislation.The role of the Families Commissioner is no longer defined in legislation. There is a confused governance structure. We are not clear what the roles of the various parts of the organisation now are. The chief executive role is retained. It appears from first reading that the chief executive might be the chair of the board not the Families Commissioner. This is very very confused lawmaking and it will not result in good outcomes. The member Mike Sabin said before that it will deliver lean and efficient outcomes from the Families Commission. In fact I suspect it will be the exact opposite as they muddle their way through trying to work out who is in charge of doing exactly what in this new and confused structure.The other thing that worries me is the new social policy and evaluation unit within the commission. The bill says that this will provide independent monitoring and evaluation of programmes and interventions in the social sector. Well that is all very well and good. It is now sitting within the unit so I have to question how independent it is given that this unit is now far more beholden to the Government than the Families Commission once was. Of course currently the commission uses peer reviewers from universities from other research centres and from independent experts. It does not just use the people it has within its own commission. It goes broader outside to really maintain that independence and get that expertise and that is now not going to happen.Currently the Families Commission has the independence to identify where the gaps in research are and child poverty is a good example of where the Government is not putting a focus on research and where the Families Commission will step in and say: “This is somewhere where we need some robust independent research so that we can have good evidence underpinning good public policy.” Well now where the Families Commission has this function of identifying opportunities for evidence and research it is now only where it will assist in achieving the Government’s priorities in the social sector—commissioning research on behalf of the Government and managing contracts on behalf of the Government. That is not independent at all.So currently the commission can go out and see where Government is failing to step up to the mark in protecting our families and where the Government is failing to do the research because it does not want people to know what is going on out there. The Government knows that the evidence will show that it is not taking issues like child poverty seriously enough so it does not want that research done. It does not want that evidence pointing to its utter failure as a Government to address the growing inequalityin this country the growing inequality within families and the increase in child poverty. It does not want that research done. So it is changing the rules for the Families Commission to say that it can identify gaps only where it is working to achieve the Government’s priorities. That is unacceptable—completely unacceptable. So it is a shame. As I said we would have no issue with the disestablishment of the Families Commission if what was being put in its place was going to guarantee better outcomes for families and for children in this country.The key question is: what are you replacing it with? What is the Government replacing it with? It is replacing it with a fig leaf that is going to be hamstrung—the new commission is not going to be independent. It is not going to be allowed to carry out research where it feels that the Government is falling through the gaps. Also the new commission will be shambolic in its structure and it is going to cause enormous uncertainty. The Government is limiting the pool of experts within the commission across the broad range—and as for the number of disciplines you need only look at that Otago University longitudinal study to see the incredible range of disciplines that are included when you are talking about families.A reduction in the number of commissioners from seven down to one means that it will be a hard task to get that broad range of disciplines represented effectively. That just shows the scant regard this Government has for peer-reviewed independent research underpinning good public policy.ALFRED NGARO (National):Tēnā koe e te Rangatira. Whakanui i Te Wiki o Te Reo Māori. I want to acknowledge the celebration of Māori Language Week. Before I do I was here last night during the dinner break and I want to acknowledge the dedication and the unveiling of the commemorative plaques for Afghanistan Timor-Leste and the missions in support of peace that are here today as a reminder. Last night what was also to remind us were the families and the whānau who were here to celebrate the sacrifice that was made. That leads me into my brief speech in regard to the Families Commission Amendment Bill because it really speaks to the importance of the role that the Families Commission plays. The previous speaker Moana Mackey talked about the importance of independence. It is quite interesting. She may have forgotten that for a while there the Labour Party talked about “hands on” and now it wants to preach about hands off so it is a bit confusing to sort of hear that speech about that. I think that this actually seriously is a combination of the two things.So let us see what the commission actually does Ms Mackey. The Families Commission established in 2003 was important because it was about identifying the needs of families and whānau in our community. Most important it was about the research that was a part of it and I was a part of that previously especially around the Family Violence Clearinghouse and information relating to family violence and that was quite critical. That function has not been removed. There is still the importance of evidence-based information that informs policy makers NGOs and others so that when we are focusing our focus of energy and effort it goes into the appropriate places.It is important to see that under the Crown Entities Act 2004 the Families Commission still has that sense of autonomy even though there have been arguments against that. So its role is as an advocate for the interests of families inside of our communities. Also it is to monitor and evaluate those programmes and interventions. What was mentioned was about Sir Peter Gluckman. Well in the Social Services Committee where we interviewed with the Families Commission it was important that Sir Peter Gluckman actually confirmed commented on and celebrated the shifts of the Families Commission in these amendments. In fact he said to us quite clearly at that point in time that the focus on evidence-based research was absolutely important. So when we went from seven commissioners down to one the other commissioners had anengagement role. This would ensure that by having a families status report and a Social Sciences Expert Panel we would have an even greater sense of an evidence base and we would have a clear focus on what that could provide for the policy makers and for our communities at large.Moana Mackey also talked about the longitudinal study and I know Professor Richie Poulton. In fact I met him last week and spoke with him about the work that he was doing—the longitudinal study which is world leading absolutely—and the importance of that impact on families. We also talked about the role of the Families Commission and we could see the benefits and the pluses of the Social Sciences Expert Panel and the evidence combined with that longitudinal study that could make a difference. So we do not agree on this side that these amendments will in any way discredit or take away the credibility of the Families Commission. Our view quite clearly from the experts who have been quoted and talked about from the communities and from those who are on the ground is that in actual fact this will truly make a difference. So I support this bill. I think that actually these amendments will both help and support the direction and the focus. Most important at the end of the day will it truly make a difference to the families in our communities? We believe it will. I commend these amendments to the House.The ASSISTANT SPEAKER (Lindsay Tisch): I understand that the next call is a split call. Carol Beaumont.CAROL BEAUMONT (Labour):I just really want to follow my colleague Moana Mackey in explaining our concerns because Labour did support this bill the Families Commission Amendment Bill to the Social Services Committee. We wanted to look closely at the implications of the bill and to look at what the role of evaluation and research should be in relation to what was being proposed. We now oppose this bill having considered it carefully during the select committee process. We believe that the changes proposed to the commission in this bill continue an agenda that is about fundamentally altering the commission’s nature as an autonomous Crown entity and really making it something more akin to a Government department or ministry. We believe that the net effect of that is really to compromise the commission and to limit its independence and most important its ability to advocate effectively for families.So given those changes we stand by our policy for the disestablishment of the commission instead replacing it with a “Ministry for Children” in order to focus on policies and programmes to ensure that children and families are the centre of all policy. I just want to say that my colleague Jacinda Ardern is doing a great deal of work in this area because in the end what happens to our children is the most important thing. As members of Parliament we should be considering everything that is done in this House in light of what the implications are for the future generations. At the moment in this country we can see the fact that we now have a situation where many young people do not believe that they have a future in this country. They do not believe that they have a right to a job or do not believe they will get a job. They do not believe they will own a house. What are the implications of that? What are the implications of so many children living in poverty? How will that flow through over the next decades? The implications are very very serious which is why in Labour we do believe that children and families should be at the centre of all policy. So as I said earlier this bill does limit the advocacy function of the commission and we believe that that really effectively means that it is meaningless. It is not going to be sufficient for doing what needs to be done.Probably the final point I would make is that the governance structure as established is very confused. I think my colleague Moana Mackey went through the fact that there will not be the ability to have the range of disciplines reflected in this that is necessaryfor something as multidisciplinary as this. So with those few words I just again repeat that Labour is opposing this bill.JAN LOGIE (Green):I rise to add another Green voice to our opposition to this bill the Families Commission Amendment Bill. I have heard words from the other side of the House about the streamlining of the Families Commission to make it leaner and more functional. You know they are good words. We like “functional”. We like “streamlined”. But I have to let the other side of the House know that when the community hears those words from you alarm bells go off. That is not what they are looking for and they know when they hear those words that it is about an agenda that is different from theirs.I would just like to read some statements from two submissions that were made to the Social Services Committee in response to this bill. The first one is from the Women’s Refuge and in its conclusion it said: “we oppose the Families Commission Amendment Bill 2012. The Bill will shift the focus of the Families Commission away from the very important function of advocating for families. Indeed the Bill undermines the Commission remaining a commission at all.” Alarm bells are going off in our communities because of the intent that lies underneath this bill.I quote also in a little more depth from the Child Poverty Action Group submission. From its perspective it is saying that “The proposed Bill also removes the autonomy of the Commission by ceding decision-making and direction to the 4-member Social Science Experts Panel who are appointed on the direct recommendation of the Minister and the Prime Minister’s principal Science Advisor. At the same time the functions of the Families Commission are considerably extended to absorb many of the research and monitoring roles currently performed by the Ministry of Social Development. The changes proposed in the Families Commission Amendment Bill 2012 would transform the Commission into an arm of Government further undermining the diminishing support available to families in New Zealand. Child Poverty Action Groups strongly urges that the Amendments should not proceed.”Our comments on this bill are not based on our own ideological view of the world. They are based on the experience of those in the community and their desire for a community where children are able to live to their potential where families are supported and nurtured and their needs are met by the Government. Sadly we find this bill to be another nail in the coffin of those aspirations of our community. It is a sad day—another sad day—in this House when we see those needs being so undermined.I would like to take a moment to speak as well to one of the functions that sit within the Families Commission at the moment and that is the White Ribbon campaign which will be moving out of the commission. I want to speak a little bit more on this. It seems to me that there are two major challenges to our country at the moment in terms of our overall well-being and specifically the well-being of our children and those are domestic violence—violence against women and children—and child poverty. They are two enormous tasks challenges and harms to our country at the moment that we need to be focusing as much of our resources as possible towards addressing. And what is this bill doing? It is taking resources away from those challenges. It is undermining our ability to actually to be able to provide the safe and healthy future for our children.The White Ribbon campaign sits within the Families Commission at the moment but now we are hearing from the Chief Families Commissioner that she does not believe that it fits with the new shape of the Families Commission. In 2011 the White Ribbon campaign produced 623 media reports. It led to 7000 Facebook users a day going towards its page and to 58000 hits on its website. When I look at its website now I have not seen any action pretty much all year. It seems that already even though things are not supposed to shift until 2015 because of the direction of this bill the ability of thecampaign has been undermined to the point where it is hard to see any action whatsoever. That is a shame for this country.Hon PHIL HEATLEY (National—Whangarei):I rise to support the Families Commission Amendment Bill. It introduces a new function in research monitoring and evaluation; establishes a social science experts panel; and requires the Families Commission to develop an annual families status report.There are some changes absolutely. There will be one commissioner. The new functions include independent monitoring and evaluation to drive quality services for families. The commission will remain an autonomous Crown entity which should give members a lot of confidence about what we are doing.The Families Commission currently receives $8 million in funding each year—$32 million over 4 years. It is still a substantial body and does substantial good in this country. I support this legislation.The question was put that the amendments recommended by the Social Services Committee by majority be agreed to.A party vote was called for on the questionThat the question be agreed to.Ayes64New Zealand National 59; Māori Party 3; ACT New Zealand 1; Independent: Dunne.Noes56New Zealand Labour 33; Green Party 14; New Zealand First 7; Mana 1; Independent: Horan.Question agreed to.A party vote was called for on the questionThat the Families Commission Amendment Bill be now read a second time.Ayes64New Zealand National 59; Māori Party 3; ACT New Zealand 1; Independent: Dunne.Noes56New Zealand Labour 33; Green Party 14; New Zealand First 7; Mana 1; Independent: Horan.Bill read a second time.Financial Reporting BillSecond ReadingHon CRAIG FOSS (Minister of Commerce):I moveThat the Financial Reporting Bill be now read a second time . The overall objective of the bill is to make financial reporting in all primary legislation consistent with the accountability and transparency goals associated with general purpose financial reporting. It makes three major changes. First it removes the requirements for small and medium companies to prepare general purpose financial reports. This change will reduce compliance costs for many companies with revenue between $2 million and $30 million per annum. The Commerce Committee has not recommended any major changes to those provisions. Second it will empower the External Reporting Board or XRB to make accounting standards for registered charities. Registered charities are already required to file financial statements but there is no consistency due to the lack of standards. Having standards will benefit registered charities because it will remove uncertainty about whatis expected. It will also increase the quality of reporting and make it easier for users to analyse the financial statements and to compare charities.The Commerce Committee made one significant change relating to charities. It has changed the definition of “specified not-for-profit entity” by increasing the threshold from $40000 annual operating expenditure to $125000. The main impact will be to reduce the percentage of registered charities that must report on an accrual basis from 45 percent to 25 percent. It will mean that an extra 5000 charities will benefit because they will be able to meet their reporting obligations by using the External Reporting Board’s proposed cash reporting standard. In total about 18500 of the 25000 registered charities will be able to report on a cash basis. I agree with this change.The third major reform implemented by the bill is to generally tidy up the financial reporting across the statute base. Many different approaches have been taken to financial reporting over the decades and there are numerous inconsistencies. The Financial Reporting Bill amends more than 80 other Acts. Taken as a whole these amendments to other Acts represent a significant improvement to financial reporting settings in ways that are fully consistent with the accountability and transparency goals of general purpose financial reporting. For example there are many different financial reporting deadlines in legislation at present. The bill as introduced proposed these deadlines be standardised at 3 months after balance date for preparation plus 20 working days for filing what is required. Several submitters stated that these deadlines would be impractical for some classes of reporting entities.The committee made two main changes relating to deadlines. First for reporting entities to have filing obligations the intermediate deadline for preparation serves no purpose and has been removed. For example the deadline for entities that will eventually become financial markets conduct reporting entities will be 4 months to file without there being any mention of a preparation deadline. This will provide those entities with more flexibility to allocate time between preparation audit and filing. Again I think that is a sensible change.The other main deadline-related change is to require other classes of reporting entity to discharge all their reporting obligations within 5 months of balance date. This change will for example benefit large companies that are not issuers by providing 1 more month than was originally proposed by the bill. This is a 1-month reduction in the deadline compared with the current requirements for companies under the Financial Reporting Act 1993. All told the position that the committee has reached on the deadline issue represents a good balance between the benefits of timely reporting and the need to provide a realistic amount of time for the work to be completed.The last major change considered by the committee relates to the proposals to consolidate financial reporting obligations for all financial markets conduct reporting entities. These changes were not included in the Financial Reporting Bill because the Financial Markets Conduct Bill has not yet been enacted. Instead they appear in Supplementary Order Paper 93 which was tabled on the same date that the Financial Reporting Bill was introduced on 28 November 2012. The committee has not recommended any changes to the Supplementary Order Paper. The Commerce Committee has made a number of other amendments to improve the bill—for example removing an audit requirement for a large company that is a subsidiary of another company that is required to have its consolidated statements audited.To sum up the bill makes changes that will both reduce compliance costs and strengthen accountability and transparency. There are some very important and useful improvements although I note that there are no fundamental changes to the bill. I would like to conclude by thanking the members of the Commerce Committee for their work in considering the bill and the related Supplementary Order Paper and byacknowledging the contributions of those who provided submissions on the bill. I commend this bill to the House.Hon DAVID PARKER (Labour):The Labour Party supports this bill the Financial Reporting Bill. Can I thank the Minister of Commerce for his comments. This is housekeeping legislation that is none the less important housekeeping legislation that regulates the way in which our commercial sector has to prepare its accounts and the standards that it has to apply.In respect of financial reporting we are trying to get the balance right between standardisation and proper principles being applied in respect of accounts that are prepared for entities that have lots of people who rely upon them and the accounts that are prepared by smaller organisations where it is really a small group of people with no public outsiders who need to have access to the information in a reliable and comparable form.This bill tries to do that by making some differentiation between larger companies and smaller companies. Larger companies and large overseas companies that carry on business in New Zealand have a slightly different regime. “Large” is defined as companies that have assets exceeding $60 million or revenue exceeding $30 million and that is assessed over the two preceding accounting periods. I am not sure whether that is $30 million in total over those 2 years from memory or whether it is $30 million per annum average. In any event you can see in respect of companies that have got $60 million of assets or revenue exceeding $30 million that they are large companies and for them the compliance costs of being required to comply with each and every one of the increasingly complex requirements of the general accounting principles and the specific requirements that come through from the accounting rules bodies that are run by the New Zealand Institute of Chartered Accountants and the like which are increasingly international rules. You can see that it is no great cost for them relative to the size of their business to go to the nth degree and prepare accounts that are very detailed.In respect of companies that are not quite that big but might have 10 or more shareholders if they have a vote amongst their shareholders and the shareholders by 95 percent majority want to opt out of compliance they can. I support that measure as well. That is very sensible. I agree that it ought not to require unanimity because one shareholder who was a troublemaker or who had fallen out with the other shareholders could effectively impose quite a large financial burden on the rest of the company despite the fact that 95 percent of the shareholders were happy to opt out of strict compliance with the most precise form of financial reporting.In respect of companies with fewer than 10 shareholders the rules are slightly different again as I understand it. If shareholders who hold 5 percent of the company’s shares require the company to comply then it must comply but unless they do it does not have to. So the onus is different there. In respect of the 10-shareholder company the default position is that it has to comply unless there is a resolution with 95 percent support that says that it does not have to. In respect of the smaller company with fewer than 10 shareholders the default position is that it does not have to comply but if 5 percent of the shareholders say that they want the company to comply then it has to. I think that that is an improvement on the status quo and I think that will reduce compliance costs and accounting bills.I was not on the Commerce Committee which heard this submission but I would imagine that the New Zealand Institute of Chartered Accountants was supportive of the changes. Can I thank the institute for that because it has tensions within its own organisation. Some of its members profit from the more complex requirements of greater specificity of compliance with accounting rules and for them to put their self-interest aside and say that on occasions they think that companies should be released from these more onerous obligations shows that they have an interest in the performance of the New Zealand economy and keeping compliance costs at a reasonable minimum.In respect of audit requirements the same opt-in and opt-out rules apply. Again this is a very good change. Large companies other than those that are required to register their financial statements—if you are a public issuer of securities to the public for example you have to file your financial statements with a regulator every year. Effectively you cannot opt out of audit requirements. I am not sure whether that arises from this legislation or the securities legislation but if you are a public issuer you have to have audited accounts.Hon Craig Foss: FMC.Hon DAVID PARKER: What is that? FMC. It is from the Financial Markets Conduct Bill. Large companies that are not public issuers can opt out if they have a 95 percent majority vote from their shareholders. So again the default is that they have to have an audit but if the shareholders pass a positive vote with 95 percent support then they do not have to go through that audit cost and they save that cost. In respect of those audits they have got to be carried out in accordance with auditing and assurance standards but the registrar in respect of overseas companies can recognise overseas standards.Charities will be required to prepare financial performance statements in accordance with generally accepted accounting practices. Currently there are no requirements in respect of charities. Given that a lot of these charities take money from the public it is appropriate that we have some level of transparency as to what is happening with the money that they say is to be used for a charitable purpose and that we want to ensure is.The PricewaterhouseCoopers view was that removal of the preparation requirements for detailed accounts for small and medium sized companies and the relatively high large entity threshold means that most companies in numeric terms will no longer be required under the legislation to prepare generally accepted accounting practice financial statements. That is an interesting point to note and an important point to note.I know that in the past politicians often got it in the neck from people who were running businesses who said that it was the taxman who drove a lot of compliance cost. Actually in some cases it has not been the taxman who has been driving compliance cost; it has been increasingly complex financial reporting requirements which have been required at a high level by Government legislation but at low level have been made more complex every year by way of changes to the accounting rules that actually have not been considered by Parliament but have been imposed by the bodies that are responsible for financial reporting rules—namely the accounting body that is responsible for those rules.I do not have time to go through the finer technical details of this bill which runs to 169 pages. I thank the Commerce Committee and the chair of that committee for the work that they did to bring this back to the House with the support of all parties. The changes that were made at select committee have the Minister’s agreement and we have got a better bill as a consequence. Again it shows the importance of the select committee processes. I think that is a wonderful thing that we have got in New Zealand that the likes of PricewaterhouseCoopers or other people who are interested can come to a select committee and say: “Look we agree with this in general but could you tweak this? It is not quite right as it is.” We do that at select committee and then as a consequence we get more practical legislation. I think that is probably one of the reasons why although New Zealand has got a small bureaucracy by international standards and we have only one House of Parliament we still manage to run ourcountry in a way that is pretty efficient because of the quality of our legislation overall. So the Labour Party is supporting this Financial Reporting Bill and recommends it to the House.JONATHAN YOUNG (National—New Plymouth):I am very pleased to stand and speak in support of the Financial Reporting Bill at its second reading. Thank you to the previous speaker David Parker for his comments regarding the select committee process which I believe worked in a way that was very conducive to seeing some very important changes take place in this bill.Tim Macindoe: A very efficient chairman.JONATHAN YOUNG: Thank you “Mr Whip”.One of the aspects that I want to touch on in terms of the select committee process was that we received a number of submissions—quite a considerable number—regarding the charities sector and the not-for-profit entities. Many of these entities—essentially charities—run on the smell of an oily rag so to speak and it is important as the previous speaker so rightly said that they are accountable to their donors. But at the same time we do not want to encumber them with such expensive accounting requirements so that probably too great a proportion of their receipts are spent on that administrative burden. So finding the balance was important.The committee on receiving many submissions came to the place in terms of the difference between a cash set of accounts and an accrual set of accounts where we lifted the threshold that was stated in the original bill for a cash basis set of accounts from $40000 up to $125000. Essentially a charity or a church or whatever that is able to employ a full-time worker or minister would generally have an income of around about $100000-plus perhaps a bit more and may not have the administrative support when they have that level of income required to do an accrual set of accounts. The difference essentially between a cash set of accounts and an accrual set of accounts is that accrued revenue is revenue that is incurred or recognised before the cash is received and accrued expenses are expenses that are recognised or incurred before cash is paid out.So it is actually quite complex to create a set of accounts. It often needs a professional and often also an auditor to check on the work that has been done in that regard as opposed to just a cash-in cash-out system which is far simpler. There are many software packages in the vicinity of $100 to $200 that handle cash book accounting very very proficiently. We felt that once a charitable organisation was receiving an annual income of greater than $125000 it was a reasonably sized entity that was probably incurring a reasonable amount of accrued expenses or revenue whether that be from interest or perhaps an invoice for maintenance on a property it owns or whatever. We felt that members of organisations that have that vicinity of income probably do need to have a more thorough set of accounts. So we worked through that process. I think some submitters wanted that threshold to be higher but we felt that that was a reasonable balance to find.The intention of this bill as I come to a close now is to rationalise the financial reporting obligations by doing a number of things apart from what I have just mentioned. It aligns such obligations with the goal of financial reporting to provide information obviously to external users to members of societies to clubs and charitable organisations and also to shareholders and the like who need an entity’s financial statements but cannot demand them. It also serves to standardise the interface between the Financial Reporting Act and other Acts by setting out core definitions and provisions with broad application to reporting entities in a new Financial Reporting Act. More important it makes the language of financial reporting consistent in all thepertinent Acts. So it is harmonising such terminology so that it becomes understandable and becomes a useful document for people.I am very happy to stand in support of the Financial Reporting Bill. I thank the members of the Commerce Committee for their cooperation in getting this through in a timely way. I think this is going to be of benefit to organisations throughout our country. Thank you.Dr DAVID CLARK (Labour—Dunedin North):I rise to support this Financial Reporting Bill. The Labour Party recognises that this is good and important legislation that is being progressed by the Government and we like to support good legislation. We support it because in principle we believe in reducing unnecessary compliance costs for businesses so that they can get on with the job that they have of growing the economy and creating jobs. It is sobering to remember that under this Government currently there are 2500 fewer businesses per year being created. That is very disappointing. We have an environment that is not particularly supportive of small business in New Zealand and our international rankings on competitiveness have dropped in a recent survey from 15th to 24th in the world. That speaks volumes about the priorities of this Government which sit at the big end of town. It is not terribly interested in looking after the little guy in business generally.However in this case there is an important exception and it is great to see the National Government actually stepping up and making some things simpler for small business. Before we get much further in it is important to remember the new Māori proverb: “Te ōhanga ripoata koretake rawa i ngā tau e 50”.Iain Lees-Galloway: What does that mean?Dr DAVID CLARK: It is a proverb important in Māori Language Week. It is a contemporary proverb. My colleague Mr Lees-Galloway asks what that means. “Te ōhanga ripoata koretake rawa i ngā tau e 50” means “The worst economic record in 50 years”. It speaks to the performance of this Government which has seen in real terms real wages the median wage drop fewer jobs in the economy and many New Zealanders struggling. Te ōhanga ripoata koretake rawa i ngā tau e 50. This Government can and must do better if it is to improve its record and not be regarded as the worst Government in the last 50 years. Certainly so far it has the worst economic record of any Government in New Zealand in the last 50 years.To return to some of the detail of this bill its overall effect is that most small to medium sized enterprises will no longer be required to prepare generally accepted accounting principles—GAAP—compliant accounts. That is a good thing. Such accounts are important for large international firms that are to be compared internationally but the requirements are burdensome onerous and in many cases completely unnecessary. There is a balance to be struck as previous speakers have mentioned between accountability which is important and must be found at an appropriate level and the ability of small firms charities and others to get on with the business that they are there to do without spending a huge portion of their revenue on preparing accounts. We can imagine that in the case of charities that is completely counter-productive. It is also counter-productive in the case of small business.The objective is to provide information for external users who have need for an entity’s financial statements but are unable to demand them. This bill sets out the appropriate circumstances for that information to be available. It is about public accountability and transparency where the public do have a vested interest—for example if an entity is effectively owned by taxpayers or ratepayers where it has sought funding through debt or equity instruments that are offered to the public where it takes deposits from the public or it holds assets in a fiduciary capacity or where it receives donations and bequests. In those circumstances of course publicaccountability is important and higher standards are required. Likewise size matters and there is in the bill a rule suggesting that larger entities must report because it is more significant to a national or regional economy if they fail.Finally there is an element of accountability in terms of separation to owners or members of an entity if they are likely to need financial statements. If they do not manage the entity this gives them the option of having those statements. In all those cases we can see it is important that there is a higher level of accountability and of transparency and that it is well worth having these statements available. Markets as we know make excellent servants but very poor masters. We need efficient and effective markets particularly where they are large and particularly where they have an impact in a broader national or regional community particularly where the board members are removed from the management on a day-to-day level and particularly where taxpayer interests are concerned.So for all of those reasons we think the Financial Reporting Bill is a good piece of legislation overall. It does actually reduce the compliance on small business in some small way. It is better to have a few small tentative steps from this Government in that respect than none at all. We want to see small business prosper. We want those hard-working New Zealanders who will put their mortgages on the line who borrow money or who try to scrimp to get by to have a successful enterprise in which to create jobs and opportunities for New Zealanders. We want them to get ahead. We want there to be an appropriate level of scrutiny—not too burdensome nor too light—and we think that this legislation moves New Zealand towards that end in some small way.Supplementary Order Paper 93 for the Part 2 reading of this bill makes some amendments that are primarily due to proper process and to the interaction between the Financial Markets Conduct Bill and this bill and therefore we think that broadly they seem to be in line with what should happen and again show good process on the part of the Government. That is in stark contrast I must say to some of the bills that were put forward under urgency last night particularly the Copyright (Parallel Importing of Films) Amendment Bill where we discussed Mr Faafoi’s interest inThe Smurfs and the Magic Fluteand Mr Mallard’s interest inNotting Hill . It was an entertaining session but arguably quite an unnecessary one and a sign of poor process on behalf of this Government. But Labour is happy to support a bill where there is good process where it reduces the compliance on business and charities so they can get on with their jobs and where there is an appropriate level of scrutiny. Therefore Labour will be supporting this bill. Thank you.JULIE ANNE GENTER (Green):Tēnā koe. Tēnā koutou e te Whare. E ngā mana e ngā reo e ngā mātāwaka e rarau mai nei tēnā koutou katoa.[Thank you and greetings to you collectively the House. To the authorities languages and ethnicities settled here salutations to you all. ]I rise to speak on the second reading of the Financial Reporting Bill which is quite a huge bill that generated a lot of interest. We heard a lot of submissions on the Commerce Committee. Although unfortunately I was not able to be present for all of those submissions I have gone through them at length. The primary purpose of this bill was to simplify the financial reporting and remove the onerous requirements for small and medium businesses to comply with generally accepted accounting practice or GAAP. The Green Party can support this bill as it is although it probably does not make all of the changes that we would like to see.Financial reports are important for a couple of reasons. It is important that investors consumers the general public and shareholders are able to get information about what is going on with the financial health of an organisation. I personally in my work as a parliamentarian find financial reports quite a useful source of information particularlyon State-owned enterprises. It has been a very interesting process for me to learn how to read financial statements because it is not something that they give us training on when we are elected to Parliament. The Victoria University of Wellington has excellent short courses on accounting for anybody who would like to learn more about reading and interpreting financial statements.It is really important—and PricewaterhouseCoopers made this point in its submission to the Commerce Committee—that the financial reports are important not only for those who are reading them and using them but also for the organisations themselves who are going through the process of complying with the financial reports. Having an acceptable standard that large entities are all complying with is extremely important for those reading and using the financial reports and also for the organisations themselves. But as has been noted by previous speakers in New Zealand the requirement for small organisations—and we have quite a lot of small to medium enterprises here in New Zealand. The Green Party very much supports small business and we would like to see more great smart green entrepreneurial activity and more small business that is helping our society and our economy transition to a sustainable and fair footing.For those small to medium enterprises having to comply with the generally accepted accounting practice—or GAAP standard—was extremely onerous and required quite a bit of resource so the main proposal in this bill is to remove the requirement on small and medium companies to prepare annual financial statements in accordance with those GAAP standards.There was widespread support for this change. Four submitters disagreed with the provisions that define a large entity. One stated that fewer firms should be regarded as large while three stated the opposite. I think that the officials did quite a good job in identifying the balance for what should be considered large and what should be considered small to medium.A second proposal in the bill was to require registered charities to prepare financial statements in accordance with accounting standards issued by the External Reporting Board also known as the XRB. All submissions that commented on this issue agreed with the broad proposal but disagreed with some of the specific provisions. Several submitters considered that the dollar amount for eligibility for simple format cash accounting—which is annual operating payments of less than $40000—should be substantially increased. No submissions stated that the amount should be reduced.So we heard from a large number of submitters at the Commerce Committee and there was broad support for the bill but there were quite a lot of small points of disagreement that were raised by submitters. It was quite a wide variety of organisations that came and submitted to us. We heard from the big accounting firms of course like KPMG and PricewaterhouseCoopers. We also heard from quite a lot of small not-for-profits and charities that were going to be affected by the changes in this bill. We heard from community law centres and we heard from companies like Air New Zealand Meridian Energy and State-owned enterprises and they all had quite a lot of useful information to bring. I found it a very edifying process sitting on the committee listening to submissions and reading through the submissions.Another big issue that was raised by organisations was the proposal to change the time line on which financial reports need to be completed. There had been a recommendation I believe from the IMF—New Zealand previously had a deadline of 5 months and the proposal was to move it to 3 months for financial reports to be prepared and submitted. We heard pretty much all of the submissions suggest that the shift from 5 months to 3 months was going to impose quite large costs because it would suddenly mean that there was a shorter period in which everybody was competing for accountants and having to get their books in order. I think the compromise that was reached was thatthe deadline would be 4 months. So there is a requirement to have those financial reports done a little bit earlier but not quite the 3-month period.I suppose that was particularly important to organisations like for example retirement villages. Their shareholders and the people investing in those retirement villages do not actually use the financial statement as much as other means to determine whether or not the accounts are being handled properly and whether the organisations are in good financial health. So imposing this shorter time frame on them would impose big costs and at the same time it would not necessarily bring any benefit. I thought that was quite a reasonable compromise to go with it for 4 months.There was another change around the true and fair override provision which previously was something that happened in legislation and is now being incorporated in the accounting practice and accounting standards. Fair and true override allows the reporting entity to depart from the recognised rules and accounting standards if the management concludes that compliance with the standards would conflict with the objectives of financial reporting. In other words if there were some facts about the financial state of the organisation that were going to be less clear by the way that the financial reporting standards require them to be reported then the organisation does have the possibility to depart from those standards to give that information in a clear and true way.The current approach was seen to be working well by the submitters who commented on it that was the big four accounting firms the Institute of Chartered Accountants of New Zealand—and there was one other submitter who commented on this. They thought that it would be best if all jurisdictions used the same approach to measurement and recognition like those appearing in the standards by the External Reporting Board and that it would be clearer if the issue was covered in legislation rather than accounting standards. We heard from officials that there were issues with that and we have decided not to change the bill. So true and fair issues will be governed by accounting standards rather than prohibited by legislation.I am sure that New Zealand citizens at home watching Parliament TV this morning under urgency are absolutely riveted by the detail of the Financial Reporting Bill and if they have any other interest I am sure they can find out more online. I welcome their further participation. I look forward to the Committee stage of this bill. Thank you.Peseta SAM LOTU-IIGA (National—Maungakiekie):Tēnā koe Mr Assistant Speaker in this Māori Language Week. I also speak in support of this Financial Reporting Bill. It is a very good bill. It was introduced by the Minister of Commerce Craig Foss. What it really does is it improves the way that we report on financial entities across this country whether they be large or small by making all-purpose general financial reporting consistent—consistent with the objectives of our financial reporting system. It has got to have the confidence and trust of investors and the confidence and trust of creditors but also the trust and confidence of those who read financial statements and who must make decisions based on those financial statements. It is another example of this Government demonstrating its ability to support not just small and medium sized enterprises but also large businesses and supporting them to go about their duties and obligations not constraining them with red tape and bureaucracy—as we found under the Labour Government the 9 long years of the Labour Government—but allowing them to prosper and not bogging them down with red tape and bureaucracy.By cutting down on expensive and unnecessary reporting obligations it builds a competitive economy. It allows employers to hire more people. It also means that financial reporting is done in an appropriate constructive and transparent manner. We know that more than half a million companies are registered in New Zealand and all ofthem regardless of their size are required to prepare financial statements. We know that small to medium sized enterprises are the engine room of the New Zealand economy. They provide many jobs and opportunities across our country and it is important that they feel confident in a system that supports them.What does this bill do? Well it clarifies what is expected of charities improves the quality of financial reporting and allows for easier comparisons between charities. The Commerce Committee received and considered 44 submissions and we heard 16 submissions. I am glad the previous Green speaker Julie Anne Genter also enjoyed and received well the submissions that were made because we did at least hear from practitioners on the front line who are dealing with their constituencies who are dealing with their customers—their consumers—and who are dealing with people out in our communities.The committee responded to that by increasing from $40000 to $125000 the threshold at which not-for-profit entities must prepare financial statements on an accrual basis rather than a cash basis. That was a reflection of and in response to some strong submissions from various charities as well as from accounting firms and others that deemed the $40000 threshold level to be insufficient. What it does is it reduces the burden on small charities which may not have the capacity to prepare such accounts. They are often one-person or two-person operations and they do not have the capacity the abilities or the resources to prepare such accounts.We also extended the deadline by which large companies that are not issuers must prepare financial statements from 3 months to 5 months of the balance date—again in response to submissions we heard—in order for those companies to have sufficient time and sufficient resources to apply to their accounts from the balance date.The committee did its job. The Minister has done his job. This Government is doing its job to promote our small to medium sized enterprises in this country which supports our economy and supports our families in our communities and that is why I support this bill.ANDREW WILLIAMS (NZ First):Kia ora Mr Assistant Speaker. Thank you very much for letting me take this call on the Financial Reporting Bill. Is it not interesting hearing from the previous speaker Peseta Sam Lotu-Iiga? The Government is obviously under some illusion that this is all new to New Zealand commerce all new to New Zealand companies and all new to this economy and that National has suddenly come up with these bright brilliant ideas. These are the sorts of ideas that have been talked about for many many years by many parties in this House and many administrations in this House: how to reduce compliance costs how to make the economy more efficient and how to reduce the burden on particularly small to medium sized enterprises which do find it very very painful trying to meet the bureaucratic hoops that they have to jump through on a daily basis. In this respect New Zealand First has always said that we want to reduce the cost to business we want to make this economy more efficient we want to help New Zealand business grow the economy and we want the economy itself to be far more competitive.In that respect New Zealand First supports this bill because although it is very much an administrative bill and it tidies up something like 80 other Acts and it tidies up the Financial Reporting Act 1993 to improve those compliance and reporting standards it also is common sense. New Zealand First has said in this House time and time again that if the Government puts up common-sense good policy we will support it; if it does not we will oppose it. In this case there is common-sense good policy throughout and we welcome it particularly as I said for smaller companies. They will not have the same level of complexity of reporting as larger companies have. Many of our small to medium sized enterprises in New Zealand are run by small family operators—husbandsand wives small management teams—and really they do struggle at times to meet all the red tape. In this respect this bill will help. It will help them get on and actually do what they need to do: actually sell their goods sell their services and do business. That in turn will help employ more New Zealanders which in turn will help grow the economy which in turn will result in more revenue coming to the Government in the way of an increasing economy with more money going around rather than those businesses spending so much time filling out forms and filling out bureaucratic nonsense half the time just so that bean counters and bureaucrats sitting back in their offices can justify what they are doing.In this respect I will highlight one particular aspect which is the amendments to the Retirement Villages Act. We are not on the Commerce Committee but it was brought to my attention that the original legislation that the Government had brought before the committee was going to provide a huge burden on the retirement villages throughout New Zealand in terms of their reporting. The time frames that were being laid down were just going to be simply impossible reducing it to 3-monthly reporting. Also I note in new section 35B(2) that originally it was going to be: “The operator of a retirement village must lodge a copy of the financial statements of the operator and each village within 20 working days after the financial statements are required to be signed”. Those 20 working days now under the bill have changed to “5 months after the balance date of the operator”. So is not that interesting Mr Lotu-Iiga? He says what a wonderful job this Government is doing but this Government put up original legislation that was going to put such an incredible burden on retirement villages to report within 20 days of their financial statements. Now they see that a 5-month period is more suitable so that they can actually do the reporting correctly and not try to under an absolutely pressure-cooker situation try to get information into the system.This bill also brings into line the obligations of charities and other such entities. That is a good thing because as we have heard from other speakers today increasingly there is the growing need for more and more charities in this country because often the Government itself is not delivering. Often the Government itself is handing over the needs of our communities the needs of New Zealanders to the charities asking them to perform the functions that previously central government used to provide and now more and more New Zealanders are having to go to charities for their assistance. However it is as a result important that those same charities be required to report in a responsible manner to the same level of reporting as is the case with many other small business enterprises and that is a good thing.I will not go any further but I will say that this 169-page bill does tie things together; it does bring a lot of things together. It refers to a huge number of previous Acts that will also be brought into line with this Financial Reporting Bill. It does help the New Zealand economy be more efficient. It does help with the overall cost of compliance of doing business in this country. Therefore it can only be a good thing and New Zealand First supports the bill.KANWALJIT SINGH BAKSHI (National):Sat sri akaal and mōrena Mr Assistant Speaker. It is my pleasure to stand in this second reading of the Financial Reporting Bill. First of all I would like to congratulate the Hon Craig Foss on bringing up this bill which is consistent with the policy of this Government to reduce red-tapism. National is focused on boosting growth and creating jobs. Only a strong economy can provide financial security for families real opportunities for young people safer communities and the high-quality education and health services that all New Zealanders need.I would like to congratulate Jonathan Young the chair of the Commerce Committee on his leadership and other members who have really worked hard on this bill. I would also like to thank the officials for their work during the deliberations on this bill.I would like to speak to this bill from the perspective of the ethnic community. I would like to touch on two things from the perspective of small to medium sized enterprises and charities. I owned a small business and I know it is difficult to meet those obligations under the statute because a lot of paperwork is required and a lot of time goes to accountants to prepare the financial reporting. As a volunteer I served in a charity for 8 years and I know it is very difficult for charities to prepare and get volunteers to do the work for their financial reporting.The Financial Reporting Bill replaces the Financial Reporting Act 1993 by reforming the Act. This National Government seeks to rationalise financial reporting obligations across the statute book in three ways. First of all the bill ensures that all reporting obligations are consistent with the goals of financial reporting so that the external user can use simplified data in a meaningful manner. Secondly definitions and provisions are standardised between the Financial Reporting Act and other legislation. Thirdly the new bill makes the language of the financial reporting in different Acts broadly consistent. The reform is needed in legislation to ensure that out-of-date rules and regulations are replaced with the current requirements.New Zealand has got more than half a million companies registered that are under the size of 20 employees. For small and medium sized companies financial reporting can be an expensive and unnecessary exercise. The Financial Reporting Bill has requirements that allow small businesses and medium-sized companies to direct their resources to where their need is greatest—that is growing their businesses. From the charities’ point of view the bill proposed that there should be a $40000 threshold for charities’ financial reporting but when the select committee heard the submissions it was deliberated that $125000 should be the minimum requirement for a charity to report back its financial statements. So with these changes I think the bill will be very well received by the different submitters and I hope this will go a long way. I commend this bill to the House.Hon DAVID CUNLIFFE (Labour—New Lynn):Tēnā koe. Ko Titirangi te maunga. Ko te Whau te awa. Ko Hoani Waititi te marae. Ngāti Pākehā te iwi. Te Roopu Reipa te mahi. I would like to honour Māori Language Week. I would like to acknowledge members who have spoken and to reaffirm that Labour supports this Financial Reporting Bill. This bill has benefited from the work of the Commerce Committee and I recognise the chair and the members of the select committee who are here in the Chamber today.The bill seeks as my colleague David Parker said earlier the right balance between the reduction of unnecessary compliance costs and the maintenance of proper standards of accountability and transparency for companies for charitable organisations and for other forms of entities such as friendly societies. The select committee and the Government have wrestled with where that boundary line should be and in these brief remarks I would like to draw upon several of the boundary issues. But before I do that let me say that Labour’s support for this bill reflects our determination to reduce unnecessary compliance costs wherever available. Compliance costs—red tape—are a bit like a hedge. You need regulation to maintain boundaries but if you do not take the clippers to it occasionally it tends to get a little overgrown. As David Parker said earlier this bill is a worthy tidy-up bill. It is a bit of housekeeping if you like. It is where Parliament gets the hedge clippers out and tidies up some of those boundary fences around our company law and that is an appropriate thing.I would note though—if members will forgive me in a fairly technical bill a slightly political comment—that there is a bit of spin from the other side sometimes that Labour somehow likes compliance costs. I think our support for this bill really puts that ghost to rest. It is about as true as the spin that Labour somehow likes fiscal deficits. Of course members of the public know very well that in the last 15 years certainly since I have been in Parliament Labour has never ever ever when in Government run a fiscal deficit and we do not plan to. National since I have been in Parliament has never ever ever run a fiscal surplus. It does plan to but as we have said in earlier debates there is so much smoke and mirrors in Budget 2013 that it is very difficult to discern whether that will actually occur. The third piece of spin that I would just draw attention to on the way through is that somehow Labour is anti-growth. As I have said before in this House if one examines a 30-year history of economic growth data and matches it against the periods when Labour and National have led the Government the conclusion is irrefutable that growth rates on average in a 30-year cycle have been higher when Labour has been in Government. We have taken the concept of growth strategy very very seriously. We have been prepared to get the efforts of the State squarely in behind that. It does not always follow to be fair that business confidence reflects higher economic growth under Labour but none the less I make the point.May I just quickly pick up the point that several previous speakers have made about small and medium enterprises and endorse what members opposite have said. Small and medium enterprises are absolutely crucial to New Zealand. They are about 80 percent by number of our businesses and they employ about half of the total employed workforce. But as David Clark said earlier there are currently 2500 fewer new businesses being created per annum and that is something that I think both sides of the House would wish to see turned round. Our business failure rate is that four out of five new businesses go belly-up in the first 2 years. That is a matter that is not new; it has been across different Governments. But it stands in huge contrast to some of the rapidly developing countries of South-east Asia where the small business survival rate is the other way round; it is an 80 percent survival rate. I think the House and the Government need to think carefully about how we can reverse that trend.Let me go to the key issue here which is the boundary between transparency and reduction of unnecessary compliance. The requirement under the bill to prepare general-purpose financial statements will apply to large companies and large overseas companies that carry on business here. They are defined as having assets including $60 million worth of turnover; having revenue exceeding $30 million; having more than 10 shareholders—through a 95 percent vote they can opt out; and having fewer than 10 shareholders if shareholders who hold at least 5 percent of the voting shares require the company to comply. A number of different audit and financial statement requirements follow from those definitions but those are really at the heart of this. What the bill is trying to do—and Labour supports with some need for ongoing vigilance this attempt at a boundary—is say that if a company has a large number of disparate owners or shareholders then it absolutely needs to provide a full set of financial reports provided it is not effectively de minimis in scale.If a company is either very small or it is very closely held then it may not be necessary to provide the full set of audited financial accounts. That is the core principle in the bill. That is a principle we agree with. But let me just lay down a slight caution that if it were to transpire that the new flexibility was abused because for example companies that were effectively large and relatively widely held found a back-door way of redefining themselves as being narrowly held for the purposes of avoiding legitimate accountability that is something that I think a future Labour Government should and would want to take seriously and could cause re-amendment of the law in this area.I would like to compliment the Commerce Committee very briefly on two amendments that it made. The first was to increase the threshold for registered charities to not have to prepare full financial statements. That threshold has been increased appropriately on the basis of latent CPI movement from $45000 to $125000 per annum turnover. It also looked at the provisions of the Financial Reporting Act 1993 that restores an exemption that was omitted that would exempt inactive companies from the requirement to prepare financial statements. That is good common-sense stuff. The select committee also—and I think Carol Beaumont would particularly agree with this given her work in the area—assisted friendly societies to take a common-sense approach to their financial reporting obligations where they are small or closely held.With those remarks may I compliment the select committee. Often we have pretty vigorous debates in this House and the public does not always see Parliament working harmoniously in a bipartisan fashion on the sort of nuts and bolts legislation that affects us all. I think that the public of New Zealand would be pleased to see Parliament working consensually on matters of detail of this kind. It does as other speakers have said reflect well on our parliamentary system.MARK MITCHELL (National—Rodney):It is a pleasure to take a short call on the Financial Reporting Bill. It is a very good bill. It is a bill that is in line with the Government’s Business Growth Agenda. It is a big part of our aim to reduce red tape and compliance costs for small and medium sized businesses especially as they make up 70 percent of the New Zealand economy.I would just like to address the comments made by Andrew—Williams was it?Peseta Sam Lotu-Iiga: David Cunliffe.MARK MITCHELL: Oh David Cunliffe. It was also Andrew Williams too actually. The select committee process is actually a very good process that does work. If there are changes that need to be made to bills and tweaks that need to be made it is the select committee process where this happens.There were two very good changes made through the select committee process as Mr Cunliffe and Mr Williams mentioned. The first was to increase the threshold at which a not-for-profit entity must prepare financial statements on an accrual rather than a cash basis from $40000 to $125000. That is actually a big move and that will help reduce compliance costs.The second was to extend the deadline by which large companies that are not issuers must prepare financial statements from within 3 months after the balance date to 5 months. This too is a very very good change. I am very happy to commend this bill to the House.IAIN LEES-GALLOWAY (Labour—Palmerston North):Tēnā koe Mr Speaker. Ngā mihi o Te Wiki o Te Reo Māori. Labour supports the Financial Reporting Bill because our primary focus in all things right now is to get New Zealanders back to work and to grow jobs in this country. That is why in the way that this bill seeks to do we are seeking in all possible ways to reduce structural costs for businesses such as seeking to reduce the price of electricity for businesses as well as households and to try to boost innovative companies through things like research and development tax credits. It is only by doing those sorts of things that we will really see job growth in New Zealand.I am not talking about the kind of job growth that sees everybody working at Burger King McDonald’s or Pak ’N Save I am talking about the kind of job growth that gives people decent salaries so that families have enough to take home so that they can make ends meet so that they can afford their house in Auckland and so that they can raise their families in a stable and financially secure situation. That is the kind of thing that Labour is focused on.We believe that in a small way this bill contributes to that. It will do two things. One it does reduce unnecessary compliance costs for businesses so that they can get on with the job of growing their business and creating those jobs that New Zealand so desperately needs. The other thing it does is that it improves transparency and gives the public greater confidence in the conduct of those entities.What I particularly like about this bill is the flexibility that is contained within it. Large companies and large overseas companies that carry out business in New Zealand will have quite stringent reporting expectations on them although those larger companies where there are 10 or more shareholders with a 95 percent majority vote can opt out of the compliance if their shareholders are comfortable with that. Indeed in respect of smaller companies if their shareholders want their companies to adhere to greater levels of compliance so that there is greater transparency then that is possible in this bill as well.A lot has been made of the select committee process. I know that the Hon David Parker talked about the excellent process we have whereby companies organisations accounting firms and the people who have knowledge about the issues of business financial reporting were able to come and suggest changes to the bill and it has come back to the House in a better form than when it went to the select committee. That is part of creating a robust transparent and secure business environment in New Zealand knowing that we have a sound legislative process that is designed to make for good lawmaking and that is important for growing businesses as well.An important aspect of this is also that charities will be required to prepare financial information in accordance with generally accepted accounting practices. A lot of charitable organisations rely on public money as well as money raised from our communities. It is important that they are able to transparently advise the public of how those moneys are being spent.All in all although this is pretty minor in comparison to the significant economic shift that the Labour Party proposes and that the Labour Party will institute once it is next in Government in its own small way this bill helps towards the Labour Party’s vision for New Zealand where people are working in high-paid high-skilled and meaningful jobs. For that reason we will support the bill.Bill read a second time.Bail Amendment BillSecond ReadingHon ANNE TOLLEY (Minister of Police)on behalf of theMinister of Justice: I moveThat the Bail Amendment Bill be now read a second time . This bill makes changes that will improve public safety and ensure the overall integrity of New Zealand’s bail system. In particular the changes will make it harder for those accused of serious offences to get bail. We want to ensure that bail decisions strike the right balance between keeping the public safe and maintaining fundamental rights such as the presumption of innocence and freedom from arbitrary detention.I would like to commend the Law and Order Committee for its thorough consideration of the bill and for the sensible amendments it has proposed. The Government has adopted all of the proposed changes. The committee received 282 written submissions on the bill and heard 42 oral submissions. A number of the oral submissions were from victims of crime and their families. On behalf of the Minister of Justice I would like to thank those people for their courage and their willingness to share their experiences in order to inform the committee in its consideration of the bill. I note that 119 submitters supported changes contained in the bill. Many submittersreferenced the petition of Tracey Marceau on behalf of the Christie’s Law group and 58000 others. Some proposals in the petition such as those relating to judicial accountability were outside the scope of this bill. They are being addressed by the Law and Order Committee separately.The bill contains two parts. Part 1 makes amendments to the Bail Act and Part 2 makes amendments to other related legislation including the Children Young Persons and Their Families Act and the Sentencing Act. The changes contained in the bill fall into six broad categories. The first set reverses the burden of proof in certain cases to target defendants charged with the most serious offences and those with the highest risk of offending while on bail. A reverse burden of proof means that the defendant must prove that he or she should be granted bail. Under the bill there will be a reverse burden of proof for defendants charged with murder. These defendants will need to satisfy the court that they will not commit any violent offences while on bail. Public safety will be the court’s primary consideration in these cases. The bill also extends the list of very serious offences that currently carry a reverse burden of proof when the defendant has a previous conviction for one of these offences.Secondly the bill improves the courts’ ability to deal with defendants facing serious drug charges. Defendants charged with class A drug offences will now be subject to a reverse burden of proof when being considered for bail.Thirdly the bill strengthens the ability of the police and the courts to deal with young defendants on bail. The bill retains the strong presumption in favour of bail for 17-year-olds who have not previously been imprisoned. Those aged 17 who have previously been imprisoned and those aged 18 and 19 will be subject to the standard adult test for bail. The bill also gives the police new powers to deal with defendants under 17 years of age who repeatedly breach their bail conditions.The fourth set of important changes contained in the bill relates to police bail. This is bail granted by the police before the defendant appears in court for the first time. The bill increases the penalty for failing to answer bail in these circumstances to 3 months’ imprisonment in addition to the existing maximum fine of up to $1000. The bill abolishes monetary bonds and sureties for defendants on police bail. These bonds and sureties are not available in the District Court. They were seldom if ever used by the police because they are very difficult to enforce.The fifth group of provisions relates to electronically monitored or EM bail. Currently electronically monitored bail is granted by the courts under the generic power to impose bail conditions. The Government believes however that there should be specific provision for electronically monitored bail in the legislation to ensure that it is applied consistently and effectively. The bill formalises the current arrangements whereby defendants can apply for electronically monitored bail only after they have been remanded in custody. The statutory regime will ensure a consistent process for assessing the suitability of defendants for electronically monitored bail and for monitoring them in the community.The final set of provisions promotes the integrity and operational effectiveness of the bail system. These amendments will reduce situations where a defendant will be bailable as of right and will restore the jurisdiction of justices of the peace and community magistrates to deal with certain defendants who breach bail.Finally the committee has recommended a number of minor and technical amendments to the Bail Act. These recommendations follow on from the recent reforms made by this Government under the Criminal Procedure Act and ensure consistency with recent changes to criminal procedure. This Government recognises that a person charged with a crime has the right to be considered innocent until proven guilty and the right not to be arbitrarily detained. However these rights must be balanced against thesafety of the public. The Government is committed to bail laws that make New Zealand a safer place and keep victims at the heart of our criminal justice system and this bill demonstrates this commitment. The New Zealand public deserve bail laws that protect them.The Minister of Justice will be tabling a Supplementary Order Paper that will clarify the drafting and technical amendments required to bring the bill in line with the recent changes to criminal procedure. The Supplementary Order Paper will also propose changes to the management of the electronic monitoring regime so that Department of Corrections staff as well as the police may undertake assessments for electronically monitored bail. I believe that the amendments recommended by the committee respond appropriately to issues raised in submissions and once again on behalf of the Minister I thank the committee members for the work they have done on this bill. I commend this bill to the House.Hon PHIL GOFF (Labour—Mt Roskill):Kia ora katoa. The Labour Party will be supporting the Bail Amendment Bill. In supporting it that does not detract at all from our commitment and as expressed by the Minister her commitment to the presumption that is fundamental to the New Zealand system of justice that everybody is presumed innocent until proven guilty. There has to be just cause to deny people the right to be freed on bail pending the hearing of the charges against them.Traditionally in our system there are three areas that the court will take into account when considering whether an accused person should be granted bail. The first and most important I think is whether that accused person is at risk of reoffending. There has to be a counter set against the presumption of innocence an absolute commitment to protecting the safety of the New Zealand public particularly where a person is accused of a very serious offence or where that person has a track record that predisposes them to being at serious risk of continuing to offend albeit under the restrictions imposed by their bail conditions. The second consideration taken into account by the court is the risk of absconding. Obviously if you think that a person who is going to be given bail or there is evidence to suggest that a person who is going to be given bail will abscond and not show up when the charges against them are being heard that is another risk that means you might remand a person in custody. The third is the risk that the defendant might pose in interfering with witnesses and perverting the course of justice. In New Zealand the judge has considerable discretion as to whether or not a person should be granted bail but it works on the presumption of innocence.In any particular year there will be something like 91000 cases considered for bail. In most instances bail is given and in most