Volume 697 Week 68 - Wednesday 19 March 2014Text is incorporated into the Bound VolumeVolume 697 Week 68 - Wednesday 19 March 2014[Sitting date: 19 March 2014. Volume:697;Page:16811. Text is incorporated into the Bound Volume.]Wednesday 19 March 2014Mr Speaker took the Chair at 2 p.m.Prayers.Questions to MinistersEconomy—Direct Currency Trading with China and Government Financial Position1.MAGGIE BARRY (National—North Shore)to the Minister of Finance: What announcements has the Government made to build on New Zealand’s international economic position?Hon BILL ENGLISH (Minister of Finance):The Prime Minister last night joined Chinese Premier Li Keqiang in announcing the launch of direct trading of the New Zealand dollar against China’s renminbi. This is a significant agreement and concludes negotiations the Prime Minister started last year during talks with President Xi Jinping. The agreement makes it more likely that New Zealand trade with China will in the future be conducted through the renminbi alongside trade currently conducted mainly in the United States dollar. It will make New Zealand businesses more likely to do business with China and do it more easily by reducing the cost of conversion between the two currencies and it will further stimulate our already strong trade links. The New Zealand dollar is now one of only six currencies to be directly traded with the renminbi.Maggie Barry: How will the agreement for direct trading of the New Zealand dollar with the Chinese renminbi build on trade and investment ties between the two countries?Hon BILL ENGLISH: It is the next logical step. The previous Labour-Green Government signed up to a free-trade agreement between New Zealand and China and that has led to a very significant and rapid increase in two-way trade. Last year alone trade in goods between New Zealand and China increased by more than 25 percent making China New Zealand’s top destination for goods exports just marginally ahead of Australia. The Government will continue to work with New Zealand banks exporters and importers that trade with China to raise awareness of the benefits of direct currency trading.Maggie Barry: What other announcements has the Minister seen about New Zealand’s international economic position?Hon BILL ENGLISH: Statistics New Zealand issued balance of payments data for the December quarter of 2013 that shows the balance of payments deficit was 3.4 percent of GDP down from 4.1 percent—the smallest annual deficit for a couple of years. It was driven mainly by an improvement in the goods balance driven by the value of dairy product exports at record highs. There is still work to be done to improve New Zealand’s international position but the latest deficit is a significant improvement on the very high balance of payments deficits in the mid-2000s of between 7 percent and 8 percent. Net international liabilities fell to 66.6 percent of GDP the lowest level since 2002.Maggie Barry: How does New Zealand’s balance of payments position compare with other developed countries as a percentage of GDP?Hon BILL ENGLISH: The deficit is now 3.4 percent of GDP less than half of what it was 6 years ago. It is comparable with other similar countries. For instance Australia and Britain have balance of payments deficits of 3.2 percent of GDP and Canada’s is slightly smaller at 2.9 percent of GDP. So there is no indication of a balance of payments crisis just as there is no manufacturing crisis no regional crisis and no jobs crisis.Roading Bay of Plenty—Hairini Link2.BRENDAN HORAN (Independent)to the Minister of Transport: Does he agree with the statement of the Minister of Transport in 2011 that “I am confident that the New Zealand Transport Agency engages with property acquisition processes under the Public Works Act in a fair and proper way” and is he satisfied that is the case in the property acquisition for the Hairini Link?Hon GERRY BROWNLEE (Minister of Transport):Yes and that would be my continued expectation.Brendan Horan: Is the Minister aware that at least two homeowners in Hammond Street whose homes are required for the Hairini Link are being offered at least $65000 less than is needed for them to buy another house on a like-for-like basis and is he prepared to ask his New Zealand Transport Agency chief executive to review the offers taking into account the huge impact on homeowners and the relatively small sum involved compared with the $55 million overall project cost?Hon GERRY BROWNLEE: I became aware of the issue that the member is raising about 40 minutes ago when I got an email from him. What I have done is ask my officials to seek advice from the New Zealand Transport Agency and once I have got that information I will be in a better position to answer that question fully.Brendan Horan: Would the Minister consider it—and I thank the Minister as well—fair and proper to take a mortgage-free home away from a New Zealander who is now an invalid beneficiary and offer them a paltry $235000 when they would need at least $300000 to buy a similar property?Hon GERRY BROWNLEE: As I say without the specifics of the case in front of me—and I am not suggesting that the member is not giving us accurate information—I really cannot respond until I have had a closer look at the particular issue.Forestry—Government Support for Timber Processing and Workplace Safety3.Hon DAVID CUNLIFFE (Leader of the Opposition)to the Prime Minister: Does he stand by his statement that the forestry industry “needs significant change”?Hon BILL ENGLISH (Acting Prime Minister):Yes although the member may need to be reminded that that statement was made in response to a question relating to forestry safety systems not the economics of forestry.Hon David Cunliffe: In relation to the economics of forestry is he comfortable that the rate of unprocessed log exports has grown at 10 times the rate of processed logs given that the export of raw logs is really exporting jobs?Hon BILL ENGLISH: I would need to check the member’s figures but he may also be interested to know that around 60 percent of all forestry production is currently value-added. It may well be that in the light of a rise in prices for export logs there are more logs being exported but anyone who has been in the industry knows that those prices can drop as fast as they rise. I am sure that there are many people in the forestry industry taking a longer view and keeping that in mind.Hon David Cunliffe: In relation to the Minister’s claim that 60 percent of timber exported is value added I seek leave to table Ministry for Primary Industries statistics that show that 55 percent is exported raw.Mr SPEAKER: Leave is sought to table some Ministry for Primary Industries statistics. Is there any objection? There is none. They can be tabled.Document by leave laid on the Table of the House.Hon David Cunliffe: Is it appropriate to export raw logs to Asia and import the sawn timber back to Christchurch when sawmills are closing in New Zealand for example with 120 people having been sacked at Tachikawa Forest Products sawmill in Rotorua?Hon BILL ENGLISH: It would be useful to public debate I am sure if the member could provide an actual example that that was the case. Secondly—Hon Members: He just did.Hon BILL ENGLISH: No he did not—he did not. He asserted it—he just asserted it—but of course we need to remember who is making the decisions about this and it is the owners of trees the owners of sawmills and traders in timber all of whom we believe are probably better placed than David Cunliffe to make that judgment.Hon David Cunliffe: What would the Prime Minister say to the people in the Deputy Prime Minister’s former home region who are gutted by the announcement that Southern Cross Forest Products is in receivership threatening up to 400 jobs across its sites?Hon BILL ENGLISH: There have been public statements made to the effect that the mill may be sold as a going concern and that in fact a problem is levels of debt rather than levels of log exports.Hon Dr Nick Smith: My question to the Minister of Finance is: what reports has he seen on the—[Interruption] To the Acting Prime Minister—Hon David Cunliffe: I raise a point of order Mr Speaker. I seek your guidance Mr Speaker. Is it appropriate for the member to ask a supplementary question of the Minister of Finance on a primary question that was to the Prime Minister?Mr SPEAKER: Yes. No it certainly is in order to do so—Hon David Cunliffe: To a different member? The primary question was to the Prime Minister. The supplementary to that—Mr SPEAKER: Oh I see. I gather the point. No it is appropriate that the member when he rises addresses the question to the Prime Minister.Hon Dr Nick Smith: My question is to the Prime Minister and it asks what reports has he received on the recent developments in forest processing in Tasmania where its Labour-Green Government has fallen apart over the very issues of forest processing and where there has been a huge loss of jobs and confidence in that sector because the—Mr SPEAKER: Order! You have made the point with your question.Hon BILL ENGLISH: I have received the same—[Interruption]Mr SPEAKER: The question was what reports has he received.Hon BILL ENGLISH: The Deputy Prime Minister and the Prime Minister have received the same reports obviously which have been to the effect that the Government in Tasmania has overseen the destruction of the forestry industry by trying to get involved in it.Hon David Cunliffe: Would the Prime Minister support an accelerated depreciation tax including for forestry processing?Hon BILL ENGLISH: No we are not entertaining that. Those kinds of policies were tried consistently I think from the 1970s when they were a bright idea and they lead to unsustainable industries and unsustainable jobs as a whole lot of Australian workers are now finding out where industries that were subsidised by the Government there are now closing down.Hon David Cunliffe: I seek leave to table a global tax alert from Ernst and Young that shows that far from the Minister’s point Japan—Mr SPEAKER: Order! [Interruption] Order! The document has been described adequately. I just need the date of the document.Hon David Cunliffe: It is 4 October 2013 not—Mr SPEAKER: It is a recent document. Leave is sought to table that particular Ernst and Young report. Is there any objection? There is objection.Hon David Cunliffe: I seek leave to table a research report from the Federal Republic of Germany that shows that it is investigating the use of a tax depreciation allowance for timber processing.Mr SPEAKER: The date please?Hon David Cunliffe: 2014 Mr Speaker. Sorry 2012 but not—Mr SPEAKER: Leave is sought to table that particular research. Is there any objection? There is objection.Hon David Cunliffe: Does the Prime Minister support a pro-wood Government procurement strategy to assist jobs and value added in New Zealand including in those South Otago sawmills; if not why not?Hon BILL ENGLISH: No. The member should have more confidence in the forestry industry. It has evolved from the time in the late 1980s when sawmillers used to be able to get very cheap logs from Government-owned forests through to a modern processing industry that is internationally competitive and makes very sophisticated decisions about the balance of financial risk different types of product and exchange rate and price risk in export markets. The idea that Labour would do a better job of that is wrong and it would end up destroying the forestry industry if it gets that involved in it.Hon David Cunliffe: Why has the Government sat on its hands for the last 5½ years while the timber processing industry has been in decline and while dozens of workers have been killed or maimed in the forestry sector—or is that just another example of this “she’ll be right” attitude to regions and jobs?Hon BILL ENGLISH: The answer to that of course is no. The industry is not shrinking; it is growing partly because of the high prices for its product. It is a bit of an odd analysis that says that because there are higher prices for the product from an industry the Government therefore needs to interfere with it. Of course the Government has acted on the serious and legitimate safety issues in the forestry industry through supporting an industry-led inquiry and setting up WorkSafe New Zealand.Dr Russel Norman: Is the Minister aware that the forestry industry and timber industry itself is calling for a partnership with the Government to help the industry value-add more rather than simply exporting raw logs or will the Government continue with its attitude of “whatever”?Hon BILL ENGLISH: It may come as news to that member but sometimes businesses do ask Government for tax breaks and other concessions. In fact it goes on all the time. The forestry industry does not have any particularly special role in that respect. The Government is working with the forestry industry on better infrastructure a more competitive energy market better regulation and a better flow of skilled young New Zealanders into the industry all of which are proven ways in which Government can support this industry.Hon David Cunliffe: I seek leave to table a report from the Southland Times about the Government subsidy—Mr SPEAKER: Order! That information is easily available to members.Hon David Cunliffe: I seek leave to table the Auditor-General’s report on the Government—Mr SPEAKER: Order! That is also freely available to members.Housing Affordable—Overseas Investment Rules and Impact of Overseas Buyers4.Dr RUSSEL NORMAN (Co-Leader—Green)to the Minister of Finance: Will the Government propose any measures to restrict the sale of New Zealand farmland or residential land to foreign companies or persons?Hon BILL ENGLISH (Minister of Finance):We are certainly not going to restrict Australians from buying homes after they migrate to New Zealand. The Government has already restricted overseas investment in sensitive land and residential land. We made changes to the regulations in 2010 which were reflected in a directive letter to the Overseas Investment Office. We believe these changes struck the appropriate balance between ministerial flexibility to consider a wider range of issues when assessing overseas investment and at the same time providing clarity and certainty for potential investors. I would note that under this Government the amount of sensitive land approved for sale to overseas buyers has been less than half what it was in the last 5 years of the previous Labour-Greens Government. I would also note that the OECD assesses our overseas investment regime as now one of the more restrictive in the developed world.Dr Russel Norman: Does he consider that China has any lessons to teach New Zealand regarding foreign ownership given that China protects its economic interests through restricting land sales to foreign buyers?Hon BILL ENGLISH: The member may be more familiar than I am with the tenets of communism but in China private individuals did not own land until recently—only the Government did—so even the Chinese could not buy land in China. But I am a bit surprised to find that the Greens only ever get this excited about foreign ownership when it involves the Chinese who happen to have a much lower number of consents than Australia the UK Germany Switzerland and I think Sweden.Dr Russel Norman: Does he have any concern that more than one in 10 homes in Auckland is purchased offshore and that according to BNZ economist Tony Alexander this figure is set to only increase?Hon BILL ENGLISH: I know that the member has been conducting his own investigation into these issues by visiting the home of Kim Dotcom a well-known foreign investor in Auckland real estate. I cannot confirm the member’s one in 10 number. The BNZ survey that I saw said that about six houses in every 100 are foreign-purchased and about a quarter of those are being purchased by the Chinese which means that 1.5 houses in every 100 might be being purchased by people whom real estate agents think are residents of China.Dr Russel Norman: When will he and his Government consider there is a problem—will it be when one in five homes is purchased by offshore buyers or will it be when one in four homes is purchased by offshore buyers? At what point will he acknowledge that there is a problem?Hon BILL ENGLISH: We do not have the same problem about buyers being foreign as the Greens do. What we have a problem with is the very high cost of housing in New Zealand for New Zealanders. And all the analysis shows that the fundamental driver of the high cost of housing is not the Greens’ friends from China; it is the Greens’ friends in the planning departments of our city councils who insist on blocking new development of new housing. So the Greens are a much bigger enemy of the affordability of housing in New Zealand than the Chinese have ever been.Dr Russel Norman: Does he consider that an increase in interest from offshore buyers in purchasing residential property in Auckland is increasing the price of housing for New Zealand homebuyers or does he think that this big increase in demand from offshore is having no effect—that it is a special kind of market where a big increase in demand has no effect on prices?Hon BILL ENGLISH: It is not obvious that there is a big increase in demand from offshore buyers. There is some anecdotal evidence that that is the case and I know that that is certainly believed by some people but it is yet to be established. The fundamental driver of the increase in housing is restrictive planning policy which means that when there is more demand—whether it is foreign or in this case New Zealanders who have stopped migrating and are staying home and more people who are arriving in New Zealand as migrants—and those factors of demand are rising the supply cannot react to it. All around the world restrictive planning laws mean higher prices and more volatile prices and the Greens back that kind of policy. They should be backing the Government on getting rid of that sort of policy if they are really concerned about low and middle income New Zealanders being locked out of the housing market.Dr Russel Norman: Does he agree with Auckland house auctioneer Adam Wang that our ambiguous laws around capital gains tax are assisting the boom in the foreign buy-up of our housing stock and does he have any plans to deal with the fact that the capital gains tax exemption in New Zealand is part of the problem driving up house prices?Hon BILL ENGLISH: All of those issues have been looked at by various inquiries by the Productivity Commission and by policy advisers and it is possible that any one of them has some influence on the price. This Government though has focused on the biggest influence and the most pervasive one and that is restriction of supply. It is hard to understand why the Greens support housing planning policies that have the effect of driving up the wealth of the leafy suburbs at the expense of middle-income and low-income New Zealanders. I think that if the Greens were really concerned about equity in New Zealand and affordability of housing they would be supporting the Government’s policies not the Labour Party’s policies.Marine Protected Areas—Kaikōura5.COLIN KING (National—Kaikōura)to the Minister of Conservation: What support has he received for the Prime Minister’s recent announcement to create a new marine reserve and whale and seal sanctuary in Kaikōura?Hon Dr NICK SMITH (Minister of Conservation):This package of measures has been welcomed by Ngāi Tahu by the Kaikōura branch of the Royal Forest and Bird Protection Society by Kaikōura recreational and commercial fishers and by the important Whale Watch business who all played an important role in the Te Korowai o Te Tai o Marokura process. It is also being supported by the local mayor and council and by organisations like the World Wide Fund for Nature. I have also received a strong message of support from the New Zealand Marine Sciences Society which notes that this deep canyon so close to shore is very unusual and has the richest marine life anywhere in the world at depths of over 500 metres. And I particularly want to acknowledge that member’s long advocacy for these measures.Colin King: Has the Minister seen the public statements by Opposition parties that our new marine reserves were pathetic and an international embarrassment; if so—Mr SPEAKER: Order! I am going to ask the member to rephrase that question. The Minister has no responsibility for other political parties’ comments.Colin King: Has the Minister seen any reports around comments with regards to the negative approach that the Opposition has taken towards the positive aspects of this reserve?Mr SPEAKER: Order! That is still a very marginal question. If the Minister can address any reports he has seen.Hon Dr NICK SMITH: I have seen criticism that the marine reserve is too small. I would note that this new Kaikōura reserve at over 10000 hectares is going to be the largest reserve adjacent to any of New Zealand’s main islands. It actually covers an area that is more than all of those nine Fiordland reserves that had previously been created. I have also seen criticism that New Zealand’s record on marine protection is poor but I would note the fact that New Zealand has a greater portion of its territorial sea in no-take reserves than any country. I also take note of the Marine Policy journal which rated New Zealand against 69 countries with significant resources and found New Zealand to be the very best of those 69 in terms of its marine management. I have no problem with criticism but I do have difficulty with those who run down New Zealand’s good name for their narrow political purposes.Te Kōhanga Reo National Trust Board—Audit and Terms of Reference6.Hon NANAIA MAHUTA (Labour—Hauraki-Waikato)to the Associate Minister of Education: Does he accept all the findings of the Independent Audit Report into Te Kōhanga Reo National Trust?Hon Dr PITA SHARPLES (Associate Minister of Education):Yes.Hon Nanaia Mahuta: How can he be confident in the outcomes of an inquiry that did not actually investigate the allegations surrounding spending by Te Pātaka Ōhanga that led to the inquiry in the first place?Hon Dr PITA SHARPLES: The terms of the inquiry were to look at the financial controls at Te Kōhanga Reo National Trust for the public money that the Government gives for the funding of kōhanga reo.Hon Nanaia Mahuta: Does he not think he owes it to taxpayers whānau andkaiako to fully investigate the expenditure byTe Pātaka Ōhanga given that it gets its funding from Te Kōhanga Reo National Trust which is publicly funded?Hon Dr PITA SHARPLES: Te Pātaka Ōhanga is like many subsidiaries of many companies the Government funds an organisation to provide particular special services. In this case Te Pātaka Ōhanga provides insurance computers a health scheme the internet fuel cards and things like that.Hon Nanaia Mahuta: Is the Minister satisfied that all aspects of Te Pātaka Ōhanga governance and financial obligations meet acceptable standards of transparency?Hon Dr PITA SHARPLES: Absolutely not. That is different from the review that we commissioned which was about the money the Government spends for the running of kōhanga. In terms of Te Pātaka Ōhanga we have made the trust aware several times that there are allegations floating around about impropriety misuse and so on and we have asked it to attend to these things formally.Hon Nanaia Mahuta: Can the Minister explain what changed this morning to lead the Government to hurriedly announce that it was now referring matters relating to Te Pātaka Ōhanga from the Charities Commission to the Serious Fraud Office?Hon Dr PITA SHARPLES: It is part of us being responsible particularly with regard to treasure like kōhanga which some of you—and some of us too—had a role in starting and keeping going and we still do. So what we have done instead is we received some information last night which we acted upon and referred to the Serious Fraud Office.Teachers—Development Council and Legislative Reform7.SIMON O’CONNOR (National—Tāmaki)to the Minister of Education: What recent announcements has she made on legislation to strengthen the teaching profession?Hon HEKIA PARATA (Minister of Education):Last week the Minister for Tertiary Education Skills and Employment Steven Joyce and I welcomed the first reading of the Education Amendment Bill (No 2) which will make a number of legislative changes to strengthen the education profession. The changes proposed in the bill will help the profession meet the challenges and opportunities of modern learning and promote high standards of safety and accountability for teachers. This Government recognises the powerful contribution that high-quality teaching makes to raising student achievement.Simon O’Connor: How will the Education Council of Aotearoa New Zealand (EDUCANZ) ensure consistently high conduct and educational standards for the teaching profession?Hon HEKIA PARATA: The proposed changes will improve teacher registration and issuing of practising certificates. To obtain and maintain a practising certificate registered teachers will need to meet standards and criteria set out by EDUCANZ. The proposals will enhance reporting requirements to maintain public confidence in the conduct of the profession. The disciplinary framework for teachers will be strengthened by developing a code of conduct ensuring automatic referral to the disciplinary tribunal for cases of serious misconduct and making disciplinary proceedings open where possible. EDUCANZ will be a strong professional body that speaks acts and leads with authority and integrity on professional matters.Simon O’Connor: What other steps is the Government taking to strengthen the teaching profession and raise student achievement?Hon HEKIA PARATA: EDUCANZ is a key part of a comprehensive successful and sustainable plan to raise achievement for all children and young people. That plan includes the $359 million investment in professional career pathways over the next 4 years; the inaugural Prime Minister’s Education Excellence Awards in June; the education festivals that open in Auckland next week which I hope the member will take advantage of and in Wellington and Christchurch; hosting nearly 20 education Ministers of the top-performing systems from around the world here in Parliament next week; new postgraduate qualifications; and a sector review of professional learning and development. This Government is backing our teaching profession to win—in law in policy in practice and in funding.Chris Hipkins: Why should the teaching profession have any confidence in EDUCANZ as a supposedly independent professional body given that she does not have enough trust in it to allow it to have any say in who gets appointed to the board?Hon HEKIA PARATA: The member is quite wrong. When the bill is considered in the select committee the member will become aware that it is proposed that there be nine members of the new council five of whom must be registered teachers and all of whom can come from a pool nominated by the profession. The Minister will pick from that pool as well as have the opportunity to make some independent appointments and all of those will be made against a transparent public set of competencies criteria for that board as a whole. I very much look forward to it working to raise the status and value of the profession and I am sure that the member joins me in that aspiration.Justice Minister—Visit to China8.Rt Hon WINSTON PETERS (Leader—NZ First)to the Minister of Justice: Does she stand by all her statements regarding Oravida Ltd because she asserts they are true?Hon JUDITH COLLINS (Minister of Justice):Yes to the best of my knowledge. If I make an error I face up to it. I correct it and I apologise.Rt Hon Winston Peters: If her explanation yesterday for the circuitous route to the airport—that is she did not know where she was—is true then why did she say on 4 March that she just popped into Oravida to have a cup of tea on the way to the airport; which statement is true and which one is false?Hon JUDITH COLLINS: Of course they are both correct. To use the term “pop in” is not a statement of fact; it is an opinion. But I can tell that member—Hon Member: It’s called a colloquialism.Hon JUDITH COLLINS: It is a colloquialism. But I can tell that member that not only did I speak with the China Executive Leadership Academy in Pudong for about 2 hours I also had a meeting with the Shanghai Municipal Discipline Inspection Commission plus there was a lunch attended by many guests. Then there was a call on the Director-General of the Shanghai Justice Bureau. The only other choice was either to go to the airport or to go to Oravida and then to the airport. It was always planned that if there was not time we would not bother going to Oravida.Rt Hon Winston Peters: How can she stand by her statement about Oravida “They were not affected by the whey powder. They’re the first exporters of fresh milk from New Zealand to China and this was not affected by Fonterra.” when close friend and Oravida director Julia Xu said just before the Minister’s trip to China that “It was having a very negative impact on Oravida and that the way to fix it was the Government perhaps could do a little more to engage in more bilateral talks to remove some of the tests on measures the Chinese Government have put on.”; which of these two statements is true and which is false?Hon JUDITH COLLINS: Of course what it does show is that I had very little knowledge of Oravida’s business and I should have had more.Rt Hon Winston Peters: Why did she not inform the Prime Minister in her letter requesting permission to travel to China that she would visit Oravida and meet with the directors of Oravida on three separate occasions?Hon JUDITH COLLINS: Well when I sought permission to travel I did not know that I would be popping in to see Oravida or meeting with it on any occasion.Rt Hon Winston Peters: Well that being the case why did she following her trip to China neglect to report to Cabinet and the Prime Minister in her Cabinet travel report that she had visited Oravida met on more than one occasion with its directors and that she had had dinner in Beijing with amongst others a senior Government border and customs official?Hon JUDITH COLLINS: I accept that what I should have done is not rely on the precedent set by the right honourable member Winston Peters on his travel reports and I should have put down every single little thing.Rt Hon Winston Peters: How can she expect New Zealanders to believe her when she has made so many demonstrably contradictory statements and behaved like this—Oravida’s milkmaid? [Interruption]Mr SPEAKER: Order! If the Minister could address the first part of the question which is relevant.Hon JUDITH COLLINS: Well I just say to that member that I have never lost $100000 put into my lawyer’s trust account like—Rt Hon Winston Peters: I raise a point of order Mr Speaker. First of all the Minister’s answer is not on the question. The second thing is that it is going to lead to disorder because that member now knows and so does that whole party over there that the original allegations were deceitful and dishonest in the extreme.Mr SPEAKER: The difficulty I have in assisting the member on this occasion is the way he framed the question particularly with his visual aid at the end. He was already leading the House into disorder.Rt Hon Winston Peters: Can I have an answer to the question?Mr SPEAKER: I will allow the Minister if she wants to add more to the answer to do so; otherwise I will consider that the Minister has answered.Hon JUDITH COLLINS: How can you get past $100000?Rt Hon Winston Peters: I raise a point of order Mr Speaker. [Interruption]Mr SPEAKER: Order! This is a point of order and it will be heard in silence.Rt Hon Winston Peters: I raised with you a point of order on the first answer to that fifth question. Now she has directly offended again. The offence is no more improved by the repetition and I want you to order against her doing that.Mr SPEAKER: And I have no intention of doing so. As I said to the member—[Interruption] Order! If the member wishes to stay for the balance of question time—[Interruption] Order!Question No. 6 to MinisterHon Dr PITA SHARPLES (Associate Minister of Education):I seek leave to table a copy of a letter to Te Kōhanga Reo National Trust Board from Minister Parata and me sent this afternoon.Mr SPEAKER: Leave is sought to table a copy of that letter. Is there any objection? There is no objection. It can be tabled.Document by leave laid on the Table of the House.Housing Affordable—Homeownership Rate and Alternative Approaches9.HOLLY WALKER (Green)to the Minister of Housing: When was the last time that the homeownership rate was as low or lower than it is now?Hon Dr NICK SMITH (Minister of Housing):The long-term history of homeownership rates is that they improved during the 1950s the 1960s and 1970s and that the decline began in the mid-1980s. The homeownership rate is currently at the lowest point since the 1950s and that is why this Government is putting so much work into freeing up land supply reducing infrastructure costs getting greater competition in the building materials market and reducing compliance costs as well as the new programmes that we have announced in respect of Welcome Home Loans and the KiwiSaver first-home deposit subsidy scheme which we have expanded.Holly Walker: Does he agree that the reason homeownership rates were so high in the past was that families had access to low-interest mortgages through State advances and that it was the end of this policy and the rapid rise in house prices that have made homeownership an unaffordable dream for many young families?Hon Dr NICK SMITH: The part where I would agree with the member is that if you look at those long-term trends on homeownership homeownership went down in periods where interest rates were high and went up in periods when interest rates were low. So the periods where homeownership rates deteriorated the most were between 1984 and 1990 when interest rates went over 20 percent and when they sharply declined last decade when the previous Government had very high interest rates. That is why this Government puts huge importance on keeping interest rates low for longer.Holly Walker: Given that answer what realistic hope does a young family on a modest income have of owning their own home in 2014 when under his Government house prices have surged by 26 percent—and by 50 percent in Auckland—new loan-to-value ratio restrictions have made it impossible for many to get mortgages and now interest rates are rising?Hon Dr NICK SMITH: It is true that interest rates increased last week by 0.25 percent above 40-year lows. All of the data shows that the sort of big-spending big-borrowing policies that the party that the member represents advocates would push interest rates up higher; as well as that its restrictive land policies would make homeownership harder. I am proud of this Government’s record because according to the independent Roost housing affordability study over the last 5 years since we have been the Government housing affordability has actually improved by 32 percent.Holly Walker: Would a rent-to-own policy for Government-built homes make it easier for young families to own their own homes; if so will he support such a plan to stabilise house prices and give families an affordable pathway to homeownership once again?Hon Dr NICK SMITH: This Government is supporting some well-finessed rent-to-buy schemes and I give the example of South Auckland where we have partnered with community housing organisations to do so. But the idea that if the Government embarks on a massive State housing building programme it can somehow do that more efficiently than the private sector—that is dreamer country. We know from the record of other countries that have gone down that path that it involves massive Government spending—tens of billions of dollars. That spending of tens of billions of dollars is exactly what will drive interest rates up and make homeownership further from the reach of average Kiwi families.Phil Twyford: Is he comfortable that the Government’s loan-to-value ratio policy signed off with the Reserve Bank is now according to the BNZ seeing 6.4 percent of houses being sold to offshore speculators and how does he think ordinary Kiwi first-home buyers facing a 20 percent minimum deposit and interest rates heading north of 8 percent will be able to compete with cashed-up overseas buyers or is building a generation of renters part of his failed housing policy?Hon Dr NICK SMITH: The first point I would make is that when we came to Government interest rates were 11 percent. They have actually consistently come down. If you look at the long-term history of interest rates they have been consistently lower under National Governments which constrain fiscal spending and make sure there are well-balanced economic policies than Governments of the left. In respect of house building rates I would point out that in the Productivity Commission study there was not any mention in terms of improving housing affordability that foreign buyers played any significant part. I point to the fact that across the Tasman in Australia housing affordability has deteriorated by a greater amount despite such restrictions showing that such restrictions are just political mirrors and will make no real difference to housing affordability.Forestry—Government Support for Timber Processing10.Hon DAVID PARKER (Deputy Leader—Labour)to the Minister of Finance: Does he agree with the forestry industry that Government incentives to encourage further wood processing in New Zealand such as accelerated depreciation rates on machinery are necessary to maximise New Zealand’s share of the global value chain?Hon BILL ENGLISH (Minister of Finance):No. A few figures might help to assist the discussion. New Zealand exported $4.4 billion of forestry products in 2013 and 60 percent of that was value-added product. New Zealand processes around 50 percent of our production onshore. Employment in first-stage processing has been steady at around 17000 over the last 5 years and mill productivity is up—quite a different picture from Labour’s tired use of the word “crisis”. Just last month the chief executive of the New Zealand Timber Industry Federation called for rationalisation in the sector to deliver a stronger sawmilling sector.Hon David Cunliffe: I raise a point of order Mr Speaker. I seek your guidance. Earlier in this question time I was allowed with the good will of the Government to table a document from the Ministry for Primary Industries that showed that the twice-repeated assertion by the Acting Prime Minister the Minister of Finance that 60 percent of New Zealand’s timber exports were value added was incorrect. The Ministry for Primary Industries document for 2012-13 entitled “Facts and Figures” shows that 55 percent are actually—Mr SPEAKER: Order! I have heard enough. The member is now using points of order to debate. The Minister who is answering the question is responsible for his answer. If in any way he had misled the House then he is certainly responsible for that.Hon David Parker: How can he claim that his current policies are working given that raw log exports have rocketed while processed exports have stagnated?Hon BILL ENGLISH: Raw log exports have not just randomly increased because bad people want to export them; they have increased because the prices have gone up sharply which has increased New Zealand’s national income. Labour has been saying it wants high-value export industries. When the prices go up people tend to export more. It happens that right now exporting logs is higher value than further processing but as people who have watched this industry for 20 years will know those prices can drop as sharply as they can rise and it could be a matter of months or a matter of a few years before the situation is significantly reversed.Hon David Parker: Why is he sticking with policies that see millions and millions of raw unprocessed logs exported each year with no value added?Hon BILL ENGLISH: I simply disagree with that. We are sticking with people in the forestry industry who through quite a long period of time have learnt how to manage the risks of being a grower of raw material and supplier of processed goods to the world when we are a small market a long way away dealing with exchange rate risk product risk and market risk. We back those people to make the decisions that will align best with New Zealand’s national interest and right now exporting logs when the price is so high is good for the New Zealand economy. We certainly do not back a bunch of Labour politicians whose best ideas come from the 1970s to run our forestry industry.Hon David Parker: Does he accept that higher tax allowances will cause more capital investment and thereby improve productivity and create more jobs by helping the wood processing industry to extract more value from the global value chain?Hon BILL ENGLISH: No. What will promote more investment is continuing the Government’s sensible programme of better roading and rail infrastructure into which we poured billions of dollars; better-skilled New Zealanders available to the industry to hire them; a stable and competitive energy market to get the benefits of competition for one of their biggest single costs; and keeping