Volume 674 Week 79 - Wednesday 13 July 2011 
Volume 674 Week 79 - Wednesday 13 July 2011 
[Volume:674;Page:20025] 
Wednesday 13 July 2011 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Visitors 
Singapore—Speaker Parliament 
Mr SPEAKER 
: I have much pleasure in informing the House that Mr Abdullah Tarmugi Speaker of the Parliament of Singapore is present within the precincts of the Chamber. I am sure that members would wish that he be accorded a seat on the left of the Chair and that his delegation in the gallery also be welcomed. 
Abdullah Tarmugi accompanied by the Deputy Speaker entered the Chamber and took a seat on the left of the Chair. 
Questions to Ministers 
 State-owned Energy Companies—Privatisation 
1. 
Hon PHIL GOFF (Leader of the Opposition) 
 to the  
Prime Minister 
: Does he stand by all of his statements on the privatisation of New Zealand State-owned power companies? 
Hon BILL ENGLISH (Deputy Prime Minister) 
 on behalf of the Prime Minister: In respect of the Government’s plans to sell a minority stake in four State-controlled energy companies yes. 
Hon Phil Goff 
: Is Contact Energy privatised by National in 1999 an example of a company in which control has now been lost to foreigners; if not why did he say in answer to that question yesterday that “nothing could be further from the truth” when the majority of shares are foreign-owned and the majority of directors are foreigners? 
Hon BILL ENGLISH 
: Contact Energy is not the model the Government is following. That model was wholly privatised and a big chunk of it was sold initially I think to Edison Mission Energy which was onsold to Origin Energy which has ended up now owning 50 percent. The Government is pursuing a different model: 51 percent Crown ownership and Kiwi mums and dads at the front of the queue. 
Hon Phil Goff 
: I raise a point of order Mr Speaker. You will recall that I asked the Prime Minister why he said yesterday that “nothing could be further from the truth” in answer to the question of whether control of Contact had passed to foreigners. I received no answer to that; I had a very interesting history but no answer to the question. 
Mr SPEAKER 
: Well— 
Hon Members 
: It was on notice. 
Mr SPEAKER 
: Well actually that was a supplementary question. With respect to the members I say that the question on notice was not that question. The member asked why and the Minister gave in his opinion the answer why. It may not have been a very satisfactory answer but that is why there are further supplementary questions—to test that “why” answer out because it clearly was not satisfactory to the member. 
Hon Phil Goff 
: Why did the Prime Minister say yesterday that “nothing could be further from the truth” when asked whether the control of Contact Energy had passed to foreign owners when the majority of shareholders are foreigners and the majority of directors are also foreigners? 
Hon BILL ENGLISH 
: Again the member is describing a sale quite different from what the Government is proposing. In that case the reason that the majority of shareholders are foreigners is that the Government sold about 50 percent of it ultimately to a foreign owner a cornerstone shareholder. This time no sale of a cornerstone shareholding is being proposed. The Government is putting forward a model much more like Air New Zealand’s—51 percent Government ownership. 
Mr SPEAKER 
: What I will do if it will assist the member is invite him to repeat his question exactly as he put it. It would appear that the Minister may not have heard it. 
Hon Phil Goff 
: It appears so Mr Speaker. From memory: why did he say yesterday that “nothing was further from the truth” when Contact Energy when privatised was passed over into foreign control when in fact the majority of shares are foreign-owned and the overwhelming majority of directors are foreigners? 
Hon BILL ENGLISH 
: Because the Prime Minister was talking about the question the member actually asked yesterday which related to all those shares—50 percent of Contact Energy—that were floated in the retail market to mums and dads. As it happens the biggest single owner of those shares is the New Zealand Government. 
Hon Phil Goff 
: Why does the Prime Minister keep on saying that it is about mums and dads when the fact is that 80 percent of the shares in Contact Energy are owned by fewer than 1 percent of shareholders who are certainly not average mums and dads but wealthy investors and foreign companies? 
Hon BILL ENGLISH 
: Because as the Prime Minister pointed out—and I think the Minister of Finance might have pointed it out—in Contact Energy’s case the Government set out to sell the whole of the company including a cornerstone shareholding. That is not the model the Government is now proposing. The reason as I said that a majority of shares in Contact Energy may be owned by foreigners—and they probably are—is that half of it was sold to foreigners in the first place. That is precisely the difference. The model the Government is now proposing is 51 percent Government ownership with Kiwi mums and dads at the front of the queue to buy the rest of it. 
Hon Phil Goff 
: Does the Prime Minister understand that at the time of privatisation there were 225000 shareholders which has now dropped to 80000 shareholders as of August and what does that represent if not the sale of shares from the mums and dads to the wealthy investors and the big corporates? 
Hon BILL ENGLISH 
: In the first place the member does not know who those shares might have been sold to. Secondly this does come down to a matter of trusting New Zealanders. We believe that New Zealanders want to invest in New Zealand. Labour members believe that New Zealanders want to sell out at the first chance they get. We are with the New Zealanders. 
Hon Phil Goff 
: I seek leave of the House to table a number of documents. The first one is from the Contact Energy Ltd annual report 2010 which shows that nearly 80 percent of its shares are owned by fewer than 1 percent of shareholders. 
Mr SPEAKER 
: Leave is sought to table that document from the annual report. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Hon Phil Goff 
: I seek leave of the House to table a document that is a company extract from Contact Energy Ltd which shows that at least five out of seven directors are not New Zealanders. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Hon Phil Goff 
: I seek leave of the House to table a document from the Parliamentary Library that shows that the original number of shareholders—225000—has now dropped to 80911 which is presumably mum and dad investors selling out— 
Mr SPEAKER 
: The last bit the member knows is totally out of order—totally out of order—because that was not a necessary description of the document. Leave is sought to table that document. Is there any objection? There is objection to the tabling of that last document. 
Hon Phil Goff 
: Does the Prime Minister agree with Pattrick Smellie who says—in the same article that he has quoted Pattrick Smellie from time and again—that partial privatisation will lead to “higher power prices sooner than might otherwise be the case” or does he still contend that privatisation will not lead to faster rises in power prices? 
Hon BILL ENGLISH 
: No I do not agree with Pattrick Smellie. In fact Labour should be apologising for what happened while all these companies were in 100 percent State ownership. Power prices went up 70 percent in 8 years. The future of power prices will be determined by the competitiveness of the market and this Government has moved to improve the competitiveness of the market and protect consumers from rapacious State-owned companies. 
Hon Phil Goff 
: Does the Prime Minister accept the figures set out in the business section of the  
Dominion Post  
this morning that show that the privatised company Contact Energy is charging a typical four-person household in Wellington $500 a year more in power prices than any of the State-owned enterprise power company alternatives? 
Hon BILL ENGLISH 
: I have not seen those figures so I cannot comment on them. It would be a bit bizarre if Labour believes that one power company can consistently charge a lot more than the rest of them and retain all its customers. In the long run that simply cannot be the case and in fact my understanding is that Contact Energy is losing customers probably because its prices are too high. 
Tax System—Fairness 
2. 
MICHAEL WOODHOUSE (National) 
 to the  
Minister of Finance 
: What progress has the Government made in making the tax system fairer? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 In Budget 2010 we recognised there were parts of the community who over the past decade have simply not paid their fair share of tax. The Government raised the effective tax rate on property by a number of different measures including denying depreciation on long-life assets tightened the eligibility for Working for Families so that those with high economic incomes could not use paper losses to qualify and allocated $120 million to the Inland Revenue Department to better enforce the rules. These measures have been successful and we have achieved a more balanced and fair tax system that supports growth and provides good incentives in the economy. 
Michael Woodhouse 
: How does the tax system interact with income support which the Government provides? 
Hon BILL ENGLISH 
: Income support and the tax system need to be seen together. We tax those who earn income at progressive rates although 75 percent of taxpayers pay no more than 17.5c in the dollar now. We also support those on low and median incomes with dependent children. A single-income family with two children pays no net tax until their income reaches $50000 a year. This year Treasury projects we will collect $26 billion of income tax. Net of tax we will pay about $12 billion in income support and another $8 billion for superannuation. 
Michael Woodhouse 
: Which groups now pay most of the tax collected by the Government? 
