Volume 696 Week 65 - Thursday 20 February 2014Text is incorporated into the Bound VolumeVolume 696 Week 65 - Thursday 20 February 2014[Sitting date: 20 February 2014. Volume:696;Page:16181. Text is incorporated into the Bound Volume.]Thursday 20 February 2014Mr Speaker took the Chair at 2 p.m.Prayers.Business StatementHon ANNE TOLLEY (Deputy Leader of the House): Next week the House is in a 1-week adjournment. When the House resumes on Tuesday 4 March the Government will look to progress the Appropriation (2012/13 Financial Review) Bill the Electoral Amendment Bill and a number of other bills on the Order Paper.Questions to MinistersBetter Public Services Targets—Progress1.KANWALJIT SINGH BAKSHI (National) to theMinister of Finance: How is the Government’s focus on Better Public Service results improving New Zealanders’ lives while helping New Zealand’s long-term fiscal position?Hon BILL ENGLISH (Minister of Finance): As the House will know the Government announced at the beginning of last year a number of results that it wants to achieve with Better Public Services and it publishes updates on those results every 6 months so that the public can hold the Government to account for achieving better communities. The Better Public Services results for the last 6 months to the end of 2013 were released today. They show that focusing public services on specific objectives is beginning to show gains for individual New Zealanders and their families particularly those who are most vulnerable. What we are finding is that making progress with for instance increasing immunisation rates protecting vulnerable children and improving educational achievement is in the long run good for the Government’s books but more important good for communities. The latest results show that 91 percent of babies are now fully immunised by 8 months for instance and they are on target for 95 percent by the end of this year. That is just one example where the results are way in excess of what the normal expectations of public services were in the past.Kanwaljit Singh Bakshi: What progress has there been in some of the other Better Public Services results?Hon BILL ENGLISH: There have been results where there has been good progress and other results where we have not yet made significant progress. But one area where we are making progress is the target of reducing long-term welfare dependency by 30 percent by 2017. More effort is going in upfront to get people off benefits and particularly more efforts to prevent young people going on benefits. We know that 70 percent of the future cost of the benefit system relates to people who first went on a benefit aged under 20. So as a result of more focused case management and growing job opportunities we are seeing a reduction in long-term welfare dependency.Kanwaljit Singh Bakshi: Are all Better Public Services results on track to be achieved?Hon BILL ENGLISH: As the published assessment shows if a result is not on track to be achieved it would be marked by a traffic-light system as red. Result No. 4 which is reducing assaults on children has seen an increase in the number of substantiated cases of physical abuse. However we believe that the figures may reflect a greater percentage of cases being reported rather than a greater number of cases actually occurring. This of course is a first step towards reducing the number of assaults on children. It is important that people speak up when they have concern forchildren’s welfare even though that might make the Government target a bit more difficult to meet.Kanwaljit Singh Bakshi: As part of the Better Public Services programme are other ways of improving results to help achieve the targets being considered?Hon BILL ENGLISH: One of the strengths of the Better Public Services results is that it encourages departments and agencies to go and find others who can help them achieve their objectives. For instance the Department of Corrections has a target of reducing reoffending because every prisoner who goes back to the prison system is very expensive. It is working with Housing New Zealand providing prisoners to refurbish at least 150 State houses over the next 5 years. The benefits both for Housing New Zealand and for prisoners who need skills are pretty obvious. Yesterday the housing Minister Nick Smith set a programme to fast track into State houses those families with children at risk of rheumatic fever. It will be rolled out across most of the North Island. Combating rheumatic fever is another Better Public Services target. So health and education officials are working with housing officials to reduce the incidence of this Third World disease.Job Creation and Unemployment—Forecasts2.GRANT ROBERTSON (Labour—Wellington Central) on behalf ofHon DAVID PARKER (Deputy Leader—Labour) to thePrime Minister: Does he stand by his statement that “when this Government came in there were predictions that unemployment would rise to over 10 percent”; if so in the December 2008 Economic and Fiscal Update what level did Treasury forecast that unemployment would peak at?Hon BILL ENGLISH (Deputy Prime Minister): on behalf of thePrime Minister: Yes. In early 2009 the New Zealand Institute warned that unemployment could rise to over 11 percent. In answer to the second part of the member’s question the December 2008 Economic and Fiscal Update forecast peak unemployment of 6.4 percent. However 6 months later in Budget 2009 once the full implications of the global financial crisis were understood unemployment was forecast to peak at 7.5 percent. Fortunately and partly because of good policy unemployment did not get that high.Grant Robertson: Is he aware that the projections that the New Zealand Institute were relying on to say that there would be a forecast of 10 percent come from a paper that has been totally discredited because of a basic coding error in a spreadsheet that makes the projections completely wrong?Hon BILL ENGLISH: No I was not aware of that because I am less concerned about the 2008 unemployment forecast than are Labour Party members who seem to be obsessed with trying to defend their terrible economic record.Grant Robertson: To assist the Minister of Finance I seek leave to table an article not easily found from dailyfinance.com which says: “Math in a Time of Excel: Economists’ Error Undermines”—Mr SPEAKER: Order! The document has been suitably described on the basis that I am assured it is not easily found. I will put the leave. Leave is sought to table that document. Is there any objection? There is not.Document by leave laid on the Table of the House.Grant Robertson: Is it in fact correct that unemployment has been above the Treasury forecast since National took office and that actual performance against the forecast has been getting worse and worse?Hon BILL ENGLISH: I think it is typical of the Labour Party’s obsession with measurement rather than with the real economy that its measure of anything is how it connects to the Treasury forecast. In fact unemployment is dropping and in a fewmonths will be lower than Australia’s. I can remember that member and others spending a number of years attacking the Government because unemployment was higher than Australia’s. I hope they will get up and compliment the Government and New Zealand businesses and workers on getting unemployment lower than Australia’s.Grant Robertson: I raise a point of order Mr Speaker. Although it was interesting to hear the Prime Minister’s views—Mr SPEAKER: Order! What is the point of order?Grant Robertson: —he did not in fact address the very specific question.Mr SPEAKER: I invite the member to repeat his question.Grant Robertson: Thank you. Is it in fact correct that unemployment has been above the Treasury forecast since National took office and that actual performance against the forecast has been getting worse?Hon BILL ENGLISH: No.Grant Robertson: It is.Hon BILL ENGLISH: No and I do not care what comparison there is with the 2008 unemployment forecast. On “Planet Labour” that matters but in the rest of the world 2014 is what matters.Jami-Lee Ross: In 2008 when the New Zealand economy had gone into recession a year before the global financial crisis—Mr SPEAKER: Order! Can the member just ask his supplementary question without the lead-in.Jami-Lee Ross: What other forecast did Treasury make in its 2008 Economic and Fiscal Update when the New Zealand economy had gone into recession a year before the global financial crisis?Hon Trevor Mallard: I raise a point of order Mr Speaker. That Minister was not responsible for the 2008 estimates. They were for a period before this Government.Mr SPEAKER: No. I have listened to the question and on this occasion the question is in order and can be answered by the Minister.Hon BILL ENGLISH: There were some alarming aspects of the 2008 Economic and Fiscal Update. Treasury forecast never-ending fiscal deficits and that under the policies of the previous Labour Government New Zealand would never get into surplus. It projected that Government debt would reach 50 percent of GDP by 2020. In fact it will be well less than half of that figure if the John Key - led Government is able to persist with its sensible policies.Grant Robertson: Why is Treasury forecasting that in 2018—10 years after his Government came into office—unemployment will still be higher than when he took office?Hon BILL ENGLISH: We can always argue about Treasury forecasts and I often do. If the Labour Party thinks it is going to win the next election by arguing that it managed the economy perfectly in 2008 then we will win by even more than people think we will now.Jami-Lee Ross: What recent reports has he seen on the outlook for growth and employment in the economy?Hon BILL ENGLISH: There have been a lot of reports on this but clearly because Labour Party members are more interested in 2008 they will not have read them so I might have to tell them about what is in them. In 2013 66000 jobs were created. There are 139000 more jobs in the economy than 4 years ago. The Purchasing Managers’ Index for manufacturing which has apparently been in crisis has expanded for 16 consecutive months and employment in manufacturing expanded in 2013. We are still waiting for the report from the mock select committee that conducted an inquiry into theso-called manufacturing crisis. In its half-year update Treasury is forecasting growth above 3 percent and employment growth over 2 percent.Grant Robertson: Does he agree with Treasury last week which said: “there are not any impediments to the rate of unemployment falling back to levels that existed in the mid-2000s.”; if so why is unemployment forecast to remain higher than the mid-2000s for the remainder of this decade under his Government’s policy settings?Hon BILL ENGLISH: There are a couple of reasons I can think of as to why unemployment has dropped a bit more slowly than we would all like. One is that the relatively low level in 2008 was built on a debt-funded consumption splurge which was always unsustainable and many New Zealanders who were led to believe they had sustainable jobs by the Labour Party in fact did not. The other reason is that there was a debt-funded Government spending splurge in the years running up to 2008 and that also had an artificial unsustainable impact on the level of unemployment. In the next 5 years we are going to be creating real sustainable jobs.Grant Robertson: What does he say to the editor of theWaikato Times who said that Mr Key had seriously exaggerated his Government’s accomplishments in recalling what had happened in recent years given the growth in unemployment in that region; and why will the Prime Minister not just be upfront and honest with New Zealand about unemployment?Hon BILL ENGLISH: The Prime Minister has never been anything less than upfront and honest about unemployment. The fact is that the conditions for reducing unemployment and for faster employment growth now are positive. One thing that is a big risk to that would be the prospect of the Labour-Greens ever getting into Government because they are expressly transparently and honestly anti-jobs.Southern District Health Board—South Link Health and Fraud Allegations3.KEVIN HAGUE (Green) to theMinister of Health: Was he told in 2010 that the Southern District Health Board had received legal advice that suggested there was the possibility of fraud in its dispute with South Link Health?Hon TONY RYALL (Minister of Health): Thank you for the question. Since yesterday’s question in the House we have gone back through the records in the office and double-checked with the Ministry of Health and the district health board’s records and can find no reference to being advised at that time. This is a complex commercial dispute over between $5 million and $6 million of savings generated through laboratory and pharmaceutical contracts during the 1990s and whether there was agreement on how those savings would be reinvested back into health.Kevin Hague: When the Minister said in the House yesterday that he had been aware of the wider issue of the dispute for quite some time but not the allegation of the misuse of public funds what precisely did he think the dispute involved?Hon TONY RYALL: I have been aware for quite some time—in fact probably even when in Opposition because the dispute had been going on since 2002—that there was a dispute about the terms in which those funds were being used. I had never been told that there was an allegation of fraud associated with that. That sounded more like a commercial dispute to me.Kevin Hague: What was discussed when the Minister met the chair and chief executive of the Southern District Health Board in October 2010?Hon TONY RYALL: If the member was able to put that question down on notice I would be able to give more advice in respect of that date.Kevin Hague: What discussions did the Minister have with Ministry of Health or National Health Board officials including Michael Hundleby Chai Chuah and StuartMcLauchlan about this issue since 2010; and what did they tell him about the likely need for legal action—criminal or civil—on the matter?Hon TONY RYALL: The member is going back 3 years or so on this issue. I would have to know specifically the dates of those things. What I do know is that as Minister of Health I have been aware of this issue for quite some time and I am aware that at the end of 2010 the district health board referred the dispute with South Link Health to the ministry.Kevin Hague: Is he seriously asking the House to believe noting the very high political and public awareness of fraud especially in this particular district health board that when the Ministry of Health received a letter in 2010 stating that there could be elements of fraud concerning more—potentially much more—than $5 million no one briefed him on this possibility?Hon TONY RYALL: The ministry has advised me that it has no record of having received the 2010 letter until 2014. What I can tell that member is that I am certain that if someone told me there was evidence of fraud at a district health board then I would have taken the appropriate action.Kevin Hague: Is it acceptable to him then that for 3 whole years officials would withhold information from him about the possibility of a fraud to which they were apparently alerted in December 2010?Hon TONY RYALL: The issue really hinges on the nature of the 2010 letter. The 2010 letter actually says that there are elements here that could be fraud but equally those elements could be a commercial dispute and further work is needed to draw any conclusion. That letter was never referred to me; nor did the ministry have a copy of that until I think 2014.Kevin Hague: When the Southern District Health Board wrote to the Ministry of Health’s audit and compliance unit in December 2010 seeking an investigation and recommendation as to what it should do why did it take 3 years for the ministry to respond?Hon TONY RYALL: Look that is a very good question and it is not a matter of it taking 3 years to respond. The audit and compliance people are based in Christchurch and you will be aware that in the weeks after the letter was referred there was the second substantial Christchurch earthquake. Towards the end of 2010 work was undertaken by the audit and compliance people there was an effort to try to mediate a settlement further in 2011 and there were a number of discussions with lawyers for the district health board and forensic accountants during that time. So action was being taken.Hon Annette King: Did he phone Murray Tilyard of South Link Health at the end of last year to ask his advice on a possible chair for the Southern District Health Board knowing that Mr Tilyard was in dispute with the board over $5 million to $6 million and having by then been told there could be elements of fraud?Hon TONY RYALL: It would have been before—I would have spoken to Professor Tilyard well before the end of November I believe. Yes I did speak to him and I did actually speak to a large number of people in the Southern District Health Board area.Finance Services—Protection for Vulnerable Consumers4.Le’aufa’amulia ASENATI LOLE-TAYLOR (NZ First) to theMinister of Consumer Affairs: Does he believe he is doing all he can to protect consumers particularly vulnerable low income families?Hon CRAIG FOSS (Minister of Consumer Affairs): The Government is taking a number of steps to protect consumers—particularly vulnerable low-income families. The passage of the Consumer Law Reform Bill will protect consumers by giving moreprotection under the Consumer Guarantees Act and implementing unfair contract provisions so that consumers do not get stung. The Commerce Committee is currently considering the Credit Contracts and Financial Services Law Reform Bill. This bill will help protect vulnerable low-income families by cracking down on dodgy loan sharks and helping families to become more informed when making financial decisions.Le’aufa’amulia Asenati Lole-Taylor: Does he think that it is fair that vulnerable low-income families investing $50 per week are paying up to $20 a week in fees which is 40 percent?Hon CRAIG FOSS: I am not sure of the question. It seems like an investment and financial markets question. Families investing $50 per week—I am just not sure of the question but the Financial Markets Authority is available to administer investment and financial issues. There are financial dispute resolution services to deal with dispute matters as the member addresses. There have been examples recently of totally unacceptable behaviour by some in some communities with similar amounts to what the member mentions and I understand that the police have been looking into those matters.Le’aufa’amulia Asenati Lole-Taylor: Is he aware of Noah’s Ark Foundation a savings scheme scam where low-income investors can pay as much as $1000 a year in fees on savings as little as $5000?Hon CRAIG FOSS: No I am not. If the member is alleging—well that sounds like some pyramid scheme or something like that. That is illegal under existing law and I advise that member to take those matters to the appropriate authority as soon as possible.Te Ururoa Flavell: Is he aware that most interest rates for pay-day lenders operating in New Zealand are between 400 percent and 600 percent and when will he follow the lead of Australia America Britain Japan Singapore France Germany Switzerland Canada Mexico and almost all of South America in applying interest rate caps on pay-day lenders?Hon CRAIG FOSS: I thank the member for the question. That particular issue was and is part of extensive consultation on the Credit Contracts and Financial Services Law Reform Bill. This and other matters are currently under consideration by the Commerce Committee and I am looking forward to its report.Le’aufa’amulia Asenati Lole-Taylor: Is the Minister aware of concerns held by Māngere Budgeting Services Trust that investors with Noah’s Ark Foundation are bound to save a minimum of $50 a week for a minimum of 5 years—a very long time for low-income families?Hon CRAIG FOSS: As I said I am not aware of the particular fund or whatever that is that the member describes but I do acknowledge the Māngere Budgeting Services Trust which participated in a consumer forum we had recently in Auckland. I commend it for its ongoing good work on behalf of so many in our community.Le’aufa’amulia Asenati Lole-Taylor: What will the Minister do to improve the financial literacy of some of our most vulnerable people to ensure that they do not fall prey to dastardly schemes such as this?Hon CRAIG FOSS: The member raises a very good and important issue around financial literacy particularly in parts of our more vulnerable communities. I acknowledge the launch of The Exchange last year pulled together by the Commission for Financial Literacy and Retirement Income which is charged with financial literacy in New Zealand which will be particularly targeting and working in communities that I think the member is very aware of. I look forward to participation by all sorts of community organisations and NGOs as that gathers its own steam.Le’aufa’amulia Asenati Lole-Taylor: What does he have to say to Mr and Mrs Lilomaiava who have been saving for quite some time and who have been prevented from buying a home where they want to buy one and subsequently upon requesting their savings were told that they had to pay a penalty of $1500 plus communication through legal representation only?Hon CRAIG FOSS: I suggest that that family take advice or the member may help them and direct them to a place where they can take advice and make a complaint because some of what she described there does sound to be quite pushing the margin of existing law.Te Ururoa Flavell: Does he support the work of the Ministerial Committee on Poverty; if so when will he introduce interest rate caps to protect loan shark victims 90 percent or thereabouts of whom are Māori or Pasifika?Hon CRAIG FOSS: Yes I do support the very good work of that ministerial committee and know that some Māori and Pasifika families are indeed vulnerable to loan sharks and predatory behaviour by some in our community unfortunately. I know that they will be benefiting from changes in the bill that is currently before the select committee. Issues around interest rate caps are being considered by the committee still I understand but I note that there was not widespread support for them in submissions although they are still an option before the committee.Carol Beaumont: Why has this Government not fulfilled John Key’s 2011 undertaking to get tough on loan sharks given the Hamilton budget service seeing 100 percent interest rates this year on loans to struggling families?Hon CRAIG FOSS: This Government is extremely tough on loan sharks. The bill before the committee—a committee that I think that member is on—actually makes life somewhat more difficult for those who prey on the most vulnerable in our community.Better Public Services Targets—Reduction in Crime and Reoffending5.PAUL FOSTER-BELL (National) to theMinister of Justice: What recent results has she received regarding Better Public Service targets for crime and reoffending?Hon JUDITH COLLINS (Minister of Justice): Results published today show that crime and reoffending continue to fall in New Zealand. The most recent Better Public Services results in September 2013 show that since June 2011 the total crime rate has fallen 13 percent the violent crime rate has fallen 9 percent youth crime has fallen 22 percent and the reoffending rate is down 11.4 percent. The Better Public Services targets set by this Government are to reduce recorded crime by 15 percent violent crime by 20 percent and both youth crime and reoffending by 25 percent by 2017. These are excellent results and we are well on target to deliver against those targets. Thank you.Paul Foster-Bell: What do these results mean for our communities?Hon JUDITH COLLINS: What a great question. Today’s results show that in the year to September 2013 51553 fewer recorded crimes were experienced by New Zealanders than in the year to June 2011. That is 51553 fewer incidents impacting negatively on our families and on our communities. This includes nearly 4000 fewer violent offences and more than 1500 fewer Youth Court appearances by 14 to 16-year-olds. This means that fewer lives are being disrupted by negative events; a significant reduction in financial emotional and physical costs; and significant savings to communities and Government agencies such as prisons hospitals and social agencies. Each year the story gets better. Crime is at a 33-year low.Paul