instances there is no problem while that person is on bail pending the court case to hear the charges against them. But we do have a serious problem with bail in New Zealand and that problem is set out in the Ministry of Justice’s own statistics which show that nearly one in five persons on bail—17 percent to be precise—offend while they are on bail. Much of that offending is of a minor nature—it may be not meeting all the conditions of the bail—but some of that offending is serious and in a small number of cases but with huge implications very serious offending.The figures from the ministry looking at the period from 2006 to 2010 were that 23 people were convicted of murder at the time they were on bail issued by the court; 21 were convicted of homicide while they were on bail; 7146 were convicted of acts intended to cause injury while they were on bail; 1132 were convicted of abducting kidnapping or threatening behaviour while they were on bail; and 763 were convicted of sexual assaults while they were on bail. Set in the context of over 91000 cases a year of the court granting bail it is relatively small. Set in the context of the victims or the families of victims who came before the Law and Order Committee whose familymembers and whose loved ones had been murdered or seriously injured or damaged by people on bail you understand why there is public concern.That is not to say that this House has ignored the question of bail laws being sufficiently tight. One of the first Acts I passed as Minister of Justice in the year 2000 was a new Bail Act and that Bail Act had dramatic consequences. It increased by 200 percent the number of people remanded in custody from around 500 in 1998 to over 1700 in 2007 which was the end date of the statistics I looked at. So there was a dramatic increase in the number of people remanded in custody. New Zealand is not soft when it comes to denying bail. The figures suggest that the rate of remanding in custody in New Zealand pending the court case is 43 per 100000 much higher than the United Kingdom at 25 or Australia at 30. The laws are not soft. Laws were changed again in 2011 but I have got to say it was more for political purposes—lots of rhetoric not much substance and it did not have much impact.This bill will make a difference but it will make a difference on the margins. The Ministry of Justice predicts that it will result in an additional 350 people per year being remanded in custody with the necessity of an additional 50 prison beds. It is significant; it is not huge. The difference that this bill will make is on the margins where the judge is considering whether bail should be granted or whether the risks to public safety outweigh the presumption of innocence until proven guilty. One of the ways in which this bill does that is to extend the situation where there is a reverse onus of proof. Normally it is up to the prosecution to prove that the defendant cannot be trusted to be on bail. Where there is a reverse onus of proof it is up to the defence to prove that the person will not commit offences while on bail. The judge still has the discretion but the judge will look more carefully at those cases because of the reverse onus of proof and it is appropriate in cases of serious offending or serious risk to the public well-being that the judge does look more closely at those cases. In the cases of murder there will be a reverse onus of proof but right now two-thirds of those who are arrested and charged with murder will spend the entire period awaiting their trial in custody. That may increase slightly at the margins.When we look at the reverse onus of proof in regard to people who have already been convicted of serious violent and sexual offences many of those offences were previously included in the original legislation—murder attempted murder manslaughter sexual violation wounding with intent aggravated wounding use of a firearm. But other offences have been added and appropriately so. They are things like aggravated burglary assault with intent to rob kidnapping and abduction. For those charged with serious class A drug offences we know that more than a third of those who are granted bail will reoffend and often reoffend quite seriously while on bail. So it is appropriate that there is a reverse onus of proof there. The bill makes other changes one of which is to make the law regarding the age of adulthood consistent. So you will not be treated differently in regard to bail if you are 18 or 19; you will be if you are 17 unless you have previously served a term of imprisonment and that is because there is a very high rate of reoffending on bail if you have previously been in prison—over 50 percent. I want to say that by and large those changes are positive changes but that we also need to look at systemic causes of offending while on bail.The committee as you will be familiar is looking at the Christie’s law petition and is looking at some other factors. I sat in court the other day along with you Mr Assistant Speaker and we watched the process of bail being granted. It is a production line - style process. The judge considers it seriously but there is limited information that may be available to the judge. There is reason to look at that to see whether we can provide better information to the judge whether there can be risk factors for which we can provide a proper tool of analysis. That ought to be done. One other factor—I am goingto finish on this factor. One reason why there is a lot of offending on bail is that it takes so long to bring people to trial. For serious class A drugs it is well over a year. If we can get a more efficient court system and we can deal with the cases more quickly that will be a major factor in reducing offending on bail. We support the bill.JACQUI DEAN (National—Waitaki):I want to acknowledge in this second reading of the Bail Amendment Bill the work of the Law and Order Committee and the willingness of committee members from across the House to have a decent look at the issues surrounding the Bail Amendment Bill matters that were brought before us. I also want to acknowledge with thanks those families and family members who came to our committee to make their submissions and to tell their harrowing stories of the loss of partners children and family members at the hands of people who were out on bail at the time that their family members were then murdered or grievously harmed.I want in particular to acknowledge Tracey Marceau for her petition and the 58000 people who supported and signed that petition. The committee thought very carefully about how we would best consider the Bail Amendment Bill and the Christie’s Law petition matters that were brought before us. The committee agreed that in order to do justice to both those matters we would separate the two matters—deal with the Bail Amendment Bill which this House is doing now and the committee would then consider the matters raised in the Christie’s Law petition. The committee is doing that. The committee is working carefully and thoroughly on the issues raised that were out of scope of the Bail Amendment Bill consideration. That work is ongoing and in due course the Law and Order Committee will be reporting back to the House on that very important bill and the issues it raises.The Bail Amendment Bill amends the Bail Act. It also amends the Children Young Persons and Their Families Act the Sentencing Act the District Courts Act and the Summary Proceedings Act and that is done to improve public safety. I do not agree that the changes proposed in this bill are around the margins. I believe that the changes promoted in this bill will make a real impact on public safety which is the primary reason for bringing this bill to the House.When National took office we promised to review aspects of the bail system. What we did do was we reversed Labour’s 2007 amendments that made it in fact easier for defendants to get bail. Labour made amendments that restricted the test for remand in custody and in fact made it easier for defendants to get bail. We reversed that and then in 2011 we did wide consultation with the public on their views about what else needed to change; hence this bill has come to the House.The main provisions of the bill are in reversing the burden of proof in bail decisions for those charged with serious class A drug offences such as manufacturing or dealing in P which in 2011 when this Government came in was at epidemic proportions. It is known that more than a third of defendants arrested for serious class A drug offences do go on to offend while on bail. We are also moving to reverse the burden of proof in bail decisions for defendants charged with the most serious crimes such as murder.The current list of specified offences has not been reviewed since the Bail Act was enacted and it now does not reflect the risk posed by defendants charged with other serious offences—violent and sexual offences—who do have a history of serious offending. So the bill expands the list of violent and sexual offences that result in a defendant being subject to a reverse burden of proof. If they have prior history of such offending they need to convince the judge through their counsel that they should be allowed out on bail.The bill will strengthen bail conditions around young defendants. It will make defendants aged 17 to 19 years old subject to the standard adult test for bail if they have previously served a prison sentence. What this does is remove the strong presumption infavour of bail that currently applies to them. The bill allows the court to detain defendants under 17 years of age who significantly or repeatedly breach their bail conditions. The bill enables the police to uplift young defendants found in breach of court-imposed curfews and return them to their homes and to approved places of safety—not only so that they cannot reoffend and to keep society safe but also in an endeavour to keep them from further harm and further reoffending. Police bail is granted by the police before the defendant appears in court for the first time and so the penalties for failure to answer police bail are increased under this bill to be an offence that carries up to 3 months’ imprisonment in addition to the current maximum $1000 fine.The electronically monitored bail regime will be put into law under this bill to ensure that it is administered consistently and effectively. Courts have been able to impose electronic monitoring as a condition of bail since 2006. The Government has reviewed electronic monitoring of bail and it is turning out to be an effective and safe way of managing defendants in the community.Finally before National came into office in 2008 crime was increasing gangs were growing stronger in number and in influence prisons faced a critical shortage of beds the drug P was at epidemic levels and was seriously damaging communities violent repeat offenders were being freed on parole and the courts were truly congested. National is turning that round. This bill is part of that and I commend it to the House.ANDREW LITTLE (Labour):I rise to speak on the Bail Amendment Bill. In acknowledgment of the last speaker Jacqui Dean I just say what a pity it is that when the House is able to come together and talk with almost one voice on a very important measure—a criminal justice measure a measure that deals with trying to strike the very important balance between the liberty of the individual and the protection of public safety—a member should rise to try to score cheap political points about criminal justice. The truth is that the only real toughening of our sentencing laws and bail laws in criminal justice happened under the last Labour Government. We have a lot to thank the Hon Phil Goff for for that work which he himself gave an account of.When the bail laws were changed in 2000 about 500 defendants were denied bail. That number increased to 1700 over the 5 or 6 years following the implementation of that legislation. Look at the National Government’s change to the bail laws in 2011 and you see that the impact was on 10 people. Ten people were detained who otherwise might have got bail. Then if you have a look at the assessment of the impact of this bill it is that it will affect possibly around 50 people. But we come from the principle of justice where if an innocent citizen is harmed hurt or negatively affected by another citizen committing a crime when the justice system might have prevented that harm through proper risk assessment and properly managing a previous charge of that offender that is still an injustice. So any measure that takes us a step further towards ensuring that that sort of injustice does not happen is a step worth taking and that is why we support this bill.The way we handle criminal offenders is vital to public safety. It is the public safety aspect that underpins this legislation that cries out for proper consideration and ultimately for our support.We note and acknowledge of course that offenders on bail either have merely been charged or of course are in the situation where they have been convicted but not sentenced. But in those situations where a defendant has simply been charged and has yet to be tried or to admit the guilt of their offence then they are entitled ordinarily to a presumption of innocence. However when we look back over the last couple of decades the reality is that there has been an increase in the reported instances of those on bail committing other offences and in some cases very serious offences. It would bea neglect of our duty as a Parliament if we did not take note of that and ensure that the courts and the judges have the tools to make a proper assessment in a bail application of a defendant who comes before them of whether that defendant poses a continuing or real risk to the community in terms of further serious harm.Clause 8 of this bill expands the number of offences to which the reverse onus that originally appeared in the Bail Bill of 2000 applies. Somebody charged with murder faces the reverse onus regardless of whether or not they have any previous convictions. That is a sensible balance. Murder is a serious charge and I think the track record of the New Zealand Police now is that the police do not charge somebody until they are satisfied that there is at least a strong prima facie case. So I think a judge is entitled to look at the prima facie evidence and decide whether or not the defendant poses a further risk to the community.Then of course the reverse onus applies in relation to other serious offences where there have been previous convictions. In my view that is a good balance to strike in terms of the court exercising its discretion over bail and having the ability to make a proper assessment of the risk posed by a defendant. The new serious offences added by the bill include kidnapping and aggravated robbery and a handful of others as well. In this situation the defendant must satisfy the judge that they will not commit any other violent offence or pose a danger to any other person.These changes as I think the Minister correctly pointed out arise largely out of the killing of ChristieMarceau and the petition that arose out of that. I think it pays to dwell for just a moment on the details of that case. There is no question that it was an unspeakable tragedy for the Marceau family to lose their daughter and sister and granddaughter in that way.The facts known about that case ultimately resulted in the defendant pleading guilty to some kidnapping charges for the first incident and then being found not guilty by reason of insanity for the ultimate act that he committed which took Christie Marceau’s life. There is no question that the defendant’s poor mental health played a large part in that offending. The sequence of events was that the defendant had committed a very serious set of offences when he detained effectively kidnapped and threatened other serious offences on Christie Marceau. Then when he was arrested he was detained denied bail and kept in custody for a period of time because the court was aware and the police knew that his mental health was an issue. Through the detention he had at that time in custody he had his mental health issues addressed and he was placed on medication. Some weeks later when he had a subsequent bail application which at his age he was entitled to make the judge faced with a call about whether or not the defendant should be given bail because this was not a defendant who had any previous convictions made a judgment call that was in accordance with the law at the time.Without wanting to detract at all from the pain and the suffering and the trauma that the Marceau family has felt there are others who have peddled those events into a case for something other than what appears in this bill. The truth is that the balance that has been struck in this bill means that were there to be another tragic event such as this case—and hopefully there will never be—the reality is that even under this bill it is likely that the court would find it difficult not to grant bail for a defendant of the nature of the defendant involved in the Christie Marceau killing in the circumstances in which that defendant was. That is not about avoiding giving comfort to the New Zealand public at large but it is a reality about legislation like this drawing an appropriate balance in the criminal justice context.This legislation also puts tighter restrictions on defendants charged with more serious drug crime and given the prevalence of it and given the prevalence of criminal offending in relation to drugs such as methamphetamine that is an entirely appropriatepath to take. Then finally the bill deals with making more explicit the management of and the risk assessment associated with the granting of electronic bail.When it comes down to it that is what we in this day and age call on the courts to do. When they are dealing with offenders in this modern age we need the courts to have the confidence to make an appropriate assessment of risk that those defendants—and some are former offenders they are convicted offenders—pose to the community as the judge considers whether or not an ongoing detention is an appropriate status for the defendant to face. That poses for judges an enormous responsibility. They are responsible for community safety as much as they are responsible for ensuring that the defendant has and can get a fair trial and is not presumed to be guilty before the facts of their charge are properly tried in the court. This is always a difficult balancing act to achieve. So on that basis and with those comments we will support this bill.DAVID CLENDON (Green):The stated purpose of this bill we are debating today the Bail Amendment Bill is “to improve public safety and to ensure the overall integrity of New Zealand’s bail system. The changes will make it harder for those accused of serious offences to get bail.”—and that is quoted directly from the bill of course. We are actually not persuaded that the changes that are proposed in this bill will achieve those outcomes. We cannot argue with the intention of the bill clearly. Those are perfectly sound aims. But really this legislation will not achieve those ends. It will compromise some of our commitments to our own New Zealand Bill of Rights Act and to various international conventions to which New Zealand is signatory and it will not overall achieve the preferred outcomes.In part we think the failure of what is intended in this bill to present a long-term solution to problems that undoubtedly do exist is in part arguably due to the fact that it is a very reactive bill. It seeks to amend to shift and to chop and change a few existing provisions in law. I think we could have taken a lesson from the Australians. We used to hear a lot from this Government about catching up with Australia. That language seems to have been a little more subdued of late. But in this instance we could have usefully looked to the New South Wales Law Commission which a year or so ago produced a very useful report in that context. It recognised that bail legislation in terms of the practice of the courts around issuing bail had been chopped and changed and much amended over time and it got to a point where it was not satisfactory and it was not fit for purpose. So the New South Wales Government took a clean sheet approach basically and thought “OK what’s the nature of the problem here?”. That is something we could usefully do here but unfortunately this bill does not take that approach. It does not take that clean sheet approach to say: “OK what is the problem? What are the issues? How can we best achieve the outcomes that we need to achieve?”.In the Australian example they came back to some basic principles asking what the purpose of bail law was how that purpose should be reflected in legislation. Then they looked at the workings of bail law in practice and how that might be amended and modified and generally made better. I think that is what is absent from this legislation: taking one step back taking the big-picture approach to looking at our bail laws. Some of the amendments have value clearly and we could support them but others we cannot support because they are substantial challenges to the constitutional and legal norms. As we have heard from Mr Goff for example the outcomes will actually be very marginal. It will not make significant difference to the outcomes. We think that there should be an approach of supporting a judiciary to interrogate some of the outcomes of decisions that have been made to seek to establish whether errors were made—errors of judgment—and to ask whether we can put in place means tools and processes that will at least reduce if not eliminate those errors that have led to some acknowledged tragedies over time.The New South Wales review came up with a set of key principles about bail law and suggested that those principles were public interest and freedom; securing justice according to the law; the integrity of the criminal justice system overall; the likelihood of harm or threat of harm to people in a relationship or in some other relationship with an offender or with an alleged offender; the protection and welfare of the community having regard to the likelihood that a person may offend or commit serious offences if released and not kept on remand; and the interests of that person and their family and associates. They seem to be some pretty sound principles on which to establish a comprehensive set of legislation around bail and its practice and whether or not bail should be allowed to individuals in individual cases.What bail does not and ought not ever be used to do of course is to punish offenders. The granting or not granting of bail ought not to be seen as a deterrent to offending. That is not its function; there are other mechanisms within legislative and judicial process to ensure those things. One sees hints of this in this legislation in the idea that somehow the likelihood of bail or reduced likelihood of bail will be a deterrent and indeed a punishment to people who are before the courts on charges and indeed quite serious charges.In that context I think it is worth recalling that the most recent numbers we have which I think come from 2006 to 2007 tell us that over half of people something like 56 percent of people who are remanded on charges and are not given bail are later found not guilty of whatever charges they were facing. That is more than half of people who are remanded are ultimately found not guilty despite the fact that they have by that point often spent significant time in custody. That is no trivial matter. The point was made earlier particularly with drug charges that it is perfectly common these days to have a year or 18 months on remand before a person actually gets their day in court before the matter is settled. If people are spending a year or 18 months in custody that is a huge cost to their family life their professional life and their employment. Inevitably people lose their income and end up in debt. The consequences of that are significant and ongoing and we need to think very carefully about the extent to which we are imposing that burden on people given that more than half those individuals are found to be not guilty of the charges that they are facing.It is not a trivial matter to deprive somebody of their liberty. It is the ultimate sanction of our legislative process our judicial process and to make it more difficult for individuals to get bail based on a response to a very small number of cases albeit tragic cases we think is not the way to make good law.The bill would undoubtedly compromise New Zealand’s international commitments to a number of conventions around human rights not least of all the United Nations Convention on the Rights of the Child which says very clearly that in this case 17-year-olds should not be treated as adults. Yet within this legislation we see a requirement that 17-year-olds who have previously served a term in prison will be treated effectively as adults; the reverse burden of proof will apply in those instances. We think that is very unfortunate. It is also an admission a quite explicit admission that imprisoning young people generally does not work in terms of dealing with their offending. We know that prison is actually a cause of crime and that provision acknowledges that having been in prison means a young person is much more likely to reoffend. Prison is not effective in rehabilitating young people. It does not deter them from crime on the whole. Most often we see that it actually is the first step to a career of crime. Over some 15 or 20 years typically a young person in prison will continue to offend until their mid-30s or beyond. The prison sentence has very little effect on them. We see that the provision in this bill around the expectation that 17-year-olds who haveserved a previous sentence in prison is unreasonable. It is an admission of defeat effectively an admission that prisons do not work.We believe that this bill and the provisions in it would reduce judicial discretion. There is always a tension between the rights and powers of this Parliament and the rights and independence of the judiciary—the independence of the judiciary to make its own decisions as it sees fit. We think some of the provisions of this bill take a step too far in terms of reducing the discretion of the judiciary. I forget for now the number of bail decisions that are made each year but it does run in the tens of thousands. Often the decisions are quite straightforward around relatively trivial matters but nevertheless judges do get it right most of the time and I think we need to acknowledge that. To the extent that this House seeks to limit the discretion of the judiciary I think that is unfortunate and we ought not to be going that way. The Greens will continue to oppose this bill.MARK MITCHELL (National—Rodney):It is a pleasure to take a call on the Bail Amendment Bill. Firstly I would just like to acknowledge Ministers Collins Tolley and Borrows the three Ministers achieving great results in our criminal justice sector. I would also like to acknowledge the Law and Order Committee. I would like to acknowledge our chair Jacqui Dean who has done a very very good job chairing the committee in its hearing of the submissions on this bill. I would like to acknowledge the Hon Phil Goff Kris Faafoi David Clendon Richard Prosser from New Zealand First and of course my own colleagues Jami-Lee Ross Ian McKelvie and Lindsay Tisch—you Mr Assistant Speaker.This was actually quite a difficult bill to debate and for the committee to have in front of it because obviously it deals with victims of crime. We had a lot of brave submitters come along to the committee and make submissions that were deeply personal. Some of them had been victims of crime and others had been supporting families and friends who had been victims of serious crime. It was actually really important for us as a committee to hear submissions like those because we can sometimes live in a bit of a sterile world down here in Parliament in Wellington and to actually hear submissions like those allows us to get really focused and to understand how law changes can really affect victims and people in the community.I listened to what Mr Goff said. I understand that as part of the Opposition’s role it does a fair bit of work trying to analyse and work out how much of a real impact legislation is going to make. He talked often about how this bill operates and touches just around the margins. You know I just cannot buy that. Personally I think that if we can prevent one other Kiwi or New Zealander from becoming a victim of a serious crime then it is our duty and our role to make sure that we pass law that can stop that from happening.I do have to take a short call so I am going to get to the crux of the bill which I think is a very very important part of it and that is one of the main provisions which is around reversing the burden of proof. The bill will reverse the burden of proof in bail decisions for those charged with serious class A drug offences such as manufacturing or dealing in P as more than a third of defendants arrested for serious class A drug offences actually offend while they are still out on bail. It will also reverse the burden of proof in bail decisions for defendants charged with murder. Obviously murder is the most serious offence in New Zealand law currently but it is currently subject to the same test for bail as other less serious offences. So this obviously was a no-brainer. This had to be corrected. We will make this change to reflect the seriousness of the charge of murder.The current list of specified offences has not been reviewed since the Bail Act was enacted. It does not reflect the risk posed by defendants charged with other seriousviolent and sexual offences who have a history of serious offending. These were very very important changes to make to actually put the onus of proof back on the defendant to ensure that they could show a judge or a court that they are not going to be a danger that they are not going to reoffend against the community.The bill also expands the list of violent and sexual offences that will result in a defendant being subject to the reverse burden of proof if they have a prior history of such offending. We have only to read our papers watch the television or turn on the radio to understand that sadly our communities are still at risk and exposed to these offenders who are habitual reoffenders. This bill with this reverse burden of proof is going to strengthen the laws around them being able to be granted bail. This is a very good bill and I am very happy to commend it to the House. Thank you.RICHARD PROSSER (NZ First):I am pleased to rise on behalf of New Zealand First to speak to the second reading of the Bail Amendment Bill. New Zealand First supports this bill. This bill has been examined by the Law and Order Committee under the fine chairpersonship of Jacqui Dean. I sit on the committee but at the time that this bill was first referred to it I was not a member so this is the first opportunity I have had to speak on this bill.In general terms New Zealand First finds itself most often in agreement with the National Government on matters of law and order. We find that we agree with it more closely than we do with the Labour Opposition on these matters and this bill is no exception to that. However we also find that we frequently feel that the measures taken by National that are intended to improve public safety and law and order do not go far enough. Again this bill is no exception.New Zealand First believes that some further changes could have been made within this bill in order to make it an even more robust tool that the courts could use to improve public safety and to protect innocent people from the actions of criminals. But our dissatisfaction with that aspect is not sufficient for us to not support the bill nor is it enough that we felt compelled to submit a minority report to the House as part of the bill’s report back from the select committee as Labour and the Greens have done.We are satisfied that this bill will improve the bail system and that it will contribute to the enhancement of public safety. We hope that in future a New Zealand First - influenced Government of either potential flavour will have the opportunity to revisit the subject of court bail yet again and when that times comes we look forward to tidying up some of the aspects that we feel to be insufficient at this time.New Zealand First supports the provision in this bill that will introduce a reverse burden of proof for offenders charged with serious violent offences and class A drug dealing. We support the provision that will remove the strong presumption in favour of bail for defendants aged 18 and 19. We are not particularly happy that the removal of the strong presumption in favour of bail will not extend to 17-year-old defendants as well.We do not agree that the international obligations referred to namely the United Nations Convention on the Rights of the Child should take precedence over the requirements and processes of lawmaking here in New Zealand. New Zealand First believes strongly that laws applied in New Zealand should be made in New Zealand with the realities of our society and the rights of our citizens being placed first and foremost. We do not believe that the United Nations should be making our laws or influencing our lawmaking processes.We are also not happy with the provisions that will empower the police to arrest only those young defendants who they believe have significantly or repeatedly breached the conditions of their bail. New Zealand First believes that as a matter of principle anybreach of bail should be regarded as significant and should be classed as grounds for arrest.We understand the objections raised against this position by the Labour Party and some submitters that a person on bail has not been convicted of a crime and should not therefore be penalised for any so-called minor breach of the bail conditions imposed prior to a court appearance. We understand that objection but we do not agree with it. We hold—I reiterate—that any breach of bail conditions constitutes an offence in its own right and the police should be empowered to arrest a person on that basis. Indeed as the committee’s report states we were told that some young people disregard their bail conditions because they are aware of the restrictions on their arrest—they play the system. We do not believe that a requirement for breaches of bail to be significant or repeated will be sufficient to deter them from doing that.We note that the changes to bail that this bill will bring about will have an impact on prison capacity. We accept that reality as we believe do the majority of New Zealanders. There will be more required of the prison system. There will be more beds required. There will be a greater cost. We accept that cost. We accept that it is going to cost more. But we believe in protecting New Zealanders and in keeping people safe and if it costs more to do that then it costs more.There is a cost in not locking people up as well which is often not taken into account when the cost of running prisons is being talked about. There is a social cost and there is a financial cost—the cost of dealing with offenders when they commit further crimes while on bail and the cost associated with helping and assisting their victims.Sometimes the cost of not locking someone up is unacceptable as we saw with the tragic case of Christie Marceau. The committee received the Christie’s Law petition at the same time as we were considering the bill and because the appeal in the case was still before the courts there were aspects of it that we were not able to take into account. There remain some deficiencies in the bill with regards to the concerns raised by Christie’s Law petitioners which will not be addressed by this new law. That is something that I am sure all members of the House find as unacceptable as do those fine people who campaigned on behalf of Christie Marceau and her family.I salute those brave people. I believe that this House owes all of them a debt and we must undertake to revisit the matter of bail yet again as soon as is practical in order to address the deficiencies that still remain and to put in place the learning that we took from considering the petition. I believe that the Government must sponsor such a change and I call on the Minister of Justice and the members opposite to give this possibility serious and urgent consideration.In closing I would like to highlight an issue that the Labour Party raised in its minority report and with which we in fact do agree. Labour says: “A critical issue that the Government must address is delays in the court system.” Indeed it must. New Zealand First agrees with Labour that the time taken from arrest to court appearance and from court appearance to trial and the length of too many trials is far too long. Justice delayed is justice denied I say to this House. Two weeks may be an acceptable time frame but 2 years is not.Delays in the court process system put great pressure on judges to grant bail rather than keep accused people in custody and this in turn results in more offences being committed by people who should be locked up and in innocent people being hurt raped robbed and in some cases murdered. This is not good enough and it is the Government’s responsibility to address this issue to resource the courts sufficiently and to look at matters of procedure that lead to unacceptably long delays. That said we believe this bill is a step in the right direction and we are happy to support its passageinto law while reiterating that the deficiencies in it still need to be addressed and should be addressed as soon as possible.IAN McKELVIE (National—Rangitīkei):Tēnā koe e te Rangatira. E te Whare e tū nei tēnā koutou tēnā koutou tēnā tātou katoa. This Bail Amendment Bill is another in a list of bills introduced to this House by this Government with a view to improving and reforming the law and order sector in New Zealand. There is an extensive list of those bills and many of them have been successful.The Law and Order Committee spent much time on this bill receiving a large number of submissions many of which related directly as has been said by a number of speakers already to the Christie’s Law campaign. The chairperson of this committee had a very difficult task in firstly sifting through those submissions and appropriately placing them and secondly dealing with what were some very testing submissions during the course of the select committee process. Some of these submissions described some very challenging and tragic issues so I congratulate the chairperson Jacqui Dean on her performance in handling this select committee. I would also congratulate the select committee on what was a very difficult task for its members. I found it quite testing at times.The select committee has reported back to Parliament a number of sound recommendations. A number of those have been dealt with already. I would like to deal with just a couple of them in the course of this short speech. One is related to defendants under the age of 20 and David Clendon referred to this in his speech. I would remind the House that these people are not amateur criminals. Many of them are hardened criminals and as we went through the submissions on this issue we came to the conclusion that a lot of these young people really need to be dealt with very firmly by the courts and we needed to give the courts the opportunity to do that. That is the first issue I wish to deal with.The second one relates to the amendment to the Children Young Persons and Their Families Act and it is the power to arrest a child or young person more than 14 years of age and less than 17 without a warrant where they have been released on bail and have repeatedly breached their conditions. Again this refers to the issue that David Clendon raised. These kids as you might call them are by no means amateurs and I think we needed to deal with that strongly too. The reverse burden of proof and a number of other issues have been dealt with very competently earlier in this discussion.I want to briefly touch on some issues that Phil Goff raised in the course of his speech related to numbers. He used a lot of numbers all of which are historical. I contend that changes this Government has made will transform those figures. You see our objectives of reducing crime and the effects of crime and the rehabilitation of prisoners and so on are having a great effect and they are working and the Bail Amendment Bill will add to that.Our judges carry a great deal of responsibility. They often carry the community’s safety with them as they make their decisions on bail. Our role is to give them the best possible tools to achieve that. This Government has a great record when dealing with law and order and I am pleased—in fact I am quite proud—to be part of a law and order section in this Government that I think is achieving great results. I have no problem in supporting this bill as it proceeds through the House. Thank you.Hon LIANNE DALZIEL (Labour—Christchurch East):I rise to speak on the Bail Amendment Bill. I wanted to start with a quote from some briefing papers to a former Minister of Justice. “It was stated that the problem of offending on bail could be addressed by remanding more people in custody than at present. There are however several major difficulties with this approach. The first is that it remains difficult to predict with any certainty who will offend while on bail and secondly it is difficult tosee how a greater use of custodial remand could be based in principle simply on the seriousness of the offence since it picks out one variable and ignores others which the research concludes are much more important in determining the rate of offending while on bail. For example only 2 percent of those charged with a violent offence committed a violent offence while on bail. Research indicates that a large proportion of those remanded in custody who are subsequently convicted do not receive sentences of imprisonment.” That report was to the then Minister of Justice the Hon Douglas Graham in 1991. I spoke on the Bail (Miscellaneous Provisions) Bill 22 years ago and we are still debating the same issue today.I think that it is possibly time for a consideration of bail laws on a basis where basically we get all parties together to actually consider what the evidence says and what would be effective in terms of identifying what the drivers of crime are. I attended a ministerial meeting on the drivers of crime when the Hon Simon Power was the Minister of Justice and very little has flowed from that and yet such a good beginning was promised at that meeting when we had people presenting evidence on what were those fundamental underlying drivers of crime. Yet we continue to deal with the ambulance at the bottom of the cliff instead of building a really strong fence at the top of the cliff. I would like us to think about bail in that sense.Mike Sabin: What was that? Crime at a 30-year low? What’s that all about then?Hon LIANNE DALZIEL: The member is just really defeating his own argument. The point that I am making—Mike Sabin: Well hold on—if there is less crime is that not an example of more activity at the top of the cliff?Hon LIANNE DALZIEL: Well why are we passing this legislation without the evidence to back it up? I heard members on the other side of the House basically saying that as long as we save one person’s life it does not matter how much we spend and that it does not matter how many people we lock up as long as one person’s life is saved. I think that Parliament owes this issue much more in-depth attention than those members are prepared to give it because they seem to be debating around the emotionalism which is always the case when one is presented with a petition as the Law and Order Committee was in this case.I sat on the Justice and Law Reform Committee as it was back in 1991 when it considered the bail legislation back then. We are always hearing from people who present a very compelling case based on the tragedy that has befallen them and we are right to listen to their concerns. But we are not responsible unless we actually address them by doing something that is effective and actually makes a difference so that those lives that are lost are not lost in meaningless political debate that does not actually advance the cause. That is simply the point that I am making.That being said in 1991 we voted against the Bail (Miscellaneous Provisions) Bill; today we are voting for with reservations the Bail Amendment Bill. I hope that the next Parliament does decide to make more progress in this area. I think that would do more to honour those who see themselves as families of the victims of crime than political rhetoric.MIKE SABIN (National—Northland):I take exception to what the member resuming her seat Lianne Dalziel has just said about more activity at the bottom of the cliff and not at the top because if there is one Government that has actually done something about the drivers of crime it is this Government. Yet the Labour Government sat for 3 years in a position to be able do something about it—Hon Member: 9 years.MIKE SABIN: —sorry 9 years. So that is three sets of 3 years. It sat for 9 years and did nothing. It did absolutely nothing. Labour is a very effective Opposition partybecause Labour members like to sit on the Opposition benches and criticise the fact that we are actually doing something—the very something that they never did themselves. That is a constant irony that we see and I think that that is something that New Zealanders have completely woken up to. They actually realise that the disingenuous words are never followed by any real actions from that party.This Government has got on and made the changes that are required at the top of the cliff but is also doing things at the bottom of the cliff. The reality is that laws are made for law-abiding citizens and there are some citizens in this country who feel that those laws do not apply to them. The criminal justice system and the corrections facilities must deal with those people.There are some very very important changes being made in this Bail Amendment Bill in its second reading. As a former police officer and certainly as a detective dealing with some of the more serious crimes—reversing the onus of proof or the burden of proof back to the offender is a very very positive move because there are so many who will reoffend knowing full well that the likelihood of consequences is insignificant and diminished.There are many who are suffering under the burden of drugs likemethamphetamine and the idea of remediating their criminal activities will simply not enter their heads. They are driven by other forces. The ability for the criminal justice system to be able to put the onus back on that offender back on that defence team to say “Well they must prove that this individual will not reoffend.” is a very positive move.We have also seen the idea that if youth aged 17 to 19 years who have been in prison—and make no mistake about it people have to do something very significant at that age to be in prison—come out of prison and they reoffend then they should be treated as adults. They should be treated as adults because clearly they are in a very troubled state and in a position where they simply do not get it.They must not be in a position where they can single out—Jacinda Ardern: They don’t get it so just moving the line helps!MIKE SABIN:I am not going to listen to what that member says because if we are talking about disingenuous chance that member knows how to sing them long and loud.Jacinda Ardern: Tell me what you mean.MIKE SABIN:There are some very good—Hon Member: Motor mouth with no evidence.MIKE SABIN: Bring it on. There is some very good—come on Mr Faafoi you are supposed to speak on this sort of stuff—work being done here with youth.The changes to the granting of bail as of right are also very positive because so often as a policeman I saw people bailed because the law said that they had to be bailed. The rights should remain with the victims and that is what this bill is about. It is about putting the rights back with the victims.The ASSISTANT SPEAKER (Lindsay Tisch): I understand the next call is a split-call.KRIS FAAFOI (Labour—Mana):I am glad that Mike Sabin has had the opportunity to have his daily rant. There are some things that I have agreed with him on and there are some things that I have disagreed with him on. I will get to the stuff that I agreed with him on soon; it will be a very short part of my speech. What I did disagree with him on is that that side of the House has got some kind of longstanding record on law and order. It relies on it a lot but it is actually quite shallow. He says that on this side of the House any moves that we have taken in this area have been—I think he said we were sitting on our hands. But as Mr Goff pointed out in his speech the changes that the last Labour Government made in the areas of sentencing parole and bail aremuch more fundamental than the changes that are taking place in this bill the Bail Amendment Bill so I fundamentally disagree with Mr Sabin on that issue.I just want to begin by acknowledging the other members of the Law and Order Committee. I know we have had our challenges as of late but I do see Mr Mitchell; Mr McKelvie; you Mr Assistant Speaker Tisch; David Clendon; and also Richard Prosser. The process of listening to the many submissions on the Bail Amendment Bill I think as Mr McKelvie said was challenging. We had a lot of submitters who had very emotional stories to tell and I think that all those people who did come through with some personal stories are very very brave. I did want to point out two people—the first one being Tracey Marceau the mother of Christie Marceau and also someone who at the session we had in Auckland stood out for me and that was Charlie Borrell the father of Augustine Borrell a young man who was killed by someone who was out on parole.As has been said the Labour Party will be supporting the Bail Amendment Bill. One area that I do agree with Mr Sabin on is that we do support the reverse onus of proof operating in cases such as those with I think it was class A drugs and serious offences. We support—[Interruption ]KRIS FAAFOI: Excuse me?Hon Tau Henare: You heard.KRIS FAAFOI: I prefer not to listen. We do support that reverse onus of proof because that will put more of an onus on the judges to look more carefully especially at the high-risk cases when using their discretion about applying for or whether or not to give bail. I guess that in the case of Christie Marceau—and that is certainly one case we heard a lot about during the submission stage—that would have made a difference.Mr Sabin also talked about the discretion of police to arrest youths without an arrest warrant. We also do support that with a proviso and this is something that Youth Court judges said needs to clearly exclude the trivial while providing the police with the ability to be effective when faced with serious and significant breaches of bail with young people. As Mr Prosser said in his speech as well we think an issue that the Government does need to address is the serious delays in the court system which are creating long periods of time for people waiting for their cases to be heard and which are increasing the likelihood of offending while out on bail.Another thing—a practical thing—that the select committee heard was around a risk assessment tool that may be able to be provided for the judiciary. I understand that the Department of Corrections does have one called ROCROI and there was some talk about being able to see whether we could implement a similar risk assessment tool for the judiciary to use. Hopefully that is something that is followed up by the Government when it starts implementing some of the changes in the Bail Amendment Bill because we think that that is one practical way that could help.Just to finish up this is a bill that we hope will make a difference to a lot of people who we do not want to have the same experience as the people who came to us and submitted to the select committee.JAN LOGIE (Green):Tēnā koutou tēnā tātou e huihui mai nei ki roto i te Whare. I would like to add to my colleague David Clendon’s voice in offering the Green opposition to this Bail Amendment Bill recognising that that voice is in a minority in this House.There are some key reasons that we oppose this bill. One is that it widens the range of offences that call for a reverse burden of proof despite the challenge that this poses to that basic principle of law that a person is innocent until proven guilty. We also oppose it because it significantly reduces judicial discretion when hearing bail applications despite the exercise of discretion also being a very basic principle injudicial practice. Thirdly it compromises the presumption in favour of bail for those aged 17 to 19 where the accused person has already served a term of imprisonment. That is despite there already being a provision within the Crimes Act that allows for the detention of people in this age group which really means that no extension of power to detain is necessary. So it signals to us that this is about more of a dog whistle to those who have that misunderstanding of what works in this system and the sense of needing to get tough on crime and the misunderstanding that that kind of approach will actually make a difference in our community when we know it will not.I would like to also note the Human Rights Commission submission on this bill when it looked at whether there was a basis for going against the New Zealand Bill of Rights Act. It noticed: “Statistics demonstrate that most people who commit murder do so only once and the figures appended to the [regulatory impact statement] itself indicate that homicide and related offences amounted to only 0.1% of offences committed on bail from 2004-2008. The case for change therefore effectively relies on a reverse onus preventing less than one instance of a serious violent offence a year.” Therefore that is hardly the basis for undermining the New Zealand Bill of Rights Act for many many people.I would also like to point out and reinforce what my colleague reminded us: that in cases where people are remanded on bail 60 percent are found not guilty and that in terms of remand people are now waiting between an average of 1 year and 18 months for a hearing. So I just really want to ask people to think about what those two things together mean.I would like to now speak more specifically around the provisions in this bill and what they mean for young people. As I have highlighted we believe that the provisions are more of a dog whistle than anything substantive to address reducing crime. I would like to refer this House back to a piece of meta-analysis research that was done by the Ministry of Youth Affairs in 2000 on the consideration of youth crime. It was titledTough is not Enough—Getting Smart about Youth Crime . It noted that effective interactions with young people will touch on the four cornerstones of a young person’s life which are family school and work peer group and neighbourhood and be fair and respectful in terms of treatment by the youth justice system. It noted that those kinds of approaches will make a positive difference. But sadly arrest has little positive impact and particular types of sentences seem to have little impact on offending except for the situation of probation or restitution and fines. Things that really really struggle to work are residential interventions and I think we can consider prison the most obvious example of a residential intervention.Getting tough on crime offences almost always fails and the primary reason for that is that a lot of the young people who are most at risk of being serious offenders are young people who have come from situations where physicality and physical responses and tough responses to anything were the norm. These young people have been inured to that type of approach. What will make a difference in their lives are strength-based approaches. Sadly this bill is another example of a dog whistle to conservative interests.JAMI-LEE ROSS (National—Botany):Thank you Mr Assistant Speaker. I appreciate the opportunity to speak on this bill the Bail Amendment Bill. This Government’s focus in the law and order area has been all about ensuring that New Zealand is safer for New Zealanders. We are seeing great results. Crime is at a 30-year low. We have got more police officers on the street. Public confidence in law enforcement in New Zealand is on the increase and long may it be so. But this bill is all about ensuring that we have our bail laws correct. It is an important thing that we ensure that we both balance the rights of those who are rightfully innocent until proven guiltybut also ensure that New Zealand’s streets are safe for those who want to go about their daily lives in the normal manner. The changes in this bill will help to achieve that. The changes in this bill will ensure that New Zealanders are kept safer.Firstly we have got a reverse burden of proof which will be beefed up around murder and I think that anyone out there in New Zealand who looks at the bail situation for accused murderers would appreciate the fact that for a first-time offence an individual is subject to a reverse burden of proof. They will also appreciate the additional offences that will be included in the list for the reverse burden of proof for people who are accused of a crime and have previously had some time inside at Her Majesty’s pleasure. I am also particularly pleased that in the Law and Order Committee we had quite a long discussion about the situation for 18 and 19-year-olds and now they will be subject to the adult test for bail at the age of 18 and 19 rather than the youth test. I think that most New Zealanders would accept that the age at which you become an adult is 18 and therefore the age at which you should be subject to the adult test for bail should be at 18 not at 20.I am pleased though to follow the Green Party member Jan Logie because like a number of members on this side of the House we are actually quite offended by some of the comments the Greens have to say. I want to read out for the record what the Green Party said in its minority report. It said: “Many of the provisions contained in the bill appear to be a purely political response to expressions of public concern about crime …”. So for those out there who are listening at home the Green Party thinks that ensuring public safety is a prime consideration when it comes to bail for murder is purely a political response. It also said: “Unfortunately much of that concern is based on misinformation aided by a vocal minority calling for excessively punitive measures”.I do not know whether the Green Party members were actually listening during our hearings but we had family members who had suffered significant losses at the hands of criminals. We had in front of us mothers and fathers whose children had been killed by offenders who had committed heinous crimes against their children. I would not call them a vocal minority. I would call them New Zealanders who are hurting. I would call them New Zealanders who want to ensure that the ratbags and rascals who commit crimes against their family members are given the proper test for bail. I would call them New Zealanders who want to ensure that this country is a safe place to raise a family a safe place to live in a place where we are not soft on criminals and not a place where we have politicians who care more about reducing prison numbers than ensuring that our streets are safe. This bill is an important part of ensuring New Zealand is safer for New Zealanders and it should be passed by this House.The question was put that the amendments recommended by the Law and Order Committee by majority be agreed to.A party votewas called for on the questionThat the question be agreed to.Ayes101New Zealand National 59; New Zealand Labour 33; New Zealand First 7; ACT New Zealand 1; Independent: Dunne.Noes19Green Party 14; Māori Party 3; Mana 1; Independent: Horan.Question agreed to.Bill read a second time.Family Court Proceedings Reform BillSecond ReadingHon JUDITH COLLINS (Minister of Justice):I moveThat the Family Court Proceedings Reform Bill be now read a second time . The bill is an omnibus bill that amends nine Acts. The Acts to be amended include the Care of Children Act 2004 the Domestic Violence Act 1995 the Family Courts Act 1980 and the Legal Services Act 2011. The bill will implement the Government’s decisions that are based on the findings of a Ministry of Justice review of the family justice system in 2011. The reforms will ensure a modern accessible and sustainable family justice system—a system that supports the children and vulnerable people who most need the Family Court’s protection. The reforms are the first significant changes to the Family Court since it was introduced more than 30 years ago. The slow pace of resolving Family Court applications is creating additional pressures on children and families. Currently Care of Children Act applications are taking on average 238 days to resolve; domestic violence cases are taking on average 117 days to resolve; and relationship property applications are taking well over a year on average.The bill emphasises the needs of children and vulnerable people in order to ensure ongoing support and protection for them. It clarifies the provisions relating to care of children cases involving allegations of violence and improves the Family Court’s response to domestic violence. The bill encourages parents to resolve matters themselves. Families will be supported to reach agreements and resolve disputes outside of court. The successful and free Parenting through Separation course will be expanded and a new out-of-court family dispute resolution or FDR service will be introduced.The bill focuses the Family Court on resolving parenting disputes that require a judicial decision. It targets the use of professionals including lawyers to help resolve the more serious cases. To help people to independently navigate the court for more straightforward matters we will introduce improved information services a simplified three-track court system and easy-to-use forms. The Government believes that parties should contribute to the cost of a lawyer used in Family Court proceedings unless this causes serious hardship. This view is reflected in the bill which also allows regulations to cap the proportion of cost to be paid by parties.The Justice and Electoral Committee has considered the bill. I thank the committee and officials and commend them for their efforts. There was significant public input into the bill. There were 386 written submissions and the committee heard 217 oral submissions. I have listened very carefully during the committee process to submitters’ concerns. The modifications to the family justice reforms support the Government’s key priorities—a court that protects vulnerable people provides fast and efficient resolution of private disputes and puts the needs of children first. I am very comfortable with these changes and I have received positive feedback from many in the family justice community.The changes to the family justice reforms are to provide up to 4 hours of legal support prior to court entry for parents who meet the legal aid threshold to provide up to 3 hours of preparatory counselling to help eligible parents to make the most of family dispute resolution to enable a judge to refer parties back to family dispute resolution or Parenting through Separation courses if it is likely to help resolve the case to enable lawyers to participate earlier in the court process at the judge’s discretion if they believe it would increase the chances of a successful resolution and to enable provisions of the Act to be brought into force by Order in Council as opposed to a specific date to provide greater flexibility in implementing the reforms. Cabinet agreed in April to thesechanges most of which are now incorporated into the bill as reported back to the House. Additional legal support and preparatory counselling will be provided operationally.The bill as reported back provides Family Court judges with more options to help resolve disputes. Judges will be able to refer parties back to family dispute resolution or Parenting through Separation courses. Judges will be able to allow lawyers to participate earlier in the process where they believe that it is going to help the chances of success. As a result of the changes to policy parents may be provided with some initial legal advice prior to court entry. They may also be provided with some preparatory counselling to help them make the most of family dispute resolution. Currently pre-court taxpayer-funded counselling is available to anyone on request for up to 3 hours. Under the reforms the focus will shift from dealing with private relationship issues to resolving parenting issues and reducing conflict for the benefit of children. Family dispute resolution will be free for the estimated 60 percent of participants below the income threshold for civil legal aid. For those over the threshold the cost of family dispute resolution is likely to be less expensive than retaining a lawyer and proceeding to a defended court hearing.The bill recognises that the Family Court should be one part of the wider system that helps families resolve issues. The court is often not the best means though for helping families settle disputes. The reforms in the bill are designed to support people to more quickly resolve disputes out of court where appropriate. They will ensure that the court focuses on the most vulnerable and on the most serious matters. They will also bring much-needed clarity to court processes and rules. Users will have more certainty and it will be easier for them to understand and navigate the court system.It is always good I think for the House to remember when children are involved that their parents once at one stage loved each other so much that they decided to have children. I think that is something that sometimes gets lost in the Family Court system. As a lawyer with over 20 years’ experience I have seen it happen time and time again that people’s best interests have not been put first but actually those of professionals have been. I believe that this bill will help reduce that situation. As a result of the bill the Family Court will better meet the needs of families today by reforming a system that was introduced into a very different world more than 30 years ago. I commend this bill to the House.ANDREW LITTLE (Labour):I rise to talk on the Family Court Proceedings Reform Bill and to confirm that the Labour Party will oppose this bill. Far from providing a better process for parents separating and for protecting vulnerable parties—both adults and children—it will do the reverse. The Minister of Justice made a play for the emotions by saying that this bill deals with the situation where two adults who once loved each other so much that they had children now find themselves moving apart. Well actually it is exactly that fact and that situation that explains the intensity of emotion around separation for separating adults and in particular separating parents. That is where the practicality of this legislation I think is going to be put to the greatest test.The origins of this bill were honourable in intention. There were delays in getting some cases dealt with and disposed of; there is no question about that. There were participants who were playing and continue today to play the game or to play the court system off against each other to express their anger or whatever else it is—the sociopathological behaviour that they might have towards each other. It is correct that court time is being used for arguably trivial matters although of course in matters of human affairs and the human heart one is very reluctant to accuse anybody of regarding the matters that are important to them as trivial. I think there is some substance to the allegation that perhaps the Family Court which was conceived with the intention ofcreating an environment of conciliation has moved away from that in many respects. So all those allegations and those complaints about the Family Court were known and are known.In response to that the Minister of Justice of the day Simon Power convened a conference of stakeholders at Parliament and that thrashed out the issues. That led to the establishment of an expert reference group. That led to other consultation and the end product was this bill which has been modified only slightly as a result of the Justice and Electoral Committee process. The original bill included measures that were not however reflective of that consultative process. The select committee was put in the somewhat embarrassing position of having the expert reference group come as a group to make a submission to distance itself from the bill as it was originally drafted. That is not a particularly pretty picture for a select committee to have to confront. At the heart of the reforms is what is called the family dispute resolution process. A mediation approach to family disputes is not unknown to or unusual for the Family Court even today. One of the changes made under the previous Labour Government was to promote and encourage greater mediation. One of the things that the previous head of the Family Court Peter Boshier did was to allow this process of lawyer-led mediation which meant that the judges did not have to get so heavily involved in it. That process has been remarkably successful. It is interesting that the select committee heard that between 75 percent and 85 percent of cases that are filed with the Family Court are resolved without the intervention of a judge. Nevertheless this Government has gone ahead with its family dispute resolution process. The family dispute resolution process is a pre-litigation process. If a party files a matter or makes an application to the Family Court it will then be mandatory to undergo the family dispute resolution process before the court will properly seize itself of the application unless there is an allegation of violence or abuse involved and then there will be a fast-track process that will place it before a judge. But in the absence of that and the vast majority of cases do not involve allegations of violence and abuse there will be this mandatory process.The parties—and they are parents let us face it—will be expected to participate in the family dispute resolution process without representation and support during the process. One of the concessions that the Minister made announced on Easter Saturday this year was that there would be some pre - family dispute resolution legal advice allowable particularly for those who do not have the means and are reliant on legal aid. Legal aid will be available to those who need advice prior to the resolution process as indeed there will be some counselling as well bearing in mind that the amount of counselling available to separating parents was reduced at the end of last year from six sessions now down to three. Those three sessions will continue under this regime for the purpose of preparing parties for family dispute resolution.In cases where the care of children is an issue the separating parents will be expected to represent the best interests of the child or children in that situation. There will be restrictions on the appointment of counsel for the child. That is one of the issues that concerns us the most not only because of our international obligations on the rights of children and their rights to be heard in judicial processes that concern them but because it is simply impractical for parents in the heat of and the intensity of separation to be able to properly represent the best interests of a child or children involved in that separation. It is just impractical for many parents. Indeed the evidence that the select committee heard from parents who had been through the process was the important role that counsel for the child played in assisting mediation between the separating parents which is something that counsel for the parents could not easily do. The role that counsel for the child played became a very pivotal role indeed—a mediating role and abrokering role—between the other parties. That was the evidence that the select committee heard.This bill will take that away. It will place on the shoulders of the facilitators who will be registered and go through the processes—in addition to trying to get the parents to talk to each other in the intensity of this very difficult emotional period—a focus on their view about the best interests of the child. And guess what we can predict it now. Separating parents will have a different view about what the best interests of the child are and there will be no mediating influence at all. I want to read what the United Nations Convention on the Rights of the Child says in this regard. Article 9 talks about ensuring that children shall not be separated from their parents against their will except when competent authorities subject to judicial review determine. That includes where “Such determination may be necessary in a particular case such as one involving abuse or neglect of the child by the parents or one where the parents are living separately and a decision must be made as to the child’s place of residence.” Article 9 goes on to say in paragraph 2: “In any proceedings pursuant to paragraph 1 of the present article all interested parties shall be given an opportunity to participate in the proceedings and make their views known.” This legislation runs directly counter to it because the children involved will not be represented in any discussion about where they should go.Article 12 goes on to provide that “State Parties shall assure to the child who is capable of forming his or her own views the right to express those views freely in all matters affecting the child the views of the child being given due weight in accordance with the age and maturity of the child.” Paragraph 2 of Article 12 goes on to say: “For this purpose the child shall in particular be provided the opportunity to be heard in any judicial and administrative proceedings affecting the child either directly or through a representative or an appropriate body”. This bill does not provide for that. This bill places us in direct contravention of that United Nations convention. That is one of the reasons we are opposing the bill.We are opposing it also because it is simply impractical. The expectation that parents who are going through the dreadful unfortunate and traumatic experience of separation particularly when they have been together for a long time have amassed assets together and have formed a family together will be able to with the assistance of a single facilitator and without the benefit of advice on the legal effect or impact of what they are doing happily form some agreement over a period of time is just frankly bananas. It is off the planet and it is out of this world. It is for that reason that we simply do not see that this bill is going to achieve the so-called efficiencies that the Minister thinks that it will.There is no question in my mind that this bill is driven by fiscal considerations. It is not driven by practical considerations about what is needed for the effective resolution and disposal of family disputes. For the avoidance of any doubt let me make it very clear that on the Labour side we believe that the State does have an interest in effective family dispute resolution. That is why we have a Family Court. That is why in 1980 the Government established a Family Court. Everything this bill does runs counter to that notion and that is why we are opposed to the bill.SCOTT SIMPSON (National—Coromandel):It is a pleasure to stand and rise in the second reading debate of the Family Court Proceedings Reform Bill in the name of the Minister of Justice the Hon Judith Collins. As chairman of the Justice and Electoral Committee I am more than a little disappointed to hear the comments from Andrew Little the previous speaker. I think that probably what we have heard from him today really goes to the core of the differences between how members on this side of the House see people’s individual private lives and their ability to solve their own issues versus members on that side of the House where they take the view that the State mustbe in control of every aspect of people’s lives. We would accept that the State does have a role but as a first priority people should be allowed to and encouraged to sort their affairs out for themselves in a way that is going to be far more productive to them than going to court. The evidence is overwhelming. The evidence is overwhelming that if couples can sort out their matrimonial relationship issues out of court then that proves to be a better result every time.This bill aims to ensure a modern and accessible family justice system. As the Minister said in her address it is the first major significant reform of our Family Court system in the more than 30 years since it was established. I would like to thank the Minister for her careful consideration of the submissions that were received by the committee. I would also like to thank the other committee members because I think that notwithstanding our political differences and our philosophical differences the committee did an exceptionally good job. There were 386 written submissions and we heard 217 oral submissions. That is a big piece of work for a select committee to do. I wanted to thank members for their patience and for their careful considerations of all the submissions. We heard evidence in Wellington here in Auckland and in Christchurch. The committee’s recommendations changed significantly the first draft of the bill and I think that indicates that in fact the select committee system can work very well when there is an opportunity to allow it to do so in a way that produces better legislation.The changes that have been incorporated into the bill for instance will provide up to 4 hours of legal support before entry into the courts for parents who meet the legal aid threshold. The bill will provide up to 3 hours of preparatory counselling for eligible parents so that they can make the most of the family dispute resolution process. A judge will be empowered to refer parties back to family dispute resolution or the Parenting through Separation course if it is likely to help resolution. These are all steps designed to bring about a good solution for the people and the children involved. Lawyers will be able to get involved earlier in the court process at the judge’s discretion if that would increase the chances of a successful resolution. Provisions of the bill will be able to be brought into force by an Order in Council as opposed to a set date and that is to enable a more flexible approach in terms of implementing the reforms that the bill contains.This bill has its genesis arising out of serious concerns about issues that users of the Family Court have made clear over such a long period of time. We heard some evidence from people some of it in secret and some of it in private and that evidence was harrowing. The sorts of concerns that people have the type of time frame that is taken and the amount of money involved are very very scary. So this bill really is