Volume 657 Week 24 - Tuesday 15 September 2009(continued on Thursday 17 September 2009) 
Volume 657 Week 24 - Tuesday 15 September 2009(continued on Thursday 17 September 2009) 
[Volume:657;Page:6567] 
Tuesday 15 September 2009 
( 
continued on Thursday 17 September 2009 
) 
Local Government (Auckland Council) Bill 
In Committee 
Debate resumed. 
Parts 1 to 4 schedule and clauses 1 and 2 ( 
continued 
)  
NIKKI KAYE (National—Auckland Central) 
: 
 The Local Government (Auckland Council) Bill was to be historic legislation for Auckland offering tremendous opportunity not just for the people of Auckland but also for the people of New Zealand. The Auckland Governance Legislation Committee did not hear just from Aucklanders. The members of the committee had a day in Wellington to hear from people there and we heard people from other parts of New Zealand. Although we are here to deliver a strong regional entity for the people of Auckland which they have never had in the last 50 years and although we are here to deliver strong units of local representation we are also here to be able to put a model in place that we can stand up and say with our hands on our hearts could work in other parts of New Zealand. That is not to say it is up to us to make that decision; it is up to people in other parts of New Zealand to decide whether they want to have change in their areas. I am proud to stand to support legislation that is supported by the Opposition in terms of providing for one unitary authority that is supported by the Opposition in terms of providing for local boards and that is supported by the Opposition in terms of providing for the funding of those local boards in order to give them decent functions and powers. 
But the debate that we have had has not been about this historic day for Auckland it has not been about the public transport system that we want to fix it has not been about Auckland’s urban design that desperately needs to be better and it has not been about the lost opportunities to attract major events which we will finally maybe get. There has been a whole lot of scaremongering from members on the other side of the Chamber. We have seen this in the provisions around the protection of the sale of assets for which there is a clear provision within the Local Government Act 2002 in section 97. We have seen this in the amendments that Opposition members have put up about a Social Issues Board when know that Paula Bennett has already established one. We have seen this when the Opposition talked about mammoth costs which they have absolutely no evidence of. The point I would make about that relates to the cost of delay. Aucklanders have been waiting for this step. The previous Labour Government set up the royal commission because it did not want to make a decision. Aucklanders have been waiting for this for not just 10 years; they have been waiting for this for over 50 years. Finally we have had 18 months of a royal commission looking at the issue with 3500 submissions made to it and we have had a select committee process in which 2500 submissions were made. What exactly would the Labour Opposition want to see happen? 
We have had over 2½ years of consultation but now it is time to make a decision and sometimes decisions can be hard. But I am confident and I know the Labour Party agrees with me on this that we will finally deliver a strong regional entity to the people of Auckland we will finally deliver some local boards that will have real functions and powers and we will finally deliver to those communities a real say over local issues. I am proud to support this legislation. I am proud to be in this Chamber on a historic day for Auckland talking about the opportunities that have been lost and the opportunities that Aucklanders will be able to take in the future. It is sad that we are looking at Opposition members on the other side of the Chamber unable to stand up and say they actually agree with us on those issues. There are areas where we disagree but actually a lot of those areas are not in this legislation. I am proud to stand here to support this legislation which provides for one regional entity for Auckland and a system of strong local representation. This is a historic day for Auckland. Thank you. 
Hon GEORGE HAWKINS (Labour—Manurewa) 
: 
 I listened to Nikki Kaye who has just resumed her seat saying how proud she was to get up to defend the Local Government (Auckland Council) Bill. What a pity the Cabinet Ministers have not done that. We had Jonathan Coleman who stumbled and dithered in the debate until someone told him it was the wrong debate to be talking about. We have two other people—the Minister of Local Government Rodney Hide and the Associate Minister of Local Government John Carter. They are both sincere people who talk with passion for Auckland. Well I talk with passion for Auckland too. Nikki Kaye did not tell us one thing. She did not tell us why she has not told the ratepayers of Waiheke Island—and they would love to know—why they should be funding the intersection improvements along Ti Rakau Drive in Pakuranga. They will not hear that from Nikki Kaye but they will be paying for them. She should put them on the ferry take them out to Ti Rakau Drive and show them what they will be paying for. 
This is what this bill is about: it is about the executive not fronting up. I want people to tell me why the executive is not down here defending its legislation. Have we heard Steven Joyce talk about this? When is Steven Joyce getting up and having a go? What is Wayne Mapp saying about this bill? Rodney Hide is one person who talks about it but does Murray McCully? No. Jonathan Coleman has had a go. Paula Bennett—there is a name. She will get in any scrap as long as it is between teenagers and she can step inside but she will not get involved in this debate. There is Maurice Williamson. Have we heard from him a good Auckland member a bit of a maverick? But of course no we have not. He has his gag on. There is John Key. We do not see John Key. Not a word from him. Judith Collins sits there day after day saying nothing absolutely crushed by this debate. That is why I think they call her “The Crusher”. She has been crushed by this debate and has not got up to speak. People of Papakura think this is disgraceful. What did we have last night? We had Mr Tremain from Napier getting up to talk about the Auckland bill when we had Ministers from Auckland who were not saying anything. That is quite interesting really. We had Colin King from Kaikoura getting up to have a go. But where were the Auckland Ministers? 
I have to say that the people of Auckland would have expected that an administration that has such important legislation for Auckland would get up and defend it but no that has not been the case at all. They have sat there with their mute buttons on. They have sat there with their gags on. I had National people tell me yesterday that they were not allowed to speak. We went for about 2½ hours with no National person getting up at all. They tried that tactic—the big silence. In the end the people of Auckland will realise that when the mail drop goes round the Papakura electorate asking why the National member did not get up to speak and why she was so quiet and when it goes round Botany to Pansy Wong’s supporters asking why she did not get up to support the bill. As the Minister of Women’s Affairs Pansy Wong represents half the population of Auckland well over 600000 to 700000 people but what did she have to say? Yes she was in the Chamber she was busying herself she sat in the Chair but she did not say “boo”. I think she must have found it pretty hard even drawing breath down here because over on the Government side they got people from out of Auckland to stand up and have a say. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 Thank you for the opportunity to speak once again on this very important Local Government (Auckland Council) Bill. 
Dr Rajen Prasad 
: Something new! Something new Paul! 
Dr PAUL HUTCHISON 
: I want to take a further call on the powers and functions of the Local Government Commission because as we go forward and this very important bill is expeditiously enacted by the wonderful National-ACT coalition the Local Government Commission will become more and more important. I think it is really important to realise that the Local Government Commission is a quasi-judicial body and its decisions can be challenged only on points of law. 
 One of its major things is to ensure that it does everything practical to keep communities of interests together. As I said last night the bill’s commentary makes it very clear that the bill will empower the commission to undertake consultation before determining the city’s boundaries but it does not specify a process or require any particular person to be consulted. In the commentary members of the Auckland Governance Legislation Committee urged the commission to carry out a comprehensive consultation process with Aucklanders before setting the city and the local board boundaries. Dr Prasad says I should say something new. Well this is hugely important for every Aucklander for every board for every ward and maybe even Dr Prasad might take some interest in this very very crucial decision-making. 
The reality is that when it came to the southern boundary catchment issues Treaty issues and development issues have probably overridden communities of interest. So the duties of the Local Government Commission are going to be incredibly important. I go back to those small communities south of Pukekohe to Buckland which is 200 to 300 metres away and Tuakau which is connected by a sewerage system to Pukekohe but has had community of interest involvement for over 100 years. It may be that the Local Government Commission can use its extended powers—its flexibility—to include those areas if those areas want that to happen. It may be that it is outside normal interpretation but I think it very important that Parliament is aware that the Local Government Commission is charged with the responsibility of doing everything practicable to keep communities of interest together. Exactly how far they can go outside the existing boundaries is not well defined although indeed they have the flexibility to do so. 
When we come to Part 3 “Transitional arrangements” we learn that the Local Government Commission must determine the boundaries no later than 1 March. I understand an interim report will occur in November and there will be the opportunity to make submissions. I say that it is absolutely vital that the Local Government Commission is adventurous innovative flexible and courageous in deciding on communities of interest and that it does the very best it possibly can for the whole of Auckland particularly for Franklin. I challenge the whole of this Committee to support the Local Government Commission in doing this very important work. I challenge the whole of this Chamber to ensure that it can be courageous that it can be flexible and that it is given the appropriate resources to ensure that that happens. It is somewhat ironic that it was none other than the Hon George Hawkins who put in a finely crafted amendment— 
SUE KEDGLEY (Green) 
: 
 I would like to raise a couple of issues in the last hour of this debate. One of them is the extraordinary hypocrisy of the ACT Party in refusing to support— 
Hon John Carter 
: I raise a point of order Mr Chairperson. The member knows that that word is out of order in this House and should not be used. 
The CHAIRPERSON (Eric Roy) 
: It is a longstanding tradition that that word is not used in referral to people or parties in this House. The member will desist from using it. 
SUE KEDGLEY 
: I would like to discuss how extraordinarily unusual it is that the Minister of Local Government who has of course masterminded this legislation has gone around publicly declaring his support for the single transferable vote (STV)—I have seen him on television on numerous occasions supporting STV and he has told the public that the reason for his not supporting Maori seats is he supports STV—but now we learn that he will not vote in the House for STV. The excuse he is using for not voting for it is the collective responsibility of Cabinet. In the meantime the Government is saying it would support Maori seats but because of ACT it cannot. So there is a sort of game going on here whereby they blame each other. It is an extraordinary situation. He runs around all over New Zealand saying he supports STV then he comes into this Chamber and votes it down. 
As a result Auckland will likely have a mayor who gains only 20 percent of the vote. As John Banks pointed out yesterday in a very revealing radio interview that I listened to only about 40 percent of people vote in local government elections so one would need only 20 percent of the vote to be voted in. With the powers in the bill powers that no other mayor has that mayor—for example John Banks—would be able to control the Auckland Council dominate the council and drive through his agenda. So it is extraordinary that ACT is using as an excuse for its opposing Maori seats the fact that it supports STV then when it comes to the crunch voting against it. I know we are not allowed to use the “h” word but it is hard to think of other words that could be used as a substitute. 
The second issue I wanted to raise is that I think everyone should read an article in today’s  
New Zealand Herald  
by Joel Cayford warning us of what is happening quietly behind the scenes. He is concerned that the new Auckland Transport Agency being set up to replace the Auckland Regional Transport Authority will be completely independent and that it will not be required to give effect to the Auckland regional transport strategy and will not be accountable for delivering a regionally agreed transport strategy. In other words a body will be set up that the people of Auckland have no control over. He points out that already the Auckland Transition Agency has written to the Auckland Regional Council and said that it is not appropriate for the regional council to publicly notify the regional policy statement which is being reviewed and which is in fact the paramount strategic planning document for the region. Aucklanders need to be aware of that. The agency is already saying that the regional council should not be able to publicly notify the most significant planning document for the region. He warns that it looks as though the same thing is going to happen to water; that body will be completely separated off from the Auckland Council it will be a completely separate entity and it will be required to be accountable to not the new council but rather the Government. 
We are starting to see the hidden agenda come through. The Government needs to be aware that this new council arrangement will be in place for 1 year before the next election. Aucklanders will have plenty of time to discover that this great new model which Nikki Kaye has been going on about has not delivered grassroots democracy. The local boards which are little more than community boards have not been given the powers that Mr Carter and others are promising. They will quickly become disillusioned when they realise that despite all the spin about empowering local boards the local boards do not have any power. 
Hon JOHN CARTER (Associate Minister of Local Government) 
: 
 I want to take a call to respond to the speeches made by George Hawkins and Sue Kedgley and to comment that I had expected this morning given that we have about half an hour left for this debate that the Opposition would want finally to set out its thoughts on directions and plans for how Auckland might work. Unfortunately Mr Hawkins’ speech was all about asking why this or that person has not spoken. 
For a start I say we are in the Committee of the whole House. The second thing is that there is a report of the Auckland Governance Legislation Committee to Parliament about what happened so it is appropriate that the majority of the speeches from Government members are made by members who attended the select committee. It is the select committee’s report to Parliament. To suggest that for some reason the Government the executive is dodging its responsibilities is silly. 
Hon Darren Hughes 
: Too busy chairing select committees. 
Hon JOHN CARTER 
: Exactly. I certainly did chair the select committee and I was pleased to do so. I was pleased about the cooperation we had from every member of the committee. It was a very good select committee which did a lot of very hard work. It is just silly to suggest that for some reason it is wrong for members of the select committee to be taking the majority of the calls in the Committee on this bill. 
I had thought that this discussion would be about setting the pace and setting the future direction by talking about how Auckland will actually look as we move forward. So in the absence of anything in that regard from the Opposition I ask members to allow me to take a few moments to explain to Parliament the changes the select committee recommended to the legislation. Primarily the issue was this: we were looking to ensure that there is an overarching regional structure that will look after the things that matter to Auckland. The neat thing about that is that the Opposition members absolutely agree with that. They are supportive of it and I say to them it is to their credit that they have added to the strength of that. They need to be recognised for their involvement as we moved forward and made this bill a better bill at the select committee. I recognise the contribution made by the members of the Opposition along with that of the members of the Government. It was a good team in that regard. 
The second issue and the biggest issue of concern to the people of Auckland—and I know that one or two members have already commented on this—was the issue of the local boards. I listened to the address by Sue Kedgley who has blinkers on with regard to the functions of those boards and other issues relating to them. Again I say the Labour Opposition members along with members of the Government worked very constructively to make sure we got this bit right. They recognised as we did that the most important thing we could do after we got the overarching structure right was to make sure that the local voice—local democracy; the heartbeat of Auckland—was given the opportunity to express itself. So again I commend the Opposition for working with the Government to make sure we made the bill a better one. I think that generally we can all stand in this Chamber and say we made the bill a better bill and as a consequence we will make Auckland a better place. 
I think it is a great disappointment that Sue Kedgley still has doubts. I can understand why she may have them but she should have taken the advice of her colleague Sue Bradford who was actually one of the most strident voices in the select committee and the member who inquired most often about how this arrangement will work. Members of the Opposition and members of the Government would agree with me about that. Sue Bradford repeatedly questioned the officials on how the arrangement will work. She came away from the select committee satisfied that we have got it generally right. No one is suggesting we have got it absolutely perfect. 
Hon Darren Hughes 
: That’s true. 
Hon JOHN CARTER 
: Absolutely—I am the first to say that but let us remember that this arrangement is a work in progress. We have a third Auckland bill coming up and it will allow us to adjust those things that we find need to be reconsidered. We are prepared to do that. That is what this Government is about. We do not just put something in place and tell people that is it so they must take it or leave it. We are prepared to work with people and with Parliament to make Auckland a better place so the legislation is a work in progress in that regard. It is silly for Sue Kedgley to suggest that there is something fatally flawed in the work we have done with regard to the local boards. 
JACINDA ARDERN (Labour) 
: 
 I am pleased to take a call. I have been waiting to take a call since late yesterday evening when I felt utterly compelled to come down to the Chamber having heard the very wise words of Mr Chris Tremain. Let me tell members why I felt compelled to come down to the Chamber and listen to Mr Tremain in full flight. Well he spoke about the Maori seats. I found his views interesting to say the least and patronising at best. He spoke of the renaissance we are seeing within the Maori culture and said it was somehow the reason why we do not need Maori seats on the super-city. For some reason the fact that we now sing the first part of our national anthem in Maori means we do not need Maori seats in Auckland. The war we have waged has been won apparently and we can all sit back and feel very satisfied with what we have achieved. But Chris Tremain’s speech did not stop there. I thought we had reached a new low when Mr Tremain explained to us that if Maori can organise a hikoi they can organise a campaign across 70000 voters. A hikoi and a campaign in a super-city election is exactly the same thing! 
I have two words to sum up the speech we heard last night from Mr Tremain: naive and patronising. We heard from that member that for all the Government’s chat about listening to people every single submitter who told the select committee why Maori needed specific representation was wrong. And apparently not just the submitters were wrong—the 15000 who marched on the issue were wrong according to the Government. We heard an utterly patronising explanation as to why. But it did not stop there. The explanation we heard from Mr Tremain further on was that women are represented well in Parliament and do not need specific seats in this House in order to get represented. Mr Tremain now sounds to me more like the Peter Cetera of Parliament fighting for the honour of women. I say to Mr Tremain that first past the post did not afford greater representation to women or minority groups in this House. What are two of the big contributors that have seen greater representation in this House? Firstly MMP certainly helped the cause and secondly Maori seats certainly helped the cause as well. So I say to Mr Tremain that he shows an absolute lack of understanding of the fundamentally important things about our democracy that have enhanced representation in this House. I thought that what we heard from him last night was an absolutely naive presentation of the current reality in New Zealand. I was disappointed by that. 
But it did not stop there. When it comes to the representation issue we have not been talking just about the importance of the Maori seats; we have been talking about the other groups that absolutely deserve a greater say in the way that the Auckland Council will work. We have talked about ethnic groups in Auckland. We have also talked about young people. I want to come back to that issue as it specifically relates to the election process and to the representation young people can expect to be afforded through the super-city structure. Young people represent 37 percent of the population of Auckland. That is mammoth. They have communicated with the select committee and their members of Parliament. I know that many of them approached their local member on this issue and asked what MPs thought the chances were of a young person—someone under the age of 25—being elected to the council. 
It is a very simple question. Let us look at the way it currently works in New Zealand. I found out how young people are currently represented across the various councils and local boards. The numbers are dismal—fewer than 10 across the country—and the Government expects that the new structure with wards with as many as 70000 people in them will be an accessible ground for young people to campaign in and win in their own right. 
I think young people are electable—absolutely—and I think they should be given the same opportunity as everyone else but I want to inject a little reality into the situation. A young person campaigning against an opponent who is doubtless well-resourced and well-funded will have some difficulties working across such a large ward and we need to acknowledge that. 
PAUL QUINN (National) 
: 
 I say to my friend and colleague Jacinda Ardern that unlike her colleague Shane Jones I will not chastise her for mispronouncing the word “hikoi”. If Shane Jones wishes to lambaste her she should give me a call and I will come running to her aid. 
This is the last time that I will have the opportunity to speak and address this debate. Unfortunately I have been summoned to attend a select committee meeting in order to hold the Opposition to account. So unfortunately I will not be able to partake in the rest of the debate. I take this opportunity to provide some overview commentary on some of the comments that we have heard from the Opposition. I would like to start with my friend and colleague the Hon George Hawkins. In his contribution last night he wondered aloud in his offerings why the Government members had not been standing up to debate and why the Ministers had not presented themselves to front up to the debate. Well let me tell the Hon George Hawkins that the reason we have not had to respond is simply due to the quality of the offerings from the Opposition. There has been nothing to respond to. 
The Hon George Hawkins got up last night and said that we would sell the assets. When he was challenged to say which assets he said that he did not know. The point is that Labour has not offered up anything to respond to. 
Moana Mackey 
: What about the Maori seats? 
PAUL QUINN 
: I tell Moana that in frustration and I might say at the request of the Opposition we have had to get up and entertain those members. We have had to get up and entertain the Opposition members because they got frustrated and bored with their own contributions. 
As my time shortens I want to lay out for the record my congratulations on the outstanding contributions to the work on this bill under the great leadership of the Minister of Local Government the Hon Rodney Hide who has led this process in close consultation with and support from the Hon John Carter. Of course the Hon Darren Hughes—I think the member has that title but there are lots of “honourables” on that side of the Chamber; they were dishing them out like gongs—criticised the fact that the Associate Minister John Carter chaired the Auckland Governance Legislation Committee. He said that it had never been done before. Well so what? We are visionaries. This shows the seriousness with which we take the issue. We wanted strong leadership and we wanted an experienced member to chair that meeting. John Carter was the man to do it. I am tremendously proud of the work he has done. 
I want to congratulate the other National members of the committee. Nikki Kaye has done an outstanding job over the last 24 hours in rebutting the contributions from the Opposition. Simon Bridges made an excellent contribution. Dr Paul Hutchison has represented his constituents as a true constituent MP and that should go on the record. In fact I might nominate him for a gong in this year’s Honours List. I think that would be deserved. The list goes on. Tau Henare led the subcommittee hearing on the Maori seats. 
Simon Bridges 
: Jackie Blue! 
PAUL QUINN 
: Jackie Blue was another one. They all gave outstanding contributions. We really have to wonder where Phil Twyford was in all of this. 
Simon Bridges 
: Raymond Huo! 
PAUL QUINN 
: Raymond? Was he on the committee? No. 
PHIL TWYFORD (Labour) 
: 
 I want to make some comments about one of the amendments that Labour is putting up in this debate. It proposes the establishment of an Auckland Services Performance Auditor. This is one of the many recommendations of the royal commission that this Government has chosen to sideline and ignore. Aucklanders will judge the success of the super-city on three things. The first is rates: what it will cost us. The second is democracy: whether we will still have a say in the running of our city. The third is the quality and scope of the services of the city. The royal commission recommended that council-controlled organisations be established for virtually all of the council enterprises. Two of the main ones will be the new water monopoly which the Local Government (Auckland Council) Bill will go a long way to establishing and the new Auckland Transition Agency. 
I want to focus my comments on the water monopoly for a second. It is a hugely ambitious project a vertically and horizontally integrated water company dealing with drinking water and waste water right across the city—huge assets that are essential for the long-term well-being of the city. Water as we know is a human right—nothing is more essential for human survival than access to water—yet there is concern and anxiety across Auckland today about the likely impact of this new organisational merger on water bills for Aucklanders. We know that the Government policy and the recommendation of the royal commission is that volumetric pricing be rolled out across the city. We also know by comparative analysis of water charging across the different territorial authorities in Auckland that if the volumetric pricing regime currently used by Metro Water were to be implemented in other councils then a family of four in the North Shore Waitakere or Manukau would be looking at a $700-a-year increase in their water rates. 
This alone is reason enough to seriously consider an appropriate accountability mechanism for this new monopoly company. The amendment that we are putting up from this side of the Committee proposes that the new performance auditor be responsible for ensuring that the water company is accountable that it is transparent that its pricing practices are subject to scrutiny and that it is held accountable for providing the highest standards of customer service. The performance auditor would report publicly not just on the water company but on all of Auckland Council’s operations and all of its council-controlled organisations. It would conduct a 3-yearly efficiency and effectiveness review of the new water company. We all have a stake in this issue. Auckland ratepayers are all water consumers. 
The other aspect to the amendment is an annual performance audit of the Auckland Council. This provision needs to be in the bill because the water monopoly is well under way. This bill mandates the establishment of a fully integrated water company and it has to be put in place if Aucklanders are to have trust and confidence that the new water company will behave in a way that is appropriate for a publicly owned monopoly especially one that deals with such a vital commodity as water. 
I want to make it clear that the proposal does not detract from the governance responsibilities of the Auckland Council. It does not set out to undermine the responsibility of those people who were elected through the political process and who are responsible for the council-controlled organisations and the operations of the council. The purpose of this amendment is to provide analysis reporting and advice so that Aucklanders can see with some regularity and transparency the quality of the operations of the Auckland Council. If we are going to go down the track of amalgamating rationalising and integrating all the operations of the council into such large operations it is essential that this performance auditor is an advocate for citizens that it protects the interests of citizens and that it is able to go into bat to assist the politicians and the political process. 
It is also a check on the bureaucracy. 
Hon RODNEY HIDE (Minister of Local Government) 
: 
 I thank everyone for the contributions to the debate. I think it has been a worthwhile debate on such important legislation. Let me walk through as many of the amendments that we will be voting on as I can. 
First of all I will explain what the Government’s Supplementary Order Paper 62 involves. The amendment to clause 17C is a technical consequential amendment to the Local Government (Auckland Council) Bill. The amendments to clauses 18 and 19 and the schedule will as we have announced extend the northern boundary to include the whole of the Rodney District with a single-member ward based on the rural area of that district. 
There are also amendments to the Local Government (Tamaki Makaurau Reorganisation) Act that relate to annual reports. There currently is a requirement that each council prepares an annual report after 12 months. If we think about it we realise it is silly for them to be doing that when they will have only 4 months to go. It will also be impossible for them to do their final 12-month wrap-ups. The amendment to clause 23 and the new clause 23B oblige the Auckland Transition Agency to prepare a planning document for the Auckland Council that will apply until the end of the 2010-11 financial year. New clause 23C fixes up a drafting error. New clause 23D requires that the existing local authorities prepare annual reports for the remaining 4 months only but it also clarifies that they must set rates for a 12-month period in order to provide income for the new council. It also removes the obligation for the local authorities to prepare and adopt an annual report for the 2009-10 financial year and for the 2010-11 financial year; instead they must prepare one report for the period 1 July 2009 to 31 October 2010 which is just a wrap-up report. 
That is the Government Supplementary Order Paper that we will be voting on. There is also a range of amendments from members. Several in Hone Harawira’s name cover various options for having Maori seats: having Maori seats voted out of the general wards having the Local Government Commission decide on Maori seats and indeed having mana whenua seats with candidates signing statutory declarations that they are mana whenua. 
There is also a variety of amendments from the Labour Party. They are interesting because they go beyond the issue of Maori seats to picking up on the idea that there should be legislated advisory boards. This issue would be properly considered in the debate on the third Auckland Council bill if Parliament was of such a mind. For example Raymond Huo’s amendment includes the insertion of a new clause 12B which would establish a statutory Asian Advisory Board. That option could be looked at in the debate on the third bill because it does not relate to electing anyone so that debate can be had again. Likewise with Su’a William Sio’s amendment to establish a statutory Pacific Advisory Board. Yes he can raise that issue now but it would be better raised in the debate on the third bill. Likewise with Jacinda Ardern’s amendment to establish a statutory Auckland Youth Council. That can be relitigated when we debate the third bill which will be introduced into Parliament towards the end of this year and debated early next year. 
I make the point that those amendments undermine local government to the extent that they involve our deciding through legislation how it will structure its advisory boards and how it will have its youth councils. One will find that local government bodies are doing those things all around New Zealand but they are doing it in their own way uniquely and they can evolve it over time. They have an obligation to do it under the Local Government Act and they do it. The danger we have is that if we make it statutory we freeze how it should be done and how the relationship should be managed. If we think about it we realise that this legislation may exist for 50 years. Of course it will be amended over that time. But the proposed amendments would mean that Parliament was setting in place how the Auckland Council would interact with the community throughout the Auckland region. We might do better to give it a broad steer that it should have that interaction then leave it up to the people of Auckland and the council itself to decide how it does it. Mr Prasad is shaking his head; he thinks we cannot do that. I just signal caution. It is something for Parliament to decide but it may well be wiser to allow it to evolve because all the wisdom does not exist in this place. 
I also make the point that Parliament in that way would be establishing a category of citizens and interaction. We would be saying that a certain group is special that mana whenua or Maori will have a certain number of seats that Pacific Islanders and Asians are special enough to have advisory boards but not special enough to have their own seats. Again we would be freezing that; the only way that it could be changed would be by coming to Wellington. 
Dr Rajen Prasad 
: Only a mechanism to change laws. 
Hon RODNEY HIDE 
: No it is not only a mechanism; it is actually a legislative device. It is making the law. We have not done that for local government. We have had mechanisms evolve and they are working quite well whether in Manukau Porirua City or anywhere else. They are not legislated for. 
In conclusion I would like to thank everyone. I think the debate has been good. There is plenty of debate to be had because we have the third bill still to come when we will reconsider the whole issue of advisory boards. Thank you very much to everyone. 
The CHAIRPERSON (Eric Roy) 
: The time for this debate has concluded. Members may wish to note that there have been 202 speeches by my calculation from 49 different members. 
The question was put that the amendments set out on Supplementary Order Paper 62 in the name of the Hon Rodney Hide be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Amendments agreed to. 
The question was put that the following amendment in the name of Phil Twyford to clause 2 be agreed to: 
to add the following subclause: 
(3)(a)The House of Representatives shall within 5 years of the commencement of this Act appoint a select committee to review the operation of this Act since its commencement. 
(b)The select committee appointed shall consider the following: 
(i)Maori representation on the Auckland Council: 
(ii)the functions powers and responsibilities of the Auckland Council including both the governing body and the local boards: 
(iii)the size and number of local boards: 
(iv)the number of councillors: 
(v)the number of members on each ward: 
(vi)council boundaries: 
(vii)ward boundaries: 
(viii)the voting system: 
(ix)whether any amendment to this Act or any other law are necessary or desirable to improve the governance arrangements for Auckland.  
(c)The select committee appointed shall report back to the House of Representatives within 6 months. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 57 in the name of Hone Harawira be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 14 
Green Party 9; Maori Party 5. 
Noes 108 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; United Future 1; Progressive 1. 
Amendments not agreed to. 
The CHAIRPERSON (Eric Roy) 
: The next amendment which is in the name of Hone Harawira and on Supplementary Order Paper 58 is ruled out of order as being contingent on a previous amendment which has been negatived. 
The question was put that the amendments set out on Supplementary Order Paper 36 in the name of the Hon Mita Ririnui be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendments not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 59 in the name of Hone Harawira be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendments not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 60 in the name of Hone Harawira be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendments not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 61 in the name of Hone Harawira be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Phil Twyford to clause 8 be agreed to: 
to omit from subclause (1) “20 members” and substitute “25 members”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 55 in the name of Sue Kedgley be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendments not agreed to. 
The question was put that the following amendments in the name of Phil Twyford be agreed to: 
to insert the following clauses: 
9ASocial Issues Board 
(1)This section establishes a Social Issues Board. 
(2)The purpose of the Social Issues Board is to set direction for social well-being policy of the Auckland Council. 
(3)Decisions reached by the Social Issues Forum will be binding. 
(4)Decisions will be implemented by the Auckland Council and/or the appropriate government department. 
9BMembership of Social Issues Board 
(1)The Social Issues Board will include the following: 
(a)Minister of Local Government: 
(b)Mayor of Auckland: 
(c)Chief Executive of the Auckland Council: 
(d)Chief Executive of the Ministry of Health: 
(e)Chief Executive of the Ministry of Education: 
(f)Chief Executive of the Ministry of Social Development: 
(g)Commissioner of Police: 
(h)Chief Executive of Housing New Zealand Corporation: 
(i)members of the relevant Auckland Council social issues committee: 
(j)representative from the Maori community: 
(k)representative from the Pacific community: 
(l)representative from the Asian community. 
(2)The Social Issues Board will be chaired by the Mayor of Auckland. 
9CResponsibilities of the Social Issues Board 
(1)The key functions of the Social Issues Board will include: 
(a)responsibility for decisions on the regional social well-being strategy; and 
(b)drafting an implementation and funding plan. 
(2)Without limiting subsection (1) the Social Issues Board will also be responsible for: 
(a)identifying social well-being outcomes for the Auckland region using the community outcomes consultation process set out in the Local Government Act 2002: 
(b)developing the regional social well-being strategy that will include prioritising critical social issues for action: 
(c)making recommendations to the Minister of Local Government and the Auckland Council for decisions on resource allocation including the redistribution of resources to address critical social issues: 
(d)deciding what government body will take action: 
(e)setting outcome targets and monitoring progress on the critical social issues: 
(f)engaging with the private sector non-government organisations and philanthropic agencies. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the following amendments in the name of Phil Twyford be agreed to: 
to insert the following clauses: 
9AAuckland Services Performance Auditor 
(1)This section establishes the office of the Auckland Services Performance Auditor. 
(2)The purpose of the Auckland Services Performance Auditor is to assess whether the Auckland Council is performing adequately in providing high-quality services in a cost-effective manner. 
(3)For the purposes of subsection (2) the Auckland Services Performance Auditor has the following powers: 
(a)review the adequacy and relevance of Auckland Council controlled organisation performance targets as set out in the statement of intent and the accuracy of performance reported against those targets: 
(b)with respect to council controlled organisations the Auckland Services Performance Auditor will have the power to: 
(i)review service standards set out in their customer service charter annual customer satisfaction survey results and customer complaints processes: 
(ii)assist the Auckland Council with its three-year reviews of their statements of intent including the relevance of any targets: 
(iii)protect the consumer’s interests and advocate for them in respect of the reliability and affordability of services: 
(c)the ability to report publicly on any issue at any time: 
(d)to obtain information from all Auckland Council bodies. 
9BPowers with respect to Watercare Services Limited 
Without limiting section 9A(3) and with respect to Watercare Services Limited the Auckland Services Performance Auditor will have the power to undertake three-yearly efficiency and effectiveness reviews incorporating international comparative industry benchmarking and an evaluation of service levels efficiency affordability of water and demand management performance. 
9CAppointment of Auckland Services Performance Auditor 
(1)The Auckland Services Performance Auditor will be appointed by a majority vote of the governing body of the Auckland Council for a three-year term. 
(2)The nomination of candidates will be made jointly by the Chair of the Commerce Commission and the Auditor-General. 
9DAuckland Services Performance Auditor Report 
(1)Without limiting section 9A(3) the Auckland Services Performance Auditor will be required to produce an annual report assessing the performance of the Auckland Council. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Carol Beaumont to clause 12 be agreed to: 
to add the following subclauses: 
(6)This subsection applies if at any elections held at the same time for a member or members of the governing body or local board and a member or members of Parliament a person is declared to be elected as a member of the governing body or local board and that person is also declared to be elected as a member of Parliament. 
(7)If subsection (6) applies the person declared to be elected to both offices must be treated as having vacated office as a member of the governing body or local board. 
(8)This subsection applies if at any election other than an election to which subsection (6) applies a person who is a member of the governing body or local board is declared to be elected as a member of Parliament. 
(9)If subsection (8) applies the person declared to be elected as a member of Parliament must be treated as having vacated office as a member of the governing body or local board. 
(10)Subsections (6) to (9) will expire 1 November 2010. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the following amendments in the name of Jacinda Ardern be agreed to: 
to insert in clause 4 the following definitions in their appropriate alphabetical order:  
Child 
 means a person under the age of 18 years. 
Young person 
 or  
young people 
 means a person or people of or over the age of 14 years but under 25 years.; 
to insert the following heading and clauses: 
Youth Representation 
12BAuckland Youth Council 
(1)This section establishes an Auckland Youth Council. 
(2)The Auckland Youth Council must comprise a representative from each Youth Forum established in section 12C. 
(3)The purpose of the Auckland Youth Council is to enable the participation of children and young people of or over the age of 12 years in the decision-making process of the Auckland Council. 
(4)The Auckland Council must assign one of its members the responsibility of liaising with and providing support to the Auckland Youth Council. 
(5)The Auckland Council must provide adequate resources to the Auckland Youth Council for the purposes of this section. 
12CTerritorial Youth Forums 
A Youth Forum is to be established for each local board area. 
(1)The purposes of the Youth Forums are to: 
(a)ascertain the views of children and young people in the local board area; and 
(b)provide an opportunity for all children and young people residing in the local board area to openly discuss and form opinions on local board issues on a regular basis; and 
(c)elect a young person attending the Youth Forum to present the views and opinions of children and young people within the local board area to the local board and the Auckland Youth Council. 
(2)The Local Board must provide adequate resources to the Youth Forum for the purposes of this section.; 
to insert after clause 13(2)(c) the following paragraph: 
(ca)must consult with and consider any views and preferences expressed by their Territorial Youth Forum on matters which affect or may affect youth; and; 
to add to clause 13B(2) the following paragraph: 
(d)consult with and consider any views and preferences expressed by the Auckland Youth Council if the decision affects or may affect the people represented by those groups.; 
to add to clause 13B the following new subclause: 
(3)(a)In addition to the requirements described in subsection (2)(d) the governing body is required to meet with the Auckland Youth Council a minimum of once every 3 months: 
(b)further it is explicitly recognised that the governing body will consult and consider any views and preferences expressed by the Auckland Youth Council in development of the LTCCP and the annual plan.; 
and to add the following clause: 
25New subsection 13(5) inserted 
The following subsection is inserted after subsection (4): 
“(5)The Auckland Transition Agency must take into account the views of children and young people and the youth councils and forums of existing local authorities when decision-making.” 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendments not agreed to. 
The question was put that the following amendments in the name of Raymond Huo be agreed to: 
to insert the following clause: 
12BAsian Advisory Board 
(1)This section establishes an Asian Advisory Board. 
(2)The purpose of the Asian Advisory Board is to: 
(a)perform an advisory role for the governing body in relation to its decisions relating to the Asian community: 
(b)represent the views of the Asian community: 
(c)enable the participation of the Asian community in the decision-making process of the Auckland Council. 
(3)Membership of the Board will be determined by the governing body in consultation with Asian communities and community leaders within the Auckland region. 
(4)The Asian Advisory Board will have no fewer than 4 members appointed by a majority vote of the governing body. 
(5)The Auckland Council must provide adequate resources to the Asian Advisory Board sufficient for the purposes of this section.; 
to add to clause 13B(2) the following paragraph: 
(d)consult with and consider any views and preferences expressed by the Asian Advisory Board if the decision affects or may affect the people represented by those groups.; 
to add to clause 13B the following subclause: 
(3)In addition to the requirements described in subsection (2)(d) the governing body is required to meet with the Asian Advisory Board a minimum of once every 3 months. 
(a)Further it is explicitly recognised that the governing body will consult and consider any views and preferences expressed by the Asian Advisory Board in the development of the LTCCP and the annual plan.; 
and to add the following clause: 
25New subsection 13(5) inserted 
The following subsection is inserted after subsection (4): 
“(5)The Auckland Transition Agency must take into account the views of the Asian community and existing Asian Advisory Boards when decision-making.” 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendments not agreed to. 
The question was put that the following amendments in the name of Su’a William Sio be agreed to: 
to insert the following clause: 
12BPacific Advisory Board 
(1)This section establishes a Pacific Advisory Board. 
(2)The purpose of the Pacific Advisory Board is to: 
(a)perform an advisory role for the governing body in relation to its decisions relating to the Pacific Island Community: 
(b)represent the views of the Pacific Island Community: 
(c)enable the participation of the Pacific Island community in the decision-making process of the Auckland Council. 
(3)Membership of the Board will be determined by the governing body in consultation with Pacific communities and Pacific leaders within the Auckland region. 
(4)The Pacific Advisory Board will have no fewer than 4 members appointed by a majority vote of the governing body. 
(5)The Auckland Council must provide adequate resources to the Pacific Advisory Board sufficient for the purposes of this section.; 
to add to clause 13B(2) the following paragraph: 
(d)consult with and consider any views and preferences expressed by the Pacific Advisory Board if the decision affects or may affect the people represented by those groups.; 
to add to clause 13B the following subclause: 
(3)In addition to the requirements described in subsection (2)(d) the governing body is required to meet with the Pacific Advisory Board a minimum of once every 3 months. 
(a)Further it is explicitly recognised that the governing body will consult and consider any views and preferences expressed by the Pacific Advisory Board in the development of the LTCCP and the annual plan.; 
and to add the following clause: 
25New subsection 13(5) inserted 
The following subsection is inserted after subsection (4): 
“(5)The Auckland Transition Agency must take into account the views of the Pacific community and existing Pacific Advisory Boards when decision-making.” 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendments not agreed to. 
The CHAIRPERSON (Eric Roy) 
: There are amendments to clause 18(1A) in the name of the Hon George Hawkins and in the name of Sue Bradford. They are ruled out of order as they are inconsistent with the previous decision. 
The question was put that the following amendments in the name of the Hon George Hawkins be agreed to: 
to omit from clause 18(3)(a) “may undertake the investigations and consult the persons that it thinks desirable; but” and substitute “must consult with those persons affected by the draft determination”; 
to omit clause 18(3)(b); 
and to add to clause 19(3) the following paragraph: 
(i)those persons affected by the draft determination have been consulted. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendments not agreed to. 
The question was put that the following amendments in the name of Phil Twyford to clause 19(1)(e) be agreed to: 
to omit “divide Auckland into wards” and substitute “divide Auckland into 25 wards”; 
to omit from subparagraph (i) “number”; 
and to omit subparagraph (ii). 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 49 
New Zealand Labour 43; Maori Party 5; Progressive 1. 
Noes 73 
New Zealand National 58; Green Party 9; ACT New Zealand 5; United Future 1. 
Amendments not agreed to. 
The question was put that the following amendment in the name of Phil Twyford to clause 19 be agreed to: 
to omit from subclause (1)(e)(ii) “determine the number of elected members for each ward” and substitute “ensure that each ward has no more than 2 elected members”. 
A party vote was called for on the question  
That the amendment be agreed to 
Ayes 49 
New Zealand Labour 43; Maori Party 5; Progressive 1. 
Noes 73 
New Zealand National 58; Green Party 9; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Phil Twyford to clause 19 be agreed to: 
to omit from subclause (3)(a) “20 but no more than 30” and substitute “14 but no more than 20”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 49 
New Zealand Labour 43; Maori Party 5; Progressive 1. 
Noes 73 
New Zealand National 58; Green Party 9; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 53 in the name of Sue Kedgley be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The CHAIRPERSON (Eric Roy) 
: Phil Twyford’s amendment to add Subpart 3 to Part 3 is ruled out of order because it is outside the scope of the bill. 
The question was put that the amendment set out on Supplementary Order Paper 54 in the name of Sue Bradford be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The CHAIRPERSON (Eric Roy) 
: The amendment in the name of Phil Twyford to clause 23A is ruled out of order as being the same in substance as a previous amendment. An additional amendment in the name of Phil Twyford to add clause 25 relating to transitional personnel provisions is ruled out of order as being outside the scope of the bill. A typescript amendment in the name of the Hon George Hawkins to omit the schedule is ruled out of order as being the same in substance as a previous amendment. 
A party vote was called for on the question  
That Parts 1 to 4 the schedule and clauses 1 and 2 as amended be agreed to. 
Ayes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Parts 1 to 4 schedule and clauses 1 and 2 as amended agreed to. 
The CHAIRPERSON (Eric Roy) 
: I thank members for their conduct during the debate and in the putting of the questions. 
Bill reported with amendment. 
Report adopted. 
Third Reading 
Hon RODNEY HIDE (Minister of Local Government) 
: 
 I move  
That the Local Government (Auckland Council) Bill be now read a third time 
. The purpose of this bill is to set in place the policy framework that will deliver one council one mayor and one integrated plan for Auckland by 1 November 2010. The Auckland region needs decisive leadership robust infrastructure and the facilities and services of a world-class city. The Auckland Council as a single unitary authority governing the region will provide leadership and deliver the services its communities want efficiently and effectively. The council’s local boards will ensure that communities are empowered on local issues. That is the foundation upon which we will make a great Auckland even greater and drive New Zealand’s economic growth. This bill provides for the governance structure of the Auckland Council including the high-level framework for the structure of the council 20 members elected from wards between 20 and 30 local boards and direction and provision of powers for the Local Government Commission to determine the boundaries of Auckland its wards and its local boards. 
The Auckland Governance Legislation Committee added tremendous value to this bill in key areas. I emphasise in particular the contribution made to developing recommendations around the roles functions and decision-making responsibilities of the council’s local boards. This work will ensure that local voices are heard in the administration of the new Auckland. Local boards will act for their communities by making decisions on council facilities and services making decisions on promoting the well-being of their communities providing input on Auckland Council strategies policies plans and by-laws recommending by-laws and carrying out council business delegated by the governing body of Auckland Council. The governing body of the new council made up of the mayor and 20 councillors will focus on those matters where an Auckland-wide approach will best promote the well-being of the communities across Auckland and will be most efficient for the administration of council business. 
The policy framework that is established by this bill provides certainty around the overall structure roles and responsibilities of the two tiers of the new council. It provides clarity and direction for the Local Government Commission and the Auckland Transition Agency for the work that needs to be completed by 1 March and 1 November 2010. Later this year I will bring forward a third Auckland bill that will fill in the technical detail and finalise the transition arrangements for moving from the old to the new Auckland. 
