Volume 691 Week 46 - Tuesday 25 June 2013Text is incorporated into the Bound VolumeVolume 691 Week 46 - Tuesday 25 June 2013[Sitting date: 25 June 2013. Volume:691;Page:11175. Text is incorporated into the Bound Volume.]Tuesday 25 June 2013Mr Speaker took the Chair at 2 p.m.Prayers.Speaker’s RulingsElectoral Act—Registration and Recognition of United FutureMr SPEAKER: Honourable members on Wednesday 12 June I indicated to the House that I would be giving further consideration to the ongoing recognition of the United Future party and how long the party should be given to put right the matter of its registration under the Electoral Act 1993. The matter is still with the Electoral Commission and appears likely to take more time than originally anticipated. The commission is an independent body and I do not want to influence its decision in any way. However the time that may be involved creates a level of uncertainty that has the potential to disrupt the business of the House. The House’s longstanding practice is that it does not concern itself with the membership of political parties. Its concern is only for their parliamentary membership. The Speaker takes action only when advised of a change to a parliamentary membership.I do not believe that this is now a tenable basis on which to proceed given the 2011 change to Standing Order 34(1) to make it clear that at the commencement of a Parliament or following any subsequent by-election where a member or members are elected in the name of the party that party must be registered under the Electoral Act if it is to be recognised. However when that Standing Order was amended no consideration was given to the situation of a party losing its registration during the term of Parliament. Standing Orders 34 and 35 do not provide a clear path ahead. Therefore I intend to deal with this matter under Standing Order 2 which provides that the Speaker “is responsible for ruling whenever any question arises as to the interpretation or application of a Standing Order and for deciding cases not otherwise provided for.”Registration under the Electoral Act and recognition of a party under the Standing Orders are not the same thing. Registration allows political parties to contest the party vote at the next election and to be considered for an allocation of free time and money to broadcast election advertising. Recognition acknowledges the parliamentary membership of parties elected at the previous election. Recognition provides some benefits in the House but its greatest significance resides in the fact that it enables a party’s parliamentary membership to receive additional funding. In considering the recognition of a party the Speaker must balance two fundamental public interests: on the one hand it is not tenable for a party that cannot reasonably demonstrate its wider representative capacity to continue to be funded; on the other party representation of community interests expressed at a general election should not be interfered with lightly.I have given this considerable thought and have determined that as from today the parliamentary membership of the United Future party will no longer be recognised as a party for parliamentary purposes. The Hon Peter Dunne will be treated as an independent member for parliamentary purposes. However if the party subsequently regains its registration I will revisit the matter of the recognition of its parliamentary membership on the basis that it is a political party in whose name a member was elected at the 2011 general election. In doing so I believe I am properly balancing the competing public interests—balancing on one hand the need for openness and transparency in public funding and on the other hand party representation as determined by the electorate at the last election. Clearly Standing Orders 34 and 35require clarification to provide adequately for the situation the House now faces. A review of the Standing Orders which will get under way shortly provides the opportunity to achieve this.Rt Hon WINSTON PETERS (Leader—NZ First):I raise a point of order Mr Speaker. I seek clarification as to your justification for the operative date of your decision. Second I want to know whether you have read the letter I wrote to you that recites the salient points of a barrister’s legal opinion on this issue. And third we would like to know on what legal authoritative basis you would be reconsidering this issue should the United Future party as you put it regain its membership. Because the fact of the matter is that if it did not have 500 members—and by his own words Mr Dunne said last week that its membership has quadrupled and on Sunday was now over 1000 which means he is talking about 250 roughly when it failed to declare a statutory declaration—I want to know on what legal authoritative basis or for that matter Standing Order you would be reconsidering membership given that I have also recited to you the case ofFitzgerald v Muldoonand the consequences if people decide to act outside the law of this country.Mr SPEAKER: As I said in my ruling I will revisit the matter if the party becomes re-registered and I will consider advice certainly from the Clerk of the House on that occasion. I can give no other information about further advice I may receive at that opportunity. In relation to the second point the member raised of whether I have read the letter that was forwarded from the honourable member this morning—yes I have. The first point raised in the member’s point of order was what day this becomes effective and in my ruling I have said that it is effective from today.Hon TREVOR MALLARD (Labour—Hutt South):I raise a point of order Mr Speaker. It is a relatively minor point but will you make clear as far as the funding is concerned that there is no question of the backdating of the previously unused funding that I think you have made clear exists?Mr SPEAKER: I will certainly look into that matter but the decision is effective today so the funding—the additional funding—ceases from today.Questions to MinistersGovernment Communications Security Bureau—Law Society Submission on Legislative Reform1.KEVIN HAGUE (Green) on behalf ofDr RUSSEL NORMAN (Co-Leader—Green) to theMinister responsible for the GCSB: Does he agree with the New Zealand Law Society when it describes outcomes in the Government Communications Security Bureau and Related Legislation Amendment Bill as “unacceptable and inconsistent with the rule of law”; if not why not?Rt Hon JOHN KEY (Minister responsible for the GCSB):No because the bill clarifies the longstanding practices of the Government Communications Security Bureau to assist other agencies as it has under successive Governments for over a decade. The bill also significantly strengthens the oversight regime for our intelligence agencies. As I have said several times before this is not a debate about whether a particular New Zealander will have intelligence gathered about them and their activities. That will happen with the appropriate safeguards and oversight. The debate is about which agency conducts that surveillance which of course must be done under lawful authority.Kevin Hague: Is he relaxed then that as the New Zealand Law Society highlights the bill will allow New Zealanders to be spied on more extensively and never be told in a manner that is—and I quote—“unacceptable and inconsistent with the rule of law.”?Rt Hon JOHN KEY: I have just answered that question in my answer to the primary question. I do not agree with the Law Society.Kevin Hague: Does he agree with the Law Society that the bill transforms the Government Communications Security Bureau from an agency focused on foreign threats to an agency focused on New Zealanders—and again I quote—“in a way not previously contemplated and that is inconsistent with the rights to freedom of expression and freedom from unreasonable search and seizure under the New Zealand Bill of Rights Act 1990 and with privacy interests recognised by New Zealand law.”?Rt Hon JOHN KEY: No. Other than actually strengthening the oversight regime and some work around support for private companies in relation to cyber-security nothing actually changes from what the Government Communications Security Bureau has been doing under the Labour Government with the legislation introduced by Labour in 2003 supported by Helen Clark and Michael Cullen and half the travellers sitting on the other side of the House.Kevin Hague: Does he stand then by his claim that this bill is simply a matter of clarification when in fact as the Law Society has spelt out the bill completely transforms the Government Communications Security Bureau and gives it expanded powers and functions?Rt Hon JOHN KEY: I completely stand by my statement. It is worth recalling if we go back let us say to 2006 a period when Helen Clark was the Prime Minister. I am sure that if we looked through the records it is eminently possible that the Government Communications Security Bureau provided assistance to the New Zealand Security Intelligence Service the New Zealand Defence Force or the Police. That will be the situation when the law is changed and that is because there are currently difficulties of interpretation and we therefore ceased that assistance. I would also point out that that assistance is very important for New Zealanders and it provides security and safety for New Zealanders. Members who do not want to provide that security and safety for New Zealanders should make that clear to the New Zealand public next time there is a problem.Kevin Hague: Is it the Government’s intention as is currently in the bill to allow the Government Communications Security Bureau—and again I quote the Law Society—to “under a cloak of co-operation with some other specified agency perform any activities that it chooses.”?Rt Hon JOHN KEY: That just shows you what is wrong with the Law Society. It is not under a cloak; it is under a warrant.Kevin Hague: Is the Law Society incorrect when it says that safeguards provided in the bill are—again I quote—“entirely inadequate” to protect New Zealanders’ freedom of expression and freedom from invasive search?Rt Hon JOHN KEY: I believe they are incorrect. I think it is also worth pointing out that if we look at the legislation these are the sorts of things that it is doing in terms of enhancing oversight of the intelligence agencies. We are changing and removing the requirement that the Inspector-General of Intelligence and Security be a retired High Court judge. This will increase the pool of people who can do the job. Secondly we are making the Inspector-General’s office more proactive by increasing the requirements on the office and moving it a step forward from existing review-focused work programmes. Thirdly we will be increasing the resourcing and staffing of the Inspector-General’s office including creating a new role of Deputy Inspector-General—Kevin Hague: I raise a point of order Mr Speaker. I think we have all read the explanatory note. I do not think we need—Mr SPEAKER: If the member is satisfied with the answer then has he further supplementary questions?Kevin Hague: Does the Minister have a genuinely open mind when it comes to the submission from the Law Society and will he ensure that the bill is amended so that it complies with the New Zealand Bill of Rights Act and international human rights standards?Rt Hon JOHN KEY: Of course we will be listening to submissions as they are presented to the Intelligence and Security Committee but of course if the majority of Parliament does not agree with them then no amendments will be made on the back of their recommendations.Economic Programme—Progress2.CHRIS AUCHINVOLE (National)to theMinister of Finance: What progress is the Government making in building a more competitive and productive economy and how is this helping New Zealand families?Hon STEVEN JOYCE (Acting Minister of Finance): I am pleased to report we are making very good progress in building a more productive and competitive economy. For example last week Statistics New Zealand reported on gross domestic product for the March quarter. Despite the impact of the drought earlier this year the data confirmed that the economy grew 0.3 percent in the 3 months to March and 2.4 percent in the 12 months to March. It shows that the New Zealand economy is on the right track in line with Budget forecasts of economic growth more jobs rising wages and a return to fiscal surplus in 2014-15. It is good news for New Zealand families providing them with more security in a world that still faces a number of economic difficulties.Chris Auchinvole: How is the New Zealand economy performing compared with other developed countries?Hon STEVEN JOYCE: Very well in fact. The 2.4 percent increase in GDP in the year to March compares favourably with many other developed countries. In the same period the US grew by 1.8 percent Canada by 1.4 percent Japan by 0.2 percent and the UK by 0.6 percent and the euro area’s economic activity contracted by 1.1 percent.Dr David Clark: Worst economic record in 50 years.Hon STEVEN JOYCE: Do not be a parrot Clark. New Zealand’s economic growth was comparable to Australia’s 2.5 percent in the year to March. Although the drought did affect growth in the March quarter forecasters expect momentum to continue this year supported by rising consumer and business confidence and a lift in construction activity.Chris Auchinvole: How has the manufacturing sector contributed to the economy’s improving performance particularly given the declining indicators for manufacturing 5 years ago?Hon STEVEN JOYCE: The manufacturing sector is in much better heart than it was 5 years ago. Since the beginning of 2009 the manufacturing sector has grown 9.2 percent as measured by GDP which means it has been growing faster than the economy as a whole. The BNZ - BusinessNZ Performance of Manufacturing Index is currently at 59.2 showing very strong expansion—in fact one of the highest readings in the world today. This is in contrast to 2008 when manufacturing shrank in 1 year by 12 percent and the performance of manufacturing index reached as low as 35.8. You could even argue that the manufacturing sector was in crisis back in 2008 under the previous Labour Government.Hon David Parker: Is it correct that manufacturing exports outside of the primary sector are down 17 percent since 2008 and 6 percent in the latest year for which there is a record?Hon STEVEN JOYCE: This is the constant attempt by Mr Parker to pare away at the manufacturing sector to try to find some bits that have not been successful. But in answer to him I do not have those exact numbers here but I can confirm to him that the construction sector did decline during the global financial crisis but manufacturing overall has been growing under this Government when it was shrinking under Labour.Grant Robertson: I raise a point of order Mr Speaker. He has finished now but if Mr Joyce did not have the answer that would have been completely sufficient. He should have had it but he did not have it so—Mr SPEAKER: Order! It is not the member’s job to now start designing the answers he wants from the Minister.Chris Auchinvole: What do current improvements in the economy mean for New Zealand families?Hon STEVEN JOYCE: I am very pleased to report that the outlook for both the economy—Hon Trevor Mallard: I raise a point of order Mr Speaker. There seems to be a continuing trend from Government backbenchers to use both unnecessary points at the beginning of questions and in that particular case irony.Mr SPEAKER: Order! The member Chris Auchinvole has every right to ask a supplementary question. He can ask his supplementary question again.Chris Auchinvole: What do current improvements in the economy mean for New Zealand families?Hon STEVEN JOYCE: Notwithstanding the Opposition’s disinterest I am pleased to report that the outlook for both the economy and New Zealand families has improved considerably. For a start the economy is now growing. In 2008 it was deep in a domestic recession that had started before the global financial crisis. There are around 50000 more jobs in New Zealand than there were 2 years ago. The cost of living is low increasing by around 1 percent annually. In 2008 inflation was more than 5 percent. Floating mortgage rates are at 50-year lows and around half of what they were in 2008. The export sector and jobs in that sector are growing. Five years ago tradables—Mr SPEAKER: Order! That is a sufficiently long answer.Hon David Parker: In light of his answer to my last supplementary—Hon Gerry Brownlee: No you can’t ask a question like that.Hon David Parker: —question that he does not know—sorry?Hon Gerry Brownlee: Use the proper question language.Mr SPEAKER: Order!Hon David Parker: Is that a point of order?Mr SPEAKER: It would be helpful—[Interruption ] Order! It would be helpful if interjections were not continued from the front bench of the National Party.Hon David Parker: Given that the Minister in response to my last primary question said that he did not know that manufacturing exports outside of the primary sector were down 17 percent why is it that the Minister of Finance has not been advised by the Minister for Economic Development who has been in that portfolio for a number of years that manufactured exports outside of primary exports are down 17 percent in real terms since 2008 and 6 percent in the last year?Hon STEVEN JOYCE: I am reliably informed that the Minister for Economic Development has been in the role for about a year and a bit but it may feel like some years to those in Opposition. But I can confirm for the member that the volume of non-food manufactured exports—which may or may not be the exact same definition as hehas—actually did drop 5.8 percent in 2008. Since that time it has grown by 14.6 percent.Government Communications Security Bureau—Legislative Reform3.DAVID SHEARER (Leader of the Opposition)to thePrime Minister: Does he stand by all his statements?Rt Hon JOHN KEY (Prime Minister):Yes.David Shearer: Does he stand by his statement on the Government Communications Security Bureau legislation that “I don’t actually agree it is expanding their powers”; if so how does he explain section 8 in the bill which allows him to authorise the bureau to use its powers in relation to any Government agency without consulting Parliament?Rt Hon JOHN KEY: In relation to the first part of the question yes.David Shearer: How does he explain section 8 in the bill which allows him to authorise the bureau to use its powers in relation to any Government agency without consulting Parliament when he says that the bill does not expand its powers?Rt Hon JOHN KEY: In my view it does not expand powers. The Government Communications Security Bureau has always had the ability to provide agencies support and that will continue provided it is on a warranted basis.David Shearer: How is he balancing New Zealand’s security and privacy with a bill that allows the Government Communications Security Bureau to access data held by any Government agency including the Inland Revenue Department the Ministry of Health or any district health board in the country?Rt Hon JOHN KEY: I am not going to go through all of the records that the bureau might be able to access but the reality is that it has to do that under a warranted basis. It does that providing assistance to another agency. If it was not doing it itself that other agency would have to do that. I would point out to the member that that has been the longstanding practice as established under law by Helen Clark and if that member was really taking his responsibilities seriously he would be voting for the law.David Shearer: Does section 15A in the bill allowing him to grant interception warrants—“(5) This section applies despite anything in any other Act.”—mean that this legislation overrides for example the Crimes Act?Rt Hon JOHN KEY: I am not going to offer a legal view because that is not my responsibility. But what I can say is yes I do have the ability to sign a warrant and that is under that well-established practice as any other Minister responsible for the GCSB has had.David Shearer: Does he think consulting with a Minister of Foreign Affairs provides sufficient checks and balances to ensure that the extended powers in the bill are not improperly used?Rt Hon JOHN KEY: The member is quite wrong. The powers are not expanded or extended. The oversight is extended. But what the legislation is attempting to do is to ensure that the very poorly drafted legislation that was brought in by a Labour Government in 2003 where it operated it providing assistance right through that whole period of time is actually now clarified. I say to that member if he does not want to keep New Zealanders safe if he does not want to ensure that we have bare information about the security of New Zealanders well keep going the way you are son but you will not become—Mr SPEAKER: Order! Do not bring me into the debate. [Interruption ] Order!David Shearer: Is he prepared to put the bill on hold pending a short sharp independent inquiry of our intelligence agencies that would secure broad parliamentary support?Rt Hon JOHN KEY: I now see that the Leader of the Opposition who realises he is on the wrong side of this debate is trying to find a way out with what he is now calling a short sharp inquiry. That is not the way he was describing it a wee while ago. The member knows we have had a thorough review of the Government Communications Security Bureau—absolutely thorough—[Interruption ] Well they have not been able to find one single point that they actually disagree with with the review—not one point. The member knows that because we have had that discussion. It is the SIS that he has been asking about and the Inspector-General has had a thorough review of that.David Shearer: If he believes it is so urgent to put this bill through in its current form when the situation about illegal spying was known last August why did he not just simply act sooner?Rt Hon JOHN KEY: Well firstly the member is quite wrong. There is no proven fact of illegal spying with the one exception of Kim Dotcom. What is correct is that the law has difficulties of interpretation. It is the law passed by Labour in 2003. It is the law administered by Labour in exactly the same way that I have since I have been Prime Minister. The member knows because he sits on the Intelligence and Security Committee and the member knows because he gets briefings from the Government Communications Security Bureau and the SIS that actually the work that they do provides security to New Zealanders and the reason he is not supporting it is that his little pal sitting next—Mr SPEAKER: Order! [Interruption ] Order! That is quite a sufficient answer.Better Public Services Targets—Online Interaction with Government4.KANWALJIT SINGH BAKSHI (National)to theMinister of Internal Affairs: What are the Government’s plans for providing more services online?Hon CHRIS TREMAIN (Minister of Internal Affairs):Yesterday the Prime Minister and I launched the Government ICT Strategy and Action Plan to 2017. One of the key initiatives in this new plan aims for all new transactional services to be offered online by 2017. Online options are faster easier and cheaper to use and will be the default option into the future. This relates to our Better Public Services result 10 which aims for 70 percent of New Zealanders’ most common transactions with Government to be completed online by 2017. The services that will increasingly move online include passport renewals and tax payments amongst a range of other initiatives.Kanwaljit Singh Bakshi: How will New Zealanders’ private information be protected as more services move online?Hon CHRIS TREMAIN: New Zealanders’ information will be better protected with oversight from the Government Chief Information Officer who will report to Ministers on any security risks. The Government Chief Information Officer will also implement improved privacy and security standards and controls across the public sector. The Government Chief Information Officer has already reviewed all kiosk and internet-based information and communications technology systems following issues with Ministry of Social Development kiosks last year. All Government departments have been required to take action to tighten up their services and ensure that New Zealanders’ information is being protected.Kanwaljit Singh Bakshi: What evidence has he seen that New Zealanders are demanding online services?Hon CHRIS TREMAIN: We are seeing a huge demand for online services already with 68 percent of people applying for financial assistance from the Ministry of Social Development now doing that online which is up from 48 percent when the targets were set last year. About 35 percent of adult passport renewals were being done online within 6 months of this service launching. It is clear that there are huge demands for theseservices and this plan the Government ICT Strategy and Action Plan to 2017 takes this country forward.Hon Trevor Mallard: Does he have confidence in his Government Chief Information Officer given his performance in relation to the oversight of Novopay where he chose not to look at the problems because no one asked him to?Hon CHRIS TREMAIN: I have total confidence in the Government Chief Information Officer. He did not have a mandate at that particular point in time for the oversight of Novopay. He now has that mandate and I am confident he will do a great job.MediaWorks—Licence Payment Arrangement Receivership and Outstanding Taxes5.Rt Hon WINSTON PETERS (Leader—NZ First)to thePrime Minister: Does he stand by all his statements?Rt Hon JOHN KEY (Prime Minister):Yes.Rt Hon Winston Peters: Was he aware before the Government’s delayed licence fee deal with MediaWorks was approved that MediaWorks had a substantial and escalating tax bill that was not being met?Rt Hon JOHN KEY: No.Rt Hon Winston Peters: When he was told as it is reported inHansard of 27 September 2012 that the company was as the market said going belly up and tens of millions of dollars of taxpayers’ money was going to be lost what did he do about it?Rt Hon JOHN KEY: It is not for me to wade into a publicly owned company and seek to restructure it. What the Government did do was when there was the issue of licences that had to be paid for up front and it was obvious that MediaWorks amongst a number of players at the time might have had difficulty in actually meeting that cash flow it looked to spread those payments over a period of time. It did so by ensuring there was security over those licences and it did so also ensuring there was an above-market interest rate. That was actually done to protect—Rt Hon Winston Peters: I raise a point of order Mr Speaker. That has got nothing to do with my question. I am talking about—[Interruption ]Mr SPEAKER: Order! I will hear the point of order in silence.Rt Hon Winston Peters: I am talking about a growing then escalating tax bill which got to $22 million at the time of receivership. That is what I am talking about.Mr SPEAKER: Order! The supplementary question as I remember asked when he was told such and such in the House at some time in September what he did about it. The Prime Minister said that he did not do anything but then he went through a number of things his Government did and he was still answering that question when the member rose to his feet to interrupt him. The member has further supplementary questions if he wants to use them.Rt Hon Winston Peters: Why is MediaWorks being allowed to go into what has been described as a “ ‘technical’ receivership” to dodge its tax debt of $22 million when that is not available to other taxpayers in this country be they a company or individuals even though they may be mates of Mr Steven Joyce?Rt Hon JOHN KEY: Firstly it is very important to understand that there is a clear separation between the responsibilities held by the Inland Revenue Department and Ministers of the Crown. The member knows as a very longstanding member of Parliament that it would be quite wrong of me to engage myself as Prime Minister in the tax affairs of MediaWorks and if I did so the member would be on his feet in this House saying things. The second point I would make is that it is not for me either to understand fully the financial circumstances that the receivers face at MediaWorks. But I can say this one general point—and it may well apply; I have not looked deeply intoMediaWorks—and it is this: it is highly likely that this particular case when it comes to this particular tax liability is an unsecured creditor. It is also highly likely that the secured creditors that are the banks which are owed a considerable amount of money and have now put the company into liquidation even if they did not do this particular form the unsecured creditors would not have their liability met. So whatever way it happens it is highly likely that in fact the tax bill would not be met by MediaWorks because the company is fundamentally broke.Rt Hon Winston Peters: Why is the Prime Minister acting on behalf of six foreign-owned banks behind MediaWorks by claiming that he cannot—Hon Steven Joyce: Don’t be a clown. Silly old clown.Rt Hon Winston Peters: Can I ask this question without Steven Joyce—Mr SPEAKER: Order! [Interruption ] Order! It would certainly be helpful if there were no interjections from this side of the House. Would the member just ask his question.Hon Trevor Mallard: I raise a point of order Mr Speaker. I think that when you were on your feet you were referred to as an old clown by the Minister for Economic Development.Mr SPEAKER: I did not hear it and it is not useful for the order of this House for the member to raise that as a point of order. Would the Rt Hon Winston Peters please continue with his supplementary question.Rt Hon Winston Peters: He meant a bald crown talking about himself. But look—Mr SPEAKER: Order! If the member wants to ask his question—Rt Hon Winston Peters: I am entitled to ask the question. Your job is to—Mr SPEAKER: Order! The member is entitled to ask his question but he is not entitled to start it in the way he started that question.Rt Hon Winston Peters: I raise a point of order Mr Speaker. Is it the ruling of this House that you can actually get a question out without constant interruptions from the front bench of the National Party or is that allowed—including insults as well?Mr SPEAKER: I am trying to assist the member. I have told the front bench of the National Party they are not to interject. The member then rose and started with a comment that was unnecessary to his question. I said that was out of order. I am trying to help the member to have the opportunity to ask his question if he wants to do so. [Interruption ] Order!Rt Hon Winston Peters: Did you hear that interjection?Mr SPEAKER: No I did not. If the member wants to ask his question he should do so otherwise we are moving to the next question.Hon Trevor Mallard: I raise a point of order Mr Speaker. When Paula Bennett interjected you looked at her and called her to order. You cannot say that you did not hear her.Mr SPEAKER: It is a matter of which interjection he is referring to. [Interruption ] Order! If the member—for the last time—wants to ask his question he will rise to his feet and ask the question. There will be absolute silence from this side otherwise a member will leave the Chamber. If the question is not asked then we are moving to the next question.Rt Hon Winston Peters: Why did the Prime Minister and his Government not move to put this outfit into statutory receivership thereby enabling the recovery of a tax bill of now $22 million which was agreed by MediaWorks when it signed off with the Inland Revenue Department in the Alesco case—why is he allowing it to get out of this by using a technical receivership that is not available to the balance of New Zealand companies?Rt Hon JOHN KEY: Firstly I do not have any technical advice—or any advice I should say—about ultimately whether the company could have been put into statutory receivership. At no point was I asked to do that. Secondly there is nothing specific or unique as I understand it to the way that MediaWorks is acting in relation to its receivership. That is not specific to that company—any company could technically do that. Thirdly like I said to the member earlier it really depends on how much debt is owed in terms of secured creditors whether the Inland Revenue Department would have received anything.Economy—Reports6.Hon DAVID PARKER (Labour)to theMinister of Finance: Does he agree with ANZ regarding the New Zealand economy that “Our concern is that the domestic-centric mix of growth is not sustainable from the standpoint of New Zealand’s external imbalances”; if not why not?Hon STEVEN JOYCE (Acting Minister of Finance):I agree with a number of statements in the ANZ’s review of GDP in the first quarter for example when it says that lead indicators suggest solid growth in the second half of the year. I agree with it when it says that base momentum is lifting. And I agree with it when it notes a build-up in manufacturing inventories added to GDP. However I do not agree with the particular passage the member quotes. Household savings are in fact up. The Government remains on track to surplus and to begin paying off debt and forecasts have to be considered in view of the large one-off effect of the Canterbury rebuild on domestic activity. And on that basis I disagree with its assertion.Hon David Parker: Why does he expect the public to believe that the recovery is broad-based and the benefits are being shared by all when 40 percent of working New Zealanders did not get a pay rise at all in the last year yet the cost of living—be it electricity prices petrol taxes health or education costs—keeps going up and up?Hon STEVEN JOYCE: Well the member makes an interesting point but I am not sure that it squares with the facts because the reality is that the cost of living is actually the lowest it has been in 9 years. It has gone up about 1 percent in the last year. Interest rates which are of course one of the biggest household costs are as low as they have been for 40-odd years—in fact 50 years I think. That means on balance that most households although they would all like to be further ahead—and of course we all would—are in fact slightly better off in the last 12 months than they would have been the year before.Hon David Parker: Does he understand that New Zealanders are feeling disappointed with his management of the economy given that most of the modest economic gains have gone to the few percentage at the top while everyone else has stayed still or—Hon Dr Nick Smith: Not true.Hon David Parker: —it is—gone backwards?Hon STEVEN JOYCE: I suppose the lie of that statement is probably the polling numbers that suggest that New Zealanders in fact are supporting the economic direction of this Government. The reality is that it has been tough the world over in terms of people getting ahead but in the New Zealand context with low interest rates low mortgage rates a low cost of living increase and a Government that is running the economy carefully and successfully we are actually doing better than most parts of the world.Paul Goldsmith: How does New Zealand’s external balances compare with what the Government inherited in 2008?Hon STEVEN JOYCE: Statistics New Zealand last week announced that the current account deficit in the first quarter was 4.8 percent of GDP and was actually down a bit and compares with the current account deficit in the final quarter of 2008 where it peaked at 8.8 percent of GDP. That was the worst quarter in the last 25 years and came at the end of a 4-year period in which the current account deficit averaged over 8 percent. So what we are seeing is a steady rebalancing of the New Zealand economy and that is reflected in our external balances.Human Rights—Legislative Decision-making and Constitutional Safeguards7.JAN LOGIE (Green)to theAttorney-General: Does he agree with the New Zealand Law Society that “The rule of law lies at the very foundation of a free and democratic society and is essential for the protection of human rights”; if not why not?Hon CHRISTOPHER FINLAYSON (Attorney-General):Yes although I would observe that it is the rule of law not the rule of lawyers and it is certainly not the rule of the mob which is the Green Party’s preferred approach.Jan Logie: Does he also then agree with the Law Society’s view that “a number of recent legislative measures are fundamentally in conflict with the rule of law”?Hon CHRISTOPHER FINLAYSON: No I do not.Jan Logie: Does he stand by that response given that the Law Society identified that this Government has passed five laws that remove the courts’ constitutional role of judicial review three laws that the give the executive—i.e. his Cabinet—unjustified powers three laws that have serious human rights concerns and five laws that he himself gave negative New Zealand Bill of Rights Act reports to?Hon CHRISTOPHER FINLAYSON: No I do not agree with the Law Society. Moreover I say for example in relation to section 7 reports that I provide those reports as the law officer of the Crown and then they are made available to Parliament so that it can debate the issues. The Law Society has got the wrong end of the stick when it goes on about section 7 reports because it does not understand the procedure set out and adopted by this Parliament for many years.Jan Logie: How was his last performance appraisal with the Prime Minister given that the first role of the Attorney-General in the Cabinet Manual is “maintaining the rule of law” and the Law Society has identified he is not doing that and is therefore clearly failing to protect New Zealanders’ human rights?Mr SPEAKER: I call the Hon Chris Finlayson in so far as he sees a ministerial responsibility.Hon CHRISTOPHER FINLAYSON: Well I have my priorities meeting with the Prime Minister tonight and I expect that my report card will be what it was last time—outstanding? Outstanding.Migrant Workers—Protection from Exploitation8.DAVID BENNETT (National—Hamilton East)to theMinister of Immigration: How is the Government planning to further combat the exploitation of migrant workers?Hon MICHAEL WOODHOUSE (Minister of Immigration):This week I announced plans to introduce tough new changes to the Immigration Act in order to make it clear that unlawful and exploitative behaviour will not be tolerated in New Zealand. The new offence will see exploitative employers of temporary migrants face up to 7 years in jail and fines of $100000 and be liable for deportation. By breaking the law unscrupulous employers not only prey on vulnerable staff but also gain an unfair competitive advantage over the majority of good law-abiding employers. The Government is taking the issue very seriously.Dr Jian Yang: What needs to happen to encourage exploited migrant workers to speak out and come forward?Hon MICHAEL WOODHOUSE: Migrants need to be able to speak out against exploitative employers without fear that they themselves will be penalised or even deported. That is why I have issued new instructions to officials asking them to shift the focus on to employers and away from the employee who comes forward with a complaint. I have asked that those who come forward be able to reapply for a new visa should they need it without the fact that they may have been in breach of their previous visa conditions counting against them. It is important that this message gets out in our migrant communities. That is why I have also asked officials to work closely with our migrant organisations and community leaders to build a communications plan through various channels to get that message across.Dr Jian Yang: How will Government agencies be following up on allegations from migrants who come forward?Hon MICHAEL WOODHOUSE: Immigration New Zealand agents and the labour inspectorate will work together to investigate and take action as necessary. As we begin to lift the lid on exploitation and get a clearer picture of the size of the problem we will distribute resources as necessary.Sue Moroney: Answer his question. You’re actually avoiding his question. He wants to know how it’s going to happen.Hon MICHAEL WOODHOUSE: Well if the member would be quiet I will answer the question. We will distribute resources as necessary to ensure that these new initiatives are properly supported. I am working closely with my colleague the Hon Simon Bridges who is in charge of the labour side of things. From an immigration perspective—[Interruption ]Mr SPEAKER: Order! Would the Minister please finish his answer.Hon MICHAEL WOODHOUSE: —I am exploring future funding options around Immigration New Zealand’s enforcement capability.Darien Fenton: Does he expect Immigration New Zealand to do more with less when it comes to investigating and prosecuting cases of migrant worker exploitation as he told the Transport and Industrial Relations Committee a couple of weeks ago given there is no increase in the 2013-14 and out-years Budget for inspection and enforcement?Hon MICHAEL WOODHOUSE: I will clarify what I said to the select committee and it was this: “The last thing I would say is about resources. I make no apology as the Government doesn’t for asking our public servants to do more with the same.” I then went on to discuss the fact that with those same resources we have managed to reduce the overstayer rate by about a third from what it was under Labour and increase the number of voluntary departures from New Zealand by illegal overstayers by 50 percent. I think that is a very good outcome by our compliance team. I expect the same in the area of exploitation.Solid Energy—Communications Consultants9.Hon CLAYTON COSGROVE (Labour)to theMinister for State Owned Enterprises: Does he stand by all his statements regarding Solid Energy?Hon TONY RYALL (Minister for State Owned Enterprises):Yes within the context that they were given. I also stand by my statement that praise was heaped on Don Elder and Mr Palmer not long ago. Actually it was in April last year: “You are performing well.”