Hon BILL ENGLISH 
: Our tax and transfer system is highly redistributive and the number of people paying income tax is surprisingly small. The lowest-income 43 percent of households currently receive more in income support than they pay in income tax. The 1.3 million households with incomes under $110000 a year collectively pay no net tax—that is their total income support payments match their combined income tax. The top 10 percent of households contribute over 70 percent of income tax net of transfers—over 70 percent of income tax net of transfers. This system is highly redistributive and we believe it is fair. 
Michael Woodhouse 
: What steps has the Government taken to prevent the erosion of the tax base? 
Hon BILL ENGLISH 
: When we became the Government we found a pretty chaotic tax system where a lot of wealthier people were simply not paying their fair share of tax so we set out to tighten the taxation of property beef up enforcement by the Inland Revenue Department and reduce widespread income-sheltering through trusts. The Inland Revenue Department did an exercise where it tabulated New Zealand’s 100 richest people and found that over half of them were not paying the top personal tax rate. That is how badly the tax system was operating. 
State-owned Assets Sales—Meetings with Grey Power 
3. 
Hon ANNETTE KING (Deputy Leader—Labour) 
 to the  
Prime Minister 
: At recent meetings he has had with Grey Power have they raised with him their concerns about the sell-off of state assets? 
Hon BILL ENGLISH (Deputy Prime Minister)  
on behalf of the Prime Minister: Yes; equally when the Prime Minister raises concerns about their investments in failed finance companies they see the mixed-ownership model from a different perspective. Many share his view that it makes no sense for New Zealanders to be prevented from investing in good solid New Zealand assets which the mixed-ownership model would allow and which is currently allowed through the Air New Zealand model put in place by the previous Labour Government. 
Hon Annette King 
: Is he aware that according to Statistics New Zealand 81 percent of senior citizens live on New Zealand superannuation with little or no other income; if he is aware of that where does he suggest older people get money from to invest in assets they already own and have paid for? 
Hon BILL ENGLISH 
: The comments the member is referring to relate to the Prime Minister’s discussing with Grey Power whether they want the choice of investing in finance companies—where under the previous Labour Government investors lost $8 billion in those finance companies; the legacy of Labour’s economic management—or the opportunity to invest in a utility company providing reasonable returns consistently over time. Most of them indicate the obvious choice. 
Hon Annette King 
: What is his answer to Grey Power members who are quoted as saying in their magazine: “Why are we buying back what we have already paid for in taxes? They belong to New Zealanders now; why buy them back?” 
Hon BILL ENGLISH 
: Grey Power members will not have to buy them back. Many of them will be quite happy with their 51 percent ownership retained by the Government. They will also be happy to see 1.7 million KiwiSavers buying into our State-owned enterprises. They will be happy to see ACC in which they have all invested being able to buy shares along with Kiwi mums and dads looking for ways to invest their hard-won savings. 
Hon Annette King 
: Can he remember advertising in the Grey Power magazine recently stating “We’re working for you. Security. Well-being. Respect.”; if so does that respect include listening to and acting on the advice of those older people who are saying that selling the State assets they paid for is totally unacceptable? 
Hon BILL ENGLISH 
: I do recall some ads in the Grey Power magazine including one on asset sales that did not carry an authorisation statement. I think that will be among the material referred to the police with the Labour Party yet again in trouble for breaking the electoral law. 
Hon Annette King 
: I seek leave to table an advertisement from the National Party in the Grey Power magazine that solicits votes and is unauthorised. 
Mr SPEAKER 
: Leave is sought to table an advertisement from the Grey Power magazine. Is there any objection? [ 
Interruption 
] Someone wants to know what date it was published. 
Hon Annette King 
: It is the March issue of 2011. 
Mr SPEAKER 
: I thank the member. Is there any objection to that document being tabled? There is no objection. 
Document by leave laid on the Table of the House. 
Peseta Sam Lotu-Iiga 
: What other economic messages has he communicated to superannuitants? 
Hon BILL ENGLISH 
: There is more good news which is why the Prime Minister is so popular at Grey Power meetings. In the last 3 years prices have gone up 10 percent in total but superannuation rates have gone up 19 percent. That means for example that a married couple on superannuation is getting $166 more per fortnight than 3 years ago—$166 more per fortnight. This is a result of tax cuts and real after-tax average wage increases and those people are happy about that. 
Hon Annette King 
: In light of his claim that he shows respect to older New Zealanders will he undertake a thorough and independent analysis of the impact on power prices of his privatisation plans before the election and make it available before people go to the polls so they can be fully aware of what they are voting for; if not why not? 
Hon BILL ENGLISH 
: An independent analysis of power prices shows that older people were right to feel they were victims of rapacious State-owned companies over the decade that Labour was in power: power prices went up 70 percent in 8 years. An independent analysis of the electricity market shows that Government decisions are likely to lead to power price increases lower than that in the future. 
Hon Annette King 
: I raise a point of order Mr Speaker. I asked whether he would undertake a thorough and independent analysis of power prices before the election and release it so people could know what they were voting for. I did not ask about what had happened in the past. I asked whether he would do that and he went nowhere near that question. 
Mr SPEAKER 
: Towards the end of his answer—I accept it did not start as a direct answer to the question—the Minister claimed an analysis had been done if I heard him correctly. I cannot judge the accuracy or otherwise of that but that is what I believe that the Minister told the House. So he did answer the question. He said an analysis has already been done. 
Hon Annette King 
: Could the Minister tell the House which document he is using to say that the independent analysis has been done on privatisation and power prices under National’s policy? 
Hon BILL ENGLISH 
: The Government has done an electricity market review that showed that regardless of ownership the structure of the market was not as competitive as it should have been—something the Labour Government said it was going to fix but did not. The Government has made a number of changes as a result of that review. The second point is if Labour thinks that private ownership automatically means that businesses can put up prices then why did it not go out and buy back the supermarkets and buy back the clothing stores so that people could have lower prices? 
Peseta Sam Lotu-Iiga 
: What other reports on asset sales has the Minister seen in relation to Grey Power? 
Hon BILL ENGLISH 
: I have seen reports that back up the material we have already covered today which is that a lot of older New Zealanders are bitterly disappointed they lost their life-savings $8.5 billion worth in the crash of the finance companies. They are looking for better opportunities for them and particularly for their families to invest their savings safely in New Zealand. A re-elected National Government will provide those opportunities. 
Prisons—Escapes 
4. 
Dr CAM CALDER (National) 
 to the  
Minister of Corrections 
: Has she received any reports on the rate of escape from New Zealand prisons? 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 I am pleased to advise the House that the number of escapes from New Zealand prisons has fallen to an all-time low. In the last financial year there were four escapes from corrections custody but only two from jails. This compares with nine escapes in the previous financial year and 23 in 2007-08. This great result is due to more sophisticated perimeter fencing new detection and surveillance systems improved intelligence and single points of entry into our prisons. The Department of Corrections is firmly focused on public safety and it is doing a great job. 
Dr Cam Calder 
: What other information has she received in relation to escapes over the past year? 
Hon JUDITH COLLINS 
: I am pleased to report that for the first time there have been no walk-away escapes at all. Instances in which low-security prisoners walk away from work parties or other areas of supervision have been the most common method of escape from New Zealand prisons. This is a fantastic achievement and is testament to the new security classification system implemented by the Department of Corrections in 2010. The new system focuses much more heavily on escape prevention and tightens the criteria that a prisoner must meet to be considered for employment in a work party outside the perimeter. This is more excellent work from the Department of Corrections. 
State-owned Assets Sales—Budget 2011 Net Debt Track 
5. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister of Finance 
: Why doesn’t his Budget’s net debt track take into account lost dividends from SOEs and sales costs arising from his policy of privatising state assets? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Because final decisions have not been made about the mixed-ownership model. In fact the National Government has been very clear that it would proceed with that model only after it had laid out its plans to the New Zealand voter and it had managed to get re-elected. 
Mr SPEAKER 
: Question number—does the member have a supplementary question? We cannot wait all day. 
Hon David Cunliffe 
: Given that the Minister has banked in Budget 2011— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. Although some of us do not mind some jovial encouragement from you in the Chair that is not the sort of comment you use to Ministers when they miss their opportunity to get questions. I think— 
Mr SPEAKER 
: The member is quibbling with what I have just done. That is not a matter of order. I was about to call Kevin Hague and I was surprised that the member had a further question. Members cannot expect the House to wait for them; that is not unreasonable. Some members take too long to get to their feet and being occasionally reminded that they should take their call is no bad thing in itself. It is not the end of the world. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I think we need to look at this carefully. I think your role is as a referee not a commentator. 
