Volume 666 Week 52 - Tuesday 24 August 2010(continued on Thursday 26 August 2010) 
Volume 666 Week 52 - Tuesday 24 August 2010(continued on Thursday 26 August 2010) 
[Volume:666;Page:13589] 
Tuesday 24 August 2010 
( 
continued on Thursday 26 August 2010 
) 
Limitation Bill 
Third Reading 
Debate resumed. 
RAYMOND HUO (Labour) 
: 
 The Limitation Bill simplifies the limitation regime by providing a general civil limitation defence to most claims. A new concept—“money claim”—is introduced. It is a new and unifying concept which means a claim for monetary relief whether at common law in equity or under any enactment. This replaces the haphazard approach taken by the 1950 Act which sets out different limitation periods for different causes of action. The limitation period of almost all claims will be 6 years after the act or omission on which the claim is based. There are exceptions or modifications to this period in cases of minority or incapacity or if there has been an acknowledgment of liability part-payments or fraud. A 3-year late knowledge period is introduced because there might be circumstances where people do not realise they have a cause of action. 
Currently the limitation period for most claims runs from the date the cause of action accrued—namely the date on which all the elements necessary to establish the claim first came together. This has been very contentious and ambiguous. Under this bill for most claims the start date will be the date when the act or omission on which the claim is based occurred. The bill provides that the limitation defence cannot be used in cases of child sexual abuse no matter how much time has elapsed since the abuse took place. There is currently a new statutory limitation period for claims under the New Zealand Bill of Rights Act. This bill rectifies that situation bringing the New Zealand Bill of Rights Act under the definition of “money claim” and the 6-year limit. 
There are two other issues I wish to revisit in the third reading. Although Labour agrees with most of the bill we disagree with the longstop period provisions. The bill provides for a longstop period of 15 years for most cases but only 10 years for Building Act cases. I acknowledge the contributions made by the Hon David Parker last night on that particular issue. I believe that it should be 15 years for all claims. Owners of houses with latent defects should have just as long to bring the claim as those with other claims. 
The second matter is related to a Supreme Court case that I cited earlier in the first reading of the bill. The case is  
Commerce Commission v Carter Holt Harvey Ltd 
. The brief background of that case is as follows: in October 2002 the Commerce Commission started an investigation relating to the misgrading of timber prior to November 2003. In August 2005 the commission brought proceedings under the Fair Trading Act in the District Court. Carter Holt Harvey pleaded guilty and was fined $900000. In October 2006 the Commerce Commission brought civil proceedings in the High Court under the Fair Trading Act seeking compensation for end-users of the timber and competitors of the company. Carter Holt Harvey applied to have the High Court proceedings struck out on the grounds that it was statute barred under section 43(5) of the Fair Trading Act having been brought more than 3 years after the date on which the loss or damage was discovered or ought reasonably to have been discovered by the commission. 
The struck-out application was unsuccessful in the High Court but it succeeded in the Court of Appeal. In the Supreme Court the decision of the Court of Appeal was reversed. What is relevant to this particular bill according to Bell Gully is in respect of “reasonable discoverability”. As drafted the bill does not define “knowledge” nor does it specify the degree of knowledge required before a claimant is taken to know or ought reasonably to know the specified facts. I quote: “It is therefore likely that in the absence of amendments to the Bill the Supreme Court’s decision in the  
Carter Holt Harvey  
case will influence the application of the Limitation Bill once enacted.” I asked the Attorney-General to take a call during the Committee of the whole House last night to shed some light on that point; it is a bit disappointing that the Attorney-General appears not to have taken a call on that point. 
Turning back to the Limitation Act nevertheless the bill appears to succeed in its goals of enhancing clarity as to the applicable limitation period. In relation to equitable claims such clarity has arguably come at the expense of equities history freedom from limitation periods. I agree with what Russell McVeagh stated in its opinion that although the concept of the “late knowledge period” may prevent injustices to claimants the bill cannot of course prescribe a code for assessing whether in a particular case a plaintiff knew or ought to have known the necessary facts. That will always be a task for the courts and one of increased significance under the new regime. I guess that would have answered to some extent the question I posed last night to the Attorney-General. Having said that I hope that with the bill being passed into the law the surgery required is no longer beyond the proper province of the courts. Thank you. 
HEKIA PARATA (National) 
: 
 Tena koe Mr Assistant Speaker. Otira ki a tatou i tenei ata tena koutou katoa. I rise to speak in the third reading of the Limitation Bill and I do so following the illustrious and comprehensive presentation made by the Attorney-General last night. At every phase of this bill he inspired us with the majesty of his comments as they relate to the Limitation Bill. I am aware that all around the country the lawyers and practitioners in this particular field are on their knees with gratitude that finally after three reports by the Law Commission we have this bill that updates the Limitation Act 1950. As members of the House who sat through this debate will know we enjoyed the technical detail that the Hon David Parker and the Attorney-General were able to swap with each other about the length of the longstop period and whether there should be the distinction drawn between claims relating to buildings and other types of claims—they gripped us with the detail that was attendant upon that discussion. We have at last an amending of an Act that has been in place for the last 60 years. It balances the rights of claimants to bring what they consider to be causes of action with defendants’ rights when after such a long passage of time the cause in their view may have become stale. 
I am pleased that we are at the point in this discussion where we will imminently be able to pass into law—since I believe all sides of the House are supporting it—this Limitation Bill. We have had the opportunity and it is apposite and appropriate to reiterate the contributions that all members of the Justice and Electoral Committee have made to this particular legislation. They have given it the scrutiny and the searing insights that this select committee has become known for as well as its burden of work—our select committee chair Chester Borrows reminded the Committee last night that 17 pieces of legislation have passed through this very hard-working committee. All members are to be applauded from the diminutive Ms Pillay to the hulking majesty of my colleague Mr Paul Quinn. He has brought his quick-witted sharp and incisive contributions not only to this bill but to all other bills that have come before our select committee. Indeed my colleague Mr Kanwaljit Singh Bakshi has also offered his clear considered and deliberate approach to this legislation. I have been but a learner at the knees of these colleagues as I have joined this select committee. I am delighted to have learnt so much from them. I end by saying that this legislation all compliments aside really does add to the strong foundation of quality legislation that the National-led Government has been navigating through this House. I commend the bill to the House. 
Bill read a third time. 
Insurance (Prudential Supervision) Bill 
In Committee 
JO GOODHEW (Junior Whip—National) 
: 
 I seek leave to have all parts of the Insurance (Prudential Supervision) Bill taken as one question. 
The CHAIRPERSON (Lindsay Tisch) 
: Leave is sought for that purpose. Is there any objection? There is no objection. 
Parts 1 to 5 schedules 1 to 3 and clauses 1 and 2 
Hon NATHAN GUY (Minister of Internal Affairs) 
: 
 I think it is appropriate to acknowledge that this bill has good cross-party support. It had its first reading in December 2009 and it received 57 submissions 31 of which were heard by the Finance and Expenditure Committee. The committee worked particularly well through this process and made some useful refinements to the bill. 
The bill generally focused on licensing and prudential regulation for all insurers carrying on insurance business in New Zealand. All insurers are to be licensed and supervised by the Reserve Bank. They must comply with prudential requirements and the Reserve Bank will be both the regulator and the supervisor. The bill aligns New Zealand with international regulatory benchmarks and expectations. It is a stand-alone measure rather than an adjunct of the Reserve Bank of New Zealand Act. 
The bill’s primary purpose is the promotion of a sound and efficient insurance sector and the promotion of public confidence in the sector which as I am sure the Committee would agree is particularly important. The bill covers all categories of insurers carrying out business in New Zealand: life non-life and medical. All insurers must have a financial strength rating except the very small insurers and the friendly societies. All insurers must have a satisfactory fit and proper risk management programme and life insurers must maintain a statutory fund to protect their long-term policy liabilities. 
As I mentioned before the Reserve Bank will have broad information-gathering powers of supervision including an active role in the management of distressed insurers. The bill has had extensive stakeholder consultation and its purposes and approach have generally been accepted by the industry. 
Hon SHANE JONES (Labour) 
: 
 Morena Mr Chair. Without wanting to protract our deliberations the record of Parliament must show that this side of the Chamber supports the Insurance (Prudential Supervision) Bill. Although it deals with a very technical area the underlying theme is common with what we said yesterday in relation to improving the quality of administration and the safeguards around the broader elements that comprise the commercial sector. For those reasons the Reserve Bank is viewed by us as being a very suitable location from which the prudential powers should be located and exercised. 
The difficulty as I recall hearing from Mr Garrett is that from time to time if insurance companies are not adequately supervised they will be like a host of other commercial institutions and be prone to whim fancy or whatever passes as the mood in the investment community—that which is enjoying vogue at that point in time. These are very important institutions and indeed a number of speakers earlier in the debate made reference to the fact that insurance companies are critical to their lives because they have a type of insurance that they are entitled to gain access to if they are without a job. I do not fit into that category because I never imagine that I will be without a job. The difficulty may be that I am not paid for the job that I end up with but such is the life associated with assuming a role outside the paid workforce. My relation Hone Harawira and I can speak at length about those matters. 
Of course the deeper problem that I have alluded to earlier in relation to this bill is that we are applying another responsibility to the Reserve Bank of New Zealand Act but we are not dealing with the underlying writ of the Reserve Bank of New Zealand Act which a number of my colleagues have referred to publicly. That is if we are to promote an export-led level of growth if we are to promote—[ 
Interruption 
]—perhaps a type of lashing is needed. My train of thought was disturbed not only by looking at Mr Foss but by the whips ringing Dr Blue. 
Craig Foss 
: You’re looking for guidance and expertise. 
Hon SHANE JONES 
: No I can rest assured. I will repeat what I said yesterday. Out of  
The Wizard of Oz 
 comes the story of someone looking for a heart another person looking for a brain and another looking for courage. I will leave Mr Foss to determine which of those qualities he seeks in his political career. However let me come back to the deeper problem which is the ambit— 
Paul Quinn 
: Are you going to do that 58 times? There are 58 of us. 
Hon SHANE JONES 
: I accept that Mr Quinn when he originally heard the story did not quite know what I was talking about but he did pick up on the reference to Gonzo the Muppet. However the broader challenge in terms of the responsibilities of the Reserve Bank concerns whether we have the right mix of focus in our current monetary policy over which the Reserve Bank has an exclusive level of authority. That largely is its writ. 
We look forward to actually engaging in a broader debate beyond the refinement of the prudential obligations that the insurance industry should observe which will be located in the Reserve Bank. But at a broader level if the current Government is good for its word and is interested in fostering an export-led economy I ask it what ideas and remedies it has to deal with the volatility and the current arc that our currency is going through. I want to know whether it is time for monetary policy which has been in place for 20 to 25 years to be opened up and debated in a very robust way to see whether it can play a more useful function in relation to advancing an export-led recovery. 
There is a real contrast between the type of sophistication that has been brought to the economic area by the current Government and that brought by the previous Labour Government. In changes of this nature broadly the current Government has built on what Labour did in its time in office. We were particularly interested to ensure that we laid down the broad architecture for those policies whether they were savings policies or measures to improve the institutions that really are the pillars of our commercial communities such as insurance and the administrators’ insurance. This Government over the last 18 months in the absence of any radical or sustainable ideas about how to grow the economy has ended up exhausting energy and time both on cutting taxes and on other issues. 
STUART NASH (Labour) 
: 
 As my colleague Mr Jones alluded to the Insurance (Prudential Supervision) Bill amends the Reserve Bank of New Zealand Act and gives the Reserve Bank prudential supervision over the insurance industry. I suppose we can have no discussion at all about the Reserve Bank without mentioning monetary policy. As Mr Jones alluded to monetary policy I suspect will be one of the election issues where National wants to keep the status quo thereby inhibiting the potential of our exporters to really really grow and achieve their potential in this day and age of globalisation. Labour conversely has a bold new plan—that is p-l-a-n; but I know that those chaps on the other side do not know how to spell it let alone what it means—to really deal with one of the three major problems that the New Zealand economy has at the moment which is a volatile exchange rate. A volatile exchange rate at this point in time means that exporters have no ability to plan with any type of certainty in relation to how much they are going to produce where they are going to sell to and how they are going to do that. The only way to do it is to work with the Reserve Bank and with the Reserve Bank of New Zealand Act. 
The introduction of this legislation the Insurance (Prudential Supervision) Bill 2009 is another significant step towards achieving clear robust regulatory arrangements across the financial sector. Again when we talk about what has happened in the financial sector we can say it has been an absolute disaster—an absolute disaster—as many thousands of Kiwis have lost literally millions and millions of dollars. I am talking about the financial sector here— 
The CHAIRPERSON (Eric Roy) 
: You should be talking about the bill. 
STUART NASH 
: I am Mr Chairperson; it is very much to do with the financial sector. 
Amy Adams 
: Yeah but the insurance part of it? 
STUART NASH 
: We are talking about the financial sector. 
Amy Adams 
: We’re talking about insurance. 
STUART NASH 
: I will get to that. If that member had something worthy to say then we might listen but she should keep quiet and wait for her turn. 
What this bill does—[ 
Interruption 
] If people listen they might actually learn something. The bill will replace outdated and disjointed legislation. It will fill gaps where no prudential regulation currently exists. If that is not part of the financial system then I am not too sure what is. Having said that I say that Government members of the Chamber have no idea at all; they want to retain the status quo when it comes to the financial systems of this country but we know that the status quo has not worked. People always go back to the status quo when they do not have a plan on how to move things forward—but anyway! 
This bill will remove the inconsistent application of requirements between different insurance sectors. The purpose of the bill is to encourage the maintenance of a sound and efficient insurance sector that promotes confidence among policyholders and the general public. Of course confidence among the general public in the financial industry has been at an all-time low due to a dreadful state of governance maintenance and management to date. 
Hone Harawira 
: Hear hear! 
STUART NASH 
: Thank you very much. The bill establishes a licensing regime for insurers and prudential regulators with compliance being largely self-administered while supervision is provided by the Reserve Bank. As mentioned this is another tool in the Reserve Bank’s arsenal of tools. We think the Reserve Bank could do a hell of a lot more in driving the economic growth of this country but it does not have the statutory power to do that. The Labour Government which we will have here in the next—I do not know—12 or so months will change things; we have a plan. The bill will cover most entities that undertake insurance business in New Zealand including life insurance health insurers captive insurers and the insurance activities of incorporated societies. It is a sensible bill and it is one that we support. It establishes as we have mentioned a prudential regulatory framework for the insurance industry and in doing so it gives a number of powers to the Reserve Bank to carry out its new role. 
I will mention some of the key provisions of the bill. It will require insurers for example to obtain a licence—and criteria for eligibility will have to be met in order to do that—and to maintain solvency. Well that makes sense does it not? Of course we want our financial institutions to maintain solvency because if that does not happen we will get what happened with the finance companies: they were insolvent so Kiwis lost millions and millions of dollars. In fact I hope the new Minister of Consumer Affairs will take a call on this bill because this legislation does affect consumers and consumers are at the heart of it. 
Hon Ruth Dyson 
: And he’s actually very passionate about that. 
STUART NASH 
: He is passionate about it; he is indeed. So I hope he comes to the Chamber. 
The bill also requires insurers to obtain and publish financial strength ratings which allow consumers to have choice but not the sort of choice that they had in respect of financial companies. This means that an insurer is transparent it is out there and consumers can look at it and understand what they are getting into. 
Those companies will have to meet fit and proper standards for directors and relevant officers. Again that is most important. If we look at the financial sector in the past 3 or 4 years we could very strongly make the case that one of the reasons why it acted so dismally—in fact it failed—is that there was not a sound governance structure at all. In fact the structure was deficient; it was missing. Insurers also have to comply with a risk management programme. Again that was a provision that was missing from finance companies. Insurers have to appoint an actuary and they have to prepare an annual financial condition report and annual and 6-monthly financial statements. 
Hon Ruth Dyson 
: Is this all in the new bill? 
STUART NASH 
: This is all in the new bill; it is a fantastic bill because it provides certainty for the consumer. Insurers also have to maintain at least one statutory fund that relates to their life insurance business which is solely for the purpose of meeting life insurance liabilities. 
This bill recognises and accommodates supervision by the home regulator of overseas insurers based in New Zealand—subject of course to such regulation meeting the satisfaction of the Reserve Bank. The bill also allows for cooperation with overseas regulators. In essence this means that if an insurance company with a parent overseas meets a whole lot of conditions deemed necessary by its governance authority—say an authority in Australia for example—then that company does not have to go through the whole rigmarole in New Zealand if the company can prove that it is good sound and robust as a lot of those key provisions that I mentioned allude to. 
The bill obliges the Reserve Bank to supervise insurer compliance with the bill and with regulations. In the event of non-compliance the bill enables the Reserve Bank to escalate supervision through investigations and ultimately through distress management and liquidation. Some regulations will be new to insurers and a transition period of 2 to 3 years will follow enactment to facilitate a path to compliance for insurers that are unable to meet the licensing requirements at the time of enactment. The insurance market is very large and diverse in this country so the transition period is important to make sure that we give every company the opportunity to comply. More specifically the bill sets out a framework of prudential regulation and supervision for the New Zealand insurance sector. The approach is generally aligned to internationally accepted insurance regulatory practice and will recognise the diversity of the New Zealand insurance market. 
I will go through some of the main areas of the bill and these are as follows— 
Paul Quinn 
: Oh! Wake me up when you’re finished. 
STUART NASH 
: The member over there yawned; that is astounding is it not? Many of that member’s constituents have lost hundreds of thousands of dollars due to a very very lax set of regulations governing the financial sector. But he does not care one bit at all. I challenge that member to call a public meeting and invite to that meeting every single person in his area—I know he does not hold an electorate and has no hope of holding one of the Hutt electorates—who has lost money to one of the finance companies and explain to them why this sort of financial regulation is not important and why it is not needed. 
The CHAIRPERSON (Eric Roy) 
: This legislation is about insurance not finance companies. The member will continue. 
STUART NASH 
: I will cover some of the main areas of this bill. In respect of the licensing of insurers licensing ensures that a consistent set of minimum standards is met by all insurers. The standards must be obtained to receive a licence and once a licence is granted insurers are able to be monitored against those standards. There is a minimum set of standards that every insurer must meet. That is most important but it is also common sense as legislation should be. That reduces the need for consumers to make complex inquiries regarding an insurer’s financial strength and other indicators. 
One of the criticisms I have is that there is such a DIY mentality to investment in this country that we need to make that licensing incredibly clear: the level of financial literacy is low so we need to make it very clear and very simple so that consumers know what they are getting into. This bill does that. Insurers covered by this new regime will need to be licensed before the legislation comes into force. The bill will come into effect 18 months after it has received its Royal assent. After that date it will be an offence to carry on or hold out that one can carry on an insurance business in New Zealand without a licence. That is most sensible. Thank you. 
CRAIG FOSS (National—Tukituki) 
: 
 Well that speech from Stuart Nash was the best indication that voodoo economics is on the way back. The platform of the Labour Party at the next election will be monetary policy apparently. Its platform will not be tax cuts affordability the cost of living climate change or jobs; its policy going around the traps will be monetary policy. 
I look forward to seeing Mr Raymond Huo Mr Choudhary etc. going around the traps and talking about monetary policy. At every meeting we will furnish our candidates and MPs with the report of the inquiry into future monetary policy which was started and completed under the previous Government at the whim of Dr Cullen and the Labour members on the Finance and Expenditure Committee what was it 2 years ago? In September 2008 I think that report was presented to the House. 
Hon Member 
: I thought this bill was about insurance. 
CRAIG FOSS 
: It was very interesting because the terms of reference of that inquiry—I am just replying to Stuart Nash the previous speaker—were agreed to and formulated by the National members including me on the Finance and Expenditure Committee and members of the previous administration. As two other speakers have already brought this debate into the realm of monetary policy for some reason— 
The CHAIRPERSON (Eric Roy) 
: It was my error to allow the previous speaker Stuart Nash a second call. I regret that but that does not mean—[ 
Interruption 
] That member can go outside for half an hour. I am on my feet; I mean that. That does not give any other member the opportunity to move the debate away from the bill. We are on the Insurance (Prudential Supervision) Bill. Members will speak to the bill in the Committee stage. 
Paul Quinn withdrew from the Chamber. 
CRAIG FOSS 
: Thank you Mr Chairman; I totally agree with you—I reiterate that the Insurance (Prudential Supervision) Bill falls under the ambit of the Reserve Bank. I make one qualification: the bill has nothing whatsoever to do with the Reserve Bank of New Zealand Act as some members have indicated although the Reserve Bank sponsored the bill and its officials helped the Finance and Expenditure Committee during the bill’s select committee process. As we are now in the Committee of the whole House it is appropriate that the officials are in the Chamber to assist the Minister and the Committee of the whole House where necessary. 
It is very pertinent to not confuse this Insurance (Prudential Supervision) Bill with any type of regulation to do with finance companies. I think I am correct in saying that not one cent has been lost within New Zealand or even in the United States from memory from collapses of insurance companies. Attention has been focused on the need for this type of supervision and for a more generic approach to all things financial. But Mr Chairman is quite right to say that bringing the debate into the realm of finance companies in Lower Hutt or somewhere has absolutely nothing to do with insurance. I reiterate that I do not believe that even one cent has been lost by New Zealanders from their funds held by insurance companies in New Zealand. 
This bill is a preventive measure and it is quite a prudent measure—the word “prudential” is in the bill’s title. Prevention is better than cure. This bill is a recognition that in modern finance where funds in finance companies and companies in the insurance industry are exposed or where there is any cross-pollination or exposure of each other’s funds it is good to have the same regulator at the top of the tree keeping an eye on everything. There are some common themes between how this bill works and how banking supervision works. Even though some of the funds involved are ring-fenced in many aspects their supervision needs strengthening. Many of these funds are quite substantial and they dwarf the funds in some of the institutions that members opposite were speaking about in those two earlier speeches. 
As tempting as it is to discuss that matter—and I note Mr Chairman’s comment earlier about sticking quite narrowly to the bill but goodness gracious me—I look forward I suppose to hearing further speeches from members opposite to counter some of the comments made. However I agree with Mr Chairman’s ruling that the previous speaker went outside the scope of the debate. Basically my assertion is that those members were totally wrong. That those members are putting monetary and fiscal policy into one bucket and giving it to the Reserve Bank—which is kind of what I heard—is very interesting indeed. 
The Finance and Expenditure Committee had 57-odd submissions on this bill. I acknowledge the process the officials who were involved and the members of the committee. I realise that members opposite are voting for this bill and once we got to the nitty-gritty there was only one point of real interest or angst perhaps in the bill for one or two select committee members. I recall them speaking about that point in the second reading debate. 
We opened for submissions on 8 December 2009 and closed on 10 February 2010. The point is that there was ongoing consultation. There was the normal process of a bill coming to the committee and then the committee opening it up for public submissions particularly from those who had not been involved in any process pre-consultation or discussions with the Reserve Bank or whoever might be running the bill. If it were a tax bill the discussions would have been with Inland Revenue Department officials. Really parallel conversations were going on. That was the correct process because the committee was totally informed as to who was involved in those discussions what material or policy changes had been made and which strong debates discussions or areas of disagreement there still were. 
Efficiency in the public sector if you like took one great leap forward in so far as this bill was concerned because it is quite substantive. If we look at just some of the background documents and some of the organisations that were involved we see overall that only one particular sector was not as happy at the outcome as others and that sector was the captive insurance industry. To its credit it made its case very very strongly. But I made the point in the committee I think that the control missing from some of those arguments was in trying to quantify the risk to New Zealand and to our reputation and aspirations as a First World financial centre if we were to be included in the same group as the Cayman Islands Jersey Guernsey and various other places like that. That would be a deliberate choice for New Zealand. On balance I am quite confident that we made the right choice. 
The committee made some substantive changes. Initially we had quite interesting discussions and debate about what insurance was in fact. We talked about whether insurance was discretionary. Members would not believe how many organisations that discussion picked up. Even if someone contributes to a fund a trust or a friendly society the key point was whether that person would have discretion on payout. Some professional bodies were included in that discussion including some Wellington organisations like the Loyal Britannia Lodge from memory. All sorts of interesting things came out of that discussion. These were organisations where fund members had put in a few dollars every week for their funeral costs intending that fund to mature in 10 20 or 30 years or whenever it might be. Originally those organisations were picked up by this bill. It is a credit to the select committee process and the Reserve Bank officials that those organisations were carved out. I think we put the cap at $1.5 million or was it $3 million? But basically there was no mischief whatsoever. The risk to the insurance part of the New Zealand financial system was very very small in so far as those bodies were concerned. 
As it turned out there were two or three types of groups. There were the very small groups. There were professional bodies such as those that offer some medical insurance veterinary insurance or dental insurance. Then there were the larger players whom we all know about such as AMI Insurance and the big-end-of-town insurance companies. Overall I still attest that on the whole they were generally comfortable. There was some detail that they were not comfortable with and some are still not very happy but all the rhetoric and allegations around this bill have quietened down quite massively. Some of the allegations about there being an increase in premiums because of this bill etc. have not come to pass because those who made the allegations were being a wee bit facetious. They had built in those premiums and made changes anyway because of other changes to the taxation treatment of the life insurance side of their businesses and the normal insurance side of the business. One side is the balloon side and the other side is the user-pays “pay as you go” - type stuff. 
One point I will raise is that other members had concerns about the impact on the balance sheets of large New Zealand insurance companies. As I said in my speech in the second reading debate that concern has been flagged for quite some time. I cannot quite remember when the bill was first introduced to the House but there have been discussions on it for quite some time. With regard to the effect of the bill having an impact on insurance companies’ balance sheets I say it will be something like 3 or 4 years all up from the first discussion of this measure to when those companies must comply. There have been allegations as to the cost for some of the policyholders trust holders or unit holders if you like for those institutions. Actually—and this came into the discussion of New Zealand regulation versus Australian regulation—after 3 or 4 years of lead time a balance sheet moves around and investment decisions are made. Some companies make those decisions based on regulatory arbitrage perhaps and others make them based on tax arbitrage. 
This is a very good bill. I acknowledge the Opposition for supporting it. Thank you. 
Hon MARYAN STREET (Labour) 
: 
 I am pleased to speak in the Committee stage of the Insurance (Prudential Supervision) Bill. Without wishing to try the Committee’s patience I want to take my few minutes in this call to describe the bill in terms of what it is not because sometimes describing something in the negative is as beneficial as describing it in the positive. We will see how we go and how much I try members’ patience in the process. 
Clearly Labour supports this bill. Our main concern was to ensure that it benefited insurance policyholders through ensuring the security the transparency and the fairness of a supervision scheme. Of course we are in agreement with that. We also support the Minister of Finance’s Supplementary Order Paper Supplementary Order Paper 155. There is a 200-page bill and a 10-page Supplementary Order Paper and both of them reflect what the bill could have been but did not go into. 
We support the bill and we support the Supplementary Order Paper but the question arises from the Supplementary Order Paper as to whether this bill seizes the opportunity that was before the Government—and before the Finance and Expenditure Committee but at the direction of the Government. In doing something essential which this bill does it achieves what it sets out to do and that is to encourage by its own purpose the maintenance of a sound and efficient insurance sector that can promote confidence amongst policyholders and the general public. 
However these are extraordinary times. To improve the insurance sector and the transparency and security of it is good in these extraordinary and uncertain times. But in fact the Government could have taken the opportunity to do something even more substantial. Here in this bill a portion of our economic structures are being given into the hands of the Reserve Bank in order for that monitoring and supervisory function to be performed. That is a good thing. 
But what the Government could have done was to take another look at the functions of the Reserve Bank and to expand its functions in a way that addresses— 
Craig Foss 
: I raise a point of order Mr Chairperson. 
The CHAIRPERSON (Eric Roy) 
: There is a point of order. I think I can anticipate what it is and without even hearing it I will uphold it. The member needs to clarify the argument she is putting in relation to the bill before us. 
Hon MARYAN STREET 
: Speaking to the point of order. 
The CHAIRPERSON (Eric Roy) 
: No. I have spoken. I have just said that the member must talk about the bill. You can make a comparative example but you must draw it into the bill. 
Hon MARYAN STREET 
: The treatment of the insurance sector as I have already said is a valid important and justifiable thing to do. But why do we not accompany that with some additional measures that relate to comparable sectors in the financial structures that we have and deal with a comprehensive range of the financial tools that are available to this Government—or that could be available to the Government with some imagination and boldness? 
In this bill we have a cringing timidity on the part of this Government that restricts it from looking at the creation of other financial and economic institutions or powers within the Reserve Bank and limits it only to the purpose of this bill which is in fact to encourage the maintenance of a sound and efficient insurance sector. We do not disagree with that but it cannot go unnoticed in the context of describing what this bill does that the Government could have done more. 
The question was put that the amendments set out on Supplementary Order Paper 155 in the name of the Hon Bill English be agreed to. 
Amendments agreed to. 
Parts 1 to 5 schedules 1 to 3 and clauses 1 and 2 as amended agreed to. 