—a statement by one Hon Clayton Cosgrove at a select committee.Hon Clayton Cosgrove: Does he stand by his statement that “I wouldn’t expect to see it happen again.” regarding Solid Energy’s spending of $48000 on communication consultants Saunders Unsworth?Hon TONY RYALL: Yes.Hon Clayton Cosgrove: Has he made it clear to Solid Energy that it should cease hiring consultants who are specifically contracted to come up with strategies to evade and undermine parliamentary scrutiny and public oversight of company activities?Hon TONY RYALL: I have made clear to the chairman of Solid Energy that I thought the spending of $48000 for the purposes described in respect of Saunders Unsworth was really a responsibility that he would have to take but I did not expect to see such expenditure again.Hon Clayton Cosgrove: Can he confirm that he and his ministerial staff were fully aware of the activities of Solid Energy senior management and Saunders Unsworth in their attempts and efforts to evade and obstruct media and parliamentary scrutiny of the State-owned enterprise’s activities?Hon TONY RYALL: Yes of course my office was copied in on a number of emails—a small number of emails. But I have got to say that my office is copied in to a lot of things including—Hon Clayton Cosgrove: I raise a point of order Mr Speaker. He has answered the question. I seek leave to table—[Interruption ]Mr SPEAKER: First of all I want to deal with whether the member is saying that he is happy with the answer and does not need any further information—Hon Clayton Cosgrove: Ecstatic. Ecstatic.Mr SPEAKER: Then he is now seeking leave to table what?Hon Clayton Cosgrove: I seek leave to table an email from Vicki Blyth Communications Manager at Solid Energy of 11 March 2013 which is copied in to the Minister’s office to one Mark Unsworth illustrating the point made in my question.Mr SPEAKER: Leave is sought to table that email. Is there any objection? There is none.Document by leave laid on the Table of the House.Hon Clayton Cosgrove: Has the Minister been advised that Saunders Unsworth has briefed companies and stakeholders about him as Minister claiming that in relation to his handling of the Solid Energy debacle he has been “incompetent”?Hon TONY RYALL: I would not want to comment on any hypothetical allegations from that member but I would—Hon Clayton Cosgrove: I raise a point of order Mr Speaker. [Interruption ]Mr SPEAKER: Order! I apologise to the Minister.Hon Clayton Cosgrove: I am satisfied with the answer.Mr SPEAKER: I do not even think that the answer has been fully given. We are going to get to the stage when—[Interruption ] Order! We are going to get into difficulty here if a member asks a question and then does not like the answer and so immediately stands up and says that they are satisfied. But on this occasion if the member is satisfied with the answer I intend to move forward. [Interruption ] Order! No we are moving forward.Genetically Modified Organisms—Regulation of Release10.STEFFAN BROWNING (Green)to theMinister for the Environment: Will she be changing the law to restrict councils’ ability to regulate the release of genetically modified organisms in their regions; if so what are the proposed changes?Hon AMY ADAMS (Minister for the Environment):The regulation of the release of genetically modified organisms is and has for more than 15 years been regulated at a national level by the Environmental Protection Authority under the Hazardous Substances and New Organisms Act. I am concerned at indications that some councils are seeking to rewrite what is a nationally set regulatory framework and accordingly it is my intention to progress an amendment to the Resource Management Act to clarify the respective functions and roles of the Environmental Protection Authority and local government in this regard. Communities can be confident that the Hazardous Substances and New Organisms Act provides a robust system of controls and a very high bar for the entry of GMOs into New Zealand.Steffan Browning: Why has the Government’s position changed since Nick Smith wrote to the councils in 2010 saying that it would not change the law to put in place protections but that “this does not preclude a council from restricting or preventing the use of GMOs in their region”? Why has it changed?Hon AMY ADAMS: Actually the position of the Government and the ministry has been consistent in this regard for some years and I would refer the member to Crown Law advice that the ministry has put on its website from 2003 and 2004 repeating its consistent position that it is not a good idea for councils to be regulating GMOs under their plans and that there are serious legal uncertainties as to how well that would work—[Interruption ]Mr SPEAKER: Order!Steffan Browning: I seek leave to table a letter from Nick Smith to the Inter-council Working Party on GMO Risk Evaluation and Management Options. It is dated 5 August 2010 and it shows—Mr SPEAKER: That is enough information. Leave is sought to table that letter. Is there any objection? There is not. It can be tabled.Document by leave laid on the Table of the House.Steffan Browning: Given that the Northland and Auckland councils’ decisions to put in place protections are based on 10 years of investigation and evaluation about how to protect their ratepayers how can she justify threatening to swoop in and override their rights and responsibilities just because it suits the GE agenda of this Government?Hon AMY ADAMS: Well I can assure that member that local councils are local councils. They operate under the national framework. There has never been the ability for them to rewrite national rules that they do not like. If councils have concerns about the way the GM regulation in New Zealand works they should raise those with the Environmental Protection Authority and attempt to address the regulation on a national basis. They should not set up their own independent states where they write their own rules and ignore the national framework.Roading Auckland—Pūhoi to Wellsford Route11.MIKE SABIN (National—Northland)to theMinister of Transport: How is the Government working with the Auckland Council to progress the Puhoi to Wellsford Road of National Significance?Hon GERRY BROWNLEE (Minister of Transport):The Auckland Council has recommended that the road progress through a fast-tracked consenting process and that the Government’s Environmental Protection Authority hold hearings through a board of inquiry and issue a decision within 9 months of notifying applications. I commend the Auckland Council’s regional development and operations committee for its foresight and look forward to improving this vital traffic and economic link to the north.Mike Sabin: What has been the response to the decision to fast track the Pūhoi to Wellsford road of national significance?Hon GERRY BROWNLEE: I have seen numerous reports praising the decision to fast track the consenting process. One referred to the Pūhoi to Warkworth and on to Wellsford road of national significance as the umbilical cord to the north. Another said the project “cannot come soon enough” and that the critics of this essential piece of roading infrastructure are doing no more than engaging in rhetoric. I note the spokesmen for both the Greens and Labour have been silent on this matter.Mike Sabin: When does the Government expect to begin the Environmental Protection Authority process?Hon GERRY BROWNLEE: The New Zealand Transport Agency advised me that it expects to lodge applications for the Pūhoi to Warkworth section of this project with the Environmental Protection Authority in August of this year. It will go through a 9 month hearing process. We aim to be construction ready by mid-2014.Government Communications Security Bureau Review of Compliance—Investigation into Leak and Ministerial InvolvementGRANT ROBERTSON (Deputy Leader—Labour):My question is to the Prime Minister: does he stand by all the answers given—Hon Gerry Brownlee: I raise a point of order Mr Speaker. I think we have heard enough of that question now.Mr SPEAKER: That is not the least bit helpful to the order of this House.12.GRANT ROBERTSON (Deputy Leader—Labour)to thePrime Minister: Does he stand by all the answers given on his behalf to Oral Question No 3 on 13 June 2013?Rt Hon JOHN KEY (Prime Minister):Yes.Grant Robertson: Why then did he say on 30 May about Mr Dunne “I accept him absolutely at his word … I’ve got no reason to doubt that.” when he had been told on 29 May by his chief of staff that Mr Dunne was not complying with the Henry inquiry?Rt Hon JOHN KEY: Because I believed that in the fullness of time he would comply.Grant Robertson: Why did he tell the media on 30 May that he did not need to seek further assurances from Mr Dunne about the leaking of the report when he had been informed the day before that Mr Dunne was not complying with the inquiry?Rt Hon JOHN KEY: Because it is important to understand that I was not running the inquiry. As I said the whole way through I would wait for the report. I was advised on 29 May that there was email correspondence between Mr Dunne and Andrea Vance. I was also told that he was not fully compliant with the inquiry but parties were hopeful that he would.Grant Robertson: Why did he tell Radio Live on 4 June about the Henry report “I’m as much in the dark as anybody else. I haven’t seen a draft of the report. I haven’t had any updates on it.” when in fact he had had updates on it and that Peter Dunne was not complying and when he had regular updates on it between 29 May and 5 June?Rt Hon JOHN KEY: Because that is absolutely correct. I did not get a draft copy of the report. I did not have an update on the report.Grant Robertson: You did.Rt Hon JOHN KEY: I was aware initially that there was non-compliance. I was also told later on that he was going to be fully complying with the inquiry. That proved to be incorrect as well.Grant Robertson: In light of that answer and the amended answer given on his behalf that he had “several conversations” with his chief of staff about the Henry reportbetween 29 May and 5 June did those conversations include an update on whether Mr Dunne was cooperating with the inquiry?Rt Hon JOHN KEY: Yes. On 29 May my chief of staff advised me that there had been email correspondence between Mr Dunne and Andrea Vance and that Mr Dunne’s office had advised my chief of staff that he was not fully complying with the inquiry. On 30 May I was advised that progress was being made and it was likely that he would be complying and on 4 June I was advised that although some compliance had taken place not all of it had taken place.Grant Robertson: Why has the Prime Minister misled the New Zealand public about what he knew about Peter Dunne’s compliance and why does he continue to bend the truth on occasion after occasion?Rt Hon JOHN KEY: I know the member is desperate to put his hand up for the leadership bid that is going on in the Labour Party but I have not misled anybody.Questions to MembersGambling (Gambling Harm Reduction) Amendment Bill—Impact1.Hon SHANE JONES (Labour)to theMember in charge of the Gambling (Gambling Harm Reduction) Amendment Bill: Is it his intention to proceed with the Gambling (Gambling Harm Reduction) Amendment Bill; if so does he believe its effect will be a reduction in problem gambling?TE URUROA FLAVELL (Member in charge of the Gambling (Gambling Harm Reduction) Amendment Bill):Tēnā koe. Hei āwhina i a koe he paku wāhanga ka whakawhitiwhiti i Te Reo Māori i te reo Pākehā. Ki te mema ka mihi ki a ia mō te āhuatanga o te pātai. Hei whakautu i tana pātai āe. Ko tōna tikanga ka heria haerehia tēnei o ngā kaupapa i runga i tōna huarahi. I hangaia e te Pāti Māori hei kōkiri i ngā take huhua pānui nei ki te āta titiro ki te hōhonutanga o ngā mamaetanga ngā uauatanga kua tau mai ki runga i te iwi Māori ka mutu ki te hunga e noho nei te rawakore. Nā reira ka kitea mai ai pea te hua ā ngā tau kai mua i te aroaro. Nō reira he paku wāhanga o te titiro whānui tonu ki ngā mahi hei karo i te āhuatanga o te ngau o te petipeti ki ngā hunga rawakore.[Thank you. To assist you small segments will be interpreted from Māori to English. To the member I acknowledge him in respect of the nature of the question. To answer his question yes its purpose being that this bill will be taken around on its way. The Māori Party created it as a means of debating the many issues reading this and examining in depth the pains and difficulties that are placed upon the Māori people and eventually upon these living in poverty. So the benefit will be seen perhaps in years to come. Therefore a small part of this really would be looking broadly at situations that will avoid the nature of the effect that gambling will have upon those in poverty. ]Hon Shane Jones: Does he expect gambling will be reduced or increased when operators are allowed to shift their machines to more lucrative venues without restriction?Mr SPEAKER: I am just concerned whether that question has anything to do with this particular bill. The supplementary question must be very tight. It must be related to the Gambling (Gambling Harm Reduction) Amendment Bill.Hon Trevor Mallard: I raise a point of order Mr Speaker. I sat on the select committee and this bill certainly does address the transfer of machines from one venue to another and it changes the rules.Mr SPEAKER: On the assurance from the Hon Trevor Mallard I will certainly allow the question.Hon Gerry Brownlee: I raise a point of order Mr Speaker. That is a question about the content of the bill not the process of the select committee nor is it about the intention of the mover of the bill. The rules around questions to members are quite tight.Mr SPEAKER: On the basis of the point of order I have heard from Trevor Mallard I have determined that the question can be asked. If it is helpful to the member he can re-ask his supplementary question.Hon Shane Jones: Does he expect gambling will be reduced or increased when operators are allowed to shift their machines to more lucrative venues without restriction?TE URUROA FLAVELL: Kāre au i te tino mōhio. Kei runga i te āhuatanga o te pire o ngā mahi kai mua i te aroaro. I tēnei wā he kōrero noa ake tērā. Ko wai ka mōhio? Ēngari me pēnei rawa te kōrero. Tērā pea i roto i ngā whiriwhiringa i waenganui i a māua ko te Minita Tremain ko te tikanga ia ka kōkirihia tērā take ā ngā tau kai mua i te aroaro.[I do not really know. It depends upon the nature of the bill and the work that has to be done ahead. At this stage that is mere speculation. Who is to know? But I must really stress this. Perhaps in the negotiations between the Minister and me that issue will be addressed in the years ahead as it should be. ]Gambling (Gambling Harm Reduction) Amendment Bill—Impact2.Hon SHANE JONES (Labour)to theMember in charge of the Gambling (Gambling Harm Reduction) Amendment Bill: How can he proceed with the Gambling (Gambling Harm Reduction) Amendment Bill when the Problem Gambling Foundation says it will have little if any effect on problem gambling?TE URUROA FLAVELL (Member in charge of the Gambling (Gambling Harm Reduction) Amendment Bill):Kai te aroha atu ki te rōpū nei ki te Problem Gambling Foundation. Kei te kaha nei rātau ki te kōkiri ki te whakatikatika i ngā raruraru kua pā mai ki te hunga e rongo nei i te ngau o tēnei o ngā mamae. Ēhara i te mea kei te whakaae atu ki tā rātau e kī nei i te mea mēnā ka whakakotahi nei i tōku pire ki tērā o te Minita ā ka tae mai ki roto i te Whare Pāremata ā ngā marama kei mua i te aroaro. Ko tāku e kī nei āe ka eke ki te taumata e pīrangitia ana ēngari me titiro whānui tōnu. Koina te pai o te noho o tōku pire ki te taha o tērā o te Minita ka kite mai ai i ngā hua.[I empathise with this organisation the Problem Gambling Foundation. It is really working hard to address and to rectify the problems that have affected the ones who have experienced this pain. It is not as though I am agreeing to what it is saying because if I combine my bill with that belonging to the Minister it will arrive in the House in the months ahead. What I am saying here is yes it will make it to the desired threshold but we must really look broadly. That is why my bill sits comfortably alongside the Minister’s bill. It will see the benefits. ]Hon Shane Jones: Has the member considered an amendment to alter the bill’s title to the “Consumption of Dead Rodents (Harm Reduction) Bill”?Mr SPEAKER: Order! That is not a satisfactory supplementary question.Hon Shane Jones: I’m prepared to say it in Māori.Mr SPEAKER: Order! The member can move to question No. 3 if he so desires.Gambling (Gambling Harm Reduction) Amendment Bill—Impact of Amendments3.Hon SHANE JONES (Labour)to theMember in charge of the Gambling (Gambling Harm Reduction) Amendment Bill: Does his Gambling (Gambling HarmReduction) Amendment Bill as amended at select committee fulfil his original intentions of the bill he introduced?TE URUROA FLAVELL (Member in charge of the Gambling (Gambling Harm Reduction) Amendment Bill):Pēnei i ētahi o ngā mema o te Whare Pāremata mēnā ka noho i tērā taha o te taiapa he uaua kia eke ngā pire katoa ki runga i te taumata e tika ana. Mā te kōrero mā te wānanga mā te tō mai i tētahi wāhanga mā te whakatakoto mai i tētahi wāhanga ka ea. I tēnei wā kāre i tino eke ēngari kei reira tonu tētahi painga. Mēnā ko te painga ka puta ki ngā hapori Māori ki ngā mea e noho nei i te wāhi rawakore koinā te mutunga mai o te pai.[Like some members of the House if they sit on that side of the fence it is difficult for all bills to reach the desired threshold. It is by conversing discussing dragging forth a provision or making one that it will be taken into account. At this stage it has not quite made it but a benefit is still there. If it makes it to the Māori communities to the ones living in poverty so be it. It cannot get any better than that. ]Hon Shane Jones: Given the hopeless nature of the current bill what support is he expecting and will he receive anything supportive from Dr Sharples?Mr SPEAKER: Order! That question does not relate to the primary question.Gambling (Gambling Harm Reduction) Amendment Bill—Impact4.Hon SHANE JONES (Labour)to theMember in charge of the Gambling (Gambling Harm Reduction) Amendment Bill: How can he proceed with the Gambling (Gambling Harm Reduction) Amendment Bill given that the Salvation Army says that the Government’s rewrite of his bill means that the aim of his original bill has been largely cancelled out?TE URUROA FLAVELL (Member in charge of the Gambling (Gambling Harm Reduction) Amendment Bill):Kua oti kē i a au te whakamārama i te āhuatanga o taku whakautu ki tērā pātai. Ēngari me pēnei pea te kōrero. Mēnā e aro nui nei tērā mema ka mutu te Pāti Reipa ki tēnei mea o te whakakore i te petipeti kaua e haere ki te Skycity ki te mātakitaki i te whutupaoro.[I have already explained the nature of my response to that question. Perhaps I should put it this way. If that member and the Labour Party at the end of it all really heeded this thing in respect of abolishing gambling do not go to Skycity to watch the rugby. ]Mr SPEAKER: Question No. 5 the Hon Shane Jones.Hon Shane Jones: Supplementary question.Mr SPEAKER: Supplementary question the Hon Shane Jones.Hon Shane Jones: Me pēhea rānei te mema e whakamārama atu ki te hunga e noho mai rā i roto te Ikaroa-Rāwhiti ko te hua o roto i tēnei pire he koretake rawa atu?[How will the member explain to those living in the Ikaroa-Rāwhiti electorate that the outcome in this bill is absolutely ineffective? ]Mr SPEAKER: If the member wishes to answer—yes.TE URUROA FLAVELL: Kāre au i te tino mōhio mēnā e tika ana te whakamārama o te kaiwhakapākehā ēngari kai te pai waiho tērā ki reira. I roto i ngā whiriwhiringa mō tēnei pire i kitea mai ētahi hua o roto i ngā kōrero. Tuatahi ko te hunga e rāwekeweke nei e tinihanga nei i roto i te tukunga o te moni ki tēnā ki tēnā kua katia tērā āhuatanga. Mō te āhuatanga o ngā mīhini e karo nei i te ngote mai o te moni kei reira tonu tētahi whiriwhiringa. Ēhara i te mea kia pēnei i tōku ake pire—ēngari o roto i ngā whiriwhiringa e kī ana te reo Pākehā ko ngā “regulations”. Kei reira tonu te painga.[I do not really know whether the interpreter’s interpretation in English was appropriate or not but that is fine. Let us leave that there. In the consultations on this bill some outcomes were uncovered in the talks. Firstly in respect of those who fiddled and took liberties with the distribution of funds to that group and that organisation that situation has been stopped. In respect of machines avoiding money being siphoned off a consideration is still there. It is not as though and like my own bill—but in the negotiations there are things in there called “regulations” in the English language. The benefit is still there. ]Mr SPEAKER: Question No. 5 the Hon Shane Jones.Hon Shane Jones: Not a supplementary question?Mr SPEAKER: The member has had a supplementary question.Gambling (Gambling Harm Reduction) Amendment Bill—Impact5.Hon SHANE JONES (Labour)to theMember in charge of the Gambling (Gambling Harm Reduction) Amendment Bill: Why did he agree to continue with the Gambling (Gambling Harm Reduction) Amendment Bill when at select committee all of its main provisions were either removed or weakened?TE URUROA FLAVELL (Member in charge of the Gambling (Gambling Harm Reduction) Amendment Bill):Ko taua pātai anō. Kātahi anō ia ka pātai ia ka pātai i Te Reo Māori. He aha te take kei te whakatuarua i te pātai?[It is that same question again. He has just asked that in the Māori language. Why is he repeating it? ]Hon Shane Jones: Supplementary question.Mr SPEAKER: Supplementary question the Hon Shane Jones.Hon Trevor Mallard: I raise a point of order Mr Speaker. Is saying that a member is just repeating a question again when it is a primary question actually an answer?Mr SPEAKER: On this occasion it is. I think the member could have taken quite a lot of time to repeat earlier answers but that would adequately have covered it. I have called a supplementary question if the honourable member wants to deliver it.Hon Shane Jones: Given the member’s pride in being at the table how does this bill show Māori there is value at being at the table?TE URUROA FLAVELL: Mr Speaker—[Interruption ]Mr SPEAKER: Order! [Interruption ] Order! Would the Hon Tau Henare please quieten down so I can hear the answer to his question before I forget the question.TE URUROA FLAVELL: He member’s bill tāku pīre. I tērā wiki e ai ki ngā kōrero e 74 ngā members’ bills i tae mai ki roto i tēnei Whare ko te tikanga i roto i te Tari o te Clerk. Ka mutu i roto i ngā whiriwhiringa ka tīmata mai ai i roto i ngā kōrero mō ngā wild animals tae atu ki ngā wheel clamping. Koinei ngā kaupapa i roto i tērā o ngā komiti. Nō reira kāore au i rongo i tētahi pire e pā ana ki tēnei mate e ngau nei i Te Ao Māori me te kī a tērā mema. Mēnā kei te ngākaunui tērā mema me tana rōpū ki tēnei mea e ngau nei i te momo pōhara he aha te take kāore tētahi paku pire i runga i te Pepa Whakarārangi Take Pāremata e hāngai ana ki tēnei kaupapa?[My bill is a member’s bill. According to what has been stated 74 members’ bills arrived in this House last week but technically speaking in the Office of the Clerk. Furthermore within the considerations it started with accounts about wild animals and including wheel clamping. These in fact were the proposals in that other committee. Therefore I did not hear one bill pertaining to this ailment that gnaws away at Māoridom according to that member. If that member and his party are being kindly disposed towards this thing that chews away at this form of poverty why is there not a small bill on the Order Paper from them that relates to this matter? ]Gambling (Gambling Harm Reduction) Amendment Bill—Impact6.Hon SHANE JONES (Labour)to theMember in charge of the Gambling (Gambling Harm Reduction) Amendment Bill: Why has he agreed to the Government’s amendments to his Gambling (Gambling Harm Reduction) Amendment Bill when as the Salvation Army’s social policy spokesperson Major Campbell Roberts says the Government’s latest proposals have nothing to do with minimising the damage done to communities by gambling?TE URUROA FLAVELL (Member in charge of the Gambling (Gambling Harm Reduction) Amendment Bill):Mēnā ka āta titiro koe ki te pātai ēhara tērā i te pātai. Ēhara tērā i te pātai—[Interruption ] Ā ka pai kai reira te pātai.[If you examine the question that is not one. That is not a question— [Interruption] Oh good there is the question. ]Hon Tau Henare: Turned over a new leaf.TE URUROA FLAVELL: Āe turned over a new leaf. Kai te pēnei taku whakautu ki te mema i mua kei te aroha atu ki te Salvation Army. Kaha nei rātau ki te mahi ki te karo i ēnei āhuatanga. Ēngari kia kaua tātau e pōhēhē ka mutu mai i roto i tōku pire. Mēnā ka ngākaunui mai tērā mema tāpirihia atu ētahi kōrero ā te wā ka eke mai ki roto i te Whare Pāremata. Kātahi ka kitea mai ai mēnā e ōrite ana te hiahia ki te whakamāmā i te āhuatanga o te ngau o te petipeti ki Te Ao Māori ki te hunga rawakore.[The tenor of my response to the member previously was that I empathise with the Salvation Army. It works hard to avoid situations like these. But we should not be deluded by the fact that my bill will put an end to it. If that member is keen add some comments to the bill when it arrives into the House of Parliament. It will be seen then whether the desire to ease the gnawing effect of gambling on Māoridom on the poor ones is the same. ]Hon Shane Jones: Is this bill in either Māori or English a bitter pill or a dead rat?Mr SPEAKER: Order! That is not a question that is in any way related to the primary question.Urgent Debates DeclinedBiosecurity Management—Contamination of Imported Palm Kernel ExpellerMr SPEAKER: I have received a letter from the Hon Damien O’Connor seeking to debate under Standing Order 386 the discovery by a New Zealand dairy farmer of the remains of a cloven-hoofed animal in his consignment of imported palm kernel expeller from Malaysia or Indonesia and the subsequent failure of both the Minister for Primary Industries and his ministry to adequately respond to the issue. This is a particular case of recent occurrence involving ministerial responsibility. However the ministry’s response to biosecurity risk from the importation of palm kernel is ongoing. The big hurdle to get over in an urgent debate application is whether the matter has reached the stage that the business of the House should be set aside. The test is a high one. An incident has been reported and the ministry is working with authorities in Malaysia. Further options are being developed for consultation. An urgent debate was held on the ministry’s effectiveness in preparing for and responding to biosecurity incursions in New Zealand earlier this year. I am not convinced that I would be justified in setting aside the business of the House again today. The application is therefore declined.Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman):I raise a point of order Mr Speaker. I am not wanting in any way to challenge your judgment or ruling on this but I would seek some clarification on the point of urgency because if the Speaker considers that the incursion itself is required before an urgent debate isaccorded the House then I would be very concerned. At what point of warning or possible incursion can we consider that biosecurity is an urgent matter? I am not trying to trifle with the House or yourself Mr Speaker but it is indeed a genuine question. Do we have the ability to debate in the House the risk or do we have to wait until we have an incursion and then debate the clean-up? This is of utmost importance and the No. 1 issue for primary industries in this country so I seek your guidance on the point of urgency.Mr SPEAKER: And I have given my guidance to the House in my ruling. I fully accept the points the member is making. Biosecurity is of utmost importance to this country but in this case my responsibility under Standing Order 386 is to determine whether because of this particular incident and because of the letter I received from the honourable member a discussion is required today. I have ruled that that is not the case.Local Electoral Amendment Bill (No 2)Third ReadingDebate resumed from 13 June.SCOTT SIMPSON (National—Coromandel):When this debate was interrupted I was commending the Minister of Local Government the Hon Chris Tremain for introducing the Local Electoral Amendment Bill (No 2) to the House. This is a bill that amends the Local Electoral Act 2001. Its aim of course is to modernise local electoral law and improve transparency particularly transparency surrounding electoral donations. This legislation is planned to be in force and ready to go in time for the local body elections in October this year. It is part of the Government’s strategy to improve the transparency of democracy and local elections with particular focus on donations. The main intention is to bring the local electoral law closer into line with the provisions of the Electoral Act.There are three main aspects to this bill. Firstly it will improve provisions for the conduct of local elections. Secondly it will increase transparency and accountability in relation to candidate donations particularly those that are anonymous donations. Thirdly this bill strengthens the integrity of the entire local electoral system. As we all know there is growing public concern about the transparency and accountability of candidate donations particularly surrounding anonymous donations.There are a couple of points I would like to make in terms of the donation provisions of the bill. An anonymous donation to a candidate can be retained if it is under $1500. There are of course some other technical provisions in the bill. For instance the bill will increase the flexibility for city and district councils to set ward boundaries and better reflect communities and geographical features.The Government has introduced Supplementary Order Paper 198 relating particularly to contributions and trusts. During the Committee stage of the bill the Government passed a Supplementary Order Paper to bring the bill further into line with the Electoral Act relating to contributions made by trusts. The Supplementary Order Paper amends the bill by replicating the disclosure provisions in the main Electoral Act for contributions and that in my opinion is a very good thing. This change will help make the local authority elections later this year more transparent and more in line with the standards expected of candidates who seek parliamentary election. Candidate profile statements will have to state whether a candidate’s principal place of residence is within the local government area in question and this applies to all positions for which they are seeking election. Candidates will be required to specify the campaign to which an anonymous donation over $1500 was designated and goods and services worth less than $300 will be excluded from the definition of an electoral donation.This is a good piece of legislation. It is timely it is appropriate and I commend it to the House with full vigour.Su’a WILLIAM SIO (Labour—Māngere):Talofa lava. I am happy to rise and make some remarks around the Local Electoral Amendment Bill (No 2) and say that Labour supports this bill. For months we have had a similar bill in the ballot drafted by the Hon David Cunliffe to address what many would call the ridiculous situation we have seen regarding John Banks and his so-called anonymous donations. We are pleased that this bill has finally been allowed to advance and hopefully it will be advanced in time to be used in the upcoming local government elections on 12 October this year. It is a bill that is strongly supported by the professional organisations—namely the Society of Local Government Managers or SOLGM and Local Government New Zealand. There are obvious reasons which are well-known throughout New Zealand as to why this is such a critical bill to finally be advanced to its final reading. These organisations and many others that value local government believe that aligning the Local Electoral Act provisions for donations more consistently with those provisions in the Electoral Act 1993 which applies to parliamentary elections is a great thing. There is general consensus from this side of the House that the amendments this bill provides will enhance transparency and accountability in local elections. All of us who value local government anticipate that these provisions will hopefully in turn increase the public confidence and trust in our local electoral system.The Electoral Act which provides for parliamentary elections has been revised three times in the last 5 years in 2007 in 2009 and in 2010 to strengthen and clarify its provisions—for example by requiring more disclosure and reporting of donations by candidates and third parties. Another example is in limiting the size of anonymous donations so that there is greater openness about who is financing whom. The Local Electoral Act however has not undergone a review of its donation provisions since 2001. In effect there has been no limit on the amount of money that can be donated anonymously.But I think what is critical is that the House agrees that the situation that occurred in 2010 with one particular candidate should not ever happen again particularly when you have a candidate who meets up and engages with a potential donor receives a donation asks that donor to then split up the particular donation and despite knowing the name of the donor actually receives and reports as if the recipient of the donation did not know the donor. So I think Labour is very happy to support this bill. We are happy to support also the Supplementary Order Paper that has been introduced to provide more transparency and clarity around trusts that provide donations. I think it is important.I want to just highlight some of the key things that I think people would appreciate particularly in the public and one is that there is going to be a limit to the size of anonymous donations that a candidate can retain. That limit will now be $1500 as opposed to candidates having unlimited donations. There is going to be a requirement on a third party who receives a donation on behalf of a candidate to disclose the identity of the donor to the candidate so that there is no excuse whatsoever for candidates who seem to find joy in playing around with the rules and pretending that they do not know who are the donors who made donations to them. There is going to be a requirement for the person administering the affairs of the candidate who receives an anonymous donation of more than $1500 on behalf of the candidate to also disclose the identity of the donor to the candidate.I also think it is a good thing that there is going to be a requirement that the candidate’s statement includes whether or not the candidate’s principal place of residence is in the local government area in question. There have been cases where a candidate may not necessarily reside within the electorate boundaries of the electoratewhere they are standing for either council or mayor or local board but they will use that for one reason or another which plainly I think many voters understand is just plain wrong and for deception purposes.I note in particular the ability to now take a prosecution and the ability to include any prosecution “within 6 months of the date on which the prosecutor is satisfied that there is sufficient evidence to warrant the commencement of the proceedings; but not later than 3 years after the offence was committed.” That is a good thing considering we have also had a case latterly in the last local body elections where clearly there was a breach of the rules and the police were unable to do anything about it because they had run out of time.So I join with the rest of my colleagues on the Labour Party side to say yes it is about time that this bill finally receives its third reading and yes we agree that this is a bill that ought to provide security and confidence and more transparency in local government elections. It aligns well with the particular legislation that also administers parliamentary elections. In my view hopefully it puts a stop to the kind of candidate whom we have seen in the last local body elections who clearly did care one iota—did not care one iota—about keeping within the rules. So I am hopeful that the new provisions will deter any candidate who might have the “John Banks syndrome” of believing that they are above the law from flouting the law and that they maintain and keep within the limits that this bill now provides.But I think the thing that most voters will appreciate and I hope that they take it on board is that there is now a greater requirement for any candidate who may choose to run either for mayor or as a councillor or as a local board member to declare the amount of money that they are receiving particularly identifying who the potential donor is if that donor happens to be an anonymous donor. There is going to be a greater requirement that they hold on to their financial reporting; they do not destroy that. Clearly also the police will have the ability to be able to prosecute any person who is found to have broken the rules and they can do that within a 3-year period which I think is sufficient time for the public to raise any concerns they may have and sufficient time for the police also and others who might want to do some investigatory work to find out whether certain candidates are aware of the donors who are donating money to them and to ensure that there is openness transparency and I think some confidence greater confidence.This Government keeps talking on. It keeps going on about how trustworthy it is but we know clearly that by this Government aiding and abetting a certain candidate who is now in this House I would say this is a good thing. I commend this bill to the House and hopefully it prevents the likes the attitudes and the behaviour that we have seen from candidates and particularly the certain candidate of 2010.HOLLY WALKER (Green):Tēnā koutou e te Whare. The Green Party has supported this Local Electoral Amendment Bill ( No 2) at all stages and we will continue to support it today at its third reading. We support it because we support the modernisation of electoral law and greater transparency at a principled level wherever we can. This bill does move our local electoral law in that direction and therefore it is worthy of our support.We know of course what gave rise to the need for this bill and it has been referred to by previous speakers and that is John Banks’ questionable conduct in the 2010 local body election and Auckland mayoralty race particularly regarding the identity of anonymous donations. That case I think certainly highlighted the gaps in the current legislation governing local body elections that urgently needed to be closed and it is good that this legislation closes them. But it is a shame that the approach taken was simply to close those gaps and not to take a wider view and look at how to bring thelegislation governing local elections in line with the legislation governing general elections across the board.A lot of speakers have referred to this or talked about this bill as though its purpose is to align those two provisions. I want to set the record straight. Although it does that in a very limited way unfortunately it is only in a very limited way that it aligns the provisions and in most aspects there still remain large gaps between the provisions governing local body elections and those governing general parliamentary elections. It does somewhat align the provisions and most important it does so so that anyone who works with a candidate and who knows the identity of someone who makes a donation of over $1500 must declare the identity of that donor to the candidate. That has arisen directly as a result of the John Banks case. Also thanks to the Minister of Local Government’s Supplementary Order Paper 198 which we support the same provisions now apply for donations funded from contributions of over $1500.Those are good provisions but in many other ways this bill is a missed opportunity to more closely align the provisions for local and general elections. For example it could have included—and does not—a $5000 cap on donations by any person or group to a candidate a lower limit for anonymous donations of $500 a ban on overseas donations and penalties for avoiding rules related to donations which is quite important. If there are not penalties for avoiding the rules then there are not the right incentives in place to comply with them. It could have included regulation of third-party spending in local elections which is something that is very important and I will come back to that shortly. It could also have included a register of pecuniary interests for elected members of local authorities. If it did that it would truly be aligning local electoral law with that governing general elections.All of these measures were included in a Supplementary Order Paper in my name during the Committee stage and it was disappointing therefore that the House did not take the opportunity to adopt these measures to increase transparency in local democracy and to actually align the provisions of local body elections with those governing general elections as many have said they would like to see us do. Fortunately the measures that I have outlined are also contained in a member’s bill in the name of my colleague Denise Roche and so for now we will have to hope that her bill is drawn from the ballot so that the House will have the opportunity to revisit these measures in the future.In considering this bill some have put the argument to me that local body elections are lower profile and less likely to attract high levels of attention less likely to attract high levels of anonymous donations and third-party spending and that therefore there is no need to further align the rules of local elections with those governing parliamentary elections. I think this is a very flawed argument and I want to address it now briefly by focusing on the issue of third-party spending which this bill fails to regulate. It is a glaring omission that this bill does nothing at all to regulate third-party spending in local body election campaigns.To give you a practical example of that we know because of media coverage and reports that there is a wealthy individual in Hamilton who intends to spend a large amount of his own money