Gambling Amendment Bill (No 3) — In CommitteeText is incorporated into the Bound VolumeGambling Amendment Bill (No 3) — In Committee[Sitting date: 09 September 2015. Volume:708;Page:6452. Text is incorporated into the Bound Volume.]Gambling Amendment Bill (No 3)In CommitteePart 1 Class 4 GamblingADRIAN RURAWHE (Labour—Te Tai Hauāuru): I would like to start off by going straight to clause 6 of the Gambling Amendment Bill (No 3) and speaking about commission-based payments. I want to reflect also on the original Act the Gambling Act 2003. The real purpose of the venue payments as I understand it from the original Act was based on cost recovery for those venues that hosted class 4 gambling machines or pokies. I understand and believe that in doing so the intent was for commission-based payments to be prohibited at that stage because this was seen as a community service and as for the real payment back to the community the funds would be distributed to the community that those funds came from. Clause 6(b)(ii) reads: “the only commission that is paid to or received by a person for conducting the gambling is a commission payment to a venue operator that complies with regulations made under section 371(1)(dd);”.So that is a fundamental change to the original intent of the Gambling Act 2003. We pointed this out in the Labour Party minority report and provided information on exactly why we are against commission-based payments and it is for that very reason. The original intent was for communities to benefit from gambling machines and from the profits being distributed back to that community. Ever since that time venues have created ways that they can maximise the return that they get from cost recovery and I think that has been well documented. So this is a fundamental change which we believe will incentivise gambling so that venues have an interest in seeing more money going through the machines that they host and we are fundamentally opposed to that. There are—and I will get to that in later calls perhaps—the issues around the areas that we do agree with but this is a key area.Another issue that we have as I said refers to another section. We are concerned about that because we do not actually know what the model is. We do not know what the commission-based model will be for making those commission-based payments. That is a problem. It is a problem because it could be anything. There is a Supplementary Order Paper that suggests that it should be set at a certain level. I think that it is not a good idea to leave the model to be created by regulations. It should have been part of this bill.Every single provider organisation that made a submission to the select committee opposed commission-based payments to venues. They all cited that they believe it would incentivise gambling. It would also in their opinion and certainly in my opinion provide another reason for the venues not to fulfil their host responsibilities and as we saw in the mystery shopper project that the Department of Internal Affairs ran in December last year only one out of the 102 venues was compliant. I believe that it is not unreasonable to think that commission-based payments organised and run by those venues are going to provide us with a better outcome. I have not seen the evidence. I refer to the submission made by the Problem Gambling Foundation which is adamant that this kind of process and this kind of payment system to venues will indeed make its job a lot harder and every other provider also had that same opinion about commission-based payments.Also in Part 1 I want to talk about the “key person” issue. There were a number of submitters who made some very good submissions about the “key person” issue because of the difficulty it would provide and the way that it was originally stated within the bill as it appeared in the first reading. So the work that the Government Administration Committee did on this particular issue I think resolves it to a better outcomethan was originally stated which we see in the bill today. For example the Racing Board told us that because of the way the bill was written it would not be able to pay its employees. Of course that is not a good outcome for this part of the bill so I wanted to highlight that.I also wanted to address the submitters who were in support of these payments and acknowledge some of the things that they actually said about their reasons for commission-based payments. I do not agree with the outcome but I acknowledge that the current system is not being implemented in the way that it should be and I think that the Department of Internal Affairs could be doing a lot better. That is all I have to say on Part 1. Kia ora.CLAYTON MITCHELL (NZ First): I am very pleased to be standing here tonight after our scheduled meal break to talk about the Gambling Amendment Bill (No 3). You are looking at me a little bit confused as to a scheduled meal break Mr Macindoe. It is what we do but unfortunately this Government has taken that away—I am just letting the world know. Anyway I digress and I am really wanting to get back to the bill.The Gambling Amendment Bill (No 3) I think is actually heading very much in the right direction and I would really like to put it out there to the Minister to give me some feedback on his thoughts in relation to Supplementary Order Paper 95 which we have got in for an amendment. It is to do with section 30 in clause 6 amending the meaning of class 4 gambling. Unlike the Labour Party New Zealand First strongly believes that the current situation with “actual reasonable and necessary costs” is a very clunky way to work out how site venue operators are going to be remunerated for the cost of having those machines in their venues.There is a real cost associated with having licensed machines in a licensed premises and it is very difficult to work out what you are actually entitled to receive as far as payment goes. I think the fairest and most equitable way of working that out despite what Labour says is through a commission-based payment. You only have to look at other parts of gambling throughout New Zealand that operate under a similar method. When you look at the TAB which of course does exactly the same thing it works on a commission-based payment for its venue operators on the turnover of their site. It is 1.5 percent commission—I believe it is 1.5 percent commission for their venue operators. If you have got a busier operation you are obviously going to get a higher return but at 1.5 percent of your gross turnover it is hardly a significant incentive to have a racing organisation like the TAB for example in your establishment.What we are proposing here—what New Zealand First is putting forward on the table—is exactly that. A fair reasonable and actual cost to be calculated is very clunky. It is very antiquated. It is very difficult to actually determine what you are entitled to. With rents going up all the time and as wage costs alter you are virtually going through uncertainty from month to month and from quarter to quarter as to what you are actually going to receive as a payment to have those machines on your premises.What this amendment will do is amend this bill by bringing in a 1.5 percent commission-based payment on the gross turnover of class 4 venue operators’ licences. We looked at the different scenarios that may work in a commission-based system. We looked at 16 percent of net turnover but the fluctuations that you get from net turnover as opposed to gross turnover are of course how often those machines pay out. You have some weeks where of course you have a negative banking situation where you have actually given more money to your gamblers—your punters who are in your venue—than you actually took in in kind. So some weeks you find yourself under a net turnover adjustment of actually getting a negative fee. On gross turnover you look at the overall turnover of the venue and you are putting a 1.5 percent loading on that.We think that that is a very fair very reasonable and respectable amount. It is hardly going to justify venue operators going out there to promote gambling and of course there are laws that already prevent that from happening in your licensed premises. It is very very heavily monitored. You cannot even have a display on your monitor to show what your jackpots are to the outside world. When you enter a gaming room you know you are doing so for the purposes of having a punt on the gaming machines and you do not know what the jackpot is until you enter that gaming machine so you can hardly go out there handing out flyers or go out with a megaphone promoting that your gambling room is going off like a bucket of pipis in the sun—“Get in there and have a quick punt in my pokie-machine room because it is going to be fantastic.” That is not how the system operates.I think to be honest the Labour Party is creating ghosts where there are not any—ghosts goblins and ghouls in its brain—to come up with an idea that somehow getting a commission-based payment for licensed venue operators is a bad thing. We do support that. We hope that the Supplementary Order Paper gets the support in the Committee. I clearly see that it is not going to get support from the Labour Party. We certainly do hope Mr Dunne that we get your support and the support of the National Government.We would be a strong supporter if we could get that through in this piece of legislation. We do believe that the amendments that have been put forward are heading in the right direction. When the first and the second readings were put through we were a little bit concerned about some of those clauses particularly around key operators. I do believe that that has been ironed out.We certainly had some issues in regard to what constitutes a conflict of interest particularly in the light of New Zealand being so small that only one degree of separation is going to basically negate