Education (Export Education Levy) Amendment Bill — In Committee 
Education (Export Education Levy) Amendment Bill — In Committee 
[Volume:619;Page:14747] 
Education (Export Education Levy) Amendment Bill 
In Committee 
Part 1 Amendments to principal Act 
PANSY WONG (National) 
: 
 The Education (Export Education Levy) Amendment Bill is the title of this bill but I believe that it does not convey the substance of the bill. When the export education levy was first established it was clear that the purposes that the fund or levy could be put to were to develop and promote quality assurance in the export education sector. Those purposes may include professional development marketing the implementation of scholarships research resource development and support or they may relate to other bodies engaged in the development the administration and the audit of the co-care or pastoral care of students and the general administration of the levy and associated purposes. 
The title of this bill is not very informative to the public. In fact the Government proposes to increase one category of levy and that particular levy will be charged to private education providers only. It will not be a levy imposed on the whole export education sector. That levy will be restricted to the private providers of the export education levy and it will then be used to reimburse students’ fees or accommodation expenses and other expenses in cases where private education providers fail. We were told that was to be so whether the reimbursement was first paid out by ministries or departments—by the Crown. 
All the submitters to the Education and Science Committee were unanimously against that. I could not summarise the opposition to the increased levy better than by referring to the submission made by the Association of Private Providers of English Language. Its representatives believed that the real priority if the Labour Government was trying to give protection to students’ fees paid in advance would not be achieved by punishing private education providers but by improving enforcement. Those providers told us that if they believed that this bill would have an impact only every few years—that is if the New Zealand Qualifications Authority did its monitoring job properly and institutions that had not adhered to the proper guidelines were put on notice and had effective action taken against them—then they might not be hesitant to support this particular additional levy. But the fact is that in the last 10 months there were not one and not two but three major collapses of private educational institutions and in all of those collapses according to those providers questions can be raised about the enforcement or lack of enforcement by the New Zealand Qualifications Authority. 
 When the private export education providers have no confidence in the enforcement agency or gatekeeper doing its job then the export education additional levy that is to be charged on them will not be fair. The title “Education (Export Education Levy) Amendment Bill” should be a bit more— 
The CHAIRPERSON (Ann Hartley) 
: This is not the title debate. 
Hon Trevor Mallard 
: Part 1. 
PANSY WONG 
: We still believe that the title is not informative. However in terms of the substance of the bill it has been pointed out by private providers that if the gatekeeper the New Zealand Qualifications Authority had done its job when people informed it that certain institutions had not adhered to the guidelines or if it had used a robust auditing procedure then some of the earlier high-profile collapses could have been prevented. 
DEBORAH CODDINGTON (ACT) 
: 
 On behalf of the ACT party I rise to oppose this legislation and in particular Part 1. New section 238I(1A) inserted by clause 4(2) states that: “Subsection (1B) applies if—(a) an international student is or was enrolled with a private training establishment”. That is the whole ideological thrust behind this legislation and is one of the reasons why we oppose it. This is yet another example of how private enterprise is being punished by this Government. The legislation does not apply to public tertiary training establishments. It does not apply to any public education establishments but only to private training establishments. Yes some private tertiary establishments have let their students down really badly and in a reprehensible way. But why do we have to punish all of them because of the actions of a few? Why is the Minister not applying the same sanctions against public tertiary institutions that have taken money to which they were not entitled? They will be let off with a slap on the back of the wrist with a wet bus ticket. Where is it stated that this Government will tax all the other public tertiary institutions to make up for what Christchurch Polytechnic has done in the last few weeks? In exposing that matter I give credit to the National spokesperson on education the Hon Bill English because if he had not brought it to the Government’s attention absolutely nothing would have been done about it. 
The Minister is hell-bent on getting the private sector out of education in this country. We have seen that with regard to tertiary education and early childhood education. Not only are private providers being prejudiced but parents who want to send their children to private providers are being disadvantaged. The other thing with regard to this bill is that it is not just the providers that are private tertiary establishments that will be damaged by this legislation. Consumers will be damaged as well. This legislation reduces the choice for students because the inevitable result of imposing the levy on all private providers is that they will have to put up their fees. That is one result the Minister will be quite happy about because he will be able to herd more people into public institutions where outcomes do not matter. It is a matter of statistics; it is just a matter of bums on seats. This afternoon in question time in the House the Government crowed about the drop in the unemployment figures. We do not hear it crow about the number of students who enrol in dodgy polytech courses. They are enticed into those courses and that hides and distorts the statistics of the number of people who are unemployed. It is just a matter of statistics; it is not about outcomes and measuring achievement at all. 
Hon Trevor Mallard 
: I raise a point of order Madam Chairperson. I am aware that we are on Part 1 and that it is the broadest part of the bill. However a general discussion on alleged dodgy polytechnics and the unemployment rate is beyond Part 1. 
The CHAIRPERSON (Ann Hartley) 
: I ask the member to stick to Part 1. 
DEBORAH CODDINGTON 
: Part 1 does deal with private training establishments that cannot have not or will not provide in whole or in part the course of study or training. My point is that we oppose this legislation because it applies only to private establishments and does not apply to public establishments. That is a gross omission from the legislation. 
As I said this legislation is ideologically driven. Why are we imposing this tax—because that is what it is? It is a tax because it can be used for all sorts of reasons such as making refunds once twice or three times. It opens the way for double-dipping. That has not been cut off. Why are we imposing this legislation on private establishments which have no say over who enters the industry? The gatekeeper will be the New Zealand Qualifications Authority. It is the very gatekeeper that failed to do proper checks on private establishments that could not did not or would not provide courses to students leading to the introduction of this legislation. The Minister should take a call instead of taking a point of order to explain why the New Zealand Qualifications Authority can be trusted. 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 This legislation is another Mallard mess mop-up. As far as I am aware the Minister has been in charge of the education portfolio for about 5 years. He has some remarkable achievements in his name. For instance each time he goes to China to talk about international education in New Zealand student numbers here drop. I recommend that he stay at home and do his job properly. 
We would not need Part 1 if the Minister had done his job properly. He has a public agency the New Zealand Qualifications Authority whose express function is to ensure the security of funds paid by overseas students and it simply has failed in that function and I might say it has failed in it for quite a long time. Going back to the 1990s the authority did not do that job well and as far as we can see it is still not doing that job well. The other agency that has failed for which failure every other private training establishment will pay the price is the Tertiary Education Commission. The most prominent collapse of recent times which involved Carich and international students was in circumstances known in detail for many months by the Tertiary Education Commission. In fact the decisions it made over how to handle that organisation were directly related to its collapse. So the Minister should stay home he should not go overseas and frighten off our potential customers he should not be bullied by the Chinese Government into picking on one form of institution—that is private training providers—and he should get public agencies to do properly the job they are meant to do. 