to actively campaign against every single incumbent councillor on the Hamilton City Council. There is nothing at all in the current provisions nor in this legislation that would in any way restrict or regulate how that individual can campaign. Because he is not campaigning for any particular candidate he is unrestricted in what he can spend and unrestricted in what he can say in his efforts to campaign against the incumbents even though there are numerous restrictions on how the candidates themselves can campaign what they can spend and what they have todisclose in local body elections. Clearly this example highlights the unfairness of not regulating third-party spending at the same time as we regulate what candidates do.We are also seeing the increasing use of joint campaign tickets or platforms in local body elections and even now established political parties are standing candidates for local body elections on a ticket or in a platform manner. Again there is nothing in the current provisions nor in this legislation to limit how much someone can donate to a platform or a ticket or to regulate in any way the requirements of disclosure of those donations because provided it is not allocated to an individual candidate on that ticket there is no need to disclose those donations and no limit on what they are and no limits or requirements on how that money can be spent. In an era of increasing professionalisation of local government which is a good thing given its vital role in the governance of our communities and in an era of increased amalgamation of local councils meaning very high-profile high-spend contests like the Auckland mayoralty this gap in failing to regulate third-party spending needs to be rectified as soon as possible. It is a serious omission and this bill really should have addressed it.To its credit the Justice and Electoral Committee must be commended I think for its very constructive work on this bill. I very much enjoyed being a part of the discussions on this bill in the select committee notwithstanding that the amendments did not go far enough. The select committee did actually identify third-party spending as a gap in this legislation and recommended that the Minister consider bringing amendments to this effect at the Committee stage. Unfortunately this did not eventuate but I do take some hope from the support of the committee that there will be some attention paid to this issue in the near future because clearly it does need to be addressed.Meanwhile the other area of concern for the Green Party in this bill is the provisions that give the Minister of Local Government the power to postpone or adjourn local body elections. Our concern on this front comes from unfortunately the general disregard that has been shown by this Government for local democracy including not only sacking the democratically elected councillors of Environment Canterbury but twice postponing their elections. This provision seems rather dangerous. It gives once again a dangerous amount of power to the Minister to postpone local body elections. We do recognise that there may be—and indeed likely will be in future—some situations in which it is necessary to adjourn elections such as in the aftermath of a natural disaster but in our view it should be the electoral officer and not the Minister who makes that decision. There is no need for that decision to be made at the political level—at the ministerial level—when it is a practical decision about whether a community is able to hold an election in the aftermath of a natural disaster. So again we put a Supplementary Order Paper at the Committee stage in the name of my colleague Eugenie Sage to this effect which would extend the same powers but give them to the electoral officer not the Minister. Unfortunately that was not supported by the Committee either.These concerns notwithstanding this bill is broadly speaking a good one albeit a missed opportunity to make more of the changes required to laws governing our local body elections. So the Green Party supports this bill and we look forward to it being in place in time for the 2013 local body elections later this year to ensure that we do not ever see a repeat of the situation that we saw in Auckland in 2010.KATRINA SHANKS (National):It is my pleasure to take a call on this bill the Local Electoral Amendment Bill (No 2) tonight. I would just like to acknowledge the Ministers of Local Government and the work they have done on this bill; the chair of the Justice and Electoral Committee Scott Simpson and the way he chaired the select committee deliberation on this bill—getting it back into the House was fantastic—andalso the officials and the time and effort they put into this bill. We kept on sending them away for more information and they kept on coming back. It was fantastic to see the level of detail they got for us during the deliberation on this bill.We had 32 submitters come and submit to the select committee on this bill. Fifteen of them were supportive of the bill and 17 provided comments but did not indicate a position on the bill. In the case of most of those submissions we made changes to the bill while it was at the select committee to address those concerns that were raised. So I would like to thank the submitters for the time and effort they put into their submissions especially those who travelled long distances to get to Wellington to see us.What we have currently is a piece of legislation from 2001 that appeared to be insufficiently transparent in relation to campaign donations particularly with the anonymous donations which we have heard so much about. The definition is actually amended in this bill and it is amended to be in line with the Electoral Act. It is saying that candidates must disclose the identity of a donor if they reasonably should know who that donor is and can identify them and also a third party or other people administering the campaign are also obliged to disclose the identity of that donor as well. So that is principally the first big part of this piece of legislation. The second one is the size of the donation. Once again we are mirroring the Electoral Act in limiting the size of the donation to $1500—that is increased—and if you get over that amount the additional that you get over that amount will have to be paid to the authority administering the election whatever that will be at that time. The third area I want to touch on is where people live. There was concern about the initial bill. Submitters came in and said that if they disclosed where they live they might be in danger and they might have safety concerns. So the bill was changed to say that you have to show only where you live not actually your address to alleviate some of those concerns.I suppose the big thing about this is that it is about ensuring that we have a transparent donations system in the local body elections coming up in 2013. As with all elections it is very important that there is transparency that the people of New Zealand can have faith that they understand what is happening and that it is legal so I commend this bill to the House.DENIS O’ROURKE (NZ First):New Zealand First supports the Local Electoral Amendment Bill (No 2). We acknowledge the many small but valuable amendments that are made by the bill which will assist in the better administration of local democracy for the local government elections later this year. Although New Zealand First supports the bill as is we do not think that the work however is finished and after these elections there will need to be a further review and follow-up legislation. I will come to that later. As the bill now is it is just enough and it is just in time.New Zealand First identifies four major issues with the bill. Firstly is an issue concerning candidate profile statements in clause 15 which inserts new section 61(2)(ca) which will require a candidate profile statement to include whether or not the candidate’s principal place of residence is in the local government area in question. That is a desirable provision something that voters ought to be aware of but this does not preclude a candidate from living outside the area and does not preclude him or her stating what connections he or she has with the area. Living within a local authority area though a relevant matter for electors to consider is not always so important. Some people who do live within the area may in fact have been there for a very short time and not have much of a genuine connection with it while others who live outside the boundaries may have very strong connections with the area. It is of course over to the candidates to emphasise that. The point here is that a few people who do stand live a long way away from the area they are standing in and so that does need to betransparent but voters do need to be aware that just living within an area does not necessarily mean a genuine longstanding connection with it.New Zealand First’s second area of concern is the several long-needed new provisions concerning anonymous donations. The need for these provisions has been demonstrated by the John Banks issues in relation to his last unsuccessful Auckland mayoralty campaign and they concentrate on showing the identity of a donor where substantial donations are made. The Government in this bill attempts to address future abuses of the law by improving the rules around donations and especially anonymous donations. But the Government still has a Minister a person whom the vast majority of people in this country consider to have carried out just such an abuse. The Government has done nothing about that except of course to maintain the fiction that this Minister has done nothing wrong under the law—the very law that the Government now seeks to improve so that in future people in Mr Banks’ position could not get away with what the Government is tacitly conniving with Mr Banks to get away with currently. The Government has been saved in this only by the failure of the police to bring a prosecution and that is now left to one good citizen to do by way of private prosecution. This is an important issue for transparency and local democracy and it is such a shame therefore that the Government will look only to the future as it is doing with this bill and not to the current situation with Mr Banks. I think that is a great shame.The bill does address the matter that the John Banks’ electoral return from the 2010 local body elections has highlighted and that has revealed a gap in the existing legislation which was allowing candidates to call donations “anonymous” that they did know or ought to have known were not anonymous donations. Section 103F in clause 27 will say: “If any person involved in the administration of the affairs of a candidate in relation to his or her election campaign knows the identity of the donor of an anonymous donation exceeding $1500 the person must disclose the identity of the donor to the candidate.” So it will be necessary to prove actual knowledge under this section and I think that may be difficult because the section as drafted relies on the term “knows the identity of the donor” so the prosecutor will need to prove actual knowledge and that is not always easy. It is in fact the same issue that is likely to face the court in cases under the current law. I tried to persuade the Justice and Electoral Committee to add the words “or ought to have known” so that knowledge could then be inferred from the totality of the surrounding circumstances but unfortunately the committee did not agree with me on that. Nevertheless the new section is an improvement that will help solve the Banks problem at least until the electorate solves it more comprehensively at the next parliamentary election.The bill also provides in section 103H that an anonymous donation may not exceed $1500. It says that “If an anonymous donation exceeding $1500 is received by a candidate in relation to an election campaign the candidate must within 20 working days of receiving the donation pay to the electoral officer responsible for the conduct of the election to which that campaign relates the amount of the donation or its value less $1500.” And also: “If an anonymous donation exceeding $1500 is received by a candidate who is seeking election to more than 1 office the candidate must (a) designate 1 election campaign for election to 1 office for which the donation will be used;”. Section 103I provides for offences relating to contravention of section 103H and says: “A person who enters into an agreement arrangement or understanding with any other person that has the effect of circumventing section 103H(1) or (2) commits an offence and is liable on conviction to a fine not exceeding $5000.” New Zealand First firmly supports these new sections. They will solve some of the issues surrounding the Banks situation.Thirdly the bill provides for the postponement of a local election which many members have expressed concerns about. The new powers given to the Minister of Local Government to adjourn elections in the case of natural disasters would cover situations such as the earthquakes in Christchurch. The bill would now allow the whole election to be postponed by Order in Council by up to 6 weeks at the discretion of the Minister. So I understand the concern that some members have expressed about that. The provision actually says in section 73A(1) in clause 21 that “The Governor-General may by Order in Council made in accordance with this section specify a later date for 1 or more of the” situations that are then listed. I understand the concerns that some have expressed about that when one considers the disgraceful situation that currently prevails in Christchurch with local government having been excessively diminished especially concerning Environment Canterbury. But for the purposes of this bill section 73A(6) does say that this can be done only on reasonable grounds and the section provides for comprehensive provisions about that. I think that those are quite adequate remembering that they would be legally enforceable.Fourthly and lastly the bill is very defective in respect of third-party expenditure as one member has already mentioned. It leaves a potential gap for third-party campaigners to receive donations and use funds without a candidate’s permission or knowledge. That is a complex area. We do not have the time before the next local government election to deal with it now but I express the strong expectation that the Government will address that in the next 3 years before the 2016 local government elections because it is a very important matter.Overall the bill is a good one. It deserves support. It is still a work in progress but New Zealand First will be happy to support it.ALFRED NGARO (National):Kia orana Mr Assistant Speaker. Meitaki maata Mr Assistant Speaker. I rise and take a call on this third reading of the Local Electoral Amendment Bill (No 2). First I want to acknowledge the Minister of Local Government the Hon Chris Tremain for his fine work and his leadership and also I want to acknowledge the two chairs of the Justice and Electoral Committee the honourable member Tim Macindoe who handed over the baton to the honourable member Scott Simpson. It is great that we have had great leadership. I think just as the honourable member Denis O’Rourke said it was a good working party and a select committee that worked well together—hence the reason why we have got overwhelming support for the bill bar the Greens who we know will not be supporting it. But overwhelmingly there is support for this bill.This Government bill is improving transparency of local electoral donations and bringing the local electoral law closer in line with the Electoral Act. It is improving transparency and will help build public trust. We know that it is important that constituents out there are keen to ensure that they can trust both the process and also the people whom they would like to elect into those leadership roles. The local electoral reforms are in tandem with National’s Better Local Government reforms and we are modernising how local government is run and how it is elected.The purpose of this bill is threefold. It improves the provisions for the conduct of local elections increases transparency and accountability in relation to candidate donations and particularly anonymous donations and strengthens the integrity of the local electoral system. There were some comments about this being the “John Banks Bill” but we do know that both major Auckland mayoral candidates were able to receive substantial anonymous donations under Labour’s legislation. These changes will improve transparency.The changes introduced last year around the setting of ward boundaries information provided by candidates streamlining of vote processing and other areas reflect therecommendations from the Justice and Electoral Committee’s inquiry into the 2010 local elections. Just a minor technical issue that we did have some debate about in the select committee was around the provision that candidates for local elections must provide more information including whether they live in the area or are seeking election to more than one position. This becomes important in that it allows for constituents to be aware of the candidates and whether they are local candidates. But the debate was also about acknowledging their residential address and we were clear that we needed to provide protection as well as raising awareness. We think we have come to a good balance.This is a good bill. We think it does address the issues of transparency and most important it gives trust to the constituents. We look forward to the elections in October for all local bodies up and down the country. I commend this bill to the House.PHIL TWYFORD (Labour—Te Atatū):This is a Government that has made a habit of attacking local government over the last 4½ years. Local government—councils—have been the whipping boy of choice for this John Key - Peter Dunne - John Banks - National Government for the last 4½ years. I want to say that because I think it is an important context for considering this bill the Local Electoral Amendment (No 2) Bill. The reason I say that is this Government has ripped the guts out of democracy in Canterbury and we still have a situation in Canterbury where the regional council is effectively suspended and commissioners run Environment Canterbury.The Government has consistently accused councils of irresponsibly borrowing and running up huge debts—this from the Government that has borrowed more than any other Government in recent history. It has accused councils of poor financial management—again that is a bit rich. It has put pressure on councils to sell publicly owned assets because this Government believes in flogging off anything that is not nailed down. It has accused council planners of trying to wreck the macroeconomy as Bill English said the other day and in fact this Government is blaming local government for the housing crisis which is a direct result of this Government’s policy settings. So it is not I think putting too fine a point on it to say that this Government has consistently waged a campaign against local government since it was elected in 2008 and it has systematically chipped away at the powers and freedoms of local government on all those issues that I mentioned. I say that because there is an irony that this Government would bring a bill to this House that seeks to lecture and mentor local government on ethical standards and accountability. I find it heavily ironic that this Government would set itself up to be a model of accountability and ethical standards and would tell local government what to do in those areas.My colleagues have made it very clear that Labour supports this bill. It is an overdue clean up and upgrade of the electoral law—in particular the rules relating to campaign finance in local government elections. We support it. It is a no-brainer. There are a number of things in here that significantly improve local government law but nevertheless it is ironic that this Government would seek to set itself up as some kind of mentor to local government on ethics and accountability. Nothing makes that clearer than the fact that this bill really is the “John Banks Memorial Bill”. That is what it is. I am quoting my fine colleague Carol Beaumont who coined that name for the bill. If it was not for the fiasco around John Banks and his self-induced political amnesia this bill probably would never have made it to the House. So we can thank John Banks actually for the service that he has done for democracy in this country by forgetting the name of one of his most important political donors. I am talking about Kim Dotcom the man who hosted John Banks at his house the man whose wife John Banks complimented—I think he said she was the most beautiful woman in the world. John Banks was there at Kim Dotcom’s birthday party. He made the toast in front of dozens and dozens ofguests. He was flown in from Mechanics Bay to the Chrisco mansion in the Prime Minister’s electorate in Kim Dotcom’s helicopter. You would think he would remember that but no Mr Banks has a very very poor memory.All this came out as students of politics will remember when it emerged that John Banks had received a hefty donation for his mayoral campaign in 2010 from Kim Dotcom. I think one of the most poignant images that I remember from this whole saga is when Kim Dotcom sitting in his jail cell at the Mt Eden Corrections Facility phoned up the Minister in the Government to whom he had made a generous political donation only a couple of years before—to Mr Banks’ mayoral campaign. Kim Dotcom using his one phone call a day was calling from the Mt Eden Corrections Facility and he dialled the mobile phone number of Mr Banks—his good friend the person he had entertained in his mansion in Coatesville—and what did Mr Banks do? He refused to take Kim Dotcom’s call. He refused to even talk to the man who contributed—how much was it? Was it $15000? How much was it? It was thousands and thousands of dollars—$50000.Hon Annette King: 50 in two lots.PHIL TWYFORD: That is right. Two lots that amounted to $50000 and poor old Kim Dotcom could not even get through to Mr Banks. Mr Banks would not even take his call. What an indignity! What an absolute indignity! How humiliating that the Hon John Banks who sits in this House as a Minister in the John Key - led Government would not even take the call of a man who gave $50000 to his mayoral campaign. What an extraordinary act of bad faith. I mean he could have at least taken Kim Dotcom’s call and had the gumption to tell Kim Dotcom that no he was not prepared to help the man who wrote two $25000 cheques to help his campaign. That is a very telling insight into the character of John Banks a Minister in this John Key Government.I think that says it all. Not only did John Banks refuse to take the call from Kim Dotcom languishing in the Mt Eden remand prison but somehow he then forgot when he went to fill out his donations return for the 2010 mayoral election campaign that it was Kim Dotcom who made those donations even though he was in the helicopter even though he toasted Kim Dotcom’s wife at the party at the Chrisco mansion and even though John Banks himself solicited those donations. In fact he asked Mr Dotcom not to write a cheque for $50000 but to write two cheques for $25000. That says a lot about the character of John Banks. He was prepared to circumvent if not the letter certainly the spirit of local government law. It is that cringing embarrassment that he inflicted on the John Key - Peter Dunne - John Banks Government that really is the genesis for this bill. We on the Labour benches are glad to see that there are some sensible limits on campaign finance improvements in terms of disclosure and transparency.I want to use my remaining couple of minutes just to note my disappointment that John Banks who has done so much for democracy in this country who has done so much by being the inspiration for this bill coming to the House could not bring himself to vote for my Supplementary Order Paper 252 in the Committee stage which would have plugged a glaring omission in this bill and that is that this bill allows candidates in the Auckland mayoral election to spend around $600000 to get elected. It will make the Auckland mayoralty a rich man’s club. John Banks in 2010 is on the record saying that that should be reduced to no more than $100000. Len Brown is on the record saying it should be either $150000 or $200000. Both the mayoral candidates from 2010 said that the $600000 limit that National put in place in the Auckland super-city legislation was way too much. It will deter any future candidates who do not have deep pockets. It is an offence to the democratic spirit. John Banks supported lowering that limit to$100000 but he could not bring himself to vote for that very sensible amendment in the Committee stage and that I think was a real disappointment.I am not surprised that the National members did not support the amendment. They do not want to do anything that might clip the wings of some deep-pocketed corporate candidate in future mayoral elections. That is their form; I would expect that. But it was a shame and very disappointing to see that John Banks was not prepared to vote in line with principles that he had already expressed. Thank you.PAUL FOSTER-BELL (National):It is a pleasure to rise and speak in support of the Local Electoral Amendment Bill (No 2) in this third reading debate. I would firstly like to congratulate the Minister of Local Government the Hon Chris Tremain on this amendment to the Local Electoral Act 2001 as it will modernise our electoral law and improve the transparency of local electoral donations in New Zealand. I would also like to acknowledge both the current chairman of the Justice and Electoral Committee Scott Simpson and the immediate past chairman Tim Macindoe for the work that they have done and the leadership they have shown. I would also like to congratulate the deputy chair Alfred Ngaro.So the three key changes that this bill brings in will include improving the transparency over local electoral donations to bring the Local Electoral Act into greater alignment with the Electoral Act of New Zealand. Improving transparency will also help build public trust in local elections and these local electoral reforms are taken in tandem with the Government’s Better Local Government reforms which will modernise how local government is run as well as how it is elected. I think this bill strikes a very good balance between running transparent and open elections that the public of New Zealand can have confidence in without getting into too much bureaucracy and a large amount of expense around the management of the election process.The donation provisions limit the size of an anonymous donation that a candidate can retain to $1500. I think this is a very reasonable amount. You do not want to get down to the level where you are having to account for every single person who has bought a sausage in a sausage sizzle but $1500 is a reasonable amount. Any greater amount over the $1500 would have to be donated actually to the local authority that is administering the election to defray some of the electoral expenses. The definition of “anonymous” is very important. Candidates cannot claim that a donation was anonymous if they could reasonably be expected to know who the donor was. Raising the amount of donations that have to be reported I think is also a useful measure that adds additional transparency. If the donation is over $1500 it does have to be reported and listed whether it is anonymous or not. Additionally in that area requiring third parties that receive donations on behalf of other candidates to disclose the identity of the donor if known to the candidate does resolve a particular issue there. It is as I say a pleasure to speak and I commend the bill to the House.CAROL BEAUMONT (Labour):I also rise to speak in support of the Local Electoral Amendment Bill (No 2). As others have commented Labour is supporting this bill. I do think we should acknowledge as my fine colleague Phil Twyford has done that this bill—or a very significant part of the bill—is certainly down to John Banks especially in relation to anonymous donations. Most of us will never ever be able to think of anonymous donations in quite the same way again. I think Mr Twyford’s contribution very clearly outlined why that is.In general terms this bill will align or provide greater alignment between rules governing local body elections and those governing general elections. That greater consistency means a tightening-up of a number of provisions which have been outlined by a previous speaker—certainly the size of anonymous donations the definition of anonymous donations and the requiring of a third party who receives a donation onbehalf of a candidate to disclose the identity of the donor if known to the candidate and likewise the person administering the affairs of the candidate. All of these situations were ones that were called into play in the John Banks fiasco in the 2010 Auckland Council elections.So that greater consistency and tightening-up is certainly important not just as a technicality or for the sake of neatness but because we need to strengthen—and we need to continue to strengthen—the conduct of our electoral processes. We need greater transparency to ensure that the public of New Zealand has confidence in the integrity of our electoral processes. That is of fundamental importance. It is important that the public are confident in knowing who has donated and how much. It is important that they can judge whether or not those who are being elected are being elected because they have more or less money for their campaign because of the people whom they spend time with—whether or not they have rich friends for example—and whether that determines greater resourcing for their campaign. But it is also important for the public to be able to assess whether they believe that people are trying to buy influence from their political representatives effectively. Those are all very important questions. But we need to strengthen our democracy. I am sure every member in this House would agree with that.But there are some real problems that are undermining our democracy at the moment. There is a lack of public confidence and trust at the moment. Some of the things that have been happening in recent times have certainly undermined public confidence and trust. We certainly want to try to turn that round. I want to acknowledge my colleague the Hon David Cunliffe who had a member’s bill in the ballot about these very issues prior to the Government actually drafting this bill. Labour saw that it was really important to try to strengthen the controls around the local government elections and to try to pull them into line with those that apply in the general election. There is so much happening at the moment to undermine confidence in our democracy. There is much that smacks of undue influence. There are corporate cronyism moments throughout this Government’s term so far and I am sure people can identify them for themselves. There is much that removes the controls on the executive. There is much that is anti-democratic. There is much that removes the right of New Zealanders to challenge decisions in this House. I am sure that the Minister over there if he was honest would acknowledge that.So why is it necessary to bring in this legislation? Well as I said the 2010 Auckland mayoralty race specifically—Hon Craig Foss: I raise a point of order Mr Speaker.Mr DEPUTY SPEAKER: I think I know what it is. The member cannot cast aspersions against another member in the way she did. All members are honourable members.CAROL BEAUMONT: Thank you very much Mr Deputy Speaker. The member John Banks and his conduct in the 2010 Auckland mayoralty race and subsequently are the reasons for this legislation. That confidence was severely undermined by the pretence around anonymous donations. Again I mentioned that Phil Twyford has gone through in some detail really to identify what that was. The police inquiry into this showed not that there was not a problem but merely that there was not the ability to pursue the matters raised. The technicalities that were there were what enabled John Banks to get off the hook so to speak. So I think that is really important for the record. Finally I would just like to say that there is much more to do to strengthen our democracy and I look forward to further amendments around electoral law. Thank you.EUGENIE SAGE (Green):I am pleased to take a short call on the Local Electoral Amendment Bill (No 2) and to correct an impression that was given by a previousNational speaker. The Green Party is supporting this bill but we do have some reservations about the gaps in it.It is the time of year when candidates are announcing their intentions to stand including a member of this House who will be a very strong contender for the Christchurch mayoralty. In 2010 we had nearly 4000 candidates who stood for 1895 positions in local government. I hope that we see a similar number of candidates standing this year for our 78 regional councils unitary councils district councils and city councils because they are a fundamental part of our democracy. Most New Zealanders interact a lot more frequently with local government activities and local decision-making than they do with central government. We rely on local councils to provide us with the necessities of life—with clean water sewerage stormwater libraries cultural facilities and a lot of sporting facilities as well. So it is really important that we have very competent staff in local authorities and very competent councillors and that they are elected through a robust and transparent process. That is why the Green Party supports this bill—because it is making improvements in transparency particularly around electoral donations with for example the requirement to declare donations above $1500. So it should help give the public more confidence in the electoral process because of that.But as Phil Twyford noted it is ironic that this Government is introducing this legislation when its attitude to local government has been anti-democratic and has been one of bullying and blaming local government. It has undermined local democracy in areas like Christchurch with the excessive powers that the Canterbury Earthquake Recovery Authority has weakening the ability of the Christchurch City Council to make decisions for the recovery of Christchurch. It blames organisations like the Christchurch City Council for their progress with building consents but does not assist with additional resources. It criticises councils for their levels of debt yet at the same time it removes things like the regional fuel tax which was an opportunity to raise revenue in other ways. And that whole approach of not trusting and of bullying local government is implicit in the housing accord legislation in the changes to the Resource Management Act which we will be debating this evening and in the ability of Ministers to override the plans that have been developed by councils in conjunction with their local communities. It is indeed ironic that this legislation about transparency in the electoral process is going ahead at the same time as the Government is hammering local authorities and does not trust them.Although the Green Party supports the bill we have been disappointed that it focuses very much on electoral donations and does not deal with the gaps in the Local Electoral Act around third-party donations and there is quite a major gap there. It actually allows unlimited spending by third parties to campaign either for or against certain candidates and that can skew the results of elections. It is not democratic. The gap should have been filled. Denise Roche has a member’s bill that would fill the gap. It was disappointing that the Government members did not support some of the Supplementary Order Papers that we put forward to improve the law there and nor did they support our Supplementary Order Paper that would have adopted more of a partnership approach with local government when local elections are to be postponed when there is an emergency by requiring not just consultation with the affected council but also its agreement.The Green Party recognises the importance of local government its 4 percent contribution to GDP and the $110 billion worth of assets that it manages. We recognise and value the local democracy that is there at the council level the local and community board level. We want to strengthen that. We want to strengthen the legislation around the electoral process. We can do that by strengthening requirements around third-partydonations and not just around anonymous donations. But this bill is a step forward and the Green Party will be voting for it.TIM MACINDOE (National—Hamilton West):As my colleagues Paul Foster-Bell and Alfred Ngaro have kindly noted I was the chairman of the Justice and Electoral Committee at the time that this bill the Local Electoral Amendment Bill (No 2) was referred to the committee for consideration.Scott Simpson: A good chairman you were.TIM MACINDOE: Thank you Mr Simpson; I appreciate that. I have therefore a real appreciation of the fine work that the committee has done under the capable chairmanship of the new chairman the honourable member for Coromandel Scott Simpson and I want to thank all members for the thoughtful contributions that have been made on this important measure. I particularly welcome the fact that it has such broad support across the House.Bill read a third time.State Sector and Public Finance Reform BillSecond ReadingHon Dr JONATHAN COLEMAN (Minister of State Services):I moveThat the State Sector and Public Finance Reform Bill be now read a second time . I would like to begin by thanking the Finance and Expenditure Committee for its consideration of this important legislation and I acknowledge the contributions of all members on the bill. I would particularly like to thank the former committee chair the Hon Todd McClay for his extensive efforts and also the Hon David Cunliffe for his constructive approach. I am very pleased that this important reform has bipartisan support. That is important because this legislation determines the workings and architecture of the State sector and its ramifications will be felt for years to come.The State Sector and Public Finance Reform Bill is an omnibus bill and the intention is that during the Committee of the whole House it be divided into three separate bills: a State Sector Amendment Bill a Public Finance Amendment Bill and a Crown Entities Amendment Bill. The changes are designed to enable the delivery of Better Public Services and more effective and efficient achievement of results. I wish to acknowledge those who have made submissions to the bill. Their input led to important changes to many provisions and I also acknowledge the constructive approach of the Public Service Association when engaging with the Government and the committee.Better Public Services is one of the Government’s four priorities for this term. Better Public Services is all about delivering a Public Service and State sector that is achieving value for money is innovative provides high-quality services and manages change effectively. We have deliberately chosen 10 stretch targets that will make real tangible differences to New Zealanders and stimulate different ways of delivering services in the process. This legislation gives new tools to the State Services Commissioner to the Public Service and to Ministers to coordinate together as a system and deliver against those targets. It is the biggest reform of the State sector in a generation.Part 1 of the bill amends the State Sector Act. The changes will charge the State Services Commissioner with leadership and oversight of the State services and more targeted leadership development for the Public Service to improve leadership from the top and get more cohesive action across the public sector. They will also require chief executives to look and act beyond their own departments and beyond the short term. We want to see departments take this as an opportunity to achieve better results as a system such as the excellent savings we have made in property leasing costs by the Government Property Management Centre of Expertise by coordinating and directingdepartments in their leasing of office space. Such action is predicted to save 20 percent on costs and reduce floor space by 30 percent across five departments.The changes will expand the range of service delivery mechanisms giving chief executives broader powers to delegate and introducing a new organisational form called a departmental agency. The changes also place workforce and personnel matters on a more consistent and transparent footing. The majority of the changes received broad support or general acceptance during the submissions process.Four aspects of the bill were of particular interest to the committee: redundancy provisions workforce policy provisions the ability of chief executives to delegate functions or powers outside the Public Service and immunity from prosecution for public servants. I will now deal with each of these four areas in turn. The overriding aim of the redundancy provisions is fairness. There are clearly situations in which redundancy payments are the right thing to do by employees. However in circumstances where a public servant is able to move seamlessly from one job from which they are made redundant to a new job in the State services it would not be reasonable for them to receive a redundancy payout. This issue was worked through by the committee and in summary for there to be no redundancy payment the next job must start the next working day or even before the current employment period ends and it must be treated as continuous service with the State services. Furthermore it must be in substantially the same general locality or within a reasonable commuting distance and it must have comparable duties and responsibilities to the current job. It must also entail a collective package of terms and conditions that are no less favourable than