I believe it is timely to once again thank the many people who contributed to the success of this bill and brought it to where it is today. I acknowledge and thank the Royal Commission on Auckland Governance for its report the Auckland Governance Legislation Committee for its work on the bill and especially its chair the Hon John Carter who did such a great job in terms of listening and taking the heat out of the issue. I also thank the Government MPs and Ministers who have worked so closely and collaboratively with me on this issue. I also thank in particular Mr Phil Twyford Mr George Hawkins and other members of the Labour Opposition. To be honest they kept us on our toes and they made us check our assumptions and the work we were doing. I believe that as a consequence because of that robust challenging we actually have a better bill as a result. I thank those Opposition members for their work in that regard. 
I thank the councils of Auckland. They took a leadership role in engaging with their communities on Auckland governance issues—thank you to them. I also thank the staff—and particularly the chief executives—of the Auckland councils. This is a tough time for them and their staff and they have worked very diligently with the Auckland Transition Agency and the Government to ensure the least disruption and the greatest amount of certainty in this time of change. They always did so with the best interests of Auckland and New Zealand at heart. In fact through this process of working with councils and Aucklanders the Opposition parties and the Government have seen Auckland at its very best and that bodes well for the new council. 
I am especially grateful for the hard work and dedication of the officials particularly those in the Department of Internal Affairs who put in long hours and produced quality advice and support. I do not believe that as a Minister I could ask anything more of the officials than the intelligence talent hard work and dedication they provided to me John Carter this Government and ultimately to Auckland and the people of New Zealand. They have been fantastic. I especially mention Marilyn Little Anne Carter and the chief executive Brendan Boyle for their outstanding service. 
Finally and most important I thank the people of Auckland who contributed through their submissions to the work of the royal commission and the select committee considering this bill. There has been huge interest in the development of the policies of Auckland that are now expressed in this important bill. We listened to what people had to say and we responded to their ideas and concerns. This is a bill that Auckland needs. Auckland’s success and New Zealand’s success go hand in hand. Getting Auckland right is in the interest of all New Zealanders and certainly this Parliament. Thank you very much. 
Hon GEORGE HAWKINS (Labour—Manurewa) 
: 
 I also start by thanking the officials who worked with the Auckland Governance Legislation Committee. They were a dedicated lot who worked under pressure transporting the select committee from place to place around Auckland and I thank them. I thank the Minister of Local Government Rodney Hide and the Associate Minister of Local Government John Carter because at least they let us know what they thought. They were very clear about that. That is not to say I agree with them. We disagreed on many things but those members were very clear about what they thought. 
But the rest of the Cabinet members who come from Auckland are condemned by their silence. We have what the Minister described as a world-class city ahead of us laying the foundations for the future. The driver of the New Zealand economy will be the Auckland super-city. Where were the Auckland Ministers? Why were they not saying anything? They were probably learning about family trusts from Bill English which are far more important than the Local Government (Auckland Council) Bill is. 
We need to be very mindful that people were looking forward to seeing how their submissions would be treated by Cabinet. I thank the submitters on the bill. They made some very good suggestions and they were sincere. Some of them were nervous when they came before the select committee which is understandable. The submitters expected something: they expected they would be listened to. We hear the National members say they have been listening to submitters. I think even Chris Tremain has been listening so he said. But where were the Auckland members of the executive? The only one from the National Government who got up and gave a speech was Jonathan Coleman. He got up once. There were over 200 speaking opportunities according to the Chair. There were over 200 speaking opportunities and Jonathan Coleman got up once. 
The process regarding this bill is all about the madness of John Key. I think he was mad to leave it to people like Nikki Kaye to carry on the debate. I acknowledge that as a new member she took on a lot. I did not agree with her very often but she took on a lot. She arranged for the subcommittee to go to Great Barrier Island and she took the committee to Waiheke. It had a nice day out at the beach and that is wonderful. But when we look at the issues we have to ask why Ministers did not come down to the Chamber and take calls. That shows up the Government really badly. 
Pansy Wong is the Minister of Women’s Affairs and the member for Botany. She is a Cantabrian from way back who came to Parliament via Philip Burdon. Now she is the MP for Botany. She came into the Chamber and sat in the chair but she did not say a thing. She should tell the residents of Cockle Bay Meadowlands and Flatbush where she has been and what she has been doing. Did she advocate on their behalf? In Cockle Bay Daniel Yu and Fiona Jeffcoat-Yu have been fighting to prevent the installation of a cellphone tower in Litten Road in Howick. How much confidence will they have over the new super-city when an ordinary constituents’ matter goes by the board? 
Judith Collins the MP for Papakura went to a meeting with a thousand people. John Carter got up; he took the flak. I think three people voted in favour of the proposal. Why did John Carter have to do that when the local member sat there and said very little? I want to talk about how Papakura has been represented. I used to walk down the Great South Road in Papakura and see people like the Hon Merv Wellington. He was not an MP whom I voted for but I had a lot of admiration for him. 
Shane Ardern 
: Who’s that? 
Hon GEORGE HAWKINS 
: Merv Wellington. He actually looked after his community. The Papakura community is now being neglected. People like Warren Kyd listened to what people had to say. He would have listened to submitters but it does not happen any more. We have a mayor in Papakura who is absolutely adored by the community. He will be shattered by this legislation. I have to say the concerns of the people of Papakura are not being listened to. 
I will talk about Manukau Manurewa Manukau East and Mangere where the three MPs held a referendum on the issue. We got out and found out what people had to say. The results were staggering. People felt that the Government was not listening at all. That is right; the Government was not listening. You see the Government had an agenda and it had a way of ramming the legislation through the House. Yes 16 hours’ debate for the Committee stage of this bill is good but why for 2½ hours did no National MP take a call? That is what happened yesterday morning; not one National member took a call. Whose idea was that? 
Jo Goodhew 
: You’ve got nothing to say about the bill. 
Hon GEORGE HAWKINS 
: Well I am talking about how the Government did not listen to the people of Auckland. The young lady should get that into her head because that is important to Aucklanders. It is absolutely important to Aucklanders. You cannot sit there with a smug smile nodding your head. You do not understand Auckland. I do not know whether you have ever been there. 
Mr DEPUTY SPEAKER 
: Order! 
Hon GEORGE HAWKINS 
: I am sorry Mr Deputy Speaker. I know that you are a very fine member. I was talking about the National junior whip—my apologies. 
The member for Maungakiekie decided to take a call after a lot of provocation. He is a councillor; he could have made a huge contribution to the debate on this bill. But did he? Not at all. As we look around we see again that the Chamber is not full of people. They are not interested in this bill. That is rather sad. My colleagues will be talking about the substantive issues in this bill but I think it is very important to lay out clearly that the executive has failed Aucklanders. It has absolutely failed them because Government members have not got up and explained things. Rodney Hide is not popular with the people. People saw John Carter doing the work. But where were the other Ministers? What have they done? They have turned their backs on people and said they would leave it to the backbench. They have left it to people like Tau Henare. He used to be a New Zealand First member then he became a Mauri Pacific member and now the only people who do not like him are those from National as he goes sliding down its list. Tau Henare could not get out of the vote for this bill; I feel very sorry for him. Georgina te Heuheu has previously had something to say about issues such as those raised by this bill but when it came to the Auckland area and Maori representation she said nothing. 
Where was the executive? The executive should be held to account. That is how Parliament works. The Opposition questions the executive but no it is not here to answer us. That is very sad. 
Dr JACKIE BLUE (National) 
: 
 I am pleased to speak on the third reading of the Local Government (Auckland Council) Bill. I was part of the Auckland Governance Legislation Committee which heard the many hundreds of submissions on this second Auckland bill. It was a privilege to be part of the committee that went to all Auckland districts to hear the submitters. Every effort was made to ensure that all submitters who wanted to be heard were heard—and they were. All credit goes to the Hon John Carter for his expertise and good humour in chairing the committee. 
This process really started over 50 years ago. Since that time there has been a growing realisation that all was not well with the governance of Auckland. Frustration and concern has been growing. Traffic congestion has been an increasing problem; traffic has been grinding to a halt. The economy has suffered. Auckland is the powerhouse of New Zealand. When it grinds to a halt New Zealand grinds to a halt. There has been red tape duplication and bureaucracy. 
The previous Government formed the Royal Commission on Auckland Governance which over 20 months did a tremendous job. It consulted far and wide. At the end of its consultation it produced a comprehensive report. The royal commission stressed the importance of acting decisively and it stressed the impact of doing nothing. This Government has taken on board that report. We have acted decisively; we have moved quickly. We had to. We need to be ready for the Auckland local body elections in September 2010 and we will be. We are on track for them. 
This bill is one of three on Auckland governance. It creates the Auckland Council. The most exciting change to the structure of the governance in Auckland is the creation of local boards. These are new structures. They are not the current community boards; they are not the current councils. They are new entities and they will have the status and powers that this legislation brings. We have given these local boards real local authority. These local boards will be required to have a holistic approach to their communities to promote the social economic environmental and cultural well-being of communities within the local board area in the present and for the future. Local boards will be required to listen to and consult their communities. Local boards must provide a local board plan. Local boards will have a dedicated budget to provide local services. These boards will not be toothless. The Auckland Council will be required to take on the views of the local board and the views of the local board will have special status on the council. 
This bill is about empowering our diverse communities. It is about local boards getting back real local authority. I commend this bill to the House. 
Hon SHANE JONES (Labour) 
: 
 Tena tatou katoa. Given that I will give a more reflective contribution I look forward to the time when simultaneous translation will be available in the House so we can give our mihi to the Speaker in te reo and it will be suitably translated. Mr Deputy Speaker I have enjoyed your stewardship of us in the Committee stage of the Local Government (Auckland Council) Bill along with that of your colleagues. It is a certain understated style but it gives us an opportunity to vent and then come back when necessary to improve what has actually been a sorry bit of legislation. But despite the wide array of amendments and Supplementary Order Papers that were put forward by this side of the House we realise that we occupy a space that is dominated by realpolitik. 
I want to focus on three or four things in the Local Government (Auckland Council) Bill. The first is the theme of accountability. We have described “super-city” in Maori as “he taone koromatua” because we could not quite find a sexy way of describing it. “Koromatua” gives one the notion that it is something extremely large. The super-city will have such a powerful level of influence on the economy of the lives of garden-variety Kiwis whether they are in the leafy suburbs or in “Strugglers’ Gully” so Labour members put a lot of effort during their contributions into considering how those people will be elected and how many there will be. I do not propose to say much more in relation to the issue of Maori seats other than to record our disappointment that we did not ensnare the necessary level of support— 
Hon Clayton Cosgrove 
: What about the sell-out? 
Hon SHANE JONES 
: Well we had Tau Henare; I accept that Tau Henare’s style of oratory is to give speeches in anger which is why his greatest speeches are those he goes on to regret. We have had contributions from some of the Auckland MPs but I was disappointed when it got to accountability that we did not hear more from the councillor of Auckland City Peseta Sam Lotu-Iiga. He came to the House with such a huge amount of promise for the people he purportedly represents not only in that particular area but also the people he comes from. It was very disappointing. Of course we have heard from Nikki Kaye and that is fine. She was a very industrious member of the Auckland Governance Legislation Committee. However her level of influence over her colleagues shows that she is from the lilliputian part of the National Party: lots of contributions but a tiny level of influence. But that is the nature of the cycle for her. Sam Lotu-Iiga is about to learn that there is a difference between vacant and vacuous. “Vacant” is the seat he currently occupies and is about to lose and “vacuous” was the nature of the contributions he made during the debates. 
Let us come back to the aspect of accountabilities. Maori people actually wanted their own seats. They are not antagonistic towards Pakeha representatives or anyone else but they wanted their issues and their agenda to be represented at the place of power by one of their own. Rodney Hide’s contribution was to say that Maori are the hoi polloi and people are capable of representing them whether or not they choose those representatives. So we saw that classic conflict. 
The second issue is cost efficiency. The reality is that one of the most powerful forces in the new super-city will without doubt be the bureaucracy. The debate ebbed and flowed about whether Auckland will be better off by having this super-empowered mayoralty office but I tell members that the characters who will have inordinate power will be the chief executive officer then the managers and then the divisions. That is why unless we have the right governance structure they will run the show. If we do not put enough mechanisms and safeguards into the structure—and we have not unfortunately—they will be the ones who drive up the rates. People up and down the super-city boundary are fearful that after the National Government’s model all that will happen is that costs will go up which will feed an appetite within the bureaucracy to set a higher rate. So I do not think that we heard enough in the Committee stage from the Ministers responsible for the bill or from the National members as to how they believe that the super-city will manage its cost structure. It is perverse that the Minister who is sponsoring this legislation who has cultivated a reputation as being not only a perk-buster but anti-regulation has actually ended up presiding over the creation of a structure that will be very costly and more than likely not particularly accountable. 
There was some discussion that the “satellite committees” which is what I am calling the community boards—they will revolve around the large planet with its gravitational pull and will have to go back to the table of the super-city to get authority money and mandate—will be poorly staffed and the quality of people they will attract will lead to a weaker type of governance because people will not be attracted to understaffed under-resourced committees. They will go and do other things with their lives because at the end of the day politics which is what we are asking them to do—to get involved in political governance—is a voluntary activity. 
The other thing that Labour expressed considerable concern about—and I think future Ministers will have to deal with this issue—is the existence of monopolies. There is the Auckland water infrastructure. I do not want to focus in any negative way on how the provision of water-related services will happen in Auckland other than to say that once we have a monopoly we must have an agency that can effect regulatory oversight. If we do not have a mechanism that monitors and challenges the behaviour of any monopoly then it is the consumers who pay. That is why it was very very disappointing that Mr Hide did not choose to take up the suggestion of the royal commission and have a performance auditor. That is not to deprecate any of the people working for the monopoly but monopolies have a life-force of their own. If there is an opportunity to gouge or to take more than perhaps a market or competitive system would allow that tends to be what happens. 
I also reflect on the fact that during the time that the select committee and the Maori subcommittee sat people came with a genuine desire to improve the system of governance. They have been left with not so much a hotchpotch outcome but a system over which at the end of the day they will have very little influence. To influence this system they will have to get into the power room and the power room has some obstacles along the way. Those obstacles have to do with the cost of running a campaign and with the difficulty caused by an inbuilt bias that is now in the electoral system. People will also have to deal with the difficult question of how given the limited number of super-city councillors the voices of the average citizens of Auckland will be accurately translated into action in the council if there are not a suitably large number of representatives. We know that the Maori representatives have been written out of the script. There is only one way that Maori representatives will end up there and that is if they join a team that treasures the Maori contribution to the life of the super-city or in our case the life of the nation State. 
In wrapping up I congratulate the officials on the work undertaken and congratulate all the people who made an effort to make their contributions. I also acknowledge the role that John Carter played in demonstrating that a Northlander was able to come from the kumara gardens of Kaipara and be a punching bag for his own party. He could take the blame— 
Shane Ardern 
: You shouldn’t talk about yourself like that Shane. 
Hon SHANE JONES 
: Well I have to say that because there is a great Maori proverb “a kumara never boasts about his own sweetness”. It falls to me as a fellow Northlander to describe how when the kumara goes into the hangi a certain odour wafts and unfortunately that was the nature of John’s contribution on the key aspects of this bill. 
Mr DEPUTY SPEAKER 
: The next call from the Green Party is a split call. Each member will have a 5-minute call and there will be a warning bell at 4 minutes. 
SUE BRADFORD (Green) 
: 
 It is apt I guess that we are holding the final debate on the Local Government (Auckland Council) Bill under urgency today as urgency has characterised the whole process around the changes to Auckland governance ever since the royal commission first reported back. The Government’s response to the royal commission’s report took only hours or at least that was what it seemed like at the time. 
The Government then introduced the Local Government (Tamaki Makaurau Reorganisation) Bill which went through all stages in the House without any consideration whatsoever by a select committee. Then this second bill appeared to be dealt with quick smart and quick it has been although I am not so sure about the smart. At least this time round the public submissions process was allowed and I am sure that every MP who had the privilege of sitting on the select committee to hear those submissions was as impressed as I was by the number quality and heartfelt energy of those who came to give their views from whatever part of the Auckland region and from whatever perspective. 
On behalf of the Green Party I thank all submitters whether or not I was lucky enough to hear them in person. The calibre of the content of submissions and the passion with which they were presented even by those of political persuasions quite different from my own gives me great hope for the future of our city and region. I also take this opportunity to acknowledge everyone involved with the select committee which had a fairly gruelling task in its early weeks; I thank the Green MPs who sacrificed days off to step in for me when I could not break longstanding commitments and the chairperson of the committee John Carter for the courtesy and humour with which he led his little flock on a pilgrimage around the farthest reaches of our far-flung city—and some of us did get lost on a few occasions trying to find the locations of the select committee hearings. I also acknowledge my fellow MPs on the committee from all parties most of whom were absolutely dedicated to the huge job that we were tasked with. Last but not least I acknowledge the long-suffering officials who worked with us in shifts night and day over a protracted period and then had to face extremely tight deadlines back at home base. 
The Green Party continues to oppose this bill on a number of grounds even though we realise that some improvements have been made to the original version. We particularly endorse the removal of the provision for at-large councillors and the intention that most of the city be divided into multi-member wards. We seem to have some disagreement with our Labour Party colleagues on this matter as we see multi-member wards as one of the best ways of ensuring diversity of representation especially given that we are stuck with a first-past-the-post voting system. We are also pleased with the recommendation that Waiheke and Great Barrier have their own separate local boards and that the rest of the region be divided into between 20 to 30 local board areas based on communities of interest. 
On the question of the powers and responsibilities of local boards I realise that this has been a little contentious for us but I think it is a step forward that the bill as amended includes statutory decision-making powers for the boards incorporates the principle of subsidiarity and requires the Auckland Council to consider the views expressed by local boards on regional as well as local issues. 
I hope that in the third bill on Auckland governance we will see a further strengthening and clarification of the boards’ powers and roles and more detail on issues like funding and staffing of boards and remuneration for board members. I am sorry that the Government has not seen fit to pick up the Green amendment extending the minimum number of board members from four to 11 as we simply do not believe boards can operate with any real efficacy as a balance to the council if board membership remains as low as this. 
On the question of the northern boundary the Government has missed a golden opportunity to do the right thing. Although the Greens endorse the Government’s last-minute decision to pull northern Rodney back into Auckland city I believe that what should have happened as per the Supplementary Order Paper I put before the Committee is that the very northernmost part of the district should have gone to Kaipara on the west coast and to Northland on the east coast. I hope further consideration might be given to this matter at a future date. 
There are several other lost opportunities in the bill that are far more significant. The first is in relation to Maori representation. This bill was a chance for the new Government to show faith with the Maori Party with all those who marched on the hikoi in May and with the submitters who told us that guaranteed Maori representation on the new council must happen. It is a disgrace that this has not occurred. 
SUE KEDGLEY (Green) 
: 
 I warn Aucklanders that there is a right-wing agenda behind the Local Government (Auckland Council) Bill which is after all masterminded by Rodney Hide whose party has a stated agenda of seeking to privatise local government assets and to reduce local government democracy—just look on the ACT website. The right-wing agenda is to set up a structure that gives the mayor who could be elected by as little as 20 percent of Aucklanders under first past the post the ability to exert almost total control over the council. He—and I use the word “he” advisedly—will appoint all chairs and will be able to appoint himself as chair of any committee and this will give him and his inner cabal control over the votes as well as the agenda of council. He will decide when and if the council will consult with Aucklanders and he will draw up the budget the strategy and the long-term plan and this will give him the ability to control the council and drive through an agenda. 
The mayor will also of course have control over local boards which are even smaller than community boards but with slightly increased powers. Sure local boards will have the ability to advocate for their communities and propose by-laws and they will have some as yet unspecified functions but I ask how they can be empowered as Mr Carter keeps claiming when they have no staff of their own no autonomy no independent source of finance no ability to deliver services and even no representation on the Auckland Council which will control their budgets and resources. Fundamentally they will be totally beholden to the council which despite what John Carter says has the power to veto virtually any decision of the local board. This is in the much-vaunted principle of subsidiarity; just look at the clauses that provide the ability to veto virtually any decision of a local board. 
We need to remember that these tiny local boards will be replacing Auckland councils that are very well functioning and autonomous. On the one hand we will have a council the largest organisation in New Zealand with $28 billion of assets and representing one-third of New Zealand. We are setting up a sort of state government. This council will be controlled by a mayor and his inner cabal with executive powers that no other mayor in New Zealand has. On the other hand the only counterbalance will be the 20 to 30 tiny local boards in this legislation which are subservient to the governing body of the Auckland Council. 
Aucklanders need to be very careful about who they vote for as mayor next year. If they vote in John Banks this legislation will give him the powers and the tools to become a sort of tsar of Auckland and to push through a radical agenda including privatisation. It is no wonder John Banks says that he already has 600 staff working for him on his campaign team because there is so much at stake here. If on the other hand Aucklanders were wise enough to vote in a mayoral candidate who genuinely wants to empower local boards and to give them as much power as is possible under this bill and who does not want to run the council as a fiefdom then there is a possibility that we could have some form of local democracy through the boards. The choice is stark and it is up to Aucklanders. But ultimately even if we have a progressive candidate next time round as long as this legislation is in place in subsequent elections we could still allow a mayoral fiefdom in the super-city. 
I would like to end with a warning from the Mayor of North Shore. He said that it will only be a matter of time before communities in Auckland realise that despite all the lofty promises their democratic right to decide local issues for their local area has now been passed to 20 councillors in Queen Street who will call all the shots. There will certainly be a community backlash he predicts once local communities start approaching their new local boards for better services only to be told that the best they can do is advocate their case to the Auckland Council or try to plead their case for inclusion in the next Auckland Council long-term or annual plan providing they can secure the funding and there are no regional issues at play. There will be 1 year when this legislation is in place for Aucklanders to come to grips with the full implications of what is being set up under this bill. 
JOHN BOSCAWEN (ACT) 
: 
 It is a pleasure to speak in this third reading of the Local Government (Auckland Council) Bill and I thank National for allowing me to take one of its calls. As a member of the Auckland Governance Legislation Committee it is a privilege to speak on this bill. The select committee heard from over 800 submitters. There were well over 1000 written submissions and over 800 individuals or groups were heard by the select committee. It was a very arduous process. In the first 2 weeks the committee sat from 9 in the morning until 9 in the evening on most days. 
I acknowledge the comments of Sue Bradford. She talked about the quality of the submissions and the passion with which they were delivered and she said it left her feeling very optimistic for the future of our city. I totally concur. It was a privilege to sit and listen to the submissions and to hear from so many community groups. We also heard from many local councillors. A councillor from Waitakere the former Mayor of Glen Eden had been serving the people of west Auckland as an elected representative for over 40 years and what a contribution she has made. 
I acknowledge the chairmanship of the Hon John Carter. Members of the committee were spelled at various times but John Carter was there every morning at 9 o’clock and he was there every evening at 9 p.m. when we finished. He sat through every submission and chaired every meeting. His dedication his commitment and his hard work was beyond equal. I have never seen anything like it. I found it hard and I do not know how John Carter coped because he did not actually get a break. 
I would like to contrast the differing approaches from National and Labour which I found particularly interesting. National members on the committee—Simon Bridges Jackie Blue Nikki Kaye and Tau Henare—basically came every day. Yes we were spelled on the odd occasion and the Hon John Carter did a very good job of marshalling his troops and making sure we were well watered and fed but by and large the National members attended the committee every day so those individual members can speak with authority because they heard most of the submissions. I contrast that with Labour’s position. I prefer the approach that Labour took because its members were spelled regularly. Several Labour members sat on the select committee. They may not have sat on the committee for the entire time but Phil Twyford and George Hawkins certainly spent a lot of time on it. Many other Labour members sat in on the proceedings maybe for just half a day or for a day so they will have gained a very very good view—probably more so than the National MPs. 
How demoralising it must be for Labour members to have to participate in this debate. So many of them heard those submissions and one could not possibly sit through that select committee process and come away with any other conclusion than that there is overwhelming support in Auckland for a super-city. There is overwhelming support. Although I know that there are probably only five National MPs who sat through the proceedings personally I know there had to be at least 20 if not 25 Labour MPs who sat through that process. Even the Hon Phil Goff turned up to the first 2 hours of deliberations on the first Monday in order to appear on television. How demoralising it was then for Labour members to have to go through that debate and to have to stand up and oppose the overwhelming wish of the citizens of Auckland to have one city. 
Let us look at some of the contributions that have been made. I am very much aware that the general public sees just the ping-pong between the Government and the Opposition. As one person stands up for the issue another one stands up to oppose it and the public are probably often wondering who is right. I would like to comment on some of the contributions that were made last night. We heard from George Hawkins. He talked about the cost of the super-city and about having to go from eight computer systems to one computer system. I ask George Hawkins and the Labour Party what the cost is of eight computer systems. What did it cost to put eight computer systems there in the first place? If we do not have a super-city what will it cost to replace those eight computer systems? Yes they may not be replaced at the same time but Papakura District Council is going to replace its computer system as is Waitakere District Council and North Shore City Council. Eventually it will happen. What we have is massive economies of scale. We are moving from eight councils and eight computer systems to one computer system. 
One of the overriding themes in this debate has been the issue of Maori seats. What have we just heard from the Hon Shane Jones? He said that Maori want their issues their agenda represented at the top table. What about the agenda of the Pacific peoples? What about the agenda of the Asian peoples? We heard from Su’a William Sio a person whom I have come to respect for the contribution he made on the select committee. Yesterday he said that the Pacific community was prepared to put on hold its aspirations to be at the top table. What Su’a William Sio was really saying to this House was that yes they would like to be there too. Without a doubt they would like to be there too but they are happy for Maori to have the Maori seats first; they will go with that first. Then we will have Pacific seats and who knows where it will stop? 
One of the things that I found most moving about my participation in the select committee process was the element of Maori culture from the Maori submitters the formality of the Maori submissions and the karakia at the beginning when the Manukau City Council presented its submission. That council’s submission was just one of many submissions to start the proceedings in a very formal way. Maori culture is unique to New Zealand and it is something we should all cherish. But surely the major argument the one key argument against having Maori seats or any seats divided by race is that we are one people we are one country and we want to go together. I say that the reason we do not have Maori seats is that if we have Maori seats then we will have Pacific seats and Asian seats. Who knows? One day we will probably have white seats. The dynamics of New Zealand are changing and one day European people will be in the minority. 
Let me go further. Su’a William Sio undermined his own argument. He was a former deputy mayor of Manukau City. There are 20-odd councillors on the Manukau City Council. He was elected as a councillor for the Otara ward and he was elected as the deputy mayor of Manukau City. He was the second-highest official in Manukau City New Zealand’s largest-growing city. Did he win that position as a result of there being a specific seat for Pacific Islanders? No he did not. He won it by being elected on a first-past-the-post basis for the Otara ward. I have heard mentioned the name Sam Lotu-Iiga the member for Maungakiekie. Sam Lotu-Iiga was also elected to the Auckland City Council for the Maungakiekie ward on a first-past-the-post basis. 
I would like to comment briefly on the contribution made by David Shearer. He talked about the fact that the mayor of Rodney was listened to because she was a former ACT MP. What utter rubbish! The submission of the Rodney District Council showed that the council was totally opposed to going into Auckland City so that is far from the truth. 
Let me finish by mentioning last night’s contribution by Lynne Pillay. She said that there should be a referendum on this issue. How many times have we heard over the last 36 hours that there should be a referendum on this issue? I ask the members of the Labour Party what the point is of a referendum. We have actually just had one. [ 
Interruption 
] That is right Mr Cosgrove. We have just had a referendum. Mr Cosgrove knows that I am holding a meeting in his Waimakariri electorate next Monday night because 27000 people voted No in Waimakariri and only 16000 voted for Mr Cosgrove. The reason I am holding a public meeting in Waimakariri is to try to get support for my member’s bill. I believe that people in Waimakariri need to be listened to and Waimakariri is a Labour electorate. About 11000 more people voted No than voted for their local MP. 
Let me conclude by saying that it was a privilege to serve on the Auckland Governance Legislation Committee. It was a privilege to get to know other members of Parliament particularly the Labour members of Parliament. I would say that at least 20 if not 25 members of the Labour Opposition attended the select committee at various times. It was a pleasure to get to know them and it was a pleasure to get to know Sue Bradford. It has been a privilege and a pleasure to serve on this select committee. Thank you very much. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 Outside this Chamber the date today is actually 17 September and it is a day to remember. Four years ago on 17 September 2005 the Maori Party took the nation by surprise capturing four of the seven Maori seats in a spectacular demonstration of Maori political power. There is no doubt that the previous Government’s decision in 2004 to legislate away Maori rights to the foreshore and seabed was the trigger to the Maori Party’s establishment. The Maori Party became a vehicle in which to channel the intense discontent expressed by New Zealanders over an action that sought to erode the status of Maori as tangata whenua and the human rights protections guaranteed and affirmed to us under te Tiriti o Waitangi. But the vehicle that brought us into Parliament was also a powerful force for Maori political representation—to articulate a strong and independent Maori voice in every aspect of the parliamentary programme. This was exactly what we sought for Auckland: the right to articulate a strong and independent Maori voice in every aspect of the local government agenda. 
Throughout the long hours of this debate we have brought to the House the aspirations of iwi and Maori submitters around Maori representation in local bodies and participation in local governance. They asked Parliament to invest in the full participation of Maori in governance arrangements. Iwi and Maori submitters sought to increase Maori representation in local governance bodies. They shared the experience of the establishment of Maori wards provided for under the Local Electoral Act 2001 as indeed the Bay of Plenty Regional Council has done. They expressed the importance of recognising te Tiriti o Waitangi in local governance arrangements including the rangatiratanga kaitiakitanga and manaakitanga rights and responsibilities of mana whenua. 
I want to acknowledge today our profound sadness at the way in which mana whenua have been treated by this Government in this decision today. Earlier this morning the chair of the Auckland Governance Legislation Committee the Hon John Carter rose and praised the process as having reflected the heartbeat of Auckland. I want to offer the wisdom of one of our well-known whakatauki which guides us in the pivotal role that mana whenua play in our land: “Hutia te rito o te harakeke kei hea te komako e ko? Ki mai ki ahau he aha te mea nui o te ao? Maku e ki atu he tangata he tangata he tangata.” 
[ 
If the centre shoot of the flax plant is plucked out where will the bellbird go? Ask me what is the greatest thing in the world and I will respond it is mankind it is mankind it is mankind 
.]  
Mana whenua representation has been fundamental to the history and the evolution of Tamaki-makau-rau. The respective iwi have adopted a collaborative approach to building the city of Auckland. Tangata whenua have worked alongside the founding fathers to establish New Zealand’s largest city. All the time they have maintained their obligations of manaakitanga and kaitiakitanga to look after all the people who settle within their territories. Mana whenua in essence are the pounding heart of every rohe. They hold occupational rights and interests over tribal areas and they will continue to hold this role no matter what the vote tells them today. 
Ngati Whatua spokesman Ngarimu Blair shared this view in a comment he made yesterday: “When we look at struggles we don’t think of three year terms like our Pakeha politicians do our people think in blocs of generations and know it’s inevitable that there will be Maori seats in Auckland and across the country”. So I pay my tributes today to the generosity of mana whenua their patience and their longstanding optimism that will continue to provide the heartbeat to Tamaki-makau-rau with or without this bill. 
The Maori Party sought to exercise creativity in putting forward five different options to honour the desire for Maori representation. We put forward amendments for two mana whenua seats candidates put up by mana whenua and voted on by all Maori; for two mana whenua seats in which candidates sign a whakapapa declaration voted on by all Maori; for two Maori seats voted on by all Maori; for one Maori seat voted on by all Maori; and for ensuring that Local Electoral Act 2001 provisions are lawful if Auckand Council members or electors want to establish Maori seats. One by one each of these amendments was voted down. It reflected indeed the supposition of Te Waiohua which told the select committee that without special acknowledgment of the Treaty partner they predicted a form of political ghettoisation where Maori are in a minority and are overridden in every vote cast. 
I acknowledge the support of Labour the Green Party the Progressive party and individual National MPs who supported these amendments and in doing so supported the right and responsibility for mana whenua representation. I have to commend the initiative of Ngati Whatua which recommended that the Maori seats should have been made a conscience issue to enable MPs from National to cross the floor on such a critical issue. 
Ngati Whatua themselves have admitted that they have been here before. In 2007 the Waitangi Tribunal castigated the Labour Government for the sloppy way in which it had approached negotiations with Auckland iwi. Just 2 years on we see another shameful episode which throws into question the Government’s understanding of the constitutional rights and obligations of partnership under the Treaty of Waitangi applied between the Crown and the mana whenua which gifted land on which Auckland City is built. Today our thoughts are with the people of Ngai Tai Ngati Manuhiri Ngati Maru Ngati Paoa Ngati Rehua Ngati Te Ata - Wai o Hua Ngati Tamaoho Ngati Tamatera Ngati Whanaunga Ngati Whatua Tainui Te Ahiwaru Te Akitai and Te Kawerau-a-Maki. These people have generously opened their arms and welcomed people into their rohe. We recognise the magnanimity of Ngati Whatua in granting the opportunity to establish a settlement that would flourish socially and economically. 
I am thinking too of the 15000 people who walked in the hikoi to call for Maori seats in the super-city and the 80 percent of the submissions supporting these seats as being the strongest form of Maori representation. The decision today is not just one of exclusive import to the people of Auckland. The Local Government Act 2002 requires that local governments acknowledge the authority of mana whenua. As provided for in the Treaty tangata whenua should have an equitable say in the decisions that affect them via Treaty-based representation. 
I listened to the Minister sponsoring this bill the Hon Rodney Hide say that getting Auckland right is in the interests of all Aucklanders and all New Zealanders as well. I have to say that we have not got it right in terms of Maori representation. We have not got it right in terms of supporting Maori communities and advancing Maori representation through forms such as the single transferable vote through Maori representative positions on council committees and advisory bodies nor through the Maori seats. 
I bring back to the House the words of my colleague Hone Harawira: “The report of the committee is unjust improper and politically motivated. The bill signals an enduring and profoundly disturbing fear of sharing decision-making with Maori as provided for in the Treaty of Waitangi.” 
Finally in the spirit of anniversaries I reflect on the historic Declaration on the Rights of Indigenous Peoples which was signed 2 years ago this week. Article 18 of that declaration agreed that indigenous peoples have the right to participate in decision making in matters that would affect their rights through representatives chosen by they themselves. What harm would it have done to share decision making to invest in Maori representation and to engage with tangata whenua the first peoples of this land? I guess we will never know. But the heart will keep beating; the call of the people for justice for dignity for representation will continue. We know that it is inevitable that one day there will be Maori seats in Auckland and across the nation. Tena koutou. 
NIKKI KAYE (National—Auckland Central) 
: 
 We are here to deliver a system of local government to Auckland and to New Zealand. We are delivering that system for a unique city in the world; it is a city that is unique in terms of our people and our geography. The system being delivered will have an impact on all of New Zealand for generations with one strong regional entity that will finally be able to focus on delivering more equitable services across the region and with strong local boards so that people can better influence what goes on in their community. It is a system that will help to deliver better services for the arts that will help to deliver better services for people with disabilities that will help to deliver a better public transport system and that will help Aucklanders finally to grab the opportunities and the quality of life that the people of Auckland deserve. 
Aucklanders have been waiting for this system for 50 years. After the royal commission process which took 18 months and 3500 submissions the consideration of the Auckland Governance Legislation Committee which sat for hundreds of hours with over 2500 people involved and the passage through the House of two pieces of legislation with one more piece to go there is no time to delay. Most Aucklanders including the 6500 people working in local government who need certainty for themselves and for their families and the local body politicians who are already out there campaigning are saying that we need to get on with it. The local body elections are 12 months away and 50 years is long enough to wait. As a result of the submissions and of listening to the people of Auckland the legislation has changed significantly: it includes beefed-up powers changes to the boundaries the principle of subsidiarity except where there is a clear regional interest and properly resourced boards with access to staff and facilities. 
The Opposition actually agrees with National members on the basic system of local government that is being delivered which is one regional entity with strong local boards. Where we differ and where I am proud to be on this side of the House is that we believe in stronger grassroots democracy. I am proud to be delivering strong local boards to the people of Waiheke Island and Great Barrier Island who have been after a stronger voice for a long period of time. With the exception of Maori representation the opposing Labour arguments have focused on whipping up mythical fears about problems that do not exist and then delivering half-baked legislative amendments to fix those mythical problems. I have a lot of confidence in Auckland’s local body politicians. I do not believe that they are going to sell all of Auckland’s assets. There was a push from Pacific youth and Asian communities to have a stronger voice and the issue of whether there needs to be legislation to address this will be looked at in the third bill. Putting forward legislation on advisory boards without wide consultation would be a mistake. 
I believe that Auckland would be better off with stronger local body Maori representation. I acknowledge the passionate and heartfelt representations of the submitters the Maori Party and my colleagues including Tau Henare on this issue. Parliament is a better place for having the Maori Party here. Its members are some of the hardest-working politicians in this House. For me the issue is not whether there should be stronger representation but how we achieve that. There are provisions within the Electoral Act to have a referendum on this issue. It is likely that with mayoral candidates campaigning on this issue we could see a referendum in Auckland some time in the future. We know that those referendums have not been successful in the past but I have confidence that Aucklanders will do what is right. 
I thank all MPs from both sides of the House and the officials who have worked on this bill and I thank the Hon John Carter and the Hon Rodney Hide for their leadership. Today is a historic day for Auckland. The new system of local government is only part of what will make Auckland the best city in the world. Let us not forget that it is people who matter: one strong city with many diverse villages. It is a time of immense opportunity for Auckland and New Zealand. I am proud to be part of a historic process focusing on delivering a new era of local government for the people of Auckland. 
SU’A WILLIAM SIO (Labour—Mangere) 
: 
 I say to the House e nga mana e nga iwi e nga reo e nga hau e wha e nga karangaranga maha tena koutou katoa. Malo e lelei. Talofa lava. Kia orana tatou katoatoa. Ni sa bula vinaca. Fakalofa lahi atu. Ni hao ma. Namaste. Sat sri akaal. I think it is important that I reflect to the House the languages spoken by the people of the Auckland region in order to give members a bit of a taste of the diversity that exists in the Auckland region. 
I also want to use those comments to acknowledge the hundreds and hundreds of submitters who came from the four corners of Auckland to put forward their views and their opinions who gave their time and energy and who took time off work to contribute to the work of the Auckland Governance Legislation Committee and to this debate overall. I particularly acknowledge my colleagues in the Labour Party who by and large have attempted to do their best to reflect to the Government the views that have been expressed by the people of Auckland. In particular I acknowledge the Hon George Hawkins who has led our team of MPs on the select committee. I also acknowledge the other Opposition members on the select committee and to be fair I also thank the members from the Government side. 
One of the submitters whom select committee members will be aware of is councillor Efu Koka who submitted in Manukau. The first question that he asked the Government members of the committee was: “Are you listening?”. There was a deafening silence. The submitters in the room including Maori women from the Maori Women’s Welfare League then chastised the ACT member on the select committee because he was playing on his phone. He was not listening to the submitters. Throughout the debate the theme from the people of Auckland has been that this Government is not listening to the voices of the people who will be affected by this change. 
We have to ask ourselves what this debate is all about. From Labour’s perspective it is about setting up a vehicle a democratic structural governance model that will ensure the full potential of the Auckland region is released now and in the future. Labour wants the Auckland region to be dynamic inclusive thriving and progressive for all people young and old male and female Maori and Pakeha Pacific and Asian Africans Latin Americans—for all people. We cannot take everyone on this journey into the future unless we ensure that the diversity of Auckland’s communities is acknowledged recognised and tapped into. As a region and indeed as a country we must be comfortable with people of different colours who speak different languages who have different religious beliefs and who have different lifestyles. We must take that diversity and find our unity and strength in it. “Our unity in our diversity” is what we say in Manukau. 
Auckland is after all the region that impacts on the rest of the nation. It has been said that if Auckland sneezes the rest of New Zealand gets a cold. The debate then is about how we ensure that Auckland now and in the future becomes strong dynamic thriving and a progressive region that benefits all its people. To enable us to understand the governance structure and for the benefit of our public we have to ask what the values are that drive that change. From Labour’s perspective we acknowledge that any change to the governance structure requires united support from the regional and local authorities and their peoples. Labour values consultation and taking everyone along in the change process; the Government does not. It listens but it does not hear. It rushed through the first bill snuffing out the life of the existing local governments. It rushed through the select committee process which has been called a sham by the people of Auckland. It will no doubt rush through the third bill. 
Labour values a Maori voice; the Government does not. The Government listens to the race-based arguments of the ACT Party—the party that has been dubbed the “1 Percent Party”—and enhances Mr Hide’s mana and no one else’s. Labour values inclusiveness where diversity is strength; the Government does not. Government members are determined to deliberately exclude Maori Pacific Asian young people and people with disabilities because nowhere in that bill is there any recognition of that diversity. 
I say this in response to ACT member John Boscawen who spoke earlier. The Otara ward is a ward of only 35000 people and about 25000 voters. Two councillors represent that ward on the Manukau City Council and yes I was elected from that ward. I became the deputy mayor because I was elected by the councillors of the Manukau region. Two councillors represent 20000 voters in the Otara ward. What is changing—the big difference—is that that we are deleting or extinguishing the life of those local authorities and replacing them with 20 councillors representing 1.4 million people in the Auckland region. Is that democracy? I say to members that it is not and that is how the people of Auckland feel. There will be 20 councillors representing 1.4 million people which is a population of over 70000 for each councillor. That is more than the population represented by most MPs. In response to John Boscawen’s comments about Pacific people supporting Maori seats I say that it is the view of Pacific people that if the establishment or the Man does not get things right for Maori how on earth will the establishment get it right for other minorities? What is wrong with having everybody on the governance structure? What is wrong with enabling participation from Maori Pasifika Asians Africans and Latin Americans? There is nothing wrong with that. What drives the Government’s intent in not allowing for that participation is fear; it intends to keep the governance and the decision making to a select few. 
Labour supports the reform of Auckland governance. It always has. But it wanted to take everybody with it. That is why there was a royal commission which took 18 months to look at the issue. There needed to be more consultation. Labour opposes the Local Government (Auckland Council) Bill because it is flawed and undemocratic and because the whole consultation process has been a sham. 
There are two documents on the Table which no doubt the public will eventually get to understand. The first is the select committee report. On the whole I have to say that there was a genuine attempt by the select committee members to reflect what was said by submitters. Generally the report provides the evidence and it is basically reasonable. The other document on the Table is the bill itself with the amendments that have been made by the select committee. The clauses in the bill do not reflect the sentiments in that report. I want to say briefly that when it comes to local boards—and I was pleased that the select committee listened to what the public said—if we look at the report and then compare it with the amendments in the bill we see that they do not align—there is no recognition of the sentiments in the report. Let me show members. Clause 10 “Local boards” lists purposes. Those are nice words. Clause 12 is about their membership. There will be four to nine members. Clause 12A says that a local board’s status is that of an unincorporated body. It recognises in clause 13 functions duties and responsibilities. In terms of the principles for allocating responsibilities clause 13A identifies activities that must be included in a long-term council community plan. 
The bill talks about a funding policy and it talks about local boards having a plan. But the whole essence and crux of it is the fact that those local boards cannot act without agreement from the 20 people on the local council. In essence they cannot move if they do not get permission from the local council. Again I say we have an authority that will have an impact on the lives of the people of Auckland and its power will be held by a minority few. 
I want to briefly say that the issue of Maori seats was an important point in this debate. Others may say it was a small point but it was a significant point. I want to read out something that I think the House will benefit from. It came from Ngati Whatua. They say: “It is the presence of Maori which makes a large part of what makes New Zealand distinct from anywhere else—what makes New Zealand and New Zealanders different. That is an important quality which should be valued treasured and safeguarded. Maori have a distinct contribution to make to New Zealand society. Ensuring a place at the top table enables such a contribution to take place.” Auckland deserves better than what this Government is proposing. 