the interest rate cycle low. One thing that will kill the forestry industry is 10 percent first mortgage rates such as were reached under the last Labour Government.Hon David Parker: Does he agree with the Associate Minister for Primary Industries who told the ForestWood 2014 conference this morning that the Primary Growth Partnership “is absolutely about picking winners”; if so why does he criticise the Labour Government for trying to support the wood processing industry?Hon BILL ENGLISH: Well I do agree with the Associate Minister about the Primary Growth Partnership because it is based on science and research and that is the proper role of the Government. But I agree that Labour is good at picking winners. It picked the manufacturing sector as a crisis; it is winning. It picked the regions as a crisis; the regions are winning. It has picked forestry as a crisis and it is winning.Hon Member: And David Cunliffe.Hon BILL ENGLISH: It picked David Cunliffe as a winner and he is a crisis.Mr SPEAKER: Order! That will not help the order of this House.Hon David Parker: Does his $600 million irrigation fund for multimillion-dollar dairy farms or his corporate cronyism for Rio Tinto or Skycity come within his definition of picking winners and what is the difference between his cronyism and an industry-wide support for better forest processing?Hon BILL ENGLISH: No. What it does show is that this is a Government that is willing to be pragmatic when it makes the judgment that it is in the best interests of New Zealand. I know it annoys Labour that we are not rigidly ideological but actually we have made occasional interventions where we have believed that that is in the national interest and we are ready willing and able to draw the line around those. What we are not going to do is try to run whole industries particularly in this case the forestry industry which is doing well. The last thing it needs is to be run by a bunch of Labour politicians whose best ideas come from the 1970s.Hon David Cunliffe: How does the Minister’s “pragmatic” approach to “healthy competition” square with today’s finding by the Commerce Commission of price fixing in the Auckland timber products market by Carter Holt Harvey and Fletcher Building or is that just another example of the Government’s approach to crony capitalism?Hon BILL ENGLISH: The member could not have picked a worse example because in our push to improve housing affordability we identified the pricing of building products as a potential problem and did the first ever market study under the Commerce Act to investigate those issues. We are currently considering the policy issues that flow from that study and the member can expect to see action following on from it. It is exactly the opposite of cronyism; in fact at least one of those firms is vigorously campaigning against the Government’s policy direction.Hon David Cunliffe: I raise a point of order Mr Speaker. [Interruption]Mr SPEAKER: Order! This is a point of order.Hon David Cunliffe: I seek to table this publication—[Interruption]Mr SPEAKER: Order! Can I just have—[Interruption] I am going to ask the member to start again because there were still interjections. This is a point of order and it will be heard in silence.Hon David Cunliffe: I seek leave to table this charming cover on TheEconomist magazine and ask the Minister—Mr SPEAKER: Order! That is a magazine that is available to members if they want it.Prisoners Rehabilitation and Rate of Reoffending—Education Programmes11.JACQUI DEAN (National—Waitaki)to the Minister of Corrections: What recent reports has she received on the provision of education programmes in prison?Hon ANNE TOLLEY (Minister of Corrections)More good news. I am pleased to advise the House that there has been a huge increase in the number of education programmes in our prisons. Almost 3000 prisoners—3000 prisoners—are scheduled to start a numeracy and literacy programme this financial year which is an increase of 155 percent since 2007-08. There has also been a massive increase in the number of prisoners receiving qualifications up from just 197 in 2008-09 to 1833 in 2012-13. Increasing the number of education programmes in prison is a key part of our plan to reduce reoffending by 25 percent by 2017—Le’aufa’amulia Asenati Lole-Taylor: They’ve been doing the same for the last 10 years Minister.Hon ANNE TOLLEY: —and for that member we will continue to focus on this area as well as providing more drug and alcohol rehabilitation and skills training.Jacqui Dean: What role does education play in reducing reoffending?Hon ANNE TOLLEY: Lack of a basic education is a major driver of crime. Most prisoners we find have difficulty reading and writing properly. If this is not addressed prisoners will not only have difficulty finding work on release but they will find it harder to make full use of support and social services. Too often this leads them back to a life of crime. So that is why this Government has introduced education screening and individual learning plans for all prisoners so that the Department of Corrections can accurately assess the level of support required. By increasing access to literacy and numeracy programmes we give prisoners the skills they need to participate fully in other rehabilitation programmes and study towards qualifications.Justice Minister—Visit to China12.GRANT ROBERTSON (Labour—Wellington Central)to the Minister of Justice: On what date was she invited to dinner in Beijing with the founder and Managing Director of Oravida Ltd and when was she informed as to who else would be attending the dinner?Hon JUDITH COLLINS (Minister of Justice):Some time prior to my trip to China my friend Ms Xu suggested that she and Mr Shi would like to take me to dinner when I was in Beijing. It was an oral invitation. I said I would be accompanied by Margaret Malcolm. I do not recall the exact date. Some time in the week prior to my trip Ms Xu advised me that they would be inviting another friend of theirs. She advised me of his name and position.Grant Robertson: Given that answer at the point at which she was advised of the name and position of the other person attending the dinner was she not concerned that that person was a senior Chinese border control official?Hon JUDITH COLLINS: My understanding is that he is a close personal friend of Mr Shi and at the same time I was also advised that the ambassador was invited if he and his wife wanted to attend.Grant Robertson: Why did she not advise the Prime Minister that she would be attending a dinner with a senior Chinese border control official when she knew that that would be the case before she left New Zealand?Hon JUDITH COLLINS: I have already apologised to the Prime Minister.Grant Robertson: I raise a point of order Mr Speaker. I do not believe that that did address the question that I asked.Mr SPEAKER: I invite the member to ask his question again.Grant Robertson: In doing so it was not a question that was written down. So I will do my best.Mr SPEAKER: Well I can help if the member needs some help.Grant Robertson: Oh would you like to?Mr SPEAKER: No I would rather not. I would rather the member could handle it himself.Grant Robertson: Why did she not advise the Prime Minister before she left New Zealand that she would be meeting with a senior Chinese border control official given that that information was available to her well before she left New Zealand?Hon JUDITH COLLINS: Having already advised the ambassador I really should have given far more information to the Prime Minister. I regret that and that is why I have apologised.Grant Robertson: Does the Minister not believe that given her long experience as a Minister she should have known before she left to go to China that there was a serious conflict of interest issue in her meeting a senior Chinese border control official given Oravida’s difficulty getting products into China?Hon JUDITH COLLINS: The Cabinet Office has already advised the Prime Minister that I do not have a conflict of interest situation. It is not as though I was a Minister getting the Prime Minister Helen Clark to open up my wife’s law firm like David Cunliffe did.Grant Robertson: Did the founder and managing director of Oravida Ltd travel with her to Beijing?Hon JUDITH COLLINS: No.Urgent Debates DeclinedTe Kōhanga Reo National Trust Board—Audit and Terms of ReferenceMr SPEAKER: I have received a letter from the Hon Nanaia Mahuta seeking to debate under Standing Order 386 the results of the review of the financial controls of Te Kōhanga Reo National Trust which were released last night by the Minister of Education and the Associate Minister of Education. This is a particular case of recent occurrence involving ministerial responsibility. The test for whether a particular case requires the immediate attention of the House is a high one. The business of the House should not be set aside just because a ministerial announcement has been made. There must be an element of urgency for the matter to take precedence over other business. Although public confidence in the use of public funding is important the announcement does not raise issues of national significance that require substantive or urgent policy change. A question has been addressed to the Associate Minister today and the House is about to embark on a general debate. In these circumstances I am not persuaded that the matter deserves the immediate attention of the House today. The application is therefore declined.General DebateHon CLAYTON COSGROVE (Labour):I move That the House take note of miscellaneous business. Nothing strikes more at the heart of a democracy in a Parliament than the word “corruption”. Nothing strikes at the heart of a Parliament—as the Minister of Justice who may or may not take a call sort of disappears from view and from target.Mr SPEAKER: Order!Hon CLAYTON COSGROVE: Nothing strikes more at the heart of a democracy than when Ministers show an abrogation of the truth and a lack of transparency.John Key is wont to require in this House that we use full quotes. He often says that in question time. So I invite the Prime Minister wherever he may be and the members of his Government to look at the Cabinet Manual paragraph 2.61. I will read the full quote: “A pecuniary conflict of interest may arise if a Minister could reasonably be perceived as standing to gain or lose financially from decisions or acts for which he or she is responsible”. It goes on in paragraph 2.62: “A conflict may arise if people close to a Minister such as a Minister’s family whānau or close associates might derive or be perceived as deriving some personal financial or other benefit from a decision or action by the Minister …”.I put it to you in this House that from Judith Collins’ her actions of obfuscation of hiding the truth from journalists and answering only questions she was forced to answer of some would say lying by omission—in fact I think the Prime Minister said “lying by omission”—of dodging and weaving and drip-feeding out details every day and of changing her story one can only draw the conclusion that this Minister not only had the perception of a conflict of interest not only had a conflict of interest but had a pecuniary conflict of interest. And by the way she was the one who brought her husband into this debate not this Parliament not this Opposition and not the media. She and her husband were attempting to enrich themselves by her actions of having dinner of endorsing products and of knowing—before she advised the Prime Minister as we just heard from question No. 12—that she was going to be meeting with a Chinese official.No one can say that this Minister is somehow some sort of delicate dilettante daisy—a first time MP. Oh no! This is “Crusher” Collins. This is a lawyer a senior member of Parliament a Minister who told Paul Henry that she does not apologise for anything and a Minister who told Paul Henry that she by her own admission has done an outstanding job—an outstanding job. Humility comes to this Minister? I do not think so.Then of course on the 10th day of the saga going through as if by some act or some training to cry on cue we have the Minister shedding the odd tear as she is put under pressure on the bridge by the media. Well I say that camouflage will not wash. I say that camouflage will not wash. The truth about this Minister one of the most experienced Ministers and the Minister of Justice to boot is that she knew exactly what she did and what she was going to do when she omitted certain events from her request to travel. Not only that of course she knowingly did not inform the Prime Minister that she was meeting a Chinese border official. When it was found out by the media by Grant Robertson and by others they had to drag the truth every day from this Minister. She thinks she is off the hook because she can stand up and grin in that Shirley Temple sort of way and say she apologised.The problem that Minister has is that she has a problem with the truth. She has a problem with facts. Every day there is a new revelation. She told us yesterday she did not know where she was. Well maybe somebody should have bought her a GPS. She told us yesterday she was just popping in to see somebody but then we know there were dinners there were meetings and all the time she lied by omission when she was answering only questions she was forced to answer.That strikes at the heart of democracy. This is a Minister who allegedly prides herself on her professionalism and prides herself on being New Zealand’s sort of Iron Lady a lookalike Maggie Thatcher. This is a woman who can spit acid in this place better than an Australian cane toad. This is a woman who is no shrinking violet and can dish it out of course. This is a Minister who called a member of Parliament in this Chamber—a member of Parliament in this Chamber—a “pervert” and then she expects us to sort of have a little bit of sympathy for her as she sheds a wee tear. The poor old daisy.Hon Dr NICK SMITH (Minister of Conservation):The last person in this House I am going to take a lecture in humility from is Clayton Cosgrove. His speech showed a desperate Opposition that is disconnected from the issues that matter. Over the weekend National had its very successful Bluegreens conference. We reviewed the progress that we are making in bringing together sound environmental and economic policy and planned for the policies that we want for the future. I want to commend my colleague Amy Adams for the work and the announcements on improving water quality and on getting better standards in areas like waste and so many other others.This afternoon is a good opportunity to contrast that record with what took place in the electoral landslide in Tasmania. There the Labor-Greens coalition Government was responsible for the worst economic malaise in our part of the world for political instability for record numbers of people who are jobless and—ironically given Labour’s announcement on timber processing—for a meltdown in that Government because of the differences of view between Labor and the Greens on timber processing. There is a salutary lesson for New Zealand as we go to the polls in looking at the record of that Labor-Greens Government in Tasmania. A warning for Labour members opposite: this is the only time in our part of the world Labor has gone into formal coalition with the Greens. Do you know how many Labor members of Parliament are left in Tasmania after the weekend? Just four—just four. I say to members opposite that Shane Jones is right—get into bed with the Greens at your peril. But we know Labour members think otherwise.Let me go through a few of the reasons the parallels are important. Of course we know that Tasmania is closest to us geographically. They actually have a proportional system of government like us. Unlike the rest of Australia the biggest part of the Tasmanian economy is their farming their forestry and their fishing industries like here in New Zealand. Let us not listen to the rhetoric; let us look at the record of what the Labor-Greens Government gave. What has happened to unemployment in Tasmania? It is the worst in Australia. Youth unemployment in Tasmania is over 20 percent—over 20 percent. What is more is there has been a record number of young people leave Tasmania over the last 3 years of that Labor-Greens Government. Understand that a Labor-Greens Government meant young people losing hope and leaving the country. That is a salutary lesson for New Zealand.But let us look elsewhere—the deficit. The deficit in Tasmania has gone up every single year of the Labor-Greens Government. It is the worst of any state in Australian and it is a warning to New Zealand of the red ink that we would get into were we to go down that path. But there is another interesting parallel. The Green Party in Government in Tasmania has insisted on a single electricity purchaser. Well how has it gone? Electricity prices in Tasmania have gone up by 12 percent under the very policy that Labour and Green members promote in this House.If you look at growth—the worst growth of anywhere in Australia—if you look at jobs if you look at power prices if you look at the deficits and if you look at political instability there is a very loud warning from the electoral landslide in Tasmania. You see Shane Jones is right. The contradictions that exist between the Labour and Green parties would result in a hugely unstable Government. New Zealand cannot afford it. I just simply invite Labour members to reflect on the advice from mainland Australia Labor politicians who say “Get in bed with the Green Party at your peril.” That is advice that I am sure Shane Jones is taking on board. The record is clear. A Labour-Green Government would mean high unemployment high deficits political instability high power prices and record youth unemployment. New Zealand should not have a bar of it.Rt Hon WINSTON PETERS (Leader—NZ First):The milk has gone sour. Let us look at the facts of the Collins-Oravida saga. Oravida arranged a dinner in Beijing last year. It invited a senior and influential New Zealand Government Minister Judith Collins. It invited a senior Chinese border official. This was not some spontaneous last-minute casual brief encounter. This was an intentional business meeting.The public is being asked to swallow that this Minister had nothing to do with Oravida’s business but Oravida’s business is a matter of great consequence for her husband a director of the company. Judith Collins kept this meeting under wraps covertly before going to China. She covered it up and omitted to mention it to the Prime Minister when the story broke. She left it out of her trip report. How very convenient it was for her to do that! What was actually happening was that she was covering up her tracks—her connection to a business meeting that was about securing advantage and benefit for Oravida.This smells to high heaven. We have the Cabinet Manual for a reason. It is to avoid the very situation that Minister Collins is now in. It is to protect the public from corrupt practice but sensible Ministers know that it is also to protect them. Judith Collins has committed one of the most glaring examples of conflict of interest and breach of the Cabinet Manual in recent New Zealand history. It does not get any more black and white. The irony is that she was of course over there officially to talk to this group in China—and it was all part of her report—the China Executive Leadership Academy in Pudong. And what was she talking about? She was talking about a “culture of openness and transparency. [The] law provides mechanisms for the public to find out what different branches of the government are doing.” She goes on to say more: “We believe that this builds trust and confidence in our system.”If she or the Prime Minister had any actual sense of decency they would ensure that she was no longer a Minister. The irony is that the ostensible reason for Judith Collins’ official trip to China was to talk about probity and principle in Government affairs in that speech. When a Minister flaunts and ignores the Cabinet Manual there must be consequences. The Prime Minister must take the ultimate responsibility for the failure of his Minister. He should have asked his Minister where the standards were where the care was where the integrity was where the probity was where the scrupulous attention to ethical standards was because all were missing.John Key talked about there being a new standard under his leadership—oh how he loved to talk about that. Well the only standard we have seen is a double standard. If you are Pansy Wong or Richard Worth you are down the road. If you are Judith Collins you are as right as rain. Let us not beat about the bush here. The Prime Minister has been severely embarrassed by Judith Collins. He has been up on the ninth floor blushing away. But it begs the question: why has he not sacked her? What is he so afraid of about this milkmaid from Oravida? That is what she has been engaged in behind everybody’s backs back in this country. Now the big question in Parliament is what Judith Collins has got on John Key for him to be too scared to act. The Prime Minister looks weak. He looks out of touch. He is sitting on his hands while Oravida’s milkmaid runs about making a laughing stock of him. So Key must accept that this Government is contaminated infected with the taint and smell of corruption from Oravida’s milkmaid.New Zealand First says that this matter is not going to go away. New Zealand does not need Ministers who serve themselves; it needs Ministers who serve New Zealand. And as for the attack that she made on me let me just say this: Mike Williams a former president of the Labour Party made it very clear that those members’ allegations about me were false and he put it out—[Interruption] It is all in the article. If those members want to contest this then why not go to the reports from the Privileges Committee? Remember three drafts say that if Winston Peters wins this petition he becomes the member of Parliament and the pecuniary interest there is that he gets an electorate member’s salary except that that is not the law. A successful petition would have been a by-election so it was demonstrably false. I pointed it out to them and they pulled that out and checked the same finding.Hon Amy Adams: Get over it. Move on.Rt Hon WINSTON PETERS: Let me tell Minister Adams over there that she is the last person who should attack Winston Peters because I know something about her landholdings and her associations with the water supply in her part of the region. It reeks of corruption—reeks of it—and the public are going to hear more of that.Hon AMY ADAMS (Minister for the Environment):While other members are insisting on rolling around in the dirt this Government and this party got together last weekend to talk about what we have done for the environment and what we are doing for the environment. We have got a record that we can be proud of. I want to particularly highlight the work of my colleague the Hon Dr Nick Smith and local MP Colin King who have come together to develop the Hikurangi Marine Reserve the brand-new whale sanctuary and the fur seal sanctuary. It is the final culmination of a very successful community collaboration by the Te Korowai o Te Tai o Marokura group. I want to congratulate Minister Smith and the whole community of Kaikōura on their work in putting together the protection of those most important mammals in New Zealand.Although we are getting on with it delivering real results the actual record of Labour and the Greens when it comes to the environment is utterly woeful. It is woeful. Under the last Labour Government propped up by the Greens the reality is that we had more coal oil and gas energy produced than ever before. We had a 23 percent rise in our carbon emissions. We had 30000 hectares of forestry cut down in that Government’s last 3 years alone. We had absolutely no meaningful action on water management meaning that in the time those members were in Government water quality continued to deteriorate. You only have to pick the last report from the Parliamentary Commissioner for the Environment where she absolutely lays out the woeful deterioration through those years to 2008 which this Government is now getting on and fixing.Now we are seeing what a Labour-Greens Government 2.0 would look like. We have already seen of course proposals for the Kiwi tax on the Kiwi net. We have heard them roll out their intentions to have KiwiAssure adding the 97th insurance company to the New Zealand market. And today we have got Kiwi wood. Kiwi wood—finally a policy that Shane Jones can get behind. I can only assume that David Cunliffe is so sick of having brickbats thrown at him that he is now taking steps to ban bricks. But instead of the Labour Party telling the forestry industry how it should operate there is one lesson that Labour should be taking from the forestry industry and that is about trimming and culling dead wood—a lesson that the Labour Party has completely failed to learn. We have heard from my colleague Nick Smith. We have heard from Nick Smith exactly how much Australian voters punished Labor for getting into bed with the Greens. They saw how damaging that association was. They saw what it did to an economy very very similar to New Zealand’s as Nick has told you.In New Zealand what is really interesting is that the infighting and the divisions have already begun. They have not even got into bed yet; they are just arguing over which side they are going to sleep on. Already they cannot work together. We know that the Greens would ban a mining policy. The Greens would ban it. Labour has said “Oh it’s a significant part of the economy and we won’t be turning off the tap.” David Parker of course is on record describing the Greens’ monetary policy as unhelpful and unnecessary. On cannabis—the Greens have always wanted it to be legal and Labour of course takes the opposite view. We have got Metiria Turei questioning the integrity of Labour MPs in taking corporate gifts. We have got Phil Twyford describing the Greens as simply wrong on environment policy. Grant Robertson of course came out attacking Kennedy Graham’s blog as pure politics and just wrong. And while Metiria Turei has been complaining about Labour nicking policy from the Greens we have got Clare Curran complaining about white-anting going on with the Greens encroaching on Labour territory. So clearly they are happy bedfellows over there!My favourite though has got to be Russel Norman coming out and telling Trevor Mallard to “go back to closing schools and making housing unaffordable like you did in govt”. So is it not interesting that today we have had Russel Norman talking about housing affordability when he was on record not very long ago quite rightly pointing out that between 2002 and 2007 house prices doubled the current account ballooned and Labour did nothing? Wise words indeed from Russel Norman for once.So what do we know? We know they cannot work together. They contradict each other. They do not trust each other. They do not like each other. The one thing we know is if you cannot run yourselves you cannot run a country. We have seen it in Tasmania. It suffered under that for 16 years and now the Labor Party has been punished with the worst result it has had a result that will take a long time to recover from. That is the lesson to New Zealand. Do not make the mistake of Australia. Do not let a Labour-Greens coalition destroy this country.Hon ANNETTE KING (Labour—Rongotai):I have to say to the member who has just resumed her seat Amy Adams talking of bedfellows how does it feel to be in bed with a party that thinks incest is OK? I have to say that this Government has become a mathematical nightmare not just because of its bodgie Budget figures or the dishonest recollection of the state of the economy in 2008 or its shonky promises of a brighter future. No—National has been reduced to an algebraic equation of its own actions over the last 5 years and it goes like this: “f” plus “s” equals “be” plus “sr” over “a” plus “c”. That is “flattery” plus “self-importance” equals “bloated ego” plus “self-righteousness” over “arrogance” and “cronyism”.The greatest exponent of this mathematical operation must be the Minister of Justice Judith Collins because she has fallen for the oldest political trap in the book—the oldest political trap in the book. She fell right into it. It is called flattery. She believes the people around her and all her new-found friends when they say to her: “Yes Minister. Very courageous Minister. You are such a clever Minister. You should be the Prime Minister Minister. Can we help you and your party be more successful Minister? How much do you need Minister?”. You see flattery has led to self-importance a bloated ego and a self-righteous defence of any action—dodgy or otherwise. And that is what we have had from the Minister of Justice. She has been bolstered by all the sycophants around her calling her “Crusher” and “Bold” and “Ballsy” and the “Reputation Slayer” and “Tougher than Teeth”. So when she is questioned as a Minister about her conflict of interest—not a potential one but a real conflict of interest—involving a business her husband fees paid promotion for more business to help the family coffers financial gain and Cabinet rules what does she do? First of all she says “I’ve done nothing wrong.” She claims that others are using terminological inexactitudes and then she says others are using malicious fabrications.She was economical with the truth and she has been caught out. She was caught out and the Prime Minister first of all was a little cross and then he said he was angry. And what we saw was very little boldness or “ballsiness” from the Prime Minister because all he did was slap her with a limp bus ticket. She should have been sacked as a Minister if he had shown real leadership as a Prime Minister. She was economical with the truth to the media. None of us will forget her saying “You’re wrong Paddy. You’re wrong Paddy. You’re wrong Paddy. There is nothing to see here.” Then we had from her the fake regret: “I’m apologising but I don’t like apologising.” That was the sort of apology that we got from the “apologetic” Minister. Then we got: “It is all so hurtful. It’s not fair to my family and my friends.” And then we got the tearfulness. But yesterday and today she was back at it. She was back at the old arrogance—it has not gone away.You know I did think it would take a little longer for her to become so arrogant but there were real signs of it in Opposition. Judith Collins built her reputation on relentless attacks—often unfounded untrue and vicious—on Ministers in Helen Clark’s Government. Some of us will not forget her outrageous attack on the former Minister for Social Development. She called him a pervert a grub and a dirty old man. Perhaps it is she who has perverted the conflict of interest rule. Perhaps it was she who perverted the course of her car on the way to the airport. Judith Collins is the current Icarus of the National Party. She has flown too close to the sun and she is crashing and burning. And she has helped to create a new algebraic equation: “a” plus “dd” equals “gd” over “d20/9”—“arrogance” plus “dodgy deals” equals “growing distrust” over “defeat on 20 September 2014”.NICKY WAGNER (National—Christchurch Central):I have to say that I was really surprised to hear that attack on Judith Collins by the Hon Annette King—her attack on Judith and a conflict of interest because of her husband. Was she not the same member whose husband was the chief executive officer of a district health board earning over $200000 worth of health money when she was the Minister of Health? I think people in glass houses should not throw stones.It is my absolute pleasure to talk about the Bluegreens National’s environmental group and about National’s environmental achievements because the Bluegreens philosophy is something that New Zealanders understand and support. Bluegreens know that caring for the environment and growing the economy can and must go hand in hand. We also understand that it is the Government’s job to run this country well and to ensure the wise use of our natural resources in a way that supports the well-being of both the environment and the people of New Zealand. Bluegreens know that environmental decisions must be based on good science and resource use on sustainability and that the tough decisions about our economy and about our environment can be dealt with by involving appropriate stakeholders and a collaborative approach because Kiwis when it comes to the environment want to be part of the solution not part of the problem.We know that the quality of life for New Zealanders is predicated on the intelligent and sustainable management of our environment because the two major economic drivers agriculture and tourism—the industries and the places that create the jobs and pay the wages—are both predicated on a clean pure and unpolluted environment. No one wants to visit a dirty country. Nobody wants to buy food from a polluted land. That is why the Bluegreens are working hard to maintain and improve environmental outcomes in New Zealand and we have made great progress.We have made progress in reducing waste in cleaning up the air and in cleaning up contaminated sites and long-polluted water bodies. We have insulated homes to cut emissions we have increased renewable energy and we are expanding pest control to protect our magnificent birds. But we are also tackling the really tough environmental challenges and have introduced three important pieces of legislation for the very first time —legislation to better manage fresh water the first ever framework to protect the oceans of our exclusive economic zone and a new bill to mandate environmental monitoring and reporting.Firstly we are absolutely focused on improving water quality and for the first time we have a National Policy Statement on Freshwater Management and a National Objectives Framework. They are being built on the Land and Water Forum which is the collaborative process and a significant step change to deal with this issue. Secondly after 50 years of oil and gas prospecting and drilling in New Zealand without any environmental protection—I repeat that: without any environmental protection—we have introduced world best-practice rules for anyone working in the exclusive economic zone. This much-needed protection was voted down by Labour and the Greens. And finally our Environmental Reporting Bill will drive better environmental outcomes for the long term because for the first time we will have good-quality long-term monitoring which will provide comprehensive quality information to show trends highlight issues test solutions and find the facts to make good environmental decisions for the future.KEVIN HAGUE (Green):In 2009 a man named Michael Swann was sent to prison for defrauding his employer the Otago District Health Board of millions of dollars. The Minister of Health Tony Ryall was so incensed by the district health board’s handling of the case that he sacked the board chair tore strips off the board and appointed a Crown monitor. There was no doubt in anyone’s mind that this particular Minister was very interested in the subject of fraud particularly against the Southern District Health Board.I am not expressing an opinion about whether or not the actions of South Link Health in relation to about $15 million of taxpayers’ health funds were legal or not. What I am clear about—and I remind members that I was intimately involved in this matter from 2003 to 2008—is that the South Island district health boards and particularly the Otago and then Southern District Health Board which led action on the matter believed very strongly that South Link Health had spent money outside the scope of its contract and without authorisation and that they had evidence to establish this.By 2010 the Southern District Health Board was ready to take the matter to court having spent 7 years of negotiation and then mediation without achieving any progress at all and with no prospect of success if the process were prolonged. I also know that in 2010 the Southern District Health Board had received at least one and possibly two legal opinions to the effect that fraudulent behaviour may have occurred. First Tony Ryall claimed in this House that he thought that this was a commercial dispute not involving allegations that public funds had been misused. Now he concedes that he knew all along that this was the nature of those allegations. He first claimed to have had no involvement. He now concedes that in 2010 he advised the district health board not to take the matter to court.As every district health board chair and chief executive officer in the country knows the Minister’s advice is actually an instruction. He has claimed several times—most recently in his answer to my primary question on 5 March—that former district health board chief executive Brian Rousseau was wrong to say that senior Ministry of Health officials were kept well-informed about the matter and about the fraud possibility. He says that they did not know about a possible fraud until late 2013. Today I have released correspondence—in response to Mr Rousseau’s request that I help defend his reputation—that proves that senior ministry officials clearly were in the loop and were aware that fraud had been raised as a possibility in 2010. I am looking forward to the Minister correcting this answer as well in the House.What this shows is that the Minister’s account is completely implausible. His story now is that in an environment where everybody knew that he was super-sensitive about the possibility of fraud the board and senior staff of the district health board South Link Health itself his senior ministry and National Health Board officials and his own monitor at the Southern District Health Board all knew that fraud had been raised as a possibility but nobody thought to tell him until late last year when the Auditor-General raised the matter.Hon Annette King: Unbelievable.KEVIN HAGUE: It is very very hard to believe and I do not believe it. I call on the Minister to release immediately all the advice he received from officials about this matter. I have to call on him to do this because the Ministry of Health from which I have requested many documents under the Official Information Act including advice to the Minister has refused to release every document except one: the Auditor-General’s advice—the one document it knew I already had. I believe that even the interference that the Minister admits to having made in this case is inappropriate and steps over the line. If it can be proved that he knew about the possibility of fraud that would be completely and utterly unacceptable.COLIN KING (National—Kaikōura):On the weekend just gone we had the most positive Bluegreens Forum that one could imagine. It was held in Kaikōura and it culminated a lot of hard work somewhere in the region of 8 or 9 years of collaborative governance. On the Sunday at the Takahanga Marae the Prime Minister gave the Government’s response to Te Korowai o Te Tai o Marokura. I would have to say being the member of Parliament for Kaikōura that it was incredibly positive when you look at the size and scope and the complexity of what was established through Te Korowai o Te Tai o Marokura. It is a marine reserve a whale sanctuary a New Zealand fur seal sanctuary five customary fisheries areas two taiāpure local fisheries and three mātaitai reserves. There will be an advisory committee and fishing regulations that are specific to the area.Just to help the listeners to the general debate understand the scope of this it spans between the Conway River and the Clarence River. It has been a work of collaborative governance. When you look at it the determination of this Government was to ensure that we had an asset for generations to come not a liability. When you look at the work that this Government has done around environmental issues you have got to say that they are at the very forefront of global policy establishment. Look at the Land and Water Forum. What a great way forward that has produced around a really difficult situation. The exclusive economic zone legislation now ensures that when anybody wants to do anything in the exclusive economic zone they have got to follow regulations. It is worth remembering that under Labour there were no regulations. There were 34 wells drilled out in that ocean space under no regulations whatsoever.When you actually look at this Government’s record around ensuring that there are enduring assets we want to also be able to look at what the Labour Government did. I go back to a situation in the Kaikōura electorate when the Prime Minister of the time pilfered all the money out of the arts culture and heritage fund and purchased for $43 million a leasehold property in North Canterbury. Can we say that that is an asset to the country to future generations? We cannot say that because at the moment there is nobody managing the noxious weeds the pests and whatever else is growing there.When we make a comparison between all the talk of what is occurring between the Greens and Labour we have got to realise that this is a very very serious combination. Effectively we have only got to look across the Tasman Sea to Tasmania and we can see