you from getting any sort of financial support if you are in a club organisation from those societies that are handing them out. I think that you have tidied that up very nicely too Mr Dunne so thank you for that.This very important piece of legislation has five areas that we largely support. It creates further transparency. It makes it a lot clearer about who is getting what and why. It identifies a much better way of who are going to be the key people who are now going to be held responsible. That is what this legislation is about too; it is about personal responsibility to make sure that you are operating within the confines of the law. And what it really is about which I like the most is cutting through a little bit of the red tape. It is about cutting through the bureaucracy to ensure that we can actually get more money returned to those communities which is what class 4 operating licences in venues are there to achieve.Unlike the counterparts that we have got—Skycity Casino—which operate under a completely different model from what we are operating under here this is sensible. This is for the community. This is about returning as much as we can back to those communities. We will support this if we get the support for our Supplementary Order Paper 95 put forward by New Zealand First which amends the 1.5 percent of gross turnover for those venue operators. We hope that it does get through for the final reading. Thank you.Hon RUTH DYSON (Labour—Port Hills): I am really pleased to be speaking in the Committee stage of the Gambling Amendment Bill (No 3) but I have to say that I am also disappointed that this is not a bill that we can wholeheartedly support. We are going to put our vote in favour of it in the end but we have got a major reservation about a key part that is in Part 1. I think that that is disappointing. With regard to public health issues such as gambling and there are many others that this Parliament debates I always think that it is good to have as broad support as possible and I think the Minister of Internal Affairs has himself been inclined to that view on occasions. So I would like him to take the opportunity of the Committee stage—because it is the only chance that he will have—to tell us why he had such reluctance to move to an agreed different approach rather than take the commission-based approach which is what Labour is opposed to in this part.This part is really the guts of the bill if you like. It covers clauses 4 to 16. We have got four Supplementary Order Papers on the Table I understand. One is from Clayton Mitchell from New Zealand First—in amongst some rather disparaging comments that I am sure he will regret making in the Chamber by the end of the evening—and not on the basis of his contribution tonight but on the basis of the content of the Supplementary Order Paper we will be voting against it. There are two Supplementary Order Papers in the Minister’s name both of which seem sensible amendments and we will be supporting them. And there is one that Denise Roche has recently tabled which we will also be supporting.I would like the Minister to take a call and just give us a straightforward explanation. Every single one of those submitters who did refer to commission-based payment agreed that we should look at a different model that was less onerous less time-consuming and more efficient and effective and that either retained or enhanced the level of transparency that the current system has. If everyone agreed with the problems and said we would work together on the solutions but that we opposed the proposed solution in the bill which is the withdrawal of the commission-based exemption—you know currently you cannot have a commission-based payment. This bill takes away that prohibition. It does not say that we are going to have one but of course it leaves the door wide open to having that happen.So I want the Minister to just explain why he was right and the rest of the world that was involved in this discussion was wrong. Everyone put their hands up and said “We will work together to find an alternative that meets the concerns that have been identified.” because everybody agreed with the concerns. We want something that is transparent that is not time-consuming that is not onerous and that makes sense for everyone who is involved in the industry but people do not want to move to this commission-based payment. So I want to understand what drove the Minister in the face of that opposition to continue to leave it in the bill. Or perhaps you know ever-hopeful that I am that the Minister will use the common sense that he is renowned for I am ever-hopeful that he might say “Well I didn’t even know that.” and now the Minister might table a late Supplementary Order Paper just to say: “Let’s in regulation make this a payment system that meets the concerns of the submitters.”As I said at the beginning Labour would have really liked to support this bill 100 percent because on issues that address public health concerns such as those that gambling causes it is best to have a consistent approach and an approach that is supported by the majority of Parliament. But in this case I am not sure where the Greens are going on their final vote. I know that New Zealand First has got some different concerns from what we have in that regard but this issue is one that was certainly I think quite fundamental.Commission-based payment has been acknowledged as not being the best method of payment since gambling legislation was introduced in New Zealand in 2003 and that is because it can drive the incentive to increase gambling. It does not do it deliberately; it does not necessarily do it in every case but unlike all other types of payment a commission-based payment system does have the opportunity and the incentive to incentivise increased gambling and that seems to me to be the last thing that anyone in this Parliament would want. We will have the debate about how much we regulate and how much we introduce harm reductions—you know they are all legitimate debates—but I do not know of a single member of Parliament who would say that incentivising increased gambling because of the payment system dictated in legislation is a good idea. That is why I cannot understand why we have still got it in this legislation and I really want the Minister to explain it.I want to talk about one other concern that Labour has with this bill and that is not what is in it; it is what is not in it. We have a lot of gambling legislation so it is certainly not the last opportunity. I hope the Minister has got another bill coming to Parliament soon.Hon Peter Dunne: At least.Hon RUTH DYSON: At least one. We might have a few in this term of Parliament. It is something that needs to be worked on on an ongoing basis not because anything is faulty in the legislation that is before us now although it is but that is not the reason that we need to continually revise gambling legislation. The reason is that technology changes. People’s habits change. We now have a situation in regard to online betting that none of us would have envisaged when the original legislation was introduced in 2003. The world is a different place and if we want to maintain the contribution going to community organisations and the harm reduction protection of problem gamblers then we need to continually revise the legislative framework. That is the other area on which this bill misses out.This was an opportunity for some serious measures to be introduced in terms of gambling harm minimisation and again this was a very strong point of contribution from a large number of submitters. The submitters we talked to and heard from were very moving. A number of them were people who told their life stories to the committee about the harm that they had caused to themselves and to their families because of their addiction to gambling and that takes a lot of courage. It takes a lot of incentive to want to do good actually—to tell their stories in that way. People came to the committee and said “This bill should have more about harm minimisation in it. Here is what happened to me because I wasn’t protected against myself.” basically. So this is a missed opportunity. I think we do those courageous people who fronted up to the committee a disservice by not having a serious contribution to harm minimisation in this bill.I know that the Committee stage is not generally the time to be talking about a lot of what happened in the select committee but because the bill was introduced and considered so long ago I had almost forgotten how much alteration the committee made. I just want to commend all the members of the Government Administration Committee. If you flick through the track-changed bill that we have before us now you will see page after page after page of unanimously agreed alterations and I think that was a result of the serious work done by all the committee members. We listened not just to the officials but also to the submitters and I think the officials worked really hard to answer our questions and to make sure that despite our reservations about some parts of the bill we were truly satisfied with the level of advice we got. You know that is pretty well always the case I guess but not 100 percent.I think in this quite complex bill short though it is we should commend the officials for the work they have done. I am sure they are looking forward to staying here until 10 o’clock as we debate this bill tonight. It is one of the few joys and opportunities that public servants have when they have worked on a bill—that they get to sit in Parliament until 10 o’clock alongside us.I have not yet seen the Minister in the chair Peter Dunne move in a way that indicates that he is going to take a call but I certainly would strenuously encourage him to do that. I think that this Committee deserves an explanation from the man holding the pen and he is the Minister in