based on trying to make the system better and to get better outcomes. There was a review and the review found that although the complicated court process can cause lengthy delays that was probably no surprise to the people who have had experience of being involved in the Family Court. People know that it is adversarial that it places stress on already stressed relationships and situations that it is negative for the children involved and that it is not focused enough on their needs.I commend this bill to the House. It is a significant advancement in the course of our Family Court system. The process will ensure better outcomes. I reject completely the suggestions from the Labour Party lead on this who said that in fact it will cause problems. This is a bill designed to create solutions rather than problems. Thank you.Hon LIANNE DALZIEL (Labour—Christchurch East):I believe that this legislation the Family Court Proceedings Reform Bill represents a very serious retrograde step in the history of the Family Court. I remember when the Family Court legislation was passed. I think it was back in 1980. I do not have the information in front of me but I was completing my law degree at the time. There was a lot of interestin the Family Court—[Interruption ] Yes I know. I was just a child. The point was that the Family Court course was changing because the law was changing and that was the point I wanted to make. It certainly was designed as we said in our minority report “… with its jurisdiction covering care of children domestic violence and property matters with a high degree of state assistance provided to the parties [signalling] an important policy principle: the state has an interest in effective and just resolution of family disputes.” That is what the law was based on.Apart from the money-saving driver that really is behind this bill the ideology that lies underneath it is that family disputes are private matters. Two adults whose marriage civil union or relationship is unravelling cannot expect to call on the State for any support in resolving the disputes that necessarily arise in such a case and potentially the conflict that arises. Of course we all know that conflict can be healthy. How one manages conflict is really the primary consideration. The Minister of Justice made it very clear in her comments that it was really up to private individuals to deal with their private disputes and that that was not an issue for the State.The chair of the Justice and Electoral Committee I will say has chaired the process extremely well but we do disagree on this matter. It is not a matter purely for private consideration and I do not think that the divide is as he stated it to be. He said that the Government has a view that a family dispute is private and the Government should stay out of it and therefore the opposite is that Labour believes that we have an interest in the private context. No we do not. It is the peaceful resolution of the dispute—it is the conflict resolution—that is very much in the public interest. That is the public good and that was what the counselling services that were made available—six sessions per couple for free funded entirely by the State—were for.I think that that public good could actually be framed by reference to the legislation from the Family Proceedings Act at the time which had the focus of everyone on reconciliation and conciliation. That really does put a line underneath what is the most fundamental aspect of the Family Court legislation as it was established more than 30 years ago. It was also very much focused on ensuring that the best interests of the parties were able to be served in dealing with what was a difficult situation. When we go to the regulatory impact statement we find why the Government wants to get rid of the six free counselling sessions. As my colleague Andrew Little has already said that was reduced to three sessions and it is down to one session I think in October. We discover in the regulatory impact statement why we are getting rid of the counselling sessions. It is not because we do not like people sorting out their own disputes; it is because it is costing $9.7 million—$9.7 million. That is the reason for getting rid of the counselling provisions. Nowhere in the regulatory impact statement can I find what the absence of free counselling sessions will cost in the medium term or the long term.Reduced relationship breakdowns—we have been told that there were a number of couples who reconciled as a result of the free counselling and that of course there are flow-on effects to children as a result of relationship breakdown and how that is managed. Agreed day-to-day care arrangements more understanding about the relationship more ability to cope less disputes between separating parents—the list goes on and on. I could go on to the intergenerational impact because we know that relationship breakdown has an ongoing effect with children. We know that domestic violence is intergenerational. All of these issues are matters that should be the subject of the regulatory impact statement but the regulatory impact statement is very short-sighted. It is interested only in how much cost is going into counselling at the moment. It does not seem that the Government is really interested in the long-term costs. It is really about individual Ministers who are interested in reducing their budgets in the hereand now and it does not really matter that a future Government will have to pay the price in another Minister’s budget down the track.The process for changing this law was excellent. It was the best process that you could possibly imagine. Members might have heard me commenting on a previous bill about how important it is to get people around the table to look at the evidence and to actually bring the experts to the table—Hon Ruth Dyson: Oh not that evidence again!Hon LIANNE DALZIEL: I know that an evidence-based approach is not popular with the Government but I do think that it has got something to offer us as a nation. What happened was that the Government released a discussion document and the Minister got together with the profession the academics the officials and the NGOs. Everyone who was anyone in the whole area came to the table or actually came to Parliament—to the Legislative Council Chamber—where they held an in-depth conference where they workshopped the issues where they traversed the issues where there was good healthy debate and understanding. Out of that there was an expert reference group established.So what could possibly go wrong? What could possibly go wrong when such a good process was established? Well I think the requirement to cut money out of the justice budget is what went wrong. An online survey was given more weight than the expert advice and that is unfortunate to say the least. What we ended up with was legislation that pretended that early legal advice does not make a difference to people’s behaviour. We had lawyers but not just lawyers; we also had some of their clients—previous litigants—who came to us and said that they understood that their rights were quite different until they had received advice from their lawyer. There were a lot of men who felt that the Family Court was biased against men against male litigants. There were a lot of women who assumed that they were automatically entitled to have day-to-day care of their child. There were a number of misconceptions that were remedied in that first consultation with the lawyer.Then second we heard what happened. These clients had the initial conversation with the lawyer and then the lawyer would refer them off for counselling—as I say reconciliation and conciliation. There were a number of lawyers who told us that they saw people for that initial advice they sent them off for counselling and they never saw 95 percent of them ever again. That is because the counselling service works. It might cost $9.7 million but it is incredibly effective. So why would we remove the one thing that is known to be effective and replace it with something—the family dispute resolution process—that we do not know the detail of? And actually we will make people pay for that and we will actually indicate that that could be as much as $900 for X number of sessions because we do not even know the number of sessions that we will pay for either. That is nuts. Why would you throw out what works and replace it with the unknown unless all you cared about was saving the money up front instead of thinking of the long-term consequences.The cases that came back had a range of problems that were highly complex. So basically the Government wants to see only those cases going to the court and everything else being dealt with in family dispute resolution before they can come near the court. I think the trouble with that is that it ignores the dynamics of a relationship in meltdown—completely ignores it—especially where one has already made the decision to move on and has maybe entered into another relationship. We heard that from submitter after submitter after submitter. It depends where you are at. Whether your husband comes home and says: “I’m leaving you for the person I’ve been having an affair with for the last 15 years.” or the other way round the woman comes home and says: “By the way I’m leaving you for the person I’ve been having an affair with.” thebottom line is that these are enormously emotional difficult issues for people to face up to. These people actually need support and power imbalances can be extremely well hidden when they do not know who is on their side. At least when they have a lawyer sitting with them they know that they have got somebody who is on their side whom they can tell everything to and we can get good results.I think this bill has a lot of problems within it and that is why the Labour Party will not be supporting it.METIRIA TUREI (Co-Leader—Green):Tēnā koe Mr Assistant Speaker. Tēnā koutou e te Whare. Let us just be really clear about who the people are who will be most affected by this Family Court Proceedings Reform Bill and its attack on the rights of New Zealanders to access genuine justice. Because that is what the Family Court has been designed to do: to provide for those most vulnerable New Zealanders particularly women and their children access to a system that can provide them with genuine justice and support particularly in circumstances where their lives and their well-being are threatened.First let us have a look at some of the numbers in this country. One in every three women in this country has suffered some form of psychological or physical abuse from their partners—one in every three. There are around 2.25 million women in this country so we are talking about 750000 women in this country who have suffered from some form of psychological or physical violence at the hands of their life partners. There are 14 women six men and 10 children killed by a family member every year in this country. They are women men and children who are living in unsafe environments in their own home who are killed by a member of their family because they could not escape.The police attend around 200 domestic violence incidents every single day. That is around one incident every 7 minutes in this country—200 a day; one every 7 minutes. That means that a women most likely or a child often as well is in a situation where their life and their well-being are being threatened by someone who most likely lives with them in their own home. The cost to the public purse of these statistics is somewhere around $8 billion a year. Those are the costs of the police. Those are the costs of failed housing because a person has to run—a mother particularly with her children—from an abusive partner. It is the costs of the hospitals dealing with the beatings and the bruises. It is the costs of loss of schooling for the children who are suffering in these circumstances.What institutions do we have that make it possible to help reduce these appalling numbers in this country? What options do women and children have when it comes to finding someone who will help not only with the practical issues of finding somewhere else to live securing an income and getting on with their lives but with making sure that the legal arrangements that they must provide in order for their kids to do well and be settled are available to them? What are those legal avenues open to them? It is the Family Court actually. The Family Court is the only legal avenue for these women and children—some 750000 arguably in this country—who need to know that they have a legal institution that they can go to that is accessible to them that provides justice for them and that provides services for them and their children so that when they are in really difficult circumstances where they fear for their safety and well-being they have some legal protection.So what does this Government do with the institution that is designed to protect these women and these children? What does Judith Collins so-called Minister of Justice do with this institution? She complicates it enormously from the process that is available currently she increases the cost significantly for the women who are trying to access justice and support and she cuts access to legal advice and support for exactly thosewomen. And what does she say? How does she justify this? She justifies this on cost-cutting grounds when she knows—she must know just as I do from the statistics—that it costs about $8 billion a year to deal with the consequences of this kind of family violence that occurs. She must know that the fewer the women who are able to access the Family Court to get justice and real legal protection when they need it the more the cost to the public will increase.But you know she would rather see that $8 billion being spent on fixing up the bruises and repairing the broken bones than on providing counselling sessions or providing a lawyer for the child or making sure that women are able to access free legal advice that they can then use to protect themselves and their kids in the Family Court. She would much rather see that cost being borne by the public overall than make sure that the Family Court is able to provide genuine justice and support to the women families and children who need it the most.This bill is an appalling piece of legislation. We have known that from the start. In fact when the Minister put out the proposals for this review the legal profession was horrified by what she was trying to do because of the cost that their clients would bear not just in money but in terms of the safety and well-being of the clients who desperately need legal support and justice to protect them from some of the worst violence and the worst circumstances.Let us have a look at some of the provisions. It is now going to cost families around $1000 in order to access the compulsory family dispute resolution service. The median-income family in this country has around $2000 in the bank. That is a couple with a couple of kids and they are doing OK right? They have got a couple of thousand dollars maximum in the bank on average. Yet this Government wants to take in effect half of those annual savings that these families have got in the bank in order to pay for family dispute resolution services that have been provided for free in the past and that are asked for and sought because these parents and these families are wanting to find a way to resolve their issues so that they do not continue to bear the costs of a failed relationship or a difficult circumstance.What does Judith Collins do? She makes them pay up. “Give us the cash.” she says. The bureaucratic costs will be imposed on these families. Report writing costs will be imposed on these families. The costs of the lawyer for the child will be imposed on these families. Where do children get access to justice when they do not get access to genuine legal support? Judith Collins has decided to take away legal advice for our most vulnerable citizens. She says that somehow this is a good thing and that it is going to provide better access to genuine justice for children. No it is not. We all know that the whole process of court can be a very complicated one and that it does often need real skill and understanding of how to navigate through any legal process. Yet that has been denied to the women and particularly to the children of this country because Judith Collins has such a mean approach to the real costs that families bear when there is a relationship breakdown.I have said before that the Green Party opposes this legislation and I agree with other colleagues who again have also stated their clear opposition to this legislation. This Government intends to take dollars take money—desperately needed money—from the most vulnerable families while in the process denying them the justice to which they are entitled. She will do it with a smile no doubt and try to sell it as being a good thing for our country and for our kids. At the end of the day the one in three women who we know have suffered some form of abuse by their partners and their children many thousands of their children whom these women are trying to protect from the worst circumstances of domestic violence are the ones who bear the cost of this legislation. It is a disgrace.ALFRED NGARO (National):E rau rangatira mā tēnā koutou. Ki aku nui ki āku rahi tēnā koutou katoa.[To the esteemed of a hundredfold greetings to you collectively. To all my superiors and numerous hello there. ]That speech by Metiria Turei was probably the worst grandstanding speech heard in this House for over 50 years or by me as a new member. What concerns me is that that member can walk out of the House and can make those assertions. Yet if she was really serious about doing something about it she would have subbed on to the Justice and Electoral Committee she would have heard over 270 oral submissions and she would have made a contribution that makes a difference. Instead we just heard a whole lot of gobbledegook. But what is of most concern is that she uses the statistics of everyday men women and children who are suffering under family violence and what the Minister of Justice has done in her wise leadership is look at a bill that will actually address these issues.In April 2011 Cabinet directed the Minister of Justice to undertake a review of the Family Court. This included the concerns raised by the public judges lawyers and counsellors. This was a wide consultation of all those key stakeholders and this is what they said. They found that the Family Court was adversarial at times placing additional stress on already strained relationships; it was negative for children and not focused enough on their needs; it was not focused enough on the most serious cases of domestic violence that were talked about; it spent too much time on simple private matters that are better resolved outside of court; and it was too complex and too difficult to resolve these disputes. The purpose then of the Family Court Proceedings Reform Bill is to ensure a modern and accessible for families justice system that is responsive to children and vulnerable people and is effective in that regard. We have heard about the growing costs over there rising up to 70 percent—from about $84 million to $142 million—and yet the number of applications for court proceedings has been lower.I want to just actually talk about some of the concerns that have been raised. I note that Mr Little talked about Christchurch where we heard some of the submissions. He regarded it as a bit of a shame that we heard from one of the members of the expert panel which was Mr Garry Collin. He spoke there. In fact—I want to give the fullness of that story—he talked about the good things in the bill and the intent of the bill. He applauded that. There was one aspect that he was concerned about which was new section 7A. So I just want to give the full picture. You are absolutely right Mr Little; there were concerns. But there were also some areas that the expert panel of judges of those in the judicial system and of counsellors as well who actually gave an overall picture around recommendations that have been followed through.Just very quickly Family Court lawyers said: “The new system is a complex maze of procedures with different entry points criteria and exemptions.” So here is the response that is coming through from this bill. The reforms will support people to resolve disputes out of court where appropriate. Improved information services simplified contracts and easy-to-use forms will be available to help people navigate the parts of the court system independently. The bill still removes the right of a party to choose to be legally represented in all Family Court processes which was also talked about. In court people can have a lawyer represent them in complex matters such as for a defended hearing or without-notice applications. Judges will be able to allow lawyers to participate early in the court process if it would increase the chances of successful resolution.The reform was talked about in regards to counsellors. I know about and have supported the work of the counsellors as was talked about by Mrs Dalziel and the importance of their role. So there is a concern at the reduction in the level ofcounselling. We heard from Relationships Aotearoa in its submission. It talked about the fact that counsellors were contracted for four sessions but they were averaging three sessions in all. So here is the response from this bill and from the select committee. Currently pre-court taxpayer-funded counselling is available to anyone on request for up to 3 hours. Under the reforms the current focus on private relationship issues will be replaced by a focus on resolving parenting issues and reducing conflict for the benefit of the children.I also want to commend the Minister the chairman of the select committee and members of the select committee because we went the extra mile. We actually even had a session on Parenting through Separation. We saw the importance of this role around information that was given so that the impact on children was clearly understood by parents in that situation.My final comments are this. We know that children are often at the heart of these matters. They are the ones who are most vulnerable. These reforms are designed in a way to improve the system for it to be accessible. Where possible where these disputes can be addressed outside of the court system they should be. That is simply what we are doing here. We are responding to the concerns and ensuring that there is a clear and direct process that is accessible. We hope and we know that it will truly make a difference to the lives of these children who often go through very difficult circumstances. I commend this bill to the House.DENIS O’ROURKE (NZ First):At the first reading of the Family Court Proceedings Reform Bill I thought that overall it was a good bill but I said then that the devil would be in the detail and in particular in the costs that it would impose for the out-of-court processes. I said that the bill would fail to attract cross-party support if those issues were not reviewed and that New Zealand First would then have to reconsider its support.We in New Zealand First have carefully examined the detail of the bill and we have listened to the very large number—over 200—of extremely well-argued submissions in various parts of the country. We initially supported the overall thrust of the bill which was claimed to be as follows. Firstly it would encourage faster and less expensive resolution for broken families who have issues concerning the custody and care of children by requiring parties to participate in a new family dispute resolution process instead of having to go to court for determination unless that was necessary especially in cases of family violence. Also lawyers were not to represent parties at family dispute resolution but were able to give initial advice if a party was on legal aid.The bill would focus the Family Court on matters genuinely needing a court decision where protection of vulnerable people and children were prioritised. It would encourage parties to take responsibility for their own arrangements concerning the care of their children where possible. The bill would also seek to reduce the exacerbation of family disputes by making it not so easy to get to court because legal proceedings often make relationships worse but of course the court would still be there as a backstop.The bill would also seek to be more responsive to the victims of family violence. We note that the bill expands the definition of “psychological abuse” increases the maximum sentence for this from 2 to 3 years and improves delivery of mandatory non-violence programmes. The intention overall was to make the Family Court more efficient and cost-effective by refocusing its resources. It was always clear that the major objectives were to save money and also of course to speed up court applications by reducing the court’s rapidly increasing workload.But New Zealand First’s support was always on the condition that firstly access to lawyers and to legal aid was preserved from the beginning of a dispute including the family dispute resolution process; and that secondly access would be provided topublicly funded counselling prior to family dispute resolution—and that means preservation of the full system of counselling not just 3 hours—and of course that the costs of the proposed family dispute resolution process would need to be reasonable that children’s rights to separate representation would need to be preserved and that the effect of the bill would have to be to reduce and not increase power imbalances that would result from a party having financial means whether privately or through legal aid that the other party did not have.Debate interrupted.Sitting suspended from 1 p.m. to 2 p.m.Questions to MinistersPrime Minister—Electricity Market and Skycity Convention Centre1.DAVID SHEARER (Leader of the Opposition)to thePrime Minister: Does he stand by all his statements and have confidence in the statements of all his Ministers?Rt Hon JOHN KEY (Prime Minister):Yes I stand by all my statements and although I have confidence in all my Ministers I do not have specific knowledge of all of their statements or the context in which they were given over the last 4½ years of this Government.David Shearer: Does he agree with his Minister of Finance and Minister of Energy and Resources who both said that New Zealanders are not paying too much for their electricity?Rt Hon JOHN KEY: Yes in the context in which they made those statements.David Shearer: Does he think that electricity prices are too high?Rt Hon JOHN KEY: I certainly thought they had gone up way too much under a Labour Government. I often hear Labour members privately talking of the shame of when electricity prices went up 72 percent under a Labour Government.Hon Trevor Mallard: I raise a point of order Mr Speaker. Although the question sought an opinion it was a straight non-political question asking the Prime Minister his view on current electricity prices. It did not ask for a historical explanation.Mr SPEAKER: No I do not think that is correct on this occasion. The question was: “Does he think that electricity prices are too high?”. It was not qualified as to whether it was current prices or whether it was past prices.David Shearer: Does he think that current electricity prices today are too high?Rt Hon JOHN KEY: They are slightly less than the current OECD average. Some of the cost increases that occurred in the last 4½ years have been in relation to transmission increases. What I do know is that an emissions trading scheme that Labour and the Greens would put on the average consumer would add $500 per household a year. I know that Stalin-type nationalisation of power companies would be a disgrace.David Shearer: I raise a point of order Mr Speaker. That was a pretty straight question that did not need a political comment at the end.Mr SPEAKER: That is true. It was answered earlier. It did not need the latter part. Would the member now continue with his supplementary question.David Shearer: Does he think that New Zealanders are paying a fair price for their electricity today?Rt Hon JOHN KEY: I think that they are paying a price that is cognisant and fair in relation to the environment we find ourselves in having to invest in infrastructure. As I say given that they have gone up half the amount they did under Labour what I mainlyfind is New Zealanders who are outraged at the way Labour ran the economy and who are disgusted with the economic management that this Government had to inherit.David Shearer: In light of his comment about Transpower and upgrades why has his Government insisted that Transpower pay $472 million in dividends over the last 2 years rather than invest them in upgrades to our system?Rt Hon JOHN KEY: I do not have all the details on their dividend flow. You can put that question down to the Minister for State Owned Enterprises. I do know that they have spent about $3 billion in terms of upgrades of the national grid. Where I find myself a bit confused is that the Labour Party went on that the mixed-ownership model was terrible—[Interruption ]Mr SPEAKER: Order! And the Prime Minister can resume his seat as well.David Shearer: What does the Prime Minister say to the thousands of Genesis customers who as a result of the decision to take the dividends rather than invest them in the national grid are now paying for the upgrade to that grid through higher power prices?Rt Hon JOHN KEY: I do not accept that assertion. I go back to the point that I was making which is that I have seen statements that actually the Government should be taking more dividends not fewer dividends. Those statements came from David Shearer.Metiria Turei: Does the Prime Minister stand by his statement “the Government has been very transparent about its dealings with SkyCity”?Mr SPEAKER: Order! Can I just clarify—the member just called to take a supplementary question and has now moved immediately as far as I can see to question No. 2.Metiria Turei: No Mr Speaker. Question No. 2 is to the Minister for Economic Development and asks him about that statement. Mine is a supplementary question to question 1.Mr SPEAKER: So it is a supplementary question. Can I hear the supplementary question again please.Metiria Turei: Does the Prime Minister stand by his statement “the Government has been very transparent about its dealings with SkyCity”?Rt Hon JOHN KEY: Yes but in the context I would have made it.Metiria Turei: Why has his Government refused to release advice on the social harms associated with this deal until after it is signed?Rt Hon JOHN KEY: I do not have those details but if you put the question down to the Minister I am sure he will answer that for you.Metiria Turei: Is the Prime Minister refusing to release information on the social harms from this deal because he knows that it will increase the opposition to the deal by Aucklanders after 61 percent have said that they oppose it and the Auckland Council voted against it?Rt Hon JOHN KEY: To the best of my knowledge my office is not refusing to release it but if you put the question down to the Minister I am sure he will answer that for you.Metiria Turei: Does the Prime Minister believe that the cost of the social harm of the deal is a relevant consideration for Parliament when deciding on whether to support gambling law changes that he has promised will be part of this dirty deal?Rt Hon JOHN KEY: I do not have the details of that with me so I cannot answer that question.Metiria Turei: I raise a point of order Mr Speaker. I asked the Prime Minister whether he believes that these issues were a relevant consideration not to provide specific information. He does have the ability to answer that question.Mr SPEAKER: Order! The member was very lucky to have the question left in order particularly with the qualification she added to the end of it. Does she have further supplementaries?Metiria Turei: Yes. Will the Prime Minister agree to allow a personal vote on any changes to relax gambling law in SkyCity’s favour so that MPs can vote with their consciences on this dirty deal?Rt Hon JOHN KEY: No that is not my intention.Metiria Turei: When the Prime Minister told this House that his Government was being “very transparent” about its dealings with SkyCity was he deliberately lying to us?Mr SPEAKER: Order! That question is out of order.Question No. 2 to MinisterMETIRIA TUREI (Co-Leader—Green):I raise a point of order Mr Speaker. I refer you to Speakers’ rulings 151/5 of Gray and Tapsell. My primary question was originally accepted and authenticated by the Clerk of the House and directed to the Prime Minister concerning his own statements. Only the Prime Minister can know whether or not he agrees with or stands by his own statement. This is not a question that could reasonably be answered by any other person and therefore should not have been transferred according to Speakers’ rulings.Hon TREVOR MALLARD (Labour—Hutt South):This is an area that we have had some experience in recently and I thought the point we had got to was that when questions are transferred like this they should at least be reworded to say: “Is it the Minister for Economic Development’s understanding that the Prime Minister stands by his statement?”. What that does is it at least goes to the real question and that is what is in the mind of the Prime Minister not his subsidiary Minister because that is the right of members to ask.METIRIA TUREI (Co-Leader—Green):I would also refer you to Speaker’s ruling 152/5 where although it is accepted that questions can be transferred to Ministers and that in those circumstances there may be some grammatical changes that need to be made to the question to make sure that it is relevant it is none the less an issue if a question is in effect out of order as a result of the transfer. So it is not sufficient to simply say a question can be reworded but that actually there is a serious issue if a question is out of order unless it is reworded. That suggests that it should not have been transferred in the first place.Hon GERRY BROWNLEE (Leader of the House):Two points on that last point from the member. I think what we are seeing more frequently are attempts by particularly the Green Party to rewrite the Standing Orders by virtue of Speakers’ rulings. There is a process for the rewriting of the Standing Orders and I would suggest that those members do participate more fully in that process. But on this occasion Speaker’s ruling 152/1 which does protect the Government’s right to transfer questions to the appropriate Minister where there is going to be the most information available does stand. Indeed the member has proved to the House that that is the right course of action in this case by insisting on asking this very question directly to the Prime Minister during the supplementary questions to question No. 1. The Prime Minister while answering as well as possible clearly said that there was other information that would be better answered by the Minister responsible for this particular aspect of Government involvement. Therefore the transfer is not some deception but a genuine understanding of what is required by the House when a question is asked and the expectation that the answer is better given by another Minister.Hon David Parker: Speaking to the—Mr SPEAKER: No I need no further assistance on this thank you. There are a number of Speakers’ rulings around this particular issue and I particularly want to refer Ms Turei to Speakers’ rulings 152/1 and 152/2. It is the Government’s right to transfer a question. There would be only very exceptional circumstances when the Speaker would rule that not appropriate and that would be if I in any way anticipated that the Government was avoiding answering a question. In my mind this question can very easily and justifiably be transferred and it has been. Subsequent to the transfer clearly the wording then required some alteration because it was a statement made by the Prime Minister and not by the Minister for Economic Development. There was further discussion between the Office of the Clerk and the member for that wording to then be approved by the member. So the question stands if the member wants to ask it. If the member does not want to ask it she does not have to and we will move immediately to question No. 3.Metiria Turei: Point of order Mr Speaker.Mr SPEAKER: Is it a fresh point of order?Metiria Turei: It is on a different issue.Mr SPEAKER: It is not in any way disputing the ruling given?Metiria Turei: No.Mr SPEAKER: I will hear a fresh point of order.METIRIA TUREI (Co-Leader—Green):I raise a point of order Mr Speaker. I refer to Speaker’s ruling 152/2 which you have referred to also but I refer to a particular matter that is referred to in that Speaker’s ruling where Speaker Wilson said: “Ideally such changes”—transfers—“should be rare arising only from real and significant conflicts of interest. Where they do occur it would be helpful if the Government were to ensure members are officially informed.” I would ask that you seek from Government members what the Prime Minister’s conflict of interest in answering this question is.Mr SPEAKER: Order! That is now disputing the decision I have given as to the right for this question to be transferred. I have got a mind to move immediately to question No. 3 but I will on this occasion show a little bit of goodwill to the member. I now invite her to ask her question.Metiria Turei: I raise a point of order Mr Speaker. A different issue—genuinely—Mr SPEAKER: No. [Interruption ] Order! I will give the member one more chance to move to question No. 2 otherwise we are immediately going to question No. 3. I will—Metiria Turei: Point of order—Mr SPEAKER: No the last point of order was meant to be a fresh one; it was again disputing my ruling. If the member wants to ask the question she should proceed to do so.Metiria Turei: Point of order—Mr SPEAKER: Question No. 3 Alfred Ngaro.METIRIA TUREI (Co-Leader—Green):I raise a point of order Mr Speaker. I would ask you for two clarifications. One is that where in the past members have stated that they are raising a point of order on a different issue those members have been taken at their word and I am concerned that you did not take me at mine—that is the first issue. The second is that I seek leave of the House which I am entitled to do for this question to be transferred back to the Prime Minister.Mr SPEAKER: No we have had this in the past. The question has already been transferred and that is the matter that has been raised. I have given the reason and I am not going to put up with the member jumping up to her feet and down raising points oforder when the point of order was clearly questioning a decision. I took the member at her word that it would not but she did do that.CHRIS HIPKINS (Senior Whip—Labour):I raise a point of order Mr Speaker. I think there are a couple of issues here one of which is that you are absolutely entitled to rule at any point that you have heard enough about a matter and insist that a member either raise a new matter or move on. You are absolutely entitled to do that Mr Speaker. But where a Minister has transferred a question a member is entitled to seek leave to transfer it back. So the situation that we have here is that Metiria Turei having had your clear ruling did not contest that and asked to seek leave to transfer it back. She is entitled to do that.Mr SPEAKER: The difficulty with the point the member is raising is that the member did contest my ruling with a subsequent point of order. She then attempted to raise I think a fourth point of order seeking leave to transfer it. For the cause of goodwill in this House I am prepared to let the member seek that leave. I think we can anticipate the result but she can so seek leave. I will then go back to question No. 2 on this occasion. But I warn members that if in the future they are going to continue to challenge rulings the likelihood of me moving forward reasonably rapidly to the next question will occur. The member can so seek leave.METIRIA TUREI (Co-Leader—Green):I seek leave of the House to have this question transferred back to the Prime Minister.Mr SPEAKER: Leave is sought for that course of action. Is there any objection? There is.Hon DAVID PARKER (Labour):I raise a point of order Mr Speaker. In your last ruling you said that you will move on and not hear applications for leave. I would ask you to reconsider that ruling because it is a different matter to ask for an interpretation from the Speaker as to whether something is in order or not—which is answered one way or the other—and then whatever that answer is to seek leave for another course. In the second case it is not your decision that is being asked for; it is the House’s decision.Mr SPEAKER: I accept that and that is why I did reconsider the matter. Question No. 2 Metiria Turei.Hon Members: Point of order.Mr SPEAKER: This is now getting to the very ridiculous stage.Hon GERRY BROWNLEE (Leader of the House):I raise a point of order Speaker. I do not want to prolong things quite obviously but we are in an interesting situation where you have got Speaker’s ruling 152/1 which says: “The Government is perfectly entitled to transfer questions from one Minister to another …”. You have upheld that the transfer was quite reasonable in the circumstances yet we have had something that I think may have crept in before but it appears quite new to me: a Government having made a decision about where a question should go members can then seek leave so the House can overrule a Government. That is not a good place for us to land in. Might I say also that I note that you have previously ruled that the member had lost her question No. 2 and we were moving on to question No. 3.Hon Ruth Dyson: Did not.Hon GERRY BROWNLEE: Well question No. 3 was called Ms Dyson—very very loudly called—Mr SPEAKER: Order! I thank the member. The member raises a very good point but at the end of the day a member does have a right to seek leave for anything in this House. The chances of it then happening I think because the Government has transferred the question are very very slim and I anticipated that and I stated that. Listen at this stage we have had a long session of points of order. I am going to go back on an earlier decision I made. I am going to give the member a chance to ask questionNo. 2 but I am not going to put up with that member rising to her feet and raising yet another point of order. I call question No. 2.Metiria Turei: Point of order Mr Speaker.Mr SPEAKER: On the basis that a member has a right to raise a point of order I will allow it but if it in any way relitigates any of the matters that have been discussed this afternoon then the member will lose that question.METIRIA TUREI (Co-Leader—Green):Under Speakers’ ruling 152/6 I withdraw question No. 2. Thank you.Retirement Savings—Trans-Tasman Portability3.ALFRED NGARO (National)to theMinister of Finance: What recent developments have further contributed to building the closer economic market between New Zealand and Australia?Hon BILL ENGLISH (Minister of Finance):New arrangements allowing New Zealanders to transfer their retirement savings between complying Australian superannuation schemes and KiwiSaver took effect from 1 July. This welcome development follows confirmation from the Australian Government in May that it had completed the legislation allowing this to happen. It is a direct result of the strong commitment between the New Zealand and Australian Governments to remove another obstacle to the free movement of labour between our two countries. Trans-Tasman portability of retirement savings will make it easier for people to take advantage of employment opportunities in both countries and take their retirement savings with them.Alfred Ngaro: How did the agreement to allow trans-Tasman portability of retirement savings come about and how significant will this be for New Zealanders saving on either side of the Tasman?Hon BILL ENGLISH: Negotiations were begun and significantly progressed under the previous Government by Dr Michael Cullen. I signed an agreement with the Australian Treasurer in July 2009. Legislation was passed in this Parliament in September 2010. This is significant for New Zealanders who are currently working or have previously worked in Australia. The Australian Taxation Office has estimated there are billions in lost accounts in the Australian superannuation system. We expect that some of that money belongs to New Zealanders who have worked in Australia at some stage and have returned home. These new rules will allow those New Zealanders to find their account and bring those funds back to New Zealand into the New Zealand KiwiSaver scheme.Alfred Ngaro: How will the new portability arrangements work for New Zealanders who want to bring their retirement savings home?Hon BILL ENGLISH: From 1 July New Zealanders are able to transfer funds in their Australian superannuation schemes into participating KiwiSaver schemes and vice versa. Retirement savings transferred from Australia will be exempt from any taxes. Amounts transferred from Australia will generally be subject to KiwiSaver rules. However KiwiSaver members will not be able to withdraw money transferred from Australia for buying their first home but they may use interest earned on those savings for that purpose.Alfred Ngaro: What are the rules setting out when retirement savings transferred from Australia to New Zealand and vice versa can be withdrawn?Hon BILL ENGLISH: Retirement savings transferred from Australia into New Zealand KiwiSaver schemes can be withdrawn when members reach the age of 60. KiwiSaver savings transferred to Australian schemes can be withdrawn when members reach the age of 65 which is in line with KiwiSaver rules. One effect of the new arrangements is that individuals will no longer be able to withdraw their savings as cash1 year after permanently migrating to Australia but they will be able to take with them any Government contributions such as the kick-start and member tax credits when they move KiwiSaver funds to Australia. And they will be able to access their first-home subsidy. It is worth noting that participation in the superannuation portability scheme will be voluntary for members deciding whether to leave their funds in New Zealand for instance or transfer them to Australia.Apprenticeships and Trades Training—Minister’s Statements4.GRANT ROBERTSON (Deputy Leader—Labour)to theMinister of Education: Does she stand by all her statements?Hon HEKIA PARATA (Minister of Education):Tēnā koe e te Mana Kaiwhakahaere. Yes I do in the full context in which I made them.Grant Robertson: Given her statement at the weekend that there is “a danger of a shortage of tradespeople in New Zealand” is it correct that Tertiary Education Commission figures show a 20 percent drop in the number of apprentices since National’s first Budget in 2009?Hon HEKIA PARATA: I do stand by my statement—[Interruption ]Mr SPEAKER: Order! The question has been asked. I at least want to hear the answer.Hon HEKIA PARATA: I stand by my statement as I said in the full context and that was that this Government is committed to providing multiple pathways including vocational pathways that increase options for all our young people.Grant Robertson: I raise a point of order Mr Speaker. I appreciate the fact that I introduced the question by saying “Given her statement …” but the question I actually asked was whether it is correct that the Tertiary Education Commission—Mr SPEAKER: Why does the member not just ask the question again.Grant Robertson: What a good idea. Given her statement that there is “a danger of a shortage of tradespeople in New Zealand” is it correct that Tertiary Education Commission figures show a 20 percent drop in the number of apprentices since National’s first Budget in 2009?Hon HEKIA PARATA: I am not responsible for the Tertiary Education Commission but I am happy to speak to my response which was about providing multiple pathways so that we could get more young people through. In my area what I know is that we have had an increase to 3700 young people participating in trades academies. We have had an increase to 8700 young people participating in Youth Guarantee pathways.Grant Robertson: I seek leave of the House to table figures from the Tertiary Education Commission industry training performance information that show that—Mr SPEAKER: Leave is sought to table that information. Is there any objection? There is objection.Grant Robertson: Given her statement “that there is too much of a focus on channelling students to university and academic pathways” can she confirm that her Government cut $55 million from industry training in 2010 and gave it directly to universities?Hon HEKIA PARATA: As I said again I am not responsible for the tertiary education system but I can talk about the statement that I made which was that we are increasing the options for young people to have choices both the academic pathway and also the five vocational pathways that we have established and that parents and young people are very excited about.Grant Robertson: I know it is unusual to table press releases but this is from some time ago and the Minister was unable to answer. I seek leave of the House to table the press release from Steven Joyce—Mr SPEAKER: No. I am not—[Interruption ] Order! That is available to any—[Interruption ] Has the member got further supplementary questions?Grant Robertson: Given her statement that there is too much of a focus on channelling students to university and academic pathways has she raised with the Minister for Tertiary Education Skills and Employment why $83 million has been taken out of the polytech sector over the last three Budgets seeing thousands of student places cut and programmes in areas like automotive engineering carpentry and other core trades cut?Hon HEKIA PARATA: Again I am not the Minister for Tertiary Education Skills and Employment and the member could put that question to him. But the context of my statement was that this Government is committed to getting every kid across the line and giving them a range of options including tertiary academic pathways and the five vocational pathways that we have also established. This Government has put our money where our mouth is: we have invested in fees-free places for all these young people.Grant Robertson: Is it not correct that nearly 5 years in after a 20 percent reduction in the number of apprentices and millions of dollars being cut from polytechnic funding for trades courses the fault for the lack of tradespeople lies firmly with that Government over there?Hon HEKIA PARATA: I am not the Minister for Tertiary Education Skills and Employment but my statement which the member was ostensibly interested in was about how we created more pathways for more young people to be successful because this Government is interested in giving every kid a chance.Business Research and Development—Funding5.Peseta SAM LOTU-IIGA (National—Maungakiekie)to theMinister of Science and Innovation: What investment is the Government making in business-related science innovation and research?Hon STEVEN JOYCE (Minister of Science and Innovation):Alongside our massive investment in the tertiary sector we are making significant investments in science and innovation because they are key drivers of economic growth and making New Zealand businesses more internationally competitive. That is why we have invested total funding for science innovation and research across Government agencies. We have increased it to $1.36 billion in the financial year just started which is up from $1.24 billion last year and an increase of 28 percent over the last 4 years. A very sizable proportion of this increase is in the area of business research and development. Increasing funding in this area will help our businesses grow deliver more and higher-paying jobs for New Zealanders and improve our living standards.Peseta Sam Lotu-Iiga: What support is available for businesses wanting to invest in research and development?Hon STEVEN JOYCE: Well over the course of this financial year which started last Monday the new Government agency Callaghan Innovation will allocate $141.5 million in research and development co-funding to innovative New Zealand businesses. This is easily the highest amount ever and is a 24 percent increase on the funding available just last year. This funding is being invested in a number of ways including nearly $91 million for research and development growth grants $46.6 million for research and development project grants which are targeted at new firms with smaller programmes and $4 million for research and development student grants to providesupport for undergraduate and postgraduate students to get work experience alongside research and development - active businesses.Rt Hon Winston Peters: Can I take it from the Minister’s long answer that his Cabinet and he himself in particular never talk to for example Sam Lotu-Iiga or the backbench and that is why he has to inform them in the House in this lengthy way?Mr SPEAKER: Order! That question is out of order.Rt Hon Winston Peters: I raise a point of order Mr Speaker. What on earth is out of order with that question?Mr SPEAKER: It was an unsatisfactory question. If the member wants to phrase it with something that has got a responsibility of the member I will entertain it.Rt Hon Winston Peters: I raise a point of order Mr Speaker.Mr SPEAKER: Is this a fresh point of order?Rt Hon Winston Peters: If the Speaker thinks that the Minister talking or not talking with the backbench is not a matter of his ministerial responsibility that would be a very new one. That is simply what I asked him. It is not out of order and I want an answer.Mr SPEAKER: The question was out of order. I have ruled it out of order. If the member wants to attempt it again to get it into order then we will have a go. [Interruption ] Order! I am giving the Rt Hon Winston Peters an opportunity.Rt Hon Winston Peters: Can the Minister advise us as to whether or not he thinks it is appropriate to come to the House to pass information on to backbench colleagues or does he have another means of communication hitherto unknown to us?Hon STEVEN JOYCE: Well I am not sure how it works in that member’s party but actually we do talk to backbenchers in this party—indeed we know their names. What I can say is these questions are for the benefit of the whole House and going on the member’s knowledge of our science and innovation investment I think he could do well to listen.Peseta Sam Lotu-Iiga: What support is the Government giving to the manufacturing sector through research and development funding?Hon STEVEN JOYCE: The manufacturing sector is a very important partner in the research and development co-funding. It is in fact the biggest recipient of the Government’s research and development co-funding programme. Countless internationalising New Zealand firms have received assistance over the last 4 years to develop new products and services to help them move up the value chain and export more effectively. These include firms such as Douglas Pharmaceuticals Buckley Systems Compac Sorting Equipment WilliamsWarn Fisher and Paykel Healthcare Tait Electronics Altitude Aerospace Interiors and a company known as HamiltonJet which has been in the news recently just to name a few random examples. The Government has established Callaghan Innovation as a high-tech headquarters for business research and development. We are investing hundreds of millions of dollars annually in business research and development across all export-focused sectors. This may have made a contribution to the BNZ-Business New Zealand Performance of Manufacturing Index which was released last month—Rt Hon Winston Peters: I raise a point of order Mr Speaker. It would have occurred to you—it occurred to everybody else in the House who was watching the Minister—after that very long answer that when he switched to page 2 it was well time for you to stop him.Mr SPEAKER: It was certainly a long answer and I think the Minister was coming to the end. I was watching him switch to page 2 and I was confident that he had very little left to add to the question.Hon STEVEN JOYCE: Hardly half a sentence Mr Speaker. The New Zealand manufacturing sector is now expanding at its fastest rate since 2004 and at one of the highest rates across the world.State-owned Energy Companies Sales—Share Price Stability Revenue and Purpose6.Hon DAVID PARKER (Labour)to theMinister of Finance: How much have investors lost on the value of their Mighty River Power shares compared with the price at float on May 10 and what effect will this have on the price the Government expects to receive if it proceeds with the partial float of Meridian?Hon BILL ENGLISH (Minister of Finance):The market price of the shares has declined about 10 percent but investors who have retained their shares of course have not lost anything. They still have their shares. They are in line for significant dividends. In addition New Zealand investors will receive bonus shares if they keep their shares for 2 years. Many investors of course disappointed the Labour Party by taking a view of these shares as a long-term investment proposition and so they will retain them in order to earn the dividends and the long-term capital growth. In terms of the second part of the question about the effect on the price of Meridian Energy I do not intend speculating on future floats. As the Labour Party should know financial and political markets move around and can go through flat patches a bit like opinion polls.Hon David Parker: Will he proceed with the partial float of Meridian Energy if the money forecast to be raised is significantly less than the $3.1 billion predicted by Treasury in 2011?Hon BILL ENGLISH: Treasury has not done any accurate predictions of the value of any particular float. We have always said that we would anticipate proceeds of $5 billion to $7 billion. It is a bit rich for the Labour Party to be criticising the impact on the value of Mighty River Power shares after it set out to reduce that value and—Mr SPEAKER: Order! I do not think that is necessary to that part of the question.Hon David Parker: How can moneys raised from asset sales through the Future Investment Fund be utilised to fund the Auckland City Rail Link in 2020 when the Future Investment Fund is due to expire in Budget 2016?Hon BILL ENGLISH: Of course what happens with the Future Investment Fund will depend on what view the Government takes as it lays out subsequent Budgets and we get the proceeds from the sales because the timetable for the sales is going to be flexible as well. But the general point is correct—we are selling 49 percent of these power companies. As a result of the Mighty River Power sale we have $1.7 billion in the bank which I have to say is much more use to the Government than 49 percent ownership of that company.Hon David Parker: Given that the Government has pledged the asset sales cash several times over is it true that its new economic plan is to photocopy State-owned enterprises sale proceeds to cover spending—National’s version of printing money?Hon BILL ENGLISH: No the handling of the proceeds of the asset sales is set out transparently in the Future Investment Fund as laid out in the Budget. Of course the Labour Party will have to be transparent with the public about its plans to borrow a lot more money from foreign bankers to pay for the assets that we are paying for from the proceeds of asset sales. I look forward to the transparency with which Labour sets out its extensive borrowing plans.Hon David Parker: Does he agree with the 2011 version of John Key that asset sales are necessary to avoid a credit downgrade or the late-2011 version of John Key that asset sales are necessary to fund Kiwibank or does he agree with Tony Ryall in 2012 that asset sales are necessary to pay down debt or does he agree with the 2012version of John Key that asset sales would be used to build new schools and hospitals or does he agree with Steven Joyce in 2012 that asset sales will fund KiwiRail or does he agree with Nathan Guy—Mr SPEAKER: Order!Hon David Parker: I raise a point of order Mr Speaker. This is considerably less than the length of answer that we had from Mr Joyce—Mr SPEAKER: Order! The question is now getting very very long. Would the member bring it to conclusion.Hon David Parker: Does he—I will not start again. Does he agree with Nathan Guy that it should be used for irrigation or with Gerry Brownlee that it should be used to rebuild Christchurch or with John Key that it should be used to fund the Auckland City Rail Link in 2020?Hon BILL ENGLISH: Yes because the asset sales give this Government the choice of paying for almost all of those things without borrowing from foreign bankers. What is even better is that our choices to invest in those things allow New Zealanders to invest in a large New Zealand company. I am pleased that the Labour Party finally understands all the reasons for the asset sales.National Certificate of Educational Achievement—2012 Results7.Dr CAM CALDER (National)to theMinister of Education: What reports has she received on the NCEA Level 2 results of last year’s school leavers?Hon HEKIA PARATA (Minister of Education):Tēnā koe Mr Speaker. I have received a report from the Ministry of Education indicating that overall in 2012 we have improved to 74.3 percent—which is nearly three-quarters—of all our senior students. That is an over 10 percent increase since 2009 which translates to more than 5000 more students leaving with National Certificate of Educational Achievement level 2 or higher than there were before we became the Government.Dr Cam Calder: According to the report which particular regions showed significant improvements in school-leaver results?Hon HEKIA PARATA: Although there has been improvement across all regions since 2009 our Government is committed to getting every young person across the line. This has seen for instance in Northland an increase of more than 12 percent over that time or more than 250 kids; in Gisborne an increase of more than 15 percent or another 113 kids; on the West Coast an increase of a whopping 29 percent or another 50 kids; and in Auckland an increase of nearly 9 percent or over 2100 more kids achieving level 2 than otherwise would have.Hon Trevor Mallard: What proportion of the change she has outlined to the House just now followed the reduction in standards after moderation?Hon HEKIA PARATA: I do not agree with the basis of that question. There has been no reduction in the quality of moderation but there has been in the instances of it because we are dealing with workload issues.Health and Safety Workplace—Forestry Industry8.DARIEN FENTON (Labour)to theMinister of Labour: Does he stand by all his statements on safety in the forestry industry?Hon SIMON BRIDGES (Minister of Labour):Yes.Darien Fenton: Does he stand by his statement to the Transport and Industrial Relations Committee on 6 June that “the message I got loudly and clearly from yes the business owners but also the workers on the ground is that in December we brought into play … this approved code of practice … that this is working it’s starting to work but it does need time to bed in.”?Hon SIMON BRIDGES: Yes.Darien Fenton: When he visited forestry workers on 2 May is it not true that the workers in fact raised a number of very serious health and safety concerns and that they confirm the opposite of his statement to the select committee—that the new regulations for forestry safety are not addressing the key risks in the industry?Hon SIMON BRIDGES: No not at all. I was very impressed with what the young Māori men I talked to said. It showed that they had very good knowledge of this approved code of practice they understood what it meant and it was delivering good safety benefits for them. What is true is that the member’s good friend and my dear friend Helen Kelly did lead the witnesses as it were and asked them very directly a number of very negative questions not about their situation but about what might be happening in other places. What was quite clear—Grant Robertson: And you decided to ignore that.Hon SIMON BRIDGES: No. What was quite clear was that this is bedding in and that we need to do more to get it out there and we are.Hon Trevor Mallard: Why do people keep on dying?Hon SIMON BRIDGES: Well they did under you too buddy.Mr SPEAKER: Order!Hon SIMON BRIDGES: What did you do? What did you do?Mr SPEAKER: Order! The member does not bring the Speaker into this debate.Darien Fenton: Did he listen when the workers told him that many workers were working in very dangerous conditions including working in the dark working long hours and without sufficient support; if so why is he refusing to hold an independent inquiry and continuing to assert that his code of practice is working when there have already been six forestry-related deaths this year?Hon SIMON BRIDGES: What is true is that throughout the 2000s too many people have died in this industry and this Government has done much more than the last Government did to prevent that. The fact of the matter is we have had many documents and many reports. We know what the problem is. Actually we know what the solutions are. We need to give this approved code of practice which came in in December 2012 time to bed in because what I am hearing and actually what Helen Kelly would have heard if she chose to listen was that it is working.Darien Fenton: I seek leave to table a letter from Helen Kelly to the chairperson of the Transport and Industrial Relations Committee copied to me disagreeing with the transcript—Mr SPEAKER: Right. Leave is sought to—[Interruption ] Order! Leave is sought. It has been used by the Minister in his answer in terms of the reference to Helen Kelly. Leave is sought to table it. Is there any objection? It can be so tabled.Document by leave laid on the Table of the House.Superannuation—Overseas Pensions and Deductions9.DENIS O’ROURKE (NZ First)to theMinister for Social Development: Does she consider the direct deduction policy of overseas pensions from New Zealand Superannuation under section 70 of the Social Security Act 1964 to be fair and consistent?Hon CRAIG FOSS (Minister of Commerce)on behalf of theMinister for Social Development: As the Minister answered to a question very similar to this 3 weeks ago yes.Denis O’Rourke: When an overseas pension is paid to a pensioner what justification is there for applying section 70 to the spouse in respect of their entitlement to New Zealand superannuation?Hon CRAIG FOSS: The spouse deduction is just one aspect of the direct deduction policy. The rationale for the direct deduction policy is that all New Zealanders receive the equivalent amount of New Zealand superannuation. This may be made up of the full amount of New Zealand superannuation or a combination of an overseas pension and a reduced amount of New Zealand superannuation. This applies to individuals and couples.Denis O’Rourke: Has the Minister received legal advice on the human rights implications of applying section 70 to the spouse of a pensioner who receives an overseas pension; if so does that advice raise the possibility of a claim under the Human Rights Act by the spouse?Hon CRAIG FOSS: I understand that the Minister has not received advice on that matter.Denis O’Rourke: How would the Minister respond to a human rights class action by New Zealand superannuitants affected by the direct deduction of overseas pensions?Hon CRAIG FOSS: I am sure the Minister would seek advice on such matters.Denis O’Rourke: Does she review the use of her chief executive’s discretion under section 70 in so far as it affects overseas occupational pensions under the direct deduction policy; if so when was the last such review?Hon CRAIG FOSS: I understand that the last comprehensive review of all of these matters was in 2007 under the Labour - New Zealand First Government out of which no substantive changes to any of these matters were made.Schools Partnership—Authorisation Board Chair and Potential Conflicts of Interest10.CHRIS HIPKINS (Labour—Rimutaka)to theMinister of Education: Has she read and understood each Cabinet paper she has signed off as Minister of Education?Hon HEKIA PARATA (Minister of Education):E te Mana Whakawā āe kā mōhio tūturu ahau ki ngā pepa katoa i haina e au i ahau i roto i tēnei tūranga Minita mō te Mātauranga.