what such a relationship would bring about. A lot of the conversation we have been hearing here in Parliament is around Julie Anne Genter talking about cycleways and suchlike. I would just like to draw Labour members’ attention to the point of view that when you actually look at getting your exports from the rural community to where they are further processed and then off to the ports you have got to have first-class highway systems.There is obviously a lot of conflict between the Greens and Labour. There is no doubt about it. Shane Jones has got it right. He is on our Primary Production Committee and he is a level-headed sort of person who knows what “2” and “2” make. When you look at what has happened in Tasmania and the result there the decimation of Labor because of its relationship with the Greens what do we see? We see 20 percent unemployment amongst the youth. We see a single purchasing agency for power and a 12 percent rise in electricity prices annually. Tasmania was advised by every other state in Australia to not get into bed with the Green Party. That is something that we have got to remind the Labour Party of. When Labour members speak about their level of support they talk about the level of the left the lobby of the left. In actual fact it is a combination of the Greens and Labour and that will not last. The Labor Party over in Tasmania had to sack its Green MPs and then call an election.Let us look at what we leave as an inheritance to our future generations by way of assets not liabilities. Let New Zealand be aware that we cannot afford to have a Labour-Greens Government.CHRIS HIPKINS (Labour—Rimutaka):I say to Colin King who was talking about the Bluegreens Forum that when you mix blue and green like that you get a haughty shade of purple. I think there is no better colour to symbolise this National Government than that—no better colour to symbolise a Government that is beset by scandal and arrogance. Scandal and arrogance—there is no better example of that than Judith Collins and her behaviour in the last few weeks. Judith Collins will not admit that she made a mistake—not one but several mistakes. Judith Collins still will not apologise. She kind of gives this sort of Clayton’s apology: “Well I am sorry if people think I should be sorry.” But she is not ever going to front up and admit what she did was totally and utterly wrong. She is the pin-up for the type of arrogance that New Zealanders have come to expect from this National Government—an absolute pin-up for the type of arrogance the people have come to expect from this National Government.Then of course there is the incompetence that New Zealanders have come to expect from this National Government. Hekia Parata is the perfect pin-up for that. It takes a special kind of Minister to establish an inquiry into a scandal that does not actually look at the scandal. That is exactly what Hekia Parata did. She set up an inquiry to look into the scandal involving Te Kōhanga Reo National Trust and the taxpayer money given to it but it did not actually look at it. Let us remind ourselves why this inquiry was established in the first place. It became apparent that money was being spent on things like a Trelise Cooper dress a 21st birthday present a big farewell dinner and $1000 cash withdrawals being made out of ATM machines and somebody’s son graduated and the costs of that were borne by the taxpayer. This was the sort of scandal that this inquiry was established not to look at. The inquiry did not even look at those things. Hekia Parata and Pita Sharples then called a press conference in the dead of night to announce the results of this inquiry. And they wonder why it is that people think that this Government is not being upfront and is being arrogant and out of touch. Those are two classic examples.This is a Government that has one rule for itself and another rule for everybody else. It is a Government that is interested only in furthering the interests of its mates and those close to it. Look for example at the number of National Party donors who have been given honours under this Government. Tony Astle—60 grand to the National Party was enough to make him an Officer of the New Zealand Order of Merit. Chris Parkin gave $66000 to the National Party and that made him a Companion of the New Zealand Order of Merit. Sir Graeme Douglas—twenty-five grand gave him an insignia of the Knight Companion of the New Zealand Order of Merit. Sir William Gallagher—$42000 got him a knighthood. Lady Diana Isaac—$20000 made her an Officer of the New Zealand Order of Merit. [Interruption] Oh there is old “Maestro” Jonathan Coleman piping up at the perfect time of course because we know that Garth Barfoot gave him $5000 for his campaign and he got made a Member of the New Zealand Order of Merit in exchange for that.This is a Government that is only too happy to promote the interests of its donors and its mates while New Zealanders out there who are struggling with higher power prices and who cannot afford to buy houses are completely overlooked by this National Government. It is very clear whose interests National is governing in. It is not in the interests of ordinary everyday New Zealanders who cannot afford to buy a house and who cannot afford to pay their power bills. This Government turns a complete blind eye to all of that while it focuses on furthering its own interests and the interests of its mates. This is a Government that is completely arrogant and completely out of touch. I would run through the list of appointments to boards and others of the National Party and all its mates former MPs the partners of MPs and the partners of former MPs but I have got only about 30 seconds left. That would take another 5-minute speech and I would probably still be only scratching the surface of the cronyism and the arrogance that has beset this National Government.New Zealanders deserve a Government that is focused on their needs on the interests of all everyday New Zealanders. That is what they will get after 20 September when they will have a Labour-led Government that is interested in dealing with the real issues affecting New Zealanders such as creating jobs making sure housing is affordable bringing down the exorbitant price of electricity that this Government is in complete denial about and making sure that our kids get the best education that they possibly can.JONATHAN YOUNG (National—New Plymouth):What a disgraceful outrageous fabrication of fiction came from that member Chris Hipkins as he listed off some great New Zealanders who have done more for this country than the combined members of that Labour Party. You have got to be amazed at that. What this country needs is an Opposition that does the job properly instead of maligning New Zealanders for the political pleasure and advantage that they see at this particular point in time. You know New Zealanders deserve an Opposition who will be people—men and women—of integrity and I think we have been disappointed today by that speech.We have got to say that this Government is doing more for this country particularly in the area of the environment than we have seen for decades. As a number of members have stated in this House in terms of a policy group the Bluegreens group is working very very strongly and bringing some great policy initiatives that bring the right balance that keeps New Zealand working well but also builds a great environment. You know I am very privileged to come from the region of Taranaki and I stand here to say that as a region it stands out in its ability to maintain strong economic growth alongside a strong commitment to environmental conservation and enjoyment. Growing up in Taranaki enjoying our environment is a birthright. We understand and we know that—from mountain to the surf and all the beautiful countryside in between.New Plymouth was named best place to live by North and South magazine beating all the big cities in New Zealand. We won the best small city in the world category in the International Awards for Liveable Communities. Yes that was back in 2008 but recently—just a few weeks ago—2000 people responded to a survey sent out by travel experience provider Experience OZ and NZ and voted Taranaki top spot on the list of New Zealand’s best destinations. It is in a region that utilises and develops its environment. We have intensive agriculture. We have oil and gas exploration. We have all of those activities that utilise our environment yet people still vote that it is the best place to come to and that it is the best city. So we have got it right in terms of being able to develop an economy and protect an environment. I think New Zealanders ought to and should continue to look to Taranaki as a great example of this.We can be assured that the National-led Government and the National Party are continuing to do tremendous work around the environmental care and protection of our country. You know we believe that resource use must be based on sustainability. We have a sound record on better environmental management. Successful economic and environmental policy can and must go hand in hand to provide a cleaner greener brighter future for all New Zealanders. I believe that we do have it right and we are not lurching from one position to another position. We are science based and we are making methodical progress. We believe in the values of having a great environment but we also believe that we need to not just enjoy the environment but be able to afford to live in this great country.A number of our speakers have raised what must be a frightening story of what has just happened in Tasmania to the Labor-Green coalition there. For a long time it drove a very very strong environmental programme and ended up—Hon Annette King: 16 years in Government.JONATHAN YOUNG: You have got to be frightened Annette King. You have got to be frightened of the coalition partners that you are looking at. There were 16 sad years—16 years that ended up with an economy with 20 percent unemployment and a continual deficit. Finally the voting public and even I think the union members tossed the coalition out. You have got to understand that people have now reacted and are now swinging back and are probably swinging back too far. That is the problem about a Labour-Green coalition—it swings far too far. You know it was reported by the Sydney Morning Herald that the new leader of the Government that is going to come in there went in there with a promise that it was going to turf out toss out the peace agreement that was forged between the labour markets and the environmentalists and—Mr SPEAKER: The member’s time has expired.KRIS FAAFOI (Labour—Mana):It is a sad indictment on the National Party when it is not only its current Ministers who are arrogant and have conflicts of interest but also its previous Ministers. I am speaking about Georgina te Heuheu and what is going on at the Māori Television Service. What is going on at the Māori Television Service when the shareholding Ministers Bill English and Pita Sharples are finding out from media reports about what is going on with the appointment process with their chief executive?David Shearer: It’s a shocker.KRIS FAAFOI: It is an absolute shocker. The process has been started again beset with leaks and conflicts of interest. I want to talk about the position first and not the person because this is a very important position. The Māori Television Service has a taxpayer budget of well over $30 million. It has two channels and it has a duty to preserve protect and promote the language and Māori culture here in New Zealand. It is an extremely important role in the broadcasting and Māori community and the Māori Television Service board has a responsibility to choose the right person for cultural reasons for broadcasting reasons and for political financial management and integrity reasons.As I say this appointment has been an absolute shambles since it began in June last year. There had been leaks and people who were applicants for this job found out through the media that they were no longer being considered for the job. There has been a conflict of interest with the chair of the board of the Māori Television Service Georgina te Heuheu with her close friend Paora Maxwell being in the running for this job and because of that the process had to start again late last year.The conflict of interest with the former National Party Minister Georgina te Heuheu relates to Paora Maxwell her very close friend who we understand in the first iteration of the appointment process got his application in late. Although the recruitment company that received the application late said it should not consider that application Mr Maxwell made the shortlist and we have to ask why. The very close friend of Georgina te Heuheu made the shortlist and we have to ask why that happened with a very close friend of the board chair.Much has been said of Paora Maxwell and he actually took the rare step of looking for some redress for some comments that were made in this House. But much has also not been said about Mr Maxwell. We know from his comments that he left Television New Zealand (TVNZ) in February 2013 and reports suggest that he left under a confidential agreement. We still do not know the details of that confidential agreement and despite attempts directed at TVNZ we have not got the detail and I do not think that we will ever get the detail.I have two quite simple questions for the chief executive of TVNZ: seeing that Mr Maxwell has gone and given his track record of employment at TVNZ does he trust Paora Maxwell and would he re-employ Mr Maxwell if he went for a job back at TVNZ again? If the answer to those questions is no then I have serious reservations as to whether Mr Maxwell should be appointed to the senior job of chief executive at the Māori Television Service. I believe that TVNZ does have an obligation to the wider broadcasting industry to make sure that there is someone with integrity at the head of the Māori Television Service and the board of the Māori Television Service has obligations to seek all information to make sure it gets the right person.Why has Mr Maxwell been pushed for this job? Well I think the simple answer is on the front page of the Dominion Post. It is because he has been chosen by his friend to go in and take the stick to the news and current affairs department at Māori Television because this Government does not like scrutiny. When the hard questions get asked members of this Government do not want anyone looking for them because they do not want to answer. There were no answers yesterday when Hekia Parata fronted up over the allegations of corruption at Te Kōhanga Reo National Trust. There were no answers there but Māori Television has been doing a very good job according to Gavin Ellis the former New Zealand Herald editor of making sure the hard questions get asked.The question of why this is happening has a simple answer which is that this Government does not want Māori Television and its journalists asking those hard questions any more. Well if it does not like it do not enter into those situations where you are having Trelise Cooper dresses bought and where you are having 21st birthday presents bought. If you do not like the hard questions that does not mean you bring someone in to take the stick to Māori Television.JOANNE HAYES (National):I am pleased to be the final speaker in this general debate but before I get on to it I just want to say that I am not going to talk about Māori Television. When we start talking about the merging of colours let us talk about the Dunedin South election in 2011 when National turned Dunedin South from red to a beautiful blue shade of purple. I will not be talking about that.I am going to be talking about the conference I attended at the weekend at Kaikōura—our Bluegreens conference hosted by our member Colin King. I thoroughly enjoyed it. I enjoyed listening to the announcement of the Kaikōura marine reserve a marine reserve that covers more than 10000 hectares around the Kaikōura Canyon and protects the area from fishing mining and harvesting of any kind. The Kaikōura (Te Tai-o-Marokura) Marine Management Bill will introduce a whale sanctuary of over 4 million hectares which will protect whales and their habitats from disturbances including the type of seismic surveying used for petroleum exploration. There will be a seal sanctuary at Ōhau Point as well as—I will reiterate—the five customary fishery areas. The bill will amend the recreational fishing regulations that allow the public to fish and dive in specific areas. We have not forgotten our recreational fishers and divers and we have not forgotten our public because we are giving them access to beaches and rivers as part of this bill. We are maintaining that.The Kaikōura marine reserve is only one of many of the environmental policy outcomes this Government has successfully been responsible for. This is a Government that 5 years ago set out clear environmental priorities—priorities to improve the Resource Management Act improve freshwater management give better protection for flora and fauna provide better ocean management and meet our climate change commitments. These are only some of our principles.I take note that the previous Labour Government was responsible for drilling 34 wells without regulation. When that was announced at the conference everybody cringed—they cringed.Tim Macindoe: How many?JOANNE HAYES: Thirty-four—disgusting. This Government has introduced regulations and we have taken responsibility for establishing the Environmental Protection Authority to make sure we regulate the drilling in our area. This Government has a sound record of better environmental management. We have successful economic and environmental policies. These must go hand in hand to provide a cleaner greener brighter future for all New Zealanders. We all know that every country that has a good environmental policy has a strong economy. It can go on the record of this House that this Government has a strong economic policy and strong economic outcomes. Kia ora.The debate having concluded the motion lapsed.Families Commission Amendment BillThird ReadingHon ANNE TOLLEY (Minister of Police)on behalf of theMinister for Social Development: I move That the Families Commission Amendment Bill be now read a third time. The changes provided for in this bill are integral to building a stronger more resilient social sector. On behalf of the Minister for Social Development can I thank officials and the Social Services Committee for the work they completed to get this bill here to the House today. With a more focused and streamlined structure the Families Commission will be in a much better position to contribute to the social sector than it has been previously. With the creation of the new social policy evaluation and research unit—or SuPERU—Government agencies NGOs academics and philanthropists have a vital new tool for the important work they do with New Zealand families. We are confident that these changes have the power to improve decision making across the social sector and as a result help New Zealanders improve their lives and build better futures.The bill proposes to amend the commission’s current role. Two broad functions will be established headed by a single commissioner down from the original seven. The social policy evaluation and research unit will be able to carry out thorough and independent research on and monitoring of the issues faced by New Zealand families and the communities they live in. We have historically had a real gap in this area as has been clearly identified by the Prime Minister’s Chief Science Advisor Sir Peter Gluckman. The Families Commission already undertakes some research but this has been restricted specifically to its advocacy role for families. This bill extends this research and evaluation function across the entire social sector.The commission will also play an important role in coordinating research and evaluation across the wider social sector. This is a significant change particularly at a time when agencies are working closer together than ever before in sharing ideas and expertise. The Families Commission must be able to review and evaluate cross-sector work to remain relevant and to provide vital independent expertise. This goes beyond merely identifying opportunities for evaluation and research. Through these changes the commission will be expected to actively identify evidence and research that will support the achievement of social sector policies and priorities. The academic rigour of the unit and its focus on delivering greater transparency and value for money will allow us to work out what supports and services will add value to the social sector. This will ensure that the Government and communities are making decisions based on the best possible advice.The changes proposed in this bill not only enable the commission to take a sector-wide view; they task it to do so. Simply put there is no point in undertaking research to have it sit on a shelf unread. As the sector changes the way we measure it must change as well. We have made it clear that in carrying out its monitoring evaluation and research functions the commission will be acting independently of the programmes and interventions being monitored or evaluated. This is essential to make sure that the work of the commission is seen as credible and robust and not captured by provider interests.Already the unit has taken over the management of the longitudinal study Growing Up in New Zealand from the Ministry of Social Development. In last year’s Budget the Government committed $6.4 million to the Growing Up in New Zealand study. This is New Zealand’s largest and most diverse longitudinal study and it is following the lives of 7000 4 to 5-year-olds from birth until they reach 21. It will provide information on child development that is New Zealand - specific. We have got high expectations that our investment will deliver results providing robust information that can be used to inform policy.The bill also requires the commission to prepare and publish an annual family and whānau status report. The first has already been published with the second due shortly. The report is a valuable means by which the well-being of New Zealand families can be regularly measured and monitored.Additionally the bill provides for the creation of a social science experts panel. This group will provide guidance and academic peer review of research undertaken by or for the commission to ensure that all research is rigorous and credible. It is important to be clear that the panel is to provide quality assurance and not to direct the work of the commission. The proposed changes require a minimum of four panel members and we are pleased to note that the commission has already established an expert advisory group. This group is made up of seven respected academics and professionals representing a range of disciplines and experience. This clearly demonstrates the willingness of some of our best minds to contribute to the work of the commission. Even so the panel would not provide the sole means for peer review of the commission’s research. There may be occasions where the range of expertise offered by the panel would not be wide enough to provide peer review and guidance in all the required subject areas. In these cases the commission has the ability to consult more widely.The final changes provided for in the bill are largely designed to refocus the commission’s governance arrangements. To that end this bill requires removing the title of commissioner from all but one member of the commission who will be known as the Families Commissioner. This will focus the attention of the other commission members on their governance role as board members. It puts the commission on the same footing as most other Crown entities. By aligning the governance of the commission more closely to other Crown entities roles and responsibilities will become clearer with a leaner and more effective structure. As such the autonomy of the commission as prescribed in the Crown Entities Act 2004 remains unchanged. The commission will continue to have regard to Government policy only when directed and would not be required to give effect to it. The board will ultimately decide the course the commission takes. It remains responsible for decisions relating to the operation of the commission. This is consistent with the Crown Entities Act which states in section 25(1) that the role of the board of a statutory entity is “to exercise the powers and perform the functions of the entity.”We firmly believe that the Families Commission Amendment Bill will enable the commission to become the modern forward-looking and relevant organisation it needs to be to meet the needs of an ever-changing and innovative social sector. I commend this bill to the House.Dr RAJEN PRASAD (Labour):Bula vinaka Mr Assistant Speaker. I am pleased to take my final call in this long debate around the Families Commission. The Families Commission Amendment Bill restructures the commission and redraws its functions. Though we are passing this bill today almost all of these changes are already in place so we can look back and look at the results that the Families Commission has produced under the leadership of the Minister for Social Development. What we find is a train wreck. The Families Commission today is a train wreck. I want to go through why that is. It certainly is a train wreck in terms of its performance. It is not performing and it has not performed over this past year that it has just reported on to the Social Services Committee.The second aspect of the train wreck is that the commission is now riddled with political conflicts and there will be no way that this particular commission can actually resurrect itself to become the kind of commission it should be the kind of commission it was and the kind of commission it was designed to be. The other point is that the Minister herself has actually been donkey deep in this right from the time that she took over the ministership of this particular commission because she has set its functions and she has set its particular governance structure and it is a train wreck.I want to go through each one of those aspects of the commission that I have identified. The changes actually reduce the consultation functions and the advocacy role of the commission. They do it in a way by giving new functions to the commission that will keep it bogged down in the kinds of things that the Government wants it to produce rather than the kind of advocacy the commission was designed to deliver for the families of New Zealand. It actually increases its evaluation and management of those things that were Crown functions—functions of the Ministry of Social Development. One of its major functions now is the management of Government contracts—contracts of evaluation in the social sector. Those jobs and responsibilities were quite well handled by the Ministry of Social Development. By giving the commission those roles the Government has actually confounded restricted and reduced the ability of the commission to function well and to advocate for families.Although the Minister Anne Tolley who was just talking sings the praises of the new longitudinal study coming under the management of this particular commission there was no need for that. It will not be much management because that programme is run by the University of Auckland. It is a multimillion-dollar project that is doing very well. It is the new generation of longitudinal studies for families. It will produce the results. The Families Commission is now simply holding if you like in very small quotes the “management” of this particular thing. It is managing the Government aspects of that but none of the work takes place in the Families Commission. That particular function the longitudinal study cannot really be counted as a new function of this particular commission.Then the bill changes the board and the board’s functions. It is amazing that here we have a Families Commission and this bill now allows for any one of members of the board to be a Families Commissioner and the functions of that particular commissioner to be determined by himself or herself. So the Minister has no view on what the role of the Families Commissioner ought to be and the Minister’s focus was absolutely wrong when she said that this is how it is with the other commissions. Who is in any doubt about the role of the Children’s Commissioner the Privacy Commissioner or the Chief Human Rights Commissioner? It is all very clearly identified in the legislation. But here we have a hybrid structure that actually takes those kinds of things away and this particular structure is actually flawed.If you look at the results that it has produced I just want to take two things from its current annual report. When it comes to its influence on organisations working with families and whānau here are the results: in 2001 its actual performance rating was 83 percent; in 2011-12 it was 83 percent; and in 2012-13 the period of reform the target was 85 percent. What did it produce? It produced 59 percent. Well that is a huge reduction in anybody’s language. Then for the other one its own output indicator—“Impact of knowledge transfer activities on public awareness on those who influence policy and practice”—the target was 850; the actual performance was 115. These point to a big hole in what this particular commission is now doing so it is flawed.I want to come to talk about the conflicts of interest that are now endemic in this particular organisation. We now have the Chief Families Commissioner underperforming really at the last select committee when she could not see why it was the business of the select committee to ask questions about a conflict of interest with one of her commissioners. Here we have one of her commissioners campaigning with a National Party rosette on at the Pasifika Festival a week and a bit ago. So here is a deliberate political act by a commissioner. These commissioners are required to be independent and palpably so.What is more the Minister Paula Bennett knew about the politics of this particular commissioner. She said: “I have known Dr Parmar for several years and I am well aware of her political views …”. Despite that she appointed Dr Parmar to the Families Commission did no work in managing the potential conflicts that are emerging there and did no work to advise the Families Commission as to how that should be managed. Or did she? Was it a deliberate position of a National Party candidate – to – be? She has now come out and declared her candidacy for the Hunua seat. So right from the time when she was appointed this conflict was palpable yet it was not managed. Here Dr Parmar is campaigning with the Prime Minister.That is not the only conflict. When we look at the opinions expressed by the Chief Families Commissioner on her own website—that is the commission’s website—she takes the view amazingly so that in election year family violence does not need more money. Her reasoning is as follows: we have spent $60 million - odd over the last 10 years or so on family violence and the numbers have gone up. Therefore it is not working. Therefore money is not the answer. It is amazing. Anybody who knows the family violence area knows that the whole programme was designed to bring family violence out into the open. Therefore it would produce many more complaints and many more incidents would be brought to its notice. But here is this commissioner arguing in election year the Government’s agenda—that we do not need to throw money at this. I wonder why when the actual advocacy should be quite the opposite.She defends the conflict by saying that it is in tune with the State Services Commission’s requirements. Well it is not. The requirements of the State Services Commission are very very clear and there is a conflict because things that she is doing now will affect other things that she has been part of. That is a conflict. Declare it and deal with it. The guidelines of the Auditor-General are also very very clear. So how can this commission hide behind something that it has created for itself to say that the conflict is not there?In the end this is a compromised commission. Its very focus is now compromised. How can it be taken seriously? Everything is now internal. Its advice comes internally. It previously had the ability to go to anybody that it wanted to nationally and internationally to peer review its particular reports. Now it has got to be done internally. The advisory panel is internal. This is a reduction of the potential influence of this commission and it is fatal. The reforms are fatal and what this bill does is flawed. How the commission has been working has realised all of its risk. The responsibility for all of that lies with the present Minister for Social Development because it is under her leadership that she has restructured this commission in her own image. It has not performed and therefore now what we see is the destruction of an institution. The Labour Party will be honest about this—let us morph it into a Ministry for Children. Thank you.MELISSA LEE (National):Ahn nyung ha se yo Mr Assistant Speaker. It is a great pleasure to rise to speak in this third reading of the Families Commission Amendment Bill. But before I actually get on to the bill I would like to address some of the comments that were made by the speaker who just took his seat Dr Rajen Prasad. He did actually say that it was “amazing”. He used that word quite a lot and I have to agree with him. It is amazing that that member could stand there and talk about conflicts of interest. He did actually say that the Families Commission was riddled with political conflicts.Let me put some facts to the House. When that member was with the Families Commission he was in fact the Chief Families Commissioner—not just a commissioner; he was the Chief Families Commissioner—in 2008. When he became a member of the Labour Party—and he was actually on the Labour list; he was elected in November 2008—how many months before that election did he stand down from his position as the Chief Families Commissioner? It was actually only about 2 or 3 months before and he is talking about someone who is not even a candidate in the election that is coming up in September and saying that there is a conflict of interest. I have to say that that is amazing. That is so rich coming from that member.I have to say that I hate talking about friends across the House because I have known Dr Rajen Prasad for many many years. But I really hate the fact that he actually believes—it is very sad—that there is a conflict of interest when he himself as the Chief Families Commissioner did not declare his political interest. He was on the list at No. 12. If he is on the list for Labour at No. 12 how long were the negotiations going on for? How long was he a member of the Labour Party for? How long was he actually campaigning for the Labour Party before he became a member of Parliament? He also travelled to India. That member travelled to India with the then Prime Minister Helen Clark when he was the Chief Families Commissioner. Was that a conflict of interest? It is rich coming from that member talking about another person who is not even a candidate yet in the election.If we are going to make a difference for families who are struggling we need to be able to invest in interventions that will actually work. No one in this House wants to waste time researching issues that are going nowhere. No one in this House wants to research issues that may end up becoming of absolutely no use to anybody. This bill will streamline the Families Commission’s core activities. The commission will continue to work on issues that are important to families within a leaner and more focused structure. I thought “focus” was a good word. We are not altering the commission so that it becomes closer to being a Government ministry as some Labour members like to think. The Families Commission is not going to turn into something that is closer to being a Government department. The bill simply means that the way that the Families Commission works is going to change. It will remain an autonomous Crown entity. In fact the bill extends the commission’s powers and functions in order to make it more relevant.It is strange that Labour members worry that the changes we produced to the bill will bring the Families Commission closer to being a Government department when they would rather dissolve the Families Commission altogether and turn it into a Ministry for Children. What the changes to this bill will mean is that there will be significant change for the Families Commission in terms of its structural arrangements work programme capability and size. The Families Commission will be headed by a single commissioner down from the original seven. The commissioner will take on a new role providing for independent monitoring evaluation and research to measure effectiveness of initiatives across the social sector. The bill requires the Families Commission to develop the annual families status report to see how New Zealand families are getting on and provides for the appointment of a social sciences expert panel to provide academic peer review and guidance. The panel compromises a minimum of four members with the flexibility to appoint additional members if necessary as concern was expressed that a panel of four may not have skills across a broad range. The Government will be redirecting $4 million over 4 years to fund extra parenting programmes and relationship education in secondary schools.The Ministry of Social Development and the Families Commission will work together to make sure that the research of each in fact complements that of the other. The research will not be duplicated and I know that New Zealand First members mentioned that they were quite worried about that happening. But the Ministry of Social Development and the Families Commission have two very different roles so I believe that there will not be duplication. Nobody wants duplication. That would be a complete waste of money. The Families Commission is to actively identify and move forward in areas where research will actually assist. An inter-agency team from the Ministry of Social Development the State Services Commission and the Families Commission is currently overseeing the changes. It is a significant change for the Families Commission in terms of its structural arrangements work programme capability requirements and size. The new unit will build a body of evidence that will allow policy makers NGOs and anyone wanting to invest in social services to make informed decisions about which programmes are effective for New Zealand families.As the Minister mentioned there is a longitudinal survey that we have undertaken called Growing Up in New Zealand that looks at 7000 young children aged between 4 and 5 and tracking them right to the age of 21. It will be an amazing piece of research for all of us to take note of and understand.This is a great bill and I commend it to the House.Su’a WILLIAM SIO (Labour—Māngere):Talofa lava Mr Assistant Speaker. As the previous speaker Melissa Lee sits down I just want to say to you Mr Assistant Speaker and to the members of this House that there was no shred of truth in her attacks on my colleagues and I would challenge her to show any evidence—any example—that my colleague Dr Rajen Prasad as a former Families Commissioner was campaigning during the period that he was a commissioner. That is not what we saw in the behaviour of a current member of the Families Commission Dr Parmjeet Parmar. We actually saw a picture of that member of the Families Commission standing next to the Prime Minister with a National Party blue rosette on. She should step down from the role that she currently holds and become political—get involved in politics if that is what she wants—but do not beguile the community by wearing a rosette and at the same time holding the position of Families Commissioner.The Child Poverty Action Group in its submission on the Families Commission Amendment Bill said that in the history of New Zealand there has rarely been a greater need for an autonomous Crown entity whose role it is to advocate for the interests of families. I agree with that submission. That need is greatest today right now.Child Poverty Action Group goes on in its submission to list a range of things that are happening within families in our communities the length and breadth of New Zealand. It lists the number of people who are self-harming the number of people who have committed suicide family violence and family violence - related crimes the number of police apprehensions and the number supported by Women’s Refuge. In its submission it highlights that these things have been rising over time. In fact it is one of the reasons why the Families Commission was formed in the first place—to try to attempt to address these issues because if they are happening to one family they impact on the rest of our communities.Today the need is greater than ever before for an organisation to be championing and advocating for the needs of families. And I say that the need is even greater today because New Zealand families are under constant attack not necessarily from violence and the