the chair at the moment. Why did we leave that door open to commission-based payments when so many people said that this could incentivise harm and we had an opportunity to get an agreed better system?DENISE ROCHE (Green): It is my pleasure to take this first call for the Greens on the Gambling Amendment Bill (No 3). Like the previous speaker Ruth Dyson I also did have to go back and review what had happened at the Government Administration Committee and in the second reading because it has been quite a long period of time since we were here in the Chamber debating these issues and a long period of time actually since we heard the submissions during the select committee deliberations.I am not usually a member of the Government Administration Committee but I stepped in because I am the gambling spokesperson for the Greens. I want to acknowledge the chair and the other members of the Government Administration Committee for the excellent way that we examined all the evidence before us and made our report. Unfortunately I do not agree with a lot of things that are still in the bill and it is for this reason that I have put forward Supplementary Order Paper 120 which actually covers several issues.We spend an enormous amount of money on gambling in this country. There are 1300 class 4 gambling venues across the country and it is acknowledged that these need to be regulated. I am pleased to see that the Minister in charge of that regulation Peter Dunne is in the chair because I do have some questions for him. The area where gambling venues need to be regulated is around where there is the potential for the funds that are generated from gambling—around how those funds are gathered where those funds come from and where those funds go to.There are parts of this bill particularly in the first part that we agree with. Things like transparency and dealing with conflicts of interest are very sensible and reasonable adjustments to the legislation. But where we do not agree is around the issue of the controls and mechanisms that should be in place in the regulation to control problem gambling and to control the ease of access to the gambling machines if there is a problem in the community. It is also about the fact that we have to acknowledge that class 4 gambling—electronic gambling machines—does create problem gamblers.There is international evidence that actually supports the fact that the machines themselves are designed to ensure that there is a percentage of gamblers who gamble regularly and that they will become problem gamblers. It is here that I believe our regulation should be focused. It should be focused on minimising harm and I think it is the duty of a responsible Government to ensure that our laws are in place to protect our citizens. That is surely what we all want across the Committee and I am sure that I would get cross-party support on that statement. It is how we go about it—fundamentally we disagree with some of the provisions in this bill in Part 1 that will liberalise access to gambling and subsequently will incentivise venue owners particularly to not control problem gambling or monitor it in the way that they are required to under the Gambling Act.Since 2003 I think it is when the first Gambling Actwas modernised there has been a strong opposition to having commission-based payments for venue operators. This I am sure will be outlined time and time again tonight. The reason—and it is the reason that we have heard put forward time and again by submitters—to not have commission-based payments to venue owners is simply that it does incentivise the venue operator to not do the correct host responsibility and to promote problem gambling.We have a situation where 40 percent of the funds that are generated for community purposes from class 4 gambling—40 percent of those funds—come from people who have gambling problems. They have limited control over their gambling behaviour. We also know that where those 1300 venues are placed they target poorer communities. Essentially they sell hopes and dreams in a very cynical way that lures people in in the mistaken belief that they will be able to get rich get out of their financial problems and basically make a life. They are false dreams. They are definitely false dreams because it is a cynical ploy by the industry to ensure that they entrap people with limited control over their gambling. It creates that sort of gambling behaviour.So we have got a few Supplementary Order Papers to Part 1—well they cover a few things. One is around removing the ability for venues to be paid on a commission basis. The other area is around removing what I think the officials have described as an incentive to venue holders with licences to extend those licences for 3 years. The reason we oppose that is that we have seen that there is very limited good behaviour in the pokie sector—not much at all. The sting which other people have referred to by the Department of Labour where its compliance team in December last year visited pokie gambling venues across the country and only one complied with good host responsibility behaviour—that seems to imply that there are very few venues that are currently operating in a way that actually says they should be rewarded for good behaviour. What I would like to see is more compliance and evidence of compliance well before we regulate to offer a 3-year licence with few controls or regulations or even oversight.The other area is around harm minimisation which is completely missing and this was one of the issues that came up time and time again in the submissions that were put forward. Some of them were really heart-breaking. What we would like to do in order for us to support the bill would be to amend the bill to ensure that there are effective harm minimisation practices in the regulations which would then have to happen in class 4 venues across the country.The sorts of harm minimisation suggestions that I have in my Supplementary Order Paper are around things like player tracking—real-time player tracking—and pre-commitment cards. This hands control over to the gambler. With a pre-commitment card they can determine before they start gambling how much they are going to spend how much time they are going to spend and then once their card has expired they are finished. This in effect limits—it is a very effective limit—the amount of gambling. Someone who wants to have a flutter can basically just go ahead and have a flutter and it will not be a problem. But for those who are starting to emerge with problem gambling behaviours it is a way for them to regulate or self-monitor their own gambling behaviour.We have also suggested that there be player tracking and this is something that we could be doing as the technology improves. I think there was some discussion—and there has been in previous bills as well—around facial technology. If you use facial technology you can actually ban people from playing on the machines and losing money. I guess we could be going down that track but actually we need to be looking at prevention before the problem happens rather than at restrictions on gamblers who already have the problem gambling behaviours in place.I was pleased to be part of the select committee to hear the submissions that we heard on that. There was some very very good and compelling evidence from places like the Auckland Council for example which although it supported the bill in many aspects—certainly around distribution of funds and increasing that to 40 percent from where it has been at 37 point something percent the issues around conflict of interests and the issues around greater transparency—TRACEY MARTIN (NZ First): Kia ora Mr Chair. I would like to take just a short call to support the contribution by my colleague Clayton Mitchell and it is an appeal to the Minister in charge of the bill the Hon Peter Dunne with regard to Mr Mitchell’s Supplementary Order Paper 95.What I hope the Committee heard was a gentleman who is actually following the values of New Zealand First which we articulated when we first came into this House. Those are that we will not oppose legislation just for the hell of it; we will oppose legislation that is in our view badly written. What Mr Mitchell has articulated is as a person who knows this industry and who understands the practicalities of it. He complimented the Minister several times during his contribution because the Minister had written a bill that in his view and in his knowledge of this industry—down on the street where this bill is going to land where the New Zealand businesses are going to have to work with it—he understands what those businesses are going to have to do. He complimented the Minister on changes that he had made and he asked the Minister to recognise that New Zealand First would like to support this bill.But there is one change that we feel needs to be made and that is around the payment structure. I have heard the Labour Party contribution and the Green Party contribution with regard to not having commission payable for class 4 gambling because it incentivises it. Mr Mitchell in his contribution argued from the real perspective from the perspective of the business owner how that does not make sense. It may very well be that for politicians sitting in this Chamber it might make perfect sense in theory and on paper. But when you are in business and Mr Mitchell told you all the other criteria that are there by which you cannot promote gambling—and I thought the pipis going off in the sun was a particularly good metaphor and one I had not heard before. It was the voice of reason about a small change that is required to gain another party’s support for this piece of legislation.I want to also comment on the fact that the contribution from the Green Party talked about problem gambling and harm minimisation. We have heard this conversation before and all due credit to them—they