Foster-Bell: What additional steps are being taken to keep reducing crime rates in New Zealand?Hon JUDITH COLLINS: Despite these fantastic results from our hard-working agencies this Government knows that it cannot rest on its laurels. There is much work yet to be done. Examples of projects focusing on further reducing crime include the Hutt Valley Innovation Project where community agencies and justice and social sector agencies work together to reduce crime and improve efficiencies; flagship initiatives expanding the Hutt Valley methodology to Hamilton the East Coast and Papakura; front-line workshops across the country engaging operational managers of related agencies working together; and a collective impact tool box that has been developed to further spread this methodology in a practical way to front-line staff.Supermarkets—Relationship with Suppliers6.Hon SHANE JONES (Labour) to theMinister of Commerce: Was he aware of alleged cash payments being made to buyers from Countdown Supermarkets in return for the preferential treatment of suppliers prior to 19 February 2014?Hon CRAIG FOSS (Minister of Commerce): If the member is referring to the allegations he raised in the House yesterday no but this allegation and those that the member raised involving blackmail extortion and retrospective payments should be taken to the appropriate authority.Hon Shane Jones: Given the grave allegations regarding the Australian-owned supermarket Countdown that were detailed in a sworn affidavit broadcast onCampbell Live last night will he now apologise for saying I was grandstanding making inflammatory allegations and had not backed up my statements regarding the behaviour of this particular supermarket?Hon CRAIG FOSS: Absolutely not. The member made serious inflammatory allegations of blackmail—which is in fact covered under the Crimes Act—extortion and retrospective payments. To make a retrospective payment a member would have to have some kind of time machine.Hon Shane Jones: Does he think that his performance—in particular that recent response—is standing up on behalf of Kiwi workers and firms against the Woolworths empire and does he think that Kiwis still have confidence in him as a Minister?Hon CRAIG FOSS: The Commerce Act is in place for the protection of Kiwi families Kiwi buyers Kiwi suppliers and Kiwi businesses. The Commerce Commission administers the Commerce Act. If any member gets in the way of that process or prejudices its outcome there may be an unintended outcome as far as that process is concerned as it moves through the Commerce Commission. I am very cautious of trying to let the Commerce Commission do what it is prescribed to do.Hon Shane Jones: I raise a point of order Mr Speaker. In the midst of that supernumerary response there was nothing as to whether—Mr SPEAKER: Order! There was a relatively lengthy question asked as well. No on this occasion the Minister has addressed the question—maybe not to the member’s satisfaction. He has further supplementary questions.Hon Shane Jones: Is he prepared to promote tough restrictions on how supermarket chains including Countdown use their market power including giving the competition watchdog greater oversight?Hon CRAIG FOSS: Currently I think that under the existing Commerce Act the Commerce Commission has good oversight and tools to investigate such matters. I can confirm that the Commerce Commission has launched a formal investigation into the supermarket sector of New Zealand.Hon Shane Jones: Given that he told the House that he keeps a watchful eye on what is happening in Australia will the Minister confirm to the House that he has read digested and is prepared to call for work to be done on the code just entered into inAustralia to deal with its supermarket giants’ suppliers which was agreed to by the Australian Minister for Small Business—not the small Minister?Hon CRAIG FOSS: That member who hides behind parliamentary petticoats when he makes accusations—[Interruption]Mr SPEAKER: Order! Is this a point of order?Hon Shane Jones: I raise a point of order Mr Speaker. The question was related to a statement he made about—Mr SPEAKER: Order! What is the point of order?Hon Shane Jones: —how much he is watchful across Australia. That was not addressed in terms of the code just introduced—Mr SPEAKER: Order!Hon Shane Jones: —in terms of Australian commerce policy.Mr SPEAKER: Order! The member also had a sly dig at the Minister when he asked the question. The Minister has started his answer; I want to hear it.Hon CRAIG FOSS: The member is incorrect. The Australian code between the supermarkets has been accepted by the Australian Minister. It is going through the policy process at which stage at the end it may form part of the Australian Competition and Consumer Commission’s administration. It is not yet fully in play as far as law is concerned. Of course we are keeping a watching brief on all developments in Australia including the “root and branch” review of all competition matters.Hon Shane Jones: I seek leave of the House to table a copy of an article outlining the code given that the man is ignorant of it.Mr SPEAKER: Order! I need the source of the article. If it is a newspaper article I am not even prepared to put leave. What is it?Hon Shane Jones: The article comes from a newspaper not commonly available in Parliament called the Australian.Mr SPEAKER: No it is available if members want to search for it.Student Achievement—Pasifika Power UP for NCEA7.Dr CAM CALDER (National) to theMinister of Education: What recent announcement has she made on initiatives to help Pasifika parents engage in their children’s learning?Hon HEKIA PARATA (Minister of Education): Today I announced the launch of this year’s Pasifika Power UP for NCEA with new components to help Pasifika students with their National Certificate of Educational Achievement (NCEA) studies. This is a 3-week programme to guide NCEA students in years 9 to 13 and their parents to make good subject choices in a programme of study to ensure a good-quality NCEA qualification. As I announced earlier in the week provisional data for 2013 shows that achievement of NCEA level 2 amongst Pasifika students has risen to nearly 72 percent up an outstanding 7 percentage points since 2012 and up 16.5 percentage points since 2008. These students their parents their communities their teachers and their school leaders deserve to be congratulated on achieving these truly great results.Dr Cam Calder: What effect does parental engagement have on student achievement?Hon HEKIA PARATA: Research tells us that the two most important out-of-school factors that help young people to be successful at school are strong parental involvement in their child’s learning and high expectations held by their community. Pasifika Power UP is a great example of parents teachers and communities raising the expectation of success for their students and working together to enable them to succeed. Last year I met the Asi family in Porirua. Three generations attended the Pasifika Power UP station there and made a family education plan to prepare their year10 son for his first year of NCEA and to begin preparing their year 7 daughter. The really great thing was that as a family they were able to map out the steps they could take to support their son—Rt Hon Winston Peters: Without a charter school!Hon HEKIA PARATA: —yes I am talking about out-of-school factors not in-school ones—in his specific programme of study towards his career aspirations. The 3-week programme being launched this week is focused on getting more Pasifika families involved in making good choices to support their children’s education. One size—Mr SPEAKER: Order! It is now getting to a very lengthy answer. [Interruption] Order! That answer is quite sufficient.Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill—Financial Veto8.SUE MORONEY (Labour) to theMinister of Finance: Is it still his intention to use a financial veto against my Bill which proposes to extend paid parental leave to 26 weeks?Hon BILL ENGLISH (Minister of Finance): The Government has not made a final decision but quite possibly.Sue Moroney: Does he think a financial veto would be justified for a bill supporting families that would cost just $36 million in the forthcoming 2014-15 financial year?Hon BILL ENGLISH: The Government will take into account a number of factors including the fact that the cost rises pretty quickly after that. Another factor is that the focus of the Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill excludes a significant number of families in much more difficult and challenging circumstances with much lower incomes who may be more deserving of Government support.Sue Moroney: What does the Minister of Finance propose to do for the families that he has just spoken of who miss out on paid parental leave?Hon BILL ENGLISH: It would be a very long answer if I went through the wide range of ways in which the Government is endeavouring to help those families. They range from extensive investment through the investment approach—for instance to get sole parent families out of welfare dependency and into work because when they do not have a job but they could have one they are not eligible for paid parental leave at all. So that is just one measure and there are many others.Sue Moroney: Does he agree with the Prime Minister when he said in reference to the Tīwai Point subsidy that $30 million is not a major outlay and does this cause him to reconsider his threatened use of the financial veto when it comes to a similar amount for families in this forthcoming financial year?Hon BILL ENGLISH: As I think the member may have picked up over the last year or two the Government is less focused on spending large amounts of money to try to show it cares—that is other people’s money—and more focused on actually supporting the people who need it to change the course of their lives which is what taxpayers expect us to do. So in that sense the amount of money is less important than the impact of the intervention and we believe that there are other groups that are a higher priority for very necessary support from the Government to bring some order and aspiration to lives that may be chaotic and lacking hope. The old Labour Party used to be interested in those families. The new Labour Party is not.Sue Moroney: What assurances can he give women like Nicola whom I spoke of on Tuesday in the House whose twins are due on 9 July 2014—that is this year—that there will more than 14 weeks’ paid parental leave available for her and her babies?Hon BILL ENGLISH: We can give her the assurance that because of sound fiscal management over the last 5 years 14 weeks of paid parental leave is sustainable and she can certainly expect that. We can assure her that we will be making every effort to work with her to have her twins immunised and there is the availability of early childhood education the prospect of work if she wants it—Sue Moroney: I raise a point of order Mr Speaker. The answer from the Minister was interesting but he has failed to answer the question which was will there be more than 14 weeks’ paid parental—Mr SPEAKER: Order! That was not the question that was asked. The question was what assurances could the Minister give to Nicola etc. and the Minister was adequately addressing what assurances he could give to Nicola.Supermarkets—Regulation9.MOJO MATHERS (Green) to theMinister of Commerce: Will he support the introduction of a supermarket code of conduct in New Zealand that governs relations between supermarkets and their suppliers and an adjudicator with the power to investigate breaches of the code; if not why not?Hon CRAIG FOSS (Minister of Commerce): I thank the member for her question. I would be supportive of any voluntary code of conduct between supermarkets and suppliers that would benefit New Zealand families.Mojo Mathers: Will he consider widening the inquiry currently set up to ensure that suppliers are able to give their evidence anonymously so that systematic problems across the entire supermarket sector are able to be investigated; if not why not?Hon CRAIG FOSS: The inquiry which I can confirm today that the Commerce Commission is undertaking into the supermarket sector of New Zealand will have the checks and balances for confidentiality sensitivity and security of information that are embedded in the Commerce Act and the Commerce Commission will of course treat any process procedure or complaint as it is required to under the Commerce Act.Mojo Mathers: Why will he not proactively introduce a supermarket code of conduct in New Zealand and a supermarket adjudicator given that the United Kingdom has done this and its market is significantly more diverse than our current anti-competitive model?Hon CRAIG FOSS: I thank the member for the question. I note that the Greens have had a bill in this space for quite some time but I do note that it is still to be introduced as a member’s bill. The Australian code of conduct which is yet to be fully implemented has undertaken a long process of consultation and development until such time as it is absolutely implemented. I imagine that the Commerce Commission once it has finished its current inquiry—this may well be a result of its inquiry. We will just have to wait and see what the Commerce Commission comes up with.Migrant Workers—Protection from Exploitation10.DARIEN FENTON (Labour) to theMinister of Labour: Does he stand by his statement “addressing migrant exploitation is a priority area for the Labour Inspectorate and Immigration New Zealand”?Hon CHRISTOPHER FINLAYSON (Acting Minister of Labour): Yes.Darien Fenton: What priority has his labour inspectorate given to the case of Carlos Claveron and Emmanuel Francisco who were recruited from the Philippines to work in the Christchurch rebuild for $18 an hour but after they started working in New Zealand their employer demanded that they repay $3 an hour in cash?Hon CHRISTOPHER FINLAYSON: I would not have a clue because it is a particular matter but I will certainly find out for the member.Darien Fenton: I hope he has got a clue about this question. What advice has he had from the Minister of Immigration about workers like Carlos and Emmanuel who came to New Zealand after paying $15000 to an immigration adviser who was publicly reported as scamming other Filipino workers last March then censured and fined but who is still operating as a licensed immigration adviser?Hon CHRISTOPHER FINLAYSON: I would not have a clue because it is a particular matter but I am very happy to make inquiries and check up for her.Darien Fenton: Is he aware of Filipino workers Enrico and Alfie recruited by the same person who also signed contracts to work for $18 an hour in building work but were paid just $300 in cash for 40 hours work when they got to Christchurch?Hon CHRISTOPHER FINLAYSON: No I am not.Darien Fenton: One more try. How can he say he is addressing migrant exploitation when these and other workers were not paid holiday pay not given smoko breaks despite working 10-hour days not paid for all the hours they actually worked and asked to work on a site that was labelled with asbestos warnings?Hon CHRISTOPHER FINLAYSON: Quite easily but the member has raised particular matters with me. I have said that I would make inquiries about them if she gives me chapter and verse. I can answer matters of policy but particular matters are ones that require careful investigation in order to get it right.Environmental Reporting—Legislative Reform11.PAUL GOLDSMITH (National) to theMinister for the Environment: What progress is the Government making to ensure that New Zealanders have access to comprehensive environmental information that is independent is easy to understand and relevant?Hon AMY ADAMS (Minister for the Environment): Today the Environmental Reporting Bill has been introduced to the House. It represents the Government’s commitment to a step change in the way we monitor and report to New Zealanders on the condition of our natural environment and if passed it will create for the very first time a statutorily mandated independent environmental reporting regime. The bill requires the Secretary for the Environment and the Government Statistician to publish a domain report on one of the five environmental domains—air atmosphere and climate fresh water land and marine—every 6 months and a comprehensive state of the environment report once every 3 years. Credible environmental information will allow for accurate tracking of changes over time as well as the monitoring of the impact of policy and changes in land use and will provide a proper understanding of how New Zealand rates internationally.Paul Goldsmith: How will the bill ensure the independence of environmental reporting?Hon AMY ADAMS: Independence from the Government of the day is a key aspect of the proposed system. It will be achieved by clearly defining the roles of all of those involved. The report will be produced by the Government Statistician to provide assurance that it is independent and the Parliamentary Commissioner for the Environment will have an important role in ensuring the quality of reporting by providing independent commentary. The commissioner will have an enhanced legislated mandate to provide analysis of environmental data and reports identification of trends and a discussion of implications and responses along with additional funding to complete this work. I thank those parties that have already indicated their support and I look forward to working with all members.Eugenie Sage: Is not the Government’s poor environmental record with increasing water pollution and 61 percent of monitored swimming sites being unsafe forswimming the reason that the Government has chosen to do a U-turn on National’s election promise to implement fully independent state of the environment reporting?Hon AMY ADAMS: No and the Government has indeed implemented fully independent environmental reporting. What is more we have gone further than what we proposed by ensuring that it will be done every 3 years rather than every 5 years as we originally proposed and every 10 years if at all under the Labour-Greens Government.Eugenie Sage: How can the Minister say that her state of the environment reporting is independent when the bill provides for her to set through regulation the topics that will be reported on?Hon AMY ADAMS: The fact that this House sets primary legislation and that the executive sets tertiary frameworks under which that happens is reasonably well established and any statutory system has to have that. The fact is that it is the Government Statistician who chooses all of the indicators who ensures themselves of the appropriateness of all the data all the methodology and if the Parliamentary Commissioner for the Environment has any concerns she has the full ability to audit it. I am just disappointed that the Green members cannot bring themselves to support New Zealand finally having for the first time an independent system.Eugenie Sage: Is the Minister concerned given that we have a history of the Ministry for the Environment suppressing a chapter of the state of the environment report that by not following through on fully independent state of the environment reporting the measures that are chosen through her regulations will potentially not reflect the state of the environment and the measures will ensure that a full pretty picture is painted of what the Government is doing?Hon AMY ADAMS: No. Actually the very reason we are passing this legislation is to ensure that that sort of interference that we saw in 2007 cannot happen again. The Government does not choose the measures; the Government simply determines through regulation the areas to be covered. The Government Statistician does the rest.Immigration—Fraud and Exploitation of Workers12.Dr RAJEN PRASAD (Labour) to theMinister of Immigration: Does he stand by all the statements he made in his answers to Oral Question No 11 on 13 February 2014?Hon MICHAEL WOODHOUSE (Minister of Immigration): Yes I do with one qualification on the point about whether the individuals referred to were unlawful at the time of the alleged fraud. The timing of the alleged fraud is a matter of conjecture but I can confirm that they were unlawful at the time of their first approach to Immigration New Zealand.Dr Rajen Prasad: Does the following statement contained in letters from Immigration New Zealand dated 20 and 23 January to the students referred to in oral question No. 11 last Thursday amount to a threat of deportation: “If you do not leave New Zealand voluntarily you will be liable for deportation.”; if it does will the Minister accept that his challenge to me to verify my statement has been satisfied?Hon MICHAEL WOODHOUSE: No I do not. It is simply a matter of fact that individuals who are here without a valid visa are unlawful and are liable for deportation. That is a simple fact that does not in and of itself constitute a threat to deport.Dr Rajen Prasad: I seek leave to table the two letters that I referred to from Immigration New Zealand to the Minister—Mr SPEAKER: Order! That is all that is required. Leave is sought to table two letters from Immigration New Zealand to the Minister. Is there any objection to those two letters being tabled? No. They can be so tabled.Documents by leave laid on the Table of the House.Dr Rajen Prasad: Given his comments in his answers to oral question 11 last Thursday that “my instructions to officials is that people who speak up do so without fear of being disadvantaged in the way that the member describes.”—that is without being threatened with deportation—and that the Immigration New Zealand threats of deportation represent a breach of his instructions how will he strengthen his instructions to ensure that these breaches do not occur?Hon MICHAEL WOODHOUSE: I do not think it is difficult to reconcile those two statements. If somebody is already unlawful simply speaking up about an allegation does not give them a free pass. However I will say this about the case being referred to by the member: it is a very good opportunity I think to test the fairness of the instructions I have given Immigration New Zealand and I am doing that.Dr Rajen Prasad: Given the Minister’s statement that it is a simple matter for people who have been the victims of fraud involving false job offers and job selling to call the 0508 558 885 number or the Crimestoppers line why is it that of the 75000 inquiries received last year—the Minister’s own figures—only 52 cases of fraud were investigated; and in the last 2 years the number of investigations fell by almost half compared with the previous 2 years?Hon MICHAEL WOODHOUSE: Firstly the number I quoted on 13 February was I think 750000 not 75000. I think the measure of the success of the policies that have been put in place is not necessarily the number of investigations. Often the policies remove the situations that could give rise to them. But I do note and reiterate that the number of successful prosecutions has gone up by between 400 percent and 500 percent over the time of this Government.Question No. 6 to MinisterSu’a WILLIAM SIO (Labour—Māngere): I raise a point of order Speaker. I am sorry I should have raised this earlier but I did not want to disrupt the flow of questions. I note that when my colleague the Hon Shane Jones asked the Minister of Commerce a supplementary question to question No. 6 earlier one of the comments made by the Minister was—and I think I am correct in the quote—“Don’t hide behind parliamentary privileges.” or something to that effect. I thought it was inappropriate and now I have been trying to find something here in the Standing Orders. I feel that it was seriously wrong for the Minister to use that in a threatening way not only to my colleague—[Interruption]Mr SPEAKER: Order! This is a point of order.Su’a WILLIAM SIO: As a member of Parliament I feel that that is a threat to all of us because if we are meant to be able to speak frankly and freely in this House as representatives of our communities I find it inappropriate for one of our own to then use that as a threat. I am not asking you to rule on this now. I think that those words ought to be struck from the records and I think also that you should be instructing all members of Parliament that they need to uphold parliamentary privileges.Mr SPEAKER: Order! I will rule on the matter—[Interruption] No I do not need assistance. The words cannot be struck from the records. They were said in this Parliament and they will remain. I accept that the member took it as a threat. I listened to it. I certainly did not think it was said in a threatening way. Members as we have demonstrated over the last week certainly have an opportunity to utilise parliamentary privilege. That has been done and nothing that has happened should ever change that. Members have a responsibility to use parliamentary privilege responsibly and in this case I think they have. The Minister did challenge the member to step outside. That is alegitimate debating point; it is for the member to decide. I do not think it was issued as a threat but I acknowledge that the point raised by Su’a William Sio has been raised genuinely.DENIS O’ROURKE (NZ First): I raise a point of order Mr Speaker. The point of order is that the words actually used were “parliamentary petticoats” which I think is disrespectful to Parliament and unparliamentary. The person concerned should be required to withdraw and apologise for that comment.Mr SPEAKER: Order! If the member was offended by something that was said at the time then it is important the member raises it immediately.Questions to MembersParental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill—Purpose and Timing1.JACINDA ARDERN (Labour) to theMember in charge of theParental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill: What is the purpose of the Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill?SUE MORONEY (Member in charge of the Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill): My bill will extend paid parental leave from the current entitlement of 14 weeks to 26 weeks. This will enable parents to spend more time with their newborn babies in those precious early months without having to rush back to work due to financial pressure. The World Health Organization recommends that babies are exclusively breastfed for the first 6 months of their lives and enabling a parent to stay at home during this time will make it significantly easier for parents to do this.Jacinda Ardern: When is the bill proposed to come into effect?SUE MORONEY: Great news for families. I propose that the first 4 additional weeks of paid parental leave be available to families from 1 July 2014—this year. This would bring New Zealand in line with the 18 weeks’ paid parental leave available in Australia. I further propose that this would increase to 22 weeks on 1 July 2015 and finally reach 26 weeks on 1 July 2016.Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill—Report-back Date2.JACINDA ARDERN (Labour) to theMember in charge of theParental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill: Why did she agree to the extension of the report back date from the Government Administration Committee until 28 February for the Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill?SUE MORONEY (Member in charge of the Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill): I thank the member for the question. I was approached late last year by the National Party with a request to extend the report-back date of my bill to enable it to reconsider its opposition to my bill. I said I would if any proposals it had on paid parental leave were to be done through my bill in my name. It agreed and therefore I agreed to extend the report-back date.Jacinda Ardern: Were there any other extensions?SUE MORONEY: Yes indeed. The bill was extended on two other occasions earlier on in the piece because of the large number of submissions received on the bill and the comprehensive fiscal work the select committee asked officials to provide on this bill.Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill—Support3.JACINDA ARDERN (Labour) to theMember in charge of theParental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill: What support does she have for the Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill?SUE MORONEY (Member in charge of the Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill): There is enormous support for my bill. At the Government Administration Committee we heard from mums dads grandparents community organisations businesses health advocates and even the legal fraternity. In fact 99.6 percent of more than 3800 submitters supported the bill. I would also like to thank the Green Party New Zealand First the Māori Party Mana and United Future parties for their support for families at the first reading of my bill. Their support reflects the broad support this bill has from New Zealanders.Jacinda Ardern: Has she seen any opposition to the bill?SUE MORONEY: Indeed I have. Yes the National Party and the ACT Party both voted against my bill at the first reading but I hope they have listened to New Zealanders on the importance of this issue and I look forward to their support when the bill is reported back to the House. From the 0.04 percent of submitters who were either neutral or did not support the bill the interesting argument was put forward that women would lose their ability to do their job if they were away from the workforce for more than 6 months. That was a really disappointing point of view from an organisation like Business New Zealand.Points of OrderCommerce (Code of Practice for Supermarket Grocery Suppliers) Amendment Bill—Leave to IntroduceMOJO MATHERS (Green): I raise a point of order Mr Speaker. I seek leave for a member’s bill the Commerce (Code of Practice for Supermarket Grocery Suppliers Amendment) Bill to be introduced forthwith and for it to be set down for first reading as members’ order of the day No. 1 on the next members’ day.Mr SPEAKER: Leave is sought for that course of action. Is there any objection? There is.Urgent Debates DeclinedMeat Industry—Inspection and Certification of ExportsMr SPEAKER: Honourable members I have received a letter from the Hon Damien O’Connor seeking to debate under Standing Order 386 a report of a media investigation into the certification and inspection of New Zealand meat exports. For there to be an urgent debate there must be a particular case of recent occurrence that involves the administrative or ministerial responsibility of Government that requires the urgent attention of the House. An urgent debate is a way of holding the Government to account for an action for which it is responsible. There must be distinct ministerial responsibility for the particular case for which the debate is sought. There is no ministerial responsibility for a media investigation or report. Issues of importance may have been raised but a debate cannot be granted on the basis of media allegations or speculation or the absence of actions on the part of the Government. The application is therefore declined.Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman): I raise a point of order Mr Speaker. I would just like clarification of the issue because to my knowledgethis is the first time that we have had a public admission that seven consignments of meat sent to the US were in fact rejected by US officials. To make matters slightly worse and that is why I consider we need a debate officials have been denying that reality. In fact one of the senior people—Mr SPEAKER: Order! I have heard enough.Hon Damien O’Connor: —Carol Barnao at MPI said—Mr SPEAKER: Order! I have ruled on the matter. There will not be a debate today on this matter. I am happy to further discuss the matter with the member in my office.Taxation (Annual Rates Foreign Superannuation and Remedial Matters) BillThird ReadingHon TODD McCLAY (Minister of Revenue): I moveThat the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill be now read a third time. This bill aims to continue the work of further rationalising the tax system and ensuring that existing tax bases are applied fairly. I want to recap on the main points of this.The bill aims to simplify the rules relating to the tax treatment of foreign superannuation schemes. This will bring fairness and certainty to the rules and ensure that more people understand and can therefore comply with their tax obligations. It also contains proposals for bringing the tax treatment for mining of specific minerals broadly into line with that for other industries in New Zealand. This bill aims to clarify the minimum financial reporting requirements for companies and includes changes to the tax rules relating to bad debt deductions for holders of debt to make them fairer. It is important that existing tax rules are working as intended so the bill continues proposals to ensure that income tax rules cater for the rebuilding activity now taking place in Canterbury and I think this is a very fair thing.Proposals are also included to ensure that the changes to the general and life insurance business tax rules work as was intended as well as proposals to further improve the integrity of the Working for Families tax credit provision. In addition an extension of time is proposed to allow the Inland Revenue Department to fully test and implement changes to the child support scheme and to bring certainty. Donee status is proposed for three new charitable organisations namely the Kailakuri Health Care Project—New Zealand Link Marama Global Education and Marama Global Health. Donors to these charities will now be eligible for tax benefits on their donations.I would like to thank at this point the Finance and Expenditure Committee for its work on this bill and its recommendations for improvement. Its members have done a very good job here and I commend the chairman and all members for working under such difficult and arduous circumstances. I would also like to acknowledge the work of our officials including the tax law drafters and policy development staff and to recognise many from the tax industry in New Zealand who have worked closely with the Inland Revenue Department on the development of many important tax policy positions in this bill. I commend the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill to the House.Dr DAVID CLARK (Labour—Dunedin North): I applaud the Minister of Revenue for coming into the House to deliver the third reading—sorry I mean for remaining here to hear my words of wisdom in response. The Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill which we are debating will be supported by Labour but with significant reservations. We have debated these on the way through.Significant among them is the fact that this bill solidifies the tax changes that were made in 2010 that have seen inequalities in New Zealand grow to their highest levelsince we have kept reliable records. Those changes of course have to be affirmed every year for our tax rates—that is part of the Government’s business; it has to reaffirm the tax rates—but as this bill passes through we note that we are not comfortable with the divide that is growing between rich and poor primarily because of the opportunities that are being stripped from those at the bottom and those in the middle. It is at their expense that those at the top have had the biggest benefit from the tax swindle in 2010. We know that a full 44 percent of the value of those 2010 tax changes went to the top 10 percent of earners in New Zealand and that the bottom 20 percent got just 2 percent of the value of those tax changes which of course was immediately swallowed up in the GST increase that John Key said he would not make but then made as soon as the election was over and he had the opportunity.The people in the middle are the people who are getting squeezed but who did not used to get squeezed and that is middle New Zealand. We are hearing more and more from those people as they see the opportunities for their children dwindling. Children who can get away are getting away and I note that over 200000 New Zealanders have left for Australia under this Government’s watch despite its promise that you would not lose your loved ones.This is a Government that is out of ideas and even those few ideas that it did have do not seem to be working. So we have a situation in New Zealand where the inequalities are growing bigger and bigger and bigger and that is proven by all of the statistics available to us—the Gini coefficients and other measures relied upon by economists throughout the world. We also know that changes could be made. We could be having a more productive economy through having a progressive tax system that is actually aimed at growing the economy. A pro-growth tax reform package could have been put into this bill but it was not. Right now we know that there are loopholes for those who wish to invest in the speculative sector—in property—and we have people there who pay very little tax but who have a high degree of capital invested in that speculative sector.When a pro-growth tax reform is achieved and it will be achieved under a future Labour-led Government we will have more money going into businesses in the productive sector. We expect that that will halt the decline that is inexorable under this Government for manufacturing in the non-primary sector. That Government does not seem to care. Government members have all got their heads down now because they know that the statistics are not in their favour. They know that what little vision they had has not been realised. They know that median wages are still below what they were when they took office and the recession was kicking in. That is a Government that has failed to deliver on its promises. It has talked about ambition but it has not delivered.Some of the other things in this bill are uncontroversial. The fact that the mineral development taxation regime is being looked at—to firm up expectations and to be clearer about when taxes will apply and at which stages in the mineral development process—is appropriate. It will hopefully make things clearer so that there can be investment in the responsible development of our resources.In the bill we note that there are some changes that will be difficult for New Zealanders to swallow in terms of the way in which foreign superannuation will be treated. We know that two siblings going on separate overseas experiences on their OEs—one to Australia and one to the UK—who return at the same point in time having earned comparable amounts will have their superannuation treated differently when they return to New Zealand as the Australian scheme will be treated far more fairly than the British one. That will be a point that many many many New Zealanders will be uncomfortable with.Some of the changes to the foreign superannuation provisions were needed because there is a lot of lack of clarity in the law. That will certainly make it simpler for people to understand how it will apply. That said the way in which people can transfer their funds from the UK is somewhat more complex and we have certainly had many submissions in the select committee process calling at the very least for a thorough education programme so that people know how to comply with the law whilst preserving the savings that they have made abroad for their retirement.One of the more controversial things in this bill comes to us late in the piece. The Minister announced a few days before Christmas that this bill would also contain a remedial matter as it is known in the kind of uncontroversial-sounding language that is used and that it would be the winding back of the child support legislation that was put through Parliament not very long beforehand. The child support legislation aims to change the formula for calculating the amount that is owed to the primary carer of a child by the other parent. We know that there are families in New Zealand that have very difficult circumstances when they separate—there are many many blended families amongst our communities—and that it is difficult for those families to work out their financial arrangements. The very sad thing about this is that it was entirely preventable. Families around the country will have been preparing—taking legal and financial advice—for the changing law and now we know as of a few days before Christmas that the law change will not be implemented. The Government has decided to back out of that law change in order to retain the current law for a bit longer. So those families who took out extensions on mortgages rearranged the education of their children or made various other arrangements that involved them committing to financial arrangements will now have to seek further financial advice as to their situation in the interim before the bill that makes the law change to the new calculation regime is finally enacted.We also know that that new regime will be far more complex that the Inland Revenue Department is voting itself a whole lot more money to train its own staff how to use it and that the regime will be challenging for families and parents to use. This additional complexity this delay in the implementation was entirely avoidable but it is the doing of a Government that really has not got its head round the fact that the computer system that collects our taxes is now 24 years old. The Government was told 5 years ago when it took office that the system was on its last legs but it has done nothing—nothing—to fix it. There would not be many people at home watching this broadcast who rely on computer software that was designed and implemented in 1992 but that is the situation in our tax department in New Zealand. We have a computer system that was built before Google. We have a computer system that was in place 10 years before Facebook was even a concept for people.This is a Government that has had the responsibility for upgrading the system. We are not the only country in the Western World that has a tax system after all. It should not be rocket science. The National Government was told 5 years ago when it came into office that the system urgently—urgently—needed fixing but this Government has done nothing. Two years ago Prime Minister John Key said that tax policy was being held back because of this computer system. He said that the systems “can’t actually support radical changes from Government.” He also said: “You don’t want to be in a position where Parliament is held hostage to a lack of technology.” That is where we are today. It is over 2 years on from John Key’s statement saying that this was a priority for this Government. This is indicative of the way this Government goes about its business. It says that things are a priority but it is doing nothing. It is not repairing those most fundamental problems that need to be addressed.That is why New Zealanders find that they are experiencing a lack of opportunity and lack of hope for their children. Not only are the changes that we do have ideologically driven to drive the gap between those who have and those who have not ever wider but even those productive changes like implementing pro-growth tax reform could not actually be put in place because this Government has neglected the most basic structures of government. But the system was not entirely neglected I would say because the one thing we do know is that it has spent $50 million in the past 2 years—$50 million and growing—on international consultants to tell it what we already know: that there is a problem. It has now agreed in principle to spend more money—Hon Ruth Dyson: How much?Dr DAVID CLARK: It has already spent $50 million on international consultants and now it has agreed in principle to spend more money developing business cases to fix a problem that we already know exists.PAUL GOLDSMITH (National): It is my pleasure to stand at the third reading of this bill the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill. It puzzles me following Dr Clark—he has a PhD I believe. I am not quite sure what subject it is in but I thought if you had a PhD you could expect that there would be some link between evidence and claims.Hon Trevor Mallard: I raise a point of order Mr Speaker. I do not think the member is being deliberately disrespectful to you in referring to your academic qualifications but he has now done so three times. I am pretty sure that you do not have a PhD Mr Deputy Speaker—I am not absolutely certain but I am pretty sure—but the member is referring to it.Mr DEPUTY SPEAKER: I was not offended but the member ought to be careful with his pronouns and not include the Speaker.PAUL GOLDSMITH: My apologies Mr Deputy Speaker. It may well be that you indeed have an honorary doctorate from somewhere; I am not sure. But going back to David Clark the member he endlessly says that the rich are getting richer and the poor are getting poorer. Well there is no evidence anywhere to indicate that at all. If you can show us the data—[Interruption] Clearly there was a change in the 1980s when the Labour Government was in power but there is no evidence anywhere that you can point to that since the mid-1990s there has been any difference in terms of income inequality in New Zealand. Please show it. Rather than keep talking about it show us the facts because there are not any.The second thing is he stands up and says we should have a more progressive tax system. Well hang on a moment is it not progressive as it is at the moment? We have got nearly 70 percent of income taxpayers in New Zealand paying a marginal tax rate of 17.5 percent which is not a high tax rate and a very small group of income taxpayers—about 6 percent of them—paying around 40 percent of the income tax and much more when Working for Families is taken into account. So why does David Clark not just stand up and scream it that he really wants to follow Mr Francois Hollande’s approach of a 75 percent income tax rate. That is what he wants. If that is what he wants then why does he not say it and be honest about it? If he really thinks that that is how the New Zealand economy is going to grow—that we should get a real progressive tax system back—then why do you not stand up for a 75 percent tax rate? Because that is what the Labour Party wants. I am just waiting for Labour to do that. That party is clearly out of touch when its leader thinks his reasonably middle-range existence is one—I am not quite sure what tax rate should be appropriate for his middle range existence but there you have it.Getting back to this bill the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill the main thing that I just want to draw attention to is that there are four main proposals in this bill. I just want to thank—Dr David Clark: Is the member covering SOP 413?PAUL GOLDSMITH: —I will come to that—the members of the Finance and Expenditure Committee who have worked very collegially and hard on this bill. There are quite complicated matters around foreign superannuation and the mining of specified minerals. We had a lot of detailed submissions and we worked our way through them more or less in a collegial manner. I do want to thank all members of the committee. I just mention that the changes to the tax on foreign superannuation are designed to make it simpler and fairer both for New Zealanders returning from having worked overseas and for migrants. It is a difficult area. Where we have got to is you know it may not be perfect but it is a lot better than where we were before where we had a huge number—a very high percentage—of those people who were not actually paying their tax and not even understanding where they had to go.Finally bringing the tax treatment of mining of specified minerals such as gold and silver into line with general business tax principles is the way to go and this bill achieves that. On that basis I commend the bill to the House.Hon TREVOR MALLARD (Labour—Hutt South): There are a couple of points I want to make about previous speakers. Without getting into any detail about the presence or absence of members it used to be a tradition in this House that Ministers when they were making the first speech on a bill would listen to the response. They would be in the House listening to the response in order to be briefed by their officials and to work with their colleagues on the team.I could tell that the Minister in charge of this bill Mr McClay was not listening or communicating with later speakers on the legislation. I think that is a pity. It is a loss. Ministers used to think that the House took some priority for their time and in fact there used to be a requirement for many more Government members to be present in order for there to be a quorum and I think it is a pity that that is not the case at the moment.I now want to turn to Paul Goldsmith—the person who sacrificed his seat so that the major ethical supporter of the National Party John Banks could come to this Parliament—and refer him to his comments by way of interjection and I think during the Committee stage that there is a lot of the detail in the bill that he as chair