Volume 629 Week 8 - Thursday 2 March 2006 
Volume 629 Week 8 - Thursday 2 March 2006 
[Volume:629;Page:1653] 
Thursday 2 March 2006 
Madam Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Business Statement 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 Next week the House is in a 1-week adjournment. In the week starting Tuesday 14 March priority will probably be given to the second readings of the Education Amendment Bill the Legal Services Amendment Bill (No 2) the Judicature Amendment Bill (No 3) the Criminal Procedure Bill the Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill and the Land Transport Amendment Bill. Wednesday will be a members’ day. 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 Is it the intention of the Leader of the House to seek urgency in the first week back to pass the Land Transport Amendment Bill? 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 Not at this stage but I am certainly open to discussions with other parties particularly if there is the possibility of arriving at broad consensus within the select committee around changes to the bill. 
Tabling of Documents 
TV3 Transcript—Hon David Benson-Pope 
RODNEY HIDE (Leader—ACT) 
: 
 In response to Mr Peters’ claims yesterday I seek the leave of the House to table a TV3 transcript from last night in which a Miss Geana Earl documents how Mr Benson-Pope slapped her across the thigh in support of my question yesterday. 
Madam SPEAKER 
: Is there any objection? There is objection. The document will not be tabled. 
Report—Rt Hon Winston Peters and Accusations Against Iraqis 
RODNEY HIDE (Leader—ACT) 
: 
 I seek the leave of the House to table a report of Mr Peters failing to front up to two Iraqis whom he falsely accused in the House of working for Saddam Hussein. 
Madam SPEAKER 
: Is there any objection? There is objection. 
Questions to Ministers 
Madam SPEAKER 
: I just remind members at the beginning of question time that although there is always a level of chatter there are to be no interjections while the question is being asked and if we could have as much silence as possible it will assist. 
Social Development and Employment Minister—Allegations 
1. Hon BILL ENGLISH (National—Clutha-Southland) 
 to the  
Minister of Education 
: Does he stand by his statement that: “I am also aware that Mr Benson-Pope has stated that his behaviour complied with school policy at the time”; if so does he believe that that statement includes all allegations that have come to light about the Hon David Benson-Pope’s conduct as a teacher including those investigated by police? 
Hon STEVE MAHAREY (Minister of Education) 
: 
 Yes. I stand by my statement that Mr Benson-Pope has stated that his behaviour complied with school policy at the time. A large number of allegations have been made about Mr Benson-Pope’s conduct by members opposite but they remain without foundation. The allegations contained in the police report were of course the subject of a wide-ranging investigation that resulted in no action being taken by the police who noted at the time that these alleged events happened many years ago and the victims were not motivated to lay complaints at the time. 
Hon Bill English 
: Is the Minister aware of a complaint from a former Bayfield High School teacher that Mr Benson-Pope had bullied her that there was a formal mediation and that she received a letter of apology from Mr Benson-Pope? 
Hon STEVE MAHAREY 
: I am aware of that incident. I am also aware that the apology was mutual. 
Hon Phil Goff 
: Do the comments on the files of the police investigation into Mr Benson-Pope that the Minister referred to support the innuendo of Mr English and Ms Collins or do they indicate that overwhelmingly fellow teachers and students alike regarded David Benson-Pope as competent as dedicated and as a respected and popular teacher? 
Hon STEVE MAHAREY 
: I am well aware of the reports that say exactly that—that this was a person with a 24-year respected professional career. 
Rt Hon Winston Peters 
: Is the Minister aware of reports from Labour caucus colleagues that Mr Benson-Pope bullied them but in every case their complaints were unwarranted? 
Madam SPEAKER 
: There is no ministerial responsibility for that question. 
Hon Bill English 
: Can the Minister confirm in the case of the bullying complaint that a complaint was certainly made that it was dealt with formally and that Mr Benson-Pope took action himself by writing a letter of apology; and does the Minister now accept Mr Benson-Pope’s statement to the House that he is unaware of “any complaint of any kind”? 
Hon STEVE MAHAREY 
: I am not intimate with every single detail of this event. I said before that those people laid complaints and mutually apologised to each other. I imagine that the same kind of bullying behaviour has gone on between Mr English and his party but I am sure that no one has apologised to him—yet—for dumping him as leader. 
Hon Phil Goff 
: What reports has the Minister seen that support Bill English’s assertion “that teachers’ unions and the public are united in their condemnation of Mr Benson-Pope”? 
Hon STEVE MAHAREY 
: I have not heard any such reports. Indeed last night on television I watched the people of Dunedin say unanimously that they supported their local MP. I also heard the following comments on Television New Zealand’s  
Close Up  
programme from Principals Federation president Pat Newman—[ 
Interruption 
] 
Madam SPEAKER 
: Please be seated. In question time yesterday members complained they could not hear answers to questions. So I would remind members that of course they can interject but they are to keep the barrage down so that all members can hear the answer. 
Hon STEVE MAHAREY 
: I have heard no such reports. Indeed I watched television last night to see the people of Dunedin unanimously supporting their local MP. I also heard the following comments on Television New Zealand’s  
Close Up  
programme from Principals Federation president Pat Newman: “It is not election year. Politicians have a responsibility to look at the harm they are doing to our profession by jumping on the bandwagon that’s not yet been proven. Stop demeaning male teachers and stop attacking them.”—very good advice to Mr English. 
Hon Bill English 
: Does the Minister share the view of the Prime Minister that the school camp complaints referred to in the House yesterday were not serious so Mr Benson-Pope’s statement to the House—that he did not know of any complaint of any kind—was acceptable; if so does the Government believe that the second bullying complaint is also too trivial for Mr Benson-Pope to remember and that it is therefore acceptable for him to mislead the House about that complaint as well? 
Hon STEVE MAHAREY 
: It is not my recollection that the Prime Minister said yesterday that the complaints were not serious. What she was saying was that they were not formally laid and did not lead to disciplinary action. That leaves open the fact that people often complain about what teachers might do—as Mr Brownlee knows—but that does not lead to disciplinary action. 
Hon Bill English 
: Now that the House has established that there were certainly two complaints of a serious nature against Mr Benson-Pope which he must have known about is it still the Minister’s position that Mr Benson-Pope’s statement: “I am not aware of any complaint of any kind.” was a statement of the truth? 
Hon STEVE MAHAREY 
: My understanding is that Mr Benson-Pope has consistently noted that he was referring to formally laid complaints that lead to disciplinary action not the normal discussion that goes around any school. In that sense he has adopted an honest approach. 
Hon Bill English 
: Is it now the Government’s position in respect of the school camp complaints that Mr Benson-Pope knew about them but because he knew they were dealt with outside the formal disciplinary process he did not have to tell the House; and in respect of the bullying complaints Mr Benson-Pope knew about that matter as well but he did not regard a formal mediation by his own union as a process that warranted rating it as a serious complaint—so he could mislead the House on that one too? 
Hon STEVE MAHAREY 
: The accusations that Mr Benson-Pope has misled the House are simply wrong. He has consistently made it clear that the normal complaints that go around schools which people such as Mr Brownlee will be aware of do not constitute the kinds of formal complaints he was referring to. 
KiwiSaver Scheme—Business Reaction 
2.  
SHANE JONES (Labour) 
 to the  
Minister of Finance 
: What recent reports if any has he received on the business reaction to the KiwiSaver scheme? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 Among the many positive reports I have seen on the scheme is one from the Employers and Manufacturers Association (Northern). This notes that “Employers in general are supportive of KiwiSaver”. The report went on to express some concern around compliance costs for small business something it was working to minimise. The report concluded that the future augers well for the scheme. 
Shane Jones 
: Is that report representative of the feedback received from business? 
Hon Dr MICHAEL CULLEN 
: Yes; for example there is similarly positive feedback from ING and from AMP. The only serious report I have seen that is not generally supportive of the scheme is one that continues a nonsensical comparison of it with a Christmas club. I am sure that all the entire managed funds industry and financial sector of New Zealand will be pleased to know that Mr Key thinks they run Christmas clubs. 
John Key 
: Should unions compromise their annual wage demands if they are asking employers to make matching contributions to KiwiSaver? 
Hon Dr MICHAEL CULLEN 
: I think it is highly desirable that unions and employees think about the way in which they can move forward on KiwiSaver and I would expect obviously that if unions are seeking some degree of salary increase as a result of KiwiSaver contributions to employers that would be offset in part by salary sacrifice around their own straight wage demands. 
Craig Foss 
: What proportion of KiwiSaver accounts does he think will fall dormant or remain with very modest balances and how does he calculate that proportion? 
Hon Dr MICHAEL CULLEN 
: On the last part obviously it is not possible to make calculations since we will not know until we have seen the scheme in operation. But of course if we set up a scheme that provides for lock-in until retirement and provides no ability for flexibility of contributions—for holidays or to pay down the mortgage for example—first National will attack it because it did not have the flexibility and second very few people would sign up to the scheme. 
Te Ururoa Flavell 
: Na runga i te kautenui o te tau 2001 i ki nei ko te weheruatanga o nga utu mo te Maori pakeke ake i te 15 tau he tekau $14800 he whai kiko te whakaaro ka taea e te Maori te hoatu kia 4 o-rau o tona putea moni hua ki te kaupapa Kiwisaver; kua tono ano ia ki nga rangatira Maori pera i era kei te hui kei te wananga i nga kaupapa a-putea hei whakamana i te Maori kei te tu i te marae o Pipitea i tenei rangi?  
[An interpretation in English was given to the House.] 
[ 
In the light of the 2001 census data that the median income of all Maori over the age of 15 was $14800 how realistic is it to expect Maori will contribute 4 percent of their income to the KiwiSaver scheme; and has he sought any advice from Maori leaders such as those currently meeting to discuss Maori economic empowerment at Pipitea Marae today? 
] 
Hon Dr MICHAEL CULLEN 
: I was not aware of that meeting until about an hour or so ago so it is a bit quick for me to have received any response back from them from an approach I have yet to make and probably will not make today. On the former matter of course since then unemployment rates amongst Maori have dropped very considerably indeed and median incomes will have risen amongst Maori. There is no reason why Maori who are on the same incomes as Pakeha should not have similar savings rates and every reason why they should. 
Tariana Turia 
: What reports has he received from his Maori MPs that the KiwiSaver scheme will have a discriminatory impact for Maori because so few live past the age of 65 years and will therefore not access the benefits of the scheme in a proportional manner? 
Hon Dr MICHAEL CULLEN 
: That makes a fundamental error. Unlike New Zealand superannuation—which of course if one dies before the age of 65 one never collects—with a contributory scheme even if one dies before the age of 65 the assets within that scheme become part of one’s estate to pass on to one’s heirs. In that respect the KiwiSaver scheme is advantageous when compared with New Zealand superannuation. 
Shane Jones 
: Has he any reports from business expressing concerns about the hardship criteria in the bill? 
Hon Dr MICHAEL CULLEN 
: I have seen a report stating that the bill does not define financial hardship. That seems somewhat strange since clause 11 sets out a quite specific set of rules around that definition and perhaps before Mr Key utters further silly statements he might care to actually read the bill. 
Social Development and Employment Minister—Personal Judgment 
3.  
JUDITH COLLINS (National—Clevedon) 
 to the  
Minister for Social Development and Employment 
: How often does he exercise personal judgment in his role as Minister for Social Development and Employment? 
Hon DAVID BENSON-POPE (Minister for Social Development and Employment) 
: 
 Often and subject of course to existing Government policy and the collective decisions of my Cabinet colleagues. 
Judith Collins 
: What does it say of his ability to make sound judgments for one of our country’s most important ministries when his judgment has seen him call the tennis ball allegations “ridiculous” and say that he “utterly refuted them” then change track and merely say he has no recollection of the incident and when his judgment has seen him prematurely release parts of his police report and say that it “vindicated him” when police found the nine witnesses against him credible and that there was a prima facie case of assault against him? 
Hon DAVID BENSON-POPE 
: Those allegations were exhaustively canvassed by a very lengthy police investigation at the end of which the authorities made a decision to take no further action. 
Judith Collins 
: I raise a point of order Madam Speaker. The Minister was asked what it said about his ability to make sound judgments. I do not believe if you consider his answer that he actually addressed that question. 
Madam SPEAKER 
: The Minister addressed the question. 
Judith Collins 
: What does it say of his personal judgment that he referred to the latest allegations of improper behaviour as “nonsense” only to acknowledge later that there had been complaints and then to apologise? 
Hon DAVID BENSON-POPE 
: The quote referred to was in relation to the articles on the Wishart website and those allegations were despicable—as despicable as the comments of that member in the House yesterday. 
Judith Collins 
: I raise a point of order Madam Speaker. Is that comment by the Minister in order or out of order? 
Madam SPEAKER 
: It was not an unparliamentary term. 
Judith Collins 
: OK—as long as we can now use “despicable”. What does it say of his personal judgment that he said to the House yesterday: “I completely refute the ridiculous statement that has just been made by Mr Hide”; and if does refute it what does he now want to say to Geana Earl who has backed up Mr Hide’s allegation? 
Hon DAVID BENSON-POPE 
: I would say to Geana Earl that she should recall not only my refutation of her allegation but also that of the school and the female staff member Ms Armstrong who was present at the same time which was communicated to her parents some years ago. 
Judith Collins 
: What does it say of his personal judgment that he said in this House he was not aware of any complaints made against him when it has been alleged and verified that a student a parent and a teacher all laid complaints against him? 
Hon DAVID BENSON-POPE 
: Like any member of this House I am human and sometimes make mistakes. [ 
Interruption 
] 
Madam SPEAKER 
: If you wish to remain in the Chamber in question time please do not interrupt while the member is asking her question. 
Heather Roy 
: What advice would he give as the Minister for Social Development and Employment to a mother if a male teacher had entered a dormitory when girls were getting dressed or changing whether or not the school had a policy in place and can he detail any circumstances when it would be appropriate for a male teacher to enter a dormitory unannounced? 
Hon DAVID BENSON-POPE 
: I would advise the mother or any parent or concerned adult to make an appropriate approach to the relevant authorities and ascertain the facts of the matter concerned. 
Rodney Hide 
: Following his answer yesterday does he now accept that he did enter a girls’ dormitory in 1998 after the policy had changed when the young pupils were getting changed for a school tramp to give them “a hurry-up”? 
Hon DAVID BENSON-POPE 
: I do not recollect but if so it would have been subject to the school’s procedures including the giving of an advance warning. 
Hon Phil Goff 
: I seek the leave of the House to table a document from a National voter saying that he sees these personal attacks on Mr Benson-Pope as being from small-minded and malicious people who wish only to ruin a man’s reputation. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? 
Judith Collins 
: Point of order— 
Madam SPEAKER 
: I am dealing with something else and I would like to complete it. Leave was sought. [ 
Interruption 
] Does the member wish to raise a point of information? 
Judith Collins 
: Yes a point of information. How does the Minister know that that document is from a National voter when of course votes in this country are secret and anybody can say he or she is a National voter—and hopefully there will be a lot more? 
Hon Phil Goff 
: Simply because the person states in black and white that he is a National voter and “probably always will be although I still weigh all the issues up before voting”. 
Madam SPEAKER 
: Leave has been sought. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Hon Steve Maharey 
: I seek leave to table an email from a National Party voter who says: “I am disappointed that the National Party in so far as I am concerned needs to dish dirt in order to make points.” 
Madam SPEAKER 
: Leave is sought. [ 
Interruption 
] I understand the point; members themselves can decide. 
Judith Collins 
: I raise a point of order Madam Speaker. Would the Minister please explain how he can be certain that the person is a National Party supporter. 
Madam SPEAKER 
: That is not a point of order or a point of clarification. Leave has been sought. Members can decide for themselves whether that document should be admitted. 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. Despite the fact that the person says they are and has obviously put their name to it the member cannot surely raise objection on the basis that that is two and that is one too many! 
Madam SPEAKER 
: That point of order was about as irrelevant as the others. Leave is sought. Is there any objection? There is objection. 
Foreign Affairs and Trade Ministry Officials—Confidence 
4.  
NANDOR TANCZOS (Green) 
 to the  
Minister of Foreign Affairs 
: Does he have confidence in his Ministry of Foreign Affairs and Trade officials? 
Rt Hon WINSTON PETERS (Minister of Foreign Affairs) 
: 
 It is early days but I have found Ministry of Foreign Affairs and Trade staff to be conscientious and professional and therefore the answer is yes. 
Nandor Tanczos 
: When the Minister told the House yesterday in answer to a question on the Convention on Biological Diversity that: “there is no such international convention or treaty.” was that because his officials did not tell him or was it just because he forgot? 
Rt Hon WINSTON PETERS 
: The member full well knows that he began with a convention on an issue called “the terminator” where it comes to seeds. That is what he started with but where he went after that I do not know. It puts me in mind of the old saying: I shot an arrow into the air. Whither it landed I knew not where.” The fact is if a member puts down a primary question and staff prepare the answer to it that is likely to be what the answer is about. 
R Doug Woolerton 
: Apart from the terminator gene is the Minister aware of any other substances that effect sterility? 
Rt Hon WINSTON PETERS 
: The answer is yes for it is generally accepted that smoking cannabis has an impact on driving capacity on mental capacity on social capacity and on the issue of sterility which was the primary question asked yesterday. It can be a real terminator. 
Nandor Tanczos 
: Is the Minister aware of reports that the United States although not a party to the convention has been working through other countries in an attempt to overturn the status quo on terminator technology and is that what he meant when he said in a recent speech that New Zealand is working in the interests of the United States in the Pacific? 
Rt Hon WINSTON PETERS 
: My answer is this: that is not what I said in my recent speech at all. The member should refer to it in order to get the honest interpretation from it. What I did say at the time was this: that Ministry—[ 
Interruption 
] Well I can see why honesty would be so foreign to that member but not to me. 
Madam SPEAKER 
: Please just stick to the answer. 
Rt Hon WINSTON PETERS 
: I am happy to stick to the answer. The trouble with National members is that they can dish it out but they cannot take it. They cannot take it and we know why: it can be lonely with one’s nose against the window for all these years. 
Nandor Tanczos 
: I raise a point of order Madam Speaker. The Minister is attempting to avoid the fact that he does not know the answer to the question by obfuscating in this House. 
Madam SPEAKER 
: I asked the Minister to stick to the answer to the question and I accept that there was certain distraction and therefore we meandered into other areas. I ask the Minister to address the question. 
Rt Hon WINSTON PETERS 
: I am well aware of what the United States is doing abroad on this issue. I am also very well aware that we will soon be sending officials to Brazil on an issue that relates to a conference agenda that was agreed to by the then National Government way back when Mr Storey was in charge of these affairs. But the real point is this: the Ministry of Foreign Affairs and Trade is involved in amalgamating and coordinating the views of various departments. All those departments have a greater role than the Ministry of Foreign Affairs and Trade has in respect of the issue the member seeks an answer on—in particular the Ministry for the Environment. He has put his question to the wrong Minister. 
Nandor Tanczos 
: I raise a point of order Madam Speaker. The Minister seems to be unaware that officials of the Ministry of Foreign Affairs and Trade are according to their own account due to present to Cabinet fairly shortly prior to that meeting. Is he telling us that he is simply a puppet for the Labour Government and does no decision-making of his own? 
Madam SPEAKER 
: That is not a point of order; it is a point of debate. 