Mr SPEAKER 
: I do not think I need such lectures. 
Hon David Cunliffe 
: Given that the Minister’s 2011 Budget has already booked the proceeds of those asset sales for which he has just confirmed that he lacks a mandate did his Government’s Budget 2011 Fiscal Strategy Report set the upper net debt ceiling at 35 percent and what guarantee can he offer that his policies will not break this limit when his Budget does not properly account for the costs of his Government’s plan to sell public assets? 
Hon BILL ENGLISH 
: The 35 percent ceiling is well above where we expect net debt to peak which will be just under 30 percent. I think this will be more of an issue for the member. If he says he will use a capital gains tax to offset sales of assets he cannot count the dividends because they are still in the Budget now. He cannot add dividends from retaining State assets. They are still in the Budget. 
Aaron Gilmore 
: Assuming that 49 percent of the State-owned energy companies were sold what impact would this have on the operating balance and what would the size of the Crown’s future commercial assets be? 
Hon BILL ENGLISH 
: It would depend a bit on the price. If we use last year’s valuations our annual interest costs would fall by $400 million and annual dividends would fall by about $185 million leaving the operating balance about $215 million better than it would otherwise be. 
Hon David Cunliffe 
: If these State-owned enterprise assets yield low returns as he claims and given that Treasury says that efficiency gains from privatisation are likely to be moderate at most would not power prices have to rise to make these new companies attractive to investors or will he now admit that these assets are already highly profitable which is why foreign buyers he has met like the China Investment Corporation want to buy them and why it does not make sense to sell them? 
Hon BILL ENGLISH 
: No that is not the case. The measure of poor performance of the last Labour Government is that despite the fact that power prices went up 70 percent in 8 years these companies actually paid very poor dividends. 
Hon David Cunliffe 
: Why does the Minister not just admit what all New Zealanders already know which is that he has booked the proceeds of selling State assets in his Budget before he has a mandate to sell them and that he has done so without booking the lost dividends that he must take down if he goes to 51 percent? 
Hon BILL ENGLISH 
: No that is not the Government’s position. The fact is that the Government needs to keep investing in its core information technology systems in ultra-fast broadband and in rebuilding KiwiRail. We have arranged the Budget so that we will be able to use the proceeds of a partial sell-down of electricity companies for the very real capital needs of the core State sector which will continue to grow. 
Mine Safety—Underground Coalmines 
6. 
KEVIN HAGUE (Green) 
 to the  
Minister of Labour 
: Is underground mining safe in New Zealand? 
Hon KATE WILKINSON (Minister of Labour) 
: 
 As I have previously answered of course we have concerns about mine safety which is why we have taken the matter of Pike River and the tragedy that happened there very seriously. It is why we have established a royal commission of inquiry in relation to that. In addition in order to get immediate assurance a safety audit of all operating underground coalmines in New Zealand was recently completed by two independent Australian mining specialists. The audit did not reveal that a dangerous situation was imminent in operating underground coalmines in New Zealand. 
Kevin Hague 
: Does she think it is good enough that of the four recent ignitions in the Spring Creek underground coalmine the mines inspectorate had the resources to follow up only two? 
Hon KATE WILKINSON 
: Those issues have been raised as evidence at the royal commission. Therefore that is the appropriate place for them to be considered and I am reluctant to comment further on that. 
Kevin Hague 
: I raise a point of order Mr Speaker. The Minister does of course have the opportunity to say that it is not in the public interest for her to answer a question but if that is the case she should say that. The proceedings before the royal commission are not sub judice in any way. 
Mr SPEAKER 
: I hear what the member is saying but I think the Minister was implying in the way she answered that she did not consider it to be in the public interest to second-guess the royal commission. That is not an unreasonable position for a Minister to take. 
Kevin Hague 
: Does she agree with international mine safety expert Dave Feickert who said in the  
New Zealand Herald  
yesterday: “Pike River represents a spectacular failure of self-regulating companies in a high-risk industry. Why we allowed an economic theory of business competition to persuade us that competing companies would co-operate on mine safety is something else I will never fathom.”? 
Hon KATE WILKINSON 
: Again I am reluctant to comment on evidence that is before the royal commission. Whilst those matters are before the royal commission—and some matters will be before the royal commission—I think it is inappropriate to make comments that may be seen as compromising or influencing its determination. 
Kevin Hague 
: Is the Minister aware that as a result of the Kaye and Party mine disaster in 1940 in which five people were killed all underground mines need to be connected by phone to emergency assistance on the surface? 
Hon KATE WILKINSON 
: Those suggestions are also under the ambit of the royal commission of inquiry. It is a wide-ranging inquiry and I am reluctant to make further comments until those determinations have been made by the inquiry. 
Kevin Hague 
: I raise a point of order Mr Speaker. The question simply asked whether she was aware of a particular rule about the requirement for a phone connection between underground mines and emergency assistance on the surface. That does not seem to me to be a matter that is currently before the royal commission in the manner that the Minister suggests. 
Hon Christopher Finlayson 
: I refer you Mr Speaker to Speaker’s ruling 31/6. It is acknowledged in a very old ruling of Speaker Statham that “The House is not debarred from discussing a matter that is before a Royal commission as would be the case if the matter were before a court.” So questions are not necessarily out of order but they are questions of propriety as “members should avoid embarrassing the commission by any statements they make.” We have two royal commissions and I believe it is extremely important that we avoid any suggestion of embarrassing the members of the commission in doing their work or crossing those bounds of propriety from general questions on a particular subject and moving into an area that may have been for example a couple of days ago the subject of evidence and cross-examination and is a live issue before the commission. In my submission the Minister has taken exactly the right approach. 
Kevin Hague 
: I cannot see how it could possibly be an embarrassment to the royal commission to say whether the Minister is aware of a requirement for such a phone link between underground and emergency assistance on the surface. 
Hon David Parker 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: I will hear briefly from the Hon David Parker. 
Hon David Parker 
: I think there is another point of principle here too and that is that Governments of course cause the creation of royal commissions of inquiry. If by doing that the Government could effectively oust the right of parliamentarians to discuss issues of public interest that would pervert the course of this Parliament. So long as the question is not embarrassing to the royal commission in the way in which the Speaker’s ruling states it should be perfectly in order. 
Hon Member 
: Further to the point of order— 
Mr SPEAKER 
: No I do not want to go on with this indefinitely. I propose to invite the member to repeat his question because I have some sympathy with the point he makes. Whether a Minister is aware of an alleged rule—I do not know whether such a rule exists—cannot in my view compromise the royal commission. But we must trust the Minister’s judgment in respect of issues that may not be in the public interest because of implications for the royal commission. I invite the member to repeat his question. As members have alluded to under the serious points of order raised it is not out of order to ask questions. There must be some questions that it is OK and in the public interest to answer. I invite the member to repeat his question. 
Kevin Hague 
: Is she aware that as a result of the Kaye and Party mine disaster in 1940 in which five people were killed all underground mines need to be connected by phone to emergency assistance on the surface? 
Hon KATE WILKINSON 
: I concede that I am not aware of all the technical specifications or requirements of mining standards mining regulations or mining practices. I am not a miner. 
Kevin Hague 
: Does the Minister think it is good enough that when the two Pike River survivors struggled to the phone in the Pike River mine and called the Pike River surface controller their call went to an answerphone? 
Hon Christopher Finlayson 
: I raise a point of order Mr Speaker. That question crosses the line into something that is potentially very embarrassing to the commission. The commission is dealing with these very factual issues at this time. It is quite improper. 
Mr SPEAKER 
: I appreciate the lecture from the Attorney-General but the judgment as to whether a matter is not in the public interest—[ 
Interruption 
] I am on my feet if it has escaped the Attorney-General’s notice. This is a matter for the Minister. The Minister must be the sole judge as to whether answering a question is in the public interest. That is a matter for the Minister. The Minister can certainly seek the advice of the Attorney-General around these issues prior to question time or at any stage during question time but it is up to the Minister to make that determination. 