Bill reported with amendment. 
Report adopted. 
Third Reading 
Hon NATHAN GUY (Minister of Internal Affairs) 
: 
 I move  
That the Insurance (Prudential Supervision) Bill be now read a third time 
. I wish to thank all of those who have contributed to the smooth process of this sensible and well-targeted bill through its parliamentary process. Although this morning we heard a lot of political point-scoring during the debate of the Committee of the whole House generally speaking this bill has very much cross-party support. The collaborative approach taken firstly by the industry and the stakeholders in their active engagement with officials through the developmental phase of the bill and subsequently between the industry officials and also the Finance and Expenditure Committee through the select committee process has meant that overall everyone has made a very valid contribution to the appropriate and effective outcomes that this bill will achieve. 
The purposes of the bill are to promote the maintenance of a sound and efficient insurance sector and to promote public confidence in the overall sector. The bill takes a number of steps to achieve these purposes. It establishes a framework for the prudential regulation of insurers and it requires insurers to be licensed and subject to prudential requirements. It makes the Reserve Bank responsible for supervising insurer compliance with the bill and it provides certain powers to the Reserve Bank to act in respect of insurers in financial distress. By taking these steps the bill will bring New Zealand into general alignment with established international insurance regulatory practice. 
The bill recognises the diversity and the comparatively small New Zealand insurance market and it seeks to maintain the balance of the market through regulation and making sure that that regulation is appropriate in the New Zealand context. We do not want to impose excessive or unnecessary compliance costs on the industry and overall we need to deliver an appropriate level of regulatory effectiveness. Once the transitional implementation phase is completed compliance costs will be comparatively light for compliant insurers. The financial reporting requirements contained in the bill the emphasis on governance and senior management accountability and on involvement in the process and the outsourced viewpoint of insurers’ financial strengths from independent rating agencies all contribute to a cost-efficient yet effective mode of delivery of this new regulatory model for New Zealand insurers. 
The enactment of this legislation will see the repeal of a number of existing outdated and poorly linked pieces of insurance legislation that date back in some cases to 1908. It will remove inconsistent legislative application between the different insurance sectors. In summary it will deliver to New Zealand a current relevant and international-standard model of insurance prudential regulation. As I mentioned during the Committee stage the first reading of the bill in December 2009 had wide-ranging cross-party support and general support from those within the industry. This demonstrates that across the political spectrum and within the industry there is a clear recognition of the purpose of this bill. The means by which it will achieve those purposes are appropriate to the New Zealand market that it will regulate. I commend the bill to the House. 
Hon DAVID PARKER (Labour) 
: 
 As earlier speakers on behalf of the Labour Party have said we support the Insurance (Prudential Supervision) Bill as far as it goes. It does improve the prudential supervision of insurance companies. It will help protect New Zealand consumers by ensuring that those insurance companies act prudently maintain prudent balance sheets and do not fail. That is important because insurance companies are repositories of not just contracts of insurance which people expect them to honour—for example if people have life insurance they expect the insurance company to honour the contract when they die—but also money through endowment policies and the like. So we need to ensure that they are robust. That is good as far as it goes. 
I think the bill has been brought forward because of the effects of the global financial crisis and the failures we have seen around the world of some very large insurance companies which have cost many billions of dollars not just to consumers through insurers not being able to honour their contracts of insurance— 
Craig Foss 
: I don’t think any insurance companies failed. 
Hon DAVID PARKER 
: —but also to taxpayers who have had to bail out those insurance companies. Well there have actually been some multibillion-dollar Government investments in respect of some of the insurance companies in the United States. 
In terms of how this bill works it increases the powers of supervision of the Reserve Bank of New Zealand which is the body that has been given increased supervisory powers to maintain prudential supervision of insurance companies. The point has probably been made by prior speakers that there is a lost opportunity here to go further in respect of prudential supervision of our banking sector which could assist our export sector through influence on monetary policy. At the moment the Reserve Bank has an almost singular focus when it comes to monetary policy on interest rates. It tries to take the excesses out of the economy by putting interest rates up and therefore suppressing consumption in order to ameliorate the effect of asset bubbles and to take the heat out of the economy which is inflationary. The bank’s reliance on that single instrument has had a detrimental effect on the export economy. The export economy of New Zealand has suffered a number of detriments. For a start the way in which we have implemented monetary policy in New Zealand means that we have structurally higher interest rates than our competitors. So whether one is a farmer or an exporter in the manufactured goods area one is facing higher interest rates than those faced by competitors overseas. 
That has a number of detriments. The first is that the exporter or the investor in a New Zealand enterprise has a higher cost structure than competitors overseas in respect of interest rates. So if all other things are equal a widget manufacturer in New Zealand has a higher cost structure than overseas competitors because New Zealand has structurally higher interest rates. After 20 years of monetary policy in its current incarnation we do have to question in my view whether the higher interest rates that we have structurally in the economy now are actually partly an outcome of current monetary and Reserve Bank policy. This legislation which changes the prudential requirements for insurance companies could have taken a similar approach in respect of banks so as to introduce more tools to the Reserve Bank so that it does not have to rely exclusively on the interest rate tool. 
The second detriment that is suffered by New Zealand businesses as a consequence of those higher interest rates—which also undermine their ability to invest in productive plant which is needed to improve the overall productivity of the New Zealand economy—is that we are effectively creating an unlevel playing field in a world where there are global flows of capital. A bidder who is sourcing funds overseas to bid for a profitable New Zealand business pays a lower interest rate in his or her home country than a New Zealand borrower pays when borrowing in New Zealand—unless it is a multinational like Fonterra which borrows from the international market. In the case of a small to medium sized business facing competition from an overseas purchaser for the purchase of the same assets—again if everything else is equal; if it is facing the same wage costs the same sale price for its goods the same cost for its raw materials—the overseas buyer can afford to pay more for those productive New Zealand assets compared with the New Zealand purchaser of those assets because the overseas purchaser has a lower cost of funds. So all other things being equal overseas purchasers can afford to pay a higher capital sum for that same business enterprise and I do not think that is in the long-term interests of New Zealand. So we need to have a different mechanism for the Reserve Bank in order to take the pressure off the interest rate device. 
We also know that the sole reliance on the interest rate device is according to the exporters causing volatility in our exchange rate which is difficult for them. The volatility of the New Zealand exchange rate is extreme. The New Zealand currency is the fourth most traded currency in the world. It is an astounding statistic. Our currency is traded more than the Indian rupee a vastly bigger currency than New Zealand’s. It is traded more than the Brazilian real. It is traded more than the South African rand. These economies are vastly bigger than New Zealand’s economy yet there is more trade in the New Zealand dollar than there is in any of those currencies. I think it is even traded more than the Russian rouble. 
Hone Harawira 
: Why is that? 
Hon DAVID PARKER 
: Perhaps it is because we have structurally higher interest rates and people are speculating on their knowledge that the Reserve Bank pulls that trigger harder than most other countries in the world have done historically. So the exporters say they need some more tools in the tool kit other than the interest rate and they say we need to be using prudential tools in respect of banks more than we do. That is why is this matter is relevant to this discussion. Here we have the Reserve Bank being given more tools in respect of prudential supervision of the insurance sector yet in the banking sector we have very limited ways in which those prudential tools can be used by the Reserve Bank. 
The Reserve Bank has two main functions. The first is the maintenance of stable prices and the second is the maintenance of stability in the financial sector. There is not much doubt that although relative to the rest of the world we did pretty well during the global financial crisis we were not perfect. We had to have Government guarantees of banks in terms of both retail deposits and wholesale deposits and we had to have the Reserve Bank buying packets of securities from financial institutions. So although we might have done better relative to some other countries—partly because of the savings history of Australia and the strength of its banks not because of our own New Zealand - based savings I would note—it is true that we are not perfect. I think it is worth considering increasing the powers of the Reserve Bank in respect of not just insurance companies but also banks so that the banks can use prudential ratios to stop the rapid growth of credit in boom times. 
In New Zealand we ratchet up the interest rate. The interest rate that New Zealand borrowers including exporters have to pay goes up and their cost structure goes up. Actually most of that money ends up going overseas because it is owed to overseas lenders. It does not stay in the New Zealand economy. The Labour Party believes we should be conferring on the Reserve Bank and making explicit that instead of relying purely on interest rates it can actually adjust prudential ratios for the banks so that they have to source more of their money offshore. Sometimes they will have difficulty doing that and we will stop some of these flows of “hot” money in and out of the country which is what really caused the over-inflation of the property market. The over-inflation of the New Zealand property market was not based on New Zealanders’ saving more money and therefore having more money in the bank to spend on assets; it was actually because the liquidity in the New Zealand economy increased because of the banks borrowing a lot of money offshore and lending it in New Zealand. That was good for the banks—they earned an extra margin—but it was not good for the New Zealand economy because it inflated the property bubble and added to the imbalance in the New Zealand economy. 
This bill is good as far as it goes but the Government is missing an opportunity to make it explicit that the Reserve Bank can use prudential ratios for monetary policy purposes. It can do that only tangentially at the moment; it can use prudential policy first and foremost only for the prudential supervision of the banks. We say that the Reserve Bank needs to be doing more than that and use prudential ratios to control the growth of credit. Thank you. 
CRAIG FOSS (National—Tukituki) 
: 
 That was an incredibly scary scary speech from the Opposition’s spokesman on finance the Hon David Parker on the Insurance (Prudential Supervision) Bill. If people offshore are listening to that speech—they are probably not up at the moment; it is very good if they do not hear it though I guess they can access  
Hansard  
at some stage—my goodness gracious me! The only saving grace is that Labour is somewhat behind in the polls so the impact of what it is saying will probably not be reflected in the New Zealand markets. 
H V Ross Robertson 
: It won’t be long. 
CRAIG FOSS 
: Perhaps it will not be long but I say to the seasoned member from Auckland over there that we have just heard that essentially the party that would like to be Government—the second-largest party in New Zealand—is saying we should get rid of the inflation target. It says we should no longer target inflation. That is essentially what that party is saying. It wants to fix the currency or something because the implication of taking volatility out of the currency is a fixed exchange rate. Members opposite talk about volatility in the currency and then they talk about exporters. Here is a question: would they like the currency to be volatile around 40c to US$1 or would they like it to be stable at 80c to US$1? Which one? 
Hon Member 
: 60c. 
CRAIG FOSS 
: Would they like it stable at 60c or volatile between 35c and 45c? I am somewhat flabbergasted at those members. Do we have School Certificate any more? I do not know whether they passed it; it is quite obvious that they did not. 
Let us just think through what Labour members are saying. Here is the point: New Zealand is a debtor nation. New Zealand in 2000 owed the world $100 billion; New Zealand now owes the world $175 billion - odd. On the other side of the House they are talking about savings problems but actually $75 billion more was borrowed from overseas by New Zealanders—both private and State—over the 9 years of the previous Government. I now understand why they want monetary policy - type inquiries and why they want to go around the country and campaign on them rather than on the growth story of this Government. They are in denial. They are actually blaming the monetary policy settings for the Reserve Bank and they are blaming the Reserve Bank of New Zealand Act. Members should recall that under their watch inflation used to be 0 percent to 2 percent and then it went to 0 percent to 3 percent. Under their watch inflation was floored at 3 percent so we knew no upside. The cost of debt for New Zealand—the discount of future cash flows of any investment in New Zealand—went up and the present value went down. CPI was floored at 3 percent—not capped at 3 percent—under their watch. So maybe we can understand why they are in denial and want to change those actual targets and those settings. 
Labour members talk about not wanting volatility. The currency against the US dollar went to 80c under their watch—80c. It has been 73.5c or 74c under this Government but it went to 80c under their watch. If they want to moan about volatility fair enough but do they want it fixed and less volatile at 80c volatile at 40c or somewhere in between? How will they get there? Only one message has been heard—beyond perhaps the Bowen triangle if you like—in the financial markets who lend to New Zealand. The financial markets who fund New Zealand’s mortgages who lend to fund working capital in New Zealand are hearing that the second-largest party in New Zealand—the party that aspires to be the next Government; the party that was in Government for 9 years—wants to throw out New Zealand’s inflation targets in the Reserve Bank of New Zealand Act it wants to bring in some kind of premium on petrol I suppose and it wants to bring in some prudential management on mortgages or something. It is all State control. We need a lot more clarity. There used to be a party in the House that went down this path all the time. There was some popular stuff all around it. Actually there was. Yes exporters are having a bit of a squeeze at the moment when referenced to the US dollar. But those referenced to the Aussie dollar are not doing too badly. They are not doing too badly actually. At NZ40c to US$1 which customers would be coming to their door? Perhaps we would have some importers coming in and exporters would start to be a bit more comfortable trying to manage their way through. 
Members on the other side of the House need to think through just exactly what they are trying to say. They are in denial. The problem is not monetary policy; the problem was the balance between monetary and fiscal policy under the previous Government which is what we are trying to address. Fiscal policy resulted in real wages in New Zealand increasing only 3 percent over 9 years. They increased only 3 percent over 9 years because of the fiscal settings of that Government. What were those fiscal settings? An incredible hike in tax rates and tax take—$25 billion more tax was taken in 2007 than in 2001. Members on the other side have gone quiet. It was one of the key reasons why real wage growth was only 3 percent. The problem was the balance between fiscal and monetary policy. The learned speaker on the other side was constantly saying that we have to fix and tinker with monetary policy. Actually Government grew 20 or 25 percent over a couple of years the tax take was $25 billion more and New Zealand’s indebtedness went from $100 billion to $175 billion under their watch. Monetary policy ain’t got nothing to do with it. 
Then they talk about the housing boom. Do members know what fed the housing boom? Thank you Mr Deputy Speaker; this is a third reading speech. Do members know what kicked off the housing boom? It was the increase in the top marginal tax rate from 33c to 39c. If members do not want to take my word for it that is OK. There is plenty of research out there. I tell them to look at some of the archives and look what is happening now with the market when it is moving from 39c to 33c and aligning the rates because they created this credible arbitrage. If members want further evidence they should look at the briefings to the incoming Minister be they tax or fiscal. They should look at those taxpayers whose income interestingly enough sits around $59000—$1000 under that for the top marginal tax rate. 
Anyway this is a good bill. I felt the need to reply to some of the somewhat confused speeches from the other side of the House; no doubt we have a couple more coming. As I acknowledged earlier I appreciate and acknowledge the work of the committee and the House on this bill. I acknowledge political points from members on the other side as naive as they might be. I am grateful for their support of the general thrust of this bill and I am sure the whole House is grateful for their backing of the general thrust of the Insurance (Prudential Supervision) Bill. Thank you. 
Mr DEPUTY SPEAKER 
: Before I call the next speaker I say that I have given some latitude to both sides of the House in this debate. This debate is not about monetary policy—that is very clear. If we look at the provisions and the parts of the bill we see it is not about monetary policy. I ask future speakers to bear that in mind. Although one can certainly refer to monetary policy it cannot form the substantive part of the debate. This is a third reading debate so the speeches are not open-ended like in a first reading debate. I also draw members’ attention to Speaker’s ruling 117/4 in particular which says that “On the third reading of a bill a member cannot discuss—(1) Any matter not included in the clauses of the bill;”. That is very important as we proceed. I trust that future speakers will bear that in mind. 
Hon MARYAN STREET (Labour) 
: 
 Yes I will bear that ruling in mind. However I think it is also appropriate in third reading speeches to be permitted a little bit of rebuttal. There was a good deal of misrepresentation in the previous speech by Craig Foss that should not go unanswered.  
There was misrepresentation of the Labour Party’s position on the inflation target under the Reserve Bank and that needs to be dismissed. Labour has never said that the inflation target should go wider. We know that inflation can have a devastating effect on people’s standard of living especially on Kiwi householders with fixed incomes and people who struggle to have anything left over at the end of the week.  
To return directly to the Insurance (Prudential Supervision) Bill it is fine as far as it goes. That is what we have said and that is what the previous Labour speaker said very eloquently. This measure is designed to improve prudential controls over the insurance sector and provide fairness transparency and security over the supervision scheme for the benefit of policyholders. But it cannot go unsaid that this bill represents a lost opportunity. 
We are in extraordinary economic times. We have seen the collapse of economic orthodoxy. We have seen the collapse of financial institutions. We have seen the punishment of innocent people who entrusted their savings to banks financial houses and economic structures on which they should have been able to rely. The financial crisis that we find ourselves in as part of the global community is not the construction of the Labour Party or the former Labour Government. It is not our construction. It is an international phenomenon. However the unfortunate thing is that the New Zealand currency bobs about on the ocean of international trading in a way that disadvantages our exporters. In order to assist the economy to recover we need to assist exporters. 
One way to assist would be to alter monetary policy and the kinds of prudential structures that exist in the economic system. Taking one measure this bill when others could have been employed is a lost opportunity. It represents timidity—in fact I said earlier that it was cringing timidity—on the part of this Government. It has not been bold enough to deal with some of the big issues in order to restore faith in economic and financial structures. 
All that this bill addresses is the insurance sector. It is a reasonably good bill that is improved by the addition of the 10-page Supplementary Order Paper which clearly indicates that the Minister of Finance realised that not everything was right in the first draft of the bill. We support the Supplementary Order Paper—we support that. But why take baby steps towards addressing and correcting financial supervision when giant steps are required? Quantum leaps are required not just step changes—in this case a baby step change—if we are going to provide our exporters who are far and away the money earners in this economy with some stability in order for them to trade profitably. It is good that we have security transparency and fairness in a supervision scheme for the insurance sector and for the policyholders within that sector. Of course anything that protects and buffers policyholders—ordinary New Zealanders and New Zealand businesses—from the vicissitudes of the fluctuating financial situation in the world at the moment is good and worth supporting. But it is essential to note that this baby step will not fix the things that need fixing. 
This bill will not—and it could have—address the core issues at the heart of the financial and economic malaise that encompasses the world at the moment. The heavy trade in the New Zealand dollar comes at the price of our exporters. It makes our dollar volatile. It makes it very difficult for exporters with very low margins—like most of our commodity producers—to anticipate and roll with the punches in their trading functions. That makes exporting a risky business. It will take more than this bill to fix that. 
This is one measure of many that is appropriately being put into the hands of the Reserve Bank as an independent arbiter to monitor and supervise. On this side of the House we believe that the Reserve Bank needs clearer legislative authority to allow it to use prudential powers to support wider-ranging monetary policy—a different mix within our monetary policy settings. We would address the Reserve Bank’s powers and we would welcome the inclusion of these supervisory functions in its powers but we would look at other powers that the Reserve Bank ought to have because it is hamstrung by the limitations of the tools it has at its disposal. Of course we want inflation controlled. Of course we want stability of prices. But we also need additional measures to fix the kinds of problems that New Zealand experiences to take pressure off interest rates to make our dollar a less attractive trading currency than it currently is and to allow our exporters to flourish. Labour would make those changes. We believe that we should make them. We believe that this bill is heading in the right direction but it is not the step change that the Prime Minister talks about. 
Not only is the step change in this bill insufficient but it represents a lost opportunity. We have lost an opportunity to do something bold something that would truly make a difference to the economic direction of this country something that would support our exporters enable our interest rates to arrive at levels that are manageable and increase capital flows to exporters. The provision of prudential supervision over the insurance sector is good and we will support it but— 
Mr DEPUTY SPEAKER 
: I am sorry to interrupt the honourable member but her time has expired. 
DAVID CLENDON (Green) 
: 
 I am pleased to take a short call on this the Insurance (Prudential Supervision) Bill. Although it is somewhat against the trend of the debate so far this morning I will try to focus on the insurance industry sector and some of the very major challenges that are coming before it. In fact they are already before the sector. 
We have supported this bill so far and will continue to do so. We believe that the insurance industry has been largely unregulated. That is against international norms and expectations and indeed against local expectations as well. There has been a degree of self-regulation in the New Zealand insurance industry and to be fair for the most part that has worked. The industry has been proactive in developing its own framework for self-management. It has set out to achieve a fairly high standard of ethical behaviour a degree of transparency and the requirement of some proof of financial solvency within the sector. 
However we cannot be at all complacent. Clearly there is a history of reliability within the New Zealand insurance sector. The same could be said for the financial sector up until quite recently as was referenced by the previous speaker. We know that goodwill and past performance are far from being reliable indicators of future performance and the potential for future risk and indeed collapse. The insurance industry has never been one for the faint-hearted. There are some significant and some very new and demanding challenges ahead of it so this bill is timely to the extent that it does endeavour to give some surety or at least a degree of acknowledgment that the sector needs to be regulated. 
The bill is complex it is wide ranging and there were elements within the original drafting that caused us some concern. Those concerns were also reflected by other stakeholders industry people and political interests as well. One of the primary concerns we saw was that the bill as originally drafted on the matter of solvency standards created the potential for New Zealand - based operators and companies to have a significant disadvantage particularly against providers from Australia. That could have imposed a competitive disadvantage on our companies and potentially could have driven our New Zealand insurers offshore. Fortunately the select committee did some useful work and responded to some of the submitters. The provisions of clause 53 essentially remove the likelihood of sending our insurance industry overseas. 
It is clear that one of the more serious challenges facing the industry which makes the need for regulation to better protect consumers against the likelihood of industry failure is the reality of climate change and the impact that will have on the assets that the industry protects and in which the industry invests. It is a considerable amount of cash every year. Insurers internationally are recognising that global warming and climate change are a serious business issue as well as an environmental issue—that the two are intertwined. To that end international companies are endeavouring to lead by example to reduce their own environmental footprint and to encourage suppliers and customers to do likewise. IAG is far and away the largest player in the New Zealand market. It has gross written premiums in excess of $1.2 billion and holds something like 2½ million policies. The company is also one of the most active in advocating for and acknowledging environmental and social as well as financial considerations being incorporated into risk assessments. 
Climate change is already having and will continue to have serious consequences for our natural and our built environments our national and local infrastructure and our ability to conduct business and to maintain the integrity of our communities. We are already seeing both locally and internationally instances of much higher intensity and much more regular adverse weather events than we have seen historically. The insurance companies the industry that are carrying the risk for any damage to our natural and physical resources are of course highly exposed and will become more so as climate change and the effects of it continue to develop over the coming few years and decades. If we do not respond quickly if we do not respond intelligently and if we do not respond by changing our policies and our practices towards future-proofing our private and public assets against the effects of climate change we can confidently expect to see the insurance sector as all others come under increased pressure and increased likelihood of failures and collapses. Failure to future-proof our economy by attending to the effects of climate change will see the insurance industry either taking some huge financial hits or potentially withdrawing cover from the areas most exposed to the risks and challenges of climate change. 
I will quote from IAG’s website which reminds us that that company is the largest player in the New Zealand industry. This company has become very active in the area of sustainability and in acknowledging the threats to the industry. The company states that “The weather has become a vital concern to the insurance industry. … We accept the strong scientific consensus that human-induced climate change is real. The consequences of climate change are being seen and heard with higher frequency and greater intensity. Those who live in risky areas could well find insurance less affordable and less readily available unless new solutions are found.” 
The bill we are debating today is one useful and positive step towards finding new solutions. It provides a mechanism for the continued evaluation of the financial and operational health of the insurance sector. It should to some extent provide an early warning system if you like that will let us know whether any players in the sector are starting to get into any real difficulties. That is a necessary element albeit in itself not a sufficient one of what must be a much more comprehensive and much more sustained response to protecting our individual and our collective future in what will be a much more dynamic much more unpredictable and much more volatile physical and economic environment. Kia ora. 
AMY ADAMS (National—Selwyn) 
: 
 It is a pleasure to take a call on the third reading of the Insurance (Prudential Supervision) Bill. Before I get into the detail of my contribution I acknowledge the previous speaker for making an interesting and thought-provoking contribution. It was one of the few speeches this morning that actually focused on the insurance sector and I found that quite refreshing so I thank Mr Clendon for that. 
As we have heard across the debate on this bill’s passage through the House this bill focuses on ensuring that our insurance sector is robust and that the public can have confidence in it. It is one of a number of measures that have been taken around the supervision of various entities within the financial sector. There has been quite some discussion around the need for care in that area and certainly that view is shared across the House. But we do have to be careful I think when we are talking about prudential supervision not to get caught up in the hysteria of concern around one aspect of the financial sector and use that heavy-handed and emotion-fuelled response to deal with all aspects of the sector. 
The aspect of the bill I want to focus on in my contribution is that yes the insurance sector must be regulated; yes we need to bring it into line with international benchmarks and that is certainly what this bill is doing; and we need to ensure that there can be public confidence in what is a very important sector for all New Zealanders. What we have to be careful of though as we must with any regulation that we bring into existence is the need to have a balanced and appropriate response to the scale of the issue in this sector. We are not talking about finance company failures we are not talking about banks and we are not talking about some other more worrying aspects of the financial sector. We are talking about the insurance market in this bill. 
As my friend Mr Foss said in an earlier contribution this is not where the problem has been in terms of New Zealanders losing vast quantities of money. We recognise that the insurance sector needs to be appropriately regulated and I think that giving the Reserve Bank the power to ensure that all insurance companies that carry on business in New Zealand need to be licensed and subject to various prudential supervision requirements which we can talk about later is an appropriate step. But we have to be mindful of the need to be balanced in our response. 
The Minister of Internal Affairs in his contribution at the beginning of the debate described the bill as sensible and well targeted and I think that is exactly right. But I would add to that comment the word “balanced”. The challenge we always have is to ensure that our response is balanced and appropriate. Maryan Street in her contribution referred to it as baby steps. If Labour had a view of what else needed to be done to regulate insurance companies we certainly did not hear it from Labour members during the select committee process. If this is a baby step I challenge those members to tell us what in the insurance sector— 
Stuart Nash 
: No she wasn’t talking about this bill Amy—she was talking about the whole area of monetary policy. 
AMY ADAMS 
: Well she was making a speech on this bill I say to Mr Nash so it is not unreasonable to assume that she was speaking about it although it might be an unreasonable assumption to make that Labour would actually talk about the bill in front of us. But she referred to it as baby steps and I disagree with that. In terms of the insurance sector this is exactly the appropriate response needed for the level of actual risk and concern. 
It is worth pointing out that the powers that can be exercised under this bill have to be exercised for the purposes of promoting public confidence in the sector. That is the test. We do not need to regulate for the sake of it. There is no point in measuring the success of our supervision programme by the sheer quantity of red tape we create. We have to ensure that what we have done is no more than necessary because let us not forget that any time we put compliance costs on business—and insurance companies are no different—that cost is passed through to consumers. If we care about keeping down the costs to consumers we have to be mindful of not over-regulating. 
This bill is an appropriate response to the challenges faced by the insurance sector. I think the amendments made by the Finance and Expenditure Committee which I described in my second reading contribution will assist in getting that balance right. We now have a response that is appropriate that is well considered and that will serve the needs of this sector and the New Zealand public. I thank the House for working for the large part collaboratively and constructively on this bill during its passage through the House. It is certainly good to see such important legislation having widespread support in the House. I take the opportunity once more to commend the bill to the House. Thank you. 
STUART NASH (Labour) 
: 
 I also rise to support the Insurance (Prudential Supervision) Bill. This bill is important to the people of New Zealand for three reasons which I will outline and elaborate on. The first reason is that this bill is another step in achieving clear robust laws and regulations across the financial sector. The second is that it will provide a much higher level of security to New Zealanders with exposure to the insurance industry. The third reason which is important is that it tidies up legislation governing the sector where there was an unacceptable level of uncertainty. Tightening up the legislation regulating an important segment of the financial sector and providing certainty are the three reasons why Labour is supporting this bill. These measures will help to provide confidence to all New Zealanders that their Parliament is working together to further protect their rights and their money. 
New Zealanders have lost a significant amount of money in this economic recession—New Zealanders who worked incredibly hard saved hard dreamt and aspired and who should be allowed to live and retire with dignity. Parliament has already passed legislation in several areas to tighten or make laws where there really was a deficit in the financial sector and this is just another step in ensuring that hard-working Kiwis can have confidence in the New Zealand financial sector. That is what I mean when I say this bill is another step in achieving clear robust laws and regulations across this very important sector of the economy. It is not only sensible but also absolutely necessary in this day and age. That is why we all work together across all parties on this type of legislation which benefits all New Zealanders. 
Although the New Zealand insurance sector is not generally in distress and was not in distress during the heights of the economic recession the global financial crisis has demonstrated the vulnerability of the financial sector as a whole. Currently New Zealand does not have a framework for the prudential regulation and supervision of insurers. The current insurance legislation is outdated and inconsistent in its application across the diversity of the New Zealand insurance market. 
There has been extensive consultation on the provisions of this bill. A draft version of the bill was released for consultation in April 2009. The draft bill reflected policy approvals made by Cabinet in December 2007 and August 2008. Prior to that the proposals originated from the Review of the Financial Products and Providers work stream. A discussion document was released by the Ministry of Economic Development in September 2006. A further consultation paper was released by the Reserve Bank in May 2008. 