Nandor Tanczos 
: As New Zealand’s Minister of Foreign Affairs is he concerned that the reputation of New Zealand is being damaged due to the widespread condemnation of our position in attempting to open the door to terminator technology against the wishes of the vast majority of signatories to the convention? 
Rt Hon WINSTON PETERS 
: What I am aware of is this: there are very few countries in the world that follow the prescription of the Greens. That is why Green parties are not in power anywhere in the world that I know of. The real issue is that we have provisioned a group of people to take part and perform their role at the next conference with respect to those matters abroad. They are well apprised of the views of the whole range of countries that will be there and they will be governed by the domestic policy of this country not by some policy made on the hoof. 
Nandor Tanczos 
: I seek leave for the benefit of the Minister to table the list of parties to the convention that he referred to—188 parties. 
Document by leave laid on the Table of the House. 
Nandor Tanczos 
: I seek leave to table decision 5 of the Convention on Biological Diversity which New Zealand is party to as a ratified member. 
Document by leave laid on the Table of the House. 
Rt Hon WINSTON PETERS 
: In the interests of helping that member I seek leave to table a paper from the convention in respect of terminator technology but I cannot because there is no such convention. 
Madam SPEAKER 
: That wasted the House’s time. 
Rodney Hide 
: I raise a point of order Madam Speaker. I ask you to rule Madam Speaker on a situation where a Minister of the Crown gets up and asks for leave to table a paper that does not exist. 
Madam SPEAKER 
: I did note Mr Hide that the Minister had wasted the House’s time and that is not acceptable. I said that at the time and I am sorry if you did not hear it. 
Rodney Hide 
: That is not my point Madam Speaker. Of course it is a waste of time but it is also an abuse of the process because one could seek leave for all sorts of things and to table reports that do not exist. The problem is not that it is a waste of time. The point is that it is an abuse of the process to seek leave to table something that does not exist. 
Madam SPEAKER 
: I take the member’s point and I would make the point to all members in the House that when they raise points of order on any matter those points of order must be relevant to what is in the Standing Orders. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. I raise this with you now—I could have left it until the end of question time but Mr Hide has brought up the issue of Mr Peters raising frivolous points of order. If you go back through the  
Hansard 
 of this week you will find that your instruction to the House last week that raising frivolous points of order should stop has been followed by the National Party. We have not had the sort of protracted time spent on points of order that we had last week. Mr Peters engaged in at least four of those points of order on Tuesday in a number again yesterday and he is so far up to three today. It seems that whenever he is involved it is just a matter of: “Oh well it’s too bad. It’s a bit of cross-banter and we’ll let him off.” We do expect to see him be pinged at some point. 
Rt Hon WINSTON PETERS 
: Those members who were paying attention know full well that yesterday the member from the Greens Nandor Tanczos asked a question on a convention in respect of the restriction of the use of genetic technologies. That is the convention that he asserted exists. He knew full well that there was no such convention but he stuck to that argument. Today he wished to switch his argument. 
Madam SPEAKER 
: That is a point of debate. 
Gerry Brownlee 
: If the Minister knew yesterday that there was not one why did he not tell him? 
Rt Hon WINSTON PETERS 
: I did. 
Gerry Brownlee 
: No you didn’t. 
Madam SPEAKER 
: Order! I take Mr Brownlee’s point that my rulings on points of order last week were that we were to try to restrain ourselves and confine them to facts. I intend in the future to rule very strictly on that and I put everyone on notice of that. I do appreciate those members in the House who have been following those rulings. I ask those who have not been following them to please take note. 
Gordon Copeland 
: I raise a point of order Madam Speaker. I ask you to check the  
Hansard 
 record of the exact words that the Rt Hon Winston Peters used in that point of order because I think that in referring to his willingness to table a document and then telling us that no such document existed he has come very close to misleading the House. I would like you to reflect on that point. 
Madam SPEAKER 
: I take the member’s point but I would like us now to move on. I think every member is on notice. 
Nandor Tanczos 
: I raise a point of order Madam Speaker. I am sorry to extend this point of order to and fro but I ask you to give consideration to this matter: when a Minister of the Crown uses a point of order to make a political point that is not a point of order and to make an allegation against a member such as Mr Peters has just done against myself there is then no opportunity to reply to that because it is unacceptable to use a point of order to reply to a political point. I have just tabled a document that demonstrates my point and used the Standing Orders appropriately but what come-back do members such as myself have when a Minister misuses a point of order to make a political attack? 
Madam SPEAKER 
: The member has made a good point. He has obviously got his point of view through on this occasion. Could we just confine these particular proceedings in the House to questions and answers. 
Electricity—Supply 
5.  
Hon Dr NICK SMITH (National—Nelson) 
 to the  
Minister of Energy 
: Does he agree with the statements by Meridian Energy Chief Executive Keith Turner that electricity supply is “very tenuous” and: “This winter is the tightest we have ever had as a nation” the statement by electricity industry consultant Bryan Leyland that “the risk of a severe shortage is quite high.” and the supporting statements by Genesis Energy Chief Executive Murray Jackson; if not why not? 
Hon DAVID PARKER (Minister of Energy) 
: 
 The Electricity Commission has a published set of assessment criteria that are intended to assure supply against a 1 in 60-year drought. I am advised that based on those criteria although lake levels are well below average the probability of a power shortage this winter is low. 
Hon Dr Nick Smith 
: Noting that the Minister has effectively dismissed the views of Keith Turner and those of the chief executive of Meridian Energy Murray Jackson both of whom this morning at the Commerce Committee— 
Hon Paul Swain 
: I raise a point of order Madam Speaker. It is a well-known practice in the House that one begins a questions with a question word not “noting”. 
Madam SPEAKER 
: Could we have the question. 
Hon Dr Nick Smith 
: Is the Minister aware that the chief executives of Meridian Energy and Genesis Energy the Government’s two biggest power companies told a select committee this morning that they have no confidence in the Electricity Commission’s model and that lake levels are at the lowest level ever; why does he not face the reality that New Zealand is facing a severe electricity crisis? 
Hon DAVID PARKER 
: It will not come as a surprise to the member to know that I do take an interest in lake levels. As a consequence I spoke with Mr Turner about lake levels both before and after his comments yesterday. On both occasions he advised me that although he is concerned about lake levels he considers that no additional action on the part of the Electricity Commission is needed at this point. 
Hon Dr Nick Smith 
: How can the Minister say to the House that Keith Turner from Meridian Energy said that no further action was required when both he and officials from Genesis Energy told the select committee this morning that the Government should fire up Whirinaki a power plant that has been paid for by the consumers of New Zealand and save water to ensure that we do not have a crisis this winter; why will the Minister not take that sound advice and do just that? 
Hon DAVID PARKER 
: I am aware that Dr Turner today suggested that reserve generation at Whirinaki should be brought on at a lower price point and it is a matter that I will consider. 
Hon Dr Michael Cullen 
: Does the Minister recollect in reference to the last question that the National Party opposed the purchase of the Whirinaki power station by the Labour Government? 
Hon DAVID PARKER 
: I most absolutely do. Were it not for the back-up facility at Whirinaki the situation would be worse than it is. 
Gordon Copeland 
: What assurances will he give to our senior citizens and families on fixed incomes that an electricity shortage this winter will not lead to price spikes; and if it does how does he expect those on fixed incomes to find the extra money to pay the power bill—by going deeper into debt or by going cold? 
Hon DAVID PARKER 
: If there were to be a power shortage this winter then we would expect that there would be a spike in power prices but we would find that most residential consumers would be protected from that because they are not exposed to the spot market. 
Hon Dr Nick Smith 
: How does the Minister reconcile his answer that Meridian Energy had told him yesterday that no action was required by the Government with his answer to the next supplementary question in which he accepted that Meridian Energy does say that Whirinaki should now be fired up to save water? 
Hon DAVID PARKER 
: Once again the member is confused. What I said in response to the first question was that Mr Turner advised me that no additional action was required on the part of the Electricity Commission at this stage in his opinion. 
Jill Pettis 
: What is the Government doing to address electricity sector issues? 
Hon DAVID PARKER 
: It is abundantly clear to most people that we have put up with National’s ham-fisted design of the energy sector for long enough. As the Prime Minister said late last year as a consequence we are developing a National Energy Strategy that will address these issues including issues of security of supply energy efficiency and renewable energy sources. 
Hon Dr Nick Smith 
: Is the Minister aware that all of the last three electricity crises in New Zealand showed that the Government had responded too slowly to lake levels being low and given that lake levels are now lower than they were in 2003 2001 and 1993 for the same time of the year why does he not now do something rather than sit on his hands waiting for the lights to go out? 
Hon DAVID PARKER 
: The Government already has put in place both reserve generation and the Electricity Commission to develop models— 
Hon Dr Nick Smith 
: They’re not using it. It’s turned off. 
Hon DAVID PARKER 
: Reserve generation does come in. It has been used this year. The price point at which it comes in is 20c per kilowatt hour. Mr Turner suggested that that price point should be lower. Of course National opposed altogether the provision of any reserve capacity. 
Hon Dr Nick Smith 
: I seek the leave of the House to table the graphs on lake levels that show that New Zealand’s hydro storage is at the lowest level ever in New Zealand’s history in terms of securing electricity supply. 
Document by leave laid on the Table of the House. 
Hon DAVID PARKER 
: I seek leave to table the Electricity Commission assessment of lake levels against the minimum zone required to achieve security of electricity generation through winter. 
Document not tabled. 
Accident and Emergency Services—Hospital Benchmark Report 
6.  
BARBARA STEWART (NZ First) 
 to the  
Minister of Health 
: Is he concerned at the findings of the latest hospital benchmark report which shows that a majority of hospital emergency departments are struggling to meet target times for treating sick or injured patients; if not why not? 
Hon PETE HODGSON (Minister of Health) 
: 
 Yes I am concerned but at least in part for a different reason from the member I suspect. I am concerned about the report as it fails to provide a real or accurate picture of the situation in emergency departments around the country. 
Barbara Stewart 
: Would he agree that one of the main reasons that more patients need treatment at hospital emergency departments is the lack of after-hours and emergency services formerly provided by general practitioners; if so what is his ministry doing to rectify the situation? 
Hon PETE HODGSON 
: The member should be aware that in many parts of the country the service formerly provided by general practitioners is still provided by general practitioners. In respect of the second part of the member’s question as the member will be aware we have a working party on after-hours care. That working party has made an interim report which is out for consultation that is due to conclude shortly. 
Ann Hartley 
: Does he share the concerns of the Australasian College for Emergency Medicine that the triage reporting process is flawed; if so what will he do to address the problems? 
Hon PETE HODGSON 
: Yes I do share those concerns. At present a person’s waiting time begins when he or she is seen by a triage nurse and ends when a doctor begins treatment. From 1 July the waiting time will stop when the treatment is started by a doctor or a skilled emergency nurse. 
Barbara Stewart 
: Can the Minister assure the House that his ministry will not seek to artificially improve triage times by simply changing the way in which the start of treatment is recorded so that we do not find ourselves in the ridiculous situation whereby patients are recorded as being seen as soon as they begin filling out their Accident Compensation Corporation forms in the accident and emergency waiting room? 
Hon PETE HODGSON 
: I certainly shall not be part of artificially improving the statistics but I would put it to the member that if someone comes in in need for example of resuscitation which would mean triage 1 and he or she is immediately resuscitated by a nurse or resuscitation is begun by a nurse that person’s waiting time has in fact come to an end. At the moment we record it in such a way that it is not until the doctor is able to see that patient that the person has somehow begun treatment. 
Hon Tony Ryall 
: What mark out of 10 would the Minister give our hospital emergency departments? 
Hon PETE HODGSON 
: A pretty good mark. Certainly first out of the five countries— 
Hon Tony Ryall 
: What number? 
Hon PETE HODGSON 
: I have just answered the member’s question in part and I will justify my answer now. 
Hon Tony Ryall 
: What number? 
Hon PETE HODGSON 
: First out of five. From the five countries that I draw my remarks—that is Australia Canada New Zealand UK and USA emergency room use in New Zealand is the lowest of all those countries. In respect of the waiting time in emergency rooms before a person is treated New Zealand is the lowest of all five nations. In respect of difficulty in getting care on nights weekends and holidays without going to the emergency room New Zealand is the lowest of those five nations. So in all of those cases New Zealand rates No. 1 out of five. If the member wants to make that a mark out of 10 I will find another five countries to compare New Zealand with and I guess we will beat them too. But we are the best of five nations. If the member has prejudices about the quality of our health care he would do well to have them better informed by the facts. 
Hon Tony Ryall 
: I raise a point of order Madam Speaker. I know that the Minister of Health himself is heading to be a consumer of the pharmaceutical budget with that sort of outrage but the question was what mark out of 10 he would give emergency services in hospitals. 
Madam SPEAKER 
: As the member knows the question cannot prescribe an answer like yes or no or 1 out of 20. 
Hon Tony Ryall 
: What mark out of 10 would he give the health system generally? 
Hon PETE HODGSON 
: A better mark now than was ever the case in the 1990s. 
Hon Tony Ryall 
: I seek leave to table a newspaper interview where New Zealand’s Minister of Health after 6 years of a Labour Government and $4 billion extra rated the New Zealand health system at 5½ out of 10. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? Yes there is. 
Transit New Zealand—State Highway Funding 
7.  
Hon MAURICE WILLIAMSON (National—Pakuranga) 
 to the  
Minister of Transport 
: Can he guarantee that the increased funding that will be made available to the National Land Transport Programme will be enough to ensure the completion of the August 2005 Transit New Zealand 10-year State highway forecast as published? 
Hon DAVID PARKER (Minister of Transport) 
: 
 I am assured by the Minister of Finance that that is his intention. 
Hon Maurice Williamson 
: Can the Minister or anybody in the House have any confidence in a process that had the chief executive of Transit asked on  
Morning Report 
: “Have you heard anything from the Government that they are going to make up the $685 million shortfall?” and the chief executive replied: “I’ve only heard that advice this morning as you did on the radio.” and is he worried that if the chief executive had been in the shower at the time he may not have known the money was coming? 
Hon DAVID PARKER 
: No I am not worried by that. As I said before I am assured by the Minister of Finance that it is his intention that we increase the funding to the State highway budget so as to meet the projections that were forecast in August last year. 
David Bennett 
: How does the Minister of Transport explain the comments of Hamilton West MP Martin Gallagher in the  
Waikato Times 
 on 1 March that: “It’s my credibility … You can imagine how I feel. I don’t like it one bit … I am just aghast at what’s gone on … It’s like groundhog day … Transit has put eggs on a lot of our faces.” in regard to Transit’s 10-year plan for Hamilton when both the Minister of Transport and the Minister of Finance knew late last year that Transit would be making such arrangements in the latest 10-year plan? 
Madam SPEAKER 
: I remind members even of the same party that if they interject during questions they put themselves at risk. 
Hon DAVID PARKER 
: I am sure that the member for Hamilton West—Mr Gallagher—the local councils and the local population in Hamilton will be relieved and pleased when they see the final form of the State highway plan in June. 
Martin Gallagher 
: I raise a point of order Madam Speaker. I seek leave for the member to table that  
Waikato Times 
 article so that the House can clearly understand that the last three or four sentences attributed to me were not correct. 
Madam SPEAKER 
: No the member cannot seek leave on behalf of someone else. 
Peter Brown 
: Does the Minister accept that had the Hon Maurice Williamson when he was Minister of Transport not stopped the gradual transfer of petrol tax from the Crown account into the roading account there would now be billions of dollars— 
Hon Dr Nick Smith 
: I raise a point of order Madam Speaker. The question being asked by Mr Brown is clearly outside the Standing Orders. The Minister cannot be responsible for things that were done or were not done last century. Right from the beginning the question was clearly out of order. 
Madam SPEAKER 
: Would the member like to rephrase his question so that it is specific to the Minister’s responsibility. 
Peter Brown 
: Is the Minister aware that had the Hon Maurice Williamson when he was Minister of Transport not stopped the gradual transfer of petrol tax from the Crown account into the roading account there would be billions of dollars more in the roading account and that our roading problems would be much less severe? 
Hon DAVID PARKER 
: I am aware that at the time National blocked proposals from New Zealand First to divert more of the petrol tax into roading rather than the consolidated account. I am not surprised by that because even at the last election National was saying that it would not divert the fund until after 6 years. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. It is interesting that you allowed that question after Nick Smith had questioned whether it was appropriate. It seems to me that it would be just as appropriate for someone on this side of the House to take a trivial point of order and suggest that the transfer was not made and that the Government could pay for the absolutely dopey policies of New Zealand First that were part of the price of coalition and then ask the question of how much more funding that should go to roads is being diverted now to pay the price of dopey policies and coalition arrangements with New Zealand First. 
Hon Dr Michael Cullen 
: First of all I am appalled that the member described the abolition of the surcharge on superannuation as a dopey policy. It was in fact the main condition New Zealand First imposed for coalition in 1996. But more substantially although the Minister has no responsibility for what Mr Maurice Williamson did—indeed most of his colleagues have denied they have responsibility for that—the reality is that the consequences of that decision may still be current and they are the responsibility of the current Minister of Transport. 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. My complaint is twofold. Firstly Mr Brownlee got up and added a whole lot of words into his supposedly valid complaint and talked about New Zealand First’s dopey policies—funny that; National stole them all at the last election. My second point— 
Madam SPEAKER 
: Would the member please come to the point. 
Rt Hon Winston Peters 
: Well my real point is that Mr Bennett—[ 
Interruption 
] 
Madam SPEAKER 
: Members will come to order or it will be a very empty House soon. I know the prospect is entertaining for some but will the member please address the point succinctly. 
Rt Hon Winston Peters 
: My second complaint is that Mr Bennett got up and I believe purported to read from a newspaper when that newspaper article in the way he recited it simply does not exist. Now that is a very serious offence in this House and if he wishes to dislodge that claim he can table the document he said he quoted from. 
Madam SPEAKER 
: He may well do that if he is given an opportunity to do so but it is too late because the House has addressed that point of order. The point I want to come back to is the point raised by Mr Brownlee. When questions are asked certainly historical comparisons are permitted—provided of course that they relate to the Minister’s portfolio. In that particular instance they did. 
Hon Mark Gosche 
: Is the Minister aware that if he had been looking in 1999 for a 10-year State highway forecast for highways to be built in Auckland it would have looked like this blank sheet of paper—absolutely bare with nothing on it—and if the then Minister Mr Williamson had dropped it it would have gone altogether? 
Hon DAVID PARKER 
: As the—[ 
Interruption 
] 
Madam SPEAKER 
: It is very difficult to hear. I ask the Hon Mark Gosche please to rephrase his question in terms of ministerial responsibility—and I wish all members to hear that so I do not have to ask them twice because they will lose their questions if I do. 
Hon Mark Gosche 
: Is the Minister aware that if he had been looking in 1999 for a 10-year forecast for State highways to be built in Auckland in the following 10 years it would have looked like a blank sheet of paper and had the Hon Maurice Williamson then dropped the forecast it would have gone altogether? 
Gerry Brownlee 
: I raise a point of order Madam Speaker. That question cannot possibly be in order; otherwise it would lead the House to all sorts of questions about all sorts of irrelevant and extraneous matters. The question must be asked: why can a man of Mr Gosche’s experience—a former Minister of Transport—not ask something that is more helpful to someone on his own side? 
Madam SPEAKER 
: I agree with the member so that question is out of order. 