stay on track; they stay on message. What we know to be true is that small bars and RSAs and so on who have a few gambling machines report more problem gamblers than any casino in New Zealand and they get levied for it. They get charged because they report more problem gamblers to organisations to actually assist them to work with their problem. You could argue that that is because they create more. Or you could argue that the casinos do not report them because the casinos do not know them and that bars and RSAs are actually doing these people a service by having them come and gamble with them.I heard Miss Roche also say that Auckland Council supported many parts of this bill. Auckland Council has a sinking lid on gambling machines on pokie machines inside the Auckland city boundaries and yet the Government supports Skycity. So from that perspective to suggest that there should be more harm minimisation inside this bill is the wrong place to be directing that criticism in our view. Small bars RSAs and local community organisations that have pokie class 4 gambling machines are reporting more often. They know their clients more regularly. They care about those individuals. They do not wait until an individual is incredibly in debt before they put in face recognition. They do not wait until a person is beyond the pale as casinos have been doing and so we see that as a non-argument inside this piece of legislation.So again we appeal to the Minister. This is a small Supplementary Order Paper. It is a small change that we believe would improve the bill. We hope that the Minister has an open mind. I hope that the Minister listened and believed that Mr Mitchell came from a place of knowledge and a place of good intent around actually improving this bill. It was not from a place of politics; it was from a place of intent. So with that contribution I say that unfortunately unless this Supplementary Order Paper is able to be supported by the Minister and the National Party members and the majority of the Committee New Zealand First is unable to support the rest of the bill. Kia ora.IAIN LEES-GALLOWAY (Labour—Palmerston North): This is my first opportunity to speak on Part 1 of the Gambling Amendment Bill (No 3). Part 1 deals with class 4 gambling which if you read the website of the Department of Internal Affairs you will see that class 4 gambling not only is defined as gambling that occurs in pubs and clubs which members will be aware of but it also represents high-risk and high-turnover gambling.I was not on the Government Administration Committee and I have not heard all the deliberations. I have a number of questions both for the Minister in charge of the bill the Hon Peter Dunne and for members about the Supplementary Order Paper that has been offered up in Clayton Mitchell’s name and this question of commission payments which has been the subject of some discussion this evening.I have been trying to get my head around why it is that we need to change the system to allow for commission payments. I appreciate that venues do need to cover some administration costs and we have systems already that allow venues to cover for their administration costs. What I do not fully understand and what I have not actually heard anybody talk about this evening is why the change is necessary. I have certainly heard a lot of convincing arguments against using commission payments but what I have not actually heard from the Minister or from anybody else contributing this evening is why this change is necessary. We already have systems in place for covering the administration costs of venues and I am unconvinced. To be fair I read the explanatory note on Clayton Mitchell’s Supplementary Order Paper and that was the closest thing to an explanation that I got.What I do not understand is why a venue with x number of machines that has a high turnover ought to receive more in payment for administration costs than a venue with the same number of machines with a lower turnover. I do not understand where the additional costs come from. If you have got a certain number of machines you need a certain number of staff to keep an eye on those machines. You have got certain maintenance that goes along with them. With higher turnover I cannot see where the additional costs come from.That is a genuine question. If Mr Mitchell wants to respond to it I would welcome that. If the Minister wants to respond to it I would certainly welcome that as well. I do not understand how the mechanism lines up with the need. What is the problem that this change is actually trying to solve? I would appreciate some support. Or indeed is there a better way of doing it? Were submissions heard at the select committee that described a better way? If there are improvements that can be made are there other ways of doing it? That is a genuine question and I would really appreciate an answer to it.Another concern that I found in Clayton Mitchell’s explanatory note is that his Supplementary Order Paper 95 appears to align the commission rate with what the TAB and Lotto retailers receive. There is a fundamental difference between those. The TAB and people who sell Lotto tickets—that is their business. That is their primary source of revenue. They are doing that as a commercial practice. That is very different to class 4 gambling where actually the primary purpose for those venues is usually that they are a drinking establishment. There is some other activity going on and the gambling is sort of tacked on as an addition. Gambling under a class 4 licence is not meant to be for commercial purposes. It is not actually meant to generate any revenue for the venue. The funds generated are to be distributed by a charity and to be used for public good works—for all manner of different reasons—but not to make a profit for the venue where they are actually located.I am concerned that we are starting to blur the lines a little bit here between the way gambling for commercial purposes operates and the way gambling for the non-profit raising of charitable funds operates. So again I am very very happy to hear an explanation of that. [Bell rung] Mr Chair?The CHAIRPERSON (Hon Trevor Mallard): Oh Iain Lees-Galloway.IAIN LEES-GALLOWAY: A good choice Mr Chairman.The CHAIRPERSON (Hon Trevor Mallard): Well only just.IAIN LEES-GALLOWAY: I am very keen to hear what explanation members have for those issues as well.I am also interested in why the requests made at the Government Administration Committee for more active and proactive harm reduction activities were not taken up and not included in the legislation. I am not a prohibitionist. I am not a fan of prohibition; I do not think it works well. But I am a big fan of harm reduction and having a legalised but tightly regulated market can be a far safer way of dealing with harmful activities than prohibition can.Obviously harm reduction is vitally important to any system governing and regulating gambling and there were recommendations made to members on the select committee for identification and tracking of gamblers particularly people who demonstrate tendencies towards problem gambling and also for prepayment cards so that before people start gambling they could set the amount that they actually want to pay and that could be monitored by the venue owner. These were all rejected it would appear by the select committee but again I have not seen an explanation either in the commentary on the bill or from any of the members who have spoken this evening as to why that was.Again I have heard strong arguments from Denise Roche in favour of including such aspects in the legislation. What I have not heard is the arguments either why it is not the time or that the technology is not there or that the research does not support those approaches. Why is it that that was not included in the original bill? Why was it not included at the select committee as well?I got the feeling when I was called that the Minister might be enthusiastic about responding to some of these questions. If that is the case I would be very happy to hear some responses to the questions I have asked and look forward to asking more if the Minister’s contribution requires it.Hon PETER DUNNE (Minister of Internal Affairs): Let me respond to some of the points that have been raised during the course of the debate so far. Can I begin by acknowledging the support for the general principle of the bill that most members of the Committee have espoused. This is a constructive piece of legislation and I acknowledge the general support that it has received.The issue that has attracted the most interest is around clause 6 and I will talk about that in a moment. I also want to address the point about harm reduction issues. I need to say to the Committee that I am in a somewhat unusual position. As Minister of Internal Affairs I am the regulator; as Associate Minister of Health I am the Minister responsible for problem gambling issues which puts me in a unique position that I have to talk to myself constantly. That is quite relevant in this particular discussion.With regard to clause 6 which is the issue that has exercised the Committee—what clause 6 in effect does is open the possibility for commission payments. It does not per se introduce commission payments. What we are doing is changing the venue payment system which is inefficient and clunky and outmoded and very complicated to a more facilitative arrangement that will be devised through consultation with the sector with the Problem Gambling Foundation and with anyone else who has a particular view to express. We have not finalised decisions on that model but we want to leave open a range of possibilities.I also want to acknowledge in my health role that there are serious issues relating to problem gambling and I am not in favour of using a commission-based system to incentivise further gambling opportunities. But when we have as