The second reason why I support this bill is that it provides a much higher level of security to New Zealanders with exposure to the insurance industry. The bill requires all insurers operating in the New Zealand market to be licensed and supervised by the Reserve Bank and to comply with minimum prudential requirements. The Reserve Bank will have powers to act in respect of insurers that are in distress or in other difficulties and I will elaborate on these points in a minute. That said in the end the new regime has been designed around a self-managing approach. For example insurers are expected to devise and adhere to their own fit and proper risk management policies subject of course to Reserve Bank oversight. 
The cost to the Reserve Bank associated with the insurance proposals is estimated to be in the range of $2.5 million to $4 million per annum on an ongoing basis once the prudential regulation proposals for insurance have been fully implemented. The new insurance prudential supervision regime will generate transitional and ongoing compliance costs. However the new costs will be incurred largely at the stage of the transition to the new regime. Also the overall marginal cost to the industry is mitigated by its relatively light-handed and comparatively non-prescriptive approach. In addition to this foreign-owned insurers that operate in New Zealand are already subject to a degree of regulation by their home country supervisors. The regulatory impact statement concluded that the benefits contained in the regulatory regime outweighed the costs. 
I will outline some of these costs now. Insurers will incur a cost in applying to be licensed under the regime. This includes the cost of familiarisation with the new regulatory requirements self-assessment against the regime preparing an application dealing with the Reserve Bank as a supervisor and making any organisational and business changes needed to qualify for a licence. The proposed regulatory and supervisory requirements will impose additional compliance costs on insurers including the need to maintain structures to verify compliance with requirements to maintain capital in line with the minimum standards and to report regularly to the Reserve Bank. These are not onerous requirements or costs at all. They are not expected to be significant relative to insurers’ revenue and profits and they are not likely to affect the ability of insurers to continue to provide an insurance service at current levels—this was one point that we made very clear at the Finance and Expenditure Committee—although the impact on small insurers may be proportionally greater than on large insurers; we recognise that. Once insurers are licensed those costs are likely to become routine costs of doing business and we do not believe that they represent a material increase in costs over the status quo. 
Compliance with capital adequacy and solvency requirements may place constraints on insurers’ business operations to a small degree. These requirements and the associated costs are generally aligned to internationally accepted prudent practice for the insurance industry. The regulatory reporting of public disclosure requirements will impose some additional costs on insurers beyond existing levels but these are not expected to be significant relative to insurer revenue and existing public reporting requirements. The costs will be higher for those insurers that do not currently have to comply with the Financial Reporting Act 1993. 
The proposed mandatory requirement for insurers to have a financial strength rating will impose additional costs on those insurers that are not currently rated. Ratings are already mandatory for most general insurers and a number of other insurers have voluntary financial strength ratings. That is just common sense if one wants to attract consumers into one’s financial institution. The annual cost to insurers of having a rating is expected to be in the range of around $30000 to $40000. There will be indirect costs associated with ratings such as management time and the provision of information. In some cases the cost of ratings will be absorbed by insurance providers although in other cases some or all of the cost might be passed on to policyholders. In order to minimise costs for those that can least afford them the bill provides an exemption for certain very small insurers with annual gross premiums below a prescribed threshold. 
The Reserve Bank has the power to require information from insurers which the bank can require to be audited at the insurers’ expense. Costs will be incurred on a case by case basis by insurers who breach the regulatory requirements. In both cases the bank will adopt a risk-based approach to supervision which means that only non-compliant or at-risk insurers will face a specific cost. 
There are a couple of risks with the legislation. Licensing requirements may represent a barrier to entry for potential new market participants and increased supervision may reduce market discipline on insurers and increase moral hazard. 
In conclusion the reasons why Labour is supporting this bill are that firstly it is another step in achieving clear robust laws and regulations across the financial sector. The second reason is that it will provide a much higher level of security to New Zealanders with exposure to the insurance industry. The third reason why Labour is supporting this important bill is that it tidies up legislation relating to the sector where there has been an unacceptable level of uncertainty. I commend this bill to the House. 
AARON GILMORE (National) 
: 
 It is a pleasure to quickly take a short call on the Insurance (Prudential Supervision) Bill; particularly given that is my birthday I do not want to take a lot of time talking. I will touch on a couple of things. This bill fits in very nicely with the prudential security rules being put in place by our Government and it is another step in another sector. A lot of work has been done on trustees and other things but I will touch on one point briefly. Opposition members discussed at length in their earlier speeches the issues around the need for other forms of prudential security outside the insurance sector. Well actually the Reserve Bank is doing that and doing a very good job of putting in place those prudential rules particularly around liquidity rules and self-funding of deposits. I think that is a good thing and we all support that. 
This bill puts in place for the first time in a very long time a set of rules around regulation of insurance companies bringing them all together and that has to be a nice thing. It allows more surety and safety for those people out there all those mums and dads and everybody else for their insurances and their investments in insurance companies to be safer. We are highly supportive of that because it allows a greater step in the right direction to protect those savings and investments and it helps economic growth. Thank you. 
Bill read a third time. 
Motor Vehicle Sales Amendment Bill 
In Committee 
Part 1 Amendments to principal Act 
Hon JOHN BOSCAWEN (Minister of Consumer Affairs) 
: 
 The Motor Vehicle Sales Amendment Bill proposes to amend the Motor Vehicle Sales Act 2003 to improve its operation. The purpose of the Motor Vehicle Sales Act 2003 is to promote and protect the interests of consumers in relation to motor vehicle sales. This measure creates an environment in which consumers have the information and confidence they require in order to make informed decisions. 
A statutory review of the Motor Vehicle Sales Act in 2006 identified that its operation could be improved in a number of ways. The Motor Vehicle Sales Amendment Bill introduces changes to the Act to improve its operation and ensure that consumers’ interests continue to be protected in relation to motor vehicle sales. This includes ensuring consumers have access to quality information that allows them to make informed purchasing decisions. The bill also removes compliance costs and red tape for motor vehicle traders private sellers and motor vehicle purchasers. The amendments are in three broad areas: disclosure requirements registration requirements and the operation of the Motor Vehicle Disputes Tribunal. 
CAROL BEAUMONT (Labour) 
: 
 It is a pleasure to rise and speak in support of the Motor Vehicle Sales Amendment Bill and I start by acknowledging the new Minister of Consumer Affairs Mr Boscawen who is in the chair. It is good to see him here and I look forward to engaging in an interesting and robust debate with him over the next few hours on the issues in this bill. 
Labour supports this bill. It required review to ensure that it is operating effectively and that review identified a number of areas for change. Before I get into that let me start by saying we have a situation that is not different from what occurred a couple of weeks ago when the Minister of Consumer Affairs was an ACT Minister. Of course the previous Minister the honourable Heather Roy has steered this legislation through to date in this Government although much of the work was started by the previous Labour Government. We now have another ACT Minister of Consumer Affairs the Hon John Boscawen and I congratulate him on that appointment. 
Mr Boscawen is somebody of whom we do not know how he will take on his new role so we are looking forward to hearing his comments today. But it is fair to say that from this side of the Chamber we believe that an important part of a portfolio like consumer affairs is protection and that will often require us to have good solid protections in law and in regulation. Of course when we are discussing the Motor Vehicle Sales Amendment Bill and the changes that it provides for certainly we want to see that remain the case. Our concern with ACT Ministers is that they can have a philosophical objection to concepts like regulation and legislation. But I hope that in this case we will be able to agree on more things than we disagree on. 
The main purpose of this bill is to make a number of compliance-related amendments to the Motor Vehicle Sales Act 2003. Of particular significance is the increase of the financial limit on the jurisdiction of the Motor Vehicle Disputes Tribunal. I will talk more about the tribunal and its work but I will start in this first call—and I will be taking others I am sure—by acknowledging the work of the tribunal. Certainly consumer access to complaint processes is really important. Another significant factor is that they should be robust but easy to use. So this bill increases the jurisdiction of the tribunal which is a positive thing although it would be fair to say that most New Zealand consumers are probably not looking at vehicles in the range of $50000 to $100000. 
It is a good bill in that it makes some amendments to the current law. This bill was initiated under the previous Labour Government. Motor vehicle sales are very significant. New Zealand is a country that is highly reliant on roads and motor vehicles so getting this right is important. During the course of the work I undertook on the loan shark issue it was raised with me that for many many New Zealanders who cannot afford to buy their own home their motor vehicle becomes the most significant purchase they will make. So getting that process right and making sure they are protected and have redress with their problems as provided for by the disputes tribunal is very important. 
In South Auckland for example Otahuhu is an area where there are many motor vehicle sales yards. During the course of the work I was doing it became obvious to me that many people were being severely disadvantaged by the action of those motor vehicle salespeople and motor vehicle yards. It raised a particular point about enforcement of legislation because we have protections in law. We need to ensure that consumers are literate and know their rights that they are financially literate and know that they have recourse to action and that we enforce the provisions that are there. But some of the worst examples of high interest rates and extortionate levels of fees were ones that I found in relation to motor vehicle sales. So that is very relevant to this bill. 
Just looking at the specific purpose of the bill as has been said it is to promote and protect the interests of consumers in relation to motor vehicle sales. We are glad to see we are dealing with this bill. Whether it is the most urgent thing that requires urgency so it can be pushed through is another whole question but I will leave that to other colleagues to come back to. 
The specific provisions of the bill provide for seven main changes. There are provisions around processes to renew the annual registration of motor vehicle traders and that is partly about reducing compliance costs on traders. Let it be said that we have no problem with the idea of reducing compliance costs of businesses. There are some across the Chamber who often try to make out that this party is not business-friendly but that is not true. We are a party that likes to see balance and the interests of both consumers and businesses taken into account. Reducing compliance costs is not a bad thing. 
The bill also adds a requirement for providing information to the registrar when there are new directors or persons involved in the management of a registered company. It closes a loophole that prevents the automatic banning of traders whose registration has lapsed following conviction under the Act removes the requirement for a private seller to display a consumer information notice when selling through a car market and removes car market operators from the definition of motor vehicle traders. Essentially the argument is that they are just providing a space where that market takes place. The bill removes the requirement for transactions between traders or traders and wreckers to display a consumer information notice and as I have already mentioned it increases the financial limit on the jurisdiction of the Motor Vehicle Disputes Tribunal from $50000 to $100000. 
The Motor Vehicle Sales Act is not one of the oldest Acts we have by quite some way. It came into force in December 2003 and it provides for the registration regime that we are now amending with this bill. It also provides for the information disclosure requirements and the establishment of the Motor Vehicle Disputes Tribunal. The policy underpinning that which is still of course relevant is that there was a requirement for those trading motor vehicles to be registered a requirement for information disclosure concerning used motor vehicles and provision for consumer redress through the tribunal. 
When the bill was brought in in 2003 it required a review after 2 years. That review was completed and tabled in the House on 22 March 2006 and I guess it provides quite a lengthy background to this bill here in the Parliament today. 
Going back to the importance of motor vehicles which I will touch on again in later contributions I say that getting this right is important for New Zealanders who are struggling at the moment. In tough economic times making sure that consumer protection is strong and that people are not ripped off—or if they are that they have redress—is significant. People can ill afford to lose money in such tight economic times. This is why we support the Motor Vehicle Sales Amendment Bill. I am sure colleagues will also be talking about that. 
Let me also flag that I want to look at this bill later on in a broader context of consumer legislation and at how the various proposals in this bill align with what we might consider to be a robust framework for consumer protection and information. I am sure that as a new Minister Mr Boscawen will be particular interested in hearing our point of view on what a framework for consumer affairs could look like. We have some pretty strong views on that. Those in the Chamber including the Hon John Boscawen know that we have a particular interest in protecting vulnerable consumers. 
I go back to my point about motor vehicle sales yard in Otahuhu in particular vulnerable consumers who are ripped off daily by motor vehicle sales people. I am sad to say that but it is the reality. A woman called Catriona MacLennan in Auckland a journalist and a lawyer who works in the community law sector will be able to evidence that for the new Minister. I think it will be very important for him to get that information. Thank you. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I am very pleased to follow on from my colleague Carol Beaumont and to pick up where she left off—that is to reinforce the view on this side of the Chamber that vulnerable consumers are those who require our protection. I also want to talk a little bit about regulation. 
I know I bang on about regulation and people get sick of the fact that I am really interested in it but the process that has been adopted is really good and I want to commend it. Carol Beaumont mentioned in her contribution that the Motor Vehicle Sales Act which was passed in 2003 had a 2-year review built into it. I quite like that concept. Sometimes 2 years is too soon; actually given how long it has taken for that 2-year review to turn into something practical—the Motor Vehicle Sales Amendment Bill which is before the Committee today—maybe 2 years is a good time to get things cracking. That process enabled the new regulatory framework that had been put in place to be subject to the test of time and experience and the contribution of major—I was going to say “key” but I have stopped using that word—stakeholders. I shall identify the ones consulted: the Motor Trade Association the Independent Motor Vehicle Dealers Association the Motor Industry Association the New Zealand Automobile Association and Consumer New Zealand. That is not a full list but it shows us the degree of stakeholder engagement in a really good process of review. So I commend the process to Parliament and to the new Minister who has taken up the role of champion of consumers. I hope that is how he sees his role as Minister of Consumer Affairs; certainly that has been my experience from working with him on the Commerce Committee. He was probably a member of the select committee when the Motor Vehicle Sales Amendment Bill came before us and he will recall the work we put into it. 
Another thing that I thought was useful was that the review process picked up a number of recommendations. I think there were a dozen in total many of which are picked up in this bill now. Post the review a discussion document was produced that set out the proposed amendments to the Act. It was released in March 2007 for discussion. Then there is a little gap in time; I know that a general election intervened and that may have had something to do with it but the bill was introduced into Parliament on 26 May last year and it came to the very efficient and excellent Commerce Committee which reported back on 14 December 2009. So I ask why we are dealing with it under urgency on a Thursday morning when the Commerce Committee would normally be undertaking its very important work. Instead we are in the Chamber sitting under urgency. The calendar on the wall says 24 August but I know that it is not really 24 August; it is 26 August. Under urgency in this place alone time stands still. We are still on Tuesday because that was when we entered urgency. 
I notice that the Government has used the expression “extended sitting hours” and I want to put on record that I am really supportive of the change of name from “urgency” to “extended sitting hours”. The use of the word “urgency” indicates that things are urgent but if this bill was urgent it would have been dealt with before Christmas last year. It is definitely not urgent. I support the idea of asking the Standing Orders Committee to change the Standing Orders so that the expression “urgency” would be used for what is generally referred to now as “extraordinary urgency” which is when the House has to immediately take a matter through all its stages. Usually it happens post Budget but there are other occasions as well—often when we find some fault with the law that we have to correct very quickly. Those sorts of cases are genuine urgency but I think extended sitting hours of House like this should be called extended sitting hours. I know that I am slipping away from the topic but I am allowed to refer to the context of the discussion we are having at 11 o’clock on a Tuesday morning— 
Hon Paula Bennett 
: Thursday. 
Hon LIANNE DALZIEL 
: It is Thursday morning but the calendar on the wall says Tuesday morning. 
Grant Robertson 
: Forever Tuesday morning. 
Hon LIANNE DALZIEL 
: Forever Tuesday. That would make a really good song I reckon. 
I am diverting from the subject. Let me get back to the really serious issue which is that an excellent process was put in place to make sure that the Act would be capable of being refreshed after the experience of its operation. This bill essentially is an opportunity to refresh the Act. 
I think the degree of consultation that occurred—and I pay credit to the officials for that—is indicative of that process. The closing date for submissions was 20 August 2009. We received and considered eight submissions from interested groups and individuals and we heard two submissions. I pay credit to the Ministry of Consumer Affairs and the committee’s excellent advisers from that ministry for that and the reason I give credit to them is that if the bill had been controversial there would have been a lot more interest in it. The fact that they were able to do so much consultation prior to the arrival in Parliament of the Motor Vehicle Sales Amendment Bill—see I got mention of it in there—is the reason why there was so little controversy or commentary about it. 
To deal with the specifics provisions of the bill which I am sure the Chair is really keen I get on to one of the issues that the committee managed to do is update the legislation so that it speaks to the modern environment—the electronic environment—that we all operate in. We have recommended that clause 7 be amended to make it clear that the Motor Vehicle Sales Act requires motor vehicle traders to display a consumer information notice when displaying or offering for sale a used motor vehicle physically or when displaying or offering for sale a used motor vehicle over the Internet when a contract to buy the motor vehicle can be entered into online. That is the critical point that I want to emphasise; it is not a question of having a consumer information notice on every single page where a car is offered for sale on TradeMe or whatever website people are using but when people can enter into a contract to buy online that information needs to be made available. That is really important. Consumers need to have access to that information before they enter into the transaction itself. The purpose of the change that we made to the bill was to distinguish between Internet advertisements that offer the ability to enter into a contract to buy the vehicle online and therefore should display a consumer information notice and Internet advertisements that are effectively the same as classified advertisements in local newspapers for which the provision of a consumer information notice would be an unnecessary and onerous requirement. That is a very sensible arrangement that we have entered into. 
I personally would not buy a car on the Internet. I have bought other things on TradeMe but I certainly have not bought a car. 
Chris Hipkins 
: What other things? 
Hon LIANNE DALZIEL 
: I think the Chair might rule me out of order if I started talking about the lenses for my lovely Canon SLR camera. We will not talk about photography being my favourite hobby outside this place either. The point I am making is that the purpose of the legislation is to have a regulatory framework that is fit for purpose and we have to take into account the new environments within which people make purchases. It took me a long time to feel that I could make a secure purchase on the Internet. I have now managed to do that with DVDs— 
Grant Robertson 
: DVDs? Don’t try to table them! 
Hon LIANNE DALZIEL 
: I will not try to table one as an example just in case I am told it is not a document. The point is if the wording in our legislation does not match the changes in technology then it will simply not be able to achieve its purpose. I am very pleased with the changes that have been made to make the Act modern. The previous Labour Government introduced the original legislation. This Government has managed to update it and I pay tribute to it for doing that. 
I also acknowledge the previous Minister of Consumer Affairs who played a very important role. I compliment her on her presentations to the Commerce Committee. I thought she was excellent. I want to put that on the record and I think I can rightfully use a bill that she introduced to this House to do so. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I want to talk a bit about the comments made by my colleague the Hon Lianne Dalziel about people’s purchasing habits online. Although she may not yet have made her first online car purchase many many New Zealanders have. I do not have the statistics to hand but many New Zealanders are purchasing motor vehicles camera lenses and other things online. There is a growing trend whereby people are buying and selling houses online and as my colleague Carol Beaumont mentioned today these are major purchases and major decisions in their lives. When people enter into a contract to buy or sell those sorts of items it is absolutely critical that purchasers in particular can trust the process and trust that they are not being duped. That is one of the reasons why this bill is very important. 
I thank all my colleagues on the Commerce Committee for their work on this bill. I also thank Heather Roy the previous Minister of Consumer Affairs for her work on the bill and her work generally in that portfolio area. I congratulate the Minister in the chair the Hon John Boscawen the incoming Minister of Consumer Affairs on his new role. I really look forward to hearing his pronouncements and what he has to say on this bill and on future issues concerning consumers. 
One of the most important things about this bill is that it is very much a common-sense measure and a step in the right direction. That is why Labour is supporting it. The bill makes some quite important amendments to current law. As members have heard the bill was initiated under the previous Labour Government. Given New Zealanders’ high proportion of vehicle ownership the bill will make a difference for many consumers as other speakers have said. Members on this side of the Chamber certainly care about consumers and any legislation that protects consumers is important. 
As my colleague Lianne Dalziel also mentioned Labour is perplexed as to why this bill has come up again under urgency. I think this is the third time I have spoken on this bill and every single time I have spoken on it the House has I think been in urgency. Although the bill is obviously tremendously urgent it seems to have taken quite a long time in between the bits of urgency for it to come back to the House. I am a bit perplexed as to how something can be so urgent yet have a big pause until the next bit. I have been scratching my head about that given the important issues out there at the moment in terms of the number of New Zealanders who are out of work and the fact that the economy is trying to move out of a very bumpy recession. I would have thought that an important priority of the Government would be to try to create jobs and get people back into work. However this urgent bill must somehow fit into a wider plan that maybe we are not aware of at the moment. 
I have been thinking about the last time I spoke on this bill and I think it is worthwhile mentioning a few points again given the quite lively discussion that followed. We know that many people are struggling to afford to run a car let alone considering selling one and buying another because of the rising costs they are facing as a result of the emissions trading scheme. I am sure the new Minister of Consumer Affairs the Hon John Boscawen will have a number of things to say about the fact that those costs are being put on to ordinary consumers that they are facing rises in GST and that many of them are losing jobs and struggling to find new ones. 
The last time I spoke on this bill I reflected on the importance of the decision to buy a new car. I reflected on my first decision to buy a car. That car was a 1948 Morris Ten. It was kind of blue with runner boards and those little indicators that flick out. It had a crank thing in it although I did not have to use it very often. The car’s name was Maurice and he was a great car. I had him for about a year and a half and then I sold him. He cost $125 to buy and I sold him about a year and a half later for $125 which I thought was a pretty good deal. 
I asked other members who were speaking on this bill to reflect on their first cars. We on this side of the Chamber have a good outlet through which to express our views and get our thoughts out there. I am referring to our blog Red Alert. I am sure that a few members have heard of it and might even read it. I mentioned this issue on Red Alert and there has been an extraordinary number of responses right across the House and out in the community. Some people got quite emotional when they recalled their first cars and the importance of that purchasing decision which brings me back to the Motor Vehicle Sales Amendment Bill. Consumers need to be protected. 
Today I put the same question to the incoming Minister of Consumer Affairs the Hon John Boscawen. He might like to share with us some of his purchasing decisions about cars. I am sure we would all be really interested to know what his first car was. I think that the decisions people make about important purchases say a lot about them. It would be really interesting to know about other members’ first cars. I wonder what Tony Ryall’s first car was. I know that the Speaker Dr The Rt Hon Lockwood Smith takes a great interest in car-purchasing decisions as I am sure does the presiding officer at the moment Eric Roy. 
I come back to the Motor Vehicle Sales Amendment Bill and its importance. The bill amends the Motor Vehicle Sales Act which was passed by the previous Labour Government in December 2003. The bill is important because it brings the provisions in that legislation into the 21st century. It makes those consumer protections more transparent and it makes sure that the new technologies that have emerged since then and are being used in the sales of vehicles are robust. It would be interesting to do a search on TradeMe to see whether there are any 1948 Morris Ten cars for sale. TradeMe is where many people these days are looking for and purchasing vehicles. 
The bill introduces a new registration regime for motor vehicle traders and it also makes them more accountable to consumers. It will also offer some degree of flexibility in terms of participation in the motor vehicle industry. We have heard that the policy that underpins this legislation has several core elements that ensure accountability. They include the requirement for those who trade vehicles to be registered more disclosure concerning used motor vehicles and the provision for consumer remedies through the Motor Vehicle Disputes Tribunal. I know that my colleague Carol Beaumont has quite a lot of good thoughts on that. The bill increases the financial limit on the jurisdiction of the Motor Vehicle Disputes Tribunal from $50000 to $100000 which is very important given that consumers have avenues for recourse when it comes to trading. It also intends to reduce the compliance costs. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I will begin by offering my congratulations to the Minister in the chair John Boscawen. I understand that this is a very significant day for him because it is the first day that he is sitting in the chair as a Minister presiding over a bill. I also believe although I have not checked it out that it is the first day he has spoken in the House when he has not mentioned the emissions trading scheme. I am sure that is still to come. I looked through the Motor Vehicle Sales Amendment Bill and I could not work out where he might be able to fit it in. We might get through a whole bill where we hear from Mr Boscawen but we do not hear about the emissions trading scheme. I appreciate that this is a very significant day for him. 
I also acknowledge the previous Minister of Consumer Affairs Heather Roy. I am sure that she presided over this legislation very conscientiously and very thoroughly during the time that she was a Minister as she was well known for doing. 
I want to talk primarily about the consumer information notices that are required to be displayed in vehicles. I want to ask some questions either of the Minister or of one of the other members of the Commerce Committee. I have read through the bill I have gone back to the principal Act and I have read some of the information provided by the Ministry of Consumer Affairs—I know I am a bit of a geek. It is not particularly easy to follow the impact that this change will make. As I read it it is about reducing the compliance cost for people who are privately trading in motor vehicles. They will not have to display a consumer information notice as they would if they were registered car dealers. 
As I read the principal Act one of the primary pieces of information supplied in that consumer information notice is a statement that the vehicle is being sold without any finance conditions attached to it. I want to know either from the Minister or from someone else who is on the select committee what protections if any somebody who trades a vehicle privately has. It could well be that even if a consumer information notice had to be displayed as was required previously there was no protection in terms of the financing provisions for someone involved in a private vehicle transaction. Maybe someone could purchase a vehicle from somebody else in a private transaction and find that money was still owed on that vehicle by the seller and therefore the vehicle could be taken off the buyer. I understand from my reading the Act that if a vehicle is purchased from a registered motor vehicle dealer the dealer has to provide a statement saying there are no financing conditions and therefore any liability for any previous financing conditions would actually rest with the vehicle dealer rather than with the person who purchases the vehicle. But I want to receive clarification of where people lie in terms of a private transaction in motor vehicle dealing. 
I was quite surprised when I looked up the information required on a consumer information notice to find that the notice did not necessarily need to supply all of the information that I thought it would. I had always thought of a consumer information notice being a little thing that hangs in the window of the car when I go to a car dealer to buy a car and that therefore everything that was on that notice was required by the law. I understand now having read the information that that is not the case. Not all of the information supplied on the notice has to be supplied; it is supplied simply for ease of reference by motor vehicle dealers. Some clarification of that from the Minister would be quite useful. 
The reason I am particularly interested in the private transactions is that a significant amount of car trading happens over forums like TradeMe or through private vehicle sales and I think that will increasingly become the case. We are seeing it even in housing sales. People are increasingly trading their houses over the Internet through TradeMe without any involvement of real estate agents. Increasingly we will see more cars being traded without the involvement of car dealers. We need to make sure that we get this law really clear and that people are clear on their rights and obligations. That is quite important. 
While I was listening to Clare Curran speaking before me I reflected on the number of cars that I have owned. I have owned five cars. 
Hon Tau Henare 
: You’re not old enough! 
CHRIS HIPKINS 
: I have owned five cars. My first car was a Mitsubishi Lancer which was older than I am. It was a 1977 Mitsubishi Lancer; I was born in 1978. I purchased that one privately. The next car that I owned was a Mitsubishi Starion. That was my favourite car. 
Grant Robertson 
: Are you sponsored by them? 
CHRIS HIPKINS 
: Not quite; just hang on a minute. That was also purchased through a private sale. The next car that I owned was a Nissan Terrano. I still own it; that car is good fun. 
Hon Tau Henare 
: I’ve got to hear the end of this! 
CHRIS HIPKINS 
: That is right; it is good—it is worth it. I purchased that car from a licensed motor vehicle dealer. The Nissan Terrano is the only car that I have ever purchased from a licensed motor vehicle dealer and I still own it. I then bought a big Ford Transit van for the last election campaign. I bought it from a private trader and that was a very unsuccessful transaction. The van had my face painted all over the side of it; the only problem was that it did not go. We had to tow it everywhere so it was not a particularly useful addition to my election campaign. That van went by the wayside not long after the election campaign. 
Jo Goodhew 
: A non-starter. 
CHRIS HIPKINS 
: It was a non-starter but I still won. I then traded that van down for a little Nissan S-Cargo which is one of those little bubble cars. It is down in the basement quite often; people will see it down there. The bigger van would not have fitted in the basement so it was a good trade because it means that I can drive it to work. That was also purchased through a private transaction. 
I am probably not atypical of somebody my age: I have owned five cars in the 15 years that I have been driving. I got my driver’s licence when I was 15—16 years actually; I just did the maths which has never been a strong point for me. Of the five cars that I have owned four have been purchased through private arrangements. So to some extent the removal of the consumer information notice would have an impact on me. I am willing to throw the comment out there—I have no absolutely no evidence for it but that is all right; I have not had much evidence for anything else that I have said today—that younger people are probably more likely to purchase motor vehicles in private transactions rather than through motor vehicle dealers. As we go through the debate on this bill I think we will see that the lower-value vehicles tend to be exchanged through private sales—through classified advertising like TradeMe or whatever means. People who go to a car yard will typically spend five grand or more. Those who buy a vehicle for 500 bucks will do so through a private sale and younger people are more likely to be in that category. This legislation is very important for them as they will maybe be purchasing their first cars. It is important that they are aware of all of their rights and obligations through that process. 
I hope the Minister of Consumer Affairs will be able to take a call and clear up what is probably quite a simple matter around these consumer information notices in terms of what they need to contain and where people are left in respect of previous financing arrangements when there is a private sale of a motor vehicle. Thank you very much. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I am pleased to be able to take a call on the Motor Vehicle Sales Amendment Bill and I join with other colleagues in acknowledging the presence of the new Minister in the chair John Boscawen. I have been waiting for the Minister of Consumer Affairs to tell us what his first car was. Someone cruelly suggested that it was a “Lamington 3000”. I do not know whether that is true but it would be interesting to hear from the Minister on that. 