related suicide and all of that bad stuff. They are under constant attack now from poverty—poverty that has been rising in the last 5 almost 6 years. Inequality is rising rapidly. At least one child in five lives in severe and significant poverty. If 185000 children are living in severe and significant poverty all of those families are doing it tough right now today.Unemployment continues to remain high at 6.8 percent—with all the hardship that that means for our families. In the Pacific and Māori communities it is even worse. They are in particular the hardest hit today despite the economic recovery that we hear about from this Government. Pacific unemployment is at 13.7 percent today almost double what it was in 2008. The rate of Pacific youth aged from 15 to 24 years who are not in education employment or training stands at 21 percent today. The Pacific median income—the weekly incomes for Pacific people—fell from $455 in 2008 to $381 in 2013 while the median income for the rest of New Zealand rose by $51 a week in the same period. The Salvation Army reported that in 2012 it gave away almost 5000 more food parcels to Pasifika clients as compared with the number of food parcels it gave out in 2008.All of this signals the plight and the struggles that families are undergoing throughout New Zealand and it has been getting worse under this Government. There is a need for an advocate a Crown entity that is able to champion and advocate on behalf of all of these New Zealand families. But alas in this particular bill all we are getting is tinkering on the edges and the removal of the independence of this particular Families Commission. This is really critical.The removal of the independence of the Families Commission means that it becomes almost as if it was a puppet of this Government. It is an example of where once upon a time the Families Commission was the champion and strong advocate for paid parental leave but the minute that this Government decided that that was not on that it did not support that what did we find later on? The same Families Commission organisation that supported paid parental leave then began to toe the party line advocated by this particular Government.This bill removes the independence and the freedom of the Families Commission to be able to advocate strongly and to think for itself about how to address the hardships and the difficulties that families are facing today. In addition to the removal of the independence of the Families Commission the Government’s legislation means that the commission loses its autonomy and it loses its ability to think freely and to advocate for those things that would support families up and down New Zealand.Under this bill there is the establishment of a social science experts panel. I do not know what the aim of this expert panel is but I recall under Labour it was the Ministry of Social Development that released on an annual basis a state of the nation report on the situation of families in New Zealand. On releasing that report all other Government agencies would act upon it to try to rectify and provide the badly needed support that families required like employment like income like support for early childhood education. The removal of the ability of the Ministry of Social Development to be able to release that annual report and giving of it to this special expert panel just simply means again a removal of the requirement for this Government to act for and support our families who are in need.National has gutted the independence of the Families Commission and as far as Labour is concerned it is best now to disestablish it altogether. Labour will in its stead subsume the Families Commission’s original and independent role and its functions into what we will call the Children’s Commissioner. I said earlier that there are 185000 children who are classed by many many reports as being in significant and severe poverty. They are not poor by themselves; they belong to families. All of those families are struggling to put food on the table and they have been struggling even more since the coming into power of this particular Government.By doing what this Government is doing to the Families Commission it is actually washing its hands of its responsibility to support families in New Zealand. When Labour comes into power on 20 September we will establish a children’s Minister. We will make sure that the Children’s Commissioner has its independent voice and is able to act autonomously to support the needs of those children because when we are able to do that—when we are able to support families and their children—we are also supporting in the long run the welfare of this country.That is where our interests are and I doubt very very much based on this piece of legislation that that Government has any consideration for the rest of New Zealand other than for the kinds of people whom we have seen in the previous several weeks—the kinds of people whom it supports. It is supporting only its people its families which are a few. And I say that any New Zealanders who are listening so far to the debate that has occurred are not stupid. They will have recognised once and for all that this is an arrogant Government—an arrogant Government—that is looking after only itself and its mates and it does not care one iota about the rest of New Zealand’s families who are struggling and doing it tough.DENISE ROCHE (Green):Tēnā koe Mr Assistant Speaker. E te Whare tēnā koutou katoa. I rise to take the first call for the Greens on the Families Commission Amendment Bill. We will be opposing it and it will not come as any surprise to members of the House that we will be doing that.Essentially we believe that the changes that the Government is making to the Families Commission with this legislation fundamentally undermine the commission’s ability to advocate for families in Aotearoa New Zealand. Like others and the previous speaker Su’a William Sio we have concerns about the independence of the commission and we question the motives of the Government in actually going through this process of essentially decommissioning the commission.We are concerned about the independence of the Families Commission because this legislation changes things so that the Government has the upper hand in picking who will be in the governance roles and what type of research can be conducted. The Government will be hand-picking if you like the board that will replace the commissioners and it will be hand-picking the social science experts panel. We have already heard during the Committee of the whole House stage from members of the Labour Party that that hand-picking already occurs and that there is a close personal relationship between some of the existing commissioners and National Party MPs. We are concerned about this because we believe that it has an impact on the quality of the research that the Government then receives. That is important because Governments should be receiving strong independent research that underpins the policies that they want to enact to make a better society for our families and children.We have already seen examples where the independence of research is being undermined. If we look back to the example of the research that was commissioned in late 2008 on paid parental leave it was very very supportive of the role that parental leave could play in supporting families and supporting children. We saw that completely reneged on by the existing Chief Families Commissioner when she took office who basically said that the commission did not have a view on paid parental leave at this stage. Nothing has changed. The research did not change but the view of the commission did change because the relationship of the commission with the existing Government changed. It is independence that we need to see in place.The Families Commission has a huge part to play in advocating for families and it always has. The commission has given evidence to Productivity Commission inquiries and to select committees and that evidence has enabled politicians to make sound policy. What we see from this undermining of research and this undermining of independence is a decrease in democracy. That is what happens when we do not see free and frank advice being offered from independent organisations that work alongside the Government. What we see is a dumbing-down of the policies that get made. What we see is evidence being presented to the Government ministries and Ministers to make decisions that is based on the policies that they want to have in place. We do see this happening. We see this with the welfare reform panel that was set up. We see these things being set up that actually reinforce the Government’s position and that is not free and frank advice.When we take into account at the same time that if we are wanting independent research we need to be relying on third parties to provide it what we are starting to see is that they too are being stifled in their ability to give free and frank advice. Again that is an undermining of democracy. As an example of this I am thinking of universities where academic researchers are now stating quite clearly that they do not feel that they can give too much of a critical opinion on the Government policies of the day in case they lose their funding.We are seeing this in the community and voluntary sector as well. We saw this with submitters who came to the Social Services Committee. Some people are actually too scared to offer an independent opinion because they fear that the Government’s tentacles will reach out and pull away the funding that they exist on. That is why the Families Commission is even more crucial than ever. It is—or was before these reforms—an independent body that was charged with advocating and putting together the programmes that would lift our families out of poverty and away from the social harms that they are facing today. Like previous speakers we suspect that the Families Commission will eventually become a Government department with all pretence of independence removed.I just want to go back to research again and talk about that a bit. In the research sector there are some alarming things that are happening. The Families Commission had a role in ensuring that the collection of research was put in one place and could be utilised. When we change the Families Commission so that it is now contracting out that role if you like we also undermine the very existence of some of these research organisations.The one that springs to mind most is that of Ngā Pae o te Māramatanga which is a Māori research organisation that currently has its funding in jeopardy because the people who make the decisions about the funding for research for that organisation are the members of the Royal Society of New Zealand. It is sort of like a second-tier contractor if you like and the society determines how the funding pie is cut. This time it has cut Ngā Pae o te Māramatanga out of the picture altogether. What worries me about this is that we do not really know how the Royal Society of New Zealand made that decision. We do not know whether it has Māori on its board who are making those decisions. We certainly do not know whether it is valuing the research that is coming through. I would have thought that we need more research specifically for Māori because in every social indicator of deprivation Māori are overrepresented.One of the things that I have always loved about the Families Commission has been the White Ribbon programme and the work that it has done to support men to take responsibility step up and say that violence in families is not OK. The commission has done huge amounts of work on this and it has every right to be proud of it. My concern is that with the changing nature of the commission that programme will also change.We heard at the Social Services Committee quite recently that the programme is looking at partnerships in the private sector to keep it going. What worries me about that is whether we are suddenly going to have “Skycity White Ribbon Day”. Are we going to be partnering with companies that will incredibly undermine the whole meme of what White Ribbon Day is about? I am absolutely worried that partnership with organisations that promote family—[Interruption] I am concerned that the Families Commission and White Ribbon Day—[Interruption]The ASSISTANT SPEAKER (H V Ross Robertson): Order!DENISE ROCHE: Thank you. I am concerned that the Families Commission could partner with organisations and companies that actually contribute to family harm and violence in Aotearoa New Zealand. When I say that I am referring to the alcohol industry and gambling sector. Just to wind up this Government—[Interruption]The ASSISTANT SPEAKER (H V Ross Robertson): Order! I am sorry to interrupt the member. Can I just remind members that it is a longstanding convention in this House to be aware of the fact that when you are on the cross benches and you are close to someone who is addressing the Chamber any interjections on the speaker have an effect on the microphones. As I said it is a longstanding convention so would members please respect that.DENISE ROCHE: This Government is obsessed with meddling in places where it is undeserved and unwarranted. We will be opposing this bill because we support advocacy for families and this Government is undermining that.Dr RAJEN PRASAD (Labour):I raise a point of order Mr Speaker. [Interruption]The ASSISTANT SPEAKER (H V Ross Robertson): It is a point of order. Please points of order are to be heard in silence.Dr RAJEN PRASAD: In light of what has been said by Melissa Lee I seek leave of the House to make a personal statement.The ASSISTANT SPEAKER (H V Ross Robertson): Is there any objection to that course of action being taken? [Interruption] Order! Is there any objection to that course of action being taken? There is none.Dr RAJEN PRASAD: Melissa Lee in her speech referred to a visit to India in 2004 that I made with the then Prime Minister. I want to put it on record that the then Prime Minister invited two senior officials to go with her for the State visit to India: me as Chief Families Commissioner and Anand Satyanand the then Ombudsman. That was because of our familiarity with India and because of our own ancestry as Indians. At that time I was not a member of the Labour Party and did not participate in any political activity. Melissa Lee then went on to imply that I also took political action in my role as Chief Families Commissioner. During the time I was Chief Families Commissioner I did not take part in any political activity for any party. I want to put that on record. Thank you.ALFRED NGARO (National):Kia orana Mr Assistant Speaker. In light of the comments by Mr Prasad I would say that the Opposition has been going on for some time about the issue of perception. I suppose Mr Prasad there is an issue of perception in that one may perceive that there is a conflict. Anyway—Dr Rajen Prasad: I raise a point of order Mr Speaker. After my having made a personal statement is it in order for the member to then refer to that and deride it in the way that he has?The ASSISTANT SPEAKER (H V Ross Robertson): Can I say that once a personal statement is made then that is it and there should be no further reflection on the member. It has been accepted by the House.ALFRED NGARO: I just want to make a couple of points though to the member who just spoke just in regard to his comments about one of the commissioners. He raised this as a conflict of interest. We know that the election period officially is around about 3 months out from an election. That person who is a commissioner did not declare during that period of time that they were going to be a candidate. So again I just want to reiterate the point that OK there was no conflict in there.There are issues in the fact that inside the commission itself there is a senior staff member who is a candidate for the Labour Party for Ōtaki. Now in regard to that action has been taken place a declaration has been made and the right appropriate processes have been put in place. With regard to the commissioner that process was not in place because the commissioner had not officially acknowledged that they were standing. So I think that it is a bit of an anomaly. It is politicking that is going on.But I want to get straight to the point on this bill the Families Commission Amendment Bill which I think is of importance. Denise Roche the previous speaker actually talked about the issue of independence. We know that the Families Commission is still bound by the Crown Entities Act of 2004. There is no evidence in the things that she has been talking about—conflicts or independence being taken away. In fact I also want to talk about the fact that Sir Peter Gluckman who has been highly acknowledged and recognised for his skill and his independence has clearly said that he confirmed commented on and also celebrated the shifts and the changes in the commission in terms of the direction that it is taking.The Families Commission has not changed its intent. The new statement of intent clearly declares the fact that the Families Commission has an exciting new mandate to act as a catalyst in New Zealand’s social policy—a clear focus and direction. None of that has been removed. None of that has been taken away. I think that what is very clear and what is exciting is the fact that we are now seeing that this is going to be focused also on an evidence base.Mr Prasad talked about the fact that the Families Commission was managing contracts. It is not managing contracts. In fact if anything it is monitoring and evaluating research that is evidence-based and does make a difference. If he had read the full report he would have seen that the commission is also to focus on issues like Pacific families and problems there. In fact today we had the Retirement Commissioner talk about the importance of this evidence this collaboration in dealing with the issues of families in our communities. If Mr Prasad had read even further he would have seen that there is the Families and Whānau Status Report 2013 which is absolutely important when talking about the high rates of family mobility and transience in our communities. Again this is clear evidence of what we are bringing to the conversation and the discussion for decision makers around this.The last thing that I want to talk about is the longitudinal study which I think is absolutely important. Mr Prasad talked about this and said that there was no need. Mr Prasad knows that the fact is that the longitudinal study also needs to have a champion. It needs to have a champion. I will say this. Minister Maharey in a former Labour Government commissioned the blueprint report. I was part of that blueprint report. Over 2 years when we developed that one thing that it lacked in its implementation was a champion. We have now got a Families Commission that is taking on the role of Growing Up in New Zealand which is absolutely critical.Jacinda Ardern: Peter Gluckman’s taking it over.ALFRED NGARO: It is the right role. Ms Ardern knows it Mr Prasad knows it. This is a critical role. We think that the changes that have been made focus both the intent and the direction of the Families Commission. That absolutely does make a difference. It is evidence-based it is independent and we are actually seeing the results already. I am looking forward to this bill being implemented. In this third reading of the bill in the House I commend the bill to the House.BARBARA STEWART (NZ First):I rise on behalf of New Zealand First to speak to the third reading of the Families Commission Amendment Bill. Yet again we have been left disappointed with this bill. There have been no substantive changes made that would make us or even enable us to reconsider our position on this particular bill. I have listened very carefully to the speeches from the opposite side but nothing concrete has actually come from there. As we have always said New Zealand First opposes this bill because to date the commission has failed to make any worthwhile difference for families. A practical difference has not been evident. Replacing seven Families Commissioners with one will not have any positive effect on the operation of the commission. Basically any impetus for change in the commission has been negated. Of course as we have heard one must then question the overall independence of the commission from the Government.Ironically the support and work that the Families Commission has provided is already being undertaken by the Ministry of Social Development and in New Zealand First we have to question whether the Families Commission is really worth the investment when it does much the same work and research as the Ministry of Social Development. We all know that duplication of effort is wasted in these strapped economic times but I must say that I was very pleased to hear a National speaker stating that this was not going to happen. So we will be watching this area with great interest. We believe that the Families Commission basically is no longer worthwhile and that its continued existence cannot be justified.Today is quite a sad day for the Hon Peter Dunne. It was one of his conditions of his supply and confidence agreement with one of the previous Labour Governments that the Families Commission actually came into existence. So it appears from the outside that the Hon Peter Dunne has finally sold out his Families Commission when ironically he has always been in a position of influence in every Government to ensure that it functioned appropriately that it was financed appropriately and that it could meet the objectives that were set. So it is quite a sad day for the Hon Peter Dunne. Wherever your efforts were Mr Dunne I have not seen them yet.In 2014 looking on it is now time that we worked towards protecting the family in times of widespread poverty rather than taking steps that would be detrimental and taking money away from this area. In New Zealand First we believe that the Families Commission Amendment Bill actually undermines efforts now to protect the family unit and children. Families requiring assistance will look to the commission for leadership only. They will be disappointed. Although it may be economically and politically more desirable to minimise the number of commissioners to a lower number we do not believe that that number should be pared down to just one. Of course a number of the Families Commissioners have already signalled that they will be leaving the role and heading into politics—into Parliament—so it is quite timely for them but it leaves a big gap in the Families Commission. What we are actually going to see is a major revamp of the role of the Families Commission and one has to ask whether it goes far enough. Do we really need this Families Commission particularly when one of the Opposition parties—Labour—is talking about creating another organisation?Hard economic times are upon us. We have heard that story many many times. Research in these hard economic times has to be forward and focused and the money could be better spent towards research elsewhere. And of course there is a total limit for the amount of research that can be carried out. Somewhere along the line we do want to see something practical from these organisations. There seems to be a total lack of consideration of the fact that the issues and themes on which a research unit will be focused are totally interrelated and of course they cross many social sector boundaries. Because many of the social issues are interrelated it would make far more sense for the Ministry of Social Development to use that amount of available funding wisely and with consideration of this particular fact.We look at some of the studies that have been carried out by the select committees. The White Paper for Vulnerable Children which the Ministry of Social Development produced last year contains issues and themes that are directly linked to the work that the commission carries out. Of course we have to take note of the recent Health Committee report. Again it points out to the Families Commission a way to go. I know that the Māori Affairs Committee has also carried out research in this area. All of these solutions are starting to surface and complicate the work that the commission administers especially when we are going to have only one commissioner overseeing the entire body. Of course this will inevitably have dire consequences on the expected outcomes for the commission. Here in Parliament we will most likely be re-evaluating the work of the commissioner in the future.What we are seeing is that version one in 2003 did not work out. So we have got version No. 2 which is supposed to be leaner and more focused—or so we are told. Our best hope is that version two of this Families Commission is going to be monitored on a very regular basis to ensure the best possible output and outcomes and that monitoring is taken to ensure that the direction that this new Families Commission is going to take is worthwhile for New Zealanders. There is definitely a limit as to how many versions of the commission there can be before New Zealanders lose their confidence in it totally. Version No. 2 almost reaches that limit. Greater emphasis needs to be put on promoting and carrying out groundwork that creates better understanding and ensures better outcomes for all New Zealand families. We know that New Zealand families are experiencing considerable social and economic hardship. Changing the governance of the Families Commission and reprioritising its budget is only going to complicate it further.In New Zealand First we would like to see an agency that would be useful to New Zealand families for the money that is spent. We will be carefully monitoring the outputs and ensuring that the money is not spent on consultants to travel at the expense of these families. It is for these reasons that New Zealand First is opposing this bill.Hon PHIL HEATLEY (National—Whangarei):I for one accept Rajen Prasad’s apology and explanation to the House in his personal statement. It came as some surprise to me that he used his speech to attack a possible National Party candidate out there because it is not like him to attack people personally. It is not like him. It is not in his character to do that and I was a little bit surprised. It is true that people raised that he was in fact Chief Families Commissioner once. He clearly had some sort of Labour Party allegiance or support at that time. He has explained that in fact he was not active.Dr Rajen Prasad: I raise a point of order Mr Speaker.The ASSISTANT SPEAKER (Lindsay Tisch): I know what the member is going to say. The member speaking cannot relitigate comments following a personal explanation so the member will not mention that again. It has been cleared. A personal explanation is the finality of it and that is the end of the matter.Hon PHIL HEATLEY: Mr Assistant Speaker I was just accepting Mr Prasad’s statement.The ASSISTANT SPEAKER (Lindsay Tisch): No no just carry on and go ahead with your speech.Hon PHIL HEATLEY: I acknowledge that and support this legislation the Families Commission Amendment Bill in the House. This bill amends the Families Commission Act 2003. It provides for a single Families Commissioner along with new provisions for the independent monitoring evaluation and research of key issues and programmes across the social sector.There have been threats that the Families Commission will be subsumed under a new Labour Government. Should that ever come to pass it would be a sad thing. The reality is that it is a commission that is going to become more focused and more useful to families and the taxpayer in the future. I am disappointed as I say in the Labour Party’s approach and in Rajen Prasad’s approach given his history. But I support this bill in the House today.JACINDA ARDERN (Labour):It is my pleasure to speak to more of the substance of the Families Commission Amendment Bill than Phil Heatley the last speaker referred to. Our concern with this bill has been that for some time there has been an erosion of the Families Commission. It has moved away from its original purpose and it is no longer advocating for the best interests of families in New Zealand and we believe that that is being furthered today through this legislation. Not only do we have organisational change—so fewer commissioners; some consolidation of the way that the structure works—it also feels to us that there is a narrowing of the advocacy role of the Families Commission as if it could have been narrowed any further.The best example I can think of is that recently the Families Commission chose not to put down an advocacy position around the extension of paid parental leave despite research and evidence from the World Health Organization advocating an extension and despite the Families Commission itself in the past having done research and advocating an extension. Therefore the only thing you could point to was that there was some kind of politicisation—that because the Government did not wish to extend paid parental leave to the extent that the Labour Party was promoting through Sue Moroney’s bill it was a face-saving mechanism not to have a commission like the Families Commission come out and agree with that. That is the only interpretation one can take given that there was such a turn-round in its position.So it has become our view that given all of that the Families Commission should be abolished entirely and that we should instead start investing greater effort in the Office of the Children’s Commissioner particularly given that it has demonstrated a greater advocacy role and has taken up of its own volition—which it should as an independent entity—what we think are the true issues facing children. In fact we would like to give it greater independence in the same way that the Parliamentary Commissioner for the Environment is independent for instance.The New Zealand First member Barbara Stewart rightly I think pointed out that we do now have a wealth of information out there about the kinds of things that we need to be doing on behalf of children and their families. We have had the Children’s Commissioner’s Expert Advisory Group on Solutions to Child Poverty we have had the Māori Affairs Committee and we had the Health Committee produce a very very good report on the importance of the first 1000 days and what should be done to improve the lot of children there. So we have a range of evidence and yet interestingly the Families Commission—which presumably would have been involved you would have thought or at least advocating on or realising some of the issues that have been raised in these areas—had very little to say on it. In fact when you ask it via a select committee about its main focus in the future it talks about things like adolescence and alcoholism. Yes alcoholism is very very important but there is a range of other issues that feel very very untouched on by the Families Commission.So that is what we would do differently. Not only would we reallocate that investment to the Children’s Commissioner; we would also establish a children’s Minister. We would establish child impact assessments so that every piece of legislation coming through Parliament that would have an effect in some way on children would have an impact assessment included. So for instance any bills that suggested changes in gambling laws would rightly include an assessment of the impact on children and families. Alcohol law changes—exactly the same. It would be a really practical measure that we could take to improve the lot of children and families.We would also introduce a child poverty eradication and reduction bill. Essentially it would be an action plan for children and families. It would set out how we would measure child poverty and what targets we would set to reduce it. It would establish a board across health education and social development and create a set of objectives on how we would make sure that we would reduce the effects of poverty across all of those areas—housing as well. For instance if you wanted to reduce rheumatic fever rates you would not just put that with health; you would put it with housing. We would make it an across-the-board gathering of chief executives and we would set genuine targets to start reducing the effects of poverty on children and their families.Those are some of the practical initiatives that we want to take to put children at the heart of everything we do. We do not believe that the Families Commission is a part of that any more. It has simply stepped too far away from its mantra.One concern I do want to raise though given that the Government has decided to retain the Families Commission is that it will now establish a social policy and evaluation unit. It has got a predetermined annual budget of $3.5 million. There is not too much specific information about what it will be confined to researching. There are a great number of contracts out there in this space of working with families that might for instance tap into the evaluation resource that will exist here but we are not quite clear on who will be benefiting from the existence of this unit.One thing we do know—and Alfred Ngaro talked about this—is that the Government wants the Growing Up in New Zealand longitudinal study to be connected to the Families Commission. Alfred Ngaro claimed that what the longitudinal study needed was a champion. Well I have to disagree. The longitudinal study was doing very well thank you very much without having to have a 40 percent funding cut as I understand attached to what Alfred Ngaro then dressed up as needing better advocacy. The advocacy it needed was to be able to maintain its ability to continue that very very important study without having a Government come in and start adjusting whether or not it had the money to survive and continue. That is the kind of advocacy it needed. Instead however we have seen carte blanche shifting of that report and for what reason? Why is that occurring?The University of Auckland was a perfectly good home for the longitudinal study as was Otago University the last time we did something similar. The Ministry of Social Development was funding the longitudinal study. There was nothing that suggested that anything was going wrong. We had some very good interim reports and some vital information—the kind that this unit is now being established to produce because apparently we do not have it. We do. We have very good information. Why the change?If some member on that side of the House can tell me why we needed this change I would be very interested to hear it because it strikes me that it is nothing more than political. Also could some member perhaps rationalise the funding cut to that study—anyone? Does anyone wish to give us a reason why what this bill presumes to advocate which is the provision of greater research and evaluation a better evidence base and better information for us so that we can benefit families—which report did that better than the longitudinal study Growing Up in New Zealand? It is pretty hard to find anything that is going to do a better job at it than that report and yet this unit is getting a separate budget allocation and the Growing Up in New Zealand report has seen a change for the worse in terms of its funding. So if any member would like to explain that to me I would be greatly enlightened.I suspect that it has got something to do with the Prime Minister’s Chief Science Advisor coming in and playing a role in some regard and deciding that things needed to be done differently. A little transparency would be very very useful. But overall that is not the only contradiction in this bill—all of which points to the fact in our minds that this organisation is now highly politicised and we have seen good examples of that lately. It is time for it to go. The role that it plays could be played better by the Children’s Commissioner. That is why Labour opposes this bill.MIKE SABIN (National—Northland):I will give a short contribution to cap off what other members have been saying on the Families Commission Amendment Bill. I want to acknowledge the member Dr Rajen Prasad for his previous role and actually for his thoughtful contribution to the Social Services Committee. We do not often agree on things but I have to say that the member’s experience is valued.The previous speaker Jacinda Ardern just alluded to finances and funds and so on and so forth. Interestingly enough we just had the Families Commission in for a financial review the other day and it said that it was not about money; it was about outcomes. Actually that is exactly what the New Zealand taxpayer should rightly expect of good Government—that is that we are always looking to evaluate to ensure that we are getting the absolute best outcome for the investment that the taxpayer is making. The changes in this legislation and what this legislation really points to is the fact that the Families Commission has now got a far more prescriptive role in terms of driving its research towards arriving at positive outcomes for the families that are struggling in this country. I personally get very cynical about the idea of creating commissions here and administrative bodies here there and everywhere and thinking that if we throw a lot of money at them somehow that is going to change things. What we really need to ensure is that for every dollar that we are spending—that the Government is ultimately spending—we are doing it in such a way that we can drive a better outcome. That really goes back to the heart of the Better Public Services improvements that we have been making and to putting expectations upon agencies that are receiving Government funding.In terms of the discussion that we had at the financial review the other day the commission focused very much on the idea of its enhanced ability to be able to understand a problem to therefore understand the nexus with the appropriate solution and then to look to drive those solutions to achieve outcomes and measures and to evaluate those. I think that is a very fine place to end this call. I very much commend the bill to the House.The ASSISTANT SPEAKER (Lindsay Tisch): I understand that the next call is a split call. Poto Williams—5 minutes.POTO WILLIAMS (Labour—Christchurch East):The Labour Party opposes this bill the Families Commission Amendment Bill. We did support the bill going to the Social Services Committee because we wanted to have a closer look at the implications of it. What does this bill do? Well one of the things it does is it changes the governance structure of the commission and it devolves the commissioners and therefore it can determine a lot more of its own course and functions. So it really could be seen as a quasi - Government department rather than an independent autonomous Crown entity that makes useful recommendations on what the issues are that families face and what the Government social service providers and the community can do to better support our families. By developing this governance structure we lose the independent advisory nature of the current commission’s set-up and that makes no sense to me at all. So you lose the advocacy ability of the commission the ability to advocate on the best way forward for New Zealand families because some of the recommendations will likely be at odds with Government policy. Is that not a useful grown-up and good thing to have—an independent commission that can advise you when your policies are not meeting the needs of New Zealand families and potentially doing them harm?This bill also by its very nature does away with the valuable programmes that have been developed in conjunction with the community such as the White Ribbon campaign. I have heard a member from the other side of the House say during a previous reading of this bill that the White Ribbon campaign has a life of its own and that it would survive without the injection of support and funding from the commission. Yes that is true. It has become an event or a series of events that is hugely successful and has gained a lot of traction. But why stop now when more and more men are coming on board with pledges becoming ambassadors wearing the ribbon and having healthy and safe conversations about family violence? Why would you stop? Does it not make more sense to continue with the momentum that is building? I think so anyway.What else does this bill do? It establishes a social policy evaluation and research unit within the commission to provide independent monitoring and evaluation of programmes being delivered in the community and also to provide research into key issues programmes and interventions. That is great—I hear lots of people say—but I just want to quote from something that the Hon Anne Tolley said in the House a little earlier. She said: “The intention of the unit is to improve decision making across the sector and to thereby help families improve their lives. The evaluation would go across the wider social sector.” So is the intention to provide genuine unbiased evaluative advice and feedback to the community groups working with those families or as I suspect it might be to act as an audit function into the sector? What if your group or your provision does not make the grade? What then? Do you potentially lose your ability to serve your community? Does the ministry then decide to pull your funding?Or have I got that completely wrong and will the research concentrate on developing best-practice models for the sector? That would be great too. The best-practice models and ideas for developing the workforce had better come fairly cheap because I can assure you that the Government is unlikely to fund best practice even if its own research unit recommends it. It is unlikely to spend money on developing the workforce either. Why do I say this? Because of the funding cuts that have already been made to the Families Commission and to programmes.Why will we not support this bill? We do not support this bill because we feel the changes being promoted will diminish the useful work that the commission has had a long history in providing. We would do away with the commission altogether and focus on funding the Children’s Commissioner. We would do that because we know that there is one glaring omission on this Government’s watch and it has been the development of measurements and targets to reduce child poverty. Backed by legislation we would require regular reporting on progress at every Budget because it is important and useful and should be done as an absolute priority. But we all know that this Government is not good at numbers—missing 20000 kids off the poverty list. Healthy kids grow up to be healthy adults; hungry children living in damp homes with poor nutrition grow up to be unhealthy adults. I am afraid that the health and social impacts are cumulative and progressively detrimental. Thank you.JAN LOGIE (Green):I rise to take a short call on the third reading of the Families Commission Amendment Bill. The Green Party opposes this bill. We have recently had concerns regarding the independence of some of the commissioners and we are very disappointed in particular to see the commission backtrack on a very well-established and researched commitment to paid parental leave and to basically just echo the Government’s line which I must say has not been supported by evidence or the majority of New Zealanders’ values. Despite all of this we would like to see the independence of the commission strengthened not undermined as we see this bill doing.The Green Party did not initially support the establishment of the Families Commission but we were very happy to be proven wrong and have for many years now really valued its advocacy for our families and the well-considered and focused research on such topics as resources for Māori grandparents; diversity experience and support needs for disabled parents; families and whānau status reports; family violence indicators; supporting Kiwi dads; escaping debt; and changing Pacific households. All of these reports have informed our decision making and our understanding about the needs of our communities. The list of valuable research that has helped us consider our response to significant issues and best support for all our families is much longer than that. With that background and that history it really is hard to understand exactly what the problem is that is requiring this bill to come to the House to change the commission.The commission has also had a history of making strong independent submissions to this Parliament on proposed pieces of legislation of relevance to families. I would like to repeat a point that the commission made recently in a submission on the Family Court Proceedings Reform Bill where it outlined how the changes to the Family Court process could have a negative effect on children and families and suggested that the proposed introduction of costs for Family Court relationship counselling services could be a barrier for some families needing to access the court.The submission also pointed to the need for more independent research into the needs of whānau particularly when negotiating care contact and financial arrangements for children especially given that 30 percent of parties to the Family Court are Māori. We need this evidence to make informed legislation and we need those perspectives to be independent. An independent perspective was given and yet sadly that bill passed without those concerns being addressed. It is a bit difficult to have confidence in the stated aim of this bill which is supposedly to improve decision making in the social sector when we are seeing that existing research which has been well respected is being dismissed so easily when it conflicts with this Government’s priorities.I would note that in the Minister’s speech tonight she said that the changes to the structure around research in the commission were to widen the focus. I would also suggest that this is basically decentring the focus on families. We do not have any research to suggest that we should be decentring families from our research agenda. In fact I would suggest that perhaps we have evidence of the opposite. Eight out of the 11 submissions on this bill opposed it. The primary concerns of submitters echoed this fear of loss of independence in the research process. They had particular concern around the appointment of the social science experts panel and we echo that concern. We absolutely support peer review of research. That is just the norm in academic circles as well as in Government circles now and it is good practice. You do not need an expert panel to be set up to provide peer review. You set it up only if you are wanting to confine and constrain that expert review which is another reason why we are opposing this bill.TIM MACINDOE (National—Hamilton West):The Minister outlined clearly that the reasons for these changes are to build a more resilient social sector and I am happy to lend my support to the Families Commission Amendment Bill. I wish the newly structured Families Commission well in the work ahead of it.A party votewas called for on the questionThat the Families Commission Amendment Bill be now read a third time.