Dr Paul Hutchison 
: How can the Minister justify the recent announcement of further delays to the upgrading of New Zealand’s most deadly highway State Highway 2 between Pokeno and Thames where over 40 lives have been lost in less than 5 years giving it the name the “killer highway”; and how many more lives will be lost before his Government commits to a four-lane expressway over that section of State Highway 2? 
Hon DAVID PARKER 
: I am informed that work has already commenced on that stretch of highway. But further I note that the final outcome of the 10-year State highway forecast will not be known until June. 
Dr Paul Hutchison 
: I raise a point of order Madam Speaker. I asked a very clear question of how the Minister could justify the delays and he in no way— 
Madam SPEAKER 
: No. The Minister did address the question. That is not a legitimate point of order. 
David Bennett 
: What reports has the Minister of Transport received from the Hamilton City Council regarding a breach of contract by Transit in its recently announced 10-year plan due to the council having taken actions in reliance on its agreement with Transit to complete the Avalon Drive bypass in the 2006-07 year; and what does the Minister intend to do about that? 
Hon DAVID PARKER 
: I am of course aware of dissatisfaction in the Hamilton area with the current draft State highway plan. I envisage people will be much more pleased when they see the final version. 
Martin Gallagher 
: Can the Minister confirm—notwithstanding the hard-working Hamilton West member’s frustration at aspects of Transit’s processes which is shared by the Hon Trevor Mallard and other Ministers—that road funding in the Waikato has increased significantly under this Government? 
Hon DAVID PARKER 
: That is indeed true and will be even more so when the final State highway forecast comes out in June. 
Martin Gallagher 
: To clear up any ambiguity I seek leave to table the  
Waikato Times  
article alluded to by the member for Hamilton West. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? 
Hon Dr Nick Smith 
: I raise a point of order Madam Speaker. I would just like clarification from the member who is seeking leave as to whether he said in that article that this was another groundhog day. 
Madam SPEAKER 
: That is not a point of order and given of course that we are not having trivial points of order that is out of order. Leave was sought to table that document. 
Document by leave laid on the Table of the House. 
World Trade Organization—Viet Nam 
8.  
H V ROSS ROBERTSON (Labour—Manukau East) 
 to the  
Minister of Trade 
: What feedback has he received from the outcome of New Zealand’s negotiations with Viet Nam over its accession to the World Trade Organization? 
Hon PHIL GOFF (Minister of Trade) 
: 
 I have received very positive feedback in particular from our major exporters such as the dairy meat wool and seafood industries. Fonterra’s estimate for example is that New Zealand’s dairy producers will be better off by around $12 million as a result of the negotiations. Although it is never possible to get all that one wants from negotiations New Zealand clearly achieved significantly improved market access for both goods and services. I congratulate Jim Sutton and the Ministry of Foreign Affairs and Trade team on that result. 
H V Ross Robertson 
: Can the Minister tell the House what the significance of achieving those outcomes is? 
Hon PHIL GOFF 
: The outcome was significant because our trading relationship with Viet Nam is of growing importance. Our current goods exports for example are $140 million and rising and Viet Nam is the second-fastest-growing economy in South-east Asia. That means that our service exports also have real potential there. These talks were in fact a one-off opportunity for New Zealand and ended with a deal after hard negotiations that was regarded as fair and acceptable by both sides. 
H V Ross Robertson 
: Can the Minister tell the House what areas apart from dairying will benefit from the outcome of the negotiations? 
Hon PHIL GOFF 
: A reduction in final tariff rates was achieved for beef sheepmeat fish and seafood fruit and vegetables paper and other manufactured products. Services in the areas of education agriculture and the environment will also be significant beneficiaries from that agreement. 
Small Business Minister—Employment Issues 
9.  
KATHERINE RICH (National) 
 to the  
Minister for Small Business 
: Does she stand by her reported comment that: “Unfortunately one of the main reasons why many very small businesses ones with no employees won’t take on staff is because they’re frightened of employment issues and of being subjected to professional grievance claims.”? 
Hon LIANNE DALZIEL (Minister for Small Business) 
: 
 Yes although I suspect that the journalist wrote the word “professional” when I was referring to personal grievance claims. 
Katherine Rich 
: What specific changes to employment law will she be promoting this year to assist small-business people who will not take on new staff because they are frightened of employment issues and of being subjected to professional grievance claims? 
Hon LIANNE DALZIEL 
: I have yet to meet with the Small Business Advisory Group in order to discuss the fact that it has included its recommendation for a personal grievance - free period in the second of its reports. I have already told the group that I will not advocate for that solution. 
Katherine Rich 
: I raise a point of order Madam Speaker. My question asked the Minister what specific changes in employment law she would be promoting this year. She did not address that in any way. 
Madam SPEAKER 
: The Minister did address it through her answer that she would be talking about that question with the group concerned. 
Maryan Street 
: Did the Small Business Advisory Group include any other recommendations on employment issues apart from the recommendation of a personal grievance free - period; if so what was the Government’s response? 
Hon LIANNE DALZIEL 
: Yes. Recommendation five requested that a complete checklist of issues to be considered when hiring an employee be made quickly and cheaply available to small businesses. The Government has through the Department of Labour produced a  
How to Hire Guide for Employers 
. As I reported to the House yesterday the Small Business Advisory Group gave the Government 10 out of 10 for this response. 
Katherine Rich 
: Can the House take her previous answer to mean that she will be doing nothing in this area and was she correctly reported on 21 November 2005 in an article stating: “Ms Dalziel says the employment arena has developed to a point at which decent employers who have dealt with difficult employees perfectly appropriately are being taken to the cleaners by employees”; if so what specific changes to employment law will she be promoting this year to make a difference to those small-business people? 
Hon LIANNE DALZIEL 
: I know that some people think it is OK to sack someone without warning without reason and without an opportunity to meet the employer’s requirements. I do not. I have made it absolutely clear that I will work with the Small Business Advisory Group to find other solutions as I am not prepared to advocate for that option. 
Peter Brown 
: Is the Minister concerned that there are organisations encouraging the promotion of personal grievance claims on a “no gain no pay” basis; if she is concerned what plans does she have to address the issue? 
Hon LIANNE DALZIEL 
: Yes. I have made a number of comments about the concerns I have that there are employment consultants in this country who work on a contingency basis who say “no win no pay” and who are not interested in the worker getting his or her job back and in working with the employer to get a good result in mediation. All they want is enough money so that they can take their share—a fifty-fifty split or whatever they can get. That is not in the interests of small business and it is certainly not in the interests of this country. 
Maryan Street 
: Does the second Small Business Advisory Group report state that the only solutions to the problems it describes are the ones that the group proposes? 
Hon LIANNE DALZIEL 
: No the report states that the group recognises that they are not the only solutions. However the group thinks they would prove to be effective ones. My concern with the personal grievance - free period is that it takes the focus off the employment relationship and especially that access to mediation which is often so successful is lost. I again express the view that mediation is undermined when employment consultants working on a contingency basis work to obtain a high financial settlement rather than repairing and promoting an ongoing relationship. 
Dr Wayne Mapp 
: Is the Government aware that Business New Zealand in its publication just last week entitled  
Skills Perspectives 
 has said that New Zealand should have a probationary period for employment law in order to encourage businesses to employ groups with untapped skills; and how will she deal with that concern? 
Hon LIANNE DALZIEL 
: I am well aware that that member and others have expressed the view that this will help new migrants young people with few qualifications and people re-entering the workforce. If that is help I would like to see hindrance. 
Dr Wayne Mapp 
: Why will the Government not allow a full select committee consideration in order to examine all the arguments of the Employment Relations (Probationary Employment) Amendment Bill which is a member’s bill so that these issues can be properly considered instead of the cavalier approach that the Minister is apparently taking? 
Hon LIANNE DALZIEL 
: My understanding of parliamentary proceedings is that it is the House that decides whether a bill is referred to a select committee. 
Environment Court—Whangamata Marina 
10.  
SANDRA GOUDIE (National—Coromandel) 
 to the  
Minister of Conservation 
: Will he stand by the decision of the Environment Court made in October 2005 to approve the Whangamata marina development; if not why not? 
Hon CHRIS CARTER (Minister of Conservation) 
: 
 I am due to make a decision on that matter early next week. 
Sandra Goudie 
: Does he believe in the integrity of the Environment Court and its processes; if so why is he effectively allowing the relitigation of the decision made by the Environment Court? 
Hon CHRIS CARTER 
: When I make my final decision I will take into account only those matters that are relevant under the Resource Management Act passed by the previous National Government . 
Jill Pettis 
: Has the Minister seen any reports of illegal Resource Management Act activity in the Coromandel area? 
Hon CHRIS CARTER 
: Yes I have a report from the  
Waikato Times 
 dated 26 September 2005 stating that MP Sandra Goudie was involved in an illegal action in clearing mangroves. The article states that she was not worried about possible legal action and she would do it again. I believe in following the law; it seems that that member does not. 
Eric Roy 
: Given that he will be making a decision next week does he consider that a half-day of lobbying is equal to over 10 years of judicial process; if it is where will the justice be for the applicants and the people of Whangamata? 
Hon CHRIS CARTER 
: I repeat: when I make my final decision I will take into account only those matters that are relevant under the Resource Management Act passed by the previous National Government. 
Sandra Goudie 
: What implications does he think there will be for the integrity of the Environment Court and its processes in the future if he vetoes the Environment Court’s decision regarding the Whangamata marina development? 
Hon CHRIS CARTER 
: Unlike that member who has a history of breaking the law concerning Resource Management Act processes I intend to make my decision strictly according to the Resource Management Act passed by the previous National Government. 
Jeanette Fitzsimons 
: Would the Minister like to explain to the Opposition that the matters he is required to consider in exercising his discretion under the Resource Management Act under the coastal plan are different from those considered by the Environment Court? 
Hon CHRIS CARTER 
: Yes I thank the member for that question. Indeed they are different. I would be happy to invite the member for Coromandel to come and see me and I will explain that to her in simple language. 
Sandra Goudie 
: I seek leave to table the editorial from this morning’s  
New Zealand Herald 
 which is headed: “Minister’s veto power an outrage”. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Hon CHRIS CARTER 
: I seek leave to table an article in the  
Waikato Times 
 entitled: “MP joins illegal mangrove blitz”. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? Yes there is objection. 
Hon Dr Nick Smith 
: I seek the leave of the House to table the decision of the Environment Court in respect of the Whangamata marina which the Minister is now considering vetoing. 
Document by leave laid on the Table of the House. 
Accident Compensation Corporation—Performance International Reports 
11.  
Hon MARK GOSCHE (Labour—Maungakiekie) 
 to the  
Minister for ACC 
: Has she received any recent reports assessing ACC’s performance internationally? 
Hon RUTH DYSON (Minister for ACC) 
: 
 Yes as a matter of fact I have. A joint Australian - New Zealand report on workers compensation comparisons shows that although 8 years ago the Accident Compensation Corporation’s levies and Australian levies were similar New Zealand rates have been steadily decreasing and are now on average just over one-third of Australia’s rates. This gives New Zealand a clear competitive advantage in most industries. 
Social Development and Employment Minister—Allegations 
12.  
RODNEY HIDE (Leader—ACT) 
 to the  
Prime Minister 
: Does she still believe Hon David Benson-Pope “to be an honest man who answered the questions to the best of his recollection”; if so why? 
Hon Dr MICHAEL CULLEN (Deputy Prime Minister) 
 on behalf of the 
 Prime Minister 
: I thank the member for his question which was referred to him by the National Party. Yes because she believes that he answered the question to the best of his abilities. 
Rodney Hide 
: I raise a point of order Madam Speaker. I have been trying to understand how the first comment had anything to do with the answer and what it was to do with. 
Hon Dr MICHAEL CULLEN 
: I was just pointing out that this was a question set down for the National Party. It was transferred to the ACT party by the National Party. 
Hon Members 
: What? 
Rodney Hide 
: No. We swapped Tuesdays. 
Madam SPEAKER 
: I think all this is irrelevant. We will stick to questions and answers. 
Rodney Hide 
: Could the Prime Minister tell the House whether she believes that the Minister was telling the truth when he said on 12 May in Parliament: “I have not been guilty of or involved in any inappropriate behaviour in my 24 years as a secondary school teacher. As well I am not aware of any complaint of any kind.” and if the Prime Minister believes that the Minister was telling the truth could the Prime Minister explain in what way that was a truthful statement? 
Hon Dr MICHAEL CULLEN 
: The Prime Minister said in an answer to a previous question in relation to the matter of the complaint that she believes it an error of judgment that Mr Benson-Pope did not view the parent’s letter as a complaint because it did not breach school policy and was not dealt with as a disciplinary matter. It is a fact that it did not breach school policy and it was not dealt with as a disciplinary matter. 
Hon Phil Goff 
: Given the testimony both by the principal and indeed by the students who made complaints that Mr Benson-Pope never for example entered the shower room and that privacy of students was never compromised to what does he attribute the repeated innuendo by Mr Hide other than desperate political opportunism and dishonesty? 
Hon Dr MICHAEL CULLEN 
: I believe that there has been concerted— 
Rodney Hide 
: I raise a point of order Madam Speaker. I would ask you to reflect on that question and ask yourself how it can possibly be in order for a—[ 
Interruption 
] Well they can try to interrupt me during a point of order—and I notice they can get away with it. 
Madam SPEAKER 
: I am sorry—everyone has got away with it today. That will be it for this week and the next week we come back after the recess will be a new week. 
Rodney Hide 
: How can it possibly be in order for a Minister to get up and ask another Minister and sort of try to make an inference and suggest that somehow my questioning is dishonest? 
Madam SPEAKER 
: Was there an implication of dishonesty? 
Hon Dr Nick Smith 
: Of course there was. 
Madam SPEAKER 
: If there was then I ask the Minister to withdraw it. 
Hon Phil Goff 
: I withdraw that aspect of the question but mentioning political opportunism is absolutely within the Standing Orders and desperate political opportunism particularly suits that member. [ 
Interruption 
] 
Madam SPEAKER 
: “Political opportunism” is not an unparliamentary term in the context of what we are debating here. 
Lindsay Tisch 
: I raise a point of order Madam Speaker. When the Minister withdrew his answer he should not have qualified it after it was withdrawn and that should be ruled out of order. 
Madam SPEAKER 
: I agree. The Minister should just withdraw and apologise and then we can proceed. There will be no further comment. 
Hon Phil Goff 
: I withdraw and apologise. I raise a point of order Madam Speaker. Does that mean I have to ask the question again in respect of political opportunism because it is not clear from your ruling whether I need to repeat that question? 
Madam SPEAKER 
: No. The question stands with that deletion. 
Hon Dr MICHAEL CULLEN 
: It is clear that there has been a concerted campaign of continuous misrepresentation of what actually happened. In the case of the issue relating to the showers—[ 
Interruption 
] I have the microphone and none of those members can be heard outside this place—the girls themselves and all other evidence is clear that Mr Benson-Pope never entered the showers and never saw any naked girls. When last night on television that assertion on TV3 was repeated and then the Prime Minister’s reference to an error of judgment relating to a different matter was run back to back that just shows how concerted this campaign has been particularly between TV3 and Mr Hide. I challenge Mr Hide to tell the public of New Zealand how much taxpayers’ money has been spent on him flying to Dunedin and back to try to gather together—[ 
Interruption 
] 
Madam SPEAKER 
: Order! 
Hon Dr MICHAEL CULLEN 
: —his sleazy series of accusations. 
Madam SPEAKER 
: Did everyone hear that answer or must it be repeated? 
Rodney Hide 
: I missed the last bit and I think it concerned me. I would quite like to hear it. 
Hon Dr MICHAEL CULLEN 
: I challenge Mr Hide to tell the taxpayers of this country how much money has been spent by them paying for his airfares to go backwards and forwards to Dunedin and elsewhere to gather evidence for his sleazy campaign. 
Hon Bill English 
: Does the Prime Minister believe that any complaint of any kind was lodged against David Benson-Pope in his 24 years as a teacher? 
Hon Dr MICHAEL CULLEN 
: Yes; it is clear a complaint was lodged. 
Hon Phil Goff 
: Given the previous answer does the Minister believe that the scurrilous allegation made by Mr Hide yesterday in this House was not only wrong but libellous and is he aware that that member has ever had the courage to say it outside this House? 
Madam SPEAKER 
: That question is not in order. 
Rodney Hide 
: I raise a point of order Madam Speaker. I would have thought— 
Madam SPEAKER 
: I have just ruled it out of order Mr Hide so I have addressed your point. 
Hon Bill English 
: Can the Prime Minister confirm that she has just told the House that she does believe there were complaints of any kind lodged against David Benson-Pope during his 24 years as a teacher? 
Hon Dr MICHAEL CULLEN 
: As the Prime Minister made clear she believed that Mr Benson-Pope had made an error of judgment in not viewing—[ 
Interruption 
]—that member should keep quiet—the parent’s letter as a complaint because the matter did not breach school policy and was not dealt with as a disciplinary matter. The Prime Minister has already made that statement to the House. 
Hon Bill English 
: Is it now the case that the Prime Minister believes that David Benson-Pope knew about the bullying complaints and the school camp complaints but did not reveal that to Parliament because he believed they were not formal and serious complaints; or does she believe that he just misled Parliament as everyone else in this House believes? 
Hon Dr MICHAEL CULLEN 
: I reject the last assertion. There are many members of this House who do not believe— 
Hon Bill English 
: He lied. 
Hon Dr MICHAEL CULLEN 
: He did not lie. The only person in this House I know of who has actually been found guilty of lying is Dr Nick Smith to a court. The court found he had lied to it. 
Hon Steve Maharey 
: Has the Minister seen any other reports relating to members of Parliament and school camps? 
Hon Member 
: Get out the dirt. 
Hon Dr MICHAEL CULLEN 
: No not dirt at all just the following extraordinary exchange on television: “Judith you’d be the first person leaping up and down if the school did this and something happened and a paedophile went on a camp.”; Judith Collins: “No actually I wouldn’t really.” That was only a few nights ago on television. 
Judith Collins 
: I raise a point of order Madam Speaker. I seek the leave of the House to table the entire transcript of that particular interview so that my position can be properly represented. 
Document by leave laid on the Table of the House. 
Rodney Hide 
: Who does the Prime Minister believe: David Benson-Pope who told the House yesterday that he did not slap a pupil on the thigh when it was against policy and against the lie; or Geana Earl who went on camera and said that he did and that it was her thigh and a second witness to the slap whom I have spoken to today? If he believes the Minister over these two former pupils what is the basis of that belief? 
Hon Dr MICHAEL CULLEN 
: I have seen the reply that was drafted by the school to be sent which also cited evidence from the accompanying female schoolteacher that no slap was observed to have occurred. 
Rodney Hide 
: I raise a point of order Madam Speaker. The Minister was actually quite clever not to address the question and say whether he believed the Minister or the pupils. Can we take it that in fact the Prime Minister is not prepared to stand up and say that they believe this Minister any more? 
Madam SPEAKER 
: Remember we are not having these trivial points of order now. The Minister did actually address the question. It may not have been to the satisfaction of the member or the answer he wished but it did address the question being asked. 
KiwiSaver Bill 
First Reading 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I move  
That the KiwiSaver Bill be now read a first time. 
 What it pleasure it is to move from sleazy allegations about the past to the future of this country and the things that are important to the great majority of New Zealanders. I intend that the KiwiSaver Bill be referred to the Finance and Expenditure Committee. 