I also acknowledge my colleague in the Wellington central area Heather Roy the previous Minister of Consumer Affairs. I know that she as a Minister took that job particularly seriously including the area of motor vehicle sales where a lot of consumers make what is perhaps one of their larger purchases. I know that she took her responsibilities seriously and it is very good to see her back in the House today. 
I will focus my first contribution today on a couple of sections in this bill—in particular new section 40A to be inserted by clause 12 about the requirements for people to notify the registrar if a new person becomes involved in the management of a company that is selling motor vehicles. On reflection I think that is something the new Minister might be interested in in another part of his life because the requirement is in relation to a new person becoming concerned with the management of a company. The Minister himself has just recently become concerned about the management of an organisation and I am not sure whether he has notified all of the appropriate people about that. But if the Minister were a motor vehicle trader—actually in the bill it is extended to a licensed car wrecker and perhaps some people could suggest that Mr Boscawen has been involved in the wrecking and dismantling of something this week if not a motor vehicle—he would be interested that new section 40A requires that all people who are doing that give notification about their change of arrangements. 
The Chairperson will have to indulge me a little on this but it is relevant; the purchase of the second car I owned had some relevance to this new section. I purchased a particularly poorly running Nissan Sunny station wagon. That was about 20 years ago; I know that the Hon Judith Collins was somewhat alarmed to learn that she had been driving for 5 years longer than Mr Hipkins had been alive. That is probably alarming for all of us actually but particularly— 
Hon Judith Collins 
: Oh no—that was legally. 
GRANT ROBERTSON 
: Oh right. So the member was legal when she was driving. That is excellent and important to know. I purchased my second car the Nissan Sunny station wagon from a used-car salesman in Invercargill. That probably should have been my first warning—that I was both in Invercargill and in the presence of a used-car salesman—not that I am making any reflection on Invercargill— 
The CHAIRPERSON (Eric Roy) 
: I just caution the member to be relevant to the bill. 
GRANT ROBERTSON 
: Thank you very much Mr Chairperson. I was in Invercargill purchasing this car and it was purchased from the father of a friend of mine who was involved in the firm. Some time had elapsed and I had to drive from Dunedin to Invercargill with friends to purchase that car. But when I finally got around to purchasing it the ownership of the dealership had changed and my friend’s father was no longer involved. It would be fair to say that as I drove back from Invercargill to Dunedin—and the Chairperson may be familiar with the part of the road that I am talking about there; there are some quite good straight stretches as one leaves Invercargill—I noticed the car had a distinct wobble. I almost made it to Clinton which the Chairperson will know well before we discovered that the crossmember was completely rusted all the way through. That caused me a bit of drama but had new section 40A under clause 12 been in place at that time I would have at least been able to know there were some changes in the ownership of the company. I think that is important because as we all know used-car sales folk rank somewhere about where we do in terms of trustworthiness. In the last survey politicians were still beating used-car salespeople but prostitution had moved above us in terms of being a trusted profession. 
Chris Hipkins 
: It is legal. 
GRANT ROBERTSON 
: That is right; Mr Hipkins seems well informed on that subject. It is important now that we— 
Moana Mackey 
: He keeps a close eye on what’s legal and what’s not. 
GRANT ROBERTSON 
: —ha ha—have within this amendment legislation new obligations on people to register a change in ownership. As with all professions it is important that the motor vehicle sales industry improves its credibility and its performance. Cars are a very important part of people’s purchasing lives and anything we can do in this bill—and we are doing some good things in this bill to improve that—is great. New section 40A requires people to notify the registrar if a new person becomes concerned in the management of that company. 
Later on in clause 14 it is stated that it is an offence to fail to notify the registrar of a change and failure to comply with the provision will see the person banned from trading motor vehicles. That is a very strong punishment and a very good one because it means that it is an effective tool; people will want to register the changes if they want to carry on being motor vehicle salespeople. I believe that that is a very useful advance in this bill. 
I refer back to the process for renewing annual registration which is provided for in clause 9. Again this is a balance as in all consumer legislation between compliance and the rights and needs of the consumer. In respect of the process that Mr Boscawen will follow as he moves through his time as the Minister of Consumer Affairs in the next 18 months—sadly for him that time will end next year when the Government changes—I say that it is important that that balance is right. Here in this bill we are making certain new obligations for motor vehicle salespeople—in particular we are making sure that they register and that they notify any change in the ownership of a company—and there are now penalties in place for not doing that. I think that can be only good for the consumer. 
As earlier colleagues have mentioned a lot of people purchase cars—cars are required by most people in their daily lives—but a lot of the people who are purchasing cars are perhaps not familiar with all aspects of consumer law. Therefore we need tight protections in this area of consumer law. Someone like Mr Hipkins who purchased a car when he was about 12 years old by the sounds of it— 
Chris Hipkins 
: I was 15. 
GRANT ROBERTSON 
: —he was 15 years old so that was last year—was obviously somebody who like a lot of people would have been in need of greater consumer protection. Young people purchasing what for them is perhaps their major asset at that time need the improved and enhanced rules in relation to motor vehicle sales that we see in the bill in front of us today. 
There is within this bill the ability for the registrar to cancel the registrations of motor vehicle salespeople if the registrar is satisfied that their company is one that people should not be buying cars from. But as is good in any consumer legislation there is another stage in the legislation for motor vehicle salespeople themselves if they feel they have been hard done by. That route to redress in this bill is by the disputes tribunal; clearly it is important for that to be covered. I see that the committee in its process of working through the bill made some changes in that area. Perhaps a member of the committee or the Minister might like to clarify what those were. Essentially the disputes tribunal has jurisdiction over that matter and it is important that there is a place where any dispute on such matters can be resolved. As motor vehicle salespeople have a fairly bad name in the community it is possible that they would want the ability to be able to show to people that they had been unfairly dealt with. Clauses 16 and 17 go through and make clear where people will have to go if they are dealing with the disputes tribunal what the fines are and where the process will lead them. 
I think the bill in general and Part 1 in particular contain some very good things. I am pleased that Mr Boscawen is here. Most vehicles I know of have four wheels; five wheels is perhaps the preferred option for Mr Boscawen and his party although it was touch-and-go this week as to whether 4 wheels would be viable. But it seems that the spare wheel is back and hopefully will be able to be used frequently because I think most of us who have driven cars over a period of time know that the spare wheel can sometimes be the most important wheel on a car. 
CAROL BEAUMONT (Labour) 
: 
 Let me start by taking up the challenge that my colleagues have given the House. I say that my first vehicle was a baby-blue Mini with a fibreglass clubman front. 
Darien Fenton 
: Blue? 
CAROL BEAUMONT 
: I know I know; I was quite young at the time. I have to say that it was a very cute little car. I thought it suited me very well. I look forward to hearing what the honourable Minister John Boscawen’s car was when he gets up to speak. I acknowledged our new Minister in my previous contribution but I also acknowledge Heather Roy. It is great to see her back here. That is wonderful. 
I will talk specifically about the provisions in the Motor Vehicle Sales Bill about the disputes tribunal. My colleague the Hon Lianne Dalziel went through a bit of the background on process. Although it is fair to say that this has taken quite a long time it has been a reasonably effective review process. The matters that were raised have been dealt with in this bill. I think it is a very good thing for this House that we have a robust process where we review things we get people’s input we then translate that into a bill and it comes before the House albeit perhaps somewhat slowly except for the final bit which is being forced through under urgency. That seems a little strange. 
I will talk specifically about the Motor Vehicle Disputes Tribunal. There are changes in this bill to the jurisdiction of the tribunal and also around decisions being publicly available. The tribunal established by the Motor Vehicle Sales Act was brought into effect in December 2003. It can hear claims under the Consumer Guarantees Act the Fair Trading Act and the Sale of Goods Act. It can decide claims only when one party is a motor-vehicle trader and the other party is not. Currently it can decide claims of up to $50000. This bill amends that by increasing the jurisdiction to $100000. 
I took the time to have a look at what was suggested in the part of the process where the discussion document went out after the review. The review had 12 recommendations. There were two that I could see that related to the tribunal. One was the extension of the jurisdiction that I have just mentioned. The other was the publication of the decisions of the tribunal. Both of those recommendations have been picked up in this bill. I looked with interest at the annual report of the tribunal. I have to say that it looks like the tribunal is a fairly effective body. In the last year the tribunal reported to—the year ending June 2010—it had 266 applications. That number was up on the previous year. I am unclear whether that is because there are more difficulties or because of a greater understanding of the process. 
The tribunal reports that 93 percent of all applications heard had a decision issued within 2 months of the date of filing. Ninety-five percent of all applications were heard and a written decision given within 3 months of the date that the application was filed. That seems a reasonable process. What is interesting is that in its annual report it provides examples of cases that in the adjudicator’s opinion required special mention. They are quite interesting. The ones that were raised in the annual report of the Auckland tribunal talked about a car-fair trader. The purchaser was a young Spanish holidaymaker who went to the Auckland Carfair at Ellerslie Racecourse which is very close to the part of Auckland where I work the Maungakiekie electorate. 
The example was about the car that he purchased and the issues that went on as a result of that. The second example that the tribunal drew attention to was interesting as well. It was about a faulty transmission in a 6-year-old vehicle that had travelled only 34000 kilometres. As the daughter of a mechanic it does seem to me to be a bit out of order that such a thing would happen. That was the second case that the tribunal drew to attention to. The third case considered whether a problem was caused by contaminated diesel or a faulty fuel-injection system. 
I think that it is useful for tribunals like this to do that. I am not saying that just to fill up time. It is useful for tribunals to draw to our attention these sorts of cases so that consumers can be informed and that we can look for trends and so on. Interestingly enough in its annual report the tribunal made some recommendations for amendments to the Motor Vehicle Sales Act that the adjudicator thinks desirable on the experience of the tribunal. We are looking at amendments to the Motor Vehicle Sales Act in relation to the tribunal. I think this is an example of good practice: that we have a tribunal that is identifying where it finds issues that are worthy of further attention. I think that that is a very good process. In this document I have it makes recommendations which I would also like to make to amend the Act. It concerns section 94(1)(b). It is the provision that requires the tribunal for the purpose of protecting the public—which should be a fundamental part of consumer legislation—to direct the chief executive of the Ministry of Justice to publish a notice in the  
Gazette  
if the tribunal in determining an application decides against a motor vehicle trader. This section appears not to impose such requirements on the tribunal when it determines an application against a manufacturer—a manufacturer of a vehicle as opposed to a trader. 
In the last case that I told members about—on whether the problem was with contaminated diesel or a faulty fuel-injection system—the manufacturer was found to have breached the Consumer Guarantees Act. But because of the wording of section 94(1)(b) of the Motor Vehicle Sales Act the tribunal was unable to direct the publication of the manufacturer’s name in the  
Gazette 
. That may be considered a gap that the Minister of Consumer Affairs may wish to close by amendment. 
I was pleased to see that obviously ministry officials have briefed the Minister well. In a recent media comment Mr Boscawen referred to this very matter that was suggested about allowing the manufacturer’s details to be published as well as those of the trader. He has acknowledged the point raised by the tribunal and I think that is fantastic. This is based on the real world: here is the problem the problem is identified and the ministry picks up the issue. 
What interests me though a little I say to the honourable Minister is what it says and I would like the Minister to answer a question on it. It says: “ ‘These issues are being considered as part of the “One Law” 
review of consumer legislation currently being undertaken by the Ministry of Consumer Affairs’ Mr Boscawen said.” The One Law—One Door review—which I will talk more about later everybody will be pleased to know—is a consumer law reform discussion paper and submissions on it have closed. It is looking at the identification of updates and principle-based legislation and it is looking at seven pieces of legislation. It specifically does not include the Motor Vehicle Sales Act. I am aware that the tribunal deals with other Acts as I have just said dealing with consumer guarantees fair trading and the like but I worry a little bit because at the time of my loan sharks bill the then Minister Heather Roy said that some of the concerns we were raising around extortionate interest rates and irresponsible lending would also be covered by the One Law process. 
Again I think that that was a marginal call. It was convenient to be able to say that so that it looked as though the Government actually cared about this issue—an issue that is harming many in our community. In the area where I live and work it harms many people. There was evidence recently for those who saw the  
Campbell Live 
 programme about a young man looking for loans in Onehunga and Panmure who was offered all sorts of interest rates. But going back to the point at the time the Minister said that that issue was covered by the One Law review process. I hear now that the new Minister says that this issue around vehicle manufacturers as opposed to traders can also be covered by that. 
I am a little worried about what I call review creep. There is a bit of review creep going on here in terms of the consumer law reform process; any issue that is raised in terms of problems for consumer law is somehow we are told packaged up in this. When people take time to look at the document it certainly does not seem immediately clear how the issues of excessive interest rates in particular are a central point of it. They were marginal. There was a separate review of that process going on. In looking at in relation to the Motor Vehicle Sales Act I cannot necessarily see how the matter that the Minister has said would be dealt with will be dealt with. I urge the Minister to answer that question. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I know Mr Chairperson had a range of speakers available so it is a pleasure to have been chosen amongst those options. 
Hon Member 
: A stellar field! 
IAIN LEES-GALLOWAY 
: That is right. I add my congratulations to the Minister in the chair John Boscawen. It is fantastic to see one of the wider class of ’08 promoted to such a prestigious position. Minister Joyce jumped the gun on all of us and got straight into the Cabinet but I congratulate Mr Boscawen for the achievement of being the second in the class of ’08 to hold a ministerial warrant. It is also fantastic to see Heather Roy in the Chamber. I know that she was a passionate Minister and she was very keen on driving this legislation through the House. She also took her role as Associate Minister of Defence very seriously and as the Opposition’s associate defence spokesperson I enjoyed some of the exchanges we had and some of the opportunities we had to meet on some of the bases. I know that she was very well respected in the Territorial Force and in the wider forces for the role that she played. So it is great to see her here; she is not a spare wheel by any stretch of the imagination and certainly not a retread. It is great to see her in the Chamber. 
The Motor Vehicle Sales Amendment Bill is good solid technical legislation that will make all New Zealanders better off. Probably everybody at some point in time has to purchase a vehicle whether it be a new vehicle or a second-hand vehicle through a licensed trader or just casually often through TradeMe these days. It is something that most people do so to know that the rules and the protections around that activity are being tightened up in this way will be important for everybody. Although it will probably sail under the radar I think that everybody will appreciate the changes. 
Members have been reflecting on their first vehicle purchase. Mine was a 1979 Honda Civic so the vehicle was a little younger than I am. Like Mr Hipkins I am rapidly approaching my 32nd birthday. I went for a vehicle slightly younger than I was but I have to say that I learnt a lot about doing bodywork on a vehicle with that car because it was an absolute rust magnet. How it managed to pass warrants of fitness each time I am not quite sure but I learnt a lot about how to deal with rust how to reattach the exhaust pipe and all that sort of thing just to make sure it passed the warrant of fitness test each time. If I had had to display any details about that car when I sold it I think I would have been in a bit of trouble. Nobody would have wanted to purchase it but that was probably right because it was not too flash by the time I got rid of it. I traded it in and I really hope that the person who took it off my hands crushed it immediately. It would have been quite easy to crush— 
Chris Hipkins 
: Judith Collins knows. 
IAIN LEES-GALLOWAY 
: Judith Collins would have known how to do it. It would have been quite an easy job; there was not a heck of a lot of metal left in it. It was all bogged by the time I had finished with it. Then I was able to get something that was a little bit better. Clearly if the kinds of protections for consumers in this bill had been around when I got rid of that car I would have found it very difficult to sell in that environment. 
The bill amends the Motor Vehicle Sales Act 2003 which was designed to protect consumers in relation to motor vehicle sales. It is not the most stunning legislation and it will not make the headlines but people will find it important to know that they have those protections in place. The Commerce Committee noted that it was important to distinguish between Internet advertisements that offer the ability to enter into a contract to buy a vehicle i.e. a more formal purchasing contract and the online advertisements that are effectively classified advertisements of the TradeMe style which is so popular these days. That is a very important distinction to make. We support that distinction. We do not want to make a casual car sale too onerous with too many hoops for the person trying to sell a car. That is a good recommendation coming back from the select committee. 
I go back to the issue of crushing and the removal of the requirement for transactions between traders and wreckers to display a consumer information notice. Maybe that is what happened to my 1979 Honda Civic. The purpose here is to display information to consumers; it is not necessary for trader-to-trader or trader-to-wrecker transactions. Again this provision removes unnecessary compliance costs and makes life easier for traders working in this environment. It is really good to see that the bill increases the financial limit on the jurisdiction of the Motor Vehicle Disputes Tribunal from $50000 to $100000. Again this is an area where I have a little experience— 
Moana Mackey 
: Aaron Gilmore? 
IAIN LEES-GALLOWAY 
: I do not have the kind of experience that members might expect from Aaron Gilmore as I did not invent the process nor did I invent the car and I certainly did not lecture in the field but I say to Ms Mackey that I will come back to that. 
I have been on the receiving end of what I thought was a pretty dodgy transaction from a motor vehicle trader and we ended up in the disputes tribunal. Luckily my dispute involved a figure small enough to go to the disputes tribunal. I know that there are plenty of people who would prefer to take that option rather than the more formal and complex option of going through the courts to resolve a dispute that would easily fit into this $100000 realm so it is great to see that extension. It will make things a lot easier for people who feel as though they have been hard done by. It means that both the trader and the consumer can get a reasonable outcome that determines where the responsibility lay. That is good news for both parties. 
This legislation is an improvement on the Motor Vehicle Sales Act 2003. The Act came into force in December 2003 and introduced a new regime for motor vehicle traders which served to make traders more accountable and offered more flexibility to participate in the industry. New information disclosure requirements for used motor vehicles were introduced back then and the Motor Vehicle Disputes Tribunal was established. It was good legislation that was introduced in response to the needs at the time and it is great to see this process which was started of course by a Labour Government finally progressing under this Government. It has taken a bit of time for the Government to get around to it but it is good to see it progressing now under urgency in a way that will see it concluded in due course. Perhaps it will not be long before we run out of Labour bills and— 
Moana Mackey 
: Then we’d have another Labour Government. 
IAIN LEES-GALLOWAY 
: Yes by that stage there would probably be another Labour Government and good legislation that protects consumers’ rights will be back in play and progression on that work will be under way. This bill is good legislation and I think consumers around New Zealand will be very pleased to see it pass through the House. It has been a pleasure to speak on it. 
MOANA MACKEY (Labour) 
: 
 I am so pleased to see that Jo Goodhew is looking forward to my speech. Her expression of joy makes me want to speak for 10 minutes instead of 5. I did not realise how much National members wanted to hear from me. 
I was in my office listening to the debate on the Motor Vehicles Sales Amendment Bill and I felt I needed to come down to the Chamber for Minister’s Boscawen’s first piece of legislation. Like other members I congratulate the Minister on his appointment. But I was a little bit disappointed. When Mr Boscawen was on the backbench he was a lion on many issues and here he is the Minister of Consumer Affairs with his first piece of legislation. He has been released on the Chamber. He can say what he wants. He has the power in his hands. What does he do? Nothing. He has been muzzled. He has been curtailed. It is incredibly disappointing. 
This bill deals with motor vehicle sales. Motor vehicles produce emissions. Emissions cause climate change. Climate change has resulted in an emissions trading scheme. Mr Boscawen feels very strongly about the emissions trading scheme and about emissions that come from motor vehicles and this bill was an opportunity for the Minister to take a call. Finally he is in a position to do something about it but he has not. That is a bit disappointing but the Committee stage is not over yet so we do look forward to the Minister taking a call in that regard. 
This bill is another piece of legislation that started under the previous Labour Government as many other pieces of Government legislation have. I wonder when we will stop passing Labour legislation. But if we are going to have a National Government then I prefer it to be one that passes Labour legislation. So I will not complain about that too much. 
This bill is very important. Consumer protection is one of the critical roles of this Parliament and a vehicle purchase is one of the biggest purchases that New Zealand families will make. I am a case in point as to why we need consumer protection legislation. Everyone has been talking about their first cars. Mine was black and it did not have a cup holder and that is about all I can tell members about it. My current car is white and it does have a cup holder. Ergo by the very complex Moana Mackey vehicle-rating system my current car is better than my previous car. It has a cup holder and my previous car did not. I am one of those people who do not know what to look for. Mr Chair you do not need to regard me in such a disappointed fashion. I am being honest. I know nothing about cars except that they are useful and I have to have one and a cup holder is incredibly important to me personally. 
There are other people who may be too ashamed to admit that they did not know the bit of the car that Mr Robertson talked about—the bit that rusted through. I had never heard of it. I did not even know it existed until today. I thank Mr Gary Bates from Gary Bates LMVD in Gisborne who was incredibly helpful to me when I had to purchase a car. He explained to me that there were probably other functions and attributes of a car beyond the cup holder that I should probably be asking about. When he asked me what I wanted I said “My mother said it has to be white or silver because I drive a lot so visibility is important and it has to have a cup holder. And that is pretty much it.” So he went through the process with me and this is an example of why consumer protection law is very important. 
A car is a major purchase and many many people know nothing about vehicles or the questions they should be asking or the problems they should be looking out for. We know what happens in private sales. In our electorate offices we see people who have been burnt by these sales because they did not know the questions to ask—that protection is not in place. That is why it is so important for people to go through licensed dealers who can make sure that they are getting what they think they are getting and that they are getting value for money. 
I have to say that this is one of these bills that I feel if a Labour Government was passing it then we would be told that we were being too nanny State that too many rules were in place and that people should be able to buy a dog of car if they want to. We would be told it is their right as free individuals of this country that the free market will provide and the invisible hand of the market will make sure that that the car goes properly. That is not the reality and there are people out there who will take advantage of ignorance. People are very busy. The often do not have time to do all the things they should and look up all the things they need to know. They do not have time to make sure that they are prepared when they are buying something as important as a car and that is why it is important to have these protections in place. It is also very pleasing to see the role of the Motor Vehicle Disputes Tribunal beefed up because tribunals are a much easier way of dealing with things. If we can keep things out of the courts as much as possible it is absolutely desirable—and I say happy birthday to Aaron Gilmore— 
The question was put that the amendments set out on Supplementary Order Paper 161 in the name of the Hon John Boscawen to Part 1 be agreed to. 
Amendments agreed to. 
Part 1 as amended agreed to. 
Part 2 agreed to.  
Schedule 
The question was put that the amendments set out on Supplementary Order Paper 161 in the name of the Hon John Boscawen to the schedule be agreed to. 
Amendments agreed to. 
Schedule as amended agreed to. 
Clauses 1 to 3 
CAROL BEAUMONT (Labour) 
: 
 It is a great pleasure to stand again and speak on the Motor Vehicle Sales Amendment Bill. I have thought about whether the title is a good title and I think it is a reasonably accurate reflection of what the bill contains. It is clearly a bill that is designed to amend the existing Motor Vehicle Sales Act and generally speaking the amendments although positive are not life-shattering or anything like that. They are all relatively small amendments so I do not think the bill warrants a grander title than the one it has—the Motor Vehicle Sales Amendment Bill. 
As I said the changes are positive and they follow what has been a reasonable process. The changes are primarily around the renewal of annual registration for motor vehicle traders. There is a very good amendment that closes a loophole that prevented the automatic banning of traders whose registration has lapsed. That is positive. It is not huge in the grand scheme of life but it is a very positive change. There is the requirement in terms of the consumer information notice which we have discussed and which my colleague Mr Hipkins outlined so well. 
The legislation removes car market operators from the definition of motor vehicle trader. There is the removal of the requirement to display the consumer information notice for transactions between traders or between traders and wreckers and of course the bill increases the jurisdiction of the Motor Vehicles Disputes Tribunal and there is the ability for the tribunal to publicise its decisions. So there are a number of good solid amendments to the Act; probably the Motor Vehicle Sales Amendment Bill as a title reflects pretty accurately what it is. 
There was a process around that bill which my colleague the Hon Lianne Dalziel outlined. Of course the Motor Vehicle Sales Act was good legislation brought in by the previous Labour Government. It put in place things like the disputes tribunal and it required good solid consumer information and registration of motor vehicle traders. It was good legislation with pretty chunky requirements. As others have said motor vehicles are very important in New Zealand life and for many the most significant purchase they are likely to make. 
In the legislative process there was an automatic requirement of a 2-year review there was a discussion process and 12 areas were identified and they carried through into this bill mainly. As my colleague the Hon Lianne Dalziel said the bill was considered by the Commerce Committee—a committee that she does an extremely good job of chairing; we are all very proud of the Hon Lianne Dalziel and the work that she does. She is extremely well qualified for that role with a very incisive mind and a good ability I think to deal with the issues. 
The process is reflective of what the Motor Vehicle Sales Amendment Bill is called. I thought about whether we could call it something else that would be better than that. Although it is a very accurate reflection of both the process and what is contained in it and its relative importance it occurred to me that we could call this bill the “Not the Most Important Issue Facing the Country Today Bill”. I think that is a very important point. As we are debating this bill under urgency—a nice solid bill as we have all identified—out there people are struggling. They are struggling to make ends meet. Unemployment is at a very high level. There is no approach to bring greater jobs or skills into our economy. So calling the Motor Vehicle Sales Amendment Bill the “Not the Most Important Issue Facing the Country Today Bill” would have been more accurate and reflective of what is going on in the wider community. As I say people are struggling to make ends meet. 
To link that issue to the motor vehicle area I noticed when my colleague Chris Hipkins a very fine member of Parliament gave his first reading speech he talked about the implications of the recession on the motor vehicle industry and the job losses in that particular industry. He noted that a survey carried out by the Motor Trade Association in January showed that over 200 people in the motor vehicle industry had lost their jobs. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 Thank you very much Mr Chairperson. Once again it is great to have your enthusiastic support for giving me the call. I will pick up where my colleague Carol Beaumont left off on some potential alternative titles for the Motor Vehicle Sales Amendment Bill. Obviously that title is one option because the bill amends the Motor Vehicle Sales Act so that would be traditional. 
Moana Mackey 
: It’s not very original. 
GRANT ROBERTSON 
: It is not terribly creative and I think it is important that in this Committee we try to make sure that our laws are contemporary that they stay in touch with what is happening in the world and that they are relevant. 
One title that I considered was the “Motor Vehicle Sales (ACT Party Shuffling the Deckchairs on the  
Titanic 
) Bill”. That is one way of looking at it. Mr Boscawen has found himself in the chair and— 
Hon Trevor Mallard 
: How many knives could they melt down from a car to put into Heather Roy’s back? 
GRANT ROBERTSON 
: Mr Mallard has a suggestion which is interesting coming from him as he has just re-entered the Chamber after having been out of it for some time. Mr Mallard might want to reflect further on that. The ACT Party has obviously reshuffled the deck and Mr Boscawen has found himself in the chair. He is obviously concerned about consumers—it is in the name of the party—so he is concerned about those who buy and sell motor vehicles. 
Hon Trevor Mallard 
: ACT—consumers and taxpayers? 
GRANT ROBERTSON 
: Yes that is right. 
Hon Trevor Mallard 
: Surely you can do something— 
GRANT ROBERTSON 
: No we will come back to that soon. But the “Motor Vehicle Sales (ACT Party Shuffling the Deckchairs on the  
Titanic 
) Bill” is one alternative title that we have thought of. 
I actually think Ms Beaumont was on to a particularly good point around alternative titles given that we are yet again here in urgency to debate the Motor Vehicle Sales Amendment Bill which has been taken through most of its stages under urgency. Perhaps the “Motor Vehicle Sales (Go Stop Go Stop Go) Amendment Bill” might have been a more appropriate title because it is hard to understand why a bill that was brought in by the previous Labour Government and was wending its way through its processes—and that National occasionally believes is an urgent bill—occasionally merits the title of urgency and then stops for a long period of time. 
Jacinda Ardern 
: Lada-Ferrari. 
GRANT ROBERTSON 
: Yes perhaps it is going from being a Ferrari of a bill to a Lada of a bill; we are not getting much in between that from this Government. 
The Motor Vehicle Sales Amendment Bill is the title that the Government has come up with. It is probably a fair enough title. Mr Boscawen has been strangely silent during the Committee stage of this debate; he made an early contribution although signs of life have been rare since then. But I hope that we will hear from him again in the further stages. 
Hon Trevor Mallard 
: Heather Roy would have spoken on it. 
GRANT ROBERTSON 
: Heather Roy has had a lot of references made to her in this Committee stage. She took the consumer affairs role seriously and I am sure she would have taken several calls in fact and answered Mr Hipkins’ very useful questions that were raised earlier in the Committee stage about the consumer information notices. I think on balance the Labour Party can support this title. We perhaps would have preferred something that was more creative. We could have injected other words into the title like “lamington” for instance—that is one potential word that could have found its way into the title—but I think on balance we will be able to support the title being the Motor Vehicle Sales Amendment Bill. However we would obviously welcome a contribution from the Minister in the chair to this particular part of the debate. 