of the Finance and Expenditure Committee did not understand. Well what is the point? What is the point of having a member who chairs the Finance and Expenditure Committee who gets extra funding for doing it who is meant to look after the process and who admits to this House that he did not focus enough on this very important legislation to the point of being able to understand it? That is sad.Maggie Barry: Tell us what you know about it. This is your chance.Hon TREVOR MALLARD: I hear Maggie Barry going on. Clearly it is after lunch. Clearly it is after lunch because Maggie Barry has had some of her stimulation.Maggie Barry: FebFast Trevor—you should try it. You need it.Hon TREVOR MALLARD: There she goes again—another clear example. The member got a bill out of the members’ ballot this morning and maybe she celebrated for 2 or 3 hours. She celebrated for 2 or 3 hours in the bar over lunch. She does not need that sort of win to behave in the way she is in the House today. She seems to do it without an excuse.But I do want to go back to the bill. In particular I want to focus on the child support part of the bill and say that any member who is worth their salt and who works in their electorate would have worked over the last year with constituents who have beenlooking forward—sometimes for many years—to the changes that were meant to occur and have been deferred.No one—no one—will ever describe the current system for child support as fair. It is not fair. It does not take enough into account it is much too narrow in its effect and it does not take into account properly both sides of the custodial relationship. There was an agreement within this Parliament for a new system whether it is totally satisfactory or not. Again I do not think anyone would agree with that. I think it would be in the eyes of the beholder and certainly people who are involved in custodial and support disputes will not agree that the new system is ideal. But the vast majority of reasonable people will agree that the new system is better and will be better than the one it is replacing. People have been looking forward to it.All of us I am sure have been sending out to our constituents copies of the changes that were to have occurred. I am feeling somewhat culpable because I relied on the word of the Government I relied on the decisions of this Parliament I shared them with my constituents and they made their financial planning decisions based on them. And what did we have by way of an awful grubby little Supplementary Order Paper? We had Todd McClay coming to the House and taking away from parents an entitlement that had been established by this Parliament. He took away from parents a decision of this Parliament without any consultation without going to a select committee and without even an apology—without even an apology—to those parents who have increased their mortgages those parents who had made schooling arrangements those parents who let their kids join clubs and those parents who let their kids get involved in sports that were slightly more expensive than what they could normally afford.Parents made a lot of spending decisions for themselves and for their children. Some of them had bought a car and arranged to pay it off using the money that was coming. Some of them did an extension in order to have an extra bedroom so that teenagers of different genders could have their own rooms. Houses were extended. Some people shifted houses to places with higher rent. And now Todd McClay has come into the House and said: “Oh sorry the money that we agreed you would have you are now not allowed to get for 2 more years. And by the way it will not be backdated.” Which member opposite says that that is just and fair? Not one. There is not a single member opposite who is prepared to say that they agree with Todd McClay. But I want to be generous to Todd McClay because he is not the Minister who for most of the last 7 years has been in charge of developing the computer system for those changes to occur.Dr David Clark: Who was?Hon TREVOR MALLARD: That was Peter Dunne. Peter Dunne was the Minister who was meant to be in charge of that computer system up until June last year. He spent $50 million. Peter Dunne has spent $50 million not on buying a computer system but on overseas-based consultants—$50 million on overseas-based consultants spent by Peter Dunne. Who thinks that that is good value for money? And what has John Key done now that he has brought back Peter Dunne into his ministry? He has given him charge of the computer information systems and their oversight not for the Inland Revenue Department but for the entire Government.Dr David Clark: What about data security?Hon TREVOR MALLARD: He is in charge of data security notwithstanding the fact that John Key has told the House that he thinks Peter Dunne is the person who leaked the Kitteridge report or made it available to a reporter. John Key has in an act of desperation brought Peter Dunne back into his ministry when we all know that Peter Dunne is a guilty man who is responsible for the parents of New Zealand not getting the amounts to which they are entitled and their kids will suffer as a result. There is not oneNational member opposite who is prepared to defend Peter Dunne from the accusations—from the facts—of his ineptitude.Dr RUSSEL NORMAN (Co-Leader—Green): I stand here to speak on the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill which the Green Party will be supporting even though it has some significant concerns about the bill. Perhaps the single largest problem with the bill is of course the way that the Government has chosen to cut tax rates for upper-income earners as part of its 2010 signature tax cuts policy. Of course part of this bill continues those tax rates going forward. It is a simple fact that the tax cuts from 2010 meant that the top 10 percent of income earners were $1.1 billion a year better off. Those basic tax cuts that National introduced were a direct transfer of wealth to the top 10 percent of income earners of around $1.1 billion per year one of the single most expensive policies that this Government has introduced. The Government prioritised spending—public money—on the top 10 percent of income earners in New Zealand.We live in a country with over a quarter of a million children living in poverty. You would think that getting money to that quarter of a million children would be a top priority for spending $1.1 billion every year year on year. But in fact what the National Government decided with the support of John Banks Peter Dunne and the Māori Party as they voted for the Budget was that the priority for spending $1.1 billion—so $1100000 every year; that is the cost of the tax cuts—was the top 10 percent of income earners in New Zealand. It beggars belief that this is the value system of this Government. The value system of this Government says that the priority for spending a huge amount of money every year should be those who have the most. Instead of saying we should be directing spending to the 270000 children living in poverty to the kids who cannot afford lunches at school and the kids who cannot afford shoes to wear to school—instead of those kids being the priority for Government spending; instead of the kids who are growing up in poverty and cannot get a proper education because it is very hard learn when you are hungry—instead of National prioritising those children National chose to prioritise giving $1.1 billion every year to the top 10 percent of income earners. Year on year it is continuing the spending in every Budget. To my mind that is a completely unethical decision and I think it tells so much about the values of the National Party.The Green Party recently proposed spending about $100 million a year to support children going to decile 1 to decile 4 schools that is the poorest schools in the country so that they got a decent lunch and access to welfare services and health care at their schools. We called it the school hubs programme. The spending involved was $100 million a year or thereabouts—a very significant sum of money. But it is less than one-tenth of what National gave to the top 10 percent of income earners through the tax cut policy. National attacked the Green Party for spending lots of money on the poorest children in New Zealand—$100 million a year a significant sum of money I totally agree—but we believe that it was the priority. National spends $1.1 billion every year giving money to the top 10 percent of income earners and it attacks the Green Party because it wants to spend one-tenth of that amount to make sure that poor kids get an opportunity to get a decent education. Those are the priorities of the Government—the National Party and the ACT Party—and these are priorities of the Green Party. We believe that the Green Party proposal should be in this bill. If you were going to do something about income tax then why would you think that you should give $1.1 billion a year to the top 10 percent?The other thing of course that is remarkable about the tax system in New Zealand and the spending that the Government prioritises is the subsidies to the oil industry. The Government subsidises the fossil fuel industry in the order of $40 million to $50 milliona year. On top of that there is no price on carbon any more in New Zealand. The Government has slowly gutted the emissions trading scheme and of course there is no carbon charge so effectively there is no price on carbon. The Ministry for the Environment has modelled what will be the effect of the current policies of this Government on greenhouse emissions. The Ministry for the Environment tells us that according to its official projections net greenhouse gas emissions from New Zealand will increase by 50 percent in the next decade. So there will be a 50 percent increase in net emissions by New Zealand in the next decade. That is a result of the current policies of this Government.Instead of putting a price on carbon and introducing complementary measures—around transport for example—in order to reduce our greenhouse emissions the New Zealand Government has policies in place that will result in a 50 percent increase in greenhouse emissions in the next decade according to the Ministry for the Environment. Just think about it for a second: what if every country in the world was as irresponsible as this Government. If every Government in the world took the attitude that it was going to increase its net emissions by 50 percent we would have an even worse climate problem than we have at the moment. It would be a climate catastrophe. When you look at the floods across southern England at the moment and when you look at the typhoon that hit the Philippines most recently these are kinds of extreme weather events that climate scientists tell us we can expect more of as we destabilise the climate. This National Government has a policy of destabilising the climate so that our children inherit out-of-control climate change.Hon Tau Henare: I thought climate change was calming down because of the winds in the Pacific?David Bennett: What a load of rubbish.Dr RUSSEL NORMAN: The noise that people might hear in the background is the heckling from the Government members who are climate change deniers. They deny the science of climate change which is remarkable. They are very happy to have the science that sits behind their mobile phones or the science that sits behind their computers but when it comes to the science behind climate all of a sudden they become science deniers. They say: “Oh no we do not want to have that kind of science. We do not like the climate science.” So they heckle repeatedly about how they do not like the climate science but the fact is that climate science tells us very clearly that if we keep increasing our greenhouse emissions we will destabilise the climate which will result in more extreme weather events—the kind of extreme weather events that we have seen in southern England and the Philippines in the recent past. Under this Government’s policies the plan is to increase New Zealand’s net greenhouse emissions by 50 percent.Hon Tau Henare: Rubbish! Why is it that climate change has calmed down through winds in the Pacific or did you not read that article? I didn’t think so.Dr RUSSEL NORMAN: The Government members may shout and scream about it and heckle about how much they hate science and how they are not going base their policies on science but the science around climate is pretty settled now. We have very large studies done by thousands of climate scientists across the world and they have now reached these conclusions. Yet still we have the deniers in this very Parliament—Hon Tau Henare: Oh the deniers.Dr RUSSEL NORMAN: —who are screaming and shouting as climate deniers do that they do not accept the science around climate. That is why in this bill in front of us which should be putting a price on carbon there is no price on carbon and New Zealand’s greenhouse emissions will increase.On top of that we have increasing inequality in New Zealand. The labour cost index which is according to Statistics New Zealand the way to measure changes in earnings over time tells us that since this Government came in wages have increased 9.3 percent while inflation has increased 10.5 percent. This is according to Statistic New Zealand’s labour cost index which is what it tells us to use. Wages have gone backwards compared with inflation. Real wages are declining in New Zealand under this Government. Those are the statistics according to the Statistics New Zealand labour cost index the one measure that it tells us to use to measure changes in earnings over time. All of these things are happening under this Government.Then we have the structural imbalances that this Government is making worse. This is reflected in the current account deficit. The Reserve Bank of New Zealand says that the current account deficit in New Zealand will increase to 5.8 percent of GDP by 2016. That is 5.8 percent of GDP. We will have to borrow or sell assets in order to cover the current account deficit. That is what “current account deficit” means. So yes there is a short-term stimulatory effect going on in the economy at the moment but it is funded by borrowing and by selling assets to offshore owners. That is not a sustainable strategy for Aotearoa New Zealand. That is not smarter greener economics. That is going backwards. It is our children who are going to have to pay and the next Government is going to have to fix it up.MAGGIE BARRY (National—North Shore): I rise to talk at the third reading of the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill. As I have said in my previous calls and would like to affirm at the beginning of this call this bill—with all of its complexities with all of its technical difficulties with all of the things that it seeks to readjust—is very simple at one level which is that we are trying to make this tax system fairer and more transparent so that people will comply with it. That is the essence of it. The issue of foreign superannuation is probably one of the more interesting aspects of this legislation for many people because it impacts on so many people’s lives. We really need to keep in mind that with the current rules for New Zealanders who live overseas and for the people who come to live in our country and bring with them their own superannuation funds people have had to deal with some very complicated and variable superannuation schemes. This bill really addresses those complexities.Under the proposed changes from 1 April 2014 lump sums from foreign superannuation schemes will be taxed only when they are withdrawn or when they are transferred to a New Zealand or to an Australian scheme. This tax would depend on the gains made while the person has been a New Zealand resident. That is fair because it uses one of two calculations options. Not being taxed on accrual under the foreign investment fund rules is a major simplification. It is going to make it a whole lot easier for a lot of people who want to come and settle in this country who have been genuinely confused—as have their advisers. People came and made submissions to us talked to us at length about how tax specialists and experts found this to be a very confusing area. I commend the advisers I commend the people who have drafted this because it is complicated and it has been a minefield. I think the path has been trod very well and very carefully so I am very pleased with the legislation as it is. I know that Todd McClay as the responsible Minister on this piece of legislation is as well.It has been shepherded through the Finance and Expenditure Committee of which I am currently deputy chair. Todd McClay was the chair of the committee at the time when this was first introduced. I give you that background by way of explaining the rigour that has gone into this and the length of discussion that has gone on as well. We really do want to make it as simple as possible for people to meet their tax obligations—for example getting back to the foreign superannuation one of the measures that Iparticularly approve of is that when people are transferring their foreign superannuation scheme interest into KiwiSaver they can then make a withdrawal from the KiwiSaver scheme to pay their tax bill. That is going to allow people who have complied with their tax obligations by using those foreign investment fund rules before May 2013 to continue using those rules in relation to that interest after 2014 which is when those new proposed rules will of course come into effect. Those measures do make it fairer and easier for people who have not actually got the amount of money that they might need to pay their tax.As with the student loans amendment legislation we are trying to make it possible for people to pay back their loans and to do what they need to do because they need to actually meet their obligations. As we have said about the student loan scheme it is not a gift; it is a loan. People have obligations to pay it back. That is an issue of fairness and so too is this bill. I commend it to the House. Thank you.ANDREW WILLIAMS (NZ First): It is very good to stand and take a call on behalf of New Zealand First in this third reading of the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill and to come after the deputy chair of the Finance and Expenditure Committee Maggie Barry who has obviously given it great rigour. We think though that it should be regarded more as rigor mortis perhaps rather than rigour because at one stage the deputy chair was saying that it was going to be very simple and by the end of her speech she said that it was very complicated. So hopefully somewhere between the simple and the complicated there is an average ground.When that member said she was going to help foreigners bring their superannuation onshore I hope that she did the same when she moved from Point Chevalier over to the North Shore. Maybe she has moved her KiwiSaver funds to Fisher Funds in Takapuna and Devonport rather than leaving them on the south side of the bridge. If she is a true North Shore-ite she will have moved her funds over the bridge to invest them in the North Shore.But we are back on to the bill and we are talking about a number of things here. This bill is very much an administrative bill. New Zealand First will be supporting this bill in its third reading as we have done in the earlier readings. It basically amends the Income Tax Act 2007 the Tax Administration Act 1994 and the KiwiSaver Act 2006. In so doing it replaces some existing tax rules for New Zealand residents with interests in foreign superannuation schemes. It also changes the tax rules relating to the mining of specified minerals clarifies the rules for Working for Families tax credits addresses a mismatch in the tax rules relating to imputation credits and Australian dividends refines the rules for the deductions available to holders of bad debt and includes the granting of donee status to three charitable organisations. We are in agreement with all these measures and we believe that this is correct legislation to be passed.The bill proposes a much simpler regime for taxing New Zealand residents who receive foreign superannuation interests in their previous country of residence. The bill proposes a simple way for people to remedy their previous positions and start afresh under a new regime and a concessionary approach encourages them to do so. This particularly takes account of the fact that in terms of KiwiSaver there are proposed changes to the KiwiSaver Act 2006 to allow taxpayers who transfer from a foreign scheme to a KiwiSaver scheme to withdraw sufficient funds from that KiwiSaver scheme to pay the tax that arises on that transfer. Again this is sensible to encourage those KiwiSaver funds back into New Zealand. In terms of student loan obligation the bill allows a taxpayer to withdraw funds from KiwiSaver to cover their student loan repayment obligations arising from such a transfer as well as the tax obligation.These measures are just a sampling of some of the things in this bill. There are a great many other facets including in relation to mining. The bill proposes a range of measures including the fact that immediate tax deductions for prospecting and exploration expenditure will continue. However on the establishment of an operational mine exploration expenditure on items used for the extraction of minerals will be clawed back and will be deductible over the life of the mine. Tax deductions for development expenditure will be deferred and allowed over the life of the mine also.I note that the bill also contains a number of amendments to ensure that the income tax rules cater for the rebuilding activity now taking place in Canterbury. Again that is a good move. So overall we are in agreement with what is in this bill and New Zealand First commends it to the House.JOHN HAYES (National—Wairarapa): I think that although I did not understand the gobbledegook of that last speech from Andrew Williams I did understand its general tenor which was that the speaker’s party New Zealand First agrees with the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill. I am pleased that those members want to do that because this bill is about our country building a more competitive and productive economy which is one of the Government’s key priorities. It is only by lifting economic performance that we can create jobs we can boost incomes we can improve living standards and we can provide the world-class services that the people in my community in the Wairarapa want.This bill is the largest piece of tax legislation aimed at making the tax system fairer and simpler and strengthening our economy. This Government aims to raise revenue not through hiking tax rates as some people in this House would like to do but by ensuring that the existing tax rates are applied fairly to everybody. An important aspect of fairness in the tax system is that taxpayers must be able to understand and comply with rules and it is necessary for the tax rules to be cohesive to be fair and to be applied consistently. This bill does that and I commend it to the House. Thank you.ANDREW LITTLE (Labour): It is a great pleasure to speak to the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill. It is not a bill that I followed through the House in great detail nor did I participate in the Finance and Expenditure Committee deliberations on it and I really had only one minor contribution to make in the Committee of the whole House but it is a bill that I feel a great deal of affection for because I think it illustrates one of the distinguishing features between this National Government and the Opposition.It is the fact that this bill once again represents a lost opportunity for this Government. Our colleague Mr Hayes who has just resumed his seat said that this is a bill that will assist with economic growth and that great bounteous virtue will flow from it but it will do nothing of the sort. We know that it confirms existing personal income tax rates. Well that is another lost opportunity because what this country is desperate for is a more progressive scale of taxation. That opportunity has been lost. The National Party’s biggest donors and the biggest income earners in the country have had their benefit. They had their benefit within weeks of this Government being elected in 2008 and the rest of the country has been paying for it ever since and it will continue to pay for it because we are now wallowing in an additional $60 billion of debt racked