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes59New Zealand Labour 34; Green Party 14; New Zealand First 7; Māori Party 3; Mana 1.Bill read a third time.Employment Relations Amendment BillSecond ReadingHon JO GOODHEW (Minister for the Community and Voluntary Sector)on behalf of theMinister of Labour: I move That the Employment Relations Amendment Bill be now read a second time. I thank the members of the Transport and Industrial Relations Committee and particularly its chair David Bennett for their thorough consideration of this bill. This bill implements the Government’s policies aimed at increasing flexibility and fairness in our employment relations framework. The select committee has recommended that the bill proceed with a number of amendments and I agree with the changes proposed some of which I will touch on today.The bill changes the duty of good faith so that it no longer requires parties to conclude a collective agreement. The Employment Relations Authority may declare whether collective bargaining has concluded. The aim is to reduce overly protracted bargaining and give some certainty and balance to the collective bargaining framework. The United Future leader Peter Dunne expressed concern that the bill as amended could embolden employers or employees to merely go through the motions of negotiation then walk away from collective bargaining simply because they oppose or object to the direction negotiations are going or to being party to a collective agreement. They could then call in the Employment Relations Authority to declare the end to bargaining. He therefore wanted the inclusion of stronger provisions in the bill to enable the authority to be fully satisfied that parties engaged in collective bargaining had done so in good faith.To address this concern about possible surface bargaining I propose to introduce an amendment to the bill a new section 50KA so that the authority cannot declare bargaining concluded if parties have not complied with the duty of good faith. Where the authority is precluded from making a declaration or determination under this section however the authority can issue orders recommendations or directions to bargaining parties who have failed to observe good faith about what steps ought to or must be taken to rectify the failure. I thank the Hon Peter Dunne for his intervention and believe that this amendment makes for a more balanced and resilient piece of legislation.The Transport and Industrial Relations Committee has also recommended other technical changes in relation to collective bargaining to improve the workability of the law. The bill exempts employers and their associated persons who have 19 or fewer employees from the requirement to take on those employees who are eligible to transfer to a new employer under Part 6A of the Employment Relations Act. Part 6A requires that eligible employees be allowed to transfer to a new employer following a restructure. This exemption responds to the review of Part 6A which found that small to medium sized businesses have difficulty absorbing the financial risk associated with such transfers. I acknowledge the concerns of some submitters regarding this part of the Act.The committee carefully considered the provision and weighed up the diverse views on the issue to find an appropriate balance. It has recommended—and I agree—that the bill be amended to alter the definition of “associated person” to exclude a franchiser where the franchisee bids for and manages the contract independently of the franchiser. That means that small to medium sized franchisees that operate with a high degree of independence from the franchiser and therefore share characteristics of small to medium sized enterprises in many respects are able to access the exemption.The bill also clarifies that any failure of an outgoing employer to fulfil their obligations in relation to employees who are eligible to transfer to a new employer after a restructure under Part 6A will not affect an employee’s entitlement to transfer to the new employer or obligations that the new employer has.The committee has also recommended changes that ensure that in each type of restructuring situation employers wanting to give a warranty as an exempt employer can obtain sufficient information about the identity and contact details of the person they need to give the warranty to. The bill relaxes the current overprescriptive and often unworkable provisions in the Act around rest and meal breaks to ensure that the requirements are practical and can be complied with in all workplaces. Some submitters were concerned that the changes would have a negative impact on health and safety. The committee has considered these issues carefully and has noted that the bill does not override any requirements for breaks under other legislation notably the Health and Safety in Employment Act. I agree that the bill continues to protect the rights of employees while improving the workability of the law.The bill gives employers the ability to respond to partial strikes with specified pay deductions. This gives employers an additional much more proportionate choice when responding to partial strikes than simply locking out or suspending workers. A range of submitters requested greater certainty in the bill as to what constitutes a partial strike. The committee has recommended improving the clarity of the definition and I support this change.The bill introduces requirements on the nature and timing of determinations by the Employment Relations Authority to help improve the timeliness of its decisions. The bill as introduced required the authority to give an oral determination or an oral indication of its preliminary findings at the conclusion of an investigation meeting. The authority would then be required to record oral determinations in writing and in the case of oral indications provide written determinations within 3 months unless there were exceptional circumstances. Some submitters were concerned that the changes could lead the authority to making hasty decisions. The committee has suggested several enhancements that should allay these fears including allowing for reserve determinations and amending and clarifying time frames and content for different types of determinations.The bill amends the requirement for an employer to provide an employee with relevant information if a decision were being made that might affect their continued employment. The balance between providing natural justice and recognising that some situations require particular sensitivity has been improved by the committee recommendations. The bill now provides that an employer is not required to allow access to confidential information regarding individuals other than the employee concerned if it would result in an unwarranted disclosure of information about another individual.The committee has also recommended amending the bill so that it no longer provides a basis for employers to withhold certain evaluative and opinion material from the employees concerned. In addition the committee has recommended that an employer cannot withhold information just because it is in a document that also contains confidential information.The changes recommended by the Transport and Industrial Relations Committee reflect a balanced and careful consideration of the wide range of comments received from submitters on this bill. Flexible and balanced employment relations legislation is essential for business to grow while ensuring that protections for workers are retained. I believe that this bill with the improvements recommended by the committee strikes this balance. I commend this bill to the House.ANDREW LITTLE (Labour):The Employment Relations Amendment Bill is a nasty insidious document—yet another repeat of the nasty insidious strategy that this National Government has for working New Zealanders. That is what it is and that was a shocking address a shocking speech delivered by the Hon Jo Goodhew on behalf of the Minister of Labour on a matter that affects hundreds of thousands of working people every day. Far from being balanced there could not be a more unbalanced a more radical change to our employment laws and our workplace code than what is in this bill. It is just another continuation of the nasty rubbish that this Government insists on serving up to hard-working New Zealanders.There were 13679 submissions and more than 160 oral submissions and most of them—the vast majority—were totally and deeply opposed to what is in this bill. The advice from the officials from the Civil Service is this: “the proposed options are likely to increase choice and reduce compliance costs for some employers. They will reduce choice for unions and employees and may expose New Zealand to critical international scrutiny over its international labour obligations.”This National Government does not care about the long and enduring obligations that this country has stuck with when it comes to the treatment of workers in this country. It just does not care. The evidence is clear cut. It is getting harder and harder for workers in New Zealand workplaces today to get their voice heard whether it is for wages whether it is for other issues that affect them in the workplace even whether it is for health and safety—and I will come back to that in a minute.Before looking at what this bill actually does which is nothing like what the Minister reintroducing the bill says it does let us actually look at the problem that we are trying to fix in this country. Let us look at the labour market problem in this country: wages. It is wages and incomes. The wages of the bottom half of the workforce in New Zealand have stayed the same in real terms or gone backwards over the last 20 years—the last 20 years. The pay rates of 50 percent of New Zealand workers have stayed the same in real terms or gone backwards over the last 20 years.What about productivity improvements? It will be news to this Government because its members mislead this House all the time about them but the reality is that productivity in this country has improved—gradually and incrementally but it has improved—every year for the last 20 years. It has improved by nearly 50 percent in the last 20 years in this country. Real wages on average have moved barely 14 percent. If the average wage in this country had actually matched productivity improvements which is the very thing that Business New Zealand and its acolytes in the National Party call for the average hourly rate in this country would be between $7 and $8 a hour better than it is now. The truth is that wages in this country have not been keeping pace with productivity as Business New Zealand keeps on claiming they should do.What is the other fact here? It is that 400000 workers in this country nearly one-fifth of the workforce are dependent on tax credits because their earned income is not enough to make ends meet—400000 people are dependent on tax credits because their wages do not allow them to make ends meet. That is a shameful statistic and that is something this House ought to be embarrassed about. At the very least that ought to prompt this Government to do something meaningful about it—to do something meaningful about wages and incomes.The problem in the labour market in this country today is wages and incomes. They are too low they do not keep pace and far too many New Zealand workers are being ripped off. We have had economic growth in this country and we have had productivity improvement so affording better wages is not the issue in this country—affording better wages is not the issue. For the National Government the issue is about screwing more out of workers and giving that to its rich mates in corporate New Zealand. That is what it wants to achieve and that is why this bill is drafted the way that it is.Wages and incomes have been going backwards for far too many for far too long. What would a solution to this particular problem look like? Well first of all we would want mechanisms to improve bargaining so that workers would not be fearful about approaching their employers to say: “You know what? I’ve been here a couple of years. I’m doing a pretty good job. The manager seems pretty happy with me—can I get a pay increase?”. Or here is something else: why do we not protect the freedom of choice to belong to a union so that people do not have their employers standing over them saying: “You go anywhere near the union you’re in trouble.”? That is what happens. Why do we not have mechanisms to improve wage bargaining and collective bargaining at that? Why do we not give a greater voice to working people and protect freedom of association? Why do we not respect the internationally recognised right to strike? This Government with this bill wants to punish people for standing on their digs standing up to bad employers and taking industrial action including when that industrial action does not lead to any loss of production or revenue or income at all. That is how nasty and vicious this National Government has become when it comes to New Zealand workers.This bill will fix no problem that I can see in the labour market. It panders and cuddles up to the worst employers in this country—the donors to the National Party who keep saying to their MP mates in the National Party: “Do something. Give us a bit more. Squeeze more blood out of the worker stone so it’s better for us.” This bill sets up a number of things such as the peremptory opt-out by employers from multi-employer collective bargaining. Never mind that workers have to go through various hoops to get their employer round the table with others in their industry to get some commonality some baseline conditions in their industry; never mind that workers have to vote on that; and never mind that workers choose to have that. This Government says that whatever employers want employers should get. It is not about mutual relationships. It is not about mutual respect in relationships. It is about whatever the boss wants.Then we have employers going to the Employment Relations Authority to get a declaration that bargaining is at an end. I have to say that the sole redeeming feature of the Minister’s statement in the House just now is that the Government has accepted—after protestations at the Transport and Industrial Relations Committee I might add were rebuffed by the Government and indeed personal approaches to the Minister were rebuffed. It is pleasing to see that the Government has recognised that a fundamental condition to the Employment Relations Authority’s interfering in bargaining is that the applicant to the declaration has to at least have met their good- faith requirements. That is part of the employment jurisdiction that we have had for over 100 years in this country; it is called the equity and good conscience jurisdiction and it comes from the equitable principle that whoever comes to equity comes with clean hands. You could not possibly have an employer rocking up to the Employment Relations Authority demanding a declaration that bargaining is at an end with no requirement that they have acted in good faith all the way through. I have to say that that is the only redeeming feature in the statement given in the House this afternoon.Then there is the removal of the 30-day rule amongst other things in the bill. When unions negotiate a collective agreement workers in a workplace come together and get the best deal from their employer. They do not do it just for themselves; they do it for every generation of workers that follows and the new workers who start. That will now be undermined. The freedom of choice the workers exercise to join together and negotiate collectively with their employer can now be undermined by that new employee provision. It is all about driving down wages as if somehow the wages in this country are a problem. It does not help of course when you have got a Minister of Finance and others who go abroad boasting to other countries and big business in those countries about how low our wages are and that being therefore a reason to relocate here.This bill is all about saying to workers: “Leave your brains at the gate. Your thoughts aren’t welcome here. Your voice has no place in this workplace.” This bill is all about saying: “Leave your spirit and your motivation at home because we don’t want that at work.” It is about command and control—command and control of the employer because that is all this National Government understands. It does not understand modern workplace relationships. It does not understand genuinely mutually respectful workplace relationships. This Government like this bill is embarrassingly out of date.Here is the challenge we have in this country. It is to create high-quality workplace relationships and high-quality workplaces with high-quality businesses that respect workers’ rights that respect freedom of association and that are respectful of the place of workers and their thoughts and ideas when it comes to decision making. The challenge is to have high-performance workplaces managed well with good-quality managers. Everything in this bill like every piece of employment legislation passed by this Government incentivises bad managers and poor management.The one thing we need is workers in this country being properly and fairly paid. This bill will do the opposite. That is why we are opposed to it totally and utterly and we will object strenuously every step of the way.DAVID BENNETT (National—Hamilton East):I just wanted to follow on from that speech. Andrew Little is a good member of our Transport and Industrial Relations Committee but that was a very disappointing speech because rather than focus on the Employment Relations Amendment Bill he talked about the wider context of wages and how employees are not valued. That is simply rubbish. Wages are increasing in New Zealand at this time employees are valued and we see a future in which we can have a modern environment that is dominated not by what Andrew Little talked about—the methodology that is dominated by union movement—but by a methodology where companies can grow and provide more jobs and opportunities for people. That is the future of work in New Zealand. It is an environment where there is listening between the worker and the employer and that does happen. That is happening in New Zealand.The Labour Party wants to go back to some model where it is not actually the worker who has control and it is not actually the union that has control; it is the Labour Party that has control. That is what it really wants. There is a difference between giving workers rights and having the Labour Party in this room say what workers’ rights should be.Hon Members: Ha ha!DAVID BENNETT: They can laugh now because I have hit a nerve but that is the reality of the Labour Party. It does not want to have fair and equal bargaining or an open environment for workers; it wants to have a place where it controls it dictates and it sets the tempo of that environment. It is a shame to see someone like Andrew Little do that in this House. Thank you.DARIEN FENTON (Labour):Labour is strongly opposing the Employment Relations Amendment Bill. That was a most disappointing speech from the chair of the Transport and Industrial Relations Committee David Bennett who sat and listened to something like 170 oral submissions; who travelled around the country to Auckland Wellington Christchurch and Palmerston North; and who had as evidence the people who came before the select committee. They had no impact on that member at all. They certainly had an impact on the Labour members of the select committee. I will always remember Christchurch. We went to Christchurch and I have never seen anything like it in a select committee hearing. Workers came before the select committee showing support for each other. They came waving their banners to show they were opposed to this bill.Jacqui Dean: Back to the 1970s.DARIEN FENTON: They came forward and told their stories and I have to tell that member over there who is shouting out that they cried.Iain Lees-Galloway: It was Jacqui Dean.DARIEN FENTON: Jacqui Dean. Shame on her because they cried. They cried about this bill. What they told the select committee was that this is the last straw for them. They have been through the earthquakes. We had workers from a range of occupations from the lowest paid to quite professional nurses and front-line response workers and a whole range of other workers who came forward. They talked about how after the earthquakes they went back to work to help other people. The cleaners at Hillmorton Hospital went back to work and helped clean up the mess helped the people who were coming into that hospital and helped their workmates who were suffering because their houses had been trashed.Those workers from all walks of life have not been listened to by this Government. It is extremely disappointing because I asked the Minister of Labour Simon Bridges late last year whether he would listen to the submissions and particularly to the submissions around Part 6A which is the provision that he is weakening thanks to his friends from CrestClean who sent the media unit a stupid mug last week. Actually what it says is to not go ahead with the amendments. Well we agree with CrestClean on that. But however it wants to be able to make sure that it does not have to employ vulnerable workers or transfer them from one job to another.Simon Bridges told me in answer to the question I asked him about the workers at Hillmorton Hospital who I said quite truthfully were sick with worry about the changes to Part 6A of the Employment Relations Act because they feared they could lose their jobs—and that would be the last straw after the earthquakes they have suffered—that “In all seriousness they can be confident that I am listening and taking this very seriously.” Well did he? Have the amendments to Part 6A changed? No they have not changed except to make another group of employers exempt as well—that is franchisees who are not the parent company. So he has actually made it weaker than it was before it went to the select committee.The other person whom I will never forget who came before the select committee was a home-care worker called Julie Reason. She was fantastic. She told the select committee that she earns between $14.10 and $15.86 an hour depending on the nature of the work. Ninety percent of her work is at the lowest rate of $14.10 an hour—well lucky her; she will have gone up to $14.25 an hour with the miserable increase in the minimum wage! She said: “I drive between my clients’ homes and then help them shower or dress or do their shopping or housework. My work is deemed to be casual so I do not have guaranteed hours. The idea is that we build up a pool of regular clients and try to fill in the gaps in the day as best we can. Extra assignments are offered via group texts sent out to everyone and are grabbed on a sort of ‘first come first served basis’. I am not reimbursed for my petrol my travel time or my vehicle wear and tear. Roughly 10 to 15 percent of my income goes on work-related petrol. Our terms have not always been this generous. It is only recently that a freephone number has been provided so that we do not have to pay for our own work-related calls and texts and it used to be that if a support worker like me arrived at a scheduled appointment and could not actually do the work because the client was not there they would not be paid at all.”This Julie Reason told the select committee that it was union pressure and union collective bargaining that made the tiniest bit of difference for her and her job. What was really interesting about what Julie told us was about meals and rest breaks. Do Julie Reason and other home-care workers like her get a tea break? They are not allowed to sit down with their clients when they visit a home and have a cup of tea with them because that would be breaching some kind of protocol so she never gets a paid tea break even though the legislation provides for it. The Government is unfortunately proposing to weaken the legislation. Julie Reason never gets a paid tea break. She has to pay for her own tea while she is on the road driving if she is lucky to the next client. She told the select committee: “It is hard enough doing the work I do without having the Government actively trying to undermine the bargaining position of my union and the union representing me. Why would a Government want to make it even harder for me to earn a fair wage?”.I will never forget the courage of Julie Reason and the workers like her who told their stories to the select committee and who were ignored. They have been ignored because apart from minor technical changes this bill is as bad as it was when it went to the select committee.There were 13679 submissions—13679 submissions. Workers put a lot of effort into making sure they got their submissions through. There were complaints about the fact that the select committee did not hear enough submissions and in fact there was a people’s submission process organised by the Council of Trade Unions so that people could have their voices heard throughout the small towns and regions throughout our country. But of course it has all gone for nothing because this Government does not take workers seriously. It does not believe that it is a struggle for some people and that our system that we already have of collective bargaining our system under the Employment Relations Act—which this Government has weakened through pieces of legislation after legislation since 2008—does not work for them.What this bill will do is make it even harder for those people those workers on the margin like the cleaners in this place who earn just on the minimum wage of whom Tau Henare said: “Oh if they don’t like it they should get another job.” Remember that? He had to apologise for it but how disgraceful was that? How disgraceful to have a member of Parliament on a huge salary telling the workers in this place who clean his office that if they do not like it they should get another job. He should be ashamed and I know he was actually. But that is the attitude of the National Party.Another little part of this bill—well it is quite a big part of the bill—is the stupidity around the ability of employers to decide that they are not going to conclude bargaining. What that means is that workers will go to bargaining and the employer can come up with an excuse to drag it out and eventually apply to the Employment Relations Authority to say that bargaining has ended. Workers in that situation immediately lose their collective agreement. They immediately go on to individual contracts and what is more they cannot strike for a period of 60 days—in fact it is 90 days by the time they reinitiate. So we have a strike ban on workers who want to get a collective agreement. Then we have this petty thing that if they decide in their workplace—like Julie Reason the home-care worker might decide she does not want to go on strike because of those clients whom she looks after but maybe she will not take them shopping. That would be deemed a partial strike and her employer could fine her 10 percent. So we have now got stupid pitiful and mean provisions in this legislation that are going to make it really hard for everybody.Labour is deeply opposed to this bill. It is not necessary—it is not. It builds on the bad record of this Government and the way that it treats workers. It will not survive a change of Government. In fact it may not even get through by the election—Mike Sabin: That’s right. You won’t have to worry about it because there won’t be a change in Government. Don’t panic Darien.DARIEN FENTON: Mike Sabin is saying that there is not going to be change of Government. Well I will tell you what: bringing this bill to the House is the best thing you could have done to mobilise the workers of this country against that Government.DENISE ROCHE (Green):It is a great shame that the Employment Relations Amendment Bill has returned to the House for its second reading. I am rising to take a call for the Greens on it. This piece of legislation does nothing for the economy does nothing for job creation does nothing to address inequality in Aotearoa and does nothing to lift the 280000 children living in poverty in this country out of poverty. This bill does nothing to fix that.This bill amends the Employment Relations Act of 2000. That Act states that its original aim was to promote collective bargaining which we all know—certainly on this side of the House—is one of the requirements of the International Labour Organization’s clauses that we have endorsed. This bill states that its raison d’être its reason for being is that it “implements Government policy”—and I am quoting here—“that is aimed at creating an employment relations framework that increases flexibility and choice ensures a balance of fairness for employers and employees and reduces compliance costs … It also reduces unnecessary regulation. The Bill will help create an environment where employers can grow their business …”. From my point of view that does not seem very balanced at all. It feels like the aims of this bill as stated like that tilt the balance of power in favour of the employer and that does nothing to increase jobs improve the economy increase wages—The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to leave the Chair for the dinner break.Sitting suspended from 6 p.m. to 7.30 p.m.DENISE ROCHE: When I was interrupted I was talking about balance and fairness. Before I get into my speech I just want to take a moment to acknowledge the passing of Viv Walker who was a stalwart of the Wellington union movement and a good feminist. It was her funeral tonight. She strongly believed in fairness and her funeral was actually a fund-raiser for the pay equity campaign.We believe that a balanced approach means that workers’ rights are protected that managers manage well and that businesses thrive from a cooperative work environment. There are examples of this and we had submissions from members of the Dairy Workers Union who are highly unionised and who have a thriving relationship with their employer and excellent productivity as a result. They are well unionised and they bargain collectively.It is a false economy to legislate like this. Over 400000 people are receiving Working for Families. That means that the taxpayer is subsidising employers to keep wages low. For low-paid workers—like for example the cleaners who clean this House who are unionised and who earn $14.10 an hour—the costs of that low pay are externalised. That means that the taxpayer pays the social costs that come with poverty wages. When we lift wages through good union rights and collective bargaining all of us are better off. So how do workers improve their wages? They do it through collective bargaining and through the ability to organise and join a union. This bill removes the duty to conclude bargaining. It cuts through any attempt that workers can make to improve their lot. It removes the right of workers to be included in a multi-employer collective if the employer does not want to be part of it. It allows employers to refuse to bargain. Basically it undermines all the principles of good faith that are in the existing legislation.It further harms working conditions by allowing for the divide and rule of workers by employers. So where a workplace currently has a collective employment agreement this bill will remove the right of new employees to be on that collective agreement for the first 30 days. So it takes us back to 1991 and the Employment Contracts Act where the focus was on individual bargaining. But there is little choice in bargaining your wages and conditions and there is little power and very little balance in the employment relationship when you want the job and when there are thousands of other workers who are unemployed who will take less than you to get that job. When you combine that with the 90-day trial provisions this Government introduced which allow employers to sack workers for no reason whatsoever before 90 days we have a situation where the balance is tipped in favour of the employer and the employee has very little say whatsoever. That very thing undermines the ability of other workers to get decent pay and conditions because it pulls everybody’s wages down.We received written submissions from over 12000 union members. All of them were really concerned about the clawbacks in this bill that will erode their wages and conditions. As a worker the only way to redress the imbalance in the employment relationship—and so much employment law actually shows that the relationship is not balanced—is through collective bargaining and collective action and in a worst-case scenario when things go wrong through industrial action. This bill will actually escalate industrial action by introducing penalties on workers if they are participating in partial strikes. That is their last-ditch weapon of negotiation. If they participate in a partial strike they will be penalised. What that means—and we heard this from submitters—is that they will say: “Oh well—might as well go the whole hog and go on strike.” So it is actually conducive to poor employment relationships.I have to say that a lot of the provisions in this legislation use a sledgehammer to crack a nut. There have been only around a dozen cases of industrial action or industrial unrest in the last few years. Two major cases have been Talley’s in the meat sector and the Ports of Auckland. Workers faced huge clawbacks from their employers and casualisation there and it was the employer that took militant industrial action by locking workers out.This bill is mean-spirited—the removal of tea breaks for heaven’s sake. It totally undermines any of the health and safety legislation that was just recently introduced to the House last week. Having a tea break is a time for a worker to rest and they will be under pressure—you can bet your boots they will be under pressure—to sell it in exchange for I do not know a lolly.The bill also removes the only provision that we have had in law in Part 6A of the Employment Relations Act—and that was thanks to the Labour Government and frankly the work of Darien Fenton from the Labour Party—that was protection for vulnerable workers. It was the only way they could be sure of security of work if a current contractor—say a cleaning contractor or laundry contractor—was undercut by another. These workers are not in a strong position to be able to take industrial action and to be totally militant. This provision was their only protection. This Government has eroded it to the detriment of those workers.We have heard a lot about productivity and how this bill increases productivity but what we actually know is that productivity has increased over the last 10 years while wages have stagnated. Our rock star economy is not working for the low paid. This legislation cements inequality. The provisions in this bill will ensure that another generation of workers is condemned to low wages and poor conditions. This legislation is a breach of our international human rights obligations. We want good lives and fair futures for all workers in Aotearoa New Zealand. This bill will not deliver that.MIKE SABIN (National—Northland):The member who just resumed her seat Denise Roche was talking about lifting wages. Her answer to lifting wages was actually more unionisation and collective bargaining. I do not think so. Lifting wages is about productivity. Hello! You know in the world of the Greens this