apply to the current position. It is very important to note that not every single term or condition in the new job has to be the same. There will be multiple factors to take into account from job title and salary to location and compensation details like access to car parks. It is not the intention of the Government to make sure that every last detail be replicated or approved but the overall package must be no less favourable when considered by a reasonable person. These new redundancy provisions will not apply until 3 years after the new legislation comes into effect.The workforce policy provisions introduce a more transparent and consistent process for setting and applying Government policy on workforce matters. Submitters expressed concerns about the purpose and content of the proposed Government workforce policy orders and their perceived effect particularly on existing employment agreements and good faith obligations. In response to those concerns workforce policy will no longer be issued by Order in Council but as a Government policy statement. They will not be used to set expectations that determine pay or conditions and will not create alter or remove employment or other legal rights or obligations.Chief executives will be able to delegate functions such as management of any operational aspect or service to a person outside the Public Service. This is to provide effective and efficient decision-making and service delivery. A number of specific statutes already provide such powers to an individual chief executive. This bill extends this ability to all chief executives as a generic power under the State Sector Act while not overriding special controls in other Acts and extensive safeguards have been put in place. These safeguards include a requirement for ministerial consent for every case; a requirement that potential conflicts of interest will be avoided or managed and that delegates will be subject to the code of conduct and the Official Information Act; a requirement that there will be no sub-delegations; and a requirement that delegations have to be reported to Parliament.One provision in the bill that has not changed is the immunity from personal liability for prosecution of public servants who acting in good faith are carrying out their duties as employees of the Crown. Front-line staff working with the public in sensitivesituations need to have confidence that provided they act in good faith they cannot be personally sued in the course of their duties. Without that security there could be a chilling effect on the ability of front-line public servants to carry out their duties in the prescribed manner. There is no change to Crown liability. The public can still sue the Crown. This amendment makes sure that ordinary New Zealanders can still be compensated by taking legal action against the Crown directly clarifying the situation that was generally thought to already be in place. I acknowledge that the Law Commission is undertaking a comprehensive review in this area and a recommendation for further legislative change may follow. However legislation should not leave public servants unprotected in the meantime.Part 2 of the bill amends the Public Finance Act. These changes will make Public Service chief executives responsible for their departments’ financial sustainability not just current performance. Chief executives will need to look and act beyond their own departments through explicit responsibilities for the financial management and advice on those Crown assets liabilities revenue and appropriations that the department administers on behalf of the Crown. Those changes will also provide greater flexibility for resources to be allocated to where they will have the greatest effect through a new appropriation type called a multi-category appropriation and clarity that one department can utilise an appropriation administered by another when so committed by the responsible Minister or administering department.Changes in the bill also encourage a more strategic focus in the statements of intent a greater focus on what will be and what has been achieved with the appropriated resources and flexibility to package this information in more useful ways. Ultimately that will mean that the changes support more meaningful information being reported to Parliament.Finally the changes will strengthen the governance and reporting regime for companies currently on schedule 4 of the Public Finance Act by applying to them the same standards we have for Crown entity companies.Part 3 of the bill amends the Crown Entities Act to maximise the collective impact of the State sector. The collective duties of statutory board members are expanded to require entities to collaborate with other public entities where practicable. The bill also leverages the scale and expertise of Crown entities through enabling whole-of-Government directions to be issued to smaller groups of Crown entities and to meet a broader range of Government objectives.I believe that the amendments to these three Acts provide a package that will support the delivery of better services to the public now and in the future. Again I thank the select committee for its hard work in bringing back to the House this bill which includes important amendments that the House should support. I commend this bill to the House.Hon DAVID CUNLIFFE (Labour—New Lynn):May I offer perhaps rare congratulations to the Minister of State Services on several points. The first is that by being willing to embrace changes from the Finance and Expenditure Committee I believe that the Minister and the chair of the committee Todd McClay—now the Hon Todd McClay—have assisted Parliament to get to the point where we have a piece of legislation the State Sector and Public Finance Reform Bill that is workable and does make useful amendments to our structure of Government and the Labour Opposition will now be able to support this bill. That is a change from our position in the first reading; we were opposing it at that stage. So this is a significant shift for the Labour Opposition. It reflects the amendments that have been made in the select committee process. I will comment now on the most major changes which have allowed us to switch our position.Secondarily I would like to compliment the Minister on choosing the right speech to read. It has not always been thus but we are very pleased that he—Hon Dr Jonathan Coleman: You know I wasn’t going to say anything nasty about you David.Hon DAVID CUNLIFFE: Well all in jest Minister. Come on have a thick skin; you have been here a couple of years.This bill is for the public one of those interesting pieces of legislation that might not seem particularly flashy but actually goes to the heart of how we run our institutions of Government: the rules under which Government departments and public entities are operated how they are accounted for and the rules by which they employ their staff. In the first version of this bill—the bill as introduced—which we opposed there were a number of provisions that would have violated the existing rights of public servants in the stampede to create more flexibility in the State sector. For example with regard to the redundancy rights of public servants new sections 61A and 61B in clause 49 as introduced would have removed provisions for the transfer of employees between public service departments and unduly restricted redundancy payments where State sector employees who have received a redundancy notice are offered and have accepted an alternative position prior to ceasing their employment. The effect of the provisions would have been to remove the existing rights contained in collective agreements and would have ignored the fact that the State Sector Act actually established Government agencies as separate employing organisations. The effect of that would be that State servants would have lost existing entitlements by being forced to transfer without access to redundancy payments where in fact there was a significant difference in their terms and conditions of employment.The change made by the select committee has been to enshrine the principle that for redundancy payments not to be paid the new job offer has to be “no less favourable” than the existing position. The select committee considered but rejected ultimately an alternative formulation proposed by the Government which was “no less favourable overall” and instead took advice that said it is already through the case law that courts can see the package of provisions and entitlements as they currently stand and can make judgments about equivalence. We did not need the word “overall” which would have been taken as an undue liberalisation. The Government compromised on that key point to the satisfaction of the public sector unions—the Public Service Association which led that debate and the New Zealand Council of Trade Unions—and on that basis the Labour Opposition is now willing to support that provision.The select committee’s amendments to the transition arrangements in new section 61AB in clause 49 included the insertion of a new 3-year sunset clause following the enactment of the bill which will ensure that collective and individual agreements are treated equally. That was really important to State sector employees and their representatives because otherwise individual agreements could have lasted longer than a collective agreement putting State sector employees who were on a collective agreement at a disadvantage relative to their colleagues on individual agreements. I am very pleased that the Government has seen sense on that matter and introduced a new 3-year sunset provision which means that everybody is treated equally as you might say people should have been from the start.The Labour Opposition was very concerned about the proposed Government workforce policy orders by which the Crown would have sought to tie the hands in a binding fashion of State entities involved for example in wage bargaining. The committee has amended those provisions so that they are now Government workforce policy statements not orders; that they are not binding at the level of detail; and to specifically reinforce the point that none of the existing bargaining rights of Stateservants will be trammelled by this—that is all of the existing legal rights of State sector employees to good-faith negotiation have been preserved.Other improvements made by the committee include tidying up the conflict of interest provisions. These have been strengthened where there are delegated powers and the application of the Ombudsmen Act has been clarified. Improvements have been made to the provisions for strategic intentions as embodied in the formal statements of intent. The original bill would have diluted the statement of intent process so that they were written for Ministers only once every 3 years often when Ministers were green as grass at the start of a triennium when you might say Sir Humphrey could be hard at work. The committee has prevented that from being diluted to once in 3 years—they are currently annual—to give Ministers the right to have a statement of intent update every year and it is mandatory for State servants to brief the Ministers that they have that right. New section 55B(2) in clause 42 has been amended to balance the efficiency objectives with a broader notion of effectiveness that includes fairness considerations of both a substantive and procedural notion.Those are some of the key changes and I acknowledge that they are significant changes for a Government to make and I really wish to commend the work of the committee chair Todd McClay and the Minister who has resumed his seat—the one without much of a sense of humour earlier—because they have been willing to make these changes in good faith such that the bill can now command the broad support of the House. For members of the public watching it is not actually every day that you see Parliament working in a cooperative fashion at select committee level that results in significant redrafting of bills like this.Andrew Little: Because they are so unreasonable on the other side.Hon DAVID CUNLIFFE: Sometimes they can be intransigent as my colleague Mr Little has said but in this case there was good cooperation across the committee—Hon Maurice Williamson: At least we don’t use the “f” word at the select committee.Hon DAVID CUNLIFFE: —and that has captured the imagination of the often slumbering Maurice Williamson who has come back to consciousness particularly to contribute to this debate and we are very honoured by the fact that he has woken up and tossed in a very small barb or two. No process is perfect but in general this one has been pretty good.Having said that may I in my final minute or 2 note some remaining reservations that the Labour Party has which are not significant enough in our eyes or those of the State sector unions to prevent support for the bill but upon which we will be giving close ongoing monitoring. They include these. In respect of the redundancy provisions there are still concerns that the protections relate only to the Public Service. There are concerns that someone who accepts another job during a notice period now has greater protection in maintaining continuity of service and that the position must start on before or immediately after the date upon which the current employment ends. We are also concerned that the delegation of powers from the core State sector to non-State partners and implementing agents is too broad and we will be watching very closely to see how that is used in practice and whether later amendment is required. We are concerned that immunity from suit rather than indemnity is being afforded. We think that that is a bit broad and we note the Law Commission’s concerns in that regard. The amendments to the Public Finance Act that will assist in removing barriers to greater cooperation between Public Service entities need to be balanced in practice with greater clarity of financial accountability documents. We did receive assurances from officials and the Minister that it would always be possible in the Budget documents to achievecomplete traceability of output classes even where there is a multi-category appropriation.To sum up the committee has made significant progress. We commend the Government for being able to listen to the Opposition and to the State sector unions and to actually forge bipartisan compromise on a structural piece of legislation that will most likely be around for a political generation or two.PAUL GOLDSMITH (National):It is my pleasure to speak on the State Sector and Public Finance Reform Bill. Indeed it was a positive experience working closely with our colleagues on the other side of the House in the Finance and Expenditure Committee process working our way through what were complicated issues and reaching an agreement. That is important with such structural legislation as this which is intended to guide the State sector over generations and continue that sense of bipartisanship we have had over these bills in the past.The key point of this legislation is delivering Better Public Services to New Zealanders as one of National’s main priorities. This omnibus bill amends the State Sector Act the Public Finance Act and the Crown Entities Act to provide the legislative grunt to deliver Better Public Services. Why is that important? Well for a start core Crown expenses represent about one-third of the economic activity of this country. Core Crown expenditure peaked at around 35 percent of GDP during the global financial crisis and thanks to prudent management by this Government we are back on track to get it down to about 30 percent in 2015. When we add in local government and capital spending total Government spending is around 43 percent of GDP. So when we are interested in New Zealand growing and becoming more prosperous we have to pay attention to that large part of the economy which is directly in the hands of the Government.How we ensure that the State sector itself is productive that it is increasing its productivity year in year out is a very significant question. I have spent much of my career to this point writing business histories and the striking thing when considering successful companies is that they are constantly innovating and rethinking every part of their business from ground zero every year. They have to do that because they know that if they do not they will go out of business because somebody else will have discovered a better way of doing things and they will eat their lunch. That basic discipline is sometimes muffled when it comes to the public sector funded by taxes which are ultimately funded by force.The amendments in this legislation create a range of public sector management tools to foster an innovative efficient public sector to deliver better-indicated results for New Zealanders. If we drill down to the specifics of this legislation we see that the changes to the State Sector Act in particular focus on strengthening the State Services Commissioner’s role in leading the State services and extending the chief executive’s responsibilities to consider the collective interests of the Government and longer-term sustainability rather than focusing on single departments or agencies. This legislation has been a result of detailed thinking over an extended period led by the Better Public Services Advisory Group which was set up to identify the issues that need addressing in order for the State sector to be more productive and more effective. That group identified the tendency of agencies to work in silos at the expense of the sector and system-wide performance. So this change which is getting Government agencies led by their chief executive officers to work more closely together and to organise themselves around results that make a difference to New Zealanders is I think a more effective way of doing things rather than carrying on the way things have always been done.So what is it that we are trying to achieve in child health or education outcomes and how is it best for all the relevant agencies to work together? That might sound simple and obvious but the structures of how the Government is organised and how the leaders of each department are incentivised makes a huge difference. This legislation by broadening the things that a chief executive in a particular department has to think about and broadening that into a wider public sector will I think make a difference over the long term.There are many other things that were handled during the select committee process. The Minister of State Services has covered the issues of redundancy and the ability of chief executive officers to delegate powers and create a mechanism. I will not go into that in further detail. I will leave that to other speakers but in all I commend this bill to the House. Thank you.Hon DAVID PARKER (Labour):I rise to take a call on behalf of the Labour Party. I want to deal with a couple of issues that I think are less than perfect in the State Sector and Public Finance Reform Bill as amended by the Finance and Expenditure Committee. The Labour Party given the changes that have been made and negotiated at the select committee will be supporting this legislation. We do so in part because in respect of legislation that is intended to endure beyond Governments and beyond the term of any one particular Parliament we think it is one of the roles of the main political parties in this House which at times sit on Government and Opposition benches to try to reach agreement on framework legislation so that there can be continuity and certainty around those settings in a way that means that we have consistently applied standards in the State sector and the wider public sector. With the changes that have been agreed at select committee we find ourselves on balance favouring this legislation and will be supporting it through subsequent stages.There are a couple of things that I do want to refer to that I thought were pretty poor in the original legislation. For a start there was a regulation-making power effectively that was conferred upon the Minister of State Services to give directions to chief executives. Those powers were so broad as to effectively enable the Minister by a directive that amounted to or was akin to a statutory regulation to impose a wage freeze throughout the State sector. As we said at the select committee that was akin to the regulation-making powers that National Governments used to vote themselves and exercise under the old Economic Stabilisation Act under which the then National Prime Minister Mr Muldoon inflicted upon New Zealand a wage and price freeze through statutory regulation.Hon Maurice Williamson: How did that go?Hon DAVID PARKER: That is right. “How did that go?” said Mr Williamson. It did not actually go very well Mr Williamson. Indeed it was as a consequence of the inept management of the economy by that particular National Government led by the Rt Hon Mr Muldoon that led to New Zealand having the highest Government debt that it has had since I was born. I think that at one stage one dollar in four of all taxes collected was being spent on interest as a consequence and debt was out of control. Of course subsequent Governments—firstly Labour and then National and then Labour again—reduced Government debt very substantially so that by the time the Government that Mr Goldsmith now forms part of came to power New Zealand had zero net debt and gross Government debt had gone from 38 percent of GDP down to 18 percent of GDP. So it was in fact the responsible fiscal management of the last Labour Government and the prior two Governments—the prior National and Labour Governments before that—that meant that New Zealand was in a position come the global financial crisis to actually see things through in a way that did not cause the downward spiral that has been experienced in other countries which have had decliningeconomic circumstances at the same time that they have had to pursue austerity on the Government books.There are a couple of other things. That regulation-making power has been severely narrowed in this version of the bill and as a consequence that particular detriment of the bill has been remedied. I want to go a little bit further into two things. One is that you have got to be very careful not to cause unintended consequences when you change foundation legislation. There are a number of occasions where this is happening at the moment in the law. The Government has modified its position in respect of whether people who move from one position to another in the wider Government service can be effectively pushed into a new job and lose their existing rights under their employment contract or their collective agreement. They often have redundancy provisions which they were going to lose under the version of the bill that went through the first reading and went to the select committee. The Government has agreed to change that so that now for people to lose their entitlements they have to accept a position that is no less favourable than their existing package. That is a fair enough outcome.There is another area where the Government is causing an unintended consequence at the moment and that is in the changes proposed to the Employment Relations Act. Under that Government legislation—and this is dawning upon the business community at the moment—which is so ideologically driven notwithstanding the fact that New Zealand has had very low rates of industrial disputes the number of strikes and lockouts will actually be increased. The reason for that which was explained to me recently by an employment lawyer is quite simple. Under the new employment relations legislation people will lose their right to strike or lock out once negotiations are deemed to have broken down. Once you reach the point of breakdown of negotiations and negotiations are deemed to have broken down you cannot strike or lock out. That means that if you are an employer who wants to lock out or an employee who wants to retain the right to strike you have to do that before you reach the point that negotiations are deemed have broken down under this new definition of a breakdown of employment relations.That logically must mean that as a consequence we are going to see more industrial disputes move to lockout or strike earlier—earlier. So this ridiculous piece of legislation the employment relations amendment legislation which the Government is bringing through in the context of very low rates of industrial disputes that turn into strikes or lockouts is going to make it worse—the Government’s own industrial relations legislation—because people will lose the right to strike or lock out once they pass a certain point. Therefore in the context of those negotiations which sometimes are protracted people will have to exercise their right to strike or lock out earlier in the process or they will lose the right to do so.Mr DEPUTY SPEAKER: Just come back to the bill.Hon DAVID PARKER: It shows how careful we have to be with legislation that we do not make things worse.Another area of this legislation that concerns me—and I do not think we have got it right yet—is new section 86 in clause 54 of the bill which protects Public Service chief executives and employees from litigation. I for one think that when someone who is acting on behalf of the Crown is going about their business in their job and makes a mistake then they ought not be the one who actually faces liability for the consequences of that mistake. The Crown stands behind them and it is the Crown that wears the loss in respect of a problem that is caused to a member of the public who has a right of action. I have no problem with members of the Public Service being protected from liability in civil proceedings for their mistakes.That is not what this debate is about. This debate is about whether they should be protected by way of having an indemnity from the Crown or whether they should havean immunity. This legislation according to the Law Commission and the Law Society goes too far by conferring immunity. The Law Commission said that we are effectively creating a faceless bureaucracy—and it used that phrase—that cannot be brought before court. You think: “What is the consequence of this?”. Well the consequence is that you could actually have someone who in good faith does something that is grossly negligent but because of the wording of this provision is given an immunity from civil proceedings so long as it was done in good faith. The act could be grossly negligent yet the injured party out there in society will have no right of suit. It is not just that the public servant will have a right of indemnity from the Crown; the injured person will have no right of suit. The injured person in society the powerless person who has suffered an act of gross negligence on the part of an arm of the State through a public servant is to be left without remedy. That is wrong. This is actually going a step too far. What we should be saying is that the employee who makes that mistake is indemnified against liability but we should not be giving immunity so that the person who is injured by an arm of the State has no remedy.At the select committee we tried to change that. Labour members said that was wrong. We thought the Law Commission had it right. There are occasions when the Crown will not be vicariously liable for a grossly negligent act of an employee because vicarious liability will not cover the action and the private citizen injured by an arm of the State through an act of gross negligence will be unprotected. That is wrong the Law Commission said it was wrong and the National Government refuses to fix that aspect of the law. This legislation is not perfect but overall it is important housekeeping legislation and we will be supporting it at this stage.DENISE ROCHE (Green):I rise to take the first call for the Greens on the State Sector and Public Finance Reform Bill. This is a complex piece of legislation. I do acknowledge that this bill makes changes to legislation that has been in place for about 25 years. Before I get into the detail of the bill I would like to thank the many submitters—and there were many—and particularly those members of the Public Service Association who came and submitted on this bill who came and provided a face to the Finance and Expenditure Committee the face of those people who will be affected by the changes in this bill. That helped to clarify some of the significant parts of the legislation. I want to acknowledge to those submitters that their actions were very brave. It is quite difficult to front up to a select committee of politicians when you work in the sector that is governed by those politicians.Too often people in the community think of public servants as faceless cardy-wearing bureaucrats or clerical staff. That could not be further from the truth. Public services and consequently implementation of the Government’s policies stand or fall on the skills and efforts of public servants. There are over 44000 individuals who work in the Public Service today. They work in Crown entities and they work in departments and ministries. They are frequently specialists in their fields. They are in hot demand and the Public Service is constantly facing the challenge of recruiting and keeping them in the Public Service.There are some parts of the bill that we think are very good. We certainly agree with providing more joined-up thinking and the ability to get departments and agencies to work together. To some extent that is happening now more and more. I think particularly of Gateway which combines wraparound services and assessments for young people based on their health needs their education needs and their social development needs—three different departments working together for the benefit of their clients. There is no doubt that reducing the silo mentality of departments is a good way to promote Better Public Services. The term “better public services” has been bandied around a lot actually co-opted by the Government to mean anything frombudget restrictions to the discontinuation of services and the removal of State housing. Although we can agree that we all do want better public services we do not really agree with the method that this Government is trialling here or the twisting of the term.There is little doubt that the State Sector Act particularly does need to be overhauled. I recently attended a public meeting addressed by the Rt Hon Sir Geoffrey Palmer and Stan Rodger. Stan Rodger talked about the original intention of the State Sector Act and Sir Geoffrey talked about the impact of the State Sector Act in shaping the way our public services have worked. I acknowledge that there are other members in the Chamber who attended that meeting. Sir Geoffrey’s points in particular highlighted a lot of the problems that we do see in the Public Service today. He included as problems the cult of management; the loss of institutional memory which is tied to talented staff migrating from the public sector; the lack of rewards for top staff; and the lack of training and professional development for staff. He talked about quality issues. He talked about the Crown’s legal risk being not adequately protected and he suggested that Crown Law often came in too late on legislation and issues. He talked about the fact that some public servants were no longer providing free and frank advice and he referred specifically to Ministers’ offices. Despite this quite damning criticism Sir Geoffrey also described this current bill the one we are talking about today as a dog’s breakfast. His advice for ensuring better public services in New Zealand was to stop this tinkering and have a royal commission of inquiry into how the Public Service could be improved.The week before last I was also present at the Government Administration Committee during the discussion on the vote where the Minister of State Services Jonathan Coleman and the State Services Commissioner Iain Rennie were present and were answering questions—some good questions too. I agree with the commissioner’s view that there does need to be the ability to deploy good people across the organisations and to utilise the best of them. Well we believe that this bill as it is currently written even with the amendment and the good work that has gone into it as it comes back to the House will hinder that.The purpose statement proposed by the bill includes promoting and upholding “a State sector system that … (e) is supported by effective workforce and personnel arrangements;” and there are amendments to introduce obligations of stewardship of the system and yet the bill actually removes the one provision in the current Act that gives Public Service chief executives the ability to actively manage skills and capability across the system. It removes the power to transport employees between agencies and to do the deployment work at the beginning of a process rather than at the end. It replaces this with a seemingly simple restriction on public servants’ right to redundancy compensation which does not have the same effect.We note that the bill takes a more sensible approach with Public Service chief executives. They get far more opportunity to be deployed and they have that in the bill. Notwithstanding the softening of some of the clauses from the original bill we believe that as it is now it will have a significant effect on public servants’ conditions of employment. It will remove some entitlements that have been freely contracted for for 25 years of the life of the original Act. To a large extent the provisions around redundancy technical redundancy and transferable functions and people seem to ignore the fact that Public Service employees are not employed by the Crown. They are not employed by just one agency. They are employed in many different agencies and yet they are treated like that.As has been the case throughout the 25 years since its passing the Act gives public servants none of the benefits that would come from working for a single Public Service provider. There is no redeployment process. Redundant public servants find work solelythrough their own efforts. This bill seeks to let the Government both have its cake and eat it too by withholding those same benefits and at the same time extracting what could be a cost of working for a single employer—a restriction on access to redundancy compensation. I know that the Labour Party members on the select committee worked very hard on that and it has been softened but there are still major changes to the working conditions that public servants have currently.On balance we believe that this bill leaves workers worse off. I will be introducing a Supplementary Order Paper which I hope will be supported about reintroducing relocation protection but in the meantime we will not be supporting this bill. We are not convinced that the changes in the bill in any parts about the Public Finance Act or the Crown Entities Act actually deliver better public services. I do not think that the process used to get the bill into its current state was either terribly transparent or democratic and I would welcome the opportunity to have a bigger discussion about that. That is why I would support what Sir Geoffrey Palmer said which was to have an inquiry that looks at the entire Public Service and stop tinkering with it because otherwise we will as he said be left with a dog’s breakfast.JOHN HAYES (National—Wairarapa):I support this bill the State Sector and Public Finance Reform Bill and want to thank colleagues across the Chamber for their support and for very sensibly contributing to the select committee process which sees the result here in this House today. I would say to the people of New Zealand who might have been listening to the last speaker Denise Roche this afternoon that if in the next election you are looking for a very left-wing Government you will have heard a speaker who alluded to the sort of New Zealand those members would construct if they ever were to get a chance at power in this country.I speak as a former public servant. We have had in this country for more than 100 years a very professional Public Service and the Government wants to strengthen the legislative framework so that all New Zealanders benefit from a public sector that is oriented to delivering results. It is very tempting—and I saw it in a meeting in my electorate this week—for a bunch of different Government agencies to all work in their own silos and they are not all that interested about coming and working together. So the purpose of this bill is to ensure that the benefits of wider changes to the public sector become apparent. We want to see more New Zealanders satisfied with our public services. We want them to be satisfied with the front-line public services that they receive and surveys are indicating that they are moving into that space.Another point that I would like to make in the wake of the last speaker is just to make sure that that speaker understands that we now have more women—significantly more women—in leadership roles in the public sector. At just over 42 percent we now have the highest percentage of women in senior leadership positions in the 13 years since the Human Resources Capability Survey of the Public Service departments began—42 percent the highest ever.Can I just very quickly touch on another point that came up from the last speaker which was around the question of provisions in this legislation for redundancy. I think that if you start from the point of asking yourself where the Government’s money comes from—out of people’s pockets—then how is it possible to look a taxpayer in the eye a taxpayer who contributes their taxes to the Government and say: “Look you’ve gone from this department and you were made redundant but you’re going to go to that department the next day and you should be entitled to redundancy.”