up by this Government. This bill is a lost opportunity.The bill also deals with a new regime for taxes for the mining industry. There is nothing particularly controversial about that but the mining industry is not the industry of the future. It is not the industry that in 20 30 40 or 50 years’ time is going to be generating the value that this country needs to sustain its citizens to provide for health education support and a coherent society that we have come to expect in this country. It does not. It misses a great opportunity to provide for a capital gains tax. That is agood form of taxation because it is about directing investment incentivising investment away from our preoccupation with property into productive investment—Hon Maryan Street: And R and D.ANDREW LITTLE: —and in research and development and all those other things. How disappointing it is that we do not have an accelerated depreciation regime in this tax bill. That could have been put in there too. That would have assisted the wealth creators and the real value creators in this economy. The truth is that this Government is not a Government that is about long-term wealth creation value addition and lifting the general wealth and harmony of this country. This is a Government obsessed with mucking around in the same puddle of water we have been in frankly for far too long—more primary production more mining more commodity goods to be sold at commodity prices. The challenge for this country is to make the shift in our economy into totally new productive enterprises and into the new economy—the economy that is going to generate real wealth. It is the economy that is going to enable incomes to be lifted and the economy that is actually going to see an improvement in productivity whether it is labour productivity or capital productivity or multifactor productivity.This bill represents everything wrong in this country and it represents everything that this Government stands for and that is do nothing do the barest minimum do a bit of window dressing to make it look like you are doing something but do nothing meaningful that is going to make a long-term difference to New Zealand. Do nothing that is going to inspire some hope and give a bit of inspiration to the young people who are looking around now—teenagers who are looking around—and asking where their place is in the future where their place is in this country and how they are going to generate incomes make their mark and make their way so that they can provide for themselves and their next generation. This bill represents a frustration of ambition and of aspiration. Those are the very things that this Government claims to have been elected on. This bill represents nothing important or big for New Zealand.It is very telling that at the heart of this bill—and one of the other key elements of this bill—is superannuation and the tax regime for repatriating superannuation funds from Kiwis or residents who have worked and saved overseas got superannuation funds overseas settled back here and want to use those funds. What that illustrates is one of the real problems of New Zealand and that is our shallow capital. We are dependent on funds raised overseas to fund our lifestyle and do things over here. That is what this illustrates. This Government—because of its inaction lack of vision and because it does not have a view about where our future wealth is going to be generated from—is presiding over some of the worst inequality in this country. Paul Goldsmith stands up in this House and asks where the evidence is. He does not see it because he is not interested in it. When you live in Parnell you do not see a great deal of inequality because all the $2 million to $5 million houses all look the same.The reality is that there is growing income and asset inequality. There is a generation of young New Zealanders who cannot get into their first house because of the mismanagement of this Government. They know it is going to get worse. They know it is going to get worse when those interest rates start going up next month. They know it is going to get worse. The Government is desperate to spin distract divert attention and make sure nobody notices. The one thing that the Government has been claiming credit for—for the last nearly 6 years—is that interest rates are low which has nothing to do with the Government. It happens to be the result of a worldwide financial crisis which we are still crawling our way out of. Actually interest rates are going to go up because this is a Government that has borrowed nearly $60 billion in its time in Government because it has slashed taxes for the wealthiest and it has done nothing toencourage or promote greater wealth generation. That is the crying shame of this Government.The people of New Zealand are waking up to it. They know it they see it and they are looking around now for alternatives. They have gone off this crowd. They have gone off this crowd because they want better. Working New Zealanders want better for themselves and they want better for their kids and the next generation. Their kids want better for themselves as well. They want a future in New Zealand. They want to do good stuff. They want a Government that is interested in managing an economy in a balanced way asking those who are doing extraordinarily well to contribute a little more asking those who want to work and invest in themselves to make their contribution and asking those who have a clue about value and wealth generation to come forward and be assisted and add to the great things that this great country can do and can do for its people.This bill is a lost opportunity. This bill could have done a lot more. It could have put in place a more progressive personal income tax regime. It could have put in place a capital gains tax. It could have ensured that the once gradual but now rapidly dividing income and asset inequality was actually rectified and addressed. But it does none of that. We are bound to support this bill because it provides the income tax rates that provide the revenue that the Crown needs to carry on doing the bare minimum that it is doing. But the bill offers no vision. It offers no hope. That will be left for the next Government to do which will be a Government focused on the next generation of wealth generation. It will be focused on what this country is going to look like in 20 or 30 years’ time—a great country—and will be a Government focused on the sunlit uplands of a great future with a good economic base a balanced economic base and a happy and prosperous people who do well earn well make their contribution to each other well and who live to enjoy the benefits.DAVID BENNETT (National—Hamilton East): That member who has just finished his speech Andrew Little is a very good member of our select committee but he always uses the words “crying shame” in his speeches. I feel that the crying shame is actually his leader—the leader who lives in Herne Bay who seeks to represent the poor and downtrodden of this world and who does not actually stand for what his party stands for. When we hear that member Andrew Little we hear only about increased taxes capital gains taxes and things like that. That is all the Labour Party wants to do. It wants to tax the guts out of the working part of New Zealand and spend that on its mates. That is what it is after. That is what the Labour Party has always stood for. That is what Labour Party members want to do and that is what they are talking about today.When they talk about a capital gains tax they are not talking about a real capital gains tax; they are talking about a capital gains tax that is on only the productive part of New Zealand—a capital gains tax that is on every house in New Zealand and on every business in New Zealand. Is Labour going to promote that? Is that true? Are you promoting that?Dr Megan Woods: That’s not true.DAVID BENNETT: It is not true. So your capital gains tax is on everything is it?Dr Megan Woods: It’s not on every house no.DAVID BENNETT: It is not on everything. I did not think it was.Dr Megan Woods: It’s not on family homes.DAVID BENNETT: It is not on the family home. So the capital gains tax of Labour is not a real capital gains tax. We heard it here from the Labour Party. It is not a true capital gains tax.All the people who go around the world saying “capital gains taxes are good for economies” and who are talking about real capital gains taxes—the Labour one is not.The Labour one is going to exempt the family home. All it covers is the productive part of New Zealand and that is what the Labour Party stands for—less production less growth more interest rates and bad economic management. This bill is good economic management and we commend it to the House.IAIN LEES-GALLOWAY (Labour—Palmerston North): David Bennett is not often right but he is wrong again. He has completely got the wrong end of the stick. He does not understand Labour policy he probably does not understand National policy and he certainly does not understand tax policy by any stretch of the imagination. So let us talk about a capital gains tax and let us talk about why National hates the idea of a capital gains tax. First of all David Bennett says that this is a capital gains tax on the productive sector. It is a pity that David Bennett is not paying close attention to what I have to say. It is a pity that David Bennett gets up in the House makes inaccurate accusations shows his lack of intelligence shows his lack of understanding shows his absolute ignorance and then cannot pay attention to the speaker who responds to what he has to say.This is what a capital gains tax would do. It would encourage investment in the productive sector the job-creating sector and discourage investment in speculation in property. That is one of New Zealand’s biggest problems and it is something that this National Government has failed to address—the fact that far too much capital in New Zealand is tied up in unproductive speculation in residential property. It is true that Labour does not want to apply a capital gains tax to the family home. That is not speculation in the property market; that is putting a roof over your family’s head. The vast majority of nations in the OECD have a capital gains tax and most of those do not apply it to the family home. This is an absolutely normal run of the mill international best practice approach to taxation.But that party over there the National Party hates the idea of a capital gains tax. I wonder why that is—I wonder why that is. The first reason is that so many of them and the people who keep them in Government the people who ensure National has the resources to run campaigns rely on capital gain for tax-free income. They rely on investment and speculation in the non-productive residential property sector to make their money. They do not like the idea that a Government will come along and say to them: “Hey the way you make your money ought to be taxed just in the same way that everybody else makes their money.” Why is it that a person can go to work for 40 hours a week maybe 50 hours a week maybe 60 hours a week and earn wages to put food on the table to put a roof over their children’s heads and pay tax on every cent they earn yet National’s property speculators do not pay tax on their capital gains?That might be one reason why National does not like a capital gains tax. But I think there is another reason—speculators are the people who do best out of capital gains and the tax-free income it generates. And who are the lackeys of the speculators? It is the traders. It is the share traders and the money traders. Speculators are short-term investors. They put their money here. They wait for the price to go up. They pull their money out. They put their money somewhere else. They wait for the price to go up. They pull their money out. Every time they put their money in and they take their money out is a transaction. That is a transaction that a trader carries out and the trader clips the ticket along the way. Who is the biggest trader in New Zealand? Why is it our Prime Minister John Key. So this is just a classic case of John Key looking after his old buddies his mates in the trading sector—the money traders the used-money salesmen—who want to clip the ticket every time a speculator makes a transaction. Those are the people who are opposed to a capital gains tax.The real investors the value investors put their money into businesses for the long term. They want to see those business grow create jobs and contribute to our nation’sGDP. They are not funding the traders. They are not worried about the capital gains tax. They are worried about building a good business that is going to pay them a dividend—a dividend that they already pay tax on. No—a capital gains tax is opposed only by those who have no interest in building our nation. It is opposed by those with vested interests those who support the speculators and those who want to put their private wealth their private benefit ahead of the interests of the nation.Tax tends to be something on which the left and the right do disagree. There are good reasons for that. Over here on the left we want a fair tax system where everybody gets to pay their fair share. Over there they want to make sure that the people reliant on salaries and wages particularly the people who are on modest incomes pay more than their fair share and that the people at the top get a sweet deal. We saw it of course back in 2010 when National cut tax rates for the top 10 percent whilst at the same time putting up GST—that regressive tax—which meant that people buying food buying clothes for the kids and paying school fees had to pay more tax to make up for the shortfall from decreasing the tax on the people at the top.Bill English late last year tried to defend these changes by saying that the tax system is more progressive now since those 2010 changes. He said that households earning less than $60000 a year which total around half of all households are generally expected to pay less in percentage terms than they were in 2008 and 2009. Conversely those at the top are expected to pay more. That tells me just one thing—inequality is growing in New Zealand. Those at the top are earning more and mercifully are it would seem paying a little bit more tax and those at the bottom are earning less and therefore paying less of the overall taxation. But is it fair—is it fair? That is the question we have to ask.A measure of whether or not taxation is fair is simply this. If the top 10 percent say control 50 percent of the wealth they should be paying 50 percent of the tax. Those who control say 5 percent of the wealth should be paying about 5 percent of the tax. Here is what Bill English said. Here is what Bill English said—the words of the Minister of Finance himself. He said the top 12 percent—not just the top 10 percent but the top 12 percent—pay around 46 percent of taxation. So they are paying less than their fair share under National. Meanwhile those earning less than $60000 a year who make up around half of New Zealanders i.e. those who control about 5 percent of the wealth in New Zealand are paying 11 percent of income tax. So those earning the least who have the least wealth are paying about twice as much tax as is fair whilst those at the top get the sweetheart deals from this Government not only in income tax but also through the benefit of the tax-free capital gains that that party over there refuses to budge on.It is clear it is plain and it is in the words of the Minister of Finance himself that our tax system is unfair and New Zealand is growing more unequal and has become more unequal over the last 5 years. You do not have to listen to me. You do not have to listen to my colleagues in the Labour Party or our friends on the left of politics. You just have to listen to the Minister of Finance Bill English. His own words say it for themselves. New Zealand is more unequal and New Zealanders on moderate and low incomes have a higher tax burden than what is fair. In fact they are paying twice as much tax as they ought to.Labour members think we can do it differently. We think this bill should have been used to implement a progressive growth-focused taxation system but that is not here. That is not here because that party over there is not interested in growth. Its members are not interested in supportive innovative businesses that create jobs and contribute to our nation’s GDP. National members are interested in doing deals that support their mates. They are interested in maintaining the status quo because that is in the best interests of their mates. They are not interested in growing our economy they are notinterested in creating jobs and that is why they will be out on their ears by the end of this year.A party vote was called for on the questionThat the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill be now read a third time.Ayes119New Zealand National 59; New Zealand Labour 34; Green Party 14; New Zealand First 7; Māori Party 2; ACT New Zealand 1; United Future 1; Independent: Horan.Noes1Mana 1.Bill read a third time.Border Processing (Trade Single Window and Duties) BillSecond ReadingHon MAURICE WILLIAMSON (Minister of Customs): I moveThat the Border Processing (Trade Single Window and Duties) Bill be now read a second time. The bill was introduced to Parliament in July 2013 and had its first reading on 27 August last year. The bill is an omnibus bill. It amends the Customs and Excise Act 1996 the Biosecurity Act 1993 and other related border legislation. It has been reported back to this House from the Foreign Affairs Defence and Trade Committee and I would like to thank the members of that committee for the prompt attention they gave this bill. The committee received just three submissions on the bill—so I accept that it is not one that gets talked about around the breakfast table—including one accompanied by an oral submission.The bill makes important amendments to existing legislation to underpin the implementation of the Trade Single Window component of the new Joint Border Management System. The Trade Single Window component of the system provides a single electronic gateway for industry to interact with Government agencies for customs and biosecurity requirements and filing. The Trade Single Window will promote more effective protection of New Zealand’s border and facilitate a smoother flow of legitimate trade and is consistent with the Government’s priorities relating to the provision of more joined-up online services.The bill contains three main categories of amendments that underpin the implementation of the Trade Single Window: registering users of the Joint Border Management System; providing information to and receiving information from the Trade Single Window; and consequential changes to offences. The bill also makes minor technical changes to the Customs and Excise Act 1996 to provide more clarity and improve the effectiveness of the Act to meet Government policy goals for border management.The Customs and Excise Act 1996 requires that all goods imported or exported must be entered into the Customs Service computer system by individuals these being importers exporters or their agents who are registered users of the system. The Trade Single Window will provide for a wider range of border requirements. For example registered users will be able to provide and receive information on the movement of their goods streamlining their supply chains. The bill amends several aspects of the Customs and Excise Act to ensure that there are appropriate registration mechanisms for access to and the use of the Joint Border Management System. The areas covered by the amendments include allowing companies to be registered users instead of only individuals. Specific grounds on which the Chief Executive of the Customs Service canrefuse an application are included. It also allows the Chief Executive of the Customs Service to issue unique user identifiers for the Joint Border Management System that can be used with both the Customs Service and the Ministry for Primary Industries for border-related purposes. That is a big step forward.The Trade Single Window will use the new international data model from World Customs Organization for lodgment messages supporting access for our exporters and reducing compliance costs for the industry. The new lodgment messages will include customs biosecurity and food safety - related information enabling the Customs Service and the Ministry for Primary Industries to receive more accurate and current information to better identify and target potential risks to New Zealand. Several amendments will assist in supporting how information is provided to the Trade Single Window. These amendments cover advance notices of arrival and departure for all goods and crafts crossing our border—inward and outward cargo reports—and establish a more effective trans-shipment process for the national movement of goods.Additionally the bill amends the Customs and Excise Act to provide the Chief Executive of the Customs Service with the ability to prescribe customs rules that reflect other border-related requirements such as health biosecurity and maritime safety. This will be done using a process agreed by the chief executives of those various agencies. This process will promote clarity and consistency in industry and reduce the administrative burden of maintaining multiple and often disparate requirements from the various Government agencies. Basically it becomes a one-stop shop.To enforce the amendments contained in the bill some consequential changes to offences are necessary. These amendments relate to advance notice of the arrival of goods and craft and of the departure of goods and craft. The bill makes a number of corresponding amendments to the Biosecurity Act 1993 to ensure its alignment with the Customs and Excise Act. The bill also makes consequential amendments to other related border legislation.The bill includes some minor technical changes to provide more clarity and improve the effectiveness of the Customs and Excise Act to meet the Government’s policy goals. These amendments include updating the definition of “motor spirits” to reflect the 2012 changes to the excise and excise-equivalent duties table in the Act and clarifying the duty calculation that may be used for goods re-imported into New Zealand. The change will allow the Customs Service to assess duty using a calculation approach that is set out in an international convention. The bill delegates the power to exempt certain international organisations from excise and excise-equivalent duty on alcohol and tobacco from the Minister of Customs to the Chief Executive of the Customs Service.Finally the bill enables regulations to be made that prescribe valuation methods and the value for an import consignment below which duty need not be collected by the Customs Service known by most of us as the de minimis. This is intended to make it simpler to change the de minimis threshold in the future should any future Government wish to do so. It is not intended to review the level of the de minimis in this bill however.I also acknowledge the contribution made by the Foreign Affairs Defence and Trade Committee on this very difficult issue. The Foreign Affairs Defence and Trade Committee has recommended the bill proceed with two amendments. The committee has proposed new clause 15 to address the submission made by the New Zealand Retailers Association. The clause makes consultation mandatory with representative groups whose interests are likely to be substantially affected by proposed changes to regulations governing the de minimis and that would seem quite sensible. This amendment will increase the rigour of the minimum duty provisions and provide confidence to business and individuals about the way regulations are made for tax andduty-related matters. I am very happy to accept this amendment in order to provide assurance to members of the public and the trading community.The committee on the recommendation of the Ministry for Primary Industries and the Parliamentary Counsel Office has also proposed an amendment to one of the levy provisions in the Biosecurity Act. This amendment will more avoid doubt by clearly providing for the making of biosecurity levy orders that enable the levy to be paid at more than one rate and that can set the actual levy rate or rates. The amendment aligns the provisions in the Biosecurity Act on biosecurity levy orders with other provisions in the legislation.I once again want to say