[Mr Speaker yes I certainly stand by all the documents that I signed in this position as Minister of Education. ]Chris Hipkins: Did she read and understand her 5 February Cabinet paper outlining her intention to appoint Catherine Isaac as the chair of the partnership schools authorisation board where she recommended that Catherine Isaac’s conflict of interest with the Partnership Schools/Kura Hourua Working Group be managed by her resigning with immediate effect from the working group formally disclosing any interests she had in any school that may be considering applying to be a partnership school and having no further contact with any potential applicants; if so why is Catherine Isaac still listed as a member of the Partnership Schools/Kura Hourua Working Group?Hon HEKIA PARATA: To the first part of the question yes I did know that that was what I had asked her to do.Chris Hipkins: Is Catherine Isaac still the chair of the Partnership Schools/Kura Hourua Working Group?Hon HEKIA PARATA: The working group has been disbanded.Chris Hipkins: Was Catherine Isaac still the chair of the Partnership Schools/Kura Hourua Working Group when it met in February and in March this year?Hon HEKIA PARATA: I do not have the detail of those dates. I think it is unreasonable to expect that I might because that was such a wide primary question but I am happy to come back with that detail.Chris Hipkins: Did she ensure that her recommendation to Cabinet on 5 February that Catherine Isaac resign from the working group with immediate effect was actually implemented?Hon HEKIA PARATA: Yes I did. I provided that instruction to the Ministry of Education which carried it out.Drinking-water Supplies—Contamination11.EUGENIE SAGE (Green)to theAssociate Minister of Health: Is the Minister concerned that in 2011/12 92000 New Zealanders relied on drinking water supplies with an excessive number of E. coli breaches which are a marker of faecal contamination and if not why not?Hon JO GOODHEW (Associate Minister of Health):Tēnā koe e te Mana Whakawā. Yes I am. However in the majority of cases where contamination was identified water suppliers took immediate remedial action. I am not satisfied that the response was quick enough in a small number of cases covering 0.4 percent of the survey population. But I have been assured that these suppliers were followed up with district health board assessors immediately. The good news is that the Institute of Environmental Science and Research Ltd has advised me that there were no outbreaks of disease reported as a result of these breaches.Eugenie Sage: Is the Minister concerned that the number of people reliant on water supplies with an excessive number of E. coli breaches increased by 20000 between 2009-10 and 2011-12?Hon JO GOODHEW: What the report does show is that although there were some breaches in fact we are achieving some quite remarkable results. I point to the most remarkable side of this; we are looking at chemical breaches bacterial breaches and protozoal breaches. The most important improvement is the 79.1 percent of protozoal standards improved to 79.8 percent. They are the most expensive to treat and the most difficult to treat. And it is also in protozoal prevention that we actually have to spend the most money which we do through our subsidies to the drinking-water schemes.Eugenie Sage: Does the Minister agree with the Ministry of Health that the most important way to manage drinking-water supply is to protect the source of the supply; if not why not?Hon JO GOODHEW: What I do understand is that each supplier that is covered in the drinking-water scheme will receive very good advice from the Ministry of Health about either having protection for their scheme—that might be chemical protection—or in fact that they will have a public health risk management plan. That will mean that they have to give effect to understanding where the water supply is coming from and that there will be enough testing so that they immediately detect if either chemical protozoal or bacterial breaches occur so that they can protect the population concerned.Eugenie Sage: Why has her Government cut funding for small communities to upgrade their drinking-water supplies by $16.3 million in Budget 2012 while allocating more than $80 million to subsidise irrigation when agricultural intensification is a major cause of water pollution?Hon JO GOODHEW: The first thing I would like to actually deal with is that this report this annual review of drinking-water quality does not find any causes of these particular breaches. So if the member feels that she read that in the report she is quite wrong. It is not there. Secondly I want to tell the member that in fact we changed theway that the subsidy scheme was actually delivered. What there is is still 3 years of $10 million per year of subsidies to deprivation index seven to 10. We have spent $66 million already actually providing 171 suppliers with fully upgraded water supplies. There are 72 projects under way. In fact this is targeting the areas of the country that most need the money—something this Government is far better at than the previous Government.Eugenie Sage: Why is the last round of funding for the drinking-water subsidy scheme in February 2015 when the ministerial advisory committee on drinking water compliance is concerned that 48 percent of medium-sized schemes do not comply with the New Zealand drinking-water standard for protozoa which of course include giardia and cryptosporidium and when that same committee is concerned with the low level of compliance by small and medium sized schemes; so why is the scheme ending in February 2015?Hon JO GOODHEW: What I am able to tell the member is that the applications that we are receiving from the water schemes all around the country are receiving the subsidies that they require. The $10 million has not been fully subscribed so therefore no schemes are missing out on the subsidies they are actually applying for. We have structured this so that the schemes come in on a rolling basis during a period of time when this Government has taken into account that territorial local authorities need to plan for the future in a reasonable way not in fact going holus-bolus and going broke in the process. This Government is very mindful of clean drinking-water for New Zealand’s population.Digital Literacy—Computers in Homes Funding and Other Initiatives12.COLIN KING (National—Kaikōura)to theAssociate Minister of Education: What recent announcements have been made to support digital literacy particularly in low-income communities?Hon NIKKI KAYE (Associate Minister of Education):Tēnā koe Mr Speaker. Yesterday Ministers Parata Goodhew and I announced that the Government will fund $1.6 million to Computers in Homes. This additional funding will mean that 1500 families across low-income communities are provided with a computer to take home IT support and subsidised internet connections for 12 months. Parents will also receive 20 hours of computer training at their children’s school. This is great news. I want to acknowledge the 2020 Communications Trust for its hard work and effort in running this highly successful programme. The 21st Century Learning Group which I have also recently established has a mandate to look at improving device access and more learning opportunities for New Zealand students.Colin King: What other initiatives is the Government supporting to improve digital literacy for New Zealanders?Hon NIKKI KAYE: Along with Computers in Homes this Government has a strong commitment to improving digital literacy for all New Zealanders. There is a $1.5 billion investment in fast connections to give 2500 schools across the country access; $136 million over the next 4 years to speed up the school network upgrade project by 2 years; and $9.8 million per year specifically for e-learning professional development. We are providing more than $21 million for laptops to teachers. Recently we announced the Computer Clubhouse programme now called the High Tech Youth Network and that will receive another $1.9 million. We are also investing in online resources such as the Enabling e-Learning community and a virtual learning network and I can confirm that there is more to come.Family Court Proceedings Reform BillSecond ReadingDebate resumed.DENIS O’ROURKE (NZ First):Before the lunch break I mentioned that New Zealand First had wished to support this bill and I gave some reasons why. I said that fundamentally we were not against the principle of family dispute resolution but I also said that there would be a number of conditions and I listed what they were. In the end despite a very large number of amendments having been made to the bill as introduced New Zealand First’s reservations and concerns have not been met and so New Zealand First will now vote against the bill.The bill targets the use of professionals especially lawyers for the parties and lawyers appointed to represent children. Under clause 5 legal aid will be available only to a limited degree prior to but not during any mandated dispute resolution process and secondly if a dispute goes before a judge. New Zealand First does not agree to penny-pinching of this kind which results in a lack of adequate legal representation and severely reduced legal aid entitlements.As a fundamental principle of justice parties with a reasonable need—not regulations—should decide whether they need a lawyer. Family dispute resolution would be free for those under the income threshold for civil legal aid estimated at about 60 percent of participants. So most parties are already legally aided out of necessity. But the availability of legal aid should not be the basis upon which parties decide whether they should have a lawyer or not for these family dispute matters.Although family dispute resolution is likely to be less expensive than hiring a lawyer and proceeding to a defended hearing in court these requirements are so tough that many people—many of the 40 percent not entitled to legal aid—will simply not get a lawyer when they really need one. There is also the very real problem of power imbalances being created as a result. These reductions in legal representation and legal aid are the main reasons for New Zealand First opposing the bill. These reductions are likely to be a false economy anyway because costs in other areas are likely to increase and several submitters described why this is likely.Fundamentally if the quality of the process is compromised the resolution of disputes may be illusory resulting in another dispute later. Another reason for opposition is that the bill prohibits the court from appointing a lawyer to represent the child unless it is “necessary”. Clause 5 of the bill as introduced would allow a lawyer to act for a party in a proceeding if the application was made without notice if it relates to international child abduction if the party is the Crown if a judge has directed the case proceed to a defended hearing or if the lawyer is lawyer for the child who is party to the proceedings.The concern though is that lawyers would no longer be involved in all of the cases where they are needed. The problem is that the bill requires the court to have concerns for the safety or well-being of the child and to consider that an appointment is necessary. It should be the other way around. The court should appoint a lawyer for the child unless it finds that it is unnecessary. That is what it is in the current law and that really is the way it should stay.The official advice is that parents are expected to represent the best interests of the child in the process but parents in too many cases are not really able to objectively look after their children’s interests as one would hope. In these cases a lawyer for the child is needed and the test of necessity is too tough. Children cannot always rely on their parents especially in the stressful atmosphere of a relationship breakdown. The interestsof children must be paramount which is the foundation of the Care of Children Act 2004.This bill fails children with its restriction of independent representation for them. New Zealand First also believes that the full Government funding of counselling services should be reinstated. The bill would repeal existing provisions for Family Court counselling under the Family Proceedings Act and the Care of Children Act except for up to 3 hours of counselling and it would replace them with a new scheme. The provision for only 3 hours’ counselling is not adequate. Not all families will break up if they get adequate counselling before the other process is used. In the past most matters were resolved by counselling and it should be reinstated. The court will be able to appoint a lawyer to assist the court in appropriate cases under this bill but the parties would have to pay for this—probably a one-third apportionment. That is also wrong and is opposed.Another issue of concern to me not addressed by the bill is the lack of enforceability of agreements in the family dispute resolution process. These agreements lack the status of a court order. They are likely to be recorded and may be signed but they depend on the commitment of the parties to carry them out. The risk of course is that they will simply be ignored.Although the bill started out with good intentions and although New Zealand First is not opposed to family dispute resolution in principle the overwhelming thrust of the bill is clearly just to save money and the effectiveness of our Family Court system will be compromised. The bill fails to ensure the availability of adequate publicly funded counselling when it is needed most. It fails to ensure that parties will have legal representation at all stages when they need it. For those reasons New Zealand First is obliged to vote against the bill.KATRINA SHANKS (National):It is my pleasure to take a call on the Family Court Proceedings Reform Bill this afternoon. The best outcome for all families who are going through tough times conflict and separation is to find their own solutions define their own resolutions to make them sustainable and enduring for their own families. We know that roughly 90 percent of New Zealanders manage to do that. Their families find their own resolutions and sustainable outcomes. About 10 percent of New Zealanders roughly have to use the Family Court system.For those 10 percent who use it—because they cannot find their own resolutions they need a bit of help—this is where the Government can come in and support these people. What the family dispute resolution does is give them another way to find that resolution. We are doing that by allowing them to stay out of the court system for as long as possible to give them access to parenting courses to allow them to have somebody work with them to see whether they can find some resolution and to resolve some of their conflict and then if they need to to go into the court system and use that court system. Of course there will always be a safety net for those who are vulnerable or at risk to be able to go straight into that court system and use it but this is to assist those people who do not need it straight away.We had about 64000 people in the 2011-12 year who were applicants to the Family Court and we know that 40 percent of those applications were made under the Care of Children Act. So about 26000 applications that went through the Family Court system involved children. We are here today to debate this bill about giving a solution to keep people—families who are in conflict—out of the court system. From all the submissions that we heard one thing that we did hear from those parents who came in to talk to us about their experience was that it is time-consuming—it takes a long time to get through it—and it is very expensive to get through the system. And actually they kept on going back and back and back into the court system. It was not good for the children it wasnot good for their relationships and actually in many instances the outcomes were not sustainable. This bill is to offer an alternative to that—to offer an alternative.Some of the main issues raised through the submission process were the ability to access legal aid; access to lawyers for the child; allowing a screening process for fast tracking those who are vulnerable; the ability to refer parents back to family dispute resolution from the court system so if you have gone through family dispute resolution and you get to the court system the courts can send you back again for more parenting courses or can send you back again to resolution; allowing relationship counselling to be part of the tools for the family dispute resolution; the importance of parenting courses—we heard that over and over again through our submitters how important those parenting courses were—and understanding what the needs of the children are when you are going through. It is not necessarily about the needs of the parents but about the needs of the children and about putting them first when they are making those decisions. The lawyers’ involvement in the family dispute resolution system was what we heard of a lot but then 46 percent of the submitters were lawyers so that was most probably reflective of that. And also we heard of the skills needed in the family dispute resolution system. Who do you need in that process? Do you need an arbitrator? Do you need a dispute resolution person? Every family may be slightly different with slightly different needs. We listened to all these concerns and we addressed them before the bill came back into the House.I think this is a good new system in place to allow families to stay out of the court system for as long as possible. I look forward to the debate in the future. Thank you.Hon PHIL GOFF (Labour—Mt Roskill):The Labour Party will be strenuously opposing this bill the Family Court Proceedings Reform Bill which far from achieving the objectives set out in the bill does exactly the contrary. It is damaging to equity it is damaging to the interests of children it is damaging to the ability of parents who have separated to reconcile their differences and to find a way through and it has nothing to do with improving the quality of the Family Court process in this country. It is inherently dishonest in what it says it sets out to do when it is absolutely clear and set out in black and white in the regulatory impact statement that this bill is all about cutting costs.In her comments the Minister of Justice said that this was the biggest change that has ever been made to the Family Court system since 1981. You know the experts who appeared before the Justice and Electoral Committee did not deny that comment but they added this—and this comes from five people four of whom have 30 years’ experience and professional expertise in the Family Court. They said this about the bill: “If this Bill proceeds as drafted the very fabric of the New Zealand family justice system will be destroyed.”Hon Bill English: Rubbish.Hon PHIL GOFF: Continuing the quote: “The Bill is based on flawed policy development without a statistical or research base justifying such fundamental and radical changes.”A member of the Government side said just then that that was rubbish. These people—these five practitioners—were not simply the most experienced and expert barristers before the court and psychological experts; they were so well regarded for their expertise that the then Minister Simon Power appointed them to the experts reference group. The National Party says that it is rubbish but this so-called rubbish is actually the advice of very experienced very professional people appointed by Simon Power to advise him on the bill. And they say that this bill is a disaster.You know when I picked up this bill I thought that this might be a piece of legislation that I could support. I looked at its objective which was “to ensure amodern accessible family justice system that is responsive to children and vulnerable people and is efficient and effective.” What do I find when I read the submissions and I read the detail of this bill? That that is a truly Orwellian quote because the bill does exactly—exactly—the opposite of what it purports to do.I want to actually again take some of the evidence that was received by the Justice and Electoral Committee and refer it to the House. You know Judith Collins said that this bill would make it easier to understand and navigate the court system. Her namesake Garry Collin Chair of the Law Society family law section says that this change will actually “create a more complex system than we currently have … The new system is a complex maze of procedures with different entry points criteria and exemptions.” He says that this will cost more rather than save money. And when he says that it will cost more he is talking not only about the financial cost but also about the basic costs to the most vulnerable people in this system who will lose their right to legal representation and will lose the ability to go to the dispute on an even footing with the opposing party who may be well funded who may be educated and who may be articulate.What we find is that the lawyers who have watched the way this system has evolved over decades say that this will be damaging to the interests of the child. For heaven’s sake the bill reduces the funding available for counsel for the child. So the child may be in a situation where nobody is representing his or her interests and the funding will be taken away from a person who has the professional expertise and the knowledge to actually ensure that the interests of the child are well looked after.The other thing that worries me most about this bill is when I read from that submission it says this about the bill: it is not based on empirical evidence. This is the biggest change in the Family Court’s history and it is not based on any empirical evidence. It says that in fact it is contrary to extensive existing evidence of best outcomes for families and children. Not only is it not based nor does it even pretend to be based on factual evidence but it runs contrary to the wide body of research that has been done on family law and what would be good for the interests of families and children.The submission says the bill will create a two-tiered family justice system: “The more vulnerable members of society will have limited access to services to assist them in the resolution of family disputes. For those who do have access to the services the services will be of lesser quality.” It goes on to say: “It is entirely foreseeable that inequalities arising from gender socio-economic status and ethnicity will become entrenched resulting in increased costs to the health education child protection and criminal justice budgets.”That evidence from people who ought to know from people who were appointed to advise the Minister of Justice shows that this bill is a disaster. But for any doubting members on the National benches all of whom have their heads down at the moment what that expert evidence showed was actually what was put into the regulatory impact statement by the Government’s own advisers. As well as saying that this is driven by the overall fiscal situation and the need to lower the costs of the current justice system—they were honest. At least the officials were honest about it; not so the Government members who have spoken on it. They also said that the bill was based on “limited” research which is exactly the point that the submitters to the Justice and Electoral Committee were making in their evidence. The regulatory impact statement said that “There is insufficient historical fiscal and statistical data …”. It said: “There was insufficient time for piloting proposed processes or for undertaking … ([a look] at court documents) to obtain further data ...”.All of the evidence on this bill points to the fact that it will be an absolute disaster. It is about cost cutting. It is not about equity it is not about fairness and it is not about getting a good outcome from the bill. It is about saving the Government money. The Government’s own advisers and the experts warn the Government that it will not save it money; it will cost it more money and worse still it will cost those families and particularly the vulnerable children of those families unnecessary misery because the situation will not be resolved as quickly or as fairly as it could be.It was not time that prevented the Government from going back to its expert advisory group. First of all the Government claimed that the bill was consistent with the expert advisory group. The group in an outraged statement said: “That is simply not true. It couldn’t be more inconsistent—on four key points of what the Government is doing.” It was not time that stopped the Government from going back to its expert advisory group. It was the knowledge that this bill is dishonest it is fraudulent it will not do what it claims it is setting out to do it is not even motivated by what it sets out to do and it will be a disaster for the New Zealand courts system.The Minister says that it will save money. I want to remind the Minister of the change that was introduced by I think the Minister for Courts for processing Family Court cases in Auckland. What did the Principal Family Court Judge say about that botch-up? He said that urgent custody cases involving domestic violence previously dealt with in 14 days were now taking 2 months. Was it saving money? No it was costing a million dollars more. The Government has made one disaster in the Family Court system it is compounding it with another disaster and it is not even honest enough in this House to admit that it is doing it for purely fiscal reasons and that this bill will be a disaster in terms of the principles of justice.PAUL FOSTER-BELL (National):Tēnā koe Mr Speaker. Kia ora tātou katoa ki te Whare Pāremata o Aotearoa. I would like to take a brief call on the Family Court Proceedings Reform Bill in part because I was not actually sworn in at the point of the introduction of this bill or indeed the proceedings of the Justice and Electoral Committee. But I have read very carefully the deliberations of the committee the bill itself and some of the reports that fed into it. It is obvious to me that this is a positive measure. It is reforming the Family Court in a way that will solve some of the concerns that were raised in the report by the Ministry of Justice in April 2011.Those concerns included that the Family Court is an adversarial environment that places additional stress on already strained relationships. It has been a negative environment for children and is not sufficiently focused on their needs. It is also not focused enough on the needs of the most serious cases—that is ones that involve abuse or violence which is a point I will come to later. It spends far too much time on personal disputes and private matters rather than resolving those serious issues and the legal issues. It is too complex and slow in resolving disputes. I think these are issues with the system as it currently stands that do need to be addressed and resolved and I think the provisions of this bill do a very good job of resolving those issues.I mentioned the issue of domestic violence. We have heard from other speakers on the Government side that this bill does a lot in terms of improving the environment of the Family Court for children and the people who are going through it but also in terms of improving the process and the efficiency of the court. There are three specific measures in this bill that respond to domestic violence in a way that I think is appropriate and positive. Firstly this bill is expanding the definition of psychological abuse in the Domestic Violence Act 1995 to include financial and economic abuse. Secondly it is increasing the maximum sentence for breaching a protection order from 2 years to 3 years. Thirdly it provides for greater flexibility in the development and delivery of mandatory non-violence programmes. Given that domestic violence is verymuch a bane of this country and something that we are working very hard to combat I think these are positive measures and when taken with the other provisions of the bill I think this is both timely and appropriate legislation. I have no hesitation in commending this bill to the House.CHRIS HIPKINS (Labour—Rimutaka):I am happy to take a brief call on the Family Court Proceedings Reform Bill. I just want to state at the beginning that I guess any member of Parliament who meets regularly with people in their constituency office will deal with issues that are very sensitive and very difficult all of the time and some of the most difficult ones that we deal with are where there has been a relationship breakup. Regularly I get people coming into the office to talk through difficulties they have with the child support system for example. That seems to take up an awful lot of time and I acknowledge that relationship breakups can be incredibly difficult for all involved. So the changes that are being debated today around the Family Court Proceedings Reform Bill are actually incredibly important for us to get right because when relationships break up people need to have an adequate level of support. That is just an absolute bottom line. They have got to have an adequate level of support. We also have to recognise that in relationship breakups there can be all sorts of external factors that create a huge power imbalance in the relationship which can be very difficult to work through.I am not as familiar with this legislation as the members of the Justice and Electoral Committee are but having listened to the debate there are certainly some aspects of this legislation that concern me greatly. For example if we take the removal of lawyers from large chunks of the process on one level I might look at that and say that that is actually probably quite a good thing because if there is a family dispute maybe it is better that it is not a legal proceeding but that in fact we get people together—we get them to sit down and talk things out—and maybe getting lawyers involved makes things more difficult. But actually a lot of the evidence suggests that by having a good process around things and ensuring that all of the parties to that process are well supported with good rational sensible advice removed from the emotions of the situation we get a better outcome.In something like the Family Court where the interests of children are involved it is really really important that everybody involved is adequately supported so that we can get the best possible outcome. This is not something where we should make decisions based on saving a bit of money because in fact if we get these things wrong it is costly in fiscal terms for the country but it is hugely costly in a whole lot of other ways for those who are involved in that process. So for the children and for the parents who are going through or have been through a separation and are dealing with disputes it is important that the process is right and that they get the support they need.I am really concerned about some of the reforms—for example limiting the access to court-funded counselling at the time of separation. Actually this is a time when we want to make sure that parents have all of the support they could possibly need in order to deal with the issues that are before them. The bill is limiting the role of lawyers in the processes of the court and is therefore limiting access to legal aid. What we have to recognise again when a separation occurs or when a relationship breaks up is that there are going to be huge economic disparities in the way things happen. So limiting parents’ access to legal aid can be very difficult for some of them.The establishment of a new process called family dispute resolution will cost around $900 just to get into it in the first place. That is a big barrier for some people and I think we have got to really consider the cost that we are going to be imposing—that this Parliament will be imposing if this bill passes—on people who are at a very very vulnerable stage. I do not think that that is a time when we should be imposing costs onthem and making things more difficult for people who are going through this process. We should actually be doing all we can to support people who are having relationship and family issues so that they can resolve those satisfactorily and so that people can reach the best possible outcome particularly as I said where children are involved.I am very very concerned about limiting the role of counsel for the child by raising the threshold for the appointment by the court. Children are the people who need to be the most supported in this process and removing from children any level of support in Family Court proceedings cannot be good for those children. They should have as much support as we can possibly provide them with.I was not a member of the select committee and I was not part of the debate in the earlier parts of these proceedings so I look at it from a much higher level perhaps than those who were engaged in the detail. I simply ask the House this question: will this bill leave children particularly and also those experiencing family difficulties better off or is it about saving money? My analysis of reading what I have seen so far is that it is about saving money and that is the wrong motivation for these sorts of changes.DAVID CLENDON (Green):I would like to begin by acknowledging and referring to the petition that has formed part of the report back from the Justice and Electoral Committee the petition of Christopher Perry and 4470 other ordinary New Zealanders who have signed their name to a petition that sought to have this House not impose certain reforms on the New Zealand Family Court. I think it is significant. It is a representation of considerable public disquiet and concern about the direction that this bill the Family Court Proceedings Reform Bill is taking. I do not think there is particular concern about the fact of a reform or a review of the practice of the Family Court but about the way in which it has been carried out particularly the cost-saving focus and the fact that it will disadvantage many many people that it will reduce access to the court for many people and that it will give worse outcomes for some of our most vulnerable citizens not least of all our children.The petitioners sought to get four key things. They sought to protect the right to a lawyer for parties in the court and we have lost that frankly. We have qualified access to lawyers now and that is very unfortunate for all sorts of reasons not only because the right to legal representation is a constitutional underpinning if you like—it is absolutely essential to our judicial process and in this instance it has now been compromised—but also the fact that even to the extent that perhaps we might seek to take some cost out of the court having self-litigants in the court will slow the process down. They will impose costs on the courts. There will be significant cost both personal and financial when people try to represent themselves in the court which they will typically do quite badly.The petitioners sought protection for lawyer for child. They wanted to see no barriers to the appointment of lawyer for child. Again we have a qualified situation here where a judge may appoint lawyer for child but it will not be as automatic or as spontaneous as it has been up to now. The children in this of course are the innocent parties invariably. They are not the ones who are having disputes or relationship failures but unfortunately their interests will not be as well served as they might otherwise be.The petitioners sought the protection of legal aid in the Family Court and of course that has been reduced. Of course later this afternoon we will also be debating the latest onslaught against the provision of adequate legal aid to people who might need it in order to be fairly represented in the courts.The fourth and final thing these petitioners required was to have no fee no financial barrier to people entering the dispute resolution process. Unfortunately that barrier does still exist to the tune of about $1000 or so which is a significant barrier to many people and of course that is only the beginning of the cost.I think it is unfortunate that there seems to be a key presumption from some of the Government spokespeople or in speeches we have heard from Government members on this bill that the intention of the bill is to ensure that people sort out their own problems without recourse to the courts. But that is nonsensical in a sense because as one of the earlier Government speakers made the point something like 90 percent of relationship breakups marriage failures or whatever it is are resolved without recourse to the courts albeit on occasion through using the counselling service which is extremely good value for money and an inexpensive way to assist couples to deal with their issues. But the notion that we are dealing with hordes of people who could otherwise deal with their own problems outside of the legal process simply is not borne out by the numbers: 85 to 90 percent of couples do resolve their own issues without coming to the court. It is not a matter of overuse of the court; in fact it is underused if anything.By definition the court sees only the hard cases the difficult cases. The idea of requiring couples to go straight to dispute resolution rather than going into the court process overlooks the fact that there are a whole host of issues of circumstances that may make that inappropriate and some of those circumstances could be family violence hidden family violence which means that a person who has been subjected to some form of physical or psychological abuse could be required to sit in a room and engage in a dispute resolution process and that is simply unacceptable. On paper it might look nice and clear-cut; in practice it will not work. Neither will this bill and we will continue to oppose it.LOUISE UPSTON (National—Taupō):I am pleased to take the final call in the second reading of the Family Court Proceedings Reform Bill. I think there would be one aspect that we agree on in this House and that is that courts are no place for children. If you think about the reform that this bill is undertaking it is really looking at the needs of children first and making sure that the environment and the reform that we are putting in place really provides a structure that is going to be the most useful for them that provides the most safe environment and that provides a lasting resolution. That is why the emphasis is not on what the last speaker David Clendon was implying but on using the family disputes resolution process more so that you can get really lasting outcomes.As a constituent MP I think some of the most difficult cases that I have had before me have dealt with families who have parenting issues income support issues and separation issues with their children and it is very clear to see that it is actually the children who come off the worst in these environments. I am a firm believer that the more we can keep them away from the court process and put other processes in place that assist resolution not just for a month or 3 months but for the lifetime of that child the better. That is why this is quite a different process when we are talking about courts and when we are talking about resolution because children have very different needs from those that can be met by some of the other court processes that we have in place. Yes we have had some significant cost implications in terms of the use of the Family Court but the driver of this really is looking more at how we can have lasting solutions for those who are most vulnerable. And in this case I am particularly interested in the children who are in those families that have had separation and breakup issues so that we are able to have a solution that works for them long term.I disagree with some of the other speakers. This reform is clearly aimed at those who need court assistance—absolutely. But it is not making that the most desirable option. It is trying to look at making sure that those who need legal representation and legal aid absolutely will get them but not making them the most desirable channel for people to go through in terms of resolving these issues. The Government recognises that the Family Court provides only one component that is important in terms of people sortingout their issues and problems. And for the long-term benefit people should be encouraged and other mechanisms provided for them so that they can seek that assistance and get long-term resolution which is of course going to be in the much better interests of the children involved. Thank you.The question was put that the amendments recommended by the Justice and Electoral Committee by majority be agreed to.A party votewas called for on the questionThat the question be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; Independent: Dunne.Noes58New Zealand Labour 33; Green Party 14; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.Question agreed to.A party vote was called for on the questionThat the Family Court Proceedings Reform Bill be now read a second time.Ayes61New Zealand National 59; ACT New Zealand 1; Independent: Dunne.Noes58New Zealand Labour 33; Green Party 14; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.Bill read a second time.Psychoactive Substances BillSecond ReadingDebate resumed from 27 June.CLARE CURRAN (Labour—Dunedin South):It is not every day that a young woman walks into your electorate office just straight out of a psychiatric institution where she had been hospitalised and was receiving intensive treatment for an addiction to and symptoms arising from taking synthetic cannabis. This young woman was very sick. She was 24 years old and did not have a history of drug taking. She had got herself into a situation where she had taken some synthetic cannabis and had quickly become addicted. She was very sick and she was very adamant that she wanted a law change as quickly as possible.That was in March this year. Subsequently my office has been besieged with a number of phone calls from schools from concerned parents and from other organisations around this issue.This is as we know a huge issue for parents for our children for our community generally for schools for the police and for our health services and there has been some very good work done in my community by our health services. We have a toxicologist at the Dunedin Hospital Dr Leo Schep who has been doing some very good work on this issue and some studies on this issue. His work is yet to be released but it will help with the treatment of addiction to these substances.Following those representations I visited dairies. I wrote to dairies—every dairy in my electorate. I visited them. I visited users in prison. I supported a petition in my electorate. I went back to those dairies that had said they were still selling it and I askedthem to cease. I spoke to the Dunedin police on a number of occasions and I met with organisations such as the Salvation Army.Two weeks ago I was invited to and attended a symposium in Dunedin at the Wakari Hospital which is run by the district health board and mental health services and it included people working in inpatient services community-based mental health services emergency psychiatric services specialist alcohol and drug services and others. Here are some of the things that they said arising from that meeting. They said that synthetic cannabis was a clinical burden on health services that emergency department patients had cyclical vomiting and seizures from smoking synthetic cannabis and that many of the patients had experienced delayed seizures up to a day after smoking synthetic cannabis. A 22-year-old man had been in the emergency department 14 times with synthetic cannabis - related issues in the past 6 months. Thirteen percent of admissions to the acute psychiatric ward at Wakari Hospital in a 14-week period earlier this year were related to synthetic cannabis. In 2010 there were no synthetic cannabis - related admissions to that hospital. The average age of patients admitted was 10 years younger than in 2010.A community mental health nurse said that some of the synthetic cannabis manufacturers were using extremely clever marketing to target children that we were fighting a losing battle and that it was going to get worse before it gets better. This was said in the knowledge that this law was going to pass through Parliament. They said that patients were being admitted daily to the psychiatric wards to detoxify and that many of them had no prior history of mental illness or substance abuse.I could go on and on about this issue.Thankfully and as a result of the inputs to this bill particularly the work put in on this side of the House by the Labour members—and I would especially like to acknowledge Iain Lees-Galloway—there is in the commentary on this bill a section headed “Possible increased demand on health services” which states: “We acknowledge that with the banning of some substances currently available there could be increased demand on mental health and drug and alcohol services which health providers will need to make provision for.” In the Committee stage of this bill I will be putting a question to the Minister as to what provisions are being made in the health services for the effect of this bill and what this will mean for our communities such as the community in Dunedin which is no different from many other communities around our country where the significant effects of these drugs will not cease as a result of passing this bill in the House.As the police have said to me and my colleagues in Dunedin these drugs are likely to go underground. People who are addicted to these drugs will still want to try to get them. There will be increased effects from these drugs. We need to know how we are going to handle them as a community and in this House I think there has to be some responsibility taken by the Government for putting increased services into the services that are needed. Thank you.SHANE ARDERN (National—Taranaki - King Country):It is a privilege and a pleasure to rise in the second reading of the Psychoactive Substances Bill. National is obviously sponsoring it and supporting it and wants to see it passed as soon as possible. I must acknowledge my colleagues from both sides of the House on the Health Committee and the great chairmanship of our very good chairman Dr Paul Hutchison on this particular issue. He actually brought quite a high degree of expertise to the debate given his medical background.When you look at something like the issue we are considering here or when the House considers something like the issue it is considering here—not you entirely Mr Assistant Speaker—there is a range of different arguments that you can put forward. The previous speaker who just resumed her seat Clare Curran brought forward a lot ofthe constituent-type issues that each and every one of us has experienced since this became a common thing. There was an example right in my own electorate in the Stratford area where my good colleague and friend the Hon Chester Borrows took it upon himself as a member of Parliament and a former police officer to visit a dairy and suggest to them that it was not in their best interests or certainly not in the best interests of the young people of our area for them to be selling this substance and they just said: “Well it’s legal so you know we make money from it.”I am reminded of a very heartfelt submission we received from the Mayor of the Ashburton area. She brought forward a very good submission in my opinion on the type of investment that some of the retailers of this product were making and the type of return they may get from it. All of that leads to a sort of discussion about why we do not just ban it—why we do not just pass a law and make it illegal. Well as most in the House will be aware when you put in place a total prohibition it seldom works. In fact if you look back in our history you will find that the King Country an area I represent in the late 1940s and early 1950s decided it was going to introduce a prohibition on alcohol. There were more moonshine distilleries and underground clandestine activities—Hon Trevor Mallard: My uncle ran the Manunui Club through the entire period.SHANE ARDERN: I am not surprised by that Mr Mallard. That does not surprise the House at all. In fact we have often wondered what type of psychoactive substance might have been employed. The reality is that prohibition seldom works. It tends to drive these types of activities underground and the end result is that you do not end up with the outcome that the community that wanted it banned in the first place might see as the ultimate outcome.With all of those issues and all of that as a problem for the Government—it is where the rubber actually does meet the road—the Health Committee listened to a substantial body of evidence that would suggest that if the onus of proof as to the safety or otherwise the lack of harm and the minimisation of harm from these substances could be placed on the manufacturers and could be properly policed and checked regularly by an expert panel which will be set up as a result of this then the outcome for this would likely be much better.Hon Trevor Mallard: Why does the member want to kill dogs?SHANE ARDERN: The member asks a very good question: “Why would the member want to kill dogs?”. Well there are some different individuals whom we would like to try these substances on. Dogs are not among them. The argument about animal welfare is one that I think most New Zealanders will be concerned about. The member needs to take a look at what the expert panel membership looks like. What he will find is that the head of the SPCA is on that panel. Does the member not understand that the SPCA is the organisation in New Zealand that along with a lot of concerned people looks after the welfare of animals? Why would you not take the advice of that body as opposed to someone baying from the other side of the House about the misuse of animals? If the member were to care to look at the substance of the bill he would find that even though that may possibly happen—there may be animals used in testing—all other testing systems will be exhausted before that happens.What the member probably needs to have a closer look at—and clearly has not to this point—is what the make-up is of the expert panel that will make recommendations on whether or not a substance is of minimum harm and what the likely chances are of animals being used in the testing process to determine that outcome. I do not know whether the member is suggesting because I would not even attempt to suggest that the member might suggest this that perhaps this experimentation should take place on young people as opposed to animals.Hon Trevor Mallard: No not at all.SHANE ARDERN: No. Well I would be surprised if the member had been suggesting that. But if without using animals you cannot test something to a point where you can establish that it has minimum harm then what would the member suggest happens?Hon Trevor Mallard: That it not be approved.SHANE ARDERN: That it not be approved so that the substance could actually then be made available without evidence that it is of minimum harm and it could be experimented on in society. How would the Minister of Health or the expert panel advising the Minister know whether the substance is of minimum harm without thorough testing?Hon Trevor Mallard: Just shocking—the member’s for the drug dealers.SHANE ARDERN: The member over there baying who suddenly has a new-found love for dogs or other animals as it may be may go and have a look at what the—Hon Trevor Mallard: I’ve been breeding dogs for 40 years not killing them for drug dealers.SHANE ARDERN: The member has been breeding dogs for 40 years. Well I have been farming for that long and I know that the member would not understand but farming requires humane treatment of animals. There are plenty of other people who have been training and breeding dogs for that long as well so he does not have a unique franchise on that. I have no doubt if that member has been breeding dogs for 40 years and lives in an urban environment there would have been several animal welfare issues in the activity that the member has been involved in because you cannot breed dogs in an urban environment without creating such an animal welfare environment. So there you go. The member has his own animal welfare expertise obviously and I would suggest that the member knows about as much about that as he knows about the bill that he is interrupting on. The reality is that this bill ends up in a situation where the best attempt at minimising risk to society to young people in particular has been achieved by going through the process that we have.There are a number of other issues that I care to touch on. One of them is the fact that there has for a long time been a range of very suspect processes in terms of the production of these products particularly party pills which are becoming more and more common. I think the previous member to speak Clare Curran who made a lot more sense than the one who is interrupting said that the incidence of hospital treatment and admission has substantially increased in the period since 2010 and there was a high degree of evidence to back that up. What has changed since 2010? Well what has changed is the number of organisations that are producing this product the amount of money they are able to make by selling it the number of outlets that exist that trade in it and the I guess societal acceptance that this is going to happen.Of course that is other than in the case that I mentioned earlier where society said: “We do not accept that this should happen in our area. We do not accept that our dairies should sell it.” and boycotted those premises. I understand that at least on the front they have stopped selling it. Whether or not it is still happening in a way that is not so public I am not sure. But certainly that is one way that those who feel so strongly about it could do something about it—that is of course they could boycott those who are making this available particularly to young people.This law or this bill once it becomes law will give some certainty to I guess the safety of legal products. It will place the cost of that burden of proof on those who produce it and it will help substantially in bringing about a change of behaviour particularly amongst the young who have been severely affected by it. I support the bill.Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman):I am pleased to take the opportunity to have a short call on this speech—Eugenie Sage: I raise a point of order Mr Speaker. My apologies to my colleague for interrupting. Could I confirm that this is a split call?Mr SPEAKER: Correct it is a split call.Hon DAMIEN O’CONNOR: What a quagmire of contradictions in this bill the Psychoactive Substances Bill. For a party that believes in the power of the market and the wisdom of the market it is good to hear some reality from the members on the other side.I would firstly like to acknowledge the Hon Peter Dunne for pushing ahead. I am sure that the National Party was probably far more reluctant to push ahead with this bill and intervene on its sacred market. The market as the member acknowledges is both dangerous if not regulated and potentially lethal of course for too many people.Although I have some concern for dogs my primary concern is for kids. It is a shame that the National Government does not think beyond this bill and show that same level of concern for kids and for people who have no ability and no control. If I was to grow a few boysenberries throw in a bit of sugar and then try to sell it I have to go through the Food Bill which is about this thick because of the requirements to sell that. But what we have here is a reluctant Government that is thankfully passing a piece of legislation to try to control drugs. I know that Peter Dunne pushed for it and I acknowledge that. I was rung by a friend who has suffered for a long time the monkey on his back of drug addiction whose brother is a general practitioner who said: “Please please carry on with the good work that Peter Dunne has done in this area because I face on a regular basis young people coming into my surgery who are all but destroyed by an addiction—by a problem created from legal highs.” So we must move in this area. I acknowledge that the Government has with the provocation of Mr Dunne dare I say moved in this direction. I am less concerned about the effects on animals than I am about the effects on human beings. It is important that we move ahead here.But I suggest that the bill is not perfect and I suggest that we do need to look carefully and there will be some Supplementary Order Papers and some amendments that come up that the Government should look at very carefully. We cannot create more harm in our attempt to of course reduce harm in one area—two wrongs never make a right. We have to be sure that we are moving ahead that the onus of proof of safety falls upon any chemist or any weirdo who wants to create these drugs that they say are recreational but that we know are very very harmful. My concern is particularly for a young woman who might be pregnant who might consume these because she is told you can have a good time on them and they are safe so therefore they must be OK. That is the worst possible outcome—in vitro effects on unborn children and the effects on their lives from there on is the one thing that we have no idea of.So I go back to the I guess precedents set in the Food Bill where the Minister has indicated that we should go back and look at that bill and make improvements. It is this thick and that is fair enough because we do not want to produce anything in this country and sell it offshore that might in any way harm our consumers. Yet for how long have we had the ability for some wacky chemist to produce some—Mike Sabin: And what did Jim Anderton do for 8 years with BZP?Hon DAMIEN O’CONNOR: —weird outfit? And dare I say to the member over there be careful because if he can guarantee that this piece of legislation will keep any of these harmful drugs off the shelves and off the market that is great and I acknowledge his faith.What I say is that because of the reluctance of the National Government to move in this area I am concerned that this bill will not do all the things that we know need to bedone in this area—that is to completely ban these unless someone can prove that any product sold for any consumption must be safe. We do that with food; we must do that with any other substance that may be ingested. I am not sure that the Government has got it right. The Opposition will scrutinise this and look very carefully at all of the outcomes. But I state clearly that the most important focus must be on the kids and on the people who are affected by these drugs and who have no ability to control that ingestion—The ASSISTANT SPEAKER (Lindsay Tisch): Sorry to interrupt the honourable member.EUGENIE SAGE (Green):Tēnā koutou tēnā tātou e huihui mai nei ki roto i te Whare. E te Māngai o te Whare tēnā koe.[Greetings to you and to us collectively assembled here in the House and to you the Speaker of the House. ]I am pleased to take a short call today on the Psychoactive Substances Bill on behalf of my Green colleague Mojo Mathers. The Green Party and particularly Mojo Mathers has worked with thousands of New Zealanders to oppose unnecessary and unethical testing on animals which this bill still allows. The Green Party certainly supports the bill because we support minimising the harm that party pills cause and we want to have a modern proportionate and rational drug policy as Kevin Hague has previously outlined. But we do not want the testing to ensure that these psychoactive substances are safe for humans to be done at the expense of animals causing them pain harm and suffering.Many many New Zealanders support freedom from animal testing. We have seen that when in just 1 month 60000 people have signed a petition calling for animal testing of party pills to be ruled out. Many organisations put quite considerable time and effort into making submissions on this bill focusing on animal testing and that was based on good faith and on the advice of the former Associate Minister of Health Peter Dunne that that was the best way for their concerns to be addressed. So the democratic process was seen to be very wanting when the chair and majority on the Health Committee decided that those submissions were out of scope and returned them. The Green Party then organised a separate hearing so that we could listen to the evidence—and it was very good and relevant evidence—that the Health Committee chose not to hear. So I want to thank everyone who made submissions.On the basis of the evidence the Green Party through Mojo Mathers and her Supplementary Order Paper 260 is proposing an amendment to the bill. That amendment would ensure that any information from animal testing cannot be used in support of an application to register a psychoactive product. That would include information that came from overseas and that would have the force of law once the bill came into law. In the last 6 days more than 7700 people have emailed MPs asking for their parties to support Supplementary Order Paper 260 in Mojo Mathers’ name so we are very pleased by the level of support that is getting and we hope that parties in this House will also support that. Some have already; we hope others will follow suit.We certainly acknowledge the change in the bill in clause 11A as reported back by the select committee. It is a significant improvement particularly given the earlier decision around submissions. This new clause 11A would require that the advisory committee not rely on animal testing for psychoactive substances “if suitable alternatives exist.” and if those alternatives comply with the Animal Welfare Act. But the implementation of this clause would be very difficult to monitor so it provides absolutely no certainty that animals would not continue to suffer for human benefit and that they would not continue to be subject to pain and harm. Animal testing is notoriously unreliable and that is why the United States Environmental ProtectionAgency the National Institutes of Health and the Food and Drug Administration have begun a process to replace all toxicology testing on animals with alternatives. That is because these alternatives produce results that are much more relevant to humans. Those alternatives include things like in vitro human cell line studies computer models micronucleus assay in vitro absorption tests and so on.When other countries such as the United Kingdom are so much further ahead of us and are putting a ban on animal testing for all recreational substances including alcohol and tobacco we must act. We are lagging. We are not ahead of the field here. Why do we continue to use animal testing in New Zealand? Because it is cheaper than non-animal testing. We should not be making decisions around the safety of these psychoactive substances to protect the profit margins of industry. We should be making them on an ethical basis and that ethical basis is to ensure that animals do not suffer pain and harm in order to protect humans. So we can vote for a modern ethical 21st century safety testing regime if we vote—The ASSISTANT SPEAKER (Lindsay Tisch): The member’s time has expired. I understand that the next call is a split call.MIKE SABIN (National—Northland):I want to just reflect a little bit on the history of the synthetic drug scene and the background that really has been consequential in this bill the Psychoactive Substances Bill. That is that back in the late 1990s and early 2000s when Matt Bowden and Logan Williams pioneered benzylpiperazine (BZP) or party pills as they were commonly phrased. What was discovered through that was that the ability to manufacture a synthetic drug—something that people could get high on and that could mimic the effects of the illicit drugs—found a popular market particularly within the youth of New Zealand at a time that was quite critical because that was the same time that methamphetamine was growing. It sort of said to New Zealanders: “If you want to get high let’s go out and take pills.”Around 2008 BZP was banned but long before that Logan Williams and Matt Bowden had signalled their ability to simply change a chemical make-up to derive analogues of BZP to achieve the same purpose. In fact they almost saw it as sport in my view. That is exactly what they did do so by the time BZP was banned there was already a large volume of similar drugs out there and making their way into the market. That has really precipitated the cat and mouse situation that has brought about this bill. So the temporary class drug notices that were put in place to actually try to capture the drugs as they moved and were obviously classed as harmful to some extent were able to put a stop to it but only for the amount of time that the drug chemists could then remanufacture something else and that is exactly what they did. Some 33 temporary class drug notices were issued. But what we can say both here in New Zealand and overseas is that as long as there is the demand the chemistry will always beat the legislation.So what does this bill do? Well at the heart of this bill it actually places the onus back on those who are producing the drugs to say that if they are producing a substance that a human being is going to consume then it needs to be safe for consumption—Dr Paul Hutchison: Minimal risk.MIKE SABIN: —or minimal risk low risk or whatever. To me “safe” is what it is all about. Ultimately what we do know is that drugs such as K2 or some of the other synthetic cannabises and drugs of scene are far from low risk and are far from safe. The onus now goes back on to the manufacturers of the drugs. They must prove that they are of low risk for human consumption.Some would say and I have heard it certainly from Labour and the Greens that this means we are creating a regulated drug market. Actually I do not think that is what we are doing. There is nothing in this bill that says taking drugs is a legitimate thing. It issimply a way to get ahead of the ability to constantly chemically re-engineer the drugs to beat the legislation. This is not about legitimising the idea that drug taking is a good thing. The only safe drug-use is actually no drug use and that conversation should not be lost in this bill.When we talk about low harm—that is where the crux of this will come down to—we have to ask what would constitute low harm. I am pretty sure that any medical physician would say that smoking something would not be of low harm. Certainly no doctor says to go and smoke your aspirin or smoke this or smoke that as part of a medical practice. So I cannot see anything that can be smoked as being of low harm. I cannot see anything that would cause depression or anything that would trigger any sort of mental illness as being of low harm. I could not see anything as being of low harm that had any addictive impact—that would cause withdrawal craving and bingeing. So that then says that anything basically that stimulates dopamine to a degree that would create a high would be harmful because it would create withdrawal cravings and bingeing which is the nature of the addictive cycle which means that people typically turn to something more significant.In the Committee of the whole House I will talk to Supplementary Order Paper 260 in the name of the member Mojo Mathers but suffice to say what is being tested at the moment what is the guinea pig at the moment is human beings. This bill is about taking control out of drug-peddlers’ hands the people who prey on vulnerable young people. I have no hesitation in commending it.SCOTT SIMPSON (National—Coromandel):As a member of the Health Committee it is a pleasure to take this final split call on the second reading of the Psychoactive Substances Bill. The bill is being sponsored by the new Associate Minister of Health Todd McClay but in my opening comments I would like to congratulate and give credit to the Hon Peter Dunne for his work in preparing this bill to bring it to the House and for the credible way in which he has developed it so that it represents a new and revolutionary way of addressing the pernicious dangers of so-called legal highs. This bill as Peter Dunne said in his speech earlier on in this debate will be a game-changer in the way we regulate party pills and other so-called legal highs. I support this bill and I congratulate both Peter Dunne and Todd McClay on bringing it to the House.The bill regulates psychoactive substances or legal highs so that substances have to be proved to be low risk before they can be sold. Cleaning up the legal high industry is part of this Government’s drive to deliver Better Public Services and this bill is all about safety—human safety. New Zealanders deserve to know that products available to them are safe and that they are not being put in harm’s way with untested risky unknown substances. The cost of testing these substances will also be borne by the manufacturers rather than the taxpayer. This bill will seamlessly replace the current temporary class drug notice regime which has until now worked reasonably effectively. This new bill when it becomes law will change that regime and replace it with a whole new level unknown in other places in the world so we will be a world leader.This bill includes provisions to establish a regulatory authority within the Ministry of Health and part of the ministry’s job will be to consider and approve or decline psychoactive substances. It will be required to issue a manufacturing code of practice; it will issue importation manufacturing and sales licences; and it will conduct post-marketing monitoring to audit and recall product if necessary. New Zealand has faced an acceleration in the development of these new recreational drugs. They are all over the place. They are in dairies and supermarkets. They are dreadful products that are being sold over the counter all over the country at the moment. The regulatory authority established by the bill will consider and approve or decline psychoactive substancesand it will assess the toxicological and clinical data for each product. But even if products meet that standard the Government will still be insisting that tight controls be in place around their availability. So from the day that this bill is enacted neighbourhood dairies will no longer be allowed to stock any such products and nor will sales to those aged under 18 be permitted.The bill has to a large degree been hijacked if I can put it that way by the issue of animal testing. Although everybody I think would accept and understand that animal testing is an issue and most people—probably all people—feel pretty strongly about it the bill provides that if there are suitable non-animal tests then they must and will be used. This bill is a response to the harm caused by untested products and the countervailing consideration here is human safety. I think that is a fact we should not lose sight of.One of the things that interest me is that in the select committee consideration of the bill we had unanimous approval for what I thought was a very sensible approach. Labour members bought into it. It seems to me that Labour’s science spokesman one David Shearer seems to have been rolled now by a faction within the Labour Party to change what is a very sensible piece of science and to turn it into an animal rights issue. That is detracting from the big picture here which is the harm and injury being done to mostly our young people. And so despite Labour members including Annette King all having been in favour of voting for that compromise it seems now that a faction within Labour has rolled David Shearer its science spokesman. For a serious mainstream political party to have been put in that position is clearly very worrying.This is a good bill. I support it. I commend it to the House. It is good legislation.Bill read a second time.Legal Assistance Amendment BillIn CommitteeDebate resumed from 11 June.Part 2 Amendments to other Acts(continued )The CHAIRPERSON (H V Ross Robertson): The House is in Committee. Kia ora tātou nō reira e te Whare e ngā iwi e ngā reo e ngā hau e whā. Tēnā koutou tēnā koutou tēnā koutou katoa. Good afternoon honourable members. We are in Committee—Hon Trevor Mallard: Following the standards of the Speaker.The CHAIRPERSON (H V Ross Robertson): Well thank you Mr Mallard. We are in Committee for further consideration of the Legal Assistance Amendment Bill; for consideration of the State Sector and Public Finance Reform Bill the Plumbers Gasfitters and Drainlayers Amendment Bill and the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill; for further consideration of the Airports (Cost Recovery for Processing of International Travellers) Bill; and for consideration of the Administration of Community Sentences and Orders Bill the Reserve Bank of New Zealand (Covered Bonds) Amendment Bill and the Medicines Amendment Bill.Members we move first to the Legal Assistance Amendment Bill. When the Committee was last considering this bill we had reached Part 2. It is my understanding that the Hon Lianne Dalziel had the call and she has 4 minutes 55 seconds remaining if she so wishes. We do certainly have a significant number of bills here to consider Committee—Grant Robertson: I raise a point of order Mr Chairperson. I just want to clarify whether we had begun the debate on Part 2 of the bill at the last point at which this was done or were we just ending Part 1? I just want to get a clarification of that matter. I am just going to continue talking for a little moment longer. Yes so were we on Part 1 or Part 2?The CHAIRPERSON (H V Ross Robertson): We were Mr Robertson. I have it in front of me that we have here—and I have it written down here—Part 2 read. The honourable member Lianne Dalziel was speaking at 2150 and 2155 and therefore she has 4 minutes and 55 seconds remaining if she so wishes. The question is that Part 2 stand part. I call the Hon Lianne Dalziel.Hon LIANNE DALZIEL (Labour—Christchurch East):Because of the time that has elapsed since we last spoke on this bill I am going to start again. That is actually quite useful because I cannot remember what I have already said so it is probably a good thing to start again.Part 2 actually deals with amendments to other Acts. Quite often when you get to the amendments to other Acts you are really just seriously looking at amendments subsequent to what is dealt with in the substantive part of the bill that we have already addressed. However there are a number of areas that I think it is worth traversing and that in particular relate to the Care of Children Act 2004. This is where a lot of the controversy has arisen in terms of some of the changes that have been brought into place. It is not clear in terms of the legislation exactly what all of the implications of some of these amendments might in fact be. I seem to recall from the hearings that we had at the Justice and Electoral Committee that there was a lot of discussion about whether parties would be required to reimburse the costs associated with counsel for the child. I am looking to the Opposition spokesperson on justice Andrew Little for some assistance here. I think that there was a lot of debate around contribution to the costs for a lawyer for the child potentially able to be ordered which would be split between the two parents.Andrew Little: They could be different proportions.Hon LIANNE DALZIEL: They could be in different proportions. That was of some concern I think because there was certainly a fear that any payments that were required to be made in relation to the legal aid coverage or the payments for lawyer acting for child could actually make people feel quite uncomfortable about their role in the hearing itself. I must say that there is a degree of disquiet around this particular change so that each party must pay an equal share of the prescribed proportions. I know that we had a discussion on another bill the Family Court Proceedings Reform Bill—which is perhaps not relevant to having a conversation about the Legal Assistance Amendment Bill—and there was a deep concern about it because of course some may qualify for legal aid and others may not. So you have got one of the parents up for a substantial proportion of the cost and the other parent up for a funded share. That I think created again some sense of disquiet about whether that would make the dealings between the parties more or less comfortable—and probably more uncomfortable—as a result. So there are some significant issues in respect of that.There are also issues around enforcement of orders to refund fees and expenses of court-appointed lawyers. There is a whole process to be gone through in the legislation to order a refund as a debt due to the Crown by that party and being enforceable in a District Court or the High Court as the case may require. Again this is forcing people into a situation—well in relation to the enforcement of a debt—of seeing themselves in a position where perhaps they are not seeing that their contribution is necessarily their legal responsibility.But it all really comes back to that same issue that we were debating before in the other legislation and that is that essentially when you have got a Government that thinks that family disputes between couples are private matters and therefore not eligible for any form of State assistance and the only interest the Government has is in helping parents agree to the care of the children arrangements it does seem to be a real mismatch because of course the whole focus is actually on reducing costs. This makes absolute sense when you tie it in with the Family Court Proceedings Reform Bill but it does not make sense when you are looking at what might actually be in the best interests of children.When people are facing these enormous costs what they end up doing is entering into agreements that may in fact not be in the best interests of their child. I will give you one example that came up in one of the hearings that we had where a couple had agreed that they were going to share care. They were going to share the day-to-day arrangements for the care of their child. As a result of them reaching this agreement which was going to be 1 week about—so 1 week for one parent and 1 week for the other. The child—remind me again our spokesperson on justice. I think the child was 18 months old—Andrew Little: 6 months.Hon LIANNE DALZIEL: 6 months old. The parents thought they were doing the right thing. They—Scott Simpson: The Family Court bill.Hon LIANNE DALZIEL: Yes I know. The point that I am making is that it is relevant when it comes to cost-sharing arrangements because a lot of people enter into these arrangements because of the costs associated with them. There are three sets of costs that are now in play. One is the cost of now going to a family dispute resolution which of course is the other bill. The other is the cost of the child support because eligibility for child support is dependent on the number of days or the number of hours essentially for the primary caregiver. That has created an incentive for people to look for ways to share the arrangements so that basically it is like an insurance knock-for-knock arrangement where you can cancel each other out. But then on other occasions they are not able to achieve that so none of the costs that the non-custodial parent or the one providing day-to-day care—that parent is not allowed to take into account the cost of holding an extra bedroom open which is an issue for people especially who are renting. They are not allowed to take into account the extra costs for food and entertainment and things like that for that time. So they continue to pay their child support every week. The point that I am making is that all of these issues come into the decision-making process and have nothing to do with the best interests of the children.The final one that we have decided to add to the whole mix is that you can pay for counsel for child as well. Well we have already heard from our debate on the other legislation that there are some limitations around that. That lawyer acting for the child—in the best interests of the child—may in fact provide the only legal advice that anyone gets at any point in time and it is at the point that they get to family dispute resolution. Now we are going to send them the bill as well—to both parties.I actually think that people should take a serious serious look at what this Parliament does from time to time. We should join the dots. We have had an issue down in Christchurch around building consents where we have got a silo mentality within the council and we have got a silo mentality outside the council in all the different Government departments. Even with the Canterbury Earthquake Recovery Authority in play there are still all these silos all doing their own thing and not joining the dots. Well for goodness’ sake when we are talking about the best interests of children should wenot be joining the dots? Is that not probably the most important thing that we could do for those little dots?I think that it is irresponsible to go through a process of decision making on these separate issues in silos and not see that they have a huge impact on children. That is why the word “sustainability” went out of the title of this bill; it is now the Legal Assistance Amendment Bill. The word “sustainability” has gone because actually it is not a sustainable proposition. I know that the Government took it out because it did not really want people to focus on the fact that it was only about the money but actually it has gone for another good reason and that is that this is not a sustainable approach. If we really care about the best interests of children and ensure that they are at the heart of all decision making then we would not be doing child support separately from legal assistance and separately from Family Court proceedings. I actually know that there are a number of people who agree with that point of view. I know that there are many actually on the other side of the Chamber who secretly agree with that point of view too and would like to see something done about it.The other part of this particular bill talks about the costs of court-appointed barristers or solicitors. When the court finally reaches the nightmare situation of having two self-represented litigants in front of them who are both going hammer and tongs at each other it finally brings in a court-appointed barrister or solicitor to help sort the mess out which is going to happen much more often as a result of the previous legislation that we have been dealing with. We are going to end up in the situation where the parties are going to be required to pay for that barrister or solicitor as well even though they were appointed to represent the interests of the court. I think that there has been a fundamental flaw in the thinking here. Early legal advice is what actually helps resolve disputes.Hon CHESTER BORROWS (Associate Minister of Justice):I take a call just to respond to some of the points raised by the Hon Lianne Dalziel. Obviously she has with her experience recognised that there have been some issues that need to be addressed that have been spoken about amongst the family legal fraternity. It is important to point out that in the consideration of this Legal Assistance Amendment Bill and further on in the implementation of it there will be some regulations that will for instance prescribe the portion of lawyer-child costs that parties are required to pay as two-thirds. But by default this cost will be split in equal shares between the parties. It is also important to note that however the court may substitute a different share for a party if satisfied that in the circumstances of the case it would be inappropriate to require each party to pay an equal share. The substituted share may not exceed the prescribed portion so no party may be required to pay more than two-thirds of the cost of the lawyer.There obviously needs to be built into this some safeguards—and the safeguards are all around the paramount principle of the Care of Children Act 2004 under which most orders are made—that the welfare and best interests of the child are paramount. Therefore any decisions about orders of costs must be taken with that principle in mind. The court may decline to make an order of costs if satisfied that it would cause serious hardship to either party or to a dependent child of the party and the court may adjust the default equal share of costs if it is considered inappropriate.It is also to be noted for instance that even as part of the Family Court review which the previous speaker mentioned there are a number of alterations that have been made there in respect of for instance allowing legal aid to be granted for counsel to be provided in the preparation of parents who will be representing themselves because it recognised that there was “inequity of arms” if for instance one party with a substantial income was able to go and get coaching if you like from a legal counsel and would be better prepared. So it was important in the interests of justice to allow that to happenunder that particular bill and I think it is important to know that legal aid is moving to recognise that there have been these issues.My final point to make is in response to the courts’ ability to alter or to waive the imposition of the costs of counsel for the child. In the institution of fees and filing fees in the Family Court there was a lot of noise about the fact that these had never been in place before. The point was made that waivers would be granted or would be able to be granted in circumstances. In actual fact 70 percent of the matters appearing before the Family Court now receive a waiver. Any argument that says the Ministry of Justice would be unlikely to give waivers is actually not an issue. It has not proven to be an issue under that particular regime and no one would expect it to be in the future.ANDREW LITTLE (Labour):I rise to make a further contribution on the Legal Assistance Amendment Bill in the very important Committee stage. Having listened to the contribution of the Associate Minister of Justice Mr Borrows I simply reiterate the concern that the Labour Party has about the regime that is now to be set up for the recovery of a proportion of the costs associated with the appointment of counsel for the child.I am not reassured by the Minister’s attempt at reassurance just now and I refer him specifically to new section 131A of the Care of Children Act inserted by clause 27 and to the definition of “serious hardship” remembering that under the regime that the bill proposes there is first of all a presumption that the costs or part of the costs of counsel for the child will be levied across the parties. There is scope to have the share between the parties different across each party—I understand that. But the basis on which one party or both might not be levied at all is on the grounds of serious hardship.Serious hardship as defined in new section 131A(6) “(a) includes significant financial difficulties that arise because of—(i) the party’s inability to meet”—and this is the phrase I want to focus on—“minimum living expenses according to normal community standards;”. With all due respect to the Minister that language is somewhat vague. What is a judge to make of “minimum living expenses” and what is a judge to make of “normal community standards” understanding that that sort of language sounds like a very shifting sort of standard: the shifting sands of minimum living expenses and the shifting sands of normal community standards?It looks to me like this provision in its current form is more likely to cause more confusion and anxiety than to give any greater assurance. Perhaps the Minister could answer the question about what a judge is to make of that sort of language when it comes to this sort of cost recovery. I know it appears in the previous part of the bill but it relates also to the other powers of attachment that will now apply when it comes to cost recovery including for cost recovery of counsel for the child. It is also related to the part that allows not only attachment orders but that attachment orders can be up to 40 percent of the net pay of a grantee of legal aid or of someone who has had the benefit of counsel for the child or whose child has been represented by counsel for the child. Up to 40 percent of net pay can be the subject of an attachment order to meet these costs that can now be levied.There is nothing in the bill unless the Minister can point it out to us that suggests there is any potential for alleviation—for a judge to avoid levying a party or both parties who have had the benefit of counsel for the child in their care of the children proceeding—other than the general discretion of the court on the very vague “serious hardship” condition. This still remains highly problematic for us. This does not give us any reassurance that this bill will not lead to some people facing considerable hardship and considerable debt. Once the amount is levied it will be subject to interest and it will be subject to recovery action not the least of which would be an attachment order thatcould see up to 40 percent of a person’s net pay being extracted from them before their pay lands in their bank account.That has the potential to cause significant problems for people and to really create a great sense of fear in people who are in the position often not by choice where they are utilising in this case family proceedings where they are subject to this type of levying. That makes the legal aid scheme not a scheme of fairness not one of ensuring access to justice but a scheme that will become one of great fear. People will fear that they may be plunged into permanent or long-term hardship or poverty or destitution as a consequence. That is not good.As a matter of public confidence what we need is a legal aid scheme that does what it is intended to do. We need a scheme that provides legal assistance for those who simply do not have the means to meet the cost—one that provides legal assistance to those who are in a position where they must pay legal costs the costs of representation and advocacy in a situation where they would prefer not to or in a situation that they have not necessarily chosen. These sorts of clauses are enough to suggest that a legal aid scheme that is built on these sorts of provisions will not be a legal aid scheme worthy of the name.I call on the Minister in the chair the Associate Minister of Justice to give some clarity about just exactly what the Government has in mind when it comes to recovery of costs for these matters for the lawyer for the child under this part and what it means in terms of the test for serious hardship for a party to be afforded their minimum living expenses according to normal community standards. That is not meaningful to me and any black-letter lawyer looking at that is not going to be reassured that this is going to provide any assurance at all. That remains a very important and very serious question in terms of this very important piece of legislation.Given the changes that have already happened there are going to be costs and expenses that lawyers are no longer going to be willing to pick up whether it is the $50 user charge or other charges that may be imposed. Lawyers providing this sort of work under legal aid are simply not going to be able under the current regime to pick up those costs and they will fall on the parties. These are already impecunious parties—that is why they are seeking legal aid and apply for legal aid—and to then be subject to a further test of serious hardship does not look like good justice to me. Let us hear from the Minister on those points.KRIS FAAFOI (Labour—Mana):Taloha ni and tēnā koe Mr Chair. It is a pleasure to take a call on Part 2 of the Legal Assistance Amendment Bill. This is an issue that has played quite largely in my electorate of Mana. There was a quite well-attended public meeting around the issue of access to legal aid organised by someone who I think knows the Minister in the chair the Associate Minister of Justice quite well and who has I think lobbied him on many occasions around her concerns with many of the provisions in this bill.Pointing directly to Part 2 I want to also head towards clause 27 I think it is as I think my colleague Andrew Little did. This is the insertion of some new sections sections 131A to 131C around the advocacy for children. One submission during the select committee process that I did want to highlight was from the Children’s Commissioner Dr Russell Wills where he had serious concerns about where this bill was heading in terms of looking after children. In point 21 of the submission that Dr Wills made to this bill he said: “In addition I note that the Bill makes no reference to the best interests of the child in the explanatory note to the Bill despite the fact that it will clearly impact upon children and young people who are involved in Family or Youth Court proceedings.” He goes on to say that “These children and young people areamong the most vulnerable in our community and it is therefore imperative that their interests are given primary consideration.”I think that is very interesting—I think that is probably one way to put it. But it is quite a damning statement from the Children’s Commissioner the fact that this bill has not really taken the best interests of children to heart both within the explanatory note and also within the provisions of this bill. That was in essence the substance of the meeting that was held in Porirua. There was a lot of concern from the legal community from a lot of agencies who deal with children in this situation about the ability to advocate properly for children in these situations where you have families who are separating especially because there is a lot of legal assistance offered in this situation. A lot of the families that these lawyers are acting for do find themselves in serious hardship.Just as Andrew Little did I want to point to I think new section 131A(6) inserted by clause 27 of this bill and ask whether the Minister in the chair could try to clarify for us the definition of “serious hardship” as it is in the bill as it stands at the moment. As it stands section 131A(6) says that “serious hardship” in relation to a party or a dependent child of that party: “(a) includes significant financial difficulties that arise because of—(i) the party’s inability to meet minimum living expenses according to normal community standards;”.For any judge to try to make sense of that I think would be difficult. If that judge were to be sitting in the Porirua District Court that would be difficult because I would say that most of the families appearing there would meet that test and would therefore be able to get some kind of compensation or get legal assistance but some others may not depending on where they were at the time or which court they were being seen in. Could I ask the Minister in the chair whether he could clarify that for us; that request comes from me and also from Andrew Little.I did want to make the point just before my 5 minutes is up that we do not believe that the best interests of the children are at heart here. We can look at the change in the title—and we will get plenty of opportunity to debate that. It was originally the Legal Assistance (Sustainability) Amendment Bill; the title has been changed. But we believe that the real driver of this bill is in its original title and that is to make in the eyes of the Government legal assistance much more sustainable which in “real speak” is to cut costs to the detriment of justice and access to justice and unfortunately in this case to the detriment of the ability of families to get access to justice for their children in these situations.That was certainly made clear by the Children’s Commissioner and I just want to read that quote once more to make the point. In that submission the Children’s Commissioner said that “the Bill makes no reference to the best interests of the child in the explanatory note to the Bill despite the fact that it will clearly impact upon children and young people who are involved in Family or Youth Court ...”