? You cannot find one person paying taxes in this country who thinks that that is sensible and that is the arrangement that the Green Party would like to see.So it seems to me that a key provision of this bill is very important because it relates to civil servants who are made redundant but who have a new State sector job to go to.Those people will not be able to get a redundancy payout. The criteria for not getting a redundancy payment are if the civil servant starts working the next day or even before their current employment contract ends is treated as undertaking a continuation of service within the Public Service is substantially in the same general locality or within a reasonable commuting distance of the last job or has a collective package of terms and conditions that are no less favourable than those that apply to their current position. I think it is essential to note in this process that not every single term or condition in the new job has to be the same for that situation to arise.I think this is a very good bill. It has broad support across Parliament particularly in our Finance and Expenditure Committee and I commend it to the House.Rt Hon WINSTON PETERS (Leader—NZ First):One of the National Party’s major election promises was “better public services”. It was going to be a top priority and this is it—4½ years later this is the sum of all its effort. Apparently what is going wrong with the country economically and socially is all to do with New Zealand’s Civil Service. Here is 176 pages of technocratic jargon and bureaucratic speak with a few legalistic niceties thrown in for good measure and I was certain the MP for the Wairarapa with his experience would have picked this up because he is a man of the world. He has been around. He has heard this sort of mumbo-jumbo before. I thought that if there was one man in the National Party team who would pick this up it is Mr Hayes. Usually he is as sharp as a tack and he shows courage. There is nothing in this State Sector and Public Finance Reform Bill that would deliver any tangible benefit to the Kiwi mums and dads whom National claims to represent.What does the bill propose to do? Well it is going to establish departmental agencies within existing Government departments each with its own chief executive officer. It is all there in Part 1 clause 17 and new sections 27A and 27B amending the State Sector Act. Mr Hayes surely must have been alarmed when he saw that. The National Party’s approach to better public services is more Government departments and more chief executives. Oh yes it is. It is all here. There are already 35 Government departments and each has its own chief executive officer earning on average between $457000 and $470000 a year. Do you hear that? There are 35 Government departments already and each has its own chief executive officer earning between $457000 and $470000 a year or 10 times the average annual income. What is National doing? It is hiring more of them. That is what the State Sector and Public Finance Reform Bill means in practice and it is all here in black and white in Part 1 clause 28 amending section 35 of the principal Act. We have no idea how many new departmental agencies and departmental agency chief executives there will be but the intent is clear. New Zealand First firmly opposes the National Party’s attempts to hire more of its rich mates into cushy public sector jobs.David Bennett: Ha ha!Rt Hon WINSTON PETERS: Mr Bennett from Hamilton laughs but I will get to a quote shortly and he will not be laughing then. That is precisely what the National Party wants to do. The sad thing is that previously innocent but sometimes good people like Mr Bennett are being led by the nose being taken for a ride and having the wool pulled over their eyes.Here is the point. Section 2 allows for departments or departmental agencies to delegate Public Service functions or powers to contractors or individuals working in the private sector. It is all here in Part 1 clause 28 which amends section 35 of the State Sector Act. New Zealand First has serious reservations about the delegation of Public Service functions and powers to individuals working in the private sector. How does that work? Who is going to surveil them? Mr Bennett when he is at the select committee. Do you feel safe now? Do you feel safe that Mr Bennett is going to besurveilling these people making sure he keeps an eye on them—these private individuals with public contracts with the taxpayer? Amazing really. We question the efficacy and appropriateness of such outsourcing. We are yet to see any evidence that this will result in more savings and better public service outcomes.This bill threatens to overturn the longstanding constitutional convention of Civil Service impartiality by exempting public servants working in a Minister’s office. Any public servant in a Minister’s office now is exempt from the issue of Civil Service impartiality. They are not political appointments or they should not be from the requirement that selection must be based on merit. How do you like that? So now no longer do we have a constitutional convention of selection on merit. You get them exempt from these provisions of the old legislation. Such a provision leaves the door wide open to cronyism within the State sector and New Zealand First holds grave concerns about the politicisation of the Public Service.Here is the point Mr Bennett Mr Hayes Maggie Barry and all those people who so clearly are resigned to giving away their loyalty on such an important matter. It is with interest that we note a recent National Party strategy paper leaked to the media that called for “a pool of fiscal conservative bureaucrats who will work with politicians to implement policy.” It is all laid out: “a pool of fiscal conservative bureaucrats who will work with politicians to implement policy.” Crikey they have already got Treasury. They have already got Treasury but they are not happy with that. It is unbelievable.John Hayes: Could you table that report please. Table it.Rt Hon WINSTON PETERS: They go on further. Do you want me to table the National Party strategy? Look Mr Hayes go beyond the veil of your caucus and demand as a hard-working provincial MP who is about to be taken for a ride again to see the paper. They go on to say in the National Party strategy paper that reform is “necessary to ensure policy is implemented by bureaucrats rather than blocked by them.” It is unbelievable—naked plain clear as daylight. In other words they want to stack the Civil Service with their mates and these reforms will give them the capacity to do so. The rest of the bill of course totally sidesteps the real issues. New Zealand First remains firmly of the view that there is nothing in this bill that will result in any tangible benefit to ordinary New Zealanders. National wants to stack the Civil Service with its mates. These reforms give it the ability to do so. Removing the requirement for ministerial appointments to be impartial overturns centuries of Westminster tradition and must not be tolerated in a modern democratic nation. It is down to that.Mr Bennett and Mr Hayes here are some issues: Novopay fraud in the Canterbury rebuild Pike River theRena disaster Cave Creek the LAVIII 105 vehicle blowout from $170 million to a billion dollars and the INCIS computerisation scandal. Tell me. Those are just a few notable cases. What in this bill is going to stop that?Denis O’Rourke: Nothing.Rt Hon WINSTON PETERS: Nothing. So stop blaming everybody but yourselves for your economic incompetence for your inability to run a sound economy. Since 2007 the GDP per capita of this country has moved by 0.7 percent. It is standing still; utterly standing still. Since that time of course in the recovery we have had 1 percent of the population pick up about 120 percent of the recovery. The other 99 percent have gone down 0.04 percent; picked up nothing. It is unbelievable. Again of those disasters which one would be solved by this legislation? The answer is none. Mr Bennett is speaking next. I want him to tell the people of Hamilton why he will not do his duty by his country instead of acting as sycophantic cannon fodder for the National Party.DAVID BENNETT (National—Hamilton East):Just before we talk about the bill the State Sector and Public Finance Reform Bill I want to give a bit of a history lesson for those young people who may be watching this. They have just seen Winston Petersgive a speech in this House. Every speech he gives is the same. I was just going through that speech and I wrote down exactly what he said. He said the same thing 3 weeks ago and he said the same thing 3 years ago. He could not say it about something 5 years ago because he was not here. But he said the same thing 10 years ago and he said the same thing 20 years ago. His speeches are all the same—they are all the same. If you listen to his speeches they start off—the first 2 minutes of a Winston Peters speech has been prepared—Rt Hon Winston Peters: I raise a point of order Mr Speaker. I know that these rules are pretty broad and pretty loose and pretty lax but you are required to get up and at least within the first couple of minutes say that you understand which bill is before the House and that you might have some remote idea what the debate is about. [Interruption ] But he is inexperienced.The ASSISTANT SPEAKER (Lindsay Tisch): He has been going for only 48 seconds and I am sure he is on to it now.DAVID BENNETT: Yes and I am sure that the member will enjoy it when we talk about this bill. That member had to use a point of order because he knew he was in trouble. It is the oldest trick in the book by the oldest dog in the House. But it did not work did it?Let us go back to that speech. We heard words about this legislation about better public services and about no tangible benefit for mums and dads in New Zealand. All those lines we hear all the time—more Government departments more chief executive officers. He does not want contractors. He expects it all to be done—[Interruption ] What is that?Rt Hon Winston Peters: More snouts in the trough.DAVID BENNETT: More snouts in the trough—now you would know about that would you not? How long has your snout been in this trough?The ASSISTANT SPEAKER (Lindsay Tisch): Order! That is completely unnecessary.Hon Member: He’s accusing you now.The ASSISTANT SPEAKER (Lindsay Tisch): Yes and I do not—Rt Hon Winston Peters: Throw him out.The ASSISTANT SPEAKER (Lindsay Tisch): No we will just stop that. Be very careful what you say because you are bringing the Speaker into the debate.DAVID BENNETT: That is the first part of a Winston Peters speech. Then when he gets to minute 2 he waits for someone to interrupt him and Mr Hayes was the interruption this time. Then we get the personal attacks like saying that there is a hard-working provincial MP like Mr Hayes—you know personal attacks on Mr Hayes. That is the next step.But then there is the third part of a Winston Peters speech. This is the bit you are always waiting and listening for because there is no way that that member can get through 10 minutes without saying the words “cronyism” “leaked papers”—Hon Trevor Mallard: I raise a point of order Mr Speaker. I think we are well beyond 48 seconds now. It is clear the member has prepared some comments that do not relate to the bill. He should stop reading those and get back to the bill.The ASSISTANT SPEAKER (Lindsay Tisch): Sure that is a fair comment and I will ask the member now to get on to the bill and from now on in to concentrate on the bill before us.DAVID BENNETT: Well it is my pleasure to speak in regard to the bill—Hon Members: Which bill?DAVID BENNETT: The State Sector and Public Finance Reform Bill. But I just want to clarify some of those comments that were made by the previous speaker aswell. We got to 6 minutes of his speech. We got the “cronyism” and then we got words like “sticking with his mates” and such like—Hon Trevor Mallard: I raise a point of order Mr Speaker.The ASSISTANT SPEAKER (Lindsay Tisch): I know what the member will raise. Look I have warned the member. If he does not come back to the bill I will terminate this speech.DAVID BENNETT: So this bill is an important bill and it is good that the Labour Party actually agreed with it. In the Finance and Expenditure Committee it was good to see that agreement from the Labour Party members. They actually worked constructively in the committee to come to some plausible solutions I think. Mr David Cunliffe was leading the Labour Party in that role. He worked through the provisions of the bill to make sure that both National and Labour were confident that it retained the rights of State service employees but also worked together in the best interests of getting the bill through this Parliament. So I would like to commend this bill to the House. It is a shame that the Green Party cannot also be supportive of the bill but it is in the best interests of the New Zealand State sector going forward. Thank you.Hon CLAYTON COSGROVE (Labour):Well that was a lesson in how not to do it from that member David Bennett. No one actually knows what he said and it would be an indignity to the House to give that member more than a few seconds.The State Sector and Public Finance Reform Bill is an important piece of legislation. I have got to say that the Opposition’s role is to oppose but also to propose but we are getting a little tired on this side of the House of being the guys with the shovel behind the elephant cleaning up the mess made by this crew over here. First it was the car-park tax; they botched that. I am going to pay tribute as I did in the last speech to Mr Hayes who as I have said before showed a ton of guts at the Finance and Expenditure Committee in actually saying that the Government was wrong.Hon Trevor Mallard: I thought it was Maggie Barry.Hon CLAYTON COSGROVE: No. Old man’s beard? No. John Hayes showed a ton of guts at the select committee in reining in his members and actually speaking out—in the privacy of the select committee with no public present of course. But none the less he opposed that. And we cleaned that up. The iPad tax the car-park tax—we cleaned them up.Now we are cleaning this up because this bill was a mess from start to finish. It took away fundamental rights—fundamental rights of employers. I will say on record and I think it is a comment that most of us across the House would agree with that we have one of the top Civil Services in the world one of the best Public Services in the world a non-corrupt Public Service highly professional. But things go wrong. People are human; mistakes are made.I want to touch on the point that Mr Parker made around what I call the John Banks clause—the immunity clause—because there is a problem. If you actually track back what this does it provides immunity in respect of a gross act of negligence if it occurs. It may be something as simple as the boss saying to the junior public servant: “Don’t do it.”—whatever it may be—“Don’t do that.” The junior not out of any maliciousness simply does it gets it wrong and acts in legal terms—Ms Barry might want to work on this one—in a grossly negligent way. So you then have a victim you then have potential injury or loss but that public servant has immunity.What does that mean? That means that the victim of that grossly negligent act cannot—they have no right to—bring a suit against the Crown. They have virtually no right because the act in itself may carry no vicarious liability and they have no right potentially to bring suit against the individual the junior who in a non-malicious way acted grossly and negligently. That I think is a step too far. I say that simply not as aslur against the Public Service but because people are human and things go wrong. We in our offices every day have constituents and people who come to us where something has gone wrong in the machinery of government. It could be ACC. Mr Little and Mr Mallard have raised a whole series of examples over the last few years in respect of that. Many of those presumably I would argue are not malicious are not done in a malicious fashion. They are what you would commonly call in Kiwi parlance a stuff-up. But there are rights for victims and those who have experienced loss or injury to have and to seek remedy. In this case those rights it appears to us are taken away and we have the John Banks clause the immunity clause. Maybe Mr Banks would want this clause extended to him given his difficult and perilous circumstances at this point.Andrew Little: John Banks Judith Collins—you name them.Hon CLAYTON COSGROVE: Well John Banks Judith Collins and possibly even Peter Dunne. Who knows? The list of suspects goes on—Hon Trevor Mallard: Chris Finlayson.Hon CLAYTON COSGROVE: Chris Finlayson my colleague says. The list goes on and on and on—the rotten foundations that are propping up this crew.The other point I want to make is this. One of the issues that Mr Peters touched on was the infamous strategy report that was leaked by I think this chap Mr Lusk who basically said that the objective of the National Party was to politicise the Public Service to the point where it would just do what it was told. That is a very very dangerous thing. One of the great qualities—Hon Trevor Mallard: Michael Woodhouse agrees.Hon CLAYTON COSGROVE: Michael Woodhouse—well he is a Lusk acolyte I think—Hon Trevor Mallard: No no quite the opposite.Hon CLAYTON COSGROVE: Quite the opposite—OK. [Interruption ] He tried to clean Mr Lusk out. One of the great qualities of our Public Service is that it is an unbiased non-political Public Service that in my experience when I was a Minister gave free and frank advice and would say to you: “Minister I think you are wrong if you are going to do this.”Hon Trevor Mallard: Quite often to me.Hon CLAYTON COSGROVE: Quite often to Trevor Mallard. But if the Minister—where the buck stops—decided “No no I’m going to do it this way. I believe I’m right.” then the Public Service would row the boat in that direction. It would implement as it should constitutionally the wishes of its Minister and its Government which it serves. But the point is that they—the public servants I would deal with; I will not destroy their careers by naming them—would say to the Minister: “Look we are going to give you free and frank advice. We believe that this won’t work. We believe that it is the wrong course of action. Here is our recommendation.” That is what you want from a professional non-political Public Service.But I have talked to the odd public servant recently and they now say things like for instance how the staff-student ratios in education were a stuff-up par excellence by this crew. They were forced to back down by the weight and the pressure put on by parents. The Christchurch school closures—how they were done why they were done criteria being wrong and other issues. I believe and some public servants have said to me that they now do not have the ability or they do not feel confident in saying to the Minister: “We think this is heading for the rocks. We don’t think in the case of Hekia Parata you can convince parents. There is no logic or data that says that if you increase class sizes your kids will get a better education. We think you shouldn’t do this Minister.” I do not believe that that advice came. Likewise on the school closures: “You shouldn’t do it this way Minister. You should front the schools. You should adhere to your own criteriathat you set down for closures which you have departed from. That is not the way Minister to do this in Christchurch.” That advice I suspect if it came—I do not know whether it did; if it did it was not rigorous—was not listened to by the Minister.There is a feeling I believe in the Public Service that one there is no point in giving contrary advice and saying to a Minister “We don’t think this will work.” or two there is a bit of good old-fashioned intimidation where you know that you are going to get trodden on if you give contestable free and frank advice and say: “Minister this may not work.” Therefore we do not get the best possible advice from our public servants.That might suit that crew over there who now have a strategy paper leaked that shows that they do not want that; they just want public servants like robots who will do their bidding. They want a highly politicised Public Service simply to do their bidding. They want a Public Service that effectively is a political lackey for them to do their bidding regardless of the constitution—the lack of it—and regardless of the ethics. That is what is now in print in a strategy paper that Mr Peters alluded to. That is highly dangerous. That is grossly unethical. That is a hit and an attack on our constitution and on the good name of public servants.From time to time of course everyone likes to kick around the old public servant and from time to time bluntly they deserve it—some of them do. Some of them do deserve it and some of them do act from time to time a bit like the old Sir Humphrey where there is a battle between the Minister and the senior public servant because the Minister wants to do something and the senior public servant—one or two in my experience—is implacably opposed which goes beyond simply saying: “Hey we think you should go the other way but we’ll implement it.” So there is a need I think for some discipline around some of those public servants but I say that it is very very dangerous in our open little democracy where a Government openly overtly and bluntly is writing papers about politicising our professional Public Service. That is not on. That is wrong.We will support this legislation because we cleaned it up. It was a mess from start to finish. Some incredible Supplementary Order Papers were put up which broke the consensus as Mr Mallard has said. Ideas and clauses were put up that would have stripped basic working folks—public servants are entitled to get paid especially the odd teacher but these guys struggle with that concept—of basic rights. Not outlandish rights not luxuries not things that any other citizen would not expect if they were working in the private sector—basic rights. And we cleaned that bill up and the Council of Trade Unions and the Public Service Association which we should pay credit to put in robust submissions. I will give some credit to Mr Hayes and others whom we worked with to clean it up. But I have got to say that this is about the third time that the Opposition has had to act like the guy with the shovel behind the elephant and clean up their mess. The people deserve better and we are getting a bit tired of providing the answers to these geniuses over there.MAGGIE BARRY (National—North Shore):I rise to speak to the State Sector and Public Finance Reform Bill in its second reading. Basically this is a document that updates the old Public Finance Act 1989 which has stood us in pretty good stead actually for the past 25 or so years. It is a piece of legislation though that does need to be brought up to date and needs to be futureproofed. As our acting chair of the Finance and Expenditure Committee Paul Goldsmith said earlier this omnibus bill provides legislative grunt. That is pretty much what this bill does.The three new provisions which were outlined by the Minister of State Services earlier today are to formulate fiscal strategy to recognise its interaction with monetary policy—something of a mystery to the people on the opposing benches. It is also designed to formulate fiscal strategy recognising its likely impact on current and futuregenerations. And of course ultimately what we need to do with this is ensure that the Crown’s resources are managed effectively and efficiently which is something that the Opposition woefully was incapable of doing in its 9 long years on the Treasury benches.The select committee process is of course a robust one. Various parties and speakers before me have alluded to the fact that some changes were made. Overall with this piece of legislation we received four submissions and we heard two of them and there were a couple of changes that are worth mentioning. One of them is that of course as we know the relationship between fiscal policy and monetary policy is a two-way thing and the revised wording of the Act as a result of the discussions at the select committee will clarify that further. Keeping up with the times and this Government’s desire to see more services available online this bill has been futureproofed. The bill is now amended so that it is able to bring those fiscal responsibility provisions in line with modern technology which is where via the internet a lot of people read legislation like this and where they need to go to find out what is happening.I will clarify as well I think something that has come forward from some of the other speakers today—a misnomer a common sense of confusion—and put that right. Some people think that this is a bill that is a result of a confidence and supply agreement between this Government and the ACT Party. The Labour Party’s minority report for example alluded to that. That is of course not true. This is a bill that arose out of a Treasury-initiated review of the fiscal responsibility provisions of the Public Finance Act and I commend it to the House. Thank you.The ASSISTANT SPEAKER (Lindsay Tisch): I understand that the next call is a split call. I call Darien Fenton.DARIEN FENTON (Labour):I have been fascinated hearing about the select committee process on the State Sector and Public Finance Reform Bill particularly because David Bennett is a member of that committee the Finance and Expenditure Committee and I am hoping that he will learn quite a lot about how you can make changes that actually improve workers’ rights when we come to consider the draconian employment law legislation in front of the Transport and Industrial Relations Committee. In my first reading speech I said there were some good things in this bill and there were some things that we were concerned about. Some of them have been cleaned up. I am particularly pleased that we have got to a position with the redundancy provisions for State sector employees where the Public Service union is comfortable with it although it has commented that there is no doubt that there are more restraints being imposed on redundancy compensation but compared with the original proposal it has certainly made some ground.I noted also that Jonathan Coleman the Minister of State Services when he was in his second reading speech talked about redundancy being about fairness. I am quite confused about that actually. It seems that redundancy is about fairness when it comes to this bill but it is not about fairness when it comes to Sue Moroney’s bill the Employment Relations (Statutory Minimum Redundancy Entitlements) Amendment Bill which would provide redundancy fairness for private sector workers as well as public sector workers. Also it seems that this is about fairness when it comes to situations in the Public Service which of course I support where workers are being transferred from one position to another—and there are many rights that are being cleaned up in this bill and I totally support those—but when it comes to transferring low-paid cleaners or low-paid kitchen workers or low-paid orderlies or laundry workers who work in the private sector or even in hospitals or are employed as contractors under Part 6 of the Employment Relations Act fairness does not apply. Actually whatthe Government wants to do is take away rights of workers who are actually employed by small employers.The second thing that I wanted to mention is the issue of workplace orders and again this is something that I understand took a lot of negotiation and a lot of consideration and that perhaps is an exemplar about how select committees can reach agreement and make progress on a bill that is important to everyone. Originally the bill allowed for the Government to use Orders in Council to intervene in collective bargaining between the union and the employer for example to prevent the employer agreeing to a pay rise. It is really pleasing that the select committee has dropped that provision and instead the new bill allows the State Services Commissioner to issue workforce policy statements but these specifically exclude pay and conditions. But as my colleague David Parker warned earlier though there are consequences—there are knock-on effects. The Government’s Employment Relations Amendment Bill will have a knock-on effect in the State sector. Although the State Services Commission will not be able to interfere with collective bargaining the Government’s bill around collective bargaining will have an enormous impact on State sector workers and we will see how that goes. But under that bill employers will not have to negotiate a collective agreement. They can just say: “Well we don’t want to.” So it is going to be harder for them to negotiate a pay rise let alone protection for people who work in the State sector in the public sector who may be in a situation where they are trying to bargain for a pay rise or to keep their current terms and conditions as they have to do at the moment because this Government has been so mean.Also under those provisions new workers can be paid less. So having a collective agreement is one thing but being able to bring in new workers and pay them less under the Government’s other legislation will actually undermine the provisions in the bill around collective agreements. There are other provisions that I could talk about but I will not. What I would say is I find two things very interesting. One is that we have a select committee process where there seems to be agreement across the board albeit with some reservations on our side about the rights of workers to redundancy and collective bargaining but then on the other hand another select committee is about to completely undermine those provisions for all workers.KEVIN HAGUE (Green):The previous speaker in this debate Darien Fenton talked about her first reading speech in which she indicated that the State Sector and Public Finance Reform Bill was a mix of positive and negative. I agreed at that time and actually I still agree that that is a correct summary of the bill. For our colleagues in Labour the changes made by the Finance and Expenditure Committee which I agree have been positive have been enough for them to support the bill; for us they have not been. We believe that the bill is still an unsatisfactory mix of positive and negative. In particular we are frustrated I guess by the fact that these basic Acts that set up the machinery of the modern State sector deserved more scrutiny and a proper overhaul rather than this omnibus bill that tinkers around the fundamentals.The positive that I want allude to is around the silo effect of the State Sector Act which from the word go I guess was identified as a problem in that the Act rather than create a single public service created incentives and created levers that set up the siloisation of Government departments. I think we have witnessed in New Zealand some of the downside of that where Government departments have not been collaborating with each other in ways that the public expects and that any Government I am sure would wish to happen. So the modest improvements made by this bill in that area are ones that are welcome. It could have gone a lot further and certainly we would hope in the future to be able to try to make further progress in that area.However on the negative side and I alluded to some of this in the first reading speech and sadly it has not been really addressed by the Finance and Expenditure Committee the ministerial interference through ministerial observers in Government departments offends against the very basic idea in the State Sector Act around separation between the Minister and the chief executive. That has not been remedied by the select committee. The establishment of departmental agencies offends against the basic building block if you like of the Public Finance Act whereby one of these departmental agencies will receive funding from one source but be accountable to a different Minister. That basic alignment of funding and accountability that sits at the very heart of the Public Finance Act is lost in the changes made by this bill.Perhaps most important the delegation of Crown functions to someone outside the State sector makes the boundary around public services and the public sector a porous boundary and that is a retrograde and dangerous step. This Government has made a habit of changing the social contract that the State has with its citizens as we are seeing with the Government Communications Security Bureau bill before the House at the moment which is a basic change to that social contract. Indeed constraints on the liberty of citizens that they may tolerate accept and consent to from the State they may be unwilling to tolerate and consent to from an agency outside of the State. This bill in extending the ability of Government departments and State agencies to contract out services to agencies outside of the State sector is meddling with this very basic aspect of the social contract between the State and citizens. It is wrong. Sir Geoffrey Palmer was right: this bill is a dog’s breakfast and the Green Party at least will still oppose it.The question was put that the amendments recommended by the Finance and Expenditure Committee by majority be agreed to.A party vote was called for on the questionThat the question be agreed to.Ayes95New Zealand National 59; New Zealand Labour 33; ACT New Zealand 1; Independents: Dunne Horan.Noes25Green Party 14; New Zealand First 7; Māori Party 3; Mana 1.Question agreed to.A party vote was called for on the questionThat the State Sector and Public Finance Reform Bill be now read a second time.Ayes95New Zealand National 59; New Zealand Labour 33; ACT New Zealand 1; Independents: Dunne Horan.Noes25Green Party 14; New Zealand First 7; Māori Party 3; Mana 1.Bill read a second time.Resource Management Reform BillSecond ReadingHon AMY ADAMS (Minister for the Environment):I moveThat the Resource Management Reform Bill be now read a second time . I would first like to thank the chair and members of the Local Government and Environment Committee for their work on the bill. I would also like to thank all those who took the time to make asubmission to the committee. I understand the committee received 234 submissions to the bill and heard 147 oral submissions in hearings in both Wellington and Auckland.The Resource Management Reform Bill represents the first step of phase two of the Government’s programme of resource management reform. Phase one of this programme led to the enactment of the Resource Management (Simplifying and Streamlining) Amendment Act 2009. The provisions of that Act made important and overdue improvements to the operational efficiency of the resource management system. Amongst other changes this has resulted in significant improvements to the consenting process. The percentage of resource consent applications processed on time has increased from just 69 percent in 2007-08 to 95 percent in 2010-11. There still exists however frustration with the resource management system as it currently operates. There is considerable uncertainty in the outcomes of the planning and consenting process.The recent Statistics New Zealand Business Operations Survey highlights the impact of the Resource Management Act on business performance. According to the survey only 3 percent of businesses think that the current processes enhance their business practice and 430 businesses had cancelled projects worth over $100000 each because of Resource Management Act - related delays and difficulties. Businesses have also blamed uncertainty in Resource Management Act processes for the cancellation of projects potentially worth more than $800 million over the last 2 financial years and some have even had to spend up to 25 percent of their total expenditure on applying for resource consents.Interestingly it is the small and medium enterprises that feel the most constrained by the Resource Management Act. The issue for most is not what they can or cannot do; it is the time and cost it takes to get an answer and it is not just businesses. Communities homeowners and families suffer from the same uncertainty and cost either directly or through higher prices and fewer jobs. These issues need to be addressed so that New Zealanders can benefit from a resource management system that provides good environmental outcomes while still supporting economic growth.The Resource Management Reform Bill makes several important changes to the Resource Management Act that will be of real benefit to New Zealanders. The bill delivers on two areas of reform. It makes discrete changes to improve the functioning of the Resource Management Act and provides a streamlined process for the delivery of Auckland’s first unitary plan.Firstly the bill will provide for a 6-month time limit on council processing of resource consents for medium-sized projects. The current average time for processing a medium-sized consent is 9 months so this proposal may represent a reduction in the delay for many communities and developers of about one-third. The cost per day of delaying a hypothetical $10 million project was estimated in 2007 as being around $2200 so this proposal could represent a saving of about $140000 for a project of that size compared with average consent processing times.The bill also introduces improvements to the quality of analysis underpinning local authority decision-making. More robust cost-benefit analysis will now be required before councils and hearings commissioners make decisions on significant plan changes and projects. Section 32 of the Resource Management Act now specifies the requirement to consider economic growth and employment. The level of analysis required will be proportionate to the size of the project or the plan change in question. This means that although major projects and proposals will require careful and detailed analysis small projects will not be burdened with undue cost or effort. I support the select committee’s recommendation that positive as well as negative impacts on economic and employment growth should be considered.An option for simpler direct referral to the Environment Court for major regional projects is also included in the bill and will help increase business certainty. Once regulations are made councils will be required to agree to a request for direct referral unless there are exceptional circumstances. The types of projects that will qualify for this option are those that represent a regionally significant investment. I support the select committee’s recommendation to introduce criteria that must be regarded in setting regulations to determine the investment thresholds for what constitutes a major project. The views of council iwi and other key stakeholders will be taken into account when developing these regulations.The policy intent of the Resource Management (Simplifying and Streamlining) Amendment Act 2009 to remove blanket tree protection rules has been clarified and I also accept the recommendations of the select committee in strengthening this clause. The bill clarifies how councils may make rules in relation to tree protection. A rule in a district plan may restrict the felling trimming removal or damaging of trees on private property in an urban environment only if the allotments have been identified by a street address or a legal description of the land and the trees are described in a schedule to the plan. Groups of trees that cover adjacent allotments may be identified if they form a cluster grove or line. This does not affect the ability for regional or district councils to identify areas of significant vegetation or to create and use bush protection zones. Although most councils already operate in this way the provision will come into force after 2 years to allow those that have to date used blanket rules to update their schedules.As I have mentioned the other area of reform in the bill is a proposal to develop a one-off hearings process for Auckland’s first unitary plan. The streamlined process for developing and making operational the first plan is essential for developing a set of consistent planning policies and rules within a workable time frame. Long-term costs and uncertainty around the delivery of the plan will be lowered while ensuring the delivery of a high-quality document that has comprehensive input from the public and key stakeholders.Once Auckland Council has developed the plan it will be referred to a hearings panel to be appointed by me and the Minister of Conservation in consultation with the council and the independent Māori Statutory Board. Board appointments will follow strict guidelines and appointees will be competent and have a strong degree of local knowledge and an understanding of tikanga Māori. It is my intention that the board will be chaired by a retired High Court judge or Environment Court judge. The board will consider the plan and hear public submissions and then deliver recommendations to the council. Accepted recommendations may generally be appealed only on points of law. In respect of any recommendations that the council does not accept full appeal rights to the Environment Court will be available. Delivery of the plan within 3 years as opposed to the 10 years it might have taken under the current processes will have real benefits for Aucklanders and the country as a whole. Getting the plan right for the future of Auckland matters but there is no benefit to having an overly drawn-out process that will cause significant cost and delay.I support the select committee’s decision to exclude the district-level provisions relating to the Hauraki Gulf islands from the first iteration of the Auckland Unitary Plan. Auckland Council requested that the Hauraki Gulf islands section of the district plan be excluded as it is on the verge of being made operative now 7 years after it was notified in 2006. It is not the intention of the bill to force the council to re-notify these district-level provisions reopen unnecessary and expensive litigation and place further costs on the Hauraki Gulf islands community.The bill also addresses some minor and technical issues. Environment Court procedures have been amended to explicitly promote timeliness and cost-effectiveness and access to emergency provision under the Resource Management Act to all lifeline utilities has been extended.The Government will be putting forward amendments at the Committee stage to address a number of minor issues that have been identified. I intend to move amendments to divide the bill into its three separate parts which is a straightforward move for an omnibus bill such as this. I am also seeking further advice from officials on amendments to ensure that the bill aligns with Auckland Council’s intention to notify the unitary plan in September of this year.In conclusion the Resource Management Reform Bill makes a valuable contribution towards increasing our long-term economic and environmental prosperity. A robust accountable fair and workable resource management system is required to meet these goals. This bill makes significant changes that will help to achieve those goals and a further package of resource management and freshwater reforms will follow later this year. I commend the bill to the House.Hon MARYAN STREET (Labour):I rise to speak to the Resource Management Reform Bill which Labour will be opposing. This is the first of the onslaughts on the Resource Management Act that we are seeing from the National Government. It is not going to be the last one. We have had items foreshadowed by the Minister for the Environment that are raising concerns up and down the country about the dilution of environmental protections. However that may well be a speech for another day.I just want to set this bill in the context of a range of plans that the Government appears to have to as it sees it balance the environment against development agendas. To me and to the Labour Party that is a wrong-footed way of approaching environmental protections. The Resource Management Act is an environmental protection Act; it is not a development Act or an economic development Act. And it is primarily for the purpose of laying down in fact some world-leading standards in environmental protections which should not be conceded easily if at all.We are in favour of improving the processes around the Resource Management Act. The Labour Party believes that there may well be room for improvement in the processes of the Resource Management Act and we are not averse to making those more efficient and achieving some expediency around how the legislation is implemented. But we are opposed to any undermining of environmental protections or of the right of communities to be engaged in the consent process and that is where we begin to differ from the National Government.I want to talk about three things in particular. I want to talk about trees and the protection of trees particularly in Auckland. I want to thank the Minister for some of the changes that she has made in respect of tree protection but I do have some serious reservations about it even as it stands amended. I want to talk about the cost-benefit analysis clause clause 69 which deserves closer scrutiny. And I want to talk at some length about the transitional regulations which have caused a great deal of concern as they stand in Part 2 clause 124 of the bill as it is. I want to address all of these things both in general and in particular. Obviously I will have more opportunity at the Committee stage to pick through the detail of some of my objections but I do want to sit all of these things together because they form the fundamental opposition that we have to this bill as it currently stands. So tree protection cost-benefit analysis—The ASSISTANT SPEAKER (Lindsay Tisch): 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.Hon MARYAN STREET: Just before the dinner break I had outlined the things that I was going to cover including trees the idea of a cost-benefit analysis and the transitional regulations that appear in this legislation.When this legislation first came to the Local Government and Environment Committee it had very onerous provisions around the identification of the trees that were going to be allowed to be protected by local authorities. Instead of allowing local authorities to say: “Trees in this area are protected.” or “That line of trees over there is to be protected.” or in the case of