a result of the 2003 Act a national sinking lid and when we have work that is required as part of that legislation every 3 years to set a problem gambling levy and to set in place a programme of work that has to be done regarding harm minimisation and related issues you have got to look at the total package.The issues that Mr Lees-Galloway and others have referred to are more appropriately dealt with through the work around the problem gambling levy. We are currently in the process of striking that levy for the next 3 years. The consultations are going on literally as we speak; the recommendations will come back via the Gambling Commission later in the year and I expect that levy from memory will be promulgated in the first quarter of next year for the next 3 years and a series of activities will be identified as part of that process. That is where a lot of the issues regarding harm minimisation are likely to be addressed.On the commission one as I indicated this is a facilitative clause. At this point we will be consulting further about the detail and nature of that before a new payments regime is implemented but the important point is to get something that is more efficient more effective and less administratively complex.That brings me to a final point that I want to make which really underpins this legislation and I think goes to the point that the Hon Ruth Dyson was driving at. The speed of change in this environment is intensifying and what we need to have in our legislative structure is sufficient flexibility to be able to meet new challenges as they emerge. The preceding bill to this one as members joked at the time with a degree of accuracy took 7 years to pass. This bill is actually far quicker than that but it is still a long process to change the law every time we meet new situations. So what we are trying to do here is move to a more streamlined approach where we do have a greater degree of flexibility to meet some of the new challenges that will emerge in the future. I have indicated previously and I repeat it tonight that there is further work under way beyond the scope of this legislation that I expect to come to fruition over the next little while.But if I can just sum up for the Committee we have a situation at the moment where we need to make the gambling industry fair and responsible. We need to deal with the issues around harm minimisation and problem gambling. We have constructive and comprehensive strategies on both. This is the legislative regulatory framework. The other matters are dealt with through other mechanisms. Overall I believe this bill as it is before the Committee at the moment is a step forward and ought to be supported.Hon DAVID CUNLIFFE (Labour—New Lynn): It is a pleasure to take a brief call in this Committee stage debate on the Gambling Amendment Bill (No 3) a bill that the Labour Opposition supports with reservation. The reason that we support it is that we commend the objective of increasing the transparency around the proceeds the conditions and the regulated persons who are and who are not able to undertake the management and regulation of a class 4 gaming establishment which includes pubs and clubs. The background to that is of course that clubs such as RSAs cosmopolitan clubs and many others are integral parts of our community and we do not seek to totally ban legitimate gaming from those venues where it is the wish of the community to retain them.Having said that we have some significant reservations about the bill’s failure to prohibit—in fact its willingness to provide for—commission payments to venue operators. I turn the attention of the Committee to clause 6 which amends section 30 on page 6 of Part 1 of the bill. It states: “the only commission that is paid to or received by a person conducting the gambling is a commission payment to a venue operator that complies with regulations made under section 371(1)(dd);” which sets out a bunch of regulations.What is interesting is that it is a weakness in the current law that although there are no commission payments allowable there are cost payments available for venue costs in gaming premises. There is some history which I am sure the Department of Internal Affairs officials would attest to about operators bulking up those venue costs as a way of shall we say maximising the operator margins and minimising the payout. It is a matter that officials have worked hard to police across the sector as one issue.Embedded in that is the potential issue of conflict of interest in the way in which recommendations for disbursements are made particularly by some of the large gaming trusts which rely quite heavily on the recommendations of individual proprietors of pubs and clubs. The story goes something like: “We’ll get a grant for your rugby league club”—or other club; fill in the blank—“to have some new uniforms or sport equipment if you wink wink nudge nudge continue to get your wholesale supplies from my outlet for the next 3 years.” That is why there must be an arm’s length relationship between the proprietor and the decision-making body of the community grant disbursement as part of the increased transparency provided for in Part 1 of this bill.The ability to make commission payments rather than increasing the transparency of that system actually decreases it. Clause 6 is a clause that we remain concerned about and will track in the implementation of the bill because it allows more discretion for the venue operator to build into those commission payments what might otherwise be considered to be margin and that in turn conflagrates with the conflict of interest issue that I referred to earlier.Some of the more useful parts of Part 1 include some more transparency about prohibited relationships between operators immediate family and family members and other transparency measures which we support. We try to take a balanced approach to this legislation and again I would note that we would not seek to prohibit well-managed gaming from community venues.In making a short contribution on Part 1 I do wish to draw attention to the—perhaps we would call it—irony of this bill which is seeking to improve transparency and the lack of transparency in the process around the largest single provider of gaming venues the Skycity convention centre; and to the importance of ensuring that there is good process around the way in which any future consents for gaming machines gaming licenses the term of such licences and the conditions under which such licences are operating are consistent with Part 1 of this bill.CLAYTON MITCHELL (NZ First): I rise to take another call on Part 1 of this bill the Gambling Amendment Bill (No 3). In speaking to this bill I appreciate the Hon Peter Dunne taking a call and clarifying just a couple of things. That probably leaves a little bit of an untold story there and I just really want to refer again back to New Zealand First’s Supplementary Order Paper 95 around clause 6 and new clause 6AA which is about commission-based payments.Mr Iain Lees-Galloway along with the Greens and Labour have been sort of talking more about the Gambling Amendment Bill (No 2) and harm minimisation. This bill is not strictly about harm minimisation. This is about transparency and a clearer easier way to fundamentally work out what and how we are going to be paying those venue operators. The question was asked by Mr Iain Lees-Galloway—he cannot get his head around or fathom why a higher turnover venue would justify a higher payment.Under the current scheme it comes down to fair reasonable and necessary costs to operate a licensed premises. The difficulty you have got when you try to work out what your premises is entitled to comes down to the floor area of your gaming room compared with the floor area of your entire establishment whether you have got carpet what the wall coverings are what sort of fittings you have got in your room how many staff it takes what the turnover is on your bar what your hours of operation are and what your power costs are. You can imagine the sort of conundrum you have got to work out where you sit for a payment under the current scheme. What we are simply saying under a simple scheme—and let me give you some numbers so you can rattle those around in your brain. An average to high turnover—The CHAIRPERSON (Hon Trevor Mallard): Order!CLAYTON MITCHELL: Mr Chair?The CHAIRPERSON (Hon Trevor Mallard): Nothing is going to rattle in my brain.CLAYTON MITCHELL: Mr Chair I do apologise. It is a bad habit—I will get out of it. I mean Mr Iain Lees-Galloway’s brain. To get that clear inside Mr Iain Lees-Galloway’s brain—if you took an averagely high turnover of $9000 a week of banking in a gaming site which is over the average but we are working on that and if you look at a current site payment of around about $150 per machine it would work out somewhere around about $1350. Of course they fluctuate. The rents in Auckland can be astronomical and they could be paying twice or three times what they are paying or even five times what they are paying in Invercargill. So a site rental in Auckland might be getting $200 for a site machine and therefore generating more turnover because of the location and so forth.With each increase in turnover comes an increase in foot traffic and that becomes costs in staff. Staff costs are the largest unfixed variable business cost in hospitality. Rent is fixed power is generally fixed and a lot of those other associated costs are fixed. But the moment you have to increase your staff to cover a higher turnover venue you have got more wear and tear on the fixtures and fittings in your premises then you could surely understand economically that you could not sit within the current regime.What we are suggesting—putting it under a commission-based system—allows for higher turnover. At a turnover of $9000 a week and earning $150 a machine that is around $1300 a week—you are