The KiwiSaver Bill represents a landmark in social and economic legislation. Saving and investing is the foundation of the future wealth of our country and of us as individuals. KiwiSaver adds a new important element in the savings landscape providing a vehicle to encourage all working New Zealanders to set aside a portion of their earnings to fund their long-term income security. 
It completes a set of measures that this Government has taken. First when elected in 1999 we restored the cuts made to New Zealand superannuation by the previous National Government consistent with its record of attacking superannuitants over its 9 years in office. Second we moved to create the New Zealand Superannuation Fund to revive long-term stability for the basic State pension and remove the years of instability that had characterised the 1980s and 1990s. Third we recognised the need for the Government to show leadership in providing workplace savings options by introducing the State Sector Retirement Savings Scheme—like all other initiatives attacked at the time by the Opposition but taken up by a far higher proportion of public servants than we had anticipated. Now KiwiSaver completes that picture by providing easy access for all employees to a long-term savings scheme. 
Like most Western nations we have struggled to achieve high rates of participation in long-term retirement savings schemes. New Zealand superannuation provides a base level of income in retirement. It has always been clear that most Kiwis will have to top that up with their own savings in order to avoid a significant drop in income during retirement. The current savings environment provides little encouragement for New Zealanders to address the issue earlier in their working life. Many never develop a serious savings habit and delay any serious attempt to save until relatively late in their working lives. KiwiSaver is an important factor in addressing that problem not through compulsion or through distortionary tax breaks—both of which Mr Key now seems committed to on the basis of a radio interview last night—but through a relatively simple mechanism of automatic enrolment. 
KiwiSaver focuses on encouraging savings in the workplace and that allows for deductions at source provides benefits of scale and reaches a high proportion of the population that is able to save. There are 6 features of the bill. First the scheme tilts the playing field towards establishing a long-term savings habit. It does so through automatic enrolment when an employee starts a new job—for those aged 18 to 65. All others below the age of 65 may join KiwiSaver at any time—those in a job and the self-employed. Contributions are deducted from pay by the employer at a default rate of 4 percent or 8 percent if the employee elects a higher rate. Those who are not employed will be able to elect their own contribution rate in agreement with their scheme. The Government provides a start-up contribution of $1000 per member—a flat rate—which of course is worth more for those on low to modest incomes than for those on higher incomes. 
Second the bill locks in savings for use in retirement. Savings are primarily for retirement and funds cannot be accessed until the age of 65 or after 5 years’ membership of KiwiSaver whichever is the later—except in the case of the purchase of a first home serious financial hardship or permanent emigration. In the case of death of course the savings become part of the estate of the deceased person. Members can stop contributions for up to 5 years at a time via taking a contributions holiday with contributions resuming unless a further option to suspend is exercised. No contributions holiday can be taken until 12 months after joining KiwiSaver. 
Third KiwiSaver provides members with a choice regarding how their savings will be managed. Members can choose from a range of funds managers whose products qualify under the KiwiSaver scheme. There is a default option for those who do not choose a funds manager and members can change between schemes at any time. 
Fourth KiwiSaver minimises compliance costs for employees employers and providers. Employers will deduct contributions from employees’ pay and forward them to the Inland Revenue Department along with PAYE. Employers will be able to make contributions on behalf of their KiwiSaver employees via the Inland Revenue Department or direct to a scheme manager. The actual rate of an employer contribution will be a matter of negotiation between the employer and employee. Employers will be able to choose the preferred KiwiSaver scheme for their employees if they wish and if the employees have not already chosen their own scheme. Employers with a suitable work-based registered superannuation scheme will be able to apply to the Government Actuary for an exemption from the automatic enrolment provisions. The Government contribution towards fees will be a flat dollar amount per member per annum and will be paid into each member’s account. 
Fifth the bill provides for prudential oversight of schemes and allows existing fund managers to join. Although KiwiSaver schemes and products will not be guaranteed by the Government as all existing products are not KiwiSaver schemes will be governed by trust deeds and regulated in a similar fashion to registered superannuation schemes. A limited number of providers of default schemes will be selected by a competitive tender process and calls for expressions of interest will occur shortly. Other providers will be able to offer KiwiSaver schemes if they meet a minimum set of criteria including a requirement that the fees are not unreasonable. Existing registered superannuation schemes are able to operate independently of KiwiSaver to convert to a KiwiSaver scheme or to establish a KiwiSaver scheme within their existing scheme under their existing trust deed. 
Sixth KiwiSaver includes a mechanism to encourage homeownership as an important element in long-term financial security. KiwiSaver will be linked to a new scheme to assist modest to middle-income families with a deposit for a first home. Those who are with KiwiSaver for a minimum of 3 years will qualify for a deposit subsidy of $1000 a year up to a maximum of 5 years at the time of purchase of their first home. They will be able to draw down all their accumulating savings except for the initial $1000 start-up contribution. There will be conditions relating to the total household income of the applicants and the value of the house being purchased—the criteria are yet to be determined. The homeownership deposit subsidy will also be available to members of registered superannuation schemes if their employer is exempt from the automatic enrolment provisions. 
Since the Budget 2005 announcement the Government has engaged in extensive consultation with providers employers and consumer groups to ensure that the KiwiSaver scheme is robust and workable. That consultation has led to some changes to KiwiSaver. Those changes include clarifying how information about the allocated default schemes will be sent to new employees extending the opt-out period for new employees from 3 weeks to 6 weeks in order to enable employees to seek financial advice extending the minimum period before a contributions holiday can be taken from 3 months to 12 months and providing existing registered superannuation schemes with an option to establish a registered KiwiSaver scheme within their existing registered superannuation scheme under the existing trust deed. 
The Government intends to have the KiwiSaver scheme up and running by 1 April 2007. That would require the bill to obtain royal assent by early October in order to ensure that providers of default schemes have around 6 months from their appointment time to be ready for the scheme to commence. That means that tenders to select providers of default schemes will occur in parallel to the select committee process and those providers will be appointed after the legislation gets the royal assent in order to meet obvious constitutional objections to anything untoward occurring in that regard. We anticipate perhaps some 25 percent of eligible people will take up enrolment within some 5 years of the start of the scheme. There will not be an initial surge impact in terms of the housing market because no one will qualify for the deposit subsidy until 1 April 2010. 
The KiwiSaver scheme has been warmly welcomed by the savings industry and supported by a range of business groups. It is supported by a number of parties in the House for discussion within the select committee. The only significant group in the country that has condemned the scheme has been the National Party. I am happy to stand with the great majority of Kiwis who dream of owning their own home and dream of having a secure retirement—not having made millions of dollars in financial market speculation as a means of buying their own retirement provision. 
JOHN KEY (National—Helensville) 
: 
 The fact that the Minister of Finance has to revert to those kinds of comments on a bill like the KiwiSaver Bill shows me just what pressure the Minister is under and how extreme it is. I think that shows he is at the end of his career and he is saddened unfortunately to be overseeing not only a collapse in confidence in his Government but also at having to be the one who picks up the pieces for Minister after Minister who fail him and his Government. 
Chris Auchinvole 
: Take the blame! 
JOHN KEY 
: I do not think he will take the blame actually. 
Let me start by saying that unfortunately for the Minister he is once again deluded if he thinks the National Party is the only party in New Zealand that is opposed to the KiwiSaver scheme. In fact what people in the industry say in the privacy and comfort of their own boardrooms— 
Jill Pettis 
: Enter the scheme you can buy another Georgian clock for £2000. 
JOHN KEY 
: Actually Jill you should start listening and stop talking because you clearly do not know what you are talking about and it would be useful for you to stop sounding like a fishwife and little bit more like an intellectual member of Parliament. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The member will be seated. I refer the member again to the use of nicknames and also the use of a member’s first name. I refer the member to Speakers’ rulings 26/6 and 26/7. Members are not to use nicknames or Christian names; they should use the person’s full name or his or her title. 
JOHN KEY 
: That is quite correct. I should have said that Jill Pettis sounds like a fishwife and that she should be listening not talking. 
Jill Pettis 
: Oh! 
JOHN KEY 
: I say to Mrs Pettis that we could if she wanted to spend our entire time in this debate on the KiwiSaver Bill discussing her failure to win a seat and why she is on the way out of the Labour Party. I am happy to have that debate but I would rather debate KiwiSaver. 
Unfortunately Dr Cullen is quite wrong when he says that the National Party is the only party to oppose KiwiSaver. He is quite wrong when he says that the only people in New Zealand who are opposed to KiwiSaver are National members. In fact he will find that in the confidence and privacy of boardrooms around New Zealand most members of the savings industry have considerable concern about KiwiSaver but that for a variety of reasons they need to hold up a public position that sometimes looks a little different. 
Let us put a bit of perspective if we may around this whole debate so as to understand these points. Firstly the National Party does not argue the point—or at least I certainly do not—that there is a dissavings issue in New Zealand. New Zealanders are consuming on average around $1.14 for every dollar they earn. We do not debate the issue that on a long-term basis that dissavings rate is probably not sustainable. Nor do we debate the point that New Zealand has a high level of indebtedness. On average about $135 billion is owed by the private sector and 90 percent of it is owed offshore. That is not a debatable point either. 
Nor do we argue the point that the demographic changes occurring in New Zealand are quite significant. Currently one in eight New Zealanders are aged over 65 and if we roll the clock forward about 30 years that number will be one in four. Nor do we debate the fact that those New Zealanders are likely to live considerably longer. Most New Zealanders will be aware of the fact that the average woman in New Zealand currently dies at the age of 81 and the average man dies at the age of 79. As every decade passes New Zealanders live on average 2½ years longer. We can take the conclusion that New Zealanders will live a lot longer and I think most of us accept that they will be capable in fact of achieving a great deal more in their retirement. When they are 65 they will not be heading to the patio and the rocking chair; they most likely will be heading to the Gold Coast or the golf course. In fact many of them are heading to the Gold Coast well before they are 65 because this Government is overtaxing them to death. Anyway we will worry about the ones who hang around until they are 65. Jill Pettis will not be hanging around this House until she is 65 because she in the official term of this Government will be “gone-burger” “outski” and all that sort of stuff. Anyway we will worry about that later on. 
We do not argue those points and we do not actually argue the point—which  
The Economist 
 made and which I agree with—that if we want a private superannuation scheme a compulsory opt-in voluntary opt-out scheme has some merits to it. Let us put those facts on the table. 
But let us move to why KiwiSaver will be unsuccessful in its current structure. Firstly and most important why do New Zealanders not save in their current position? The answer is actually pretty simple: they simply do not earn enough. Using the most technical term savings are foregone consumption today for consumption tomorrow. Actually Dr Cullen might be right; I probably can forego a little consumption today for some consumption in the future and that is totally fine but the bulk of New Zealanders do not currently save because they make real-life decisions about consumption that they need to make for themselves and their families today. The reason they do not save is that they are earning $30000 or $40000 or $45000 they are seeking to raise a family and they have a variety of expenses. To make those savings today would simply require them to make compromises that are frankly unconscionable. Therefore they do not save. 
So I ask the first question: post-KiwiSaver what in their position will have changed? Nothing—absolutely nothing. Their ability to save is not enhanced. It is in no way different. In fact the National Party and rightfully so went into the election looking to give those New Zealanders who earn the average wage—$42000 in New Zealand—up to $50 a week more. That would have given them more chance to save than any other trumped-up little scheme that Michael Cullen thinks is a mighty fine idea. Fifty dollars a week could actually go quite a long way in terms of savings. That would be the first suggestion I would make to Michael Cullen. He should get out of the ivory tower and follow the advice of Treasury every self-respecting thinking New Zealander and the vast majority of New Zealand voters who voted for tax cuts. If he gives New Zealanders more money in their pocket there is a darned sight greater chance that they will save more than anything else. 
The second issue I raise is that if Michael Cullen thinks that 25 percent of New Zealanders will have a serious KiwiSaver account in 5 years’ time he is deluded in la-la land dreaming—or probably all three. The reason for that is quite simple. The State Sector Retirement Savings Scheme that the Government rolled out did receive a pretty high take-up rate—about 50 percent. That is slightly higher than rates the Treasury predicted. Why? Because self-respecting State servants who have half a brain know that when the Government wants to match their savings dollar for dollar it is called a pay rise and it is not a bad idea to take the money. Now let us compare that to KiwiSaver. What will anyone get under KiwiSaver? At the most they will get $1000. 
The minimum contribution is 4 percent of a person’s wages. Let us take the average New Zealander. The average New Zealander earns $42400. He or she will get a $1000 contribution. In year 1 that 4 percent is $1600. That is matched on year 1 on the basis of approximately 50c in the dollar—not dollar for dollar like the State Sector Retirement Savings Scheme and not at 4 percent of wages in excess of the average wage but at 50c in the dollar for year 1. When year 2 rolls around that person gets zero. That might be the reason why the Retirement Commissioner—the person charged with leading the debate on retirement in New Zealand—said that New Zealanders should look carefully at the KiwiSaver account because it may not suit all of them. 
It probably happened to be the reason why the commissioner went on to say that those New Zealanders who have a mortgage would probably choose to pay down their mortgage before they save. I hate to point out this fact to Dr Cullen but a third of all New Zealanders have a mortgage. Inevitably they are the people who have the least ability to save and I strongly suggest are probably those who have lower incomes. Therefore the very people he will be targeting—those who do not have savings today—do have a mortgage and the Retirement Commissioner is telling them not to worry about KiwiSaver because it is not for them. If he thinks that 25 percent of all New Zealanders will have an account that is not dormant—an active account—I would strongly suggest to him that he is dreaming. 
Of course he should not take my advice. I heard Brian Easton saying on the radio the other day that this was a world-leading policy. I am sorry but he is wrong again. If he has a look at some real economics he will find that the equivalent of KiwiSaver was rolled out in the UK and in Ireland and guess what in Ireland 92 percent of the accounts were dormant just like they will be in New Zealand. So yes some New Zealanders will put money into KiwiSaver. They will be New Zealanders who are seeking to have a first home buyer’s grant. If that is what this is—if it is a first home buyer’s grant—then it is a pretty poor one because in Australia people get $15000 up front. However if it is a first home saver’s allowance then that is no problem. 
Michael Cullen should come down here and tell me whether that is right. I can see members nodding over there on the back benches of the Labour Party. It is a first home buyer’s grant. It is a really poor one because people get $5000 in 5 years. As Jo Doolan from Ernst and Young said one will not get a park bench for $5000 in 5 years’ time. However if that is what the KiwiSaver account is that is cool but let us not call it a long-term savings account. What will happen is that those New Zealanders will save $1000 a year for 5 years they will take their money out—Darren Hughes looks confused but this is the way it will work—and they will buy a house. When they have bought a house like every other New Zealander out there they will have a mortgage and the No. 1 thing they will do is repay their mortgage because otherwise they have to make 13 percent in KiwiSaver and they will not make that. Mark my words if this Government gets the chance it will change the functions and the criteria around KiwiSaver because if it does not it will be remembered about as lovingly as David Benson-Pope is. 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I am glad that nobody has to rely on that speech to understand what the KiwiSaver Bill is all about. I bought one of my nieces a piggy bank for Christmas because I thought it was important to get young children thinking about saving. That caused my sister and me to reflect on the days of the Post Office Savings Bank books that we all had as schoolchildren with the squirrel on the cover putting money away for the future. What a great message we had as children! I believe that KiwiSaver is about starting that message again—not with children but with the parents of those children to have them thinking about saving for the future. That is why I endorse the comments made by the Minister of Finance. Saving and investing are the foundation of the future wealth of New Zealanders as individuals and as a country. 
Although New Zealand superannuation provides a base level of income middle-income New Zealanders have to provide for their own savings to avoid a potentially significant drop in income during retirement. We had that fear factor all the way through National’s period in Government in the 1990s when it threatened every tenet of the Superannuation Fund that Michael Cullen had to establish in order to preserve our future. KiwiSaver helps people to change their long-term savings behaviour. KiwiSaver aims to increase the well-being and financial independence of individuals particularly in retirement. KiwiSaver is designed to complement New Zealand superannuation for those who wish to have more than a basic standard of living in retirement. 
I have been actively involved in the development of the KiwiSaver legislation that is before us today both as Minister of Commerce and Minister for Small Business. From my perspective as Minister of Commerce I see KiwiSaver as an important mechanism to help New Zealanders to save more for their retirement. It will also change the way that many superannuation schemes currently operate. In this way it will provide a real opportunity for scheme providers and strengthen the market for superannuation in New Zealand. I am surprised the National Party does not see the benefit in that. 
I appreciate that there are currently a number of effective employer-based superannuation schemes that employers choose to offer their employees and I commend the employers who have already taken active steps to assist their employees in their provision for retirement. We do not want to shut down those or any other current retail schemes with the introduction of KiwiSaver. Rather our objective is to enable them to continue to operate outside KiwiSaver or to facilitate their transition to the KiwiSaver environment. This is achieved through several provisions in the bill. An existing registered superannuation scheme will be able to fully convert to a KiwiSaver scheme with the consent of all of its members. Those members would then become members of the KiwiSaver initiative. A scheme can also partially convert to a KiwiSaver scheme by creating a KiwiSaver section within its current scheme. Members of the scheme can then decide whether to stay in the existing scheme or move to the new KiwiSaver section. Employers with existing registered superannuation schemes that meet minimum requirements can seek an exemption from the requirement to have their new employees automatically enrolled in KiwiSaver. Employers can also choose any registered KiwiSaver scheme to be the scheme that their employees are allocated if they decide not to make their own active investment choice. 
In the design of KiwiSaver we have also been concerned to reduce the risk of small balances occurring and when they do occur to minimise the impact of those small balances on KiwiSaver providers. That has been achieved through the Government making a $1000 upfront contribution to all KiwiSaver accounts the Government contributing towards each KiwiSaver member’s fees the requirement that members must contribute for a minimum of 12 months before they can take a contribution holiday and an exemption from the providers’ requirement to provide annual reports to members where a member’s account has been inactive for at least 2 years. 
Another important aspect of the framework for KiwiSaver products and providers is the protection of investors in KiwiSaver schemes. Where possible the bill has leveraged off existing regulatory systems to provide adequate disclosure and protections for investors. This includes ensuring that existing disclosure requirements in securities legislation apply effectively to KiwiSaver schemes and in particular ensuring that employees receive investment statements for the default scheme that they will be allocated before they are required to make a decision whether to opt out of KiwiSaver. 
Schemes will be regulated in an equivalent way to existing registered superannuation schemes but with additional KiwiSaver requirements such as lock-in of funds; permitted withdrawals for reasons such as housing serious financial hardship and permanent emigration; transferability between schemes; an independent trustee; and a requirement that fees not be unreasonable. And the Government Actuary will register and monitor KiwiSaver schemes on an ongoing basis. There will also be specific requirements for those KiwiSaver schemes that wish to be default schemes—schemes that employees are allocated by the Inland Revenue Department when they do not make their own choice of provider. Those schemes will be selected through a commercial tender process that will run alongside the legislative process. 
From my perspective as Minister for Small Business I have also been particularly concerned to ensure that KiwiSaver does not place unnecessary additional burdens on employers particularly small employers. KiwiSaver is primarily a scheme to facilitate work-based savings. That is because making deductions at source straight from wages—almost without people noticing them—is the simplest and most effective way for people to overcome their inertia and start to develop a savings habit. The introduction of a work-based savings scheme will however inevitably have some impact on employers. Various aspects of the design of the scheme have enabled us to minimise those impacts as much as possible while retaining the advantages of a work-based scheme. Information and payments that employers need to provide to the Inland Revenue Department will be transmitted through the existing PAYE scheme. The Inland Revenue Department will facilitate matching transactions between the member and the provider. For example there will be no need for employers to confirm an employee’s current KiwiSaver provider if he or she is an existing KiwiSaver member when starting a new job. The Inland Revenue Department will ensure that the contributions are sent to the correct provider. 