is all you need to do: you just need to get a bit of the old union strong-arming or to lift the minimum wage with a bit of legislation and employers can just pay higher wages forthwith. Well that is not actually how the real world works. What a business relies on in terms of its employees and raising wages for employees is the fact that they produce a product and they do it efficiently—OK? Is that not right? So if the Greens are so concerned about lifting wages then I would expect that they should be voting for the bills in this Parliament that this Government is passing that are all about the economy and productivity. But that is right—the Greens do not vote for those bills because they are not actually about lifting productivity. They are actually about lifting the presence of the unions or possibly that is their friends over there on the other side of the House in the Labour Party.Andrew Williams spoke earlier and anyone tuning in to that speech would think they had gone back about 60 years or so to the wharf strikes because the sort of rhetoric that was coming out of his mouth was archaic. It has had its day and it is gone. Part of the noise that comes out of there—admittedly they have got to do a bit of payback to their union friends who will be tuning in and watching the debate so there is a bit of payback going on there—[Interruption] Oh that has got them excited. That has got them excited. Part of it is that I think the unions and people like Andrew Williams and co. are worried about the fact that actually the flexibility that is introduced—Barbara Stewart: I raise a point of order Mr Speaker. Andrew Williams did not speak on this bill. It was Andrew Little.Mr DEPUTY SPEAKER: Will you correct that?MIKE SABIN: Sorry Mr Deputy Speaker a Freudian slip. Yes Andrew Little—Andrew Little. Sorry Barbara—yes Andrew Williams. Andrew Williams is not the person we are talking about.Dr Cam Calder: He would have spoken well though.MIKE SABIN: Yes he would have. It is Andrew Little. Andrew Little talked as though we had gone back a couple of generations in his thinking. Actually anyone listening to that speech would think that employers are there to do nothing else other than to exploit employees. It is just an absolute load of rubbish. It is as much a load of rubbish as Labour members suggesting that there is a manufacturing crisis out there. We all know that that is not the case. They are not banging on about that any more are they? Oh no. They will be saying: “Let’s take dairying out of that equation. Let’s just magic up some different figures because then actually what we’re saying is plausible.” Well actually nothing of what they are saying is plausible.I actually think that what the Employment Relations Amendment Bill recognises is that there is a reciprocal relationship between the employer and the employee and that relationship is centred on the need for one another to work in a collaborative and respectful manner in a fashion that improves productivity because when productivity is improved everyone is actually a winner. That is what this bill provides for. And I do not know why Labour members are so scared of that. Are they so scared of that because that means that they will not have as much control in the workplace any more? As the Greens seem to suggest if you want to lift wages it is all about collective bargaining. Collective bargaining and discussions of that nature will always have a place but do not ever forget that raising wages is about raising productivity. It is about an economy and it is about a Government that actually gets what it takes to grow the economy. It is an excellent bill and I look forward to seeing workplaces embrace it.BARBARA STEWART (NZ First):I rise on behalf of New Zealand First to speak on the Employment Relations Amendment Bill. On this side of the House we had hoped that because the bill had been sitting on the Order Paper for quite some time the Government would just let it sit there just like it has let so many others fade into the background. This bill affects thousands and thousands of workers negatively right across New Zealand. There are too many changes that basically affect workers’ rights.It is not a popular bill. In fact there was no call by employers or employees for any changes to the current situation. So why we have this bill is quite a mystery. We know that by far the biggest number of submissions—and we received over 13000 of them—were opposed to this bill. We heard some heart-rending stories and again those people were opposed to the bill. It is not a popular bill.With this Government it is unfortunate that we have seen numerous pieces of legislation slowly but surely pursuing an anti-worker agenda. We in New Zealand First believe that this bill will negatively undermine wage-fixing principles under New Zealand law and create conflict between employees and employers. We must tell the National Government that there is a very fine balance between on the one hand assuring and affirming the rights of the workers and on the other hand allowing enough worker flexibility so as to not hinder any business’s production profitability and productivity which we firmly believe in. New Zealand First definitely understands that and we believe too that the New Zealand public largely recognise that. There is always a trade-off. There is a balance between the two extremes. Kiwi owners and Kiwi workers and business owners know that. They are all more or less in the centre. They are very aware that to go to either end of the spectrum is to invite the prospects of worker strikes or businesses failing.In New Zealand First we believe that employers need flexible dedicated staff and that employees need appropriate conditions and remuneration. Safety of workers is absolutely paramount—we have had bills in the House on this particular issue—and of course scheduled breaks assist with that. This bill unfortunately changes the existing rule for employees’ entitlements for rest and meal breaks. Saying that these should be more flexible and negotiable and should be able to be paid out to workers is going to have a negative effect on safety and workers’ output.The removal of the 30-day rule will seriously undermine collective bargaining. Employers will now be able to offer different terms and conditions to new employees despite agreements reached with unions for that to not happen. The bill is going to remove the protection new employees have had from being taken on at lower pay rates or on inferior terms and conditions. The employment relationship is not a level playing field. We have already seen numerous businesses and organisations come out against this particular legislation. They want to protect their brands by protecting the rights of their workers against the unnecessary legislation that this Government is proposing. Employment relations must be collaborative.The duty to conclude collective bargaining has actually been removed from this particular bill. Working to rule can actually be considered a partial strike. There is a fine balance between assuring and affirming the rights of workers and allowing sufficient flexibility so as to not hinder production or productivity. This bill before the House today is basically a kick in the head for hard-working New Zealanders but there is a bit more to it than that. It is seeking to apply a set of rules for which there is already a great deal of flexibility and it really goes to show just how out of touch this bill is with the reality of the workplace and with owners of small to medium sized businesses up and down the country.The bottom line is that small-business owners have understandings with employees. Café owners retailers electricians—they all expect that their workers will go the extra mile when they are faced with a deadline and staff by and large are obliging. They need to work. They know how hard it is to actually find a job in today’s environment. Unfortunately this bill is not about bettering business. It is definitely not. Once again this Government is attempting to pass legislation for a small problem that does not exist in reality. Once again it has misunderstood working relationships in small businesses and companies and once again it is pursuing an anti-worker agenda when most businesses seem content with the status quo.For these reasons New Zealand First is pleased to be voting against this bill.Dr CAM CALDER (National):It gives me a slight amount of pleasure to rise and talk on this bill the Employment Relations Amendment Bill. The purpose of this bill—Barbara Stewart: It’s a terrible bill.Dr CAM CALDER: Barbara it has a lot of good points to it. It amends the Employment Relations Act 2000 in relation to collective bargaining flexible working arrangements good-faith bargaining rest breaks meal break provisions and the Employment Relations Authority. What do we expect to have as a result of these changes? Well we expect faster resolution of disputes through changes to the processes of the employment relations—Barbara Stewart: You want to increase productivity.Dr CAM CALDER: What can be wrong with that Barbara? What can be wrong with that? Nothing. We also expect that the extension of the flexible working arrangements means that any employee not just caregivers can ask for flexible work. Also employees will be able to ask for flexible working arrangements from the start of their employment. I just picked the eyes out of a couple of the positive things of this bill. I will restrain myself from any further comment and commend the bill to the House.CAROL BEAUMONT (Labour):Well that speech by Dr Cam Calder was a rather pitiful attempt from across the other side of House on such a major piece of legislation. I intend to take my full 10 minutes because this legislation is hugely significant. This Employment Relations Amendment Bill does a number of things and I just want to outline them for people who are listening. We have got a Government that is saying that this bill makes minor or technical changes to the Employment Relations Act. Nothing could be further from the truth. This bill will actually undermine the wages and conditions of all New Zealanders. This bill works against the key objectives of the Act it seeks to amend in terms of undermining our commitments to working New Zealanders and our international commitments to things like collective bargaining. The main changes focus on collective bargaining and include removing the duty to conclude a collective agreement and allowing employers to opt out of multi-employer collective bargaining which is where we operate across more than one workplace. It has a strike tax to try to make it more difficult for workers when they are trying to settle a collective agreement and they use the ultimate tool that they have to do that. It will make it more difficult. It removes basic entitlements to meal and rest breaks. For people listening to this I ask you whether that sounds like minor or technical changes. I do not think so. I think that this is a Government that is very good at spin. It is very good at just repeating the same messages. Whether or not they are actually accurate is by the by. It is like if you say it often enough it will become the truth. Well in this case I can assure people that that is not the case.The impact around collective bargaining I want to really unpick because collective bargaining is the way that working people together negotiate wages and conditions and improve their position to both promote and protect their interests. That is around improving their wages but it is more than that; it is also around ensuring that they get decent rest breaks have conditions of employment get leave improvements and all of those sorts of things. Most of the things that we would now take for granted in this country the things that we think are normal have been obtained through collective bargaining and through unions and employers reaching agreements on fair wages and conditions. This is about an exchange. When a person works for somebody else they are exchanging their labour. In our value system in this country that exchange is meant to be a fair one. It is meant to be about a fair day’s pay for a fair day’s work. That is what I was brought up on—that principle. I know that many other New Zealanders believe in that principle as well.This bill undermines that principle. Making it harder to negotiate a collective agreement will make it harder to improve wages and conditions. We have seen that. We have seen that in this country. The evidence is actually there. It was not that long ago that wages in this country were fairly level with wages in Australia. Over the last couple of decades that gap has grown and it is continuing to grow now. There is a differential of between 30 and 40 percent in wage rates for the same jobs cross-Tasman. But it is more than that. Inequality in this country is growing. Those on low and middle incomes are doing it tough out there. If you do not believe me go and talk to your local budget service. Ask them because what those services tell me—and I talk to a lot of budget services in my consumer rights and standards role—is that among the people they are seeing there is an increasing proportion of those people who are in paid work OK? So it is not just people on benefits; it is people who are what you might describe as the working poor—people who are struggling to make ends meet even though they are working. Their wages do not support their family. That is wrong. That should not be how it is in a rich country like this one.I want to ask who suffers the most. Well obviously we could say that children living in families who are struggling to make ends meet certainly suffer but when you look at it it is Māori workers it is Pasifika workers and it is women workers who actually are worse off when we fragment collective bargaining and when we say: “Let’s do it individually. Let’s not worry about getting together as a group and trying to improve our wages and conditions.” The net impact is that those people who are less able to negotiate individually will be far worse off. I just want to say here for the record that it is not just people who are covered by collective agreements who benefit from collective bargaining. Collective bargaining has a much wider reach. It does still have an impact across industries where there is collective bargaining in place. As we reduce that as this bill will do we will see wages driven further down.While I am talking about women and women in the paid workforce I want to acknowledge a woman I worked with and a woman whose funeral I went to today. That is Viv Walker. I worked with Viv at the New Zealand Clerical Workers Union here in Wellington many years ago. Viv was a battler for women workers. At her funeral it was acknowledged that what she was saying to people up to the day she died was: “We have to get rid of this Government. It is not looking after the interests of most of the people living in this country.” And that is so right. This bill is another example of working people in this country being harmed by the actions of that Government—the Government members across there who sit there and serve the interests of their corporate mates rather than the interests of low and middle income New Zealanders. I want to acknowledge the work that Viv did. I want to acknowledge her as a strong woman who fought for fairness in the workplace and say that this bill goes against everything that she stood for.Going back to low wages I want to say that it means that families cannot necessarily afford to have decent food. Does that matter to anybody across the House—decent food? What becomes a discretionary spend in a household is actually food because they cannot change what they are paying in rent or mortgage or whatever.Meka Whaitiri: Power bill.CAROL BEAUMONT: They cannot change the power bill—that is right—and a whole lot of other things. What becomes discretionary? Families’ food bills. That is shocking. That is just disgusting. It puts stress on families and that has a whole lot of negative consequences. It could look a whole lot different.Mike Sabin was talking earlier about productivity. Well actually a cost-minimisation approach—a “screw down the labour costs” approach—will not lift productivity in a sustainable way. What will lift productivity are decent workplaces where people are well trained where they are treated with respect where there is fairness in the workplace and where they are paid well. That is what will mean that you have an engaged and productive workforce. There is plenty of evidence to show that when workers are treated in that way and when they have a collective voice actually they can work with their employer to lift productivity in that workplace. That is the way to lift productivity not as Mike Sabin says a bill like this designed to reduce wages and to treat people as commodities whose labour you screw down the cost of.I want to urge people to think about what kinds of workplaces we want in this country because this bill is going in a very very bad direction. Many New Zealanders will recall what happened under the Employment Contracts Act. This is taking us back. This is back to the future. Recently we had a Danish delegation visit the Transport and Industrial Relations Committee. It was fascinating actually. It was a delegation from right across the political spectrum in that country. I happened to have dinner with the delegation and on either side of me I had two MPs from the equivalent of the National Party. And do you know what? They were shocked—they were shocked—at what they heard about employment relations in this country because in Denmark they actually value collective bargaining. These were National Party equivalents. They value collective bargaining value the role of unions and actually want to see workers paid better and treated with respect in the workplace. They were shocked at how big the divide is in this country between what we are saying and what those across the House are saying.In conclusion I just want to say to members opposite that this bill takes us backwards. This is not the future that we want for our workplaces in this country. This is not going to create a strong economy that can continue to provide the standard of living that we want for New Zealanders. This is a bill that will hurt many working New Zealanders. We will oppose this bill and for those listening to this I say there is a real alternative. If you want decent wages if you want to see workplaces where people are treated fairly and if you want to see workplaces where there is cooperation and high productivity then change the Government.SIMON O’CONNOR (National—Tāmaki):People do not want to change the Government. That is really clear in recent polls. Part of it is that when they listen in to debates like this they hear only backward talk from an Opposition living well back in the 1970s and the 1960s—if not the 1870s—and arguing the old tired arguments. You see one of the great things about being a National Party MP and a National Party member is that we believe in people. We believe optimistically that people can make the right decisions for themselves and their families. I think that something that the Opposition needs to contemplate within the context of this legislation the Employment Relations Amendment Bill is that it continuing to run around declaring every person it decides arbitrarily is a victim or a vulnerable group is actually contributing to that. It continues to keep people down. That is not to say that there are not people including in the area of workers who need help but if you always listen to the Opposition arbitrarily calling people victims holding them down telling them that they are no good—[Interruption] And some of them oh dear they put their hands on their heads and say: “How could this come from a person on the right wing?”. Well you know let us say that a lot of us have actually worked in the community for year after year in the prisons or with the army or in the streets with the workers. This is not just theory.When it comes to the dignity of people you want to give them the positive choices beginning with the opportunities to work and to tell them: “We have a belief in you that you can make the right decisions.” and not make continual excuses—excuses that keep people down. [Interruption] Oh those members hate it. They hate it. You see what we have heard from the other side is negativity pessimism and no vision and ultimately it comes down to a desire for control. That is what we are seeing being pushed back here.The Employment Relations Amendment Bill is introducing that flexibility taking us back to those original principles in employment relations. Yes we are looking to say that we do not want absolute set rest breaks in law. We want that flexibility because you know right at the moment—to use a quick analogy—we do not want to stop because the MPs’ agreement says that we need a 5-minute break at 8 o’clock. That is not how the real world works. It is the same for the people in the nursing professions health professions and so on. We are allowed to have that flexibility.We have heard a lot of concern around the partial strikes. Well all we have done around that is make it more clearly defined so that people know where they stand. When it comes to bargaining we on this side believe that Kiwis can make the right decisions. They can choose to go collectively and deal with the unions or they can choose—like people like me in the past—to negotiate individually. Do you know why? Because we believe optimistically that Kiwis are smart that Kiwis can make that right decision and that they will generously make that right decision.There is a lot of good in this bill. The Transport and Industrial Relations Committee spent a lot of time considering this bill. I certainly acknowledge that there were thousands of submissions. Of course it is important to say that a lot of those were form submissions and they said the same thing. A lot of them as my colleague from Coromandel was saying were from the unions. That does not invalidate them—they absolutely have the right to speak—but of course there is a range. They have that ability to talk and we are very happy for that to happen but sheer numbers do not necessarily speak to the quality or I suppose the range.Hon Member: Labour’s union mates.SIMON O’CONNOR: Absolutely and there is an element of that of course around control and it comes back to why those members do not like this. They want to control. They want to control the way places are run in the same way that they want to control logging now I believe. They want to control the electrical market—Hon Member: Labour knows best.SIMON O’CONNOR: Absolutely—Labour knows best! Was it a hands-on policy? I have said it once before. They want their hands on your wallet and round your throat. They want to control New Zealanders. We do not believe in that.Mr DEPUTY SPEAKER: Iain Lees-Galloway—split call 5 minutes.IAIN LEES-GALLOWAY (Labour—Palmerston North):For those members in the House who were not on the Transport and Industrial Relations Committee—and although I am no longer a member of the select committee I did sit through a number of the hearings on this legislation the Employment Relations Amendment Bill—we heard from all sorts of different people. We heard from cleaners on the minimum wage we heard from aged-care workers we heard from meatworkers who work in the private sector we heard from clerical workers we heard from academics we heard from education support staff and we heard from teachers. We heard from people right across the range the breadth and the depth of the New Zealand workforce—all sorts of different people—and they all came to tell us the same thing which is that this legislation is unfair that it will make their lives tougher at work and most important that this legislation will keep wages down.I say that we had people from all different parts of society—all the different kinds of people whom the National Party seems to hate—but they had some things in common as well. Scott Simpson was quite derisory about the fact that overwhelmingly the workers who came and spoke to us were union members. There is a reason why the people who came and spoke to us were union members and that is that being a member of a union gives a worker the opportunity to be organised. It gives workers the opportunity to have their say on legislation like this. So not only by trying to break up unions through this legislation is this Government trying to keep wages down and keep workers down; it is trying to stop ordinary people from engaging in the legislative and democratic process just like it is trying to stop workers from engaging in their workplace from having a say in their workplace. I heard the previous National Party member—gosh I cannot even remember who it was and I cannot see him now—Carol Beaumont: Simon O’Connor.IAIN LEES-GALLOWAY: —Simon O’Connor—who said that this was about control. Well he is absolutely right because National wants to ensure that workers are under the control of the Government by making sure that they do not have the opportunity to work together not only in their workplaces for better pay and for better conditions at work and to have a say about their workplace and their industry—because shock horror and this might come as a surprise to National workers actually have some really good ideas about what is right for their industry and what will make their industry sustainable. In fact the businesses that have done best through the financial crisis have actually been cooperatives where the workers own the business because they knew what was best for their businesses and they knew how to get their businesses through difficult times without having to lay people off. That is the power of working together that is the power of the collective and National hates it. National hates it because it is working for the 1 percent. It is working for the top end of town—the people who benefit when ordinary people are divided. When ordinary people are divided that is when National does well.I say that we should be doing everything we can to give ordinary people the opportunity to work together and if they work together against that Government then we will back them even more because it is only when people have the opportunity to work together that we see wages increase. I heard Mike Sabin talking about productivity. Well it is absolutely true that as productivity goes up so should wages but have we seen that over the last two or three decades? Have we seen it since the Employment Contracts Act? No way. What we have seen is productivity increase and wages being left behind and that is a direct result of the union-busting Employment Contracts Act which was introduced in the early 1990s. What we should be doing is trying to recover ground for workers. We should be saying that all those ordinary New Zealanders—the cleaners the meatworkers the teachers the academics the people who work in engineering firms the people who work day in day out doing the right thing and trying to get ahead in life—should be given the opportunity to work together to get ahead but no this National Government believes in divide and rule. If we stand united that is when we will beat this lot.JAN LOGIE (Green):I am pleased to take a call and express the Green Party’s unequivocal opposition to the Employment Relations Amendment Bill. Earlier my colleague Denise Roche outlined many of our reasons for opposing this bill and tonight I would just like to focus primarily on one area in relation to collective bargaining. This bill attracted 13677 submissions and from my calculations less than 1 percent supported this bill. But of course this Government listens to only 1 percent so it is really no surprise that the bill has come back with very little amendment.This bill is another demonstration of whom this Government is serving and it is certainly not the majority of New Zealanders. This bill is yet another example of the voices of the privileged few overriding the voices of the many. It is yet another demonstration of the inequality that this bill will exacerbate. One of the alleged aims of this bill—so ironically—is to ensure “a balance of fairness for employers and employees”. George Orwell would be proud of this example of double-speak because most New Zealanders know and they know at a very deep personal level how out of kilter our system actually is.Employers are currently holding too much power and this bill gives them several more fairly hefty tools to add to that imbalance. We can already see the effect of the current imbalance even without these changes when we look at how the benefits of the very significant increases in productivity in this country over the last few decades have been channelled into profits and chief executive officer pay packets rather than being shared with the whole team who actually generated this increased productivity.We see how out of kilter things are in the struggle of the cleaners in this very Parliament to get a living wage. We see the current imbalance with our rest home workers currently struggling to get by on just over the minimum wage while they hold people’s lives in their hands every day doing critical work for our society and our economy. We see how out of balance the system is already when we see that over 40 percent of New Zealanders are defined as living in vulnerable economic circumstances.We see how out of balance the system is already when we know that two out of five children in poverty in this country are living in working families. This is not a sign of workers having too much power; this is clearly a sign that employers are holding too much power and too much of the benefit of our economic work. In a new Government the Greens will be advocating for more tools for employees to help negotiate fair and safe work conditions and wages.This bill puts barriers in the way of negotiating fair contracts. It undermines the original intention of the Employments Relations Act which is to promote collective bargaining. It takes us back to the bad old days of the Employment Contracts Act which alongside benefit cuts was largely responsible for the massive growth of poverty and excessive wealth in this country. We do not support that. It is not serving us as a country.This bill removes the duty to conclude bargaining and removes the requirement for employers to bargain for multi-employer contracts. Both of these provisions will make it less likely that some employers will want to negotiate collectively. And it removes the requirement in the Employment Relations Act that collective employment agreements be offered to new employees. That is effectively a return to individually based bargaining. It is not going to work for the people who need the most support who are contributing the most to our economy.JAMI-LEE ROSS (National—Botany):I commend the Employment Relations Amendment Bill to the House.The question was put that the amendments recommended by the Transport and Industrial Relations Committee by majority be agreed to.A party votewas called for on the questionThat the question be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes58New Zealand Labour 34; Green Party 14; New Zealand First 7; Māori Party 2; Mana 1.Question agreed to.Bill read a second time.New Zealand Superannuation and Retirement Income Amendment BillFirst ReadingHon BILL ENGLISH (Minister of Finance):I move That the New Zealand Superannuation and Retirement Income Amendment Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill. I want to start by acknowledging the encouragement and support of the Attorney-General. He is clearly keen to see this bill pass through the House.This bill implements some changes to Part 2 of the New Zealand Superannuation and Retirement Income Act. These are changes related to the activities of the Guardians of New Zealand Superannuation. It is the manager and administrator of the New Zealand Superannuation Fund. I just want to remind the House about why the activities of the fund might matter. It was set up under the previous Government by Dr Michael Cullen with an elegant legislative scheme and funding formula designed to allow New Zealand to pre-fund some of the costs of national superannuation—in fact pre-funded to the extent that tax rates would hold steady while the population aged. In that sense it is a form of savings for today’s taxpayers where they will avoid tax increases in the future.The New Zealand Superannuation Fund is getting rather large. Even though the Government has not made contributions to it since we have been in Government over the last 5 years—Andrew Williams: Why not?Hon BILL ENGLISH: —because we were not willing to borrow to make contributions to the fund—it has made fairly significant returns. Even in retrospect the Government would not have changed its view about that issue. Because of the returns it has now built up to a $25 billion fund.It is part of an ongoing process of change in the taxpayers’ balance sheet. In fact if you add up all the managed funds on the taxpayers’ balance sheet the New Zealand Government balance sheet it is well north of $50 billion and before too long it will reach $60 billion. The popular perception—I have to say cultivated by the Opposition—is that taxpayers own lots of businesses that generate lots of profits. That might have been the case in the past. Just to give a sense of the relative size of these things the electricity generators all rolled up together may be worth say $10 billion. The New Zealand Superannuation Fund is 2½ times the value of all the electricity generators put together. In fact it is a pretty similar size to ACC. Over time the Superannuation Fund and ACC will continue to grow.Our balance sheet is becoming increasingly dominated by shares and bonds owned by the Crown. So it is becoming much more of a fund manager’s balance sheet and much less of a business owner’s balance sheet. In fact the proportion of it that is devoted to businesses is probably down to somewhere around 4 or 5 percent now. The proportion of it that is managed funds is growing pretty rapidly and that which is property holdings—roads hospitals schools—is pretty steady.Over time the efficiency and the governance of these Government-controlled fund managers is going to become more and more significant to the economy and certainly to the taxpayers’ balance sheet. That is why there is an ongoing programme of work looking at the efficiency and effectiveness of the management of not only the New Zealand Superannuation Fund but also the other large funds—ACC the Government Superannuation Fund the National Provident Fund and the small one in the litter the Public Trustee. So there is a focus on whether we have got the structures right there because for instance lower costs over 20 or 30 years can make a big difference to the return.The way these funds are organised to manage the much more significant risks they are taking is pretty critical to taxpayers. The flip side of these high returns of recent years in the Superannuation Fund is high risk. The reason they make big returns at the moment is that they are making fairly risky investments. There will be years where they make zero or negative returns. That is almost certain in a long-term fund.I would have to say though that in this case the previous Government set up this fund in about as sensible a way as you could for a Government-owned entity. It has got an independence that we respect that I think the whole of Parliament respects and that is particularly important around its investment policies. The biggest risk to the taxpayer around this fund is that one day politicians decide to override the legislation in order to instruct the fund how to invest.The fund follows theories of diversification. A substantial part of its investment is outside of New Zealand. In fact the majority of its investment is outside of New Zealand. Essentially it takes in cash generated by New Zealand households and businesses and it invests that in offshore equity and debt markets. It is one of the reasons I do not get too worried about the fact that New Zealand borrows money overseas because it is not that difficult particularly if it is matched by investment overseas. It also gives another aspect to the discussions about foreign investment in New Zealand. The New Zealand Government is a fast-growing foreign investor in other countries and I would expect that that investment is respected by the sovereign Governments that run those countries if we do not find ourselves as investors in Australia the US and the UK the victims of arbitrary and populist policies about being a foreign investor.So the efficiency with which the New Zealand Superannuation Fund operates is going to matter and become increasingly significant. The bill here focuses on one reasonably significant issue and then a number of other minor changes but they have all been sought by the Guardians of New Zealand Superannuation. The current legislation prevents the guardians from having control of an entity. That was a soundly conceived protective measure. A fund of this size could easily control a significant part of the New Zealand Exchange. Even now it probably owns a significant proportion of it.Clause 7 inserting new section 59A of this bill allows the Superannuation Fund to pursue the global best practice where it can control entities that are formed “for the purpose of holding facilitating or managing investments of the Fund”. It does not relax the prohibition on control of New Zealand entities but it does allow it to run the kinds of investment entities that are quite common for large fund managers. The guardians will get added flexibility and we would hope—in fact the reason we are making the change is that they believe and we have taken their advice—that it will allow them to structure and access investments more efficiently. That will lead to greater returns for given quantities of risk that the guardians take with our investment.There are a number of other smaller changes—for instance enabling the guardians to delegate the power to appoint custodians and investment managers to those who manage funds on behalf of the guardians so they do not have to do it all themselves and to grant powers of attorney in respect of the management of the fund. These things have been looked at in some real detail and it is considered that they will help the fund to act more efficiently. There are also some references here to the nature of the fund in order to clarify them and to remove ambiguity about the nature of the fund. That is the legislation explicitly states that the fund is not a separate entity of the Crown. There is potential for material gains from this and I commend the bill to the House.Hon DAVID PARKER (Deputy Leader—Labour):I am pleased that the Minister of Finance has finally come around to supporting what is colloquially known as the Cullen fund because at the time it was implemented he called it a “dog”. That is a quote. The New Zealand Superannuation and Retirement Income Amendment Bill is supported going to the Finance and Expenditure Committee by the Labour Party. It will further the good management of the Superannuation Fund.But I would like to remind New Zealanders that it is good if occasionally when it comes to some of these big decisions the National Government could get things right with foresight rather than with hindsight. We heard the Minister of Finance say that with hindsight maybe it should have invested over the—Hon Bill English: No no I didn’t say that. I said even with hindsight I wouldn’t have.Hon DAVID PARKER: Even with hindsight he would not have. With hindsight he would not have taken the gains either. That is even more stupid. My goodness! I did not think I heard him right when he said that the first time. The reason the New Zealand Superannuation Fund has done very well recently is that actually sovereign funds can take a very long-term perspective and they can invest in a countercyclical manner in a way that a lot of other funds cannot. A lot of other funds when things are going down in sharemarkets have rules that say they have actually got to reduce their weighting to a particular sharemarket because they have to run their fund in a way that is proportionate to different size asset classes. A sovereign wealth fund like this Superannuation Fund can take a countercyclical view and say that actually this is the time when some of this lemming-like behaviour where everyone follows each other off a cliff is wrong and they can take a long-term view and go in the opposite direction.Sometimes I would like the Minister of Finance to manage these Crown assets with foresight a bit better. Solid Energy—there are lots of those movies Honey I Shrunk the Kids. The next sequel was probably going to be “Honey I Shrunk Another Government SOE—I Ruined It”. What happened with Solid Energy was that the Minister of Finance the Minister for State Owned Enterprises and the Minister of Energy and Resources collaborated to ruin it—to ruin it. They turned Solid Energy from an award-winning profitable company into a dog. They ruined it. They told Solid Energy in the face of rising concern about the importance of environmental emissions like carbon in the face of everyone except Don Elder and the National Party and Gerry Brownlee knowing that there was not any near-term