hardly saying that you are making a lot of money out of that. It is not even covering a portion of your rent let alone all the other running costs that go with it. What we are saying is that establishing a fee that is based on the gross turnover of gaming machines ties in with the actual running costs attributed to that site and the ongoing costs of that. That is why we think that commission-based payments are better than not.We have gone through the Gambling Amendment Bill (No 2) which talked about harm minimisation and the Minister has talked about other areas where that is going to be picked up on. We too are concerned about issues of problem gamblers. They do make up 0.03 percent of the population. That as a percentage seems pretty small—I think it is about 20000 problem gamblers—but that is not broken down into the types of problems we are having. There are problem gamblers that have TAB problems there are casino problems and there are pokie machine problems and none of that is really captured in an overall breakdown of what class 4 gambling is actually directly proportionally responsible for.The biggest problem that we have got as this very fast world of gambling changes is the new onslaught of online gambling. That is the elephant in the room. That is something that needs to be addressed that we have not even started to consider. Yet we are throwing a lot of stones and a lot of weight and a lot of anti - commission-based payments talk when it is just a simple and easy way to work out payment for the venue operators and for the Government to assist in those payments.JAMI-LEE ROSS (Junior Whip—National): I move That the question be now put.A party vote was called for on the question That the question be now put.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 31; Green Party 14; New Zealand First 12.Motion agreed to.The question was put that the amendments set out on Supplementary Order Papers 98 and 111 in the name of the Hon Peter Dunne to Part 1 be agreed to.A party vote was called for on the question That the amendments be agreed to.Ayes 104New Zealand National 59; New Zealand Labour 31; New Zealand First 12; ACT New Zealand 1; United Future 1.Noes 16Green Party 14; Māori Party 2.Amendments agreed to.The question was put that the amendments set out on Supplementary Order Paper 95 in the name of Clayton Mitchell to Part 1 be agreed to.A party vote was called for on the question That the amendments be agreed to.Ayes 12New Zealand First 12.Noes 108New Zealand National 59; New Zealand Labour 31; Green Party 14; Māori Party 2; ACT New Zealand 1; United Future 1.Amendments not agreed to.The question was put that the amendments set out on Supplementary Order Paper 120 in the name of Denise Roche to Part 1 be agreed to.A party vote was called for on the question That the amendments be agreed to.Ayes 45New Zealand Labour 31; Green Party 14.Noes 75New Zealand National 59; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Amendments not agreed to.A party vote was called for on the question That Part 1 as amended be agreed to.Ayes 92New Zealand National 59; New Zealand Labour 31; ACT New Zealand 1; United Future 1.Noes 28Green Party 14; New Zealand First 12; Māori Party 2.Part 1 as amended agreed to.Part 2 Miscellaneous mattersThe CHAIRPERSON (Hon Trevor Mallard): We now move to debate on Part 2 which is debate on clauses 17 to 20 and the schedule.ADRIAN RURAWHE (Labour—Te Tai Hauāuru):Can I also thank the Minister for his previous contribution. I think it was important for us to hear it. I know that the most substantive issues are in Part 1. There was not as much discussion at the select committee on Part 2 or submissions on this particular part but there was some concern especially from societies who did not like clause 17 in particular which inserts new section 235A into the Gambling Act 2003. They had some concerns around the appeal process to the Gambling Commission and they expressed that quite clearly to the select committee. I think that the select committee has done a very good job though on that particular part in new section 235A(1)(a) where it says: “that person exercises that right of appeal;”. I think when we heard from those submitters we heard very clearly what their concerns were.I think I also have to reflect on the whole issue around running venues as a business model as opposed to the original intent of the 2003 Act of it being a community service. I would explain it like this: over time since 2003 the way that things have been operated by the organisations and societies that own the class 4 machines has changed. I think that in the overall bill and coming to Part 2 in particular the process for making appeals to the commission highlights the very fact that things have changed and they need to reflect what is actually happening. We did hear from those operators and the societies in particular who expressed their concerns. I think the bill is much better for the changes that have been made.I would further note that our particular opposition to the two parts within this bill are in fact as I said before about the whole nature of the changes that the societies have had to make to the way that they operate. There is not a lot to say in this particular part except that overall we support this bill but the changes to that process are important mainly to the societies. But one thing I would also add is that it has been a missed opportunity to address those real issues around harm minimisation. Thank you.DENISE ROCHE (Green): I rise to take a call on this part of the bill—Part 2 “Miscellaneous matters”. But what I want to address my comments to is clause 18 which amends section 371. I have a Supplementary Order Paper that essentially deletes this clause. As the previous speaker explained this is the clause that deals with and allows for commission-based payments for venues. I would be interested in hearing a response from the Minister about why this clause is here given that there has been such strong opposition to it for so many years. It was explicitly prohibited in previous legislation. I am really keen to know why there has been a change and why allowing commission-based payments is going to be a part of this legislation when really it did not come out of anywhere or from any evidence.The arguments that we heard from the Minister at the time that this bill was introduced were around the fact that the payment for venues was complicated. Without a doubt the payment for venues is very complicated—there is a very strict equation—but it is for venue operators receiving payments for having pokie machines on their premises that they be paid actual reasonable and necessary costs. That is the exact wording: “actual reasonable and necessary costs”. Yes even though it is complicated there has been an enormous amount of work done by the Department of Internal Affairsover several years working with venue operators to try to ensure that they are able to claim what they are meant to claim for. In the past there had been other rorts perpetrated by venue operators for things like claiming for wages and for premises upgrades which were above and beyond reasonable. This is where we come to “reasonable”. There had been court cases about that.So the complexity of the regulations has been the subject of much discussion and much education actually with the Department of Internal Affairs and with the venue operators. In fact in 2009 the department began working with gambling societies to standardise venue cost schedules and it encouraged gambling societies and hosts—the venue operators—to participate in what it called the Venue Costs Resubmission Project. That was to get venues to put in their submissions so that they could work with them to make sure that they were getting it right. The Department of Internal Affairs did a report on this in September 2013. That was after 4 years of work. The department reported on the project. It was called the Venue Costs Resubmission Project. It included a series of recommendations about the calculations for venue payments including for a full review and to initially adjust some of the limits to cover where there had been increases in inflation and for example wages.This is not unreasonable. This is good practice. This is the regulator operating with the industry in a very responsible manner and the industry responding in a very responsible manner. But nowhere in the report with these recommendations did it recommend introducing a commission-based payment system for venues. So my question to the Minister is: where did this come from? Who put this forward? It did not come from the Department of Internal Affairs. The only submissions that supported this part of the bill were from the industry from venue operators themselves and from gambling societies. In fact the opposition to this part of the bill came from everyone else—the people who have been harmed by problem gambling the people who have been problem gamblers themselves and their families. They went into great detail when describing how problem gambling had impacted on their lives.If you think about who benefits from commission-based payments it is the venue operators. Who does not benefit from that? That is what is not clear to me. I do not believe that there has been a relevant cost-benefit analysis of commission-based payments to venues because surely they have not—The CHAIRPERSON (Hon Trevor Mallard): Order! I am now going to ask the member to resume her seat. I remind her that we are now on Part 2 of the bill which is a very very narrow area. The member—and she has not been the only one speaking on this part—has strayed well past it.DENISE ROCHE: I raise a point of order Mr Chairperson. I would like an explanation. Clause 18 refers specifically to commission-based payments. If you look over the page to subparagraph (iii) that is where commission-based payments are. I am referring to the submissions