. That also goes back to the access to justice issue which I know we have already debated in Part 1 but this is very much related to it around the fee that some families would have to pay to access legal aid. I understand and I may stand corrected that it was originally $100 but I think the select committee process has brought it down to a fee of $50. But I know certainly from the people in my area that they have been saying that if they have someone who comes along arrives at their reception area whom they have dealt with in the past—they have a history they have a relationship with that family—they are very reluctant to turn them away just because they cannot afford to perhaps pay $100 as it originally was or $50 as it stands now. So what they will do is more than likely accept the case because they know that the family does have a very important case to be heard and as I said there may be children involved.There are three options that could potentially happen in that situation. The provider will simply just pay that fee itself and wear the costs; all the clients will end up wearing the costs over that financial period or that financial year if they just aggregate all those fees; or in the end the legal provider will just end up slapping another $50 or what could have been potentially $100 on the bill that the Crown gets. We do not think that is necessarily the cleverest situation to be in especially when it is asking a lot of legal firms many of which are considering getting out of the legal aid arena to wear the additional costs of getting over the first hurdle for many of these families in order for them to access legal aid.So that was one of the concerns that were certainly raised in the Justice and Electoral Committee by a number of submitters and again it was raised by one very strident legal provider in my area who again knows the Minister in the chair quite well and who I am sure has had a conversation with him about it.We are concerned around the ability of this bill to look after the best needs of the children—that has been made pretty clear in the quote from the Children’s Commissioner that I have used twice—and the ability of families to access legal aid in that situation in order to get the best advocacy for children. Then on the other side of things we are also very concerned about the access and I guess some of the barriers that have been put up under this bill to access to justice for a lot of families.Just before I finish off I want also to commend the select committee. As I have said in a previous contribution on this bill I think the committee has taken what was an awful bill and made it just bad which is an improvement because I think the committee has taken into consideration some of the submissions that it heard through the process. I guess members on this side of the Chamber have tried to make some changes and there has been some movement from the Government to support changes around first of all reducing the fee from $100 to $50. That is an improvement but it is still we think a hindrance to access to justice. I do not want to be too harsh on that select committee because it has made some changes that make the bill better but we still do not think it is a very good bill in terms of making the legal aid arena more efficient and I guess a little bit more sustainable and also in terms of balancing that up against access to justice and fairness especially for those vulnerable families.I will leave it there and hopefully the Minister in the chair can answer some of those questions especially around section 131A in clause 27 in terms of serious hardship—if he could try to explain to the Committee what the spirit of that clause means where it says “the party’s inability to meet minimum living expenses according to normal community standards;”. If the Minister in the chair could elaborate on that for us it would be quite useful for this side of the Chamber.Hon CHESTER BORROWS (Associate Minister of Justice):I just want to address three points that have been raised by the previous two speakers and put their minds at rest in respect of those issues. In respect of clause 27 the point was made that the Children’s Commissioner had made a submission that the best interests of children were not mentioned in the Legal Assistance Amendment Bill. The fact is that clause 27 amends the Care of Children Act 2004 and the paramount principle of that Act is what is in the best interests of the child. When a decision is being made by a judge under these clauses that go to amend the Care of Children Act 2004 he must consider what is in the best interests of the child. So just because it is not mentioned in this bill it does not take anything away from the fact that when the Care of Children Act is amended by this bill the judge will have to make those considerations.Another question that was raised by the earlier speaker Mr Little was around how the costs of child contributions were going to be recovered by the court. I had I think quite extensively covered that in my previous speech which said that the regulations that willaccompany the bill make provision for the judge to be able to recover no more than two-thirds of the cost of counsel for the child. The judge can apportion that by default fifty-fifty but has the opportunity to move that or to remove it completely if he believes that there is hardship or that it is not in the best interests of the child to try to recover those costs.So then the question was around what “serious hardship” means and as this is not defined within the bill how a court could possibly understand what “serious hardship” means. The term “serious hardship” is a term that is used in other legislation and so is interpreted now by judges in the course of their deliberations in respect of these other Acts. Two examples are the Income Tax Act and the Tax Administration Act. This term has been defined by case law—by the common law—so judges seeking to interpret the term “serious hardship” have precedents that they can fall back on.I guess it is important to note in global comments in respect of this particular bill that the cost of legal aid had blown out by 55 percent over a 4-year period. That is something that any Government has to address. The previous Government which had the means and the resources to be able to do more in this area did a couple of unusual things. One of them was that it spent more money in this area by widening the boundaries for which legal aid could be granted. But what it did not do at all was take up the legal aid rates that legal aid lawyers were paid. So what we found when we came into Government was that there were a number of firms providing legal aid that were getting out as the previous member indicated. They were getting out because those levels of remuneration were not there.To be fair that member’s Government did nothing about it in the 9 years that it was there. I accept that what the National Government has done now is to restrict access to legal aid in some areas but at the same time it has extended it in others. Where an initial premise of restriction or constraint has been promoted in the bill and there have been submissions made against those constraints we have responded by way of folding those back. The previous speaker mentioned that too in respect of the filing fee moving from $100 back to $50.I can understand that there will be members of the Committee who will not be voting for this legislation. I understand that. I hope they do reconsider that if that is their current standpoint bearing in mind that even they accept—in rather derisory terms—that some improvements have been made. I believe that it is a bill that will ensure ongoing sustainability of legal aid. I do not expect that in a sector that is bound up in convention and tradition we are going to have huge accolades for changing anything until those changes have been proved to be worth their salt. Thank you.Hon PHIL GOFF (Labour—Mt Roskill):I want to pick up on a couple of points that the Minister in the chair Chester Borrows has just made. He repeats the justification for a bill that in the end could not be justified. That is why when we look at Part 2 of the Legal Assistance Amendment Bill as in Part 1 page after page of the bill is struck out. Even “(Sustainability)” in the title is struck out. Can I suggest that the reason that the word “sustainability” has been struck out is that in relation to what the National Government was proposing in terms of fairness in terms of decency and in terms of having a justice system that actually deserves that title there was not anything that was sustainable in the original bill if you judge it on the basis of those particular principles.The Minister talks about the blowout as he terms it in legal aid. What the Minister does not tell the Committee is that before legal aid was increased under the last Government it had been static for 20 years. Legal aid had not been increased in 20 years and of course it was going to cost more when you decided that actually if the principle of legal aid—affording justice to all—is to be realised then you cannot makethe threshold for being eligible for legal aid as low as it is. The threshold it will surprise listeners to hear for a single person getting legal aid is an income of $22000 a year. That is less than what you get on the minimum wage. So effectively what we had and what this Government was seeking to worsen was a situation where if you are at the lowest level of income in society if you are on a benefit you could get legal aid but if you are out there working working every hour that you are able to to try to get things together for your family you would be rendered ineligible for legal aid because the threshold was—[Interruption ]—“you” meaning the person who is receiving it Mr Chairman—that they were not so poverty-stricken that they would get it.What this Government seems to be saying in this part of the bill and in the bill as a whole is that if you are absolutely poverty-stricken then you might get some assistance but the Government ignores the fact that a great many people—ordinary hard-working New Zealanders trying to get justice through the system—will get no assistance because the threshold levels are so low. You will be denied the right to justice. And there are tens of thousands of New Zealanders who come into that category. So when the Minister talks about as he did a blowout of legal aid what he was effectively talking about was an extension of legal aid so that people who could not reasonably be expected to pay for the cost of justice themselves would not be denied justice.One of the basic principles by which you judge any society is that access to justice should not be based on the amount of money you earn. What this section of the bill shows more than anything is that Ministers on more than a quarter of a million dollars a year do not understand what it is like for people on $30000 $40000 or $50000 a year when they are confronted with the huge cost of legal bills. They cannot afford it they do not get represented and justice does not get done. Surely—surely—there would be bipartisan agreement in this House that a priority must be that nobody is denied justice by virtue of their inability to pay but the tragic reality of the system in New Zealand worsened by this bill is that time and again people are denied access to justice. Justice is for the rich. Justice is for those who can afford the Queen’s Counsel—and those who can afford the Queen’s Counsel end up getting away with things that they probably should not—and those people at the bottom who are struggling to see justice done are denied justice by this Government. I refuse to believe that this is about the fact that the Government cannot afford to pay for it. The Government could afford to give John Key a couple of hundred thousand dollars a year in tax cuts. Surely it can afford to ensure justice for people. In this clause of the bill surely it can afford to give justice to the child who might otherwise be unrepresented—the child the most vulnerable person in the system. If there is a need for counsel for the child that means that their life has been pretty miserable they have had a hard go of it and they do deserve justice. But this bill constantly in every clause that was put into it by Simon Power denies people justice.If you look at the report back and the summary from the Justice and Electoral Committee you will see how appallingly bad this legislation was when it was introduced. It was so appallingly bad that a new Minister of Justice coming in could not sustain it particularly not one with leadership ambitions and trying to take away the flinty-faced image that she had. She realised that this was poison to her and particularly poison to her when justice to children is being denied. But the Minister has not realised that very effectively because this is the second bill that we have had in the Chamber this afternoon that has sought to take away the rights of representation that children can have. I think that that is an absolute disgrace. This legislation has been gutted of about maybe 70 percent of the appalling—appalling—original clauses that it had in it. What I am saying to members today is that the remaining 30 percent is not worth the paper that it is printed on either.When you look at it there are so many extra procedural things that the court will have to go through that this will not be saving money; this will be costing money. This becomes a bureaucratic nightmare when you work out what the interests of justice involve and where there is serious hardship all for the saving of $50 as a fee on legal aid or for trying under Part 2 to force the parents to pay the cost of counsel for the child. There will be battles between the parents who may be at odds with each other. In the end for the sake of saving a little bit of cash up front there will be huge administrative costs and the child runs the risk of not seeing justice done in his or her case.The regulatory impact analysis of this bill applying to Part 2 says that “The purpose of the legal aid scheme is to provide access to justice by providing legal services to people of insufficient means. It contributes to fairer outcomes by ensuring that parties with unequal financial resources have equal access to justice. Consequently legal aid helps underpin confidence in the justice system.” That is the Government’s own regulatory impact statement. I want the new Minister in the chair the Minister for the Environment to explain how in any way Part 2 of this bill—or for that matter Part 1—meets the objectives set out in the regulatory impact statement. How is it that this bill helps provide access to justice? The whole purpose of this bill is to deny access to justice. It is to deny access to justice to save money. There are many areas where the Government could save money without denying access to justice and particularly without the punitive areas that are involved with changes to the Care of Children Act that are made in Part 2 of this bill. The Minister of Justice under the pressure of submissions that were made to the Justice and Electoral Committee has tried to make this bill acceptable. She has taken out some of the worst features of it but she has equally left features that render this bill unacceptable to our side of the Chamber.In relation to clause 27 of the bill the Minister previously in the chair the Minister for Courts said the paramount principle of the Care of the Children Act was the best interests of the child and that because that was in the principal Act it did not need to be included in Part 2 of this bill. That is not a very good reason. It is abundantly apparent that when you are charging for counsel for the child and putting in obstacles in the way done by this bill and the previous bill that the Parliament has just considered the Family Court Proceedings Reform Bill you are not acting in the best interests—The CHAIRPERSON (H V Ross Robertson): Order!Hon PHIL GOFF: “You” meaning the generic “you” Mr Chairman. I am sure that you would want to see the best interests of the child protected in this bill. You are a very good Chair and member of the Parliament. We are interested in upholding what every New Zealander believes should be upheld: that the interests of the child should be paramount. Why is it that this bill is so miserable—SCOTT SIMPSON (National—Coromandel):It is always very interesting to follow the Hon Phil Goff and particularly one of his vein-popping angry presentations. That was I think probably an indication that he has been following Australian politics very closely this week. One of my colleagues was unkind enough to think that maybe a new name for him might be “Phil Rudd” but probably I should refer to him always by his true and proper name which is the honourable member for Mt Roskill.Speaking in the Committee stage on Part 2 of this Legal Assistance Amendment Bill there are several point that I would like to make. Part 2 is the part that makes amendments to other Acts—notably amendments to the Accident Compensation Act 2001 and the Care of Children Act 2004. Clause 26 relates to the costs of court-appointed counsel: “the court may if it thinks it is appropriate order a party to the proceedings to refund to the Crown an amount the court specifies in respect of any fees and expenses that relate to” the appointment of counsel. During the select committeestage the Justice and Electoral Committee considered this point carefully. It is appropriate that I just mention the good work of the committee. These were issues that were in some cases quite technical quite complicated and committee members addressed themselves to them with full keenness vigour and attention to that detail.The clause that I was referring to goes on to say that “no order under section 131A may be made against—(a) the Crown … (b) a person in whose custody the child concerned has been placed [following] an order made under the Children Young Persons and Their Families Act 1989.” Proposed new sections 131A through to 131C have been inserted into the bill. Proposed new section 131A allows for an order requiring refund of payments in respect of a lawyer acting for the child. Proposed new section 131A(2) says that each party must pay an equal share of the prescribed proportion and that such an order may be declined to be made by the court against a party if the court is satisfied that the order would cause serious hardship to the party or serious hardship to the dependent child of the party. The court would need to be satisfied that in its view of the circumstances of the case including the conduct of any party—that is important the conduct of any party—it would be inappropriate to require the amount payable in accordance with the court’s view.The test for serious hardship is important and one that I know the courts already take seriously and it is well considered in other legislation. Kris Faafoi in his contribution to this debate a few minutes ago spoke about this. Serious hardship includes significant financial difficulties that arise for a variety of reasons. Those reasons can include such matters as the party’s inability to meet minimum living expenses according to what is known as normal community standards. Also relevant for consideration in a determination of serious hardship will be the cost of medical treatment for an illness or injury of the party or a dependent child of the party and I think that is right and appropriate. Serious illness suffered by the party or by a dependent child of the party is also to be considered in the measure of what serious hardship is and I am pleased to see that the cost of education for a dependent child is another relevant factor the court would take into consideration in determining serious hardship.The clause goes on to exclude some factors that are not to be included in the definition of serious hardship. Again I think the legislation will address those matters appropriately. For instance social activities and the entertainment of the party or the dependent child are not to be considered. The party’s inability to merely fund or afford goods or services that are expensive or of a higher quality or standard than the normal community standard of goods and services is also excluded from the consideration in terms of the definition of serious hardship.As I said the committee has dealt very carefully with these sections. They are complicated. They are worthy of the careful consideration of this Committee. I am very grateful for the work done by all members of the select committee.A party vote was called for on the questionThat Part 2 be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; Independent: Dunne.Noes58New Zealand Labour 33; Green Party 14; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.Part 2 agreed to.Clauses 1 and 2ANDREW LITTLE (Labour):I rise to take another call. It is quite clear from the Legal Assistance Amendment Bill and from the debate we have had so far on it—and by the removal already before we even came to the Committee stage of the word “(Sustainability)” from the bill as was originally presented to Parliament—that this is not a bill about legal assistance at all. It has departed so vastly so greatly from that original objective that it cannot possibly be described as a legal assistance bill in any measure at all.This bill is fiscally driven. It is about this Government’s desperate bid to drive down the cost of legal aid. We know that legal aid is expensive. It comprises a significant proportion of the Ministry of Justice budget—I think about 50 percent and that is a big chunk. But that is because legal aid plays a very important part in the life of our justice system and I underscore “justice” because knowing what legal costs are in this country as they are in other developed countries without legal aid a large number of people would be deprived of the right to access our justice system. They would be deprived of the right to representation. So when we are considering matters of legal representation and the assistance that people need to get legal representation so that they can stand up and have their views heard in court and they can defend themselves whether it is against the power of the State or whether it is against the power of other citizens who are well funded and well founded then we should tread very carefully and very cautiously. And we should bear in mind the fundamental principle that there is no such thing as a justice system that shuts out a significant proportion of the population.We as a developed country celebrate our participation in and our adherence to the principle of the rule of law. I have talked about that before in this House and it is absolutely fundamental to a developed country. In fact one of the markers of a civilised and developed country is that we observe the principles of the rule of law and a fundamental principle of the rule of law is that all citizens have equal access to justice which means that they have equal access to the institutions of justice which include our court system. So when citizens are called upon to be in court because somebody else sues them or they are in a situation where they have faced an injustice—it might be a consumer malfeasance it might be a family matter it might be a criminal matter it might be a regulatory matter—and they are required to appear in court to argue their case or defend their position then those who cannot afford legal representation must be given assistance to do that. That is a constitutional principle. It is not about private rights. It is not about the private realm. It is a constitutional matter that if people are caught up in private disputes and must call upon the justice system or if people are called upon to answer the powerful hand of the State then they must be afforded proper support so that they can be represented and be advocated for in court.The legal aid system that we have at the moment already sets a very low threshold—in fact actually a very high threshold but a low income threshold which enables them to get access to State assistance to be represented in court—of $22000 a year. There are a lot of people who are earning considerably more than that who would have great difficulty affording the legal fees that would be required to mount even a small or brief legal case. Even a plea in mitigation for a small criminal matter is going to cost a few hundred dollars and if you are on $30000 $35000 or even $40000 a year an extra few hundred dollars at a point in time in your earning year is going to be a significant burden. Those people do not have access to legal assistance. If it is a serious criminal matter they may do but the income threshold that entitles a person to legal aid is very low.This bill compounds that situation when it comes to civil matters. The imposition of a $50 user charge to somebody who is on $22000 a year is a significant obstacle. Thatis a huge burden. That is the difference between buying some food that week paying the power bill that month or meeting other important costs and not. It might be a school bill or something like that. Fifty dollars is a significant imposition on somebody on $22000 a year but this bill puts it on them.This bill also potentially levies other costs. When it comes to a care of children matter a person on legal aid may be required to meet the cost of counsel for the child if the court appoints counsel for the child in a case in which they are involved. They may have access to time payments. There may be means for them to do that but that will be a significant burden on them as it would be obviously to somebody on much less than $22000 a year. The bill provides for debt collection measures which add to it and they include attachment orders and attachment orders to the extent of 40 percent of people’s net income—their net weekly pay. That is a huge proportion of their pay and that is enough to tip people over into absolute dire poverty.This bill is not about legal assistance. This bill might be more appropriately named the “Legal Costs (Imposition of a Cost Burden on the Poor) Bill” because that is what it will do. In a desperate bid by this Government to drive down the cost of legal aid it has lost sight of the wood for the trees. What is an important constitutional principle that is about access to justice has got completely lost in the Government’s desperate bid to recover costs and make its books look better. Although no one would argue against proper fiscal responsibility in the management of the Government books we cannot overlook the important principle that access to justice will be put at risk at least for some people as a consequence of this bill. So the title must reflect that. “Legal Assistance Amendment Bill” simply does not speak to the reality of this piece of legislation which is the imposition of significant hardship and a much greater burden on people who are least in a position to bear that. We are opposed to it for that reason.KRIS FAAFOI (Labour—Mana):The title and commencement clauses debate for bills is usually an opportunity for members of Parliament to take some licence and have some fun with the titles of bills. But in this instance I am certainly not going to do that because this is simply not a funny issue at all and to do that would be belittling the effect of what this bill is having on our communities. It is a serious issue.As it stands I believe the title of the bill is the “Legal Assistance Amendment Bill”; the word “(Sustainability)” has been struck out by the Justice and Electoral Committee. The question has to be asked—and I have commended the select committee for making such changes—as to why the select committee thought it fit to remove one word from the title that being “Sustainability”. Wanting to be accurate the Chair has given me the ability to borrow his dictionary. It does not exactly have the word “sustainability” but under “sustain” one of the descriptions is “to provide for or give support to esp. by supplying necessities:”.Therein lies the reason why this select committee has taken out the word “Sustainability” from the title of the bill. It is because this certainly does not provide for or give support “especially by supplying necessities” to the legal assistance arena of our justice system. In fact we would argue that it does exactly the opposite of that by taking away support for and not supplying the necessities for legal assistance especially for our most vulnerable families. As Andrew Little argued we do not want to get to the stage where access to justice and the ability to go through the justice system whether it be a civil matter or a criminal matter is all based on how much money you have in your bank account.We believe that the motivation for this bill is simply fiscal and that is to cut costs. Unfortunately one of the effects of that is as we fear that access to justice for many New Zealanders will be removed. So we do believe when looking at the dictionary here that the select committee was right to remove the word “sustainability” from thetitle because this bill does not provide any support and it certainly does not provide the legal assistance arena with the necessities to do what we believe the legal assistance provisions in our justice system are there to do. We do think it does exactly the opposite.We need to think of this from three different perspectives. One is as I have mentioned before the perspective of the child. There are no words in the title at the moment that I can see that point towards it being in the best interests of the child nor in the explanatory note and that was a point that was made by the Children’s Commissioner. I will take the liberty of taking some quotes out of his submission to the select committee. He made a number of very good points. He noted that “the Bill makes no reference to the best interests of the child in the explanatory note to the Bill despite the fact that it will clearly impact upon children and young people who are involved in Family or Youth Court proceedings.” He went on to say that “These children and young people are among the most vulnerable in our community and it is therefore imperative that their interests are given primary consideration.”You cannot argue with the Children’s Commissioner on that. You may think that his being the primary advocate for children in our Government set-up would mean that he is purely focused on that but as we can see and as I have referenced before there is no reference to children in either the explanatory note or the title.The recommendations that the Children’s Commissioner made were basically not to proceed with this bill. His recommendations were “That the Bill is amended to expressly provide for the continuation of the current Court-administered selection processes;”. Also basically he thought that the provisions for access to justice for the best interests of the children were not in the best interests of the children.There are other pieces of legislation that are going through this House that we also think are down to cost cutting and one has been on the Order Paper earlier today. I do want to read a quote from Mark Henaghan from Otago University. This is going back to working in the best interests of the children. Professor Mark Henaghan expressed his feelings in a very concise quote on the removal of child advocates and this is certainly something that is covered in this bill. He said—it is a very quick quote—“So if we take their representation out we kind of doom them to not be heard.” In essence if we do make the barriers much higher for families to access justice which is what we are doing here in the Legal Assistance Amendment Bill I think that Mr Henaghan’s quote becomes quite apt. As Mr Little said we believe that one of the effects of this bill is there will be fewer child advocate counsels being able to be accessed by families and we do think that is of major concern to a lot of communities.Certainly as I have mentioned in my community in Porirua the legal fraternity is very worried. Family lawyers are very worried about their ability to be able to act for families that they have had a relationship with for many many years. I think they are a bit frustrated with some of the commentary that came back in their direction when they were opposing the moves that the Government is making—that the lawyers were trying to keep the gravy train going and that they were concerned only about the fees that could be got out of prolonging what is already in place or taking away any legal assistance that might be open to them. There was a deep level of frustration at that and I think that is well founded because if you go to most communities around New Zealand and you talk to lawyers who are acting in Family Court proceedings or family proceedings they very much have the interests of children and families at heart. I am sure some of them also need to eat so they want to make sure that they get paid but the insinuation that these lawyers were basically out to look after themselves was something from the Government that certainly upset them.As I said this is not one of those title and commencement debates where you have fun with the title of the bill or with the commencement of the bill—not that I think anyone has ever had any fun talking about the commencement of a bill. This is a serious issue. I note that the word “Sustainability” has been removed from the title. I have noted that this dictionary which has been loaned to me momentarily talks about sustainability being the ability “to provide for or give support to esp. by supplying necessities:”. We do not believe that this bill does that to the legal aid framework. We believe it does the exact opposite. It is appropriate that that word “Sustainability” was removed from the title. Maybe the Government should not have put it in there in the first place and it has been exposed for that. We do not believe that the bill does make the legal aid framework sustainable. We think it takes away the rights for many many New Zealanders to access justice especially for the most vulnerable. Especially on this side of the Chamber we do not want to get to the stage where access to justice depends on whether you can afford it or not.Hon LIANNE DALZIEL (Labour—Christchurch East):I would like to follow on from that excellent contribution from my colleague Kris Faafoi where he basically ended with reference to the original name of the bill the Legal Assistance (Sustainability) Amendment Bill. Of course the word “Sustainability” has been removed. I too agree with him that “Sustainability” should have been removed from the bill and probably should not have been in there in the first place although it was there for a particular reason and that was that it was a cue for explaining what the Government was actually trying to do which was to cut costs—cut the costs of legal aid.Of course when one cuts costs in one area there is something else that always happens somewhere else. And is it not unusual that normally speaking in a regulatory impact statement you cannot find where that blowout is going to occur because it looks only at the short-term impact and the impact on the particular budget and it is not looking in the long term. But actually in this regulatory impact statement they have done an excellent job and I want to congratulate those who put it together unfortunately without the benefit of wide public input because of time pressures and the budget-sensitive nature of the issues under consideration. We were told that the select committee process would of course substitute for the public input. I actually do not think we do justice to the need for public input on matters as important as this by saying that the select committee process will do. You can put in a written submission and then turn up and have your time in front of the committee for 5 or 10 minutes as an individual. I think that that is a bit of a problem.I will quote from an individual’s submission because I want people to know that this is not about what lawyers think or about what people who work within the system necessarily think. It is the very direct and real impact that makes this bill not sustainable. That is why the word “Sustainability” has appropriately been withdrawn. But let me just read out the number of risks that were discerned. One was that a change of purchase approach is required but is likely to be resisted by some parts of the legal profession. Well that has happened. There are people who have pulled out of legal aid all around the country. In fact we heard evidence from one person down in Christchurch who had actually left her firm and set up her own practice so that she could continue to offer a degree of legal aid work to her client base which was largely made up of refugees and migrants. I say good on her. She was extraordinary.The regulatory impact statement states: “Reductions in the price paid to lawyers could create gaps in provision particularly in the family and civil jurisdictions …” which is exactly what has happened particularly in smaller centres; “The introduction of income and asset thresholds for the criminal means test will be in tension withsection 24(f) of the New Zealand Bill of Rights Act” and that was something raised by this individual submission that I am going to refer to; and “It could also delay some court cases if judges defer proceedings because of inadequate representation. Restrictions to eligibility will disadvantage people on low incomes who have few options to find legal services elsewhere. Generally this includes young Māori men in the criminal jurisdiction and women and children in the family jurisdiction.” I went through the list of the sequence of events that actually discriminates—not deliberately but in fact discriminates—against Māori and that is why we have a higher proportion of Māori in our prisons. It starts right from when they get stopped in the street all the way through the process. They are much more likely to end up in jail for longer.The final risk which was the interesting one because it is raised in another submission that I want to refer to is that “Withdrawing legal aid for low income groups is likely to lead to additional costs elsewhere in the justice system. In particular it may increase the number of self-represented litigants with flow on costs dues to delays additional assistance required from court staff and the judiciary and higher numbers of appeals of decisions.”This refers me to Anita Cochrane from Auckland who has made this submission saying that she believes it to be “a travesty and makes a mockery of the New Zealand Bill of Rights Act …”. I congratulate her on being so forthright in her presentation to us. What she was saying was that section 24(f) of the Act makes it absolutely clear that people “shall have the right to receive legal assistance without cost if the interests of justice so require and the person does not have sufficient means to provide for that assistance;”. She talks about not having the right to get a fair hearing if you cannot afford to pay for a lawyer and I think that that is a statement that is well made.What she went on to do was to speak of her own experience and she did not talk about the particular matter that took her to court but it was a case that took her “1 year and 5 court attendances 4 of which were all remanded by the prosecution due to some reason”—for example the documents were not there it lost some evidence or there was another important case going on. She says: “It was only on the 5th attendance and the 5th attempt by the prosecution to remand the case yet again that I demanded that the case go to court or they withdraw their charges.” Each time she had to pay her lawyer $2000 to appear. She makes the point that she earned $51000 owns a car worth $2000 could not afford to own her own house and had no capital or other assets. “The opposition”—meaning the prosecution—“then tried to bully me into pleading guilty. I had to weigh up the cost of trying to find more money as I had paid out so much and still had not even seen a judge or the possibility of the end of the case. So what did I do? I was forced to agree to a $500 fine and pay court costs. It was cheaper than trying to find more money for the Lawyer yet the prosecution had lost the evidence!”.This was in 2010 under the current arrangements. She asks: “Has anyone looked at how much a person earning $22000 a year actually is in real terms? After tax a person earning $22000 takes home $330 a week. The cheapest rent for 1 bedroom in Auckland is approx $200 a week. That [leaves] $130 for food transport medical and possibly child care. They could possibly have 1 dependent. What portion of New Zealand earners are in that area? Those people working in the fast food business waitress staff and the likes. Students working part time shelf packers … The low income earners.” Then she went on to talk about her daughter falling into that bracket but owning a car—again that being her only asset. “The changes to the current bill”—she says—“will require 90% of the population to pay for their own defence. From the person packing shelves right up to the company directors and owners. The 10% of the population who can get legal aid are the Zero to $21000 a year earners. These are people that are unemployed or on sick benefits maternity benefits or other benefits or those that fall into this criteria … who take home $315 a week after tax.Where is the fairness in saying only 10% of the people are entitled to assisted legal representation?”. She made the point that actually in the Crimes Act—she quotes the Crimes Act—“ ‘The fact that an offender is ignorant of the law is not an excuse for any offence committed by him’ The reality is that many people are ignorant of the law.” She says: “There are so many laws. The people trust Parliament with the making of the laws to protect them [not] to disadvantage them so they can represent themselves in court or plead guilty due to ignorance of the law.” That is the problem: she pleaded guilty due to ignorance of the law. She was not guilty of the offence; she would have got off if she had been able to defend herself but the system failed her. The system let her down.That is what my major concern is and that is exactly what the concern was when it was expressed in the regulatory impact statement. Be careful what you wish for. Be careful what you do. The regulatory impact statement states: “Withdrawing legal aid for low income groups is likely to lead to additional costs elsewhere in the justice system. In particular it may increase the number of self-represented litigants with flow on costs due to delays additional assistance required from court staff and the judiciary and higher numbers of appeals of decisions.” And the one they missed out? Pleading guilty to a crime you did not commit. And that is going to happen time and time and time again because it is much cheaper to plead guilty and end up with a conviction—$500 and court costs—despite the fact that the prosecution has lost the evidence. I wanted to mention a real case a real submission in front of our Justice and Electoral Committee because I think it makes it real for this Committee.ALFRED NGARO (National):I rise to take a call on the Legal Assistance Amendment Bill especially in regards to its title clause. I actually do agree with the Hon Lianne Dalziel. I think that hearing those real cases of real people and real places and the impact that they have is important because when we are doing this we take those into consideration with the regulatory impact statement. The member Kris Faafoi talked about the word “sustainability”. If the member would actually read the bill he would see that the intent talks about the importance that legal assistance be affordable into the future and available to those who need it most. I think that really is our concern.When we look at the ongoing growing costs that there are we know that for instance the honourable member Lianne Dalziel and former member of Parliament Charles Chauvel petitioned the Minister of Justice to consider pausing the progress of the Legal Assistance Amendment Bill so that we could take into account the review that was taking place in the Ministry of Justice in regards to the Family Court. It is acknowledged that that time was taken the Family Court review was then conducted and completed and then therefore the Legal Assistance Amendment Bill was taken into consideration with that. So it is important to be able to see that the fact is that when we talk about electorates our communities that we are talking about—Tim Macindoe: I raise a point of order Mr Chairperson. I am sorry to interrupt my colleague but ever since he started speaking the level of interjection particularly from Mr Cunliffe has been unreasonable and I would ask you—The CHAIRPERSON (Lindsay Tisch): I am the judge of that.ALFRED NGARO: It very much was the concern of the Justice and Electoral Committee when we heard the submissions to ensure that legal aid was available but most important not just for now but into the future as well. Sustainability was absolutely important to us. We realise the importance of that at the moment. The budget for 2011 included $103.5 million in short-term funding while longer-term sustainability issues were addressed through both this bill and the wider review of the Family Court which would include $138 million over 4 years.We know that adjusting the eligibility for legal aid was important and it does make it sustainable in this. The reforms include tightening the merits test by no longer needing to take into account the interests of other vulnerable parties and adjusting thespecial circumstances consideration in the means test for family and civil cases so that it focuses on expensive cases. We know—and I know Mr Faafoi knows in his community in the electorate of Mana and even the legal fraternity there talks about it—that in the number of cases and for the number of our people who needed legal aid and should have accessed legal aid this bill will not remove it from them. In fact if anything it will make it easier and more accessible and if he reads the details he will see that. He will see that. What is important is that—Hon David Cunliffe: I raise a point of order Mr Chairperson. I believe that under the Standing Orders governing misrepresentation the member has misrepresented the Government’s position—The CHAIRPERSON (Lindsay Tisch): No sit down. Look that is not a point of order; those are debating points.ALFRED NGARO: Thank you Mr Chair for your wise counsel. We know that adjusting eligibility for legal aid is important. The reforms include removing the requirement to index means thresholds to movements in the Consumers Price Index and simplifying the administration of funding of legal aid for offenders for Parole Board appearances so that all such cases are classified as criminal legal aid. This bill increases payments by legally aided people. This change encourages people to actually take consideration of whether they need legal aid or not and to think about whether they wish to proceed with litigation and it provides incentives for repayment of legal aid.We believe that the changes that are being made through this legislation in consideration of the wider context of the Family Court review and the Family Court Proceedings Reform Bill not only are sustainable for the future but also make legal aid accessible to our communities of need and to our vulnerable communities. I commend this clause.A party vote was called for on the questionThat clause 1 be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; Independent: Dunne.Noes58New Zealand Labour 33; Green Party 14; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.Clause 1 agreed to.A party vote was called for on the questionThat clause 2 be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; Independent: Dunne.Noes58New Zealand Labour 33; Green Party 14; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.Clause 2 agreed to.The Committee divided the bill into the Legal Services Amendment Bill the Accident Compensation Amendment Bill the Care of Children Amendment Bill the Child Support Amendment Bill (No 2) the Family Proceedings Amendment Bill and the Property (Relationships) Amendment Billpursuant to Supplementary Order Paper 251.Bill to be reported with amendment presently.State Sector and Public Finance Reform BillIn CommitteePart 1 Amendments to State Sector Act 1988The CHAIRPERSON (Lindsay Tisch): This is debate on clauses 3 to 57C and schedule 1.Hon DAVID CUNLIFFE (Labour—New Lynn):I rise to take a large number of calls on this detailed and very important bill the State Sector and Public Finance Reform Bill and to confirm that Labour supports this bill with certain reservations and it will be supporting a number of the Supplementary Order Papers despite the late timing in which they have been brought to the Committee.It would be remiss of me to continue with this debate before adding a quick personal comment about the proceeding. May I enter into the record my deep deep concern about the removal of access to justice and the tightening of the legal aid provisions. That is a huge backward step for this country.Labour supports this bill with reservations. We were opposed to it at the first reading and it is not often that an Opposition that opposes a bill changes its vote to support the bill at the second reading and at the Committee stage. This for those watching is a rarity and it has occurred for the following reason. The bill as introduced had a fundamentally damaging effect on the rights of civil servants. It made it much much more difficult for them to transfer between agencies while retaining their existing rights to redundancy provisions. It trampled all over the negotiation rights in wage bargaining that civil servants have under the law. There were a number of other provisions that were at odds with the existing standing of public sector rights and good practice.I am very pleased to be able to offer compliments to the Minister of State Services the Hon Jonathan Coleman to officials who worked very hard on the bill and to members opposite who chaired by the Hon Todd McClay entered into a good-faith process of negotiation by which the core intent of the bill was preserved. Its good effects in terms of introducing more flexibility and teamwork across the public sector will be achieved but the offending provisions that had an undesirable effect on the rights of public sector workers have been changed. They have been changed so dramatically that I am able to enter into the record the support of the State sector unions not only for the changes but for the position that our party is taking in supporting the bill. That is a significant turn-round given the state of the bill as introduced.I would like to address some of the specific provisions in Part 1 of the bill which covers the amendments to the State Sector Act. We understand that the Government will move to split the bill into a number of bills that affect different underlying core legislation. Part 1 of the bill was in fact the most contentious. Mr Chairman I hope that you will allow the Minister to take a number of calls to underline the Government’s thinking on the bill as introduced and on the changes that it has made. Mr Chairman I hope that given the importance of this part of the bill that you will allow members on this side of the Chamber to debate its provisions in some detail. Several of the issues that we will wish to canvass in our comments today include firstly that the redundancy provisions have been improved so that State sector employees retain their entitlements unless accepting a position that is “no less favourable” than the position that they currently have in terms of terms and conditions.You know sometimes there is an argument in lawmaking about one word. I think it was Oscar Wilde the writer and poet who said a long time ago: “I spent all morning putting the comma in [to the sentence] and all afternoon taking it out again.” He might have said it with a slightly different accent of course. We spent the best part of a day arguing about whether we were going to put the word “overall” into clause 49 whichsays the terms and conditions had to be no less favourable and we ended up taking it out again. The reason that we were able to take it out by agreement—and we appreciate the work of officials on that matter—was that it was agreed common ground that the existing case law in fact allows a court to look at a package of terms and conditions and no change was needed. From this side of the Chamber we would want to underline the fact that the core principle that is being given effect to remains that the terms and conditions must be no less favourable and in seeking to address this as a package a court must not sell short the key provisions of the existing—[Bell rung ]Reminded by the bell let me move on to the transitional provisions in Part 1. These have been improved so that collective and individual agreements are sunsetted equally 3 years after the bill takes effect. There was a considerable debate about this issue too. It was of concern quite rightly to the Public Service Association to the Council of Trade Unions and to a number of individual submitters that the bill as introduced would have given individual employment agreements—individual contracts—longer life under the provisions of bills than some collective agreements which would have expired before the individual agreements. By a process of discussion and mutual agreement in the Finance and Expenditure Committee the 3-year sunset clause clause 49 was introduced to ensure that collective agreements did not expire before individual agreements and therefore that the results of collective bargaining by State sector employees were not undermined.I have to recognise members opposite who were members of the select committee. It was a good-faith discussion ably assisted by officials. As with a number of bills that Parliament has been debating today it was an example for the public of where Parliament can through select committees actually do its job of changing the detail of legislation to iron out in this case some pretty fundamental kinks and creases so that we have ended up with a bill that in our view does achieve the intent of the Government—the Government would be pleased about that—and also removes at least the most part of the issues that would have been at odds with worker rights and social justice.Another example of that was the Government Workforce Policy Orders as introduced. This would have been a problem legally because an order would have been potentially construed as legally binding upon the chief executives of Government agencies and Crown entities so that they could not enter into or sponsor employment discussions that for example might end up in a wage settlement at a higher level than the order prescribed. In so doing our advice was that that could undermine the existing rights to good-faith bargaining that State sector employees enjoy. It is therefore gratifying to be able to record in this Committee stage of the debate that by a process of good-faith discussion amendments have been made not only to change the word “order” to “statement” to better reflect its actual status as providing guidance rather than as a binding proclamation but also to ensure that clauses were introduced into the bill that actually enshrine in very specific terms the existing legal rights of State sector employees to good-faith bargaining.There are a number of other clauses that attracted the attention of the select committee which we will have the opportunity to go through as this Committee stage works through the different parts of the bill. I would like to mention just a few of them. The conflict of interest provisions have been strengthened there is enhanced governance for delegated powers and there are strengthened accountability requirements which we will detail later about public sector financial reporting.We have worked very hard to ensure and we will come on to this that the proper constitutional cascade—that line of moral authority—of the voice of the people vested in the balance of Parliament which is in turn vested in Ministers of the Crown and isthen reflected in the ability of Ministers to direct their departments is not lost in seeking to streamline the Public Service. Crucially the key accountability instruments such as the statement of intent which is a binding contract between the Minister of the day and the chief executive of the day—in seeking to make that more flexible and on a multi-year basis we have preserved the rights of Ministers to amend and update the “SOI” as the statement of intent is known each and every year and placed an obligation on their Civil Service advisers to inform the Minister of those rights.Speaking personally I would be very keen to ensure that the accountability contract between Ministers and civil servants remains effective and remains in place because ultimately that is the moral authority upon which departments of State must operate. In these days—[Bell rung ] Mr Chairman.The CHAIRPERSON (Lindsay Tisch): You can have only two consecutive calls unless some other member takes a call and I see Dr David Clark is anxious to take a call.Dr DAVID CLARK (Labour—Dunedin North):I am very very pleased to take a call Mr Chair and thank you for the opportunity. The State Sector and Public Finance Reform Bill is one the Labour Party will be supporting albeit with some reservations. We opposed the bill at its first reading and those present here in the debate will remember that but ultimately changes that were forced at the Finance and Expenditure Committee by Labour and the State sector unions have averted disaster for Government workers who were set to lose their redundancy entitlements and employment rights. I guess I want to thank the members opposite who engaged in those negotiations in good faith because it has become a better bill and one that hopefully will stand the test of time. These public sector bills are important for their longevity for the fact that they survive various Governments and provide some kind of certainty for future planning for the good of all New Zealand. So I do thank members opposite who were involved in that process as well as the unions—the Public Service Association and the Council of Trade Unions—and the Labour members of the committee who fought hard to ensure that that disaster was averted for Government workers who would otherwise have lost redundancy entitlements and employment rights.The bill as I said was heavily amended in the committee in response to the strong submissions from State sector employees themselves and from their representatives. Tough negotiations at the committee have produced this better bill and these employees’ rights are now better protected than they otherwise would have been. The redundancy provisions that were improved mean that employees retain their entitlements unless they are accepting a position that is “no less favourable” than their existing package.David Bennett: Put a bit of meaning into it. Give it a bit of feeling.Dr DAVID CLARK: Mr Bennett opposite I can see is bursting to make his contribution too but Mr Bennett I will look forward to your contribution in due course. In the meantime I am just outlaying the important provisions that are now in the bill. The transitional arrangements have been improved too in our view so that collective agreements and individual agreements are now sunsetted equally. That is important and that will take effect. The Government Workforce Policy Statements have been revised to ensure that all existing legal and bargaining rights have been protected and there are conflict of interest protections in there as well. Although Labour has some concerns with some aspects of the bill with the support of the unions significant change was brokered and that means that Labour will support this passage of the bill.Overall the bill is an omnibus bill that amends the three principal statutes governing the management of the State sector and the public finances in New Zealand so it is not be underestimated just how important this bill is to the future of our country. It will notbe one of the sexiest bills to be debated in this Parliament if I can put it that way but it is an extremely important bill. The powers that it will give to chief executives and to Ministers in terms of reporting requirements in terms of the way that happens and in terms of the way in which they can work with appropriations will have long-term effects. They will make some things more efficient and hopefully the right balance has been struck in terms of providing accountability to go with these measures.In Part 1 of the bill the main changes it makes involve strengthening the role of the State Services Commissioner—that is the first one that should be noted—to make sure that the role of the State Services Commissioner in leading the State services and ensuring that agencies work together collaboratively as a system is strengthened. It is set out for the first time ever in legislation—the commissioner’s role. That is a very significant step but an important step. The commissioner’s functions will be broadened to include the ability to transfer chief executives within the Public Service when a vacancy arises and to draft Government policy on workforce and employment matters from the perspective of the State sector system as a whole. This power would not extend of course to determining pay or conditions. Extending the responsibilities of chief executives to their Ministers to include matters relating to the collective interests of the Government and stewardship of the interests of the Crown and departments in the medium and long term is another significant change that is being proposed. Chief executives will have the power to delegate statutory functions and powers between agencies and subject to certain safeguards to non-government service providers.The proof will be in the pudding with these particular amendments. How these interests are played out the kinds of delegated statutory functions that we are asking—and I speak collectively—The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to leave the chair for the dinner break.Sitting suspended from 6 p.m. to 7 p.m.Dr DAVID CLARK: When I was rudely interrupted by the dinner bell I was discussing the strengthened role of the State Services Commissioner and the effects of the changes to the amendments to the State Sector Act 1988. I was about to introduce a person as an example of why this is important policy. These new powers will give a formalisation to the role of the commissioner. It will also mean that he or she has the ability to transfer chief executives within the Public Service as a vacancy arises. It gives them the ability and responsibility for Ministers and chief executives to have a greater interest in the stewardship of the interests of the Crown and departments in the medium and long term.An example of this might be if a future Government for example had a priority to change the way in which the electricity system worked. As it happens currently the Prime Minister has said that he thinks that Kiwis are paying about the fair amount for power prices. Most New Zealanders—Hon Ruth Dyson: What? He didn’t say that!Dr DAVID CLARK: No he did say that. Most New Zealanders think that power prices are far too high but the Prime Minister thinks that they are about right. Labour sides with most New Zealanders in thinking we should have a fair price for power—The CHAIRPERSON (Lindsay Tisch): Order!Dr DAVID CLARK: I am coming to a point here—The CHAIRPERSON (Lindsay Tisch): Yes. Well you are meant to be.Dr DAVID CLARK: —which is that if we wish to change the policy it would very much involve implementation by the public sector by people who are tasked with implementing changes whether you agreed with the policy—not meaning you MrChair—if changes need to be made. This flows on to the responsibility of Ministers and agencies concerned and these additional powers should ease the ability to change policies. So where one party has decided that capitalising the value of free water is not the fair way to build a system where you think the cost of electricity should not rise at double the rate of inflation for the last 15 years and where you wish to implement a new policy that says instead of the long-run marginal cost you would look at a model that looked at a fair return on capital and paid only the marginal cost for new generation you could implement that—I do not mean you Mr Chair. But the Government of the day could implement that change through the powers of the State Services Commissioner filling a vacancy in a relevant department and/or having the sanctions and rewards necessary—Hon Ruth Dyson: As long as it wasn’t privatised.Dr DAVID CLARK: —as long as that department had not been privatised as my colleague alludes to. Subject to the normal powers there is a wider range of abilities or a strengthened range of abilities for the State Services Commissioner to effect change. That at least in theory is partly how this legislation could play out and we in Labour think that is a good thing and that is why we will be supporting this bill. The Government thinks it is a good thing also. It should enable the Government to achieve its objectives more easily if it has any that are clear and in the interests of New Zealand.There is no accounting for bad policy. If the Government has bad policy or no policy or no idea or no plan about how it is going to get ahead—and we have argued often on this side of the House that this Government seems to have no direction and no plan—then that cannot be accounted for by this legislation. This legislation really is about implementing the plan. If the Government does have a plan how will it be implemented? What is the role of the State Services Commissioner? That will be spelt out more clearly. How does that flow on to chief executives in the Public Service? What are the implications for their workloads and the way that their responsibilities are set up? That flows into the State sector system as a whole. So if as is done by members on this side of the House good policies are put forward and the party has the opportunity in Government to implement them this State Sector Act amendment bill will allow for those policies to actually take effect and actually make a difference for real New Zealanders.So that is why we will be supporting the bill. We are satisfied with what has been achieved in terms of protecting the arrangements for State sector workers the redundancy provisions that have been approved as opposed to what was originally proposed the transitional arrangements and the conflict of interests protections—all of those things that were negotiated in the select committee and fought for strongly by the Labour Party along with the New Zealand Public Service Association and the New Zealand Council of Trade Unions.PAUL GOLDSMITH (National):I rise to take a call on the State Sector and Public Finance Reform Bill. I just wanted to pick up on a couple of things. I want to pay tribute to the previous chair of the Finance and Expenditure Committee Todd McClay who shepherded this piece of legislation through the committee stage—Hon David Parker: Through the Committee stage? Through the select committee?PAUL GOLDSMITH: —through the select committee stage with the full cooperation and good work of the members on both sides of the House in particular David Cunliffe who was very thorough and detailed in his examination of the particular issues and in fact was indefatigable in the way that he worked through the issues.I think we have landed in a good space here looking at the amendments suggested here in Part 1 relating to the purpose of the State Sector Act and the definition ofministerial staff and the independence of chief executives. We have made some amendments concerning their ability to delegate functions of powers. There are amendments relating to the restriction of redundancy payments which has been discussed at length on the other side of the Chamber. Finally there is a part that makes further recommendations in relation to the protection from liability for Public Service chief executive employees. We had a lot of debate about that issue in relation to whether indemnity was a better approach. The Law Commission was strong in its views on that but I think that after due consideration we have come down on the right side of that argument. All in all this piece of legislation is part of the broader Government approach in terms of delivering better public services to New Zealanders.I do think we have to pay tribute to the Public Service generally in this country. We have had 5 years now where there have been relatively few increases in terms of resources. It has been tight. It has been a tough period when the Public Service in general has been asked to deliver productivity gains and less with more as every other business in the country has been dealing with. We do have to pay tribute to the work that aspects of the Public Service have done in many different parts. This bill is about trying to give better tools to the leaders in the public sector so that they can have some clarity around what they do and so that they can work together more effectively. On that basis I recommend this bill to the Committee.Hon DAVID PARKER (Labour):Can I begin by thanking the officials. We see a range of officials and they are generally very good at the select committee but it is refreshing when we see officials who are so on top of their understanding of complex issues that they are able to engage with the select committee and not just hold a line in defence of what is proposed but engage in discussions that both educate the committee and show some movement on the part of officials at times when perhaps the policy intent is clear but there are details that need to be addressed. We found the officials—or I found the officials—advising the Finance and Expenditure Committee and providing advice to be of the highest calibre so thank you.There are a couple of issues that I want to address in this contribution. The first relates to why it was necessary to change provisions relating to Government Workforce Policy Orders. That is the language that was used in the form of the State Sector and Public Finance Reform Bill when it came to select committee. The new provisions in Part 5 of the Act as inserted by clause 42 of the bill—to insert new section 55A into the Act more precisely—provide for Government Workforce Policy Statements. These workforce policy statements are very broad in their ambit. They were described as orders and the Governor-General could by Order in Council on the recommendation of the Minister approve a Government workforce policy as a Government Workforce Policy Order as if it were something akin to a Government regulation of some kind. But then it went on to say that those orders were not a regulation for the purposes of the Regulations (Disallowance) Act or the Acts and Regulations Publication Act 1989.Labour members of the select committee were concerned that the ambit of these regulations was so wide as to allow the Government to effectively issue a directive that was akin to an order by the executive which would have enormous power across the whole of the State services but it did not need to come to Parliament in respect of it and there was no ability for people to challenge it under the Regulations (Disallowance) Act 1989. That was wrong.On the Labour side we were aware of course that the Government that was the most egregious in its use of statutory regulations in the past was another National Government under Mr Muldoon who gave himself hugely broad regulation-making powers under the Economic Stabilisation Act which allowed him by Government regulation to impose a wage freeze and he did. Incredible though it now seems he didthat by way of statutory regulation. We on the Labour side thought that the subsequent Lange Government with Geoffrey Palmer’s assistance in this regard cleaned up a lot of that silly overly broad regulation-making power and tried to make sure that the big decisions for New Zealand were taken by Parliament and not by Ministers using executive powers.We were concerned that this proposed provision allowing Government Workforce Policy Orders to be made was so broad as to allow the Government to effectively say that there will be a wage freeze across the public sector. We asked officials whether that was the case and they said that was not the intention but it did appear to be that that was the effect of the words or at least that was a concern that I had. The select committee agreed across both party sides that that was inappropriate and that the power of the executive the power of the Government to make workforce policy orders should not be that broad. Indeed it would be absurd to be giving the executive powers that broad.So the select committee has recommended to the Committee that we amend the provisions in respect of Government Workforce Policy Orders and that we start to call them Government Workforce Policy Statements rather than orders. So already you can see that they are not sounding as legislation-like as the original language proposed. They still are a statement. They still are not a regulation for the purposes of the Regulations (Disallowance) Act but there is a statement at the proposed new section 55D that says that notwithstanding that “A department must give effect to a Government Workforce Policy Statement.” the policy statement cannot “create alter or remove employment or other legal rights or obligations;”. So if there is an existing employment right that cannot be taken away by a workplace order. If there are existing legal rights or obligations on the employer—for example to embark upon good-faith bargaining—then this provision could not be used to cut across those obligations and impose a wage freeze. The Labour Party is pleased that that was picked up by submitters and that this change has been made.I want to raise another issue which I have spoken of previously and which is raised in our minority view. The Labour Party is still not convinced that it is right in principle that the Public Service is immune from liability as opposed to being indemnified for the consequences of its actions. In the Labour Party we do believe that public servants who are acting in good faith no matter how negligent they are should be protected from the consequences of civil liability for their actions. But that does not mean to say in our view that they should be immune from prosecution—sorry immune from suit is a better way to put it or immune from prosecution of the suit if I was trying to cover my own language there which was rather loose.We had submissions from the Legislation Advisory Committee that said that it is wrong in principle that the Public Service is immune from liability in civil proceedings. The committee thought the Public Service should be indemnified in its duties rather than have an immunity from prosecution. There are a couple of reasons behind that. Firstly it says: “Do we really want to live in a society that a public servant who acts egregiously”—egregiously—“cannot be brought before a court and suffer the embarrassment in a civil proceeding of being involved in the proceeding?”