thank you to the members of the Foreign Affairs Defence and Trade Committee for their work. They did it very quickly they did it very thoroughly and I am very delighted at the work that they produced back to this House. I recommend this bill to the House.Hon PHIL GOFF (Labour—Mt Roskill): The Labour Party supports the second reading of the Border Processing (Trade Single Window and Duties) Bill. In fact as the Minister of Customs might have noted—but I do not think that he did—this had its origins as a system under the last Labour Government. That is where the concepts and the issues were worked through. Of course the Labour Party will support the bill if it facilitates the movement of goods across the border either as imports or exports and does not diminish the necessary border protection—in particular as we are a trading and agricultural country the biosecurity provisions.What this bill does is reasonably straightforward. It amends the Customs and Excise Act 1996 and also the Biosecurity Act 1993. We need it because it is required in order to implement the Trade Single Window component of the Joint Border Management System. In that one sentence alone anybody listening to this debate would ask “What the hell are they talking about?” so perhaps we should explain what that jargon means—Hon Maurice Williamson: No they talk about it over the breakfast table every day.Hon PHIL GOFF: —although the Minister of Customs is indicating that perhaps it is the Government’s policy to always keep the public in ignorance as a preference. It is not the policy of the Labour Party to do that however.The name `”Joint Border Management System” basically indicates that it is a joint initiative between the Customs Service and the Ministry for Primary Industries. It replaces the current system of providing information about movement across the border and it modernises and integrates border clearance processes for both people and goods on aircraft and ships that are arriving in and departing from New Zealand. The first stage of this tranche one has actually been implemented already in the last year.I just want to ask the Minister a question about that and hope that he will come back in the Committee stage or that subsequent National speakers will give the answers to these questions. This is a computer system. It is IT based. We have had a lot of experience of implementing new computer systems in New Zealand. The Minister introducing the bill the Minister of Customs will remember INCIS. Interestingly he says he does not. He has got a very selective memory this Minister. INCIS was a total botch-up introduced under a National Government to try to upgrade the police information technology system. Interestingly INCIS involved the same multinational computer company that is involved in this system IBM.I have heard Minister that there have been some problems with the information technology. The Government has been very quiet about it possibly following the philosophy that the Minister has acknowledged on two occasions—a lack of transparency and not talking about things that might be uncomfortable. But I have heard that there are some difficulties. I would like to know from the Minister or fromsubsequent speakers from the National Government what those difficulties have been in the technology system how big those problems have been how we are seeking to address those problems whether those problems have been resolved and what the additional costs are that might have been incurred. It is really important that we know those things.In fact when this bill was introduced it was introduced not by this Minister Maurice Williamson but by Craig Foss. Craig Foss was at that time of course the Associate Minister of Education who was in charge of Novopay. Well 18 months out Novopay is still causing huge problems for the schools in my electorate. When I saw Craig Foss in the chair introducing this legislation I thought “My God it might have been Labour’s concept but do I really trust the implementation of this system under Craig Foss and the National Government?”. The answer to that question is quite patently no. Why would you?We have had experience of those costly failures and I just think it is incumbent on the next National speaker to address the question of what difficulties have so far been incurred in implementing tranche one which is covered by this legislation. If there are major problems this House and New Zealanders need to know that. We have the right to know and the Government has the obligation to be upfront open and transparent about it. As I say those words I feel a sense of naivety in expecting those things from a National Government but I am asking for that. We are not dividing the House on this bill as we are in support of the concepts but we want to know that the Minister has implemented this properly and that the system is working.I did say before that I would explain the other part of the jargon the phrase “Trade Single Window”. It is a curious phrase “Trade Single Window” but what it essentially means is that there will be a single portal through which business and industry can meet the arrival and departure requirements of the Customs Service and the Ministry for Primary Industries. There are three changes needed that this legislation has to deal with in order for this new system to be introduced. One is to register the users of the Joint Border Management System the second is to provide information for the Trade Single Window system and the third is simply the consequential changes to offences that are created.Registration is the most important part of this bill. It is about providing for all individuals and companies that interact with the Joint Border Management System to be registered with the Customs Service. It sets out the grounds on which registration might be refused by the Minister it prescribes the form and the manner of the registration and it allows for chief executives to issue joint unique user identifiers to access approved border information. So those things are necessary. I have got to say from a trade perspective speaking as Labour’s spokesperson on trade that this is a model that is compatible with the World Customs Organization. It means that we are using internationally comparable and compatible data and it includes customs biosecurity and food safety - related information. That is an advantage of what the bill does. The information that has to be provided for the Trade Single Window by the users includes advance notice on the arrival and the departure of the craft that are carrying the goods and people. It also says who must provide cargo reports.I want to come back to the fundamentals of this legislation and why Labour is supporting it. We are supporting it because as a trading nation we have to do everything we can to minimise the costs to those who are exporting from New Zealand. We have to be internationally competitive. Having a border system that is efficient and effective is fundamental to that. From the viewpoint of importing it is about trying to minimise the costs that might be imposed on the consumer in New Zealand. So that is a fairly straightforward argument.The second criterion that we would look at on this because we are an agricultural exporting country—nearly two-thirds of our exports are primary sector based—is the need to have proper biosecurity protection. I do not think this bill does damage to that but I want to see this bill in the context of what has already been done by the Government over recent times. I have got to say that I have concerns about what has been done because in the Budget for 2013-14 there is $6 million cut out of biosecurity. I worry about that. Yes I know the Government wants to make savings but the savings are tiny in comparison with the costs if something goes wrong. And what better evidence of that do we need than the importation of the Psa disease into New Zealand which is affecting horticulture and costing hundreds of millions of dollars? So I am really worried that this Government in cutting back biosecurity is going to incur huge costs for New Zealand. I also remember that back in 2009 when the Government made cuts to biosecurity 54 biosecurity officers were cut at that point.We have been talking about importing biosecurity hazards but what about the question of exporting? Today we almost had an urgent debate on the fact that the Government is deregulating the meat inspector regime which Mr Assistant Speaker Robertson you and I are very familiar with. I worked for 7 years in the freezing works as a slaughterman. You Mr Assistant Speaker Robertson were equally closely involved in that. When you deregulate and you say that the company becomes the manager of the standards you put those standards at risk because the company has a conflict of interest. We have seen that on seven occasions we did not meet the zero-tolerance requirements of the United States market for meat which is worth $6 billion or more.I am really worried that the cost-cutting mentality of this Government will put our exports at risk. We saw the disaster that was incurred in terms of the Chinese market with the botulism scare with the dicyandiamide scare and with other problems all because the Government was penny-pinching. What I do not want to see in this legislation is the Government to be penny-pinching. I want to see proper biosecurity and I also want to be sure that this IT system is working as intended. I want the next speaker from the Government to give an assurance to the House that the IT system is working as intended and there are no significant difficulties with it. With that we support the bill but obviously conditional on the Government giving that assurance.JOHN HAYES (National—Wairarapa): I have got to say that it is quite difficult and a little awe-inspiring to come into this House and have to follow a man Phil Goff who has just admitted blood on his hands having been a slaughterman for 7 years of his career. [Interruption] Well I think it is the sort of occupation he will be looking to when he faces being in Opposition later on this year because he has clearly got no other skills that are valuable. We are well served by Minister of Customs Maurice Williamson and I think that he is one of the most competent people in this Parliament to be dealing with IT issues. I had a call this afternoon—in fact while I was sitting here in the House—from one Brother John McGeachie who had just jetted in from Papua New Guinea where he had been living. He rang to give me great compliments about the electronic passport system that Minister Williamson has been involved with putting in our airports. Any of us who travel know that that is a very good system and works without glitches.I want to react to the very direct request made by the last speaker for a comment from a National speaker. He was trying to make allusions that this electronic system is not going to work. Well I want to put categorically on record—Hon Phil Goff: I want your assurance that it is working now.JOHN HAYES:—and I give him my personal assurance—that he needs to understand that this package of electronic componentry and system is massive absolutely massive. I have got to tell you that it has taken 5 years to develop and I havegot to tell you that each module is tested and retested and retested before it is introduced and when it is introduced it is working perfectly. I categorically say to the House that this system is working well. There are inevitably little glitches here and there but we are not dealing with the sort of package we inherited with Novopay—quite different.This Border Processing (Trade Single Window and Duties) Bill makes an important amendment to existing legislation to underpin the implementation of the Trade Single Window component of the new $89 million Joint Border Management System. Can I just say that what we are talking about is amalgamating a range of services for people who are involved in bringing product into this country and giving them a one-stop shop. That means you send your documentation in one email to one address and that is all you do. What I can say is that companies like FedEx that have been trialling this system are very very pleased with it. It means that the Trade Single Window will promote more effective protection of New Zealand’s border will facilitate a smoother flow of legitimate trade and is consistent with the Government’s priorities relating to the provision of more joined-up online services. The system will lower traders’ compliance costs over time—in fact I think it should reduce their costs by about $450 million over 10 years. During the pilot with industry partners Mondiale Freight Services achieved faster response times and savings on electronic data transmission costs.Building a more productive and competitive economy is one of the Government’s priorities. The supply chain efficiency from this system as I said is estimated to deliver benefits of at least $450 million over the next 10 years. It has been a pleasure to have this legislation in front of the Foreign Affairs Defence and Trade Committee and I thank members from all sides of the House for the contributions they have made to progressing this legislation to this point today. Thank you.Su’a WILLIAM SIO (Labour—Māngere): Talofa lava. I am no longer on the Foreign Affairs Defence and Trade Committee—that lot there booted me out—but I am happy to make a contribution on the Border Processing (Trade Single Window and Duties) Bill. I recall in its first reading the points made by my colleague the Hon Phil Goff. They were pretty valid then and they are still valid today. When Craig Foss began the first reading debate there was genuine concern. We might have laughed about it in this House but there was genuine concern given it was Craig Foss who was responsible for the Novopay mess the numerous botch-ups that teachers and principals in our schools the length and breadth of this country are still having to experience. Here is a quote: “The Novopay system continues to fail …”. Three hundred and fifty principals remain underpaid this year. There is a high error rate in the pay cycle this year as compared with last year.The House will recall that this Government after the honourable Minister Craig Foss began the botch-up then appointed the Hon Steven Joyce who is well known around these corridors as “Mr Fix-it”. After his being on the job for a whole year we are still none the wiser of when the Novopay debacle is going to be fixed. So there is genuine concern despite the fact that we are supportive of this Trade Single Window. In fact it was under the previous Labour Government that this idea of the Trade Single Window was first discussed and the information as the Hon Phil Goff has mentioned came through that. In fact the SmartGate system which John Hayes lauds as being something that Maurice Williamson is credited for did not begin with National; it started under the Labour Government. So although we are supporting this bill there are these serious concerns that we need to be assured of in this House.The Hon Phil Goff made mention of INCIS—a system that was instigated with the police force under a National Government. I understand that it cost $100 million but that system failed. So the concerns we have about this Government being able tomanage these systems are genuine and they are real. Although we support our borders being protected and well resourced we note that under this Government there has been this consistent cutting of funding. I know that at one point in time the Hon Damien O’Connor raised the fact that this Government is responsible for cutting significant staff numbers as well as money from the customs budget when it first got into Government. And what we have seen under the presence of this Government in the last 6 years is the Psa fungus which affected our kiwifruit. We have seen also the fungus in our rivers. In more recent times there has been a report of a fruit fly from Australia impacting on our orchards up north. So we are not making this up—that is the point.That Government is a Government that this side of the House has serious concerns about when it has got its hands on this kind of system given its track record. It has failed with Novopay it has failed with INCIS and we are still seeing fungus and other diseases impacting on our orchards under its particular watch. What this bill now does is it enables information to be shared between the Customs Service and the Ministry for Primary Industries. Here is a concern that still needs to be raised. The sharing of information is a concern particularly when you are talking about business and the need for keeping some of that information confidential. If our business community does not feel confident about its information being made available and safeguarded by this Government I am not sure whether this Government can put hand on heart and say that that is what it will be able to do. So there are concerns and we want this Government to be able to give assurances to this House in so far as this bill is concerned.I note that when this bill went out for consultation only three submitters made a submission on the bill and only one was heard by the Foreign Affairs Defence and Trade Committee. You know our democratic system allows for—and I think we are probably the only one—a select committee process where the public are able to make submissions. I have noticed that there is a stark difference. Under Labour the opportunities for the public to participate and to air their views vigorously and robustly were made available to everyone but I have noticed that this Government has cut short the period for public consultation. I notice that the bill went out to the committee at the end of August but submissions closed in the middle of September. Is that one of the reasons why we got only three submissions?I have a concern that if the public are not given ample opportunity to air their views and to make submissions on this bill then I am not sure whether we can fully trust this Government to be making the right decisions and to get things right. As I have said and I hate to repeat myself for the sake of the House the fact that the Novopay debacle has existed since 2011—or was it 2010? It just seems like it has existed ever since the beginning of this particular Government—Hon Peseta Sam Lotu-Iiga: I raise a point of order Mr Speaker. I just want to help the member. The Government does not determine the consultation period; the select committee of each bill determines that. Thank you.The ASSISTANT SPEAKER (H V Ross Robertson): Actually that is a debatable motion Mr Lotu-Iiga.Su’a WILLIAM SIO: I raise a point of order Mr Speaker.The ASSISTANT SPEAKER (H V Ross Robertson): Are you sure? It is Thursday! The honourable member Su’a William Sio.Su’a WILLIAM SIO: I recall that in past situations where a member has got up and given a frivolous point of order they were usually kicked out of the House.The ASSISTANT SPEAKER (H V Ross Robertson): Order! No no no. I know that it is Thursday—home time soon. We have had our fun. I call the honourable member Su’a William Sio.Su’a WILLIAM SIO: I would like to repeat again for the sake of that member who may not have listened that the point we are making is that although this side of the House is supporting this bill at its second reading there are serious concerns about the Government’s ability to be able to safeguard information under the system that has been proposed. Given the Government’s track record with Novopay and INCIS and its failure at the border on some occasions I believe that it is going to be difficult for us to proceed further unless it can provide those particular assurances.The fact that Novopay has existed for quite some time—even today reports are saying that Novopay continues to fail that there are 350 principals that remain underpaid and that the errors of its pay cycle are high compared with last year—does not give confidence to the New Zealand public that this is a Government that you can trust with the information that it will gather under the Trade Single Window.I think that the trust factor is a huge factor in the minds of New Zealanders as we go into this year’s general election. I do not share the confidence of that Government in its Minister being able to completely bring this about and safely protect the information that would be gathered under this Trade Single Window.STEFFAN BROWNING (Green): I rise to speak to the Border Processing (Trade Single Window and Duties) Bill’s second reading. Back in September last year the Customs Service took us for a presentation over at its headquarters at the port there and went through this Joint Border Management System and where it was at. It was a very good glossy and smooth presentation. It was quite impressive and we did not think there was too much untoward about its system. It was coming together people were trialling it and we were pretty well reassured that everything was happening well. But we heard before from Phil Goff that there were doubts about how the system was coming into play and maybe there were some hiccups along the way so the Green Party also joins that call to ask the Minister of Customs and anyone from National what is going on what the hold-ups are and whether we are heading into another debacle in a systems way.The principle of this is very good. It tidies things up it makes systems smoother and way more efficient and it potentially cuts lots of cost. But there are issues of whether of course it will run smoothly. There are issues of whether there will be privacy concerns with the information that is shared. We have a lot of issues and we have had a lot of issues around privacy with thousands upon thousands of people’s data some exceptionally sensitive being shared inappropriately through different services. In fact the Customs Service not so long ago offered information on Kim Dotcom straight to the FBI without it even being asked for by the FBI. It was not legitimately being sought but there was a customs officer who thought it was just the right thing to do to earn some brownie points through supplying a private individual’s—a New Zealander’s—information to the USA’s FBI.Hon Anne Tolley: He’s a crook. A real crook.STEFFAN BROWNING: If there is anyone who is a crook it should be dealt with through the appropriate system. I think it is inappropriate for anyone in this House to call someone a crook; they are innocent until proven guilty if that was ever going to be the case.What does the border system do now? The border system is broken up into the Customs Service and the Ministry for Primary Industries. The Customs Service has a range of different services it is doing including clearance of all arriving and departing cargo and people including risk assessment and targeting duty and GST collection. There is quite a lot: intervention notification of cargo status to different ports data going from the Customs Service to the Ministry for Primary Industries and official trade statistics. There is a lot going on in terms of this data process. There is going to bea lot required of it. The Ministry for Primary Industries has got the issue of also being involved with clearance particularly around biosecurity of course. There is the clearance of certain imported foods—we have food safety issues there—and then there is export certification for animal and plant products to make sure that when our products do go overseas they are in good condition and they have been certified audited and verified whatever is required to make sure that our export markets have confidence in us so it is very important to get that right. Of course we have a big big question as we speak around meat inspections in this country because of deregulation which has allowed grotty dirty meat to go off to the United States that then has to be turned back because we have allowed the companies to do their own inspections. There are some issues around policy there. But the Ministry for Primary Industries has a role in trying to make sure the paperwork and everything that follows those theoretically good inspections happen properly.That is what the agencies are up to but what this will do is consolidate some of those transactions because the exporters and importers have had to go through both agencies and there is a lot more cost and there is a lot more paperwork. This is intended to be a good system. In 2012-13 there were over half a million transactions clearing 3.48 million export consignments—that is a lot of business—124000 cargo reports for 2300-odd