Along with the ACT party I share a concern about the way in which this legislation picks on private training establishments. In the Government’s mind they are marginal organisations that should not really exist and that do all sorts of dodgy things. If the Minister has not noticed he needs to know that public organisations in education are doing much more damage to the reputation of this country and his policy than private training establishments are at the moment. Christchurch Polytechnic is just one of half a dozen New Zealand polytechnics all of which have foreign fee-paying students that have indulged in the worst sort of unprofessional and ruthless exploitation of the Government’s slack policies and weak education Ministers. 
And those polytechnics are doing it without any punishment. That is the odd thing that is going on. The private training establishments are all being punished because of the actions of one and they will all have to pay their levies but in the polytechs the offenders are getting away with it and all the polytechs that have kept the rules are getting punished. So at least that is consistent: whether one is in the public sector or the private sector with this Government if one does the wrong thing nothing happens but if one does the right thing one gets it in the neck—and in the case of the polytechs to the tune of millions of dollars. I would like the Minister to explain that. 
I am very pleased that the select committee dropped out clause 5—another defeat for the Minister and one of any number that he has had to deal with. He is a Minister who usually overreaches with his policy then gets a whack on the nose and has to pull back. Part 1 originally set out to levy private training establishments for just the year 2004 in a way that was grossly unfair bad public policy and unsustainable. I want the Minister to tell me how it ever got into the legislation. How did it ever get through the officials process past a Cabinet committee and into this legislation when it was so demonstrably unacceptable? It met almost no criteria of good public policy. One can only assume that once again the mighty pair of Mallard and Maharey sat in their offices one night and thought: “How can we really hit someone we don’t like?”. 
Hon BRIAN DONNELLY (NZ First) 
: 
 When I came down this week I received a note from one of the major players in the export education field. It thanked New Zealand First for the work that it had done in getting this particular legislation as right as it possibly could be. The final point was interesting: “Let us hope that this is the last time this Government and this Minister actually tries to get the export education levy right.” This is about the third crack that he has had at it. It started off under the Education Standards Bill with a levy on monitoring pastoral care. Then a Tertiary Education Reform Bill was ready for deliberation by the Education and Science Committee—there was 1 day to go—and the Minister threw on board an Education (Export Education Levy) Amendment Bill that contravened the principles in the Tertiary Education Reform Bill. 
When that bill went to the select committee—the Minister did not want it to go to the select committee—we ended up with only two parties actually agreeing with it. One was the Government and the other was the Education New Zealand Trust. The Education New Zealand Trust was supposed to be representative of all the providers yet the providers came along in their own groups representing themselves and absolutely and utterly opposed the bill. The export education levy had not been laid down in front of them by the Minister. There had been no consultation and no buy-in. Of course we know what happened. Although some parties tried to get it as good as it possibly could be—and that meant some modifications of that legislation to make sure there was at least an element of consultation—it still was not good enough and when Carich and the Modern Age Institute of Learning fell over the Minister thought he would use the levy to cover the costs that the Government incurred in getting those people out of a ditch. That is not to mention the simple fact that in particular in the case of Modern Age the real villain was the Government’s monitoring agent the New Zealand Qualifications Authority which did not recognise that the activities Modern Age was getting up to signalled there was danger ahead. 
So the Minister decided to dig into the export education levy. There was only one little problem: it was ultra vires. He was not allowed to do it. So he decided that there was only one way to do it: “This is Clyde Dam stuff. We will do what the Nats have done in the past: we’ll just change the law and we will change it retrospectively.” That has been mentioned. Even though the regulations that went through in December 2003 set a 0.45 percent levy on all providers the Minister came along with this legislation which set a 0.7 percent levy. It is a completely new regime. I think both sides of the House were very uncomfortable with this particular issue and finally the Minister saw that he had perhaps overreacted— 
Hon Trevor Mallard 
: Good discussions with Brian Donnelly. 
Hon BRIAN DONNELLY 
: Maybe it was a little bit like the Panoho case. But in fairness I think the worst excesses were caught in the end—[ 
Interruption 
] 
Hon Trevor Mallard 
: I raise a point of order Madam Chairperson. I think the suggestion that a member in this Committee is a lapdog is certainly out of order. Mr English made that suggestion. 
Dr Wayne Mapp 
: I listened very carefully to my learned colleague Mr English and he made no such imputation about an individual so there is simply no point of order. 
The CHAIRPERSON (Ann Hartley) 
: Did the member make such a remark? 
Hon Bill English 
: I was referring to the collective of New Zealand First and certainly not to an individual. You will notice that I used the plural which was “lapdogs” —not “lapdog” —so clearly the comment was in order. 
The CHAIRPERSON (Ann Hartley) 
: A reference to a party is treated in the same way. It was not appropriate. The member should stand and withdraw that remark. 
Hon Bill English 
: Could you just explain that again? I am not exactly sure what the ruling is. I hope you are not suggesting that it is out of order to make a derogatory remark about another party in this Houseouse. That seems to me to be part of the business of Parliament. 
The CHAIRPERSON (Ann Hartley) 
: A party is made up of members of the House and the remark was not appropriate. The member will withdraw. 
Hon Bill English 
: I withdraw. I raise a point of order Madam Chairperson. Can I just get clarification on the ruling you have just made? Do we now take it that members cannot make a remark about a party that if applied to an individual would be regarded as out of order? 
The CHAIRPERSON (Ann Hartley) 
: I refer the member to Speaker’s ruling 47/1. If the member reads it he will see that it makes the situation quite clear. 
Dr Wayne Mapp 
: I raise a point of order— 
The CHAIRPERSON (Ann Hartley) 
: I have ruled on the matter. It is finished. 
Hon BRIAN DONNELLY 
: I guess that scenario demonstrates that New Zealand First is here to constructively make a difference for the good rather than to play petty little games of the kind just demonstrated. The question that— 
Hon Bill English 
: I raise a point of order Madam Chairperson. In terms of Speaker’s ruling 47/1 the member has just made a derogatory reference and used an offensive term. It was unparliamentary in my view. 
The CHAIRPERSON (Ann Hartley) 
: I am sorry but I did not hear it. Could the member clarify whether he used an offensive term? 
Hon BRIAN DONNELLY 
: Certainly to my mind I do not think I made an offensive remark at all. It certainly was not intended to be offensive. It was simply a description of some of the activity that was going on. I will withdraw it; I am quite happy to do that if it makes things easier. As I said we are here to be constructive not destructive. 
We already have a quite significant amendment that the Minister has put up on Supplementary Order Paper 240. He is inserting a whole paragraph as to what can be done with this levy which seems to me to get to the very intention of the bill in the first place. I ask the same question that was asked of me: has the Minister finished with this legislation or are there to be subsequent pieces of legislation? Have we finally got the export education levy operating in the manner that it should operate—that is serving the purpose of that particular industry? 