The legal risk for employers has been mitigated through provisions in the bill that clarify that an employer will not be liable as a promoter of a KiwiSaver scheme by simply complying with the Act or choosing a preferred KiwiSaver provider. Employers will also not be liable as investment advisers if they simply pass on factual information to employees about the KiwiSaver scheme. I was very concerned to ensure that the bill would not be an additional burden on small employers in my role as Minister for Small Business and I am very pleased that we were able to contribute to the design of the scheme in order to minimise the impact in that way. In addition—and I think it is worth remembering—a payroll subsidy has been made available to small businesses that use a payroll intermediary and that is something that will reduce some of the burden that the PAYE system imposes on small business and will thus also benefit those employers when KiwiSaver is implemented. 
We certainly have worked hard to achieve the idea of having an efficient and effective model for the implementation of KiwiSaver. Building long-term savings habits will be of benefit to all New Zealanders and KiwiSaver is an important part of the Government’s efforts to encourage these. I commend the bill to the House. I believe that it says a lot about a wonderful future for our nation because it is about encouraging the kinds of saving and investment that will take us into the future. I do not believe that anyone who does not take seriously saving and investment for the future of this country has our country’s interests at heart. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 National does not condemn the Government for exploring how to improve the savings record or the savings progress of New Zealanders. We support the notion that it is in New Zealand’s interests that its people save more. But the central problem with this bill with this Labour Government’s approach is: how does Dr Cullen expect people to save more money when as they earn more money he taxes them more and more? That is what is happening. Look at the tax collected from Kiwis in the year before Dr Cullen came to office. In the last year that National was in office the Government collected $30 billion in tax revenue from New Zealanders. This year Dr Cullen will collect $46 billion. The figure has gone from $30 billion to $46 billion in just 6 years. In just 6 years the tax taken from Kiwis has gone from $30 billion to $46 billion. That is a 50 percent increase. The population sure has not gone up 50 percent. The working population to pay that tax has not gone up 50 percent. So how does Dr Cullen expect New Zealanders to save money when as they earn more money and go into higher tax brackets Dr Cullen taxes them more and continues to tax them more? As we look ahead he will continue to tax them more. 
I have news for Peter Dunne. His increases in the tax thresholds are well and truly dog tucker. Dr Cullen has made that very clear. The other day at the select committee—and these are not exactly his words—the message he gave was that the public should not take any notice of Peter Dunne and that they should listen to him; that he was the Minister of Finance and the buck stopped with him; the public should listen to him. That is a little message for Peter Dunne. 
But the issue is serious. How does Dr Cullen seriously expect New Zealanders to be able to save money when as they earn more money he takes it in tax? Of course that is why the after-tax income of New Zealanders has not increased much under this Labour Government. Wages have gone up sure but the amount New Zealanders are paying in tax has gone up and the amount New Zealanders have left in their pockets has not gone up. Hence to make ends meet people have had to borrow more and “dis-savings” have been going on. But it is part of the problem of overtaxation. If Dr Cullen is serious about New Zealanders saving more money a far more effective way to do that would be to ease the tax burden especially the marginal tax rates on New Zealanders. 
The extent to which Dr Cullen and this Labour Government control ordinary families’ net incomes is staggering. I would love some of those members opposite like David Cunliffe to sit down and calculate the net incomes of families. Let us say that a low-income family is trying to make a better life for themselves—it might be a sole parent trying to get off the domestic purposes benefit. One would have to calculate the impact of their work and the PAYE they pay; the domestic purposes benefit they are paid and the fact that as their income goes up there is an abatement of their domestic purposes benefit; the family support tax credits and as their income goes up the amount that that abates; the in-work payments as their income gets a bit higher and the amount that abates; and the extra tax they have to pay because the domestic purposes benefit is paid on an after-tax basis. We have to gross it up and work out the extra tax then finally work out the net income of that family as they try to earn more money—which they will have to do if they are going to save. Dr Cullen and the Labour Government are controlling that. 
Some families with small children must double their hours to increase their income significantly. Our lower-income people get to keep only a tiny percentage of that income. Over a certain income in a low-income range a family could double its income and get to keep $1000 of it. They could take their earned income from $10000 to $20000 a year and keep only $1000. They would be only $1000 better off at the end of the year. I do not believe that any of those Labour members opposite have ever sat down to think about that. I suspect that good people like Hone Harawira even are staggered to hear that kind of thing because many Maori families are caught up in it. Dr Cullen is in a dream-world if he thinks that this “baubles” tax bill will appeal to New Zealanders. Labour got Winston Peters sucked in with baubles and they think that a KiwiSaver scheme with a few baubles in it will suck in ordinary New Zealanders. Ordinary New Zealanders are not as stupid as the Rt Hon Winston Peters. It will not work.  
I was talking a moment ago about low-income families. I invite members opposite to nominate the sorts of families that will put money into the KiwiSaver scheme and what kinds of income they will have. Mr Cunliffe may nominate the income and I will tell him the marginal tax rate that that family will face. Mr Cunliffe may tell me the family size and the income and I will tell him the marginal tax rate that they will have to pay on the next dollar they earn. I will tell the member that from ordinary income from say just below average—about $30000—up to $100000 the Government takes more of their next dollar earned than they get to keep. I tell members that right the way through that income range—from $35000 to $100000 of income for a three-child family—the Government takes more in tax of the next dollar that the family earns than the family gets to keep. The Government takes more than the family gets to keep and when I say more I mean more—that Labour Government under Dr Michael Cullen takes more than 50 percent of the next dollar earned over that income range. How can we expect that family to save money? Where is the opportunity to save money? 
A lot of people would like to save money. People realise that saving money for their retirement is a good thing. But how do we expect them to? In some ways the bill is an insult to good hard-working New Zealanders because it treats them as fools. It shows no recognition of the realities that ordinary hard-working New Zealanders are grappling with. Often the age group that this is targeted—our working-age population—is the one with dependent children and 90 percent of the age group are caught up in those kinds of tax rates that I spoke of. Those people who think that families only face the marginal tax rates of our basic income tax structure are simply wrong. Those families face tax rates miles higher than that. The bill is targeted at our working-age Kiwis. But they are the people with dependent children. They are the people from whom the Government takes more than half the next dollar they earn. The bill is an insult to them because it does not recognise that it is not that they do not want to save; it is that they cannot save. They cannot save and also provide the education they want for their children because their children need the money spent on them today. They cannot save for their future as parents because as good parents they are providing for their children today. 
One thing is certain the scheme is not going to work. If one looks at the State sector superannuation scheme which the Government subsidises much more dollar for dollar one can see that there is a 50 percent take-up. My good colleague John Key mentioned how Ireland has tried the scheme. What was the percentage? 
John Key 
: 92 percent. 
Dr the Hon LOCKWOOD SMITH 
: Under a scheme like this one 92 percent of people ended up with dormant accounts. One must ask oneself what is going on here. I know that Dr Cullen is no fool. I do not agree with him in any way shape or form but he is shrewd. I suspect that what we are seeing here is the birth of the next election bribe; that in 3 years’ time the Labour Government will do a student loans scheme thing with the policy or a Working for Families thing with the policy and come the next election the baubles will be increased in size tenfold. New Zealanders deserve better. They deserve a Government that understands that cutting their taxes would help them to save a great deal more. 
R DOUG WOOLERTON (NZ First) 
: 
 New Zealand First will be supporting the KiwiSaver Bill because we have long agreed with incentivised savings no matter how big or how small. I personally agreed absolutely with Lianne Dalziel when she said that one is missing the point if one goes to the technical aspects of the bill and ignores the ability of the bill to change behaviour. 
It saddens me somewhat—and I am not one for criticising other parties—to hear Mr Key say that National accepts that there is an aging population that we do not have a good savings record and all those sorts of things. Then I heard Mr Lockwood Smith going on about tax. I have lived through—and was a participant in—the days when the National Party’s mantra was that the free market would fix everything and that if we would just sit back get rid of all the Government institutions and leave it to business then everything would be all right. That mantra did not work then and it has never worked. Today the mantra we are hearing is: “If you cut tax everything will be fine. Leave it in the hands of the wealthy and everything will be all right.” Well it will not work in that way any more today than the so-called free-market mantra worked all those years ago. 
 One of the essential things in society for a Government to do is to send messages. If a Government is intent on sending messages it will also be intent on making sure those messages have something of a monetary nature to them. That is why we fine people who speed that is why we fine people who do wrong and that is why ultimately we put those people in jail—but we often find that jail does not work as well as a financial penalty. So it saddens me that the argument for and against the KiwiSaver scheme degenerates quickly in my opinion to one of technicalities. It is not about that. It saddens me that Mr Key who is a respected expert in the financial markets—and I personally do not have a problem with that; I respect his expertise and all the things he has done in a remarkable life so far—cannot accept that one does not have to be a financial expert to understand what is going on with this scheme. 
If we go down the road of analysing everything as a financial expert is wont to do we will miss the essential message that needs to go out to the other 90-odd percent of New Zealanders—and that is what the KiwiSaver scheme is about. I remember when I was in the National Party that there was a little blue membership book. The party probably still has it; I hope it does. It talked about a property-owning democracy. Is it still there? 
Hon Members 
: Yes. 
R DOUG WOOLERTON 
: Yes it is. I believed in that and I believe in that today. But unfortunately for a whole number of reasons property ownership is not as widespread as it used to be. The trend lines are heading in the wrong direction and we need to fix that. We need to give messages that are understood not only by the financial market but by average Kiwis in particular the young when they are vulnerable at the start of their business or married lives and the aged who are vulnerable because if mistakes are made their ability to earn is not so great. I have already talked about the inability of most people to understand let alone participate in the financial market so messages are the things we have with the KiwiSaver scheme. 
New Zealand First has said all along that for our savings record to be changed we must have incentives. We must have surety that our savings will last forever. The importance of those savings is not so much in the return they will give people although that is obviously very important as it is in the surety that they will be there when people need them most. The KiwiSaver scheme will do that. New Zealand First has supported the savings scheme loosely known as the “Dr Cullen scheme” and that is proving to be a success but sadly it is another scheme that the National Party did not back or endorse in any fulsome manner at all. So New Zealand First believes in not only sending a message out but in the Government putting its money where its mouth is however small that amount of money is—and I agree with the National Party that it is not enough. 
A homeowner incentive of $1000 to get an account started or $5000 over 5 years is not enough and it will not be enough. I also agree with National that there will be changes to this scheme. But New Zealand First is not nearly as pessimistic about the number of people who will participate in it and we are not nearly as pessimistic about whether it will work. But we certainly believe that changes will be made over time and we have no problems with that as long as those changes are advantageous to participants and are not in the nature of making things worse for them. 
New Zealand First believes that over recent years people in the retirement sector of our community have become increasingly worried as people have spoken about there not being enough retirement funds for future years. It has been said that the first of the so-called baby boomers will use up all the funds and that there will not be enough money even for the rest of the baby boomers let alone for the generations to come. We do not subscribe to that pessimistic view either but we certainly believe that to take the worry out of people’s lives something that gives them surety needs to be put in place and this legislation does that. 
New Zealand First is certainly in favour of anything that encourages saving whether or not the scheme is perfect in its entirety. This scheme may not be perfect but it is certainly something we will support. It is certainly something we have spoken about since our party was formed in 1993 and we will continue to keep speaking about it in spite of the pessimists in the National Party. 
CRAIG FOSS (National—Tukituki) 
: 
 I am opposed to the introduction of this bill. Quite frankly I think it is typical of an administration that has lost touch with reality that is trying to grab back an agenda and that is trying to get on the front pages of the paper for perhaps what it believes is some good news rather than for the reasons that it may be in the paper or on the TV news currently. Perhaps the resources the time and the energy spent in preparing this bill would have been better spent with an examination of what was not working in the New Zealand economy. To put it more simply why on earth are 600 New Zealanders per week leaving New Zealand for Australia permanently? No one seems to be addressing that question. This type of policy will actually increase the numbers of those moving to Australia. 
This KiwiSaver Bill was part of a suite of pledges that appeared on the Labour Party election pledge card which incidentally is also the subject of an investigation by the police; to that I simply say: “Pay it back.” 
The proposal in this bill in my eyes is typical of socialist thinking. I am sure that Mr Cullen like all socialists has the best of intentions in mind. He is looking to achieve the best for his country—I am sure he is. But also like all socialist policy once those ideals are confronted by reality and meshed with the real world they fail. We have a shambles of compliance band-aid papers emergency policies all sorts of changes to legislation and of course a further decrease in our country’s productivity. 
I believe that it is ironic that this current Labour Government has committed over $2 billion in asset write-offs and maintenance of a student loan scheme—an interest-free student loan scheme—that is targeted at school leavers and encourages them to take on debt yet at the same time it is spending $700 million over 5 years on a scheme that supposedly encourages those same people to save. The total cost of those two schemes is over $3 billion yet they cancel each other out—one encourages to borrow more and one to save more—and they are targeting the same people. It is absolutely nuts. Members opposite still believe that there is no room for tax cuts or more efficiencies in the Government books. 
I believe that like many of the other pledges on the Labour Party pledge card this bill is not named correctly. The Working for Families package as we know should be renamed “Welfare for Families” package. The interest-free student loans package should be renamed the “State Asset Free Give-away” package—$1.5 billion at last count. This KiwiSaver proposal I believe should be renamed the “Increase the Cost of Entry-level Housing by $5000” package. Because quite simply those who try to enter the first-home market will find that the price of the house funnily enough will start to nudge up by the amount that they have on deposit regardless of the fact that the credit card has probably been racked up three or five grand. 
The explanatory note of the bill states that essentially New Zealanders are not saving enough. My colleagues and members opposite have addressed this and are not particularly arguing to that but my point is that this is not just a savings problem. New Zealand does not have just a savings problem. We have a productivity problem and at its worst in the public sector. We have a social welfare problem that is destructive and poisonous to those in our next generation. We have an over-taxation problem we do not have just a savings problem. We have a drain to Australia of our brightest and best—problem! We have a Resource Management Act and infrastructure problem. This KiwiSaver Bill will not address or fix any one of those issues. 
The underlying reason for the lower savings ratio that Mr Cullen thinks is not right in New Zealand is quite simply as my colleague Lockwood Smith just said that New Zealanders do not have enough spare cash. There is no money left after the bills are paid and after the mortgage is paid on the higher floating and fixed rates that are now coming through the system. New Zealanders’ after-tax incomes are an absolute disgrace. It is no wonder that workers are going on strike. It is no wonder that workers are striking for higher after-tax incomes. One cannot tell me that this is good for workers and their well-being because this was an election proposal which is now about 5 or 6 months old. 
Workers are striking or proposing to strike to try to catch up and at least get some decent living wage so they can scrimp maybe save pay off their own debt pay off their mortgage buy some decent food and pay for their petrol or electricity. Perhaps they have just heard what their Aussie mates are getting across the ditch for the same work. 
Just keep an eye on those same unions keep an eye on those strike dates and proposed dates if Mr Cullen’s pay-roll tax comes in and totally devastates New Zealand’s labour-intensive industries. Again it is socialist dogma hurting those that it is supposed to protect the best in the first place. 
My colleague Lockwood Smith earlier pointed out that the Labour Government over this past financial year has taken in $16 billion more in the way of tax than in the year 2000. That is why New Zealanders are not saving. That money has been whipped—“pick a pocket or two”—by Mr Cullen for his taxes surcharges levies local government charges and whatever it might be. 
Darren Hughes 
: We have the lowest unemployment. 
CRAIG FOSS 
: That is quite right because there are so many in Australia. Bondi actually has quite high unemployment. That same $16 billion is thrown at various schemes and various pet proposals where there is no accountability where even Treasury the guardian of our Government’s books is not receiving adequate timely and quality information. So how on earth can those who are starting to argue for the KiwiSaver Bill justify the diversion of expenditure? 
I did find one good point in this bill and the Minister mentioned it earlier— 
Hon Member 
: Who? 
CRAIG FOSS 
: But she was a bit confused. The Government will not guarantee any of the deposits. Well OK therefore the risk is not on the Government. That is a very good thing. But then what on earth is the point other than just being a conduit to various private entities who will take fees and pay under-market interest rates to those who will not be able to afford a house in the end anyway? I guess the test is does this bill give the taxpayer value for money? Does it cross that threshold? Is it worth it? Well the evidence from the UK and Ireland says no. The indication from the Wellington public service says no; even with a dollar for dollar subsidy—an incentive—it is not working. 
 One of the most disturbing aspects of this bill is that it opens the door to pork-barrel politics and election bribes. I can see the next Labour Party election pledge card hopefully paid for legitimately which states: “Vote for us and we will double your contribution to your KiwiSaver.” It is absolutely outrageous and an abuse of taxpayers’ funds. The explanatory note also says that there will be minor compliance issues for small business. The Minister said earlier that that was great. Surely the point is that it is yet another compliance cost on businesses which are already de facto payroll agents and administration payment agencies for the Inland Revenue Department that are not compensated each and every time they have to adjust something for their employees. 
There are four or five default agencies to be appointed under this bill. My money is that Kiwibank will be No. 1 in line again at the expense of our regional building societies and our credit unions. 
In conclusion I recommend that members have another look at this bill step back from the trees and the twigs of little detail look at the forest of the big issues that are facing New Zealand and ask and deal to the hard questions. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 It looks like “here we go again”. The KiwiSaver Bill is a good idea. Unfortunately though it has been designed by people who are divorced from the reality of those it is supposed to support particularly the whanau of the working poor and the families of beneficiaries. Now it comes before us for consideration which is a bit of a joke really—when our individual tax bills are bigger than the annual income of 50 percent of the nation. 
Let me say firstly that the Government is to be commended for its efforts to set up a workplace scheme to encourage people to sign up to long-term retirement savings with the offer of a $1000 Government sweetener to get things rolling. The ability to use KiwiSaver savings as a home deposit is also a positive step in encouraging workers to save for their own homes. The Maori Party supports the thinking behind this bill because it aims to help whanau become financially secure and self-reliant into the future. But while the Government in its bumbling flip-flop way is trying to encourage people to save this bill sadly will not address the issues faced by low-income families. 
Yesterday I quoted Nelson Mandela. He said that a political movement must keep in touch with reality and the prevailing conditions. Mandela also said in referring to poverty: “It should never be that the anger of the poor should be the finger of accusation pointed at all of us because we failed to respond to the cries of the people for food for shelter for the dignity of the individual.” The rights to food shelter and human dignity are determined by people’s access to those rights. In this country that access is determined by the income or the wages that people receive and it is that low level of income that we need to focus on in consideration of this bill. 
The bill sets at 4 percent the threshold for getting into the KiwiSaver scheme. That is a real problem for those on low incomes and particularly for low-income working families. We note here that for a young family with the breadwinner on a minimum wage it would mean a drop in wages that that family simply could not afford. We note that with a 4 percent threshold the bill also makes it impossible for beneficiaries to join the scheme and given that Maori unemployment is three times higher than that of the general population Maori will be doubly penalised. 