Clause 1 agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 161 in the name of the Hon John Boscawen to clause 2 be agreed to. 
Amendment agreed to. 
Clause 2 as amended agreed to. 
Clause 3 agreed to. 
Bill reported with amendment. 
Report adopted. 
Third Reading 
Hon JOHN BOSCAWEN (Minister of Consumer Affairs) 
: 
 I move  
That the Motor Vehicle Sales Amendment Bill be now read a third time 
. The bill introduces changes to the Motor Vehicle Sales Act to provide for its more effective operation and to ensure that consumers’ interests continue to be protected in relation to motor vehicle sales. It ensures that consumers have access to good information that allows them to make informed purchasing decisions. 
The Motor Vehicle Sales Act came into force in December 2003. It introduced a new registration regime for motor vehicle traders that served to make traders more accountable. It also offered more flexibility to participate in the industry introduced new information disclosure requirements for used motor vehicles and established the Motor Vehicle Disputes Tribunal which offered consumers a forum in which complaints against traders could be heard. 
The bill is the result of a review of the operation of the Motor Vehicle Sales Act conducted by the Ministry of Consumer Affairs. I endorse the review of legislation 2 to 3 years after enactment. This allows assessment as to whether legislation is bedding in as intended and it provides for any operational problems to be addressed. 
I thank the members of the Commerce Committee for their consideration of this bill. I also thank those who made submissions on the bill to the select committee and throughout the initial review of the operation of the Motor Vehicle Sales Act. Many of the issues raised in those submissions have been addressed in this bill. I also thank the previous Minister of Consumer Affairs officials from the Ministry of Consumer Affairs and parliamentary counsel for their work on the bill. 
As an ACT Minister in the National-led Government I am pleased that this bill not only includes benefits for consumers who buy motor vehicles but also removes some compliance costs and red tape for motor vehicle traders private sellers of motor vehicles and motor vehicle buyers. The bill tidies up the processes related to motor vehicle trader registration renewal and the registration process for overseas directors. It removes the requirements for a consumer information notice if selling a car privately at a car market and also in sales made between motor vehicle traders and motor vehicle traders and wreckers. Car market operators those offering premises for an Internet site or for vehicle sales but not actually selling vehicles themselves will no longer be required to register as motor vehicle traders. 
A key function of the Motor Vehicle Sales Act is to protect consumer interests and I am pleased to highlight to the House that the bill raises the limit to which the Motor Vehicle Disputes Tribunal may hear claims. It has been increased from $50000 to $100000. This will allow better access to the tribunal and will also future-proof the limit. The bill also includes some amendments to allow for the more efficient functioning of the Motor Vehicle Disputes Tribunal and it provides for all decisions of the tribunal to be published which will provide more transparency and allow traders and consumers alike to learn how best to adjudicate disputes between themselves and resolve them. 
In terms of positive outcomes for both consumers and motor vehicle traders the success of the Motor Vehicle Disputes Tribunal highlights how well these kinds of dispute resolution entities work in providing low-cost efficient and fair outcomes for all New Zealanders. I encourage consumers to take advantage of their existence if in a dispute about a motor vehicle and a trader. 
The changes I have outlined are designed to strengthen the operation of the Motor Vehicle Sales Act. They are designed to improve consumer outcomes when purchasing motor vehicles and to remove unnecessary regulatory requirements and the associated compliance costs. I commend this bill to the House. 
CAROL BEAUMONT (Labour) 
: 
 It is my pleasure as Labour’s consumer affairs spokesperson to speak on the third reading of the Motor Vehicle Sales Amendment Bill. As Labour members have noted previously we support this bill. It has a number of very sensible amendments. It is not a bill that will set the world on fire or indeed a bill that it is necessary to deal with under urgency but it is a good solid piece of work. 
I want to talk first about why legislation in the consumer affairs area is important. This bill is part of our consumer legislation. Motor vehicles are significant items for many New Zealanders. For the many New Zealanders who can no longer afford to buy houses—and that is an increasing number of New Zealanders—a motor vehicle may well be the biggest single purchase they make. Consumer legislation on motor vehicle sales is important. The motor vehicle industry employs a number of people. We have seen many people in that industry lose their jobs as a result of the recession. In tough economic times New Zealanders are reliant on cars. In most places in New Zealand people are reliant on cars because they do not have an alternative; public transport is not the way in which people get to work. They require a car to get around to get to work to take the kids to school or whatever so a car is often not an optional purchase for New Zealanders. I think we would all accept that. Although some of us are probably more committed to changing that situation and having alternatives the reality is that buying a car is very significant. I just want to put this in context. 
The Motor Vehicle Sales Amendment Bill deals with an issue that is important to us—that is the sale of motor vehicles. As has been outlined this legislation was brought in by the previous Labour Government. The Motor Vehicle Sales Act which was significant legislation came into effect in December 2003 and provided for some very important things. It provided for the registration of motor vehicle traders. Used-car salesmen are not seen as the most honest and reliable people in the world; I cannot remember whether politicians are ranked above or below them at the moment. There was a need to tighten up that industry and so another part of the legislation set up the disputes tribunal so that people had somewhere to go to deal with any disputes they might have. I have previously noted that the disputes tribunal seems to be working very effectively. It also legislated around the issue of consumer information—the sorts of things one might expect to know when one is purchasing a vehicle. 
That legislation was set up in December 2003 with a requirement that the Act be reviewed after 2 years in operation. I think that is important especially in an area like consumer law where things change. Even in 2003 who would have thought that the amount of buying and selling that takes place in the online trading area would be the case? The fact is that consumer law is an area that we need to review fairly regularly. That process led to a review and 12 areas in the Motor Vehicle Sales Act were identified as possibly needing amendment. A discussion document went out a number of people commented on it and that fed into a process whereby a bill was put before the House. That bill was introduced in May 2009—so it has not had a speedy track through the House since that time. The bill was referred to the Commerce Committee and I am pleased to note that my colleague the Hon Lianne Dalziel is the chair of that committee and provides very good leadership in it. It was important that this bill went to that committee. It has had good thorough scrutiny and by all accounts it has had good assistance from officials. The bill was reported back in December 2009. The second reading occurred in June 2010. So after a slow start we are dealing with the Committee stage and the third reading under urgency. It is a little unclear to me what is so urgent about the Motor Vehicle Sales Amendment Bill that warrants us being here in urgency to deal with it. That is not to say that the amendments are not useful and helpful amendments but it does seem a little strange given the pressing issues facing New Zealand at the moment—such as high unemployment lack of an economic plan and New Zealanders struggling to make ends meet—that we are dealing under urgency with what are effectively fairly minor changes to the Motor Vehicle Sales Act. 
Just what are those amendments? As has been outlined the amendments include changes to the process whereby motor vehicle traders renew their annual registration. This change was partly driven by a desire to reduce compliance costs on traders. One change that is really important and which should be valued by all of us is the closing of a loophole that prevents the automatic banning of traders whose registration has lapsed following conviction under this Act. That is important. It is what should happen and it has been fixed up by this bill. The bill also deals with a set of changes around consumer information notices primarily around the use of those notices in car markets. It essentially recognises the fact that people operating a car market are not by definition motor vehicle traders themselves. They provide a space where people buy and sell cars. It also removes the requirement for transactions between traders or traders and wreckers to display a consumer information notice. That is probably OK. We would expect that those people would be aware of their rights and aware of the information they need to decide on whether to purchase a motor vehicle. 
The third area is around the Motor Vehicle Disputes Tribunal and the bill increases the financial limit for claims it hears from $50000 to $100000. I have already said that we think the disputes tribunal appears to work well that it is effective in its decision making that it is dealing with an increasing number of cases and that it draws to our attention matters that are of interest or indeed matters for further law change. So that is all positive. We have no issue with extending the financial limit for claims from $50000 to $100000 but it would be fair to say that this change will not affect most New Zealanders. Most New Zealanders are not in the market for a vehicle that is worth more than $50000; we have to accept that. In tough economic times people are holding on to their old vehicles and they are looking at downsizing often especially with fuel prices being what they are and little or no wage increases. That provision is not exactly something that will affect the majority of struggling New Zealanders but certainly Labour does not have a problem with it being in the bill. Again I say that it is not the key issue facing this Parliament at the moment. 
I want to put this bill into the context of consumer affairs generally. We could judge this bill in light of a framework. I mentioned previously to the new Minister of Consumer Affairs that we are looking at a framework around consumer affairs and I seek to meet him to discuss this. Firstly it would look at things like improving consumer knowledge and protection so we could say that to a degree this bill is part of that. Secondly it needs to take account of the needs of vulnerable consumers. I am not sure that this bill touches particularly on that area although the Motor Vehicle Sales Act is important because as I said cars are one of the biggest single items that consumers may purchase. The Government has failed to show much leadership in the area of vulnerable consumers. The fact that National and ACT MPs voted against the loan shark legislation not long ago shows a lack of interest in the interests of vulnerable consumers. I know that the Hon John Boscawen has a concern about vulnerable consumers and I will be seeing whether he wants to change tack on that issue. As for targeting exploitation I think we need to look at what we are doing in the area of the motor vehicle market at the bottom end if you like. I identified one part of Auckland where it is particularly an issue and that is Otahuhu. Again this bill in itself is not in that space but there is enforcement work particularly that could help. Updating consumer law is clearly part of our framework and we see this sits within the bill. It takes account of changed circumstances and that is important. Greater regulation is something we will probably debate as is increasing consumer awareness. I will end there. Thank you. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 I rise to take a short call on the Motor Vehicle Sales Amendment Bill. Firstly I acknowledge the previous Minister of Consumer Affairs Heather Roy for the work that she did—not just in this portfolio of consumer affairs but also as Associate Minister of Defence and Associate Minister of Education. I know that she was a strong advocate for those portfolios. I also acknowledge my colleague and friend Mr Boscawen who has just left the Chamber for his work on this bill as a member of the Commerce Committee. He is now the Minister of Consumer Affairs and has moved the bill’s third reading. He is a hard-working MP and will be a very good addition to the ministry of this Government and future National Governments. 
I acknowledge the members of the Commerce Committee. I thought we worked well as a committee. The committee was well chaired of course. I also acknowledge the submitters who put forward the very few submissions that were heard orally and the officials for the work that they did in bringing this bill through the select committee process. 
The Minister has already alluded to the main components of the bill but I say this bill promotes and protects consumer interests. In the tough times that we have been through in the recession consumer protection legislation is particularly important and a number of speakers have alluded to that. The issue is about creating an environment of confidence and choice—choice in that consumers want to rely on the information produced by the vendors of motor vehicles and choice in that that they can make their decisions by relying on that information. 
This bill is about the reform of regulation. This National Government is cutting red tape reducing compliance costs and pushing through— 
Carol Beaumont 
: This was a Labour bill. 
PESETA SAM LOTU-IIGA 
: No this is actually a National bill which has been moved by an ACT member. The bill is about cutting red tape and the previous Labour Government had no idea about how to do that. One of the policy reform areas is to cut red tape in order to improve the long-term performance of the economy lift our living standards and create jobs. This bill is part of a series of reforms that we have brought to the House. It is being considered under urgency. National is a Government of action. This bill is part of that reform and I commend it to the House. Thank you. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 Thank you for the opportunity to speak in the third reading of the Motor Vehicle Sales Amendment Bill. This bill has had quite a long history in terms of its gestation and its traverse through the House and I want to comment on all of those points as we did in the Committee stage. First I want to again comment on the history of the bill and how we have arrived at this position today. I think it is important that we have very good regulatory processes in order to assess the operation of a regulatory framework after it has been in place for a certain period of time. The Motor Vehicle Sales Act 2003 which this bill amends had within it a review after 2 years. There are those who would consider a 2-year review as too short and there are those who would consider a 10-year review as too long. I am probably of the view that the 2-year review is too short. 
Although I think this process was robust in that it involved the review that had a number of recommendations coming out of it it then led to the development of a discussion paper that proposed amendments to the Motor Vehicle Sales Act. There were 18 submissions on the discussion paper and there was an open forum with industry and consumer representative organisations. It engaged with the major stakeholders that one would expect to see involved such as the Motor Trade Association the Independent Motor Vehicle Dealers Association the Motor Industry Association the New Zealand Automobile Association and Consumer New Zealand amongst many others. 
I think the importance of the process was that those particular major stakeholders were able to engage quite fully in the process. If it was a 2-year review after legislation that had come into force in 2003 the discussion document came out in 2007 and the legislation was introduced in 2009 I am starting to get a picture of things having probably moved on during the period. I personally think that 2 years is too short. Just for future reference—and we all learn as we go along in this particular role—I think that a review of this nature should have been 5 years unless there were circumstances that required the urgent attention of the Government that would bring it forward. 
We also need to consider truncating the process because I think we have doubled up here. There were 18 submissions on the discussion paper and at the Commerce Committee we received eight submissions on the bill and we heard two submissions. Again one of the concerns I have is that although it is a robust process and I again place on record our thanks to the Ministry of Consumer Affairs which gave us very good support when dealing with this bill it possibly could have been dealt with a lot sooner if we had managed to get the bill before the House a bit sooner than we did. Be that as it may we got the bill in front of the House last year in about May we reported it back from the select committee in December last year and now we are in urgency finishing off the final reading. It is actually— 
Hon Trevor Mallard 
: I was a member of the select committee way back then. It was when Chris Carter was our education spokesperson I think. I sat on the committee. 
Hon LIANNE DALZIEL 
: No I do not think so because it was my select committee and I do not think I have ever had the pleasure of having Trevor Mallard on my select committee. I kind of hope that— 
Hon Trevor Mallard 
: It never happens? 
Hon LIANNE DALZIEL 
: —it stays that way. Oh it is nothing personal. 
Hon Members 
: Poor Trevor! 
Hon LIANNE DALZIEL 
: Well I do not think I could compete with that degree of testosterone but there we go! We were speaking on the Motor Vehicle Sales Amendment Bill I say to Mr Mallard. 
Hon Trevor Mallard 
: Right—wrong bill. 
Hon LIANNE DALZIEL 
: I thought we were speaking at cross purposes. 
The Motor Vehicle Sales Amendment Bill was reported back to this House on 14 December last year but the bill was not read a second time until June this year. I went back and had a quick look at that second reading and it was dealt with under urgency as well. Now here we are completing the final stages of the bill under urgency. I made the point during the Committee stage that although the calendar on the wall says that it is 24 August it is in fact 26 August. Although time may have stood still as far as the urgency motion goes we are debating this bill now when our select committee should actually be meeting and dealing with other legislation. But here we are in the House dealing with this bill. If this really was a matter of urgency then it ought to have been dealt with some time sooner. 
The main issue that I focused on when we were in the Committee stage on this bill was the question of the display of a consumer information notice. I will comment on one of the submissions that we received in the select committee because I thought it was the most appropriate submission to refer to in respect of e-commerce and the advent of TradeMe into the car market as it were through online car market operators. According to the submission the theory of the current situation prior to this bill coming in is that each of the 175000 motor vehicle auctions on TradeMe in the past year would have had to include a consumer information notice and TradeMe provides advice to the sellers in the car listing process that they must do that. But as the submission said the reality was quite different. It said that the Commerce Commission had advised in 2006 that it would enforce this requirement only against motor vehicle traders and the Ministry of Consumer Affairs recommended in 2007 that the law be changed to remove this requirement on private sellers. I guess that in the meantime generally only motor vehicle traders have been displaying the consumer information notices. 
The point made in the submission—and I guess that this backs up the point that I was trying to make before about the time frame for review and action on those reviews—is that the amendment simply changes the law to catch up with the reality of what people are doing and with what everyone seems to agree makes sense. That is why when the previous speaker said that our Government did not address red tape and compliance costs I would make the point that I was the Minister who developed the model of the Regulatory Improvement Bill. Something like this does not need to be separate legislation. This could have been dealt with by way of making amendments under the Regulatory Improvement Bill. 
I think that one of the things we need to also contemplate as a Parliament is having a much more open approach towards an omnibus bill or generic legislation that is able to pick up a range of compliance-reducing initiatives that do not always get the priority of the department the Minister or the Leader of the House in terms of the process that will be adopted for ensuring that legislation can be updated in a timely fashion. The sequence of events that I have spelt out in terms of the timing of the review the discussion document getting it to a bill stage and getting priority in terms of the House means that something that was identified in 2006—according to this submission from TradeMe—is being fixed in 2010. That to me is the fundamental flaw we have in our parliamentary system. 
This bill has had to compete against changes to “three strikes” legislation and with other things that the Government might think are a priority but most New Zealanders do not. Bills have to compete on that basis. I would certainly recommend that we ensure these things are kept up to date with sensible review periods and also take an action approach to implementing those changes. I commend the bill to the House in its third reading. 
DAVID CLENDON (Green) 
: 
 Kia ora koutou Mr Deputy Speaker. I am pleased to take a call on the Motor Vehicle Sales Amendment Bill. It has been interesting to hear both during the earlier reading and the during the Committee stage earlier today the extent of the peculiar love-hate relationship we have with motor vehicles in this country. It is probably not unique to us but it is certainly a characteristic and it is another reason why this market needs to have some regulation on it and some attention paid to it. 
The lower end of the market has not been characterised by a high level of integrity I have to say. Clearly new car sellers franchise holders and for the most part secondhand-car dealers operate with some degree of integrity but there is a minority whose reputation probably equates to our reputation as politicians and it is not a particularly high level of trust that is shown by the public in that market. So it is important that we are seen to apply consumer protection provisions in this bill. 
Given the economic and apparently the cultural importance of motor vehicles in New Zealand I think it is probably unfortunate and a bit odd that this bill has languished for nearly 18 months since its first reading. I was interested in the comments made by the previous speaker Lianne Dalziel about the necessity of perhaps looking at a more regular review a more timely review of what is quite a significant market. 
The numbers are interesting. There are over 4 million vehicles currently registered in New Zealand. Looking at the population we see that that equals roughly one car each which puts us on the top tier certainly in terms of per capita ownership of vehicles. That number is also fairly stable. The number of new vehicles coming on the market more or less balances those that get trashed each year and it is interesting that we do seem to maintain this very very high level of vehicle ownership despite the fact that clearly vehicles are a liability. 
Vehicles are often perceived as being an asset but they are a liability to own and operate. New vehicle sales hit a peak in 2007—something like 100000 vehicles were newly registered in that year—and that figure dropped substantially during the recession down to a low last year of fewer than 70000-odd vehicles. But that figure is clearly on the way up. There is something like a 15 percent increase in new vehicle sales this year and something like a 43 percent increase in the sale of imported second-hand vehicles and again it reflects the need for some constant attention to regulate and ensure that consumers are getting a good deal in this market. 
The most popular vehicle segment is mini and small vehicles. But there have been major drops in sales as more people think very hard about the purchasing of large investments like cars and of course the collapse of finance companies also discourages people from getting involved in anything that commits them to debt. It is interesting that the hardest-hit segment of the market is large cars People are turning away from large sedans and moving more towards the sport utility vehicles in spite the fact that the particular qualities or characteristics of those vehicles really only meet the needs of a relatively small number of people. 
All this information leads us to reflect and to acknowledge that the purchase of a motor vehicle is often a very emotive rather than a wholly rational decision. There may be a degree of rationality about it but people often buy vehicles on quite an irrational basis. In a market like that it is important that we have appropriate regulation and without wishing to sound patronising that we apply some protection for consumers in an area where they are very easily ripped off and cheated. 
The age of the New Zealand vehicle fleet is hovering at about 12 years to 13 years particularly the light vehicle fleet which is the largest component of the overall fleet. It is about 90 percent of the total. About half of that fleet is made up of used imports—vehicles that have come in as second-hand vehicles. Something like 78 percent of total vehicle kilometres travelled in New Zealand are in the light passenger vehicle category which indicates that most of the kilometres travelled in New Zealand are travelled in cars and very light commercials. Again all those figures tell us that the buying and selling of vehicles is a very busy very complex market and any steps to better inform and protect consumers in that market place is to be welcomed. There are provisions in this bill that seek to do that. The numbers also point to the need for developing much more coherent and much more appropriate strategies for incentivising customers to make purchases that will meet their needs and reduce the adverse environmental impact of motor vehicle use. 
Over time the Greens have put up a number of propositions aimed at increasing in particular fuel efficiency standards across the whole vehicle fleet. We have proposed a system of tradable credits that would give importers absolute discretion in terms of what vehicles they choose to import. But clearly that would incentivise a mix that favours the most fuel-efficient vehicles coming into this country which would not only meet the needs of consumers to the extent that it would reduce the overall running cost to vehicles but also would reduce the significant negative environmental impact of our vehicle use. 
The Greens have proposed a “feebate” system—that is a differential in registration fees—to advantage and incentivise the purchase and use of smaller more fuel-efficient vehicles rather than the larger less fuel-efficient vehicles. This would give consumers maximum information and maximum choice so that they can reduce their overall cost of ownership of vehicles over time. It is true that this amendment to the Act will provide more consumer protection. The Internet has also been pointed out as a factor. It is not a new phenomenon but certainly the number of vehicles that are bought and sold through Internet sales and auctions now makes up a significant part of the total. When I checked a few days ago there were something like 32000 motor vehicles advertised for sale on the web mostly on TradeMe and some 25000 of those were private sales. Again that points towards the need for ensuring that private and indeed commercial sellers are obliged to give consumers information that is as appropriate accurate and honest as possible. 
The Greens will be supporting this bill. It enhances the degree of consumer protection. We do regret that much more fundamental coherent and broad-based attention is not being paid to how we buy sell and incentivise the importing and the purchasing patterns of motor vehicles in New Zealand. We will continue to advocate for an approach that leads us to a more sustainable low-carbon economy which is the way we need to go. Thank you. 
HEATHER ROY (ACT) 
: 
 I rise to speak on behalf of the ACT Party in the third reading of the Motor Vehicle Sales Amendment Bill. It is very pleasing to see support from across the House for this bill. The bill makes a good deal of sense. It came together as the result of the review that was done. A car is a large purchase for most people but it is most important for consumers that those protections exist. It is also very important and we should not forget this that a fair environment exists for sellers. I would like to say that the consultation process from within the motor vehicle industry itself was conducted very well and I think very fair and reasonable conclusions have been arrived at as a result of that process. In light of that I would like to compliment the consumer affairs officials who were responsible for conducting that very professionally. 
I also would like to mention the Commerce Committee. We have heard about the submission process through the Commerce Committee and the amendments that came forward as a result of that work. That was also done very well. Having been involved in the introduction of this bill in my former capacity I am pleased to see that we have reached this conclusion. 
It is a little mischievous of Labour to talk about this bill being heard under urgency. Labour of course originated this process. The review happened pretty slowly in some respects. Had Labour been really committed to pushing this through much faster it could have done so when it was in Government. I have to say that it is very pleasing as the Minister who introduced this bill to the House to be able to speak in the third reading and see that it is about to reach its conclusion today. 
Section 163 of the Act required a review within 2 years of the bill’s commencement in 2003 so we are going back quite some way. That review was undertaken by the Ministry of Consumer Affairs as I have mentioned and it identified areas where the Act’s operation would benefit from amendment. Some gaps become apparent over time and those have been dealt with in a rigorous and thorough way as part of the review process. The review report which was tabled in the House in March 2006 was followed by further consultation on the review’s recommendations. That process has led to the amendments we see before us in this bill today. 
I am very pleased to see that the bill will remove several unnecessary compliance costs for motor vehicle traders and consumers. The amendment is in line with the Government tackling regulatory obstacles as promoted by both ACT and the National. 
The issues in the bill have been pretty much traversed by all members who have spoken on this bill both at the Committee stage and by those who have preceded me in this third reading. But I will briefly go over those that I see as priorities that will improve things for consumers. The bill removes the requirements for private sellers at car markets to display a consumer information notice. That amendment will reduce risk of confusion between private sellers and buyers as to their responsibilities and rights. I think it makes a good deal of sense. Certainly it was a compliance that was unnecessary in that particular circumstance and it has very sensibly been removed. 
The other thing I previously promoted heavily was that the bill offers increased consumer protections particularly with regard to the Motor Vehicle Disputes Tribunal. The protections offered to consumers here include increasing the financial limit at which consumer claims may be heard by the Motor Vehicle Disputes Tribunal. It has increased from $50000 to $100000 and it is a very sensible move. This increase means that the majority of consumers can now have their issues heard in the expert forum that the tribunal offers. This change will also assist in the future-proofing of claims limits and provide protection to consumers who purchase high-end vehicles. Previously some of those consumers were not able to take their case genuine though it might have been to the disputes tribunal. Currently regardless of their financial means consumers can still have difficulty in gaining redress from a specific motor vehicle trader. The increasing of the limit to $100000 should help in this regard. 
The bill allows the tribunal to award costs for non-attendance of either party to the dispute. This creates the right incentive for both parties to turn up to hearings which has been something of a problem. Currently costs can be awarded against the consumer when he or she does not attend but the amendment bill will enable the ability for costs to also be awarded against the trader so we have a much more level playing field with the amendment before the House at the moment. For a consumer considerable compliance costs may be associated with attending a hearing that has to be postponed because of a trader’s non-attendance so from a purely practical perspective this amendment makes a good deal of sense. 
The bill also closes a loophole where the automatic banning of a trader from future trading as a motor vehicle dealer cannot be applied to a person who is unregistered or has a lapsed registration at the time of his or her conviction or bankruptcy. Currently such people can continue to trade in motor vehicles until the registrar can take a case to court to ban them which may take some months. The Motor Vehicle Sales Act is predicated on a fairly light-handed registration regime and that is as it should be in my view and it is supported by enforcement. Effective banning provisions are an important element of this enforcement. 
It gives me a great deal of delight to see the completion of this bill today and I am very pleased to see that it has cross-party support. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 It is a pleasure to stand and speak on the third reading of the Motor Vehicle Sales Amendment Bill and especially to follow the previous Minister of Consumer of Affairs Heather Roy and hear the details that she was able to give. The purpose of the bill is pretty straightforward: to promote and protect car buyers. That is an honourable goal and is consistent with that of other bills that have gone through the House under urgency such as the bill to protect the rights of investors by focusing on standards for financial advisers. 
The bill amends the process for motor vehicle traders to renew their annual registration and it also extends the range of people banned from car trading. It makes pretty good sense to the Maori Party that those who stoop to give false registration information or those who have lapsed registrations should not be rewarded for that with opportunities to trade. So we are pleased to support this bill all the way through the House and will continue to do so. 
However I have a couple of concerns. The bill promotes and protects car buyers but unfortunately it has a huge gap in that it does not protect car drivers from people like Ms Mackey’s mother who feel that the only thing they need is that a car be white and have a cup holder. I think that my son before he bought his last car must have been speaking to her mother because he bought a white one as well. It had more than a cup holder though. Since then he has spent more money on upgrading his car than he did on buying it. Since he bought it he has lowered it and he has put mag wheels on it. I recognise the mag wheels because when one takes the car out on a bright Wellington day one is blinded by all the bling. But the thing that he spent most of his money on was the sound system and because of the amount of bass one can hear that car coming for miles around. I do not know whether my son was talking to Ms Mackey’s mother when he put all of that into his car but we really need to be looking for things other than whether cars make the right sound and are the right colour—those sorts of things. Maybe we need to think about making some amendments to the bill to make sure that car buyers buy a car and not a sound system on mag wheels. 
Hon Trevor Mallard 
: Support New Zealand music not overseas cars. 
RAHUI KATENE 
: It is a bit late now; next time! 
I also cannot leave this debate without making the connection to some of the other policy priorities that have been impacting on Parliament during this last week. The first is to raise public awareness of young drivers’ crash risk. The statistics for the years 2006 to 2008 show that of all the drivers involved in fatal crashes the 20 to 24-year-old and the 25 to 29-year-old age groups were the most likely to be affected by alcohol/drugs. To that end we support the need to improve the road safety education available to young people and to increase access to it. Somewhere hopefully we will be able to deal with that issue. 
The Maori Party supports this bill. We support the decision for tribunal findings to be made available on the Internet and the focus on greater transparency and accountability. The issue is about providing a better deal for consumers and keeping the traders honest. This bill will help consumers in disputes that relate to misrepresentation about the condition of vehicles for sale and it will provide some protection from unsafe traders. We are particularly aware of the requirement for traders to display a consumer information notice on vehicles. That is a positive move and it will add to the general safety and protection of the New Zealand consumer. We congratulate the previous Minister of Consumer Affairs and the current Minister on their initiatives in that regard. We are supportive of the bill and its consumer focus and make the point that of course there are many other initiatives that we must promote and uphold as part of any approach to keeping New Zealanders safe on the road. 
KATRINA SHANKS (National) 
: 
 It is my pleasure to take a call on the Motor Vehicle Sales Amendment Bill this morning. I firstly acknowledge the previous Minister of Consumer Affairs Heather Roy for her commitment to getting this bill through the House and her commitment to the consumer affairs portfolio. I also thank her and the officials for the support and guidance they gave the Commerce Committee which helped the legislation get to its third reading in the House today. 