Hon Trevor Mallard 
: Does the member want to help us? 
Hon BRIAN DONNELLY 
: I ask the Minister to take a call and to give this Committee some sort of guarantee that we will not be back here again debating some of the issues around the export education levy which in the long run will make us less competitive in this particular industry. The Minister is aware it is a very important industry to New Zealand. We have to make sure we get it right. We certainly are not doing it by continuing to have legislation come back to this House. 
BERNIE OGILVY (United Future) 
: 
 I rise just to take a short call and to follow through on what my predecessor spoke on. The amendments that have been added by the Minister of Education now clarify what the bill is all about. Anyone can now see what the intention is—yes it is to penalise private training establishments—but also exactly how it will do that. I certainly concur with that. 
But contrary to the letters that the Hon Brian Donnelly has received I have received all sorts of emails and letters of “no thanks” on this particular bill. I have not received any that have given any thanks for it or that consider that it is worthy of taking up the time of this House and the Education and Science Committee. Everybody has been opposed to it and that worries me. The entire industry is against it and not only because of the way it has occurred—and the Hon Brian Donnelly laid out very well the historic flow of events and the surprise that was caused when the original bill was pushed upon everybody. 
I ask the same question: how many more times are we going to sit down to modify change strike out and/or correct legislation to somehow capture those who have enough enterprise to keep in business? It is a huge business that we are referring to. In my second reading speech I established that it is a massive business of over $2 billion a year. The Government takes a huge slice of that—at least 25 percent—by way of taxes. As a result the whole issue now is that as the Minister has brought forth to catch a little sparrow he is utilising a massive great big machine. The little levies that he is asking for add up to a bit over $3 million maybe $4 million. He by the same token in the recent Budget has just offered $10 million to export education. Why does he not just net it all out and give away $6.5 million to the private tertiary industry for it to establish itself work the whole process out and work through the angst and the issues associated with this matter thus getting all the establishments onside being cooperative and working together? 
I am concerned that if this bill goes through the House it will not solve the question marks that the industry has about it being penalised. I would be sad to see this bill go through the House because I think basically it is a disturbance to an industry that is trying to do its best is bringing umpteen hundreds of millions of dollars into the nation and is doing it very well. Having withdrawn certain clauses out of the original bill then today putting in a whole new paragraph by way of a Supplementary Order Paper the Government 
has literally mashed this bill around in such a way that it no longer resembles a clean bill. We will certainly not be supporting it. 
Dr WAYNE MAPP (National—North Shore) 
: 
 As is well known from the previous speakers and from our votes National is opposed to this bill. Fundamentally we are opposed to it because it is discriminatory and in addition reflects the lazy answer. It is the easiest answer the Government can come up with without really listening to the sector itself. Extensive evidence was given by various submitters to the Education and Science Committee about other options: insurance bonds trust funds and the like all of which were industry-based solutions as opposed to a Government-imposed solution. After all in other sectors where there are questions of protecting people affected by a particular industry or institution the result is a collective fund insurance policy or indemnity policy organised by the industry itself not controlled by the Government. That is the distinction is it not? That is the distinction between the Law Society and other similar entities and this solution. This is the Government solution—the statist solution. 
When that occurs there is a responsibility. For instance at the very least the sector should be able to rely on the governance entity the New Zealand Qualifications Authority to do its work properly. But it does not. For instance about 12 months ago the New Zealand Qualifications Authority knew that the Paramount Institute of Auckland which was a private tertiary provider was in trouble. At that point the deficiency was about $200000. Over the succeeding 10 months that deficiency grew to $800000 which effectively now becomes an impost on all other private tertiary providers. So the sector is caught in a bind. It has to pay this money which is mandated by the Government. It relies on the State entity the New Zealand Qualifications Authority to be the monitoring agency. If that agency was doing its job properly the funds represented by the levy would be reduced and therefore ultimately the levy would be reduced. So not only are the providers stuck with the levy but the bad supervision by the New Zealand Qualifications Authority which the Minister is well aware of causes the levy to be significantly higher than it otherwise would be. 
I listened to the various speakers on Part 1. A person tuning into the radio just to hear this debate might well think New Zealand First is supporting the Government and that has been referred to. But even those members and they are well-known these days to be the tail that is wagged by the Government dog—[ 
Interruption 
] Well that is a phrase we are apparently not allowed to use so I will say that they are the tail that is wagged by the Government dog. Even they see the deficiency. So one would think that the Government would take on board that all sensible parties in this House and I even include New Zealand First in that category for this particular purpose are voting against the bill with the exception of the Green Party—and everyone knows that that party is not sensible. 
So essentially the votes by the parties in this House demonstrate the bankruptcy of the Government’s solution here. The proper approach was to listen to the industry and look at the solutions that the industry was prepared to come up with—and it would check those with the Insurance Council in particular. That would have been a reasonable approach. Everyone recognises that there is a problem to be dealt with. What the industry does not want is the statist discriminatory approach—the lazy reversion to type by Labour—in imposing a centralised levy with poor supervision by the New Zealand Qualifications Authority. 
JANET MACKEY (Labour—East Coast) 
: 
 I move  
That the question be now put 
. 
PANSY WONG (National) 
: 
 I really appreciate the opportunity to make a second contribution because there is some very important information that I want to share with my fellow politicians about why even the Greens should not support this bill. The unanimous action by all the export education providers to not support this additional levy is because of the lack of confidence in the way the gatekeeper the New Zealand Qualifications Authority is doing the job which means that the private institutions that actually perform are punished. 
 Let me give two examples. I have some information in front of me concerning a high-profile college—the Paramount Institute of Auckland. On 14 November 2003 an ex - staff member wrote to the New Zealand Qualifications Authority about problems at the school and its lack of adherence to the authority’s criteria for providing good education. The person did not get much of a reply so on 26 November she again wrote to the authority. This time she provided three pages of details outlining where the school had failed in terms of individual students or collectively in adhering to the authority’s guidelines. On 27 November she received from the authority a reply to the three-page complaint thanking her and advising that if the authority were to act on the information she would have to lodge an official complaint. 
An official complaint form was attached for her. But how bureaucratic: a detailed complaint was lodged but not accepted because the correct form had not been used! Eventually on 1 December she wrote to another person at the New Zealand Qualifications Authority saying: “What do I need to do before the NZQA will take positive and decisive action?”. I ask the Minister to give us one good reason why we should have confidence in the gatekeeper and why we should be supporting this bill. 
I want to detail a train of events that happened in respect of the Modern Age Institute of Learning—-an example of another high-profile collapse. On 13 May 2002 the first financial statement filed by an accountant at that stage already showed that the balance of the trust fund held at the institute as at 31 December 2001 was $611054 while the accountant’s work paper indicated the amount should have been $1011714. One would have thought that by then alarm bells would be ringing. 