SIMON BRIDGES (National—Tauranga) 
: 
 As Nicky Kaye has said it was an unalloyed pleasure and a privilege to be on the historic Auckland Governance Legislation Committee which dealt with such an important issue for Auckland and for New Zealand. 
Hon Clayton Cosgrove 
: Don’t speak too fast. 
SIMON BRIDGES 
: I can speed it up a little; I only have 3 minutes. Despite what the Opposition has said the select committee process was an example of that process at its best. The select committee has been listening very hard. I do not mind saying that National members went to the committee with certain views about how things would go and certain preconceived views as to what would be best. But we listened and listened carefully. I know I did and I am sure other members did because we changed our views as a result of what we heard. The process was far from a sham as the previous speaker Su’a William Sio said it was. We heard from hundreds and hundreds of ordinary folk throughout all the diverse communities that make up Auckland. As I said we did not just hear them; we listened to them and we made serious changes as a result of what they said. 
I will give members a couple of examples. We beefed up the local boards as a result of what submitters said to us. We beefed up boards substantially. In New Zealand we do not tend to like fancy concepts and principles but we were influenced by the principle of subsidiarity so we beefed up local boards. 
Chris Hipkins 
: Are you from Auckland or Tauranga? 
SIMON BRIDGES 
: We put the “local” back into local government. The other thing we did—which again was very much a listening exercise—was listen to what people said about at-large seats. 
Hon Darren Hughes 
: Are you from Auckland? 
SIMON BRIDGES 
: We did away with them and we went with a ward system. I say in response to what I am hearing around the House that I came into this process somewhat as an outsider but I enjoyed very much being part of the process and hearing from Aucklanders. Auckland is an important city and like Tauranga it will be a huge part of the future of our country. 
I finish as I started by telling members what a pleasure and a privilege it has been to be part of this important and future-focused project. 
PHIL TWYFORD (Labour) 
: 
 We have heard some plaintive mews from the National benches saying that we in the Labour Opposition actually support the Local Government (Auckland Council) Bill. Nothing could be further from the truth. Yes we support having a unitary authority and we support having one mayor. We support one council one plan and one rates bill. We support an integrated water company and a transport authority in public ownership. We support much but not all of what the royal commission recommended in March. 
However we do not support this Government’s ham-fisted mishandling of the Auckland governance reforms. We do not support the rushed process the confiscation of Aucklanders’ right to a referendum the abuse of urgency in this House and the fake listening campaign conducted by the members on the other side of the House. We do not support the ill-judged plans for powerless boards and at-large councillors or the fiasco over Maori representation that saw the Prime Minister professing to have an open mind on the issue weeks after he had caved in to Rodney Hide’s threat to resign. Then there was the panicked eleventh-hour change to the northern boundary. Between them Huey Dewey and Louie have made a mess of this whole thing. We have a Prime Minister who will say anything to anybody because he wants to be liked a Minister of Local Government with his own extremist agenda whom no one trusts or likes and an Associate Minister of Local Government whom everyone likes but who got it wrong on the boundary matter when it mattered. 
This bill is flawed and undemocratic. These are the reasons why: it centralises too much power in the hands of a privileged few; there will be too few councillors for a city of 1.4 million people; the councillors will be elected from multi-member wards that will be too big for many to be able to campaign across them which will disadvantage communities with lower voting turn-out and leave many communities unrepresented; councillors will be elected under first past the post which is an unfair voting system that we discarded from this House 13 years ago and which will likely elect the new mayor of the Auckland super-city with 20 percent of the vote; the mayor will wield executive powers unprecedented in New Zealand local government that will unbalance the relationship between the mayor and councillors; and local boards may be too small if there are 30 of them to wield real influence or be a force for change and development; and the creation of the local boards will divide up established communities of interest. 
The litmus test of the success of these reforms will be increased public engagement with local government. If people feel they have less say in the affairs of their community if they feel their community has been shut out of the city’s decision making and if they feel that power is being grabbed by a select few they will not take part in the political process. 
This Government has played fast and loose with the trust of Aucklanders with its shonky process and with an undemocratic and unbalanced model. In spite of the efforts of the Auckland Governance Legislation Committee members including Government members to seriously grapple with the powers of local boards the result is highly constrained. Members on that side of that House protest too much when they claim that local boards have been fully empowered. These boards will have no legal status no staff no role in service delivery and no regulatory function at all not even in regards to the powers over dogs brothels graffiti and liquor that Rodney Hide promised back in April. Although principles have been laid down requiring the delegation of powers these requirements themselves are highly constrained. Transport and planning are out. Anything that impacts a greater area than the board’s territory or that might be better handled regionally is out. Not much is left. 
Perhaps as the officials argued that is how it must be if there is to be a unitary authority. But on this side of the House we have our doubts. The royal commission argued that to be successful the centralisation of regional powers in the Auckland Council must be counterbalanced by a strong local second tier. If the local boards are not seen to be genuinely and effectively serving local communities the super-city will fall far short of aspirations. This is one of the main reasons that Labour is proposing a review of the new structures in 5 years’ time. 
The issue of Maori representation was a huge lost opportunity. This Government could have taken Auckland forward into the 21st century in a spirit of inclusion with Maori at the top table being part of decisions about the future of our country’s biggest city. The public support was there the royal commission made the arguments and the moment was ripe. But what did the Government do? It caved to the threat of a man whose party has 1 percent support in the polls. What a travesty! There was a botched decision by this Government on the issue of boundaries and mediocre decision-making was rescued at the last minute by pulling northern Rodney into the city but still leaving Franklin partitioned and giving away our dams Hunua and several regional parks. I do not think Aucklanders will appreciate that in years to come. 
During this debate we have laid on the Table a number of amendments that were not supported by National and ACT members. They were amendments that would have seen commitments of fairness and certainty to 6500 local government staff during this transition period. One of the amendments would have set up a performance auditor to guarantee accountability transparency and standards of customer service for the new water monopoly and other council-controlled organisations. The amendments included the establishment of advisory councils that would have guaranteed an inclusive approach to engaging with ethnic minority communities and youth in Auckland. Finally the amendments included the issue of the protection of assets that Aucklanders overwhelmingly believe should be kept in public hands for generations to come. They do not trust the Minister of Local Government Rodney Hide and this Government to safeguard those assets. 
Aucklanders deserve better governance than they have had in recent generations. They also deserve a better reform process than they have been subjected to over the last 5 months. They will judge the success of Rodney Hide’s super-city on the following factors. Firstly they will ask whether it gets things done. Will they see action on public transport and infrastructure? Well we will see. Secondly they will ask how much it will cost. We do not hear the Minister of Local Government talking much about cutting rates these days. But he must know that this rushed and hugely complicated organisational merger has a high risk of cost blowouts. People know what happened in Toronto when a similar thing was attempted. Unbelievably 5 months after the royal commission reported the Government has yet to give Aucklanders any substantial data about what this exercise will cost. No reliable information has been provided in the public domain on the transition costs or on what will happen to people’s water bills when volume pricing is rolled out across the city. All we have heard from the Minister is that Aucklanders will pick up the tab. How is that for fiscal accountability for ratepayers from the Minister? Thirdly Aucklanders will ask whether they will have a say. Will their voice be heard in the new super-city? Will their communities be able to maintain their identities? 
With Labour the Greens and the Maori Party voting against this bill it is plain for everyone to see that National and ACT are imposing this odious bill on Auckland. National and ACT have abused the democratic process. They have offered up a flawed and undemocratic super-city model with a lost opportunity to include Maori in the governance of 21st century Auckland and a botched decision on the southern boundary. When the Associate Minister said that this super-city was not perfect he was surely a master of understatement. 
I close by challenging the Government. If it is so confident of this super-city model if it is so sure that this is what the people of Auckland want and if it is so sure that it has listened to the people of Auckland and accommodated all their aspirations and all their objections then it should put the question to the people. I challenge the Government to give back to Aucklanders the right to a referendum that the members on that side of the House confiscated several months ago with the first super-city bill. It should put the super-city model to a referendum and let the people decide. 
Hon JOHN CARTER (Associate Minister of Local Government) 
: 
 I guess those last few paragraphs from Phil Twyford exemplified why the last Labour Government just could not get on with the job. It could not make decisions; it was always wondering and testing. 
I thank the Minister of Local Government Rodney Hide and congratulate him for the good job that he has done on this issue. He has given outstanding leadership and can be very proud of the fact that the Local Government (Auckland Council) Bill has moved a lot because of the work that he has done and the leadership that he has shown. I acknowledge the work that he is doing in local government generally and also in regulatory reform. I thank the Prime Minister and Cabinet for the work that they did and the leadership that they have given on many of the issues. Some were challenging and some were a bit difficult but nevertheless decisions were made and we have moved through it. I particularly thank the members of the Auckland Governance Legislation Committee and my colleagues on this side of the House very much for the contribution that they have made; I also thank all the members of the select committee. Of all the select committees I have worked on in my time at Parliament this one was probably the most satisfying and the most productive I have been involved with. I also acknowledge all the staff that were involved from the Office of the Clerk the Department of Internal Affairs and the Parliamentary Counsel Office. They were outstanding in their contributions and we cannot acknowledge them enough. Finally I thank the Aucklanders who took so much time and interest and delivered their contributions with great passion and great heart. They are to be commended for their input. 
This bill is one of the few bills that we can claim—even though parts of it are obviously not supported by different parties in this House—is a Parliament bill. It is a bill of this Parliament. The members of this House support and agree with much of this bill. I think we can say it is one of the few bills that has gone through and has changed and is better for it because there has been input from Parliament into it. That is important for us to remember. We must remember that this bill is not just the Prime Minister’s bill nor is it Rodney Hide’s bill as some people have claimed. It is not the right-wing agenda’s bill; it is Parliament’s bill and it is Auckland’s bill. It is the better for the debate and for the contribution by all members who have been involved in this bill. 
If there is one thing that I am still disappointed in it is that I am uncertain of exactly what Labour’s vision is. We have had the second reading 16 hours of debate in the Committee stage and the third reading yet I am still unclear of the vision that Labour has in respect of where it wants to take Auckland other than it thinks there should be a referendum which does not give a lot of vision and leadership. 
Let me clearly set out what the Government’s vision for Auckland is. It is to have an authority that ensures that the regional issues that Aucklanders have constantly wanted to be addressed—for at least 50 years if not the last 100 years—will be addressed on a regional basis. Such regional issues include planning spatial plans roads and water. For those sorts of things we will set up a structure that allows them to be addressed. To me that is absolutely vital. Without achieving that we achieve nothing. We will achieve that because the select committee and Parliament have set it in motion. 
Alongside that and probably at least as important if not more important was the issue of the local boards. There has been much discussion about what that means and what we endeavour to do. The whole purpose of where the select committee report got to and what Parliament addressed is to ensure that we empower the local boards. We have certainly ensured that the Auckland Transition Agency will set out the functions of the local boards once they have the report from the Local Government Commission. The Auckland Transition Agency will then ensure that the funding is provided. That sets the foundations for those boards that the unitary authority cannot interfere in. It gives the power to the local boards. It gives the funding to the local boards. It allows the local voice. It allows local democracy. It allows that local heartbeat. This bill is about ensuring that the voice of Aucklanders gets recognised gets heard and most important gets implemented. That is what this bill will do. 
As I have said before as we move forward this is work in progress. It is not just one step or two steps; ongoing work will need to be done. We will address things in the third bill that bring this work together. We will for example address the establishment of the new Auckland Council and the disestablishment of the existing local authorities. That will provide an orderly transfer of assets and liabilities and associated matters. We will provide an optimal environment for the new Auckland Council to work in. We will provide in the third bill for an appropriate legislative framework for the Auckland Council. We will also address things that actually matter. A lot of local legislation currently affects Auckland—for example the Waitakere Ranges Heritage Area Act and the Auckland Regional Amenities Funding Act which was discussed by the Opposition. How we transfer through the local legislation that affects Auckland will be considered in the third bill. 
In the third bill we will consider the disestablishment of the Auckland Regional Transport Authority and setting up the provisions for the new transport entity. We will provide temporary legislation under which the new Auckland Council will operate including how things such as the district plans translate and move forward. The long-term council community plans will all be part of the third bill. We will create a dispute resolution mechanism so that any disagreement between the unitary authority and the local boards will be addressed. We will address the matter of the transfer of assets under the Local Government Act 2002 which was put in place by the previous Government to ensure that those assets continue with the protection that is afforded to them by that legislation. We will also make sure that if the funding and the powers of the local boards issues need to be addressed or further tweaked they will be considered in the third bill. The third bill is the nuts and bolts of the work we have done. It is important legislation to bring all this work together. 
I am satisfied as the chairman of the Auckland Governance Legislation Committee and as the Associate Minister of Local Government that the legislation we are putting in place today and the ongoing legislation that will follow will ensure that a structure is put in place for Aucklanders that will allow them to realise their ambitions and the things that they aspire to and at the same time take away those costs that Auckland currently imposes on New Zealanders. Not just Auckland but all of New Zealand will benefit as a consequence of this legislation. It is a proud day for this Parliament and for this country. 
A party vote was called for on the question  
That the Local Government (Auckland Council) Bill be now read a third time. 
Ayes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Bill read a third time. 
Student Loan Scheme (Repayment Bonus) Amendment Bill 
Second Reading 
Debate resumed from 10 September. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I will be very brief on this. One would have to be completely crazy to take up the student loan repayment bonus. Therefore I think it is important that before people take up the repayment bonus they receive adequate advice so that they can ensure that they are making a prudent decision. There are very very few circumstances in which it would be in somebody’s best interests to take it up. My colleague Trevor Mallard has put forward an amendment to that effect which would ensure that somebody receives appropriate advice and guidance before taking up the repayment bonus. I commend his amendment to the House. 
COLIN KING (National—Kaikoura) 
: 
 It is indeed a pleasure to speak to the Student Loan Scheme (Repayment Bonus) Amendment Bill during its second reading. I would like briefly to cover off the intention of the bill the reasons why someone would take advantage of its provisions and some of the work that was given significant consideration by the Education and Science Committee. 
I will start off by saying that this bill is consistent with the National Party’s goals of creating incentives for people to get ahead. It is consistent with the National Party’s vision of aspiration and making the most of one’s opportunity. It is a worthy bill. It is designed to do two things: first to encourage students to pay back their student loans quicker; and second to reduce the cost of or add value to the student loan scheme. From that point of view I would like to go through some of the points that I think are good reasons why people will take up the opportunity. 
The select committee learnt that there are a significant number of people who are risk-averse or debt-averse and that these are the people who will take up the opportunity. We learnt that some 40000 people have paid off in effect more than the compulsory part of their payments. The projections from the officials are that this bill would increase that number by another 14000-odd to a level of 54800 people. 
Student borrowers who have completed their degree and are thinking of going overseas would be very wise to take up this opportunity while they still have that interest-free component. The facts and the figures also show that this bill is designed so that borrowers who are overseas can take advantage of the bill’s provisions. Fifteen percent of all borrowers in the student loan scheme are overseas and that is 77000 people. Of that number a significant proportion have overdue payments and they are a group that the Inland Revenue Department has great difficulty managing. It is expected that 4800 borrowers overseas will take advantage of this opportunity. There are also carers or parents who would like to give their children a first-class education with a debt-free start; those people will certainly take up the opportunity. A basic analysis of the figures shows that borrowers in the last 3 years of their student loan repayment schedule will be advantaged by doing that. 
I would like to take up the point mentioned by Mr Hipkins at the conclusion of his speech that there needs to be a safety or health warning for borrowers who enter into this situation. I suggest from my experience that the advice should be given long before students takes on a student loan to ensure they are undertaking education that they will see value in. There certainly is value in education but if in effect students do not take up those opportunities I say that it would be far better for them long before they start their studies to give consideration to taking on that debt or repaying it. 
In the debate on this bill Opposition members are effectively backing those who are privileged against the hard-working Kiwis. Members on the other side of the House want to take a serious look at themselves. They no longer represent the working class of New Zealand; they are a combination of university lecturers unionists and other people. 
This bill has a lot to recommend it. I am very confident that it will add value to a lot of people’s decision making and on that basis I take great pleasure in supporting it. 
Hon MARYAN STREET (Labour) 
: 
 Periodically the Vice-Chancellors Committee releases a report on the destination of graduates from universities and that tends to chart the salary band that new graduates go into. Typically it is not very high. Frequently we are told that a degree will enhance people’s earning power and therefore they will be able to earn more in their lifetime—and I hope that is true. I am concerned however that many people who on emerging from a university or a polytechnic with a degree and encumbered by student debt are not in a position for many years to take advantage of this legislation. We have legislation that is designed for the wealthy—for those who have additional money left over after they have already paid off what they need to pay off on their student loan and have then paid out for living expenses. If one has a spare $500 sloshing around after that then this bill may be of some assistance to those people. However for the vast majority of people this is not going to provide any relief at all. I am pleased to say however that there is one redeeming feature to this legislation: my colleague Trevor Mallard’s Supplementary Order Paper. I congratulate the Government on accepting the Supplementary Order Paper even though it was not accepted in the select committee. It was accepted by the Government in the end because it is the only thing that makes this bill tolerable and it is the only reason why Labour will move to support it. 
The Supplementary Order Paper relates to the “health warning”—the piece that says “for goodness’ sake get some financial advice”. It inserts new section 45G with its heading: “Commissioner must advise borrowers to seek financial advice”. In other words the commissioner is required in all material to provide information about repayment bonuses and make sure that people get financial advice. The only people that this bill really suits are rich stupid people. They are people with extra money but too stupid to realise that their money would work better for them if they put it into an interest-bearing account than if they reduce a loan that does not have any interest on it. It is particularly ridiculous legislation in that the only time it is likely to make an impact on anybody’s student loan debt is towards the very end of the life of that debt. We will not stand in the way of it however because the Government has seen fit and seen the sense of accepting my colleague’s Supplementary Order Paper that inserts this “health warning”. 
Bill read a second time. 
In Committee 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I seek leave for the provisions of the Student Loan Scheme (Repayment Bonus) Amendment Bill to be taken as one question. 
The CHAIRPERSON (Eric Roy) 
: Leave is sought for that purpose. Is anyone opposed to that course of action? It appears not. Leave is granted. 
Clauses 1 to 4 
Hon MARYAN STREET (Labour) 
: 
 I would like to draw the Committee’s attention to some of the provisions in the Student Loan Scheme (Repayment Bonus) Amendment Bill but I would also like to inform the Committee about some of the advice that was received by the Education and Science Committee in consideration of this bill. The advice pointed out that borrowers with higher student loan balances in relation to their incomes and longer repayment horizons are less likely to benefit from this bonus offer. The advice given to members of the select committee was that these borrowers would clearly have less disposable income to make voluntary repayments over and above the required amount and that they would be less likely to be able to fully repay their loan in one payment. They face long repayment times typically and there is no incentive to repay earlier as the loan balance is not adjusted for inflation. 
One of the examples that were provided in this advice was the case of a fictitious woman with the name of Fiona. The advice stated that this fictitious person—fictitious but typical—was a recent graduate with a large student loan of $50000 and a modest income of $32000. A modest income is often where graduates start. A relative had come into some money or had won Lotto and that person decided to give Fiona the opportunity to pay off her entire loan so that she no longer had to make compulsory repayments and could be free of her student loan debt earlier than would normally be the case. At Fiona’s income of $32000 she could expect to repay her debt in 18.6 years assuming that her income grows on a basis of 5 percent per annum and assuming that the income threshold is 2.5 percent. In this time Fiona would have repaid $50000. If a family member who had won Lotto decided to pay off Fiona’s student loan it would be a silly thing to do. In fact that relative would do better to give Fiona the money which she could put in an account that was generating interest and develop a nice nest egg for her first home. Perhaps Fiona could take out a mortgage put down a deposit on a first house and be a lot better off. If she invested that money elsewhere—let us say at a lower rate of 5 percent for example—instead of repaying her loan she would be $15000 better off in today’s dollars. 
The financial logic is missing from this legislation. When one looks at particular examples it is perfectly clear that there is no logic to it. It is nonsensical. But if people are able to take it up the Labour Party will not stand in their way. The only thing that rescues this legislation is Trevor Mallard’s Supplementary Order Paper which I am pleased that the Government has accepted. It requires that a statement advising that financial advice be sought—a health warning effectively—be attached to all material that goes out with any promotion around this legislation. The legislation patently does not make financial sense and if people are wealthy enough to take it up then one assumes that they are wealthy enough to get the kind of advice that would tell them so. In the event the Supplementary Order Paper will provide some protection. It will provide protection so that people do not find themselves in the position of having misused their money if they are in the lucky situation of being able to afford additional repayments. 
I do not have a lot of enthusiasm for this bill. The only thing that makes it passable is the Supplementary Order Paper. Thank you. 
ALLAN PEACHEY (National—Tamaki) 
: 
 I am very pleased to stand and take a very brief call in the Committee stage of the Student Loan Scheme (Repayment Bonus) Amendment Bill. As chairman of the Education and Science Committee that held hearings on the bill I compliment the Opposition on agreeing to support the bill. Opposition members as did Government members worked very hard to develop a scheme that was workable and although we had a lot of debate around the Supplementary Order Paper that Mr Mallard put forward I congratulate him on his success in having that Supplementary Order Paper accepted. 
The important thing is this. We are talking about taxpayers’ money and we are talking about people who borrow money for student loans. The message the Government wishes to send to borrowers is that it is in their best interests to pay off their loan as early as they possibly can and there will be a financial incentive a so-called 10 percent bonus if they do that. We must always remember that we are talking about taxpayers’ money. We are talking about other New Zealanders who pay tax so that students can borrow money to finance their education. I do not know of too many New Zealanders who object to that but I do know that a lot of New Zealanders worry about the levels of debt that are accrued and about the way that some of that money is being used. This bill sends a very very strong message. It is the Government’s wish supported by the Opposition that if one is a borrower one’s student loan is to be paid off as quickly as one possibly can. It is in the borrower’s interest and it is in the taxpayers’ interest. Thank you. 
STUART NASH (Labour) 
: 
 I stand up to speak in support of the Student Loan Scheme (Repayment Bonus) Amendment Bill in its Committee stage. I spoke against the bill it in its first and second readings but with the sensible acceptance of the Hon Trevor Mallard’s amendments I do not oppose it. 
I am actually pretty ambivalent about the bill to tell the truth. It is a bit of a nothing bill that will help very little and achieve not much at all. Let us be honest about this: as outlined in the executive summary in the regulatory impact statement of the bill this bill is just another one of National’s election promises that is targeted primarily at those who are in the upper income bracket—like the National tax cuts the super-city legislation and the 90-day “Fire at Will Act”. 
This bill does nothing for students who have elected to take courses that result in a salary that leaves very little discretionary income once the bills are paid at the end of each week. This of course does not mean that these professions are any less valuable to society than those professions paying significantly higher; in fact the case may be quite the opposite. I tell members that if I was dying I would rather have a nurse than a financier look after me and if I was after quality education for my children I would much prefer to have a teacher than a financier. Yet the health and education sectors under this Government after only 9 long tortuous months have taken a huge hit under Ministers Ryall and Tolley. 
As I was saying as I made my way through the regulatory impact statement I was hit more by what is not here than by what is. Never once does the statement outline predict or forecast how many students this bill will help—never once. I wonder why that is. I suspect it is because when the numbers were done—and they do exist because there is a very light financial analysis; in fact it is surprisingly light for a taxation bill—some key assumptions must have been made around the actual student numbers. However the Minister in charge of this bill the Hon Peter Dunne was too embarrassed to include them in the regulatory impact statement because he realised that very few students will take advantage of this scheme. That is why I say that this bill is a little bit of a nothing bill. 
Hon Member 
: That’s right. 
STUART NASH 
: It is. 
The regulatory impact statement also states: “Inland Revenue and the Ministry of Education officials will continue to monitor repayment trends over the next few years to assess the impact of the voluntary repayment bonus policy. The student loan integrated data set will enable officials to get an understanding of the debt income and demographic characteristics of those making additional student loan repayments. It will take several years however for a sufficient time-series to emerge to enable good outcome data to be collected.” 
I can tell officials that the data will say one of two things. It will say either that those earning large salaries from high socio-economic backgrounds with professional degrees in careers like accountancy law engineering commerce finance medicine dentistry etc. will pay off their loans noticeably quicker than those in less well-paying professions or that the numbers in those areas will continue to stagnate or drop as those students understand that there is actually no huge financial advantage of early repayment. It is not the Inland Revenue Department and education officials who should be monitoring progress in this scheme; it is the sociologists and the Treasury officials who should look at the data that comes out of this early repayment option in an effort to understand the level of financial literacy amongst our graduates and/or understand the reason why graduates would pay back an interest-free loan early when there would be very little financial benefit to them at all. 
These data are the ones that the Minister should be interested in and I hope he uses them wisely for future development of any student loan repayment scheme. In fact he probably will not get the chance because in 2 years and 3 months there will be a Labour Minister of Revenue and a Labour Minister of Education and they will have the ability to view these data and put them to good use. Thank you. 
Hon PETER DUNNE (Minister of Revenue) 
: 
 Let me begin— 
Hon Darren Hughes 
: He’ll still be Revenue Minister! 
Hon PETER DUNNE 
: —we shall see—by indicating to— 
Hon Trevor Mallard 
: Not if Charles wins his seat! 
Hon PETER DUNNE 
: —pigs might fly—the Hon Trevor Mallard that the Government is accepting the amendment he has moved and I appreciate the interchange there has been in terms of developing the appropriate wording. As I may have indicated by a shrug of my shoulders during the second reading I do not see the insertion of new section 45G into the Student Loan Scheme Act as proposed by Supplementary Order Paper 37 as in any way contrary to the intent of the Student Loan Scheme (Repayment Bonus) Amendment Bill. I make one other comment though that picks up on what the previous speaker was trying to raise regarding who possibly might take advantage of this. I thought the Committee might be interested to know the figures to date. Since this bill has been around the prospect of it has attracted a great deal of interest from some 1800 borrowers who have repaid either all or ten-elevenths of their loan balance. They have been getting an average bonus of around $875. Already before the bill is passed because it has a slight retrospective element there have been 1800 student loan borrowers who have chosen to take advantage of it. 
Chris Tremain 
: There’s financial sense in that isn’t there? 
Hon PETER DUNNE 
: There is huge merit and sense in that and it really goes to the heart of what this measure is about: incentivising people to make earlier repayments if they are in a position to do so. It is very difficult to argue against that proposition. The fact that nearly 2000 students have before the bill has passed through the House chosen to take advantage of that opportunity— 
Hon Trevor Mallard 
: Is that more or less than the normal early repayments? 
Hon PETER DUNNE 
: It is a considerable figure and I think that the Committee should be delighted that— 
Hon Trevor Mallard 
: Is it more or less than normal? 
Hon PETER DUNNE 
: The member asks whether it is more or less than normal. Well there has not been huge provision for early repayment to this day and that is one of the other measures being addressed. This bill incentivises people to make those early repayments and 1800 of them will benefit from its retrospective element. I simply wanted to put that information before the Committee because some members have been asking who will take advantage of it and what the point of it is. Already significant numbers are taking advantage of it. I think that puts it into perspective. I acknowledge that this measure will pass with the support of all sides of the Chamber and I thank members for that. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I will speak very briefly to say thank you to the Government and especially the Minister of Revenue for his forbearance in the negotiations of the Supplementary Order Paper for the third time. I thank the officials for putting us back on track to get a defined term rather than an undefined term. For members who have not seen it there is a new Supplementary Order Paper on the Table. It is the same as the old Supplementary Order Paper as it was for quite a period of time but there was an interim period where something else was there. I do not want to say a lot about this bill. I think Maryan Street put it pretty well. It is the bill for people who do not have a lot of financial literacy especially if they are repaying more than 2 years before the time is due— 
Hon Darren Hughes 
: Not the Minister of Finance then? 
Hon TREVOR MALLARD 
: No I think the Minister of Finance has a lot of financial literacy but not much political sense. That might be the case. In his case it could be argued that he has his hand in taxpayers’ pockets and in this case in a lot of student loan borrowers’ pockets. People would be relatively foolish to pick this up more than 2 years out. There would have to be a very good reason for it and that reason is not a financial one. 
COLIN KING (National—Kaikoura) 
: 
 With regard to the Student Loan (Repayment Bonus) Amendment Bill as it came to the select committee there were areas that needed to be given consideration to improve it. As the Minister in the chair the Hon Peter Dunne mentioned a number of people have taken up the opportunity of the repayment bonus. One thing the select committee had to do was set the date of the implementation of this bill to 1 April 2010. Effectively that gives a 12-month period for those who wish to take advantage of the bonus repayment scheme to build up a history of repayments. 
The other thing we had to look at was around the non-salary non-wage earners’ situation. As the bill came to the select committee it would have given more than 12 months after the tax year for a person to decide on what amount he or she would pay. In the end the select committee settled on 7 May after the end of the tax year so there is not an unfair advantage to those persons. But it gives them sufficient time to decide what they can or cannot do. 
The other issue that bears mentioning is the basic figure of $500 for a 10 percent repayment bonus. The question arose of what happens if there is less than $550. That was something the select committee had to wrestle with and we came to recommend that the derivatives of under $550 would be the maximum amount of bonus repayment. 
The other point I wanted to mention is the multiple voluntary repayments in the tax year. As the bill came to the select committee it would have been just a last payment. We looked at that and set it as being payments over and above the normal repayment scheme that were eligible for that tax year. 
I believe the bill is in good shape. The select committee worked very very well on it. I think it is appropriate in the Committee stage of a bonus repayment bill to mention the Education (Freedom of Association) Amendment Bill that was drawn out of the ballot. That is one we all look forward to debating because we believe that that too underpins and supports the principles of choice. Thank you very much. 
JACINDA ARDERN (Labour) 
: 
 I am pleased to rise and speak to the Student Loan (Repayment Bonus) Amendment Bill and to support the statements that have been made by my colleagues up until now. Before we go too far into this debate it is important we size the issue we are talking about. I have done a little bit of reading on the current state of our student loan scheme the uptake rate the size of the debt and the number of young people who are impacted by this scheme as it stands because I think it is important that we understand how many are captured by this bill. 
Twenty-three percent of New Zealand’s population over the age of 15 have used our student loan scheme. That is massive. Every time either this Government or past Governments have changed the scheme it has impacted on quite a significant part of the population. That is an important factor to keep in mind. As of June 2008 530000 young people in New Zealand had a student loan. That is quite a significant number of young people who would have greatly welcomed Labour’s significant policy change at the election before last when we removed interest on student loans altogether. That was the most significant change I have seen in my lifetime in terms of improving our student loan structure as it currently stands. 
But what does the bill do? Before I go down that track I will talk a little bit more about what the bill is trying to achieve. In order to establish that one needs only to look at the commentary on the bill. It states that the bill’s “aim is to encourage borrowers to repay more than the compulsory minimum amount so that they pay off their student loans sooner.” That is a very admirable goal. Why would we be trying to achieve such an admirable goal? Well one does not have to look past for instance the study on doctors in debt which found that two-thirds of doctors intended to travel overseas after they graduated in order to pay off their debts sooner. Students are willing to go to great lengths to pay off the significant debt that hangs over them. Student debt has almost doubled. The average debt in New Zealand for a student has almost doubled since between 1992 and 2007 if my memory is correct. We need look no further also than the 10-year student income survey which found that 89 percent of students with a loan said that their loan impacted on their future savings. The collaborative study by the New Zealand University Students Association and the New Zealand Medical Association found again that 83 percent of students found it difficult to save as a consequence of their student loan. Those reasons in themselves are good enough reasons to try to deal with the issue but anecdotal evidence suggests that student debt also impacts on housing and child rearing. 
There are very good reasons to try to assist our students and young people to pay off their loans sooner. Will the bill do it though? I have a lot of questions about that. Firstly what helps students pay off their loans sooner? First and foremost it is having the cash to pay off the loans. It is the jobs they are able to get after they leave university and the capacity they have to earn. Women students are significantly impacted by this. We know that given our pay equity issues in New Zealand women will be worse off than their male counterparts. That will impact on the rate at which female students pay off their loans. That is the first place we need to look. 
The second place is the incentive issue. Students will pay off loans sooner if there is an incentive for them to do so and if they have the capacity to pay in the first place. That means that the bill will positively affect those who are already able to pay off their loans quicker. They have the spare cash available. That is what incentivises those particular students. 
But beyond that we also need to look at whether any financially literate student will benefit from the scheme. I think that is why Trevor Mallard’s amendment is so critical. It is imperative that we be honest with students. If we are and the aim is that they pay off their student loans sooner then surely we should be providing them with advice that they might actually be better off keeping the money in the bank earning interest on it and then paying off something later down the track. It is important that we are honest about what we are doing in the bill. I think Trevor Mallard’s amendment does that but without it I think there is a long way to go on the kinds of incentives and arrangements that we try to put in place to tackle what is a significant issue in New Zealand. 
The question was put that the amendment in the name of the Hon Trevor Mallard to clause 4 be agreed to: 
to insert the following section: 
45FA Commissioner must advise borrowers to seek financial advice 
The Commissioner must in all material that provides information about repayment bonuses and that is made available to all borrowers include a statement to the effect that borrowers are advised to seek appropriate financial advice before making excess repayments in order to obtain a 10% bonus. 
Amendment agreed to. 
Clauses 1 to 4 as amended agreed to. 
Bill reported with amendment. 
Report adopted. 
Third Reading 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Student Loan Scheme (Repayment Bonus) Amendment Bill be now read a third time 
. Before commenting very briefly on the bill’s provisions I take this opportunity to acknowledge the members of the Education and Science Committee and the chairman Allan Peachey for the job they did in considering the bill. I also acknowledge the work the officials have done in the preparation and development of the bill their advice to the select committee and some of the subsequent developments that have taken place. It has been a very worthwhile process and I simply want to place on record my thanks to all those who have contributed to the outcome we are about to put in place. 
The bill is a comparatively straightforward measure that introduces a repayment bonus of 10 percent for students who seek to repay their student loan balances early having a minimum balance of $500 at the time. This is consistent with an election commitment made by the National Party at the time of the general election. When the bill was in the Committee stage an amendment was moved by the Hon Trevor Mallard effectively to provide for a health warning - type statement to be included in the advice the commissioner must give to prospective repayers if they are considering making early repayments. I acknowledge him for the work he did in the preparation of the amendment. The Government was pleased to accept the amendment because it does I think contribute to the spirit of the legislation. I also think it is consistent with the general view that has been developed over a number of years about people obtaining good financial advice before making prudent or otherwise investment decisions. 
The real point here is that the bill seeks to incentivise students who are in a position to do so to pay off their student loans sooner. One of the Opposition speakers during the Committee correctly described that as a highly laudable objective. We have approximately $10 billion in outstanding student loan balances. It is in both the Crown’s interests and the interests of individual borrowers that the loans be repaid as quickly as possible and anything we can do to incentivise that situation has to be beneficial. Those were the main reasons behind the bill. It has emerged from the Committee with pretty much universal support across the House. As I indicated to the Committee 1800 student loan borrowers have already sought to take advantage of it. That is a good testament to the impact the legislation will have. I am more than happy to commend the bill to the House. 
Hon MARYAN STREET (Labour) 
: 
 I rise to take a call on the third reading of the Student Loan Scheme (Repayment Bonus) Amendment Bill. I too would like to add my thanks to the work that Allan Peachey has done as chair of the Education and Science Committee in the consideration of the bill. I will also underscore the Minister of Revenue’s thanks to officials for their work in revisiting a number of issues that arose in the course of the debate in the Committee stage and during the select committee’s consideration of the bill. I am grateful to officials for their work and their support in that regard. 
I also congratulate the Minister on accepting the Supplementary Order Paper that was put forward by my colleague Trevor Mallard. That is the bit that redeems the legislation. 
Although I understand the intention is to incentivise repayment of student loans earlier than might otherwise be the case this legislation does need close consideration by any students who are looking at taking up the offer and maximise the benefit of the legislation. 
Maximising the benefit of this legislation—that is getting the 10 percent return on any amount over $500 that is repaid on a student loan over and above the statutory repayment amount required—may fly in the face of how students might be able to maximise the return on that additional money. The problem is that it will only be towards the end of the lifetime of a student loan that there may be any financial advantage. Of course retiring debt is highly desirable but if students are faced with the choice of placing money into an interest-bearing account and having it work for them in a way that over time gains them more than having a slight reduction in the total of their student loan repayable then they would be fools to take up this provision in the legislation. That is the long and the short of it. In the end the Labour amendment in Supplementary Order Paper 37 which has been accepted by the Government and improves the legislation allows us albeit in a lukewarm way to support the legislation. The amendment requires that all advertisements that go out accompanying this bill must also include a statement that people are advised to get appropriate advice so they know what they are doing with their money. 
I cannot see why this legislation was ever brought to the House under urgency and I dispute even at this stage the need for that to happen. But I support the legislation now given its improvement with the addition of the health warning that has to go out to all students who take on student debt. They will be able to work out exactly at which point in their loan repayment there may be a financial benefit to them. It certainly will not be apparent in the first few years when they are likely not to be earning very much. 
LOUISE UPSTON (National—Taupo) 
: 
 I am pleased to stand to speak to the third reading of the Student Loan Scheme (Repayment Bonus) Amendment Bill. I start by saying a word of thanks to the able chair of the Education and Science Committee my colleague Allan Peachey; the deputy chair Trevor Mallard; the other committee members; the officials who have worked particularly hard on getting this bill through; and the Minister of Revenue whom I applaud for accepting the Supplementary Order Paper put forward by Trevor Mallard today to make sure that we have broad support for this bill. I think that does make a big difference. It is a strong message to New Zealanders when the Government is supported by the Labour benches in legislation. This bill provides an incentive for young New Zealanders who have a student loan to pay off their loan faster. 
I just make a couple of comments to put some context around why the Government believes that it is important for young New Zealanders to pay their debts off faster. I refer to an article in the  
New Zealand Herald  
earlier this year that talked about the surge in individual debt which has gone from $62.7 billion to $175 billion. So basically New Zealanders are borrowing at a significant rate and we have now individual borrowings of $41000 per head of population. Student loans are obviously a small component of that figure but today I saw that the student union’s website had put that figure on its ongoing loan calculator at $10.599 million. It is small amount of the overall New Zealand debt but it is the message for young New Zealanders that paying off debt should be a priority and is important; and in this case obviously it is a debt to the Government so it is a debt to other hard-working New Zealanders who pay tax and therefore it is important that the Government incentivises students to pay off their loans sooner. 
I was really pleased also that the Opposition has questioned why this bill was brought in under urgency. The Minister Peter Dunne indicated the level of interest already out there for this incentive—the fact that 1800 young New Zealanders have already opted to make bonus payments if you like and to the value of I think about $875 in bonuses. That is brilliant and is exactly what this bill is designed to do. I am sure there will be an even greater level of interest now that they see this legislation will pass and that it is supported so broadly across the House. 
I am really pleased to be able to commend this bill in its third reading because shorter repayment times for New Zealanders will mean that they become debt-free earlier. That will give them choices in their lives and their futures about buying a house having children going into business and any other options given they have removed some of the debt they had been saddled with as students. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I again just want to speak briefly to the third reading of the Student Loan Scheme (Repayment Bonus) Amendment Bill. I thank Government members for eventually accepting the health warning about it. That had been put to them and rejected at the Education and Science Committee but they had some sense about this when the Minister became involved and we were in the House. So I do thank them for that. 
I disagree deeply with the member for Taupo and the comments that she made as to whether the Labour Party is giving its wholehearted support to this bill. It is a matter of very fine balance and a matter of us keeping our word. We said we would support the bill if the health warning went in but frankly I hope that not many students will take up this measure especially if they do so in a period that is greater than from 18 months to 36 months before the end of repaying the loan. If they do that they will end up if one considers the interest effects paying back more than they need to pay. They would be better off if they put their money in the bank and continue to make loan repayments until somewhere in the period of from 18 months to 36 months out from the end of loan. 
I accept there will be a number of other reasons that people want to make repayments and I think the most logical ones are where they receive tied contributions from other people. When a grandparent wants to help a student or graduate with repayments on his or her loan and is concerned that if he or she just gives the kid the money it might not quite make it into repaying the loan in that circumstance where there is an element of a tie-in I think there is a benefit. I cannot think of many other circumstances where that will occur. 
If one wants to look really carefully at who will benefit from this— 
Hon Darren Hughes 
: Who is it? 
Hon TREVOR MALLARD 
: Well it is the Minister of Finance. He is the person who will benefit from this legislation. When we look at the net situation we see that this measure is quite fiscally positive for the Government. 
Hon Darren Hughes 
: Twenty bucks a week? 
Hon TREVOR MALLARD 
: Not many people will get $1000 a year every year out of it. The amount of repayments required to get to that level would have to be at the level of $10000 a year. I think not many people will make additional repayments at that level but it is fair to say it would be better to be a person in that position than to be someone who is trying to get the last 20 bucks off Bill English for his cleaning bill paid through the taxpayer. 
This is pretty minor legislation. On balance the Labour Party supports it because we said we would support it if the Government accepted our amendment. We will vote for it but without much enthusiasm. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I stand on behalf of my colleague Metiria Turei. It is paradoxical that today we are voting on the Student Loan Scheme (Repayment Bonus) Amendment Bill which according to Mr Mallard has a marginal positive benefit to the Government’s position given that the Government has just announced it is giving away $400 million to the worst polluters in the country. Since 1992 we have had a student loan scheme in New Zealand whereby students are required to borrow a significant proportion of their tertiary education costs. This scheme was a major deviation from the previous social contract which provided tertiary education at low cost to the public. The principle behind the earlier approach—because there was a principle behind the earlier approach—was sound. Education in general and tertiary education in particular is a significant public good. There are immeasurable benefits to the community and economy of a highly educated population. Therefore it is of great benefit to the public overall to have significant investment of public funds in public education. For example we know that the higher the level of a mother’s education the more likely her children will be to succeed in education. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I apologise to the member. I seek leave for the Standing Order that requires a Minister to be present in the House to be set aside—although I see there is another Minister here—so that Kate Wilkinson can accompany me to the presentation of the pay equity petition that is occurring now. 
The ASSISTANT SPEAKER (Eric Roy) 
: That is not really— 
Hon Trevor Mallard 
: I am seeking leave for the Standing Order to be set aside so that Kate Wilkinson can do that. 
The ASSISTANT SPEAKER (Eric Roy) 
: There is a Minister in the House. 
Chris Tremain 
: I raise a point of order Mr Speaker. Given that there are a number of Ministers in the House I would have thought that the application would be ruled out of order. 
The ASSISTANT SPEAKER (Eric Roy) 
: The member is seeking leave. If members feel it is inappropriate they can refuse the leave. Is anyone opposed to that course of action? Leave is not granted. 
Dr RUSSEL NORMAN 
: We know for example that education is a key means to alleviate poverty and particularly intergenerational poverty. We know that New Zealand since the 1980s has become a grossly unequal country and as the level of inequality has grown the level of educational inequality has also grown. However with the introduction of the student loan scheme that social contract was torn to bits. Instead the mantra of education as a private good was imposed and a whole generation of young New Zealanders have borne the brunt of that failed social experiment. 