that we have received on this aspect of the bill.The CHAIRPERSON (Hon Trevor Mallard): I just want to remind the member that we had a substantive discussion on that areain an earlier part. The main new part—the new thing in this—is around the review of the secretary’s decision. That is really the substantive part of it and the schedule. There is quite a lot of room in the schedule but both in the second reading and in Part 1 the principle that the member is now discussing very widely was already accepted by the Committee.DENISE ROCHE: Thank you Mr Chair. I will confine my comments basically to clause 18 and to Supplementary Order Paper 120 that I have in my name which states: “In clause 18 delete new section 371(1)(dd) and (de) (page 15 line 32 to page 16 line 7).” I will probably discuss this more in the next part in the schedules because I also have a Supplementary Order Paper pretty much along the same lines to that one. I do want to know from the Minister though the justification for this clause for venues to receive commission-based payments.The CHAIRPERSON (Hon Trevor Mallard): I am sorry and I do not know whether or not I should be coaching you from the Chair but we are actually discussing the schedule now. If the member waits until after the vote on this bit then she will be too late.DENISE ROCHE: Thank you Mr Chair. I think I have probably said enough. I actually want to thank you for your assistance in this matter. I appreciate the coaching.Hon RUTH DYSON (Labour—Port Hills): I raise a point of order Mr Chairperson. Could I just seek your clarification? It was not until the member spoke just now that I realised that her Supplementary Order Paper 120 which we have already voted on over the page has amendments to clause 18 and the schedule. I do not recall you saying that we were voting on just clauses 6 to 13. Have we voted on that inadvertently in which case we need to go back or did I just miss the fact that you said “part of Supplementary Order Paper 120” when we voted earlier?The CHAIRPERSON (Hon Trevor Mallard): Just to make it clear Denise Roche’s amendments set out on Supplementary Order Paper 120 which relate to anything in clauses 17 to 20 and to the schedule are currently the subject of this debate. We have voted already on that part of Supplementary Order Paper 120 that relates to Part 1. I think it is fair to say that at that point we dealt with the principle and the substantive part of it. We are now talking about the method of regulation and frankly it is a close call whether the Supplementary Order Paper should be ruled out or not having already made the decision in a previous part. The Committee has made the decision on a previous part that it does not want the approach suggested in Supplementary Order Paper 120. We are more or less dealing with the same question again but I have been quite liberal in letting it run so far.CLAYTON MITCHELL (NZ First): I am going to take a very short call probably much to your pleasure on Part 2 clause 13 amending section 115 which is actually an amendment that New Zealand First has got there in Supplementary Order Paper 95. Quite simply what we are asking to do is to delete in clause 13 “Section 115 amended (Payment of commission prohibited)” because clearly despite not getting the support in the Committee for our first part Part 1 we will see this through to the end—The CHAIRPERSON (Hon Trevor Mallard): I am sorry if I have confused the member. We are currently dealing with clauses 17 to 20. The member has had his chance on clause 13. He spoke to it earlier actually and the amendment has been rejected by the Committee. Does the member want to have another crack?CLAYTON MITCHELL: No that is fine. I have got a Supplementary Order Paper. You are into schedules here.Hon RUTH DYSON (Labour—Port Hills): You will be delighted to know Mr Chair that I want to speak to Part 2 which starts at clause 17—The CHAIRPERSON (Hon Trevor Mallard): Well it will be a novel approach.Hon RUTH DYSON: It goes through to clause 20 and includes the schedule in this particular debate and it includes Supplementary Order Paper 120 which deals with clause 18 and the schedule. As you quite correctly pointed out the main content of this part is in relation to the review of the secretary’s decisions and what that involves. These were changes that the Government Administration Committee took some time to consider because it is not something that we normally deal with in terms of policy issues unlike the other matters that have been the subject of the majority of the vote.What I found really interesting when we discussed whether an organisation had an appeal right after the secretary had made the decision—and this is in relation to class 3 or class 4 gambling—was whether they could appeal then to the Gambling Commission how long they had to appeal and what the grounds were. What the debate indicated to me was that the nature of the organisations that we are dealing with has changed substantially since the first major gambling legislation in 2003. I think that is something that the House not during this debate should at some time give quite a lot of consideration to. I do not think that our Parliament has done that in the consideration of gambling legislation.There is the highly competitive nature between the organisations seeking to get more pokie machines basically and then after that when they are granted a licence or if they are refused a licence there is the issue of how they are able to appeal and how long that is going to take. The reason that it was so important for the organisations and why they made such a song and dance about it was that their businesses depended on it. I do not think that is how these organisations were originally established. It was certainly never the intention of the gambling legislation originally but what we have got now is an entirely different sector. We have vending operators that are dependent on their pokie machines in order to run their business. It is cart before the horse. That is why the secretary’s decision the appeals to the Gambling Commission—how long that takes how many licences they are allowed what the terms for withdrawing a licence are; all those issues—were drawn into far greater tension I guess.The other issue that became very obvious in relation to this was the groups that now get pokie money. All the electorate MPs in the Committee would be very familiar with their organisations that every year apply for pokie money and are dependent on it. The nature of their reliance I think is another problem that at some stage this Parliament needs to grapple with. They had exactly the same concerns about the issues that are outlined in clause 17 which inserts new section 235A about the review of the decision the grounds for the decision the appeal to the Gambling Commission and the opportunity to apply for a judicial review. Some of them talked about how they would have to basically get pokie money to apply for a judicial review to then be able to maintain the pokie operations of the organisation that they had a relationship with. So it is not a healthy situation actually.Clause 17 deals with the nuts and bolts of the operation. It does not deal with the fundamental policy questions about whether we think that having gambling that does public health damage should drive dependency of very good worthy community and voluntary organisations to the point that in this clause they were so anxious about the rigidity or the rigour of the licence issuing and appeal process—not because of wanting to have integrity in the gambling system but because of the potential harm that that it would do to them either as a vendor running their business dependent on gambling money or one of our really great community and voluntary sector organisations that is dependent on the pokie money for their survival. So although we looked at these provisions in clause 17 originally it was just a “Well this is just a standard process how you would go through this.” Of course you need a proper process to have a licence issued. You need a proper appeal process if there is some concern about their behaviour and all those rules in both class 3 operators’ licences and class 4 operators’ licences or class 4 venue licences are clear in here.What we learnt during our debate on this clause was entirely different. It was about the changing nature of the organisations that run pokies the huge competition that there is now and of course with more and more local authorities taking the opportunity to have sinking-lid policies on their pokie machines that heightens the tension and the inability of organisations to move their operation from one part of a city or town to another—all those issues came up during this process.I think that we did good work in considering that. I think that the small changes that we have made in these provisions—you will notice that we made small provisions right at the start of clause 17 and in 17(a) and then a deletion in clause 19 which affects new section 378 and very minor changes in the schedule. I think the changes were good but what it has left open and I would again urge Parliament in future—the Minister of Internal Affairs himself has always been interested in big policy issues. He may want to instigate a cross-party forum discussion for the issues that are not dealt with specifically in the legislation but that were debated because they were generated by the provisions in Part 2 and that is how different the organisations are now that run these machines and how the competitive nature and the licensing regime that we are discussing in this provision plus the sinking-lid policy of the territorial local authorities have combined to make it a pretty hostile environment actually. It is certainly very finance driven.The other concern that I have is the total dependence of groups on pokie money. I do not think that is a good environment