In February 2003 the New Zealand Qualifications Authority during its audit met a representative from a chartered accountancy firm expressing concern about the management of the trust fund but took it as an assurance at that stage that something was going to be done to fix the matter. That was February 2003 and we moved on to 16 May 2003 and once again the New Zealand Qualifications Authority found out that a new trustee had been appointed for the Modern Age Institute of Learning trust account and on 19 May the qualifications authority claimed it had obtained a written assurance from the new trustee that everything was fine. When I looked at that written assurance all it said was that the new trustees confirmed they would consent to the receipt of student fees which are to be held in trust in accordance with New Zealand Qualifications Authority quality assurance standard 1. It did not give any assurance whether the trust fund was operating or whether the funds in that trust were accounted for. 
DARREN HUGHES (Labour—Otaki) 
: 
 I move  
That the question be now put 
. 
Hon BRIAN DONNELLY (NZ First) 
: 
 I just want to refer briefly to the remarks made by Dr Wayne Mapp with regard to New Zealand First and I have to say he demonstrated that some parties have not got out of the first-past-the-post mode. They have not worked out that what we are actually here for is to end up with a better New Zealand; and that there will be opportunities presented from time to time for parties to be able to work together with the Government to get the best possible outcome. An opportunity was presented in this particular case with regard to retrospective taxation of the export education providers and we were able to work with the Minister to be able to get an outcome that I believe was in the best interests of all concerned. 
Had the National Party had its way of just opposing opposing opposing and saying “This is bad.” then the export education providers would have had to stump up with an extra $1.7 million. So National can go along and tell them that that is what they believe should have been done to them. New Zealand First said: “No let’s use the opportunities to come up with a better outcome.” 
The point is and it has been made by Dr Mapp New Zealand First does not support this bill and we have not supported the export education levy since it was first introduced. That is largely because it has been so poorly done. It has been introduced without the ownership of the providers themselves and it was tacked on to a bill that had an industry training levy fund in it. The principles are that the members had to be balloted if they wanted to impose a levy; 66 percent of all those balloted had to return; and there had to be a 66 percent response in favour of it. That was the principle that was applied to industry training levies. Yet when it came to the export education sector it was: “Whacko! We’re slamming this down on top of you. You’re not going to have any say and if we want to come along and run right over the top of regulations we’ll do that also.” 
As I say New Zealand First does not believe that this bill has been done well. It has not been done in the best interest of the industry itself. We believe that in the long run there is a real problem when as the Government agency that accredits those who can provide—in other words the export education providers the private training establishments—they have no say in who can provide this form of export education but when it comes to the monitoring agency failing in doing its duty they are left carrying the can. 
That is wrong. If there is to be accountability we either have to have the market running it all and that is it or we have to have a decent monitoring agency; in which case we do not need to have to use this sort of mechanism to provide the insurance policies. Unfortunately we have not had that. Therefore New Zealand First asks why those who are doing it right and doing it well should end up having to carry the can when the agency of the Government itself has not done its job properly. 
I know that a lot of work is being done on this but at this particular time it still leaves one with a sense of insecurity about whether we have in fact got all the pieces in place. If we have not got the pieces in place then more private providers will be falling over. The levy will be raised; purely and simply again next year we will be debating the whole issue the same principle that the Minister has tried to put into this bill. So New Zealand First is not supportive of the bill. However we used the opportunities to work constructively with the Government and I think got the best possible outcomes. We are very pleased and proud to be able to stand here and say that that is what we did rather than simply oppose for the sake of opposing and costing the industry $1.7 million. 
Hon JUDITH TIZARD (Minister of Consumer Affairs) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 71 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2; Maori Party 1. 
Noes 49 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; Independent: Awatere Huata. 
Motion agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 240 in the name of the Hon Trevor Mallard to Part 1 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 63 
New Zealand Labour 51; Green Party 9; Progressive 2; Maori Party 1. 
Noes 57 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; United Future 8; Independent: Awatere Huata. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 63 
New Zealand Labour 51; Green Party 9; Progressive 2; Maori Party 1. 
Noes 57 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; United Future 8; Independent: Awatere Huata. 
Part 1 as amended agreed to. 
Part 2 Validation 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 I raise a point of order Mr Chairperson. I hope there is not going to be a presumption by the Chair that this is simply a narrow technical piece of legislation. You sat in the Chair and as far as I could see heard perhaps two contributions to the debate on Part 1 and then saw fit as is your right to bring that part of the debate to a close. I was seeking the call with new material and there was no indication actually that the debate had run out or become repetitive. This is not a narrow technical piece of legislation. It involves a number of aspects of significant public policy and I hope that fact will be taken into account in your consideration of the length of the debate for this part. 
The CHAIRPERSON (Hon Clem Simich) 
: I thank the honourable member for that. I had indicated on the call before that that would be the last speaker and I thought I gave a clear signal that it would be. I am conscious of the issues the member raises. 
Hon BILL ENGLISH 
: The clarity of your signal does not necessarily confirm its correctness. I will address clause 7 because this clause and clause 5 was meant to get rid of the retrospective nature of the legislation. But in the increasingly sloppy way in which we see the Government handling legislation clause 7 is actually retrospective. What it does as we see when we read it is that: “Any funds … that are unspent on the day that this Act comes into force may be used in accordance with the purposes specified in section 238I of the Education Act 1989 (as amended by this Act).” 
So what this says is that funds that were raised for one purpose quite specifically laid out in legislation are going to be used for a completely different purpose. That is what that clause means. It means that funds that were raised under section 238I for as subsection (1)(a) states: “the development promotion and quality assurance of the export education sector … ” and it goes through a list of purposes: “(i) professional and institutional development; and (ii) marketing; and (iii) implementation of scholarship schemes;” and so on. 
Then with some care subsection (2) of 238I states: “The funds of the levy must be kept in a separate bank account that is used only for the purposes of the levy.”—all the paraphernalia of a very specific purpose for which that fund was raised. I bet that there was significant discussion at the time—in fact I know there was—about the raising of this levy because it was new in the education export sector and they were not keen to pay it. They were suspicious as they should have been that the Government agency set up to use this levy would display all the weaknesses that generically funded industry-based organisations like that do. We were familiar with them right across our economy in the past and less so now. So they would have debated that at some length and many of them would have been persuaded by the purposes set out in the Act and in the end it was pretty hard to resort to civil disobedience over a levy that had such noble purposes as those laid out in section 238I of the Education Act. So they went along with it and they paid it as law-abiding citizens whether or not they agreed with the legislation Parliament had passed. Today or when this bill passes—but today is a step along the way—we are going to agree to change those purposes some considerable time after that money was paid to the Government. 
Dr Wayne Mapp 
: It’s outrageous. It’s retrospective. 