Hon KATE WILKINSON 
: Once again I am reluctant to make any comment on evidence that may or may not be before the royal commission of inquiry because I do not want to be seen to compromise or influence its determination. 
Kevin Hague 
: Does the Minister think it is good enough that when the two—[ 
Interruption 
] 
Mr SPEAKER 
: I apologise to the member. I say to colleagues in the House that these are obviously serious questions and I must be able to hear them if I am to make a serious attempt to referee—to use the term my learned colleague has suggested should guide me. On a serious issue like this it is not helpful to have unnecessary interjections. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. Just to make it clear I am not legally qualified and I have not been called to the Bar. Therefore I am not learned. 
Mr SPEAKER 
: I apologise to the honourable member. The same would apply to me I am sure. 
Kevin Hague 
: Does the Minister think it is good enough that when the two Pike River survivors finally got through to the control room and were instructed to keep making their way out of the mine there was nobody and no supplies—not even a drink of water or first aid—there to meet them leaving them to make their own way to find help? 
Hon KATE WILKINSON 
: The issue is not what I think is good enough; the issue is what the commission of inquiry thinks is good enough and how it makes its determination accordingly. 
Kevin Hague 
: Does the Minister still agree with John Key’s comment on 22 November 2010: “I have no reason to believe that New Zealand’s safety standards are any less than Australia’s and in fact our safety record for the most part has been very good.”? 
Hon KATE WILKINSON 
: I agree with that comment. 
Kevin Hague 
: Given the clear and mounting evidence that changes made in the 1990s to both the mines inspection system and mine safety regulations have significantly reduced safety standards what possible reason is there now to wait until the royal commission reports before making urgent moves to improve the safety of workers going underground every day right now? 
Hon KATE WILKINSON 
: Those kinds of assertions and assumptions whether true or false will be tested by the royal commission. We await its determination. 
Kevin Hague 
: Will the Minister resign if the royal commission finds that her department failed in its duty to protect the Pike River miners as the then Minister of Conservation the Hon Denis Marshall did over Cave Creek? 
Hon KATE WILKINSON 
: I will await the determination from the royal commission of inquiry. I will be very interested in seeing what it finds out. 
Darien Fenton 
: How will restricting the access of union representatives to workplaces even where health and safety issues arise make underground mining in New Zealand safer? 
Hon KATE WILKINSON 
: The access of unions to workplaces is still available. It is just subject to the employer’s consent which cannot be unreasonably withheld. 
Hon Rick Barker 
: Why is the Government so resistant to miners with practical experience working underground having the power to act and if necessary stop work where health and safety issues put lives at risk preferring instead to leave all health and safety issues to management alone for whom production and profits are a priority? 
Hon KATE WILKINSON 
: The adequacy of the mining inspectorate the importance or otherwise of check inspectors and the effectiveness of laws and regulations are all matters that will be properly considered by the commission of inquiry. Until it makes that determination I am reluctant to make further comment for fear of compromising jeopardising or influencing its determination. 
Hon Rick Barker 
: Is it correct to interpret from the Minister’s answers to Labour and the Greens that she will simply wait for the royal commission to report until she does anything about mine safety? 
Hon KATE WILKINSON 
: Until the royal commission of inquiry makes its findings we will wait accordingly. That is the proper course. 
Hon Trevor Mallard 
: If evidence before the royal commission shows a clear path for improving safety in mines will she take that course before the commission reports? 
Hon KATE WILKINSON 
: If there is such evidence we will look at it very carefully at the time. 
Roading Christchurch—Christchurch Southern Motorway 
7. 
COLIN KING (National—Kaikoura) 
 to the  
Minister of Transport 
: What progress has been made on the Christchurch Southern Motorway Road of National Significance following the earthquakes in the city? 
Hon STEVEN JOYCE (Minister of Transport) 
: 
 Good news! Very good news in fact. I was visiting Christchurch yesterday and saw firsthand the very good progress being made despite the earthquakes resulting in workers being temporarily transferred to other sites for emergency repairs and the design also requiring tweaks to reflect changes to the land. The Christchurch Southern Motorway extension is still on track for its original completion date of early 2013. I take this opportunity to congratulate the workers and contractors on keeping going in what are really quite exceptional circumstances as they work to complete this very important project for Christchurch’s economic and social future. 
Colin King 
: Have the earthquakes changed the need for the Christchurch Southern Motorway project? 
Hon STEVEN JOYCE 
: The earthquakes have probably made the project more important now than before. Traffic patterns have changed in Christchurch following the earthquakes and the main southern arterials in the city are congested at peak times. This has caused frustrating delays for motorists travelling to the city to the port of Lyttelton and to the industrial areas in the south and east of the city. In addition it is likely that growth in the western areas of the city will accelerate as people and businesses relocate out of harder-hit areas. The Government is determined to continue with the $600 million Christchurch road of national significance programme which will create hundreds of jobs and help move goods and services as the city’s economy recovers. 
Earthquakes Canterbury—Red Zone Properties 
8. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
 to the  
Minister for Canterbury Earthquake Recovery 
: How many of the 5100 properties in the red zone have been deemed to be uneconomic to repair by the insurer and how many of those approximately had unimproved land valuations of less than $150000? 
Hon MAURICE WILLIAMSON (Associate Minister for Canterbury Earthquake Recovery) 
 on behalf of the Minister for Canterbury Earthquake Recovery 
: 
 Those numbers and assessments are still being finalised. The full extent of the damage to houses beyond the Earthquake Commission cap of $100000 plus GST is confidential to the homeowner and their individual insurer and is for insurers to assess. For that reason the Government is offering to purchase properties in the most damaged areas at capital value to enable homeowners to move on quickly rather than wait years for their claims to be resolved. This offer to purchase properties at their 2007 rating valuation is a fair and balanced one which the New Zealand Institute of Valuers agrees with. The land rating valuations for all these properties in Christchurch are available on the Christchurch City Council website. 
Hon Clayton Cosgrove 
: Given that answer what advice enabled him to claim in answer to oral question No. 9 last Wednesday regarding preserving the equity of earthquake victims that the Government believes that “in the vast bulk of cases” the financial offer will achieve that when he says he does not have those figures? 
Hon MAURICE WILLIAMSON 
: There is a very big difference between “the vast bulk of” and having the absolute detail. I still believe and the Government still believes that the offer we have made is fair and balanced. The vast bulk of properties that we know of at this point show that in fact the 2007 rating valuation is a fair and balanced offer. 
Hon Clayton Cosgrove 
: How is it fair and reasonable to base the land-only offer on a value that has no relationship to market value given that it is what remains when the improvements are subtracted from the capital value of the property? 
Hon MAURICE WILLIAMSON 
: I am sorry but the member does not seem to get the answer every time I reply. The Government has worked its way carefully through this. We think the most open figure that everyone knows about a figure that everyone has a copy of and knows what it is is their 2007 rating valuation. There is lots of evidence to show that since that date property prices were going down in terms of the transactions and sales. One thing I think the member is missing is that the offer the Government has made is voluntary. People do not have to take the offer. 
Hon Ruth Dyson 
: How is it fair balanced and reasonable that his red zone package will leave many elderly people—not outliers as he intimated last week—with a significant shortfall between the rateable value of their property and the purchase price of anything comparable and will leave that couple unable to borrow money? 
Hon MAURICE WILLIAMSON 
: One of the factors I think members need to take into account is what the interest rates on mortgages would be. If we go back to 2007 I can tell the member that the mortgage interest rate at that time was 10.1 percent. Right now banks are offering a 4-year fixed mortgage at 6.45 percent but in Canterbury I am told that at least one bank is offering one at about 3.6 percent. If those people take that rate on a $200000 mortgage they will be substantially better off than they would have been when holding a mortgage back in 2007. 
Hon Ruth Dyson 
: I raise a point of order Mr Speaker. My question asked specifically about a couple who were in the situation where they had a significant shortfall between their red zone rateable value and a comparable purchase price and who were unable to borrow money. For the Minister to then recall what the 2007 interest rates were and what this year’s interest rates are is irrelevant. The question was not addressed. 