Why has it failed? Because of the social and economic consequences our communities have suffered as a result. First the student loan scheme entrapped very young students who were in tertiary education in breach of basic contract law. The loan contracts were not enforceable against them. That loophole was quickly fixed but the consequences of loaning thousands of dollars to young people aged 16 and 17 years old is still being felt. These young people are offered no financial advice as to the consequences of borrowing for their fees. It is more than likely that the educational interests one pursues at 16 will be quite different from those one would pursue later in life and this leads to many young students borrowing for tertiary education degrees that they never use. The system also created an incentive for unscrupulous operators to rort the system. Some courses offered gadgets as incentives to young people who fooled by the hype took out thousands of dollars in loans to do courses of extremely dubious quality finding themselves at the end of the course thousands of dollars out of pocket and still out of work. 
Some remedy was made to resolve this but the core issue the cost of the systemic failure to provide quality tertiary education to New Zealanders as a matter of their citizenship remained. For as long as the user-pays approach is pursued some will rort the system and students will continue to pay and they do so all through their lives. We know that young people leave the country to pursue higher-paying jobs overseas and often stay there for longer than they would otherwise in order to pay off their loans. We know that young people delay purchasing housing because they must use their first 5 to 10 years of income to repay their loans rather than save for their first homes. We know that young couples delay having children because of the financial pressures placed on them by the student loan system and we know that Maori Pacific and women students are disproportionately affected by the loan scheme and have to pay for much longer periods than their Pakeha male counterparts. 
There has been a lot of tinkering with the student loan system and this bill is just another fiddle. This bill will benefit a minuscule number of students and otherwise provide no relief to the core problem of the student loan scheme. It is unfair and unjust. The Green Party is committed to a sustainable prosperous Aotearoa New Zealand that is ready to meet the challenges of this new century. That is what the Green New Deal is all about. We must invest in our communities in ways that will deal with the twin crises that face us—climate change and the recession. Investing in the education of our young people now is critical to our future prosperity. The Government has chosen to take New Zealand backwards instead. Cutting the training incentive allowance so that beneficiaries can no longer access that support to do degree courses is simply increasing poverty and pulling up the ladder after one has already climbed it. Slashing funding to universities and polytechnics is taking education out of the hands of those most vulnerable communities that need it the most. The Green Party opposes this bill. It will make no difference to the educational needs of those who need it the most. 
Hon Sir ROGER DOUGLAS (ACT) 
: 
 As a member of the Education and Science Committee I too would like to join others who have congratulated and thanked Allan Peachey for the way he chaired the committee. It has been funny from my perspective to hear the lukewarm response to this bill from Green Party and Labour Party members and to hear them arguing generally that it is helping the wealthy more than the poor. Their argument has been that wealthy ex-students will be able to make higher levels of voluntary payments and that therefore in some way this bill is discriminatory. The flaw in their argument is that they are comparing wealthy ex-students with so-called poor ex-students. The overwhelming majority of students improve the incomes they can get in life by undertaking tertiary education. In other words poor ex-students are relatively wealthy by most standards. 
The people we should be more concerned about are not the poor students but the hard-working low-income people who pay the taxes that cover the interest and loan write-offs of university students and tertiary students. The people we should care about and whom the Labour Party and the Greens are supposed to care about are the ones who do not go to university. They are the people who get a job when they are young. They are the people who are forced to pay for the education of those who will one day earn far more than they do. 
Let us take a look at who undertakes tertiary education. Eighty percent of students come from households that earn more than the average wage. They are the families with money. They are the families with capital. They are the wealthy. A study undertaken in 2001 has shown that those in the top income bracket are five or six times more likely to go to university than the ones in the bottom income bracket. We send these rich kids if we want to call them that to university with lavish student loans and large subsidies paid for by low-income families. They then graduate and go into relatively well-paying jobs. 
The Green members and Labour members wring their hands about the high level of student debt. Never mind that university students were wealthy when they went to university. Never mind that ex-students will pay off their loans quickly because of their higher incomes. Never mind that the people who pay for the lavish benefits are the hard-working poor who entered the labour force at 17 or 18 years of age and missed out on a tertiary education. In fact it is not just that this bill is in some ways unfair on people on low incomes. We would have to say that that is also true of a lot of tertiary education support. 
But who do we take the money from? We take the money from the people who leave school at 17 and we deliver it generally to those with wealthy backgrounds. Policies like this one take money from the cleaners the dishwashers the bus drivers and the people who work in McDonald’s who receive the minimum wage and deliver it to the sons and daughters of the doctors from Fendalton or the sons and daughters of the lawyers and accountants of Karori. That is the reality. 
These programmes unfortunately are sold as if they come from political parties that care about those on low incomes. The Greens and Labour tell people that the reason we must give these lavish benefits to the wealthy is so that those on low incomes have access to university. Middle-class welfare is one thing. Middle-class welfare dressed up as wealth distribution to the poor is a fraud. 
We have had the spectacle in the Committee stage and in the second reading of Labour members saying to students to not pay back their loans early because it would be to their disadvantage. In most cases I agree that it would but it would be of benefit to the country. It seems to me that students have received lavish benefits that often were paid for by low-income people. I personally did not support the Mallard amendment which had general agreement. It seemed to me that what we were doing was advising people to spend $200 to save $100. It simply did not make sense. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 I rise to take a very brief call on the Student Loan Scheme (Repayment Bonus) Amendment Bill. The issue of student loan repayment is a very significant one facing the nation. It is a collective challenge as the mountain of debt is threatened to grow by $15 billion by 2014. But as other speakers have pointed out it is not just the quantum of the debt that concerns us; it is the huge impact on students and their families. An estimated 120000 holders of student loans are in arrears or are failing to make repayments. 
We have a particular concern for the future of Maori students. The evidence tells us that more Maori have a student loan debt than any other group although the level of debt held is similar to other groups. Five years after study Maori students are also less likely to have made progress towards repayment of their student loans than non-Maori students. In a study undertaken by R Jefferies for Te Puni Kokiri in 1997 he concluded that the increasing participation in the student loan system by Maori students reflects the necessity that for many Maori the student loan scheme provides the financial support that is necessary to participate in higher education. So there are many complex issues which in and by themselves need to be addressed not just the issues of this bill related to student loan debt. 
There is the core issue about why Maori have the lowest post-study incomes and repay their loans more slowly than other groups. The annual report from Te Tahuhu o te Matauranga 3 years ago tells that Maori certificate-level students carry a larger student loan debt 5 years after study reflecting notably lower earnings. Maori with bachelor’s degrees or post-graduate qualifications also had notably higher average leaving loan balances than non-Maori. 
We will support this bill at the third reading as we know that the current student loan debt is capable of impairing the long-term financial base and self-confidence of young students. We must do everything we can to protect their interests and safeguard their futures. However I want to leave with a couple of comments that I have drawn from the excellent submissions of students from within my rohe of Te Tai Tonga from my home town the students association of Nelson Marlborough Institute of Technology. They told the Education and Science Committee that the bill is just a band-aid solution; only those graduates who can afford to pay $500 above compulsory payments will benefit; living costs are rising from recession; the bill does nothing to address the initial cost of tertiary education in the first place; and if education was affordable the Government would not have to propose such measures in the first place. 
Although I agree with the previous speakers that we must incentivise New Zealanders to pay off debt as fast as they can I do not think we can overlook the systemic issues that this students association has brought to the House. We would hope that further legislation to affect these issues will also come before the House as a matter of urgency in the direct future. 
ALLAN PEACHEY (National—Tamaki) 
: 
 The contribution of the Green member Russel Norman to this debate on the Student Loan Scheme (Repayment Bonus) Amendment Bill is probably not worthy of comment but I need to say one thing: it must be nice to be in a situation where he can stand in this Chamber spend taxpayers’ money as if there was no tomorrow and know that he will never have to take responsibility for it because he will never be in Government. I wonder about all those New Zealanders who do not get to go to university all of those young people who leave school at 15 and go into the workforce and who are taxed from the moment they start work. They will never be able to aspire to the sort of income that graduates will be able to aspire to. All that the Green member’s contribution brought home to me was that his party represents narrow selfish and sectional interests. Thank heavens for the sake of the taxpayer that party will never be in a position to spend taxpayers’ money! 
The debate has been very interesting and I am gratified that Labour finally came to its senses and saw that in actual fact it had no choice but to accept this bill. It had no choice. There is a critical date in all of this: 1 April 2006. This legislation really has its beginnings at that point. That was the point when student loans became interest-free. From that time there has been a downward trend in the repayment of student loans. This bill is designed to adjust that balance. The most important word that has been used in this debate is “incentivise”. This relates to an effort by the Government—supported I am pleased to say by Labour—to incentivise students to repay their loans sooner. 
It was interesting as the debate progressed to see naive young members like Mr Nash stand up and lecture people like myself on financial literacy. I tell Mr Nash that people of my generation knew that their first obligation was to pay off their debt. That is financial literacy. For that member and others to suggest in this Chamber that there are better uses of taxpayers’ money that has been loaned to people than for those people to pay off their debt is I suggest financial illiteracy of the worst type. I have to ask whether Mr Nash and some of his other colleagues—one-term MPs is all they will ever be—have ever thought about the risk of putting money into places like finance companies or Auckland apartments. I issue a caution to all borrowers who listen to the health warning to be very very careful where they put their money. They should not listen to the financial illiterates in the Labour Party. They do not know a lot. It sounded good but they do not know a lot. 
The one message has to be that the best thing people can do—the key to their financial future—is to pay off debt as quickly as they possibly can. Let us imagine what a tragedy it would be if young person who had the opportunity to pay off part of their debt early put their money into some high-flying investment and then lost it. Do I need to remind Labour members of what happened in that party’s last years in Government? How many New Zealanders are now seriously financially disadvantaged because they did not pay off debt? 
Debate interrupted. 
Sitting suspended from 1 p.m. to 2 p.m. 
Personal Explanations 
Mining in Conservation Areas—Clarification of Quotation 
METIRIA TUREI (Co-Leader—Green) 
: 
 I seek leave to make a personal statement. 
Mr SPEAKER 
: Could the member inform the House what it is about. 
METIRIA TUREI 
: It concerns a quote yesterday from a press release of mine and I wish to clarify any misunderstanding about the quote. 
Mr SPEAKER 
: Leave is sought to make a personal explanation about that matter. Is there any objection? There is no objection. The honourable member may proceed. 
METIRIA TUREI 
: Yesterday the Minister of Energy and Resources in answer to a supplementary question— 
Hon Gerry Brownlee 
: I raise a point of order Mr Speaker. It should be a personal statement about the member not about other members. 
Mr SPEAKER 
: The Minister makes a very good point. I remind the honourable member that a personal explanation must be about a personal matter. It should not start by talking about someone else; it should start by talking about the member. 
METIRIA TUREI 
: I raise a point of order Mr Speaker. This is of course my first personal statement to the House and I would seek some guidance. It is difficult to make the personal clarification if the circumstances in which that clarification has to be made are not set out first. So I would seek your indulgence given that this is my first opportunity to make such a statement to at least set the frame in which the personal clarification has to be made. Otherwise it would make no sense. 
Mr SPEAKER 
: I think it would be reasonable for the honourable member to set out the matter that caused her concern without necessarily naming another member of the House. It is not about another member of the House; it is the issue that the member is making the personal explanation about. 
METIRIA TUREI 
: Certainly. Yesterday in answer to a supplementary question a Minister quoted from a press release of mine and I quote from the supplementary answer: “I have seen a report in the form of a press release in support of that goal from a very surprising source. In 2006 the person concerned”—that is me—“issued a press release about the requirement for Solid Energy to move 250 Augustus snails to make way for the expansion of Solid Energy’s Stockton mine. That person said ‘This case clearly shows that it is possible to balance the economic concerns of miners and the conservation concerns of protecting endangered species in such a way that all parties are happy’ ”. That was the content of the quote. 
That comment and that quote were taken out of context. I did not refer in that quote to the removal of  
Powelliphanta augustus 
 by Solid Energy at its Stockton mine. In fact my reference was to Mount Burnett some 100 kilometres from the Stockton mine. In the Mount Burnett case I was referring to the then Minister of Conservation who had prevented an area of  
Powelliphanta 
 habitat from being mined against the wishes of the mining company. I used this as an example to contrast with that Minister’s argument that in the Mount Augustus case removing the species to allow mining was “the only possible decision”. I simply wish to ensure that members have a correct understanding of my statement in relation to the impact of mining on conservation land and the protection of endangered species. 
Questions to Ministers 
Ministers—Confidence 
1. 
Hon PETE HODGSON (Labour—Dunedin North) 
on behalf of  
Hon ANNETTE KING (Deputy Leader—Labour) 
 to the  
Prime Minister 
: Does he have confidence in all his Ministers; if so why? 
Hon BILL ENGLISH (Deputy Prime Minister) 
 on behalf of the  
Prime Minister 
: 
 Yes; because they are talented people working hard for New Zealand. 
Hon Pete Hodgson 
: Does he believe that in all matters his Minister of Finance has followed that part of the  
Cabinet Manual 
 that reads: “… Ministers are expected to act lawfully and to behave in a way that upholds and is seen to uphold the highest ethical standards.”? 
Hon BILL ENGLISH 
: Yes and I understand that the Minister of Finance gets the same accommodation allowance as about a hundred other members of Parliament. 
Hon Pete Hodgson 
: Does he believe that it is ethical for the Minister of Finance to undertake legal manoeuvres that happen to increase his family trust’s receipts from the taxpayer at the same time as the Minister of Finance requires restraint in every other aspect of Government expenditure? 
Hon BILL ENGLISH 
: I understand that the Minister of Finance has explained many times publicly that he accepts that there was a perception problem and that is why he paid the money back and now receives the same allowance as about a hundred other members of Parliament. 
Hon Pete Hodgson 
: Does he believe that it is now time for the Minister of Finance to release his family trust deed with appropriate deletions to protect the privacy of others? 
Hon BILL ENGLISH 
: No. The Minister of Finance receives the same housing allowance as about a hundred other members of Parliament and that member could ask the same question of those hundred other members of Parliament should he so wish. 
Hon Pete Hodgson 
: What is the precise pecuniary interest that must be met before it is permissible to lease a home from a family trust for use as a ministerial residence—is it a personal pecuniary interest test or a familial pecuniary interest test? 
Hon BILL ENGLISH 
: As the Minister of Finance has said many times he accepts that there was a perception problem with the arrangements. He kept to all the rules but he paid the money back. What else can he do? 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. The question was very precise. It had no extra material in it. It asked which of two tests should be used. That question was not addressed. 
Mr SPEAKER 
: I would ask the Hon Bill English whether he could focus on the test that is applied because the question was specifically about that. 
Hon BILL ENGLISH 
: I raise a point of order Mr Speaker. The Prime Minister has no ministerial responsibility for that in his capacity as Prime Minister. 
Hon Trevor Mallard 
: It is a long-established tradition in the Westminster system that in fact Prime Ministers have responsibility for everything that each of their Ministers has responsibility for including the things that they are responsible for themselves. Prime Ministers can transfer primary questions but you know as well as I do Mr Speaker that in the House of Commons and in this Parliament Prime Ministers can be asked questions that relate to conservation to economics and to social welfare. They are the Prime Minister and therefore they have to answer. 
Mr SPEAKER 
: The dilemma I face is—I take it that the honourable Minister is still arguing that there is no ministerial responsibility for that issue. 
Hon BILL ENGLISH 
: I can answer the question. 
Mr SPEAKER 
: The Minister is happy to answer the question? I thank the Minister. 
Hon BILL ENGLISH 
: The member is asking for a legal opinion. The Prime Minister has been advised that the Minister of Finance took legal advice—legal advice that was available to every member of Parliament about the declaration of pecuniary interests. 
Hon Pete Hodgson 
: Mr Speaker I am very happy to reword the question if you would like in order that it falls within the Standing Orders. 
Mr SPEAKER 
: I thought the member was seeking to ask a further supplementary question. Was he on a point of order then? 
Hon Pete Hodgson 
: No I am offering to rephrase the question. 
Mr SPEAKER 
: I believe that the Minister answered the question. 
Hon Pete Hodgson 
: If he has answered it that is fine. What then does the Prime Minister make of this document headed “Travel Accommodation Attendance and Communications Services Available to Members of the Executive”? It is dated 26 May this year which is proof that it was signed by Mr John Key. It states on page 3 under paragraph (c) concerning the principle that expenditure must be properly documented and supported with tax invoices and receipts: “Members of the Executive must be open in the use of public resources and disclose any conflict of interest in utilising entitlements whether that conflict is pecuniary personal familial or as the result of any associations.”? 
Hon BILL ENGLISH 
: It can only re-state what the Minister of Finance has said many times. He agreed that there was a perception of an interest in the arrangements and that is why he paid the money back. What else can he do? 
Hon Pete Hodgson 
: Was the test by which Mr English was judged the test that I have just read out or some other test? 
Hon BILL ENGLISH 
: The Minister of Finance kept to all the rules. He accepted there was a perception of conflict and paid the money back. The Minister of Finance receives the same accommodation allowance as a hundred other members of Parliament. 
Te Ururoa Flavell 
: Tena koe Mr Speaker. Kia ora tatou. Does the Prime Minister have confidence that the Minister for Land Information will accept the recommendation of the New Zealand Geographic Board that Whanganui City should be spelt with an “h” which is consistent with the history the heritage the culture the language and the people of Whanganui and what will be the process to enact this decision? 
Hon BILL ENGLISH 
: It is my understanding that the Minister for Land Information who is a considered Minister will look at the board’s findings and make any inquiries he sees fit before making his decision. 
Hon Pete Hodgson 
: I seek leave to table two documents. One is the  
Executive Travel Accommodation Attendance and Communications Services Determination 2009 
 and the second is the details thereof. 
Mr SPEAKER 
: We should put leave for one document at a time. Are they two associated documents? 
Hon Pete Hodgson 
: They are. 
Mr SPEAKER 
: Leave is sought to table those two documents. Is there any objection? There is no objection. 
Documents by leave laid on the Table of the House. 
Financial Position—Government Measures 
2.  
DAVID BENNETT (National—Hamilton East) 
 to the  
Minister of Finance 
: What are the measures this Government is taking to improve New Zealand’s financial position? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The Government has moved to get on top of spiralling public debt to maintain New Zealand’s credit rating to continue investment to support jobs through programmes such as the home insulation programme and infrastructure investment and to focus on better smarter public services for less money. 
David Bennett 
: What benefits has New Zealand already seen from this strategy? 
Hon BILL ENGLISH 
: We have made good progress to date. New Zealand has maintained its credit rating. We have maintained entitlements and protected the most vulnerable in society. We have been able to assist in rebuilding business and consumer confidence. It is my hope that unemployment will not reach the peaks that have been forecast but if it does that we will get unemployment levels down quickly because whether people have a job is actually the most important measure of a recession. 
Hon David Cunliffe 
: Given the Minister’s statement that he is going to “tilt the playing field in favour of investment saving working and exporting” does he agree with Pipfruit Growers New Zealand and the Manufacturers and Exporters Association that the rapidly rising dollar is driving exporters out of business; if so what is he going to do about it? 
Hon BILL ENGLISH 
: I am concerned about the level of the dollar particularly given that the economy has been in recession for about 18 months. It is going to take time for us to undo the damage done by that member’s party over the last 10 years when it allowed debt-funded consumption to get out of hand. 
David Bennett 
: How could progress towards a stronger economy that sustains more jobs be derailed? 
Hon BILL ENGLISH 
: It would be difficult to create a sustainable better-balanced economy if for instance the dollar kept rising and stayed very high. It would also be difficult to get any kind of balance in the economy if we followed the advice of the Labour Opposition which is to go out and borrow another $6 billion when we are already up to our ears in debt. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. Yesterday I raised and you upheld a point of order on exactly the same matter from that same member. That point was that he has no responsibility for Labour Party policy and the Labour Party has released no such policies nor made any such commitments. 
Mr SPEAKER 
: The member must be careful not to try to debate issues by way of a point of order. I do not think what the Minister of Finance Bill English said was excessive at all. He did not get into Labour’s policies at all. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. It is a fresh point of order. I seek your guidance. Yesterday you upheld an almost identical point of order of mine from the same member. You declared that he did not have responsibility for Labour Party policy and asked him to desist from those comments. It would appear that the member has trifled with your ruling of yesterday because he has done exactly the same stunt today. I seek your clarification on what steps you would propose to take. 
Mr SPEAKER 
: I can assure the member that the Minister was not trifling with my ruling from yesterday. If the member reflects back on what transpired yesterday the Minister started to make much more comment about the quality of certain Labour policies. Today he was simply making an allegation about what he understands to be a certain amount of money that would need to be borrowed. He did not go further into particular policies. I will not take the matter further. I did not consider that excessive at all. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. It is a fresh point of order. 
Mr SPEAKER 
: It had better be fresh point of order. 
Hon David Cunliffe 
: Without reference to the point of order that you upheld yesterday I ask your guidance now on what appears to be a new or extended ruling that you just introduced. If it is now permissible for Ministers to refer to some extent to the policies of other parties what is the guideline— 
Mr SPEAKER 
: I invite the member to resume his seat and not trifle with the Chair. A little bit of common sense should be applied. The member has been in this House long enough to know the banter that goes back and forth in answering questions and I will intervene if Ministers excessively focus on the policies of another political party which are not their responsibility. But the extent to which the Minister referred to the Opposition’s policy was not excessive at all to me. I think this is wasting the time of the House. 
Mining—Protected Areas and Forests 
3.  
METIRIA TUREI (Co-Leader—Green) 
 to the  
Minister of Energy and Resources 
: When he said that “A report circulated by the World Bank some years ago ranked New Zealand second in the world in terms of natural wealth per capita” was he aware that protected areas and forests make up 29 percent of that wealth whereas subsoil assets make up just 3 percent? 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 Yes. The general point I was trying to make was that everyone knows that New Zealand has magnificent pristine and very beautiful natural resources in the form of our conservation estates above ground. There is no question about that. But without wanting to make a personal statement I suggest that the member has taken me somewhat out of context. I do agree with her statement that it is clear that environmental goals can be met alongside responsible mining. 
Metiria Turei 
: Does the Minister then agree that 29 percent is bigger than 3 percent? 
Hon GERRY BROWNLEE 
: Can I come back to the member on that later? 
Jacqui Dean 
: How could responsible mining contribute to lifting New Zealand’s economic performance? 
Hon GERRY BROWNLEE 
: Mining uses just 40 square kilometres of the New Zealand land mass which is less than 0.015 percent of New Zealand’s total land area. The export value of that mining activity is $175000 per hectare. Dairy farming by comparison uses 20000 square kilometres with an export value of only $3500. I note that it is Green Party policy to get rid of dairy farming as well. 
Hon David Parker 
: Is the Minister confused by the word “national” in national parks into thinking his party can ride roughshod over the long tradition in New Zealand that national parks should be conserved as they are and not mined? 
Hon GERRY BROWNLEE 
: Not at all. 
Metiria Turei 
: If the Minister thinks the Stockton mine—a photo of which I have here—is a good example of good environmental mining is he happy to see our national parks looking like the Stockton mine? 
Hon GERRY BROWNLEE 
: I make it very clear that no one is talking about mining our national parks. We are saying that there is a huge amount of land in schedule 4 of the Crown Minerals Act and we simply want to have a look at it to see what is there. I do not see what the Green Party is so particularly wound up about especially given the member’s own statement that it is clear that it “is possible to balance the economic concerns of miners and the conservation concerns of protecting endangered species in such a way that all parties are happy”. 
Hon Tim Groser 
: Is the Minister aware that according to advice provided by the Department of Conservation to the Minister of Conservation no fewer than 82 separate mines were operating on Department of Conservation land on the Labour Government’s watch mining everything from gold through to limestone; and is he able to explain to a totally confused New Zealand public why Labour members would describe that mining on its watch as a win-win environment-economic result but when the issue of mining on Department of Conservation land is raised under National it is called rape and pillage? 
Hon GERRY BROWNLEE 
: Yes I am aware of that extraordinary contradiction in views. I assume that it was that situation that led Metiria Turei to make the statement that “it is possible to balance the economic concerns of miners and the conservation concerns of protecting endangered species in such a way that all parties are happy”. For 9 years the Green Party supported Labour in its efforts. Now because National wants to take a responsible approach to this matter everything is all wrong. 
Metiria Turei 
: Can the Minister confirm that he has ruled out from the stocktake that he intends to undertake all of the land contained within all of New Zealand’s national parks? 
Hon GERRY BROWNLEE 
: The member knows which bits of the national parks are in schedule 4—all of them in fact. But we have said that we are doing a stocktake of the lands in schedule 4—end of story. I also say that the process will be very very public and any decisions that result from it will be able to be judged by the public. What do the Greens have against the jobs of the many thousands of New Zealanders who work in these industries each and every year? 
Dr Russel Norman 
: I raise a point of order Mr Speaker. The question was quite specific: will the stocktake cover national parks or not? The Minister has not addressed that part of the question. 
Mr SPEAKER 
: I believe that the Minister did. He said the stocktake covers the land in schedule 4 and that does include parks. I believe he answered the question. 
Emissions Trading Scheme—Balance 
4.  
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister of Finance 
: Does he stand by his statement that “the Government has struck the right balance between its economic responsibilities and its environmental responsibilities.”? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes. 
Hon David Cunliffe 
: Should the emissions trading scheme therefore introduce an incentive for emitters to reduce emissions and adopt clean technology alternatives; if so why does the Government’s proposed “cap and trade” scheme have no cap? 
Hon BILL ENGLISH 
: As the member will be aware there have been many years of discussion about the emissions trading scheme. The feedback I have had from the wider community and the business community is that regardless of whether they like the rules—and many of them do not—they think it is better to have some certainty so that they can get on with investment and creating jobs. That is what this Government is all about. 
Hon David Cunliffe 
: Will that certainty include the giving of up to $1 billion in additional taxpayer subsidies to companies like Rio Tinto to encourage them to reduce emissions? 
Hon BILL ENGLISH 
: I do not agree with the member’s characterisation of the decision. He needs to keep in mind that a country that is to quote the media today “running chronic trade … deficits and which is up to its nostrils in debt to the rest of the world cannot afford to be cavalier about risks” of exporting our export industries losing jobs and losing export-earning capacity. 
Hon David Cunliffe 
: If we cannot afford to be cavalier about debt why does the Minister’s Government use a carbon price of $200 a tonne to reject calls for a 40 percent reduction target and then give a price of $25 a tonne when estimating the cost to the taxpayer of the proposed changes to the emissions trading scheme? Who is being cavalier now? 
Hon BILL ENGLISH 
: Again the member’s representation is I understand incorrect. If the member is really concerned about getting in touch with middle New Zealand I invite him to go to the Rio Tinto smelter at Tiwai address a crowd of 700 middle New Zealanders and tell them he would rather see them working in a smelter in China. 
Schools—Support for Maori Students 
5.  
LOUISE UPSTON (National—Taupo) 
 to the  
Minister of Education 
: What is the Government doing to support schools to raise achievement for Maori students? 
Hon ANNE TOLLEY (Minister of Education) 
: 
 Yesterday the Hon Dr Pita Sharples and I announced that 17 more schools will benefit from the Te Kotahitanga secondary schools programme next year. Funding of almost $20 million over 4 years will allow the number of schools taking part in Te Kotahitanga to expand from 33 to 50. I am delighted that we have been able to extend the programme which will now benefit an extra 7000 Maori students. 
Louise Upston 
: What reports has the Minister seen about commitments to raise Maori student achievement? 
Hon ANNE TOLLEY 
: I have seen a report from the Hon Phil Goff. He said last weekend to Maori students: “under Labour you are going to do much better. You are going to achieve more.” Because we have not heard anything other than this puffy promise one can only assume that this means more than the “Wassup!” badges that the previous Labour Minister of Education personally signed off and proudly defended in this House. Do members remember those badges? I am proud that this Government is investing in something that actually makes a difference for our Maori students—Te Kotahitanga. 
Kelvin Davis 
: If Te Kotahitanga is about teacher-pupil relationships which is identified in research as the 11th most effective strategy for raising achievement what plans does the Minister have to support the 10 other strategies that researchers identified as being even more effective at raising achievement? 
Hon ANNE TOLLEY 
: As that member well knows formative assessment which he blogged about recently is one of those strategies and national standards that this Government is introducing will address that. 
Kelvin Davis 
: If research identifies that parents who understand the language of education are better able to engage with their children’s teachers in schools which assists their children’s learning what plans if any does the Minister have to assist Maori parents to understand the language of education so that they may engage with their children’s teachers in schools and assist their children’s learning? 
Hon ANNE TOLLEY 
: I am delighted that that member has asked me that question. We have just come through a consultation around national standards. Over 2000 parents came along to consultation meetings including many Maori and Pasifika whanau. We had 3000 written submissions to that consultation and they were very clear about what they want from education. First of all they want to know in clear language how their children are doing at school. They want to know what they can do to be of assistance to those children and how they can know their children’s strengths and weaknesses. That is exactly what our national standards policy will deliver to Maori Pasifika and European families. 
Te Ururoa Flavell 
: Is it true that the rationale behind He Kakano the new professional learning and school-based development programme is to develop culturally responsive leadership? How will that lead to improved Maori outcomes in education? 
Hon ANNE TOLLEY 
: Yes that member is absolutely correct. He Kakano will develop culturally responsible leadership in up to 100 principals from next year. All the evidence shows us that Maori students succeed when schools recognise value and respect Maori culture and language. 
Women’s Causes—Minister’s Support 
6.  
SUE MORONEY (Labour) 
 to the  
Minister of Women’s Affairs 
: What actions has she taken to advance the causes of women in New Zealand? 
Hon PANSY WONG (Minister of Women’s Affairs) 
: 
 The answer to that question would take up the balance of question time so I will confine myself to the three priorities of the Ministry of Women’s Affairs. They are increasing the number of women in leadership through initiatives such as Women on Boards addressing the gender pay gap and reducing violence against women especially sexual violence. These priorities have received overwhelming support from the 52 public meetings that have been held by the ministry throughout the country in recent months. 
Sue Moroney 
: Given that two out of every three of the newly jobless in New Zealand are women what action has she taken to get her Government to create jobs in the parts of the economy where women work; or will she continue to sit on her hands because she believes that it is inevitable that women will bear the brunt of the recession as she said in her press statement dated 25 February 2009? 
Hon PANSY WONG 
: The National Government has done much to stimulate the economy especially our Prime Minister who is also the Minister of Tourism. In one of the workshops with women I was impressed when they talked about the hospitality and tourism industry being an important industry for women. I am glad that the Minister of Tourism is putting in more money and a cycleway project to promote tourism in order to create jobs especially for women. 
Amy Adams 
: What support did the Ministry of Women’s Affairs receive in Budget 2009 to advance the causes of women in New Zealand? 
Hon PANSY WONG 
: I thank my National colleagues who support the Ministry of Women’s Affairs. It received $2 million for the next 4 years to tackle the 12 percent pay gap that has existed since 2001 under Labour’s watch. Now the Ministry of Women’s Affairs can embark on four projects to tackle the pay gap. The first one is to tackle the differences in pay between male and female professionals after they have completed tertiary study. The second one is to promote the business case for flexible work arrangements. The third is to develop career paths for women in low-paid jobs and the fourth is to highlight the barriers that prevent young women from choosing trade occupations. I thank my National colleagues for their support. 
Sue Moroney 
: Apart from endless research will she take action to support the call of the 15808 New Zealanders who signed my petition urging the Government to reinstate pay equity investigations for the female— 
Catherine Delahunty 
: Point of order Mr Speaker— 
Mr SPEAKER 
: There is a point of order and I think I know what the member’s point of order will be. Members could not hear that question. I ask whether that was the point of order. 
Catherine Delahunty 
: Yes we cannot hear. 
Mr SPEAKER 
: I ask members to be reasonable. I ask the member to start her question again. 
Sue Moroney 
: Will the Minister take action to support the call of the 15808 New Zealanders who signed my petition urging the Government to reinstate pay equity investigations for the female-dominated occupations of school support staff and social workers at the front line of Child Youth and Family? 
Hon PANSY WONG 
: The National Government listens and responds. I say to those signatories that my diligent and hard-working colleague the Minister of Labour makes sure that resources developed by the Department of Labour’s employment and equity divisions are used and ensures that the chief executive continues to have response plans that take seriously pay equity between male and female workers. I say “Good on you!” to the Minister of Labour. 
Sue Moroney 
: Can the Minister confirm that she will not be renewing the Action Plan for New Zealand Women or will she finally do something constructive and announce its renewal as the country celebrates women’s suffrage day this Saturday? 
Hon PANSY WONG 
: I understand that only one person raised the subject of the Action Plan for New Zealand Women during the 52 public meetings held in New Zealand. That person was the Labour spokesperson on women’s affairs. In the same 52 meetings there was overwhelming support for the three priorities set by the Ministry of Women’s Affairs. They are about women in leadership addressing the gender pay gap and reducing violence against women. I say that National is on the right track with women. 
Sue Moroney 
: I seek leave to table what is left of a document to update the Minister of Education on the pay and employment equity review in the compulsory schooling sector. Most of it has been blanked out but I would like to table it. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Sue Moroney 
: I seek leave to table a copy of the press release from Pansy Wong dated 25 February that I referred to where she said it was inevitable that women would bear the brunt of the recession. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Sue Moroney 
: I seek leave to table a copy of a speech given today at an event celebrating the signatures gathered on the pay equity petition. The speech was given by Angela McLeod from the Pay Equity Challenge. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Sue Moroney 
: I seek leave to table a copy of a speech by Putiputi Temara a school support worker who gathered around 400 signatures on the pay equity petition. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Hon PANSY WONG 
: I seek leave to table the publication  
Women On Boards 
 
which celebrates women in leadership. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Broadband Roll-out—Rural and Urban Initiatives 
7.  
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
 to the  
Minister for Communications and Information Technology 
: How does the $1.5 billion urban broadband initiative announced yesterday relate to the rural broadband plan announced last week? 
Hon STEVEN JOYCE (Minister for Communications and Information Technology) 
: 
 Both policies aim to significantly improve the internet connection speeds of New Zealanders in both rural and urban areas through significant roll-outs of fibre infrastructure. The rural programme is designed to improve rural broadband speeds over a shorter time frame to match the speeds currently being experienced in many urban areas. The urban initiative is a longer-term plan to introduce the next generation of ultra-fast broadband with fibre to the home for three-quarters of New Zealanders over the next 10 years. 
Peseta Sam Lotu-Iiga 
: What has been the response to the urban broadband initiative announced yesterday? 
Hon STEVEN JOYCE 
: The Government’s announcement has been welcomed by the telecommunications sector. Leading Australian commentator Paul Budde commented that the emphasis on dark fibre “is a great way of addressing this development as you clearly create the right environment to move away from a telco-centric infrastructure approach.” Internet New Zealand said: “This is a world-leading programme that can be expected to deliver the infrastructure New Zealand needs.” The Telecommunications Users Association of New Zealand’s chief executive officer the inimitable Mr Ernie Newman has stated: “The paper builds very constructively on the work done previously … It takes into account most of the key issues raised in submissions … It is an excellent blueprint on which to build.” 
Peseta Sam Lotu-Iiga 
: What role could Telecom play in the urban broadband initiative? 
Hon STEVEN JOYCE 
: The Government is supportive of involvement from any potential partners that are willing to meet the tender criteria. We have specifically stated that bids covering a combination of regions including national bids will be entertained. All bids received will be assessed against the same criteria. The challenge for any prospective partner is whether it is willing to meet the open access requirements for passive fibre and the ownership requirements where the partner would be a shareholder in the company that rolls out the fibre but would not control it. 
Clare Curran 
: What proportion of the $300 million announced in the rural broadband scheme last week is public money and where is the new money coming from? 
Hon STEVEN JOYCE 
: As the member is aware those details have not been announced. But they will be announced very shortly. 
Clare Curran 
: Will the Minister guarantee that the people of north Hokianga—where Telecom will not give good service where the lines often malfunction in damp weather where dial-up is almost impossible to get and where satellite is not universally available—will get fast broadband under either of the plans? 
Hon STEVEN JOYCE 
: I am not aware of the specific example the member mentions but the Government’s rural broadband initiative will go a great deal of the way to improving broadband speeds throughout rural areas by ensuring that the fibre backhaul or the link from the trunk network to the local loops will be a huge amount better than it is currently in the existing environment. 
Palm Kernel Imports—Profitability for Palm Oil Industry 
8.  
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Prime Minister 
: Does he stand by his comment that palm kernel extract was a waste product and not leading to deforestation; if so does he believe that the $317 million that New Zealand paid for palm kernel in 2008 made no contribution to profitability of the oil palm industry? 
Hon BILL ENGLISH (Deputy Prime Minister)  
on behalf of the  
Prime Minister 
: Yes; I am advised that what drives the expansion of the industry and deforestation in places in South-east Asia is the demand for palm oil which is used in a whole range of consumer products. The supplementary feed being imported into this country is a very low-value by-product of the industry that is otherwise burnt or left to rot on the ground. 
Dr Russel Norman 
: Why will he not admit the obvious which is that because palm kernel extract contributes up to 15 percent of the income stream of the palm oil industry it significantly adds to the profitability of that industry and helps fuel its expansion into virgin rainforest across South-east Asia? 
Hon BILL ENGLISH 
: There seems to be some dispute about the proportion of value that is added. The member may have different information but the information the Prime Minister has been given is that it is about 1.5 percent rather than 15 percent. We can no doubt resolve that matter. Palm oil - based products include margarine processed foods soap and washing powder. I am keen to see whether Greenpeace intends to picket our supermarkets if it really wants to stop deforestation in South-east Asia. 
Dr Russel Norman 
: Is the Prime Minister aware of comments made by Daniel Cheow the managing director of a Malaysian palm kernel exporter called Palmbase who said that palm kernel prices “have shot up as demand is coming in much faster than expected” which in part is a result of the dramatic increase in demand coming from New Zealand? 
Hon BILL ENGLISH 
: I am not familiar with those comments but I will repeat for the member that the primary driver of value in the palm oil industry is consumer products that are bought every day by New Zealanders in our supermarkets. I look forward to the Greens and Greenpeace picketing those supermarkets if they really want to stop deforestation. 
Dr Russel Norman 
: We certainly will be campaigning. Given that diesel could be considered a by-product of the petrol industry a by-product that generates only a proportion of the profits of oil companies will he now argue that greenhouse emissions coming from the burning of diesel should not be taken into account because it is only a by-product of the petrol industry? 
Hon BILL ENGLISH 
: There may be a range of by-products from the palm oil industry. I simply repeat that the palm kernel part of the industry is small. Of course it has some impact; the Government does not deny that. But the real driver of the environmental impacts which concern I think every New Zealander is actually the consumer products that we buy every day. 
Insulation Home—Criteria for Free Installation 
9.  
CHRIS HIPKINS (Labour—Rimutaka) 
 to the  
Minister of Energy and Resources 
: What criteria will be used to determine which households could receive free home insulation? 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 As I reported to the House yesterday in just 2 months of the scheme 60 percent of the households receiving assistance have been occupied by community services cardholders and in most cases they will have paid nothing for that insulation due to the third-party funding that has been attracted by the scheme. 
Chris Hipkins 
: Was Dr Sharples correct when he said that as part of the deal with the Maori Party to support the changes to the emissions trading scheme the Government would provide free home insulation to 2000 Maori households? 
Hon GERRY BROWNLEE 
: I think that is a very very loose and somewhat interpretive recycle of what Dr Sharples— 
Chris Hipkins 
: It was in the papers. 
Hon GERRY BROWNLEE 
: We all know that one does not believe everything one reads in the papers. I tell the member that Dr Sharples has raised an issue and we are discussing that matter with him. In any event well over 2000 Maori households will be advantaged by this scheme over its lifetime—well over. 
Dr Cam Calder 
: Has the Minister received any reports on the success of the Warm Up New Zealand: Heat Smart scheme; if so what do those reports say? 
Hon GERRY BROWNLEE 
: Yes. As I advised the House yesterday in just 8 weeks more than 8000 houses have received retrofits under the scheme. This figure compares with 9000 that were done under the previous Labour Government in the entire 2007 year and the 11000 done by the previous Labour Government in the 2008 year. At the moment we are on track to beat those numbers some time during the next month. 
Chris Hipkins 
: If Dr Sharples is incorrect was Tariana Turia correct when she said that the Maori Party had secured free insulation for all low-income households as part of the Maori Party’s deal to support the proposed changes to the emissions trading scheme? 
Hon GERRY BROWNLEE 
: I am struggling a little to work out why the Labour Party finds it so difficult to accept that the National Government with the Maori Party coalition arrangements and the ACT Party coalition arrangements is providing an opportunity for community services cardholders—low-income New Zealanders—to access free insulation. 
Chris Hipkins 
: Does the Minister think it is fair to prioritise free home insulation for households in Northland and the East Coast—some of the warmest places in New Zealand—while low-income households in places like Wellington Invercargill Dunedin and Christchurch will miss out on free home insulation? 
Hon GERRY BROWNLEE 
: The member leaps to a conclusion that on the statistics that I have in front of me is quite unreasonable. Firstly Canterbury had the largest uptake of the scheme during the last 2 months—the only 2 months the scheme has operated—at 22 percent. Other areas in the South Island have been similarly quick to accept the scheme. I want to know why the member thinks it is OK for poor people to be cold in those parts of New Zealand. 
Chris Hipkins 
: Will there be any new funding for home insulation as part of the deal with the Maori Party to support the emissions trading scheme or does the scheme just bring forward spending of the $323 million announced in the Budget therefore not increasing the overall number of households receiving insulation under the Government’s scheme? 
Hon GERRY BROWNLEE 
: Negotiations are continuing. 
Emissions Trading Scheme—Deal with Maori Party 
10.  
DAVID GARRETT (ACT) 
 to the  
Minister for Climate Change Issues 
: Has he a written document of what has been agreed to with the Maori Party to advance the Government’s amendments to the emissions trading scheme to a select committee; if so will he table it? 
Hon Dr NICK SMITH (Minister for Climate Change Issues) 
: 
 Yes. The agreement was by way of an exchange of letters between leaders. It is not appropriate to release those letters at this time because we are working through the details of a number of proposals and we wish to do that directly with the Maori Party and not through public discourse as we do with negotiations with other parties including ACT. I would be happy to table the 13 bullet points that cover all the features of the agreement.  
David Garrett 
: Does the Minister have an estimate of what the agreement with the Maori Party will cost taxpayers and given that the agreement is only to support the referral to a select committee what does he think the cost of an agreement for the second and third readings of the bill will be? 
Hon Dr NICK SMITH 
: The agreement we have in good faith with the Maori Party is to work through the details around some key initiatives for providing home insulation as my colleague said for low-income households. There are details about our working through a national policy statement on biodiversity under the Resource Management Act. There is a total of 13 initiatives and I have every confidence that we can work cooperatively with the Maori Party to ensure its support for the second and third readings. 
Craig Foss 
: Which of the 13 elements in the agreement with the Maori Party will be included in legislation to be introduced next week? 
Hon Dr NICK SMITH 
: The details of the 50 percent obligation the $25 fixed price option and the additional allocation for fishing industry to quota holders will be included in the bill next week. Other details like the Treaty clause are subject to work by officials including Crown Law officials in consultation with the Maori Party. Most of the other elements of the agreement do not require legislation. They are being worked on by officials in consultation with the Maori Party. We will announce those details when they are finalised. 
Hon Shane Jones 
: Does he stand by his earlier public statement: “A separate Maori party will not help us find solutions to challenges but will polarise the debate.”; if so why is he encouraging the segregation of Maori climate change obligations from the rest of the New Zealand community? 
Hon Dr NICK SMITH 
: I am not. If the member looks in detail at the bill next week he will see that although it is certainly true that Maori have a very large interest in industries like fishing forestry and agriculture we have been very plain that there will not be—and the Maori Party has not asked for—any different rules for Maori in those industries than what there are for other New Zealanders. 
David Garrett 
: Can the Minister confirm whether the deal involves benefit hikes and whether the energy-efficiency assistance for home insulation is in fact for all low-income households or for just Maori low-income households? 