Hon BILL ENGLISH 
: It is—it is purely retrospective. There is absolutely no reason why this legislation should not replicate the provisions of section 238I(2) which states that “The funds of the levy must be kept in a separate bank account that is used only for the purposes of the levy.” So why do we not do that for this particular purpose? Why do we not say that the money levied for this purpose goes into a bank account to be used for the stated purpose in the legislation? That is what happened last time and people knew that when they paid their levy it went into that bank account to be used for that purpose. 
If the Government had not thought that mattered it would not have bothered taking up time and space in the statute to write it in. Quite frankly I was a bit surprised to see it there but there it is. It was put in there no doubt because people wanted it stated as clearly as that. They wanted to know that that bank account existed with that levy for that purpose and no one could mess around with it because they did not trust the Government. 
And what has happened? They have discovered that their mistrust was well placed. Now even though the money raised for that purpose went into the bank account specified in that section of that statute this Minister has decided to use it for something else. He has decided he has a better idea than he told them then. 
Lindsay Tisch 
: Sneaky. 
Hon BILL ENGLISH 
: Well it is sneaky but more important it is actually unnecessary. There is no need to further corrode the confidence of this sector in the Government by passing this particular measure. 
PANSY WONG (National) 
: 
 Well I have to say that the Hon Bill English absolutely put his finger on the pulse. Nobody can trust this Labour Government or especially this so-called Minister of Education. I think that the U-turns the subtle movements and the way the Minister rode roughshod over the industry and particularly over the export education sector is absolutely unprecedented. I would call on the Green Party members who always claim they have principles and that they support the rule of law to re-look at this situation. Otherwise I totally accept what my colleague Dr Wayne Mapp has pointed out—that the Greens never respect the rule of law. This action of theirs would confirm that. 
I also make this point: why should there be any levy funds left unspent on the day that this legislation comes into force? There are a few hundred thousand dollars left in the first six-monthly accounts of the export education levy. That is very concerning because a levy we are told is supposedly different from a tax. When the Government taxes people it is not sure what the money will be spent on. But the export education levy was meant to be imposed on the institutions for specific purposes. I think the Committee appreciates the fact that the Hon Brian Donnelly gave us a very detailed and good account of the history of the export education levy. The Minister did not bother to adhere to the rule of law in the process of getting the industry’s agreement to impose the levy. Then in the first year of the levy’s existence the Government reported a surplus. After reporting that surplus the Labour Government has introduced this legislation to the House in order to bring in another provision just in case the gatekeeper the New Zealand Qualifications Authority fails to do its job again and another college collapses. This additional levy would then be used for that purpose. 
The only other problem I have—and I think the Minister should take a call to assure the public on this—is that I would like to know whether with regard to all the existing private education providers the New Zealand Qualifications Authority has established that all of them are in a sound financial position. If not this levy is in effect retrospective because some educational institutions will be called upon once again to pay up for institutions that are already in existence and that are accredited and supposedly audited and monitored by the New Zealand Qualifications Authority. If such an institution goes into liquidation again it will mean that any new institution that has just joined the sector and the good performers and providers in the sector will be called upon to bail out an institution that was previously approved and accredited by the New Zealand Qualifications Authority. 
Although we were told by the Minister that he has removed part of this bill because he agrees with New Zealand First that it should not impose any retrospective provision I am afraid the Hon Brian Donnelly may not have done the whole deal—he may have just done part of the job. Part 2 certainly gives a very clear indication that it is retrospective. Not only can the existing levy be used for different purposes but we have not been reassured by the Minister or by the New Zealand Qualifications Authority that none of the existing institutions will fall over. 
Hon TREVOR MALLARD (Minister of Education) 
: 
 Although I do not want to refer to the previous part I think it is fair to say that it was slightly more substantive than this part which is technical. The regulations that were gazetted in 2002 had an error in them: they did not have a clause to spell out the purposes of collecting the levy and what it would be spent on which was required by the Act. No one ever complained about that asked for their money back or said that we should stop spending the money but we thought it was worth putting some belts with the braces and making sure we had that tidied up. It is a very narrow technical validation. 
DEBORAH CODDINGTON (ACT) 
: 
 We are now addressing Part 2 and I will look at clause 7 which the Hon Bill English has already pointed out is retrospective. Under section 238I of the Education Act the levy that was taken was to be held in trust accounts for certain purposes. We are now seeing this new legislation because two institutions in particular—the Modern Age Institute of Learning and the Carich Training Centre—took money for one purpose and used it for another purpose and the students were not able to do the courses that they had enrolled for. We now see the Government changing the legislation so that it can take money for one purpose and use it for another purpose. I do not think that is on. Mr Mallard can stand up and explain why he thinks that is justified. Referring back to Part 1 which we have already debated I note that one of the new uses for which the levy can be put is to reimburse the Crown for any expenses it may incur in refunding students or putting them back into the same position they were in before the institution they had enrolled at failed to provide their course. In other words it is just a tax. 
The Minister should come clean and say that this is not a fund or a levy to reimburse students who are out of pocket. He stood up earlier in the second reading debate and said that this legislation was necessary as he did not want to see students out on the street because they did not have accommodation. But in truth this legislation shows that it is just an excuse for a Crown entity—and in this case it is the New Zealand Qualifications Authority which I note is going through its resources at a rate of knots and probably does need propping up—to take money off the private providers and use it to justify its own expenses. We have a huge conflict of interest whereby the New Zealand Qualifications Authority sets and monitors the regulations and entry rules—specifies those who can and cannot come in from overseas—and is also responsible for setting students right when the institutions fail to provide the courses that they say they will provide and for which they take fees. That same Crown entity can then reimburse itself from those funds—not only from the new funds that will be collected from the date that this legislation is passed but from any funds that are already accumulated and not spent on the day this Act comes into force as is stated in clause 7. There is a name for that. It starts with “h” and I am not allowed to use it but the Minister knows what it is. 
I invite the Minister to take a call and justify why these funds which have been paid in for special purposes—marketing etc.—can be taken out of that named account and used to reimburse a Crown entity for money it has spent on reimbursing students or putting students back into a similar situation to that before they were disadvantaged by the failure of a private sector provider. The Minister can choose to take a call on that or he can choose not to but I think it is an important issue that has not been addressed. In the Education and Science Committee we got rid of the retrospective clauses in this bill but there is still a retrospective provision here in clause 7. 
Hon Trevor Mallard 
: Oh! 
DEBORAH CODDINGTON 
: The Minister is obviously bored by it all. It is absolutely unbelievable that the Minister is bored by all the worry and angst that he is causing the private education sector. He just does not care how heavily he tramples on the private sector. He will tax that sector and use it to prop up a Crown entity and he will be cavalier about the whole thing. 