The Motor Vehicle Sales Act promotes and protects consumer interests. It is obvious that all members agree with the purpose of this bill which is to protect consumer interests especially consumers who are more vulnerable. We want to create an environment of confidence and informed choice. This bill is aligned with the National-led Government’s efforts to reform regulations cut red tape and reduce compliance costs. It is also obvious from the debate that the House agrees with what the National-led Government is trying to do currently in those areas. 
I want to touch quickly on just a couple of things in the bill because there already has been a long debate on the bill this morning. Some of the changes include amending the process for traders renewing their annual registration. These amendments reduce the compliance costs associated with traders’ making annual statutory declarations as part of registration renewal. The legislation also closes a loophole preventing the automatic banning of traders whose registration has lapsed but who are subsequently convicted under the Act for misconduct while registered. It removes the requirement for private sellers at car markets to display a consumer information notice. It eliminates unnecessary compliance costs by removing the requirement for transactions between traders or between traders and wreckers to include display of a consumer information notice. It increases the financial limit at which cases may be heard by the Motor Vehicle Disputes Tribunal from $50000 to $100000. And it allows the tribunal to award costs for non-attendance of either party to the dispute and allows the tribunal to publish its decisions. 
I commend the bill to the House. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I am very happy to take a call in the final reading of the Motor Vehicle Sales Amendment Bill. I want to respond initially to some of the comments Rahui Katene made. I can say only that I hope the Minister of Police was not listening to the description of her son’s car because it could end up being crushed given the description she just gave. 
David Bennett 
: You’re allowed a bit of sound mate. 
CHRIS HIPKINS 
: I can just see David Bennett driving down the streets of Hamilton with his boom box on the back of his car. I want to— 
Jacinda Ardern 
: It’s compulsory with your warrant of fitness. 
CHRIS HIPKINS 
: Apparently it is compulsory in Hamilton. 
Hon Trevor Mallard 
: Along with the dice. 
CHRIS HIPKINS 
: Along with the fluffy dice that is right. 
David Bennett 
: Only one though. You are not allowed two. 
CHRIS HIPKINS 
: Only one? That is a very revealing comment. I want to acknowledge once again the previous Minister of Consumer Affairs Heather Roy. I am glad she took a call in this final reading because it is nice to hear somebody on the Government side speak with some knowledge about what the bill actually is and what it does. I was pretty disappointed during the Committee stage that not a single Government member spoke after Mr Boscawen spoke first in the Committee stage. Not a single Government member spoke. Government members did not respond to any of the questions or issues raised by the Opposition. As a result many of those questions still remain unanswered. In fact the only knowledgable speech we got from that side was from the previous Minister who spoke with some knowledge of the bill. Mr Boscawen departed not a jot from the notes his officials provided to him. 
Hon Trevor Mallard 
: I think that Heather wrote that speech. It was actually quite a good speech. 
CHRIS HIPKINS 
: Heather Roy may well have written the speech that John Boscawen then had the opportunity to deliver. He certainly did not demonstrate that he had any knowledge of the legislation we were debating. 
Despite the lack of participation from Government members or perhaps because of it the Committee stage was quite interesting and lively. We heard from Moana Mackey about her car selection criteria which tend to involve the number of cup holders that it has. She did not mention although she mentioned to me afterwards the fact that in selecting her car she did not bother to check whether it had a petrol light. In fact she discovered the hard way that the car did not have a petrol light because it ran out. 
We heard from Grant Robertson about the crossbar rusting issue that he had with his first vehicle that he purchased in Invercargill and about some of the issues he encountered there in respect of change of ownership involving the motor vehicle dealer that he purchased it from. I talked about the five cars I have owned in my period of driving. 
Sitting suspended from 1 p.m. to 2 p.m. 
Questions to Ministers 
Economic Recovery—Reports 
1. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
 to the  
Minister of Finance 
: What reports has he received on the nature of New Zealand’s economic recovery? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The New Zealand economy is growing again. Real GDP grew by 1.5 percent in the 6 months to March 2010 and annual growth could reach 3 percent this year. However it has become clear over recent months that the recovery is patchy due to the uncertain global environment and because New Zealanders are being careful with their spending and paying down debt from a large splurge in spending from 2007 onwards. As a result because the recovery is not being led by an increase in domestic spending in the housing market it will need to be led by growth in the export sector which was severely damaged under the last Government. 
Peseta Sam Lotu-Iiga 
: What are the benefits to the economy of an export-led recovery? 
Hon BILL ENGLISH 
: It is vital that we rebalance our economy towards growth from the export sector. Too much of our growth over the last 4 or 5 years has come from people borrowing too much speculating in the housing market and that being reinforced by a splurge in Government spending. As a lot of Kiwis have found out that is not a recipe for sustainable jobs so an export-led recovery is required to rebalance the economy. 
Peseta Sam Lotu-Iiga 
: Has he seen any recent indicators of export performance? 
Hon BILL ENGLISH 
: Yes. The early signs are that the economy is rebalancing. First it is evident that New Zealanders are being careful with their consumption and that they are not rushing back to the housing market either. On the other hand higher export prices have driven a 6 percent jump in the terms of trade in the March 2010 quarter which is the largest quarterly rise since 1976. The seasonally adjusted trade balance for the June 2010 quarter was a surplus of $389 million which is the second surplus in a row and is the first time that that has happened since December 2001. Although commodity prices have slipped back slightly in June they remain 47 percent higher than a year ago and near the record highs they hit in March this year. The indicators for export-led growth are promising. 
Hon David Cunliffe 
: What aspect of the Prime Minister’s figures that showed that the wage gap with Australia had increased by $23 caused him to spend the last 3 weeks remassaging statistics to come up with something even more far-fetched? 
Hon BILL ENGLISH 
: The figures we have been using are based on the statistics that are used to calculate national superannuation. So if the previous Government was deceiving superannuitants for 9 years I would be very surprised. There is general agreement on the wage numbers that are used as the basis for national superannuation; those are the numbers we have been using. I invite the Opposition to make the case that they are wrong because 600000 older New Zealanders would be keen to hear about that. 
Peseta Sam Lotu-Iiga 
: What was the cost to hard-working New Zealanders of allowing these imbalances to build up? 
Hon BILL ENGLISH 
: The cost to hard-working New Zealanders of the economic management of the last Government has for too many of them been that they have lost their jobs. Unemployment reached over 7 percent because too many of the jobs were based on excessive Government spending and excessive borrowing. They were not real sustainable jobs. We now have the job of getting through a recovery which will be quite a challenge and creating real new jobs. 
Hon David Cunliffe 
: What new policies has the Minister announced in the last 3 weeks to create jobs and would the 159000 unemployed Kiwis appreciate that he spent that time remassaging figures rather than coming up with an economic plan to get them a job? 
Hon BILL ENGLISH 
: The most significant new policy that has come out recently has been the increase in GST and the reduction in income taxes. I have been interested in the Labour Party’s position which is now to abandon the tax cuts and provide an exemption for rates for GST. I invite those members to campaign across the country on that policy. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. It is not Labour policy to provide an exemption on GST for rates. The Minister well knows it. [ 
Interruption 
] 
Mr SPEAKER 
: Order! 
Hon David Cunliffe 
: Deliberately misleading the House—against the Standing Orders. 
Mr SPEAKER 
: The member will not interject while I am on my feet. I accept the cause for grievance and the Minister should not be alleging that Opposition parties have certain policies. That is not within the Minister’s responsibility. 
Hon Sir Roger Douglas 
: Does the Minister agree that for every dollar the Government spends the average New Zealander has $1 less in his or her pocket; if so why did he allow public sector spending to increase from 46.4 to 50.4 or 4 percent of GDP in the 12 months ended 30 June 2009—an amount of $8400 million? 
Hon BILL ENGLISH 
: Where we would agree with the member is that excessive Government spending when there is too much of it can limit our capacity for growth because it keeps resources in the less productive Government sector when they should be in the more productive tradables and export sector. However this Government has chosen considered and consistent change over time rather than rapidly executed restructuring. We believe that that is the right balance but we are always open to the discussion with our supporters from the ACT Party. 
Hon David Cunliffe 
: I seek leave to table linked employer-employee data from the June 2009 quarter which show that the number of people employed shrank in the year to March 2009 and the year to June 2009. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Unemployment Beneficiaries—Increase from July 2008 
2. 
Hon ANNETTE KING (Deputy Leader—Labour) 
 to the  
Minister for Social Development and Employment 
: How many more people were receiving an unemployment benefit in July 2010 than in July 2008? 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 Due to a combination of the global recession and poor economic performance from 2000 to 2009 42513 more people were receiving the unemployment benefit in July 2010 than in July 2008. 
Hon Annette King 
: Why did she wait 18 days to release to the Parliamentary Library the full summary of benefit figures for July; and was the reason for this that between July 2009 and July 2010 under her stewardship 18000 more people received a main benefit 6800 more received an unemployment benefit over 400 more received an emergency benefit the number receiving the independent youth benefit rose by almost 30 percent and the number receiving the unemployment benefit student hardship rose by almost 85 percent? 
Hon PAULA BENNETT 
: I suppose I just question where the member has been for the last 2 years. This country has been going through the remnants of a global recession and— 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. I do not think I even need to say what it is. 
Mr SPEAKER 
: I think I can anticipate the point of order. The question asked why the Minister delayed releasing to the Parliamentary Library if I recollect it correctly certain benefit data. It then asked whether that was because of certain figures. The Minister can choose to answer either part of that question but she should answer one part of the question. 
Hon PAULA BENNETT 
: I can assure the House that on average we have been more transparent than the previous Government was. Those numbers were sent to the Parliamentary Library sooner than they were under the previous Government and that is something I insisted on when I first became the Minister. Turning to the increases that the member mentions it should be no surprise that we are going through tough times. There are people who are looking for work and are unable to get jobs. During some of the best times between 2000 and 2009 we could have upskilled young people so that they could get into sustainable jobs and we could have supported businesses more so that they were creating employment for people. Now we have a big job to do in turning the situation round. 
Tim Macindoe 
: How many new vacancies were listed with Work and Income in July 2010 compared with July 2008? 
Hon PAULA BENNETT 
: In July 2008 there were just 2496 new vacancies. In July 2009 that figure nearly doubled to 4000 but in July 2010 a total of 5116 new jobs came into Work and Income. 
Hon Annette King 
: Why did she publicly release all monthly benefit figures to the Parliamentary Library in March April and May this year just 1 or 2 days after her press releases but waited 16 days in June and 18 days in July releasing them on a Friday afternoon and why are they still not on the Ministry of Social Development website for all New Zealanders to see? 
Hon PAULA BENNETT 
: As I have pointed out we have been more transparent than the previous Government ever was in terms of making that information available. The member probably does not realise because she spent so long as a Minister that she has to do some of the work herself to find the information she might need. Reading the papers that come through might be useful and then she might get the information that she is looking for. 
Hon Annette King 
: I raise a point of order Mr Speaker. I know that you heard my question and it was pretty straightforward. She did not answer any part of it. 
Mr SPEAKER 
: The member asked a question indeed and as I tried to listen to the question it was extraordinarily difficult to hear because of the interjections from the member’s own colleagues. It was very noisy and the Hon David Cunliffe knows exactly how much noise he was making. From what I could discern of what the Minister said she did answer the question. The question asked why she did something and there is never a precise answer to that but I think the Minister did answer that question. 
Hon Annette King 
: Is the reason she recently delayed the release of all monthly benefit figures explained in the headlines of her monthly press releases given that in March she said “Benefit numbers decrease as expected” in April she said “Unemployment rate falls” in May she said “Benefit numbers remain below forecast” in June she just said “Benefit figures released” and finally in July she said “Benefit figures rise”? 
Hon PAULA BENNETT 
: Those sound to me like very honest press releases. They were put out in a timely manner and are there for everyone to read. 
Hon Annette King 
: I seek leave to table the March April May June and July benefit numbers which were released only to the Parliamentary Library and have to be requested. They are not available to the public. 
Mr SPEAKER 
: Leave has been sought to release that information. It is alleged that the information is not generally available to the public. Leave is sought to table those documents. Is there any objection? There is no objection. 
Documents by leave laid on the Table of the House. 
Hon Annette King 
: Has she seen the media release from Statistics New Zealand that was released this morning showing the annual decrease in actual jobs filled since the series began in 1999 and is that why she disagreed with the Prime Minister about New Zealand “aggressively” coming out of the recession? 
Hon PAULA BENNETT 
: Yes I have seen that press release. However I have also seen a report recently that said from 1987 to 1990 under the watch of Phil Goff and Annette King the number of people on the unemployment benefit rose from 40000 to a whopping 150000— 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. Clearly it is desperation when the Minister instead of answering— 
Mr SPEAKER 
: No no. The member will resume his seat. He cannot start a point of order by accusing another member of an act of desperation. That has nothing to do with order. I will be very courteous to the member and listen as long as it is a point of order. 
Hon David Cunliffe 
: It goes to the issue of misrepresentation. Rather than the Minister responding directly to the question that the member raised she is instead going back several generations to a time probably before she was born— 
Mr SPEAKER 
: No no. The member will resume his seat. I extended to him the courtesy of listening to a point of order that was not a point of order and that was my own silly mistake. 
Jacinda Ardern 
: What initiatives has her Government specifically designed for the more than 41000 young people who are not in training education or employment and who are not on an unemployment benefit; how many young people does the Minister estimate those initiatives will assist? 
Hon PAULA BENNETT 
: To be clear the primary question actually asked about the unemployment benefit and now the member is mixing that up with the household labour force survey—as she often does. To be clear on the unemployment benefit— 
Mr SPEAKER 
: That is not helpful to the order of the House. I must admit that I heard what seemed to me to be a rather different question so because I am now a little confused about it I will invite Jacinda Ardern to repeat her question. 
Jacinda Ardern 
: What initiatives has her Government specifically designed for the more than 41000 young people who are not in training education or employment and who are not on an unemployment benefit; how many young people does the Minister estimate those initiatives will assist? 
Hon PAULA BENNETT 
: I quite proudly stand up on behalf of this Government and talk about the Youth Guarantee that the Minister of Education has introduced and about the difference that that is making for those young people. I would like to talk about Youth Training and how that programme is being turned round. We are seeing it go more directly to those young people who need it. I also stand up on the Training Opportunities Programme which this Government has spent a lot of time on— 
Jacinda Ardern 
: I raise a point of order Mr Speaker. I specifically asked whether she could give the number that that initiative would assist. 
Mr SPEAKER 
: No no—I do not need any assistance on this one. The member perhaps unwisely asked about the initiatives that the Minister has implemented to deal with those numbers— 
Hon PAULA BENNETT 
: What new initiatives. 
Jacinda Ardern 
: Specific. 
Mr SPEAKER 
: —members should not exchange interjections—and the Minister answered on exactly that. She outlined the initiatives that she has been pursuing to deal with that issue. She does not have to cover all aspects of the supplementary question that was asked. 
Hon PAULA BENNETT 
: May I finish my answer Mr Speaker? 
Mr SPEAKER 
: I think we have heard enough. 
Jacinda Ardern 
: How many young people will the initiatives that the Minister has just named assist? 
Hon PAULA BENNETT 
: We have been specifically looking at 16 and 17-year-olds as being a key focus for this Government. I cannot give the member the exact number because there are so many that we are reaching for with that focus. We saw for the 10 years in the early 2000s that the Government was not even identifying who or where those young people were let alone providing services for them— 
Mr SPEAKER 
: The House is being very noisy and it is very hard to hear but I believe that the member asked a commendably direct question. I do not think that it contained any political statement. If I recollect the question correctly it was about how many young people have been assisted by the initiatives that the Minister outlined in her answer to the previous supplementary question. I fully accept that the Minister may not have that information given the primary question but I think the House deserves to hear the answer. If the Minister does not have the information that is fair enough. 
Hon PAULA BENNETT 
: I do not have the exact number but I will say many many many. I would like to add though—and I think that the Opposition will be interested in this—that we need to recognise that those young people were not even looked for through the early 2000s. No one looked for where they were or worked out how to get to them in order to put them into the right kinds of services. That has been something that this Government has been concentrating on and putting a lot of effort behind. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. To support your previous ruling that the Minister should attempt to give an answer in response to a very straight and succinct question— 
Mr SPEAKER 
: No no—the member is going on far too long; that is not a point of order. The member will resume his seat. The Minister acknowledged that she did not have that particular information and one has to accept that that is not unreasonable given the primary question. The primary question asked how many more people were receiving an unemployment benefit. The supplementary question had moved beyond that. It did relate to unemployed people but it related to employment initiatives for young people. It is understandable that the Minister may not have that particular information with her in the House given the primary question. I think it was a perfectly reasonable answer. As for what followed it though I confess that with all the noise in the House I could not hear exactly what followed that. 
Catherine Delahunty 
: Tena koutou katoa. How many people if any have been stood down from receiving an unemployment benefit after having their employment ended during a 90-day trial? 
Hon PAULA BENNETT 
: I do not have that number in front of me. It certainly has not been coming up. 
District Health Boards—Health Targets 
3. 
Dr PAUL HUTCHISON (National—Hunua) 
 to the  
Minister of Health 
: What reports has he received related to district health boards delivering on the Government’s six health targets? 
Hon TONY RYALL (Minister of Health) 
: 
 I have received a report that shows that after 1 full year since launching the Government’s top six health targets real progress is being made in all six targets. In relation to immunisation the goal was for 85 percent of 2-year-olds to be immunised by July this year. I am pleased to advise that the number of 2-year-olds fully immunised has risen from 81 percent this time last year to 87 percent of 2-year-olds being fully immunised at the end of June this year. 
Dr Paul Hutchison 
: Can the Minister advise what the year-end results have been for the remaining health targets? 
Hon TONY RYALL 
: Emergency departments are seeing more people faster. In the last year the number of patients admitted discharged or transferred from an emergency department within 6 hours has jumped to 87 percent. Stand-outs include Hawke’s Bay up 19 percent; Waitemata and Capital and Coast up 13 percent; and Waikato up 16 percent. On the target of cancer radiation treatment within 6 weeks district health boards achieved the standard for 99 percent of patients a major improvement on the last quarter. The number of people given help to quit smoking has risen from 17 percent to 57 percent and the percentage of patients receiving better diabetes and cardiovascular services has also risen. These targets show that patients are getting better front-line services. 
Hon Ruth Dyson 
: How many of the health targets does the Minister expect Capital and Coast District Health Board to fail to meet next year given that the chief executive has just resigned citing more cuts to front-line health services? 
Hon TONY RYALL 
: I expect Capital and Coast District Health Board to continue to do well in the health targets reflecting the additional $57 million that this Government has put into that district health board. One of the real improvements is that the emergency department is seeing more people faster than it ever was under the Government of that failed party opposite. 
Heather Roy 
: Does the Minister believe that the health sector could have done even better with the greater involvement of the private sector; if so what plans if any does he have under way to make greater use of private provision in health? [ 
Interruption 
] 
Hon TONY RYALL 
: Yes that is a very good question. Private hospitals are delivering up to nearly 10 percent of total elective surgery and the smarter use of the private sector has actually helped us reduce the cardiac surgery waiting list quite significantly. Of course the private sector has made a very strong contribution to immunisation rates because primary care is mainly in the private sector and one thing the Opposition does not like to know is that the private sector has played a very important role in making sure that 99 percent of cancer patients could get their radiation treatment within 6 weeks. 
Drink-driving Blood-alcohol Limit—Driver Fatalities 
4. 
Hon DARREN HUGHES (Labour) 
 to the  
Minister of Transport 
: Has he read the report  
Alcohol and other drug use in New Zealand drivers 2004-2009  
by Environmental Science and Research Ltd prepared for New Zealand Police; if so is he aware that it contains data showing the number of fatalities for drivers with a blood-alcohol level above 50 mg but below 80 mg/100ml? 
Hon STEVEN JOYCE (Minister of Transport) 
: 
 Yes I have. An interim version of the report was cited in the Safer Journeys document released in March of this year. The report tested drivers killed in accidents over that period whose blood samples were sent to Environmental Science and Research Ltd and it showed that 21 of them or four per year had an alcohol level of between 0.05 and 0.08. That number is actually surprisingly small and is one of the numbers used by opponents of a change. However it does not include the road toll impact of drivers with an alcohol level of between 0.05 and 0.08 who survive their accidents. That data is not complete because there is no law allowing police to collect that information. That is the very reason why more comprehensive research is required and why we are changing the law to allow this research to take place. 
Hon Darren Hughes 
: Why did he allow—commendably on his part—New Zealand research like the report we are mentioning here today to act on drug-driving but not allow New Zealand research like this to lower the alcohol limit for driving? 
Hon STEVEN JOYCE 
: Because as I just explained to the member the research is incomplete. That research provides information on people who have fatal accidents and are fatally injured themselves but it does not provide information on the wider issue of the number of people with an alcohol level of between 0.05 and 0.08 who are involved in an accident. We cannot legally currently collect that data. 
Hon Darren Hughes 
: Has he met or asked to meet Dr Helen Poulsen who wrote the report for Environmental Science and Research Ltd and the police this year a report that is clearly research using New Zealand data about New Zealand drivers on New Zealand roads? 
Hon STEVEN JOYCE 
: I have not sought to meet the researcher. I have read the information and the information is quite clear. It provides good information on drivers who are fatally injured in accidents. But as I keep repeating to the member—and I can say it as often as he would like me to say it—the reality is that we do not have research on drivers who survive accidents and have blood-alcohol levels between 0.05 and 0.08. According to this report the number of people killed in accidents with those levels of alcohol in their blood is roughly four per year. 
Hon Darren Hughes 
: Is it still his position that 64 percent public support for lowering the alcohol limit for driving is not enough and that he needs it to be 75 percent before he would support my bill to act on this issue as he said on radio recently? 
Hon STEVEN JOYCE 
: Once again it is quite hard to take the criticism from the other side of the House particularly given the long list of things we are doing in this area. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. In my questions today and on previous days I have worked very hard to stay clear of party politics and all the usual things we do in questions. All I have asked the Minister is whether it is still his position that 64 percent is not enough and that 75 percent is necessary as he said on radio. I do not think it is reasonable that I having gone to some effort to keep a partisan nature out of the questions get answers like that. 
Mr SPEAKER 
: I am sure the Minister will come quickly to the question asked. 
Hon STEVEN JOYCE 
: As I said it is hard to take that criticism because of the 9 years of inactivity on this matter from members on the other side of the House. The point is that there needs firstly to be a clear understanding of the harm being caused by drivers with blood-alcohol levels of between 0.05 and 0.08 and no matter how many times the member asks that question data is not available on drivers with those levels who survive accidents. Secondly lowering the alcohol limit does require broad public support. All the measures we have taken and there are a significant number—the cellphone rule change the illegal street racing legislation the decision to raise the driving age to 16 the drug-driving legislation the nil-alcohol limit for recidivist drink-drivers and young drivers— 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. Indeed I have congratulated the Minister on some of those initiatives but I am not any clearer on whether it is his position that there needs to be 75 percent public support before he will support this measure as he said on radio. That is the question I am asking him. Is it the position of the Government that opinion polls have to show 75 percent support for lowering the alcohol limit for drivers before he will support my bill? 
Mr SPEAKER 
: The Minister indicated that it would need a high level of support. I accept that he may not have exactly confirmed that it would need 75 percent support but I cannot force a Minister to confirm something like that. The member has asked his question the Minister has given his position and I cannot force him to answer beyond that on that question. People can draw their own conclusions as to whether a high level of support reaches that point. I do not think it is reasonable for the Speaker to try to force the Minister to answer beyond that. 
Broadband Roll-out—Rural Initiative Progress 
5. 
JOHN HAYES (National—Wairarapa) 
 to the  
Minister for Communications and Information Technology 
: What announcement has he made today on the rural broadband initiative? 
Hon STEVEN JOYCE (Minister for Communications and Information Technology) 
: 
 The Government today issued the request for proposals for the Rural Broadband Initiative which close on 12 November 2010. The Government intends to sign a heads of agreement before the end of the year which will lead to new fibre being laid in the ground in rural areas shortly thereafter. With our approach I am confident that we will achieve our target of 80 percent of rural households and businesses having access to broadband services of at least 5 megabits per second and the remaining 20 percent on at least 1 megabit per second within the 6-year period of the policy. This will be a vast improvement in Internet experience for rural households. 
John Hayes 
: Why did the Government decide to take a national approach rather than a regional approach? 
Hon STEVEN JOYCE 
: The expressions of interest informed that decision. We are now seeking national coverage proposals rather than regional proposals. It is clear that a range of national infrastructure companies will be able to meet the Government’s rural broadband objectives. In addition they have the financial backing to guarantee their proposal nationwide. It is also evident that although regional bidders were able to make a significant impact on broadband coverage in rural areas they would fall short of achieving the Government’s target for coverage. 
Clare Curran 
: How will the now national Rural Broadband Initiative fit the regional structure of 33 local fibre companies proposed for the urban ultra-fast broadband initiative and does he now see that as coming with one national supplier too? 
Hon STEVEN JOYCE 
: To answer the second part first no not necessarily. The reality is that the ultra-fast broadband— 
Clare Curran 
: Which one? 
Hon STEVEN JOYCE 
: Well we have always said that it may be or it may not be. The reality is that the two initiatives are separate. They are proceeding separately under two separate processes. I am quite confident that they will knit together in much the same way that lines companies do in the electricity sector. 
Education National Standards—Support of Trustees 
6. 
Hon TREVOR MALLARD (Labour—Hutt South) 
 to the  
Minister of Education 
: Does she stand by her statement in relation to the implementation of the national standards “The Trustees who govern schools on behalf of communities and parents were extremely supportive”? 
Hon ANNE TOLLEY (Minister of Education) 
: 
 Yes. 
Hon Trevor Mallard 
: Did she read all letters and emails she received from trustees between 2 July 2009 and 13 May 2010 on the national standards issue? 
Hon ANNE TOLLEY 
: Yes. I get a lot of emails and letters into my office. I attempt to read all of them. 
Hon Trevor Mallard 
: I seek leave to table a letter from Lorraine Kerr of the New Zealand School Trustees Association complaining of the Minister not reading a briefing letter on national standards. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Louise Upston 
: What reports has the Minister seen from boards of trustees about national standards? 
Hon ANNE TOLLEY 
: I have seen one report from a school board that said “We believe that parents have a fundamental right to receive information regarding the progress of their child through the school.” This Government agrees with it. 
Hon Trevor Mallard 
: What has led her to believe that boards of trustees are extremely supportive of national standards when of the 51 letters and emails she received and released earlier this month only one was supportive? 
Hon ANNE TOLLEY 
: If one takes a quote out of context it does not always work. The quote in the primary question related to a press release I made after attending the national conference of the New Zealand School Trustees Association. I can tell members that its members were extremely supportive of national standards. I know because I was there and that member was not. 
Hon Trevor Mallard 
: Does she feel that she has misled the public in claiming trustees are supportive of national standards when less than 2 percent of the correspondence she has received from trustees is supportive of national standards and she has publicly interpreted that as trustees being extremely supportive? 
Hon ANNE TOLLEY 
: No. As I say at the annual conference of the New Zealand School Trustees Association the president of that association who along with her executive has been extremely supportive of national standards got a standing ovation. That was a very good sign that the 600 representatives at that conference were supportive of the executive’s stance. 
Hon Trevor Mallard 
: Which of the following comments about national standards that she has received from members of boards of trustees led her to believe that they are extremely supportive of those standards: “We hold grave concerns.” “National standards will stifle student and teacher creativity.” “It is my opinion that this project would be best dropped.” “I wish to formally state my concerns against the proposed national standards.” or “We have decided we will not be implementing national standards at out school.”; which of that representative sample of the correspondence to her from trustees 96 percent of which expressed opposition led her to believe that trustees are extremely supportive? 
Hon ANNE TOLLEY 
: Those individual boards and individual members have every right to hold an opinion about anything that a Government or an Opposition does. However boards of trustees are Crown entities and they have to obey the law of a democratically elected Government. If they do not there are consequences. 
Hon Trevor Mallard 
: I seek leave to table the entire correspondence that the Minister has received from trustees which she released to me under the Official Information Act and which indicates that 96 percent of the boards that have corresponded with her are opposed to the standards. 
Mr SPEAKER 
: Leave is sought to table those documents. Is there any objection? There is objection. I call Rahui Katene. 
Rahui Katene 
: Thank you Mr Speaker. [ 
Interruption 
] 
Mr SPEAKER 
: I have called Rahui Katene. She is towards the back of the House and I want to hear her supplementary question. 
Rahui Katene 
: What involvement has there been with boards of trustees of kura kaupapa Maori and kura-a-iwi about nga whanaketanga rumaki Maori—Maori medium national standards—and what feedback has there been from those trustees? 