We suggest that the initial $1000 sweetener will soon lose its glow. In terms of the home deposit there are also issues that need to be addressed. One of those is that the home deposit will be available only after 3 years. That is a long wait for families whose living conditions are not likely to be the best anyway. Another issue is that there is no scope to increase the Government commitment based on family size which means inequitable delivery to low-income young families. Furthermore the fact that only 3000 households a year can qualify for the home deposit limits the potential to lift people out of poverty. 
With the continuing rise in house prices it is unrealistic that a family on a weekly income of $290 can service a $200000 mortgage. When Westpac can get fail-safe mortgages from the Government while ordinary workers have to bust their backsides to pay every cent or get booted out of their homes we really do have to query where the Government’s priorities lie. The Council of Trade Unions also points out that while house prices have rocketed up over 50 percent in the last few years wages have sputtered along to a pathetic 8 percent over the same time. 
One of the Maori Party’s key concerns with this bill is that quite simply it discriminates against Maori. The facts are that Maori just do not live past 65. That means that although Maori like everyone else will be encouraged to join the scheme fewer than 4 percent of Maori will live long enough to derive any benefit from it. That is simple discrimination. 
If this House is serious about helping the Kiwi saver we also need to get a clear picture of who that Kiwi saver might be. The  
Social Report 2005 
 noted that the state of being for Maori and Pacific Island people in health economic standard of living and education is poor particularly in areas like Northland and Gisborne and the report criticised the action taken to reduce those inequalities as well. This House also needs to be aware that the UN rapporteur Professor Rodolfo Stavenhagen during his visit here last year was critical of the lack of quality data to identify disparities for Maori. As Maori Party co-leader Tariana Turia told this House last night if we do not have the right data we cannot properly target our social policy. In terms of that data we know that wage levels for Maori and Pasifika are considerably lower than for Pakeha. Maori and Pasifika have difficulties with housing affordability and overcrowding. Polynesians also figure highly in unemployment statistics. Many Polynesians both Maori and Pasifika will struggle to participate in the KiwiSaver scheme. 
The Maori Party also has a number of other concerns with this bill. We are concerned firstly that yet again society’s underclass will be bypassed because as with the Working for Families package the KiwiSaver scheme will exclude beneficiary families. Secondly this bill will not change the child poverty that ravages this country. A poor child born today into poor housing will already have passed his or her most formative years before this bill has any impact on society. Thirdly despite the fact that more than 250000 children in Aotearoa are living below the poverty line this policy has no child-impact analysis at all. Fourthly the Government will not guarantee the KiwiSaver scheme and again the risk will be taken by the poor worker. Fifthly low-income families may get sucked into what might look like a worthwhile scheme when in fact limited finances might best be spent on food mortgages and kids. Sixth the record of managed funds suggests that KiwiSaver returns may disappoint those being asked to invest their hard-earned money. The seventh point is that the number of low-income families relying on food banks is still rising and the eighth is that commitment from employers may be too high an expectation for small businesses. If we really want to lift the game this bill will not do it in its current form. 
But the Maori Party is nothing if not helpful and we have a few suggestions that we would like to put forward. We should first raise the minimum wage to make the scheme more feasible—$12.50 is a good start; second introduce legislation to limit the capability of loan sharks to terrorise communities of the poor and reduce the easy access to credit for low-income earners; third reintroduce savings schemes to encourage children to learn to save and introduce budgeting education into schools; and fourth give those with a lower life expectancy the entitlement at an earlier age. 
In closing I say that the Maori Party supports the thinking behind this bill because it aims to help whanau to become financially secure and self-reliant into the future. But we will not be supporting it during this first reading because the negatives far outweigh the positives. However we will do our best during the select committee process to ensure that the concerns we have raised—the concerns of the people we serve—are met. 
GORDON COPELAND (United Future) 
: 
 Since I spent my Budget Policy Statement speech yesterday criticising the Government’s big-spending plans in no uncertain terms I would like to begin this speech by congratulating the Government and Dr Cullen in particular on the KiwiSaver initiative. I was asked a couple of years ago by a leading businessman why United Future was working with the Labour Government and whether I was proud of anything Labour had done in recent years. Let me give credit to Dr Cullen and the Government for the New Zealand Superannuation Fund and the Working for Families package. 
I would like to say to members of the National Party that when they without any intellectual rigour whatever label 193000 working families who receive considerable tax relief under the Working for Families package—some 65000 to the point where they pay no tax at all—as welfare recipients they insult those people and they will pay a heavy price at the next election if they keep going down that road. If we apply that logic then under National’s own tax reduction plans we could say that everybody in this country would become a welfare recipient—it is nutty and National members should stop saying it. 
As I mentioned I congratulate the Government on the KiwiSaver initiative. United Future backed all three of those Government policies because it is our conviction that they are good measures for New Zealand for its families and its elderly both now and importantly in the longer term and into the future. Of course United Future would like to see the Working for Families package complemented and completed by income splitting for couples with dependent children. As I mentioned this afternoon we also have some reservations and questions about KiwiSaver. But I set those aside for the moment and look at the big picture and we are delighted to give our support to the first reading of this bill. 
New Zealanders need to save more. Perhaps more important is the fact that New Zealanders need to get back to a precise saving ethic. I must say to the previous speaker from the Maori Party Hone Harawira that one of the things that we did during the election campaign was to speak to some Maori in Opua and they agreed strongly that there is a need to get back to a good saving ethic in this country. 
Shane Jones 
: Hear hear! 
GORDON COPELAND 
: That is because saving is the route to prosperity. Shane Jones was at the same meeting I recall and he will back up what I have said. Saving is the route to prosperity and security in retirement. We all know that New Zealand superannuation is aimed at just covering the bare essentials during the retirement years and most of us demand a somewhat higher standard of living than that. We want to spend the eventide of our lives without financial worry and without financial stress. By encouraging everyone to join KiwiSaver and to join immediately when they join the workforce we will simply unlock the power of compounding interest to ensure that retirement aspirations can be fulfilled for more and more New Zealanders. 
Based on the Australian experience where people have compulsory superannuation savings accounts Kiwis I think will actually get addicted to and really enjoy their KiwiSaver accounts. Australians have told me that every year now when they receive their statements showing that they have increased their savings—and furthermore when they see the effect of compounding interest—they get quite a kick out of it. They feel that they are getting somewhere in life and have something tangible they can look forward to. They can see that they are saving towards their retirement. A lot of Kiwis actually feel guilty that they are not doing that and this scheme will make a positive contribution in that regard. 
However allow me to express my disappointment with one aspect of the KiwiSaver scheme that is not contained in this bill. When the scheme was announced in the 2005 Budget the scheme would have seen the Inland Revenue Department as the central administrator able to transfer money deposited into the fund to pay off a mortgage. But that facility has been omitted from the bill. I think that is a pity. Let us take the example of people on $40000 which is around the average wage in this country. Their 4 percent contribution every year will be $1600. Some of those people will look at their mortgage commitments and say to themselves that they cannot afford to put aside $1600 a year at this stage. I myself remember as a young father and husband in my 20s not being able to join a superannuation scheme because I simply could not afford to do so given the outgoings I had on mortgages feeding my family and so on and so forth. But although those people may not be able to put aside $1600 a year it is possible they may be able to afford say $600. 
The scheme as announced originally in the Budget would have seen people on $40000 a year paying $1600 into KiwiSaver with $1000 of that going out to service the mortgage and the other $600 remaining. I think it is worthwhile to have that $600 there for the reason I mentioned: compounding interest. It would actually make a great difference to people’s ultimate lifestyle and retirement because the earlier one starts to save the better it will be and the more that can be put aside at an early age the better it will be. Most New Zealanders get to about 55 and suddenly panic because they have no money for retirement. They really have almost run out of time to save then because of course compounding interest depends on a long membership of a savings scheme to really make it effective. It would have been worthwhile to retain that part of the scheme and that is something that I would like to see revisited at the Finance and Expenditure Committee. 
It is quite interesting to reflect that when the scheme was first announced National quickly put it about that the scheme would not work because people would want to use the money to repay their mortgage. I was able to counter that at the time and say that that was not quite right because people could actually join the scheme and still service a mortgage. The point I made quite validly then has now been chopped out of the bill and we are back to I think National’s correct argument that it is quite a negative thing if people cannot do that. What we have done has given people an all-or-nothing situation and I think we could have done better than that. 
United Future is strongly in support of the provisions in this KiwiSaver Bill for first home buyers. The dream of owning a house is now becoming more remote for a growing number of New Zealanders. It is far far more difficult now to get one’s first home than it was for my generation back in the 1960s which had so much support in terms of low interest wages and of course the ability to capitalise on the family benefit. I know that Jim Anderton and many others of my age group in this House who were in the same boat got their first homes through capitalising on the family benefit. That has disappeared from our society and as a result we see the figures for homeownership gradually deteriorating year by year in this country. This legislation has the potential to make a difference for thousands of people in terms of getting into their first homes. It is difficult I know when one is paying rent to also save for a deposit on a house. 
I would also like to say in response to a point that Hone Harawira made that of course single people before they marry and before they even start their families will have a tremendous opportunity under this legislation to start putting money aside. When two single people come together in marriage they will receive a $10000 contribution towards their first home provided they have been in the scheme for 5 years. I think that is a great thing. 
Craig Foss is quite wrong when he says that the market price of housing will simply go up by 10 grand. No it will not— 
Craig Foss 
: Five grand. 
GORDON COPELAND 
: The member says five grand; it will go up by five or 10. It did go up in Australia because the Australian Government said it would give seven grand which later became 14 grand to every first home buyer. Of course the market just went up by seven grand and then it went up by 14 grand. KiwiSaver is different. It is unashamedly targeted to the most needy people so it will have little impact on the price of housing and it will certainly—I have no doubt at all—become a bridge towards homeownership for a lot of people who would not otherwise be able to get into their first home. That I think is great. 
There are other points that I think we should question during the select committee process and Hone Harawira also said that the Maori Party has some questions. I want to ask the Government whether we can find a way to bring beneficiaries into the scheme. We may conclude that beneficiaries cannot afford to save. I would say that that is a generalisation—some can save and are prepared to tighten their belts today for the sake of their future and that of their children. So I think the scheme could be easily extended to beneficiaries through the Ministry of Social Development. Also I think we need to look carefully at the criteria around the actual use of the deposit for a first home. I want to go into the nitty-gritty of that and I do not see much of that explained in the bill at this stage. 
However I say once again that we are pleased to support this bill on its first reading. 
SUE BRADFORD (Green) 
: 
 The Green Party supports this bill although we are aware that it can go only a small way towards solving New Zealand’s savings deficit and the difficulties that so many have in putting together a deposit for their first home. New Zealand superannuation is and should remain the bread and butter of our retirement income. For many people saving for retirement is difficult and for many others it is impossible and no single system or scheme will solve the underlying problems. 
The first and very obvious difficulty which several colleagues have already referred to is the simple fact that so many people are not on incomes high enough for them to pay even their basic living costs. Income inadequacy and job insecurity are major stumbling blocks to developing the kind of savings culture that Dr Cullen would like to help increase in this country. 
To address the stumbling block we need a whole range of measures including raising the minimum wage. As members are aware my youth rates bill the Minimum Wage (Abolition of Age Discrimination) Amendment Bill is currently before the House so the Greens are working hard on trying to lift minimum wages for young people. We also support the efforts of other parties to try to lift our minimum wage to at least $12 an hour as soon as possible and would like to see the Government bringing that measure forward a lot sooner than the planned 2½ years out—if we are lucky. We want to see an economy in which more New Zealand workers do earn a sufficient income such that they can make saving for retirement a practical reality. Unless minimum wage rates are addressed any scheme to encourage savings will have only very limited success. 
For years the Greens have been challenging the Government and employers to get serious about workplace savings schemes for those who can afford to save. Our colleague Rod Donald last year talked about the KiwiSaver scheme in a speech at the Association of Superannuation Funds of New Zealand national conference when he said it was high time for upfront incentives to give workers the encouragement they need to save rather than spend. The Government’s KiwiSaver scheme is a response to that call and we commend it. But it does have flaws. 
The scheme remains out of reach for far too many people not only for low-income wage earners but also for the many people now who have large student debts. This is a serious flaw as those groups are the ones most likely to have almost nil or few assets and to suffer real financial difficulties when they retire. Those are the groups that need the most assistance and they will not necessarily get it through this scheme. For those who can save we are pleased to see the $1000 Government contribution sweetener as a genuine incentive for people to save for the jam they would like to have to go on top of the New Zealand superannuation bread and butter. 
The scheme has two other added benefits. It is a first home buyer’s scheme and any impact it may have on lifting our national savings rate would therefore help to address our chronic current account deficit. From my work in the housing area I am well aware that our rates of home ownership are declining by the year. Anyone who has looked at the housing market lately even though it is in a so-called plateau will know that trying to address that gap for a home deposit is almost impossible for an increasing number of people. The small amount of money that will come from the scheme will help but when one looks at the price of houses—even in low-income and rural parts of the country—one sees that it is still just about an impossible feat. 
We need to keep looking at giving workers a serious incentive to save such as deducting superannuation contributions before PAYE. Incentives need to be more attractive. At June 2005 there were only 243970 employees and 453 employer-sponsored savings schemes. That does not compare well with the year before when there were 246000 members let alone with the year 1990 when there were over 300000 employees and over 2000 schemes. It is no wonder that the Reserve Bank reported recently that New Zealanders are expected to have a household savings rate of minus 12 percent for the year to March and it projects that rate to deteriorate to minus 14 percent this year. It is no wonder that our household debt-to-income ratio which was just over 60 percent in 1992 is now over 120 percent. It is no wonder that our national debt has reached $123 billion. 
The Green Party believes the Retirement Commissioner has a pivotal role to play in educating encouraging and enabling New Zealanders to adopt and embrace a savings culture. We would have preferred the commissioner to be an independent Crown entity rather than an autonomous one in order to give her as much independence as possible and we are pleased to have succeeded in getting in place a 3-yearly review process. But we still want to see a lot more resources made available in order to encourage a savings culture and to make it happen on a more serious scale. 
The KiwiSaver scheme will go some way towards increasing our savings records and providing further retirement protection for parts of our community that have not previously accessed it but the structural economic barriers remain in place. Income sufficiency and job security are as uncertain as ever and I would just like to echo the words of Hone Harawira and Gordon Copeland in relation to beneficiaries who simply cannot benefit from this scheme at all. Given that most beneficiaries do not get enough to live on as it is and that most of them are actually plunging deeper into debt every week they remain on the benefit it is quite hard to see how a scheme like KiwiSaver could be made functional for beneficiaries. 
Another barrier to trying to pull our economy out of its debt gridlock is the culture we have with our savings banks at the moment. Dr Cullen’s sweetener is tiny in comparison with the blandishments of our trading banks that we see and hear every day on TV in the media and when we go into the bank. Never have New Zealand consumers had debt shoved down their throats to the extent that they have it at the moment. 
We are given increased credit card limits at the drop of a hat. We have endless TV ads about using the equity in our homes for cars trips furniture—you name it. Even people who cannot afford any debt constantly receive those blandishments to take up credit cards to take on more of a home loan and so on. What is worse bank staff are even set sales targets to sell more debt to the public and we were disappointed to learn today that it is possible even Kiwibank is acting in this way. It is not only the sales staff of the banks who are set sales targets; we hear that other staff within the banks are set them as well. 
The banks make their money from debt. Over Christmas members may have heard of bank staff being encouraged to sell debt to their friends and family at the beach and at other camping facilities. Not only does that practice affect the workers’ performance bonuses but it also affects their basic rates of pay. If they meet the targets then their rates of pay are raised. If they do not meet the targets then they have a performance review. 
We would love to see this culture and the practice of the banks changed urgently. The trading banks are force-feeding the public with debt. They are putting their own staff under unreasonable stress and pressure which negates the Government’s policy on savings. We believe that the Government alongside the KiwiSaver scheme and other measures should be using every mechanism at its disposal to discourage the banks from their ever-increasing determination to push New Zealand households and individuals into deeper debt with every day that goes by. 
HEATHER ROY (Deputy Leader—ACT) 
: 
 I rise to speak to the first reading of the KiwiSaver Bill 2006 on behalf of ACT New Zealand. ACT will be opposing the bill. We do not believe that the bill will achieve what the Government says it sets out to achieve. There is nothing wrong of course with encouraging savings. Indeed we should be encouraging people to save in whatever shape or form they feel is right for their particular situation. What does matter is the way in which we go about it. 
The KiwiSaver Bill—a very thick bill—is very cynical. The announcement of the bill came at the last Budget and was timed to be an incentive for people who thought savings plans would be the answer to all their savings woes to vote for the Government. In fact an examination of the detail of the bill shows just how mean the bill is even though it was promoted as something that would deal with the savings woes of much of the population. We have just heard from the Green Party MP Sue Bradford and many others about how the bill will not help the most needy. I was very surprised to hear Mr Gordon Copeland of United Future say that the bill was targeted to the most needy when we know that the most needy in our society are those who are not earning and who are unable to earn. This bill in fact ignores those people who could most do with the benefits of saving. It is targeted at voters who probably are floating voters—voters who might float to the centre-right or to the centre-left. 
Dr Cullen when he outlined the bill spoke a lot about the timing of the introduction of the scheme. He outlined the dates but he omitted to tell the House and New Zealanders that the savings scheme would come into being just in time for the next election. So here we have a bill that was introduced in time for the election we have just had and a scheme that will come into being just in time for the next election. Mr Hughes laughs because he knows that what I am saying is absolutely true. He is very worried because his electorate is in a very precarious position for the Labour Party. The vote-buying aspects of this bill might have been played down— 
Darren Hughes 
: How’s that member’s electorate going? 
HEATHER ROY 
: I ask Mr Hughes: who came back against all predictions? This is a vote-buying bill. There is no doubt about it and those of us on this side of the House know indeed that that is the case. 
I come back again to the aspect of who will and will not benefit from this bill. The Maori Party MP Hone Harawira made a very pertinent point. In fact during question No. 2 today Dr Cullen said in response to a supplementary question by Tariana Turia one of the Maori Party co-leaders that it did not matter that only 4 percent of Maori would actually be here to enjoy the benefits of savings schemes because the families of the other Maori would inherit their savings. That must be of quite some consolation to the 96 percent of Maori who will not be here to enjoy the benefits of this bill. In fact if this bill is being promoted by the Labour Party for the purposes of inheritance then that I contend is absolutely shameful and no better than the asset testing that will come into being for those in aged-care facilities later this year. 
The background to the bill given in the Bills Digest states in relation to who will be eligible: “Savings are primarily for retirement and they are ‘locked in’ (i.e. they will not be accessible) until the age of eligibility for NZ Superannuation which is currently 65…”. That in itself is a large problem with this bill. It is not flexible. It does not provide for choice. It does not provide for people to be able to use their own savings when they need them most. For some people that might well be the age of 65 and beyond but for many people the money they have saved themselves will not be eligible for use when they may well need it for other things. They cannot decide when they will use it; somebody else does on their behalf. They will have to apply in times of financial hardship or if they want to emigrate to get back the money that they have set aside for a rainy day. 