Hon BRIAN DONNELLY (NZ First) 
: 
 My call will be brief but I will point out why New Zealand First has concerns with regard to this bill and the legislation that went before it. I mentioned that the last amendment upon which this bill is based and which it amends was put before the House 2 days before the Education and Science Committee was to deliberate on it. It was inevitable under those circumstances that we would get little hiccups in the process. When it comes to the law they are actually quite big hiccups as the Minister of Education who is also the Associate Minister of Finance knows. This bill is just an example of the need to correct that situation. 
I also take the opportunity to point out something else that seems to be escaping people. Everyone keeps saying that it will be the private providers that have to pay the levy. Ultimately in fact it will be the students who pay because the cost of the levy will be added on to the cost of courses. Whatever levy we impose will go on to the students and that will make our courses here in New Zealand less competitive with courses held elsewhere. Let us face it there is a very competitive market in export education. Back in 1997-98 we were trying to make that industry worth $1 billion per year—it is already worth $2 billion per year. The Australians are in the industry in a big way as are the Americans and the Canadians. In Britain the Government is subsiding and supporting the industry in a big way. New Zealand is actually pretty late off the block in that respect. 
When this levy was debated previously—and I said there was a lot of opposition to it—one of the problems mentioned was the fact that the providers were not necessarily opposed to an export education levy but were opposed to the purposes it would be put to. They did not necessarily accept that an export education levy should be used to give scholarships for example or agree with a number of the other purposes it would be used for. This part now states that if any money is left over from the levy and is not spent on the purposes outlined in the bill—and let us remember that it is money that has been levied on students—it can be used for some other purpose that is not stated in the bill. This part really is untidy. It leaves New Zealand First with a great feeling of discomfort about the whole progress of the legislation around the export education levy. Therefore that explains why New Zealand First will continue to oppose this legislation as it goes through Parliament. 
Dr WAYNE MAPP (National—North Shore) 
: 
 National is very concerned about Part 2 “Validation”. We have looked carefully at the regulations from 2002 and at the provisions of the Education Act. At the very minimum therefore we want some assurances from the Minister concerning the following issue. 
The regulations of 2002 which are being validated do not contain a purpose clause. That was stated to the Education and Science Committee by the ministry. Section 238I of the Education Act set out in the Reprinted Statutes of New Zealand volume 34 states that the purposes of the levy are the promotion development and quality assurance of the export education sector which may include professional development marketing the implementation of scholarship schemes research support etc. 
The one thing missing from that is essentially an indemnity provision whereby successful institutions would pay for unsuccessful institutions—which is the purpose of the current legislation. An indemnity provision is not contained in the regulations of 2002. It is not contained in the statutory provisions that were inserted in 2001. This new indemnity provision is being created only in the legislation before us now and it is worth noting as others have noted that there was an intention to apply this provision retrospectively. But that intention has gone and that is good. 
I question the Minister whether we are simply validating some regulations that have expired or whether the intention of the Government is—because we are voting against the regulations so we are not validating them—in a sense surreptitiously to achieve by way of the validation of the regulations what it has not achieved through the legislation. In other words has the Government sought to achieve through the regulations what it has not been able to achieve through the legislation? 
That is a very important issue. The sector will need an absolute assurance if that is the case. One would like to think that the only thing clause 7 does is simply confirm the types of expenditures that were set out in section 238I of the Act as passed in 2001—that section which did not have this indemnity provision. 
I want to make two points. Obviously National is opposed to the whole idea of the indemnity provision. We think that that statist solution is wrong and that there are better methods which were suggested by the sector itself. The Minister must know about those. 
The second thing is that National is opposed in principle to validating regulations that have expired and clause 7 at least on a narrow reading will validate the narrower expired regulations from 2001. Even that is bad enough because it means all the levies that were collected in 2001 2002 and 2003 were inappropriately used once the regulations had expired. The Government used the levies even though it did not have the authority to do so and now the Government has come to Parliament essentially to ask us to fix up its mistake. 
Frankly members on this side of the Chamber will not partake in that legislative charade. We think the proper course would be to pay the levies back. Is that not really the principled approach—instead of our having to come along with the pooper-scooper and fix up this problem for the Government? Well we will not play any part in that. 
BERNIE OGILVY (United Future) 
: 
 I want to speak to Part 2 and in particular to clause 7 “Use of export education levy” which everybody is touching on. One of the previous speakers talked about this clause as clearly being a retrospective take. I think it goes far further than that. I think that not only is this clause retrospective because a growth fund has been built up but it really is equivalent to a land grab. Here is a fund that no one owns and no provider has asked to take back its money—it is just left over. I would say that in today’s world people would be somewhat shocked if we did a little land grab around New Zealand at this stage especially given all the sensitivities we now have. Here is the equivalent of that; it is called a fund. The Government grabs all that is left over because no one has the right to get the money back and apportion it out to those who gave to the fund. 
I find something of a paradox in the way we are handling this provision. The solution given in clause 6 is simply to state that the collection of the levy is a lawful process. So be it but why not look at some of the other solutions to the problem rather than to see a levy as the only solution? Submitters to the Education and Science Committee had a numbers of solutions that would solidify the industry and make it work properly. I think it may be good to use this call to go over one or two of those solutions and to remind Parliament of what the industry thinks about this legislation. The industry thinks that yes there needs to be some security and that there needs to be proper accountability for any failure. Nobody had another view on that. But it is true that if there is no solution other than a levy we are left with what we have before us and I think that is the worst of all solutions because it is something no one has any control over. 
Some of the solutions proposed by submitters were arranged around for instance setting up a proper bonding regime. One or two submitters said that if the export education industry saw itself as being on a par with the airline industry just like the International Air Transport Association it would bond itself or even that if the industry saw itself as being on a par with another form of profession such as the legal profession it would take on board a fiduciary fund so it would be able to stand in the place of rescuing those who failed and there would be proper accountability in that manner. There was also the suggestion that some proper arrangements could be made through an insurance programme and there were examples given to us of such arrangements. If I recall matters rightly a firm by the name of InterGlobal Insurance Services was suggested as an insurance firm that would look after—and does look after and can cater for—the students. I think one of the previous speakers made it very clear that we are here to ensure that students get their education and that is it. So an insurance programme or a bonding programme would be in line with bringing about proper accountability for failure. 
United Future is of the mind that those sorts of solutions would be much better to place upon education providers than a levy. Once again I say United Future is unhappy about the process and the intention of Part 2 of this bill so we will vote against it. 
GEORGINA BEYER (Labour—Wairarapa) 
: 
 I move  
That the question be now put 
. 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 I want to speak to clause 6 which concerns me. First I reiterate the point made by my colleague Mr Mapp that if one looks at the regulations on the face of it one would see that the levy was payable once. If the Minister could tell members when the regulation was renewed that would be helpful. I understand the Act has generic provisions about the levy including the fact that it must be reviewed in 2006 but the regulation is not generic. It applies to the academic year 2003 and it specifies dates for payment. It is quite specific. So if regulations have been renewed or the process has been changed since then we would like to know about it because it is not in the book. 