Mr SPEAKER 
: Well I listened very carefully and for a start I was somewhat of the member’s view. But it seemed to me that the Minister was pointing out that he cannot assess whether a person can or cannot borrow money. He was pointing out that today compared with 2007 when the valuations were based it is cheaper for people to borrow money and therefore people on limited incomes may be able to borrow money. Certainly I accept that that was not the answer the member would have expected but I have to be careful not to prevent Ministers from answering a question in the way that they see fit. The member has a further supplementary question in which to dig into that issue. I am reluctant sometimes to ask a Minister to give a particular answer on a member’s first attempt to get an answer out of that Minister. I accept though that the member has some grounds for being aggrieved but there is a further supplementary question there obviously. 
Hon Ruth Dyson 
: I just reiterate the point that my question was specifically about people who were unable to borrow money but I will take your advice and go on to my second supplementary question if you did not hear that part of my question. 
Mr SPEAKER 
: I did actually hear that part of the question but when it is alleged in a question that people are unable to borrow money who says so? The Minister was interpreting it I think in that way—who says a person cannot borrow money? Banks may determine that someone who could not borrow money at 10 percent can borrow it at 6 percent. I cannot insist that a Minister answer in a particular way on that kind of assertion in a question. 
Hon Ruth Dyson 
: How is it fair balanced and reasonable for many people in a brand new home with minor earthquake damage who live in the red zone—and so are required to move not repair it—and who are not outliers as he said in answers to questions last week to be told by their insurance companies that they will be paid only the price of repairing their homes not of replacing them? How is that fair balanced and reasonable? 
Hon MAURICE WILLIAMSON 
: There are two answers to that. The first is that that is why the Government has put on the table the offer it has and the second part of the answer is that that member herself said in the 
Christchurch 
 Press 
 the day after the Government offered the package that this offer was fair. 
Amy Adams 
: What reports has he seen on the public reaction to the Government’s package for affected residents in the greater Christchurch residential red zone? 
Hon MAURICE WILLIAMSON 
: In addition to the large volume of positive letters and emails received by the Minister for Canterbury Earthquake Recovery and the Canterbury Earthquake Recovery Authority and by other Government MPs on  
3 News 
 on Monday night the results of a Reid Research Services poll were reported. This poll found that 72 percent of New Zealanders nationally and 76 percent of people in Christchurch agreed with the Government’s earthquake package. 
Brendon Burns 
: Given that the average new section price around Christchurch usually starts at about $150000 how would having to pay that price preserve equity for constituents of mine whose red zone land is valued below—well below—$150000? 
Hon MAURICE WILLIAMSON 
: I repeat again: the key words in the member’s question were “average” and “usually”. Therefore some land will be more than the average price; some will be less. The compensation package that we are offering to people in the red zone is to pay them what their capital or rateable valuations were at the time of the 2007 rating valuation. I think that everybody believes that is a fair and balanced package. 
Brendon Burns 
: What does the Minister say to my elderly constituent living on River Road in Richmond whose large section as measured by the 2007 rating valuation is worth half per square metre the value of the land of her neighbour; and how would that preserve her equity as repeatedly pledged? 
Hon MAURICE WILLIAMSON 
: I would say to that person the same thing that I would say to every one of the other 5100 property owners: that they should sit down get some advice look at the Government’s package in great detail and if they think it is a fair and balanced package—which we do—they should accept it and get out of there as quickly as they can. 
Maori Affairs Minister—Statements 
9. 
Hon JOHN BOSCAWEN (Leader—ACT) 
 to the  
Minister of Maori Affairs 
: Does he stand by all of his recent statements? 
Hon Dr PITA SHARPLES (Minister of Maori Affairs) 
: 
 Ae. 
Hon John Boscawen 
: Does he stand by his statement on Monday of this week made during his TV debate with ACT leader Don Brash that “We want to change the situation where one lot is under-achieving within a system where we have plenty for all in this country.” and that is why we have special measures; if so what concrete examples can he give of special measures addressing Maori underachievement? 
Hon Dr PITA SHARPLES 
: Ae. 
Hon John Boscawen 
: What concrete examples if any can he give of special measures reducing the number of Maori youth who leave school functionally illiterate reducing the rate of obesity diabetes and other obesity-related diseases among Maori or reducing the rate of Maori youth unemployment? 
Hon Dr PITA SHARPLES 
: I do not have any responsibility for obesity amongst people. I think that the questions the member asks should be asked of the community—of society and its organisations. 
Hon John Boscawen 
: I will go with that. Can he explain how despite having separate representation on the Auckland Maori Statutory Board separate electorates separate seats on district health boards separate consultation rights on the Resource Management Act Maori are still tragically overrepresented in adverse unemployment welfare crime health and education statistics and is it not time to realise that the special measures he supports have failed his Maori constituents that he claims to represent? 
Hon Dr PITA SHARPLES 
: The special measures are very small compared with the battle ahead to get Maori achievement to the level of everybody else. I think that that is the sort of question the member should be asking himself. 
State-owned Energy Companies Privatisation—Ownership of Contact Shares 
10. 
Hon TREVOR MALLARD (Labour—Hutt South) 
 to the  
Prime Minister 
: Further to his answers to Oral Question No 1 yesterday on the purchase of state assets by foreigners what percentage of Contact shares are currently held by foreigners or corporations? 
Hon BILL ENGLISH (Deputy Prime Minister) 
 on behalf of the Prime Minister: The Prime Minister stands by his answers to questions but he is not responsible for the Contact Energy share register. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. Yesterday there were some very specific questions where the Prime Minister said he did not know. This question was allowed; if it was into an area that was not answerable by the Prime Minister you would have ruled it out. 
Mr SPEAKER 
: I think the member makes a fair point. The question would not have been accepted had it not been seen to be in order. It is capable of answer and I think the House does deserve an answer. 
Hon BILL ENGLISH 
: I raise a point of order Mr Speaker. I did answer the question. I stood by the answers to the questions asked yesterday. The Prime Minister is not responsible for the Contact Energy share register. That is an answer to the question. 
Mr SPEAKER 
: I clearly remember the questions relating to the proportion of shares held by various groupings of people and this question has been accepted as being in order. The meaning of the question is very clear. It is a question that is perfectly capable of answer. It should not be any big deal. It is not a matter that is a huge State secret I would have thought. If it is not possible to obtain the information that would be totally acceptable but I would be surprised because the information should be reasonably readily available. Although I accept that the Minister could argue that he is not responsible for the share register this question relates to answers to oral question No. 1 yesterday where these matters were canvassed by the Prime Minister. 
Hon Dr Nick Smith 
: Point of order. 
Mr SPEAKER 
: I happen to be on my feet. It is a very simple thing. If the facts of a matter are not to be divulged we have a serious problem. This is a very simple question. It does not imply anything. The question asks in relation to the answers given yesterday for the percentage of Contact Energy shares that are held by foreigners or corporations. It may not be possible to give exact figures on that. I am not sure whether the register would break down share ownership into foreigners or corporations. But some guidance to this House on a question asked in this House on notice for a couple of hours should be possible. 
Hon Dr Nick Smith 
: I raise a point of order Mr Speaker. If you are to say that if a Minister makes any comment on any issue then he is responsible for questions that go well outside his mandate—and surely the share register of a private company is not within the responsibility of any Minister in this House or the Prime Minister—then Ministers may make the habit of simply taking a very narrow perspective of questions and refusing to answer anything. Otherwise you will have Ministers responsible for every single little bit of New Zealand society. 
Hon Trevor Mallard 
: Point of order. 
Mr SPEAKER 
: I do not need any further help on this. The Speaker would probably be fairly grateful if Ministers took a fairly narrow view of some questions asked. It would be a step forward on many occasions. This is not some passing comment made by a Minister. This was a central issue in a question for oral answer yesterday and it has been accepted as being in order. It is a primary question; it is not as if it is a supplementary question. I would not have thought it is a huge issue. It ought to be a matter of being possible to ascertain from the public record the proportion of shares that are held by foreigners or corporations so making a big deal out of is in no one’s particular interest I would have thought. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. It does appear that your ruling has come as somewhat of a surprise to the Minister. Although we have started on the question I would be happy to seek leave to have it deferred until tomorrow so that he can be briefed. 
Mr SPEAKER 
: Leave is sought to have this question deferred. Is there any objection to that course of action? There is objection. Therefore I invite the Minister to please answer the question. 