commercial ships 42000 commercial aircraft arrivals and departures and 50 million mail items each year. One of the beauties of the system should it ever work properly is that the public will be able to make use of it as well whereas previously the systems have been geared only for commercial operators. So there is potential in this but we have to question with the delays in the system whether there is another debacle coming to us. The agencies have got a range of clients. They have got some pilot programmes and we heard about Mondiale Freight Services. In fact their pilot partners while they were trialling it take up about two-thirds of the volume that is going through. So there are significant trials happening. Some have opted in but others have stayed with the old system but why the whole thing is not working yet is a very valid question and we do wait for the answers to that. The current system is quite convoluted as I was saying. There is a lot of toing and froing with material through a lot of data entry points safety systems biosecurity systems third-party gateways overseas Government agencies and industry agencies. The new Trade Single Window will bring that way way back in. There will be one electronic message that will be standard and there are different connection options in that. We look forward to this system working properly—and very very properly at that.When we went to that presentation we were told where things were at to date with the Joint Border Management System then we were told the next steps and there was a big flag saying “On the way”. I think it is still there. It is very concerning that these systems are being delayed. It will be interesting to see what the costs involved in these delays are. There is a potential problem with information sharing and we do want to know and be confident about that. When I asked the Customs Service on that day about whether things were private to New Zealand I was told no they were open to trading partners. I asked to what extent we were commercially vulnerable with this and I was told that New Zealand security is the best security in place. But we know that that is not working too well. We even heard today that the Government Communications Security Bureau could not even say how many warrants were issued—it was getting its figures mixed up. There have been a number of breaches around security. We need to be sure that this system will protect New Zealand exporters and private individuals to the absolute utmost. At the moment we have not got that confidence.I want to finish on issues around biosecurity. I have just been pulling together a paper on a new pest that is around which is called theileria. Biosecurity needs to bemuch better and this system will ideally make sure that it is. It will be another step to ensure that we have even fewer pests—rather than the direction that we have at the moment which is of even more pests—coming into this country. We have got major ones that are costing this country millions of dollars in extra management costs to producers in particular. Theileria is a cattle disease. It came in to this country only about 18 months ago. The Customs Service and the Ministry for Primary Industries have not been able to isolate how it came in. We should not be having that. As we speak there has been another one that has come in: equine herpes. That is now in the horse industry. Again how the hang did that get in to New Zealand? The great white butterfly is yet another one. We just need this system to be working at its utmost. We are looking forward to this system working but we really need to know what the problems with it are. Thank you.Hon TAU HENARE (National): Kia ora. Te mea tuatahi ka mihi au ki ngā tangata i tae mai nei i tēnei ata ahakoa kāre au i konei me mihi ki a rātau. Nō reira tēnā koutou katoa.[The first thing for me is to acknowledge the people who arrived here this morning even though I was not here. I must applaud them. So greetings to you all.]Speaking on the Border Processing (Trade Single Window and Duties) Bill I do not want to say anything about that last speech from Steffan Browning or even about the fungus and diseases in the speech from my schoolmate William Sio. The bill amends the Customs and Excise Act 1996 and the Biosecurity Act 1993. It supports the implementation of a single trade window. It is part of a suite of ideas that has been around for as long as the Hon Phil Goff and that is quite some time.Tim Macindoe: Oh no that’s not possible.Hon TAU HENARE: It is possible. It is designed—Grant Robertson: At least he’s been here in only one party.Hon TAU HENARE: —I am the lucky one—to give the Customs Service and the Ministry for Primary Industries better information and also risk-assessment tools. The previous speaker Steffan Browning was right in saying that we actually had a demonstration of how this works. I for one asked questions about Novopay and INCIS and whether this system is any better than those two troublemakers. I was assured and the team was assured—and we were even shown how the system works not only for our border security but also for our people in business. It makes it easier. It makes it a hell of a lot easier for them to go about their business.Let us not forget that one of the main thrusts of this country is as a trading nation. I suppose we have got to be on our game to make sure that our systems are not only robust and safe but also very very quick indeed. This bill enables businesses to complete border requirements for customs food and biosecurity purposes through transactions and it makes the compliance issues easier for the trader—for the person who needs to get sign-off from our border security.There is no doubt that a lot of work has gone into the ideas in this bill over a long period of time and I for one am over the moon that our traders our exporters will have it a wee bit easier in getting their stuff to market and vice versa in terms of getting imports into our markets. It will also be easier for our border security to make sure that New Zealand is safe. I am not sure about equine herpes or anything like that. That is the Green Party. Those members know all about that and that is cool. I think that it is great that we have that sort of expertise in Parliament which we can call on when we need to or if we need to so big ups to the Green Party for that expertise. Thank you very much.RICHARD PROSSER (NZ First): I am pleased to rise on behalf of New Zealand First to take a call on the second reading of the Border Processing (Trade Single Window and Duties) Bill. New Zealand First supported this bill’s referral to the ForeignAffairs Defence and Trade Committee in the first instance although we had some concerns—not exactly misgivings as such but some concerns—as to what course the Government might choose to take with regard to biosecurity in particular following the passing of this bill into law should the House in its wisdom decide that that is in fact the appropriate course of action. However in spite of those concerns we supported the aims of the bill. We felt that it was well intentioned and that if it worked as advertised it would be a beneficial thing for importers and exporters travellers and the Government alike. So we wanted to see what the select committee had to say about it and what the submitters had to say.We note that the select committee has indeed recommended a number of changes. It has recommended that the bill should proceed with a number of amendments. We believe these are eminently sensible and that they will streamline and improve the bill and make it a better-functioning and a more well-oiled piece of legislation. So I am happy to report that New Zealand First will continue with our support for the bill in line with the recommendations of the select committee.The commentary on the bill says that the committee recommends the “amendment of clauses 2(5) 5 36 and clause 1 of schedule 1”—which relate to the commencement of the Act—“to make it clear that the Act other than those provisions relating to the Joint Border Management System would come into force on the day immediately after the expiry of the 3-month period that begins on the date on which this Act receives the Royal assent.” This we feel is a very sound and sensible approach on the part of the select committee.With regard to the requirement to consult industry groups the committee recommended “inserting into clause 15 of the bill a further amendment to section 118 of the Customs and Excise Act 1996 which would make consultation mandatory with representatives of groups whose interests are likely to be substantially affected by proposed changes to regulations governing the minimum level of duty.” The advice to the select committee was that this would be consistent with the approach taken in other legislation. It would also make the bill “consistent with other Customs and Excise Act 1996 regulation-making provisions (for example sections 34A 40A and 50A relating to fees and charges).” Consistency is a fine thing in legislation and if there could be more of it that would be a good thing. We commend the committee for this most sensible suggestion which we wholeheartedly support.More important still is the essence of the amendment that is to make consultation itself mandatory. Consultation lies at the heart of robust democracy as is impressed upon us every day here in this House through the operation of the select committee process itself. Quite apart from the fundamental right of people to be at the very least informed and for preference consulted on matters of the State that may concern them consultation with interest groups and interested parties frequently brings information and perspectives that Governments and their advisers may not have known or simply may not have thought of. It makes for better lawmaking. It makes for better laws and better regulations and a better-functioning Government within a better-functioning democracy. Again we applaud the select committee for its foresight in this regard.With regard to levy orders the committee has recommended “inserting new clause 46A into the bill to amend section 140(1)(g) and (h) of the Biosecurity Act 1993 to provide more clearly for the making of levy orders to impose or allow the imposing of different levy rates for different services or functions under the Act and to help make it clear that an order could set the rate or rates for a specified period (for example a levy year). This change would avoid doubt and would reflect the fact of the 2 current levy rates.” Flexibility is as important a factor in healthy legislation as consistency and againit is a recommendation for an amendment with which we find ourselves in complete agreement.But perhaps the most complex of the changes recommended by the committee concerns the de minimis provision for imports. The select committee considered the de minimis provision for import consignments and particularly how it affects our retail environment. The New Zealand Customs Service does not collect duty on parcels and consignments valued below the de minimis which we are advised are currently those incurring less than $60 in duty—Dr David Clark: How much?RICHARD PROSSER: —$60—because the per transaction compliance and administrative costs of calculating processing and collecting the revenue are disproportionate to the Government revenue on the goods. Patently this is unfair and makes very little sense. If a parcel or consignment attracts only the goods and services tax of 15 percent it will be subject to the de minimis provision if it is valued at approximately $399 or less. If tariff duty is also payable the de minimis will apply at a lower consignment value which is entirely fair in our view.The committee accepted—and we share its view—that “the provision of an online customer purchase option promotes a competitive retail environment encouraging retailers to become more efficient. The rapid growth in New Zealanders’ offshore purchasing of goods online costing less than $399 places many traditional retailers who have to charge GST on their retail goods at a disadvantage. The Retailers Association estimates that the de minimis provision results in forgone revenue that is estimated to be around $300 million annually. Many factors influence a consumer’s decision whether to shop in person or online and the GST charged by a domestic retailer is only one of them.”The committee observed that “Under current systems if the de minimis exception were very low monitoring incoming goods and collecting taxes due could require a large organisation costing more than any revenue collected.”—an organisation such as the Inland Revenue Department perhaps. The committee was advised that “the current border technology cannot collect GST and tariff duty effectively on imports valued at less than $399 although there are various ways to monitor them including random checks which are being examined by an interdepartmental group. Under the current law Customs relies upon an honest declaration of value to establish taxes due.”—perish the thought.The committee said: “This is a complicated subject and we are aware that the Inland Revenue Department Treasury and Customs will soon be releasing a discussion paper on collecting GST on goods and services purchased online.” We look forward to reading and digesting that paper in the fullness of time. We are told that it will include “the revenue collection issues raised by the de minimis threshold and distinguish sectors that are variously affected by online purchasing.”In conclusion although we are committed to remaining vigilant in so far as our scrutiny of this Government’s biosecurity operations are concerned we are satisfied that this is a bill with which we are largely in agreement and we are happy to support its passage through the House. Thank you.Dr PAUL HUTCHISON (National—Hunua): It is a great pleasure to take a brief call on this Border Processing (Trade Single Window and Duties) Bill.Hon Members: Oh come on.Dr PAUL HUTCHISON: Well I could go on if you really like. There is no doubt that the efficient running of our borders is vital for New Zealand’s economy and also for our biosecurity. The very good people of Hunua the electorate that I am so proud to represent are hugely interested in this. The farmers the glasshouse runners and themany others involved in agriculture and horticulture are hugely interested in having a highly efficient border management system.There has been much discussion during this debate on previous border incursions. It was very salutary how well managed the fruit fly incursion was in Whangarei just a few short weeks ago. That was in sharp contrast to the bee varroa mite which happened to come in under the previous Labour Government and that Government did nothing for year after year after year.There is no doubt that in the hands of the Hon Maurice Williamson there has been great care taken in looking at the computer and IT system development around this Joint Border Management System. I must say that the Hon Maurice Williamson has instructed his department to very cautiously and carefully go through trial mechanisms to take as many of the bugs as possible out of the system before it even gets into running mode.The Trade Single Window will promote more effective protection of New Zealand’s border will facilitate a smoother flow of legitimate trade and is consistent with the Government’s priorities relating to the provision of more joined-up online services. Building a more productive and competitive economy is one of the Government’s priorities this term. Its wonderful supply chain efficiencies from the Joint Border Management System are estimated to deliver benefits to the economy of at least $450 million over 10 years. I commend this bill to the House.Dr DAVID CLARK (Labour—Dunedin North): It is a pleasure to follow that well-enunciated speaker Dr Hutchison. I rise to support the Border Processing (Trade Single Window and Duties) Bill as my colleagues have done recognising the work of the Customs Service and other border agencies on the frontline. Their contribution is a very important one to New Zealand. Of course this initiative was conceived when Labour was in Government and Labour has continued to support the initiative since that time. We accept and acknowledge the importance of good border management and a single trade window will create a hub for exchanging information.Our real issue with this bill and the concern that lies behind the questions that have been raised in the House today is whether this Government is really up to the task of dealing with the security issues that are implicit in the bill. Dr Hutchison raised the issue of a dated computer system and the need for careful cautious progress. Certainly in many areas his Government has been incredibly cautious particularly in terms of reforms that would see our country better off. This particular instance does warrant further discussion because of course we immediately think of Novopay. The Novopay problem was something that the New Zealand public felt through seeing the teachers of this country who teach their children incredibly distracted and stressed because they could not pay their mortgages when payments did not go through.I want to also credit the teaching profession for the amazing professionalism with which they have handled—for many many many months now—the disaster that the Government inflicted upon them in the Novopay system. Dr Hutchison rightfully says that this new customs system needs to be tested thoroughly for all bugs before it is made live. That was the very mistake that was made with Novopay. That was not done and teachers today are still dealing with the consequences.We also remember the cases of ACC breaches of privacy and there were many. There were many at the ACC. Perhaps members opposite would like to talk a little bit about them because they have not mentioned those breaches in their speeches—if I can get poetic I sound like the Sneetches. This is a serious issue though because it is of concern. The Inland Revenue Department’s computer system which is of course about 24 years old now or thereabouts is the one that I wish to talk a little bit about. Thecomputer system in the Customs Service that is being replaced is 15 years old. There appears to be a National Party member coming close by in the form of this fly.It is important to recognise that the Government has a terrible track record on this. The person now responsible for overseeing data security in the Government is the person who will not deny that he made the Kitteridge report available to a Fairfax journalist and that is Peter Dunne. So these concerns are very real. The Government’s track record on data security is abominable. There is seldom a better word that could more accurately describe its track record on data security than “abominable”. The ACC and Novopay breaches were terrible.I was particularly concerned about the breaches that were revealed in the Inland Revenue Department when I was the Opposition spokesperson on revenue. In 2012 there were 32 separate incidents and over 5000 victims of data breaches in the Inland Revenue Department. The Inland Revenue Department as we know holds our most sensitive information. Taxpayers hand over their bank details their IRD numbers their addresses their names and all other kinds of things that make them vulnerable to digital incidents. The Inland Revenue Department released information on 638 people in 2012 and that was considered so serious that it had to put security measures in place to prevent identity theft. That was 2012.We learnt subsequently via the Official Information Act what the Inland Revenue Department was doing: “The Inland Revenue Department is implementing a system that will detect when an email or its attachment includes one or more IRD numbers or other types of taxpayer personal information. The tool will then prompt the user to determine if the action is intended or block the email being sent if necessary.” This information is contained in some advice to the Minister on how to respond to the bad publicity around the security breaches in 2012.We can only assume that that system was either ineffectually implemented or that it was spin from the Government and that it came out of one of the Minister’s offices. What we now know is that the following year the number of data breaches went up over 400 percent—over 400 percent—at the Inland Revenue Department. This most special and sacred information that we hand over to them—and they said they would implement a system to fix the data breaches—got 400 percent worse the next year.Viewers at home may or may not be able to see this graph—probably it is too small—but it indicates over a period of time month by month how many data breaches there are at the Inland Revenue Department. What it clearly illustrates when one looks at it close up is that the little houses at the bottom of this graph the things that look like single or double-storey buildings represent 2012 and the things that look like skyscrapers represent 2013. These are the breaches at the Inland Revenue Department. Who knows? If it continues at this rate—if it keeps increasing at a 400 percent rate—every New Zealander will have their data live on the internet within a few years. Everybody of course will have their personal information out there and we will all be at risk of security breaches.That is the record of this Government. It is not just ACC. It is not just Novopay. It is the Inland Revenue Department as well. The person who was overseeing the Inland Revenue Department computer rebuild although we confess there has been precious little progress on that is now in charge of data security for the whole Government. That person is Peter Dunne who was sacked as a Minister last year. But Mr Key says that that was last year and it is this year now and all leaks and breaches and so on are forgiven. His Government needs propping up and he is happy to have Mr Dunne back in his Cabinet.So what is the Government doing in that instance—because that will be illustrative. The computer system that is going to be fixed in this bill is 15 years old. The other onein the Inland Revenue Department is 24 years old. Well they have spent $50 million to tell them that in principle it needs to be fixed. That is an outrage in my view. The briefing to the incoming Minister told them that already 5 years ago. Peter Dunne was told 7 years that that system was on its last legs and nothing has happened to fix it. So that is why we have legitimate concerns on this side of the House about whether the Government will be able to implement this kind of sophisticated computer software that will enable border agencies to identify relationships between people and goods by linking travel and trade data. That is proposed in this bill before us now.Labour of course substantially boosted New Zealand’s border security capacity when it was in office. Scientific and operational systems were changed to more effectively investigate eradicate or manage biological threats. Labour set up Biosecurity New Zealand to coordinate the agencies that manage and protect our country against these threats. We developed a comprehensive biosecurity strategy applying to all of New Zealand’s environments—land freshwater and marine and indigenous and introduced flora and fauna. These are important things for New Zealand’s agricultural export industry.We know there have been other breaches this year. Down my way down in Pukeuri inŌāmaru there have been meat processes that have failed to be able to be introduced to China because practices were not followed as accurately and correctly as they should have to comply with the Chinese expectations of biosecurity meat processing and the like. This Government has overseen those poor poor decisions that were made. What it has done in the meantime is not strengthen biosecurity. It has not made the systems changes that would prevent that because we see time and time again things going wrong in our biosecurity system.This Government has a poor track record. We commend the intention to improve our border processing. It is essential that we have efficient and effective systems at our border. It is in our national interest to have effective and efficient systems at our border. We are a trading nation. It is not only desirable it is absolutely essential. So we support this bill. We support the intention. We raise the concerns about whether it will really be able to be implemented. And we welcome also the Government’s consultation on whether