Hon Dr NICK SMITH 
: On the first point I say that the way our system of benefits works is that they are adjusted by CPI each year and when the increased cost of both fuel and power—which we have halved as part of the agreement—flows through there will be an adjustment for those benefits. In respect of the issues raised the focus of the Maori Party has been a concern around low-income households and it has not asked that the allocations be made specifically on the basis of any ethnicity. 
Hon Shane Jones 
: Can the Minister explain why the Maori concessions are good for Papatuanuku as reflected in the Maori Party commentary or is this a case of the Government preaching indigenous declaration but acceding to indigenous desecration? 
Hon Dr NICK SMITH 
: I find that interesting from a member of the Opposition. I remind him that during the time of the previous Labour administration emissions grew by 24 percent. 
Hon Members 
: Answer the question! 
Hon Dr NICK SMITH 
: Members opposite do not like it but the reality is that their climate change record was an international embarrassment. Under this Government with an effective agreement with the Maori Party we will have a very responsible approach to both climate change as well as the broader economic interests of Maori and other New Zealanders. 
Te Ururoa Flavell 
: What measures has the Government agreed to in order to ensure that the obligations of the Crown to Maori including the ones under the Treaty of Waitangi are not compromised by the New Zealand emissions trading scheme? 
Hon Dr NICK SMITH 
: The Maori Party has strongly advocated that position out of concern that Maori should not carry a disproportionate share of the costs of reducing emissions because of their concentration of economic interests in primary industry and because of Maori being disproportionately represented in low-income households. Many of the 13 elements agreed on address this including a specific Treaty clause in the law additional allocations to fishing quota holders involvement for Maori in international negotiations over forestry offset agreements to work through the issues for pre - emissions trading scheme forest settlements measures to lower the cost increases for petrol and power as well as the extension of the home insulation scheme for low-income households. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. The Minister Dr Smith indicated he would table some documents in the House. He appears to have forgotten that. 
Hon Dr NICK SMITH 
: I seek the leave of the House to table the key features negotiated between the Maori Party and the Government in respect of the emissions trading scheme. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Ministerial Accommodation—Primary Place of Residence 
11.  
Hon PETE HODGSON (Labour—Dunedin North) 
 to the  
Minister responsible for Ministerial Services 
: How is a Minister’s primary place of residence determined? 
Hon GERRY BROWNLEE (Leader of the House) 
 on behalf of the  
Minister responsible for Ministerial Services 
: The primary place of residence for all members of Parliament including Ministers is determined by the Speaker. 
Hon Pete Hodgson 
: Why does Ministerial Services not provide an official residence or pay any housing allowance to the Hon Peter Dunne the Hon Chris Finlayson or the Hon Heather Roy? 
Hon GERRY BROWNLEE 
: Because it has been determined that their primary place of residence is Wellington. 
Hon Jim Anderton 
: What information did Ministerial Services receive to persuade it that the Hon Bill English complied with the criteria of the Auditor-General relating to the primary place of residence of an MP including the criterion regarding “the locations where the MP spends most of” his or her “non-parliamentary time;”? 
Hon GERRY BROWNLEE 
: I assume that Ministerial Services used the same criteria that it used to determine where for example the Hon Pete Hodgson spent most of his time when he was an MP from Dunedin but was resident in Wellington. 
Hon Jim Anderton 
: Supplementary question— 
Mr SPEAKER 
: I am afraid that I have already been quite generous to the honourable member because there was no provision for supplementary questions from the Progressive party today and there certainly is not provision for a second question. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. I am sorry if it was not communicated to you but the Labour Party has given an extra supplementary question to the Progressive party today. 
Mr SPEAKER 
: But that question has already been used. 
Hon Darren Hughes 
: He has had only one. We have given him two supplementary questions. 
Mr SPEAKER 
: He has been given two supplementary questions? I beg the honourable member’s pardon. 
Hon Jim Anderton 
: What information did Ministerial Services receive to persuade it that the Hon Bill English complied with the criteria of the Auditor-General relating to the primary place of residence of an MP including the criterion regarding “the locations where the MP’s current spouse or partner and family live and where other dependent family members usually live (including where they spend most time work or attend school);”? 
Hon GERRY BROWNLEE 
: I imagine Ministerial Services relied on the determination made by the Speaker in the same way it would have relied on that determination when that member was living in Vogel House but had a home in Addington or when Mr Goff had a home in Wellington but was living in a ministerial house in Wellington while he had a home in Auckland or in the case of any number of Labour Ministers who were in exactly the same position. 
Hon Pete Hodgson 
: What precise pecuniary interest test must be met before it is permissible to lease a home from a family trust for use as a ministerial residence: a personal pecuniary interest test or a familial pecuniary interest test? 
Mr SPEAKER 
: Before I call the honourable Minister I say that this primary question is about primary place of residence not about matters to do with pecuniary interests. 
Hon Pete Hodgson 
: I raise a point of order Mr Speaker. It is only if a primary place of residence decision has been taken in a certain way that this question becomes relevant. The two supplementary questions asked by my colleague the Hon Jim Anderton make it relevant. 
Mr SPEAKER 
: The dilemma is that the primary question is so precise: “How is a Minister’s primary place of residence determined?”. Trying to stretch that question to issues of pecuniary interest is stretching things a fair way. I will give the member another chance to try to bring his supplementary question a bit closer to the primary question. 
Hon Pete Hodgson 
: In the event of a Minister’s primary place of residence being not in Wellington what precise pecuniary interest test must be met before it is permissible to lease a home from a family trust for use as a ministerial residence: a personal pecuniary interest test or a familial pecuniary interest test? 
Hon GERRY BROWNLEE 
: I can elucidate no more on that question than the Prime Minister has in the past 2 days. 
Hon Jim Anderton 
: I seek leave to table part 2 “Issues of Eligibility for Allowances Based on Residence” of the Auditor-General’s  
Parliamentary Salaries Allowances and Other Entitlements: Final Report 
 of July 2001. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document  by leave laid on the Table of the House. 
Hon GERRY BROWNLEE 
: I raise a point of order Mr Speaker. I wonder whether you would make it clear to the House as Speaker that it is the Speaker’s role to make such determinations not the Auditor-General’s role. 
Mr SPEAKER 
: It is not strictly a point of order but the member is correct that the Speaker actually makes those determinations. 
Paua—Changes to Harvesting Regulations 
12.  
CHRIS TREMAIN (National—Napier) 
 to the  
Minister of Fisheries 
: What recent changes to regulations have been made to address the issue of illegally harvested paua? 
Hon PHIL HEATLEY (Minister of Fisheries) 
: 
 Changes to the amateur regulations will now make it illegal to hold more than two times the daily limit of paua or the equivalent in meat weight and that includes in one’s freezer or in one’s international carry-on. This is just another tool for the Ministry of Fisheries to target those who traffick in illegally caught paua. 
Chris Tremain 
: What reports has the Minister seen regarding this policy? 
Hon PHIL HEATLEY 
: A lot of support for this regulation has come through the submission process. Fisheries officers will not go looking through anyone’s freezer for no good reason. I need to make that very clear. I want to reassure our recreational fishers that if Ministry of Fisheries officers are knocking on their door and asking to look in their freezer it is highly likely that they are the target of a sting operation. 
Student Loan Scheme (Repayment Bonus) Amendment Bill 
Third Reading 
Debate resumed. 
STUART NASH (Labour) 
: 
 Just before lunch we heard the Hon Sir Roger Douglas stand up in this House and tell us that the Student Loan Scheme (Repayment Bonus) Amendment Bill will take money from the pockets of the poor and give to the rich. That is very rich coming from a man who proposes to raise the level of GST so that he can cut the top personal tax rate. I would like to know how that will help struggling Kiwis who are below or on the average wage. Mr Peachey who followed Mr Douglas lectured us on financial literacy asking why graduates would not pay back an interest-free student loan so they can help the Government. Help the Government? “Help the Government?” I say to Mr Peachey. That would be like how he has helped the 70 percent of hard-working ordinary Kiwis on under $40000 a year by giving them no tax relief like how he has helped Kiwis to realise their superannuation dreams by butchering KiwiSaver like how he has helped Kiwis by cutting their adult and community education courses—and the list goes on. Wherever Mr Peachey is—there he is—I ask him to give me a break. 
I stand to speak in support of this bill in its third reading but I am actually quite ambivalent about it. It is a bit of a nothing bill which will help very few and achieve not much. The fact that we are debating this bill under urgency is a little perplexing but then again so is much of the National Government’s agenda. I must admit that some students will take up this scheme but I think the vast majority of reasons for taking it up will not be financial ones. The reasons for early debt repayment despite the financial disadvantages of repayment are varied. 
I found it interesting that Mr Dunne could not confirm that the number of students who have already expressed an interest in taking up this scheme was over and above the standard number of students who pay back their student loan early already. About 20000 Kiwis pay back their loan every year. Apparently about 180000 Kiwis have student loans and about 1 percent of them have shown an interest in early repayment. I tell members that well over 50 percent of the students who have already shown an interest in paying their loan back this year—about 600 which is the number of votes that we need in order to take the West Coast back and we will do that—are people who had already decided to pay back their student loan early anyway. They are putting out their hand for this bonus which has just come along. I would like to know how many of those people who are paying back their loan early are in the final 2 years of their loan repayments anyway. Those people will have worked out that this scheme is—for the final couple of years of their repayment schedule—a small window of financial opportunity that will actually make them better off. The Minister cannot even tell the House how many students the Inland Revenue Department has forecast will take up this scheme. I say to the Minister that I would have found that information most helpful and relevant. 
I paid off my student loan early and I did so simply by increasing my mortgage when I bought my first house. But the reason for my debt consolidation was that at that point in time the interest on my student loan was actually higher than the interest on my mortgage so debt consolidation actually made sense. But if I had an interest-free student loan—in fact I cannot remember; who brought in that student loan legislation. The previous Labour Government brought in the interest-free student loan legislation. Who voted against that interest-free student loan legislation? The National Opposition voted against the interest-free student loan legislation. I ask members whether Mr Peachey was part of that Opposition. 
Hon Member 
: Corporate tax cuts! 
STUART NASH 
: National gave corporate tax cuts as well; it is unbelievable! It is just obvious yet again that the Labour Party is the party of the students. I ask members to imagine voting against interest-free student loans. 
As I was saying there are many reasons why someone may pay off an interest-free student loan but very few of them are actually financial. For some people there may be a psychological rationale: they just do not like being in debt. But that is not a financial reason. The reason may be one of debt consolidation but that is not a financial reason. It may be that they have received a gift from their grandmother who will have to pay gift duty if the amount is over $27500 per year by the way. But that route to full debt repayment is not a financial reason because the investment of such a gift in an interest-bearing account would actually be more beneficial to the recipient. It may be that an employer has given someone a healthy bonus and he or she wants to pay off an interest-free student loan. But I contend that none of those reasons are financial ones. I think we get the point: paying off an interest-free student loan as proposed by this scheme may be taken up by some graduates but if they do so it will not be because of a financial decision. I contend that the majority of those people would have paid off their loan early anyway. 
I would support anything that helped university graduates to get ahead. I worked as the director of strategic development at the Auckland University of Technology and I wrote a draft business case for the purchase of the Manukau campus so I do know a bit about the stresses and strains that students and graduates are under in this day and age. Times have changed since the vast majority of the members in this House were students. Student loans have placed a whole different level of stress on graduates these days. Student loan debt has increased at an alarming rate. If I thought that this bill would actually make a difference and help graduates then it would have my unqualified support. But it does not do that so I do not give it unqualified support. 
A party vote was called for on the question  
That the Student Loan Scheme (Repayment Bonus) Amendment Bill be now read a third time. 
Ayes 113 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Maori Party 5; Progressive 1; United Future 1. 
Noes 9 
Green Party 9. 
Bill read a third time. 
Taxation (International Taxation Life Insurance and Remedial Matters) Bill 
In Committee 
Debate resumed from 27 August. 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I seek leave for the remaining provisions of the Taxation (International Taxation Life Insurance and Remedial Matters) Bill to be taken as one question. 
The CHAIRPERSON (Hon Rick Barker) 
: Leave is sought for that matter. Is there any objection? There appears to be no objection. That course of action is agreed to. 
Parts 3 to 6 schedules 1 and 2 and clauses 1 and 2 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 It is a pleasure to take a call in the resumed Committee stage of the Taxation (International Taxation Life Insurance and Remedial Matters) Bill. The Labour Opposition concurs with the Government’s motion to have the remaining parts taken as one question in order to facilitate a more coherent and general discussion. It is also perhaps appropriate to note that in contrast with some of the other legislation that has been debated in the last few days this bill genuinely needs urgency for the sake of clarity to taxpayers and proper tax planning. 
This bill makes some important changes to taxation law but in doing so has represented very poor legislative process. It provides for the reform of international tax rules with the intention of making New Zealand residents with active businesses in overseas markets compete on an equal footing with their competitors. It aligns life insurance taxation rules closer to the accounting treatment of life insurance profits and at the same time it extends portfolio investment entity rules to life insurers’ savings products. The bill provides for payroll giving to enable the establishment of a flexible system and manageable compliance costs. The taxation of emissions units is provided for—we might say thankfully in the light of recent decisions given the loss of the cap from the “cap and trade” system. 
The definition of “associated persons” is reformed. Tax thresholds are raised to reduce compliance costs for small and medium sized businesses. That was a particular priority of the outgoing Labour Government which put this bill in place. The tax treatment of relocation claimants and overtime meal allowances for employees is clarified. The bill includes changes to the income tax rules for petroleum mining—a matter much discussed earlier in the Committee stage. It provides for the new film grant the Screen Production Incentive Fund and it makes a number of other changes. 
This bill is being debated under urgency again today. Labour supports the bill but it is very concerned about the rushed process for the bill. The major Supplementary Order Papers were delivered late without sufficient time to properly consider them. It is a huge and complex bill; I am advised it is the largest tax bill ever outside the rewrite legislation. The deadlines were rushed denying members proper and sufficient time to consider its provisions and there was a general lack of sufficient time to fully consider the immense levels of detail in the bill. For that reason the Finance and Expenditure Committee was very reliant on professional tax advice. 
The process was imperfect because of the breadth and depth of the provisions in the omnibus bill and the select committee therefore had the following to say in its report: “The size of the bill and the depth and breadth of the material it covers have made our consideration more difficult than it might have been otherwise. In trying to meet the report due date for the bill we and our committee consideration processes have been put under considerable pressure. We do not consider it desirable to put a number of very distinct and significant proposals into one bill simply because they relate to one area of law.” That is reasonably strong language in the formal context particularly in the context of the Finance and Expenditure Committee’s commentary on tax legislation which is a matter normally reserved for the driest of the dry as the Minister in the chair Peter Dunne will no doubt attest. 
There are several very important substantive areas in the bill. The first that I will mention in summary today is the definition of “associated persons”. There was extensive discussion of these provisions and right around the select committee there was an agreement that we had a common aim: to ensure that genuinely associated persons were covered so that they could not evade tax and that the rules be tightened to avoid unintended consequences for those whom the association was tenuous or who could not have been expected to know about a particular investment or tax liability of a person deemed to be associated. We appreciate the Minister of Revenue’s willingness to discuss those changes through his officials with the committee. I think and all members of the committee think that good work was done in that area and we thank officials for working in detail through those provisions with us all. 
The main bulk of the bill is associated with the international tax rules. It is an incredibly important and complex area particularly as the world is globalising. As we all know the factors of production and therefore much of our tax base is becoming more mobile and effectively harder to tax. It is for that reason amongst many others that we await with interest the outcome of the Government’s Tax Working Group as we look forward to an ongoing discussion about the optimal balance between different forms of taxation in that regard. This tax legislation modernises the international tax rules particularly in respect of controlled foreign companies—for example to “ensure that key provisions relating to CFC rules … were set out clearly in one place in the legislation.” The select committee recommended “technical amendments to the accounting-based active business test for CFCs … to reduce the cost of applying the test.” It also recommended that “for the purpose of the tax-based active business test consolidation be permitted only when the taxpayer has an income interest of more than 50 percent in each of the CFCs to be consolidated.” The amendments will “allow an active CFC to pay royalties interest and rent to an associated CFC … without the associated CFC having to recognise any passive income only if the CFC and the associated CFC were liable for tax in the same jurisdiction.” So there is some tightening there. There are a number of like rules around controlled foreign companies which were important for the committee to get its head around and are important to modernise because they reflect the changing nature of business practice in this incredibly globalised environment. 
There was discussion of the taxation of life insurance businesses and the select committee recommended a number of amendments to make the proposed provisions clearer and more flexible. For example “all direct and indirect expenditure incurred by a life insurer would be deductible in the shareholder base.” and “in relation to non-life insurance policies life insurers are able to claim a deduction for movements in the outstanding claims reserve.” The amendments ensure that “where a life insurer has overpaid tax on the life office base under the existing rules the overpayments would be carried into the new rules and could be used to satisfy tax liabilities arising on both”. It is fair to say that the committee in closed session also considered in some detail some particular aspects of the rules that applied to particular aspects of the sector. I will not go into the details of that for obvious reasons but I simply note that the committee spent considerable time with officials clarifying a matter that was of some interest to some in the industry. 
There was an extended discussion both in the select committee and on the floor of the Chamber of the tax treatment of petroleum mining. Several members have raised this issue in terms of a taxpayer-specific matter so I will not repeat the taxpayer-specific element. I will say that the committee wrestled with the need to avoid multinational oil companies ripping New Zealand’s tax base off by literally hundreds of millions of dollars by for example attributing to its New Zealand profits the cost of debt incurred in foreign jurisdictions. The Labour Party wants to go on record as supporting to the nth degree the Government’s moves to track this practice down and stop it. Not only is it totally unjustifiable but it is literally robbing the New Zealand taxpayer and beneficiaries of much-needed revenue. We certainly encourage the Government to pursue the transfer pricing and transfer attribution of cost by multinationals in this regard. 
A particular case of the reverse could potentially have been caught inadvertently: a New Zealand company that was investing offshore may have been caught by an unintended potentially retrospective element if indeed it had entered into a contract before the effective date of the announcement of this provision. We are taking the Minister and officials at their word that we will be able to work through in good faith with that taxpayer on the basis of the common law a position that reflects the common view of the committee that this was not the primary issue that the provision was designed to solve and that we were wary as is longstanding parliamentary practice of any retrospective element that operated to the detriment of New Zealand business. 
There are many many pages of detail that I could go through. I have touched upon the main areas of work. There are many others that other members will want to touch on. I will however refer to the fact that we got quite a lot of last-minute Supplementary Order Papers. Perhaps because I am a former Minister I always take a very dim view of officials not providing to the Minister in sufficient time material that then ends up having to come through the Minister to the floor of the Chamber as a Supplementary Order Paper. 
Hon PETER DUNNE (Minister of Revenue) 
: 
 At the outset of this debate on the Taxation (International Taxation Life Insurance and Remedial Matters) Bill I want to make a couple of points. Firstly this is the resumption of a Committee stage debate so a number of the measures that the previous speaker David Cunliffe referred to have already been disposed of in earlier parts of this debate. But I think he was simply reintroducing our memory to those matters. I want to comment on the point though about rushed legislation. I cannot accept his assertion in that respect. I want to place on the record once more a little bit of the history. This bill was introduced in July 2008 over a year ago. Because of the intervention of a general election it had not progressed far before the change of Government last November. It has been worked on pretty efficiently by the Finance and Expenditure Committee during the course of this year. 
One of the issues I was conscience of as the bill was proceeding was that the implementation times for a number of the regimes that it contains—the international tax changes the changes to life insurance payroll giving and there were one or two others as well—were much shorter than they are in the bill at the moment. So rather than the legislation being rushed I wrote to the select committee recommending that it defer the implementation dates to in some cases next year. I did that simply because I wanted to make sure there was sufficient time. One of the reasons I am grateful for this bill being taken under urgency today is that I am getting many inquiries from a number of people seeking assurances that we will stick to this timetable that the dates that we have amended in the bill will be honoured and it will not be further delayed. I do not think we can draw a conclusion from that about rushed legislation. We can draw a conclusion about the size of the bill and I am freely conceding—as I have done before—that this bill in retrospect did bite off too much territory. In future we will do things a little differently. 
I want to pick up on the comment the member made about the associated persons changes and I was grateful for his intervention on this point. I say to the Committee and to any of the public who are anxious about this provision that from the outset we were seeking to simply ensure that the law as put in place—in this instance way back in 1973—worked as it was intended to at that time. We were not seeking to broaden the scope or to introduce new definitions or changes to definitions through that mechanism but simply to ensure that what we thought we had been doing since 1973 was accurately reflected in the law as it stands today. 
Mr Chairman let me make a quick comment in response to the member about petroleum mining. Again there are very substantial points of agreement. One of the things that could conceivably happen under this bill—and I am not being taxpayer specific when I make this observation but certainly to illustrate the point that Mr Cunliffe was alluding to—is that it could well be possible in the future for a company to take advantage of the changes we are making to the international tax rules in terms of the active/passive test and therefore be subject to taxation in the jurisdiction of their location only and not double taxation in New Zealand. At the same time have we not changed the petroleum mining law being able to write off the cost of exploration incurred on that offshore jurisdiction against the New Zealand tax base? So the New Zealand taxpayer in that hypothetical situation not only gets no tax but is paying out a tax deduction to that company. That clearly would be wrong under any reasonable assessment of the law and that is the sort of situation we are trying to guard against. 
With regard to some of the issues that are coming up in the remaining parts of this bill I draw members’ attention to the amendments to the KiwiSaver Act that are contained in Part 4 of the bill. These relate particularly to the situation that has had some publicity of recent times where a contributor has died intestate and the difficulty that the family have had in gaining access to the funds that have been deposited in KiwiSaver. This bill corrects that unfortunate situation and has been backdated to the time of the introduction of the KiwiSaver scheme in 2007 and will be a huge benefit to those families who have been suffering as a consequence of the loss of a family member in that situation and being unable to access the funds that they contributed to KiwiSaver while they were alive. I am grateful for the Committee considering and adopting that amendment in the bill. I am also keen therefore to see it pass so that those people who are in a state of anguish can have some relief. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 Much has been said about the size of the Taxation (International Taxation Life Insurance and Remedial Matters) Bill. I concur with the remarks of the honourable Minister of Revenue about the work done by the officials. We commend that work as well as the work done by the Minister who in a letter to the Finance and Expenditure Committee stated quite clearly that changes would be put in place in terms of the timing of the legislation. 
The bill addresses a number of areas for change. It provides for the reform of international tax rules. Among other measures it introduces a tax exemption for foreign active income of controlled foreign companies—the CFCs as they have been referred to in this debate already. It also addresses aligning life insurance taxation rules more closely with the actual profits of term life insurance businesses. But the area that I would like to discuss is the introduction of the voluntary payroll giving scheme. 
We all know that New Zealanders are generous with their money and their time. Nielsen Media Research found out that 75.4 percent of the New Zealanders surveyed supported the community and voluntary sector in 2007. They supported that sector either by making committed or ad hoc donations volunteering or through another form of support. The research also indicates that less than one in every five people who donated to charity filed a tax rebate for the donation. Payroll giving represents an opportunity for those who give to gain an immediate tax benefit thus eliminating the need to file a rebate annually. 
Following the introduction of similar legislation and a Government-initiated campaign to promote payroll giving the level of participation in payroll giving in Australia doubled. An initial target that has been suggested is that New Zealand aim to achieve a level of participation comparable to that of Australia. I suggest that we aim to surpass the level of participation in Australia by 2011 the year of the Rugby World Cup when we will also surpass Australia on the rugby field. From research conducted by the Tindall Foundation it predicts that unless the Government and business put significant effort and resource into promoting and encouraging similar participation in this country payroll giving is unlikely to gain traction. 
Payroll giving is about enabling employees to receive the benefit of payroll donations each pay day in real time and without the need to have donation receipts. People who make donations other than through payroll giving can continue to claim a charitable donation tax credit at the end of each tax year. A main concern raised by the Finance and Expenditure Committee was the risk that employers could default in transferring payroll donations to the chosen donee organisations especially in insolvency situations. To address that concern the committee recommended a number of changes to the bill. They included an amendment to schedule 7 of the Companies Act 1993 to confirm that when an employer goes into liquidation and has not passed on employees’ donations to donee organisations the return of those donations to the employees will have the same priority as the payment of their unpaid wages. 
That was a short cameo on payroll giving. We have made a number of other more in-depth changes to our tax regime. The bill supports the emphasis this Government is putting on tax reform and tax policy. It is part of a series of tax reforms that will continue into the future of this term of Government. 
STUART NASH (Labour) 
: 
 I say to Mr Lotu-Iiga that I wish we could get one thing clarified. First and foremost the Taxation (International Taxation Life Insurance and Remedial Matters) Bill was introduced by the previous Labour Government on 2 July 2008. It is not a National bill; it was not part of National’s agenda for tax reform. I think we need to get that clear once and for all. 
The Minister in the chair the Hon Peter Dunne is right; this bill has had quite a long process. As I have mentioned it was introduced on 2 July last year. The reason it has taken so long is perhaps that Parliament dissolved for the general election and then we were back into it. But having said that I also understand the need for urgency on the bill because business tends to operate best in an environment of certainty. The sooner this bill is passed the greater the level of certainty there will be for a whole range of businesses. So I support the urgency on this bill in the Chamber today. 
As has been mentioned we support this bill. We have already voiced our concern—I think every speaker has voiced his or her concern—not about the rushed process but about the size of the bill coupled with the amount of time we had to spend on it. We are concerned about—and my colleague David Cunliffe talked about this—the late nature of the Supplementary Order Papers which were tabled without sufficient time to properly consider them. Supplementary Order Papers 34 and 35 in the name of the Hon Peter Dunne were released on 4 August and 25 August respectively. This is a huge and complex bill—most tax legislation is complex—but at 825-odd pages that really made things very tight. There was a general lack of sufficient time to fully consider the whole immense detail of the bill but we did our best. As has been mentioned we relied on the officials and our consultants. 
I will talk about the amendments to the Income Tax Act. In 2007 around 3500 pages of New Zealand tax legislation were enacted. This legislation included the Income Tax Act of 2007. At 2800-odd pages that Act represents the fourth and final stage of a project begun in 1994 to rewrite income tax law in plain-language style. As the length of time taken to complete this task shows this rewrite was an ambitious and aspirational but absolutely necessary task. I know that sometimes the words “tax legislation” and “plain English” in the same sentence are a bit of an oxymoron but this is the way things work out in tax legislation. This task was a definite step forward in terms of New Zealand tax law. But as an inevitable consequence of the rewriting process there was a temporary but large increase in the number of remedial amendments necessary in order to maintain the tax law in sound working order. This increase was in part because very few remedial amendments had been enacted since December 2007. 
Of the remedial amendments proposed approximately 115 are typically of a very minor nature. They are intended to correct matters such as incorrect numbering and cross-referencing printing errors the use of incorrect terminology punctuation issues and omitted words. Despite perceptions and beliefs to the contrary even tax officials and drafters make the occasional mistake. I think we would agree that making 115 drafting errors in 3500 pages of legislation or in the 2800-odd pages of the Income Tax Act 2007 is not a bad effort overall. Other amendments in this bill are of a less clerical nature but arise from both rewrite issues include submissions to the Rewrite Advisory Panel and from clarification of policy in business as usual drafting. These 160-odd amendments affect provisions in the Income Tax Act 2007 the Income Tax Act 2004 the Tax Administration Act 1994 the KiwiSaver Act 2006 as the Minister has alluded to and the Stamp and Cheque Duties Act amongst other Acts. Of these amendments 30 issues were referred to the Rewrite Advisory Panel for resolution. 
In addition to the 119 remedial amendments included in the bill at its introduction the officials recommended that the Finance and Expenditure Committee propose the inclusion of about 150 further remedial amendments the need for which had been discovered since the introduction of this bill. As that shows a lot of work went into this legislation at the officials level at the Finance and Expenditure Committee level and at the consultant and advisory level. 
Several Acts that amend tax Acts have been enacted since the bill was introduced to Parliament. They include the Climate Change Response (Emissions Trading) Amendment Act 2008 the Taxation (Urgent Measures and Annual Rates) Act 2008 and the Taxation (Business Tax Measures) Act 2009. A number of the cross-references in the bill need to be adjusted to take into account the changes made by those Acts. The officials recommended that the committee include such amendments. 
CRAIG FOSS (National—Tukituki) 
: 
 I rise to speak in the continuation of the Committee stage of the very large Taxation (International Taxation Life Insurance and Remedial Matters) Bill. I acknowledge members giving leave to combine the debate on the remaining parts of this bill in order to facilitate its completion. 
Much was said about the bill by speakers when we last addressed it and I am sure we will hear some more points now and in the third reading. We are speaking about Parts 3 to 7 which include clauses 518 to 629 and the title. They cover about 140 pages which points to the substantial nature and breadth of the bill. We must also note that a large part of the original bill is no longer in this bill because it formed part of the small to medium sized enterprise tax recession assistance bill the Taxation (Business Tax Measures) Bill which we passed in March. 
I would make the point that we have an additional Supplementary Order Paper—34. I understand that it consists of simple remedial drafting changes to the substantial legislation and I would be interested to have an assurance that in fact that is the case. I fully accept that it has no policy change from what the select committee saw and what many many submitters spent much time on at the select committee. 
I should acknowledge as this will probably be my final time speaking in the Committee stage the assistance of the Minister of Revenue officials and members of the Finance and Expenditure Committee both in the previous Parliament and in this Parliament in facilitating this bill going through to at least this stage. Cooperation was extended in many many areas. I acknowledge that other members have recorded that for  
Hansard 
 and I appreciate that. I also acknowledge that at times the select committee had to begin meetings early and finish late to facilitate the process. 
When the Minister spoke earlier he spoke about the need the commercial imperative to provide some certainty for the many many sectors of business affected by the bill from insurance to payroll to you name it—to the Inland Revenue Department itself—as to when certain parts of this wide-ranging bill would be implemented. I agree totally with what the Minister said. The commentary states that the Finance and Expenditure Committee was not particularly pleased with the breadth of the bill with its wide-ranging nature and all the commentators also picked up on that. But that does not mean that the bill did not go through the due process. I note that many of the discussion documents that led to this bill particularly those about some matters that have already been raised in the debate actually appeared under the previous administration—as far back as 2006 and even 2007. The legislation was introduced in July 2008 I think it came to the Finance and Expenditure Committee in September or October 2008 and we picked it up with a vengeance early this year as Parliament got back to normal behaviour if you like. 
That was just a quick note to acknowledge all those who have assisted with the bill to reiterate the points made in the commentary and also to put on record for those who pay strict attention to the commentary of the bill not to misinterpret the commentary or to try to put words into it. The commentary speaks for itself and it is not meant to be anything other than the thoughts of the committee at that time. Other speakers have alluded to some of the issues in and around that. On that note I look forward to the third reading. 
RAYMOND HUO (Labour) 
: 
 I rise to take a call on the bill and wish to affix my contribution on the provisions in relation to remedial amendments in the bill in particular the clauses concerning KiwiSaver. The bill introduces a number of remedial amendments to the KiwiSaver scheme and in the Finance and Expenditure Committee we spent a certain amount of time hearing submissions and deliberating on them. A number of submissions are no longer relevant due to the removal of the employer tax credit. What is interesting are the issues surrounding the definition of member credit contribution in section YA 1 of the Income Tax Act 2007 and in section OB 1 of the Income Tax Act 2004. Officials are of the view that the definition should be amended to exclude the $1000 kickstart payment and the member tax credit. This would have the effect of preventing members from double-dipping which would occur if the Crown contributions were included in the calculation of the member tax credit. 
A technical issue arose in relation to whether the amendment would be intended to be retrospective or prospective. If it should be retrospective the recalculation of the member’s accounts would be required. As the independent specialist adviser Therese Turner pointed out in her report recalculation of a member’s accounts would be required. Given that some members may have already withdrawn from the scheme that would be problematic. 
I cited this relatively small part as an example to show how important it is for us to work together to bring our tax law up to date which is the main purpose of this bill in general and to provide some certainty to make the relevant clauses operative. It is particularly so to the 1.1 million New Zealanders who have signed up to the KiwiSaver scheme. I congratulate the Hon David Cunliffe on taking the initiative for the multiparty banking inquiry by the Labour Green and Progressive parties. There are two major concerns; I cited this one because the savings concern is particularly relevant to what we are talking about now. 
Two major concerns were expressed by submitters across the board. The first concern was that banks have grown faster than the surrounding economy indicating that wealth has transferred from the trading economy to the non-trading economy which has made it harder for us to grow a healthy sustainable economy. The second concern which is relevant to this bill is our low savings rates and spending habits of New Zealanders. Unfortunately the Government’s only response so far to the low savings rate is to cut KiwiSaver. The KiwiSaver scheme introduced by the Labour Government was designed to lift private sector household savings in New Zealand. By cutting the incentives for KiwiSaver the National-led Government is decreasing the amount that ordinary Kiwis will be able to save. The Government’s plan betrays the over 1.1 million New Zealanders who have already signed up and the Government’s move has effectively taken away opportunities from future generations. Thank you. 
Hon DAVID PARKER (Labour) 
: 
 I rise to take a call in the Committee stage of the Taxation (International Taxation Life Insurance and Remedial Matters) Bill which Labour supports. I will deal with a couple of technical matters for a start. An important change has been made through this legislation to the treatment of petroleum mining revenue and I endorse the steps that the Minister of Revenue started in the previous Government and has continued in this Government to clarify that the petroleum mining losses that are incurred by a foreign branch of a company cannot be offset against petroleum mining income earned from New Zealand. 
To put that in perspective New Zealand has become quite prospective for oil and gas. The price of oil and gas is a lot higher than it was a few years ago and some of the traditional sources of oil either have become risky for development companies or have been depleted in their reserves. Although as a country and a world we need to transition away from fossil fuels for environmental reasons relating to climate change and also for energy security reasons it is clear that for some time to come the world will use petroleum products and that they are valuable. It is clear that it is in New Zealand’s interests that where we have some of those reserves we use them rather than import from Saudi Arabia or somewhere like that. That adds to our wealth as a country. 
In New Zealand we do not have a Government-owned oil and gas sector. A lot of overseas countries do—for example Saudi Arabia; most of Norway’s exploration and recovery of oil is done by a State-owned company. If a country does that of course the returns from the oil that go through that State-owned company benefit the country and the tax rules are not so important because the profit is earned for the country through the State-owned company. But in New Zealand we do not approach oil and gas that way. We leave it to private enterprise companies—some of them are owned by State-owned companies from overseas actually—to explore for find and extract petroleum products in New Zealand. Recently they have been successful. One of those successes has been the Tui Area oilfield off Taranaki. Many millions of barrels of oil have been extracted from it and that has benefited the New Zealand economy. 
The benefit to the New Zealand economy comes from two sources. One is the royalty that is charged on the recovered oil. That royalty is quite small. Indeed I wonder whether there is any royalty on oil. I cannot recall. 
Craig Foss 
: Yes. 
Hon DAVID PARKER 
: There is a royalty on oil as there is on precious metals. A royalty is recovered on the oil but the main profit for New Zealand is the taxation on the profits of the oil company. Those profits need to be properly taxed in New Zealand. Oil companies have been saying that they will offset against their New Zealand oil-based income expenses that do not relate to New Zealand. It is as simple as that. They have been trying to say that they will deduct those costs in New Zealand that are incurred overseas. Actually I suspect that if we got to the bottom of it we would find that some of what they deduct overseas is being deducted again in New Zealand. It is very hard for us to tell because we cannot see into the detail of those overseas transactions. 
This legislation makes a very important change to our law by saying that the only costs that can be deducted by oil companies for tax purposes against their oil revenues in New Zealand are the expenses that they incur in exploration and development in New Zealand. It does not have to be from the same well but it has to be in New Zealand. That is a good change and I express my support for it. 
There is a possible problem with this change in that we have created a problem for some increasingly successful New Zealand - based companies that are exploring overseas including Greymouth Petroleum which is now working in Chile. That company says that this change is contrary to its interests. I understand that we have had advice from the officials to the Finance and Expenditure Committee that they do not think that is necessarily the case but none the less this issue needs to be monitored. I am sure it will be monitored by those affected who will lobby their members of Parliament if they think that they can prove their case. 
I will talk briefly about a couple of other things. Firstly I will talk about the GST treatment of emission units. That provision was originally in this bill. This bill had a slower passage than the emissions trading legislation that was passed last year and that provision does not now need to be passed because of course we already have an emissions trading scheme. We have an emissions trading scheme that is rational that is economically effective that will not drive industry out of New Zealand—contrary to the claims made by some members of the Government—and that will reduce emissions so as to benefit New Zealand. 
Why do we have that scheme? Well New Zealand already has an obligation under the Kyoto Protocol to take responsibility for its emissions above 1990 levels. After the next version of that agreement which we hope will be agreed to at Copenhagen or thereafter New Zealand’s obligation will be tougher still. We will have to reduce our emissions substantially below 1990 levels. There are two or three ways we do that in the economy. One is through education which is a good thing to do. Another way is through regulation and that is also a good thing to do in parts and where necessary. But if we do it all through regulation we end up having to regulate thousands of different transactions through the economy all of which have an effect on emissions. To do it through regulatory intervention becomes very complex and administratively expensive in that it becomes a large compliance cost and annoying for members of the public. 
An emissions trading scheme changes the relative cost of doing business. It changes the economics of producing high-intensity goods or services and makes doing that relatively more expensive than it is to produce low-emission goods or services. Through that scheme we change the productive base of New Zealand over time. It takes a long time but we have to start. Through that we gradually change our economy—and other economies in the world are starting to do this too—away from activity that causes emissions towards activity that reduces emissions. Emissions will go down sustainably. That is what the effect of the current emissions trading scheme would be. 
From a policy point of view the effect of that scheme in New Zealand is attained by a cap on the number of free units that we give away to people. Some people are exposed to competition from markets overseas that are not properly pricing emissions. It is very proper that we protect those industries against closure by saying that they have a base level of free emissions that they do not have to pay for. At the moment it is 90 percent of their 2005 emissions so they are required to pay for only 10 percent of their 2005 emissions. That will not drive people out of business. The current scheme does not allow people in the industry sector to increase their emissions above 90 percent of their 2005 emissions because to do that would make New Zealand poorer. They might make $1 profit at the margin but the country would suffer a $25 loss at the margin. 
The amendments that are currently being proposed by the National Government will actually make New Zealand poorer and will make the scheme less efficient economically and they are to be criticised. They have been brought here because the Maori Party has said that it will support legislation to soften the scheme having said just a week ago that it would support only legislation that would toughen it. That is an act of a word that I cannot say in this Chamber. It is either that or it is abject incompetence. Those members may think that they can justify it on the basis of the one or two shekels that they have received from the National Government but I cannot see why they would have sold out their interests for that. 
In respect of the other provisions in this enormous taxation bill there are a lot of things in here but I am somewhat surprised not to see anything in it fixing the terrible mistake made by the National Government in abolishing the research and development tax credit. That mistake has not been fixed by this bill. This bill runs to 800 pages yet it does not fix up the abolition of the research and development tax credit. The undermining of KiwiSaver—another revenue measure that used to give tax credits to employers for the contributions made by employers—has not been fixed by this bill. Employers still have to face that cost under the new shrunken scheme without any support from the Government whereas previously they received a tax credit for it. With regard to the amount of the tax advantage for participants in KiwiSaver the generosity of the tax credits available to employees who are saving through the scheme has been halved. That has not been fixed by this bill. Those are two glaring anomalies. Neither does the bill make good on the promise that National won the Treasury benches on—that is that we can have everything we had under Labour plus tax cuts. That promise was never affordable. It has been reversed but once again this bill does not fix that problem. 
AMY ADAMS (National—Selwyn) 
: 
 I am very pleased to take another call in the Committee stage of the Taxation (International Taxation Life Insurance and Remedial Matters) Bill. It has been some time since we last debated the bill’s Committee stage and since I last spoke. We have heard other speakers talk today about the comprehensive and extensive nature—perhaps too extensive—of the bill and there certainly are a number of important elements within it. I hope my contribution is able to add more to the wisdom in this debate than the contribution of the member who has just resumed his seat the Hon David Parker who held up the bill and said there was a lot in is. I thank Mr Parker very much for that in-depth analysis of this 823-page bill. Yes there is a lot in it; he got that quite right. I hope to talk in a little more detail about some of the matters in it. 
International taxation and life insurance are two of the big component parts of this bill but a number of smaller aspects have been a little overlooked in the debate due to the comprehensive nature of the bill and the big elements in it. One that I will touch on because I do not believe it has been mentioned in the debate thus far is the provisions around stapled stock. Stapled stock is not something that is discussed widely outside tax and business circles so I will take a moment to explain what I mean by that phrase. Stapled stock is a set-up that companies often use whereby debt securities—debt instruments—are attached to equity instruments sold by that company. We have seen that this structure can be used to enable companies to pay moneys to shareholders that would otherwise be classed as dividends and to call it interest thereby giving themselves quite a substantial tax advantage through the interest deductions that the company gets although the money ends up in the same place. 
The bill set out to say that for that sort of stapled stock arrangement issued after 25 February last year all the payments were eligible to be treated as dividends as if the entire payment related to the shares as if the entire security was a share. That is an important part of ensuring that there is fair treatment of those moneys and that companies cannot use that sort of structure to effectively avoid tax. The date of 25 February 2008 is important. As far as we know at the time when this rule change was announced no major NZX companies had stapled stock in existence. We also know that a number were certainly looking at doing that so it was a step that had to be taken. 
As the bill proceeded through the Finance and Expenditure Committee we looked at this matter in a little depth. We recommended some important changes to make sure that there was not excessive overreach in terms of these provisions. Among those we looked at was ensuring that debt stapled to a wide range of fixed-rate shares could still be treated this way as a valid instrument. We also thought it was important and appropriate that people with small closely held companies—family companies and the like—where this sort of arrangement came about through a shareholders’ agreement had the freedom and flexibility to enter into that arrangement. We were working to ensure that we protected the tax base against the inappropriate claiming of interest deduction as a way to avoid paying tax that would otherwise be payable but without going into the realm of unnecessarily cutting down the flexibility and the options open to companies to arrange their affairs. As I said what we will now have under these rules will enable all the payments to be treated as if they are shares all the payments to be treated as dividends. But when we talk about company thin-capitalisation rules with those stapled instruments the debt component can still be treated as debt. 
In respect of that particular provision it highlights that there is quite a lot in the bill beyond the title provisions of international tax and life insurance. Those are the leading ladies in the bill but there are a number of quite important lesser issues that the select committee spent an awful lot of time working through. 
At this stage I take a moment to thank Craig Foss for his chairmanship of the select committee. It was a difficult process to work through the bill but the committee worked very well. All the committee members should be acknowledged for their contribution to the work on the bill. Certainly the officials spent a lot of time with us. I commend the Minister of Revenue for not only introducing the bill last year but also having the political tenacity— 
Hon Peter Dunne 
: Masochism! 
AMY ADAMS 
: —perhaps it was—to still be here shepherding the bill through the House despite a change in Government. It is no small piece of work on his behalf and on the behalf of our committee as well. It is an excellent piece of work and I think it makes real progress in ensuring that out tax regime is brought up to speed. 
STUART NASH (Labour) 
: 
 First and foremost even though we are debating the Committee stage—and are about to go into the third reading—in urgency I think it is important to note that after the first reading of the Taxation (International Taxation Life Insurance and Remedial Matters) Bill it went to the Finance and Expenditure Committee. Select committee examination is quite an important part of the legislative process. Some of the other bills before the House recently have not gone to a select committee. Therefore the public does not have any right or ability to present submissions on them. In terms of process this bill followed a very good process. The select committee received and considered 78 submissions and heard 51 oral submissions. As members can imagine they were on some very complex areas of tax law. Reading those submissions and doing the background reading on the oral submissions was quite onerous and that is what I think a lot of members mean when they say that there was quite a tight time constraint. 