Hon BILL ENGLISH 
: It is not possible to establish with accuracy whether New Zealanders or corporations or foreigners own the shares in Contact Energy—for instance Tea Custodians Ltd—who would that be? Custodial Services Ltd—who would that be? ASB Nominees Ltd—who would that be? Custodial Services Ltd again—who would that be? What we do know is that Origin Energy owns 51 percent of the shares because the shares were sold to it originally. Shareholding is very widespread. Other than Origin Energy no institution foreign or domestic owns more than 5 percent of shares. The biggest non - Origin Energy shareholder is the Government through the Superannuation Fund and ACC which owns 5 percent of all shares in Contact Energy and 10 percent of the available non - Origin Energy shares. 
Mr SPEAKER 
: I thank the Minister. 
Hon Trevor Mallard 
: Further to the answer to yesterday’s oral question No. 1 does the document that was being referred to that extends the mixed-ownership model—which uses the same term for privatisation as the Government uses which talks about selling the same companies as the Government plans to which lists the Government’s objectives and which was released by his Minister of Finance as part of Budget 2011—not represent Government policy on asset sales when it states: “significant participation by foreign investors will be essential to achieve the Government’s overall objectives.”? 
Hon BILL ENGLISH 
: The member is correct. It does not represent Government policy. The Government has— 
Hon Annette King 
: How can that be? 
Hon BILL ENGLISH 
: Well it is just advice from officials. We often disagree with advice from officials. The Government has decided that the proposition it is putting to the electorate is 51 percent Government ownership and Kiwi mums and dads at the front of the queue. Treasury has a different view of how it should be done and we disagree with that view. 
Hon Trevor Mallard 
: Does his Government intend to prevent the onsale of privatised State-owned enterprise shares to foreigners? 
Hon BILL ENGLISH 
: The Government will be getting advice between now and the election about what the rules should be about a float but our general disposition would be to trust New Zealanders. We believe New Zealanders want to— 
Hon Members 
: Ha ha! 
Hon BILL ENGLISH 
: Well if Labour’s only reason for owning these companies is that it does not trust New Zealanders not to sell out New Zealand then why does it not tell New Zealanders that? The only reason Labour wants to own these companies is that New Zealanders personally will sell out to foreigners. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. Other than saying that he would get advice on it I invite you to ask the Minister to address the question. 
Mr SPEAKER 
: I believe the Minister did answer the question. He indicated details on the float having not yet been finalised but he shared with the House his view of the matter at this stage. I think it was a perfectly reasonable answer to the question asked. 
Environmental Decision-making—Involvement of Maori 
11. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
 to the  
Minister for the Environment 
: Does he agree with the statement in  
Ko Aotearoa Tenei 
 that “direct infusion of indigenous values into mainstream environmental regulation may well be unique in the world”; if so how will he advance the opportunities for Maori to take more positive and proactive roles in environmental decision-making? 
Hon Dr NICK SMITH (Minister for the Environment) 
: 
 The Government has not yet considered this Waitangi Tribunal report so it is premature to give a definitive answer. A group of Ministers led by the Attorney-General with advice from officials has been convened to give careful consideration to this 1000-page report. Current Government policy does recognise that Maori and local iwi do have— 
Hon Shane Jones 
: Don’t be lazy. Read it. 
Hon Dr NICK SMITH 
: —“lazy” from the guy who was late for his TV programme on work—a special perspective on environmental issues. We support specific mechanisms to ensure that the Maori voice is heard consistent with the Treaty of Waitangi on environmental decision-making but we do not support a veto. 
Rahui Katene 
: Does the Minister agree with the Waitangi Tribunal that “Nearly 20 years after the RMA was enacted it is fair to say that the legislation has delivered Maori scarcely a shadow of its original promise.” and what current initiatives does he have in train to ensure central government plays a key leadership role in encouraging local authorities to have particular regard to both the Treaty and the concept of kaitiakitanga? 
Hon Dr NICK SMITH 
: My initial view is that the report is overstated. The performance of the councils in meeting their responsibilities to consult and engage with local iwi is a mixed bag. Some councils are doing very well; some are not. This issue has been strongly advocated by the Minister of Maori Affairs Dr Pita Sharples. We are exploring policy options to improve the performance of the councils and officials are due to report back to Cabinet by May 2012. 
Rahui Katene 
: What explanation can the Minister suggest for why between 1991 and 2010 not a single section 33 delegation of powers and functions to iwi has occurred—a measure that was introduced into the Resource Management Act to enable local iwi to participate in environmental decision-making and management? 
Hon Dr NICK SMITH 
: I think the reason is that there is real nervousness about delegating decision making completely to an iwi authority. There is a big difference between iwi participating in decision making and iwi actually making the decisions. As I said in answer to the primary question it is the Government’s view that Maori and iwi have an important voice in environmental decision-making but this does not amount to a veto. 
Unemployment Beneficiaries—Canterbury Numbers 
12. 
NICKY WAGNER (National) 
 to the  
Minister for Social Development and Employment 
: What reports has she seen on the Canterbury unemployment figures? 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 There are currently 6342 people on unemployment benefits in Canterbury. I can advise that although there are 962 more people on the unemployment benefit than the week before February’s earthquake I am encouraged that businesses are open and hiring. It is likely that we are yet to see the full impact of all the earthquakes; however it is a positive sign that there are more than 500 job vacancies in Canterbury through Work and Income. 
Nicky Wagner 
: What other reports has she seen on the increase of people on benefits as a result of the Canterbury earthquakes? 
Hon PAULA BENNETT 
: I heard reports of 24000 extra people going on to benefits. Those figures were put forward by Clayton Cosgrove via the media and I think it was scaremongering. It made people very uneasy and upset. We quite simply have not reached the sort of level of unemployment of more than 20000 people as was quite often said. In fact since the February earthquake the total number of people on benefits has decreased by 670 as we have seen people going off the invalids benefit and the domestic purposes benefit. 
General Debate 
Hon ANNETTE KING (Deputy Leader—Labour) 
: 
 I move  
That the House take note of miscellaneous business 
. The rain has been pouring down. There is snow in the south and gales in the north and winter is well and truly settling around New Zealand. Kiwis are battening down the hatches and it has made me think of my 89-year-old father. I picture him at this moment sitting at home trying to keep warm. He will not have his heater up very high and he will not want to do what he calls “run up a power bill”. But I know that he will not be on his own. Thousands of older New Zealanders will be doing exactly the same. They will be worrying about how they will get through this winter and how they will pay their bills. 
They are also wondering why John Key wants to sell our assets—our power companies—and they are bemused as to why John Key thinks selling something they already own and getting a one-off chunk of money will make New Zealand better off. They know it is a done deal by this National Government. They know that the money from the sale of their assets has already been banked in the Government’s Budget documents. They know that the consultants have already been engaged and are rubbing their hands with glee as they hear “ker-ching ker-ching”. The cheques are flowing and dozens of officials are getting the assets ready for sale as we speak. All the while the Prime Minister John Key is using those honeyed words and sleight of hand to reassure New Zealanders that they get to choose whether the assets are sold at the election. Well “you can’t fool all the people all the time” and you certainly cannot fool older New Zealanders. 
John Key might think that those in Grey Power and those who are retired do not quite understand are out of touch and do not count but I think he has made a terrible mistake. Older New Zealanders know that they paid for those assets that he wants to sell. They know that they own them already so it is no surprise to me that Grey Power which has a membership of over 77000 has come out very strongly opposed to the State asset sell-off. It has made very clear in its recent Grey Power magazine that it is opposed to it. Grey Power had this to say: “How the Government can imagine that selling off more of our assets is going to improve anything is beyond reason and totally unacceptable.” That is from the major organisation representing older people in New Zealand. Older people know that the rhetoric about them getting to buy a piece of the assets is nothing more than hogwash. They know that according to Statistics New Zealand 81 percent of older New Zealanders live on the pension alone and they do not have other money to go out and buy what they already own: our power companies that they went out to work and paid taxes for and bought over time. 
They know there is no such thing as the mum and dad investor a term that is being sold to New Zealanders as a ploy by the National Government to sweeten the sale of assets people do not want to sell. They also know that those who are going to buy these assets are the big overseas investors. They know that because they have watched the sale of Contact Energy and have watched their power prices go up far more under that privately owned company than under the State-owned companies. They know that Contact Energy is not owned by mum and dad investors today. In fact it was bye-bye mum and dad investors and bye-bye New Zealand ownership. If there is one thing that older New Zealanders want it is to retain the things they paid for in their working life here in New Zealand. 