Auckland City “The coastal pohutukawas are all to be protected.” in the legislation the Minister originally wanted to name and to give a birth certificate and a christening ceremony for every tree that was to be protected. So the council in the original bill would have to go out measure the girth and everything else identify a tree by a number or a name or who knows what and say: “This is a protected tree; this ‘Jimmy Tree’ over here at this address is to be protected.” We obviously found that to be slightly ridiculous.I did refer earlier to the fact that the Minister had made some changes in this respect by allowing patches of bush to be identified and lines of trees to be identified but still and all they all have to be identified by property—by street address or title. That becomes quite problematic. So right in the middle of this discussion the heart of this is individual property rights versus the community environment. Whether it is the intrinsic worth of trees in an environment or as we heard from some of the submitters on this particular area the fact that a tree next door in Titirangi or up the bank behind you in a steep area in Titirangi in West Auckland might affect one’s own property—by virtue of the fact that it retains water it stops subsidence and all of those things that trees are known for—could not be taken into account in a collective way in a community-based way in the legislation.There were 99 submissions on this bit about trees. Of the 99 submissions 67 of them were opposed and 11 of them were opposed in part. So of the 99 submissions relating to trees 17.2 percent were in support and 78.8 percent were in opposition and still the Government proceeds to make what are quite difficult provisions for councils should they wish to protect areas that have trees and are wooded.The particular example I come back to again because it relates especially to a couple of members on the select committee who live in the area are those coastal pohutukawas as one heads north across the harbour bridge. The coastal pohutukawas ought to be able to be protected as a group without having to be identified section by section address by address unit title by unit title. There will be a lot more to say about this in the Committee stage.The second thing I wanted to touch on which I thought was one of the more ridiculous provisions was the one that the National Party makes a lot of song and dance about and that is the cost-benefit analysis—the cost-benefit analysis that has to go into applications. So I asked one of the submitters just how they worked out the cost-benefit analysis of a swimming hole in a favourite river. He said: “Well what we would do is have a look at it in the height of the summer and work out how many children use the swimming hole and then we would multiply that by the amount that it costs to take them to the local swimming pool and we would get some kind of cost-benefit analysis.” I am sorry but the man misses the point—the man misses the point. There is intrinsic value not just monetised value attached to the environment.My concern and Labour’s concern with this legislation is that the Government is preparing the ground in this assault on the Resource Management Act for even worse assaults on the Resource Management Act to come in the next onslaught. So this is preparing the ground by taking away some of the fundamental principles underpinning environmental protections and allowing development to rule.The last point I wanted to make was about transitional regulations. The Regulations Review Committee wrote to the select committee. The select committee considered those concerns in detail and with some seriousness—which I do appreciate—from the chair and the committee. But still and all there remain transitional regulations in clause 124—which I will talk about again at length in the Committee stage—that give the Minister too much power to alter the primary legislation by subsequent regulation and that is not how we do things. Thank you.NICKY WAGNER (National—Christchurch Central):I am delighted to speak about this Resource Management Reform Bill at its second reading. This bill builds on our phase one Resource Management (Simplifying and Streamlining) Amendment Act which we passed in 2009. That bill although it was defended by the Opposition has actually proved to be very successful. We have had very few complaints that it has undermined anything to do with the environment and it actually has improved the process and sped up the process. In this bill that we are looking at now we want to build on those successes. It also looks forward to phase two which is larger-scale Resource Management Act reforms but we believe that we are in the right space now. Most of the things we are discussing in this bill are pretty much uncontroversial although Maryan Street has raised some issues that I would like to make comment on as well.This bill is actually in three distinct parts. The first as I have noted is the further amendments to the Resource Management Act 1991 basically focused on improving the consenting process and the quality of decision making. It is not that we want to undermine the environment; we want to get to good decisions more quickly and more effectively. The second part of it responds to the request of the Auckland Council. It amends the Local Government (Auckland Transitional Provisions) Act 2010. Again it is to streamline the delivery of the first Auckland Unitary Plan. The third part amends the Local Government Official Information and Meetings Act 1987. This is basically to create consistent environmental indicators so that we have data for effective environmental reporting in the long term. This is something we have been working towards ever since we have been in Government.But first I want to focus on Part 1. Most of the changes in Part 1 are relatively minor changes. Most are uncontroversial. But there are three areas of debate and we made changes in each of these areas during the select committee process. The first is about section 32 reports. This bill does look to improve the quality of those reports. In actual fact most submitters agreed in principle that they want consistently good-quality section 32 reports. But what this bill does is specifically include economic outcomes and employment in these reports and some of the people who submitted felt that this could unbalance the result and may undermine environmental outcomes. Of course that requirement was already in the bill but the fact that it has been made more specific concerned them. There was a mixed reaction. Some submitters were very much in favour but some were concerned that these specific outcomes might outrank environmental factors. So the Local Government and Environment Committee agreed to amend the original to improve the consistency and the balance to ensure that both the positive and the negative outcomes of any economic outcomes were considered and also to provide guidance in the implementation of this legislation.One of the complaints we have had about the Resource Management Act in the long term is that although the regulation and the legislation itself are good the implementation of them are inconsistent. So we were very concerned to talk to our officials to see how we can make sure that councils get better support and more help in interpreting the legislation and making sure that there is consistent enaction of it right across the country.The bill also introduces a 6-month time frame for consenting medium-sized projects. There were concerns about the complexity of this part of the bill and a lot of work has been done to clarify the requirements and the time frames. The key to efficient processing and better-quality outcomes really is more complete applications at the beginning of the process. It seems to be a universal theme that we need to get as much information upfront as possible and then we get better outcomes at the back end. So the changes encourage that.The bill also increases the availability of the direct referral for major projects and includes a threshold value to be set by regulation. Some councils were concerned about a loss of local control but of course they are still involved in the decision-making processes even if it is a direct referral and that weighting needs to be considered against an increased certainty for applicants in time frames. To mitigate the concern about the threshold being decided by regulations we included a criterion in the bill for the Minister for the Environment to consider when making those regulations and I think that has improved that part of the bill too.Looking at Part 2 this is the part that streamlines the delivery of the first Auckland Unitary Plan. The Auckland Council asked for this legislation because the Unitary Plan will be the largest and most complex planning exercise ever undertaken in New Zealand and it is expecting over 10000 submitters to provide input to it. This will be the council’s main tool for achieving integrated management of the region’s natural and physical resources and it provides the rules for what people can do on their land and property. So it is important that this is delivered efficiently and is not bogged down for years and years and years in the process.The new legislation replaces the existing two-step schedule 1 process—which is a council hearing and then a subsequent Environment Court hearing of appeals—with a combined hearing process that incorporates the reduced formality of the council hearing but with key parts of the existing Environment Court process including cross-examination and mediation. So it really delivers the best of both processes but in a more controlled and tighter time frame. The Auckland Council as a democratically elected body is responsible for making local planning decisions so it will have the ability to accept amend or reject the recommendations of the hearing panel. However parties have full rights of appeal to the Environment Court if the council amends or rejects recommendations.The select committee visited Auckland we listened carefully to the submitters on the bill and we have recommended a significant number of changes to improve the legislation. The most controversial issue was the tree protection rules and we received and heard a huge number of submissions on that issue. We worked hard to get the right balance between protecting significant trees and not turning managing your garden into a bureaucratic nightmare.Hon David Cunliffe: Tried and failed.NICKY WAGNER: Well again we made significant changes to the bill and I believe we have got it right. Maryan Street thinks that it is wrong and is concerned that those trees must be linked to a property but there is a reason for that. Unless those protected trees are actually on a land information memorandum how can we protect them? So it is very important that they are actually listed and that people know where they are.The final part to Part 3 is to do with the Local Government Official Information and Meetings Act. Most councils particularly regional councils already collect environmental data and they are working together informally to make sure that they have the right data for monitoring. This legislation is designed to formalise that process. There was some concern from councils that this could be expensive and complex so werecommended that all monitoring standards and methodologies should be developed in consultation with councils in order to manage this fear.The committee listened to a lot of submitters during this process and we worked really well to incorporate the very best improvements we could make to the legislation. I think it is a good piece of legislation I think it will be very effective and I think it will be particularly useful to Auckland as it continues its very important planning work. I commend this bill to the House.Su’a WILLIAM SIO (Labour—Māngere):I rise to take a call on the Resource Management Reform Bill and say that Labour opposes this bill at its second reading. This bill is part of a trend of the Government as it enacts a series of reforms to the Resource Management Act and related legislation. It is a step in that general trend of removing environmental protections from the Act and reducing local decision-making to allow for the centralisation of power. A pattern has emerged from this Government. Instead of acknowledging and recognising the value of local government this Government views local government as an extension of central government and it treats local government as a Government department to do the bidding of the National Government. The National Government sees local government as playing a subservient role to central government and it views mayors and councillors really as people who ought to do the bidding of Mr Key Mr Nick Smith Mr Joyce and Mr English. National continues to fail to recognise that local government is an equal partner—and ought to be treated as such—in the delivering and achieving of quality outcomes for the people who elected local government politicians and parliamentarians to the positions we hold.This bill in my view destroys the ability of local communities to make local decisions and to arrive at local solutions because this Government wants to centralise power in its hands—in the hands of Mr Key in the hands of Mr Nick Smith in the hands of Mr Joyce in the hands of Mr English and as my colleague says in the hands of Gerry Brownlee. Why? Because its attitude is that it knows best. It thinks it knows better than the collective wisdom of local communities. This Government’s focus is clearly about supporting its business mates and not hard-working New Zealanders. Also I think the Government does not understand what it means to have a real and genuine partnership with local government. Partnership requires trust and I think that National members’ mentality is that they were born to rule. They think that no one else can or should least of all local representatives on local councils. That is the kind of mentality they have.Look at the way the Government treated Environment Canterbury and that particular region replacing duly elected councillors with Government-appointed commissioners and promising that elections would be held this year and then reneging on that promise and postponing elections to whenever it feels like it. Despite protests from Cantabrians this Government persists in holding that power. Look at the way it has treated Auckland Council. Firstly Mr Nick Smith pretended he was negotiating in good faith and then once he was back in Wellington he announced that if Auckland did not do as it was told this Government would override Auckland Council and run Auckland from the Beehive in Wellington. How is that for arrogance? Those two examples give ample evidence of National’s complete and utter arrogance when it comes to local government. It is further evidence that National does not like local government. National members might from time to time use the word “partnership” but they do not believe in it. Partnership is not based on ultimatums such as we have seen and heard from Mr Nick Smith—“Do as you’re told or we will override the power of local government.” That is not partnership. That is the kind of behaviour that was seen from Mr Bainimarama in Fiji or people will liken it to the behaviour of Mr Mugabe ofZimbabwe. It is terrible behaviour but that is how this Government has been treating local government ever since it came into power in 2008.This bill forms part of a group of several bills that make up phase two of a series of Government reforms to the Resource Management Act with a substantive change coming later this year. The substantive part of this reform will include the Government amending sections 6 and 7 of the Resource Management Act to change its purpose and a raft of other changes. This bill must be considered in the context of that larger reform coming later. The essence of these reforms is the centralisation of power and the undermining of the environmental protections as in this bill. The consistent theme that I read in this bill is the centralisation of power in central government and the reduction of the power of local government in local decision-making in allowing it to arrive at its own local solutions for matters that we on this side of the House know that local communities and its local government authorities are well qualified to make.It needs to be noted that the Resource Management Act is one of the fundamental pieces of legislation for local authorities. The Productivity Commission’s report earlier this year identified that regulations made under the Resource Management Act are the most significant regulatory responsibilities that local authorities have. Yet the changes we see seem to focus more on economic development than anything else and there is a big question mark over whether the benefits benefit the rest of New Zealand. The changes this bill proposes will affect the role that local government plays and will risk imposing significant added costs to local councils and ratepayers.The Labour Party is committed to improving processes under the Resource Management Act so that unnecessary and vexatious delays in decision making around consents can be avoided. We do not support any undermining of environmental protection or of the right of communities to be engaged in the consent process. This bill is seen as a power grab by the Government and Labour will not support it because it takes so much power away from local communities. We need a Government that works from the grassroots up not the Beehive down. One wonders what the Government has against trees with its overturning of an Environment Court decision. Although the tree provisions have been improved at the Local Government and Environment Committee they are still unwieldy and will impose unnecessary costs on communities.The changes to section 32 unpick the balance of the Resource Management Act. These are designed to fit with the Government’s wider agenda to turn the Resource Management Act into an economic development Act rather than an environment protection Act. The section 32 test requires that any proposal be monetised or given some quantitative monetary value as opposed to any intrinsic value of the environment affected by the proposal which makes it unlikely to work and biases it towards economic development. The decision to allow the Minister for the Environment to set an investment level by regulation to require councils to refer consents takes power away from local people to protect their communities. It is also unclear to us what this investment threshold will actually mean in practice. The documents released to the Labour Party under the Official Information Act show that the investment threshold was written just 2 days after a private secretary to the Minister suggested it in discussions with officials on 12 September last year and it went to Cabinet on 14 September. Advice on the risk around the proposal did not come back until after this date. This is poor practice from a Government that is making major changes to the Resource Management Act.Labour supports the fast tracking of the Auckland Plan in principle and the improvements to provisions in the bill such as clause 124 being added at the select committee which will make it more manageable. It is good that we see the Government putting in place the ability to set regulations to monitor the environment moreaccurately. However when the next comprehensive environment report is meant to be completed this year and the Government is putting forward the legislation for regulation-making power only now it seems to be too little too late. Labour would be an active hands-on Government that would improve the Resource Management Act without undermining environmental protections or shutting out local communities. As my colleague the Hon Maryan Street has said Labour will repeal any provisions of a new Resource Management Act that undermine environmental protection.EUGENIE SAGE (Green):I am pleased to take a call on the second reading of the Resource Management Reform Bill. The Green Party supports improving the Resource Management Act to ensure that decision-making processes are timely and efficient. The Minister for the Environment’s goal of having robust accountable fair and workable legislation is one that the Green Party shares but the problem is that this bill does not do that and the Green Party will continue to oppose it.When the Resource Management Bill had its third reading more than 20 years ago this Parliament passed it unanimously. It is a hallmark of robust legislation when you get that cross-party agreement. As the Environmental Defence Society has said it is disappointing that this bill and the Act have now become a political football. That is because of the very different ideological considerations at play. This bill is about the Government’s ideological agenda to promote development at the expense of the environment. This is because of its shallow and short-sighted economic policy that if you make it easier for developers whether they be irrigators miners or property developers then the boat will go faster even if it is headed towards a waterfall of unsustainable development.This bill promotes speedy decisions rather than well-informed sound decisions where effects are properly evaluated and addressed. One of the ways it does this is by having a 6-month deadline for consent processing. That fails to recognise the complexity of some major development applications and the value of community input and that often it is applicants who are responsible for delays because they submit applications that are incomplete and where effects are not properly assessed. This 6-month deadline will mean that council staff are forced to do a once-over-lightly evaluation that potential environmental effects will be discounted and that there will be limited time for negotiation and discussion between the applicant and submitters to reduce the impacts of the development and to address submitters’ concerns.When you look at the reality rather than at the rhetoric you have to ask what the problem is. The Ministry for the Environment’s own survey showed that 95 percent of the 36000 consent applications that councils considered in 2011-12 were processed on time; that 94 percent of the consent applications were not notified so there was no opportunity for public comment; and that only 1 percent—around 350 applications annually—are appealed to the Environment Court and 99.9 percent of those cases are settled without the need for an Environment Court hearing. So what is the problem that this bill is trying to fix?One of the major reasons the Green Party opposes it is the reduction in community decision-making. We believe that resource management decisions are best made by the communities affected by those decisions. The principal Act has a really strong commitment to public participation which this bill undermines. It is part of the whole tranche of Government attacks on the Resource Management Act that we are seeing in this bill and also in the third tranche of changes that will be introduced later this year. They cut right across community decision-making. They deform the Resource Management Act rather than reform it.Here we are seeing the bill removing the council’s discretion to agree to or decline an applicant’s request for direct referral to the Environment Court for projects above a yet-to-be-specified investment threshold which the Minister will set through regulation with no opportunity for this Parliament to consider it. Direct referral erodes local decision-making. It is likely to reduce public participation because of the much greater formality of Environment Court procedures and the greater expertise that is required to participate there. Nor is it likely to be more cost-effective than a two-stage hearing process. A lot of the issues are resolved at that first council stage and then the issues that actually go to be considered by the court are narrowed and you get the court’s focus and scrutiny on a much narrower range of issues. Now the court is going to be expected to deal with the full gamut of concerns.The Minister claimed that the changes to section 32 in clause 69 would improve the quality of the cost-benefit analysis that the Act requires which councils do before they put rules in a plan and which the Minister is also required to do before she gazettes a national environmental standard. But the Green Party believes that the variable performance across local authorities in the section 32 analysis has much more to do with their capability the resourcing of local authorities and their capacity and the lack of guidance from the Ministry for the Environment than it does with the provisions of the Resource Management Act. That is one good reason we are opposing the changes to section 32 in clause 69 of the bill. The changes that are being put in there may well be beyond the capacity of some local authorities and risk paralysis by analysis.One of the major reasons we are opposing the section 32 changes is that the new criteria that require the assessment for opportunities for economic growth and unemployment bias evaluation in favour of new measures that have quantifiable economic benefits and against those that benefit the environment and ecosystem health. These new criteria risk obstructing councils that want to regulate land and water use to promote sustainable management. The Government is making it much harder for councils to regulate because it did not like the decision that the Environment Court handed out on the appeal of Fish and Game on the One Plan in the Manawatū in which the Environment Court upheld the need for rules to control land use and nutrient leaching. Requiring councils to consider the effects on economic growth and employment will make it much more difficult for councils to actually put in place rules to control the use of land and water so short-term thinking will prevail.The Minister for the Environment in her speech talked about uncertain outcomes but this bill and the proposed third tranche of changes where the Minister proposes to gut Part 2 of the Act are all about making it much more certain that the environment will suffer that community input will be reduced and that poorly conceived development projects will get rubber-stamped. The changes are about certainty for applicants not the environment.One of the worst examples of this in the bill is the tree provisions. I would like to acknowledge and pay tribute to the more than 234 individuals and organisations that made submissions. The majority of those submissions were on the bill’s attack on the protection of urban trees. The bill is about making it much harder for councils to protect and control the loss of urban trees because it effectively allows landowners to trim or fell any urban trees with no need for resource consent unless the trees are individually described and their location is identified by either a street address or a legal description. It overturns a 2010 decision by the Environment Court that upheld councils’ ability under the 2009 legislation to have general plan rules that required a resource consent to fell or trim classes of trees like coastal pōhutukawa or trees above a certain height or girth. So it is all about private property rights winning out and property developers and landowners being able to fell and cut down trees.Many submitters including the Tree Council Auckland Council and the Environmental Defence Society strongly opposed the bill’s ban on general treeprotection rules and the changes to section 76 of the principal Act. Certainly the Local Government and Environment Committee has made some changes but the bill is still a major attack on tree protection. Submitters told us that trees create a liveable city and that they are a community asset not just an individual property right. They highlighted the loss of mature and amenity trees that would result from the change especially in Auckland given current development pressures. They said that these changes would be costly impractical onerous and unworkable and would involve huge amounts of time and resources given the work that a council would have to do to legally identify every single tree or group of trees that it wanted to schedule in the plan.The Green Party agrees with those objections and opposes these provisions. We certainly support a combined plan for Auckland but we totally oppose the fact that the hearing panel will be appointed by the Minister for the Environment and the Minister of Conservation rather than by the Auckland Council which is elected by Aucklanders.Hon PHIL HEATLEY (National—Whangarei):I rise in support of the Resource Management Reform Bill in its second reading. We from the National Party have made it very clear that we believe—in fact we know and I guess farmers foresters and those in tourism know it best—that the natural environment is New Zealand’s greatest asset. We believe that successful economic and environmental policies can and must go hand in hand. They always have. One of the best examples of this is aquaculture. We have a beautiful marine environment and we all fish we sail we water-ski and we dive—or at least that is me. We do a whole bunch of things to do with the beach and the ocean environment but we also believe that we can grow mussels oysters and salmon. We believe that our environment as beautiful as it is and as much of a provider as it is can also provide economic benefit.The Greens of course are all against unemployment and they are all for jobs but they are against aquaculture. Another example of course is our oil and gas industry which has gone very well in Taranaki for the last 50 to 100 years alongside dairy farming and tourism. We believe that the industry’s environmental record up in the Taranaki is good. It has had issues from time to time over the last 50 to 100 years but it is always improving. There is an opportunity there to expand that in other regions of the country an opportunity where again the environment and economic development can happen. The Greens of course are against unemployment and they are all for jobs but they oppose aquaculture and oil and gas exploration.It is the same on the West Coast where you have mining. I guess it is the home of the Labour Party. There has been mining down there on the West Coast which has a beautiful environment and more national parks and Department of Conservation land than you shake a stick at. Of course the Greens are against unemployment and they are all for jobs but they do not support aquaculture oil and gas exploration or mining.You cannot get a better example of agriculture in New Zealand than dairy farming which is seen right throughout New Zealand. Dairy farming is very very successful. In Canterbury the farmers irrigate as they do in some other areas of the country like Northland. I ask where else than dairy farming do you get such a good example of the business person working with the environment to create if you like jobs and something for our economic future. I ask where is there a better example of that than dairy farming right throughout the country and of course in Canterbury. Of course the Greens are against unemployment and they are all for jobs but they oppose irrigation and they do not like dairy farmers. Apart from not liking aquaculture mining oil and gas exploration dairy farming or anything else that you might like to put up there the fact of the matter the interesting thing is that the Greens are against unemployment and they are all for jobs but they oppose every opportunity you point to out there.That is why in this bill we have considered it a very good idea to introduce an opportunity for 6-month consenting for major developments. Members of the House and members of the public will know that for what we call developments of national significance we have a 9-month consenting regime. We have decided to introduce a 6-month consenting process for major developments that you may not call nationally significant but that are major just the same. We could have called them activities of regional significance but they may very well be activities of some sort of national stretch or they may not be regionally significant but major in their own right. We believe that a 6-month consenting process is a very very good idea for those medium-sized projects.We understand there are about 1600 medium-sized projects processed each year. They include subdivisions supermarkets industrial developments and infrastructure projects. I think that is a good thing. I know that the Greens are against unemployment and they are all for jobs but they oppose subdivisions supermarkets—because they grow their own—industrial developments and infrastructure projects. Just the same I support this bill. I am against unemployment I am all for jobs and I am for every opportunity that we can present that balances environmental objectives with economic ones unlike the Green Party.ANDREW WILLIAMS (NZ First):I take a call on behalf of New Zealand First on the Resource Management Reform Bill. New Zealand First does have a policy of supporting streamlining legislation in this country to improve our productivity to support economic development and to grow the economy and jobs. However in this particular instance we have some grave concerns about what is happening here with the Resource Management Act. I will quote from the regulatory impact statement on the bill which says here: “The RMA is New Zealand’s principal statute for managing natural and physical resources.” The Ministry for the Environment also states that New Zealand’s main piece of legislation that sets out how we should manage our environment is the Resource Management Act. So the Act is a most important piece of legislation. It was brought to this House and passed in 1991. For over 20 years it has been on the statute book and it is highly regarded around the world as one of the best pieces of legislation anywhere in terms of environmental safeguards. Many other countries around the world have studied it and have adopted the measures that are in our Resource Management Act. It is often referred to in international legislation and in international case studies in terms of good legislation that other countries would also like to abide by. In terms of when we were looking at the 200-mile exclusive economic zone last year the Resource Management Act played an important part in that. We were extending out to the 200-mile limit but we also wanted to ensure that many of the safeguards that were in the Resource Management Act were in our 200-mile limit exclusive economic zone bill that went through.But in this regard we do wonder what the real motives of the National Government are in relation to this bill. Once again the Government does seem to be having a cheap attack on local government with many of the measures in this bill. Throughout the select committee process and in the Local Government and Environment Committee which was considering the submissions that came in it was apparent that the Government did not fully understand the ramifications of many aspects of the bill. An example of this would be for instance that the tree provisions have changed considerably from what were first introduced with this bill. In the initial legislation the Government was going to allow the fact that virtually all trees could be chopped down and they could be saved only if they were individually gazetted and individually highlighted on property titles throughout New Zealand. That was a nonsense. That was a total nonsense because we are a tree and bush-clad and covered country and if you had a situation where everyproperty owner had to literally name and note the trees on their property in order to save them otherwise they could be bowled over by any person wishing to develop the property in the future it could have a huge impact on many of the bush areas of our urban environment and indeed of our rural environment as well. This was shown up in many of the submissions on trees such as the one on Le Roys Bush on the North Shore. We managed to convince the Government that it was crazy not to allow aerial mapping of bush areas and bush zones and to allow an area that is naturally bushed—some of it public reserve bush; some of it on private land—to be taken in as a bush zone where the properties could be listed but you did not have to actually name every single tree on individual properties.That was just a small example under the trees part of the legislation where the Government got it wrong and through this bill there are many other areas where similarly the Government does not appear to have a great understanding of what happens with issuing resource consents. Where it says that there will be a 6-month time limit for projects up to a medium size it does not always understand what is required in terms of issuing those resource consents for a proposal. What we will see very much—and this will be particularly so in the case of Auckland—is holus-bolus development going on in Auckland. Sure the Government wants to see that. It wants to see a vast acceleration of development but it will not necessarily be in the best interests of the people who are dwelling there the residents of individual urban areas. It will not necessarily be in the interests of the city itself. It will be very much in the interests of many of the developers who will be able to fast track and basically put things on the table in front of council employees and say: “Get this through quickly. You’ve got only a few months and you’ve got no opportunity to hold it up.” and they will get it through. This will be abused. There will be many people who will wish to abuse the process as a result. Those who feel that they are not going to get a fair shake from their local authority will see that it is perhaps therefore better to divert it directly to the higher authority in Wellington. Many of them will choose to take that option. Many of them will simply choose to say: “We’re not going to work with the local authority. We’re not going to work with the local regional authority. Let’s just get this sent directly to higher powers in Wellington. Let’s work with the bureaucrats in Wellington and see whether we can get it through at a faster pace through the bureaucratic process in Wellington which will perhaps turn a blind eye to half of the concerns.”I can remember being in Taupō a year or two ago and hearing so many complaints about the apartments that were built directly overlooking the Waikato River by the bridge leading into Taupō. That development was diverted to central authority for approval because all the locals opposed those apartments being built. No one wanted them on the entrance to the Waikato River but they got approved through some other means through central government through central authorities. And Taupō people now to this day regret the fact that those apartments got built. We will see more and more of that happening around New Zealand. We will see more and more of the bending of the rules going for the direct line and going for the quickest option and as a result the environment will suffer.When you look at the overview of the current Resource Management Act it says that under the Act resource consents are required whenever a person proposes to undertake an activity or development that does not comply with the rules of regional district or unitary plans with national environmental standards or with the Resource Management Act itself. What we have grown up with in the last 20 years is a situation where district plans and regional plans have been developed after extensive consultation with the local people. I can recall that the North Shore district plan was started in 2001 and was finally operative in about 2009. It was staged over a period of years and camein over a period of years in different stages as different parts of the plan became approved. But it was done with full consultation through the community and the community had full buy-in to it. So at the end of that period the community could say: “This has absolutely been thrashed out and for everyone who develops within this community everyone who does anything within this community these are the rules of this community. We are buying in to this club. We are joining this club. This is the club of x y z community. These are the rules that we abide by.”Unfortunately under many of the proposals in the Resource Management Reform Bill the Government is basically again moving in on local government and saying that it knows better than the local authorities that it knows better than the local communities who may have consulted on their district plans for 1 2 3 or 4 years to get their district plans into line with what their community expectations are. It will be unfortunate because once again we will see the big hand of central government playing a big role in the future. It will move in and if it is not happy with what local authorities are doing and if it is not happy with decisions that are made locally then the Government will once again step in and say: “We know better.”Unfortunately we are seeing this too often under this Government around this country. We are seeing it in Canterbury in particular. We have seen it in Auckland in particular. We are seeing it in more and more communities around New Zealand. Unfortunately we have only two tiers of government in this country. We have central government and we have local government. Unfortunately this Government seems to think that there is only one tier of Government which is central government and that local government really does not count. I think it is a great shame and I think we will look back on this and ask how legislation that was brought in in 1991—it was unanimously brought in in this House in 1991—was trampled on in 2013 and allowed to be watered down when we actually had a very good piece of legislation.JACQUI DEAN (National—Waitaki):The problem that the Opposition has with this Resource Management Reform Bill in its second reading is that Labour New Zealand First and the Greens will say that they want economic development—Hon Trevor Mallard: This is the person who can’t chair a committee—hopeless.JACQUI DEAN: Oh that is