. The Legislation Advisory Committee—or was it the Law Commission? I forget which. I might have that the wrong way round. One of those two august bodies—Hon David Cunliffe: Law Commission.Hon DAVID PARKER: The Law Commission. Thank you David Cunliffe. It was the Law Commission that came to us and said that what we risk doing is actually creating a faceless bureaucracy and that there should be some accountability for conduct. So if conduct is egregious why in the public sector would you not be requiredto appear in court in civil proceeding as a party and suffer the consequences of that process as opposed to the consequence of the award of damages that might flow from the end and why is it that indemnity is not enough? If you look at the comparison—and I know the comparison is not perfect but there is some truth in it—where someone was in the private sector and you were acting in the course of your employment for a private employer and you made a mistake then you could be sued in your own name probably in some situations. You certainly would not have immunity from prosecution. You would at most have a right of indemnity.And in the case of the injured party in society who has had harm caused to them by an arm of the State through this public servant doing something wrong—and it could have been deliberately wrong even if it was not maliciously wrong—why is it that there is some question as to whether the private citizen who suffers that injury has got a right of action against the individual? One of my concerns in this and it was something that we explored with the Law Commission is that there is a difference between the liabilities of the Crown which is vicariously liable for the actions of its employees which are sometimes not as broad as one might think. I can see I am running out of time here.DENISE ROCHE (Green):I want to start my contribution by thanking the staff who have been involved in the process during the Finance and Expenditure Committee examination of this bill to bring this State Sector and Public Finance Reform Bill to the Committee. I also want to acknowledge both the Labour Party and the National Party members who worked together very closely and very diligently to bring effectively a new bill to the Committee—a bill that has been softened from the original—and I particularly want to pay tribute to David Cunliffe for the work that he put into that. The Green Party position however is that at the end of the day workers in the State sector will be worse off as a result of this bill’s passing.I have checked with the Public Service Association tonight which also says that it does not give unqualified support to this bill. However it does acknowledge the work—particularly the work of the Labour Party and the members from that party—in softening and in making amendments to the bill and it says that that strategy has meant and will mean that the workers are not as badly off as they may have been when the original bill was before the House in the first reading.I acknowledge that the amendments that have been softened include the restrictions around redundancy. The redundancy provisions have been loosened since the first reading. However it is still a restriction.I have put forward Supplementary Order Paper 265 for discussion and consideration tonight. It talks about actually restoring one of the provisions that was lost from the original 1988 State Sector Act and that is the provision that relates to the transfer of employees to the transfer of functions and duties to new agencies and to giving the workers the right to apply for those jobs. This bill actually contains an amendment that gives chief executives that right but that right has been taken away from public servants.This is a really important amendment if you consider that last week the first reading of the Health and Safety (Pike River Implementation) Bill was before the House. One large part of that bill was about the provisions whereby workers and health inspectors who are currently employed by the Ministry of Business Innovation and Employment can transfer to a new agency that is being created through that legislation which is before the House. That has to go into legislation for every piece of new legislation that is developed that creates a new entity or a new agency and that is because it is being taken out of the State Sector Act. We will have to do that time and time again every time a new agency is formed and there may be times when they are.We will also not be supporting this bill because of the things that have been left out—not just the transferral arrangements but other things including in the purpose statement the equal employment opportunities mentioned in the first part of the Act which is around the purpose. Equal employment opportunities are not stated explicitly elsewhere in the bill and you can combine that with another change from the original Act which is again in the purpose statement for State sector employers to be good employers. It has been changed to “meets good-employer obligations;” which is a slight tweaking but also a weakening. So when you put the loss of the specific mention of equal employment opportunities together with that we are starting to look at some weakening of some of the overarching principles of the Act which works against workers. It does not work in their favour.I think we have to remember that we do need equal employment opportunities—we need equal employment opportunities—and that is because the State sector the Public Service is female-dominated a lot of the time. Yet for all that women in the State sector are still earning sometimes 8 percent sometimes 10 percent or sometimes 12 percent less than their male counterparts. Before 2009 this Government was actually exploring and investigating what was happening to pay rates between male and female employees in the public sector and that was an investigation that was being undertaken with the Government’s support. However the Government pulled that support in around February 2009 and the reason it gave at the time was that the Minister at the time Tony Ryall said that we could not afford to increase levels of remuneration.We have had equal pay legislation in this country for over 30 years and we still have an average weekly income for women that is 23 percent less than the average male weekly income. When you consider that the Public Service has been the bastion of good employment practices and it has been a leader in setting decent standards for workers—standards that the private sector frequently follows—then we must fight very strongly to maintain the provisions in the bill that will protect those workers.Again I do acknowledge the work that has happened particularly the Labour Party’s efforts to soften the bill and make a heck of a lot of amendments to it. However we will not be supporting the bill.MAGGIE BARRY (National—North Shore):I rise to speak in the Committee stage of the State Sector and Public Finance Reform Bill. It came through my select committee the Finance and Expenditure Committee so I sat through the submissions and the animated discussions that ensued within the committee ranks. It is a bill of course that was sponsored by the Minister of State Services the Hon Jonathan Coleman.This is as others have pointed out an omnibus bill. It amends the State Sector Act the Public Finance Act and the Crown Entities Act to provide the legislative grunt really to deliver Better Public Services. There have been some proposed changes which I will briefly outline to you tonight to the State Sector Act 1988. Effectively the bill is about strengthening extending and improving the management of the State sector and public finances.When it comes to the strengthening provisions it strengthens the State Services Commissioner’s role in leading the State services. It extends the chief executive’s responsibilities to consider the collective interests of the Government and the longer term sustainability rather than being focused on individual departments and a shorter-term view which has to be good. Also it improves governance across the system which is part of the overall thrust of this National John Key - led Government to improve the sector. When we look at some of the new provisions within the bill it does put in a new organisational arrangement called the departmental agencies. That is going to really provide more for the options available for delivering public services.Among the more contentious aspects that were considered by the Finance and Expenditure Committee and certainly exercised the attention of a lot of the submitters was around that issue of redundancy which other speakers have spoken of. As a result of the discussions some changes were made. But it is important to note that the key provision of the bill relates to civil servants who have been made redundant but have a new State sector job to go to and therefore they will not receive a redundancy. You are not going to receive a redundancy—and these are the provisions that were argued through—if for example you start your employment the next working day or indeed perhaps even before your term is up. You will also not be paid a redundancy if you are taking on a job that is treated as undertaking continuous service and that is within the body of the State Service itself.You also have to have had duties and responsibilities that are comparable to the current job. You cannot really have been someone who works here in Parliament and then suddenly be expected to go out and man the roads somewhere. There has to be a comparable set of skills and they have to be matched. Perhaps some might argue that there is a match of skills in that but there is not enough time in a debate of this kind to go into that. But having a collective package of terms and conditions that are no less favourable than those that apply to the current position has been spelt out. Also you cannot be expected to travel very long distances for the job that you are doing. These are the kinds of provisions that the submitters who came to us were very keen to have but I think really it is important to note that not every single aspect of every element of their conditions has to be exactly the same for the redundancy to not apply.I commend this bill to the Committee because it is part of what we are doing as a Government to reform the State sector to ensure it delivers better public services to New Zealanders. Thank you.Hon PHIL GOFF (Labour—Mt Roskill):It is my pleasure to support the State Sector and Public Finance Reform Bill and it is worth noting that it is not the initial position that the Labour Opposition adopted. I have to applaud the members of the Finance and Expenditure Committee on both sides but particularly the Government side for actually listening to what the Opposition was saying on this occasion. That is not a common occurrence regrettably but when it happens the select committee—John Hayes: Oh I don’t know.Hon PHIL GOFF: Mr Hayes on a good day will listen to what the Opposition spokespeople say at the Foreign Affairs Defence and Trade Committee as you well know Mr Chairman Hayes. It happens from time to time. But looking at this bill it was a rare occasion on which members on both sides of the select committee were prepared to listen to the evidence particularly the evidence from the stakeholders before the select committee and to act on the evidence. I have to also acknowledge that the Minister of State Services Jonathan Coleman was prepared to listen to the select committee.In a perfect democracy—and regrettably we fall well short of that—that would happen in a commonplace way. However we have seen with the Family Court legislation and the legal assistance legislation that we debated before this bill that this is unfortunately using tonight as an example a rare occasion. But it is good on this occasion because I think all sides of the House have a vested interest that the legislation that relates to the State sector should have as much continuity as possible between Governments rather than being used as a political football that goes one way and then the other way when there is inevitably a change of Government. So I want to welcome the role of the select committee and I want to welcome the readiness in this instance of the Minister to take on board the advice that the select committee gave him. As a result we end up with a better piece of legislation. That is most important but equallyimportant we end up with substantial support across the House for this legislation which therefore makes it stronger legislation.There were three changes that were made that I think were very positive changes and which allow Labour to support the legislation. The first was in relation to redundancies. It is a really important principle that when a person loses his or her job through no fault of their own they are protected with the compensation that a redundancy payment gives. They are not being sacked because of wrongful behaviour; they are losing a job because of structural change. What Labour was able to achieve on the select committee was a protection of those redundancy provisions. The one exception is that if a person goes to another job that is no less favourable than the existing one within the public sector—they are not losing anything and there are various provisions including you know that it needs to be reasonably convenient in terms of travel and so on—then that is fair enough. It is an equivalent job with no less favourable pay and conditions and we would not expect redundancy in that situation. But in other situations the redundancy provisions are protected and that is the right and proper thing to do. I am glad—again unusually from the National Party on industrial relations—that the Government was prepared to do the right and proper thing. The second change that was achieved was a better transition so that the existing agreements are covered for 3 years. There is a sunset provision for 3 years. It means that those on collective agreements will not be disadvantaged in relation to those on individual contracts of employment. The third change that was made was to change Government Workforce Policy Orders which in the original bill would have had the effect of being Orders in Council into statements so that when a policy was being pronounced it was a statement rather than having a legally binding effect. That ensures that existing legal and bargaining rights have been protected. Each one of those changes was important and those changes justify the decision by Labour to support this legislation rather than oppose it as it did on the first reading.There is a lot about this bill in terms of what its objectives are that I think all sides of the House could support. We support a framework that encourages an innovative flexible efficient Public Service. I think everybody should be in favour of those things. And we also support a joined-together Public Service where there is cross-sector collaboration and those are positive changes. When I look at the purpose clause new section 1A inserted by clause 5 the purposes of the bill are purposes that generally should get the support of the Committee. We want a State sector system that “(a) is imbued with the spirit of service to the community; and (b) operates in the collective interests of government; and (c) maintains appropriate standards of integrity and conduct; and (d) maintains political neutrality; and (e) is supported by effective workforce and personnel arrangements; and (f) meets good-employer obligations; and (g) is driven by a culture of excellence and efficiency; and (h) fosters a culture of stewardship.”I want to say a little bit about what those purpose statements mean because it is all very well having a purpose clause in the bill that talks about good-employer obligations on the State sector but regrettably we have seen in recent times a practice that is quite different from the theory that is being proposed here. I think for a start of the changes that were made in the Ministry of Foreign Affairs and Trade where people had their working conditions unilaterally stripped away from them and were given inferior conditions particularly security of employment where people lost pay—for example those people transferring overseas together with their partners. There is no point in having legislation before this House that states that there should be good-employer obligations if the Government is not going to carry that through in practice.I want to use another example of this and it is pertinent to the Minister of State Services because he is also Minister of Defence. You know I have talked before about the need for redundancy provisions but it is also about how you go about it and whether this bill will translate into a change of practice. I want to read this to the Committee. This is a standard letter from the Defence Force in this case to employees in the army: “You are in the New Zealand Army which is a rank from which the army was directed to release a number of military personnel.” That means that it was going to cut costs and people were going to be made redundant. “When considering you against the army business rules for future potential you were assessed as having Low Potential given that your future employability was limited to a small number of employment streams your medical grading is permanently downgraded you are unable to attempt the minimum required fitness standard.” This is a case of a letter—there were hundreds of them sent out to each of the services—that told people who were the victims of restructuring that they were to blame for the loss of their jobs. Everybody in this Committee knows that loyal members of the Defence Force who had served this country for 20 or 25 years were being made redundant. So why send out a letter that insults and degrades the personnel who were being made redundant? That was an absolute disgrace.Yes the Defence Force has now said that it is sorry and that it should not have happened but I want to know how it happened and I want a guarantee from the Minister in the chair the Minister for Courts that this legislation which sets good-employer obligations would not allow that sort of thing to happen again. What we saw through that process of civilianisation was a high level of attrition—21 percent. Every year one in five of the Defence Force was turning over. We saw the lowest morale in the history of the surveys and we saw a lower capability of the Defence Force. Hopefully this legislation in setting an important condition like good-employer obligations would not allow that to happen. Why did that happen? It happened because the Defence Force handled it badly but also because it was instructed by the Government to save $400 million a year and that meant laying off—you know the Defence Force is down a thousand people. So let us not waste our time debating legislation that is theoretical legislation unless we have a Government and a State sector that are prepared—JOHN HAYES (National—Wairarapa):The last speaker the Hon Phil Goff who was jumping up and down and thumping the table needs to realise a couple of things. First of all when you train a body of men to go and kill people and defend our country you are not training them to write letters—The CHAIRPERSON (Lindsay Tisch): No. Order! Whatever the member says must be related to the content of the bill. I will ask the member to come back to it. He can comment on what the previous speaker has said but it must be in relation to the State Sector Act amendments in Part 1 which we are talking about.JOHN HAYES: This bill is about delivering better public services to New Zealand and that is one of our priorities. If we were able to develop and ensure that better services were being delivered as this bill proposes then we would not find ourselves in the situation that we inherited from the last Government where we had a military that was trained to kill people not to write letters. The amendments in this bill create a range of public sector management tools to foster an innovative efficient public sector that will I think deliver far better identified results for New Zealanders. I think the last speaker would realise and understand and has been around this House for long enough to know that all the legislation in the world no matter how carefully constructed does not force management to write letters of a particular sort. So I think we have to have some latitude in these bills that we are considering here tonight.I particularly support those comments made by colleagues in the Labour Party and also in the Green Party who talked about our working together in the Finance and Expenditure Committee because certainly that was the case in preparing this legislation that is now before us this evening.One of the important things I think in the legislation is that it will strengthen the State Services Commissioner’s role in leading the State sector. That is really really important. I think it is also important in this legislation that it will extend chief executives’ responsibilities to consider the collective interest of Government and long-term sustainability rather than operating in silos as happened under Mr Goff’s tenure as a Minister of the Crown. What we are trying to do is rather than focus on a single department encourage much less of a silo mentality and a much more inclusive Public Service.We also want to provide for a new organisational arrangement—departmental agencies—so that options are available for delivering better public services. These operational agencies will be set up within a department to carry out specific functions and the chief executives of these organisational arrangements will report direct to the Minister—a much more inclusive system which I think will improve governance across the system. I feel that this is a good piece of legislation. I think it will ensure that the State sector is modern is flexible is fit for purpose and will deliver far better outcomes for all New Zealanders. Thank you.Hon DAVID CUNLIFFE (Labour—New Lynn):I thank the member John Hayes who has just resumed his seat for contextualising the State Sector and Public Finance Reform Bill in the Better Public Services programme. The Better Public Services Advisory Group has indeed been one of those groups that has fed into the early design of this bill seeking to establish a framework to support and encourage innovative flexible delivery of public services. Unfortunately for the Government the Better Public Services targets look like they are not going to be met in at least five out of the 10 key priority areas. So nervous was the Minister of Finance on that subject when he recently testified before the Finance and Expenditure Committee that he would not confirm how many targets were on track and how many were off track. We look forward with great interest to the release—we hope this very month—of the Government’s interim report on the achievement or otherwise of its Better Public Services goals.Strengthening the role of the State Services Commissioner is one of the core parts of the amendments to the State Sector Act that are contained in Part 1 of this bill. We share the Government’s aims to come up with a set of legislative amendments here that provide a framework that will endure across party lines and across terms of Government to ensure that the public sector will be flexible and will be responsive that Government agencies will work together to solve problems and that they will pool resources to create innovative approaches but that the use of those resources will remain trackable and accountable to the people through the parliamentary process.We think that having a State Services Commissioner as the lead manager of the managers who can ensure that Government agencies work collaboratively as a system for the first time is a good thing and we commend its inclusion in the bill. We commend broadening the commissioner’s functions to include the ability to transfer chief executives within the Public Service when a vacancy arises. One can think of—and I will not dwell on it now—a number of occasions either where underperforming chief executives might be transferred out of an agency as part of a rescue plan or where particularly able ones might be transferred in. Of course Peter Hughes currently the Secretary for Education springs to mind as an incredibly able public servant who has been deployed to assist an agency that is clearly having trouble with even the basics of pay and rations with the Novopay system.The bill also seeks to extend the responsibilities of chief executives to their Ministers which is a good thing to include matters relating to the collective interests of the Government not just the individual interests of the department. I think that that is a useful innovation. What it shows is that we are as a system becoming more focused on the outcomes and a little less silo-driven about how the outputs contribute to those outcomes to use the jargon of the State Sector Act. That is about putting the horse in front of the cart and that is sensible in anybody’s book.The risk of course is that if too much focus is taken off the output measures because we speak only in generalities about the aims and outcomes there will be a blurring of accountabilities. It is for that reason that when the Finance and Expenditure Committee wrestled with the detail of this bill we were very very concerned to maintain the trackability of expenditure and the rigour of accountability on an output class by output class programme by programme basis. And where the new innovation that is included in the bill of a multi-category expenditure class is employed the bill now following amendments made in the select committee makes it mandatory that in the budget reporting of that expenditure and in the estimates process it is fully trackable from the preceding years when things may have been individually accounted to how they fall into the multi-category appropriation or MCA. That is a very important discipline because otherwise one could imagine in certain circumstances a department trying to hide an underexpenditure or an overexpenditure might simply change the structure of the output classes so it was impossible to follow the money honey.It is important to give chief executives the power to delegate statutory functions and powers between agencies but the select committee also wrestled with the issue of whether the safeguards were sufficient. So the language in the bill has been tightened up to ensure that where power is delegated—not just an activity but a decision-making power—very clear responsibility and accountabilities follow that delegation so that the delegated decision maker remains accountable upwards through the chain to ultimately the Minister and to Parliament. So we agree with the objective. We thought the bill as introduced was a little loose in the way those accountabilities were written. As other speakers have said we think that the committee worked very well together and was well served by our highly capable professionals to improve that accountability.Part 1 also creates a new organisational arrangement called a departmental agency. This is not a Crown entity in terms of being a separate body. It is not a department. It is a separate stand-alone agency that operates within the overall structure of a department and it regularises what has been experimented on with mixed success. I think one example that has been largely successful is NZAID a semi-autonomous body within the Ministry of Foreign Affairs and Trade. That has brought a renewed focus on poverty alleviation and aid-driven principles of delivery. And another is the Crown Ownership Monitoring Unit which has existed with perhaps a little less success within Treasury—less success possibly because it has been one step removed from key Treasury decision-making possibly because it has been a little subscale relative to the heft of some of its State-owned enterprise and Crown entity clients.Hon David Parker: Solid Energy.Hon DAVID CUNLIFFE: Solid Energy as my colleague David Parker has said being the classic example where a runaway train developed. Solid Energy was investing like there was no tomorrow at precisely the same time that the bottom was falling out of the coal market. Common industry understanding is that when the market is in a down cycle you tighten your belt. Unfortunately that did not happen. And what is worse the monitoring unit appears to have had some lags in terms of getting on top of it. The structure of the entity that is provided for in this bill is not going to solve every problem of foresight or every problem of management but what it does do is it providesa coherent legislative framework within which best practice can be followed. So we hope that that makes a useful and positive contribution.The bill also increases the flexibility of provisions relating to the appointment of chief executives and senior leaders. Some flexibility is good; too much is bad. We want to put on record that we do not want to go to the extent of a Prime Minister ringing up an old school friend—David Bennett: Oh come on.Hon DAVID CUNLIFFE: —and overriding this. No do not laugh Mr Bennett. One day history will judge that as a low point for this administration. There can be no more important appointments to be politically neutral than for example the Commissioner of Police the head of the SIS and the head of the Government Communications Security Bureau. If those most sensitive positions are not only not politically neutral and independent but also are seen to be so then public trust in the institutions of the State will be fatally eroded.I do not think Mr Bennett that it is any laughing matter that a Prime Minister rejected all of the nominees shortlisted by the State Services Commission rang up his old mate invited him out for breakfast briefed him on the job got him the job and is now having done that playing catch up—as former religious studies lecturer Jim Veitch so appallingly said on the radio today—waiting for the law to catch up with practice. Actually ladies and gentlemen the rule of law is the other way round: practice is subject to the law. That applies to the intelligence community and to the Prime Minister in the same way it does to everyone else or the people whose memories are enshrined on the walls of this Chamber did not get remembered as they should have been.History will judge these matters as fundamental to the corrosion of public trust in John Key and the Government that he for now leads—for now leads because this Government is on a slippery slope to electoral defeat. It is on a slippery slope to electoral defeat because the public of New Zealand when they realise—The CHAIRPERSON (Lindsay Tisch): Order! Order!Hon DAVID CUNLIFFE: —what is being done to their hard-won freedoms will not tolerate it. Mr Chair you are right it is time to return to the substance of the bill. There is much in this bill that is good there is much in this bill that is better and we will be supporting it.Hon DAVID PARKER (Labour):The State Sector Act which this State Sector and Public Finance Reform Bill amends is a 1988 Act.Hon Trevor Mallard: Yeah who sat on that select committee?Hon DAVID PARKER: Well the Minister who was in charge of that legislation before it became an Act was the Hon Stan Rodger.Hon Trevor Mallard: A good man for technical amendments.Hon DAVID PARKER: Exactly. That is the very point I was going to make. It is still famous within the Labour caucus some two decades later that the Hon Stan Rodger was said to have said in respect of the State Sector Act which made some very fundamental changes to the arrangements of the time that it was a minor technical amendment. It went through caucus and it was duly passed by this Parliament. I think Stan Rodger for a period was stripped of his life membership of the Public Service Association which was later to be reinstated.Hon Trevor Mallard: A part-of-life membership really.Hon DAVID PARKER: Yes that is right a part-of-life membership rather than a life membership as it proved to be. The Hon Stan Rodger is still alive and well. I met him again the other day actually. I think he can be proud that his legislation from 1988that minor technical amendment that slipped through the Labour caucus has really lasted close to three decades before being substantially amended.I want to make reference to an amendment made by clause 6 of the bill in respect of ministerial staff who are on time-limited contracts. This provision is intended to refer to the people who are largely in quite political roles within Ministers’ offices whose entitlements are not the same as those of normal long-term ministry appointments because they are very political in terms of their duties and their fortunes and services are tied to the Government of the day or the Minister of the day.To show that this legislation is intended to have effect across more than one administration the example that the Finance and Expenditure Committee or the officials inserted was of “The Hon Honour Able’s ministerial staff”—a description that probably applies more to Ministers of other administrations than this one. What the provision says is that “employees ... who are employed on events-based employment agreements—(a) by the department that is responsible for the employment of ministerial staff across all Ministers’ offices; and (b) to work directly for a Minister in a Minister’s office rather than in a department” are covered by these unusual provisions. That amendment was made at the select committee to make it clear that we are not talking about the secondees who come from a ministry work inside the Minister’s office and assist the Minister but remain a departmental official and are not party political and to defend the principles of the Public Service which are politically neutral.The problem with the prior legislation was that this distinction was not made. Despite the fact that some of the people who are under the old definitions “ministerial staff” and were theoretically covered by codes of conduct that require political neutrality some of these staff who were really very political and clear in their political agencies—and it is proper that they are—were caught up in the provisions of the Act that require political neutrality. That is fixed by the amendments we agreed at the select committee.Another issue that was raised by submitters which I do not think we have properly addressed in this bill—although it is not so serious a flaw as to mean that the Labour Party is going to vote against it—is that we have in a description sense weakened the provisions relating to equal opportunity. The provisions that are in the existing Act relating to equal opportunity are still there in some way in the replacement legislation but they are not as up there in lights as they were. Given that there remain substantial disparities in the remuneration of women there are also substantial income gaps—[Bell rung ] Mr—Paul Foster-Bell: Mr Chair I move that the question be now put.The CHAIRPERSON (Lindsay Tisch): No I had actually indicated to the Hon David Parker. And the member must call. You do not just state what you want to do; you must call “Mr Chairman” so that it gets my attention. All right? You must do that. I am giving the call to the Hon David Parker.Hon DAVID PARKER: It is a new point and it is notable in respect of the contribution of the last member the Hon David Cunliffe that there has been no repetition; we are actually all covering new points because there are many of them to make. The—now I have lost my train of thought.Hon Ruth Dyson: I’m sorry about that.Hon DAVID PARKER: That is all right. One of the other amendments made by this legislation to which we agree in principle is the broadening of objectives across the State sector. I do not want to give this too much elevation because what is now being given statutory effect to in terms of the way in which appropriations can be voted across departments should be able to be achieved through cooperation between departments now.It has always been the case that certain complex initiatives reach beyond one department. An instance that I personally was involved in was of course trying to get down New Zealand’s emissions growth rate in respect of climate change emissions. The ministries that touch the parts of the economy that interact with emitting industries include to name but some: the Ministry for Primary Industries; obviously the energy division of the former Ministry of Economic Development now part of the Ministry of Business Innovation and Employment; the Ministry of Transport; and the Ministry for the Environment.In respect of the need to change our direction across departmental efforts that was achieved under the existing legislation. Although the Government claims that the changes that are proposed by this legislation will ensure that you can get more cooperation across departments I think it is somewhat of a slight to the Government departments of the past to suggest that that cannot be achieved if there is a political will to do so. The key to that lies more often than not in the personnel the forcefulness of Ministers the clarity of direction from Cabinet and the capability of the different parts of the Public Service that need to cooperate in respect of achieving complex change.The area that I did not finish talking about in my previous contribution was this issue as to indemnity compared with immunity from prosecution. The area that I—and I am a lawyer—felt that we did not quite get to the bottom of was whether we are creating a lacuna or a gap in the rights of an injured party where the public servant acting in good faith but in a way that is against an express instruction of their employer because they have made a terrible mistake and they did not read the instructions or do whatever they were told by their employer might do something that causes harm to a citizen that might give rise to a right of civil action against the public servant but not against the Crown because the actions of the public servant are so wrong as to not fall within the vicarious responsibilities of the Crown as the employer.By granting immunity from civil suit we risk leaving the injured New Zealander without remedy. It is a very narrow set of circumstances but it is I think possible and I was not satisfied that through this legislation we are not—because we are taking the immunity route rather than the indemnity route. We are giving immunity from civil suit rather than indemnifying the public servant against the consequences of civil suit. I think there is a possibility that an injured party can have no right of civil redress because they have not got a right to include the public servant in a civil proceeding and they have got no right of claim against the Crown itself. So I thought the Law Commission advice in that regard was correct and that we should not be trying to fix it in this legislation. We should await the review that the Law Commission has under way into that serious point of law. The other point I was going to make will have to wait for a later contribution.Hon TREVOR MALLARD (Labour—Hutt South):I have had some experience working in this area as the Minister of State Services for 6 years and I was one of the lucky people who sat for many hours through the night in 1987-88 when the original legislation was passed. I think by way of introductory comment on Part 1 of the State Sector and Public Finance Reform Bill it became my concern as a Minister that in fact the original legislation set up silos to too great an extent. As a result of that there were a number of areas of whole-of-Government action that could not be implemented because the priorities of the chief executives were to their specific responsibilities rather than to the Government as a whole or New Zealand as a whole. So I certainly do support the policy intent behind Part 1 of the bill which is really around reducing or removing barriers to closer cooperation and alignment of agencies within the State sector. I think there has been a bit of loose talk in this debate especially from membersopposite and a little bit of a lesson about the Public Service and the State sector is something that is worth some focusing on as far as members are concerned.Members also need to understand the different position of Crown entities and the relationship of Ministers to them and the relationship of the State Services Commissioner to those different organisations. There are some areas where he has some quite direct responsibility including the appointment and the reporting function for the chief executives as far as their performance is concerned and there are others where he or she has an advisory role. It is important I think that we do not get that mixed up and there has been a tendency to do that. Again there cannot be much argument about the primary focus here—about the need to deliver value for money from taxpayers’ funds. To do that there needs to be properly coordinated leadership across the Public Service in particular and this bill especially in Part 1 does go towards that to some extent.I think there are questions though that need to be asked about the term—about whether we are talking about value for money in the short term whether we are talking about this year’s Budget or whether we are talking about value for money in investment over a period of time and the building up of a Public Service that works in the medium and longer term and the investment that is required to do that. It is more in the next part but there is some relationship here around the Public Finance Act and the multi-category appropriations which I am sure we will get back to.I do want to say having reviewed the bill when it was first introduced and when it came out of the Finance and Expenditure Committee that I think the select committee did a very good job. There are some significant improvements in the bill. What I am not sure of—and I am sure one of my colleagues will be able to by way of interjection let me know—is who was chairing the select committee at the time.Hon Phil Goff: Todd McClay.Hon TREVOR MALLARD: Was it Todd McClay? Oh well I was going to be complimentary but seeing that the man wants to line dogs up and kill them for drug dealers I will not be as complimentary as I would otherwise be. But maybe there are some talents—Hon Ruth Dyson: He wants to do what?Hon TREVOR MALLARD: Well it is only right at the edge of this but I think it is fair to say that it does go to the question of policy advice and the question of which Ministers are run by departments and which of them have their own opinions and the balance here. It is clear that Todd McClay showed some independence as the chair of the committee in order to get a bill around which if not full consensus then a large consensus could be built. But apparently now that he is a Minister he has fallen straight into the arms of the bureaucracy and he wants to kill dogs so that drug dealers can have bigger profits. Normally it takes 4 or 5 weeks for a Minister to fall into the arms of the department and to stop showing any independence—Hon Ruth Dyson: He ran.Hon TREVOR MALLARD: Well he ran and he jumped. He ran and he jumped straight into the arms of the department. It smothered him and any sensible opinion went with it. But I think we will be talking about that more as time goes on. The idea of sacrificing dogs so that drug dealers can have bigger profits is something that I just cannot believe. I just cannot believe any Minister would accept any such advice that came from a department that was set up under the legislation that we are currently amending.As I indicated there are some reservations that we are concerned about. Some areas have been strengthened. Conflict of interest provisions have been strengthened where the delegation of powers is proposed from any State sector entity and the application of the Ombudsmen Act has been clarified. That especially the clarification is useful. Ithink there are still some discussions to be had as we go on as to the question of the delegation of powers and the appropriateness of that.There is one area where I want to take issue with both the decision of the select committee and maybe even some of my own colleagues and that is around the statements of intent and their usefulness as actual planning documents. I have been around long enough to see a whole pile of different contractual arrangements between Ministers and their departments and I think there is some overrating of the statement of intent process as to whether or not they are actually useful. It does depend very much on the Minister and the department.As we look particularly at clause 49 which replaces sections 61A and 61B and areas around that part of the bill I think we will end up finding that in respect of redundancy and the advice in that area there will be different opinions and different approaches that are appropriate.I am certainly of the view—and I think I share it with my Labour colleagues—that the delegation of powers from the core State sector to non-State partners and implementing agencies is constructed too broadly. I think it is fair to say that we will be watching very carefully how these delegations occur and what use is made of them. In a funny way it does not matter whether they are used—if they are used not at all well then they are useless and if they are used too much then there is a problem. It might well be that there is an overlap between the two.My colleague David Parker has spoken on the question of immunity and indemnity. That is a technical legal area that I am sure pointy-head QCs will be—Hon Ruth Dyson: Probably Jonathan Hayes.Hon TREVOR MALLARD: No. Pointy-head QCs will be having some discussions about going forward. No doubt when David Parker is the Attorney-General he will be involved in some of that as well.It is my view that on balance this bill is something that is now worth supporting. [Interruption ] Sorry? Well actually Mr Bennett will never ever be in a position where he has any chance of being directly involved in the State Sector Act as a Minister. He is someone who has been leaped over by talented colleague after talented colleague. He has been left behind. The sort of inane interjections that we are hearing from David Bennett on this bill are just an indication—and even his colleagues are looking embarrassed. He is going red and his colleagues are rolling their eyes because they know that David Bennett just does not understand this area at all.Hon PHIL GOFF (Labour—Mt Roskill):As the Committee knows the purpose of the Committee stage—if David Bennett wants to cease his inane interjections across the Chamber I will continue—of a bill is to get the Minister in the chair to answer questions about what the bill will actually do. We had a series of very laid-back Ministers in the chair and this one the Minister for Courts is no exception. I would like to see the Minister take the call because I think there are a lot of serious questions about this bill that need answers.In particular Minister I want to ask you about the utility of this bill in achieving the objectives of Better Public Services. The Minister in the report-back stage of the bill the second reading said: “The changes are designed to enable the delivery of Better Public Services and more effective and efficient achievement of results.” He went on to say that the Better Public Services programme was one of the four key priorities of the Government. Well I have in my hand a document that I have received under the Official Information Act. It is the Ernst and Young report and it is entitled:FINAL DRAFT: Better Public Services Programme: Independent Quality Assurance . It is dated December last year. It is 6 months old. The summary of Ernst and Young—Hon Trevor Mallard: Is this another leak?Hon PHIL GOFF: Well it is officially leaked this one because the Government had to give it out when it was requested.This is a document that is designed to see whether the Public Service the State sector is delivering better public services and the Government is achieving the goal of its programme. What does it say? I want to quote this one sentence: “Our assessment is that the programme has yet to develop critical elements that are fundamental and necessary to achieve its aims …”. You know what that means: it means that the Better Public Services programme Minister—one of the flagships of the National Government—has so far failed. It gives the reasons for this. I want to summarise the reasons—there are three. It lacks ownership leadership formal accountability and prioritisation. Well that is a responsibility surely Minister of the Minister of State Services and his chief executive.Secondly it says: “The programme does not yet have an explicit and widely agreed model or strategy for achieving change.” You have got a key goal of a Government department and there is no strategy to achieve it. This is what the Government pays hundreds of thousands of dollars to Ernst and Young to tell it. Well Minister why is it that you do not have a strategy to achieve it and will this bill actually help to deliver that outcome?The third thing—the third thing is important too—is that it says that the programme does not have sufficient resources allocated. Well that is a budgetary function of Government. So we have an official analysis of the Better Public Services that the Minister said this bill is designed to achieve and the Government is committed to achieving and it is not achieving them because it lacks leadership it lacks strategy and it lacks resources.I would like the Minister to tell the Committee how this bill will turn that round. This is a key goal of the Government. It is not being achieved. That is what the report says. I am happy to give the Minister a copy. I will table it for you if you like Minister. I presume you have read it. It says that you are not succeeding on those goals. Firstly how are you going to turn round those factors? I do not believe that the legislation before us addresses any of those factors in terms of making sure that we achieve the Better Public Services goals that the Government uses rhetoric about but fails to deliver on in terms of leadership strategy or resources.I want to look at the amendments to the State Sector Act that we are examining right now. The first change says that it will strengthen the role of the State Services Commissioner in leading the State services. I would like to ask the Minister whether strengthening the role of the State Services Commissioner will help overcome what the ministerial inquiry into the Novopay debacle found. What did the inquiry find? It found first of all that it was a debacle that teachers were not getting their salaries paid correctly 6 months after it was introduced. It said that the cost of the programme had doubled—another $23 million. It said that all of this was avoidable and it said that the Government had ignored the lessons of the past. In 1996 the education payroll had similar difficulties. Here 16 years later we have got the same thing again.The INCIS experience which cost $100 million of money put into the police was a parallel case. Steven Joyce said that this was the result of failure of leadership of the State Services Commission. I would like to ask the Minister how the provisions put in this bill might have turned round the Novopay debacle. Could that have been prevented with the provisions in this bill; if not what is the Government doing to make sure that we do have an efficient Public Service and not one that results in a debacle such as we saw with Novopay? Secondly of the changes made the bill said “Broadening the Commissioner’s functions to include the ability to transfer chief executives”.Well Minister I want to stay with education and use another example and ask you how the Act would have applied in this case. Lesley Longstone left after a year in the job of chief executive officer at the expense of $425000 in costs to the taxpayer and she left essentially if you read between the lines because she could not get on with her Minister. So would that have been the case under this bill if this bill had been enacted before that event? Hekia Parata is apparently a very hard Minister to work for. Nobody was saying that Lesley Longstone was incompetent in the job. In fact the Minister of State Services refused to say that. Would you be able when you have an incompetent Minister who is hard to work with to transfer the chief executive to another department so that the taxpayer is not paying over $400000 to get rid of somebody whom you have just put in the job?Hon Trevor Mallard: We have done that in the past.Hon PHIL GOFF: Well it has been done in the past but this gives an explicit power to the chief executive to transfer.The next one is extending the responsibilities of chief executives to their Ministers. That is what the bill says. It is the third change. If there is a responsibility on the part of the chief executive to the Minister—I hope you are listening Minister—is there a counter-responsibility of the Minister to the chief executive? As long as I was a Minister there was always a strong convention that Ministers did not go out and bag their chief executives and yet we saw Murray McCully bag John Allen. We know that Murray McCully was behind the change programme. It got unpopular so he bagged John Allen and said “You got it wrong.” even though John Allen was carrying out all of his responsibilities.So if this bill creates a responsibility of the chief executive to the Minister what responsibility does it create of the Minister back to the chief executive? Is it permissible under this bill for a Minister to go out and bag his chief executive who cannot reply who is defenceless and who can be slandered by his Minister and forced to take the responsibility? If that was an isolated example I would feel more comfortable Minister but clearly it is not because Nathan Guy—the Committee will recall—did exactly the same thing. Nathan Guy was responsible for meat exports sitting on the wharves in China for 3 weeks at a loss of millions and millions of dollars because the Government got it wrong. The Government restructured the Ministry for Primary Industries it did away with the Food Safety Authority which worked very effectively and we jeopardised our trade in meat with China which has doubled in the last year.I want to know why it is that a Minister can go out again and bag his department but not take responsibility himself. So is this bill one-sided in creating a responsibility on the part of the chief executive to the Minister but taking away the responsibility of the Minister to the chief executive or in fact is it taking away the responsibility of the Minister to be responsible and to actually earn the quarter of a million dollars that he or she earns each year by actually doing their job and not sitting back and waiting for the Civil Service to do it and then blaming them when they do not? So that is the third question Minister and if you are having trouble following these they are all set out in the bill one by one—the changes that are being made.One of the other changes is about creating a new organisational arrangement called a departmental agency as a way of providing public services. This sits in a host department and would administer the appropriations used by the departmental agency but it would have its own chief executive. Can the Minister give the Committee—KRIS FAAFOI (Labour—Mana):Thank you very much Mr Chair I think for allowing me the call.Hon Trevor Mallard: The police spokesperson will be back on the beat.KRIS FAAFOI: Yes that is right. Oh well—numbers are dwindling. Thank you very much for the chance to speak to Part 1 of the State Sector and Public Finance Reform Bill. Every so often John Hayes says something in this Chamber that needs to have some kind of rebuttal and I was watching from my office the very brief contribution he gave to the bill where he did say that this bill is about Better Public Services and about the objective for the Government to try to make sure there are much more efficient and effective public services here in New Zealand. But as Mr Goff has pointed out there are many examples that show—and he also cited an Ernst and Young report that says this—that the Government has failed in that respect.I did want to point out another very apt example of where the Government has failed to deliver better public services which has been highlighted by the Police Association in its latestPolice News magazine in July. This is a Government that says it wants better public services and law and order is certainly one of those places where it trumpets its success. But in the latestPolice News magazine out from the Police Association this week it shows that what the Government is trying to achieve in terms of better public services with our police is failing dismally with the people who are trying to deliver that public service. A survey of nearly 4000 members of the Police Association just three shy of 4000 has shown that only 6 percent of our Police Association members—of 4000 members I will point out again—more likely our front-line police officers think there has been improved efficiency effectiveness or service to the public as part of the Government’s Better Public Services push within the police. So 6 percent of our front-line police staff think that the Government is doing a good job of restructuring and its push for Better Public Services—6 percent. Six out of 100 police staff think that this Government is doing a very good job of the services that they offer to the community to make sure that our communities are safer.In that respect Mr Hayes’ objective—this Government’s objective—in the State Sector and Public Finance Reform Bill is an absolute failure and that is not just in the eyes of the public but also in the eyes of the people who are delivering the service: our front-line police officers. There are concerns within the ranks in terms of the Government’s objective of making things much more efficient and effective. Of those staff members who were surveyed 61 percent said that staffing shortages were in the top three concerns that they had. That is 61 percent of those 4000 people surveyed who said that staffing shortages within police in our communities is a concern. That is hardly achieving that goal of better public services. Of the 4000 people surveyed in this Police Association survey 45 percent said that resourcing shortages were one of their top three concerns—hardly this Government delivering better public services to our communities.This is a very concerning message from our Police Association because we are talking about our public safety here which is something that this Government over there is full of rhetoric about. But it is clear from the people who are delivering the services that the Government’s claim that it is delivering better public services via our police is not the actual reality. That side of the Chamber is full of plenty of rhetoric but the reality and the message back from those people who are delivering the services is that this Government is doing a very bad job of delivering those better public services when it comes to police. As I said just 6 percent of those 4000 front-line police staff think this Government is doing a good job and is helping them deliver improved efficiency effectiveness and a good service to the public.We also had some reservations around some redundancy provisions within this bill. I must commend some members of the Finance and Expenditure Committee who are on this side of the Chamber who did manage to make some very big changes around the redundancy provisions. We did manage to make some amendments to the bill at the select committee consideration. Before we got to the select committee things wereawful but due to the hard work of the Labour members on the Finance and Expenditure Committee we managed to make some amendments to make sure things were much better for those within our public sector who were going to face redundancy.Redundancy is also a very important word in terms of the police restructuring. Last year the Government announced that because of the effect of budget cuts to the police somewhere between 150 and 170 back-office police staff were going to be made redundant. There was very little prospect of them being able to be shifted to different jobs within the police organisation because things were so tight because this Government cut the police budget.I did just want to point to clause 49 within Part 1 relating to a restriction of redundancy payments in certain situations where people might be able to be moved to an alternative position. I just did want to quickly go through each of these situations where someone could not have a redundancy payment offered to them because an alternative position was found. The select committee said on the insertion of sections 61A and 61B that someone who “begins before on or immediately after the date on which the employee’s current employment ends;” is not open to get any redundancy. Someone who is offered “a position with comparable duties and responsibilities to those of the employee’s”—Hon Ruth Dyson: Comparable.KRIS FAAFOI: —comparable or com-parable Ruth Dyson—“current position;” probably would not be able to get redundancy. Someone who “is in substantially the same general locality or a locality within reasonable commuting distance;” would not necessarily be able to get this redundancy. And someone who “is on terms and conditions of employment ... that are no less favourable;” would not be able to get a redundancy payment. I am wondering right now whether those 170-odd people who used to work for the police about a year ago and who no longer work for the police would quite like those provisions within their termination agreements that they have with the police.The changes that are made within this bill do certainly go to the heart of some of the changes that are happening in our police sector at the moment. It is clear from the Police Association survey that the police staff themselves are not happy because of those changes which really restrict their ability to be what the Government wants them to be—more efficient and more effective. And it is plain to see that they think the changes and the budget cuts that the Government is putting them through are not helping them deliver those better public services that Mr Hayes has pointed out. That is quite sad and it is also very risky in terms of our public safety because I think everyone in this House would agree that we do want to have in terms of our police better public services. But when the Government is putting our police force under extreme budget pressure which is leading to front-line staffing shortages and resourcing shortages that could have a very damaging or very dangerous effect in our community if our police are not able to respond to or prevent crime which we would like them to do.If this Government were to be true to what Mr Hayes has pointed out—wanting to be delivering better public services for the safety of all of our communities—maybe it should not act with its intentions to cut the police budget which as I have said has really damaged the confidence of our police staff through their ability to do their job and to be properly resourced for their job. I think subsequently when people read this they will be upset or concerned that our police force is out there trying to do a job trying to be effective and this Government has said it is delivering better public services but the reality and the rhetoric do not match up.We are supporting this bill but we are doing it with reservations and the reservation I pointed out in the police arena is certainly one where this Government should take heed.CAROL BEAUMONT (Labour):E ngā mana e ngā reo e ngā tangata o te wa.Tēnā koutou tēnā koutou tēnā koutou katoa. I rise to speak along with my colleagues in support of this bill the State Sector and Public Finance Reform Bill. We have however some reservations that we will be outlining throughout this.It is probably clear to people and I am sure the point has already been made that we did oppose this bill at its first reading. But I am very proud of the fact that my Labour colleagues on the Finance and Expenditure Committee along with the State sector unions have averted disaster for Government workers who were set to lose their redundancy entitlements and employment rights. Part 1 of the bill that we are talking about covers this quite comprehensively. The Labour members of the Finance and Expenditure Committee did fight long and hard to get some very important changes. I am aware that the unions that represent our public servants believe that those changes are sufficient.It is interesting to come into the Chamber to talk on this bill and this particular matter of the treatment of public servants as during the dinner break I was at a meeting with people from Transparency International New Zealand and they were talking about the Corruption Perceptions Index. One of the points they made was that the New Zealand public sector is perceived as the least corrupt in the world. That is pretty amazing. That is about the quality of our public servants and it really says to me that how we treat our public servants—the working conditions the rates of pay obviously but also the other conditions of employment—is actually very important. To maintain a corruption-free Public Service is critically important. It has a range of benefits and we are looked up to internationally still for that.I thought that that was quite amazing. Recognising the work of our public servants is something that often is not done. Quite often people make cheap political points about bureaucrats. They make cheap political points about there being too many of these people who are not doing front-office functions—that they are actually a drain on the taxpayer. Well actually they perform vitally important roles.We were concerned that the attempts in this bill that were around trying to have a more flexible innovative and efficient set of State services and the ability to move people and to restrict entitlements to redundancy and so on were actually going to undermine public servants and treat them in a way that was not fair and reasonable. I am glad that the redundancy provisions have been improved and that State sector employees—public servants—will retain their entitlements unless accepting a position that is no less favourable than their existing package. That was quite an important debate as I understand it because originally the wording had a qualifier—“overall” no less favourable. The interesting thing is that in law the debate about what that would look like certainly did not require the terms and conditions to be exactly the same. But we were satisfied with deleting the word “overall” because we felt that that actually was likely to maintain protections for employees. We do note though that we have some reservations about this. There is a risk that courts could be too liberal in their view of interpreting what “no less favourable” means.We are concerned also along with the Public Service Association that the right for Public Service workers to bargain their redundancy provisions has been removed and a proper redeployment scheme has not been reconsidered. It is important in times of high unemployment and when in fact there have been cuts throughout the Public Service that we do consider things like redeployment that we do consider people’s needs for job security. There are many public servants who have lost their jobs and who are now in the situation of being unemployed. I think it is a shame that there was not greater consideration around those redeployment provisions. The transitional arrangementshave also been approved so that collective agreements and individual agreements are “sunsetted” equally.One of the other things that I think is interesting in this part of the bill is around the Government Workforce Policy Statement. There has been some revision there to ensure that current legal and bargaining rights have been protected. That is really important. Originally there was a mechanism for a Government Workforce Policy Order and the select committee has recommended renaming the Government Workforce Policy Order as a Government Workforce Policy Statement—so a statement rather than an order—to clarify the provisions and to constrain them to their intended effect.The important thing here is that the orders indicate a broad Government policy intention around how the State services should approach employment relations and workforce capability to create a more transparent and consultative mechanism for developing formal workforce policy for the State services. These orders though were not intended to have legislative effect nor to override existing legal rights or obligations including negotiated terms for pay and conditions in existing bargaining rights. That is really important and certainly we on this side of the Chamber strongly support the rights of workers to negotiate their terms and conditions of employment and to ensure the right to bargain and the right to protection of those negotiated terms and conditions of employment. We are very pleased that the amendments to these provisions make it clear that these statements do not have legal force and do not undermine existing bargaining rights. But having said that we have ongoing reservations that notwithstanding the clarity of these provisions the Government may try to use these instruments as a binding force. So for the avoidance of doubt Labour would like to reiterate that we and the committee in its consideration of the bill do not consider these statements to be legally binding.It is worth noting I think as we are discussing these types of provisions that of course we are in a situation in this country where workers’ rights are under attack. Since National was elected in 2008 we have seen the undermining of a whole number of provisions that affect workers—things that would basically reduce wages. The Employment Relations Amendment Bill which is now before a select committee is certainly in that category. So you can understand why when looking at a bill like this we might be concerned and might along with the unions—the Public Service Association the Council of Trade Unions and others—be very concerned about these types of provisions around redundancy clauses and around workforce policy statements. This is a Government that does not respect workers’ rights to collectively bargain. It does not respect workers’ rights to be in unions and certainly it has done nothing to see us move to the kind of high-wage high-skill highly productive economy that this country so desperately needs. In fact wages have been flat-lining or reducing for many New Zealanders. We are a low-wage economy and that will continue to hamper our ability to move forward economically.So those are the sorts of I guess umbrella concerns that we had when we were looking at this legislation and I think anybody listening to this and anybody who is aware of the record of the Government and its current intentions around the Employment Relations Amendment Bill would think it made absolute sense that we were very concerned about those provisions.Again I reiterate the fact that I am very proud of the work that was done by the members of the Finance and Expenditure Committee particularly around the provisions of this part Part 1 which involves amendments to the State Sector Act to ensure that some of these concerns around redundancy and the possibility of these workforce policy statements undermining legal and bargaining rights have been significantly improved. Ihave outlined however that we retain some existing concerns so that is why we are supporting this bill with reservations. I think that it is not surprising to see—The CHAIRPERSON (H V Ross Robertson): I call the honourable member the Hon Trevor Mallard.Hon TREVOR MALLARD (Labour—Hutt South):Thank you Mr Chairperson. It is something I like to be called. I want to start off with not entirely agreeing with Carol Beaumont my colleague whom I am following because I had a period as Minister of State Services and it is fair to say that for a period of time it was relatively frustrating. One of the frustrating things was the “siloisation” of the Public Service. You would have people who were doing exactly the same job from department to department but their conditions were all different. They were all higgledy-piggledy. We used to especially in areas of shortage—in those days we were not firing public servants. We were looking for good policy people and people who wanted to work hard in the implementation areas and there was actually something of a shortage of skills. One of the problems that Dr Cullen used to complain about occasionally to me as the Minister of State Services was that there used to be interdepartmental bidding. You know one department would bid for someone and someone would bid more and they would go back. I think it is fair to say that over a period of time salaries moved in a way that Dr Cullen was uncomfortable with as Minister of Finance.The other point I would like to make to the member is that unfortunately because too many of the chief executives especially in our early days had been appointed in the times of Bill Birch and others they were of the group who were much keener on having individual contracts and much less likely to want to bargain. In fact we had this awful intransigence on the part of many employers some of whom—the chief executives—actively resisted putting salary or wage levels into agreements. The problem was that under the law as Ministers we did not have the power to work towards a set of policies that were enforceable and could properly be implemented.That is why I would say that I—and I am going to sort of maybe admit that if this detail was carefully discussed within our caucus I missed it. But I want to say to my colleagues that in fact actually having Governments that have policies rather than high-level statements and policies that can be enforced in the hands of a good Government is a good thing—in the hands of a good Government. But you then go to the question about whether Parliament should be designing legislation on the assumption that Governments that are going to be using it are always going to be bad. What I want to tell my colleague Carol Beaumont is that good Governments will do good stuff and bad Governments will do bad stuff no matter what the law is. Therefore my view is that even from Opposition what we should be doing is developing the law in the format that we can use properly from November next year or at some point earlier if John Key gets the pip and tosses in the towel.So if members opposite can see division in the ranks over here it is probably true. You know there is a bit of difference of opinion as to approach. I would like to see more multi-employer arrangements within the Public Service and in fact where there are employment categories or employment classes I would like to see common conditions.While we are at it I will really get the frustrations going in saying that I worked for about 18 months trying to get some common leave provisions across the Public Service.Carol Beaumont: How about in collective agreements?Hon TREVOR MALLARD: I wanted to get them into collective agreements yes. But you know some of the chief executives at the very thought that a Minister might have an opinion about having particular sets of leave arrangements that are common and that it would not matter if you were working in the Ministry of Social Development orin the Department of the Prime Minister and Cabinet—I will not mention Treasury because it basically did not have any common conditions. There were no collective agreements within Treasury at all. But even the organisations that had collective agreements shuddered at the very thought that someone might have the same set of leave or sick pay provisions that were the same in one agency and in the one next door where people were doing exactly the same work.There are a number of areas as a Minister I failed in and one of them that I failed miserably in was in my attempt to get a system going where common conditions could be developed for people who were doing very much the same work from agency to agency. The fiefdoms were absolute. The silos were not made of concrete; they were made of reinforced titanium and people could not move. People could not move from one to another.Actually if you are looking at areas like redundancy and things like that sometimes it is by far the best thing for the Public Service overall if a particular individual shifts from one agency to another—slightly better for them but sometimes because of the skills that are required it is better for the Public Service for the individual to shift. But when the conditions are so tight that in shifting from one agency to another the individual loses a whole pile of long service leave arrangements or sick pay or holidays or a number of areas it just does not happen and the Public Service becomes inflexible and staid as a result. So I say to my colleagues that the idea of having more than just common statements having policies that are actually implemented is something that I think is desirable.Carol Beaumont: Not instead of collective bargaining though.Hon TREVOR MALLARD: Well the member says not instead of collective bargaining. Actually it should be the employer’s position for the collective bargaining. My view is that the best advocate for common positions across the Public Service is in fact the Public Service Association. In fact it was the one with the most interest in having a Public Service that was relevant and flexible and people were employed.The problem with the approach that happened under Birch and is happening now—who is that cigar-smoking Minister? What is his name?Dr David Clark: Mr Coleman.Hon TREVOR MALLARD: Coleman.The CHAIRPERSON (H V Ross Robertson): Order! Jonathan.Hon TREVOR MALLARD: The Hon Dr Jonathan Coleman or Dr the Hon—which way? He is the one who gets on so well in the corporate boxes. The problem is that there are a number of departments where people are leaving and coming back as contractors. They are getting sometimes quite a handsome redundancy arrangement and coming back weeks later sometimes working only 3 days a week but for double the money. That is something that is outrageous and it is something that we have to work against. [Interruption ] Well this bill does not address it properly and it is a gap in the amendments that we are currently deliberating.The other question that I would like to ask the Minister of State Services—and I am not going to refer to the absence of the Minister but I will refer to the fact that the Minister of Labour who is in the chair might be familiar with the legislation and I am sure he is capable of reading the briefing notes that come up. What I would like to ask is what the implications of this bill are for the State Services Commissioner if in fact the State Services Commissioner is going to be used as the recruiting agent by the Prime Minister for the new Commissioner of Police. Are there any changes as a result?One of the early problems that we had when we were in Government was a man called Doone. There was a rapid appointment of a successor but that also highlighted for a number of Ministers that the recruitment process was just completely undefined. Itwas just up in the air; there was nothing. I would like to know whether there is something here because we have a very serious problem coming up. The heir presumptive for the position of the Commissioner of Police is someone who has very recently shown excessively bad judgment someone who has told the—TE URUROA FLAVELL (Māori Party—Waiariki):Tēnā koe te Tiamana.The CHAIRPERSON (H V Ross Robertson): Tēnā koe.TE URUROA FLAVELL: Tēnā koe. I te mea ko tēnei Te Wiki o Te Reo Māori me tuku au i taku kōrero i roto i te reo o ngā mātua o ngā tūpuna ki a tātau i tēnei pō kia whai wāhi au ki te kōrero ki taku kupu whakahōunga ka mutu kia taea ai te whakamārama ake i te āhuatanga o tāku kupu whakahōunga.