whether it is a surf life-saving club or the local kids’ rugby or netball club or whatever it is. There are hundreds of examples where organisations are dependent on pokie money. I think those bigger issues need to be debated as we go forward. They were generated absolutely as a result of the specificity of the issuing of the licences of the appeal procedure and as I said of the provisions that are in clause 17(3) for the judicial review. The bigger issues I think need to be debated and I offer the Minister a gentle challenge. I think that this Parliament is up to that debate I think the members of the select committee would be happy to assist with it and I think that if we are going to make good progress on gambling legislation in the future those are hard issues that need to be tackled.Just in conclusion I want to briefly refer back to the provisions that are in Supplementary Order Paper 120 in the name of Denise Roche dealing with clause 18. I listened very carefully to the Minister’s explanation of why the prohibition on commission-based payments had been made. This is another attempt—your consideration earlier on is exactly right—but I think the Minister is unusually for him dancing on the head of a pin. He is certainly saying that this is not the way it is necessarily going to go because the regulations have not been promulgated. Sometimes when a politician says “Trust me.” you would laugh. I do actually trust that what the Minister says when he makes a contribution in the Chamber is what he believes and what is true but I do not think that this is a small issue. I want to have more confidence. Even though I do have that trust in him that it has not been made yet it does not mean that it is not going to be made. And the fact that that is now an available option remains the biggest consideration of the Government Administration Committee which heard it and I think of Parliament as a whole and certainly of the overwhelming number of submitters.I think that Part 2 minor though it may seem in terms of the policy issues that it contains leads us to the need for much bigger policy debate.JAMI-LEE ROSS (Junior Whip—National): I move That the question be now put.Su’a WILLIAM SIO (Labour—Māngere): I am happy to take a call on Part 2 “Miscellaneous matters”. It is very brief and therefore I will try to keep my comments brief as well. I do want to refer immediately to clause 17. As I understand it the Gambling Commission follows the judicial line when it comes to the appeals process. What I am noting is that before any person can apply for a judicial review they have actually got to exercise their right to appeal.The question I would ask the Minister of Internal Affairs is to do with the fact that I thought the purpose of this particular section was to ensure that the appeals process was done efficiently. Therefore there is an expectation that the appeals be conducted quite quickly. The way I read it a person could not seek a judicial review in the immediate sense unless they conducted the appeal and it reached an end. Therefore it seems like in this particular process we have actually prolonged the whole appeals process and if a decision has been made about cancelling or suspending or revoking a licence how long will this process take before a final decision is made?The reason why I ask that question Minister is that as many in the Chamber will be aware there are many sports organisations that may be dependent on the funding that comes from that particular pokie machine. To not be specific about the length of time that it will take in order for appeals to take place particularly where a licence has been suspended actually leaves those sports organisations in a bit of limbo. That is the first question.The second thing I would say about the appeals process is that what is not there which I think the Minister ought to be concerned about is the fact that the community and local government have over successive years taken a keen interest in this particular industry particularly where gambling-licensed pokie machines are concerned. What is not there is where local government can play a role or communities can play a role in the instance where a licence has been granted. What happens if local government or the local board has a policy where it is saying that it has a sinking-lid policy? Does it then have a right under this political process to appeal a decision by the Gambling Commission in order to maintain that sinking-lid policy despite the fact that a person might be applying for an extension of that particular licence?I know that the Minister would be very well aware that many communities and particularly impoverished communities have become reliant on pokie-machine gambling in fact as a natural part of them attempting to just make ends meet. There are organised communities including church organisations that would want to have the right to have a say in decisions that have been made by the Gambling Commission and in particular with the granting of particular licences in certain aspects of our community. Again that seems to be missing from clause 17. If the Minister has any intention of including the rights of local government and local boards—the rights of communities to be part of the appeals process—then it should also be in clause 20 in terms of the new schedule there. Again because it is missing in clause 17 it appears to be missing in clause 20.But ultimately if this bill is about being open and being transparent then there is nothing in here about how the Gambling Commission intends to minimise the harm that pokie machines bring to the local communities. Some years back when I was on local government on that famous Manukau City Council before it was rudely destroyed by this Government the council undertook to do a review of the impact of pokie machines on that particular city. After the council had conducted the review in 2004 it found that after taking all the money that came in and disbursing the money to the sports organisations what it ended up with was a deficit of $100 million in that community.So I would have thought that ultimately the fundamental legislation was about reducing harm. Ultimately this bill here is about being open and being transparent and yet it fails to highlight how these procedures would enable the community to have a say would enable local government to have a say and would also enable the community to see how these processes are going to ensure the reduction of harm to the local community.But I want to emphasise that I think if the Government is quite serious about being open and transparent in how it conducts this particular industry then what is missing in Part 2 clause 17 is where community organisations and local board organisations can intervene and have a say on the Gambling Commission’s decisions where licences have been granted and yet the communities may have wanted that particular licence to be no longer established or where the community has a policy or the local board may have had a policy a sinking-lid policy pertaining to that community. I am genuinely asking the Minister whether he would entertain making an amendment that can ensure that local boards and communities can have an input in terms of the appeals process in clause 17 and also in clause 20.JAMI-LEE ROSS (Junior Whip—National): I move That the question be now put.A party vote was called for on the question That the question be now put.Ayes 75New Zealand National 59; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 45New Zealand Labour 31; Green Party 14.Motion agreed to.The question was put that the amendment set out on Supplementary Order Paper 98 in the name of the Hon Peter Dunne to clause 18 be agreed to.A party vote was called for on the question That the amendment be agreed to.Ayes 104New Zealand National 59; New Zealand Labour 31; New Zealand First 12; ACT New Zealand 1; United Future 1.Noes 16Green Party 14; Māori Party 2.Amendment agreed to.The question was put that the amendment set out on Supplementary Order Paper 95 in the name of Clayton Mitchell to clause 18 be agreed to.A party vote was called for on the question That the amendment be agreed to.Ayes 12New Zealand First 12.Noes 108New Zealand National 59; New Zealand Labour 31; Green Party 14; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the amendment set out on Supplementary Order Paper 120 in the name of Denise Roche to clause 18 be agreed to.A party vote was called for on the question That the amendment be agreed to.Ayes 45New Zealand Labour 31; Green Party 14.Noes 75New Zealand National 59; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.A party vote was called for on the question That Part 2 as amended be agreed to.Ayes 92New Zealand National 59; New Zealand Labour 31; ACT New Zealand 1; United Future 1.Noes 28Green Party 14; New Zealand First 12; Māori Party 2.Part 2 as amended agreed to.ScheduleThe question was put that the amendment set out on Supplementary Order Paper 120 in the name of Denise Roche to the schedule be agreed to.A party vote was called for on the question That the amendment be agreed to.Ayes 47New Zealand Labour 31; Green Party 14; Māori Party 2.Noes 73New Zealand National 59; New Zealand First 12; ACT New Zealand 1; United Future 1.Amendment not agreed to.A party vote was called for on the question That the schedule be agreed to.Ayes 92New Zealand National 59; New Zealand Labour 31; ACT New Zealand 1; United Future 1.Noes 28Green Party 14; New Zealand First 12; Māori Party 2.Schedule agreed to.Progress to be reported presently.House resumed.The Chairperson reported the Taxation (Land Information and Offshore Persons Information) Bill with amendment and that the Committee had divided it into two bills progress on the Gambling Amendment Bill (No 3) and no progress on the Radio New Zealand Amendment Bill and the Organised Crime and Anti-corruption Legislation Bill.Report adopted.