future in lignite to liquids that it should develop its lignite plans. The Minister of Finance Bill English—because it was in his own electorate—proudly stood on the end of a spade turning the first sod from a lignite briquette plant. That was also a dog.This is the same Minister of Finance who wrote to Solid Energy when Gerry Brownlee was saying “Expand please. We love coal.” “Sexy Coal” was the self-titled video that Gerry Brownlee had the audacity to put up on his own website prior to the 2008 election. They encouraged Solid Energy to expand. They then wrote to Solid Energy and said “Please take on more debt on your balance sheet.” Mr John Palmer the chair of the company at the time came back and said “It is not prudent to carry these high levels of debt.” The Government said “Do it anyway.” and then it said “Please pay us higher dividends.” So there was more expansion into risky coal more debt and higher dividends. Then what happened? It has got a dog now.The Government’s silliness does not end there. The Minister of Finance said that the Government is very proud of the way ACC is going. ACC is an institution we should be proud of. It is now just about fully funded in terms of its tail because successive Governments—Hon Bill English: Got rid of by a Labour Government.Hon DAVID PARKER: No actually that is not correct. No that is not correct Mr English. The prior Labour Government invested to fully fund the tail a measure that was proposed by the prior National Government—it might have been Bill English was it or Bill Birch his predecessor—carried through by the Labour Government and now carried on by the National Government. We all agree that we should fully fund the tail of ACC. But then what else has National done? Well actually National got a report from ACC last year—it was last year—saying it should drop levies because it was over-collecting in respect of current costs and over-providing more than a fair amount in respect—Maggie Barry: What’s this got to do with superannuation?Hon DAVID PARKER: It is actually the ACC pool that the Minister was referring to but Maggie Barry does not understand that. So what did it do? Did it take that advice? No it did not. National ripped off New Zealanders by overcharging them for ACC fees in their registration and petrol so that it could construct a surplus—by taking money off people for ACC levies—when it had given tax cuts 40 percent of which went to the top 10 percent of income tax earners and could not be afforded.What else has National done wrong? I will tell you something else it has done wrong. It has allowed the New Zealand Superannuation Fund to invest in infrastructure. This is something that Michael Cullen prevented but the current Government allows. It allows the New Zealand Superannuation Fund to invest in infrastructure assets some of which used to be funded off the Crown balance sheet. These are things like public-private partnerships which this Government is keen on in schools or in respect of some roading projects. What is the effect of that in the future? In the old days that would have been funded off the Crown balance sheet. Now some of that is off the Crown balance sheet—well it is actually on the Crown balance sheet but it is funded through public-private partnerships that involve private participants. In this context the New Zealand Superannuation Fund is a private participant.So what happens when you roll forward 30 years and you start drawing down the New Zealand Superannuation Fund to pay for that bulge in superannuation costs? You have actually got to take the money back off the Government or out of the New Zealand economy rather than actually having it set in a pool that does not suck it out. It is sort of taking one pot of money that should be available for New Zealand and saying that we can spend it for two purposes. I think we have to be very very careful that we do not allow the Superannuation Fund to be used for the wrong investments.Let us take what is happening in respect of the State-owned enterprises—the sales of the power companies. You know until a year ago these were 100 percent New Zealand - owned and any profit that was being taken from this incredibly cheaply produced hydro power was being—Hon Bill English: No it isn’t. It’s not cheap.Hon DAVID PARKER: He still does not understand that our hydro power is amongst the cheapest power to produce in the world. It is cheaper than nuclear.Hon Bill English: You’re wrong.Hon DAVID PARKER: It is cheaper. The operating costs of hydro are very close to zero. You should read the First NZ Capital report on the Meridian Energy sale to understand it if you have not already. What has happened over time is that because the cost of alternatives to hydro has risen and because the pricing model pays everyone the highest price that is bid prior to dispatch for that period the price that is paid for hydro power has risen as the cost of alternatives like gas has gone up—when Māui gas ran out—and the cost of new alternatives to gas like geothermal is more expensive. Because of the pricing model that is applied to those more expensive sources of generation it flows through to the price that is paid for hydro power—not to the cost of producing hydro power but the price that is paid to the generators for it—and there has been an enormous lift in the amount of profit taken out of our public rivers. The dams have not changed; all that has changed is the amount of money that is being made out of public rivers.We went along with that when it was being recycled by the Government into hip operations educational services the police and the other things that Governments fund. But now the Government is privatising it so the effect of that is it is privatising the value of our rivers for the benefit of the 2 or 3 percent in New Zealand who bought shares. This is another example of how this Government so plainly governs for the interests of the richest 2 or 3 percent in New Zealand while everyone else relatively languishes. That is going to be the election issue is it not?Denis O’Rourke: Yes.Hon DAVID PARKER: Yes that is going to be the election issue—more of the same from National where it lines the pockets of Rio Tinto it favours the big end of town and it serves the interests of the people who are almost wealthy or vote Labour and get your fair share. That is the difference.Hon Bill English: Ha ha!Hon DAVID PARKER: That is right. That is the difference—40 percent of the income tax to the top 10 percent National will not tax capital gains $600 million of subsidies to the irrigation schemes while it does not even pay for the public water that it uses to irrigate and lift its capital values.This legislation is good legislation. It is good to see that the Minister finally realises that he was wrong to oppose the New Zealand Superannuation Fund in the first place. It is an institution that was created by Labour and we remain proud of it.PAUL GOLDSMITH (National):It is my pleasure to speak on this bill the New Zealand Superannuation and Retirement Income Amendment Bill. It is interesting that Mr Parker makes the claim: “Vote Labour and get your fair share.” It will be a fair share of not very much at all but it will still be a fair share. The problem with Labour is that it is all about spreading the gains but not about actually making the money in the first place. It is the same party that has in its manifesto that we are all about equality of outcomes. How we are going to achieve that in today’s world without a high degree of force is beyond me. That I think is the essence of the problem that we have with the Labour Party at the moment. [Interruption] It is listed in Labour’s manifesto.Hon Bill English: That’s not their policy.PAUL GOLDSMITH: My understanding is that the introduction to the Labour Party’s policy platform from David Parker himself is going to guide the manifesto when Labour is all about equality of outcomes. That means that everybody has got to have the same outcome no matter whether they work hard or do not work hard or whether they are lucky or they are not lucky or whether they are good at rugby or not good at rugby or whether they have got five kids to five different parents—they are all going to have the same outcomes. You do not have to look too far in history to see that you can achieve that only through some very serious force.But getting back to the first reading of this bill its main purpose is to enable the New Zealand Superannuation Fund to invest more efficiently and ultimately generate more return per unit of risk. This is important because the Superannuation Fund invests money on behalf of the Government some $25 billion at the moment and this will help to pay for the increased costs of superannuation in years to come. The long-term growth-orientated invested fund has about $25 billion in assets including about $3.7 billion in New Zealand but most of it is offshore. It is managed by the Crown entity the Guardians of New Zealand Superannuation. The Superannuation Fund as we have heard started in 2003 with $2.5 billion in cash and since then it has returned about 9 percent a year and is a world-class sovereign wealth fund now standing at $25 billion. It constitutes about 40 percent of the Crown’s portfolio. [Interruption]We hear members on the other side from New Zealand First say: “Oh well if they are such great returns why do we not borrow lots of money and put it into the fund?”. They do not seem to realise that there is a connection. The Government suspended its contributions in 2009 because with fiscal deficits as they were the Government debt was already increasing rapidly and it was imprudent to borrow more to invest in global investment markets.I think most people understand that in their own household budgets. You do not go and get your mortgage extended in order to invest on the stock exchange because you know that certainly you have to pay your money back to the bank regardless of what happens but there is no guarantee that what you invest in the stock exchange will necessarily be the same amount as the money that you put in. You can lose money. That is how it works. There is no question that the Superannuation Fund has done a very good job of its investment and it is to be commended absolutely.This bill relaxes the control restrictions in section 59 of the New Zealand Superannuation and Retirement Income Act to allow the guardians to control passive holding subsidiaries which are described in the bill as fund investment vehicles. These changes will enable the fund to structure investments more efficiently and give them some more flexibility.I think that makes sense after the fund has been in existence for just slightly more than a decade. It will continue to be prevented from holding or taking substantial controlling interests in any underlying operating entity such as through takeovers. We do not particularly want them running or controlling separate companies but we do want them to have the ability to control passive holding subsidiaries. The fund has been seeking these as a high priority to enable them to do their best job for New Zealand and to give us the ability to offset some of the money that we will be spending on superannuation in years to come.The income arising from the fund is included in the New Zealand tax base and that is important. We do not want any particular tax treatment of this to be unusual. The bill amends the Income Tax Act 2007 so that any fund investment vehicle or companies in which interests are held by the guardians for the fund will not be subject to the exemption for public authorities so that they can make their decisions based in a tax-neutral setting.The bill also seeks to amend the powers that can be delegated by the board to the guardians. Currently the Act provides that the board must not delegate any of the following powers: the power to grant a power of attorney the power to appoint an investment manager and the power to appoint a custodian. The bill proposes to remove these restrictions. The effect will be that the Crown Entities Act 2004 will apply in full.I am very much looking forward to the submissions and the select committee process in the Finance and Expenditure Committee. I am glad that the Labour Party members have indicated their support for this bill and I hope that together we will be able to work on this legislation and make sure that it is absolutely fit for purpose as I am sure it is as introduced and I look forward to that discussion. Thank you.Hon TREVOR MALLARD (Labour—Hutt South):We saw that member Paul Goldsmith wind down as his speech went on. He started off quite enthusiastic. We were just having a discussion here about how we were actually feeling a little bit sorry for the member. He is the member who basically sacrificed a seat for that prima facie fraudster John Banks and apparently he is being asked to sacrifice it again. He is being asked to sacrifice it again for someone who is going to play “Dueling Banjos”—you know the song from Deliverance from the backwaters of Georgia—with the Prime Minister. The Prime Minister as part of the National Party tune is going to be playing “Dueling Banjos” with the inbred people from the ACT Party or at least the people who want to sleep with their sisters and a number of other arrangements. One little bit of progress I think for the member is that if that was the sort of relationship with John Banks politically it would be getting pretty close to necrophilia at this point.Hon Christopher Finlayson: How many convictions does that member have? Two or three convictions.Hon TREVOR MALLARD: Oh many more than that—many more than that and proud of them. I was a member of the protest movement all over the place who stood up for his principles. I have convictions both of principle and from the police. The member knows that well. What I have not done is what that member has done and denied my own integrity—and denied my own integrity—the way that that member has time and time and time again through the last 30 years of his life. If that member wants to mix it up I am prepared to mix it up with the person with the wonderful cousin. What a problem it is when families have to balance out and you get a member like that member that young squealer over there Finlayson who acts like a pig and denies—The ASSISTANT SPEAKER (H V Ross Robertson): Order!Hon TREVOR MALLARD: —his own conscience all over the place. What are we saying Mr Assistant Speaker? He is allowed to interject on me but I am not allowed to respond to him? He wants the protection of the Chair because he is not prepared to take it when he dishes it up. He is like Bill English in this area. We hear Bill English trying to defend the Government’s approach to the Superannuation Fund. I want to ask members opposite: what do they hope to raise from asset sales? $4.6 billion. What have they lost through not investing in the Superannuation Fund? $10 billion. The National Party has through its mad policy on the Superannuation Fund sacrificed $10 billion which will have to be taken in future from the taxpayers of New Zealand. What National Party members are saying is that the New Zealand taxpayer has to take a $10 billion hit because they had a mad policy on superannuation which meant that they stopped investing in it.It is just a nonsense. We have got in the last 12 months a 27 percent—a 27 percent—return from the Superannuation Fund and an average over its life of 9.55 percent. At the point where the Government was borrowing at 3.2 percent it was turning down the alternative of getting a 9.55 percent return from the Superannuation Fund and 17 percent—17 percent—from the assets that it has sold. It claims to be a Government with knowledge of economic management. It claims—Maggie Barry: Running out of steam now are you? Getting sadder by the moment. Wind it up.Hon TREVOR MALLARD: Oh Maggie Barry has had a long lunch again. Maggie Barry has had a long lunch yet again. We can hear it from here. Well she is lucky they do not have breath tests on the outside of this place because if a breath test was required I think she would be blowing in the bag at the moment. In fact I have got a machine up in my office and I challenge the member to use it. I have got a machine in my office and I challenge Maggie Barry to use it.Maggie Barry: Use it on yourself Trev. You need all the help you can get you bore.Hon TREVOR MALLARD: Here we go again. We have got Maggie Barry again claiming to have economic credibility. A marginal gardener a failed talk show host and now she says she has got economic credibility in the National Party. Well I think she might be right. I think she might be right. I think the way that National is going—Maggie Barry: Does Jane like this does she?Hon TREVOR MALLARD: Oh there we go. That is an interesting approach from the member. That is an interesting approach from the member Maggie Barry. Maggie Barry I will just let you know that I have got quite a long list. I have got quite a long list and if you want to go there I am happy to go there as well. You want to go there Maggie Barry? I am prepared to go there as well.Let us get back to this particular bill the New Zealand Superannuation and Retirement Income Amendment Bill and the arrogance of the National Party members in this area of legislation. They claim to know a lot about the Superannuation Fund. They opposed it. They said it was wrong. They said it was wrong. What has this saved us so far? What has this saved us so far in future superannuation costs? It is about $14 billion. This Superannuation Fund has saved the taxpayers of New Zealand about $14 billion that they would otherwise pay in tax. The National Party members—I was going to say “to a man” you know old-fashioned—all of them even the women opposed it. Well we would not expect anything else from Maggie Barry. They said it was wrong. They would rather have had tax cuts for their mates—people like John Key. What did he get? He got a $1 million a year tax cut—a $1 million a year tax cut.Tim Macindoe: What rubbish!Hon TREVOR MALLARD: The member said “Rubbish!”. John Key does not deny it. John Key does not deny it and on $57 million worth of assets—any reasonable return. Sam Lotu-Iiga knows that John Key got a $1 million a year tax cut. Yes he is nodding. He knows. Sam knows that that is what John Key got in tax cuts and what National members would rather have done is to do that short-term approach of giving even bigger tax cuts to their mates and of getting bigger tax cuts for the richest people in New Zealand rather than investing in the Superannuation Fund which has already saved $14 billion of taxpayer liability in the future. They say they are economic wizards. I say they are economic failures.Dr RUSSEL NORMAN (Co-Leader—Green):I rise on behalf of the Green Party to speak to the New Zealand Superannuation and Retirement Income Amendment Bill. I think it is important to traverse briefly the history of the New Zealand Superannuation Fund. The New Zealand Superannuation Fund was established by the Clark-Cullen Government in order to basically prepay or to put some money aside to pay for part of the cost of superannuation for the baby boomers as they went through their older years when they would need support from the taxpayer in the form of superannuation. What this fund did effectively was take some of the surpluses that were generated during the 9 years of that Government from 1999 to 2008 and put them aside as savings on behalf of the people of New Zealand.It is important to note that the party currently in Government opposed every attempt to put money aside in order to pay for those future bills. The National Party at the time said the surpluses that were generated during those years should not be used to pay down debt or to put money aside to save for the future but rather should be given away as tax cuts. The current Prime Minister John Key and the current Minister of Finance Bill English are on the record as saying during those years that the surpluses that were generated in those three terms of Parliament from 1999 to 2008 should have been given away as tax cuts to upper-income earners rather than saved or put away in the form of the New Zealand Superannuation Fund. Of course the National Party was entirely wrong. It got it entirely wrong with regard to savings.It is a simple fact that the parties that are now in Opposition—the Greens New Zealand First and Labour—supported Budgets that enabled those moneys to be put aside. So even though the National members now pride themselves apparently on being fiscal conservatives in fact it is the exact opposite. The reality is the exact opposite of what is portrayed by the current Government.The party currently in Government is consistent on one thing which is that it wanted to give away money in tax cuts to the very upper end so it opposed putting away money in the New Zealand Superannuation Fund. It opposed paying down Government debt when it was in Opposition and now that it is in Government it runs very large deficits and has built up $50 billion - plus of Government debt. So National has been very consistent all through those 15 years in wanting more debt to go on the taxpayer and bigger tax cuts for upper-income earners. That has been its consistent position.It should also be said that even though the Green Party supports the New Zealand Superannuation Fund we do not support this bill. We do not support this bill fundamentally because what this bill does is give the New Zealand Superannuation Fund more flexibility to invest in maximised returns through the use of fund investment vehicles. Fund investment vehicles will enable the greater use of tax havens for tax efficiency. The Green Party takes the view and has consistently taken the view that it is the use of tax havens internationally that has undermined the ability of Governments around the world to raise the taxes they need to pay for the things we all value. Public health public education and all the other good things that Governments deliver do not come free. Someone has to pay for them.What we have seen is that taxes have increasingly fallen on working people and the ability of the Government to enforce taxes on large multinational corporations has increasingly declined. It has become harder and harder for Governments to force multinational corporations to pay their taxes. So for example we have seen some very famous cases recently with regard to Google and Facebook where they are able to avoid paying their taxes through the use of tax havens. Unfortunately what this bill does is enable the New Zealand Superannuation Fund to avail itself of the use of tax havens more than it does currently and for that reason the Green Party will not be supporting this bill.It seems to us that a Government fund like this—a sovereign wealth fund—should be setting an example. Rather than undermining it should be setting an example that shows that it obeys tax laws and pays its taxes and does not use tax avoidance measures such as are enabled by this bill in order to avoid paying its taxes.If sovereign wealth funds like the New Zealand Superannuation Fund use these kinds of fund investment vehicles in order to avoid paying taxes it then makes it very difficult for Governments to go to large multinationals like Google and Facebook and say to them: “We want you to stop using tax havens to avoid paying your share of taxes.” We know that when the large multinationals like Google Facebook and all the rest avoid paying their taxes it is ordinary working people who end up having to pay more tax in order to fund the things we all want—those things like public health and public education. Tax as they say is the price of living in a civilised society. So if we want large multinationals to pay their fair share it seems to me counter-intuitive that we would pass legislation that essentially facilitates a sovereign wealth fund—our very own New Zealand sovereign wealth fund the New Zealand Superannuation Fund—to use tax havens and for that reason we will not be supporting the bill.I would also say with regard to the New Zealand Superannuation Fund that there are some very interesting opportunities opening up for the New Zealand Superannuation Fund in forestry in New Zealand. The New Zealand Superannuation Fund has become a large player in the New Zealand forestry sector and it is one of the strategic objectives of the Green Party—and also I know of the Labour Party—to have more value-add within the forestry sector. So having the New Zealand Superannuation Fund as a big player in the New Zealand forestry sector I think provides real opportunities for a new Government—as we are going to get on 20 September—to partner with the sector in order to work together to get value-add within the forestry sector.Instead of simply exporting all our logs as raw logs which is the current Government strategy we believe that you can partner between the Government and the forestry sector. So having the Superannuation Fund engaged in the forestry sector on a large scale is I think a great strategic opportunity for New Zealand to work together to get much greater value-add within the forestry sector. I would also note the role of iwi organisations who are also major players in the forestry sector now. So I think there is a very optimistic future where we could see a partnership between a new Government focused on New Zealand’s strategic opportunities working with the Superannuation Fund as a big owner of forestry and iwi forestry owners to add value within the forestry sector.I would also note that with regard to retirement income which is the other part of the title of this bill the Green Party’s Solar Homes project is of course a very important part of retirement income. We know that many New Zealanders approaching the age of entitlement for New Zealand superannuation—65—are very interested in investing in solar photovoltaic panels in order to basically give them some protection against ever-rising electricity costs. We have seen that under this Government electricity prices have increased by 20 percent in 5½ years so what we have seen from a lot of older New Zealanders who are approaching the age of entitlement for New Zealand superannuation—65—is that they want to provide themselves with some kind of protection against the ever-rising electricity prices that came out of the failed Max Bradford electricity model. So that is why the Greens’ Solar Homes project is all about providing some kind of support for New Zealanders particularly those in that situation as they enter their post-65 years and want to protect their retirement income.In terms of retirement income I would also note that for a lot of New Zealanders owning their own home is a very important part of that. If you own your own home you are in a much stronger position post your 65th year. If you own your own home you are in a much stronger position than if you are still in the rental market. It is with some alarm that the Green Party has noticed the rapid decline in homeownership rates in New Zealand which has been driven by the ever-escalating increase in prices. Of course that increase in prices has been driven by the fact that we do not have a capital gains tax excluding the family home. We do not have a capital gains tax on investment properties in New Zealand. It is also being driven by the very high level of foreign interest in the New Zealand housing market. At least 12 percent of the Auckland demand side is now coming from offshore and no doubt it is probably actually double that—much higher than that. That is driving prices out of the reach of ordinary people.The result of that is that ordinary working people are struggling to be able to afford to buy their own homes. As they approach retirement—and this is going to happen further down the track—more and more people will find themselves not owning their own home and that puts them in a more vulnerable position. That is why the Green Party and others have been supporting proposals to make housing more affordable. It is so that ordinary New Zealanders who are not millionaires like many in the National Party but are just people who make a contribution and work for a living can afford to buy a home and their families can afford to buy a home.We need to make sure that housing is once again within the reach of working New Zealanders so that is part of protecting the retirement income of New Zealanders. It is making sure that homeownership once more becomes affordable for New Zealanders and that electricity is affordable for New Zealanders and I think it is very important that we deal with the tax havens so that it is not middle New Zealand that has to pay all the taxes but multinational corporations pay their share as well. Thank you.MAGGIE BARRY (National—North Shore):I rise to speak on the New Zealand Superannuation and Retirement Income Amendment Bill at its first reading. Before I begin I must say that Trevor Mallard the member who resumed his seat a little while ago would have to be the most compelling argument for retirement that I have heard for a long time. The piece of nonsense that he made us endure really where he is kind of the—we call him the pin-up boy of anger management for the Labour Party because basically he loses his temper a lot and goes toe to toe with Tau and really comes off worse than anyone could ever imagine. Most of us have more conviction than he has convictions which are not inconsiderable.He had a crack at gardeners and I would have to say that that is pretty unwise. Mostly every time he opens his mouth he loses even more votes for Labour if that is possible. To take a crack at gardeners is one of his more stupid approaches. But if we are going on to those horticultural metaphors he is the ultimate dead wood. He is the kind of dead wood that if Labour had any sense it would cut him out. Perhaps Matt McCarten is going to move out and sharpen his saw and have a good crack at him because that is the only way to rejuvenate. You see when you have got a plant that is dying you do need to chop it off. All those dead twiggy growths that are long past their use-by date horticulturally speaking should be chopped off. The manure he has got plenty of. [Interruption] Yes I know the debate is about retirement. So it is a horticultural metaphor about getting a member who is clearly past his best to get off and do something else if he can possibly find it—those convictions being no doubt something of a problem.But getting the best return from investment is what this particular bill is about. The New Zealand Superannuation Fund needs to invest more efficiently. The changes promoted in the bill which others have outlined are actually there to achieve that and I think that is a very good thing. When you look at efficiency governance and particularly Government-controlled fund managers the ongoing work in progressing the efficiency is something that this bill seeks to do.As far as independence is concerned really we need to look at the risks that the Government would face if it overruled what was happening with that independence. We certainly are not of a mind to do that but we do feel that there need to be some changes to amend the powers that can be delegated by the Guardians of New Zealand Superannuation. There are three main powers that need to be amended: the power to grant power of attorney the power to appoint an investment manager and the power to appoint a custodian. The bill proposes to remove these and that will really strengthen the investment fund and strengthen its ability. There will be other opportunities to speak on this bill and I will take them with alacrity. In the meantime I commend this bill to the House. Thank you.ANDREW WILLIAMS (NZ First):I was not listening to the previous speaker Maggie Barry because I wanted to keep focused on the subject at hand and make a valuable contribution to this debate rather than the usual toxic round-up that we receive from the other side of the House. In that respect we are here to talk about the New Zealand Superannuation and Retirement Income Amendment Bill which allows Guardians of New Zealand Superannuation “as manager and administrator of the Fund to control entities formed for the purpose of holding facilitating or managing the investments of the Fund”.The National Government was wrong to stop Government contributions to the New Zealand Superannuation Fund in 2009. In 2009 the National Government suspended Government payments into the fund. The New Zealand Treasury projects that contributions will not resume until 2016-17. As at 30 June 2013 capital contributions not made by the Government totalled $8.6 billion. So in the period that this Government has been in office since 2008—then it made the decision in 2009—it has reduced the contributions to every man’s woman’s and child’s future superannuation by $8.6 billion in that short space of time. That is appalling because during the same period of time the 12 months ended 30 June 2013 the fund posted a 25.8 percent return—a 25.8 percent return.The Minister of Finance Bill English has the cheek to sit over there and say he determined that it was not good to be borrowing money—$100 million a week—and be putting money into every New Zealander’s future superannuation. The Government can borrow at about 4 percent—even less than 4 percent. But the Minister of Finance in his wisdom—even with foresight hindsight rear sight and any other sight—determined that it was not good mathematics to invest in a fund that last year returned a 25.8 percent return.John Hayes: No it didn’t—9 percent.ANDREW WILLIAMS: Go on to its website Mr Hayes and you will see on the website that it says 25.8 percent. The rate of return on the Superannuation Fund since its inception back in 2002 has been an average of 9.35 percent per annum against a risk-free rate of return had it simply put the money in the bank of 4.79 percent. So it is double. It is double what a risk-free return would have been for the whole period.On 12 March 2014 just last week the New Zealand Superannuation Fund invested an additional US$50 million in Bloom Energy in the United States which is a maker of onsite power generation. This followed an initial US$50 million investment in May 2013. So in the last year the New Zealand Superannuation Fund has invested US$100 million in a US energy company. The New Zealand Superannuation Fund has stated that “the investment would help the Fund take advantage of increasing demand for energy globally” to go alongside its traditional energy investments. Is it not interesting that the New Zealand Superannuation Fund which now has $25 billion in assets including $3.7 billion invested in New Zealand is investing large sums of money in overseas energy assets? Is that not interesting?John Hayes: No.ANDREW WILLIAMS: Well it is very interesting—Mr Hayes says it is not interesting—because New Zealand First has said we will buy back the power companies and the utilities that were 100 percent owned by all New Zealanders up until last year. They were owned by all New Zealanders. We have said we will buy them back. A jolly good investment for the New Zealand Superannuation Fund would be to invest back into our utilities and our power companies—take them back but not under Government control so that politicians like Mr Hayes Mr English and others can then flick them on so their mates 2½ percent of New Zealanders can benefit from owning the shares. If we put them into ownership under the New Zealand Superannuation Fund and under KiwiSaver funds so that all New Zealanders can own those assets once again then every drop of water that goes down the Waikato River through Mr Bennett’s electorate of Hamilton East and every drop of water that goes down through Ātiamuri Karapiro and all those other dams can be returning money. They are all like ATM machines all those dams on the Waikato River—they are like ATM machines. Those dams in the future through the New Zealand Superannuation Fund could be returning funds for the future of New Zealanders’ superannuation.Further to that this is all about ensuring that when we all retire at 65 and we will retire at 65—David Bennett: Retire then.ANDREW WILLIAMS: —well some like you Mr Bennett might be a bit earlier than that—we can provide for our seniors when they do finally give up working and employment. New Zealand First in conjunction with this bill—and we support this bill and we think that it is a sensible thing to allow the Superannuation Fund to be able to control its destiny and investments. New Zealand First has a brilliant scheme in terms of superannuation as part of this whole package. That would be that you are entitled to receive it at 65 and keep it at 65 on the basis of how long you have paid into the scheme. If you have been in this country from age 20 through to 65 you would be entitled to have 5 years’ repayment holiday if you are away on your OE travelling or living overseas for a period of time. But for the other 40 years up to age 65 if you have worked here or if you have brought up a family here or if you have been a resident here you would receive 100 percent of the superannuation pay-out under New Zealand First’s policy. For every year that you are out of the country over and above that you would receive one-fortieth less. So if you have been in this country for only 20 years out of the 40 years of that eligible period you would get twenty-fortieths. You would get one-half. But in so doing we would allow portability of superannuation from the countries of origin. So if you are coming out of these countries of origin you can bring your superannuation with you and then get the balance according to how much time you have spent in this country.It is very clear that this country is becoming a soft touch. It is becoming a soft touch for people who see us as a place to come and live because they can then get superannuation very easily. They can then go on to our public health system. They can then go on to our ACC system. New Zealand is being seen as a soft touch around the world to come and live in because we will give out all the handouts.Well if we are going to be serious about this and if we are going to ensure—and we have 600000 superannuitants this year and within the next 15 to 20 years there will be 1.1 million superannuitants and that is a huge blossoming of the postwar baby boomers over the next 15 to 20 years—that the 4.5 million people in New Zealand will be able to afford to keep the superannuation scheme and the payments going we have to have it in tandem with a restructured scheme such as the one New Zealand First is suggesting. We have to ensure that Governments of the day such as National continue to invest in the scheme and that they do not pull it out that they do not stop investing and that the politicians do not meddle with it but continue to allow the superannuation scheme to grow. It is estimated that it will be worth over $100 billion within the next 20 or 30 years. New Zealand First supports this bill but we condemn the Government for what it has done to the superannuation scheme in the last 4 years.The ASSISTANT SPEAKER (H V Ross Robertson): I am going to call the honourable member Ian McKelvie.Dr David Clark: Oh! He wasn’t there. He wasn’t there.IAN McKELVIE (National—Rangitīkei):I was sheltered by a very solid man. I just want to comment very briefly on the last speaker Andrew Williams who clearly does not get investment. This Government has chosen its investment path and it has chosen to invest in the future of New Zealanders not in a savings scheme that could return money or could not. Clearly the investment in the future of New Zealanders has provided a great return. One has only to look at the export receipts for this year to see that.I listened to the Minister of Finance give a clear and plausible description of why this bill the New Zealand Superannuation and Retirement Income Amendment Bill is necessary. I have since listened to the Greens’ co-leader Russel Norman describing his isolationist policy for New Zealand. We have never seen Government interference in any market succeed. Distortion inevitably occurs. I did hear the co-leader of the Greens proposing tonight what sounded like a supplementary minimum price recipe for forestry. I well remember the damage done to our sheep industry by supplementary minimum prices in the late 1970s and 1980s.The New Zealand Superannuation Fund has around $25 billion in it at the moment $3.7 billion of which is invested in New Zealand. The capital market growth promoted by this Government will enable a significantly larger proportion of that fund to be invested in New Zealand in the future. That is what this Government is about. I have great pleasure in commending this bill to the House.Dr DAVID CLARK (Labour—Dunedin North):Thank you—David Bennett: Didn’t have to wait long.Dr DAVID CLARK: I did not have to wait too long as it turned out. The National member Ian McKelvie clearly felt that there was not much to contribute on this bill the New Zealand Superannuation and Retirement Income Amendment Bill.We in the Labour Party will be supporting this bill because it seems that the powers in it are sensible—at least worth discussing at the Finance and Expenditure Committee. Of course the Cullen fund was started under a Labour Government and since its inception in 2003 the fund has returned 9.55 percent a year well exceeding static investments in