Āpōpō e eke ai ki te tuawhā o tēnei marama i te tau 1868 i eke mai ngā mema Pāremata e whā ki roto i ngā pakitara o tēnei Whare. Nō reira me whakanui tātau i te ekenga mai o ngā Māori tuatahi ki roto i tēnei Whare āpōpō.He aha i haramai ai rātau ki konei? Te tikanga ia kia whai wāhi Te Reo Māori i roto i ngā nekeneke o te Whare Pāremata ka mutu e ai ki tā tētahi o aua mema e ai ki tā Tāreha Te Moananui te mema Pāremata me kī ki taku mōhio mō Te Tai Rāwhiti nāna tonu te Kāwanatanga i āki ki te hanga i ētahi ture pai mō te Māori me Te Ao Pākehā. Koinā tāna whakahōu i te wā i eke mai ia ki roto i te Whare Pāremata. Arā anō a Hone Paratene Tamanuiārangi mō Te Tai Tonga. A Takarangi Mete-Kīngi Te Rangipaetahi o Te Tai Hauāuru ka mutu ko Tāreha Te Moananui o Te Tai Rāwhiti ko Frederick Russell nō roto o Te Tai Tokerau. Koirā rātau ngā mema. Nā rātau te kī me hanga te Kāwanatanga i ētahi ture pai mō Te Ao Pākehā mō Te Ao Māori mō tātau katoa. Nō reira anei tātau e 145 tau i muri mai e pēnei anō te āhuatanga o ngā mahi kei mua i a tātau. Nō reira ā kāti.Koinei au e whakaara ake i taku kupu whakahōunga ki roto i te Whare Pāremata i te mea e kore te Pāti Māori e tautoko i tēnei pire i tōna hanga i tēnei wā. Nāku nā te Pāti Māori tonu i kōkiri tētahi kupu whakahōunga ki te whakaara ake i tētahi tikanga kua roa e kōreroia ana e mātau arā kia whai wāhi Te Tiriti o Waitangi i roto i ngā nekeneke o te Whare Pāremata. He aha te take kua huri atu ki Te Tiriti o Waitangi? I te mea nā Te Tiriti o Waitangi i whai wāhi te Kāwanatanga ki konei ki Aotearoa nei. Ka mutu i roto i Te Tiriti o Waitangi ā-Pākehā nei ko te kupu “Kāwanatanga”. He aha te tikanga o tērā ki tēnei pire? Ā ko ngā tari o te Kāwanatanga te whakatinanatanga o te kupu “Kāwanatanga”. Mā reira ka whai wāhi ahau ki te kōrero mō te whānuitanga o Te Tiriti o Waitangi i roto i tēnei pire.E te Tiamana nāku tonu tētahi kupu i whakatakoto ki mua i te Whare Pāremata me taku whakamārama ki a koe i tuhi reta mātau ki te Minita mō tēnei o ngā kaupapa ki te Hōnore Tākuta Jonathan Coleman ki te kī atu me whai wāhi tētahi kupu kōrero mō Te Tiriti o Waitangi ki roto i tēnei pire ēngari kāre i aro mai. Hāunga kei konei te Whare Pāremata. Ka riro mā tātau tērā e whakatika. Kia pēnei tonu taku kōrero ki a koe kāore tētahi kupu mō Te Tiriti o Waitangi i roto i tēnei pire. Ko tā mātau ko te kī atu kei te hē rawa atu tērā. Mēnā ka whai wāhi tētahi rārangi kōrero mō Te Tiriti o Waitangi i roto i tēnei pire ko te tino pūtake o tā mātau āki i tēnei take ko te kī atu ki ngā tumuaki ki ngā kaihautū o ngā tari Kāwanatanga kia tuhia ki roto i wā rātau kupu whāinga ngā tāhūhū kōrero o tēnā tari o tēnā tari o tēnā tari o te Kāwanatanga i ō rātau ake hiahia ō rātau tūmanako ka mutu wā rātau whakatau mō ngā painga ka pā mai ki te iwi Māori ka mutu ko te hunga manene ka eke mai ki Aotearoa nei. Mā reira pea ka kitea mai ai he painga.I ngā tau kua hipa ake kua rongo nei tātau i ngā rārangi kōrero e hia kē nei e mea ana kai raro Te Ao Māori e putu ana ā-mātauranga ā-hauora ā-whare karukaru nei. Kei reira tonu Te Ao Māori i ngā whare herehere nei. Mēnā ka taea e tātau te tuku i tētahi kupu kōrero mō Te Tiriti o Waitangi i roto i ngā kupu whāinga mēnā ka taea e tātau tekī atu ki ngā tumuaki o ngā tari o te Kāwanatanga me whakarite rātau i ētahi rārangi kōrero e hāngai tonu ana ki ngā hiahia o Te Ao Māori mā reira pea ka kitea mai ai he painga.Nō reira kei roto i tēnei pire ko tā mātau kua kī atu ko te State Sector Act Crown Entities Act Public Finance Act me whakarite i tētahi kupu ki a rātau ki te kī atu me whai i tēnei kaupapa. Mā reira ka taea e tātau te whakamātautau i a rātau ka tahi mēnā āe rānei i eke ki tā rātau i kōrero ai i whakatakoto ai i tuhi ai kāre rānei. Ki te kore a panaia panaia. Kāre wā rātau take. Ēngari i tēnei wā kāre tētahi paku whakaritenga e pērā ana i roto i ngā nekeneke o ngā tari o te Kāwanatanga. Nō reira ko tā mātau i roto i tēnei rārangi i tēnei wāhanga o te pire he kupu kōrero mō te rara e 5 e āki ana i ngā tari o te Kāwanatanga kia pēnei tonu kia āmine atu ki Te Tiriti o Waitangi ka tahi. Ka rua ka whai wāhi anō hoki i roto i wētahi atu o ngā wāhanga o te pire.Nō reira waiho ake tērā ki reira. Kotahi pea e rua pea ngā wā ka tū ake au ki te whakamārama i ngā hiahia o te Pāti Māori. Koinei te tino pūtake o tēnei pire ahakoa poto inā kē te nui o ōna toronga inā kē te nui o ōna whāinga inā kē te nui o ōna painga mēnā ka whakaaetia mai e tēnei Komiti tāku kupu whakahōunga. Kei reira tonu kei te rara e 162 he wāhi anō rā kai roto i tētahi wāhanga anō o te pire e kī ana anei tētahi huarahi. Me whakatuwhera i te kuaha o te Kāwanatanga kia whai wāhi ki te tohutohu anō hoki i ngā tari o te Kāwanatanga ki te whaiwhai haere i ētahi painga i tua atu o ngā mea e kitea nei e tātau i tēnei wā mō te iwi Māori ā ka mutu mō ngā momo iwi katoa e noho mai nei i Aotearoa nei. Nō reira me titiro tātau ki tērā 162. Ko tērā wāhanga tērā.Ka mutu ehara i te mea he nui ngā mea i tua atu o tērā ēngari mā tēnei kaupapa ka whai wāhi tētahi akiakinga o te Kāhui Tikanga Tangata. I roto i wāna kōrero i ngā tau kua hipa ake nānā tonu te kōrero ki te āta titiro ki te āhuatanga o te nohotahitanga o Te Ao Pākehā me Te Ao Māori ka mutu me āta rangahau me āta arotake i ngā ture o roto i ngā whiriwhiringa o tēnei motu kia whai wāhi ngā tikanga ngā ahurea o Te Ao Māori i roto i ēnei āhuatanga katoa ēngari mō tēnei pire kāre mātau te Pāti Māori i te tino kite i tērā. Koinei mātau e whakatakoto nei i tēnei kaupapa i tēnei kōrero ki mua i te aroaro o tēnei Whare Pāremata. Te tūmanako ia anā ka āmine mai ka tautoko mai tēnei Komiti i tēnei kupu whakahōunga ki mua ia i te Komiti anā mā reira pea ka eke ki te taumata e wawatatia ana e mātau o te Pāti Māori. Nō reira tēnā koe kia ora tātau.[Thank you. As this is Māori Language Week I will deliver my speech tonight in the language of my ancestors so that I can speak to my Supplementary Order Paper and furthermore explain aspects of it. Tomorrow reaches the fourth of this month when on this day in 1868 four members of Parliament entered the walls of this House. So we must celebrate the arrival of the first Māori members into this House tomorrow.Why did they come here? It was to ensure that the Māori language was involved in House procedures. Eventually and according to my understanding one of those members—namely Tāreha Te Moananui member for the East Coast—urged the Government to create appropriate legislation for Māori and non-Māori people. That was the change he advocated at the time he came into Parliament House. There was Hone Paratene Tamanuiārangi of the south Takarangi Mete-Kīngi Te Rangipaetahi of the west Tāreha Te Moananui of course of the East Coast and Frederick Russell of the north. Those were the members. They were the four who urged Government to make good legislation for Europeans Māori and all of us. And so here we are 145 years on and still addressing matters similar in nature in the business before us.Hence this Supplementary Order Paper of mine which I am raising in the House because the Māori Party will not support this bill as it stands at the moment. We the Māori Party drafted a Supplementary Order Paper to include the Treaty of Waitangi in Parliament procedures which we have advocated for a long time. Why turn to the Treaty of Waitangi? It was the Treaty of Waitangi that gave the Government a place here in New Zealand. Furthermore “Government” is referred to in the English versionof the Treaty of Waitangi. In terms of this bill what does that mean? Government departments are the manifestation of the word “Government”. That is the avenue that enables me to speak about the broad implications of the Treaty of Waitangi in this bill.Mr Chairman I raised a point of order before Parliament and explained to you that we wrote to the Minister the Hon Dr Jonathan Coleman to implore him to include a reference to the Treaty of Waitangi in this bill but he chose to ignore it. Nevertheless Parliament is here. We can rectify that. There is no reference at all to the Treaty of Waitangi in this bill. Our assertion is that it is a major oversight. If there was a statement about the Treaty of Waitangi in this bill then our main thrust in this matter would be to urge chief executives and general managers of Government departments to write their aspirations and hopes into the aims and mission statements for each Government department and furthermore their conclusions about the benefits that will accrue to the Māori people and subsequently migrants that settle here in New Zealand. Gains may be seen through that process.Over the past years we have repeatedly heard statements made that in terms of education health and housing Māori are in an abysmal state. As far as the rate of imprisonment for Māori is concerned the situation is the same there. If we can make a statement about the Treaty of Waitangi in the objectives say to the heads of the Government departments to consider making statements that relate specifically to the aspirations of the Māori people then gains may be seen.So in terms of this bill we advocate that in the State Sector Act the Crown Entities Act and the Public Finance Act we should consider a statement directing Government departments to follow this policy. In the first instance this would enable us to evaluate them and to determine whether they achieved what they stated set down and wrote or whether they did not. If they do not achieve then sack them get rid of them. They are no good. But at this point in time there is not a single mechanism like that in the workings of Government departments. So for this part of the bill our Supplementary Order Paper for clause 5 urges Government departments to follow this and agree to the Treaty of Waitangi in the first instance. Secondly we urge that it be included in other parts of the bill.So I leave that there. I will take another call or two later to explain what the Māori Party hopes to achieve. This is the real gist of this bill and although it is a short one the implications aims and benefits of my Supplementary Order Paper if agreed to by this Committee will be huge. There is another place that is still there in the bill in clause 162 which states that here is another way. We need to open the door of Government to find an opportunity to direct Government departments to follow up other benefits beyond those we see Māori getting at the moment and subsequently all kinds of people living here in New Zealand are getting. And so we should consider clause 162. So that is that part.Furthermore there is not much else but this Supplementary Order Paper will give traction to some of the urgings of the Human Rights Commission. In his addresses in past years he has stated that we must examine the situation relating to how Māori and Europeans live with each other and how laws of negotiations in this country need to be researched and evaluated thoroughly so that Māori customs and culture are taken into account in all these situations. But as far as this bill is concerned we the Māori Party do not really see that. This is why we are placing this Supplementary Order Paper and making this address before this Parliament. The fervent desire is that this Committee agree and support this Supplementary Order Paper before it. Perhaps it might reach the level of desire that the Māori Party is striving for. So thank you and salutations to us collectively .]The CHAIRPERSON (H V Ross Robertson): [Interruption ] Oh gee. What am I bid? I call the honourable member Jacinda Ardern. Sorry guys.JACINDA ARDERN (Labour):Thank you.Kris Faafoi: What a gentleman.JACINDA ARDERN: I smiled a lot. This is my first call on the State Sector and Public Finance Reform Bill. I am pleased to have—Hon Trevor Mallard: You only get four on this part.JACINDA ARDERN: —an opportunity to speak to Part 1. I am pleased also to know how many opportunities I have to speak on Part 1 because it is an extensive part and I think probably that the points I have to make will take some time.I want to start with some of the recommendations and comments that were made by the Finance and Expenditure Committee on Part 1 particularly around the purpose of the bill. From someone who obviously did not sit on this committee some clarification from the Minister in the chair Nikki Kaye on some issues would be beneficial to me and perhaps to other members of the Committee—in particular the recommendation around amending clause 5 new section 1A(e) of the bill. There was obviously some debate amongst members of the select committee around the wording in the objective. If I could flick to the purpose clause of the bill in new section 1A it says: “The purpose of this Act is to promote and uphold a State sector system” and then it goes on to list the things that are required by the bill that are upheld.An important question I think though is to what degree does upholding become defending? To what degree does upholding then transition into defending when there is potential for the erosion of certain objectives for the State sector? I say that because when we come down to paragraph (e) where the wording has been changed from “provides for” to “is supported by effective workforce and personnel arrangements;” there was obviously some debate by select committee members. As that currently stands on the face of it it sounds like it is almost a passive role for the State sector actors in that regard but obviously I come at it from looking at an area of the State sector like the Ministry of Social Development and like those who are working in Child Youth and Family as public sector servants. To what degree is this bill to defend the role that they have when they are no longer able to act as an effective workforce because of workplace issues for instance?What role is there for intervention in order to support that workforce? What do I mean by that? Well we know that the Government has pursued what at various times it has called capping it has called streamlining it has called efficiencies it has called various things. But let us cut to the chase of what that has meant. It has meant that in some of our departments despite demand and workforce demands increasing for those departments it has outstripped their ability as a workforce to grow and meet that demand. In the past several years alone for Child Youth and Family for instance there has been a 33 percent increase in substantiated notifications so notifications that require further action. Over that period we have had 16 new social workers per annum. One might be able to claim that it is very difficult for that workforce to be an effective workforce under those circumstances—to fulfil their requirement as public servants to act appropriately and according to their own Acts that they are required to fulfil and be governed by. So to what degree is this bill about just upholding a State Sector system and to what degree is it one that is able to defend it when that position becomes untenable for them?The second part that I want to speak to relates to chief executives’ ability to delegate functions or powers. This was obviously in clause 35 another area of contention and discussion for the select committee. In particular I see that they have distinguished between Public Service chief executives being able to delegate functions or powers from of course the separate ability to contract out the delivery of services. I would like to hear from the Minister in the chair though as to what examples she may have ofthose distinctions between the contracting out of services which happens daily within Government departments and other forms of delegation that might occur by a chief executive to just give a little flavour as to the kinds of circumstances we might be looking at. That would be important for us to consider because I think it is right that we be concerned when we are delegating any powers to ensure it is done properly.The reason I imagine the select committee said: “Look contracting is distinct.” is that we assume transparency. We assume that through the contracting system—because it is tendered and because to a certain degree of course the portals that the Government provides are meant to be a process that even the public who may not be engaging in those particular contract arrangements are at least able to see. My concern is that in recent times perhaps our trust even the select committee’s trust that we can treat the contracting out—that form of delegation by a chief executive—to be sacrosanct and fine is something that we may need to question whether or not we still actually have that layer of transparency within that tendering process.The reason I question that is because in recent times—very recently—for instance we discussed at the Social Services Committee the welfare reform bill where for the first time significant parts of the Social Security Act were being delegated to external agencies. For the first time we were seeing the administration of welfare payments particularly as they related to young people taken out of the Social Security Act and delegated to contractors. We are now seeing a second stage of that. We are now delegating the important role of support mechanisms for the transitioning into work of mental health patients and the like to contracted authorities.We have very little transparency about how that is working. We could not get it through the select committee process. I have requested tender documents and I have not seen them there. So in respect of the transparency in this bill that I think we assume through the delegation and contracting I question whether or not that necessarily exists particularly as I have said for this latest set of delegations because it is a very new delegated power in that regard. It is one given that it is such a core service that I think we would be right to ensure we do have that transparency. So as I say I would be very interested to hear from the Minister in the chair about the delegated functions and the decision-making powers—the kinds of examples that may have been considered by the select committee. I would be very interested to hear what it may have considered and what it considers to be carefully defined circumstances.I will throw up one other example. I query for instance the Work and Income board that the Ministry of Social Development has established recently under the leadership of the Minister. That Work and Income board is working directly with Treasury. In fact we have the bizarre circumstance now where the Ministry of Social Development is being asked to account directly to Treasury on whether or not it is decreasing the actuarial valuation that has been done on the Ministry of Social Development around the overall cost of benefits. It is also having to report to a Work and Income board which has delegated powers from the Minister not from the chief executive. This is an important point. This is where things get very murky. In fact there were questions on whether the chief executive departed from her role because those delegated powers came directly from the Minister and there were questions as to the hierarchy of who actually held seniority in this case. Is the chief executive reporting to the Work and Income board? Or is the chief executive reporting to the Minister for Social Development and vice versa? It became very murky.I would like some clarity because increasingly we are seeing roles like that emerging. That is a significant amount of power that the Work and Income board has now. Paula Rebstock by virtue of being appointed to this board basically could have delegated powers from almost every chief executive in the Public Service the way thatthings are currently running. She is the one individual who seems to be delegated the power of everything. So I would be interested to hear from the Minister on those situations because we lacked clarity for a very long period of time and we just cannot afford to have that for a ministry as significant as the Ministry of Social Development.I note that the bill expanded on the range of conditions and restrictions where they are using delegated powers. For instance after any delegation a chief executive would have to report on it in the annual report and comment on its effectiveness. That is an interesting point but again how far does that extend? Just a little more. I do completely acknowledge that I was not on the select committee for this so there actually may have been much more clarity on the select committee as to the circumstances where that would apply. I would love to see that kind of requirement exist for some of the delegated powers that we have seen in more recent times.The restriction of redundancy payments in certain situations is another area that I think is extraordinarily interesting and worth a degree of clarification. Obviously it is an area of much contention and we have seen many times in the past couple of years where redundancy payments have caused some distress—Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman):I will take the opportunity to speak on Part 1 of the State Sector and Public Finance Reform Bill on two particular areas. One follows on from my colleague Jacinda Ardern on the issue of delegation and the other one is on the protection of liability for Public Service chief executives.If I could just refer to a recent situation—and I am glad the Minister for Food Safety is in the chair because she can probably answer some of these questions—around meat getting into China. Clearly there were delegated responsibilities to a public servant in China who had the responsibility for clearing large consignments of meat. Yesterday in fact we had an announcement from the Minister for Primary Industries that the Government is going to increase resources into China. I think actually the truth is that they are going to go from one person to three people up there. The question is whether the delegation was a responsible delegation that put with it the resource to do the job properly. We had a bizarre situation where presumably the Minister delegated to the chief executive and then to an employee powers very important powers for certifying and clearing the meat. As it turned out the Minister criticised the chief executive and all the staff. So the question I have for the Minister in the chair is whether in that delegation the resources went with the delegation to ensure that the work was carried out properly and therefore the employee was responsible back through the chief executive or indeed whether the chief executive could have said that actually they did not have enough resource to be delegated the role and that is why the inadequacies and in fact the lack of performance occurred.The bill has got a whole lot of detail here and I acknowledge the Finance and Expenditure Committee which has clearly gone through and looked at this very very carefully and recommended that “… delegations must be in writing and that functions or powers delegated to a chief executive by a Minister ... may not be delegated further without their prior written approval.” So the question is when you have such an important market in meat such as China where you have hundreds of millions of dollars going through and we are told that there was one employee in China to deal with the certification for that huge meat trade whose responsibility was it for the delegation? And when something went wrong who should take responsibility for that problem? The Minister very quickly shunned it on to the ministry so we assume that it is the chief executive’s responsibility. He or she could say: “Well we didn’t have enough allocations through the Budget process so we had to have only one personthere.” In fact we have found a bit more money for two other people. It is pleasing to hear that for that particular incident.The issue of delegation that has been clarified as to how the chief executive should delegate the powers and how the Minister delegates them to the chief executive is all nice and dandy and all tidied up here in the bill. But the issue of accountability I suggest is something that also needs to be clarified. The age-old assumption—and my colleague Mr Mallard here would know this all too well—Hon Trevor Mallard: I’m not that old.Hon DAMIEN O’CONNOR: Sorry he has been around for a while.Hon Trevor Mallard: Unlike the member.Hon DAMIEN O’CONNOR: I have not been the State services Minister I have to say like he has.Hon Trevor Mallard: And the member never will be either.Hon DAMIEN O’CONNOR: No that is probably true and I do not want to be. Can I say that the issue of a Minister taking responsibility for the actions of his or her department is something that has been kind of accepted in politics for a while. But we had the very unusual situation with the Minister for Primary Industries dumping fairly and squarely on his ministry. That was a new situation. I am not sure whether that is perhaps an indication of the new approach that the Government is going to take under these changes here or whether it is the right approach or not. Did the select committee discuss it? That would be my question. Perhaps the Minister for Food Safety who is in the chair can answer that.If I can move on to the second issue which is in some way related to the incident I referred to and that is protection from liability for Public Service chief executives and employees. The Prime Minister who is also a Minister indicated through that whole meat debacle that there was a possibility of compensation being paid. I guess that what we have here of course is clarity of the status quo—that is that no single individual should be liable for such a mistake. Indeed the chief executive should not be. A Minister on behalf of the Government then carries the can for liability—in fact the taxpayer does. One of the questions that the taxpayer does raise quite often is whether bureaucrats should be made accountable and why it should be that a Minister or we as the taxpayers carry the can for any compensation from what they would call a stuff-up or a mistake or a major logistical problem or clearly inadequate performance. What this bill does is confirm that the public servant the civil servant should not be liable if they have done something in good faith. When a Minister then turns round as the Minister for Primary Industries did and criticises the ministry for its lack of performance then the question of liability being sheeted home in some way maybe not in a monetary way to an employee or more appropriately to the chief executive is a very fair question that each and every taxpayer should ask because it is their money that is paying compensation.In Part 1 here we have as has been the accepted norm removal from the chief executive or an individual employee any liability for mistakes. So the Prime Minister rides in on his white horse and says to the meat industry: “Well there may be compensation payable.” And then the Minister instead of saying: “My department got it wrong and therefore I should be liable.” muddies the water by saying: “No actually the ministry the department didn’t perform here. It was at fault.” So the taxpayer rightfully might say: “Well what then is the penalty that should be imposed upon the public servant or the individual who made the mistakes?”. In every other part of the law or I guess Government systems there is general accountability. People should be held to account for their mistakes but this bill is actually shifting it up the line effectively to the taxpayer. Is that the right thing? Maybe the Minister in the chair can take a call andanswer that because if the Government is going to change and alter these things then it should look at the situation that arose quite recently. I am not saying that the Minister for Food Safety was just as liable as the Minister for Primary Industries but I am not sure whether she would have dumped on her agency in the way the Minister for Primary Industries did.The hard-working New Zealander out there who pays their taxes to run these Government agencies to carry out these crucial roles expects performance all the way down the line and expects liability all the way down the line. So when as has happened in the past a Minister says: “I take full responsibility.” if it is a big enough mistake such as happened in Cave Creek or indeed at Pike River then the appropriate Minister resigns. I think people see accountability in that way. But when the Minister does not resign but turns round and dumps on the chief executive then the question should be whether this protection here provides adequate accountability for taxpayers’ money. So I leave it now to the Minister in the chair to maybe take a call and explain those things. It is a complex area of State sector accountability and responsibility. I can see her being really keen there.Hon Trevor Mallard: Not really. There’s a lot of common sense involved. What does Peter Dunne think about it?Hon DAMIEN O’CONNOR: Well there could be. I do not know actually. We are not allowed to talk about the absence of any Minister but I am sure that common sense could come into play here.Hon Trevor Mallard: Well he’s permanently absent as the Minister now.Hon DAMIEN O’CONNOR: Well I think the party is anyway. I am not sure about the member but the party certainly is.Hon Trevor Mallard: No no he’s not a Minister any more.Hon DAMIEN O’CONNOR: Look I must come back to the point here. I do not want to be distracted by my colleagues—Hon NIKKI KAYE (Minister for Food Safety):I am very pleased to take a call on this legislation. Can I start by acknowledging a previous speaker actually—Ms Ardern—because I want to address some comments that she made previously and just deal with that issue of delegations. As has already been canvassed there is nothing in the bill that will change the Crown’s power to contract. That has always been there. So I want to just address Ms Arden’s comments in regard to that.But what is really important is that the Finance and Expenditure Committee was quite clear—and I think it is a point that has been missed by Ms Ardern and Mr Damien O’Connor—that in terms of the extensive controls in this area it requires the responsible Minister’s prior written consent in every case. It prevents any sub-delegations it requires conflicts of interests to be avoided or managed it requires delegates to comply with the State services code of conduct it makes delegates subject to the Official Information Act and the Ombudsmen Act and it requires the delegation to be reported to Parliament. So what I will not accept is comments by speakers on that side of the Chamber trying to imply that this has not been thought through incredibly carefully in terms of delegations.The second point that was made by Ms Ardern in particular was around Government workforce policy. This bill will establish a new simple process for consulting on and distributing workforce policy to Public Service departments and Crown entities. That is very important and I think it is important as well for members opposite. I know that they are not listening now because they do not want to hear what is actually within the legislation which is that the bill ensures that the workforce policy statements will not be regulations and cannot override any legal rights or obligations including any relating to good-faith bargaining.So in terms of answering the final point that I just want to touch on which was raised by Mr O’Connor was around immunity in terms of public servants. Obviously I do not intend to comment on some of the substance. I do not agree with a number of assertions that he has just made in the Committee. There is a review under way in terms of the recent situation in terms of meat and he has made a number of assertions that I do not agree with. But what I would say is that what this bill does and it is incredibly important—and if there is one thing that I have learnt in the last 4 months as a Minister it is that we have some outstanding public servants in New Zealand. It is really important that this bill implements the original policy intent that public servants will have immunity from legal action for good-faith action taken in pursuit of their duties.I am not going to comment specifically on the issues that the member has raised regarding the subject of meat because he knows there is a review under way. But what I would say to him and what I would say in relation to this bill is that that member knows better than any other food producer in this country that when you are trading with 50 percent of your exports there will always be food issues.So what I would say to the member is that he knows that in this bill not only are there substantive provisions around the delegations—they are comprehensive—but also there is a clear immunity for public servants in this legislation. So I appreciate taking the call on this bill.The question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to Part 1 be agreed to.Amendments agreed to.The question was put that the amendments set out on Supplementary Order Paper 259 in the name of Te Ururoa Flavell to Part 1 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes50New Zealand Labour 33; Green Party 13; Māori Party 2; Mana 1; Independent: Horan.Noes68New Zealand National 59; New Zealand First 7; ACT New Zealand 1; Independent: Dunne.Amendments not agreed to.The question was put that the amendments set out on Supplementary Order Paper 265 in the name of Denise Roche to Part 1 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes55New Zealand Labour 33; Green Party 13; New Zealand First 7; Mana 1; Independent: Horan.Noes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; Independent: Dunne.Amendments not agreed to.Part 1 as amended agreed to.Part 2 Amendments to Public Finance Act 1989The CHAIRPERSON (Lindsay Tisch): The debate on this part includes schedules 1A to 3A.Hon DAVID CUNLIFFE (Labour—New Lynn):I rise to convey Labour’s support for this part of the State Sector and Public Finance Reform Bill. In doing so I wish to tender an apology to you Mr Chair and to the Committee. In my initial remarks on Part 1 I made the misplaced comment that Part 1 was the most major part of the bill. I see on closer examination that Part 2 is equally substantive and important amending as it does very significantly the Public Finance Act.The bill proposes a number of amendments to the Public Finance Act and principally the following: firstly the establishment of a new appropriation type to be called a multi-category appropriation or MCA. The purpose of this is to allow different types of expenditure to be grouped into a single appropriation where they support a single policy objective or overarching purpose. This is one of the principal innovations in this Act in the way that the design of the Government’s machinery is carried out. It calls us to reflect on the nature of what we are doing here today. This is not just tinkering legislation; this is framework legislation—and that is why it is good that it is bipartisan across the House—that governs the major rules and regulations by which the organs of the State operate. So that is everything from the rules upon which they are structured principally delivered through the State Sector Act reforms in Part 1 and of course the rules by which their finances are governed which are dealt with in this part Part 2 as amendments to the Public Finance Act.Members of the public will recall—and members opposite will hopefully recall—that the Public Finance Act is a very extensive piece of legislation that contains the provisions for fiscal accountability and the ability for Parliament and the public to be able to trace subventions or appropriations from year to year to be able to track the movement of public funds and to give effect to that age-old tenet of our inherited constitution that there is no taxation without representation. This is where the rubber as it were meets the road because it is through the legal framework set out in the Public Finance Act as amended by this bill that we get the rules about accountability. The main point here is to allow a new form of accountability multi-category appropriations which allow policy purposes to be driven simultaneously through several different agencies or votes.In the past what has had to happen under the rules of public finance is that a lead agency has been designated and it has borne the financial responsibility but through that it has also maintained primary control through the Cabinet process. That has not I think it is fair to say—and both sides of the House that have sat on the Treasury benches over the years would agree—always favoured the highest levels of cooperation between the agencies of the State. So what we are doing here is we are plumbing a whole new beast into the financial reporting rules. It is a beast called a multi-category appropriation and it is based on the presumption that the behaviour will follow the money. And if the money is in a common pot where several different agencies have to draw from it then we are more likely to get truly unified behaviour. The Labour Opposition agrees with the Government that it is a good thing to have that type of provision available provided that there are sufficient controls around it. I am pleased to say that following the amendments put in place by the Finance and Expenditure Committee it is now our view that those controls do exist.As our colleagues have said in relation to Part 1 for the Labour Opposition this is a relatively unusual bill an unusual process. We quite strongly opposed the bill at its first reading. There were a number of provisions in it quite a lot of them in Part 1 that we very trenchantly opposed. We are very pleased that through the negotiation process inthe select committee there has been an extensive range of amendments and we can now support the bill. The amendments here have been around two principal aspects of multi-category appropriations—firstly requirements for full and complete traceability down to the sub-output class level. It is a very granular approach so that members of Parliament and the public can trace changes in public expenditure through the years and across categories.That is particularly important where a multi-category appropriation has the potential to blend appropriations from different departments from prior years. It is too easy to do smoke and mirrors without the amendments made to this Act. It follows that it is made clear in the amendments that other departments as well as the one administering an appropriation can incur expenses against that appropriation. It is a second principle if you like that follows from the multi-category appropriation principle. The idea there is that where there is a group of agencies cooperating towards a policy outcome they can incur expenses against a single appropriation if that is appropriate. That again plumbs into the operations the machinery of government cooperative behaviour at every level.The information required in the estimates and supporting information is being changed to focus more closely on the policy intent of what is being achieved within each organisation. We talked about this in Part 1 the shift from simple output monitoring to outcome monitoring—that is measuring the work that the State does against the questions of why we are here and what we are trying to achieve; how we are trying to achieve it follows. As we said in Part 1 the risk with that is that if we lose sight of the output measures completely sometimes outcome reporting can be a bit vague but a proper combination of the two has been shown to deliver the best balance in terms of strategic thinking and specific behaviour tracking.The provisions allow annual reports of more than one department to be presented together in one document where this would more meaningfully convey information. So there is a third significant change. As well as multi-category appropriations and multiple departments drawing upon a single appropriation now we can have multiple departments reporting through one accountability document that applies to a particular programme. Again we are designing into the machinery of government the ability to require cooperation of our agencies from the ground up. We are standardising the governance and performance reporting requirements for companies that are listed in schedule 4 of the Public Finance Act—that is companies where there is a substantial element of Crown ownership. As I look through the bill—and I will be picking this up in my next call—I will go clause by clause through some of these key changes because there are 60 pages of amendments.Let me draw the attention of the Committee to one particular matter that I think is pretty important which is around proposed new clause 59B amending section 3A of the Public Finance Act as represented on Supplementary Order Paper 262. That is where proposed new section 3AB(1)(a)(i) states: “Ministers of the Crown hold on behalf of the Crown more than 50% of the issued ordinary shares in the capital of the company;”. I do think it is necessary to put on record that this is not a provision that applies to the Government’s harebrained partial privatisation scheme; this is about the development of mixed-ownership entities other than those in the privatisation scheme for the energy companies which we have heard so much about in the media. The reason for making that clear is that there are a number of strategic disadvantages with the partial privatisation programme that the Government is currently engaged in which include the loss of strategic control for the portfolio; having to have regard in law to minority shareholders’ rights; the loss of the controls normally contained in the State-Owned Enterprises Act including the no-surprises policy and the power to direct; and the loss of dividend flows which means that the programme is often cash value - negative.I will come on to it in subsequent calls but there are a large number of schedules—schedule 1A schedule 2 schedule 3 and schedule 3A—that apply to the Public Finance Act and pertain to amendments in this part and we will be touching on some of them across the debate on this part. There are a number of Supplementary Order Papers that contain measures on Part 2 that we will want to touch on in this debate. So I think with your leave Mr Chair we will be here for quite a long time going through this. Supplementary Order Paper 168 from Minister Coleman bears upon the Public Finance Act. Supplementary Order Paper 262 from the Minister which is very extensive bears upon it. We have disposed already of Supplementary Order Papers 259 and 265. Supplementary Order Paper 261 also has some provisions.Let me note two things on the Supplementary Order Papers here as an introductory comment. The first is that it is somewhat disappointing—Dr DAVID CLARK (Labour—Dunedin North):As I begin my call I will just request that Mr Cunliffe give me my notes which are under there. I have prepared some quite extensive notes on this part of the State Sector and Public Finance Reform Bill Part 2. The bill itself does make some quite significant changes to a very significant Act. The Public Finance Act of course is one that as a former Treasury official I took quite a lot of interest in.I am very grateful to have this opportunity to speak in the debate. It is true that the changes to the Public Finance Act will I hope have some really positive impacts on the way the public sector is run. The establishment of a new appropriation type to be called a multi-category appropriation will allow different types of expenditure to be grouped into a single appropriation if they contribute to an overarching purpose. There are always debates around this kind of change because effectively what happens is that the nature of accountability changes. With the change in the nature of accountability is a commensurate concern for the impact that that will have on the accountability of Ministers through to the taxpayer and the public of New Zealand who want to see the investment they make through their taxes creating a better society.These changes which allow for a wider grouping of expenses will hopefully allow Ministers greater flexibility to achieve the ends they are wishing to achieve through various pieces of legislation or appropriations which is the money they vote towards specific purposes. But that comes with the risks of being in a bigger pool and of being shifted around without the same kind of attention it has had historically. We find ourselves here in Parliament debating that balance between providing Ministers with flexibility to achieve the outcomes they want to achieve on behalf of the public and on the other side of that balance the accountability proper to the taxpayers who have provided those funds.We in the Labour Party are supporting this legislation because we believe that roughly the right balance is being struck. It is important that this legislation is enduring that it survives the various administrations that the public know what they are looking at when they look at the votes and the appropriations and that when they look at where departmental spending is going they can understand what the purposes of that spending are how the money is being spent and so on—those members of the public who follow it that closely.It is of course relevant that these changes should be considered here in Parliament and debated fully because this is the place where we have the overview of that spending. We had our estimates debate earlier on. We have scrutinised here the Government’s spending and asked questions about moneys that have been moved around between different classes of output category. We have satisfied ourselves more or less that the Government has spent that money as it said it was going to spend it.Whether or not we think it has been spent wisely is a separate debate—that is a separate debate. It is related and it is often overlaid. Mr Chair you will have heard—I should not bring you into this debate. Members of the Committee will have heard me express political opinions views about how money should be spent whether it is being spent in the right way—and by that I mean on the right things. Here we are talking about whether it is being spent in the way that the Government says it is going to spend it—whether it is true to its word. That kind of accountability is important no matter which administration is in place because each administration will have its own view as to how money should be properly spent.This legislation changes the requirements for information about departments’ strategic intentions including the frequency of its provision. Again here I think this is about striking that same balance between accountability and how often departments have to outline their strategic intentions. Should they have to do it every year? Is that a good spend? Is it a good use of public moneys to update things when they may be entirely relevant from the previous year and the intentions may be the same? Just how much public servant time should be spent on judging whether or not the strategic intentions should be updated as opposed to delivering on the objectives of the Government of the day? This again is where a balance is being struck. We believe that in this legislation by and large that balance is being struck correctly.Specifying the financial responsibilities of departmental chief executives to make it clear that they include financial stewardship for the long term is another initiative found in this legislation that we think is good. The proof again will be in the pudding in this particular one we think. Just how we consider the long term—how any Government of the day considers long-term stewardship—is yet to be proven. There will need to be measures put in place to say whether we think that a measure is really in the long-term interests of the country or not. Governments will try to outline those measures. There will be political debate. There will be a political overlay to the particular debate on these matters and that is natural. It is the job of the elected representatives of the people to try to represent their concerns.For example on this side of the Chamber we might be concerned about rising power prices and we might take exception to Mr Key saying that Kiwis are paying about the right amount in power prices. We on this side of the Chamber simply do not think that is true so that is why we have launched our New Zealand power policy. We think that there should be a different way of organising the electricity market in New Zealand. Our objective will be different from that of the current Government which seems very satisfied with the rising power prices. Power prices do not bother it. It seems unconcerned that power prices in New Zealand keep going up and up and up so it will be concerned that the money being spent here is spent preserving the status quo whereas if the Labour Party was elected into Government it would be concerned that its policy of reducing power prices for ordinary New Zealanders—The CHAIRPERSON (Lindsay Tisch): Order!Dr DAVID CLARK: —would be put in place.That goes precisely to the point here in the legislation in which we are talking about financial stewardship for the longer term. In that particular policy example Labour thinks that stewardship of that resource in the long-term interests of the country is about delivering lower power prices to businesses so that they can develop and contribute to New Zealand whereas the Government may take a different view. That is its prerogative. That is the nature of Governments and of parties representing interests in this Parliament. But we will be having the debate and I think that is the important thing. We will be having the debate about whether the financial stewardship is in the long-term interests or not. I think that is a good thing.I congratulate the authors of this bill and those who served on the Finance and Expenditure Committee which managed to work this into the legislation. I join also in congratulating the officials. Although I did not sit on the particular committee for all of the consideration of this bill on its way through I know have met or have dealt with several of the officials before and regard them as being exceptionally good officials. I heard David Parker recount his experiences and congratulations and I want to echo those.This bill will survive administrations. It is a step forward for the public sector. It is a step forward for New Zealand. It is not going to address that fundamental question of whether or not the policies are right. The wrong policies cannot be helped. No amount of fine-tuning how departments deliver what they have been tasked with doing will address the fact that I think this Government has terrible policies on some things but it will fine-tune the Government’s ability to deliver on the policies it says it is going to deliver on. It will fine-tune the accountability measures for the Government so that it can be held to account by members of Parliament and by the general public to say whether or not it is delivering what it has said it is going to deliver. That will become obvious and then we can have the debate. I can stand up here as I am wont to do and say that this Government has the worst economic record of any Government in the last 50 years. It will be a political debate because Government members can be clear that they have done what they said they were going to do they have implemented the policies that they said they were going to implement—Hon David Parker: They didn’t say they were going to raise GST.Dr DAVID CLARK: —and have spent the money on the things they said they were going to spend it on. My colleague raises the issue of GST and says the Government never said it was going to raise GST and then it did. Unfortunately I do not think this legislation is going to solve that.Kris Faafoi: They said they wouldn’t.Dr DAVID CLARK: It said it would not raise it—quite right Mr Faafoi; you have corrected me. The Government said it would not raise GST and then it did. Well that shocked New Zealanders and it was I think the wrong thing to do.The CHAIRPERSON (Lindsay Tisch): Order! That is not part of this debate.Dr DAVID CLARK: Coming back to this particular debate this legislation will not I guess stop Governments doing the wrong thing but it will—SUE MORONEY (Labour):It is a pleasure for me to take a call on Part 2 of the State Sector and Public Finance Reform Bill. This is the part of course that amends the Public Finance Act and is therefore the part of the bill that I think does need a large amount of scrutiny. In amending the Public Finance Act this is the part where the way the Government’s Budget is structured is being altered. There are often very good reasons why the way in which Budgets are structured can be altered and I think that some of them are inherent in the changes that this bill brings about.But we do need to be cautious because changing the way Budgets are structured is often a way that Governments can actually create a bit of a smokescreen so that it is difficult to compare—John Hayes: As your Government did for 9 years.SUE MORONEY: —from year to year what is happening with the expenditure. So it is right and it is proper to give a lot of scrutiny and debate and discussion to this particular part of this bill. I know that Mr Hayes agrees with that because he obviously shares the concerns that I have raised.An example of that which I will give for anyone listening to this debate is in Vote ACC in the ACC area. Between 2008 and 2012 if we look at the way Budget documents are currently constructed we can see in the area of funding for injuryprevention in ACC that there has been something in the order of a 42 percent decline over those 4 years. [Interruption ] I know it is shocking. It is actually over a period of time in which workplace deaths have been increasing a time in which there has been real concern—The CHAIRPERSON (Lindsay Tisch): Order!SUE MORONEY: —around what has been happening in that area.I want to bring it back to the bill by using that as an example of why it is important that there is some consistency between the way the Budget is constructed from year to year. When it is constructed in a similar way we can actually track that through. We can see that the injury prevention funding has been cut by 42 percent over the course of 4 years. However when change in the way in which the Budget is constructed occurs as per the changes being proposed here in this part of the bill it does sometimes make it difficult to actually compare apples with apples—that is to say that the way the appropriation was brought down in 2008 for example is a direct comparison with the way in which it was constructed and brought down in 2012. So I guess the question that I would pose to the Minister would be to explain to the Committee how these changes will still be able to allow comparisons between years in terms of what is happening with those estimates so that we can be sure of how the money is being moved around.One of the changes that is being proposed in this part of the bill is a way in which the estimates can change so that it makes it clear that other departments as well as the one administering a particular appropriation can incur expenses against that appropriation. Again the example that I just used is I think really relevant to this part of the bill and this particular amendment because in the instance where there was a rapid decline in the appropriation for injury prevention spending from ACC there was a corresponding rise in spending on injury prevention in a different department under the Department of Labour or what has become known as “MoBIE”—the Ministry of Business Innovation and Employment. So this particular change would allow some transparency around the shifting of money which is how I read this particular amendment. It would therefore make it clear that even though there had been a huge decrease in funding of around 42 percent in injury prevention in one area and just I think about a 15 percent increase in the other area you would be able to put those together by using this amendment and see that overall there had still none the less been a substantial decrease across those two appropriations of funding in the injury prevention area. I think that this will create better transparency.Hon DAVID PARKER (Labour):I rise to take a call on Part 2 of the State Sector and Public Finance Reform Bill which involves the amendments to the Public Finance Act. I want to start with the change that is heralded at clause 63 of the bill which changes the way in which the annual financial statements of the Secretary to the Treasury are published. Currently annual financial statements have to be published on paper. This legislation and this is an example of why the Labour Party is supporting this legislation updates it so as to take advantage of information technologies that are now available to “ensure that the annual financial statements the audit report and the statement of responsibility”—of Treasury—“remain available on that Internet site for inspection by members of the public for at least 5 financial years after the financial year to which the annual financial statements relate.” If I read that correctly—and the Minister in the chair the Minister for Food Safety can tell me whether I have got that wrong—that effectively means that they are going to be available to the public for 6 years and people will be able to make comparisons.Using the example that my colleague Sue Moroney just gave where they are trying to track a change in expenditure—and I think the example you used was in respect ofACC—if there was a 42 percent decrease in funding over 4 years you would actually be able to track that year by year through the internet to see what was happening over time. Assuming I am reading this correctly I presume that that would extend to the likes of the ACC although it may be that because it is a separate corporation it is dealt with specifically in its separate legislation. Certainly in respect of Treasury the Secretary must ensure that those statements remain available on the internet site for inspection by members of the public for at least 5 financial years.The next issue I would like to briefly address because I am not sure I quite understand it properly is clause 75 of the bill which amends section 80. This amends the ability of Treasury to give instructions to departments. Before doing so I would note that elsewhere in the Act we make it clear that chief executives of departments are responsible for the financial management of their departments. If we look at new section 35 inserted by clause 85 of the bill where it says “Responsibilities of chief executives: financial management of non-departmental matters” it makes it clear that in addition to the other responsibilities of chief executives for the financial management of departmental matters which are referred to in the prior part of clause 85 which amends section 34—and new section 34 requires that the financial management of departmental matters be the responsibility of the chief executive. That is how it should be. New section 34 says that “The chief executive … is responsible to the responsible Minister for the financial management financial performance and financial sustainability of the department; and (b) must comply with any lawful … actions required by the Minister or the responsible Minister.” It is a very very important provision which states that the chief executive of a department must comply with any lawful financial actions required by the Minister or the responsible Minister.At times I have heard it said by some Ministers that they feel that the relationship of power goes the other way so it is quite good to see that this Parliament is emphasising in this piece of legislation that the chief executive of a department “must comply with any lawful financial actions required by the Minister or the responsible Minister.” I do not think that that is meant to imply that any Ministers are irresponsible so I am not quite sure what the difference is between “the Minister or the responsible Minister.” and perhaps the responsible Minister in the chair could take a call to clarify what the difference is in that clause between “the Minister and the responsible Minister.”What new section 34 says is that the chief executive of a department that administers an appropriation—and they all do—is “responsible to the appropriation Minister for what is achieved with the expenditure under that appropriation;”. So that is making the link through—not only do they have to comply with lawful financial actions required by the Minister but also they are responsible to the Minister for what is achieved with the expenditure under that appropriation. So they have got to comply with those financial directives and they have got to make sure that they are responsible for what is achieved. Then there are similar obligations in respect of non-departmental matters that I do not have the time to properly address.That then brings me to clause 75 of the bill which somewhat confuses me and the amendment of section 80 which relates to the instructions that Treasury can give to departments or departmental agencies. Clause 75 of the bill says: “Subject to the provisions of this Act and of any regulations made under this Act the Treasury may—(a) issue instructions to departments”—not chief executives—“or departmental agencies for the purposes specified in section 81(1)(a) …” of the principal Act. Of course the principal Act is the Public Finance Act 1989 unless I am confused as to which Act this particular clause is amending.I have got the Public Finance Act 1989 in front of me—[Interruption ] Yes thank you to my colleague Kris Faafoi who already had it out. Section 81(1)(a) of the Act talksabout “requiring information to be supplied to the Treasury by departments and any entities referred to in section 27(3)(a) to (f) to enable the Treasury to properly fulfil the functions imposed on it by the Government or any Act:”. I am not sure what the purposes are of the change to section 80 from the existing Act which currently provides: “Subject to the provisions of this Act and of any regulations made under this Act the Treasury may issue instructions to departments for all or any of the purposes specified in section 81(1)(a) (ab) (b) (bc) (bd) or (c) to (e).” So I am not sure what the import is of that change and I would invite the Minister in the chair to take a call and clarify that important point for me.The next point I would like the Minister to address if she is to take a call is what it is that she envisages in the provision that a “chief executive of a department that administers an appropriation [for which that chief executive] is responsible to the appropriation Minister for what is achieved”. The second part of this provision that I want the Minister to address is what happens given that clause 85 of the bill requires that chief executive to be “responsible for advising the appropriation Minister on the efficiency and effectiveness of departmental expenses and departmental capital expenditure under that appropriation.” This is getting to the nub of how you hold chief executives and the departments for which they are responsible to account for the objectives of the Government.For example when a Government sets as an election promise the fact that it is going to narrow the wage gap with Australia or eliminate it I think it was—it was going to eliminate the wage gap with Australia—where is it that we see in these various accountability documents that being devolved down to departments in a way that the Government can expect accountability from them and then be held accountable to the population for that promise?Hon David Cunliffe: What if the gap widens?Hon DAVID PARKER: Well Mr Cunliffe you are quite right. If we have those sorts of accountabilities I would expect it would be of importance to the electorate to understand that those targets were not being met but rather that the gap between the incomes of those working in New Zealand and Australia is widening.Dr MEGAN WOODS (Labour—Wigram):It is my pleasure to take my first call that I have on the State Sector and Public Finance Reform Bill in its Committee stage. I am in particular very happy to speak to Part 2 of this legislation the part of the bill that deals with the amendments to the Public Finance Act 1989 and to look at some of those. As my colleagues have canvassed at great length Labour has made a decision to support this bill with reservations. My colleague Sue Moroney pointed out that we have talked in some detail about our views on this bill but there is still plenty more that needs to be canvassed in the course of this debate on this piece of legislation.Although we opposed this bill at its first reading the changes that did eventuate at the select committee process that were worked through with Labour and the State sector unions by and large have really made this a better piece of legislation that has come back to the House at the Committee stage. We are very happy to be able to say that we can offer it our support but we do still have some of those lingering reservations. It was heavily amended at the Finance and Expenditure Committee consideration and I think that that as a process is something that this Committee should applaud. That select committee consideration was allowed to work fully and really fulfil its function in making legislation better.As I said in terms of Part 2 “Amendments to Public Finance Act 1989” which we are talking about one of the issues that I really want to pick up there is the information requirements for appropriations that come under this part of the legislation. The intent of the bill is that all appropriations should be traceable and accountable from year toyear: “Traceability must be explicit where an appropriation or categories within an appropriation have changed including where a multi-category appropriation is used.” My colleague Sue Moroney has touched on a very current example of where this has been brought into relief. This legislation has meaning for every member in this House. There is no member in this House who has an interest in a portfolio either on the Government benches or on the Opposition benches who does not have to deal with the issues that are covered by this bill. For those of us who have been covering appropriations that have been brought under the umbrella of the Ministry of Business Innovation and Employment the “Ministry of Everything” it actually has been a real challenge to follow those appropriations through.My colleague Sue Moroney talked about trying to follow through ACC budget lines from years before the Department of Labour was absorbed into the Ministry of Business Innovation and Employment. I myself in the area of research science and innovation have been trying to cover through budget lines and trying to track how it is that our funding of things like postdoctoral fellowships has gone from when we had an independent Ministry of Science and Innovation and how that has gone when it was absorbed into the much larger Ministry of Business Innovation and Employment. I think that any change to the legislation like we are seeing in this is to be applauded because I think that the purpose of the House the purpose of our select committees and the purpose of members of this House is to make sure that we are scrutinising those appropriations. Members of the public also need to be able to have clear and transparent ways of scrutinising what is happening with public money. That is what we are talking about. We are talking about the use of public money here and anything we can do to make that more accessible and more transparent is something that we can support.Other changes that we think are important under this part of the bill include making it clear that other departments as well as the one administering an appropriation can incur expenses against that appropriation. Increasingly we are seeing that in the way in which Governments are run. We are having the idea of issues and themes starting to cluster around and appropriations occurring in other departments and I think it is really important that the legislation that administers the way in which we follow through our public money in our State sector recognises the changes that are happening around governance and the way in which we govern our country. It is in changing the information required in the estimates and supporting information—it is a pleasure to conclude some of my statements around this—that the focus moves more closely on to what is intended to be and what has been achieved with each appropriation. It is increasingly and incredibly important that we do have that. It is important that we can make sure that we know what it is that a Minister sets out to do with a sum of public money what it is that they want to achieve and most important what has been achieved so that at the end of each financial year we can go back and we can have a look at whether or not the money that was set aside for something was actually used for what was intended. The bill is changing the requirements for information about departments’ strategic intentions including the frequency of the provision.My colleague David Parker touched very briefly on the idea around the departments’ statements of strategic intents. These are incredibly important documents for members of the public for parliamentarians and for society at large really to know what it is that a public organisation is wanting to achieve. Allowing the annual reports of more than one department to be presented together in one document again speaks to the much more clustered way we are thinking of doing Government the way in which we need to bring things together. This does provide much more meaningful information about the department’s performance and achievements and this is what we are all looking to achieve. We are all looking to see that we can have meaningful and real information thatcan be there to show how it is that a Government department has spent Government money.So we are very happy to be able to say that we can support the State Sector and Public Finance Reform Bill at this stage because of the incredibly good work that the Finance and Expenditure Committee did and I would like to congratulate members of the committee from all sides of the Chamber on the work that they have put in. I think that it shows what this Parliament in its committees and in its House can achieve when people put their minds to addressing a piece of legislation trying to make it the best piece of legislation that it can be and working with the submitters and listening to the submitters when they come to the committee to see how these changes can be made for the better. Thank you.Hon DAVID CUNLIFFE (Labour—New Lynn):Tēnā koe. Kia mahi toa. Let me just draw the Committee’s attention to the considerable size of Supplementary Order Paper 262 which contains a significant number of pages—60-odd pages’ worth—of amendments to this part. It is not ideal practice for us to have a Supplementary Order Paper brought to the Committee that is of this length and complexity because it has not had the same level of scrutiny—for example John Hayes’ minute scrutiny—in the Finance and Expenditure Committee that the rest of the bill has benefited from. It has not had the “Hayes effect”. It may still have a haze with a “z” but not the “Hayes effect”. It is true that officials have given us their word that these are purely minor technical and non-controversial amendments that are consequential upon date changes and other such things and of course therefore there can be no policy intent in them.I want to turn the Committee’s attention to the substantive amendments to Part 2 which start on page 60 of the Supplementary Order Paper. We have an updated purpose statement and we move through to the substantive provisions starting on page 64. Proposed clause 59B replaces section 3A “Power to amend Schedule 4”. This allows the Governor-General by Order in Council to add to schedule 4 of the bill the name of any body office officer trust or organisation; and apply or disapply to any organisation any provision of the Crown Entities Act. The Governor-General can change add or subtract the name by Order in Council. Section 3AB in clause 59B provides similar amendment proposals for schedule 4A of the bill. If we move through we see that clause 60A proposed by the Supplementary Order Paper inserts new section 7C which is “Responsibility for and administration and use of appropriations”.On this one I just want to make a couple of general points that are not really drafting points. It is to echo the words of my good colleague David Parker who I think really emphasised the need to have a clarity of legal appropriation authority from Parliament to the Minister to the chief executive down through the output classes to the sub-output classes. It is provisions such as the new section 7C on page 66 and their like that make clear that the Minister or the appropriation Minister is responsible for the appropriation. So it is through provisions such as this that we are really underlining that the ethical basis of the expenditure of the taxpayers’ money is through the parliamentary process as vested in the Minister. It clarifies as David Parker has said that the chain of command after advice has been listened to and understood does go from the Minister to the department because that is how we account for the use of public money and that is very very important.It makes the further point in new section 7C(3) that “the Speaker is responsible for any appropriation administered by the Office of the Clerk of the House of Representatives or the Parliamentary Service.” I would be remiss if I did not state publicly that our staff in Parliament have not had a decent pay rise for a good 5 years. So when the Speaker is next considering his or her powers under this innocuous little subsection (3) of section 7C on page 66 of the Supplementary Order Paper I ask him orher to please have a thought for our hard-working parliamentary staff whose pay and rations really have not kept up with either the private market or the inflation index. I understand that they may be facing yet another year of severe restraint and I do not think that any of us think that they should be in that situation.On page 68 we move to clause 61D. This amends the power of the secretary of the department to receive information and clause 62 amends the power of the Auditor-General to be the auditor of the Government reporting entity. That is an important power because it means that the Auditor-General has his or her full powers when dealing with a potentially sub-delegated entity body Crown entity or company in which the Crown holds a number of shares or some other organisational form. What this bill is really saying is that that concrete chain of accountability and command can apply—must apply—across a range of organisational forms for which the Crown is responsible. The bill is trying to get in short the right balance between clarity of delegation rigour of accountability and yet a new flexibility to devolve across a range of organisational forms.In these post - global financial crisis days of fiscal constraint and fiscal prudence writ large all of us—but actually particularly social democrats—know that we are going to have to do more if not with less then with not much more in terms of taxpayers’ funds. Therefore we need to be absolutely focused on getting the best value for the taxpayers’ dollar that we can. I am reminded of an example early in my time in Parliament where we were considering the cost of delivering social work into one of New Zealand’s remote regions—I think from memory it was the Gisborne - Poverty Bay area. The salary cost for the social workers in those days quite a while ago was in the $30000s a year but the total cost per social worker was around $120000 the other $90000 being departmental overheads. I have never forgotten the example. The actual salary of a social worker was only about a quarter of the total cost; the other three-quarters was overhead. That impressed upon me then that even social democrats have to have an awareness of the best and most cost-effective way of delivering services to our people. Sometimes that might be through an agency that is semi - at arm’s length from the Crown such as an NGO or a Crown entity. It may be something that is lean and adaptable to those communities.It is interesting now to come full circle and to see a piece of legislation that with a lot of good cross-party cooperation is trying to achieve a good balance between having the flexibility to deliver those services in a variety of ways as are most appropriate without compromising on the rigour of the accountability back to the taxpayer or the chain of command back to the Minister. That is a sweet spot if we can achieve it that will allow modern social democracy to be cost-effective and active and flexible and in tune with our communities and we are reasonably excited about that possibility.New section 34 proposed in clause 65B of the Supplementary Order Paper underlines the responsibilities of chief executives for financial management and for reporting both for departmental and non-departmental matters. In proposed clause 66A on page 71 of the Supplementary Order Paper it dives down. This is quite specific prescriptive language because Parliament is wanting to leave the departments in no doubt whatsoever as to the nature of their responsibilities and the clarity of their delegations. I think it is well written in that regard. Clause 66A states that departments must prepare annual reports. There is some