I am very pleased that National in this House today pooh-poohed the idea that Grey Power does not want to sell our assets. It tried to make out that Grey Power was very happy about the mixed-ownership model. Well I ask National members to think again because they will hear plenty from older New Zealanders in the very near future. 
Hon Dr NICK SMITH (Minister for ACC) 
: 
 Hearing a lecture on asset sales from Annette King is like taking tips from Jack the Ripper on home safety. That member while in a Labour Government in the 1980s went through the Ayes door to sell assets more times than I have had birthdays. The big difference is that John Key has been up front with New Zealanders. Labour promised not to sell a single asset yet sold over 20. 
I want to talk about the good news for Kiwi families and businesses from the big drop in accident compensation levies announced this week. Families will be better off by $250 a year or five bucks a week. Business levies will be reduced by 22 percent—a saving for the average Kiwi small business of $1100 a year. These changes will put $587 million a year back into the New Zealand economy and help the recovery. 
This is the dividend for competent financial management. It is part of this Government’s plan for growth which is about reducing business costs improving living standards and giving exporters in New Zealand the competitive advantage to be able to grow markets internationally. These accident compensation changes will help on every front. 
In contrast Labour members are still in denial over their reckless spending and financial mismanagement while in Government. Labour has claimed that we have manufactured the large accident compensation scheme deficits we inherited from the previous Government. They have become so desperate to hide their incompetent management that they have resorted to conspiracy theories. The audited accounts of the Accident Compensation Corporation show that the scheme lost $2.4 billion in 2007-08 and $4.8 billion in 2008-09. That amounts to $4000 for every New Zealand household. 
The most remarkable claim by the Labour spokesperson on accident compensation—that that loss was manufactured—overlooks the fact that the annual report showing that loss has the signature of Maryan Street Labour’s Minister for ACC on it. The 2008-09 report was prepared by exactly the same officials under exactly the same methodology and audited by both Ernst and Young and the Auditor-General. Nor can Labour members deny the official inquiry that concluded that they breached the Public Finance Act when they did not disclose those massive accident compensation losses in the pre-election fiscal update. 
The truth is that in so many areas of Government Labour let costs get completely out of control. I am still looking forward to a Labour member explaining how claims costs in the accident compensation scheme grew by 50 percent—or $1 billion—in the last year of their Government. The truth is that foolish policies like free physiotherapy saw it grow out of control—a lack of focus on rehabilitation saw numbers grow by more than 20 percent. 
In order to be credible Labour members need to come clean. They need to admit that the reckless spending they indulged in not just in accident compensation but over all the areas did so much damage to the New Zealand economy. Instead what is Labour’s answer? It is more spending and more tax. Those members have learnt nothing. Spokespeople on education health welfare arts aid—every area—are promising more and more spending and to fund it they are going to hammer our most important industries and our economy with more costs and more taxes. They want to bring forward the date when the emissions trading scheme will apply to the agricultural sector socking our most productive industry. They want to whack extra taxes on businesses and extra taxes on households. The irony is that the origin of every one of those policies is the Green Party. Labour is so bereft of ideas. The choice for New Zealanders at year’s end will be a vote for growth or a vote for more tax. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 Five months ago at the dawn service held at Te Whare Runanga on the Treaty grounds at Waitangi Prime Minister John Key praised the courage and wisdom of those who signed the Treaty of Waitangi in 1840 which gave New Zealand a founding document. That same courage and wisdom is just as vital now as we chart our future onwards as it was at the time of the signing. The reason why was articulated clearly in  
Ko Aotearoa Tenei: A Report into Claims Concerning New Zealand Law and Policy Affecting Maori Culture and Identity 
—otherwise known as Wai 262. Justice Williams’ letter committing the report to the Government’s good care described New Zealand as poised at a crossroads both in race relations and on the quest for a mature sense of national identity. A crossroads offers choices but as Justice Williams pointed out “a future marked by interracial rancour must be emphatically rejected. We say that not just because to choose a path of conflict is morally wrong nor even just because it is the antithesis of the Treaty’s vision. We say this because it would be economically and socially destructive for the country.” 
It was therefore bitterly disappointing that only days after such an important statement the ACT Party launched a campaign intent solely on polarisation and inciting racial disharmony. This was a campaign that resorted to labels such as “Apartheid Aotearoa” or “The Maorification of Everything” as a ploy to gain political appeal. They got it terribly wrong. The crossroads we face today cannot lead to a dead-end street where the only highway is Don’s way. This is about the ongoing and continued existence of Maori as tangata whenua the people of the land. Let us be perfectly clear: we are not going away. This is our home and we are here to stay. 
But our survival is not just about he tangata he tangata he tangata as critical as this is. Chapter 2 of  
Ko Aotearoa Tenei  
states the case that protecting taonga species and matauranga Maori or Maori traditional knowledge aids the survival of Maori culture itself. That is why these things are important enough to justify protection in law. The call of Wai 262 claimants was to see matauranga Maori emerge from the domination of one cultural system a Western world view and to be supported to flourish again in Maori hands. This is up front a Treaty right the protection of the rangatiratanga of our taonga katoa all that we treasure. We have a traditional saying: kei raro i nga tarutaru ko nga tuhinga o nga tupuna—beneath the herbs and plants are the writings of the ancestors. It is a vivid emblem for how we understand ourselves to be interconnected with the flora and the fauna and indeed the greater environment. This is who we are. This is our past present and future but our survival as Maori is also important on other fronts. The first is the critical role Maori culture plays in New Zealand’s national identity and of course in our international reputation. As we prepare ourselves to surrender to the impact of the Rugby World Cup it is timely to remember that our unique Maori culture is a cornerstone of who we are in this country. An authentic cultural experience is one of the key reasons that tourists come to our shores. 
But protection and preservation of things Maori are also basic citizenship rights. The modern State is driven by the twin imperatives of educating its citizens and sustaining their culture and heritage. This is relevant to Maori culture and any other aspect of our unique national heritage. Furthermore Maori are becoming an increasingly significant proportion of New Zealand’s population. Whether it is in the bedroom or the classroom New Zealanders have to have the conversation to forge the relationships that are now a vital part of our national identity and culture. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 Before I address the substantive issue of my speech I want to cover one point in respect of Nick Smith and his comments about ACC. There is a very interesting way that one can save money in ACC and that of course is if one restricts the resource to folk. I make this point and I ask the Minister for ACC a question: how many constituents have walked into his Nelson office and told him that they cannot get an operation because ACC has told them that their operation is based on anatomical wear and tear but they are only 21 years old? Apparently someone can be 21 years old but the problem is wear and tear not an accident. So I say to those members opposite that if no one has gone into Nick Smith’s office—or David Carter’s office when he is around—then the fact is that they are all lining up at ours. We are seeing 21-year-olds who are saying: “Hang on; I’ve got wear and tear from old age and that’s why I’m not getting my operation. It’s not considered an accident.” But I will move on from the ghost who walks over there and resides near the hills somewhere in Canterbury. 
Let us deal with the thorny issue of asset sales which has been canvassed here today. We have heard the Minister of Finance talk yet again about mum and dad Kiwis being first in the queue. Then he was asked how he will guarantee that the shares will not be onsold to foreigners after mum and dad Kiwis sell their shares—as they have in the past because they are scratching for a bob—when somebody from foreign shores comes to them and says: “I’ll make you an offer you cannot refuse and buy your shares.” How will we prevent that from happening? Oh we are going to trust the people. Then he tries to construct a sort of elegant argument whereby if we do not trust the people then there is something wrong. Well of course we trust the people. We trust the people to do what is right for them in terms of looking after themselves and their families. If those lucky individuals who according to Bill English are awash with cash—he thinks there is cash everywhere in the household budget—whip down to the stockbroker and buy a share in the assets they already own which the Government in a benevolent way will offer them so they can buy them back again then I do not blame them. If there are mums and dads out there who have that cash I would not blame them if they bought those shares. If they were made an offer they could not refuse they would know they can make a few bob. So they would sell those shares and apply that money to the necessities of life for their families. I trust them to do what is in the best interests of themselves and their families. 