It seems a while since we mentioned one of big aspects of this bill and that is associated persons which I would like to talk about. Amy Adams is right; this bill is about more than international taxation life insurance and remedial matters. This bill covers a whole raft of provisions and a whole raft of changes to the actual tax system. It is the largest tax bill apart from the rewrite to come before the House. Let us talk about the definition of “associated persons”. This part of the bill received much consideration from all members and resulted in many reams of paper spitting out a whole lot of judgments from officials consultants and advisers. We wrestled with the risk that by relaxing the rules the resulting law might not catch people who should be caught by an associated persons rule. We all acknowledge that the implementation of this provision will be very important and the ongoing supervision and monitoring by officials will also be important. Because it is a complete rewrite we may be back in this House considering amendments if it does not look good. 
The committee proposed amendments that aimed to reduce uncertainty which is what tax legislation should be about and to narrow the scope of the proposed test to exclude truly arm’s-length transactions. The amendments included narrowing the scope of the tripartite test and excluding certain relatives from it. An example was given of parents who divorce the father marries again and the woman he marries has a son from another relationship; that relationship would have been caught before. We wanted to make sure that those quite tenuous relationships were excluded and to create certainty. We created an additional exception test for relating companies we recommended that the test apply not only for the purpose of land provisions we excluded charitable organisations from the test and we created an exception for certain employee trusts and an exception for partnerships. As I said the associated persons section took up quite a lot of time. 
I would also like to talk about international tax rules. I take the Minister of Revenue’s point that some of these provisions had been debated and discussed in the earlier Committee debate but that was a while ago and I think it is worth reiterating them. This area was incredibly complex and deserved a lot of attention. Well it received a lot of attention but it probably deserved a little more attention. We quite quickly got down to layers of complexity that reflect the ongoing game of poacher versus gamekeeper. I think we all understood that in terms of the global economy and global competitiveness New Zealand’s international tax regime needed to be amended and that was what the bill did but many private entities of course hire very very expensive—the best—tax lawyers and advisers to ensure their tax is minimised. I think it was Dr Michael Cullen who said that if as much time and energy went into creating wealth in this country as go into looking at ways to avoid tax we would be a very wealthy country. The Crown’s officials are required to stay one jump ahead whilst also maintaining the integrity of the tax system and making sure that New Zealand retains its global competitive advantages. 
The bill strikes a reasonable balance between the need to remain internationally competitive and the need to provide clear rules that allow the integrity of the tax base to be preserved. The committee ensured that key provisions relating to controlled foreign company rules were set out in one place in the legislation making the rules more accessible. We recommended that technical amendments to the accounting-based active business test for controlled foreign companies— 
The question was put that the following amendment in the name of the Hon Peter Dunne to a proposed amendment set out on Supplementary Order Paper 34 in his name to clause 2 be agreed to: 
to omit from subclause (29) “and (5)”. 
A party vote was called for on the question  
That the amendment to the amendment be agreed to. 
Ayes 113 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Maori Party 5; Progressive 1; United Future 1. 
Noes 9 
Green Party 9. 
Amendment to the amendment agreed to. 
The question was put that the amendments as amended set out on Supplementary Order Paper 34 in the name of the Hon Peter Dunn the amendments set out on Supplementary Order Paper 35 in his name and the following amendments in his name to clause 2 be agreed to: 
to omit from subclause (21) “397”; and 
to omit from subclause (27) “421(2) and (4)” and substitute “421(2)” 
A party vote was called for on the question  
That the amendments as amended be agreed to. 
Ayes 113 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Maori Party 5; Progressive 1; United Future 1. 
Noes 9 
Green Party 9. 
Amendments agreed to. 
A party vote was called for on the question  
That Parts 3 to 6 schedules 1 and 2 and clauses 1 and 2 as amended be agreed to. 
Ayes 113 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Maori Party 5; Progressive 1; United Future 1. 
Noes 9 
Green Party 9. 
Parts 3 to 6 schedules 1 and 2 and clauses 1 and 2 as amended agreed to. 
Bill reported with amendment. 
Report adopted. 
Third Reading 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Taxation (International Taxation Life Insurance and Remedial Matters) Bill be now read a third time 
. The bill introduces a number of major business tax reforms the most far-reaching of which is the reform of the tax rules relating to the offshore income of our controlled foreign companies. Our present system taxes the offshore income of those companies as it is earned and it is being replaced by one that exempts that active income. The result will be better alignment of our international tax rules with those of comparable companies—Australia in particular. That will mean removing a taxed cost for our controlled foreign companies that similar companies in many other countries do not face. These changes are intended to encourage businesses with international operations to remain in New Zealand and to enable them to compete more effectively overseas. 
Modernisation of the tax rules relating to the life insurance business is another important reform that the bill introduces. The rules are being updated to ensure that the term insurance business is taxed on actual profits as other businesses are taxed and that the tax benefits of the portfolio investment entity rules are also available to people who save through life products. The bill also introduces the new payroll giving system for charitable donations which will operate through the PAYE system. It is an initiative from United Future and it means that employees who donate through their payroll will receive the tax benefit of their donations each pay day without having to present donation receipts. The initiative has been warmly welcomed throughout the charitable sector and was generally applauded during the Committee of the whole House stage. On a similar theme the bill also clarifies the tax treatment of volunteer reimbursements and honoraria to make it easier for volunteers and community organisations to comply with their tax obligations and to reduce their compliance costs.  
Other important reforms in the bill that attracted some attention during the Committee stage include changes that strengthen and rationalise the definition of “association persons” in the Income Tax Act as a revenue protection measure. These measures are generally used to counter tax practices that could undermine the intent of the law because of the closeness of the relationship of the parties involved. The bill also seeks to clarify the law to ensure that the employer payments for relocation overtime and meal allowances remain tax free. These changes are designed to remove longstanding uncertainty and to simplify the law which will save time and money for everyone involved and generally allow people to carry on doing what they have always been doing but now in accordance with the law.  
The bill also updates the petroleum mining tax rules in order to remove possible disincentives to further investment in oil and gas exploration and development in New Zealand. As a revenue protection measure it gives effect to changes to ensure that New Zealand receives its proper share of the benefits from our petroleum mining industry which is growing rapidly. The point was made during the Committee stage by more than one speaker that the somewhat perverse situation at the moment could allow the case where a company could in effect offset all of its expenditure offshore against the New Zealand tax base and for various reasons pay very little tax in New Zealand. The net effect of that situation could be that the New Zealand taxpayer is simply subsidising offshore exploration. That is a very peculiar situation and we are closing it off. We are actually the only country in the world as I understand it that currently has a provision of that type in place.  
This speech is a brief summary of the major reforms that are proposed in the bill. There are a number of other changes that I will not go into because I do not have time this afternoon. Various Supplementary Order Papers have been added to the bill since I introduced it in July 2008. One of the members during the latter stages of the Committee stage made reference to stapled stock; we introduced a Supplementary Order Paper in August of last year to ensure that stapled stock instruments are treated as equity for tax purposes. That measure is designed to prevent a loss to the revenue through the increased use of that mechanism. Earlier this year in August I introduced another Supplementary Order Paper which made a number of remedial changes as well as other taxpayer-friendly policy changes to the bill. In that latter category are specific measures that apply to a small number of taxpayers and that needed to be legislated for as soon as possible. One of those measures that I should refer to relates to finance company workouts. A slight wording change is required to ensure that the law also applies to compromises not done under the Companies Act. That adjustment will be made in later legislation and once enacted will apply from the 2008-09 income year.  
I conclude by saying that the bill had a number of interrelated aims: to help New Zealand - based companies compete more effectively overseas to update tax law to reflect today’s commercial environment to clarify legislation to ensure that it works as intended to protect our revenue base and to strengthen the country’s culture of charitable giving. It is a long and technically complex bill. It has required an enormous amount of effort on the part of many people who have taken part in its passage through Parliament: the Finance and Expenditure Committee members the drafters the policy officials the submitters and all of the members of the House. I acknowledge the contribution that all have made to bringing this very big bill to this stage this afternoon. It is a significant point to have reached and I record my thanks to everyone who has made it possible. On that point I commend the bill to the House. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I welcome the remarks of the Minister of Revenue Peter Dunne and I state again at this point in the third reading of the Taxation (International Taxation Life Insurance and Remedial Matters) Bill that the Labour Opposition will be supporting the passage of the bill. 
I concur with the Minister’s warm remarks to officials. It is very easy for us parliamentarians as we debate the generalities of the bill to overlook the amount of detailed consideration that has gone into even just the drafting of its 800-plus pages. Even the remedial Supplementary Order Paper is over 50 pages long and there are other Supplementary Order Papers as well. The fact that typographical corrections and changing commas took 50 pages reflects the volume of work involved. It is really extraordinary. Leafing through the bill I see that every page has its highlighting underlining and revision tracks and every paragraph matters because millions of dollars’ worth of taxpayer funds rest upon such things. We are highly reliant on the good offices of our very dedicated officials and advisers and I join with the Minister in thanking our excellent team. The public are so much better off for the quality of work that has been rendered. I hope the officials and advisers will pass on the thanks of all parties in Parliament to their colleagues for this mammoth piece of work. 
Here the out and out bouquets stop. I think it has been well reflected in the discussion that the process of getting the bill to the third reading could have been on reflection a little bit better. The Minister reminded us that the first reading of the bill was in August 2008 following its introduction in July. There had been working papers and an extensive consultation with interested organisations in advance of that introduction. The bill was referred to the Finance and Expenditure Committee and then the general election happened. I do not know whether it is fortunate or unfortunate but given the election loss at least off the good ship  
Labour Government 
 there were a few lifeboats and the Minister of Revenue took one of them. He managed to steer the bill on its passage through Parliament. The issue was whether the select committee had the time to do justice to the bill and I do not think the dedicated members or even our excellent chairman Mr Foss would in their heart of hearts be able to attest that we were able to give the depth of scrutiny that we would ordinarily like to give to every page of this bill. 
The ambit of the bill if I might take a minute to reiterate themes that I attempted to summarise late in the Committee stage is broad. The commentary on the bill states: “We do not consider it desirable to put a number of very distinct and significant proposals into one bill simply because they relate to one area of law.” The reason is that even a third or a quarter of this volume would have been more than enough for a select committee process to get its head round. Having said that the bill provides for the important reform of international tax rules particularly in respect of controlled foreign companies. The bill regularises and extends life insurance taxation rules closer to the accounting treatment of life insurance portfolios and particularly around modern practices in that respect. It provides for payroll giving; I think parties around the House agree that that is a good way to assist the charitable sector. Taxation of emissions units is provided for. The definition of “associated persons” has been tightened up a bit in the Committee stage. The tax treatment of relocation payments and meal allowances has been optimised. 
There has been significant discussion about the provisions for tax treatment of petroleum mining. Let there be no mistake: in the earlier Committee stage discussion the Labour Opposition strongly supported the Government’s moves to close this egregious loophole which has been ruthlessly exploited by members of the international petroleum industry. I say shame on them for pushing it that close to the line. When one pushes things that close to the line the line gets moved because officials and parliamentarians have a responsibility to stand up for the public interest. So I hope there will be a lesson in that to the market. Labour raised the issue of an unintended consequence or potential unintended consequence. Enough has been said about that issue except that we will hold the Government to its indication of a willingness for there to be a good-faith process with officials on the basis of the common law position. 
It is incumbent upon me as Labour’s finance spokesperson to say that the country is pressed upon by many serious taxation issues not all of which are of the technical nature of even the international tax rules contained herein. New Zealand has in the latest month achieved a vast improvement on our current account deficit. It is only 6.6 percent of GDP this month; that is still bad in most people’s books. Our national debt is in net terms up to 100 percent of GDP and nearly 150 percent in gross terms. This country has to deal with some significant issues. In summing this up I guess Labour has a concern that this bill is a tome of necessary technical and somewhat rushed amendments and that this House is not giving its attention to the priority tax matters. 
What are those priority tax matters? Well there was very interesting debate around Budget 2009; there was great reference to the international credit-rating agencies and the reports for example of Moody’s Standard and Poor’s and Fitch Ratings. Although they came to different conclusions on whether we needed to have our ratings changed they all made the same underlying points: they had counted upon the Government’s fiscal prudence not just because it is a good thing in itself but because it was papering over the cracks of an economy that is fundamentally not saving enough and not exporting enough. How does tax policy play into that? Well we know that we have to innovate more. The rating agencies have made it very clear that we cannot diversify our economy unless we improve our rate of innovation. That means that the tax rules have to better support private sector research and development. The previous Government met the OECD average but private sector research and development was at less than a third. That is why the research and development tax incentives were critical. We cannot see an alternative push from this Government to come up with some better idea. If it in some way did not like the way the incentives were crafted I ask that we have a mature discussion in the national interest about how to carry our research community and our primary sector forward. 
Similarly although it is not a tax matter the Government canned the Fast Forward Fund but has not come up with an equal alternative. KiwiSaver in terms of tax matters saw the employer subsidy withdrawn and the Crown subsidy cut in half. There is a tax-related element to those changes: they were done to fund the 1 April tax cuts. Those income tax cuts dropped the top tax rate and changed some thresholds but the bottom line was that a third of the benefit went to the top 3 percent of earners. The top 3 percent have the lowest marginal propensity to consume and therefore the least multiplier effect during the recession. The cuts did not make equity sense they did not make tax policy sense and they did not make macroeconomic sense. 
We talked about emissions units in this bill. We have the bizarre spectacle this week of a Government that seems to be falling over itself to do some very strange deal with Te Pati Maori at a time when the Maori Party has given nothing more than a nod to the bill going to select committee with no promise of support after that. That might look like a bad deal. I think that the Government apparently gave the Maori Party precisely zero in return for that nod other than indexing benefits which if common media parlance is to be believed were already indexed. The real problem with the emissions trading scheme is that there is no cap on the trade and that means that the Crown’s exposure to the fiscal loss—the tax loss—alongside that is unlimited. The more the pollution is the more the tax subsidy will be. That has to be amongst the most perverse taxation effects this House has considered for some time. Finally of course the manipulation of the carbon price for different public relations purposes will leave the taxpayer—the fisc—picking up the difference between the cap on the carbon price that is used and the international price. That is a severe exposure. 
Although much in this bill is to be recommended and although the process could have been better my final word in this debate is to ask Parliament and to ask the Government to respectfully lift its sights because this country faces absolutely critical issues for our economic future. Although this bill makes a useful contribution to the modernisation of some tax rules it has skirted around the fundamentals just as Budget 2009 did. We look forward to a sensible discussion with the Government about the next steps for our tax system and the contribution it can make to guarantee a prosperous and independent future for New Zealand. 
CRAIG FOSS (National—Tukituki) 
: 
 I was half expecting from the previous speaker the Hon David Cunliffe an apology for the state of the economy that we inherited from his previous Government. He started off on tax but we will come to that. [ 
Interruption 
] Here we go! The caffeine has kicked in lunchtime has kicked in on the other side of the Chamber. 
From speeches made in the third reading of this very large Taxation (International Taxation Life Insurance and Remedial Matters) Bill it seems obvious that some members are looking forward to the end of the process of this bill going through the House. I again acknowledge the commitment and the contribution of members throughout most of the debates on the bill. I forgot earlier to make a special mention of the independent advisers to the Finance and Expenditure Committee and their assistance with this bill. Therese Turner did a great job in our committee. The committee depends very heavily on her advice on aspects in and around tax. We used an independent drafting adviser Mr David McLay. I want to go on record to acknowledge his assistance and drafting expertise. [ 
Interruption 
] He is no relation of my colleague behind me Todd McClay. I acknowledge his assistance with this substantial bill even though we have 50-odd pages of further drafting fixes. 
Much of the bill consists of remedial and technical matters particularly the amendments contained in Supplementary Order Paper 224 and the back sections of the bill which we talked about in the commentary on the bill. I will quickly touch on the last two speakers’ contributions. The first half of the previous speaker’s speech addressed most of these points but I reiterate that the interaction between the committee the Minister the officials the Inland Revenue Department and the private sector around the application dates caused a great deal of angst in many sectors as I mentioned earlier and I acknowledge the way that process panned out. Although there was a bit of tension at the time very good solutions were found. On the changes to international taxation provisions a quote was given to us saying that the changes remove the “grey list” structure that New Zealand has. The previous Minister of Finance said that the “grey list” was basically where New Zealand went boldly where no other taxation authority dared to follow. Now we are trying to remedy that situation. The active-passive proposals and other proposals in this bill are very forward looking and they lock in a more global and outward-looking New Zealand as an exporting nation. 
One of the other speakers spoke about the life insurance changes just before but I note that there was a difference in this bill. Going back to the international taxation provisions given that the bill was so large and given the assistance we needed to get our heads around a lot of the issues we inserted a signposting section into the Income Tax Act 2007. That is section EX 18A inserted by clause 116B of the bill which is a bit of a road map for the uninitiated who may for some reason happen to read the Act. It is a plain language direction as to the intent of that particular clause which is more than would normally appear in an Act. It will be interesting to see how that pans out in other taxation bills that I am sure will come before the Finance and Expenditure Committee and the House. 
On the changes to the associated persons provisions the Minister noted earlier that they were initially born in 1973 I think it was. We had many absurd examples of how people could be associated under the original proposals of the original bill of August 2008. It was pointed out time and time again that the absurd examples could already be used. Common sense prevailed and the original intent of that 1973 provision has been followed through on and clarified in this bill. I say that with all due respect to our committee and officials who made some quite fundamental changes to the bill as it appears in that particular part. I acknowledge the work that went into that because eventually quite a simple test went through with an on-off switch to test in a pretty quick way whether people are associated. 
Changes were made in this bill to the rules on portfolio investment entities to reflect changes that had been made mostly under the previous administration. Again the committee made a few changes there. I know that further discussion is continuing on the issues around the rules on film production and Government funding and I acknowledge the good intent of the Minister and officials in making sure that no unintended mischief has been created. I commend all members following through on the intent of the provisions on payroll giving. I am interested that one party is voting against this bill. I think that is the Green Party and I thought its members would applaud the provisions on payroll giving charities and allowances and the ones that make it easier to give to charitable causes whatever they might be. 
I commented earlier on the commencement date. Tax threshold changes were in the original bill and as I said earlier they were picked up from the February legislation on small and medium sized enterprises. 
I look forward to hearing from other speakers on this taxation bill. I will take only a small amount of time. I am very tempted to respond to the second part of the previous speaker’s speech as he started to get political but I think I will just let it lie on the table. I look forward to other speeches. 
STUART NASH (Labour) 
: 
 I rise in support of the Taxation (International Taxation Life Insurance and Remedial Matters) Bill. The irony has not escaped me or members of the Labour team that we are finally passing this bill under urgency because the bill has a retrospective provision that goes back to 1986. Yes the Inland Revenue Department has caught up with a legal tax problem that had slipped under the radar for 23 years and remained unamended. It relates to the Parliamentary Service and is deemed to apply from 1 April 1986. It is rather fitting then that this bill is included in the urgency motion. As we have discussed for the first time this week an urgency motion is justified because it is appropriate to provide certainty to those who will be affected by this bill. There is no doubt that the passing of this legislation will provide that level of certainty to a whole range of industries that demand it. 
I start by reiterating the tests that tax legislation has to meet. There are basically four tests. First and foremost it has to be effective and it must not hinder growth. Ideally it should promote growth. It would be a grand bonus if all aspects of this bill when implemented would in fact help the long-term sustainability and economic development of our economy both domestically and on the international scene. It allows us to build on a competitive advantage and as mentioned in this day and age of globalisation a tax bill that meets the international standards is very important. This bill does that. Secondly there must be equity. This is the question around who bears the burden of taxes. It cannot place an unfair burden on those for whom there is no equal advantage. For example we cannot be seen to take from Peter to give to Paul. 
Of course I would argue that the Government’s tax cuts for the upper end of taxpayers and the proposal mooted by the Tax Working Group to raise GST so as to be able to lower tax at the top rate does not meet this equity test especially if we extend this test to include social equity which is something the Labour Party has done with every bill in its 94-year history. In fact Harry Holland the first leader of the Labour Party had a very simple test. He always asked “Is it right?”. Harry Holland realised that if it was right for the people of New Zealand it would be right for the New Zealand Labour Party. This underlying principle of whether it was right for the people of New Zealand has guided this party long after Harry’s untimely departure from this world and it will continue to guide the Labour Party under the leadership of Phil Goff the next Prime Minister of New Zealand. 
The third requirement is that any tax legislation has to have fiscal integrity. By this I mean that tax legislation cannot provide incentives for people to restructure their affairs in order to perpetrate tax avoidance. As I mentioned during the Committee stage it was Dr Michael Cullen—who I think was the Minister initially in charge of this bill; if it was the Hon Peter Dunne I apologise to him—who said that if as much intellectual energy grunt and capacity went into increasing the productive wealth of the economy that is now directed into perfecting the art of tax avoidance then we would be a very wealthy nation. I am sure that at some stage we will be back in this House with amendments to this bill. We simply cannot have a bill that is over 800 pages long without the odd error. Goodness knows that the officials consultants and even some of the submitters went to extraordinary lengths to ensure that every possible loophole was identified tested and closed. But as we all know and as is testament to Dr Cullen’s comment—and he was in the House a lot longer than any other members present have been or will be—there will be some smart person out there looking to make his or her reputation at the expense of the greater good by looking for a way to rip off the tax system. My message to that person is that we will close these down as soon as they even think about beginning to appear. Tax legislation is an organic beast and it must be for ever growing and adapting transforming to meet the requirements of the international and domestic users of our system. This bill is testament to that fact. 
The fourth point relates to compliance and administration. Citizens must understand their rights or it must be relatively simple for citizens to be able to access information that will inform them of their rights. Compliance costs should be kept to a minimum without compromising the integrity of the system. I refer back to the 800-page income tax rewrite of 2000 which was part of this compliance and administration test. In fact one of the notable features of this bill is that it introduces significant reductions in compliance costs and thresholds for a whole range of businesses in the tax system as they apply to small and medium sized enterprises. 
We all know that this bill started life as a Labour Government bill. We certainly know that Labour is the party of the small to medium sized enterprise business sector. 
Louise Upston 
: Since when? 
STUART NASH 
: We have only to look back a couple of years. Labour was the only Government in the last 30 years to lower the company tax rates. In fact the last time a Labour Government lowered the corporate tax rate every National MP voted against it. How did National MPs go out and sell that to their business constituents? I say once again that Labour is the only Government to have lowered the corporate tax rate in 30 years and both times every National MP voted against it. It is unbelievable. 
Compliance and administration is also one of the reasons why there are over 300 amendments to other tax legislation that have arisen out of the rewrite into plain English and that are now incorporated back into this bill. As mentioned I know the terms “tax legislation” and “plain English” sound rather odd together in the same sentence. However this is what the Inland Revenue Department has attempted to do and I think it has done a sterling job. As I said of course one cannot avoid a certain amount of complexity in a tax bill of over 800 pages but this has been kept to an absolute minimum whilst ensuring legislative integrity. 
Finally any tax legislation needs to take into account fiscal implications. By this I mean how much revenue it will bring in how much it will cost the Government and the cost-benefit analysis around this whole thing. Obviously in any tax legislation let alone a bill of this size there will be fiscal implications right across the tax base. The Finance and Expenditure Committee Inland Revenue Department staff and advisers and consultants endeavoured to quantify these implications and ensure that the benefit to the economy absolutely outweighed any fiscal costs while ensuring any fiscal benefit in some areas met the other four tests around equity efficiency etc. 
When the select committee approached the deliberation of this bill we had to take these points into account. I reiterate however that due to the size of this bill the depth and breadth of the material covered and the time constraints under which the committee operated it was difficult to give each separate section due consideration debate and consultation. However I believe we did that to the best of our ability. It was difficult but we did it. The bill that will be passed tonight meets the vital tests associated with any tax legislation and this is why I very much support its passage into law. Thank you. 
AMY ADAMS (National—Selwyn) 
: 
 It is quite satisfying to take a call in the third reading of the Taxation (International Taxation Life Insurance and Remedial Matters) Bill if for no other reason than that it is good to know we are getting towards the end of it. It has been a big piece of work as previous speakers have mentioned and it is obviously very much needed in our system which I acknowledge is reflected by the fact that it was commenced under the previous Labour Government and is being completed by the National Government. 
Listening to the previous speaker Stuart Nash highlighted somewhat for me one of the major differences between the Labour Opposition and this National Government. Labour talks a big game when it comes to jobs the economy and small to medium sized enterprises. According to Labour members they understand that side of New Zealand and support it. But the reality is they do not. They can talk about it but New Zealand knows there is no substance. 
Stuart Nash 
: Why are you supporting this piece of legislation? 
AMY ADAMS 
: I say to Mr Nash that that is why he is sitting on that side of the House. Labour members might talk about business but when the rubber hit the road it was the Labour Government that sent the productive sector of this economy into 5 years’ worth of recession. I say to Mr Nash that it was 5 years of recession because his Government could not put conditions in place that allowed businesses to grow that supported enterprise that supported Kiwis who want to get ahead and that created jobs. This National Government understands that if we are to lift the living standards of all New Zealanders and if we are to have New Zealanders employed we need to get behind business and build a tax system that encourages our businesses to build and grow in New Zealand. That is why the National Government does not waste its legislative time on the Electoral Finance Act and other related rubbish that even Labour members are now apologising for at every opportunity. They hope that if they apologise for long enough New Zealand will forgive them for the hash the Labour Government made of the economy. 
This Government does not waste its time on those things; this Government is prioritising doing the things that need to be done to build a productive economy that will create jobs and that will ensure every New Zealander has a chance to get ahead. This bill is a part of that. We are looking at our tax system looking at situations where businesses are not being taxed fairly or appropriately and looking at situations where our businesses need some taxation help to encourage them to stay on New Zealand shores. 
There are two parts to this help and they are about both supporting our productive economy and the New Zealanders who build growth and ensuring that our taxpayers—the hard-working mums and dads of this country who work damn hard to provide a living for their families and who work damn hard to pay money to the Government for it to spend—are supported. We are making sure that life insurance companies will no longer have an unfair tax advantage. That advantage is not fair to people who work hard every day of their lives to pay their taxes. We have reformed the life insurance rules to ensure that life insurance companies are taxed appropriately and that term insurances are taxed in the same way as every other piece of corporate profit. We are ensuring that international taxation encourages growth and investment in New Zealand because that is what we need if we are to turn this country round from the mess we inherited from the previous Labour Government. 
We will set up systems for payroll giving. We are addressing a number of tax remedial issues that need to be sorted out. This stuff is not sexy but it is important to build the economy that this country needs to get out of this global recession—the worst recession we have seen in 50 years. This sort of legislative programme will make New Zealand the country it deserves to be. It is a good bill and I commend it to the House. 
RAYMOND HUO (Labour) 
: 
 In my previous speeches on the Taxation (International Taxation Life Insurance and Remedial Matters) Bill during the Committee stage I might have cited inappropriately a catchphrase invented by the oratorically gifted US President Barack Obama. That catchphrase was “wee-wee’d up”. The media worldwide was puzzled until 2 or 3 days later when White House spokesman Robert Gibbs shed some light on it and gave the definition that “wee-wee’d up” is when people get nervous for no particular reason. He added that “Bed-wetting would be probably the more consumer-friendly term.” A bright side of my using that phrase inappropriately in this honourable House was that it may help us to appreciate how important it is for us to have a consumer-friendly version of the bill and to get the basics right. I thank the officials and other independent specialist advisers for their excellent work in helping to transfer lots of heavy loaded terminology into a user-friendly version when dealing with this huge and complex bill. 
The bill was originally introduced on 2 July 2008 by the Labour-led Government. The bill represented the first stage of the Labour Government’s review of our international tax rules and it has been greatly influenced by extensive consultation with businesses and their advisers. This is a huge and complex bill nicknamed the “September Bill”. As the Finance and Expenditure Committee noted in its commentary on the bill “The size of the bill and the depth and breadth of the material it covers have made our consideration more difficult than it might have been otherwise.” As pointed out by some of my colleagues there was a general lack of sufficient time for members to fully consider the immense detail of the bill. The situation was made worse by the introduction of the large Supplementary Order Papers that had not been referred to the select committee and will not be scrutinised before they are passed into law in this honourable House which is sitting under urgency. 
However Labour supported the bill and it is appropriate for me to reiterate some major points in its third reading. Firstly the bill provides for the reform of international tax rules with the intention of allowing New Zealand residents with active businesses in overseas markets to compete on an equal footing with their competitors. Secondly and what interests me the most is the underlining philosophy behind the bill which replaces the current legislation that was put in place in 1991 and 1992. To some extent the important part of the active-passive distinction is whether our country will have an outward-looking taxation system or an inward-looking taxation system. Therefore the real issue is whether we want New Zealand companies to internationalise compete grow and enhance our export-oriented economy. 
Having said that we cannot talk about our taxation law without addressing some related issues. The major issue relates to the concerns expressed strongly by our export sectors. Banks have grown faster than the surrounding economy indicating wealth transfers from the traded economy to the non-traded economy. As the chief executive of the New Zealand Manufacturers and Exporters Association John Walley pointed out we have a whole range of policy settings that shelter the internal economy at the expense of the traded economy. As a result our economy is on a simplification trajectory that reduces the potential for leverage of creativity innovation and value-adding. The opposite trajectory is increased elaboration and sophistication of products and services. The basic upgrade process amplifies and liberates innovation and creativity. As the Hon David Parker said earlier in this House research and development tax credits are not fixed in this bill. The shocking statistics show that our business expenditure on research and development is one-third of the OECD average. The main disparity between New Zealand and other countries is in the low research and development spending from businesses. Unless we do something about it it will fail us—the export sector competitiveness and other levels of productivity will fail. We urge the Government to reinstate the research and development tax credit. 
To conclude Labour supports the bill. As I said it represented the first stage of the Labour Government’s review of our international tax rules. The focus of several of the reforms is on reducing tax costs for businesses. The bill will also bring tax law up to date with today’s commercial environment ensure legislation is working as effectively as possible and protect New Zealand’s revenue base. I commend the bill to the House. Thank you. 
AARON GILMORE (National) 
: 
 It is a pleasure to rise and talk on the third reading of this bill. Everybody has talked about the sheer size of this bill and the fact of it being intimidating. No doubt it is but the potential impact on the parts of the economy are equally potentially huge. 
I will talk a little bit about my experience with the Finance and Expenditure Committee on this bill given that I am a late arrival to the committee and a late arrival to this bill. As the virgin member of this committee I was deflowered by this bill. I must admit to being quite shocked when I was given this bill amid taking over from the now senior whip Chris Tremain. He gave me a file that was about 3 feet thick and said: “Here you go. Enjoy.” I must admit being given the bill and having 24 hours to get my head around it was an interesting experience. 
I will talk a little bit about some of the positive aspects of this bill because everyone has been talking about the negative issues. There are some really neat positive aspects. I will touch on two of them in particular. One is around the petroleum mining regime changes. Most people do not seem to understand that petroleum mining last year in 2008 was our third-biggest export market. We exported $3 billion worth of petroleum products. That put petroleum exports third behind dairy and meat. Many people are surprised by that. This bill has some changes that bring in some new incentives to allow petroleum explorers to be more creative in their expenditure and that would allow them to spend a little bit more money and effort to drill in New Zealand. That has the potential to make New Zealand incredibly wealthy. We are very lucky and blessed in New Zealand to have the potential to put money into some of our natural resources such as oil and maybe find resources off the coast of the South Island particularly in Canterbury in the South Island that might amount to billions of dollars. If this bill goes a little way towards that I think that is a really good thing. 
The other aspect that I want to quickly touch on is one that has not been mentioned in the Committee stage or during the other readings. That is the change to the GST treatment of loyalty points. Anybody can have a Fly Buys card a BP rewards card an Automobile Association rewards card or whatever. This bill has some changes to the GST treatment of loyalties schemes. That might not mean much to many people sitting in the House today but to the average punter it will. My mum for example was very excited when I explained to her that she might get a few extra points because the GST treatment on the loyalty points will change. That will mean that those companies that currently account for loyalty regimes such as our Fly Buys and Air New Zealand points will have a much better situation and a lot less cost in terms of administering their schemes. We are a Government that is about reducing administrative costs and having more flexibility. 
I will touch on a couple of other aspects that this bill deals with. It contains a complicated set of things that do not link together very well and that has made it quite difficult for people to get their heads around it. Again many people have mentioned how well the officials have done to put such a complicated set of disparate subjects together in a bill and make it work. I think that many Opposition members have spoken on this bill. They talked about Labour introducing this bill and National carrying it on. I do not really care about that. I care about what we have done collectively. We have put in place a bill that will in parts of New Zealand reduce some tax complexity and that has to be a really good thing. 
I also quickly comment—looking at the time tonight—that we have a number of issues to talk about but many people want to get to a couple of functions. We will soon be blessed by having the great Richie McCaw the All Blacks and the Wallabies here. I know that is not the subject of this bill but I look forward to being able to go there. I commend this bill to the House. 
A party vote was called for on the question  
That the Taxation (International Taxation Life Insurance and Remedial Matters) Bill be now read a third time. 
Ayes 113 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Maori Party 5; Progressive 1; United Future 1. 
Noes 9 
Green Party 9. 
Bill read a third time. 
Immigration Bill 
In Committee 
Part 1 Preliminary provisions 
Hon Dr JONATHAN COLEMAN (Minister of Immigration) 
: 
 It has taken quite some time to come to the Committee stage of the Immigration Bill. This is very important legislation that I know is very much welcomed across the Chamber. There is a time to be gracious in debate and there is a time to be aggressive with the Opposition. I say on this occasion that this bill has had great bipartisan support throughout its formation and a lot of the work was done on it under the last Government and previous Ministers of Immigration. I acknowledge the contribution of former Ministers of Immigration Paul Swain David Cunliffe and Clayton Cosgrove. 
Hon Steve Chadwick 
: That’s very courteous. That is very good. 
Hon Dr JONATHAN COLEMAN 
: Thank you. 
Immigration is absolutely vital to New Zealand’s interests. When we look at the contribution it makes to our economy we see that it is actually right at the centre of everything New Zealand does as “New Zealand Inc.” The Immigration Service makes half a million decisions each year. It makes decisions that bring people into our country with the skills we need that we cannot grow on our own shores. It brings tourists who bring nearly $9 billion of foreign exchange earnings into this country each year. Immigration is something on which this country was built. So immigration is very much at the core of New Zealand’s economic well-being. 
It is very timely that we are having this complete rewrite of the Immigration Act 1987. I acknowledge the contribution of the officials to this process. They have put in a heck of a lot of work over the last 2-something years. It has been trying at times I know to get such a massive piece of legislation right. It is a 500-page bill with 13 parts. The officials have certainly given excellent service in getting the bill together both to me and to the former Ministers of Immigration. It really has been an extensive work. It has been a well-consulted bill. There have been over 4000 submissions on the bill. I believe that 90 people appeared in person before the Transport and Industrial Relations Committee at various stages. I acknowledge the work of the select committee in its report back on this bill. 
I have tabled a pretty extensive Supplementary Order Paper. I know that there are Supplementary Order Papers from other members as well. The Government Supplementary Order Paper covers a number of elements. There are technical amendments relatively minor in nature. There is an amendment that was recommended by the select committee itself relating to the ability to cancel deportation orders in certain circumstances. Then there are a number of matters that the Government believes need addressing. This bill has been quite some time in passing through the legislative process. As I said the first reading was 2 years ago. Time has moved on and we want to make sure that we have an up-to-date and flexible framework for immigration policy. The bill is framework legislation. It does not stipulate the specifics of immigration policy; it sets the playing field within which any given Government can implement its own policies. The idea is that it is flexible and enduring. 
One of the main features of the bill is that there will be a universal visa system. It will be a much simpler more streamlined system to replace the current visa permit and exemption system. There will also be provisions that enable trans-Tasman travel. We are aiming to streamline trans-Tasman travel. The provisions in this bill will allow people to be processed from offshore in a way that we would not have envisaged when the 1987 legislation became law. There is also a new refugee and protection regime. I am sure that we are going to have some discussion about that as the bill progresses through the Committee stage. The establishment of a new single Immigration and Protection Tribunal is a major change that will certainly streamline some of the existing processes and take a lot of bureaucracy out of the process. There is also a new classified information system which will allow classified information to be taken into account when important decisions regarding whom we want to bring into this country need to be made. Of course more flexible compliance and information powers will enable immigration officers to do their job. 
In conclusion in immigration legislation we have to balance the national interest against the interests of individuals. Of course the facilitation aspects of immigration are not dealt with in the legislation. A lot of it is elements of policy and settlement services so by definition the legislation tends to focus more on the compliance aspects. I think we have come up with some very good changes that I hope the Committee will support. I certainly commend this bill to the Committee. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 I thank the Minister of Immigration for his generous remarks. There is an outbreak of peace that will endure for much of the evening although not perhaps all of it. The legislation has been well described by the Minister. I endorse his remarks and I do not have to repeat them. That means I might get my introductory remarks made within 5 minutes instead of within 10 minutes—we will see. 
Certainly Labour has been very involved in the legislation and the Minister was kind enough to acknowledge previous Ministers of Immigration. I think it would be a good idea if we reminded ourselves that the Transport and Industrial Relations Committee spent an awful lot of time on the legislation after Ministers themselves had spent years on it. The current Minister has had it on his desk for many many months. The Hon Vui Mark Gosche deserves mention because his contribution as the chairperson of the committee was undoubtedly pivotal. He was a South Auckland MP. He is a man who has a history in the union movement. He understands job substitution. He understands the needs of Pacific Island communities. So he has a very good idea of the balance that the Minister spoke of and I think he has a clear view that the bill in its current form is in pretty good shape. 
Since that time Supplementary Order Paper 32 has been tabled by the Government. It is a biggie. It is bigger than most pieces of legislation to come before this House—there are 106 pages of it. Labour members were granted a copy of it by the Minister and today we have had an opportunity to have a first cut at it with officials including some very capable officials. I thank the Minister and his staff for affording us that opportunity. It has increased our understanding of some of the detail. 
Frankly some of the technical detail is above my head but fortunately it is not above the heads of previous Ministers such as David Cunliffe Lianne Dalziel in particular who is a lawyer and Clayton Cosgrove. We have got ourselves to a point where we are prepared to debate some of the details of the legislation to gain further information to support much of it—in fact a great deal of it—and to make up our minds on some aspects of it that may require us to suggest alternative wording or may indeed end up with our simply opposing this or that clause. 
One issue where we do have an interest and are at variance with the Government is the issue of review. Our considered view is that with legislation of this size—which after all replaces legislation that is 22 years old—and of this complexity and breadth and which has this sort of impact on the individual lives of a number of people who are either visiting or wanting to live in New Zealand having a review clause might not be such a bad idea. In fact not reviewing the legislation after a period of time is almost certainly a bad idea. All major legislation that has come to the House in my time in the last couple of decades almost has been subject to review either by statutory requirement or by dint of necessity—that is to say legislation that is as big as this and as complex as this notwithstanding the scrutiny given to it will be subject to interpretive differences either by the court or by officials who are putting it into place or by the positive or negative actions of immigration lawyers and immigration consultants. 
So it is somewhat dynamic and therefore review is inevitable. If review is inevitable why do we not make it a matter of statute? Just as soon as the Labour Party members have worked out which part we want to amend we will as a matter of course put up a couple of review clauses—and I hope we are supported by other parties—to give the Government a couple of options to see whether it will buy that. 
The case against a review clause is worth noting and it is that strictures are caused. If the legislation states that a review will take place within this time or within that time it might turn out that it is not the ideal time. There are ways round that using wording and I will demonstrate that when I sit down and get my pen out. But I think that officials have an aversion to thinking about a review now; having just spent so many years working on the Immigration Bill in the first place they do not want some troglodyte coming along and saying “Let’s have a review.” I absolutely understand that from a human perspective but the truth of the matter is that a review clause simply puts in statute that which is inevitable. One thing it does do is enable the Government of the day to say to the complainant of the day that a review of the legislation is coming up—that actually it is a statutory requirement—and the complaint or the observation or the concern can be taken into account in that review process. I think the Government should think carefully about that. 
So there we are. It is a good bill with a long gestation and it is very substantially but probably not entirely supported by the Labour Party. We acknowledge the significant number of amendments that have come forward from the Green Party. We may or may not support them. We would like to hear the arguments especially those from Keith Locke. We acknowledge the contribution of the Maori Party and its amendment to Part 1 and we will hear about that soon. For the moment I will close by thanking the Minister for the generous use of his time and his officials’ time reasserting my appreciation of Vui Mark Gosche and saying that the passage of the bill is to be commended. 
Dr JACKIE BLUE (National) 
: 
 I am very pleased to speak in the Committee stage of the Immigration Bill. It is a significant bill. I was not part of the discussions that took place in the committee during the last term of Parliament. The purpose of this bill is as the Minister said to do a complete rewrite of the 1987 Act and certainly the world has changed dramatically since that time. The world migration flows have changed dramatically travel is cheaper it is easier to get around places are more accessible and of course on the way we have had September 11 which really put the world on notice of security problems at our borders. 
Since the 1987 legislation there have been a number of amendments. The old legislation is very complex and this bill attempts to simplify it. As it is New Zealand is very much dependent on migration and each year we bring in 45000 permanent migrants. In the 2007-08 year we approved a record 188000 temporary work permits. Over the last 5 years permanent and temporary migrants have accounted for 60 percent of the growth of our workforce helping to sustain and grow New Zealand business so migrants do contribute hugely to New Zealand’s economy. Of course with an ageing population in New Zealand and over 600000 New Zealanders living offshore it is not too surprising that one in four workers was born overseas and in Auckland that figure is even greater at one in three workers. 
The bill sets out to simplify the visa system. The 1987 Act currently provides for a visa for travel to New Zealand a permit for permission to stay in New Zealand and exemptions as some people do not have to hold a visa or permit or both. So this bill establishes a universal visa system that is simpler and more flexible in managing non-citizens’ travel to and stay in New Zealand. The visa will signify that the holder has the right to travel or stay in New Zealand. The bill establishes three classes of visa—the resident visa temporary entry visa and transit visas. 
It is unfortunate that we inherited a dysfunctional Immigration Service with poor management practices a silo mentality and an unacceptable variation in the quality of decision making between branches. That came out with the Auditor-General’s review. I know that our Minister is determined to address these deficiencies and has the department working on implementing the recommendations of the Auditor-General’s report. The chief executive officer has appointed an adviser to assist and monitor the reform. 
As an example of changing the culture a scheme was started in August this year. It has been trialled in the hospitality and tourism sector whereby Immigration New Zealand must advise applicants in a timely way of the status of their temporary work permits. That will go some way to help change the culture. It is a more reactive approach in terms of making sure that permits can be assessed and processed in a more timely way. 
This bill will hopefully in part go some way to addressing the National Government’s immigration aims and they are to retain Kiwis and attract more home. Certainly policies have been produced by the Government to meet our skill needs and to attract business and retired migrants. There has been a significant business migrant policy which has become more flexible with reduced English level requirements in order to try to attract migrants with significant skills and to provide financial back-up to New Zealand. I am sure we will benefit from that. In the last business migrant policy under the previous Government there were very few applicants. They were in the range of 10 to 20 or thereabouts. Of course we need to have a better Immigration Service and I believe this bill will go some way towards achieving that. 