detail about what must be in them and it is the same for departmental agencies—obligations to publish to put the information in the public domain whether it be in hard copy or on a website. There are time limits of no later than 15 working days after it is presented to Parliament. Again there is a lot of prescription a lot of rigour here to make sure that the public is as well informed.Earlier this evening I went to a presentation by Transparency International with a number of colleagues. That is an agency that rates the level of corruption in different countries around the world. Guess which is the least corrupt country on the planet? No. 1 on their rankings is New Zealand. We can be really proud of that fact and we score incredibly well for the integrity of our public sector. So today it might be hard graft. It might not be the sexiest bill in the world. It is rather a large bill and it contains the kinds of provisions that keep New Zealand safe. It keeps New Zealand safe from either graft or just inefficiency and ineffectiveness because the rules are not clear about how we account for public money. It is in the dense drafting of bills like this that we make good our promise to the taxpayer that we are going to deliver the very best services for them at the very least cost and we are going to do it in a way that is accountable rigorous clear and efficient. It is this kind of work that underlies the fact that we are the least corrupt the most transparent Government on the planet and every New Zealander should be proud of that.In closing can I just again start where I began in the last part and that is to compliment the Government our high-quality officials and colleagues across the Chamber for their work on the bill.Hon TREVOR MALLARD (Labour—Hutt South):I apologise to my colleague David Parker for the confusion but I think he might have had a crack already and no doubt he can be involved in a sandwich—I can be before and after him if he wishes.The first point I would like to make is to compliment the officials who have been involved in the State Sector and Public Finance Reform Bill and also the Office of the Clerk on what is for me a new approach and that is writing the Supplementary Order Papers into the bill in a substantive way. I know that we had some discussions about this process at some stage in the past. What it does do is make a bill much easier to understand for people like me who are interested in the changes that the committee has made which are not quite as well shown in the version of the bill now. More important when the Minister of State Services’ Supplementary Order Papers as proposed are incorporated in this way it makes it much easier to focus—rather than trying to work on two large pieces of paper and trying to integrate them and work out how they interrelate with each other. So I want to thank the officials and I thank the Office of the Clerk and I think the Parliamentary Counsel Office too for their suggestions and their work in the area. Having said that it may be that officials and the Minister regret the fact that it is now easier to understand because there are more questions that flow from a better understanding of it.The very first one that I have is on clause 78(3) and the definition of “departmental”. It really is a question of why we need to define “departmental”. Who does not know what departmental expenses are? For a very long time we have had departmental expenses and we have had departmental capital expenditure. Most of the stuff has been around ever since we divided out the accounts to have a profit and loss account as far as the Government is concerned and a balance sheet. That is at the point when operating expenses and capital expenditure were divided. My question is really why we need to get to the level of pedantry in having this level of definition. There might be a good reason.The next point I would like to ask is whether—oh they do not number the lines the way they used to; this is a bit shocking. Now we are going to have some criticism. What we used to have down the side in well-drafted bills about every—[Interruption ] Have we? Well I cannot see it.Hon David Parker: You are looking at the tracked version.Hon TREVOR MALLARD: I am looking at the tracked version. What is the point of having a tracked version if you do not have the lines on it? For people like me whowant to speak and focus it makes it a lot easier rather than having to count down all the lines—you know using our fingers and toes if we have to go too far—to have the lines numbered every 10 or so. If we want a suggestion for people who are doing tracked versions in the future put the lines in the way they are in the report-back version. Clearly they will be at different points and as long as we know what we are referring to it would be helpful.I want to refer to the definition of “lend money” paragraph (a). It is right below the bit about host department. To make it clear it is in Part 2 clause 59 “Section 2 amended” which is the interpretation part. I want to refer to “lend money” in section 2(1) amended by clause 59(3) in the Supplementary Order Paper and first of all to ask whether paragraph (a)(i) could be better referred to as the MediaWorks exemption clause. This is “deferring payment for any goods or services supplied or works constructed for any person organisation or government;”. The question is whether this deferred payment arrangement should be known as the “Steven Joyce previously owned companies” clause or some other approach like that. [Bell rung ] Mr Chairman.The CHAIRPERSON (H V Ross Robertson): The Hon Trevor Mallard.Hon TREVOR MALLARD: Is it 5 minutes already? That is hard to believe. I had hardly started Mr Chairman.The next question I have is that under “lend money” paragraph (a)(ii) it talks about where the department—or I assume it is the department—is “entering into hire purchase agreements or agreements that are of the same or a substantially similar nature;”. The question I have got is does it not depend on which end of the hire purchase agreement they are in? If they are buying something on hire purchase surely they are borrowing rather than lending. It is unlikely that a major Government department would enter into a hire purchase agreement. But under subparagraph (iii) which is the next section where they are entering into finance lease arrangements again the normal finance lease arrangements are those where they are in fact borrowing where they are getting goods and entering into some sort of finance leasing arrangement done I think often by Government departments and which involves those massive big printing photocopiers cars or some similar arrangements like that—what are effectively lease-type arrangements.I cannot conceive where it would be appropriate for a department or a Crown entity or a Crown agency to be the lender in such a circumstance. Do we really want the Ministry of Social Development to start getting into the car lease business—you know the hire purchase finance company for cars? Maybe it is a plan for the Minister in the chair in her area as Associate Minister of Education as far as technology is concerned and maybe it would be valid. It might well be valid if we are going to go into schools and have arrangements whereby there are computers iPads or iPhones given to families on some sort of arrangement. I do not want to characterise the Minister in the chair as one of the loan shark type people who enters into the high - interest rate arrangements because I think that would be unfair. But my question—and she could answer it with some of her other experience—is whether in fact this clause is designed for arrangements such as that. Frankly I cannot think of arrangements where it is appropriate for the Crown a Crown agency or a department to be the loan shark or finance company end of a hire purchase arrangement with the public or in a finance lease arrangement.I do want to ask questions in relation to “responsible Minister” as far as it relates to the Speaker and the Officers of Parliament. I do not want to go back over too much of the previous part of the bill but I want to ask—through you Mr Chair—the Minister who is currently the Minister in the chair about the interrelationship between the salary setting and the responsible Minister being the Speaker. It is something that I haveclearly got some interest in—making sure that the rules are right in this area. I want to ask how this interrelates for example with a policy decision to move within this complex towards a living wage over a period of time. Is it a policy decision that the Minister responsible can take under section 2(1) as amended by clause 59(5) in this particular area? Or is it something that can be done by only the chief executive whom I understand is called the General Manager in the case of the Parliamentary Service the Clerk in other cases and in other cases again the Ombudsman or a number of others? Can the Minister in charge make those policy decisions?Hon NIKKI KAYE (Minister for Food Safety):It is a pleasure to take a call on Part 2 of the State Sector and Public Finance Reform Bill. I have listened to several very technical speeches from the Opposition and I want to also just briefly remind us why we are here. It is great to see cross-party agreement in terms of public sector reform. It is also great to see as well that members are paying such attention to detail.I want to touch on a few speeches that have just come before us. Firstly I was surprised given David Parker’s extensive legal experience that he needed me to walk him through some definitions in the bill. He asked what a “responsible Minister” is and what the difference is between that term and “the Minister” so I am happy to walk him through that. “The Minister” refers to the Minister of Finance and “the responsible Minister” refers to the Minister responsible for a department. I am very pleased to correct that for Mr Parker.Hon David Parker: Clarify.Hon NIKKI KAYE: The second clause—the other clarification that Mr Parker asked for was around amendments to section 80 in clause 75 so I am as well very pleased to give him some clarification regarding that. That change is specifically to enable Treasury to also be able to issue instructions to new departmental agencies for the purposes of section 81(1)(a) so I am glad that I am able to clarify that as well. The other thing that Mr Mallard raised was around defining “departmental expenses” and whether we need to do that. There are a couple—Hon Trevor Mallard: “Departmental”.Hon NIKKI KAYE: That is right—“departmental expenses” and the reason that we need to do that. There are a couple of things. We want to be more explicit about chief executive responsibilities for departmental versus non-departmental expenses. That is the first reason. The second thing that I wanted to make clear is that “departmental” and “non-departmental” are mutually exclusive. The third point is that the terms are used throughout the bill and not everybody who is reading that bill will necessarily have the experience that that member has in terms of that difference between “non-departmental” and “departmental”. So I am very very pleased to be listening so intently to the Opposition speakers. But I want to make this point about why we are here. We are actually here to create greater flexibility in terms of our public sector so that we can focus on outcomes.I want to finish with one quote by a member opposite because I think it was the best quote that we heard tonight. It was a speech by David Cunliffe. It was a great quote. Compared with some of his colleagues who focused on very technical issues he said “We need to do more with possibly a little bit more but even less.” and I felt that that is a seismic shift in New Zealand politics. It is a seismic shift from the Opposition. I am delighted that members opposite have now supported our policy in terms of public sector reform.Hon DAVID PARKER (Labour):Well I am very glad that the Hon David Cunliffe made the earth move for the Minister. That brings me to capital expenditure incurred in emergencies some of which will be seismic.Clause 127 of the State Sector and Public Finance Reform Bill repeals section 23 of the Public Finance Act then the next clause amends section 24 and then we jump to inserting new section 25A after section 25. On that order it seems that we are not repealing the existing section 25; we are just inserting a new section 25A after section 25. I thought well why are we doing this? I thought that maybe this is arising out of the Canterbury earthquakes because now new section 25A says: “Capital injections may be made in emergencies … The Minister may approve a capital injection to meet an emergency or disaster described in section 25(1).” So I went and looked up section 25(1). It says: “This section applies if—(a) a state of emergency or state of civil defence emergency is declared under the Civil Defence Act 1983 or the Civil Defence Emergency Management Act 2002; or (b) a situation occurs that affects the public health or safety of New Zealand or any part of New Zealand that the Government declares to be an emergency.” So I thought yes I could see where those capital injections that can be made in emergencies could be authorised under new section 25A.But then I saw that under section 25(2) the Minister can already do something very similar. Under section 25(2) of the existing Public Finance Act which is not being repealed by this bill “The Minister may approve expenses or capital expenditure to be incurred to meet the emergency or disaster and whether or not there is an appropriation by Parliament available for the purpose and despite [some other sections] the … capital expenditure may be incurred accordingly.” Then section 25 goes on to say that if it has not been appropriated in advance then under subsection (5) that amount has to be included in the annual financial statements and in an Appropriation Bill for confirmation. So you can do it in the interim but eventually the appropriation has got to be confirmed by Parliament.That is already allowed for under section 25 and I would like some clarification. I am sure there is a proper reason as to why we need the new section 25A inserted by clause 129 in addition but it seems to me to be very close to the situation that is already covered by section 25 which already allows appropriations for capital expenditure in those emergency situations. So to the Minister in the chair the Minister for Food Safety I would ask her to explain why it is that the new section 25A extension to the sorts of capital injections in emergencies is necessary because it seems to me that it is pretty well covered already by section 25 in the existing Act.This is just following on the theme that the Hon Trevor Mallard has raised as to why it is that we sometimes overcomplicate legislation. I thought the point that he was making earlier was that if you have already defined “department” why do you have to define “departmental” because “departmental” obviously refers to a department. That was the point that he was making. Perhaps the Minister in the chair the Minister for the Environment could address that because I am not sure that the previous Minister in the chair the Minister for Food Safety quite got the essence of my colleague Trevor Mallard’s point in that regard.The other point I would like clarification on is in respect of strategic intentions. Sections 38 to 41 of the existing Public Finance Act are being replaced. They are being replaced in clause 136 with a new section 38 which refers to strategic intentions whereas previously the departments had to provide information on future operating intentions. I am not sure whether this is because the Government has formed the view that the information that departments have been providing on their future operating intentions has become so detailed or so general as to not be strategic and whether either because it is too detailed or it is too superficial the Government does not think the existing information being provided is strategic enough. But in the new wording the point of difference seems to be that instead of providing information on future operating intentions the departments have now got to provide information on strategic intentions.In terms of the timing of that information the Minister can at any time require the department responsible to that Minister to provide new information on strategic intentions. I can see a number of areas where that would be necessary in the current Government given its failure to meet election promises that were made to the electorate which it must be feeling at risk about in terms of future voting intentions.John Hayes: That’s not true.Hon DAVID PARKER: “That’s not true.” says John Hayes. Well I would like to list a few examples: “Wave Goodbye to Higher Taxes. Not Your Loved Ones.” Remember that one?David Bennett: Oh come on.Hon DAVID PARKER: “Come on.”—you do not like being held to account for your promises do you? That was one of your election promises. Mr Chairman sorry. I did not mean to—the member for Hamilton—David Bennett: Name one.Hon DAVID PARKER: I will name you more than one not just the promise to halt the people going to Australia. To halt the reason for them leaving National said it was going to overcome the wage gap. It was going to deal to the wage gap. What has happened since? It has grown—it has grown. So I would have thought that Ministers who were up to their game would be revising the strategic intentions for their department so that they do a bit better in that regard because until now it has been an abject failure. I mean this Government talks about introducing national standards for schools but maybe instead of strategic intentions being the topic here it should actually introduce some standards for itself including being held to account for its election promises.There was another area of strategic intention that Bill English used to talk about. He came to power saying he was going to rebalance the economy towards exports. Exports as a percentage of GDP are flat. They are flat and indeed this year they may go down as a percentage of GDP. Another strategic area of failure—and I can see how it might be more meaningful for members of the public. Instead of requiring more information on strategic intentions for the department it might be more useful for the public to have some report on whether the strategic objectives of the Government as promised prior to the election were being met by actual outcomes in New Zealand. So I wonder why it is that the Government has moved from information on future operating intentions to strategic intentions.It is interesting that once these strategic intentions are produced a department must as soon as practicable after providing the information to its responsible Minister publish the information on an internet site maintained by or on behalf of the department. That is provided in the new section 39 which is also inserted as part of this clause 136. So clause 136 does not just insert a new section 38; it also inserts a new section 39 which says that these things have to be put up on a website as soon as practicable except if there is a Budget coming up. Then if the Government wants to keep it secret during that period in the 3 months before the Minister delivers a Budget that department must not publish the information. When I say “information” that means the strategic intentions that the department is identifying perhaps after the Minister has asked it to change them.SUE MORONEY (Labour):I was very interested in the Minister for Food Safety’s contribution a short time ago on this part of the State Sector and Public Finance Reform Bill. She did say that she was going to address the questions that had been raised by the Opposition speakers but she declined to actually answer the fundamental question that I had posed earlier about seeking an absolute assurance from the Minister in the chair the Minister for the Environment that we would be able to compare estimates from year toyear by comparing apples with apples even though in this part of the bill we were changing the way that those estimates were going to be brought down. I still would like to hear an assurance from the Minister in the chair about that issue because I think that is fundamentally important.It is worrying to me and of some concern that we have members in the Chamber from the Government who are here and who sit on the Finance and Expenditure Committee but do not seem interested in taking a call in the debate around how we are amending the Public Finance Act. I really did expect that we would hear them getting up to defend these amendments and these changes but there has been nothing thus far. Hopefully that will change quite soon.The part that I want to address of the amendments in Part 2 of this bill where the Public Finance Act is being amended is the part that refers to the frequency of statements of intent from various departments coming forward. I happen to have here actually a copy of a statement of intent so that people can understand what sort of document we are talking about. This one is actually from the Accident Compensation Corporation. I happen to have it with me in the Chamber. I was just perusing it for the vote estimates that we will be looking at hopefully some time tomorrow in our select committee. Of course we are meeting outside the hours of urgency as is right and proper. They are documents that do actually inform the Government and therefore the public of what the department’s—in this case it is a corporation the Accident Compensation Corporation—priorities are for the forthcoming year. The amendment that this bill brings forward is actually to move that where there has been an annual requirement for it to just a 3-yearly requirement. I note that the select committee was concerned about that and quite rightly raised issues around moving to just a 3-yearly requirement of statements of intent and what that means for incoming Governments.I think we on this side of the Chamber have a particular interest in this because we do intend to be the next incoming Government. If statements of intent were there and were binding for 3 years then that may actually curtail the ability of an incoming Government and an incoming Minister to implement policy that they have been elected on. It might curtail their ability to actually make a quick amendment to things that they did not approve of that were in for example the Accident Compensation Corporation’s statement of intent or that of any of the other departments. So the select committee quite rightly raised that and did come to an amendment of the amendment if you like to give the Minister the right to require a statement of intent to be brought in between that 3-yearly requirement. I think that is right and proper. It might not even be a change in Government; it actually might be a change in Minister who comes forward from within the same Government. And we have seen that where Ministers have you know maybe slightly different priorities that they want to promote.Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman):Again I will not take too much of your time but I will take the opportunity—The CHAIRPERSON (H V Ross Robertson): I am sure you will take 5 minutes Mr O’Connor.Hon DAMIEN O’CONNOR: No no. I will take the opportunity to speak on Part 2 of the State Sector and Public Finance Reform Bill. There are couple of issues here that I would like to refer to in particular and they are the presenting and publishing of departmental annual reports and the issue of responsibility of directors—responsibility for and administration and the use of appropriations. I must refer I guess to my portfolio area of responsibility of primary industries. I have been studying the reports of the Government in this area for 4 years now. I am assuming that the responsibility here as stated is that these must be accurate. I think it is: “We consider this desirable to allowwhole-sector or cross-agency reporting.” The Finance and Expenditure Committee has clearly said that it wants clear and accurate reporting.If I can take the Ministry of Agriculture and Forestry as an example—and I know that has now been merged into a new superministry—there was one particular issue there on rural proofing which was a policy introduced by the last Labour Government. It was to ensure that in every area of Government policy there was to be consideration of the effect on rural communities. In fact a template had been developed and the Ministry of Agriculture and Forestry and the rural affairs unit it was kind of assumed were responsible for ensuring the implementation of that. In fact the annual report stated that. But it was not happening—it was not happening. And of course only through the select committee process—a relatively brief period—did we have the ability to ask the Minister and officials why it was not happening. Indeed what often happened was that other issues overtook the investigation into this area. So what I am hoping that this bill will demand of Government agencies is not only reporting but accurate reporting. The issue I referred to in the debate on Part 1 is about I guess the accountability of the chief executive officer or the Minister and who should take what responsibility. So I raise that as one of the points.The second one—in fact I had referred to two before but there is one other one—is the authority to lend money. Can I refer to the current situation of the Ministry for Primary Industries which is that it has a grand scheme called the Primary Growth Partnership. The Minister has indicated that $600 million - plus will be allocated on a basically one-for-one system where the taxpayer will put up over $300 million and the industry will put up over $300 million. It will get on with projects that have no doubt—we have been told—been scrutinised. What we have not been told is how they are accountable.The question I ask is—and there is no authority to lend money in Part 2 here—if the money that was allocated to a project is deemed not to have delivered is there a requirement to repay and could that be considered loaned money? It is a technical question but the bill is technical. If an agency like the Ministry for Primary Industries does not have the authority to lend money and it allocates money—and we are talking tens if not hundreds of millions of dollars—to a project that has a joint-venture arrangement is that appropriation or allocation deemed a gift or is it a loan? Is there any requirement for the money to be repaid if there is no delivery on the key performance indicators or the projected outcomes? At this particular point there are a few projects that have been running half their lives and there is not one substantive narrative report on progress—Hon Trevor Mallard: “Narrah-tive”.Hon DAMIEN O’CONNOR: Narrative—sorry. Thank you for that Mr Mallard. There is not one substantive narrative report on the progress of the Primary Growth Partnership. So if indeed the select committee Audit New Zealand or anyone deems these projects to have been a failure will that money have to be repaid and will that therefore mean that the lend money or the requirements and provisions that are in this Part 2 for an authority to lend money should have taken account of that possible scenario?The next part I will go on to—and hopefully the Minister will answer a few of these questions—is the responsibility of directors. There is a good lesson in here. Although the directors of Crown entities are different from the directors of State-owned enterprises basically they have the same moral responsibility—that is to return to the taxpayers. But I am not quite sure whether these provisions here mirror those of the State-owned enterprises. We have had a classic example in Solid Energy which is a State-owned enterprise not a Crown entity but none the less is owned by the taxpayerand is returning to the taxpayer hopefully returns on their investment and efforts and dividends. There was a clear—in my view—failure of the directors of that company to keep it in order.What we have in the commentary regarding clause 92 is: “The intention of this clause is to allow directors of companies listed in Schedule 4A of the Act to act in certain circumstances in the best interests of shareholders rather than in the best interests of the company.” I guess a State-owned enterprise would act in the best interests of the company and this is saying I assume that directors should always act in the best interests of the shareholders. It is one and the same if the Crown owns the company although we appreciate that with the idiotic sell-down of State-owned enterprises by this Government it is determined to hand 49 percent of State-owned enterprises into the hands of wealthy New Zealanders who can afford to buy a whole lot of shares or worse still as we know into the hands of a whole lot of offshore investors. That is a difference of the State-owned enterprises. There are however some Crown entities—and I am not sure but I am told that AsureQuality is a State-owned enterprise and that is one that has done a deal with the Chinese. But I will not carry on as I know this will be slightly out of the scope of the bill. I will stay within it. So the responsibility here is clearly to the shareholders as it should be rather than to the company as an entity. Well that is the way I read it. Indeed it is refreshing and it is something we should perhaps apply to the State-owned enterprises as well. I think that there are some interpretation issues there and I guess that the select committee has gone through that.I do not have too much more to say on Part 2 of the bill other than to re-emphasise and repeat the questions that I have raised of course around the accuracy of reporting on the departmental annual reports. They are generally glossy. Most people do not read the detail often but indeed it could be said that too often the reports are inaccurate.The second point as I said was the authority to lend money. If money is appropriated or handed over or allocated to projects then is there a requirement for that money to be repaid? I am suggesting that with the Primary Growth Partnership there is probably not a requirement for it to be repaid. I am hoping that this particular clause or this part of the bill does not eliminate the possibility that money could be repaid as a loan would be if there are not the outcomes as laid down in the proposal that might have been accepted by officials. It is not terribly complex just a point about basic accountability. I have to say that with the Primary Growth Partnership there is a lot to be learnt and a lot to be explained and indeed there may be a lot of money to be repaid if in fact those projects have not delivered on what they said they would.Hon TREVOR MALLARD (Labour—Hutt South):I have got lots of dog-eared corners of this State Sector and Public Finance Reform Bill but there is a particular issue that I would like to start with and that is on page 69 of Supplementary Order Paper 262 about 10 lines from the bottom at new section 34(1)(b) clause 65B where it says “by the Minister or the responsible Minister.” The question I have got is whether the words “the Minister or” are in fact superfluous. Do we need to have “the Minister or the responsible Minister.”? If one goes back to page 63 of Supplementary Order Paper 262 at subclause 5 of clause 59 “responsible Minister” means in relation to the Office of the Clerk etc. or the Speaker; in relation to any other department the Minister for the time being responsible; in relation to a Schedule 4 organisation the Minister responsible for the financial performance; and in relation to a Schedule 4A organisation the Minister and the other shareholding Minister. The question I have got is who the Minister could be who is not the responsible Minister except if one goes further into Supplementary Order Paper 262 to page 127 where you might have a Minister other than the responsible Minister who is responsible for a big report and this part of the reporting requirements are part of a bigger report and therefore the Minister who is notthe responsible Minister is in fact the Minister responsible for the report that this particular segment is part of.I think that at least the officials know relatively well that Ministers act for other Ministers. That is part of the parliamentary process. Ministers can act for other Ministers and can act for responsible Ministers in fulfilling both their parliamentary and their statutory functions. The question I have is—and it might be a bit pedantic and there might be a very simple answer for it that is passing me by—going back to that original point: who might be the Minister who is not the responsible Minister who is being referred to in that particular clause? I cannot think of a circumstance and I have been going back and forth a bit. I have been worrying at it now for about 20 minutes. I cannot work it out. I do not want to call it a non-responsible Minister because I think having the words “the Minister” indicates that it is in fact the Minister who is responsible. But then why do we say “or the responsible Minister.”? Is it belt and braces or does it have a particular meaning that adds some value to it?I do want to say to the current Minister in the chair the Minister for the Environment that the previous Minister in the chair Nikki Kaye was most helpful with some of the explanations that she gave on these technical points.Hon David Cunliffe: That’s right.Hon TREVOR MALLARD: She was quite good at reading out the responses that were given to her by the officials behind her. She did not know the name of the actual bill but that did not matter that much. I would be interested in a response from the Minister on this. In fact I would be interested in a response from any Government member. I think we could have a bit of an exemption if Mr Ryall who used to be responsible for these areas is across the detail about the difference between “the Minister” and “the responsible Minister” and the added value. In fact I would be prepared to wager quite a lot that he would be more across it than the current Minister in charge of the bill or the Minister who is currently sitting in the chair. If anyone knew the difference between “the Minister” and “the responsible Minister” in this particular context I would say other than the officials it is likely to be Mr Ryall.The next question I would like to ask is whether anything should be read into the last couple of lines on page 117 of Supplementary Order Paper 262 where there appears to be an exclusion for “an intelligence and security department”. The question that goes with that is whether “an intelligence and security department” is defined within this legislation. I have been looking for it and I cannot find a definition of “an intelligence and security department”. I think the one thing we have learnt in recent weeks is that there has been a bit of bouncing around as to what these different agencies do and how they work and interrelate with each other.Is for example the Ministry of Defence an intelligence or security department for the purposes of this Act? Do we still have a Defence Force as opposed to a Ministry of Defence? Is the Defence Force a security or intelligence department? [Interruption ] Is it? Is the Police an intelligence or security department?John Hayes: It’s in the Act.Hon TREVOR MALLARD: It is in the Act? Sorry I did look for it in the Act. Mr Hayes says it is in the Act. Can you tell me which section of the Act Mr Hayes? Mr Hayes has grunted that it is in the Act but he appears not to be able to point out the particular section—Hon David Cunliffe: Which Act?Hon TREVOR MALLARD: Well I assume it is in the Public Finance Act. That is the Act to which we are currently referring. If it is that is good; if it is not or if there is something—just forgive me for being suspicious. I think there are a number of things that used to be above the radar and used to be pretty clearly legal or illegal and nowthey are being blurred. What appears to be the case here is that expenditure which should previously have been transparent is in fact becoming less transparent under the Act.The next question I would like to ask goes to page 80 of Supplementary Order Paper 262 and the replacement of section 65K of the existing Act. That is the very old one: “The Crown must not lend money except under statute.” I want to say that when I was Minister of Education one of the things that used to drive me spare was schools that got into trouble for either borrowing or lending when they did not have the authority to do it. It happened all over the place. They were borrowing and lending money. One of the questions I have got in fact is whether schools have actually had the legal authority to lend money from their boards of trustees’ operational funds to teachers who have not been paid by Novopay. I am just going to venture a guess unless there has been a change in the legislation—I think that in the time I was the Minister of Education they would not have been permitted to lend money in that way.What I would like to ask is which Acts are being referred to in new section 65K? Is there any intention of doing a list or a cross-reference? It is all very well to say unless “expressly authorised by any Act the Crown [shall] lend money to a person or an organisation.” Actually if some lending occurs it is pretty hard on a random basis to work out the authority for that lending if in fact there is not the sort of decent listing and cross-referencing that is normally the case.Something that I do very much support is clause 70AAG set out on Supplementary Order Paper 262 which is the Auditor-General directing “Ministers to report to House of Representatives in cases involving unlawful expenses etc”. I have some experience in this area. I had the unfortunate experience back when I was the member for Hamilton West of chairing the Māori Affairs Committee when we were doing “the supplementary estimates to the supplementary estimates to the supplement to the supplement to the supplement”—I think we had about seven levels of it. I get a slightly knowing nod from the officials’ bench as to the problems—CHRIS HIPKINS (Labour—Rimutaka):This is the first opportunity I have had to take a call on the State Sector and Public Finance Reform Bill. I am happy to make a few observations about these particular clauses in Part 2 of the bill that deal with financial reporting for Government agencies. There are a few points of clarification that I would like to seek on these matters as well not having been involved in the Finance and Expenditure Committee deliberations on this bill.It is clear that one of the things that the bill seeks to achieve is a more connected and joined-up Public Service to break down some of the silo mentality that exists within the Public Service at the moment. I think that is a worthy aim and it is something that we in the Labour Party are very very supportive of. But one of the tensions with that has always been that ultimately under the existing arrangements with public finance in particular the chief executive is going to be the person who is responsible for how public agency money public money taxpayer money is spent. Under this legislation that we are debating at the moment where we are talking about specifying the financial responsibilities of departmental chief executives to make it clear that they include financial stewardship for the long term—so that is what we are doing in one part—we are saying to the chief executives that we want them to take a long-term view of the financial stewardship of their departments. But then in another area we are making it clear that other departments as well as the one administering the appropriation can incur expenses against the appropriation. It sort of highlights the tension that we have.In order to get a more connected and joined-up Public Service and to get the agencies working more closely together to some extent we have to erode the autonomy of an individual chief executive over the way their department spends its money yet we arestill going to be holding that chief executive to account. They are still going to be the person who comes along to the financial review process at a select committee to explain how that agency or department has spent its money. There are going to need to be some pretty clear controls in place here because different chief executives and different agencies may also be getting slightly conflicting priorities or conflicting directives from the Ministers for whom they work. One of the things that I think we risk here—and it is certainly not an insurmountable problem and I am supportive of what the bill is trying to achieve—is just making sure that we make it clear that where one department incurring expenses against an appropriation of another department is doing that the accountability is quite clear the lines of decision making are clear and we can keep track of what is going on there. That flows right the way back up the system to Ministers as well.Certainly most large areas of Government expenditure involve several different departments and agencies. If we take education for example I can think of several issues that we would deal with in education that would involve the Tertiary Education Commission the New Zealand Qualifications Authority and the Ministry of Education and they would all be working on the same goal. They would all be working towards the same objective and outcome yet at the moment they are very much defined separately although there is I guess a coordinating role for the Ministry of Education in overseeing the work of the other agencies. [Interruption ] There are other agents and Megan Woods has just pointed out other agencies involved in transitions—Career Services and various agencies like that. We want those agencies working together towards a collective goal. We want the Government to be able to specify that this is the direction it wants to go in in these areas and that it wants to make sure that they are connected up and that the public finance requirements do not effectively act as a barrier to all the agencies working together. Potentially it is quite possible—well I certainly think that it is the intention—that the changes being made in this legislation will provide opportunities for that to happen.Turning back to the accountability issue and the way that accountability information is presented in annual reports I point out that it is the annual reports effectively that form the starting point for Parliament’s scrutiny of how money is spent. When we get together in our select committees and we go over departmental expenditure and we review departments we look first at the annual reports and then at a whole lot of supporting information that is supplied usually in relation to quite extensive questions that members of Parliament will ask through that select committee process.What the changes in this bill before us allow is for annual reports of more than one department to be presented together in one document where this will provide more meaningful information about the department’s performance and achievements and it will allow end-of-year reporting on appropriations that contribute to a common purpose but are administered by different departments to be presented in one document. In education for example unless I am incorrect this could mean that we end up with an annual report for education rather than an annual report for the New Zealand Qualifications Authority an annual report for the Tertiary Education Commission and an annual report for the Ministry of Education—unless I am mistaken; some clarification on that would be quite good.Then what we do is we get to the point where we start to ask whether you know at the other end of the process some of the documents specifying what we want departments to do should also be common. So rather than the Government specifying a statement of intent for all of the different agencies the Government can then start specifying “This is our statement of intent for education. This is what we are trying to achieve in education.” Then all of the other things that flow from that contribute to thatoverall directive and the annual reporting coming back again contributes to that. That is all positive in my view. I think that is what we want the Public Service—the public sector and all of the agencies—to be doing. We do not want to have them competing with each other and we do not want the silo mentality. But within that we have still got to make sure that ultimately at the end of the day someone is responsible and accountable back to the House.In our estimates we get the opportunity to grill Ministers on what it is they want money that is being spent to contribute towards—what are the outcomes that they are trying to seek. We get to grill them a little bit on their plans and on the decisions that they are making—not always successfully of course; that relies on them providing the answers. Megan Woods has just raised a very good point. In the scrutiny of all of the votes and all of the departments and agencies that we have through the financial review process we very much rely on there being timely information to the select committee. For example we start as I mentioned from the annual report. That is the starting point for our scrutiny of where departments are spending their money. But we then ask an extensive range of questions. Normally there will be around 100 or 150 standard questions that go to all departments and agencies and that is actually where we get the really useful information. Then from that there will probably be more supplementary questions that go backwards and forwards—in a small department not very many; in a controversial or big-spending area like education health or social development there will be a lot of questions.By getting that information we are able to give really good scrutiny to what these departments and agencies are doing. If that is not supplied because Ministers simply do not require their departments to supply that information the select committee cannot do its job. And too often in this year’s financial review process we are seeing that happen. We are seeing agencies not supplying information that is being requested by select committees and even more so in the most recent round of estimates that we have dealt with. Ministers have been asked for a whole lot of information and it has not been supplied to the select committee at the point where Ministers are showing up in order to answer questions about it. How can the Parliament do its job effectively if we are not actually being given the information before the hearings take place?One of the things that I am concerned about—and I just I guess seek some reassurance from the Government about how it is going to handle this—is that in making the information provision more multidepartmental and stretching the boundaries of that a little bit more we have still got to have a mechanism to ensure that there is accountability to ensure that the follow-up information that is requested is actually supplied and is actually provided. It certainly can be done. There is no reason why it cannot be done. We just need to have an assurance that processes will be put in place to allow that to happen.I am very concerned that we are departing from some pretty well-established processes—just in practice—around the House and around select committees at the moment and information is not being provided in the timely manner that select committees should reasonably be able to expect. That is of real concern. It is frustrating for us of course but it is actually very concerning for the public because they rely on us as members of Parliament to scrutinise Government decision-making and to scrutinise in a very robust manner where their money is being spent and we are not getting the information that we should get to allow us to do that effectively.Dr RAJEN PRASAD (Labour):At this late hour it is a pleasure to take a call on Part 2 of this particular bill the State Sector and Public Finance Reform Bill. The bit that I want to talk about—David Bennett: You are really getting to the bottom of the barrel Cunliffe.Dr RAJEN PRASAD: Will the chattering classes be quiet and listen. You might learn something. The risk exists—[Interruption ] Those three members there just be quiet. It is late now and I know you are tired. You are making noise for nothing. We know you are tired. We know you are tired. Just concentrate—concentrate. Those members sitting at the back have got no mortgage on financial thinking.I am particularly interested in the new category the multi-category appropriation the MCA and the notion of a single overarching purpose because I think there is something quite fundamentally radical about these proposals particularly as we apply them in the social development area as I will attempt to do. It is a commendable idea to bring those two things together. Indeed other members have spoken about—and the Opposition whip just spoke about—the accountability in this. When David Clark was speaking he raised a fundamental question and he said that it does change the fundamental nature of accountability—just these particular provisions. I agree with him; it does. I wonder how this will unpack itself as we go on.One reflection one can make is that over the years or over decades—and I am going to focus and apply this to the social development area—we have increased expenditure in social development and in every decade problems in social development have increased. We are talking about children we are talking about families and we are talking about that sector of our society that for some reason multiple generations get locked into. The interpretation that this Government has made is that that is all about welfare dependency and I do not agree with them of course.But here is an approach that could possibly signal that there is something different that the Government anticipates and if it does then certainly we support that. But it does present some major challenges to the Government and to those who are considered to run programmes and deliver services in different ministries and departments that contribute to this single overarching purpose—in this case social development or development of children. I wonder how the Government has conceptualised this because here we are in silos as others have said and here is an attempt to link the Public Service together and to join it up a little bit more. We have been trying for probably over a decade now to join the Public Service departments together. But here is something conceptually different.I wonder—and maybe the Minister in the chair the Minister for the Environment might want to give us some ideas as to what the thinking was here—whether it is anticipated that there will be a different type of conceptualisation of the overarching purpose that the Government wants to achieve and if it has anticipated that then what that might be. [Interruption ] They are still chattering in the back there. Obviously they are not following the argument. Those three are not following the argument the chattering classes up the back there.How would the Government conceptualise this? If we applied that to the welfare of children for example as a single overarching purpose—here the Government has decided that there is a single overarching purpose to increase the development if you like of children to remove risk etc. We know from all of the science that is available to us that there are multiple contributions to that development pathway the trajectory that children have whether it is in housing or in health or in income adequacy or actually in physical environments in which children live—the communities in which they live and the neighbourhoods in which they live. If there was here a single overarching purpose to improve the outcomes for those children then one can anticipate that indeed those ministries and those departments—the ones I have mentioned and a number of others—are actually going to be doing something quite different. All of the science that I know actually does reflect the fact that the conceptualisation of what contributes to those problems is at multiple levels is ecological and is holistic.So I wonder whether the Minister can tell us that the officials and others have conceptualised this in such a way that there actually will be a different way of doing business a different way of addressing the needs of children rather than leaving them in silos. At the moment it is just a rough schema stating that there will be multi-agency appropriations and there will be a single overarching purpose. But what will make that effective and this will be fascinating to see is the conceptualisation behind it: how the area that the single overarching purpose is designed to address has been thought through whether all of the ministries and departments that have contributed to it have actually done the work to design if you like this schema in which they contribute and then how those services will be delivered.This comes back to what I was saying earlier. We have poured money down these silos and in the end social exclusion has actually increased. The problems have not gone away. If this is a different way of doing it then clearly there has to be some fundamental change in our education system in our housing system in the child welfare system in the social development system and in our environmental design and how we design our environments in which our—Maggie Barry: His speech is as irrelevant as he is.Dr RAJEN PRASAD: Will Maggie Barry please listen for a moment because I doubt whether Maggie Barry is actually following the argument. We are not planting a shrub now at the moment; we are talking about something quite serious. I doubt whether those three members have actually understood at all what this is about. I know that it is late in the evening. Go back to sleep. You will probably be much better off tomorrow morning.If that thinking has taken place then I believe that this is indeed quite a radical change. Other speakers from this side have actually already indicated that there is a huge promise in what this model gives us but to actually deliver it is something quite different. Of course the other point and Chris Hipkins was talking about this earlier is that when the reports come back to the select committees and the reporting frameworks that are being used—and that is being changed as well under Part 2—then we actually have a whole different way in select committees of interrogating the performance of those Ministers and departments that contribute to the overarching purpose.So really this is a radical change. If it works and if it is well conceptualised then it will be effective. But if some of the light-minded people who have been interjecting are responsible for actually designing how these things work then I doubt very much Mr Bennett whether any contribution that that member might make is actually going to have any effect on this. God help us if that member becomes a Minister. Some of the others might. But the Ministers have got to be smart enough to demand the kind of conceptual thinking that this very simple change actually requires.David Bennett: What’s the name of the bill? Tell me the name of the bill.Dr RAJEN PRASAD: I beg your pardon?David Bennett: What’s the name of the bill?Dr RAJEN PRASAD: Oh come on. Does the member think that I am that stupid? Just take something seriously. Do not be an idiot all your life. I do not think that that member remembers the bill and if that was all that that member required me to understand about this bill then I think that member is in cuckoo-land. The fundamental clause I am addressing concerns the multi-category appropriations and the single overarching purpose. If that member has not understood that then I do not know whether that member has anything useful to say. I challenge those three members on the other side to take a call and explain their understanding of this particular provision in the bill.David Bennett: Are you voting for the bill?Dr RAJEN PRASAD: Come on go back to sleep—go back to sleep.There is something quite serious about these provisions which we support on this side of the Chamber. I think they could fundamentally change the silo thinking that prevails in many Government departments and agencies. The overarching purpose is a very important way of trying to bring it together. If that is the intent of these provisions then I think it is a very good bill and we support it. Thank you.Dr DAVID CLARK (Labour—Dunedin North):Kia ora Mr Chair. Kia ora e te Whare. Kia ora koutou. And special greetings to the noisier members over the back there who seem to be enjoying the proceedings of the evening. I am sure I am not alone in looking forward to their particular contributions later in the debate.Andrew Little: You’ll be waiting a long time.Dr DAVID CLARK: I may be waiting a while says my colleague. They have been remarkably quiet when it comes to their turn to make a constructive contribution and are more focused on the interjections. I will not claim any high ground there myself but I would enjoy any contributions.To come to the substance of the State Sector and Public Finance Reform Bill lest I be hoisted on my own petard Mr Chair—The CHAIRPERSON (Lindsay Tisch): I am listening.Dr DAVID CLARK: —I wish to discuss the nature of these departmental agencies and the reporting mechanisms that will apply in future as we see right up front in Part 2. We come straight to the crux of the matter in clause 58A which says: “In section 1A(2)(d) after ‘departments’ insert ‘departmental agencies’.” Then we have a series of other changes that the bill proposes that will be about ensuring that these departmental agencies are more widely considered in the legislation that other pieces of legislation fall into line and that those agencies can incur expenses or capital expenditure under the Imprest Supply Act in the same way that a regular department would.My question I guess for the Minister in the chair the Minister for the Environment—and I know that this Minister is a capable Minister and will probably not shy away from such questions—is about this creation of a new organisational arrangement called a departmental agency as an option for providing public services. We are told that such an agency would sit legally within a host department which would administer the appropriations used by the departmental agency but the departmental agency would have its own chief executive directly responsible to a Minister for its specific activities. My question really is around how the lines of accountability would then run. It is interesting that these departmental agencies would presumably have a different type of accountability; otherwise there would be no need to create them. This entity is a new type of entity. Is there a hierarchical arrangement here? Is the departmental agency within the department now in some sense tacitly at least responsible to the chief executive of the original department? They report directly to a Minister so one can imagine that if conflicts occurred over the use of building space or the use of meeting rooms—you know if we pare it back to the basics of everyday departmental life—then solutions would need to be found.It is not immediately clear to me how this kind of conflict would be addressed or what the real purpose of introducing these new agencies is unless it is for some decreased level of scrutiny. This Government does have a track record for favouring a decreased level of scrutiny and the example that springs to mind immediately is the asset sales legislation—The CHAIRPERSON (Lindsay Tisch): Order!Dr DAVID CLARK: This is quite on point—The CHAIRPERSON (Lindsay Tisch): I am listening very carefully.Dr DAVID CLARK: —and I will bring it back directly. The public becomes concerned when there is a decreased level of scrutiny on public affairs.As I have stated earlier in Part 1 and what is set up in Part 1 is actually brought into practice in Part 2 we are striking a balance here in this Parliament with this legislation between accountability on behalf of the members of the public for the spending of money—and that is particularly relevant in the amendments to the Public Finance Act 1989 which we are discussing in Part 2—and the freedom of Ministers to achieve the goals that they wish to achieve which they have said they are going to achieve through the employment of those funds in a way that is flexible so that they are not bound by unnecessary constraints by constraints that are artificial in their nature for a reporting requirement that actually does not serve a public purpose. That is a reporting requirement for its own sake that spells something out in detail because that is the way it has always been spelt out not because someone has taken a fresh look at it and asked the question: “Is this something we need any more? Are we scrutinising things in a way that is in the public interest or are we scrutinising things in a way that is actually beyond the public interest and actually inhibits departments and their ability to carry things out without the offsetting public benefit of that wider public scrutiny in a way that is meaningful to the wider public?”. So we are trying to strike that balance here.That cuts to the issue that I was raising about these departmental agencies. I have not heard a convincing argument from that side of the Chamber as to why these departmental agencies should have this specific piece of legislation that separates them out. I expect Mr Hayes will leap to his feet shortly to articulate—John Hayes: If you’d come to the committee you’d have found out.Dr DAVID CLARK: —exactly why these departmental agencies—Mr Hayes says that if I had come to the committee I would have found out. Well I was not privileged to sit on the Finance and Expenditure Committee where this issue was discussed so I do invite Mr Hayes to share that if it is within his ken if he understood the issues at the time and is willing to share them with the wider members of this Committee. I invite him to take a call and explain why these departmental agencies should be created and what advantages they will create for the taxpayer because I am certain that at some level this Government will be very very clear that it does want to make sure that money is well spent for the taxpayer. The public at home may not have that impression from watching this because what they will observe is that members opposite have not really entered into the spirit of the debate. They seem to be content to sit and listen to many members on this side of the Chamber raise important issues.That said I must commend the previous Minister in the chair the Minister for Food Safety who did take a call and answered some of the questions that were raised. That is an important part of what we are doing here. We need to convince ourselves that this is weighing that balance—which I raised earlier—right between proper public scrutiny and not being entirely cumbersome on the Government of the day in a way that ties it up in red tape and makes it unable to achieve the purposes it sets out to achieve. We know that this is the right thing to be achieving and that is why Labour will be supporting this bill. I must reiterate that the balance that has been struck is one that we think is appropriate and is one that makes this bill one that will survive the test of times.I think as I mentioned earlier that the processes laid down here—the accountability mechanisms—although appropriate cannot inoculate the Government against bad policy. If the Government wants to implement bad policy this legislation enables it to do that in a more efficient and effective way. One of the earlier contributors to the debate made the very good point that bad Governments will do that anyway; they will implement bad policy come hell or high water. What this legislation really achieves is that it enables Governments that want to implement good policy and do it throughproper process to be able to do that in an efficient way. That cuts to the heart of the matter as to why Labour is choosing to support this bill.One of the other matters I wish to raise in respect of Part 2 is the standardising of the governance and performance reporting requirements for companies currently listed in schedule 4 of the Public Finance Act and proposed to be moved into the new schedule 4A by schedule 2 of the bill. The standardising of performance reporting requirements must on the surface appear to be a good thing. The standardisation of reporting requirements making them easier and less burdensome means that these agencies can continue to do their tasks with Crown entities and get on with the tasks that they exist to carry out.If we look at some of the earlier legislation that was passed here in this session this week there was the standardisation of the generally accepted accounting practice procedures so that fewer small to medium sized enterprises are required to undergo those onerous requirements—another good step. That is another good step and we need more of this kind of thing. We know that recently New Zealand slipped from 15th to 24th in the world business competitiveness stake according to the IMD World Competitiveness Center’s survey. We know that New Zealand business is facing tough times. This Government has skewed the playing field against small business. There is a lot of red tape it has introduced—The CHAIRPERSON (Lindsay Tisch): Order!Dr DAVID CLARK: —the child support legislation requirements—The CHAIRPERSON (Lindsay Tisch): That is not part of the bill.Dr DAVID CLARK: Mr Chair the point is that that contrasts as an example with this piece of legislation. Those areas in which the Government has put a further burden on small business—those businesses are struggling they are not being created. There are 2500 fewer a year than there were under Labour. This piece of legislation contrasts with that. This is an attempt to make sure that business can perform better.LOUISA WALL (Labour—Manurewa):Kia ora. E ngā mana e ngā reo rau rangatira mā tēnā koutou tēnā koutou tēnā koutou katoa. Ngā mihi ki ngā kaimahi o te Whare Pāremata tēnā tātou.[Thank you. To the authorities languages and leaders of a hundredfold greetings salutations and acknowledgments to you all. Greetings to the workers of Parliament House and to us collectively. ]It is my pleasure to take a call on Part 2 of the State Sector and Public Finance Reform Bill. I particularly want to commend the Minister of State Services for trying I think to make a better Public Service which is the whole intention of this bill—trying to make a better Public Service that will achieve some objectives such as increasing participation in early childhood education increasing immunisation rates decreasing—The CHAIRPERSON (Lindsay Tisch): Order!LOUISA WALL: —rheumatic fever rates—The CHAIRPERSON (Lindsay Tisch): No. Order! That is not part of Part 2 and I will ask the member to concentrate on Part 2. It is about the Public Finance Act. It is not about these other things.LOUISA WALL: It is about the Public Finance Act but it is also about establishing a new appropriation type which is multi-category appropriation. As a member of the Health Committee I am particularly thrilled about this multi-category appropriation. The Health Committee has before it an inquiry that is looking at improving child health outcomes—The CHAIRPERSON (Lindsay Tisch): Order!LOUISA WALL: —and preventing child abuse—The CHAIRPERSON (Lindsay Tisch): I will say to the member that we are on the Public Finance Act—LOUISA WALL: We are on Part 2.The CHAIRPERSON (Lindsay Tisch): We are on the Public Finance Act Part 2. I ask the member to concentrate on Part 2.LOUISA WALL: Thank you Mr Chair. What this part of the legislation is creating is this new multi-category appropriation which will allow different types of expenditure to be grouped into a single appropriation if they contribute to a single overarching purpose. I think that was the point that I was trying to make—that in fact there are a number of inquiries and some work that this Parliament is currently engaged in that this particular multi-category appropriation is relevant to. Hopefully with your discretion Mr Chair I am able to elaborate on the relevance of that within the current context.The whole Better Public Services agenda has been driven because we are wanting to achieve more for less and so I do want to commend the Government for creating opportunities for Ministers to work together. I mean that is essentially what this new appropriation type is going to allow. It will in fact break down silos. It will in fact provide opportunities for Ministers to start working together to address issues such as housing which is a fundamental driver of rheumatic fever. I have made the connection of the relevance of this piece of legislation with the Better Public Services agenda and from my perspective that is one of the reasons that the Labour Party is supporting this piece of legislation. We want an efficient and effective Public Service that meets the needs of New Zealanders and that particularly and specifically meets the needs of the most vulnerable New Zealanders. In supporting this particular aspect of this piece of legislation I think it is fair to also highlight my expectations and the expectations as the member of Parliament for the electorate of Manurewa that this type of appropriation has the possibility to—and is in fact going to—improve and transform the lives of my constituents.I would also like to take the opportunity to highlight within Part 2 of the bill the changing of the requirements for information about departments’ strategic intentions which includes the frequency of that provision. Essentially we are talking about statements of intent. Those statements of intent currently are an annual requirement of Crown entities and the purpose of those statements of intent is I think relevant to the Committee to note because they very much set the strategic directions of the ministries. They are set by the Minister and are obviously set by the Government so within that they are very specific about how the Government the sector and the entity will achieve certain outcomes. That is very much about setting the expectations and priorities. I think it is fair that all New Zealanders know what the priorities of Ministers are and what the priorities of chief executives are within that context. So the reason I bring it up and the relevance of that to this part of the legislation is that that requirement is going to be discretionary so Ministers will choose whether they—Hon MARYAN STREET (Labour):It is a pleasure to take my first call—it will not be my last call—in the debate on this bill because it is of real significance. I am aware that we are on Part 2 and Part 2 is what I wish to direct my comments to but just before I go to that I do want to note the timeliness of this bill because of course there has been a number of celebrations during the course of this year of 100 years of quality public services. This is the same year that the Public Service Association is celebrating its own existence and we celebrate with it the delivery of quality public services. So when we come to looking at the State Sector and Public Finance Reform Bill and at this part which I am going to detail in a moment it seems to me to be a significant bill—and obviously a very substantial bill—to bring in this year. I hope that because of the nature of the accommodations that have been reached during the course of the selectcommittee process this bill will be durable and will contribute to the improved delivery of public services.To get to Part 2 I too want to follow my colleague Louisa Wall and talk about the multi-category appropriation type which is a new appropriation type to be provided for and enacted under Part 2 of the bill. I am aware that there are amendments to this part that have been agreed to across the House which include the full traceability of funds from year to year. I want to state my support for this by using an example where that has not been so apparent in recent times and I want to refer to the appropriation for Whānau Ora.The Whānau Ora appropriation was a health initiative—in fact the words say that. It was a health initiative and one might have thought it would come under the rubric of the Minister of Health and so might have been examinable through the estimates and appropriations that come before select committees for consideration. But no when the Minister of Health appeared before the Health Committee to justify health appropriations in the last few years he was unable—or unwilling really but had made himself deliberately unable—to offer transparency around the appropriation of Government moneys for the delivery of the Whānau Ora programme. So we were not able to examine the Minister who was best qualified to know whether this health initiative was achieving health outcomes.My concern is not that the appropriation was handed over by that Minister there the Minister of Health to Te Puni Kōkiri and the Minister of Māori Affairs to answer to but that it was taken away from the transparency that needed to be delivered to the purpose for which that appropriation was established. In the setting up of a new appropriation type to be called a multi-category appropriation I hope that this means together with the agreed amendment that will require full traceability of funds from year to year that if any appropriation—let us take the example—for health purposes is to be diverted out of the jurisdiction if you like the care or the oversight of the Minister of Health to somebody else then that is entirely traceable by cross-referencing by calling it a multi-category appropriation and by ensuring that the numbers of Ministers who are responsible for that appropriation are able to come before a select committee for examination and that the essential scrutiny can be applied.What has happened if I go back to my Whānau Ora appropriation example—which is an example of bad practice I think not best practice—is that nobody seems to be able to find what precisely has been done with the money that was appropriated. I would have thought that Mr Ryall as Minister of Health could easily come in before a select committee—a man of his ability—and said: “This is what has happened with the Whānau Ora money. We have done it jointly with Te Puni Kōkiri but it is a health initiative so it sits under my portfolio.”If such things are to happen and a health appropriation is to go somewhere else let us use this facility that this part of the bill now gives us and call it a multi-category appropriation so that it may go across departments across ministries and across purposes—not at cross purposes but across purposes—but at the same time the appropriation and the accountability for it remain entirely transparent and accountable. That is what a good Public Finance Act ought to deliver. That is the quality that our State servants despite their battering over the last 5 years wish to provide for the citizens of this country. If this bill can help us deliver that kind of accountability and transparency across increasingly complex areas of activity by the State then that is a good thing. But let us make sure that that is what happens to this provision.I absolutely respect the good intentions of the members opposite and I respect the fact that members on the Finance and Expenditure Committee have agreed on improvements to this bill. Having been very very involved—not as a member of Parliament but as a very interested citizen and activist—in the development of the firstState Sector Act in 1986 and in fact having written the Labour Party’s paper in opposition to it I have a real interest in how these kinds of services are delivered. The integrity of our Public Service structures are critically important to the quality of our Government the quality of our accountable apparatus the quality of the transparency of that apparatus and our reputation for governance and transparency. We have a very fine reputation for that. It is my hope that this new appropriation type the multi-category appropriation type can be used to ensure that this Public Finance Act now amended for modern times will deliver exactly the kind of transparency and accountability that a complex piece of legislation like this and the complex operation of the delivery of State services require in a modern society.I am very supportive of this. I have great optimism for this part of the bill and I hope that we can proceed with this in a way that in the end can make us all proud of the Public Finance Act and the delivery of State services under its jurisdiction. Thank you.RINO TIRIKATENE (Labour—Te Tai Tonga):Tēnā koe Mr Chair. It is a pleasure to speak at this Committee stage on Part 2 of the State Sector and Public Finance Reform Bill. I would like to start with a verse from a rap from Vincent Price: “Darkness falls across the land. The midnight hour is close at hand.” You might know the rest Mr Bennett. But maybe not; maybe he was not into Michael Jackson. Maybe he might know another one. But the midnight hour is close at hand. I shall make my contribution on Part 2 because this is a very important piece of legislation.The Public Finance Act is a key piece of legislation that governs the use of public financial resources. It provides the framework by which Parliament gives its authorisation and scrutiny of Government expenditure. It establishes the lines of responsibility for effective and efficient management of the use of public financial resources and it does many other things. It is a very core piece of legislation governing the use of public resources.I want to pick up from my colleague the Hon Maryan Street regarding her comments around multi-category appropriations. They are commendable because anyone who has spent a bit of time or worked within Government departments or agencies knows that they are very much patch protectors. They very much sort of keep to themselves. They very much like to spend their money or try to get the money spent by the end of the financial year and there are not necessarily those sorts of close relationships with other departments particularly when there is a common outcome that they should be working towards. So it is commendable that there are now provisions provided for in this bill that there be multi-category appropriations which are across multiple categories to allow different types of expenditure to be grouped into a single appropriation. That is a very laudable aim.The bill also makes it clear that other departments as well as the one administering an appropriation can incur expenses against the appropriation. We see that a lot in the Ministry of Māori Development appropriation. There are a multitude of different agencies and Government entities and all sorts that are involved in Māori affairs as my colleague touched on with the Whānau Ora situation. We could rattle off a whole host of other organisations that are involved with Te Puni Kōkiri Māori affairs or contracts between various agencies or Crown entities to provide outcomes. So there is a whole multitude of different relationships that they have and it is important that they get better structure and more financial discipline around the way that they conduct their affairs and that they also report on their outcomes. So those are very commendable aims in Part 2.The bill is also allowing the annual reports of Government to be presented together.Debate interrupted.Sitting suspended from 12 midnight to 9 a.m. (Thursday)