Hon ANNE TOLLEY 
: Consultation and information gathering about nga whanaketanga were based on 14 regional hui. These were held from March to May of this year and offered an opportunity for iwi families whanau teachers and school leaders—including boards of trustees—to provide feedback on the standards. More than 800 participants attended and feedback was received through both oral and written media. The third source of information is ongoing in-depth engagement from March to December of this year with the sector including boards of trustees from 42 schools with Maori medium settings. Most of the feedback I understand has been extremely positive and constructive. 
Alcohol Law Reform—Police Fire Service and Defence Force Bars 
7. 
SUE KEDGLEY (Green) 
 to the  
Minister of Justice 
: Why are the police Fire Service and Defence Force bars exempt from liquor licensing requirements? 
Hon PETER DUNNE (Minister of Revenue) 
on behalf of the  
Minister of Justice 
: The exemptions for police Fire Service and Defence Force bars under the Sale of Liquor Act 1989 arose as a result of the hours location and nature of those jobs. All three agencies have their own internal processes and controls to manage the sale supply and consumption of alcohol on their premises in a way that the Law Commission report noted emulated the rules set down by the Sale of Liquor Act. 
Sue Kedgley 
: Does he agree with the police commissioner that “officers should face the same rules as everyone else” and that “If you are going to show some leadership around this issue then you should subject yourself to the same rules as everyone else has.”? 
Hon PETER DUNNE 
: The short answer is to refer to what I said in my primary answer—namely that these conditions are set out in the current Sale of Liquor Act because the conditions under which those bars operate are in many senses parallel to the conditions in the Act. But the Government has made it clear that it is more than happy for the select committee to give some consideration to this issue and if it feels that the view adopted by the Commissioner of Police should be adopted in respect of the police and the other agencies this Parliament can give some thought to that matter when the bill comes back to the House. 
Sue Kedgley 
: Does he agree that exempting the police the Fire Service and the Defence Force from liquor laws creates a perception of unfairness and the impression that they are above the law? 
Hon PETER DUNNE 
: I need to make the point again that it is not a question of their being exempted from the laws; they have their own procedures which actually follow very closely the law that is in place. As I say when the select committee has the legislation before it and gives consideration to this matter and receives submissions upon it it may well come to a different view. I point out to the House that there are currently only some 28 police bars throughout New Zealand and no new police bars have been put in place since 2005. So I suspect that in many instances the matter is taking care of itself. 
Rahui Katene 
: Is the liquor licensing exemption for the police Fire Service and Defence Force consistent with the decision made by the Minister of Corrections to exempt prison officers from the policy to ban tobacco in prisons? What is the rationale behind awarding special privileges to these officials to exclude them from policy reform in alcohol and tobacco control? 
Hon PETER DUNNE 
: I limit my response to the second part of the question. I think I have explained the rationale which is that these particular categories—the police Fire Service and armed forces bars—operate in a manner akin to that set out for other premises as laid down in the Sale of Liquor Act. That means that as a consequence they operate in virtually the same way as every other outlet. 
Sue Kedgley 
: Does the Minister agree with the Prime Minister’s statement that “our experience is that the they”—the police—“drink responsibly.”; if so is he aware of the series of well-publicised cases of police being convicted of driving while drunk after drinking for many hours in police bars? Does he agree that this behaviour undermines respect for the police and their ability to uphold the law especially the enforcement of liquor laws? 
Hon PETER DUNNE 
: I am aware of the Prime Minister’s statement. I am aware of the facts and the number of cases that the member is referring to. I make the observation that those cases probably fall in proportion to the level of cases in general society and I also point out that the penalties that offending officers receive often involve loss of employment—far more significant consequences than elsewhere. I think the public can have confidence that by and large the police and the emergency services operate to the highest of professional standards and that their activities are not alcohol-impaired. 
Sue Kedgley 
: Can he confirm that if police defence and Fire Service bars are exempt from the requirements of the Sale of Liquor Act they will be able to supply liquor at any time of the day or night including to intoxicated people and will be exempt from the requirement of all other bars in New Zealand to promote the responsible use of alcohol? 
Hon PETER DUNNE 
: I cannot confirm the exact nature of the member’s question. In all my experience of working with those groups they make a very high priority of ensuring that they promote responsible use of alcohol. They take very strict and dim views of their members who infringe in that regard and I have no reason to believe that that is about to change in the future. 
Sue Kedgley 
: Why does the Government believe it is important that Parliament should lead by example and give up its exemption but police who enforce the law should not? 
Hon PETER DUNNE 
: I think the situations are somewhat different. There has been a rather unusual focus on Parliament’s behaviour over the years. Parliament has decided that given the fact that we have one bar here which is open for only a limited number of hours each night it is probably just as well to put it under the general licensing provisions. I do not think we can draw conclusions from that decision in respect of those other agencies. 
Consumer Affairs Minister—Statement 
8. 
CHARLES CHAUVEL (Labour) 
 to the  
Minister of Consumer Affairs 
: Does he stand by his statement that he is “eager to continue making it easier for businesses and consumers to deal confidently in a fair market place” at the Member Forum for Electricity and Gas Complaints Commissioner Scheme DVD launch yesterday? 
Hon JOHN BOSCAWEN (Minister of Consumer Affairs) 
: 
 Yes. 
Charles Chauvel 
: How does the Minister think that the Electricity Industry Bill which he praised in his speech yesterday will make it “easier for businesses and consumers to deal confidently in a fair marketplace” when under that bill his Government will remove consumer and renewable energy representatives from their current positions on industry regulatory bodies? 
Hon JOHN BOSCAWEN 
: When I attended the launch yesterday I was impressed by the commissioners and staff of the gas and electricity complaints tribunal. I doubt whether the changes made in the Electricity Industry Bill which has recently passed through Parliament will in any way negate from the benefit of that tribunal. 
Charles Chauvel 
: How does he think that the Electricity Industry Bill will make it “easier for businesses and consumers to deal confidently in a fair market place” when our largest generator Meridian Energy would not say yesterday how much prices would rise by when the freeze ends in October and when energy consultant Bryan Leyland says the system makes consumers pay four times as much per year without great benefit? 
Hon JOHN BOSCAWEN 
: Let me repeat that having spoken with the chief commissioner of the complaints tribunal yesterday I have no doubt whatsoever that the tribunal is well resourced has capable staff and will do a very good job. 
Prisons—Escapes 
9. 
MELISSA LEE (National) 
 to the  
Minister of Corrections 
: What reports has she received about the rate of escapes from New Zealand prisons? 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 I am very pleased to report that the rate of escapes from New Zealand prisons has dropped to the lowest level the department has ever recorded. Over the past financial year there have been three escapes from places of custodial control and six “walk-aways” when low-security prisoners have walked away from supervision or escaped while being escorted. This compares with 12 escapes in 2008-09 and 23 in the previous year— 
Hon Tony Ryall 
: How many? 
Hon JUDITH COLLINS 
: —23 when Mr Goff was the Minister. It is particularly impressive when one takes into account that the prison population is now at its highest ever level. The No. 1 priority of the Department of Corrections is keeping the public safe from our most difficult and dangerous people. I congratulate the department on its excellent effort. 
Melissa Lee 
: Can the Minister explain the reasons behind the record low number of escapes apart from the fact that she is a fantastic Minister? 
Hon JUDITH COLLINS 
: I am not sure about the last bit of the question; I think I will deal with just the first part. The Department of Corrections has taken a comprehensive range of steps to ensure that prisoners remain safely behind bars. More sophisticated perimeter fencing new detection and surveillance systems improved intelligence and single points of entry into our prisons have all helped achieve this new record. The department has also brought in a new security classification system which has tightened the criteria that a prisoner must meet to be considered for employment in a work party outside the prison perimeter. This will further boost the department’s efforts to ensure that prisoners remain safely under lock and key. So well done to the Department of Corrections! 
Dr Cam Calder 
: I raise a point of order Mr Speaker. Even though the Minister was speaking very clearly and enunciating beautifully and is sitting only about 3 yards away from me I could not hear her. 
Mr SPEAKER 
: I am sure that the member could hear her perfectly adequately. I think the member is trifling with me and wants to hear the answer given again but I think the House heard it perfectly well. I am surprised there are no more questions on the matter given the last supplementary question. 
Employment 90-day Trial Period—Work and Income Policy 
10. 
DARIEN FENTON (Labour) 
 to the  
Minister for Social Development and Employment 
: Does she agree with the Minister of Labour who when asked about someone on the unemployment benefit being referred by Work and Income to a job with a 90-day trial period said “If they do not want to avail themselves of that job opportunity and that trial period then they do not have to”? 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 In context yes. We cannot force anyone to take a job. 
Darien Fenton 
: Would it be possible for Work and Income to cut that person’s benefit if they did not want to avail themselves of a trial period in which an employee can be fired within 90 days with no reason given and no right to an unjustified dismissal claim? 
Hon PAULA BENNETT 
: The guidelines on this are very clear and I quote from the Work and Income website: “A person claiming unemployment benefit is required to be actively seeking full-time work. If an employer offered suitable employment that requires an employment trial in the agreement or contract that employment is treated the same as any other suitable employment.” 
Darien Fenton 
: How voluntary is the 90-day trial period for someone referred to a job by Work and Income considering that its policy allows it to cut that person’s benefit if he or she does not take the job? 
Hon PAULA BENNETT 
: We want to see New Zealanders in work. Just in the last week or two I have heard members from the other side saying that more than 2000 New Zealanders lined up for jobs at a supermarket. I think that tells us that they do want to work and they want to step up and take every opportunity they possibly can and we certainly support them in that. New Zealanders would see this policy as very fair. 
Darien Fenton 
: I raise a point of order Mr Speaker. My question asked how voluntary the 90-day period is and I did not get anything near an answer to that question. 
Mr SPEAKER 
: To be quite honest I thought that the member’s question was answered in the previous answer given and that the member in her further supplementary question was asking for exactly what the Minister had just told her. I think the member has already received the answer. It is not as though she has not received the answer. 
Darien Fenton 
: Is it possible for an employee who is dismissed under the 90-day trial period to then face a 13-week disqualification period from Work and Income because a case manager believes that the employee was dismissed for misconduct reasons even though the employee cannot test the validity of that dismissal through an unjustifiable dismissal claim? 
Hon PAULA BENNETT 
: The guidelines on that are fairly clear. The only time there is a stand-down period within the 90 days—if there is a trial period—is if Work and Income feels it has evidence of fraud or serious misconduct. If Work and Income does not have evidence of that then it issues the unemployment benefit. If that evidence comes to light later because the police prosecute or for some other reason then Work and Income can insist that the unemployment benefit that the person received during that period be paid back. 
Work and Income—Services for Senior Citizens 
11. 
HEKIA PARATA (National) 
 to the  
Minister for Social Development and Employment 
: How is Work and Income delivering services to seniors more effectively? 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 We have been working hard to streamline services for our senior citizens: for example enhancing our senior citizens call centre operations. Previously all senior services operated on different opening hours which was confusing time-consuming and just plain inefficient. The new service line will operate from 8 a.m. to 5 p.m. on 0800 552 002. 
Hekia Parata 
: How else are services for seniors improving? 
Hon PAULA BENNETT 
: Online services are becoming increasingly available. From April this year seniors have been able to apply online for their superannuation. Already around 4000 clients a month apply online which is about 10 percent. Seniors are the fastest-growing group when it comes to being savvy with information technology and we want to make sure they have access to that sort of service. 
H V Ross Robertson 
: Tena koe Mr Speaker. Can the Minister then tell the House how these administration changes really assist senior citizens the majority of whom are on fixed incomes to meet the rapidly rising costs of electricity rates and other household costs that have already outstripped the proposed small rise in superannuation that was intended to offset the Government’s increase in GST? 
Hon PAULA BENNETT 
: What I do know for a fact is that the cost of electricity increased dramatically under the previous Government and it has not increased by anywhere near that amount under this Government so it has obviously been of benefit for those on superannuation to have the National Government representing them because previously we saw their costs going up exponentially. But there are efficiencies in services. There is access to the help that those senior citizens need and I certainly suggest that they contact us on the 0800 number that I have already mentioned. 
Employment—Workplace Access for Union Representatives 
12. 
CAROL BEAUMONT (Labour) 
 to the  
Minister of Labour 
: What situations would be defined as unreasonably withholding consent by an employer under her proposed changes to workers having access to their union in the workplace? 
Hon Dr WAYNE MAPP (Minister of Defence) 
 on behalf of the  
Minister of Labour 
: The draft of the bill does not actually specify those situations. The reason is that the Employment Relations Act 2000 provides guidance as to what is reasonable as stipulated particularly in section 21 of the Act which deals with conditions relating to access to workplaces. There is also a body of case law on these issues which provides further guidance to parties about what might be considered to be unreasonable access. 
Carol Beaumont 
: How much consideration did she give to her department’s advice that the current law is working before proposing to make changes? 
Hon Dr WAYNE MAPP 
: There are two points here. The first point is that the Government is fulfilling a campaign commitment to New Zealanders and it is worth reminding the member who asked the question that therefore 45 percent of New Zealanders voted for this policy. Secondly the Minister has had reports of union representatives stopping customers from coming into the workplace disrupting customers in the workplace and tying up workers for hours of productive time. That led to the conclusion that it was absolutely imperative to fulfil our campaign commitments. 
Carol Beaumont 
: Does she stand by her statement in regard to restricting the right of employees to invite union representatives into the workplace: “The benefits while symbolically significant are likely to be marginal in practice”; if so why is she pushing this policy? 
Hon Dr WAYNE MAPP 
: There are two reasons. One reason is that we are fulfilling our commitments to the New Zealanders who voted for us on this issue amongst other issues. The second reason is that 10 cases over the past 10 years have gone to the Employment Relations Authority or the Employment Court—and in one instance the case proceeded to the Court of Appeal—on precisely this issue. 
Carol Beaumont 
: How will her Government’s plans to restrict employees from organising in unions help to reduce the wage gap with Australia by 2025? 
Hon Dr WAYNE MAPP 
: Employees are not restricted from joining unions and frankly this issue has no relevance to closing that gap. In fact it will make workplaces more productive and more efficient. 
Questions to Members 
Employment Relations Amendment Bill (No 2)—Submissions 
1. 
DARIEN FENTON (Labour) 
 to the  
Chairperson of the Transport and Industrial Relations Committee 
: What is the deadline for submissions to the Employment Relations Amendment Bill (No 2)? 
DAVID BENNETT (Chairperson of the Transport and Industrial Relations Committee) 
: 
 The deadline for submissions on the Employment Relations Amendment Bill (No 2) is 13 September. 
Darien Fenton 
: Was that deadline set before or after the bill passed its first reading and was referred to the select committee? 
Mr SPEAKER 
: I call David Bennett if he has the answer to that question. 
DAVID BENNETT 
: The bill was referred to the committee on 19 August and the committee made a decision informally to open submissions after that time. 
Holidays Amendment Bill—Submissions 
2. 
DARIEN FENTON (Labour) 
 to the  
Chairperson of the Transport and Industrial Relations Committee 
: What is the deadline for submissions to the Holidays Amendment Bill? 
DAVID BENNETT (Chairperson of the Transport and Industrial Relations Committee) 
: 
 The deadline for submissions on the Holidays Amendment Bill is 17 September. 
Darien Fenton 
: Was that deadline set before or after this bill passed its first reading and was referred to the Transport and Industrial Relations Committee? 
DAVID BENNETT 
: The bill was referred to the committee on 24 August and the committee informally agreed that it would have submissions until 17 September. 
Land Transport (Driver Licensing) Amendment Bill—Submissions 
3. 
Hon DARREN HUGHES (Labour) 
 to the  
Chairperson of the Transport and Industrial Relations Committee 
: What is the timeline for submissions on the Land Transport (Driver Licensing) Amendment Bill? 
DAVID BENNETT (Chairperson of the Transport and Industrial Relations Committee) 
: 
 The timeline for submissions on the Land Transport (Driver Licensing) Amendment Bill is a matter that the Transport and Industrial Relations Committee has yet to decide. 
Hon Darren Hughes 
: Has the committee resolved to hear any submissions on this bill to raise the driving age which was introduced under the previous Labour Government in 2007 before the bill is due to be reported back on Christmas Eve? 
DAVID BENNETT 
: The committee has yet to determine any time frame for submissions. 
Motor Vehicle Sales Amendment Bill 
Third Reading 
Debate resumed. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 When we were finishing before lunchtime I congratulated Heather Roy on the very comprehensive speech that she gave on the third reading of this bill the Motor Vehicle Sales Amendment Bill. I contrasted her speech with the speech delivered by Minister John Boscawen who is in charge of the bill and who seemed to have barely a grasp on what the House was debating. He stuck entirely to the scripted notes provided to him by his department. I wondered whether Heather Roy had written the speech herself before she was given the chop from the job and whether John Boscawen had simply come along to the House and delivered her speech. He did not seem to have any grasp of the bill that is being debated. He took only one call at the very beginning of the Committee stage of the bill. That was the only contribution from the Government during the Committee stage. There was a very short call from John Boscawen at the beginning and nothing— 
Hon Darren Hughes 
: What’d he say? 
CHRIS HIPKINS 
: I do not know what he said; it was not all that impressive. He did not really say much. There was no mention of the emissions trading scheme which was quite a milestone for him. I think it was the only speech that he has ever delivered in the House that did not mention the emissions trading scheme. He did not demonstrate any knowledge of the bill which he is charge of. He demonstrated that he had no idea about what he will do in the consumer affairs portfolio which makes one wonder why he is the Minister of Consumer Affairs. What was wrong with the last one? She seemed to be doing an OK job. 
The Committee stage of this debate did throw up some interesting pieces of knowledge. Moana Mackey shared with us that she chooses which car to purchase by the number of cup holders it has. It has to be a white car or a silver car and it has to have a cup holder. We also found out that Moana Mackey made the mistake of choosing a car that did not have a petrol light. She discovered the hard way what that meant. Moana confided to me at lunchtime that she continued to drive the car with no petrol and discovered that it did not have a petrol light only when the car stopped— 
Moana Mackey 
: I’m a scientist! 
CHRIS HIPKINS 
: So Moana Mackey—the scientist—thought that providing the petrol light was not on the car must still have petrol even though the needle was on empty. She thought that if there was no light blinking at her the car must still have petrol. That goes to show that even scientists can get it wrong which is why it is so important that good-quality consumer information is available to consumers purchasing second-hand motor vehicles. That is one of the reasons why the consumer information notices provided when second-hand cars are being sold are really important. 
One of the things this bill does is to remove the obligation to provide consumer information notices in the case where a car is being sold privately. However as I pointed out during the Committee stage of the debate a number of cheap cars are sold privately. The majority of cheap cars are sold privately therefore the removal of that obligation is quite a significant issue for young people. Most young people buy cheap cars. They will not go to a car yard and spend five grand or more. They will spend $500 picking up something off TradeMe or off the sale and exchange classified advertisements in a newspaper. So they will need to be very wary of what they purchase. 
If there is one message that we need to get through to those who buy cars privately it is buyer beware. People will not necessarily be given information on whether a person whom they are purchasing a car from still owes somebody else money for the car. If that person still owes somebody else money then the purchaser could well find themselves facing a liability they were not aware of. People who privately buy cars need to be very cautious. There is definitely a case of buyer beware. But if they purchase a car from a licensed motor vehicle dealer the dealer needs to provide a consumer information notice stating whether somebody still owes money on that vehicle. That is a very positive thing. 
We are here debating this legislation under urgency again. We had the first reading debate when the House needed to go into urgency about a year and a bit ago but it took over a year for the bill to suddenly become urgent again. Now we are back under urgency debating the Committee stage and the third reading of it. It was not really urgent in the first place; it is still not really urgent. It is simply poor organisation on the part of the Government which is absolutely abusing parliamentary process in my view in the way that it is handling this bill as it has with so many others. 
The handling of this bill says something however about the Government’s sense of priorities. At this time when it has absolutely no economic plan whatsoever to tell New Zealanders about it thinks that the single most important priority the House should give its attention to is a bill to reduce compliance costs for used-car salesmen. That is the National Party’s economic plan at this point in time—to reduce compliance costs for used-car salesmen. It does not have anything more important or more urgent to bring before Parliament. Despite the fact that we were here until midnight last night there is still no economic plan from the Government still nothing that will close the wage gap with Australia and still nothing that will put hard-working Kiwis back into jobs. Instead there are thousands of people lining up outside supermarkets applying for relatively low-wage jobs and the Government thinks the most important thing that it can do for the New Zealand people is to reduce compliance costs for used-car salesmen. I think that says something about the Government’s priorities. 
Finally on the topic of consumer information notices I have to say that I hope they have a little bit more credibility and integrity than the voter information notice the National Party distributed before the last election otherwise known as its pledge card. We know that the voters could not believe a word of it because National has already broken nearly half of the promises on its pledge card. If that was a consumer information notice there would be a fair trading case to take on the basis that National broke its promises and that that notice meant nothing. With those comments I conclude. Thank you very much. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 Following on from that very— 
Hon Lianne Dalziel 
: Erudite. 
CLARE CURRAN 
: —erudite and articulate speech from my colleague Chris Hipkins who raised a number of important points about the Motor Vehicle Sales Amendment Bill I will reinforce a number of the points that he made particularly around the fact that this bill is being heard under urgency. I know that we considered a number of alternative names for this bill in earlier speeches in the Committee stage. Given that almost every speech that I have given on this bill has been under urgency yet my speeches have been several months apart it raises questions about just how urgent this bill actually is—or how much of a fill-in it is. 
One of the main topics of discussion that we had in the Committee stage was a very important conversation on the importance of the vehicle purchasing decision that people make. When they make the decision to buy a house or a car particularly when they do so in an online environment there are a number of issues attached to that decision. That is why it is so important that the legislation is being updated to take account of all the dangers that can occur. One of the discussions that we had was on the vehicle purchasing decisions that people made when they bought their first car. We heard a lot about the various decisions that people had made. Those people included the Hon Lianne Dalziel who has never purchased a vehicle online and my colleague Moana Mackey who leaves a little to be desired in terms of her knowledge about vehicle purchasing. Maybe she could do with a bit of assistance next time that she buys one but she had the courage to admit it. What we were really after though was information on the decision made by the new incoming Minister when he purchased his first vehicle. That question was put to him but unfortunately it was never answered. 
In my previous speech I referred to the Labour Party blog Red Alert. It ran a piece on this matter a few months ago and had a lot of responses. Today in another short post it has received a lot more responses. There was a very helpful and interesting comment from a member of the public guessing about the ACT Party members’ choice of their first vehicle. I thought I would share it with the House. The guess was that the current Minister John Boscawen chose a coal-powered vehicle and helpfully the person provided suggestions on what other ACT Party members had as their first vehicle. The person suggested that David Garrett’s choice was a horse that responded well to a good whipping; that Rodney Hide’s choice was a bulldozer; that Heather Roy the previous Minister probably had an Alfa Romeo which is attractive but temperamental and does not always perform as expected; and that Roger Douglas’ choice was a chariot— 
Moana Mackey 
: A horse and cart. 
CLARE CURRAN 
: No David Garrett’s choice was the horse; Roger Douglas’s choice was a chariot which could have been pulled by peasants who were lucky to have the privilege of pulling it. I thought that that was an interesting comment. 
Going back to this bill and thinking about its main provisions I will mention one particular amendment: the removal of the requirement for a private seller to display a consumer information notice when selling through a car market and for car market operators to take steps to ensure that a private seller displays that information notice. It places a new onus on the car market operator to ensure that motor vehicle traders display that notice. 
There is also the removal of car market operators from the definition of a “motor vehicle trader” unless they are selling vehicles as compared with providing a venue where sales occur. Car market operators are not motor vehicle traders. That provision is quite important because it clarifies the law for companies such as TradeMe which was formerly defined as a car market operator rather than as simply a venue where sales occur. I draw the attention of the House to the submission that was made to the Commerce Committee from TradeMe explaining that the current law meant that each of the 175000 motor vehicle auctions that have been listed on TradeMe in the last year would have had to include a consumer information notice. In reality that was not enforced by the Commerce Commission so this amendment simply catches up with what everybody in the industry has agreed made sense. 
I make reference to the number of vehicles that are being sold online. It is estimated that up to 70 percent of cars are being bought and sold privately which is quite significant. In terms of car sales in 2008 187000 were sold by dealers to the public 125000 were sold by the public to dealers and 462000 were private sales. That is a significant number. It is believed that a significant number of those cars are now being sold online. Traders who are using online auction sites to sell motor vehicles have been put on notice by the Commerce Commission. There was a story in the  
New Zealand Herald  
a few days ago about this issue saying the Commerce Commission wants traders to take their legal obligations more seriously. That warning came after a TradeMe seller had said in a listing that he was selling the car on behalf of his sister and he had made other statements about the car’s reliability and service history. A Commerce Commission investigation found those statements to be untrue. Apparently that person had sold more than eight cars on TradeMe over a 12-month period and had not provided consumer information notices on at least two of those sales. 
It is good that the Commerce Commission took this matter very seriously and issued a warning. It is important that all motor vehicle traders be put on notice that the Commerce Commission expects them to take their legal obligations seriously. The point is quite well made that with new technology changes in technology and changes in the way that people are making purchases—first cars or otherwise—the way that vehicles are sold and the information that buyers can expect to get are very important matters. As my colleague Chris Hipkins pointed out it has very much been a buyer-beware situation. We have had information reported to the House today during the debate on this bill that the Motor Vehicle Disputes Tribunal has received 245 dispute applications this year which is an increase on the 228 received for the year ended June 2009. The new Minister of Consumer Affairs noted in a media release just the other day that the tribunal had found in the consumer’s favour in around 70 percent of the cases and that almost 80 percent were decided using the Consumer Guarantees Act. That essentially highlights the need for a change in the legislation. 
Labour supports this common-sense bill which builds on the work that was done by my colleague the Hon Lianne Dalziel. It was initiated under the previous Labour Government and as we have heard it will make a difference given New Zealand’s high per capita rate of vehicle ownership. We heard earlier from one of the Green members that there are something like four million cars in New Zealand. The bill will make a difference because it is about protecting consumers. I commend the bill to the House. 
Bill read a third time. 
Privacy (Cross-border Information) Amendment Bill 
Procedure 
CHRIS TREMAIN (Senior Whip—National) 
: 
 I seek leave for the Privacy (Cross-border Information) Amendment Bill to be set down for its third reading forthwith without amendment or debate following its second reading. 
The ASSISTANT SPEAKER (Eric Roy) 
: So in essence there will be no Committee stage and no debate or amendment on the third reading. Leave is sought for that purpose. Is anyone opposed to that course of action? It appears not. Leave is granted. 
Second Reading 
Hon PANSY WONG (Minister for Ethnic Affairs) 
 on behalf of the  
Minister of Justice 
: I move  
That the Privacy (Cross-border Information) Amendment Bill be now read a second time 
. The Privacy Act is currently silent on the cross-border enforcement of privacy law. This bill remedies that and enables us to assure our international trade partners that their customers’ personal information will be protected by New Zealand law. The bill enables the Privacy Commissioner to issue a notice prohibiting the transfer to a third country of personal information sent to New Zealand from overseas if there is evidence of an attempt to circumvent the privacy laws of the source country. This legislation also allows foreign nationals who are resident overseas to make information privacy requests although public sector agencies will be able to charge for making that information available. Finally the bill establishes a mutual assistance framework that will enable the Privacy Commissioner to cooperate with overseas privacy enforcement authorities on the handling of complaints. 
I thank the Justice and Electoral Committee for its careful consideration of the bill and indicate the Government’s support for the amendments it recommended. The committee identified a gap that unintentionally limited the commissioner’s powers when undertaking an inquiry into cross-border sharing of personal information. To close this gap the committee recommended aligning the powers of the Privacy Commissioner to conduct a cross-border inquiry with the powers she currently has to conduct an investigation into a complaint under the Privacy Act under new section 114BA to be inserted by clause 8. 
The committee also recommended changes to new section 114B which specifies a criterion that the Privacy Commissioner must consider when deciding whether to issue a transfer prohibition notice. The committee found that the first two subsections which concern the protection of personal information received from overseas overlapped and it recommended removing subsection (1)(b). The committee also suggested that subsection (1)(c) was not sufficiently flexible because it incorporated by reference the basic principles of national application set out in the OECD Guidelines Governing the Protection of Privacy and Transborder Flows of Personal Data. The committee recommended that those principles should be incorporated in a schedule to ensure that any future changes to the principles were not automatically incorporated into the Privacy Act. A schedule that can be amended by Order in Council has been included. Other amendments to the bill involve clarifying provisions or are of a technical or administrative nature. 
The committee considered the Privacy Commissioner’s concerns about whether the current grounds for complaint and the commissioner’s enforcement powers needed to be extended. The committee also considered whether a specific provision was required relating to the sharing of information with overseas privacy enforcement authorities but the Minister is satisfied that the existing provisions of the Privacy Act are sufficient to deal with the issue the commissioner raises. 