On the way we had September 11 and what happened then shocked the world. I looked at the recent statistics of migrants and flows coming in and out of New Zealand before and after September 11 and it was quite astonishing. People virtually stopped in their tracks overnight. New Zealanders came back to New Zealand in their droves people did not go away from New Zealand on their OEs and the world basically stood still. It is really recovering only now but of course the recession has also had a further impact on that. This bill looks at security measures and has some more provisions for immigration officers so that we can make sure that security is maintained. 
KEITH LOCKE (Green) 
: 
 The Immigration Bill is a very big bill; as the Minister of Immigration Jonathan Coleman said there were 4000 submissions on it. The Transport and Industrial Relations Committee spent a lot of time hearing those submissions. I was on that committee as the Green Party representative. Most of those submissions were critical of the bill. In the Committee stage the Green Party will essentially be putting forward amendments that are in line with substantial criticisms that have been made by reputable organisations like Amnesty International the Human Rights Commission etc. 
It is disappointing that on such an important bill we are dealing with the Committee stage which should really get to the heart of the bill in urgency and at a time when a lot of members want to go home or go off to see the reception for the All Blacks and the Wallabies at Parliament and what not. It is disappointing because this bill was reported back from the select committee about a year ago so there does not seem to be any real reason for it to be included in the urgency motion. 
The Green Party has four amendments on Part 1 and in my contributions on this part I want to outline the importance of those amendments. The first one amends clause 4(1) as regards the definition of “biometric information”. We propose to exclude iris scans from that definition. The current definition includes “(i) a photograph of all or part of the person’s head or shoulders: (ii) the person’s fingerprints: (iii) an iris scan;”. The Green Party is worried about the creep towards a surveillance society and part of that creep is the increasing use of biometric identifiers. We see that iris scans which are starting to come in around the world are an even more intrusive form of biometric identification. We are not convinced that they are needed for immigration purposes. 
In fact at the select committee there was some criticism on the question of biometrics. For example the Human Rights Commission in its written submission said: “the Commission is not convinced that there are compelling reasons for requiring biometric data to be collected from everyone who wishes to come to New Zealand. It is concerned that this could set a precedent for the compulsory collection of biometric information in other areas or lead to data being exchanged with other countries.” Then it goes on to say: “there is no indication in the Bill about how the information will be dealt with—for example how it will be stored or for how long.” There was a lot of discussion on biometric information which will be dealt with in consideration of Part 2 of the bill. The Privacy Commissioner who was also a bit worried about this issue effectively intervened in the discussion in the committee. Some changes were produced as to privacy assessments and when biometric information collecting systems are introduced. We will talk about that later but I ask members to at least exclude iris scans from the system that is being applied. 
The Minister mentioned speeding up travel to Australia. This will involve New Zealanders being photographed and their facial characteristics being compared against the chip in their passport. That is not a particularly wonderful step but certainly we do not want to go one step beyond that to iris scanning. I think there was a lot of concern among New Zealanders when the United States introduced fingerprinting for everyone going to America including people in transit. I was fingerprinted in Los Angeles International Airport where I sat in a transit lounge for an hour. I hopped off an Air New Zealand plane and hopped back on to it an hour later and in the meantime I was fingerprinted. It gets a bit over the top. Supposedly from the American point of view it is part of the war on terror but it tends to affect ordinary people a bit too much. Biometrics are also being introduced in terms of fingerprints for such things as people getting out library books. We are moving more and more down that track. So I thought that perhaps setting a base here by removing iris scans from the Immigration Bill would help in not letting it spread to the rest of society with people having to clock in at work using iris scans etc. 
The second amendment to clause 4 of Part 1 that I want to talk about changes the definition of “relevant agency”. These are relevant agencies for the purposes of having classified information for the purposes of immigration processing. Normally when we think of agencies with classified information we think of the Security Intelligence Service the Government Communications Security Bureau and the Police. The Green Party wants the definition to be restricted to those three agencies as it traditionally has been rather than adding a whole pile of other agencies. I will read out the other agencies: the Aviation Security Service the Civil Aviation Authority of New Zealand the Department of Corrections the Department of Internal Affairs the Department of Labour Maritime New Zealand the Ministry of Agriculture and Forestry the Ministry of Fisheries the Ministry of Foreign Affairs and Trade the New Zealand Customs Service and the New Zealand Defence Force. All of these agencies will now be able to say that particular bits of their information are classified. The chief executives of those organisations will have all sorts of rights—we will discuss them later on in the Committee stage—to withhold information and stop the Immigration and Protection Tribunal from making it public. We do not believe that is necessary particularly in immigration cases where we want maximum transparency so that people who are going before the New Zealand Immigration Service the tribunal or the Minister are able to properly see the case for or against their staying in or coming to New Zealand. So the nature of this amendment to clause 4 is to cut out all of those other organisations. Eleven of them should not be there; just the Police the Government Communications Security Bureau and the Security Intelligence Service should be left. 
I think this amendment is important because as we all know—and we discuss this in Parliament every day—departments like to hide things for various reasons. Sometimes it is just to avoid embarrassment if they have made a mistake and that is why we have the Official Information Act to try to get this information out. We spend a lot of time asking questions in Parliament to get out information that people are trying to hide. So why should we give these agencies the right to determine as classified all this stuff relating to individuals with immigration cases? It is also a bit problematic if all of these 11 other agencies become in effect mini - police agencies in terms of their classified information investigatory powers etc. We are creeping down that path a bit in the Search and Surveillance Bill that is before the House. That bill is creeping down that path in a parallel way. That is the Green Party’s motivation for putting up that particular amendment. 
Our next amendment is to clause 5(2)(a). This amendment is supported by Amnesty International. It also relates to classified information. Clause 5(2)(a) expands on the definition of “classified information” which it says is information that “might lead to the identification or provide details of the source of the information the nature content or scope of the information or the nature or the type of the assistance or operational methods available to the relevant agency;”. I remind members that “relevant agency” covers those 14 agencies not just the traditional security agencies. Amnesty International suggested—and the Greens support this—that rather than “classified information” being defined as information that “might” lead to a problem it should be defined as information that “will be likely to”. Otherwise any chief executive of an agency might say that if he or she discloses a particular bit of information it “might” lead to something else. It is very vague wording. We have all seen in our work as MPs how agencies chop out all sorts of things from Official Information Act requests and if we give them too great a scope saying that something is classified if it “might” lead to a problem we might not get the information that is required. 
The next amendment is to clause 5(3)(a). 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 Thank you very much for the opportunity to take a call in the Committee stage debate of the Immigration Bill. I join the Hon Pete Hodgson in thanking the Minister of Immigration the Hon Dr Jonathan Coleman both for his courtesies in his remarks and also for making available the officials’ time to brief us on Supplementary Order Paper 320. I guess this is one of those processes that the public does not see often enough where there is active cooperation between the parties right around the Chamber. There is a once in a generation nature to this rewrite of the Immigration Bill—let us hope it is only once in a generation. It has passed through the hands of if I can count at least five Ministers. It has had the same officials but five Ministers. So I guess we can fairly say that a great deal of the credit—or the discredit depending on how it all works out in the end—will be attached to the loyal officials who have worked on it all the way through. It is really humbling for Ministers to realise that we are but a blink in the imagination of the officials who serve us before they move on to train the next one. 
With due humility let us record that Labour supports this bill. There is one part of the Government’s Supplementary Order Paper in respect of refugee and protection provisions that we will be opposing. In respect of all other provisions including the Government’s Supplementary Order Paper we will be rendering support. That reflects the long process of consideration that this bill has had. To give some due credit to my colleagues the bill had its gestation right back in about 2003 or 2004 when the Hon Lianne Dalziel put together some ideas for the consideration of the then Minister Paul Swain and officials were working from that point on a range of ideas. 
Also about that time to be fair we should record that there were a number of celebrated cases or at least celebrated by the Rt Hon Winston Peters of individuals like a member of Saddam Hussein’s Cabinet who ended up sunning himself on a beach in Tauranga or somewhere. We decided it would be a good idea if we made the border a bit more impregnable. So some of the early drafting around the reform programme put a higher degree of emphasis on the security side of things and on ensuring that officials and agencies of the State had what they need to do their job on behalf of the public. 
It is also probably fair to say that by the time some early versions of the bill had passed through Minister Swain’s hands to my own there was a need to rebalance it in favour of the protection of civil liberties and human rights to ensure that we had a clean New Zealand Bill of Rights Act vet and that we had the general support of the Privacy Commission. All of those things were achieved which is a credit to the long hours that were put in by officials and office staff; we recognise all of the above today. 
It is also timely to recognise the extensive work that was done under my successor Clayton Cosgrove by the Transport and Industrial Relations Committee chaired by Vui Mark Gosche. My colleague Darien Fenton is one the alumni of that illustrious committee. The bill as it is presented to the House has a 33-page intensively written committee report which I think adds great value to the bill. It has continued the process of rebalancing from the early focus on ensuring the rigour of the border and that officialdom had the appropriate powers to ensure that private protections were in place. 
I will also contextualise the legislation within the broader context of the way that the process of immigration management is changing. A word of warning to Government members: it follows from the fact that immigration Ministers come and go rather like pass the parcel in a Belfast pub. There is no point in playing politics with the Immigration Service. If we do that it is a bit like playing politics with the police force; it makes it hard for the officers appointed to defend the interests of the public to do their job and in the end we all lose. So we will not be playing politics with this bill or with the state of the Immigration Service which I know ain’t perfect. It was not perfect before I saw it it was not perfect when I had it and it ain’t perfect now. But it is filled by and large with people who get up every day to go and serve the public interest and do their very best. As politicians we ought not to be taking out on them our frustrations about the complexities of the modern world. That is not to say that if there are particular instances of malpractice we should not draw that to the public attention. 
In that regard the Immigration Bill before us today was part of a broader immigration change programme that had three layers and I imagine the Minister is still addressing himself to all three. To quickly recall those layers they are the policy and strategy layer the legislative layer and the operational layer. There have been some surprises at the operational end of things that we do not need to dwell on today but I say to the Minister that there is also a fair degree of bipartisan support for the ongoing improvement to both the policy and the operations that provide the context for this bill in the area for example of the services information technology systems and its processing operations. 
That is enough of a quick walk down memory lane. The key changes we will be discussing in the Committee stage relate to the purpose of the bill. It is to provide a stronger more flexible and enduring foundation for a modern immigration system. It aims to facilitate the entry of the people we want and to ensure that we can keep out the people we really do not want. It is the sovereign right of any nation to make that choice. Immigration is not a right; it is a gift that is bestowed on the person seeking to enter a country and it is the responsibility of the Crown to offer that gift appropriately with good process with appropriate protections for human rights but with the national interest in mind. Whatever side of the Chamber we are on it means that there will be people we say no to. We will say no to them because they do not meet the standards we require in terms of raising the average because they do not fall into a designated humanitarian category or because they carry with them risks to our international reputation or God forbid security. It is the sovereign right of any nation to turn people away and to welcome them in. If we do welcome them in we carry with us the responsibility to ensure that they are properly integrated into our society that there is room in our schools for their children even if sometimes—I will put in a particular plug for the Pacific community—the immigration status of their parents is in question; we ought not to block the access of those children to school. It is not their fault that there may be a question about their parents’ immigration status. I will be bringing that up again later. 
There is a valid purpose for this bill to provide both the safeguards that the State needs to carry out those roles and the protections that must continue to ensure that they are not abused. In any complex organisation in any Government agency there is the potential as my Green colleague has said for mistakes etc. For that reason we have updates to technology-driven matters like biometric processing; access and management of classified information; a more transparent and equitable deportation system that will also be faster but more balanced; better detention and monitoring; and more appropriate incentives for third parties to comply. We will have time to discuss each of those issues as we go through the debate. These are contextual comments. I thank the Minister again for the opportunity to contribute to the discussion. 
DAVID BENNETT (National—Hamilton East) 
: 
 I will follow on from the comments made by members of this House in regard to the Immigration Bill. This is a once-in-a-generation rewrite of the immigration legislation. One will find there is common cause amongst members of this Parliament and past Parliaments to ensure that we get it right to the extent that is possible. We see a great deal of support across the parties in the Chamber to make sure we have the best bill going forward. As a member of the Transport and Industrial Relations Committee which looked at this bill—and there are some Labour members here that were on that committee—I would like to pay tribute to Mark Gosche who did a tremendous job of leading this bill through the committee and also to the now Speaker of the House Lockwood Smith who lead the National charge in regard to the bill. He had a huge impact on how the bill was treated during the committee’s deliberation. Those two individuals need to be singled out for special mention and support. 
I congratulate the current Minister of Immigration Dr Jonathan Coleman on getting this bill to the stage where it has come before the Committee. That is a tribute to his hard work. As the previous speaker said many Ministers have endeavoured to get the bill to this stage but have not had that kind of success. I say well done to the Minister and well done to the officials who have spent many years progressing this legislation. 
It is important that New Zealanders understand that this is the Immigration Bill but it is only a procedural bill. When we talk about immigration many New Zealanders think of who can come into New Zealand. They think of the people who come into our country on a yearly basis. This bill does not deal with that issue as such. The nature of who comes into New Zealand is outside of this legislation. This bill sets the procedures of how our immigration system works. When New Zealanders hear us talking about the Immigration Bill they actually think it sets out how many people come into our country each year who those people are and what their country of origin is. The reality is that the public perceptions of what immigration is about are quite different from what we are talking about here tonight. This bill is about the structure of how our immigration system operates. It is about some of our border issues. It is about the nature of the review process and our visa system. It is much more about the procedural aspect of immigration than the practical aspect that individuals in our community will identify with when we talk about immigration. 
I think National and Labour will come together on this bill because the parties have a common approach to immigration in that we see the benefit of it for our communities and our country. The Green Party will probably provide the most different point of view on the legislation. The Greens did that in the select committee. Although it may not necessarily be in the best interests of New Zealand to follow what the Green Party is proposing it is an important part of the process of coming to the conclusions we do in this bill to have that voice advocated in the committee and in the Chamber. Its view may not reflect the end result that would be practical for New Zealand but it is something that adds value to the final result we get. I encourage Keith to stand up and say what he thinks. I know that he will be representing some people who made some submissions in regard to this bill— 
Hon David Cunliffe 
: Go easy! 
DAVID BENNETT 
: Yes well even though that idealism may not reflect what a country would endeavour to do in practical terms it may well have a value in theoretical terms. We congratulate the Green Party on putting its view forward. 
We will see a good bill come out of this session. It will be a bill that sets up a procedure going forward for New Zealand immigration that will be in the best interests of all New Zealanders. It is one of those things where we never get a final result that is perfect. It is a bit like the tax bill that we have just debated. It is an area that is so big and that has so much complexity that we cannot cover it all off in one bill and think it will be done for ever and a day. It is something that will develop and will change over time. We look forward to this bill progressing. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Chair kia ora tatou katoa i tenei po. Me penei rawa te korero ko taku ko te whakairi i te ahuatanga o te korero mo te Tiriti o Waitangi ki mua i te aroaro o tenei Whare i tenei po mo te wa poto i roto i te reo Maori kia taea ai e te katoa o tenei Whare te mohio ko te hohonutanga o tenei kaupapa ki tenei Whare. Ko te tangata nana tenei wahanga o te Pati Maori i whakairi ki mua i te aroaro o te Whare Paremata ko taku hoa ko Hone Harawira. Ko tona hiahia me ki kia whakairi te tahuhu korero i raro i te ahuatanga o te Tiriti o Waitangi. He aha te panga o te Tiriti o Waitangi ki te haerenga mai o te tangata i tawahi ki konei he aha te wahanga o te ao Maori ki tera haerenga mai o tangata ke ki Aotearoa nei. 
Ko te mea nui o roto i te Tiriti o Waitangi tetahi mea i korerohia i roto i te pire o Tamaki-makau-rau kia whai wahi te ao Maori i roto i nga nekeneke o te motu nei. Na runga i te aha? Na runga i te mea ko te Tiriti o Waitangi he korero i wanangahia e te ao Maori e te ao Pakeha i nga rau tau kua hipa hai painga mo te katoa. Koinei te tino hiahia i puta i roto i te pire mo Tamaki-makau-rau. Kai te pera tonu i tenei wa mo tenei pire. Kai hea te wahanga o te ao Maori a-tangata whenua nei i roto i nga ture o tenei Whare Paremata? No reira koi nei te mihi ki a tatau katoa i tenei po. Kia ora tatau. 
[An interpretation in English was given to the House.] 
[ 
Greetings to you and to us all this afternoon Mr Chair. My part by way of explanation is to put the case of the Treaty of Waitangi before the House this afternoon and to speak in Maori for a brief period so that everyone will have a deeper understanding of it in this Parliament. My colleague Hone Harawira was responsible for this part from the Maori Party that was put before the Parliament. He wanted to ensure that there would be references to the Treaty of Waitangi in terms of its relevance to immigrants coming here and the impact Maoridom would have on people coming to New Zealand from elsewhere.  
The most important factor in the Treaty of Waitangi something that was debated in the Local Government (Auckland Council) Bill was Maoridom’s participation in local government in this country. Why is that? It is because the Treaty of Waitangi has been talked about and debated over the past 100 years by Maori and Pakeha as being beneficial for all. This is really what was wanted to come out of the Auckland Council bill. That is the feeling at the moment about this bill. Where is the place for the Maori people of the country in the laws of this House of Parliament? So this is my acknowledgment to us all this afternoon. Greetings to us all 
.] 
As I mentioned in te reo Maori I rise to speak on behalf of my colleague Hone Harawira who has put before the Committee Supplementary Order Paper 18 for it to consider. At its heart is our belief that a reference to Te Tiriti o Waitangi should be added to the Immigration Bill to enable Maori to have a statutory right of participation in the management of immigration consistent with the rights guaranteed to Maori under the Treaty of Waitangi. I made reference to the Auckland situation because one of the things that people find hard to understand in any discussion about Te Tiriti o Waitangi is its practical implications: what the drop-down effects are of having Te Tiriti o Waitangi as a part of legislation. We know that in the health sector for example people talk about participation they talk about protection and they talk about partnership. In terms of this Immigration Bill we hope that participation in terms of setting the rules and partnership in terms of coming together with others—not by ourselves—to be able to set the scene in respect of immigration are important aspects. We have framed that under the terms of a Treaty of Waitangi clause; in other words the legislation is to be consistent with the Treaty of Waitangi. 
In debating other immigration bills we have talked about references made by Dr Ranginui Walker a very famous writer in Aotearoa. He described the Treaty of Waitangi as the original charter for immigration. He referred to the Treaty as providing the source for all migration to Aotearoa from Europe Australia and the United Kingdom. He referred to the fact that Te Tiriti o Waitangi guaranteed a developing social contract: a partnership of the two cultures. At its very core were expectations that Maori as a Treaty partner should be consulted on every aspect concerning migrants who wished to reside here. In the past we have put up Supplementary Order Papers to try to find that space whether it be through establishing a consultative body over immigration policy or by being actively involved by way of providing education programmes. 
Tangata whenua understand the intentions of the Treaty signatories in 1840; we believe that they were very clear. There was recognition by both parties to the Treaty that immigration was having a significant impact on the land and on Maori culture. We believe also that the architects of the Treaty knew that what the Treaty represented would establish a precedent in terms of how the British Empire recognised the culture the rights the traditions and the way of life of indigenous peoples against the arrival of immigrants and the onslaught of immigration. So in terms of immigration we expect that all new citizens to Aotearoa should be able to learn about the history of this land and to appreciate the context that we all share arising from Te Tiriti o Waitangi. We want every New Zealander to appreciate the opportunities that Te Tiriti o Waitangi offers to us all in a shared future. 
We are focused in this bill on ensuring the provision of immigration advice that reflects the significance that this nation places on Te Tiriti o Waitangi. I am mindful too of course that in the confidence and supply arrangement that we enjoy with National both parties have agreed to act in accordance with Te Tiriti o Waitangi. In terms of what we are facing right now I say we have a confidence and supply arrangement that acknowledges Te Tiriti o Waitangi. We are soon to have an emissions trading scheme arrangement come before the House as discussed by the Minister today that holds Te Tiriti o Waitangi out there as an important document especially around the huge issue of emissions trading and climate change. Here in this bill the Maori Party is again attempting to put the whole notion of the Treaty before the Committee by way of a small but significant Supplementary Order Paper that we think and hope the rest of the Committee will find is appropriate under the circumstances. 
I suppose the discussion is really aimed at the Minister of Immigration as he ushers through this particular bill. Indeed having set the precedent we will be looking to try to again have Te Tiriti o Waitangi in front of all legislation as it comes to the House. The key will be our working together on the drop-down effects and the practical implications of similar legislation but more important on the impact of Te Tiriti o Waitangi. We would expect that as Treaty partners Maori should be consulted on every aspect concerning migrants who wish to reside here. Surely one would accept that that is an appropriate reaction on the part of tangata whenua just as much as our expectation that we should have seats on the Auckland Council. We would expect a partnership approach in which tangata whenua in the spirit of manaakitanga—of looking after each other as fellow countrymen and women—and in a demonstration of rangatiratanga can develop systems of whanau hapu and iwi to help immigrants and refugees to adjust to life in Aotearoa when they arrive here. It must be a huge adjustment for many of them. 
Nothing in the bill serves to provide incentives for whanau hapu and iwi to produce economic social cultural and environmental benefits from pooling their skills knowledge talent and experience with those of new New Zealanders. I suppose that is one of the downsides of the bill. So Supplementary Order Paper 18 which we have put forward today is intended to give Maori a statutory right of participation in the management of immigration. We say that was and is consistent with the rights guaranteed to Maori under Te Tiriti o Waitangi—the Treaty of Waitangi—and we would hope as I said earlier that we have widespread support from across the Committee for the intention of my colleague Hone Harawira and the Maori Party to put Te Tiriti o Waitangi constantly in front of the nation. Kia ora tatou. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 Thanks for the opportunity to say a few words on the Immigration Bill which I am very pleased to see is progressing through the House. I will comment on the contribution made by Te Ururoa Flavell for the Maori Party and his colleague Hone Harawira but I will do so in the context of recognising that this bill completely changes the format of the previous legislation particularly in the area of having established the purpose clause. Given that Hone Harawira’s amendment would add another clause to the purpose clause I will comment on the fact that we are looking to replace legislation that described itself as “An Act generally to reform the law relating to immigration and in particular to remove the need for persons who are in New Zealand unlawfully to be dealt with by way of criminal prosecution”. That is rather an unfortunate way to describe such a fundamental piece of law. 
We have now a purpose statement that traverses a number of different issues right through from the purpose being “to manage immigration in a way that balances the national interest as determined by the Crown and the rights of individuals.” to looking at the way that that purpose is achieved. A number of provisions are placed in the purpose clause such as requiring non - New Zealand citizens to hold a visa to travel and to stay in New Zealand facilitating access to skills and labour supporting families allowing for the management of the immigration aspects of border control and the list goes on. Personally my favourite is to have finally recognised in our law that we are supporting “the settlement of migrants refugees and protected persons.” as a statement of purpose in the legislation. I think that is a huge advance and it is something that I have certainly been looking forward to see written into our law for a considerable length of time. 
I acknowledge what the member Hone Harawira is trying to achieve by moving an amendment to add a new clause 3A in order to make the legislation consistent with the Treaty of Waitangi but I will go back over time and explain an approach that I adopted when I was the Minister of Immigration and had the privilege of holding that portfolio. I felt that it was really important that before we started developing this new law—because this law has been in the development stage for a very long time—we consulted with Maori about what their expectations might be of a new Immigration Act so we started a consultation process. The very first consultation we had was a complete and utter disaster and I can stand here and say that I accept full responsibility for that. The main reason was that I attended that initial consultation having invited people whom I felt ought to be in the room for such a consultation and I discovered that in fact there was not a unified view from those around the table. Ranginui Walker was one of the people in the room and he certainly made that very fine and sound statement that if we were looking for our original statement of immigration policy then we need look no further than the Treaty of Waitangi. 
It was a very powerful meeting. I remember having a very interesting engagement with several of the individuals there and I learnt a lot from that particular occasion. I learnt that the Crown could not call together a group of people and say that it had consulted with Maori about which way was the right way to go. I started a process of going around individual iwi and talking to iwi—listening more than talking to be honest—to find out what people wanted out of an Immigration Act rewrite. What I started to hear because it was a job that I left incomplete was that people wanted to see people making the decision to migrate to New Zealand being tied up with an understanding of the country they were migrating to. Therefore an understanding of the Treaty need not be an administrative function for Maori within New Zealand but a knowledge base to be shared with new migrants to this country. 
A number of Maori made the point to me that under our citizenship laws there needs to be an understanding of the Treaty of Waitangi and of the relationship that we have in New Zealand yet that is not in our immigration law. My answer to the question that is posed quite justifiably by the member is that this is not the right place for this clause. In my view it is better that the immigration legislation remains silent on the matter but that the conditions against which immigration status—and residence status in particular—is granted should be more inclusive of the objectives of the Treaty and the understanding around that. Certainly in terms of establishing the immigration programme on an ongoing basis consultation with Maori is not dependent on having a Treaty clause in the document. In many respects I am arguing against myself because I tend to have a view that it is useful to have consultation obligations written into legislation but a clause that simply asks for: “The interpretation and administration of this Act will be consistent with the Treaty of Waitangi.” does not in my view get to the heart of the issue. The issue is that the people who choose to make New Zealand their home need to have a good understanding of the nature of the Treaty which establishes one of the very foundations of our nation. 
That is my view and it was part of a consultation that I had started but it was incomplete as I said. I certainly would encourage the Government of the day to think about continuing that conversation because it was a very very worthwhile process. It certainly opened up my eyes to a lot of issues that I would have been completely unaware of otherwise. 
The only other comment that I will make on Part 1 is in relation to a clause that I had some concerns about and the Minister has tabled a Supplementary Order Paper to amend the particular provision. I had some concerns about the new clause 5C which had been moved by the Transport and Industrial Relations Committee from another part of the bill. I think that the problem that arose with the wording that was framed in the clause was that the use of the new phrase “while liable for deportation” had not really been picked up with its new meaning. Simply taking the provisions of the previous law straight out of the current Immigration Act and inserting those as the new clause 5C(1) resolves the problem with the clause that I had raised and I am very grateful to the Minister in the chair the Hon Dr Jonathan Coleman for resolving that issue. I know that a couple of my other colleagues have commented on the issue of how well we have been served in terms of preparing for this debate and I too acknowledge the Minister for making officials available to work through these issues with us. I appreciate that very much and I am sure that the bill will be stronger for it. 
ALLAN PEACHEY (National—Tamaki) 
: 
 The Immigration Bill is a very substantial piece of work. Clearly a lot of effort has gone into it. I was not a member of the Transport and Industrial Relations Committee which dealt with it and when I look at the size of the task I must say that I am not sorry about that. The select committee is to be commended for its attention to detail and for the very solid and cooperative work that it has put into this bill. I also acknowledge the role of a number of Ministers of Immigration because it has clearly passed through several sets of ministerial hands to reach the point where it is at now although I believe that the current Minister in the chair the Hon Dr Jonathan Coleman deserves a lot of credit. 
Sitting suspended from 6 p.m. to 7 p.m. 
ALLAN PEACHEY 
: When we broke for the welcome dinner break I had just been commenting that the Immigration Bill is very substantial and complex legislation which has been worked on by a lot of people for a long time. I reiterate my congratulations to the Transport and Industrial Relations Committee; I was not a member of the committee during its deliberations. It clearly did a very good job as did several Ministers from both the current and previous Governments. I reiterate my compliments to the present Minister in the chair Jonathan Coleman for the fine job that he has done in getting this bill to the Committee. 
When legislation is as far-reaching and as I have said as complex as this bill it is very very important that Parliament gets it right. That takes time and it takes attention to detail. The time has gone into this bill; so has the attention to detail. As the previous speaker Lianne Dalziel said this is once-in-a-generation legislation. It is worth getting it right. 
Addressing specifically Part 1 I say the bill contains a statement of purpose. In summary the purpose is “to manage immigration in a way that balances the national interest as determined by the Crown and the rights of individuals.” As a previous Labour speaker has commented every nation has the sovereign right to control who comes across its borders. It is not a right to live in a country; it is a privilege. But it is important to get the balance right between the two and it is my view that this bill does that. The primary objective of reforming the legislation is to establish a stronger more flexible and more durable legislative foundation for New Zealand’s immigration system. The objective is to facilitate entry into New Zealand and to enable people to stay in New Zealand who are of the types that New Zealand wants and needs. 
H V Ross Robertson 
: Come on a bit of passion Allan! I know it’s been a long day but come on! 
ALLAN PEACHEY 
: Is Mr Robertson not enjoying this speech? 
H V Ross Robertson 
: I want a bit of passion. 
ALLAN PEACHEY 
: Well we decided on this side of the Chamber that on the last evening of urgency we would tone down some of the hard truths that we have had to say about the Labour Party and the previous Government. If the member would like to take a call himself and have a crack at me I would welcome that. It might get me motivated to take another call later in the evening. 
Hon Lianne Dalziel 
: If you do that we’ll ask Aaron Gilmore to take a call. 
ALLAN PEACHEY 
: Ha ha! The business of the Government is far more serious than this surely. I guess one of the privileges of being in Opposition is that members do not have to take anything very seriously because they are not responsible for anything. 
In fact given the intention of this bill to set up a strong more flexible and enduring legislative foundation for New Zealand’s immigration policy it is important that there is as high a degree of cooperation across the floor of the Chamber among all parties as can be achieved. New Zealand needs to control who crosses its borders; it needs to control who is allowed to stay. Immigration is a very very important part of the fabric of what makes up New Zealand and of where many New Zealanders came from. So immigration needs to be managed in a fair and balanced way: a way that balances the interests of the Crown with the interests of the individual. Thank you. 
KEITH LOCKE (Green) 
: 
 I want to give an explanation of my amendment to clause 5(3)(a) of the Immigration Bill. I think it relates to what the previous speaker Allan Peachey was talking about: sure we control who comes across our borders but we have to do so in a very fair way. The Green Party is concerned as were various submitters that the definition of “security” as it relates to withholding information deemed to be classified was too loose. My amendment takes out a piece of it. That is instead of information being determined as classified if it is likely “(a) to prejudice the security or defence of New Zealand or the international relations of New Zealand;” my amendment seeks to omit “or the international relations of New Zealand;” because it is so vague. As the Human Rights Commission said in its submission “Apart from the implications of using classified information in a wide range of immigration matters relying on concerns about the potential effect on New Zealand’s international reputation is problematic. Decisions about what amounts to a significant impact on a country’s reputation can be subjective. In the United Kingdom they have been described as ‘makeweight’ and held not to justify detention without trial in the absence of other reasons:”. The Auckland District Law Society said that the current definition which includes the phrase “significant impact on New Zealand’s international reputation” is considered too wide and incapable of sufficiently precise definition. 
I think members can see that in this Chamber we debate what is in the best interests of New Zealand’s international relations. We have big disagreements on that matter. For example at the moment I am looking at the ways in which the leader of the World Uyghur Congress Rebiya Kadeer could come to New Zealand and explain the cause of her people. If members look at that and how it will affect New Zealand’s international relations they will see that it will improve our relations with the Uyghur people it will improve our relations with the Tibetan people it will improve our relations with the democrats of China and it will improve our relations with democratic-minded people throughout the world but it will not necessarily improve our relations in the short term with the Chinese Government which is suppressing the Uyghur people as we speak. 
One can look at international relations in the short term or the long term. It may be that there is some penalty for New Zealand from the Chinese Government if we allow Rebiya Kadeer to come to New Zealand but if we give encouragement to the democratic forces of China that will carry on to other issues such as the fact that the Chinese Government at the moment is aiding Bainimarama in Fiji. If we have a more democratic China that might not be the case; it would help everyone. So it would be much better not to have vague terminology in that clause. Let us say that Rebiya Kadeer applies for a visa. We do not allow her to come in and the information explaining why we are denying her the visa is classified because it would affect the international relations of New Zealand. That is not the democratic path to go down. It would be much better to support my amendment and take that particular definition out of the bill. 
It is quite clear that Governments try to keep things under wraps as much as possible; I know that in the Foreign Affairs Defence and Trade Committee a lot of the documents we are provided by the ministry have bits chopped out. I think that often the ministry chops them out because those bits may embarrass other Governments. Sometimes there is a good reason for it. Other times it is because the ministry does not want to engage in more public diplomacy and everything is done behind closed doors and not very effectively. Effects on international relations are matters that are debated in this Parliament and debated across the community and people should not be denied visas to come into the country under the cover of classified information. Thank you. 
DARIEN FENTON (Labour) 
: 
 I am very pleased to take a call on the Immigration Bill. I want to let members know that I will be relying on very fine former Ministers of Immigration to look at the detail of the bill but I was on the select committee— 
Keith Locke 
: Which one? 
DARIEN FENTON 
: All three of them actually. I was on the Transport and Industrial Relations Committee chaired by the Hon Vui Mark Gosche. I was on the select committee with David Bennett who has now taken over the chairing and is not doing a bad job. He aspires to be like Mark Gosche but he has not quite got there yet. 
Hon Member 
: You’ve gone soft. 
DARIEN FENTON 
: Well that is true. I also recognise the officials in the House tonight. We got to know each other rather well I think over the very long period that we considered this bill. 
As other speakers have said Labour supports the bill. We will consider the amendments because it is a large and difficult bill and it deals with some very tricky issues. We have to remember when we debate this bill that those on the receiving end of it are real human beings. It will affect people’s lives. During the select committee process I found some of the issues quite difficult to grapple with. There were things like detention—locking people up—classified information and special advocates. On the surface those things seem pretty harsh. But the thing that I primarily learnt in my time considering the bill is that immigration by its very nature is discriminatory. There is not a Human Rights Commission aspect to it where one can say that one group of people should not be treated differently from another because of human rights legislation. We reserve the right to decide who can live and work in New Zealand and I support that. I must say also that I support the “Kiwis first” policy when it comes to jobs. But I support our doing that in a humane and compassionate way. We have international obligations. We have an international reputation. We are a country of migrants and we all have stories in our families about those who came here hoping for a better life. 
I want to address the purpose clause and in particular clause 3(2)(b)(i) which is about “contributing to the New Zealand workforce through facilitating access to skills and labour;”. The bill was drafted debated and referred to the Transport and Industrial Relations Committee in very different times from today. It was a time of high employment and of growth and New Zealand was relying on skilled migrants to fill the gaps in our workforce that we could not fill ourselves. Of course that has now changed but during those few years many migrants came here on a promise that they could start a new life here. They thought New Zealand was a good choice. We went out and encouraged them to come here and we said they would be welcome here. As I said things have changed dramatically since then because of the recession. 
I want to reflect on one particular group of migrant workers who are facing difficulty at the moment. Over the past few weeks telecommunications workers have been locked in lawful dispute with a contractor called Visionstream over that company’s determination to force those workers into “take it or leave it” owner-operator contracts. About 100 migrant workers are affected by that mainly from the Philippines but from other countries as well—South Africa Fiji India and others. Many of them live in the North Shore area that I work in and indeed where the Minister in the chair the Hon Dr Jonathan Coleman works. It is a shocking position that they find themselves in. Some of them left their homes and jobs with the biggest telecommunications employer in the Philippines and they came here at our invitation believing that New Zealand was a great choice. We advertised on the Web that it was a wonderful place to come. We needed them and they were encouraged to come here. We needed them to do the job because we did not have skilled workers here to do that work. Actually we still do not. But the workers in that group who are on work permits are in no-man’s land. They have no choice about accepting the owner-operator model because their permits do not allow it. They cannot swap from being on work permits over to the business migrant category—they just cannot. 
Visionstream has indicated as I understand it that it would employ the migrant workers but only on fixed-term contracts. I am told that Immigration New Zealand has said that is not acceptable. I know they are still waiting to hear and I know that the Minister of Immigration has said that he is keeping a watching brief on it and I hope that is right. Even the Hon John Carter the member for Northland said to those workers when they came to see him that they should not sign that contract because it is such a bad one. So they wait. 
Another group within that group of migrant workers managed to get through the work-to-residence requirements and are now New Zealand residents. They have been made redundant. They have been given 4 weeks’ notice with no redundancy pay nothing. They are not entitled to any assistance—nothing—until they have been here for 2 years. I understand those rules but the point is that a major New Zealand company is using its power to force its workforce into less pay and poorer conditions. Those migrant workers who came here with hope whom we invited here who have skills we need and whom we needed at the time are being thrown on the scrap-heap. 
I wanted to address the purpose of the bill but I also want to ask the Minister to do what he can to intervene for those workers. It is a terrible situation. It is not something that any of us feels good about. It is bad for those workers and their families but it is also bad for New Zealand. It is bad for our reputation. We will need those workers when the economy picks up. We will need migrants I am told to look after us when we all grow old. Apparently we will need lots of migrants so we will have to do a lot better when it comes to how we treat migrant workers. They do have rights; they have rights under our international obligations. But they have rights under New Zealand law as well. I do not want migrant workers whom we have invited here being put at the top of the list of people we are going to get rid of first. That is happening as well. They have rights and we need to enforce them. We need to make sure that this particular group of workers are looked after and that we do something about them. I implore the Minister to intervene; otherwise how would we ever get skilled migrant workers to come here? Thank you. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I think I remarked earlier that there is a 33-page commentary from the Transport and Industrial Relations Committee on the Immigration Bill. The member who has just resumed her seat Darien Fenton MP was a valued member of that committee. It is a very short summary of a very extensive set of work that the select committee undertook. How short? It does not even mention that the committee changed the purpose clause just a bit—just a bit! When I look at the old clause 3 I see that it had about 8 lines. The new clause 3 which is the subject of this part of the debate has about 40 lines. 
I will take members through some of the changes that have been made to the purpose clause but before I do I echo the sentiments that have been raised by my colleague and friend Darien Fenton. It is of great concern to us to see immigration once more in the political frame associated with an industrial dispute. There is a long-held bipartisan consensus around the principle that jobs ought to be for New Zealanders first and that immigration can play a valuable role filling the gaps—especially the skill gaps—when they arise. Any suggestion—as has from time to time been raised in the context of the Recognised Seasonal Employer scheme and now is being raised in the telecommunications sector—that employers might be deliberately letting workers go in order to lower costs and filling their positions with fixed-term migrant workers is not in the long-term interests of the Minister in the chair’s colleague Mr Joyce who wants to get broadband rolled out and it is also not in the interests of New Zealand. We are just putting a little flag down around the Visionstream dispute. Hopefully it will all work out; hopefully the workers’ terms and conditions will be revised and peace will break out. That is a little marker of warning. 
It is probably also worth mentioning in the context of the purpose clause that it is good for everybody if there is a steady and balanced stream of net positive migration into New Zealand. We have a birth rate slightly less than two. We want to grow and develop as a country. We appreciate the skills that people bring in. We have skill gaps to fill. A predictable and steady rate of net inwards migration is a good idea. Under the previous Government it tended to average about 10000 to 15000 persons net per annum and already in the life of this Government we have seen the good old National Government rollercoaster starting up again. Immigration dropped to 3000 per annum and it is currently running at—the Minister of Immigration will be able to confirm it—about 3500 per month net positive. So we are back up towards 30000 inwards per annum. 
Here is a prediction; members might call me a soothsayer. Given 2 years of that rate of immigration Winston Peters will rise from the crypt to rally the country against migrants. That is not good for New Zealand and it is not good for migrant New Zealanders. Maybe he will start in Epsom; I do not know. I want to see every individual human being who comes into this country treated on his or her own merits; a system of infrastructure including schooling and health care that can cope with the flow; and that we do not knock the housing market through the roof and force Alan Bollard to—I almost said Don Brash; that was an echo from the past. Of course he is now gainfully employed tilting the Government to the right but that is another story. Anyway we need predictable migration flows in line with the purpose clause which states that we need to get a balance between the needs of the country for skills and protection for individual rights. 
I hear members ask with bated breath how the Transport and Industrial Relations Committee amended the purpose clause. Why was the purpose clause expanded from eight lines to 38? 
Hon Lianne Dalziel 
: It was all the hard work of the select committee. 
Hon DAVID CUNLIFFE 
: And what a magnificent select committee it was! Let me read out a few of the excellent additions to the purpose clause; it will be a long night. Labour members are here for the duration on this bill because the flights out of here have already left. 
John Boscawen 
: Not all of them. There’s a 9 o’clock. 
Hon DAVID CUNLIFFE 
: There’s a night one? 
John Boscawen 
: You can still make the 9 o’clock. 
Hon DAVID CUNLIFFE 
: In the member’s dreams! It is Thursday night so he should bring his sleeping bag. He will be here tomorrow and Saturday because Labour members love this bill and we want to give it the attention it deserves. 
Darien Fenton 
: Look how big it is! 
Hon DAVID CUNLIFFE 
: It is a big bill and I am only on clause 3. In particular I am on lines 8 to 35 and I warn you Mr Chairman that I may need a second call. 
The purpose of the Act of course is “to manage immigration in a way that balances the national interest as determined by the Crown and the rights of individuals.” That wording is a slight modification from previously. The original clause 3 stated that the purpose of the Act is “to manage immigration through balancing the rights of the individual and the national interest …”. The reformulated clause 3(2) states: “To achieve this purpose the Act establishes an immigration system that—” and then it is spelt out in a whole lot more detail. It “requires persons who are not New Zealand citizens to hold a visa to travel to and to be granted entry permission to stay in New Zealand;”. That is an important clause because of course we no longer have visas and permits. Rationality has broken out. It took me about 6 months as Minister of Immigration to work out what the difference was and now there is no difference because they are all called visas. This will help the next 15 Ministers that the fine officials have to train because it will be that much quicker for the new ones. 
Hon Lianne Dalziel 
: It didn’t take me 6 months to work it out. 
Hon DAVID CUNLIFFE 
: Well this is my opportunity to record for posterity that in my humble opinion the Hon Lianne Dalziel—I apologise to the current Minister—was the best Minister of Immigration New Zealand has ever seen. I honestly believe that. She was visionary she was great on the detail and she brought a lawyer’s mind to the portfolio. I think she was a fantastic Minister and some of the core principles of this bill go right back to her time as Minister. I say to Lianne that it was a pleasure to learn from her. I will always believe that. But that is enough love in this Chamber. 
Clause 3(2)(b) states that the immigration system “provides for the development of immigration instructions for visas that enable people to stay in New Zealand to meet objectives determined by the Minister which may include objectives such as—(i) contributing to the New Zealand workforce through facilitating access to skills and labour; and (ii) supporting families;”. It was very important that the select committee brought families into the clause. They have been elevated both there and I believe later on in the purpose clause where it talks about supporting “the settlement of migrants refugees and protected persons.” for reunification purposes. Clearly families are more important in the reformulated purpose clause. 
A number of paragraphs in clause 3(2)—paragraphs (c) (d) and (e)—start to talk about the role of officials. The immigration system “(c) allows for the management of the immigration aspects of border control … (d) provides a process for recognising and ensuring compliance with … international obligations; and (e) includes mechanisms to ensure that those who engage with the immigration system to meet its requirements to gather information … (ii) allow for deportation … (f) establishes a specialist tribunal …” etc. Those paragraphs remind us that inherent in the purpose of the rewrite is to more tightly specify the powers and ambit of officials. I invite the Minister to take a call and explain to the Committee how in his mind he has approached the delicate job of balancing the responsibilities of officials with the required limits on official power. With that I think it is appropriate to invite the Minister to take the next call. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 I was saying over the dinner break that I was not going to take any more calls on the Immigration Bill—and perhaps the Minister in the chair the Hon Dr Jonathan Coleman will respond to Mr Cunliffe’s earlier comments. But I was moved to take a call and I suppose it is to make a plea to the Minister. Not long ago—in fact about 5 minutes ago—I went next door for a short period of time because my darling wife had said there was a discussion on television that I might be interested in. She said the mayor of Whanganui was on television—a Mr Mark Laws. Is that him? 
Hon Members 
: Michael. 