So there are many problems with this bill. I have mentioned the timing. I have mentioned that those most in need will in fact not be eligible for this savings scheme. We know that what would have been of much more benefit to New Zealanders at election time were tax cuts. ACT along with National said that money should be given back to people who earn it and given back to them now—not at the age of 65 and not sometime when Labour determines they should have it. That hard-earned money should be given back. In fact ACT would have gone further than National. Our policy was much more generous. It would have lowered tax rates to two levels: for those earning above $38000 in 1 year the level would have been lowered to 25c in the dollar and for those earning less than $38000 it would have been lowered to 15c in the dollar. That would have meant that every earner in this country would be significantly better off. The way to help beneficiaries most is to encourage them into work so that they are financially better off and in a better position to save. Once they have reached that point tax cuts would benefit them significantly. 
This bill is in fact a first home buyers account. I think it was Mr Key of the National Party who pointed that out. This is not actually a savings scheme; there is no flexibility in it. It is a first home buyers account. As Mr Key said and I agree with him there is absolutely nothing wrong with that but let us be honest about exactly what it is. It is a first home buyers account—let us call it that. It is not about long-term saving; it is about helping people into homes. 
If we want to talk about savings plans let us look at other savings plans. Let us not just limit people to one plan. People will not have a great deal of choice. The Bills Digest states: “Employees will be automatically enrolled into KiwiSaver when they start a new job. They will have three weeks to ‘opt-out’…”. There is an element of compulsion about that. Many people will not realise that they can opt out. They will not realise that that is a choice available to them. But beneficiaries—those who most need assistance—will have to opt in. How many of them are actually in a position to do that? Very few. 
We should be looking to other savings plans such as those provided by the private sector. Let us look at the activa Plan that has been put in place by Southern Cross. Health is a very good example of somewhere we need to look forward. That plan helps people provide for their own health care. It gives them an incentive to buy their own health insurance and goodness only knows that this Labour Government’s greatest failure is in health. It is a savings plan that could help people to take responsibility for their own health care. Instead the Government is promoting its own bill. The Government knows best according to those on the other side of the House—Labour knows best how people should save. This was a vote-buying exercise for the last election timed to be a vote-buying exercise for the next election. 
This is more work too for employers. It is another job for employers. They will be responsible for deducting employees’ contributions and forwarding them to the Inland Revenue Department with PAYE tax deductions. We know how friendly this Government is to the small businesses and employers of this country: not at all. This legislation will be more work more bureaucracy and more red tape for employers to contend with. 
This bill is a cynical attempt at vote buying and it is more fuzzy-thinking economics. I am surprised that Mr Gordon Copeland spoke for United Future in support of this bill because he of many MPs has some knowledge of economics. The Minister of Finance however thinks that tax cuts are inflationary but that an increase in Government spending is not. How did he come to that conclusion? Not many economists—probably not even Mr Easton who loves supporting the Government—would agree with that. 
 What do New Zealanders want? Sixty percent of New Zealand voters at the election voted for parties that promoted some sort of tax relief. New Zealanders want tax cuts and New Zealanders need tax cuts—that is the way to help people. Let them decide for themselves how to spend their own money. If they want to make that decision it is up to them. Tax cuts would also allow them to save more money because they would have more in their back pockets. People would think more about buying health insurance about spending money on their children’s education and about saving. New Zealanders are not stupid people; they know what is best for them and they should be left to make that decision for themselves. ACT will not be supporting this bill. 
SHANE JONES (Labour) 
: 
 There is a brilliant contrast in the way in which the different parties are approaching this bill. However before I elaborate on that I point out that the bill will be coming to the Finance and Expenditure Committee and there will be no shortage of opportunity for representatives from the industry to come forward and give us their views of life. There will be no shortage of opportunity for representatives from the various community groups who share our concern about the savings deficit that has blighted our country. This legislation has enjoyed great support up and down the country. Indeed it was a key part of what the recent election was about. Therefore the Finance and Expenditure Committee will be more than interested to hear the different perspectives but most important to test how practical and realistic those parched and desiccated alternatives that the Opposition refers to actually are and what resonance they offer. 
But I must first return to my whanaunga the honourable Hone Harawira. In his speech he referred to this bill offering considerable opportunity to improve the savings culture amongst our Maori people. Yes there are some concerns about the income levels of a number of our Maori families etc. but that issue is being dealt with elsewhere. 
One of the key elements of this bill in relation to its underlying thinking is independence. This bill drives a number of initiatives that we have long been concerned about which focus on how to enhance a sense of independence in people’s retirement years. Despite the ideology and the rhetoric from the other side of the House there is no clear coherent set of ideas other than the mantra of slashing the State and crudely handing out tax cuts without any clear conception of what will be the fiscal impact of those cuts. 
The other thing this bill does is celebrate the institution of work. Work is a fantastic civic institution and this bill builds on our commitment to ensuring that those people who are in work are ably assisted but more important that the employers share with the employees a joint responsibility to build deepen and broaden the capital base of our country. We cannot live incessantly or indefinitely on the grace and favour of international lenders or international investors. This is an example of where we are using the powers of this House and also the remedial forces of the State to ensure that in the future we have a stronger capital base for our economy. Another great feature of the bill is the importance of choice. 
Despite the rhetoric from the other side of the House and some rather lazy commentators in the media there are a tremendous number of positive features: pursuit of independence; enhancement of choice; and as I said earlier contribution to a savings culture. Why do we not have an adequate savings culture in this country? We need to ensure that the steps we take represent a long-term platform for both teaching our young people and ensuring that it becomes a key tenet of the employee-employer relationship that savings should grow. I am reminded of my youth and of the old Dalmatian gumdiggers and others who if they had had the opportunity we are providing would have seen in the long term as they bequeathed their efforts of savings of thrift and of prudence to their future generations. 
This bill will be carefully considered by our select committee. I have no doubt that the overwhelming number of submissions will be to enhance it and ensure that it finds a permanent place in our economic infrastructure. 
DARREN HUGHES (Labour—Otaki) 
: 
 I am very pleased to take the final call in the debate and to join my Labour colleagues Mr Jones Lianne Dalziel and others in welcoming another bill that delivers on the Government’s pre-election commitments. I believe that the KiwiSaver Bill is one of the most important bills that this Parliament will consider during this 3-year term because it is focused very much on the future. This is a bill whose benefit will be seen long after most members of this House have given way to their successors and I welcome it because it is the third leg in the treble almost. 
The Government has set up the New Zealand Superannuation Fund so that we can prepare our own finances in terms of funding New Zealand superannuation as a universal taxpayer entitlement. The Government has as an employer set up the public sector retirement savings scheme to show what an employer can do. Now we are setting up a facility for ordinary New Zealanders particularly working people to have access to some form of retirement savings—a modest amount of their weekly income 4 percent with some Government assistance. This is to try to tackle what we all acknowledge are two problems: first an ageing population and second the issue of getting New Zealanders’ savings levels up and our debt levels down. The Government has certainly tried to do that in the Crown accounts and this is a signal to try to get other New Zealanders to be able to save from their incomes. 
The Government being a Labour Government recognises that wages in New Zealand are not high enough which is why we have taken numerous measures—changes to the minimum wage changes to the Working for Families package and other industrial law changes—to try to get New Zealanders’ incomes up. So it is a little rich to hear parties of the right complain that New Zealanders do not earn enough when they come into Parliament and consistently vote against all those measures. 
We take the points that parties have made we agree with those points and we are trying to deal with them through our other policies. But we have to try to find a way of getting New Zealanders to save more. The KiwiSaver scheme is the only thing on offer—and it comes from the Labour Party—that we know most ordinary New Zealanders can get access to. This bill is a very very important bill. I welcome it. It is forward-looking and future-driven and it is no surprise to me that it comes from the New Zealand Labour Party. 
A party vote was called for on the question  
That the KiwiSaver Bill be now read a first time. 
Ayes 66 
New Zealand Labour 50; New Zealand First 7; Green Party 5; United Future 3; Progressive 1. 
Noes 53 
New Zealand National 48; Maori Party 3; ACT New Zealand 2. 
Bill read a first time. 
Bill referred to the Finance and Expenditure Committee. 
Lawyers and Conveyancers Bill 
Third Reading 
Hon PHIL GOFF (Minister of Defence) 
on behalf of the 
 Minister of Justice 
: I move  
That the Lawyers and Conveyancers Bill be now read a third time 
. This bill is a cornerstone of the reforms of legal services being undertaken by this Government. It removes unnecessary regulation from the legal services industry and replaces it with a more efficient regulatory framework that will give the public greater confidence in the legal profession. 
The bill’s purpose is to maintain public confidence in the provision of legal services to protect consumers and to recognise the status of the professions that provide them. The Government has a vital interest in the regulation of the legal profession as the quality of lawyers’ services is critical to justice and to the maintenance of the rule of law. The impetus for reform of the legal profession came from the New Zealand Law Society itself which sought a more responsive regulatory structure than the Law Practitioners Act 1982 provided. The reforms largely follow the model proposed by the New Zealand Law Society. 
I would like to acknowledge the many hours of work that the Law Society has dedicated to the development of this bill and most particularly the patience with which it has awaited its enactment. In particular I mention Ian Haynes who first came to see me as president of the Law Society about this reform when I was Labour spokesperson on justice in the 1990s. That is how long this has been around. I also acknowledge Christine Grice past president of the society Chris Darlow the current president and Alan Ritchie the Executive Director of the New Zealand Law Society and note their tireless efforts to see this bill through to conclusion. I also acknowledge the huge contribution made to this bill by Michelle Vaughan and her team at the Ministry of Justice and the work done by the Chief Parliamentary Counsel Walter Iles QC who is now retired. 
The introduction of the occupation of conveyancers has its origins in the 1997 Conveyancers Bill that I introduced into this House because the then monopoly on conveyancing and scale charges together meant that ordinary New Zealanders were in my view paying far too much for this work. Licensed conveyancers exist in most of the Australian states and in the United Kingdom. Their presence in those jurisdictions has reduced the costs but most certainly has not reduced the quality of conveyancing and the work they have done has been particularly in the residential market. The simple threat of competition has already seen in this country over previous years a marked improvement through lower costs. Consumers will now have the choice of who carries out their conveyancing work for them and as always they will benefit from a market where there is competition rather than a monopoly supplier. 
For the legal profession the bill offers a modern regulatory environment. The federal structure of the statutory district law societies will be dismantled. District law societies can continue to exist as representative bodies offering services to members if members opt to support them. The New Zealand Law Society will become the regulatory arm of the legal profession. It will be charged with developing the rules that govern the practice of law. A similar body will be formed for conveyancers. The societies will have responsibility for practice rules on matters such as professional conduct trust account rules and indemnity insurance. But the rules must be subject to consultation with the profession and will require approval by the Minister. 
This bill will create flexible professional environment for lawyers and licensed conveyancers while at the same time protect the public from negligent or incompetent lawyers or licensed conveyancers. Many areas of work traditionally reserved for lawyers will be opened up to greater competition. Many of the consumers will have greater choice about where and from whom they purchase their legal services. Where previously only lawyers have been permitted to practice either on their own account or in partnerships lawyers and conveyancers will be able to practice in incorporated firms. That will help the two professions to respond to the changing needs of consumers and suppliers in the legal services market. 
The Government has not agreed to calls for multidisciplinary practices and the Law Society itself does not support that. We will however continue to monitor overseas developments. The bill significantly improves the existing complaints and discipline regimes for lawyers. Many criticisms have been made over the years of the current disciplinary system with its focus on professional misconduct rather than providing an appropriate mechanism by which consumers can complain and seek redress. The federal structure of the New Zealand Law Society itself means inconsistencies about the way in which complaints have been dealt with across districts. 
 The bill will provide a far more efficient and independent complaints process. The focus is on fairness and transparency for all parties. The most significant reform in this area I believe is the appointment of an independent legal complaints review officer who will assume an ombudsman-like role in the hearing of complaints against lawyers and conveyancers. 
This is an important bill both for the public and for legal services providers. The introduction of licensed conveyancers is significant. The new occupational framework for lawyers and conveyancers is an excellent example of co-regulation at work. It combines the benefits of industry self-regulation—that is flexibility innovation and industry buy-in—with sufficient regulatory oversight to maintain consumer confidence. The reforms contained in the bill are fundamental and overdue. 
I am pleased to see that there has been very strong support for the bill across the House. Again I thank the Law Society for its forbearance and for its efforts to ensure that we now have this new structure covering the activities of lawyers and of the new profession of conveyancers. I commend the bill to the House. 
Dr RICHARD WORTH (National) 
: 
 The previous speaker fairly and fully summarised the merits of the legislation. He also noted its drawn-out legislative history. It is coming up to 3 years since the bill was introduced to Parliament. That from any point of view is a long period of lawmaking. 
The bill was introduced on 24 June 2003 had its first reading a month later then was referred to the Justice and Electoral Committee where it was the subject of substantial submissions. I would like to pay tribute as the previous speaker did to the work of the select committee and also to the quality of the submissions that were made. It came back from that committee not within the customary 6-month time frame but a little later than that—in fact something just short of a year. It had its second reading on 29 March 2005. It is fair to say that the Committee of the whole House on the bill was much delayed. Despite efforts by a number of us to see the legislative programme advanced more quickly that seemed in vain so it was not until this week that the Committee stage was completed. That is a pity because the delay caused quite a lot of tension. It created difficulties for the Government and for the Opposition and it created tensions within the New Zealand Law Society and probably I surmise within the various districts. But here it is and tonight we will see the legislation progressed. 
The previous speaker referred to the purposes of the bill but not completely. I will start by dealing with that aspect because the purposes of the bill are framed within the provisions that are to be enacted this evening. First they are to maintain public confidence in the provision of legal services and conveyancing services. Second they are to protect the consumers of legal services and conveyancing services. And third they are to recognise the status of the legal profession and to establish the new profession of conveyancing practitioner. The bill is called the Lawyers and Conveyancers Bill because of the significant emphasis in the legislation—as the previous speaker said—in the setting up of the new conveyancing practitioner profession. 
I would not be true to the cause on behalf of National if I did not note that we harbour a degree of reservation about the legislation. That said we have supported it throughout its passage. The bill comprises 350 clauses and seven schedules so it is weighty legislation on any basis in terms of the legislation that comes to Parliament. Although National supports the legislation I would like to note briefly some of our reservations. Those reservations are expressed in the bill as reported back from the Justice and Electoral Committee. However in the way the parliamentary process works that commentary has now gone and will likely never be revisited. Certainly the copy of the bill that is before Parliament today—the copy that is available to politicians to make comments on—is not preceded by the commentary. I will therefore indicate the key matters that have been of concern to us. 
First are the aspects relating to the preservation of the fidelity fund. I have always thought it strange that one should subsidise one’s fraudulent competitors in business. So it has been the case that a number of occupational groupings have been persuaded—and have been able to persuade this Parliament—that fidelity funds should no longer continue. We have seen the fund abolished for most other occupations including chartered accountants motor vehicle dealers and sharebrokers. Just as the fund has gone for them so it seems to me that it should be gone for lawyers. The reason for that view is that the fund had its place when lawyers were actively involved in mortgage lending. That practice is pretty much gone. It is a rarity to find lawyers involved in the advancing of sums of money by way of second or third mortgage through their trust accounts to other clients. That is the first matter we would like to have seen changed in the bill in these closing processes. 
The second point—and it will come as no surprise either to the current Minister of Justice or to the previous Minister of Justice—relates to the New Zealand Society of Conveyancers. It is not an issue about opening up the so-called conveyancing monopoly—it is not really about that at all. It is more about the issue—as we heard in the evidence offered to the select committee—that the New Zealand Society of Conveyancers might comprise say 10 people. I truly doubt the justification for a highly prescriptive statutory regime for such limited numbers. Of course there is the very real aspect that it will be impossible for a fidelity fund to be provided from such a small occupational grouping. It will not be achieved by way of insurance; it certainly will not be achieved by way of contributions from various members. 
A third point is that National had concerns about reserved areas of work but I think that that issue has now been set to rights with the skill of parliamentary counsel and in particular of Mr Iles who has been engaged on this mammoth task. We were and remain completely unpersuaded about the new complaints and discipline structure but I am bound to say as the previous speaker also said that what has been done represents a significant improvement on the present system. I had the opportunity in the Committee stage to suggest what National believes would have been a better system and also to accentuate something that I do not think sufficient is made of—that is the role that lawyers have as officers of the court with obligations to the court. I think it was a retrograde step to rank arrangements in respect of obligation which has seen officers of the High Court I would say downgraded. 
There will always be practical aspects to the implementation of legislation and National remains concerned about those rule-making power provisions. We remain concerned that issues such as compulsory legal education and the indemnity regime are to be left to rule-making powers. It is of course to be the case that the Minister of Justice will be involved in such rule-making powers. I am not aware of comparable powers held by a Minister of State in respect of other professional organisations and it is not to be assumed that the Minister will have any better view than the New Zealand Law Society on rule-making issues or that he or she will be better able to strike a balance between the interests of the legal profession and the interests of the consumer. 
The previous speaker referred to a number of people who had made substantial contributions to this legislation including officials within the ministry. That is quite proper but those he listed would not represent an exhaustive list of contributors who will see this legislation passed. He was right to identify past presidents of the New Zealand Law Society but these issues go back far beyond Mr Haynes. Perhaps they start with people like Judith Potter a president of the New Zealand Law Society who is now a senior judge. It is very much correct though to acknowledge the contribution of Mr Ritchie who has had to deal with district law societies in his unflagging and conscientious way to produce an outcome that basically sees those districts lose their statutory status and assume another—and we hope equivalently effective—form. So I too commend this legislation and its passage on behalf of National. 
RUSSELL FAIRBROTHER (Labour) 
: 
 I support the passing of this bill and I commend the Minister who spoke on the third reading the Hon Phil Goff. The bill recognises his diligent work back in the 1990s his carrying it through as an Opposition MP and his having the foresight to see the defects in the Law Society’s structure as it was and the need to bring the Law Society into the 21st century. That the bill has taken so long is not a criticism of the Hon Phil Goff but a credit to his foresight and perseverance. 
On listening to the last speaker who sometimes passes himself off as an advocate for the free market I believe that it is ironic he said that the profession of conveyancers will never get off the ground. He argued that lawyers should not lose their right to convey and that the creation of a separate profession is doomed to fail. Of course the idea of a fidelity fund for conveyancers is to put them on the same footing as lawyers and if the fidelity fund is initially very low then that will give lawyers the trading advantage and they can capitalise on that. 
However if lawyers do not continue to meet or even rise to meet the market need for conveyancing that is both safe and economical then the conveyancing profession will grow. Perhaps that will be at the expense of some of those expensive firms in the high towers we see in the city and as that profession grows so will its fidelity fund. So there is a clear point of difference that the last speaker should have been welcoming rather than criticising. 
One matter in this bill that I heartily endorse relates to the position of Senior Counsel. I have listened to the submissions to the Justice and Electoral Committee and to the debates both at the select committee and in this House and they carry the same old matters that have plagued the profession for as long as I have been in it. They are the mystique about Queen’s Counsel the move to elitism rather than meritocracy and the belief that if one is obsequious and obedient and has ability one can rise in the profession but if one is fearless and outspoken and has ability one will be held back. 
We can see an example of that in Tony Ellis a barrister in Wellington who has developed the law of human rights in the courts of this country like no other lawyer before him. He is outspoken and he is not ashamed to take judges head-on but that is not a prescription for becoming a Queen’s Counsel. We saw recently the case of Robert Lithgow a skilled litigator in the criminal field previously employed on contract by the Crown Law Office and respected as an appellate lawyer who sheeted home some home truths about underlying presentations and presumptions in the Court of Appeal in a recent  
New Zealand Law Journal 
 article. Of course that will not endear him to the process of elevation to Queen’s Counsel. 