This Government is committed to enhancing the international competitiveness of New Zealand - based businesses in cross-border commerce. We recognise that consumers too are affected by increasing globalisation and developments in e-commerce. I welcome the benefits that the bill offers to businesses and consumers alike and I commend this bill to the House. 
CHARLES CHAUVEL (Labour) 
: 
 The bill that is under consideration in this session was introduced by the previous Labour Government and as a result members on this side of the House intend to continue their support for the Privacy (Cross-border Information) Amendment Bill. 
The bill will address two problems that currently exist in the Privacy Act. The current Act does not allow foreign nationals who are resident overseas to make information privacy requests for information that is held in New Zealand and the Act does nothing to prevent data received from overseas being transferred out of New Zealand to another jurisdiction without there being adequate privacy protection. They are two obvious flaws which have come about as a result of the increased flow of both people across borders and information across borders since the enactment of the original legislation. They are a perfect example of the sort of problem that arises over time that this Parliament needs to update and address so that the commercial and the human rights concerns that arise out of those flaws can be properly addressed. There is a real business benefit as well as a personal benefit from the closure of loopholes by this legislation. Once it is passed we will be able to better demonstrate in international negotiations that information stored in New Zealand or in respect of persons and business with which New Zealand has a connection is secure. That has to be a good thing for New Zealand business. 
The bill complements the Law Commission’s review of privacy laws. The commission has recommended enacting surveillance devices legislation which would make New Zealand privacy laws more consistent and make it an offence to secretly film or track people. There is work to do in that area but we are starting at least to fulfil some of the recommendations of the commission by getting on with this legislation today. 
It is important to see the legislation in the context of much of the law that this Parliament has dealt with in the past couple of days under urgency. This legislation is an important part of the continuation of the business-friendly programme that the previous Labour Government was enacting to ensure that there was not excessive red tape and that our laws were up to date so that businesses and individuals could feel confident about that level of sophistication in our legal system. So it is good to see Parliament finally progress the international privacy legislation through its final stages. 
The Justice and Electoral Committee’s main concern was apparent from its report related to the OECD guidelines concerning privacy. Those guidelines are of extreme importance to New Zealand given our membership of the OECD. Due to the way that the guidelines had originally been incorporated into the bill any changes by the OECD to the guidelines would have been automatically incorporated into the legislation—that is changes made by a foreign organisation an organisation comprising other countries as well would have simply resulted in an automatic change to New Zealand law without any examination by this Parliament. The committee looked at that matter and took some advice from the Regulations Review Committee as I recall. The committee in the end recommended that the basic principles of national application should be set out in a schedule to the Act that the Governor-General be given the power to make regulations to amend the new schedule in the event that the OECD made new guidelines and that any changes to the schedule as a result of that OECD activity would be subject to the Regulations (Disallowance) Act 1989 and thereby scrutinised by Parliament in the event that it was necessary. So there was a proper framework put in place on an incorporation by reference clause to ensure that parliamentary oversight of any amendments would be proper and in keeping with our constitutional traditions. It is good to see that the committee’s report is being incorporated as far as those recommendations are concerned in the bill. 
The committee also recommended that it be made absolutely explicit in the legislation that when determining whether to prohibit any transfer of personal information the Privacy Commissioner should use the investigative powers in the Privacy Act if he or she felt the need to just as he or she can when conducting an inquiry under the Act. So the commissioner will be able to hear information from any person that he or she considers necessary in the event that that seems the right thing to do. The select committee process has clearly improved the legislation. We have proper scrutiny by Parliament of any changes incorporated from the OECD and we have an enhancement of the Privacy Commissioner’s authority consistent with her general jurisdiction. 
Members on this side of the House support the legislation. It is good to see the rest of Lianne Dalziel’s programme as the former Minister of Commerce and the former Associate Minister of Justice being implemented by this House. 
Hon Paula Bennett 
: Note “the former”. 
CHARLES CHAUVEL 
: We have just had an interjection from a Minister who has no respect for anybody’s privacy in this country so it is rather ironic that she decides to speak out about an international privacy matter but we will let that one go. 
The other issue that needs to be pointed to is that the select committee reported back on 30 September 2009. It is a shame that the Government does not think that this sort of red tape - cutting good pro-business legislation is important enough to progress more quickly. We have had to wait since September last year since the committee reported back to see the legislation come back to the House. 
Hon David Cunliffe 
: Why are they so anti-business? 
CHARLES CHAUVEL 
: I do not know why as David Cunliffe says members opposite are so anti-business or why we have to put up with the symbolism tokenism and dog-whistle laws such as the “fire-at-will” bill which was trumpeted as pro-business legislation when in reality this bill is the sort of thing that will make New Zealand businesses more productive and competitive. On that basis despite the lamentable delay in progressing it I commend the bill to the House. 
CHESTER BORROWS (National—Whanganui) 
: 
 It is a shame that there was the odd barb in the previous speaker’s comments because the Privacy (Cross-border Information) Amendment Bill is well supported across the House. It was kicked off under the previous Minister of Justice and completed under the current Minister. It is another sterling piece of work from the Justice and Electoral Committee and I give my thanks especially to the Hon David Parker for the contributions he made. The bill seeks to deal with a number of hurdles to international access to privacy as well as New Zealand’s ability to maintain sovereignty over the information that it discloses. A number of issues were raised and addressed during the select committee process. 
Remedies have been provided to enable foreign nationals who are located overseas to access and correct personal information. The bill also authorises the Privacy Commissioner to refer a complaint to an overseas privacy enforcement agency if the complaint is within the jurisdiction of that authority. It also enables the Privacy Commissioner to prohibit the transfer of personal information outside New Zealand in cases where that information has been routed through New Zealand to avoid the privacy laws of the originating country. The bill further provides for the transfer of personal information outside New Zealand and for prohibitions on the transfer of personal information outside New Zealand. The commissioner’s powers to obtain information have been catered for within amendments that came out of the select committee process. 
I commend the bill to the House. 
KEITH LOCKE (Green) 
: 
 The Green Party will support the Privacy (Cross-border Information) Amendment Bill. It is driven by the correct concern of the European Union to have private information on databases etc. protected when that data goes to or through other countries. It is great that the European Union is leading the world on this issue and pulling countries like New Zealand in behind. It is good that the Justice and Electoral Committee appended to its report the basic principles of national application set out in Part Two of the OECD guidelines because they are very good principles. They state that there should be limits on the collection of personal data and that there should be a specific purpose for which data is collected so that it is not just a broad-brush collection. The principles also include a use limitation principle ensuring that data will be disclosed only for particular purposes and to the right people and the right authorities. 
There is an openness principle which states that systems should be open and transparent and a security safeguards principle. The individual participation principle states that individuals should have the right to know whether they are on a database. In the New Zealand case of course they should be able to gain access to that information. If the information is wrong or dated it should be erased or changed. The accountability principle states that the whole system should be accountable. They are very good principles and this bill will help implement them particularly what previous speakers have mentioned about the prevention of information gathering that avoids European Union privacy laws by passing through New Zealand and on to a country where there are no proper privacy laws. The European Union has had an ongoing battle on this issue particularly with the United States. That is very relevant to us because we have very close connections to the United States including the passing of private data between New Zealand and the United States. 
One of the areas where the European Union has had a battle with the United States authorities is in relation to data about people who travel on airlines. For a few years the American authorities wanted every bit of information that an airline passenger might have used to purchase a ticket and board the aircraft including the credit card numbers of anyone who bought their tickets by credit card. The European Union said that that was too great an intrusion into privacy and there have been big debates on that matter in the European Parliament and at European Union negotiations. Last month they reached an agreement in terms of what data and what more limited amount of data would be passed on to the US authorities. 
The other dimension where there has been a big argument is in relation to financial transaction information that passes through the SWIFT computer system. SWIFT is an international bank trading reconciliation system involving virtually every overseas transaction including New Zealand banking transactions. New Zealand banks are among the 9400 banks that are signed up to SWIFT. All that information passes through the SWIFT system which is based in Europe with a mirror unit in the United States. The United States said to the European Union that when it had SWIFT on its territory it wanted access to every transaction in order to run it through its terrorist database. The United States said that for security reasons it wanted access to all the financial transaction information. After long negotiations the European Union and the United States reached an agreement. I am not sure of the details as I have not studied it to see whether it is a satisfactory agreement but it allows the United States access to that information with certain controls. 
There will be a European Union representative stationed in the United States to monitor whether the privacy concerns of the European Union and all those principles that I outlined in the appendix in the report back from the Justice and Electoral Committee are properly upheld. I think it will be challenging because the reality—and we found this in previous legislation that has passed through this House—is that when we talk about passing on for example customs information to the United States the idea of passing it to a specific agency in the United States is that it is for use by that agency only. It is not to be passed on by that United States agency to some other United States agency unless it is broken down a bit. This is especially the case with the establishment of Homeland Security which incorporates a whole lot of agencies that are separate in New Zealand or separate in the European Union countries. It is very hard to prevent that data crossing all sorts of boundaries in the United States. 
Secondly there is the problem of the very loose nature of the United States databases and its very weak privacy laws. I do not think that has been solved yet in the United States. The terrorist database in the United States as I understand it has 800000 names. Well there are hardly that many dangerous terrorists running around. When people investigated that database and there have been official investigations and tests to see how accurate that information is they found that there is a huge error rate—up to one-third of the entries are wrong. There are problems with all sorts of people’s privacy being intruded that should not be and people finding it difficult to get on airlines. Cat Stevens who was here recently on a singing tour was excluded from the United States because he ended up on the American database so he was hauled off the plane etc. There are still big problems with that. 
I think it is important that we are on our toes when working with the European Union to make sure that there are better privacy systems and data protection particularly in the United States. It is also important for other countries around the world. We want to be a model in that respect. I think what the Privacy Commissioner has done in this area has been fantastic too. In not only this bill but also other bills the Privacy Commissioner has insisted on being involved in vetting the regulations worked out to make sure that privacy principles were upheld in earlier legislation relating to customs. It was the Privacy Commissioner who was very insistent that any data sent overseas should be for a particular purpose and for a particular agency and not generally transferred. So with those few comments I would like to like indicate that the Green Party will be supporting this bill. Thank you. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 It is a pleasure to stand and take a call on this the second reading of the Privacy (Cross-border Information) Amendment Bill. While preparing for this speech I read a staggering statistic in relation to this bill. According to the Privacy Rights Centre up to 10 million Americans are victims of ID theft each year. It is mind-blowing to think of so many people being cheated of their unique identity and having their personal information stolen from under their eyes. I have to say that when our caucus was discussing this bill my colleague Hone Harawira was rather amused to think that some young American punk could be running around using his name and trying to access his non-existent credit card. But it was less amusing when we pointed out to him that that fake Hone Harawira could be able to access his passport and take off anywhere in the world—say Paris—and create problems over there. 
So there is a problem and it is good to know that one of the immediate advantages of this bill is that it will ensure a greater protection for personal information. The bill will also provide greater assurance to other countries that the privacy laws in this country can be relied upon to adequately protect personal data. 
In many respects this bill has been a long time coming. Since 1998 the European Commission has been urging the New Zealand Government to introduce two minor amendments to the Privacy Act in order to meet the test of adequacy regarding the law about the privacy of personal information. That will be a benefit for both the protection of personal rights and New Zealand’s trading relationships. But for Maori there is an even more important reason why this bill deserves to be supported. It comes back to whakapapa the unique genetic code that links us through our genealogy to our tupuna. One of the things Maori will often say to one another is that when a Maori child is hit the whakapapa of its tupuna is being attacked. The point is that the unique genealogy that links descendants to those who have walked before them must be respected and regarded as sacred. So this bill helps to preserve the sacred association with our origins that we acknowledge. It will help to ensure that New Zealand law meets the expectations of our trading partners and it will remove an anomaly so that people living overseas can access their personal information held here in New Zealand. 
The Maori Party is happy to support this bill and the advance it makes in keeping pace with standards of data protection across the world. More particularly we support it because it enables our whakapapa to be cared for appropriately. Globalisation the growth of the Internet and rapidly declining communication costs have presented new challenges in respect of protecting the personal information of individuals. We hope that with these amendments there will be superior protection for New Zealanders engaged in international transactions. There will be better access for people to their individual information while limits will be placed on the transfer of that information. We are pleased to provide our support for this bill. 
SIMON BRIDGES (National—Tauranga) 
: 
 At its broadest the Privacy (Cross-border Information) Amendment Bill shows a Government that takes privacy seriously and that takes international frameworks and cooperation very seriously. I agree with Charles Chauvel—in what was actually a pretty negative petty speech basically—that this bill is pro-business and does a good job there. But I really want to say this bill gives us an opportunity to talk a little in the remaining time that we have about privacy and the issues that we confront with regard to it. 
I think that privacy is a fascinating area and one that this Parliament will have to grapple with even more in years to come. It seems to me that in privacy issues there is always a balance to be struck between freedom of information and expression on the one hand and legitimate privacy and dignity issues on the other hand. We see that countries all around the world are grappling with that. Traditionally freedom of information has come out on top but I think that that is changing as we see technology grow with Facebook and with all those sorts of things. Different countries certainly take different approaches. The Law Commission has put out—as it tends to—a very long and learned paper on privacy I think in 2009. As Sir Geoffrey Palmer says in that paper these are big issues and they are hard. He said “There are difficulties about defining privacy and balancing it against other interests. Rapid advantages in technology also mean that the landscape is constantly changing. Because technology is making it easy to invade people’s privacy the issues raised … are of importance to everyone.” 
This is a very good bill. As I say it shows that the Government takes privacy international agreements and business seriously. I doubt very much whether this will be the last time that we have to seriously debate and negotiate these sorts of issues but it is good to stand in favour of legitimate privacy interests in my call to the House on this bill. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I would like to speak in the second reading debate of the Privacy (Cross-border Information) Amendment Bill and I make particular mention of the work done on this bill by my colleague the Hon Lianne Dalziel as Minister of Commerce and Associate Minister of Justice in the previous Labour Government. I also commend the Green Party today for supporting this bill. I think that shows true maturity and it is good to see cross-parliamentary support on this issue. 
The bill was introduced by the Hon Lianne Dalziel in the previous Labour Government in July 2008 and had its first reading on 1 April last year. As members have heard it was reported back to the House in September last year but it has taken long to get to this point which my colleague Charles Chauvel spoke about with some regret. The bill addresses a number of problems with the Privacy Act which I will spell out quickly. But along with the launch of the Law Commission’s review of privacy an action by the previous Labour Government this bill was part of Labour’s efforts to update and strengthen privacy law in New Zealand which is very important and significant. Ultimately this is a Labour bill; therefore of course we support it. 
Members have heard about the two flaws that this bill essentially attempts to correct. The first concerns the increasing flow of people and information across borders and the privacy issues that surround that. The first amendment is in relation to the Privacy Act 1993 and introduces new provisions that deal with the cross-border transfer of personal data. To complement those changes the bill includes new provisions that facilitate the cross-border enforcement of privacy laws. That means that the legislation will reduce the likelihood of New Zealand being used as an intermediary for the avoidance of other States’ privacy laws. The Privacy Act as it stands does not allow foreign nationals resident overseas to make information privacy requests and further nothing in the Act prevents data received overseas from being transferred outside New Zealand to a jurisdiction that does not have adequate privacy protection. That means that New Zealand is unable to provide the assurance requested by our overseas trade partners that we can fully protect their privacy and their customers’ privacy. We have had that issue quite well canvassed. 
As we have heard the Law Commission is undertaking a review of privacy values technology change and international trends and their implication for New Zealand law. In February this year a report was issued titled  
Invasion of Privacy: Penalties and Remedies 
 which complements the bill that is before us today. The commission found that New Zealand’s privacy laws—in particular those relating to surveillance—are patchy. I will talk a little about those laws and then provide the House with a case study that shows the importance of businesses keeping their information secure. The commission recommended in that report to enact legislation on surveillance devices in order to make New Zealand’s privacy laws more consistent and make it an offence to secretly film or track people. When speaking to the release of the report  
Invasion of Privacy: Penalties and Remedies 
 Sir Geoffrey Palmer the president of the Law Commission said that our laws on that are currently very patchy. He said that technology is moving so fast and we need to ensure that our privacy is properly protected which is a given. As he pointed out it is an offence to record a private conversation and get unauthorised access to someone’s computer but it is not an offence to secretly film someone or use a device to track someone. 
The Law Commission’s report recommended some law changes to fill those gaps. It recommended that it should be an offence to trespass on someone’s property to install a surveillance device to film inside someone’s dwelling without that person’s consent and to install or to use a tracking device to track someone without that person’s consent. As Sir Geoffrey said the police need to get a warrant to do most of those things and it seems bizarre that the law does not prohibit other people doing them here. He noted that several Australian states now have similar laws. That report is very interesting. 
In terms of information and the issue of transferring data across borders and the importance of business keeping information secure—and my colleague in the Maori Party has mentioned issues around credit cards and identity theft and those sorts of things—I refer to this particular case study of DoubleClick a US online advertising company. In 2000 it found out the hard way what happens when a company gets its privacy practices wrong. DoubleClick decided it would match the personal information of people it had anonymously profiled online with identifying personal information collected offline by Abacus Data an aggregator of mail-order buyer information that DoubleClick had bought. Not surprisingly that caused a backlash among web users and people who had bought items through mail-order catalogues which drew the attention of the US Federal Trade Commission. That led to lawsuits and saw the dramatic drop in DoubleClick’s share price from US$135 a share to around the mid-thirty dollars within 6 months. A year later the company dropped plans to merge the data settled all of its lawsuits agreeing to pay $1.8 million in legal costs. It agreed to purge its databases and conduct an online privacy education campaign. When the company was sold in 2005 the share price was $8.50 a share. It had gone from $135 a share to $8.50 a share. There was no suggestion that the mishandling of privacy was the only reason for the dramatic fall in share price but it was certainly a factor. I think that was the point that my colleague Charles Chauvel made—the importance of business being able to function effectively in this environment is very important. 
In summary the Justice and Electoral Committee’s main concern on this bill related to the OECD guidelines. Due to the way that the guidelines were incorporated into the bill any changes by the OECD to the guidelines would have been automatically incorporated into legislation which would result in changes to the statutory framework of the Privacy Act without examination by Parliament. So the committee recommended that the basic principles of national application be set out in a schedule and that the Governor-General be given the power to make regulations to amend that new schedule to reflect changes made to those guidelines. Those amendments to the new schedule will be subject to the Regulations (Disallowance) Act 1989 so will be scrutinised by Parliament. 
The committee also recommended that it be made explicit in the bill that when determining whether to prohibit a transfer of personal information the Privacy Commissioner may use the investigative powers in the Privacy Act just as the commissioner can when conducting an inquiry under the Act. That would allow the commissioner to hear information from any person that he or she considered necessary. The committee received and considered two submissions from interested groups and individuals and heard one as well as received advice from the Ministry of Justice. So for those reasons and on the recommendation of the Justice and Electoral Committee again acknowledging the work done by my colleague the Hon Lianne Dalziel and the bill being brought into Parliament by Labour originally Labour will be supporting this bill to the stage of the third reading debate. 
KANWALJIT SINGH BAKSHI (National) 
: 
 The Privacy (Cross-border Information) Amendment Bill is a step towards giving confidence to both national and international businesses that any personal information held in New Zealand will be protected. The bill amends the Privacy Act 1993. The intention of this bill is to prevent any information coming to New Zealand from being diverted unlawfully to any other part of the world. In today’s fast-moving world where technology has made it possible for information to travel at phenomenal speed this Government needs to assure businesses in New Zealand that any personal information between themselves and their international partners will be protected with the full force of the law. 
The National Government recognised that in today’s competitive world we need tools and protection to guarantee to clients that their interests are protected when they are dealing with New Zealand businesses. These types of assurances can provide confidence to overseas clients dealing with New Zealand businesses. The amendments to the Privacy Act will increase competitive advantage for our trade between New Zealand and the European Union in particular and other trade partners. 
The Privacy Commissioner and the Law Commission agreed to these amendments. The bill authorises the Privacy Commissioner to prohibit the transfer of personal information outside New Zealand where the information is being routed through New Zealand to avoid the privacy law of originating countries. Clauses in the bill authorise the Privacy Commissioner to prohibit the transfer of personal information from New Zealand to another State if the commissioner is satisfied on reasonable grounds that the information will not be subject to comparable safeguards to the Privacy Act or and would circumvent the law of the State where the information originated. This bill seeks to enhance New Zealand’s opportunity as a trading nation. 
It is good to be part of this National Government which has recognised the need for this bill which seeks to prevent the malicious acquisition of private information and the use of that information against those who would be identified. This bill ensures that New Zealand’s privacy law meets the expectations of our trading partners by assuring that their privacy will be protected. It will also enable people overseas who are not citizens of New Zealand to access their personal information which was previously not possible. It is my pleasure to endorse this bill which enhances the opportunities for New Zealand businesses. 
CAROL BEAUMONT (Labour) 
: 
 It is a pleasure to speak in favour of the Privacy (Cross-border Information) Amendment Bill in its second reading. This bill is obviously an amendment to the Privacy Act. It is primarily about the cross-border transfer of data and is aimed at preventing New Zealand from being used as an intermediary for the circumvention of other country’s privacy laws. 
This bill was introduced by the Hon Lianne Dalziel in 2008. She has had a long interest in the issue of privacy rights. I looked at a previous speech from her in which she talked about the right to privacy as a basic human right. She was part of the Justice and Electoral Committee that in 1993 dealt with the original Privacy Act. As well as introducing the bill the previous Labour Government also launched the Law Commission’s review of privacy which was part of updating privacy law in New Zealand in an effort to strengthen it. 
It is important to note that the House is in urgency today. Although this is a good bill and it is one that we support it hardly seems to be at the top of the list of important things that we need to be doing for New Zealanders at the moment. It is a little bit like the Motor Vehicle Sales Amendment Bill we were discussing this morning—good solid changes ones we need to make but hardly urgent. What is more urgent is looking after the interests of New Zealanders who are struggling at the moment who are struggling to make ends meet and who are facing ever-increasing costs including those imposed by this Government through things like increases to GST. 
That the first reading of this bill was in April last year is evidence that it is not really urgent. It has taken all of that time since then to come back here. The first reading was on 1 April 2009. It was referred to the Justice and Electoral Committee and submissions were due on 14 May 2009. The select committee reported back on 30 September 2009 and here we are nearly a year later having the second reading. That does not show that this is a particularly urgent legislative change. While I am talking about the Justice and Electoral Committee I noted with interest that there were only two submissions on this bill. I assume that that means it is relatively non-controversial. I thought that was quite interesting. 
I absolutely accept that this bill is important in the current economic environment and for a country like New Zealand which is so internationally connected and so reliant on international trade exporting and dealing with many other countries. Under the Labour Government New Zealand was at the forefront of building trade relationships and developing trade agreements so it is important that we deal with an issue that is of concern to business partners overseas. Dealing with it will help us with our international competitiveness. This bill contributes to that aim by ensuring that international business partners can be assured that their customers’ personal information will be protected. 
My colleague Charles Chauvel talked about this legislation being seen as pro-business. But other legislation that is seen as pro-business by this Government is in fact very short-sighted and ill-founded in many cases. The examples I will give are the changes in employment legislation changes like those I referred to earlier today in relation to access to worksites. Those changes may be seen by an ideological few as pro-business but they are unnecessary and potentially hamper the good organisation of workers so that they can get decent wages have a strong voice at work and be part of ensuring that their workplaces are more productive. I consider them to be very anti-business. 
The Privacy (Cross-border Information) Amendment Bill essentially deals with the cross-border transfer of personal data. It also includes the ability to enforce cross-border provisions in privacy law. That is important so that we are able to take action where there is potential for a breach. It is intended to stop New Zealand being used as an intermediary for the avoidance of other States’ privacy laws by removing current restrictions on who can request private information enabling public sector agencies to charge for making personal information available to overseas foreign nationals providing for the referral of cross-border complaints to the appropriate privacy enforcement authority and establishing a mechanism for controlling the transfer of information outside of New Zealand where the information has been routed through New Zealand to circumvent the privacy laws of the country from where the information originated. 
The issue of privacy is an important one and the voting will show that. We all recognise that privacy is important. Over time the ability for us to have our privacy undermined has grown as the ability to store and transfer data and also the surveillance of individuals has increased. This is the sort of legislation that requires constant consideration. It is a bit like the consumer legislation debated earlier this morning—the Motor Vehicle Sales Amendment Bill. Things change very quickly so it is timely that we look at this. It would be interesting for people to consider that even in 5 years the flow of information round the world has sped up and the magnitude of those information flows has increased. Privacy is important and this legislation both considers whether our legislation is robust enough—and clearly we have come to the decision that it is not—and future-proofs our Privacy Act to ensure that we take account of changed circumstances globally. These are the reasons why Labour members are supporting this legislation. 
In an era of increasing globalisation and e-commerce our current inability to give privacy assurances to our trading partners is a potential impediment to trade. One of the particular matters that this bill deals with and that the select committee considered is the European Union’s particularly stringent requirements in relation to this area and the bill takes that matter into account in its provisions. Getting privacy law right is important for both individuals and for businesses. Businesses have to be able to ensure that the benefits obtained by the use of new technology do not compromise individuals’ expectations for security in the use of personal information. 
As I mentioned earlier this bill complements the Law Commission’s review of privacy laws and I have to say that there is more work to be done on that. To reinforce the point I made earlier this is yet another bill that arises from work done by the previous Labour Government. There have been many such bills this week and it will be interesting to see what the Government will do in terms of substantive and positive forward-looking legislation of its own. The main provisions of the bill provide the Privacy Commissioner with the discretion to prohibit the transfer of personal information from New Zealand to another State if the commissioner is satisfied that that will breach OECD guidelines for example governing the protection of privacy or may circumvent privacy or data protection laws of the State from which it has been or will be received. So the Privacy Commissioner gets some new powers in this bill. The commissioner may not prohibit the transfer of information however where the transfer is required or authorised by any enactment convention or other instrument imposing international obligations on New Zealand. There is a limit to the ability of the commissioner to prohibit transfer in that particular situation. 
Currently our Privacy Act provides that an individual must be a citizen or permanent resident of New Zealand to make a request under the Privacy Act—that is a request to obtain confirmation of whether an agency holds personal information to be given access to personal information or to correct that personal information. That changes under this bill which is very important. It removes that residence restriction to enable foreign nationals to access that information. 
TODD McCLAY (National—Rotorua) 
: 
 Thank you very much Mr Deputy Speaker— 
Hon David Cunliffe 
: Nice tie. 
TODD McCLAY 
: —and I thank the member opposite for the compliment on my nice tie. I agree with him. Actually his tie is very nice as well. 
It gives me pleasure to speak on the Privacy (Cross-border Information) Amendment Bill. In particular I think it is important to speak on this bill because the amendment is designed to ensure that personal data originating overseas and sent to New Zealand is subject to New Zealand’s privacy protections. The bill’s transfer prohibition notice mechanism will ensure that foreign personal data cannot be sent via New Zealand to jurisdictions without adequate privacy protections. 
Well that sounds good but why is it important? I think it was a Green member speaking in the debate earlier who mentioned the European Union and the difficulties it had had with other countries of the world—namely the USA. The EU has a data protection directive in place. It was one of the first parts of the world to decide that the protection of individual data when it crossed borders was important. Its directive states that when data is sent to a country outside the European Union that country must have rules in place that will protect that data to the same degree as it would be protected had the data remained within the European Union. 
After a number of difficulties in the world—September 11 and other terrorist atrocities—the Americans decided that they wanted to collect additional information on people before those people travelled to their country and indeed at the time they were issuing visas to people who might want to travel to the USA for whatever purpose. The difficulty was that in deciding that when people travelled from Europe to America information would need to be shared it was the view of the European Union that the US data protection rules were not the same as the union’s. Therefore there were many years of discussion about that between the US and the European Union and I understand that that has been rectified. 
It could be that New Zealand will have similar difficulties with the European Union or with other countries that have very strong legislation on data protection but this legislation means that guarantees can be given. I think our data protection rules will be the same as those of the European Union and most other countries of the world and the legislation will mean there will not be any hold-up as far as trade is concerned with people travelling to New Zealand or with information we might share or be required to share with America or anywhere else. For that reason it is important that we support this bill. 
I am glad the legislation is about to enter into force very soon. I recognise that members opposite have said that the previous Government introduced this bill to the House. As with many many other bills that Government introduced it paid a bit of lip service to it but did not have time to put it through; I am not sure that that Government was very serious about it. But are we not glad we changed Governments and that the Opposition will be supporting the bill today? 
I think that the tie of the member opposite cost him more to buy than mine cost me but it is still a very nice tie. Thank you. 
Bill read a second time. 
Third Reading 
Hon PANSY WONG (Minister for Ethnic Affairs) 
 on behalf of the  
Minister of Justice 
: I move  
That the Privacy (Cross-border Information) Amendment Bill be now read a third time 
. 
Bill read a third time. 
The House adjourned at 4.13 p.m. (Thursday)