TE URUROA FLAVELL 
: Michael Laws. 
Hon Member 
: Whatever you want to call him is fine. 
TE URUROA FLAVELL 
: Yes whatever we want to call him. I am sorry; I mispronounced his name. Ken Mair a good friend of mine a radical activist from former days was also on the programme. 
That discussion stirred the blood a bit. I started to wonder why it is that when we start to mention words like “the Treaty” and “Maori rights” that when we start to fly flags like this one and that when we start to talk about terms like tino rangatiratanga for some reason that polarises the country. It seems to put people in the “Yeah I’m with you.” line or the “No I hate your guts.” line. Tonight I saw on television a person who is so wound up that he is telling the whole country that Whanganui has its own culture which has nothing to do with Maoridom. He says the culture has developed over X number of years and the Maori perspective the Maori tikanga the word “Whanganui”— 
The CHAIRPERSON (Lindsay Tisch) 
: Come back to the bill. 
TE URUROA FLAVELL 
: —I am getting there Mr Chairman—have no part to play in this country. 
I suppose to bring my comments back to this bill this is why I listened to the discussion from the Hon Lianne Dalziel about the place that a Treaty clause might have in this bill. OK we might not accept the placing of it but I suppose I am looking to the Minister in the chair and saying to him that if the parties do not accept where the clause should be or the clause itself I hope we can accept the sentiment behind it. That sentiment is about I suppose opening the door on the current issues we face as a country about allowing a space for Maoridom in there somewhere. I listened to the discussion as I said from the Hon Lianne Dalziel and I understood what she was talking about. If Supplementary Order Paper 18 in the name of Hone Harawira is voted down so be it but I would really hope that thought is given in the practical implementation of this bill to finding that space. I would hate to think that the mayor of Whanganui considers that his—I mean he said at the end of his comments: “I will fight this with every breath in my body.” or something like that. That hopefully will not—oh I had better not go there. I suppose it is a sad indictment on our society that we can have that sort of disregard for the place of Maoridom in our country. 
That is the point I wanted to make really. I ask the Minister and his officials to give some consideration as this bill is passed to finding that space in the discussion. I would hate to think that just because people happen to put up a flag wear a T-shirt or believe that their language and culture are very important to them other people disregard them. I would hate to think that that is the way our country is heading. I hope it is not and I hope the Minister will help in placing the practical drop-down effects of our new clause 3A on Supplementary Order Paper 18 if it fails so it can still find a place in the bill somewhere. I leave that as a thought for us tonight. Kia ora tatou. 
Hon Dr JONATHAN COLEMAN (Minister of Immigration) 
: 
 I want to take a short call firstly to address Te Ururoa Flavell’s point about the Maori Party’s Supplementary Order Paper. I reiterate David’s Bennett’s earlier point about this bill being framework legislation. It deals with factors that enable immigration policy. To be honest when I read Supplementary Order Paper 18 I was not exactly sure what it meant. I can fully appreciate the member’s sentiment that Maori should be consulted on immigration policy and on long-term discussions about what the New Zealand population might look like in the future. I certainly think that tangata whenua have a place in New Zealand that needs to be preserved and that they need to be part of that discussion. I would not want the member to think that because we are voting against that Supplementary Order Paper we do not recognise the rights of tangata whenua to have a major say in what we do in immigration in the long term. Certainly for Maori Party members as our coalition partner my door is literally open to them to come in and talk about these issues. I think we should have a discussion about that. 
I think there might be some misunderstanding about what we are trying to achieve in this bill. This is just a framework within which successive Governments can implement their policies in years to come. I appreciate that there probably is a point Te Ururoa Flavell is making and I am sure he appreciates the point I have made but he wants the Supplementary Order Paper tabled to make the broader point. I want to reassure the member about that. 
I will address some of the points that the Green member Mr Locke made about why this bill is being put through under urgency. Well there are a couple of reasons. Let us look at the history of this bill. The first reading was 2 years ago and there were years of consultation before that. It has taken a lot of effort to get it to the Committee stage now so we have to seize this opportunity. But more than that it will take about 18 months to implement the operational changes that will be required as a result of this legislation. When we look at how the clock is ticking we can see we have to get this bill through the House as soon as possible in the national interest. When we look at what we have coming up in 2011 we have an event that is of major significance to New Zealand and 18 months of operational changes. If we do not get this bill passed by October we will really compromise the national interest. That is the reason. There is nothing sinister about it. Immigration New Zealand will have to make a lot of changes; information technology systems will have to be frozen for a period. It will have some major implications for the service. So let me reassure the member about that. 
The member asked about iris scanning and why that should be included and he suggested that the biometric face recognition and the ten finger and thumbprints should be adequate. One of the points is that we are part of a wider ring if you like of Western World security. If other nations are to have confidence in New Zealand’s contribution to that security and in the integrity of our borders we have to keep in touch and up to speed with what those other nations are doing. If we are the only country within the broad grouping of countries that we are generally aligned with in terms of trade and general foreign interests that they cannot rely on to be strong enough to ensure the integrity of our borders that is not in the national interest. So we have to keep pace with Australia Canada the UK and the US. It is the way the world is moving. At the end of the day I think New Zealanders would generally accept that modern world security considerations necessitate this type of measure and they would certainly prefer that to some of the possible consequences. 
The member asked why chief executives of a wide range of Government departments and agencies were able to deem information as classified. If he looks at that list he read out he will see that all those agencies are related in some way to national security; they are not a random collection. It has been thought through very carefully and we felt that we needed a wider spread of agencies than those three or four that the member defined. I want to clarify the position on that. 
In terms of the Labour Party’s Supplementary Order Paper regarding a review clause Pete Hodgson has put in a couple of options. One of the points to make is that if we are to review this legislation there are major time commitments and expenditure involved—up to $1 million for one of those options. We will be practical about this legislation. If things are not working we will change them. But it has taken so long to get to this particular point that we do not feel it will be a good use of officials’ time or parliamentary time to put in a review clause committing Parliament and the Public Service to a whole lot of expenditure and use of resources in a relatively short period from now. I think the purpose of the bill has been well canvassed. Part 1 has been very well canvassed as well and it is good to see some common sentiment across the Chamber on this bill. 
The question was put that the amendment set out on Supplementary Order Paper 18 in the name of Hone Harawira to Part 1 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 14 
Green Party 9; Maori Party 5. 
Noes 108 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 31 in the name of Keith Locke to clause 4 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 14 
Green Party 9; Maori Party 5. 
Noes 108 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Keith Locke to clause 4 be agreed to: 
to omit after the words “ 
relevant agency 
 means the following New Zealand Government agency as the case may be that holds was the source of or was provided with classified information” the following: 
(a)Aviation Security Service 
(b)Civil Aviation Authority of New Zealand 
(c)Department of Corrections 
(d)Department of Internal Affairs 
(e)Department of Labour 
(g)Maritime New Zealand 
(h)Ministry of Agriculture and Forestry 
(i)Ministry of Fisheries 
(j)Ministry of Foreign Affairs and Trade 
(k)New Zealand Customs Service 
(l)New Zealand Defence Service 
(o)a government agency established in substitution for or set up to take over any function of a department or agency listed in paragraphs (a) to (n). 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 14 
Green Party 9; Maori Party 5. 
Noes 108 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 31 in the name of Keith Locke to clause 5 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 14 
Green Party 9; Maori Party 5. 
Noes 108 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Pete Hodgson be agreed to: 
to insert the following clause: 
6A 
This Act will be subject to a full review process involving public communication which process must begin no later than 2 years after entry into force and be concluded by a report to Parliament no later than one year after commencement. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Pete Hodgson be agreed to: 
to insert the following clause: 
6A 
This Act will be subject to a full review process involving public communication which process must begin no later than 4 years after entry into force and be concluded by a report to Parliament no later than one year after commencement. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 32 in the name of the Hon Dr Jonathan Coleman to Part 1 and the following amendment in his name to clause 5C be agreed to. 
to omit subclause (1) and substitute the following new subclause: 
(1)For the purposes of this Act a person is deported from a country if the person leaves the country (whether or not at the expense of the government of the country) and an order for the person’s departure made by the government of the country an authorised official of the country or a judicial authority in the country is in force. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 108 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1. 
Noes 14 
Green Party 9; Maori Party 5. 
Part 1 agreed to. 
Part 2 Core provisions and matters in relation to decision making 
MICHAEL WOODHOUSE (National) 
: 
 I am pleased to take a call on Part 2 of the Immigration Bill. As I did not have the opportunity to speak on Part 1 I begin by congratulating the officials and the various Ministers who have worked on the bill to this point and also those hard-working members of the Transport and Industrial Relations Committee of which I am one. Of course as I was not here in the previous parliamentary term I did not face the dubious challenge of wading through the several thousand submissions I am sure the committee received on the Immigration Bill. 
I will not pretend that I know terribly much about the bill but I want to make a few comments in relation to Part 2. However I will preface that by talking a little about the purpose clause. This is reforming legislation to establish a stronger more flexible and more enduring legislative foundation as we know. But really this legislation is about managing risk. It is the risk that the wrong types of people micro-organisms or pathogens will enter this country and put its people and its biosecurity at risk. Once here the risk also is that those people will be here for the wrong duration or for a different purpose from that for which their visas were extended. It is also worth recognising that the technologies have changed quite a bit not only since the Immigration Act 1987 was implemented but also I am quite sure since this process started in 2004. It has been a long time in gestation. 
The issue in Part 2 is the ability of the immigration authorities to use biomedical and automated systems for identifying people—for example iris scans. We heard the Green Party member Keith Locke express his serious disquiet about those technologies and the way they could be used or misused. Indeed the Green Party mentioned those concerns in its minority view. I think it is worth reflecting on technology generally and the way in which society has introduced it whether it is fingerprint technologies introduced many many years ago or DNA testing for criminal inquiries and genetic identification. These new technologies carry with them legitimate and sometimes significant concerns about the way in which they could be used or misused. I think that is the concern that the Green Party and perhaps some others have so I am pleased to see that the bill contains protections around the use of that information and in particular the department’s responsibility to complete a privacy impact assessment and to identify the potential effects that the use of this information may have on personal privacy. 
It is another matter altogether whether in practice those processes and protections are strong enough. I think from a legislative perspective having looked at Part 2 and realising the risks to the country the bill as laid out provides very adequate protection. I am sure it will be incumbent on the Minister—and I have every confidence that he will do this—to ensure that those technologies are used appropriately. I certainly wish the Minister all the best in that endeavour. Obviously the country wants an Immigration Service that is of world standard and that has the best technologies and the best processes. I do not think we can say that that has been the case in recent years for reasons that are well documented and do not need to be gone into again. I think we need to back our Immigration Service and give it the tools and the technologies it needs to improve that performance. These sorts of biometric tools are definitely part of that. 
The other area of Part 2 that I want to touch on briefly is the issue of classified information. This is another area where the Green Party has some concerns. But again it comes back to that fundamental risk management strategy. The risks in this area are exceeded by the benefits. I think that we need to measure those clauses in that context. Yes there are concerns in terms of natural justice and the issues of equity when we are considering the risk assessment of certain immigrants but I think on balance the need to keep certain information classified is well understood and I support it. That is all I want to say about Part 2; I commend that part. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 Part 2 of the Immigration Bill has some interesting features to it but first of all I just want to make a couple of points. A point that I did not make before is that I am struggling with the new language: to go from having “visa” and “permit” to just “visa” and from “removal” and “deportation” to just “deportation” is a struggle. I will hopefully get over that by the time the law takes effect. 
I want to address two things in this part. The Minister of Immigration has picked up one with the officials. Clause 7(1A) does not quite match section 3 of the Immigration Act. I asked him to address that and he has done so by way of a typescript amendment. It appeared as if we were required as New Zealand citizens to establish our right to be in New Zealand. I have no problem with us establishing our right to enter New Zealand but I do have a problem with New Zealand citizens having to prove that they have a right to be in New Zealand. We will vote on that amendment later. 
The second issue is a little bit more vexed. Immigration consultants lawyers and others will struggle with the loss of section 35A and its replacement by way of clause 52 which is in Part 3. I am not going into Part 3 but I found a little part of the old section 35A tucked away in Part 2. It is clause 14. When clause 14 stands alone it does not make a lot of sense. It states: “No person who is unlawfully in New Zealand may apply for a visa and where any such person purports to apply for a visa it is a matter for the absolute discretion of the Minister.” That clause was tucked away in section 35A(2) and it said that nothing “confers on any person the right to apply to the Minister for a permit and where any person who purports to apply for a permit under this section—(a) The Minister is under no obligation to consider the application;”. But that is in the context of an obligation to hold a permit. I have a little difficulty with clause 14 being separated from the rest of the old section 35A which we will all lovingly come to know as section 52 at some later point in time. We will get used to calling it section 52. 
I do not raise these things because I am trying to be cute about anything; the bottom line is that these things are fundamentally important to people who are in our country illegally. There are a lot of them at any one time. I have heard the Minister comment about the transitional policy as it was known in 2000 which was exactly the same as the transitional policy that the Rt Hon Bill Birch organised when he was Minister of Immigration some 10 years before me. He said that not many people—6000 or 7000—took advantage of the transitional policy to work their way through to residence. In actual fact a significant number of others did not show up in that figure but actually used section 35A. We had sanctuary days where people could come forward knowing that the Immigration Service would not uplift them and put them on a plane there and then. The service was able to look through their circumstances and say that if the only thing standing in the way of those people applying for residence—which on all other fronts they appeared to qualify for—was their unlawful status then there was no reason not to put them on a temporary permit so that they could at least test their eligibility for residence under normal policy. 
That process was used extremely effectively. I would not even try to guess how many people got residence that way but I suggest that it would at least double the number of people that gained residence through the transitional policy. When I was responsible for making discretionary decisions as Minister of Immigration as I was for the first 2½ years in that position I used to run that test by the cases that came to me if there was nothing standing in the way bar the unlawful status. Unless there was something dreadfully wrong about the circumstances of their remaining in New Zealand I would put them on a temporary permit and let them test their status against normal policy. I do not think that was against New Zealand’s interest at all; I certainly commend it to the Minister. 
Dr JACKIE BLUE (National) 
: 
 I am very pleased to speak to Part 2 of the Immigration Bill which is actually quite a substantial part. It covers the core provisions and matters in relation to decision making. The Government’s Supplementary Order Paper 32 makes changes to the original bill that impact on Part 2 and I want to talk about those in particular. One of the changes to Part 2 concerns the legislative ability to use biometrics. That is really all about keeping up with technology. I certainly doubt whether biometrics was a commonly used term in 1987 when the Immigration Act 1987 was passed. Biometrics involves the measurement of physical characteristics of a person for use in verifying his or her identity. Biometric information uniquely distinguishes one person from another and can be used to confirm an individual’s identity. Common forms of this sort of information include photographs and fingerprints which we use commonly. Other internationally acceptable forms of biometrics are iris scans and voice recognition. I am pretty sure that in 1987 iris scans and voice recognition were probably the stuff of sci-fi movies and certainly not common practice. 
The use of biometrics in New Zealand’s security system will only enhance security and help protect against identity fraud. Biometric identity information is increasingly being used in other countries and is regarded as essential to modern immigration and border systems. Traditional paper-based identity documents have become inadequate to manage identity fraud and we are all very familiar with the cases that have been in our own media of people whose identities have been stolen and the absolute anguish that they have had to suffer trying to prove their own identity. It is tragic. 
People are very much aware now that huge personal damage can be caused by identity fraud and that it can be quite time consuming to prove. The feeling is that biometrics will help improve the integrity of the immigration system in terms of confirmation in immigration decision-making providing greater assurance in identity fraud detecting non-citizens posing risks to New Zealand allowing for processing immigration applications more quickly and effectively facilitating the processing of arrivals at the border and New Zealand citizens and taking advantage of technology to automate the current face-to-passport check that is a standard aspect of current border processing. Biometric identity information is increasingly being used in comparable countries such as Australia Canada and the United States and is regarded as an essential modern immigration tool. 
This bill as far as its legislative ability to use biometrics goes enables the future collection and use of specified biometric information for identity verification purposes including collection storage and use of photographs fingerprints and iris scans of foreign nationals to verify their identity and check their character; use of photographs of New Zealand citizens to verify their identity and confirm their citizenship; and the ability to share biometric information nationally and internationally in certain circumstances which are being proposed by way of the Supplementary Order Paper before us today. 
The changes to the biometric provisions will ensure New Zealand has up-to-date and internationally comparable measures to address immigration and identity fraud. This Supplementary Order Paper and Part 2 are all about taking part in the modern technology that is in front of us and making sure that we can make use of that technology going forward so that we have the ability to keep up. 
Also in Part 2 are clauses that relate to a new classified information system with special safeguards. This bill enables classified information to be used in immigration and in refugee and protection decision-making with special safeguards. It can be used only when the Minister of Immigration agrees and the information relates to security or criminal conduct. The special safeguards to the classified information system are included to balance the right of the Government to use all available information to choose who may travel to enter and stay in New Zealand and the rights of foreign nationals. Classified information obviously has to be used very carefully and to date has been very rarely used. It is used only when there are very special circumstances. 
KEITH LOCKE (Green) 
: 
 I will provide an explanation of my amendment to clause 30 which is a clause dealing with the use of classified information in decision making. The amendment particularly seeks to delete subclause (2) of that clause which relates to refugee and protection decision-making claims. There is good backing for my amendment because internationally the United Nations High Commissioner for Refugees very strongly states that classified information should not be used in that way. In fact in a discussion paper during the earlier review period for the Immigration Act changes the United Nations High Commissioner for Refugees under point 21 of its paper said “As acknowledged in the discussion paper refugee/protection decision-making is different from standard immigration decision-making. Accordingly UNHCR urges the Government of New Zealand to maintain the  
status-quo 
 and not adopt practices that allow asylum claims to be determined and rejected on the basis of classified information. Classified information should not be used unless declassified and shared with all parties concerned. In UNHCR’s view such a practice would be at variance with international standards of best practice.” 
Amnesty International backs that up. It says in its paper: “AINZ therefore concurs with the UNHCR recommendation to maintain the status quo and that classified information should not be used unless it is disclosed to the claimant and open to challenge. As it stands clause 30 could see asylum-seekers disadvantaged by denying them natural justice and is contrary to the practice in similar jurisdictions including Canada The UK and Australia.” Amnesty International seeks the removal of the clause 30 extension to asylum seekers. 
So there is good backing for my Supplementary Order Paper and the reason is a very practical one too. A lot of false information about asylum seekers comes into the hands of Immigration New Zealand and the hands of appeal bodies. It comes in because asylum seekers come from situations of conflict situations of repression and situations where the Government of their country is not particularly keen on them because they are very often dissidents or religious minorities. Because of that incorrect prejudicial information comes through the system and lands in New Zealand. Also because asylum seekers often come from politically or religiously divided countries the communities here spread rumours. One group could be against another group because it reflects political or religious difference from their home country so false information about these people is fed into the system. 
Sometimes even more democratic allies of the countries where the asylum seekers come from spread false information. We can look just at the Ahmed Zaoui case where the French Government explicitly supported the military dictatorship in Algeria. So it was in the French Government’s interest to spread false information about Ahmed Zaoui who was a democratic opponent of the military dictatorship in Algeria. That is what came through the system and that is what caused a whole lot of problems in the system—this democrat was subject to false information by not only the military dictatorship in Algeria but also its democratic allies in Europe. So I think it is important to support my amendment. 
There are a number of improvements in this part some of them relating to the questions I have just talked about. For instance one of the improvements is to make sure that when classified information is provided it is provided in a balanced way so that it contains not only the negative information about someone but also the positive information. In the Zaoui case right at the end of the process after years and years the SIS admitted that it did have quite a bit of positive information as well as the negative stuff that came from overseas. That information was put on the table and it was one of the reasons the security risk certificate was taken off him. 
I will briefly indicate a couple of other positive developments. The committee did a good job on bringing about these positive developments. One of the things that has been mentioned already is bringing in the Privacy Commissioner and adopting a whole procedure of privacy orders when biometric systems are being brought into the immigration processing system. That was a progressive change. Also there was improvement in clause 32 where the protection of classified information did not limit the application of the Ombudsmen Act the Official Information Act and the Privacy Act. That was a good step forward so the committee did quite a good job in bringing in a number of improvements—although not sufficient in terms of the overall context of the bill—to meet with the Green Party’s support. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 I need just a 60-second call I think to conclude Labour’s contribution to Part 2. I congratulate the Government and the Minister on ensuring that we have a fix in Supplementary Order Paper 32 as it affects school children who are the children of people who might be here unlawfully. Clause 14A states that if one is here unlawfully one cannot work or study and now there is a Supplementary Order Paper stating that that provision applies unless one is a pupil in primary or secondary school and that is great. 
It is a matter of fact that in the term of our Government when this law was not in place we were having to do this by Cabinet directive. It may even be the case that the incoming Cabinet was perhaps not as aware of it and did not maintain pressure on officials because there seem to have been many instances of kids who were not going to school when they should have been going to school—and they were not going to school only because they were the children of parents who were here unlawfully and had therefore been damaged. 
It does not fix the problem entirely because of course the mum or dad still may not want to send their kids to school and have the school know their home address. But it does mean as I understand it that those children can go to school free of charge just as an exchange student can come from France to New Zealand and attend school free of charge. To the extent that that is the case well and good and in any case the immigration impediment is now gone and the Government should be congratulated. 
Hon Dr JONATHAN COLEMAN (Minister of Immigration) 
: 
 In response to Pete Hodgson’s comments yes this situation was drawn to my attention through the whole Gerrard Otimi saga which highlighted the plight of overstayers. It became apparent that we had hundreds of overstayer children many of them in South Auckland who were literally just not going to school. We do not want to say that there is a clear path through overstaying to gain residence in New Zealand but neither do we want children penalised by their parents’ actions. What this effectively does is allow the Minister of Education to allow these children to go to school while their parents’ immigration status is being sorted out. So we are not saying: “Well look overstayers your children can go to school indefinitely don’t worry about normalising your immigration status.” I think though I agree that it is an improvement on the situation we had before. 
In terms of Lianne Dalziel’s point about the immigration amnesty I think the point about amnesties is that they send the wrong signals. They send a signal that it is a path to residency and I think it penalises people who follow the set procedure and comply with— 
Hon Lianne Dalziel 
: I wasn’t advocating one; I was advocating sanctuary days. 
Hon Dr JONATHAN COLEMAN 
: Effectively the point I am making is that with the amnesty the Government gave around 2001 over 18 months the number of overstayers— 
Hon Lianne Dalziel 
: And the amnesty National gave in 1992. 
Hon Dr JONATHAN COLEMAN 
: I am not blaming the last Government but I am talking about the general concept of amnesties for overstayers. Eighteen months after the 2001 amnesty the numbers of overstayers had actually risen again so it does not seem that the concept works in decreasing overstaying rates overall. I think the educational side is far more effective. Over time including during the period under that member’s Government the numbers of overstayers have come down and we want to continue the trend. 
I think we have canvassed the use of biometrics. The other point on Part 2 that I will make and that we have not touched on yet is that there is a provision here to allow immigration information to be shared across Government agencies to ensure that people who are not entitled by dint of not having the correct immigration status are not able to access free public services whether those are health and disability services or some of the benefits that Work and Income offers. The Supplementary Order Paper is far more specific about the types of information that various services can ask to access from Immigration New Zealand. There is provision for biometric information to be shared in the future. At the moment law enforcement agencies do not have the technology to analyse biometric information but no doubt as technology increases and becomes more sophisticated that may happen in the future. I think this is an important safeguard of public services for the people who are entitled to them. The broader points about biometrics have been well canvassed and it is good to see once again a broad consensus across the Chamber on this part. 
The question was put that the amendments set out on Supplementary Order Paper 32 in the name of the Hon Dr Jonathan Coleman to Part 2 and the following amendment in his name to clause 7 be agreed to: 
to omit from subclause (1A) “and be in”. 
Amendments agreed to. 
The CHAIRPERSON (Hon Rick Barker) 
: Mr Locke I have bad news for you. The Clerk advises that the Minister’s amendments to clause 30 have been agreed to. Now that we have passed those your amendment set out on Supplementary Order Paper 31 to clause 30 is inconsistent with the previous decision of the Committee. Therefore your amendment is out of order. 
A party vote was called for on the question  
That Part 2 as amended be agreed to. 
Ayes 108 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1. 
Noes 14 
Green Party 9; Maori Party 5. 
Part 2 as amended agreed to. 
Part 3 Visas 
ALLAN PEACHEY (National—Tamaki) 
: 
 I will take what I trust will be a relatively short call on Part 3 of the Immigration Bill. Part 3 is another very substantial part of this bill. It establishes a universal visa system. The Transport and Industrial Relations Committee did quite a bit of work around this area and recommended a number of minor and technical amendments. As a result of that work Part 3 has a greater clarity about it and reads in a more logical fashion. 
The National Government certainly supports a simpler visa system. The single term “visa” will replace the terms currently used in the Immigration Act 1987: “visa” “permit” and “exemption”. Instead the term “visa” will be the only term used and there will be three types of visa: residence class temporary entry class and transit. As I have said the purpose of this change is to simplify things. The bill establishes a universal visa system that maintains flexibility in managing people’s travel into New Zealand and their time while in New Zealand. The bill gets rid of the old distinctions so we will no longer talk about visas permits and exemptions. It uses the one term to refer to the authority to travel to to enter and to stay in New Zealand. 
A universal visa system means that all foreign nationals require a visa to be in New Zealand. Visas can be granted or they can be deemed to have been granted. That is to maintain flexibility in managing risk and the range of unique circumstances under which a foreign national may enter New Zealand. I am interested to note that for example a visa may be deemed to be granted when a foreign national enters New Zealand territory in Antarctica. This is because he or she may travel directly to Antarctica from another country rather than through New Zealand. 
The bill introduces a new concept in allowing interim visas to be granted for the purpose of maintaining a foreign national’s lawful status in New Zealand where he or she has applied for a further visa and his or her application is under consideration. That is fair reasonable and proper. It is a positive change that should benefit foreign nationals who wish to extend their stay in New Zealand. I commend Part 3 to the Committee. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 Part 3 of the Immigration Bill contains the clause that will become known as section 52. That section replaces section 35A of the Immigration Act which we all are used to today. Of course every member of this House particularly constituency MPs who have undertaken constituency casework in the immigration area will know that this is the section under which cases are taken to the Minister of Immigration. Often it is the absolute last resort as somebody desperately tries to have his or her issues addressed. 
I do not want anyone to think that section 35A and the new section 52 are actually all about the most gut-wrenching of circumstances. I got into a taxi the other day and I had ordered the taxi using just my first name. The taxi driver picked me up from Parliament and when I got into the taxi he said: “It’s Lianne Dalziel isn’t it?”. I said yes and then he said that I was the reason that his mother-in-law is allowed to live in this country. It was so nice. This was really important because there had been a change in policy and we said that when we changed the policy we would allow a little more discretion a little more flexibility and a slightly more humanitarian approach over that transitional period. That is what we did for his mother-in-law. It was not part of an amnesty or transitional policy in that respect; she really did qualify under the previous policy but she missed out under the new policy. For the sake of the family who were well-settled in New Zealand we made a decision to intervene. 
Another case was recently brought to my attention by my sister. She spoke at a conference in a different city from the one where I live. My sister said that she had been picked up at the airport and that the woman who had picked her up had not realised that she was my sister until right at the very end of the presentation. My sister who is a very clever presenter on issues of privacy actually said to the audience—and I am getting a bit sick of it really—“I suppose you have all been wondering. No she is not my mother.” She continues to say that but I tell her that as she gets older she will not be able to say it any more. But this woman just froze and after everyone had gone as she was taking my sister away she burst into tears and hugged her. She said that I had saved her life. The reason she said that was that I had allowed her to come to New Zealand when she was at high risk of consequences from a severely violent domestic relationship in another country. She did not qualify under our strict criteria but under this provision—section 35A; the new section 52 as it will become known—we allowed her to stay. That is the importance of this clause. 
The reason I got up to speak on this part is that I think it is really important that we think very carefully about how this discretion is exercised. It must be exercised without fear or favour. There are National MPs in this House who know that I exercise that discretion without fear or favour. I recall that one of the very first phone calls I got after I became Minister of Immigration in 1999 was from Tony Ryall. He said he had had contact with people from Zimbabwe who were really concerned about their ability to get to New Zealand. They had relatives here. They could not buy a ticket home because they were not really going to go home and they asked whether there was something we could do about it. I took that to Cabinet straight away we intervened and we created a special policy that enabled a group of people to come to New Zealand. Thank goodness we did! If we look at the consequences of what happened to those who remained we will see that we did a very good thing. That was an approach from a National Party member. I think it is always important to remember that we are all members of Parliament representing our constituencies and those constituents must be treated without fear or favour. 
I will not go through the particular examples of the cases where I have felt it has been a bit disappointing of late in terms of the intervention. But if we do not hold on to that principle then we will lose it. I think it is very important that Ministers are able to look at the very human side of immigration which are circumstances that we ourselves would not think could possibly happen to us. 
DAVID BENNETT (National—Hamilton East) 
: 
 I will follow on from the two speeches that have been made on Part 3 of the Immigration Bill. The first speech made by Allan Peachey was a very good explanation of what is happening in this part. Basically we are replacing a series of visas with a much more simplistic system whereby people have a common visa. There are some differences for people who come into the country under limited visas but essentially the bill replaces the present complex system with something a lot simpler and easier to manage. 
I think Lianne Dalziel made some very good points. All members of this House will have engaged in the activity of assisting their constituents through the immigration process. For constituent MPs especially in an urban constituency that is probably the bulk of our work. In my constituency about 70 percent of my work is on immigration-related issues. We are constantly doing that work. Immigration is one of the few areas where there are discretions. If people do not pay their taxes there is not a lot we can do. But if someone wants to stay in New Zealand we have the ability to advocate on that person’s behalf to the Minister or to the Department of Labour. I must admit that during the term I have been in this House both Labour and National have been very good to deal with in respect of immigration cases and we expect that to continue in the future so that constituent MPs can represent their people and assist them in areas of concern to them. 
I think this visa process goes to a fundamental question. We have a problem in immigration in New Zealand in that we do not specify to people who come into New Zealand what holding a temporary visa actually means. When people enter New Zealand on a work permit or a visitor’s visa it is a temporary visa. There is no way of looking at it other than that: it is a temporary visa. If someone comes in under a residency programme the system is different. Once a lot of migrants and a lot of people who come to New Zealand as visitors or on a work permit get settled here they forget that they came in on a temporary visa and have an expectation that they will be able to stay here. Their children have been born here their children are attending school here and they have built up family connections. They have friends a community has been built around them and they have a work environment. They have made New Zealand their home. It normally takes a couple of years to do that and they do not then realise that they entered New Zealand on a temporary visa. They are the people who come to our offices and say that they have sons or daughters born here and they have worked for 3 or 4 years in New Zealand industries when we have wanted them to. They ask what the story is and say that they need to be able to stay in New Zealand. That situation has been going on for many many years. 
The crucial point is that we need to educate people when they come to the border on what their visa status actually is. People need to understand what a temporary visa is in comparison with a long-term visa leading to residency. That is a major part of the way that people live their lives while they are here. If they do not understand that difference they can easily forget their entry point and then have an unrealistic expectation when compared with the original visa they entered New Zealand on. I think the approach taken here will assist in that education process. We need to engage in education so that people do not have unrealistic expectations and so that they have a sense of certainty about their status. There is nothing worse for people living in a country that they have made their home than to find that they do not have the status they thought they had. That is the situation that we are confronted with time and time again as constituent members of Parliament. 
I think this is an important aspect of the bill both from the policy that it represents and also from the need to educate people who come into New Zealand so that we give the right signals and people can understand the journey that can come with being a New Zealand resident and then a New Zealand citizen. I commend this bill to the House. 
KEITH LOCKE (Green) 
: 
 It has been quite useful to listen to the tales from Lianne Dalziel and others on the immigration cases that come before us. I think one thing that humanises all members of Parliament is that each of us has immigration cases. We all have to show our real compassion when dealing with those cases and when making our submissions on them we have to try to get the Associate Minister of Immigration to show that compassion. 
I think that in the case of clause 52 which has been referred to by other speakers it is very useful to take into account the many varied circumstances that people and families find themselves in. Unfortunately that seems to be a little countered from another direction in the New Zealand Immigration Service and that is through the immigration profiling group which seems to go to great lengths holding up a lot of quite valid cases for temporary visas or other visas. Although it is very good to have this provision on exceptional circumstances in clause 52 it really should not be up to the Minister to correct so many wrong decisions of the New Zealand Immigration Service. 
The other type of visa I would like to talk about a little bit and which is included in Part 3 is the transit visa. I think New Zealand has got a bit carried away with transit visa procedures over the last little while and that is upsetting many people particularly in the Indian community. There are a whole range of countries particularly richer countries whose citizens have visa-free entry to New Zealand and therefore can arrive and just come in. 
Transit through New Zealand does not create a problem if someone is coming from Europe and stopping off in New Zealand before they go off to Niue Fiji or wherever. But it is a particular problem for people from some other countries such as India where people now have to trot down to the high commission in New Delhi or wherever to get a transit visa just to be able to sit for one hour in a lounge at Auckland Airport having come in on a plane that happens to stop in Auckland on its way to Niue Cook Islands or wherever it might be. It is just bureaucratic madness really. There might be a very slight security ground for it but I think we must have a balanced system of procedures and must not exaggerate threats. So the procedures for transit visas are creating a problem. 
In respect of temporary visas it is true that often people do not understand quite what a temporary visa is. But that being said I think that about 180000 people are here on work visas and only a smaller proportion of them are on work-to-residence visas. A lot of those people have their whole family with them. They have come over here to try to start a new life and they think their skills are needed here. When they have employment they have a future ahead of them; then all of a sudden there is a bit of a recession they get laid off and—bang—they are kicked out. 
I think the Government and the Minister should put in place systems to cater for the recession so that people can have extensions particularly people who have been here for a while on work visas. That is another side of our compassion and it has a practical use too because when there is a bit of an upturn all of a sudden we turn around and say: “We need these skilled people. Where are they? Oh they’ve disappeared overseas; we kicked them out.” Working out ways to allow more skilled people to stay here is quite useful. Thank you. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I will follow up on the comment that David Bennett made which flows on exactly from the point that Keith Locke was making. People are told to apply for temporary visas to come here to look for the job that they know will lead them to residence. They are told that in the London branch of Immigration New Zealand; they are told that in various offices around the world. David Bennett can shake his head all he likes; I know that people are told to do that. It is very simple for somebody who does not need to apply for a visa: they can come here for 3 months visa free and they can apply for an extension when they get here. A lot of people come to New Zealand on a temporary visa on their journey to residence and it is a perfectly legitimate way to use the policy to get here. 
The second thing is that there are people in this country at the moment who are working on a work-to-residence permit. If they are made redundant they are given up to 3 months by Immigration depending on which office they deal with. If they do not find an equivalent job—they have to get a job that meets the points they have claimed under their expression of interest—then basically they are told to go. That is the story that was on the front page of the 
 Press. 
 I tell this Chamber that that story on the front page of the 
 Press 
 cost us big time as far as skilled migrants coming to New Zealand from the UK is concerned. That is exactly the point that Keith Locked made. 
When we hit a recession we have to have a mechanism for just seeing us through. Quite frankly letting people who are on that direct route to residence have an open work permit until the recession is over would be a much better idea. They would not be able to apply for benefits so if they could not find a way of looking after themselves in the meantime they would go of their own accord. But they will not be front-page news because Immigration has told them they have to go. People have failed to cotton on to that point as far as this recession goes. We will need those skills again yet we are telling those people that we will flick them even if they are on a route to residence. We will flick them if they do not meet the criteria after being made redundant in these circumstances. Jim Anderton and I have written to the Minister of Immigration about that point. We want to talk to him about it. I hope that he sees this as an opportunity to test the bona fides of what we want to do. We want to do it for our country. We think New Zealand’s reputation will be on the line if we continue to have those stories in our media. They are reported on the other side of the world instantaneously as the Minister knows and it is costing us big time reputationally. 
The question was put that the amendments set out on Supplementary Order Paper 32 in the name of the Hon Dr Jonathan Coleman to Part 3 be agreed to. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 3 as amended be agreed to.  
Ayes 108 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1. 
Noes 12 
Green Party 7; Maori Party 5. 
Part 3 as amended agreed to. 
Part 4 Arrivals and departures 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I am so pleased to be able to speak to Part 4 of the Immigration Bill and to speak only positively about advanced passenger processing. I was the Minister of Immigration when we introduced advanced passenger processing and it was a very proud moment in my life. Extending the border offshore is certainly something that is of significant benefit. But it does raises privacy issues. 
I will share a recollection I have of a privacy seminar that I spoke at a short while after we had moved to introduce this measure. Justice Michael Kirby was speaking at the seminar as well; in fact he was opening it. It was a very interesting debate because he raised the question of the vast quantities of information held by airlines. It was a significant privacy issue given that the information was in the hands of private organisations and some State-owned organisations. Huge amounts of information are held by these carriers. The point he was making though was whether it was an appropriate digression from normal principles of privacy to allow those vast quantities of information to be brought together. His view was that there was a difference with the airlines bringing people into Australia or New Zealand—those were the examples that he was using. In neither Australia nor New Zealand does one have to produce an ID card just to be walking down the street. There are countries in the world where one has to produce an ID card if asked to do so. In New Zealand and Australia something that we actually value about living here is that we do not have to have ID cards. He said that for us to be part of a process that enables us to know who is coming here who they are where they have come from and why they are coming here that is perfectly acceptable. I think that goes a considerable way to meeting a lot of the concerns that people have about information that is being held by carriers. 
I think it is important that we can shift the border offshore because we can manage a lot of the concerns we have as a small isolated island State and a lot of the risk around our borders. We are subject to some of the concerns that overseas countries have to deal with on an hourly basis although in New Zealand it is on a daily basis a weekly basis or a monthly basis. So I am very supportive of this part of the bill. 
MICHAEL WOODHOUSE (National) 
: 
 We are getting into the detail of the Immigration Bill and Part 4 is very much a process part of the bill. As the previous speaker mentioned—quite glowingly I think given her being the person who thought of it—this part also relates to the processes around advanced passenger processing. 
I come back to the comment that the member for Dunedin North made about Part 1 particularly around the issue of review because it is relevant to Part 4 in the context of the Supplementary Order Paper that the Minister of Immigration has brought forward. In fact Mr Hodgson tabled an amendment for a review of this bill within 2 years or alternatively 4 years. That amendment probably had members of the Transport and Industrial Relations Committee shivering in their boots when they thought about the fact that this bill has taken nearly 5 years to get to the Committee stage. I completely understand what the member was trying to do but certainly a review in 2 years’ time would not be anything like as comprehensive as the making of this legislation. The member agreed that there were other ways to do it. 
One way I think is to future-proof the legislation to enable those sorts of changes to be effected as opportunities and technologies come about. The Minister’s Supplementary Order Paper in relation to pre-screening and the trans-Tasman agreement that has been reached between Kevin Rudd and the Prime Minister is a very good example of the sort of future-proofing that we can do. We have here an amendment that will enable the processing of passengers before they get on to the plane from a biosecurity and a passport control perspective and that will certainly speed up the process at the point of embarkation. I think that is a really good example of not waiting for a review to make that change but also of future-proofing because the provision does not just apply to a trans-Tasman service; it is written in a way that could apply to any international inbound service to or from New Zealand albeit it would probably be most effective in a point-to-point transfer and if a stop-off was required in transit in the Middle East or South-east Asia the system might be a little less effective. Nevertheless we have future-proofed this part. 
I also want to mention again biometric testing. Whereas in Part 2 we had the power of the Immigration Service to require biometric testing we now have in Part 4 an obligation on the passenger to supply that information. The same sorts of risks and onuses both on the passenger and on the Immigration Service remain and I do not think it is worth relitigating that. But I acknowledge that this is another part where the obligation now falls on the passenger. We are into the business end of the bill and I certainly commend Part 4. 
KEITH LOCKE (Green) 
: 
 Although there are benefits from Advance Passenger Processing overseas there are also downsides from that and those have been identified by Amnesty International and the Human Rights Commission in their submissions to the Transport and Industrial Relations Committee on the Immigration Bill. I have an amendment to clause 89 to try to correct that situation. 
Both the Human Rights Commission and Amnesty International say clause 89 may infringe article 14 of the Universal Declaration of Human Rights according to which every person has the right to seek asylum. That is from the Amnesty International submission and the Human Rights Commission’s submission is very similar in that respect. Clause 89 could also infringe New Zealand’s adherence to the 1951 United Nations Convention Relating to the Status of Refugees because it is out of the spirit of that convention to prevent asylum seekers from hopping on a plane to come to New Zealand to claim asylum particularly perhaps when they are coming from a rather repressive country. I think New Zealand has flights arriving from Dubai and Shanghai—places with repressive Governments. There may be asylum seekers from those countries and under clause 89 of the bill the aircraft carriers are supposed to deny those asylum seekers the right to get on a plane if they do not have fully effective documentation. 
I have set out on Supplementary Order Paper 31 in my name an amendment to rectify that by adding to clause 89(1) the following paragraph: “(e) that the carrier or person or person in charge of any craft cannot be held responsible under subsection (1)(a) if the passenger is to claim asylum in New Zealand under the Refugee Convention 1951.” This amendment makes it clear that if someone comes off a plane in Auckland from Dubai or Beijing and claims asylum then the carrier does not have any responsibility for that. It is important to put that provision into the legislation. Otherwise we are violating as I said the Universal Declaration of Human Rights and our adherence to the 1951 convention. 
Already the number of people who are claiming asylum at the border has gone down to virtually single figures I think and that is partly because of the Advance Passenger Processing system. We are already lucky in that we are at the end of the chain in terms of the desire of people to claim asylum here compared with say countries in Europe. We should not put additional legal barriers in the way of asylum seekers. It is a very important part of having a compassionate society that we should be open to people who come here to seek asylum. We cannot glory in having such a dramatic drop in the number of applications that we are receiving; that is not the mark of the humanitarian society that we should be. 
Dr JACKIE BLUE (National) 
: 
 I will take a short call on Part 4 which concerns arrivals and departures. This is not a contentious area at all. It does not deviate too much from the original 1987 Act. 
I will make some comments about advance passenger identification. I think that is obviously a very important way that we can screen arrivals in New Zealand. I have had a tour of Auckland International Airport and I was able to look at the very sophisticated ways in which immigration staff look at on-board profiling and pre-board screening. It is very sophisticated and clearly that is the way to go to prevent people from reaching our borders and to stop them getting to our borders in the first place. 
This bill establishes immigration control areas for immigration processing and maintains advance passenger processing obligations. In the debate on Part 2 we talked about biometric screening and clearly that is the way of the future. Part 4 states that passengers travelling to New Zealand are obligated to provide biometric information. I note in clause 110A that people who are leaving must also allow biometric information to be obtained from them. I think that this is a non-contentious part of Part 4 and I commend this part to the Committee. 
The question was put that the amendment set out on Supplementary Order Paper 31 in the name of Keith Locke to clause 89 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 14 
Green Party 9; Maori Party 5. 
Noes 108 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 32 in the name of the Hon Dr Jonathan Coleman to Part 4 be agreed to. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 4 as amended be agreed to. 
Ayes 108 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1. 
Noes 14 
Green Party 9; Maori Party 5. 
Part 4 as amended agreed to. 
Hon Dr JONATHAN COLEMAN (Minister of Immigration) 
: 
 I seek leave for the Committee to report progress. 
The CHAIRPERSON (Hon Rick Barker) 
: Leave is sought for that course of action. Is there any objection? There appears to be none. 
Progress reported. 
Report adopted. 
The House adjourned at 8.51 p.m. (Thursday)