Mr Mallard. That is Mr Trevor Mallard the anger-management problem member of this House who just cannot help himself. No he just loses his rag at every opportunity. OK so the problem that Labour the Greens and New Zealand First have with this bill is that on the one hand they say they want to tackle the housing problem in Auckland. They say they want to tackle economic development. They say they want to protect the environment. And yet here they all are to a man to a party opposing the very piece of legislation which this Government is promoting that will do just that.It is deeply ironic that the member for the Greens will flail against the statutory taking over of Environment Canterbury and putting it in the hands of the commissioners so that at least it will get on and do its statutory duties which Environment Canterbury failed to do in the time when that member was one of the elected representatives of that organisation. This is a Government that gets on and does things and this Resource Management Reform Bill does exactly that.I am just going to talk a little bit about 6-month consenting. This is for medium-sized projects—those very projects that we need in Auckland that we need in the big cities around New Zealand and that Labour the Greens and New Zealand First are so fond of saying that we really really need. This is the mechanism that is going to make that consenting much more efficient. Underlining the 6-month consenting process is a requirement on all parts on both the council receiving the submission and the developers—somehow under the hands of New Zealand First “developer” is a dirtyword. Well not under this Government actually because it is the developers in New Zealand who get things going. But under the provisions in this bill those developers those good people who get things done who build houses build supermarkets and build infrastructure will be required to put in really decent robust applications. It is a win-win. I commend the bill to the House.PHIL TWYFORD (Labour—Te Atatū):Labour opposes this bill the Resource Management Reform Bill not because we are against more efficient consenting processes and not because we are against reforming the regulatory framework to encourage economic development but because it seeks to do those things at the expense of the environment and at the expense of the community. That is why we are opposed to this bill. It takes away the right of communities to have a say and it weakens environmental standards. That is the bottom line.I want to focus my comments on the two aspects of this bill that I think illustrate the Government’s particularly tortured relationship with Auckland. I am going to talk about the Auckland Unitary Plan provisions and the tree protection provisions in this bill because both of those sections in the bill show what a conflicted and difficult relationship the National Government has with Auckland. They show this tendency that it has which we have seen every year since John Key became the Prime Minister to chip away at the powers and the freedoms of local government and hand over those powers to central government. This is a centralising power-hungry National Government.The Auckland Unitary Plan—in fact Labour supports the provisions in this bill that fast track the Auckland Unitary Plan. I want to just say briefly what a significant development the draft unitary plan in Auckland is. It is the first time our country’s biggest city has ever had a comprehensive public debate about the future shape of the city. It is the first time it has happened. It is because we have a fine Labour mayor Len Brown in office providing the right kind of leadership. It would not even occur to this National Government to promote the kind of progressive forward-looking agenda like funding the City Rail Link for example or supporting a quality compact city which are the things that Auckland Council has provided strong leadership on. It has had the courage to open up a process that is not without its flaws and there are plenty of critics but it is at least a process where people are having a chance to have a say about the future of their city.It is good that in this bill there is a provision to fast track the unitary plan. It puts the National Government in an interesting position because members on that side of the House are not averse to the odd bit of fast tracking of legislation. In fact they have got strong tendencies in that direction—a bit of the old streamlining here a bit of fast tracking there. But Labour agreed with Auckland Council’s request for fast tracking the unitary plan because we did not believe that it was tenable with the new unitary plan—with all the rezoning involved and a raft of measures to promote housing affordability—to expect Aucklanders to wait the 7 or 8 years that it could have taken for the plan to go through the Resource Management Act processes and get bedded down. So we supported in principle the fast tracking.As I said National is not averse to a bit of fast tracking but in this case those members found themselves very conflicted and the reason for that is that they have a problem with Len Brown. They have a problem with the fact that their guy lost the mayoralty in 2010. They do not like that they have never got over it and their mission in life is to make life as difficult as possible for Mayor Len Brown and the Auckland Council.The Government agreed to much of the request for a fast-tracked unitary plan but it could not stomach two aspects of it and it knocked back Auckland Council on these twoelements. Instead of allowing Auckland Council to appoint the members of the hearings panel which will be a kind of one-stop shop decision-making forum for the unitary plan the Government has insisted on appointing people who inevitably will be its cronies to the Auckland Unitary Plan hearings panel. It could not bring itself even to share joint responsibility with Auckland Council for appointing that panel. It had to seize control of Auckland’s decision-making process by insisting on the Minister of Local Government and the Minister for the Environment having exclusive power to appoint that panel. That says a lot about this Government and the fact that it does not trust Auckland Council and it does not trust Aucklanders. It prefers to make the decisions from its ministerial offices here in Wellington. It is not willing to allow Aucklanders and their democratically elected representatives to have responsibility to appoint the panel that will make the decisions about the future shape of Auckland City and that I think is a sad reflection on this Government.It also rejected Auckland Council’s request that the unitary plan have legal weight from notification. The whole process of the drafting the consultation and the amendments will be completed by about September this year. The plan will then be notified and it will be put out to the public for the Resource Management Act appeal processes to commence. Under the law as it was prior to 2009 the plan would then have had legal weight. That does not mean that the plan would be fully operational and that all decisions made would be made on the basis of that plan; it simply means that the plan would be taken into account. It would be considered by decision makers when they are ruling on consents and new developments and so on. I think in light of the fact that until 2009 the plan would have had legal weight from notification that was not an unreasonable request by Auckland Council in those circumstances if you accept the fact that there are urgent things like housing affordability that need to be dealt with and the unitary plan offers a comprehensive package of measures to deal with the housing affordability crisis.Having refused those two very reasonable requests from Len Brown and the Auckland Council—first that Auckland Council be allowed to appoint the hearings panel and second that the unitary plan have legal weight from notification—Nick Smith the Minister of Housing then found himself in a very interesting situation. The polls were clearly telling Steven Joyce that housing affordability had become a red-hot political issue and that the Government was vulnerable in Auckland. Secondly the overheating Auckland housing market was posing a threat to the overall economy because of the inflationary pressures it was generating. That advice was coming from Treasury and the Reserve Bank to the Minister of Finance.Nick Smith was spurred into action but his ability to actually make a difference was totally hamstrung by the fact that Amy Adams has refused to allow the Auckland plan to take legal effect from notification. So we then saw this dance of the seven veils from Nick Smith in the following 2 months rampaging around Auckland accusing Len Brown of having killed the dreams of Aucklanders and threatening to legislate to override the Resource Management Act powers of the Auckland Council all because the Government had already decided that the plan would not be given early legal effect. So the upshot was that Nick Smith was forced to bring in the hastily cobbled together Housing Accords and Special Housing Areas Bill which simply fast-tracked two elements of the Auckland draft unitary plan: streamlined consenting and greenfields land being brought in sooner than otherwise would be the case. What a ridiculous wild goose chase Amy Adams and Nick Smith have led Aucklanders on for the last few months.This is just the latest bit of evidence of National’s tortured relationship with Auckland. The Government created a super-city that it could not easily kick around andfor the last 3 years it has been paying the price of that. To be quite honest it is a pain for Aucklanders to have to put up with and the sooner the National Party gets over itself in relation to Auckland the better.I want to make brief mention of the tree protection provisions which Nick Smith tried to extinguish in 2009. It was one of the first debates that I took ever took part in in this House and David Cunliffe and I took the fight to the Government on behalf of west Aucklanders who wanted to retain the right to protect the Waitakere Ranges and protect the trees. In fact all Aucklanders appreciate the social environmental and cultural amenity value of our urban forest. There are huge environmental reasons to protect the urban forest particularly in Waitakere: high rainfall and a high erosion environment where trees make a critical difference. The effect of this bill is to make it virtually impossible for councils to efficiently cost-efficiently protect the urban forest in Auckland. That is the point of it—Mr DEPUTY SPEAKER: Order! The member’s time has expired.MAGGIE BARRY (National—North Shore):Gosh that speech from Phil Twyford was a long half-hour. I rise with great pleasure to speak to the Resource Management Reform Bill in its second reading. I am entirely in support of the provisions in this bill and I find it an excellent piece of legislation.I would have to say it was mildly diverting listening to the irony from the Greens talking about the feeling the absolute wonderment that the Resource Management Act in its original form passed unanimously through the House in 1991. I wonder why that could be. It was pre-MMP for a start—pre - the divisive and increasingly bitter Greens coming in they who oppose everything. Other colleagues of mine have pointed out that they oppose mining and oil exploration dairy farming irrigation. Anything basically that will grow the economy and grow jobs they oppose. And guess what? They are even starting to oppose their own policies. They are turning in on themselves. Quantitative easing once the banner that they all fought and died under they have flip-flopped on and have decided to sell off because it might not give them the power they desperately crave. Not even supporting their own policies is I guess a kind of consistency—a rare sign of consistency—from the Greens.But back to this bill. It is an omnibus bill. It is going to be split up into three bills when it goes through the Committee stage and I think that is appropriate. It is appropriate that we have rigorous and robust debates in the Local Government and Environment Committee which is very ably chaired I must say by Nicky Wagner who made some excellent points around the detail of the provisions and the detail of what has already happened at the select committee level. There have been a lot of modifications a lot of changes. We have listened to the submitters we have taken note of them we are duly consulting with them and that is reflected in the second reading of the bill.I would have to say the improvements in the resource consent regime are well overdue. People in my North Shore electorate are constantly telling me what an extraordinarily foolish business the consents were because the bureaucracy just burgeoned. It would take months of delays and tens of thousands of dollars of extra money to do basically very simple things. So the streamlining and the resource consents that we are putting through putting in 6-month consenting times for medium-sized projects will make a big difference. There are a number of other amendments that are coming through that others have spoken of and we will deal with them in the readings that are to come. But I certainly commend this Resource Management Reform Bill in its second reading to the House. Thank you.Mr DEPUTY SPEAKER: Hon David Cunliffe—5 minutes.Hon DAVID CUNLIFFE (Labour—New Lynn):I very much welcome the opportunity to take a call on this bill which stinks. The Resource Management Reform Bill is the bill that is going to allow the developers’ lobby to put another death by a thousand cuts through the Waitakere Ranges. It should never have got here. It should have been fixed in the Local Government and Environment Committee and it was not and the only good thing about this bill is that it will—I repeat will—cost Paula Bennett the seat of Waitakere unless she stands up and co-sponsors the local bill that will be brought to this House by Auckland Council to overturn the egregious blanket tree-trimming regulation-axing clauses of this bill. This is part of a broad agenda to undermine local democracy. It is vested here in measures that please the bulldozer brigade. They override through the Resource Management Act the legitimate and hard-fought provisions of the Waitakere Ranges Heritage Area Act which requires conservation values and cumulative effects to be considered in every resource consent issued for the Waitakere Ranges area.The Government tried making changes to the Resource Management Act in 2009 that would have overridden that and would have removed blanket tree protection from west Auckland. The Environment Court effectively overruled the interpretation that the Government might have been seeking to pursue by upholding the ability of the council to schedule or regulate groups of trees. So in a fetish of retribution the Government and its developer mates the bulldozer brigade have got the blanket tree-felling provisions back in this bill. It means that any tree can be trimmed off at ground level with a chainsaw—down to zero—and the only way to protect it would be to schedule every individual tree. It took 4 days of hearings in the Waitakere Ranges to schedule 190 trees. There are 150000 vulnerable trees in my electorate in New Lynn alone in the areas of Langholm Titirangi and Woodlands Park 150000.Give or take a little bit National is creating a bureaucratic nightmare: a mountain of red tape requiring the council to schedule each individual tree. “But no” those members say “out of the goodness of our developers’ hearts we have introduced amendments at the select committee that will allow us to schedule eeny-weeny bitsy groups of trees on every individual property.” Sorry not good enough. The people of west Auckland are going to rise up and throw that out.The evidence for that is that the Titirangi Residents and Ratepayers Association and the Waitakere Ranges Local Board have already held public meetings that have unanimously passed resolutions calling on Auckland Council to bring to this House local legislation that will overturn the provisions of this bill. I would like to say now to this House that if that council brings forward such a bill I will challenge the member for Waitakere to co-sponsor it with me. The Hon Paula Bennett would have the opportunity to stand up for the overwhelming views of her constituents rise above petty party politics and be the kind of greener type of MP that she tells her electorate she is.I make this prediction: if the Hon Paula Bennett declines the opportunity to co-sponsor this local legislation she will soon be the former MP for Waitakere. She will deserve it because she is responsible along with her colleagues for bringing legislation to this House that trashes the Waitakere Ranges Heritage Area Act—which she did not vote for—and that undermines local democracy.It is part of a broader agenda that is absolutely undermining our community values and undermining civil liberties. Whether it is the Resource Management Reform Bill whether it is the housing bill or whether it is the spy bill New Zealanders are about sick of it. They are going to stand up and fight back and the fight back is going to be big fast and strong on the tree-trimming provisions of this bill.DENISE ROCHE (Green):The Resource Management Reform Bill as reported back to the House is admittedly softer than what went to the Local Government and Environment Committee but it is not soft enough and it is still very nasty so we willnot be supporting it. It is still an attack on urban trees as we have heard from the previous speaker the Hon David Cunliffe and it still continues to ensure that economic considerations get precedence over environmental protections like water use for example in planning decisions. It undermines local decision-making and it will reduce public participation in planning processes but it leaves councils with more risk around litigation and it completely messes around with unitary plan process and democracy and accountability in Auckland.The bill essentially takes the Resource Management Act which is a comprehensive piece of legislation that has been in existence since 1991 and fiddles with the bits that the Government finds inconvenient. The bill is another attack on local government. It is an ongoing theme from this Government and it will not stop with this bill.This afternoon in the House during question time we heard the Minister for the Environment say that she is thinking about another amendment to the Resource Management Act before this one has even been finalised. This time she wants to amend it because some pesky councils might want to restrict the planting and use of genetically modified organisms in their area—some councils might feel they want to safeguard their environment. It is smart for them to actually think about safeguarding their environment because most councils have had to deal with a deregulated building sector that brought forward the saga on the leaky buildings which actually cost councils an enormous amount of money.The Greens are also opposed to the 6-month time limit for processing medium-sized developments which forgets to take into account that sometimes it is the developer who slows down the process.It is the removal of local participation in decision making that I find most offensive in the bill as reported back. Democratic processes seem to be unheard of in the National Government vocabulary. Hardest hit by this lack of consideration of course is Auckland. The bill continues the Government’s track record of stomping on Auckland Council and Auckland ratepayers who elected the Auckland mayor the Auckland councillors and the 21 local boards and their members. The provisions in this bill around the Auckland Unitary Plan are designed to undermine the council and hastily push through a unitary plan that favours the Government’s developer friends.We are not opposed to having a combined plan in Auckland. What we are opposed to is the Minister for the Environment and the Minister of Conservation appointing the hearings commissioners and setting their terms of reference. We maintain that this decision should be made by our Auckland Council representatives because it is an Auckland plan.The short time frame to get the unitary plan finalised is also a concern. It reduces genuine public consultation. When it is combined with the sidelining of the Environment Court and is allowing appeals only if the council rejects a hearing panel recommendation it is designed to cut out ordinary citizens from the processes. The plan effectively becomes a one-stop process which means that the quality of the decision making may be a lot worse than unitary plans elsewhere. Once more Auckland is being singled out. Aucklanders will not be able to challenge this plan except on very narrow points of law. We oppose the provisions in this bill that give hearing panels the power to make recommendations on any other matter that no submitter may have raised because this goes against natural justice.On a personal note I am pleased that this Government has decided that the Hauraki Gulf islands district plan will not be included in the Auckland Unitary Plan. That is because it has taken an enormous amount of effort and time and expertise to get as far as we have with that plan and there are still problems with it which are still being resolved. All in all we will not be supporting this bill because it does not do what it is set out to do.CLAUDETTE HAUITI (National):Pō atarau. I rise to speak to the Resource Management Reform Bill. This bill is sponsored by the Minister for the Environment the Hon Amy Adams. I want to remind us all what it is all about. It is about simplifying the complexity speeding up a sluggish process and reducing the number of consents through efficiency and improving the system.I want to mention my honourable colleague the matai matua rangatira Su’a William Sio and ask him whether it is arrogant to want to improve the resource consent regime. I want to ask him whether it is arrogant to want to improve the quality of local decision-making. I want to ask him whether it is arrogant to want to improve workability and whether it is arrogant to want to improve the streamlining of the delivery of Auckland’s Unitary Plan.The Resource Management Reform Bill is about more jobs for New Zealanders for every New Zealander including iwi. It is about more infrastructure for New Zealanders for every New Zealander including iwi. It is about New Zealand being productive. This bill delivers a system that works for all New Zealanders. This John Key - led National Government as well as the reform bill has a genuine engagement with iwi Māori with tangible upfront solutions based on tikanga-a-iwi. This was supported by both Te Rūnanga o Ngāi Tahu and Ngāpuhi during their respective submissions. This is about giving power to the people the kind of power my colleague the matai Su’a William Sio spoke about.Effective resource management is critically important to our economic environmental and social well-being. Resource management decisions need to ensure natural and built resources are used and protected sustainably now today and tomorrow for future generations. This bill is about chucking out processes that are cumbersome processes that are costly and processes that both Ngāi Tahu and Ngāpuhi agree are time-consuming. This Resource Management Reform Bill makes the difficult manageable. It encourages active participation investment and innovation. I commend this bill to the House.The question was put that the amendments recommended by the Local Government and Environment Committee by majority be agreed to.A party vote was called for on the questionThat the question be agreed to.Ayes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; Independent: Dunne.Noes56New Zealand Labour 33; Green Party 14; New Zealand First 7; Mana 1; Independent: Horan.Question agreed to.A party vote was called for on the questionThat the Resource Management Reform Bill be now read a second time.Ayes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; Independent: Dunne.Noes56New Zealand Labour 33; Green Party 14; New Zealand First 7; Mana 1; Independent: Horan.Bill read a second time.Public Finance (Fiscal Responsibility) Amendment BillSecond ReadingHon CHESTER BORROWS (Minister for Courts)on behalf of theMinister of Finance: I moveThat the Public Finance (Fiscal Responsibility) Amendment Bill be now read a second time . I would like to thank the Finance and Expenditure Committee for its careful consideration of these important reforms. The committee has recommended by majority that the bill be passed and has suggested some useful amendments. Fiscal responsibility first and foremost involves prudent management of the Crown’s finances but it also means ensuring that New Zealand’s fiscal institutions and practices remain fit for purpose and as transparent as they can be. To ensure that our institutions remain a sound guide for future policy-making we need to check regularly to ensure that we are learning from our real-world experiences and practices and adapting reporting requirements where incremental strengthening opportunities are identified. That is what the amendments proposed by the Public Finance (Fiscal Responsibility) Amendment Bill are about.The bill amends the fiscal responsibility provisions in Part 2 of the Public Finance Act 1989. The fiscal responsibility provisions are perhaps best thought of as a set of guidelines for how the Government should conduct fiscal policy combined with regular reporting requirements. The provisions currently have a focus on fiscal sustainability. This focus has served New Zealand well. Since the provisions were introduced in 1994 successive Governments have focused on maintaining low or prudent public debt. Public debt was at historically low levels in 2008 which put New Zealand in a relatively stronger position going into the recession of 2008-09 than we would otherwise have been in.The genesis of this bill was a review conducted by Treasury of the effectiveness of the fiscal responsibility provisions in encouraging good fiscal policy decision-making. The review found that fiscal responsibility provisions had been very successful in encouraging Governments to focus on the need for low public debt but the review also found that there was room to strengthen the provisions to encourage greater transparency around the interaction of fiscal and monetary policy and the impacts of current policy on future generations in managing resources efficiently and effectively. The additions to the fiscal responsibility provisions in the bill aim to address these and other gaps.I will point out two of the changes the Finance and Expenditure Committee recommended in its report on the bill. The bill as introduced proposed a new principle of responsible fiscal management that Governments should formulate fiscal strategy with regard to its interaction with monetary policy. To avoid misinterpretation of the intent of this new principle the committee recommended by majority that it be reworded so that it requires Governments to formulate fiscal strategy with regard to the interaction between fiscal policy and monetary policy. The Government supports this recommendation. The committee’s concern was that the original wording could give the mistaken impression that the relationship between fiscal and monetary policy is one-way—that is that fiscal policy should take monetary policy into account but not the reverse. Of course the relationship between fiscal policy and monetary policy is two-way and the revised wording is clearer on this point.By majority the committee also recommended that certain other requirements in the current fiscal responsibility provisions be updated to reflect the fact that the internet is now the primary way that the public gets information on fiscal policy. The current Act requires a notice to be published in theGazette upon the publication of certain documents including the Fiscal Strategy Report and the Budget Policy Statement. Asamended by the Finance and Expenditure Committee the bill would remove this requirement and replace it with a requirement for these and other documents to be published on Treasury’s website.The Public Finance (Fiscal Responsibility) Amendment Bill is an important step in ensuring that New Zealand’s fiscal institutions continue to be world leading. I commend the bill to the House.Hon DAVID PARKER (Labour):The Labour Party is opposing the passage of this legislation the Public Finance (Fiscal Responsibility) Amendment Bill because it does nothing of substance to improve the fiscal responsibility of Government. Therefore it is not worthy of further time in this House.The Labour Government in power—and I was pleased to hear the acknowledgment from the Hon Chester Borrows in his second reading address—was fiscally responsible. We ran nine Budget surpluses in a row. We ran surpluses of 6 percent of GDP at a time when the then Opposition the National Party opposed those surpluses and called for larger tax cuts than we were putting through at that time. We did cut taxes for the corporate rating and we did reduce the tax burden of families with children but we did not go as far as the National Party wanted us to go. Rather we ran larger surpluses than it wanted.Rather than doing as the then Opposition National Party said we ran very substantial surpluses. The National Party would have had us following the suit favoured by the likes of George W Bush in the United States where Budget deficits were run in a time of plenty so that when the global financial crisis came New Zealand’s debt levels would not have been as low as they were. We had reduced net Government debt to zero and had reduced gross Government debt from 38 percent to 18 percent of GDP over that period and that is the reason why New Zealand’s Government debt is not higher than it would otherwise be.The history of the fiscal responsibility legislation is not quite as the Minister described it there. The reason that Treasury conducted a review of the fiscal responsibility legislation was that National promised ACT in their coalition agreement that it would do so. The coalition agreement between ACT and National indeed required National to give consideration to having a fiscal cap—something like a maximum percentage of GDP that could be spent by the Government. Unfortunately the National Party did not check whether Peter Dunne would vote for it. Peter Dunne the Independent MP for Ōhariu would not vote for it because he saw the folly of having a fiscal cap.Indeed there are two examples I will give as to why that was an absolute folly. The first is California. California has a fiscal cap a spending cap that is set by its law which the legislature the local state Government cannot breach. As a consequence the quality of education in California has declined from being one of the—David Bennett: Oh what a load of rubbish.Hon DAVID PARKER: Rubbish? Yes there is rubbish education in parts of California now Mr Bennett. As a consequence of its fiscal cap it has had to decrease spending on education. The education system in California has gone from being one of the best state-based education systems to being one that is far worse. That is what happens when you have inappropriate spending caps.The other example of course is that if you had a spending cap and the global financial crisis hit and then you had a large earthquake in the Canterbury region you could not spend the money required to keep your country operating properly. As a consequence of that reality which is that sometimes Government spending increases through no fault of anyone beyond what might have been previously thought to be a prudent cap for a short period of time those members saw the folly in their ways. It ofcourse coincided with the fall from grace of the Hon John Banks—somewhat misnamed some would say—as a consequence of the controversies surrounding him and the allegations of electoral fraud that surround him and for which he currently appears on charges in court.Against that background we voted with some spirit of cooperation for the first reading of this bill because we believed that we should have consensus around fiscal responsibility legislation. Certainly on this side of the House we believe in fiscal responsibility and every Labour Government you have ever seen has been fiscally responsible. We got to—Maggie Barry: Delusional.Hon DAVID PARKER: “Delusional.” says Maggie Barry. You know Maggie Barry still does not understand that the ultimate test of fiscal responsibility is really whether you are reducing Government debt. We went to the Finance and Expenditure Committee and we asked: “Well look is this meaningful?”. We asked officials whether this new principle being introduced which is to formulate fiscal strategy with regard to its likely impact on present and future generations would mean that the current Government would have to look again at the age of eligibility for superannuation.If there is one driver of Government expenditure that has increased in recent years almost exponentially it is the cost of superannuation. It is already more than the cost of all benefit classes combined. Within 2 years the amount that is spent by the Government on superannuation exceeds the amount that the Government spends on education—that is preschool primary intermediate secondary and tertiary education combined. So if ever there was a category of expenditure where there is an effect on future generations it is the trade-off between the cost of superannuation and the cost of education and yet we were told by officials that this would have no effect on that decision. So it shows you how meaningless this piece of legislation is that that is the effect.Dr David Clark: It’s a waste of Parliament’s time.Hon DAVID PARKER: It is a waste of Parliament’s time.The next area that we had a problem with was the interaction of monetary policy and fiscal responsibility legislation. There is new wording that is introduced in the bill that says that the interaction with monetary policy has to be considered when you formulate fiscal strategy. The Labour Party has concerns that we elevate for ever monetary policy above other important aspects of economic management. That is not to say that monetary policy is not important; it is just to say that you ought not elevate it to give it primacy above other important matters of economic management. So we suggested wording that said “formulating fiscal and monetary policy with regard to the interactions between them” which was a more balanced articulation of the concept that the Government wanted to address. We were told by Government members and officials on behalf of the Government that they disagreed. They thought that we should not be talking about the effect of fiscal policy on monetary policy in this document because monetary policy is delegated to the Reserve Bank.Well that just shows you the imbalance that is created by this legislation if you do not have some counteracting balance in some other piece of legislation. But further than that it shows how narrow the Government view of monetary policy is. It views all monetary policy as having been delegated to the Reserve Bank. It is true that that which has been delegated to the Reserve Bank is delegated to the Reserve Bank but that does not mean to say that all monetary policy is. It is only the bit that is within the purview of the Reserve Bank that is delegated and that does not mean to say that other things like policy advice and other aspects of Government policy that impact upon monetary policy are not left with the Government—they are. So we think that that is wrong.We went further and we said: “Well let’s have a look at overseas jurisdictions.” and we thought we would have a look at the Australian equivalent. The Australian equivalent makes express reference to national savings as opposed to Government savings.The national savings position is expressed through the net international liabilities or assets of a country and the effect on those from year to year caused by current account deficit. As many will have heard New Zealand has the worst current account deficit in the developed world this year according to the IMF—Dr David Clark: Worse than Greece.Hon DAVID PARKER: —and the second worst according to the OECD and both of them think it will be worse than Greece’s. So national savings are a big problem for this country and we would have thought that when you are having a look at fiscal policy you should have regard to national savings. Indeed Bill English used to say that the surpluses that were run by the Government under Labour came at the cost of private savings in some part and therefore had some cost to national savings and there is something in that argument. There is something in that argument.So we could not understand why if you are going to have reference to monetary policy you could not have reference to national savings. But the Government refused to agree having refused to compromise on what were pretty reasonable requests on our part particularly given the political genesis of this legislation in the ACT-National confidence and supply agreement. We said: “Well the deal’s off. We’re not going to vote for it.”It is vacuous legislation. The idea that we cannot have regard to these other factors is wrong.PAUL GOLDSMITH (National):It is my pleasure to speak on the Public Finance (Fiscal Responsibility) Amendment Bill. I must say that I am disappointed that the Opposition could not rise above daily politics and find it within itself to support this bill. I do hope that it will reconsider over the next stages. Certainly that earlier generation of Labour Party leaders would not have gone down such a line on such an important bill.There is no question that the public reporting and transparency provisions of the Public Finance Act 1989 have served New Zealanders well for the last two decades in keeping the focus on maintaining low Crown debt levels. New Zealanders have not forgotten the horrors of the past when after each election the true state of the nation’s finances was revealed—in 1984 and in 1990. It was the same with Mr Caygill. So the Fiscal Responsibility Act 1994 which was later folded into the Public Finance Act was one of Ruth Richardson’s greatest achievements. That was followed by 15 years of Budget surpluses something totally unthinkable in the 1970s and early 1980s. People could not believe that it was possible to get back to surplus and we did.New Zealand’s reputation has changed from being a basket case of a country to a place of quality public policy. And successive Governments have focused on maintaining low or prudent public debt levels. It is true that the Labour Government maintained those surpluses for its first two terms. But it is also true—and it is sometimes forgotten by members on the other side—that it did leave the country pregnant with debt for the next 10 years according to the projections that it left behind. That is what we have had to grapple with in this Government and that is why this sort of legislation is so important.Why is fiscal responsibility important? Because quality public policy and practice and sound financial management bring confidence and it is confidence that is so important for the private sector to be able to invest and to create jobs. Conversely the absence of fiscal responsibility leads to a lack of confidence a lack of investment and alack of growth. We see that all around the world today and New Zealand is lucky that we are not in that circumstance.There are a number of new principles brought out in this bill. The first one is that Governments should formulate fiscal strategy with regard to its interaction with monetary policy. There was a fair bit of debate about this during the course of the select committee and we heard some submissions on this point. There were changes made during the select committee process. So to avoid misinterpretation of the intent of this new principle the bill is reworded so that it requires Governments to formulate fiscal strategy with regard to the interaction between fiscal policy and monetary policy. The committee was concerned that there could be a mistaken impression that the relationship was only a one-way one and that fiscal policy should take monetary policy into account but not the reverse and so the changes that the select committee brought in are meant to clarify that.The Labour Party has gone further and we do not agree with its changes. As we heard from Mr Parker earlier the Labour Party focused on this issue of saving. I cannot quite understand why Labour would say that we need to increase saving in this country and at the same time talk about introducing a capital gains tax which is essentially a tax on savings. How would you be encouraging saving if you were introducing a capital gains tax which actually takes all the benefit from saving away from you? And if you say that we have got a savings problem but your policies are all about allowing just a little bit more inflation by softening the approach of monetary policy—I have just been reading the new biography of Margaret Thatcher and she pointed out quite strongly in the 1970s that it is inflation that robs the savings of the thrifty—why would you be encouraging saving but at the same time doing a little bit more to have a little bit more inflation when money is no longer counted as the store of value?The Greens are very keen to water down the milk by debasing the currency. Maybe they have changed their minds on that but I do not believe it. If money can no longer be counted as a store of value then savings and investment are undermined. That is why it is so important that we have a good strong sound system of fiscal responsibility and that is why this bill and these changes to the Public Finance Act will I have no doubt improve the standing of New Zealand’s financial management and will benefit the country as a whole. So on that basis I commend this bill to the House. Thank you.Dr DAVID CLARK (Labour—Dunedin North):It is always a pleasure to follow that member Paul Goldsmith. Despite several vacuous comments in that address to the House I will still