banks and the like. This Government on the other hand has a shocking record on savings. It suspended the payments to that fund. It has borrowed more money than any Government. It has out-borrowed Muldoon and that is a pretty shocking statistic. This is a Government that has borrowed and borrowed and borrowed. As we all know it has the worst economic record of any Government in the last 50 years and that is quite an achievement.Of course on average we know that since World War II Labour Governments have grown the economy faster and more than National Governments. That in itself is not known by every citizen—that National Governments since World War II have on average grown the economy by 2.9 percent. You know that is not bad for second place. But it is only a two-horse race so let us not forget that. Labour Governments since World War II have on average grown the economy by 3.7 percent thereby growing the economy faster. Labour Governments have proven themselves able to make the big strategic decisions. That is why what we are tinkering with here is a Labour initiative. If you want tinkering National is the party for you. It is interested in tactical moves. Labour of course is interested in the big decisions and the strategic decisions that need to be taken when the economy has challenges that need to be faced.Let us look at employer contributions in the KiwiSaver scheme. It was 4 percent when this Government took it over. The Government took it down to 2 percent and then round it went back up again to 3 percent. This is a Government that has no idea where it is going. One minute it is down the next minute it is up. It is suspending this payment it is borrowing money and now we have a little bit of freeing up for the Superannuation Fund. Well this is sensible and Labour will support sensible steps on the odd occasion that this Government is prepared to take them.We are more focused on the big issues and on making sure that New Zealanders face lower power prices. We are thinking of things like our NZ Power policy which will reduce power costs for businesses by about 5 percent per annum. That is significant. Kiwi households will have their power prices lowered by about several hundred dollars per year—by about $300 to $500 per year for New Zealand households. That is significant. This Government is prepared to let things beetle along ticking out of control slowly getting worse and to manage decline. It regards that as OK because it is now arrogant and out of touch.David Bennett: This is the worst speech for 50 years.Dr DAVID CLARK: The Government members are jollying themselves over there. They are kind of cheerful. They are enjoying being on that side of the House but they have got no real ideas. They do not have an idea about how they are going to take this economy forward and how they are going to ensure economic growth in this country. The Government is busy trying to work out who its coalition partners might be—whether it is crazy Colin Craig and Ms Barry I note is nervous about her seat and well she might be. The fund-raising for the National Party is down in the North Shore and the party instrument is unhappy about that. The party is worried about Jamie what’s-his-name the new guy from the ACT Party who wants everyone to consider marrying their family members. These are the partners it has got. It is worried about the problem of trying to get back into Government at any cost. It does not have the ideas to back it up.I have talked about NZ Power. I will talk also about KiwiBuild. Labour is going to partner with industry to build 10000 houses per annum because we recognise that there is a problem that needs fixing. This Government is content to leave it to the market. I am sure that Minister Sam Lotu-Iiga will leap to his feet shortly to say that the market will solve all of these things. It is like Simon Bridges who says that NZ Power is not going to work that the Labour Party plan is too big and too bold and that the market just needs to settle down. It just needs a bit more time to bed in he said after 15 years in place and power prices still going up out of control. There was $4.3 billion worth of price gouging in the early 2000s. Simon Bridges said that it just needs a little more time to bed in. That shows you how out of touch members have become on that side of the House. They are looking after their own interests and the interests of a privileged few and that is coming at the expense of all New Zealanders.National is watching the gap between rich and poor grow and grow and grow. We know that it is at the highest levels—at the highest levels—it has ever been since proper statistics were recorded. We know that hungry kids do not learn properly. So if we have a policy like the Best Start policy that Labour has which is going to make sure that there is a little bit more money in those family households so that kids do have enough to eat in the morning we are going to actually have better outcomes in the longer term. That is the strategic thinking the long-term thinking the kind of change a Labour Government will bring not the tactical short-term penny-pinching that you get from a National Government that gives tax cuts only to the wealthy. We know that of those 2010 tax cuts 40 percent of the value went to the top 10 percent of earners. Just 2 percent went to the bottom 20 percent of earners. So that gap between rich and poor grows and grows and grows and it is those people in the middle who are feeling squeezed the most. They are feeling squeezed because they are watching the cost of living go up power prices out of control and a Government that is happy to leave it to the market. The Government thinks that power prices are about right says Mr Key—it thinks they are about right. It is not prepared to tackle the housing issue—the market will sort it out. Garages are being built—what is wrong with that? Where is the problem? That is the National Government’s answer.Today we have seen another great announcement from the Labour Party which is looking to make real change that will matter and that is to the forestry sector. It is a really comprehensive plan that will give proper tax incentives to build new processing so that we have value-added products not just volume going off in shipping containers. This is a plan that is bold that will make real difference for New Zealanders and real difference for an industry. We have leading-edge innovation. We have a Labour Party committed to research and development. New Zealand has amongst the lowest levels of investment in research and development of the world and that is a disgrace—overseen again by this Government. We want public science backing the development of wood-plastic composites. We want building standards. We want procurement strategies. All of these things are outlined in the Wood First policy announced by David Cunliffe today. These are the big changes not the kind of tinkering that you will find in this bill.We have big plans and that is the same with our savings policies. This superannuation policy allowing the Guardians of New Zealand Superannuation to delegate a bit of responsibility here and there is positive but it is not the kind of change like universal KiwiSaver that Labour would introduce. We know that where they have had it in Australia they have now got $1.7 trillion—$1.7 trillion—in retirement savings and when a business is looking to invest it has got support coming out of its ears if it has got a good idea. In New Zealand if you are wanting to start a business and you have got a good idea I am afraid that it is a case of handing around the baseball cap for $20 notes from the family. That is the difference. That is the vision of this Government here. It is quite happy with that status quo—without savings without the kind of economic structures and without the long-term thinking that will see New Zealand grow the pie.That is why the history tells us that National grows the economy slower than Labour. That is what the history tells us. That is what the history since World War II tells us—black and white statistics clear as day. National is after the tactical short-term penny-pinching. We will grow the economy in the interests of all New Zealanders. We will share the gains. We will not grow inequalities like National does. We will produce value-adding in the forestry sector. We will lower power prices so that all businesses can get ahead and so that families have lower power bills. We will build houses. We will make sure that they are warm. We will partner with industry to build houses and we will make sure there are warm safe houses for all New Zealanders. We will share the spoils across all people in this country not just the wealthy few.Labour has a plan. We have long-term vision and strategic thinking not the short-term tactical stuff that this arrogant out-of-touch Government has produced. We will ensure that any economic recovery benefits everybody not just the privileged few. And that is the difference between the two main parties sitting here in this particular Parliament. The Government is prepared to watch the cost of living continue to go up. It is not prepared to make the big calls. It is prepared to do a bit of corporate welfare to Rio Tinto a bit of a casino deal over here—this kind of thing—and to intervene in the market for broadband. It will intervene here or there where it thinks its interests are at stake. It will do something for a golf game to get a big donation to charity and there is more on that to come I am quite sure. Labour has the big ideas the long-term view in the interests of New Zealanders. National is making short-term decisions and it is hurting New Zealand.JOHN HAYES (National—Wairarapa):I am interested in the strategic plan that Labour has—the big ideas the grand vision—but can I say to the reverend from Dunedin that there is a hole in your argument a hole in your bucket. You will never ever get to implement those big ideas that big strategy until you start hating members on this side of the House more than you hate each other because that is going to make you fail.Can I come to the speaker from New Zealand First Andrew Williams who along with Labour supports this New Zealand Superannuation and Retirement Income Amendment Bill. You criticised us for not sharing for making a bigger gap between the rich and the poor but let me say to you that we do care about superannuitants. On 1 April this year every superannuitant in this country will get an additional payment of $14.68 a fortnight. Why? Because we are paying them the minimum wage—[Interruption] We are paying 66 percent of the minimum wage. This is a wonderful piece of legislation which I absolutely support. Thank you.Hon SHANE JONES (Labour):I would first like to say to those New Zealanders who are listening that they should drink to that speech by John Hayes. I am not entirely sure whether it is white red or rosé but whatever it is it has led to flushed cheeks.I want to stand and actually direct our attention to the name of the New Zealand Superannuation and Retirement Income Amendment Bill. The word “superannuation” is actually closely related to the doing word the verb “to superannuate”. To superannuate is to discard something that is obsolete or past its use-by date. Let me first direct my attention to the other side of the House. We were worried that there was not a Minister in the House. We did see someone up in the far corner sort of underneath a rose bush but then we looked across and we saw the Associate Minister of Local Government. Before I complete my story about superannuating make sure Associate Minister of Local Government that you have a good briefing because I am hoping to superannuate some people in the Whangarei District Council for its gross lapse of stewardship over infrastructure and civil works in Ruakākā.I mention Ruakākā because in Māori it means two parrots. I want to direct my attention before I come back to the Te Kōhanga Reo National Trust imbroglio—because there will be much superannuating taking place there. There will be superannuating at the top of the kōhanga reo governance structure and that pains me because a host of those matuas are my relatives. But this is a more serious issue than whakapapa. The Minister of Education has sought unsuccessfully—as she is soon to be superannuated by the boss when he gets home—to defend her relative the matriarch of Ngati Porou Iritana Tāwhiwhirangi who most certainly will be superannuated if not by the Serious Fraud Office then by us in the political system who will not spend another dollar on a governance structure in the kōhanga reo head office enterprise until it is tidied up.Let me come back however to the Minister of Māori Affairs. The Minister of Māori Affairs—if there is anyone who should study this bill with inordinate interest and enjoy a “come to Jesus” moment with the term “retirement” and the verb of the word superannuation “to superannuate” it is him. It is not for me to talk about the mystery surrounding the Malaysian airline in the context of superannuation. Along with my parliamentary colleagues I am quite glued to learning what has happened to this enormously expensive and highly sought after aircraft. I am going to leave that to one side and enjoy watching CNN but I say that the Minister is the political equivalent of a lost aircraft. We do not know his political whereabouts. There are occasional blips when he comes to earn his pay in the Whare Pāremata. The fact that Hone Harawira is now here more often is actually not only a tragedy for the role of the Minister of Māori Affairs but an achievement for democracy because for the last 9 years we have never seen so much of Hone Harawira.I have heard my colleague from the Green Party—parliamentary colleague I should say—refer to the bill. I have heard him talk about this particular bill providing an opportunity for a bunch of subsidiary investments into key areas. Although that is important we should never overlook the fact that as that member said today in the forestry meeting if foreign direct investment continues to flow into key sectors—and indeed it may continue to flow into the dairy sector but it is certainly in the forestry sector—why should it continue if those investors have no commitment to the New Zealand supply chain? I ask why it should continue if those investors have no commitment to enabling the tertiary and secondary industries associated with that commodity business—i.e. the growing of trees and the sale of logs. On that point I must say that the co-leader of the Green Party spoke a great deal of sense today in relation to the bill.Tim Macindoe: Unlike you in the last 5 minutes.Hon SHANE JONES: Well actually now that the member for Waikato has perked up let me say that the Associate Minister for Primary Industries was grossly outwitted today by the representatives of the Contractors Federation. That gives you an indication of how irrelevant her speech was. She made the fatal error of defending the investment into the dairy sector via the irrigation subsidy. I personally have no political difficulty with that being chosen as a way of deepening our superannuation reservoir of investment opportunities but call it what it is. It is the provision of public money to underwrite the cost of irrigation which will create a tremendous opportunity for the expansion of agribusiness.My only problem with that is that no one is offering that to my old industry the fishing industry. No one is offering that to the forestry industry. Indeed the forestry industry has been turned down five times over recent months in making applications under the grant scheme that has been plundered by the dairy industry or a small group of people in control of other rural commodity businesses. Politically I can understand that. That is the name of the game. When you are in power you reward the people who gave you power. That is fine.All I am saying is do not roll out an argument that it is incorrect for our side of the House to want to grow the Māori presence in forestry create jobs train young men and women for that particular business and move it up into a more dynamic state. Do not say that we are picking winners yet it is good enough to write a cheque out for Warner Bros. Why is it good enough to provide superannuation opportunities for Hollywood investors but it is not good enough for the Māoris and the God-fearing Kiwis in Ruatōria Kaikohe Kaitāia and a variety of other places neglected by the current regime? That is why.Now let me come back to the bill. Although this bill provides some structural changes until such time as capital flows into those areas that have become neglected—and I am not talking about dairy farmers. They have got their opportunity to enjoy their chance while the sun shines upon them. It is just that their fortunes are going to change when we govern because we are not going to allow water to be treated as some resource whose greatest contribution to society is its absorptive capacity to deal with waste. We are not going to be allowing it to be a free resource the value of which is then capitalised into land resources that when eventually sold have no capital gains tax. We might be voted out and never voted in for such ideas but there will be no ambiguity about those particular ideas. I say that as someone who grew up on a farm. I say that as someone who is very proud and a great promoter of our rural sector and our agricultural industries. Unfortunately their level of guardianship and their level of leadership in convincing the rest of us Kiwis that they do not deserve to be regulated and that their qualities of stewardship do not deserve any political oversight has come and gone.Now they are safe. They are safe while that side of the House is there. They are safe while the Prime Minister will do their bidding—not the bidding of the meat industry not the bidding of the wool industry but the bidding of the milking industry. If there is any group that has developed a hugely sophisticated way to milk resources out of the public sector it is the $400 million - odd that is delivered by way of grants for research purposes. It is the collapse of the emissions trading scheme where the dairy industry has enjoyed a “get out of jail free” card. It is not the meat industry not the wool industry and not the fishing industry. As of today it is not the forestry industry. But rest assured that help is on its way. There is no help in terms of what the Associate Minister for Primary Industries had to say today.This has been a free-ranging debate. We have invited our colleagues on the other side of the House to contemplate being superannuated. I have guaranteed that the Māori Party will go as a consequence of its shameless behaviour and its undermining of the process of appointing the new chief executive officer of Māori Television designed wholly to stop Māori Television from exposing the failure of the current Government in its Māori affairs policy and wider matters pertaining to Māoridom. When it goes it can take Georgina te Heuheu with it. Kia ora tātou katoa.DAVID BENNETT (National—Hamilton East):I think the productive sector of New Zealand should listen to the speech on the New Zealand Superannuation and Retirement Income Amendment Bill made by the previous speaker and the next leader of the Labour Party Shane Jones. In that speech Mr Jones said he is going to make an all-out attack on the one sector that is providing the income for New Zealand. Leave this room Mr Jones you should. Listen to what would be coming under a Labour Government: not only a capital gains tax on dairy farmers but an attack on environmental standards by the Labour Party which does not believe that regional councils do their own work these days.Take Mr Jones’ argument and put it the other way round. He is saying we should not be giving any particular industries a special handout without giving it to everybody. Well why attack the dairy industry which is the big income earner of New Zealand? Why give it the special attack that is coming from the Labour Party if it ever gets into Government? Labour will attack the great industry that provides the income for this country specifically to pay for its own plans.Look at your own argument Mr Jones. Turn it in reverse. Why are you attacking the industry that provides the bread and butter of this country going forward? Mr Jones think about your argument as you go forward. To all the voters out there remember that the dairy industry has got the New Zealand economy in the position it is in at the moment. Mr Jones wants to stop that.ANDREW WILLIAMS (NZ First):I wish to table the New Zealand Superannuation Fund returns for 30 June 2013 which show that the fund made a gross return—The ASSISTANT SPEAKER (H V Ross Robertson): That will do. Is there any—Andrew Williams: —a record return—of 25.8 percent.The ASSISTANT SPEAKER (H V Ross Robertson): Order! Well that may be true but the House is the master of its own destiny. Is there any objection to that course of action? There is.Bill read a first time.Bill referred to the Finance and Expenditure Committee.Customs and Excise (Border Processing—Trade Single Window and Duties) Amendment BillBiosecurity (Border Processing—Trade Single Window) Amendment BillThird ReadingsHon MAURICE WILLIAMSON (Minister of Customs):I move That the Customs and Excise (Border Processing—Trade Single Window and Duties) Amendment Bill and the Biosecurity (Border Processing—Trade Single Window) Amendment Bill be now read a third time. Prior to the Committee of the whole House stage these amendments were progressed through the Border Processing (Trade Single Window and Duties) Bill which was actually an omnibus bill. The bill had its first reading on 27 August last year.These bills amend the Customs and Excise Act 1996 and the Biosecurity Act of 1993. The two bills make important amendments to existing legislation to underpin the implementation of the Trade Single Window component of the new Joint Border Management System. The Trade Single Window ensures a smoother flow of legitimate trade and is consistent with Government priorities relating to the provision of more joined-up online services.More than 250000 transactions have been processed to date through the Trade Single Window. Traders are continuing to register and transaction volumes are increasing rapidly. The only feedback I get from all users of it is that it is a fantastic system and they would like to get the extra functionality online as quickly as they can.The bills contain three key categories of amendments in respect of the Trade Single Window: registering users of the Joint Border Management System providing information to and receiving information from the Trade Single Window and consequential changes to offences. The Customs and Excise (Border Processing—Trade Single Window and Duties) Amendment Bill also makes minor technical changes to the Customs and Excise Act of 1996 to provide clarity and to improve the effectiveness of the Act to meet Government policy goals for border management.I want to thank the Foreign Affairs Defence and Trade Committee which has proposed two amendments that have actually been incorporated into the legislation. The first makes consultation over any changes to the de minimis mandatory so that those who are representative of interests that are likely to be substantially affected by proposed changes to regulations governing the valuation method and value for an import consignment below which duty need not be collected will be consulted.The second amendment is to provide for the avoidance of doubt for the making of biosecurity levy orders that enable the levy to be paid at more than one rate and that can set the actual levy rate or rates. The amendment aligns the provisions in the Biosecurity Act 1993 on biosecurity levy orders with other provisions in that Act.I have cut my formal speech short tonight because I thought that after the Committee stage when Mr Shearer and Mr Goff raised a whole lot of issues about secrecy and privacy but have never ever given out—Hon Phil Goff: Time to give a reply to the questions.Hon MAURICE WILLIAMSON: Well see the problem is Mr Goff that I did not have my research done at that time because I remember signing out a whole lot of things. But you know you sit in the chair and you think that the worst thing you can do around this place is make a claim and then get it wrong. So we had Mr Shearer say: “We’ve never heard about this secret increase. We’ve never heard about the secret increase.” Well I want to canvass a few facts.Let us go through some parliamentary written questions first of all. These are interesting. The first one is from Damien O’Connor lodged on 19 June last year. I know that some Labour Party members do not talk to Damien O’Connor—in fact I know that most do not talk to him—but they should have. They should have because he would have been able to tell them that my answer to that written question No. 7575 said: “The capital budget agreed for the Joint Border Management System in 2010 was $75.9m. In March 2013 Cabinet approved expenditure increase of $8.9m from within existing Customs and MPI capex baselines. Cabinet also approved $4.9m fiscally neutral transfer …”. So there is the first disclosure of the extra money to a parliamentary question written by Damien O’Connor.But wait—wait—there is so much more. In fact I am sorry to do this to my colleagues. I have got pages of it. I have actually even got pages of parliamentary questions from Mr Shearer himself who asked the questions and then said—David Shearer: But why didn’t you know?Hon MAURICE WILLIAMSON: Well I did not ask them sir. You asked them and did not remember what you had even asked. For example a written question from Mr Shearer to me on 28 January this year asked: “What is the current projected costs for the completion of the Joint Border Management System and what is the current estimated completion date …?” and in the answer to that question I explained that the budget had gone up to $89.67 million because of extra functionality and scope changes that had been put in. Just like for anybody building a house who along the way decides that they might want to add on another garage or double the size of the kitchen there is a budget increase. [Interruption] That is right. But Mr Shearer did not even know that he had got it. What he said in the Committee was embarrassing for him. He must be so embarrassed. He kept saying: “This is a sneaky little deal that we’ve only learnt about”—hang on I will give you his quote. I will give you his quote: “This is a sneaky little deal that we have only learnt about for the first time tonight.” That was last week when the legislation was in the Committee of the whole House and yet he had got parliamentary written questions with it all laid out.Oh but wait there is more—there is so much more. There is a thing called the Foreign Affairs Defence and Trade Committee. I understand why people who are not on it may not have known what was disclosed to that committee—I understand that. But I am going to check with my colleague Mr Hayes. Are Phil Goff and David Shearer on that committee? Well there you go—they are.So let us go through the select committee report—let us go through the select committee report. Here we go. First of all what went before that committee the New Zealand—Hon Phil Goff: You’re trying too hard Maurice.David Shearer: Maurice is trying so hard. You’re over-egging it.Hon MAURICE WILLIAMSON: Look at how embarrassed they are now. They have been caught with their pants down. They are making out that they never got told all this secret information—“We never got told it.” It turns out that not only have they had it in parliamentary written questions but it has been canvassed at the select committee hearing on estimates. I can give you the date for that—the hearing was on 14 November. I presume the members read their minutes or if they were there listened. The question was: “What IT projects if any were completed or are under way?” etc. and the answer that was given was the Joint Border Management System tranche one with an initial estimate of $75.9 million but now a completion total cost of $89.7 million. There is the increase again. It was given to the members at that select committee hearing on 14 November last year. They came into the House last week and said: “This sneaky Minister—he’s never told us about the increase.” That is what they said. I have got their Hansard—I have got Hansard. It says: “sneaky Minister who never told us”. That shows us how much work those—you know the old guys up in the balcony on The Muppet Show? You know the two grumpy old guys upstairs on The Muppet Show—that is them.Tim Macindoe: Phil and David.Hon MAURICE WILLIAMSON: Grumpy old—what are they called?Tim Macindoe: Phil and David.Hon MAURICE WILLIAMSON: Phil and David—yeah. Phil and David—the grumpy muppets up in the balcony grumpy as hell and making up stories.John Hayes: They hate each other.Hon MAURICE WILLIAMSON: Do they? See I just do not know who hates each other any more over there. It is so hard to work out.There is even more. The select committee report that was made available on 6 December says in it—this is in the report on page 2; I will give it to you—“The Joint Border Management System has been developed since 2010 and has received considerable funding: $75.9 million in Budget 2010 with an additional $13.8 million in 2013.” That is the sneaky bit about it! We put it in the select committee report. We put it in answers to written questions to those members. We actually put it in the estimates stuff. We even had the Customs Service go before the committee and explain it all and Labour members had the cheek the absolute gall to come into this House—Hon Peseta Sam Lotu-Iiga: “Dumb and Dumber.”Hon MAURICE WILLIAMSON: Yeah “Dumb and Dumber” are their names. Now I have found that out. They had the gall.If I had another half hour I would love to go through a whole lot more.Hon Peseta Sam Lotu-Iiga: Just one more.Hon MAURICE WILLIAMSON: OK let us do one more. Let us do one more because there are so many more. Here we go—David Shearer.Hon Phil Goff: Hey try answering some of the questions that you’ve avoided.Hon MAURICE WILLIAMSON: OK we will try. A written question lodged on 28 January from David Shearer about the decommissioning of CusMod asked whether CusMod was supposed to have been commissioned. The answer was no the decommissioning was only ever planned to be done once the full operation of the Joint Border Management System was up and running. But again Labour members said: “Oh it’s all up and running. CusMod is still running isn’t it?”. Yeah. Would you like me to have done a Novopay and switch it all off and then have nothing? Is that what you would like? But again in the short period of 10 minutes—when I can spend my time ripping them to shreds because it is so enjoyable—they sat in this House and David Shearer got up with all of the anger he could muster and said: “This is outrageous. We have got a Minister who has deceived this House. He hasn’t disclosed these numbers. We have never seen them until tonight.” That is what he said. That is what he said and guess what? Not a skerrick of it not a jot of it not an iota of it was even close to the truth. That is an outrage.Hon PHIL GOFF (Labour—Mt Roskill):What an extraordinary speech from Maurice Williamson. I was really glad that there was a doctor in the House Paul Hutchison because Maurice Williamson went red in the face. He huffed and he puffed but what he could not do was hide his embarrassment. That must be the first time that I have heard a Minister get up and confess in his third reading speech that he had stuffed up in the Committee and had not done his homework. Not only had he not done his homework he was being entirely disingenuous about what happened in the Committee because what we know happened in the Committee was that the Minister of Customs admitted there had been a budget blowout—from $75 million out to nearly $90 million. That is a 17 percent blowout. And do you know what he did not explain? He did not explain why there had been a blowout.Hon Maurice Williamson: We did. It’s in the questions.Hon PHIL GOFF: He did not—no it is not. It is not in the answers to the question. The Minister is yet to explain to the House why his budget has blown out by 17 percent. He has yet to tell the House whether that is the end of the process or whether there will be further cost escalation. He has yet to tell the House where that $13 million came from. Is that going to be at the expense Minister—before you leave the Chamber—of the other services that the Customs Service is offering? What happened?The Minister explained one thing when the bill was in Committee. He said that there had been two variations—two variations—that had caused extra cost. Was that an admission that the Government was to blame because the Government having set out the plan for IBM then kept moving the goalposts so that the costs went up? And if that is the case I am really worried because I remember the INCIS program. There are a few others. I think Paul Hutchison was here in the 1990s when under a National Government the police budget blew out $100 million—down the drain with nothing to show for it. This is where institutional memory is quite useful. When we did the select committee inquiry what did we find? There was a failure of the INCIS program with $100 million of taxpayer money down the drain because the Government kept changing its mind and changing the requirements. That is just what we heard from Minister Williamson in the Committee of the whole House: the Government had changed the requirements.So maybe the Government is to blame. It was its incompetence. But then the Minister said in Committee one other thing. I have got my notes and the Hansard is there. He said that there are contractual obligations and that they will hold people to account. Well that suggests that the Minister was blaming IBM. My colleague David Shearer asked the question of whether the Government is going to sue IBM to recover some of that money. Is it IBM that is to blame? Or is it the Government because it kept changing its mind on what it actually wanted and what it needed? Then we tried to find out from the Minister. We tried to screw the information out of him about what the problems were with the system. He said that there were defects. He admitted there were defects. “It didn’t quite work.” was the phrase that he used. Well what did not work? Is it being managed? Is it being resolved? Has it been resolved yet? Is the problem ongoing? Is the problem still to be resolved? None of those questions—asked time and again in the Committee—was answered by the Minister and he comes in here with disingenuous outrage to say that they had all the answers. The problem is that in the Committee of the whole House the Minister gave no answers.Then there were other things. He said that all the information was there. Well I recall and Hansard will have recorded that in the second reading of the debate on this bill I asked questions about IT problems and I challenged the next National speaker to get up and explain what those problems were. There was silence. Nothing was said. The Minister has made no press statement no public comment about why these problems have existed how serious they are and whether they are being resolved. We are yet to hear those answers and the challenge on the next sitting day will be for the next National member to explain what has actually gone wrong here.Then the Minister came into the House and used the word “sneaky”. He said that we had accused him of being sneaky. No Hansard will prove that that is not true that that is dishonest. It was the Minister who said that an honest customs official and an honest contractor were being sneaky by acknowledging that there were problems. That is how keen the Minister was to cover it up. His first answer to my question was: “Who told you that?”. He said: “What sneaky person behind a gorse bush let out that information?”. I am glad the Customs Service and the contractors have been honest about that because the Minister has been anything but honest. It is not the person or persons who said there were problems in the system who were being sneaky; it was the Minister who never fronted up not in the House not in public and not through the medium of the press to explain what was happening with this new system.This is a new system which we on this side of the House support. It was a concept that came out of a Labour Government and it is a concept that is a good concept. I am not challenging the concept; I am challenging the implementation by this Government because we have put up with INCIS under a former National Government and right now we are still putting up with Novopay. It is 2 years after it was introduced and “Mr Fix-it” was put in place—because Craig Foss had failed to fix it—but “Mr Fix-it” has not fixed it. It is getting worse. We deserve to know in this House whether this system of the Trade Single Window IT support is suffering the same sorts of problems as Novopay.I know there is one difference. One difference is that there is a parallel system. The old system is still in place: CusMod. Is that the only reason why this is still working—because they are relying on the parallel system? We deserve an answer to that. I understand that CusMod was due to have been phased out by now. Is that correct Mr Hayes? Is that correct? That is what we understood at the Committee I think. What we now know is that this system the old system is still being generated because the new system is failing. They will not tell us how it is failing the degree to which it is failing but we know there are problems. We know the problems from the body language of the Minister when we met in the Committee of the whole House. We know the problems are real because of the body language of the officials. We know the problem is real because of the pretended offence that the Minister took about us even raising it. But it is right to raise it. I want to know when the Minister became aware of that problem. Why did he not tell the public? Why did he not tell the House? Why was it that he was reticent and it took Customs Service people and those dealing with the Customs Service to bring out to the public that there was a real problem being faced here?It is a tragedy that a concept that is a good concept—it is a great idea to bring together into a joint border processing system both the Customs Service and the Ministry for Primary Industries to have a single window system that is a single portal so that there is a one-stop shop for business. It is a great idea if we can make the system more efficient. It is a great idea for business if it reduces their costs. It is a great idea for the consumer if it means cheaper goods because the border processing costs are lower. It is a great idea if it makes New Zealand internationally competitive.But what we know from the Committee stage finally when the Minister who had never done his homework and admitted that he had not done his homework is that there is a problem in the system. The National Government owes it to the people of New Zealand and it owes it to this House to explain the precise nature of that problem. We do not yet know from the Minister whether the problem has been fixed. My challenge to the National Party member who rises to his or her feet to take the next call is to explain to us what the problem is. What required a blowout of $13 million extra? Is that the last of the blowout? This is only tranche one. Are we going to have the same problems with tranche two? Is this going to be another Novopay-type episode where the Government fails to put in place the machinery necessary to implement a change that is desirable?People in New Zealand have had a gutsful of a Government that cannot manage its IT system properly. Why was the Government not more up front about this? Yes I accept that there was a figure buried in a Customs Service report. I never heard the Minister say a word about it. He never came into the House and answered the questions in the second reading debate. He did not answer the questions—and I took four calls—that were put to him in the Committee stage. This is a Government that has not been upfront. This is a Government that has mismanaged the IT processes. This is a Government that is still to come clean with New Zealanders about the precise nature of the problem.JOHN HAYES (National—Wairarapa):I have got a lot of pleasure in standing up to discuss the Customs and Excise (Border Processing—Trade Single Window and Duties) Amendment Bill and the Biosecurity (Border Processing—Trade Single Window) Amendment Bill this evening. The Minister who is responsible the Minister of Customs is more IT-savvy than anybody else in this Chamber this evening. I think he has done an absolutely fantastic job. I will say to the last speaker the Hon Phil Goff that more than 250000 transactions have been processed to date through the Trade Single Window traders are continuing to register and transaction volumes are increasing. Building a more productive and competitive economy is of course one of our major—The ASSISTANT SPEAKER (H V Ross Robertson): I am sorry to interrupt the honourable member but the time has come for me to leave the Chair.Debate interrupted.The House adjourned at 10 p.m.