That is exactly what Kevin Ryan one of Auckland’s better-known criminal barristers and QCs has said. He fought for some 6 years to become a QC but was refused and refused. He went on TV on one of the Sunday documentary programmes wrote a book and was eventually made a QC in 1998. He said only 2½ years ago in 2003 that to become a QC was a question of who one knew who one did not know and whether one toed the party line. 
 Kevin Ryan who had trodden on the toes of the Law Society and had even sued law societies insisted the proposed new system should instead focus on how Senior Counsel are appointed. That point was picked up by Christine Grice the previous president who indicated that the appointment of Senior Counsel is a matter for the rules which are yet to be developed. 
But the argument—the folly of the vanity of Queen’s Counsel—is underscored if we look at our top court. The argument of those who criticise the abolition of Queen’s Counsel would have merit if only Queen’s Counsel held positions in our top court. Our Supreme Court has five judges. Until a few months ago three of them were not Queen’s Counsel. With the retirement of Sir Thomas Gault to run a golf club somewhere in Scotland Justice Anderson became the replacement Supreme Court judge and his appointment brought the number of Queen’s Counsel in that court to three. As I recall Sir Kenneth Keith was not a Queen’s Counsel either. So at one stage we had a Supreme Court that had only two Queen’s Counsel out of its five members. 
We go to the Court of Appeal which has six judges. In that court are two Queen’s Counsel and another four judges who are not Queen’s Counsel and we should look at the quality of those four. In the time available to me I can only touch upon this but we should look at Justice Susan Glazebrook who has an MA (Hons) First Class LLB (Hons) a Dip Bus (Finance) from Auckland University and a PhD from Oxford University in French legal history. She worked at some firm called Simpson Grierson was a member of commercial boards and Government advisory committees was the president of the Bar Association in 1998 and was appointed to the Court of Appeal in May 2002. She cannot be a Queen’s Counsel because she did not go to the independent Bar. 
Justice Hammond who was the Dean of Law at the University of Auckland and was appointed as a High Court judge in 1992 cannot be a Queen’s Counsel because he was not a member of the independent Bar. We go on to Justice Robertson who attended the University of Virginia and Otago University and was a partner in a Dunedin law firm—which should not be held against him—and a Harkness Fellow in 1972-73. He has been a judge of the High Court and president of the Law Commission. He could not be a Queen’s Counsel because he did not follow the independent Bar. 
So it is absolute vanity without substance to say that Queen’s Counsel add to the practice of law in New Zealand. The title of Senior Counsel however recognises that which is recognised at the Bar and any experienced litigators after sufficient recognition by judges will be referred to as a Senior Counsel without having to take the appellation by way of “SC” after their name because that is when it becomes a vanity rather than a merit recognition. 
We will have a process that I trust will be more open for the appointment of Senior Counsel. It is a good thing that it is based on merit and not the fallacy of the independent Bar. I say “the fallacy of the independent Bar” for this reason: there has been an argument advanced in this House—advanced in fact by some members of the independent Bar—that the New Zealand public needs an independent Bar to provide advice that is independent from the major law firms. 
Well it may need lawyers who are not part of major law firms to give independent advice but members should look at the way barristers’ practices are sold. They are sold not on the mum and dad clients or the clients’ litigation but on the connections those barristers have with law firms and that goodwill comes from the relationships they have with selected law firms. One attends Christmas parties and some Queen’s Counsel or some barristers are there—though not all. So the fallacy that says the independent Bar is truly independent and fights fearlessly is long on tradition and short on fact. 
In the short time available to me today I just want to endorse this bill. I want to recognise the good work of the Hon Phil Goff who has brought this bill to fruition and that of the Law Society. I also recognise the efforts of the Justice and Electoral Committee which worked very hard on the bill throughout the last term. This bill will become law and will convert into reality what has become the practice in New Zealand. 
Finally that reality is demonstrated most by the fact that many district law societies have been recognising the futility of continuing independently. Good law societies have been closing libraries for the last 8 years now because the move is towards centralisation one central body and specialisation which is the world of the 21st century. This bill takes lawyers into the 21st century. It is a very good bill. It will be a very fine Act of Parliament and I support it thoroughly. 
CHRISTOPHER FINLAYSON (National) 
: 
 As Dr Worth said National supports the third reading of the Lawyers and Conveyancers Bill. In my opinion it is generally a very good piece of legislation although I think it is flawed in a number of respects. 
First let me emphasise the positive points of the bill as it has come out of the Justice and Electoral Committee. First of all Part 1 usefully states the fundamental obligations of lawyers and conveyancers and I think it does so very clearly. That is a new provision and I welcome it. Secondly there is the important and fundamental distinction between misconduct and unsatisfactory conduct which is a welcome expansion of the general area of conduct in the Law Practitioners Act 1982. It is the unsatisfactory conduct of lawyers that causes so much grief to clients even if it does not come within the category of professional misconduct. 
Part 4 is at the very heart of the legislation and provides for the continuation of the New Zealand Law Society. As various speakers have said district law societies will cease to exist at least in their present statutory form. This is a move away from the old provincial model which bedevils so many organisations in this country and I welcome it. Other clauses in Part 4 are standard. They are repeats of what is in the 1982 Act and there is no magic in any of them. 
I generally welcome the provisions of Part 7 that deal with discipline. The New Zealand Law Society is now responsible for maintaining a complaints service. The reasons it is important for the New Zealand Law Society to maintain this responsibility rather than to have the task delegated to district law societies are spelt out in clause 111—particularly I emphasise paragraphs (e) and (f). That will be the model to ensure throughout New Zealand both the consistency and the quality of the complaints service and to provide assistance to lawyers standards committees and to the office of such committees. So to centralise the complaints service and to have that New Zealand Law Society overview even if the standards committees operate in various parts of the country will ensure that there is a national standard. The complaints procedures are much more flexible and I emphasise that it is not just discipline that those committees will be concerned with but also solutions and remedies which at the end of the day is what people want. 
The Minister mentioned the establishment of the new office of Legal Complaints Review Officer. I personally questioned in the Committee stage the need for that especially bearing in mind the other layers of review of decisions. But I accept that if the right person is appointed that person could effectively operate as a kind of legal ombudsman. The tribunal remains but its status is upgraded and that is no bad thing. Its procedures and powers remain basically the same. 
Finally I am still confused by clauses 243 to 247 which deal with certain jurisdictional matters but I am rapidly learning in this place that raising jurisdictional points here is even more hopeless than raising jurisdictional arguments in the court. 
Part 11 deals with certain miscellaneous provisions. I welcome the introduction of the conditional fee. I note that it will not apply to family and criminal work or certain types of work under the Immigration Act. Hopefully that will reduce reliance on legal aid for civil litigation. Finally I note the dissolution of the district law societies and workable provisions for law libraries and I express the hope that within the next 5 years the profession will grapple with this matter and provide a library service to the professions that is worthy of the 21st century because the present set-up simply does not provide that. 
Parts 2 3 6 8 9 and 10 substantially repeat what was in the 1982 Act and I am not going to waste any time on those. I briefly want to refer to what I consider are the flawed parts of the bill. The introduction of conveyancers is referred to in Part 2 and Part 5. From one point of view as a litigator I am reasonably relaxed about the concept of a conveyancer. I take the litigator’s view that it simply means there will be more people who can be sued for professional negligence and that will mean more work. But is there really a need for conveyancers? I think we will have to wait and see but I have my doubts. 
Clause 104 which repeats the present section 61 of the Law Practitioners Act with a change is essentially meaningless. I am disappointed that the Committee did not pick up various submissions I made on that point because it is an example of what often comes out of the House of Representatives—that is meaningless drivel that lawyers then have to contend with over the years. 
Of greater moment are clauses 105 and 106 which introduce Senior Counsel to replace Queen’s Counsel. After my contribution in the Committee stage someone contacted me to say that in New South Wales there has been over the years a move away from the name Queen’s Counsel to Senior Counsel and that it has not caused too much of an upset over there. Indeed some Queen’s Counsel are converting and now want to be called Senior Counsel because it is the young hip thing to do and they do not want to appear fuddy-duddy. But it is not the name that worries me so much as the concept of independence. I do worry that what we have created here undermines the essential independence of the silk particularly by allowing Senior Counsel to practise in law firms. That is a foolish move and one that I think the House will have to revisit. 
My Green Party colleague Mr Tanczos raised a very important matter—and it is a shame it was not properly dealt with in the Committee—that dealt with the State conferring a monopoly on a certain class of person. I think the time is coming as I said in the Committee when we will need to move away from the Attorney-General making these appointments in conjunction with the Law Society and the judges to the judges the Bar Association and the Law Society looking at the question of appointments. 
Generally the bill is good legislation. It reflects the needs of the profession in the 21st century and much more important than the profession it reflects the needs of the public. 
Finally I join with both Minister Burton and Dr Worth in recognising those who have contributed to the passage of the bill. The ministry officials were mentioned by the Minister as was Walter Iles. I should also mention Hugo Hoffman of Parliamentary Counsel Office who has been responsible for the drafting and updating of the bill in recent days. I join with the Minister in his generous comments about the current President of the New Zealand Law Society Chris Darlow and his predecessors for their leadership during the time of transition. I particularly mention Alan Ritchie the Executive Director of the Law Society who has worked so hard on this matter for many many years. He is the first to recognise that there is much more work to be done and I certainly wish his society and him all the best in their endeavours over the next few years. In a rare display of bipartisanship and good manners it is only fair to mention the Hon Mr Goff who was Minister of Justice during the key stages of development of the bill. He too should be thanked for his efforts. 
KATE WILKINSON (National) 
: 
 When we have a bill that has 346 pages 350 clauses seven schedules and a gestation period spanning several years; a bill that encompasses both litigators and non-litigators that introduces a new breed of licensed conveyancers that restructures law societies throughout that provides the discipline and training for two professions and that regulates the activities of lawyers and conveyancers; a bill of such enormity and such magnitude it is no wonder that there may be some details with which some will take issue. 
But we must look at this bill holistically philosophically and positively. As a conveyancing lawyer in my past life I know only too well that conveyancers think differently from litigators. It is no wonder that to organise lawyers has been likened to herding cats. From a philosophical point of view one could view this bill as an envy bill—as an attempt not to trivialise but certainly to underestimate the value of legal work undertaken by conveyancing lawyers. This bill deregulates conveyancing. But it does more than that. It says that licensed conveyancers can do any legal work except give advice relating to court and tribunal proceedings and property relationship agreements. I do have some concerns that the aspects of the bill relating to conveyancing and licensed conveyancers will have the effect of lowering the respect that lawyers are held in without necessarily increasing the respect for licensed conveyancers. We must not build up the profession of licensed conveyancers by bringing down the profession of lawyers. 
 For 26 years I have been advocating that conveyancing is not a rubber-stamping tick-the-box exercise. It is becoming more and more complicated it is involving more and more responsibility and it is becoming more and more underestimated. I am not wishing to demean qualified licensed conveyancers in any way. I am merely trying to emphasise the fact that whoever does the work must be suitably qualified and experienced to do the work. Conveyancing involves an intricate knowledge of the law of contract. It involves an intricate knowledge of the Property Law Act and the Land Transfer Act and of easements leases mortgages guarantees etc. It involves intricate knowledge of other legislation: the Resource Management Act the Building Act and even gasfitters plumbers fire safety and electricians legislation. Also it invariably involves knowledge of different ownership structures company law trust law taxation law and employment law. 
Interestingly enough under English law conveyancing is defined as the transfer of property etc. but it expressly excludes wills. But under this new bill wills will be included. Yet if one gets the will wrong often it is too late for obvious reasons to redraft it and to try to work out what the testator’s intentions were. So licensed conveyancers now need to have an intricate knowledge of wills and associated legislation such as the Family Protection Act the Law Reform (Testamentary Promises) Act and the Property (Relationships) Act. 
It is simplistic therefore to suggest that licensed conveyancers will be involved only in straightforward residential property transfers. I do fear that lawyers and conveyancers are now thrown together under this bill into the same barrel and accordingly it is imperative that robust codes of conduct be established that appropriate rules and standards be made and maintained and that they reflect the critical importance of maintaining the already good reputation of lawyers. I have said it before: we must not build up the conveyancing profession by bringing down the legal profession. 
That brings me to the provisions relating to the two fidelity funds: one for the lawyers the other for the licensed conveyancers. How many licensed conveyancers there will be is anyone’s guess but as they are required to have their own fidelity fund it will be important that there is a sufficient critical mass to enable them to set up a realistically-funded fidelity fund. In practical terms that may not be easy. But this bill places lawyers and conveyancers on the same level playing field and one of the components of that level playing field is each profession having its own fidelity fund. This will not work if only one group the lawyers are in a position to realistically fund the fidelity scheme. 
As the quid pro quo for this bill deregulating lawyers and removing their monopoly to practise conveyancing lawyers will now be allowed firstly to incorporate and secondly to sell real estate both previously prohibited under the Law Practitioners Act and the Real Estate Agents Act. Allowing incorporation merely brings lawyers into the 21st century in relation to business structures. Why should lawyers be orphaned as the only ones who must continue to practise in partnership with its consequential joint and several liability? 
One of the primary purposes of this bill is as we have heard to maintain confidence in the provision of legal services and conveyancing services and to protect the consumers of legal services and conveyancing services. Allowing incorporation should not jeopardise either of those objectives. The public—the client—will still be protected against naughty and bad lawyers and against naughty and bad conveyancers by the usual laws of negligence and by the existence of the fidelity funds. Lawyers will not be able to hide behind the corporate veil completely. 
It is important that the conveyancers’ fidelity fund is on a par with the lawyers’ one. Why should innocent good lawyers give an unlimited guarantee for all other lawyers—for the bad lawyers? It is easy to argue and I have done so in the past especially when I personally contributed my $10000 to the Renshaw Edwards fund. Times have changed since the Renshaw Edwards case. There are now fewer nominee mortgage companies for a start and the fund is now limited and capped. 
It is critically important when one is dealing with other people’s money that every protection is afforded the consumer and the client. The fidelity fund goes some way towards doing this: the money is paid over to the lawyer or conveyancing practitioner the money still belongs to the client and the money must be paid to the client or as the client directs. There are no ifs or maybes—the rules are clear. They are strict and so they must be in order to ensure that the integrity of and confidence in the legal profession is maintained; and so they must be in order to ensure that the integrity of and confidence in the conveyancing profession is earned. Deregulation of lawyers—and I know this represents only a portion of this bill—is fine but only as long as there is no risk of any decrease in standards and no opportunity of any increase in the risk to the consumer. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Some time ago a feisty young Maori MP objected to the vesting of petroleum in Crown ownership arguing that whether Maori knew about oil in 1840 was irrelevant. He argued that indigenous rights should not be locked into the time warp of colonisation and he argued that the challenge for lawyers was not the exact interpretation of the law but a vision of how that law should be developed. That politician was Sir Apirana Ngata and the time was 1937. Seventy years later Sir Apirana’s words remind us that the true art of law is not just about working to the rules but also about delivering justice. 
The Maori Party acknowledges the flourishing Maori legal profession for developing the skills of drafting practising and prosecuting law in the ways Ngata first spoke of. We recognise the help it gives to Maori politicians of all persuasions in promoting and advancing legislation through the House. We celebrate the fact that there are more than 1200 Maori students enrolled in legal studies. That celebration of course is somewhat tempered by the fact that Maori make up less than 5 percent of the legal fraternity and 7 percent of the judges. 
We have also heard a lot during this debate about how conveyancers and lawyers are supposed to act in the public interest and I have to ask myself whether that is my public. Is “the public” that is referred to the people down at Charlie’s place in Panguru or my whanaunga out in Whangaruru? Are my brother and his whanau out in west Auckland part of this decision-making process or my uncles and aunties in Te Hapua? Or is it some other public that we refer to here? I have a strange feeling that my people are not the public that is often referred to when people talk about the public interest and that worries me. 
Then when I look back into our history I see that in 1841 a Mr William Spain was appointed as a commissioner to examine land claims in Wellington and Taranaki. Our tupuna were presented with the remarkable racist and truly ludicrous spectacle of an English lawyer deciding who of Te Atiawa had land rights and what constituted Te Atiawa custom and establishing a benchmark that bedevils many of the issues we face in the legislation before the House today. In fact the whole matter would have been truly laughable were it not so tragic. Such is the basis of legal history in Aotearoa which assumes that statute law that came on a sailing ship has more authority than laws that came by waka. And such is the basis of many of the legal problems we face today. 
 The real question of course in this bill as in all other bills is what obligation we have to respect Te Tiriti o Waitangi because for all the hullabaloo that politicians raise about its historical importance its constitutional authority and its spiritual significance the Treaty does not even rate a mention in the Lawyers and Conveyancers Bill. That is the case even though it was Te Tiriti o Waitangi that gave the Crown the right to set up a Government to establish laws in the first place. In return the Crown was to guarantee and actively protect Maori authority over their lands their fisheries their forests and other treasures and to extend to them the status and rights of British citizens. 
I was very interested therefore when on 15 February the Associate Minister in charge of Treaty of Waitangi Negotiations the Hon Mita Ririnui assured the House of the Government’s commitment to the Treaty being included in legislation. I was pleasantly surprised to hear that commitment and I suggest that Minister Burton may want to have a conversation with his colleague in order to ensure they are both singing from the same song sheet. I make that point because it is due to the special constitutional status of Te Tiriti o Waitangi that the Maori Party will be introducing a paper to have an Oath of Allegiance to Te Tiriti o Waitangi included alongside the Oath of Allegiance to the Queen in the Oaths Modernisation Bill. 
The obligation to uphold the rule of law should require every lawyer to take formal education in Te Tiriti o Waitangi its significance as the founding document of Aotearoa its interpretation and its application to current systems policies and events. That education should also include a look at the effects of colonisation at the value of Maori perspective and at partnership land ownership sovereignty and social justice. It is heartening to see in the bill that the Council of Legal Education has chosen to recognise the aims aspirations and involvement of Maori as employees. We would hope that that can happen right across the legal fraternity. We commend the council for its work in that regard. 
The Maori Party is pleased to see the bill reach the light of day because it will mean the opening up of the closed-shop legal profession and it will give our people protection from the legal sharks. We all shudder at the stories of lawyers acting as trustees and choosing court action over resolution simply to fatten their wallets. But in truth it seems that legal sharks have always been part of the profession. Indeed Sir Richard Malins an English jurist made this stark observation way back in 1878: “One cannot help regretting that where money is concerned it is so much the rule to overlook moral obligations.” 
Twenty years ago Moana Jackson presented a report entitled  
The Maori and the Criminal Justice System. 
 One of his proposals was for a parallel criminal justice system for Maori. As we come into a time when politics is being dumbed down by the constant cry of one law for all it is maybe time to look again at how the law embodies and protects cultural values. Mr Jackson reminds us that the law is never culturally neutral and that legal ideals are always the product of a particular culture. He also proposes the view that one law for all should not mean one process for all but rather one justice for all. The Maori Party will demand that that justice includes the active involvement of whanau in all stages of the legal process. 
I point out that as a person who has practised the law—although not being a lawyer—I can say that there is a lot of hoodoo about what it takes to practise law. In the same way I believe there is probably a lot of hoodoo about what it takes to practise conveyancing. The Maori Party also has concerns that this is another law based on one profession sharing with another profession a role that extracts money from people who can ill afford it. 
Debate interrupted. 
The House adjourned at 6 p.m.