be supporting his campaign for the chair of the Finance and Expenditure Committee the one that he has been running across Parliament. We think that he will have much to contribute from amongst the available talent on that side on the House. We look forward to his contributions.I must first address the issue of the capital gains tax. We do not understand why members of that party across the House are so opposed to it as they claim they want to grow the economy. We all know a capital gains tax has been recommended by the OECD by the IMF by most countries in the Western World by the former Treasury head and so on. Why would they on that side of the House not want to put in pro-growth tax reform? They seem so opposed to growth in our economy because it threatens the interests of those who are the very wealthiest those who are at the big end of town those who have the vehicles for avoiding paying their fair share of tax. We know that that is really why they oppose it. We know it has nothing to do with any other economic principles. It is actually about preserving the interests of a very privileged few. If you ask any New Zealander in the street—not you Mr Assistant Speaker; I do not mean to bring you into the debate—you will understand from that person that the economy is actually not working for all New Zealanders right now. It is working in theinterests of a privileged few. The party across the floor is seeking to continue that to make sure that it continues to work in the interests of those privileged few at the expense of the rest of New Zealand.The Public Finance (Fiscal Responsibility) Amendment Bill in its current form is arguably another attempt to do that. What happens when Government spending is restricted as my colleague David Parker has pointed out is often a terrible outcome. For example with the Canterbury earthquakes if there is no flexibility to address a natural crisis like that the Government is left in an awful hole the residents of the country are left in an awful hole and there is no obvious solution. There are states in the US that have gone down that path and have experienced terrible loss of infrastructure downgrading of education systems and the flow-on effects of that into future generations. So we know that in its current form this bill is a waste of Parliament’s time but it is something that we are forced to debate here. But we must make it very very clear from the start that Labour opposes this bill because it really does nothing—nothing—in the way of advancing the cause of fiscal responsibility.My colleague David Parker has also pointed to the advice received from officials that this would not force the Government to rethink the spending in the area of superannuation which we know is already more than the cost of all welfare benefits combined—all welfare benefits combined—and it is growing. The members opposite think it is no problem but the cost of superannuation going from $7.3 billion in 2008 to $10.2 billion in 2013 is a very real problem. The growing expenses in the Government sector must be addressed when we consider that the school sector within 2 years—the whole education sector from preschool primary intermediate and secondary through to tertiary—will be dwarfed by the amount spent on superannuation very soon. We see that across the House we have a party that is not really addressing the core drivers of Government spending. What it is concerned with here is trying to limit future Governments in their choices in a very specific way that protects the interests of the most wealthy with little regard for the wider population. So that is another example of why we would not support this bill.What we could see that would be more useful would be legislation that is more similar to what they have in Australia. If we look there at the equivalent legislation it is very revealing. In Australia the equivalent legislation makes express reference to achieving adequate national savings. We see that this Government has no real commitment to savings. It has brought KiwiSaver back and now it has pushed it forward but everything it has done has been incremental. Labour introduced KiwiSaver. It set up the Superannuation Fund. It is the party that has made a real effort to ensure that we are appropriately catered for in future generations. That is real fiscal responsibility. The thinking in this bill is not.We see the problem of the current account deficit which would be addressed by a higher savings rate. It is now the worst in the developed world—worse than Greece—and set to continue in that regard. That has flow-on implications for business in New Zealand. The cost of borrowing is greater because the ratings agencies understand that at the flick of a pen private debt can be converted into Government debt. They have seen it happen overseas as banks have been bailed out. That is why businesses in New Zealand are facing higher costs. It is because of the kinds of policies that this Government continues to carry on with. It means that the field is skewed against small businesses in New Zealand against the average citizen who works hard to get ahead. They face higher tax bills than they probably should. They face a whole lot of borrowing costs. They face headwinds more red tape. This Government has put through a lot of small-business red tape and all in the interests of the big end of town. Those who already have the real wealth are protected by this kind of legislation. It is the samereason that the Government opposes the capital gains tax that would catch the 75 percent of New Zealanders with net wealth over $50 million who declare income below $70000 below the top tax rate. They would be caught if we introduced a capital gains tax.We in Labour believe that everyone should pay their fair share and we should look seriously at the question of whether future generations’ interests are being preserved. That is the pretence in this bill but it is not what is delivered because the serious questions are not addressed in it. Instead it is poorly drafted legislation that will do nothing to improve fiscal responsibility and it is a waste of Parliament’s time.Let us have a look at who is putting this bill forward. We know that it has come out of the confidence and supply agreement between Mr Banks who is out there in his cabbage boat somewhere; his ACT Party which for all intents and purposes may be defunct in the public mind but still retains one seat here in Parliament; and the National Government. The National Government wanted to put a spending cap on but even Peter Dunne Independent MP saw that as part of an unnecessary right-wing agenda. And thank goodness—thank goodness—he had some sense. That is why that part of this bill has already failed. It is a failed part of a failed bill. Labour supported it going to the Finance and Expenditure Committee because we believe in the principle of having joint understanding around fiscal responsibility. But unfortunately this Government was not open to reaching any compromise not open to addressing the really long-term issues. It was simply set on its agenda of putting spending caps into place that would replicate the experiences of Colorado and California instead of actually addressing those real issues—like savings like pro-growth tax reform and like proper monetary reform—that can actually make sure that our economy works in the interests of hard-working New Zealanders exporters small businesses and the man and woman in the street who go out to do their best for themselves and their family.So we are stuck with this bill. We are stuck with this bill that has its genesis in the confidence and supply agreement between the National and ACT parties. That really is the only reason it is here in front of the House. It offers nothing of any use to New Zealand. It expands and amends the list of criteria to be taken into account by the Government when managing the country’s finances but it does not really get to the nub of the issues that we ought to be dealing with. What is worst of all is that it has the potential to make the imbalances in our economy even worse and those are those imbalances I spoke about earlier that mean that our current account deficit is now considered to be worse than that one in Greece.David Bennett: What was it under Labour?Dr DAVID CLARK: Mr Bennett asks what it was under Labour. It was not so fine under Labour either to be fair Mr Bennett but this Government has been in power now for 5 years—5 years—and the public of New Zealand are getting sick and tired of hearing excuses for not addressing the issues of the day. Those issues are becoming clearer and clearer and more entrenched. This Government is running away from them and running the economy in the interests of the wealthy few and running away from the effect that that has on real New Zealanders who want jobs who actually want the economy to grow who want to see wages rise rather than fall consistently like they have under this Government. They are the people whom we care about on this side of the House. They are the people who value education who value a future sustainable Government that can afford to spend money on education and the things that will give everyone the opportunity to get ahead rather than protecting the interests of the wealthy few. For all of those reasons and more the fact is that this is a waste of parliamentary time and the Labour Party opposes this bill.Dr RUSSEL NORMAN (Co-Leader—Green):I rise on behalf of the Green Party to speak on the Public Finance (Fiscal Responsibility) Amendment Bill. This bill does have a poor political genesis but it is none the less a good bill and the Green Party will be supporting it. I think that most people who read this bill will be pleasantly surprised by a number of the provisions within it. I think it is worth going through and looking at some of the provisions and some of the good elements of the bill.Some of the amendments that are going to be added are for example in clause 4 “when formulating revenue strategy having regard to efficiency and fairness including the predictability and stability of tax rates;”. It seems to me that including terms such as “efficiency and fairness” around revenue strategy is a good thing to do in a fiscal strategy document and obviously fairness includes things like a capital gains tax which is a very fair tax because it is highly progressive. If you were to look at something around fairness then you would introduce much more progressive taxation than we have in New Zealand at the moment because of course the very wealthy get most of their income from capital gain which is currently untaxed in New Zealand as opposed to pretty much every other OECD country. None the less this is a good provision to put in a Public Finance (Fiscal Responsibility) Amendment Bill.The bill also says: “when formulating fiscal strategy having regard to the interaction between fiscal policy and monetary policy;”. I know that my colleagues in the Labour Party have been concerned about this clause and I understand their concern. None the less I think that the clause as it has been amended is a fine clause in terms of looking at the interaction between the two. It does not say that one predominates over the other; it says that they interact with each other and I think that is a reasonable position to take.Furthermore what the bill says is: “when formulating fiscal strategy having regard to its likely impact on present and future generations;”. It is good to introduce into legislation looking at fiscal strategy—one would also hope in terms of economic strategy—a long-term perspective and that perspective is introduced in this bill by talking about present and future generations. I think that a lot of legislation in front of this House could well benefit from looking at the long-term impact on present and future generations and clearly the Labour Party’s arguments around the future costs of superannuation are perfectly legitimate arguments and I think that these clauses support a more responsible future Government looking at the debate around the future costs of superannuation. So I think it is good that we are adding these provisions into the Public Finance Act.I think that having the clauses around looking at the likely impact of fiscal strategy on future generations gives scope for Governments to consider those long-term impacts and look at what measures we should be taking today in order to deal with the generational or intergenerational impacts of policy that we are adopting such as superannuation policy. There are other provisions within the bill that are pretty innocuous and hard for anyone to disagree with such as: “ensuring that the Crown’s resources are managed effectively and efficiently.” These are some perfectly fine amendments to add into the primary legislation.However I think that perhaps the best bit of the bill is the stuff around the Investment Statement. This has been an innovation of this Government that I think has been a valuable innovation. It states that we should not when looking at the Crown’s accounts look just at the turnover if you like or the current expenditure and income; we should be looking at the overall investment position of the Government—that is looking at the capital assets of the Government and how those capital assets should be changing over time. The Government has introduced an Investment Statement effectively. Bill English introduced this and I think it was a very valuable contribution and now within this bill the Government is putting it in legislation and I think theGovernment should be congratulated on doing that. “The investment statement” as it says in new section 26NA(2) in clause 8 “must—(a) describe and state the value of the Crown’s significant assets and liabilities; and (b) state how those assets and liabilities have changed in value over time; and (c) forecast how those assets and liabilities are expected to change in value in each of at least the next 2 financial years … and (d) identify any significant differences”. I think that is a very useful exercise for the Crown to go through.In some respects I know that this bill was driven by National’s desire to privatise assets. It wanted to look at an investment approach in order to justify some of its privatisation agenda and obviously the Greens do not support that agenda. But the actual process of putting together an Investment Statement which looks at the Crown’s assets and liabilities and puts them in one place—and now we are creating a statutory framework for that kind of Investment Statement—I think is a valuable one. The Greens think it is particularly valuable because it shares a deep commonality with green economics if you like. One of the founding principles of green economics is that we do not look just at throughput; we actually look at the capital accounts. So when we are looking at the position of the Government we should not look just at the revenue and expenditure of that year but we should also be looking at the broader issue of the capital position of the Government and how the capital position has changed over time. Likewise when we look at the national accounts we should not look just at our GDP or economic activity over the course of that year. We should be looking at the underlying capital position of New Zealand: have we built capital assets over the last year or have we degraded our capital assets? Of course one of the ongoing problems of New Zealand has been the undermining of some of our capital assets and their foreign ownership.But the Green Party would take it further. Although we support this bill and we think it is good progress there are other things we would like to have seen in the bill but we recognise they were not going to be put in there by this Government. Those things concern broadening the capital accounts to look at natural and social capital. If we are to consider our capital we cannot consider just financial capital if you like. We also need to consider social and natural capital. If for example in the course of a year we dug up some of our minerals which is natural capital and if we then spent the resource we would essentially have turned natural capital into consumption. So at the end of that year we would look at our GDP numbers and go: “Well there’s been a lot of economic activity driven by mining.” But if we were to take the capital position we would go: “All we have really done is degraded our capital assets because we’ve dug up some of our natural capital and spent it on consumption.” That may be a perfectly legitimate strategy but because our national accounts do not focus on capital accounts—they focus on economic activity or turnover—often we hide the loss of capital. It is not very clear in our accounts because we simply look at economic activity. Sometimes economic activity looks like it is going great when all we are really doing is spending our capital and that is a very short-term strategy.One of the principles of green economics is that you need to look at capital accounts in all respects—not just financial capital accounts but also natural capital accounts looking at what is the position of our natural capital and also social capital. It is harder to quantify social capital although the Government has made some attempts to do that with its investment approach and although we disagree with some aspects of the Government’s investment approach there are none the less some interesting elements of it in terms of social capital. We believe that if we degrade social capital and if we save some money in for example health or education by not investing in and looking afterthe next generation in terms of health and education it might look like the Government of the day is saving some money and it may well be.But if you look at this from a social capital point of view we are creating ongoing long-term social problems for ourselves further down the road because we have degraded our social capital if you like. We would be creating generations of people who do not get access to education or have not had access to decent health services and that actually puts a further cost further down the track. When we do not invest properly in obesity prevention and preventing ill-health then the pressure on the health system further down the track is greater. It might look like we are saving some money today but from a social capital point of view we have degraded our social capital and we are going to pay for it further down the track.So although the investment statement approach that the Government has introduced in this bill is useful along with giving it a statutory framework it should not apply just to financial capital. In the Greens we think it would very useful to apply it to natural capital and social capital to give ourselves a much better perspective of what is going on in our society so that we are not getting a sense of just economic activity but also a sense of the underlying wealth and whether we are building that wealth or whether we are essentially degrading that underlying capital or underlying wealth in order to stimulate economic activity to make GDP numbers look good for 12 months. That is a great thing for Governments of the day. They like to look at GDP numbers because we have this national obsession with GDP numbers and economic activity.But from a green economic perspective we would ask what the fundamentals going underneath that are. Are we degrading our natural capital or in New Zealand’s case degrading our financial capital as is very clear from our current account deficit problem? Or are we degrading our social capital? So although we support this element it would be great in future in both Government accounts and national accounts to extend that accounting approach the capital or investment approach into areas other than financial capital. But all things considered and in spite of a very strange beginning this is not a bad bill in the end and I congratulate the Government on it.DAVID BENNETT (National—Hamilton East):I sat there incredulous at that speech by Russel Norman. The first time the Green Party has voted for a bill in this House it is a John Banks ACT-led bill. I could not believe that. I looked at the other side and at the faces of David Cunliffe and the young man in front of him whose name I have forgotten at the moment—Maggie Barry: David Clark.DAVID BENNETT: —David Clark the leaders of the Labour Party economic team and their faces when they saw Russel Norman stand up and say that he was going to vote for the Public Finance (Fiscal Responsibility) Amendment Bill were amazing. They could not believe it. The Labour Party members had spent half an hour in this House debating the merits of Labour’s economic policy talking about superannuation talking about a capital gains tax deflating the impact of this bill and saying how great Labour’s policies are and then the economic guru of the left stood up and said that the bill is a good idea. What is happening?I will tell you what is happening. What is happening is that Russel Norman has got a severe case—I will set the scene here because he has had to reverse his print and spend policy. The Labour Party told him that print and spend will not work. It is costing too many votes out there amongst the public because everybody believes that it is a dumb idea. So Russel Norman had to run back and come to the media in a adjournment week and say: “Look I’ve given up on that policy. We’re not going to print and spend any more.” But the guru from the left then had to come into this House and make himself look like the economic genius he rates himself as being. He wanted to be seen as theeconomic statesman of the left and so he came in and supported a Government bill on economics. That is what he is doing. He gave us a 10-minute rant on economics which had no sense or sensibility to it—but that is Russel Norman for you because he knows everything—and then he goes and votes for a John Banks ACT bill on economics. Great stuff. That is when you know that the Labour Party and the Green Party are in disaster territory when it comes to economic management.We look forward to that because this is not about being reasonable and understanding economics; the Labour Party and the Green Party just do not know where they are. The Labour Party and the Green Party talk about efficiency and fairness in their capital gains tax. When they go out there and talk about a capital gains tax they always say that IMF reports recommend a capital gains tax. Well it is a universal capital gains tax that is recommended not the specific one that the Labour Party is talking about. That exempts the first family home so it is not a fair tax. Labour has got an exemption in it before you even start. If it wanted to have a fair tax it would tax everybody and anything but it will not do that. It is not about fairness.The Labour Party and the Green Party are fighting over economic policy. The guru came into this room again today to put his stamp on it by saying that he is “Mr Economic Reasonableness” because he got a big big slap around the face last week from the Labour Party. Now the Labour Party is dealing with the monster coming back in a more reasonable state than the Labour Party thought it could deal with and he voted for an ACT bill. It is great to see the Labour Party and the Green Party when they cannot agree on economic policy. Thank you.Hon DAVID CUNLIFFE (Labour—New Lynn):The deep and abiding irony of being lectured to by the National Party about the quality of one’s coalition partners! The Public Finance (Fiscal Responsibility) Amendment Bill arose out of a misbegotten promise from that lot of deficit-mongers to John Banks. The reason that he will not be here to prop it up is that he could well be in prison for lying about getting campaign donations from one Kim Dotcom. And as if life is not full enough of rich and enduring irony one of National’s other coalition partners the Hon Peter Dunne—perhaps slightly more honourable than the Hon John Banks—is not going to be here because he leaked the paper about Kim Dotcom. That has seen him lose his ministerial post—indirectly perhaps—lose his party’s status and just possibly lose his seat in the House. So imagine being told by that economic genius the member who has just resumed his seat David Bennett that Labour has got a problem with its coalition partners. I will take Russel Norman and the Greens any day of the week over the motley crew that that bunch of deficit-mongers has assembled over the years.Labour does not support this bill because it is not a bill about fiscal prudence. We have a proud record in fiscal prudence. We have never run a deficit in a decade; National has never run a surplus New Zealand. This is a bill about who gets what. This is a bill that entrenches the primacy of monetarism over fiscal balance by making fiscal policy subservient to monetary policy. It is a bill that locks in low tax rates for the rich and erroneous GST for the poor by emphasising the “stability” of tax rates. It is a bill that does nothing to fix National’s behaviour in giving away superannuation and making intergenerational theft worse. It is a bill that does nothing to fix the savings gap—the build-up of total international debt that makes New Zealand’s current account deficit worse than Greece’s.So what would it take to have a real approach to fiscal responsibility? Upon which pillars does Labour’s proud record of never having run a fiscal deficit rest? It is very simple—firstly genuine prudent fiscal policy. Labour knows how to run a prudent book; National would not know a surplus if it fell over one. In this year’s Budget National had to manufacture tax spikes to get within a bull’s roar. It had to put off $200million of spending it had previously committed to—not perhaps wrong in itself but added up with the other assumptions it is absolutely ludicrous. It had to get its little filthy fingers in New Zealanders’ back pockets by hanging on to its overwrought ACC surpluses. It had to put up petrol excise. Only having done all of that and more could it claw its way to a tiny little paper-thin imaginary $75 million “surplus”.And all the while New Zealand’s total international debt rose and rose and rose and our current account rose and rose and rose because no one has explained to Bill English that it is not just his job to manage the Government’s books; it is his job to oversee the country’s books. New Zealanders do not look to their Government just to balance its accounts at the expense of their accounts; they expect a good Government to be there for them and to grow the pie for everybody not operate for its benefit against New Zealanders’ benefit.You cannot drive a fiscal surplus without having an economic surplus. That means having an economic growth plan founded on pro-growth tax reform strong savings policy sustainable superannuation and real growth strategy right down to the regions and sectors. National has none of that. Its recipe has been putting off superannuation contributions giving filthy tax cuts to its filthy rich mates putting GST up for everybody else and having an absence of economic strategy when it comes to growing the economy. It is shameful.Look at those members. I hope the TV cameras pan and you will see them all hanging their heads and shuffling their feet. Paul Goldsmith the new chairperson of the Finance and Expenditure Committee knows jolly well we are right. He is shuffling his feet.Maggie Barry: No wonder your own party—Hon DAVID CUNLIFFE: Now in putative protest Maggie Barry rises to her highest decitone. It is a sad and motley crew over the way.This bill introduces some very unfortunate biases—biases that lock in who gets what biases that actually ruin our history of bipartisanship on fiscal responsibility in favour of a creeping bias for the rich. Here it is—here it is. Present and future generations National talks about but it is the party that has dissed New Zealand superannuation. It makes fiscal policy subservient to monetary policy because this bill requires the writers of fiscal policy to have regard to monetary policy but not the other way around.What would be wrong with the Reserve Bank and also those folks at Treasury who think about monetary issues actually having regard to fiscal settings and doing it? The answer at the Finance and Expenditure Committee was: “Well you know monetary policy is completely delegated it’s completely hands-off.” Well no it is not. There is a thing called the policy targets agreement which is written by the Minister of Finance. He calls the Governor of the Reserve Bank over for an explanation of how he is actually delivering on that. It is not completely delegated; it is—or should be—responsibly delegated. The Reserve Bank of New Zealand Act itself is a creature of the Government of the day and the Government of the day retains overall responsibility for monetary policy.Government members do not like it. They do not like it because they know they are up an economic backwater without a paddle. They are staring at their fourth deficit Budget in a row and their fifth next year. It will be their fifth straight deficit in a row but Labour had nine straight surpluses—nine straight fiscal surpluses—and a higher growth rate. Here is an enduring politics of New Zealand economics. If you take a 30-year history of data and compare economic growth under Labour Governments with economic growth under National Governments guess which comes out higher? Labour by over 0.5 percent per annum has a higher economic growth rate record than occurred under National Governments. As if that were not rich enough there is another lovelystatistic that goes with it that despite that sometimes business confidence is higher under National. That is because it is purely tribal and because certain wealthy members of the community are able to rip off the system under National and feather their own nests. New Zealanders have had enough of it.We need to measure this bill by what is not in it as well as by what things are wrong in it. Here are some things that sadly are not in it. There is no reference in the bill to total national savings or total national debt only reference to Government savings. But Government debt makes up only 15 percent of New Zealand’s total national debt. The other 85 percent is private debt and the bill ignores it. One cannot make sense of national debt without considering private debt. You know it was not long ago that Bill English talked about rebalancing the economy. He does not now because the economy is getting less and less balanced. Its current account deficit is growing its savings gap is worsening and households are borrowing again as banks are pushing their risky money on people chasing a runaway housing market. Is it any wonder that National is going back to the same old same old approach of hands-off and hoping letting the economic car go up and down the rollercoaster and seeing where it ends up?Passing sham bills like this one will do nothing to cover for National’s lack of an economic plan. It does not matter how many glossy brochures Steven Joyce fires out the back door of the Ministry of Business Innovation and Employment—Dr David Clark: The worst economic record in 50 years.Hon DAVID CUNLIFFE: The worst economic record in how many years Dr Clark?Dr David Clark: In 50 years.Hon DAVID CUNLIFFE: In 50 years. It has been said so often it must be true. This is a sad bill. It is a sham. It is a waste of a good history of bipartisan cooperation.MAGGIE BARRY (National—North Shore):It is with pleasure that I rise to speak to the second reading of the Public Finance (Fiscal Responsibility) Amendment Bill and to follow a member on the opposing side of the House the Hon David Cunliffe who actually proves that Labour members can get it right sometimes because they did not elect him as a leader. They had the good sense to spurn the unlikeable Cunliffe. So there you go: they are doing something right.The Greens of course for their part still retain the capacity to surprise. You have to hand it to them. Russel Norman the obscure extinct party guy that he is has been backing a failed policy for a long time and he actually had to try to spin his way out of it tonight. It was a pretty unedifying spectacle I would have to say and it really did not convince anyone although our colleague David Bennett did try to give him the benefit of the doubt and say that he was trying to be very clever about it. But I think that in fact Norman was abducted by aliens because what we saw tonight was a guy who is unrecognisable as the guy who has been trumpeting around the House for the past few months claiming to be the next Minister of Finance.But we come back to the measure of the piece of legislation that is on the Table tonight the Public Finance (Fiscal Responsibility) Amendment Bill. It is a piece of legislation of course that is entirely consistent with this Government’s philosophy. The Public Finance Act of the past—in 1989 it came through—has served us very well but it is time to update and we do need to have the taxpayers of New Zealand getting a better deal. They need a decent report card to accurately measure what is going on with Government expenditure. They want the predictability and the stability and they want efficiency and fairness in the tax rates and that is why this is a good piece of legislation.This bill requires the Government to be more transparent. There is nothing wrong with that—it is all part of what we do which is to responsibly manage our finances. It is one of our main priorities and this is an essential piece of legislation for us. The threemain principles that it enshrines have been talked about and I agree with other speakers. We have learnt unlike other people in this House from the problems of the global financial crisis. We need to make sure that this bill gives us the scope to make further improvements to our tax system so I commend the bill to the House.RAYMOND HUO (Labour):Having listened to the Minister for Courts and other parliamentary colleagues I would like to raise my concerns by focusing on some specific clauses. If we look at the purposes of this bill the Public Finance (Fiscal Responsibility) Amendment Bill the new principles would require the Government to formulate fiscal strategy with regard to its interaction with monetary policy. That is contained in the proposed section 26G(1)(f) in clause 4. Secondly it would require the Government to formulate fiscal strategy with regard to its likely impact on present and future generations. Thirdly it is to ensure that the Crown’s resources are managed effectively and efficiently. One existing principle would be amended to require revenue strategy to have regard to efficiency and fairness including the predictability and stability of tax rates.The proposed section 26G(1)(f) “formulating fiscal strategy with regard to its interaction with monetary policy;” is neutral enough to have little effect. However if its intent is to subordinate fiscal policy to monetary policy which are totally different things that could significantly limit a Government’s social and economic options if the policies followed by the Reserve Bank were in conflict with the Government of the day. For example a Government wishing to raise wage rates by various mechanisms could find its wishes neutered or undermined by a Reserve Bank that considers such efforts inflationary.Treasury’s and the Government’s reading of this particular monetary policy in paragraph (f) is too narrow. We believe that the wording in paragraph (f) should be “formulating fiscal and monetary policy with regard to interactions between them” but this proposed change was rejected by the Government which has said that fiscal responsibility legislation should not influence monetary policy. If that logic were applied consistently then fiscal responsibility legislation should not refer to effects on economic efficiency either which this bill does exactly.Secondly the proposed section 26G(1)(g) “formulating fiscal strategy with regard to its likely impact on present and future generations;” is sensible as long as “impact” includes a full range of considerations whether economic social environmental or otherwise. Much has been reported in the media with regard to the age of eligibility for superannuation for example. But it is clear from advice from the officials that an amendment would have no enforceable effect at all on National’s refusal to address the age of eligibility for superannuation despite this being the most obvious example of Budget settings that have an effect between generations. Superannuation costs rose from $7.3 billion in 2008 to $10.2 billion in 2013. This is already more than the cost of all welfare benefits combined. Within 2 years superannuation exceeds the amount spent by the Government on all education including preschool primary intermediate secondary and tertiary. The proposed amendment has no effect on this.Further the proposed section 26G(1)(h) “ensuring that the Crown’s resources are managed effectively and efficiently.” should also be concerned about whether they are managed in a way that is consistent with the living standards framework. For example as argued by the Council of Trade Unions assets such as schools hospitals parks and State-owned enterprises have the potential to impact most of the living standards framework’s dimensions. Judging whether they are managed effectively and efficiently requires explicit analysis being made along the living standards framework’s dimensions.Moreover the investment statement contained in new section 26NA in clause 8 focuses solely on the value—I can only assume that “value” refers to the financial value of the Crown’s assets—and omits all mention of aspects such as social value and social returns. The same can be said of environmental value and other aspects of the living standards framework yet most of the Government’s physical assets are held primarily for non-financial purposes such as education health research economic development enhancing the efficiency of the rest of the economy conservation or recreation. So to ignore those aspects and focus on financial values reduces those assets to financial ones and thus makes it easier to justify their being sold on the basis solely of financial considerations. This is misleading and unbalanced.To conclude this piece of legislation is poorly drafted and will do nothing to improve fiscal responsibility. Based on the debate particularly from this side of the House it is concluded that this piece of legislation is poorly drafted and is a waste of Parliament’s time. It is accordingly opposed by the Labour Party members. Thank you.KEVIN HAGUE (Green):I rise to take a very brief call to further indicate the Green Party’s support for this legislation the Public Finance (Fiscal Responsibility) Amendment Bill. Sometimes in this House we find ourselves in unusual combinations with other parties and I believe that this evening is one of those but on analysis of this bill we find ourselves genuinely in support of it.Dr Russel Norman has explained some of the reasons for that. We think that there are advances on several fronts. For example we very strongly support this new element that appears in this bill to require the formulation of fiscal strategy to be made with regard to the likely impact on present and future generations because it has been the short-term nature of much of our fiscal management and planning that has undermined many of the more important strategic directions for this country and for future generations. It is a bedrock belief of the Green Party that planning for and valuing the utility derived by future generations is incredibly important in making decisions today. It is the effective massive discount rate that we put on the utility for future generations that bedevils our attempts on many occasions to ensure appropriate services and appropriate decisions made for the long term.As Dr Norman has also set out the Green Party also very much supports the new section around an Investment Statement. It introduces more or less for the first time a requirement for capital accounting. As Dr Norman has indicated although the Green Party would go further and discuss natural capital and social capital in addition to the capital that is addressed here we believe that this is a very good start. So on that basis the Green Party is very pleased to support this bill.The question was put that the amendments recommended by the Finance and Expenditure Committee by majority be agreed to.A party vote was called for on the questionThat the question be agreed to.Ayes74New Zealand National 59; Green Party 11; Māori Party 2; ACT New Zealand 1; Independent: Dunne.Noes42New Zealand Labour 33; New Zealand First 7; Mana 1; Independent: Horan.Question agreed to.A party vote was called for on the questionThat the Public Finance (Fiscal Responsibility) Amendment Bill be now read a second time.Ayes74New Zealand National 59; Green Party 11; Māori Party 2; ACT New Zealand 1; Independent: Dunne.Noes42New Zealand Labour 33; New Zealand First 7; Mana 1; Independent: Horan.Bill read a second time.Local Government (Auckland Council) Amendment Bill(No 2)First ReadingDebate resumed from 6 June.PHIL TWYFORD (Labour—Te Atatū):Labour supports this bill the Local Government (Auckland Council) Amendment Bill (No 2) as I was saying before I was so rudely interrupted. The bill allows for elected members and council officials to get on with the job of representing their communities and serving their local communities in contrast to the many pieces of legislation we have seen before this House recently that actually take power away from local communities. The bill pertains to local boards in Auckland which are an important part of the local body scene in Auckland. They are the voice of local communities.I want to pay tribute to a group of candidates for the local board in their area in west Auckland that I represent. Those candidates are Shane Henderson Russell Clark Sailauama Cheryl Talamaivao Mike Williams Will Flavell Ann Pala and Chris Cooper. They have a fantastic mixture of youth and experience. They are capable talented and jumping out of their skins to serve.Debate interrupted.The House adjourned at 10 p.m.