The second question I raise is this: why is it that the people who write our legislation cannot get this sort of thing right? It is not as if raising a levy is something new to the Government—a Government of any sort. All Governments of all colours raise levies. They write legislation that allows a provision to write regulations and the Governor-General to promulgate them and the levy is thereby collected. But somehow in the middle of this machinery that writes all our law there is confusion about what is done when it comes to the purposes of a levy. 
So we have clause 6 here because when the draftsmen wrote the regulations they did not include a purpose for the levy. Presumably the argument was that the purpose of the levy was in the Act and so it did not need to be repeated in the regulations. Well whatever the argument was then it has now changed and it has been decided that that might not have been right. What is going on here? 
The Parliamentary Counsel Office writes regulations every day—in fact I think for about 23 hours of the day judging from the volume that comes out—and when its staff are not writing regulations they are writing bills. But apparently they do not know what is meant to be done about regulating the purposes of a levy. When are they going to find out? 
This clause does not even clear the issue up. It just says that whatever was in the regulation was valid—whatever was there. We had to legislate that those regulations themselves were valid because it was not clear that they were and it wastes the time of this Committee to pick up the work of some dopey draftsman who still does not know how to do it. 
So I want to know what Parliamentary Counsel Office policy is and its officials can tell the Minister while he sits there. What are the rules now? If one writes a set of purposes into legislation does one then have to repeat those purposes in the regulations—yes or no? I do not want to stand around in this Committee wasting time on this kind of mess-up again. If the dopey draftsman does not know the answer then presumably the expansively and interplanetary bright people who run the Parliamentary Counsel Office ought to know the answer. [ 
Interruption 
] Members might think it is trivial but it shows sloppiness. 
Levying that kind of money from free citizens of New Zealand is a serious business. The question of whether the levy is valid may not matter to the member for Otaki but it sure as anything matters to the people who pay it and that is part of the problem. That member does not care because as far as Labour is concerned this is costless regulation. To clean up a problem at no cost means at no cost to the Government but there is certainly cost to the payer. 
So I want to know whether the Parliamentary Counsel Office knows enough about levying levies to know whether regulations should have a purpose because this clause is not satisfactory as far as this Committee is concerned. All it says is that no matter what the dopey draftsman does the Government can always legislate later to make sure it is right. But surely there is a policy and a principle about how to do that. 
JANET MACKEY (Labour—East Coast) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 71 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2; Maori Party 1. 
Noes 49 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; Independent: Awatere Huata. 
Motion agreed to. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 63 
New Zealand Labour 51; Green Party 9; Progressive 2; Maori Party 1. 
Noes 57 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; United Future 8; Independent: Awatere Huata. 
Part 2 agreed to. 
Clauses 1 and 2 
PANSY WONG (National) 
: 
 When the original Education (Export Education Levy) Bill was introduced to the House members were told very positively by the Minister of Education that this was the bill that would fix everything in export education. He assured the public that the Labour Government cared for export education and that this export education levy would do the job. But hardly a year has gone by and we are here to fix up this— 
Hon Bill English 
: I raise a point of order Mr Chairperson. I did not want to interrupt my colleague but I intervene here only because I thought the comments made by the Minister were ones that the Parliament ought to take seriously. He said not quite in this order but certainly with the clear implication that a member of this Parliament was sabotaging that member’s country. I think he put it around the other way—“think of your country and stop sabotaging it” or something like that. Of course that is quite unparliamentary. There are not many worse or more offensive statements that can be made about a member of this Parliament. I ask that the Minister withdraw and apologise. 
The CHAIRPERSON (Hon Clem Simich) 
: Yes I heard that. 
Hon Trevor Mallard 
: I am happy to withdraw. 
PANSY WONG 
: When debating this bill one started to get used to taking personal insults from the Minister of Education which I always thought was using a very bullying tactic— 
The CHAIRPERSON (Hon Clem Simich) 
: That matter has been dealt with. 
PANSY WONG 
: As I say it is less than 1 year since we had the original version of the Education (Export Education Levy) Amendment Bill and we have just heard various debates on it. 
I think the title of the bill should be “Education (Export Education) to Fix the Failure Bill” because this bill intends to fix three types of failure. First of all it is meant to punish the private educational institutions that perform well for the failure of their competitors even though those successful institutions have no control over which providers can join the export education sector. That control is in the hand of the New Zealand Qualifications Authority. The second type of failure was by the New Zealand Qualifications Authority and the related part of the Ministry of Education. The authority is the gatekeeper—the only one that can accredit an institution—and it is supposed to monitor and audit the behaviour of those institutions. In a previous debate I outlined two cases where problems were identified a year before the collapse of those high-profile institutions. Those collapses led in effect to New Zealand’s export education sector’s reputation suffering. The third failure we were told about was the one that goes to the heart of this version of the bill—the inability of the Government to get the first version right. We are now told that the first Education (Export Education Levy) Regulations were not quite in order so therefore part of the time spent on this bill has to be devoted to fixing the original regulations. 
The National Party’s Hon Bill English and Dr Wayne Mapp have today pointed out some serious problems but we still do not have the Minister reassuring us during the passage of this bill. We will not support it but unfortunately the very unprincipled Green Party will support the Labour Government in punishing the private sector. So we are still not reassured by the Minister through his officials as to whether this bill really will fix all those previous drafting errors. 
DEBORAH CODDINGTON (ACT) 
: 
 There are two important things missing from the part of the bill that contains the title and the commencement date. The first is that the legislation does not bind the Crown and the other is that the title does not reflect the true intent of the bill. The title should actually be “Education (Export Education Private Providers Levy) Amendment Bill” because it does not relate to all providers of export education. It relates only to private exporters of education. I have huge difficulty with that term anyway. 
We have reached the situation in New Zealand where we have forgotten that we are actually dealing with human beings in terms of export education. We are starting to think along the lines of fattening cattle for beef. That is something that gets lost in the economics of this sort of legislation and it is only the private providers that are punished by such legislation. There is absolutely no need for this legislation. If members looked at what was in place before it came into being they would see that the New Zealand Qualifications Authority had suggested that private tertiary educators were not being responsible—they were shirking their responsibilities—when it came to assuring students that tuition fees were safe. But that is absolutely not the case. If we go back to the history we find that the combined registered English language schools—CRELS as they were known—comprised a voluntary organisation they all belonged to. They all agreed without being forced by Government and without this sort of legislation that they would take on the students from fellow members of their organisation if those providers got into financial difficulty and could not provide their courses. That agreement was reaffirmed as being in place a week before the Modern Age Institute of Learning folded. The members knew that that institute was going to fold yet they stuck by the deal they had made whereby they would take on those students. 