GST should be collected at the border in the way that it is currently with the de minimis approach. I have heard personally from many retailers in Dunedin in my neck of the woods who are struggling because the Government has not looked at this issue thoroughly yet.Debate interrupted.Amended Answers to Oral QuestionsQuestion No. 3 to MinisterHon TONY RYALL (Minister of Health): I seek leave to correct the answer to a supplementary question I gave this afternoon.Mr DEPUTY SPEAKER: Leave is sought for that purpose. Is there anyone opposed to that? There is none.Hon TONY RYALL: In my answer to the last supplementary question from Mr Hague this afternoon I should have said with regard to the auditing compliance people based in Christchurch: “ and you will be aware that in the weeks after the matter was referred”—I had said “letter”. And secondly it obviously follows that with regard to the Christchurch earthquake it would have been towards the end of 2011 that work was undertaken by these people rather than 2010.Mr DEPUTY SPEAKER: The record will show the correction.Border Processing (Trade Single Window and Duties) BillSecond ReadingDebate resumed.Dr CAM CALDER (National): It is a pleasure to take a brief call on the Border Processing (Trade Single Window and Duties) Bill. This bill makes important amendments to existing—Gareth Hughes: I raise a point of order Mr Speaker. I am terribly sorry to interrupt the member. It is just that the Minister of Health was making a statement from an official piece of paper I presume. I wonder whether the Minister would be prepared to table that.Mr DEPUTY SPEAKER: No I understand that he was taking it from notes that he had made.Dr CAM CALDER: This bill makes important amendments to existing legislation to underpin the implementation of the so-called Trade Single Window component of the new $89 million Joint Border Management System. This is a very very important system that we are proposing here so let us look at what it will actually do. It means that importers exporters their agents and their brokers can now submit shipment details electronically to a single point of contact through this Trade Single Window of the Joint Border Management System rather than dealing separately with several Government agencies. As someone who has been an importer in the past I can see the value of that. I am sure this will be welcomed and that is the feedback we are getting. It can be seen in the widespread support around the House that this idea has a great deal of currency. It reduces the duplication of data to border agencies and will speed up the processing of all these documents and things. It speeds up the processing times significantly. Savings will be made by connecting directly and doing away with those irksome third-party transfers and charges that any businessman or businesswoman can recall having had levied upon them.Changes are also being made to increase the effectiveness of the Customs and Excise Act and the Biosecurity Act and the Trade Single Window component of the system provides that single electronic gateway to industry to interact as I have said with Government agencies for their customs and biosecurity arrangements. That of course as we know is crucial. We have got to get biosecurity right and that is something this Government takes extremely seriously. It will promote more effective protection of New Zealand’s borders and ensure a smoother flow of legitimate trade. I commend this bill to the House.RINO TIRIKATENE (Labour—Te Tai Tonga): I am pleased to add my contribution to the second reading of this—Mr DEPUTY SPEAKER: I am sorry. I am informed that this is not a split call. Is that correct?RINO TIRIKATENE: No it is not.Mr DEPUTY SPEAKER: Thank you. Ten minutes.RINO TIRIKATENE: I will give it a bit extra. As the speakers from this side of the House have said in this debate we support the Border Processing (Trade Single Window and Duties) Bill. We supported it at the first reading. Indeed the genesis of this IT system came about when we were last in Government so we are supporting the bill.It is an IT system. It is a very important IT system because it helps facilitate the trading of our goods in and out over our borders. That trade with our trading partners is the lifeblood really of our economy. It is a very important IT system and we commendthe Customs Service and the Ministry for Primary Industries for following through on this massive project. I say “massive” because that is the word that Mr Hayes used. It is a massive IT system roll-out. It is a bespoke system so it is a tailor-made system that the Customs Service has spent the last 3 years—Iain Lees-Galloway: It’s custom made.RINO TIRIKATENE: —custom made absolutely—a custom tailor-made bespoke made-to-measure IT border management system. And it comes with a hefty price tag. It is an $89 million system.Su’a William Sio: How much?RINO TIRIKATENE: It is $89 million but that was not the initial cost of the system. In I believe the 2010 Budget the initial estimated budget of this system was $76 million.Su’a William Sio: How much?RINO TIRIKATENE: It was $76 million. What has happened over this 3-year period—and granted it is a massive made-to-measure system that has been built—is that the cost has actually blown out to close to $90 million. That is a significant cost blowout increase where additional money had to be found by both the Customs Service and the Ministry for Primary Industries within their capital budget expenditures to actually meet that shortfall. The revised cost of this system is in round figures $90 million.Su’a William Sio: How does that compare to Novopay?RINO TIRIKATENE: I do not know about Novopay but I know that it is a dud. But in terms of this system there is hope for this system we on this side of the House hope—we do. It has had a 3-year development period. As Mr Browning mentioned I had the pleasure of accompanying the members of the Foreign Affairs Defence and Trade Committee to the Customs Service premises down on the waterfront where we could get an actual real-time demonstration of how the system worked. It certainly was very glossy it was very slick and by all accounts it was doing a good job.The good thing I guess in terms of how this 3-year project has been implemented is that it has been done in phases or stages. There has been a lot of building of the system I would imagine testing it with major industry players ironing out any bugs and then moving it to the next level. Obviously it is not perfect because the actual public roll-out of the system was due to take place in April last year. But it did not happen because the Customs Service felt that it needed an extra 3 months to iron out a few bugs and make sure that everything was just right before it actually went live with registered importers and exporters interacting with the system. But the system has gradually been phased in in this implementation phase.I guess the concerns from this side of the House that have come through in the contributions so far are how robust the system is whether there are any problems with the system and what assurances we can get from the Government that the system is fit for purpose and will not turn into another lemon like Novopay which is just an ongoing saga and the likes of INCIS. As I was saying there has been this implementation of the system and I guess the key to it will be in 3 months’ time because in 3 months’ time we understand that all going to plan there will be an evaluation of the system and that evaluation will be presented to Cabinet. So we would hope I would imagine that that evaluation is probably going on right now because the Customs Service wants to make sure that everything is OK and it is checking that. Remember that it is a $90 million system so certainly we hope to get payback. We hope to get payback from the greater ease of business that our importers and exporters will be able to achieve through their use of the system and also the increased levies hopefully that will flow back to the Customs Service through businesses’ use of the system. But I think that the evaluationin 3 months’ time is going to be very important and here on this side of the House we will be seeking more information around that evaluation.I want to return to the point around the cost of this system. It is $90 million. That is not small change. That is a significant investment in an IT system a border management system. I am always curious about the fact that budgets are set for these big projects and then the money is all spent. In this case it was overspent by $14 million. I do not come from the IT world but $90 million is some serious dough. I came from—a few years back anyway—a legal practice. In legal practices we were talking about maybe up to $1 million in terms of billings for a partner.Andrew Little: Really?RINO TIRIKATENE: Around about that. This was a few years ago I must say but it was getting up there. Actually it was a bit lower than that. However $90 million—that is a lot of capital spend. Just looking at the actual list of companies that have received—basically eaten through—all of that money the lion’s share of it has gone to IBM. Forty million dollars has gone to IBM in terms of the build of this system just in the past 2 years alone. That is one single company charging a huge amount of fees—a huge amount of fees—for the work that it is doing on the system. So we would hope that certainly the taxpayer the Customs Service and the Ministry for Primary Industries are absolutely getting the best value for money from that $90 million system.We know that the costs have not stopped. We are into a new financial year and no doubt the Joint Border Management System is still going to be incurring more expense. So we hope that the implementation of this IT system and a successful evaluation will result in it hopefully being put up as best practice—best practice from among the Government sector on how to roll out an IT system because we have certainly had some huge failures in the past.That concludes my contribution. We support this bill but we will be keeping a very close eye on things and we will be asking to see what the evaluation of the service will be when it comes out in June.MELISSA LEE (National): I rise to support this Border Processing (Trade Single Window and Duties) Bill in its second reading. As the last speaker on a bill often you have to think about what fresh things you might bring to the debate because other members have actually traversed many things on this bill. I just want to comment that this bill makes important amendments to existing legislation to underpin the implementation of the Trade Single Window component of the new $89 million Joint Border Management System. In particular the thing that I want to say is that it will also lower traders’ compliance costs over time. During the pilot with industry partners faster response times were achieved and savings were made on electronic data transmission costs.My learned colleague Dr Cam Calder mentioned his experience as an importer and I just want to talk about my personal experience as well. Many years ago my parents set up an import business—the first ever Korean importers of Korean food products. Many years ago back then something like 26 years ago it was very difficult to import foreign food products. They were never available in New Zealand so the instant noodles that you find very frequently and easily at supermarkets now took $3000 every time to test for—I do not know—bugs. My parents had to go through a lot of paperwork every time they had to bring in a container load of these things. There were so many papers that they had to fill in for different Government departments. So this to me will be fantastic for people who are actually venturing into new businesses that may not have happened in New Zealand before like my parents did some 26 years ago.Particularly for new migrants into this country having the English language component of the business and dealing with Government departments is often difficultenough. Having so many departments that they have to deal with will be very difficult. So having one Government department one portal for them to deal with will make their lives so much better. I commend the Minister of Customs. As previous speakers have said he is fantastic with IT and he is a frontrunner in everything that deals with technology. I commend this bill to the House.Bill read a second time.Building (Earthquake-prone Buildings) Amendment BillFirst ReadingDebate resumed from 12 February.NICKY WAGNER (National—Christchurch Central): I was talking on this Building (Earthquake-prone Buildings) Amendment Bill when we rose last time. I was just commenting on the fact that this is an extremely important bill that the populace of New Zealand has raised its consciousness since the earthquakes of Christchurch and that there is a lot of concern nationwide now as to the quality of our building stock and the safety of the people who live and work in that building stock. Just getting back to the bill this bill requires that territorial authorities undertake a seismic assessment of the existing non-residential buildings and multi-storeyed and multi-unit residential buildings in their districts and they must do this within 5 years of the commencement of this bill. Then the building owners must do earthquake strengthening within 20 years.When we were last debating this bill the member Shane Jones was highlighting the issue of costs—the issue of costs to upgrade this large number of buildings across the country. We think it is somewhere between 15000 and 25000 buildings. He was also talking about the costs of upgrading heritage buildings and also buildings in some of our smaller provincial areas that do not demand the rent increases that might support the upgrades. I think this is a real problem. We just need to look at some of our South Island cities such as Ōāmaru that have large numbers of stone buildings which are magnificent but certainly earthquake prone and we need to understand the sorts of costs that this bill may impose on both the owners of the buildings and whoever else may want to contribute to that.The bill makes comment about what must be done during the upgrading and it means that upgrading for strengthening the building is the prime target. There has been some debate about whether as is normal when you get an upgrade of a building you have to bring in new building standards in terms of access and in terms of environmental issues such as double glazing and things like that and that is an important issue. I think the debate will wander around in this area—do we want to save some of these heritage buildings can we put them back to what they were before but strengthened or do we have to spend extra to upgrade them in terms of amenity? I think that is going to be the nub of this bill. I actually think that this bill strikes a good balance. It means that those heritage buildings can be upgraded so that they are safe but perhaps not upgraded as we would like them to be if we had more funds at our disposal.So I think that it is really important that this bill comes to the House. Certainly the consciousness of New Zealanders has been raised as to the quality of the buildings across the country. We do want to be sure that these buildings are safe for living and working in and I do commend this bill to the House.MOJO MATHERS (Green): I wish to start by acknowledging the people who died in the Canterbury earthquakes. The loss of life is significant—over 185 people died most due to the collapse of just two buildings and a further 164 people were seriously injured. My family was very fortunate to escape direct loss or injury but like manyCantabrians we were profoundly affected by the Canterbury earthquakes and experienced some very close calls. My daughters and I lost our first home in the September quake. We ended up as refugees at my mother’s house camping in her living room. The second quake struck the day before my youngest daughter turned 15 when she was on a bus with her school friends to go shopping. When she dismounted a large aftershock brought down a multi-storeyed brick building right in front of her. My second-eldest daughter was inside the Avonside Girls’ High School drama room rehearsing for a play with other students. When the quake struck the room was plunged into darkness and the terrified girls were left scrambling to get out. That building was red-stickered and has since been demolished. So personally I have every motivation to see buildings that are at risk of failure in an earthquake identified and a nationalstrategy developed to ensure that they are strengthened.Safe buildings are essential. There is no dispute about that and the Green Party strongly supports that outcome. But—and this is the big one—we are strongly opposed to the provision in the Building (Earthquake-prone Buildings) Amendment Bill that enables buildings to be exempted from current building requirements to upgrade disability access and fire access when undergoing earthquake strengthening. We see the removal of the current access provisions as a serious breach of New Zealand’s obligation to eliminate barriers to accessibility under article 9 of the United Nations Convention on the Rights of Persons with Disabilities. The Minister for Building and Construction says that he wants building owners to be exempt from upgrading disability access because he considered it just too hard an ask of a building owner. That is what he said. My question is: has he considered just how hard it is on wheelchair users to access services and go about their daily lives in an inaccessible environment? I would suggest to the Minister that the two situations are simply not comparable and if he doubts that then he should try spending a week or more in a wheelchair. He might just reconsider.The fact of the matter is that access to buildings is a human right not an optional extra like a “nice-to-have”. Accessibility affects everyone at some point in time sometimes temporarily due to illness or injury or parenthood but often especially as we get older we face permanent limited mobility. With an ageing population failing to upgrade disability access represents a missed opportunity to futureproof our buildings. Providing disability access at the same time as strengthening work is undertaken saves building owners money and is cheaper in the long run.At present there are between 15000 and 24000 older non-residential and multi-storied residential earthquake-prone buildings in New Zealand that lack disability access. At the moment the earthquake-strengthening work is one of the very few provisions triggered in the Building Act that requires these older buildings to upgrade disability-impaired access. What this has meant is that the accessibility of public buildings has been progressively improved over time although for many the pace of the upgrade has been frustratingly slow. It is worth reminding ourselves that the requirement to upgrade access to buildings when undertaking strengthening has been around for a long time now and was established after a hard fight by the disability sector—initially in the 1975 Disabled Persons Community Welfare Act and then in the 1991 Building Act.The Green Party believes that the removal of these hard-won provisions from the Act is a backwards move that could potentially see thousands of buildings remain inaccessible to disabled people for the indefinite future keeping people with limited mobility locked out of buildings as diverse as art galleries universities and sports venues. Building owners have already been given plenty of time to plan for when they will upgrade disability access and it is our view that they should not be given anexemption at this point in time. They should not be rewarded for poor planning and ducking their responsibilities.Lack of access to the built environment is a major concerning factor for many disabled people and their families greatly restricting our ability to access core services obtain employment and participate in social activities. The frustrations experienced by many people about inadequate access to buildings is reflected in the many complaints that have been made to the Human Rights Commission about lack of physical access to buildings ranging from movie theatres museums educational establishments and hotel accommodation through to bars sports venues and art galleries. These are the kinds of buildings we are talking about exempting from upgrading disability access.We agree with the Minister for Disability Issues when she said in her letter to the Prime Minister last year that removing current access provisions from the Act sends the wrong message to disabled people and older people. We agree with Minister Turia when she points out that it says that this Government does not value all of its citizens equally and that it says that those who are already missing out those who cannot access many of our buildings do not matter. We agree with her that the proposed new provision says to building owners developers and designers that this Government is not serious about wanting a fully accessible built environment where everyone can participate and contribute. We also agree with her that this move is inconsistent with our disability strategy and with our compliance with international standards. In fact we agree with all of the points that Minister Turia has raised with both the Prime Minister and the Minister for Building and Construction in repeated letters last year.In our view it is shameful that this Government is prepared to ignore the pleas of their own Minister for Disability Issues in this way. For us it speaks volumes of this Government’s real attitude towards disabled people. The message its action sends is that it is OK for disabled people to remain out in the cold locked out of full participation in society locked out of employment opportunities locked out of social and cultural events and locked out of thousands of public buildings. We say that it is not OK. Society expects buildings to be both accessible and safe and we believe that it is both reasonable and practical to aim for that outcome. We should not sacrifice access for the most vulnerable people in our society just to save building owners 1 percent of the cost of earthquake strengthening work.I would like to wrap it up by saying that we do recognise that in a small number of cases it may be simply impossible or impractical to make certain buildings accessible. In our view however that situation is already covered in the existing bill by the exemption ground of reasonable practicality. So although we are not voting for the bill at present we would very much like to be able to support it in subsequent stages if the select committee can adequately address the concerns of the disability community around this. Thank you.ANDREW WILLIAMS (NZ First): It is a great pleasure to take a call on the Building (Earthquake-prone Buildings) Amendment Bill. Once again I draw the short straw in getting to start my speech at 2 minutes to 6. This seems to have become a regular occurrence in this House. It is almost like I need to have some sort of other little act to do or a song or some other thing I can do because when you have only 1½ minutes you do not have time at all to even get into the gist of it.Anyway having now used up 30 seconds I would just like to say that it is interesting sitting on the Local Government and Environment Committee because we have been looking at all sorts of things in relation to local government and also buildings and building requirements. Sometimes we are very confused as to where this Government is coming from. In this particular instance the Government is saying that it is going to tighten up around earthquake-prone buildings and do all it can to ensure the safety ofNew Zealanders—the safety of our citizens—but on the other hand we have discussed bills in the last year building amendment bills and things where this Government wanted to reduce compliance in terms of what the local authorities’ involvement will be with oversight of consents and to have far more self-regulation from the building industry and far more situations where the local authorities are less involved in ensuring that the buildings are built to a certain standard. So you almost have a sort of Jekyll and Hyde situation with this Government half the time because on the one hand it wants to—Mr DEPUTY SPEAKER: Order! I am sorry to interrupt the member but the debate is interrupted.Debate interrupted.The House adjourned at 6 p.m.