Those were private institutions that were already acting responsibly. They are now going to be punished by this legislation. That is why if this title were a true reflection of the bill the words “private providers” should be in the title or there should be the clause in the bill that provides: “This Act binds the Crown.” It is the public institutions that will be allowed to get away with doing exactly what they have been doing. Many of the polytechs—not all; places like Unitec are not included in the association of polytechs—have been getting away with taking money for purposes and not using it for those purposes. It is the policy the Minister has set up. 
I would strongly argue that this title is misleading and any claims that private providers have behaved irresponsibly and should be punished are ridiculous. In fact the combined registered English language schools have actually had a legal opinion from Geoffrey Palmer that they had no extra liability after Modern Age collapsed and that they had fulfilled all their obligations in taking on those students. Even though they knew that Modern Age was going to collapse they still took them on. Yet this Minister is intent on bringing in this legislation that will punish them. Not only that the bill is being put through with a totally misleading title and it is allowing public institutions to be let off the hook. The bill is not necessary and it should be thrown out. 
Dr WAYNE MAPP (National—North Shore) 
: 
 This part is essentially the summary in a wide-ranging debate and National wants once again to restate its fundamental opposition to this legislation. It is statist. It is the sort of legislation one would expect from a Government that stems from a socialist background. I see the members across the Chamber are proud of the fact that they believe in a statist socialist background. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Dr WAYNE MAPP 
: As I was saying prior to the dinner break National has profound objections to this bill and we have these profound objections because of the Labour Government’s knee-jerk approach to dealing with a genuine problem. I think everyone would acknowledge there is a real problem involved in the question of how we protect consumers particularly overseas students in the event of failure of the institution they attend. 
Labour’s solution is the classic statist solution that we have grown to expect from this Government. Of course it is the reason why so many New Zealanders have come to the view that this Government has really run out of steam; that this Government has now just simply when confronted with a problem taken the easy way out. What is the easy way out for a Government of Labour’s heritage? The easy way out is more regulation more statutes and in particular more cost on the private sector. 
The private sector as the Government will know did not want this bill. The private sector is opposed to this bill. The private sector does not just oppose it because it does not want to do anything about the problem. It actually came up with realistic solutions that in fact all the speakers thus far have referred to. Members spoke about bonds as one particular option about insurance as another possible option and about better prudential supervision as a third option. They even spoke about self-regulation as probably the worst of all those private sector approaches where they would manage a levy system themselves. 
This was clearly not seen as the most desirable outcome but all three of those solutions were seen as better than the statist solution—the solution that is always the recourse of the neo-socialist such as the Minister sitting in the chair today the Hon Chris Carter who I am sure will be voting for this bill in just a few minutes. He and his Green mates in that other party that no one would recognise as a sensible party are from the only two parties in this entire Parliament that support this kind of State lunacy. Every other party is opposed including their erstwhile coalition partners of a sort the United Future party including the New Zealand First Party with which National has considerable differences these days and including the ACT party. All of those parties coming to the issue from different perspectives have all concluded that the statist solution is fundamentally wrong particularly when there are better options available. 
So even when the Government removed the retrospective nature of the bill that could not and did not fix its fundamental flaws—the fundamental flaw is the statist approach. This will not fix the problem in an effective way. There were better ways available to the Government. It should have listened to the sector and we would not be confronted with this bill which I guess reflects more than any other bill that we have debated today the fundamental divide between the old-fashioned statist solution and the contemporary approach which is to trust the private sector. Let the private sector organise its own solution maybe with a bit of State guidance and assistance in a prudential supervisory way but not the old-fashioned: “Let’s just levy them; make them pay; we’ll organise it and trust the New Zealand Qualifications Authority to deal with it.” 
PANSY WONG (National) 
: 
 I would like to continue the theme started by my colleague Dr Wayne Mapp. There is a problem in the export education sector. Actually the biggest problem is the Labour Government because 2 years ago— 
Hon Dover Samuels 
: What’s wrong with that? 
PANSY WONG 
: The member asks a good question. The Labour Minister has not even bothered to brief his own colleague on what the problem is. The problem is that a Labour Minister brought in some legislation 3 years ago and told all political parties that if they supported the Government in passing the Code of Practice for the Pastoral Care of International Students then export education would be fine. In the next minute we were told that if the Education (Export Education Levy) Amendment Bill was also passed the export education sector would be an absolutely top performer. 
Actually the export education sector was performing without the Labour Government. In fact it was doing very well. In 2003 it was one of the top five export earners for New Zealand. 
Then successively we had two very high-profile collapses. The problems of those two institutions—the Modern Age Institute of Learning and Carich New Zealand—had in some cases been detected a year before they hit the media and before harm was done to New Zealand’s export education industry’s reputation. 
The Labour Government’s remedy was first of all to shift the blame. So instead of the Government admitting that it was the fault of the gatekeeper—the New Zealand Qualifications Authority; the organisation authorised to accredit institutions that could enrol international students—it shifted the blame and said: “Well if only good students came to New Zealand and if only good schools existed in New Zealand then none of those problems would exist.” But the truth is that if the gatekeeper the New Zealand Qualifications Authority had done its job a lot of the problems even if they had happened would have been minimised. 
In this case passing a bill to charge for an extra levy—to punish private education providers for the failure of their competitors—is not providing any solution to the problem. If the Labour Government is serious about trying to fix the problem in the export education sector it has to engage the sector in carrying out a proper inquiry into the New Zealand Qualifications Authority to see whether the authority has the expertise and the competence to carry out its monitoring role. 
In my previous speeches in respect of staff from institutions that had collapsed I provided examples of how staff had tried to alert the New Zealand Qualifications Authority to problems in those institutions. So either the authority was reluctant to implement or it was not capable of implementing quick actions to stop New Zealand’s export education sector from suffering those high-profile collapses. 
The passage of the export education levy legislation will certainly not solve the problem. I urge Labour members to rethink because this bill concerns a very important sector and its passage is not supported by members on the Opposition benches—that is almost all members apart from the Greens who have a problem philosophically with private institutions. The Greens are against anything that is private which is a shame in this case because I do not think they have the good of international students at heart. If we are really serious about wanting to enhance New Zealand’s reputation in international education we should not pass this bill. 
DIANNE YATES (Labour—Hamilton East) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 71 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2; Maori Party 1. 
Noes 47 
New Zealand National 27; New Zealand First 13; ACT New Zealand 7. 
Motion agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 63 
New Zealand Labour 51; Green Party 9; Progressive 2; Maori Party 1. 
Noes 55 
New Zealand National 27; New Zealand First 13; ACT New Zealand 7; United Future 8. 
Clause 1 agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 63 
New Zealand Labour 51; Green Party 9; Progressive 2; Maori Party 1. 
Noes 55 
New Zealand National 27; New Zealand First 13; ACT New Zealand 7; United Future 8. 
Clause 2 agreed to. 
Bill reported with amendment.