But the fact remains that no one on that side of the House from the Prime Minister to the Minister of Finance to any of those great geniuses who sit in Cabinet can tell us how they will prevent onselling how they will prevent foreign domination and how they will guarantee that mum and dad Kiwis will be first in the queue. Bill English read out a list from the Contact Energy share register—Origin Energy and a couple of other names I cannot recall—and he said: “Well we can’t tell what they are—mums and dads.” That is exactly the point. We cannot tell; we do not know. There was no mechanism to stop onsale or foreign domination—none. 
I ask members opposite about a real couple in my electorate whom Annette King and I met—and I have never seen a $36 a month power bill before—who earn $40000 a year and who are struggling to make ends meet. I had never seen a $36 a month power bill in my life until I went to this woman’s house. I asked her how she did it—and these people are scratching for it. I said: “How’s the tucker?”. She said: “My husband has two meals a day.” This was reported in the local rags. Oh members opposite are all quiet now. How many of those people have fronted up in Ms Wilkinson’s office when she is around or in David Carter’s office? That women and her husband are struggling. He has two meals a day. They have meat twice a week if they can afford sausages. The last time they went out for a bit of a do was down to the Kaiapoi Club 2 months ago to have one jug of beer between the two of them luxury souls that they are. I ask how that mum and dad will be awash with cash. The members over there think it is funny. David Carter thinks it is a real hoot. When was the last time that member had sausages? There are a few sausages on that side no doubt and a few meat patties ground away but I say that that member would not have bumped into that woman or her ilk in many many years. 
So how do those mum and dad Kiwis actually afford to whip down to the stock exchange and buy what they already own given that they are awash with cash? I say this: if a couple in New Zealand today are struggling to make ends meet and a husband and wife can afford only a couple of meals a day and they turn the lights out then we have a problem in this country. We have a problem in this country when a couple can turn on the hot-water cylinder for only 2 hours a day. We have a problem and the Government is it. 
Hon DAVID CARTER (Minister of Agriculture) 
: 
 We do have a problem in this country and the problem is that we have not focused the economy on real growth. I hope that when Phil Goff returned from his lengthy Greek holiday he had taken some time while lying on the beach in the Greek Isles to think about the economy of the country he was visiting. The Greek economy is in desperate trouble and it is threatening to send the rest of Europe into continuing recession. The reason it has got into trouble is that it forgot about the importance of a growth economy. 
As National came into Government at the end of 2008 the New Zealand economy was out of balance. What is not well recognised is that the tradable sector of the New Zealand economy had gone into recession in late 2004. It was masked completely because the then Labour Government concentrated on growth in one area and one area only and that was in Government spending which went up a massive 50 percent in 5 years. 
That was a totally unsustainable situation and there was no way we could to hope to continue to deliver the standard of living that New Zealanders expect unless the economy was reversed. This Government has a very simple growth plan. It has six simple steps and if we devote time to all of those six steps we can turn this economy round. We already have the tradable sector performing substantially more strongly. 
Let me go through those steps. We need a tax system that enhances growth and rewards enterprise. We certainly do not need a new tax which is what the Labour Party is about to deliver in its manifesto tomorrow—a tax on capital gains. We need a better education system that will deliver people the skills they require so that they can be part of our economy. We need substantial expenditure on infrastructure and this Government has so far committed $7.5 billion for roading broadband and issues like water storage which are so critical to New Zealand’s primary sector. 
The fourth point is that we are rationalising the Public Service which grew so massively during Labour’s period in Government. We are about less regulation. A lot of the regulation that is in place does not give the economy the ability to grow and it needs to be changed. 
The final point relates to science innovation and trade. Under the guidance of the Hon Tim Groser we have made huge progress. China has signed its first free-trade agreement. I acknowledge that it was signed in 2005 but China is now New Zealand’s second-largest trading partner. Since 2008 we have completed free-trade agreements with Malaysia and Hong Kong and talks are under way with India our Trans-Pacific Partnership Korea and Russia. 
We have a very good story to tell in the science and innovation area: the Primary Growth Partnership. We now have $477 million worth of research specifically devoted to our primary sector under way. That is the largest spend of its type ever in the history of New Zealand and it has been criticised by only one faction in New Zealand— 
Dr Cam Calder 
: Who would that be? 
Hon DAVID CARTER 
: The New Zealand Labour Party. One of the reasons the economy is going well is that farming is performing well. I note what the Labour Party proposes to do if it gets a chance to attack the farming sector. We know that Labour members are  
Hobbit 
 haters but many New Zealanders did not realise how much they hate the farming sector. 
Stuart Nash was quoted in a story on the front page of the  
Dominion Post  
in which he said that farmers did not pay enough tax. The man who is meant to be Labour’s revenue spokesperson did not know the difference between profit and turnover. He argued that farmers should pay income tax on turnover not on profit. It was absolutely dopey. Then Mr Goff came out and said: “Let’s slug the emissions trading scheme into farmers in 2013.” 
Labour desperately needs $800 million. It sees a target so it says it will gouge it from farmers which would cost every genuine sheep beef and dairy farmer in this country $33000. That is why there will not be a farmer in New Zealand who will back the Labour Party at the next election. 
STUART NASH (Labour) 
: 
 We have just seen a Minister of the Crown the Hon David Carter stand up and say that the National Government is focused on growth. The only real plan the National Government has put forward is to sell State assets—it is to sell State assets. Is selling State assets a plan for growth? It absolutely is not whatsoever. 
The Minister said that National was focused on developing infrastructure. In Hawke’s Bay in Napier that Government took $71 million—$71 million—out of the roading budget that was earmarked for Hawke’s Bay. The provinces have gone backwards under that Government yet Government members have the nerve to stand up and say they are concentrating on infrastructure. I challenge the Minister to hold a public meeting in Napier and tell the people of Hawke’s Bay that the Government’s taking $71 million out of their budget is good for growth. 
Then the Minister said that the Government is concentrating on research and development. Labour put in research and development tax credits. The Minister of Revenue in this Government voted against removing the research and development tax credit. Treasury advised the Government not to remove the research and development tax credit yet the Government did. That is not a plan for growth. The Government removed the one vehicle that New Zealand companies grabbed hold of and embraced to drive forward growth in this country. 
As for taxes I will back up my colleague Clayton Cosgrove. The Government gave $1000 a week to people earning $1 million or more a year but it gave less than $10 a week to the average mum and dad “shareholder”. How the hell is a New Zealander on the median wage going to be able to afford to buy shares when the Government sells assets? Quite simply they will not be able to. 
Jonathan Young 
: KiwiSaver. 
STUART NASH 
: KiwiSaver! That is the answer. Who put KiwiSaver in place for New Zealanders? 
If there is one thing I have learnt about New Zealanders it is that they do not ask for much. They very rarely complain but what they really hate is the feeling that they are being ripped off that they are not being treated fairly or that they are being taken advantage of. New Zealanders hate that. So imagine how hard-working New Zealanders feel when they are told by John Key that he will sell assets they already own back to them. Hold on a second how does that work? He is going to sell us what we already own? That is not only a travesty but also a con. But it gets worse. John Key wants to sell assets that New Zealanders have built up over generations through blood sweat and their forebears’ taxes. 
But all is not lost. There is absolutely a solution: vote Labour. Phil Goff and the Labour Party have said that we will not sell State assets—no ifs no buts; there will be no State asset sales. This is not like when Mr Key stood up and said to the camera that National would not raise GST but then he did. Phil Goff has said that Labour will not sell State assets. It is a very clear choice—a very clear choice. The plan of John Key and the National Government is to sell State assets and to sell New Zealanders’ assets. The plan of the next Labour Government will be to not sell State assets. 
Let us be honest. We all know that if State assets are sold the shares will not be held by ma and pa investors. We all know that—come on let us be honest. The vast majority of these shares will go to overseas investors. They will be sold to foreigners. They will be sold to foreigners and the dividends will go offshore. The choice is very very clear. National will sell State assets; Labour will not sell State assets. 
JACQUI DEAN (National—Waitaki) 
: 
 Despite a worldwide global recession and two devastating earthquakes in Canterbury the New Zealand economy is now much stronger than it was 3 years ago. It is far better placed to meet future challenges thanks to the National Government. When National took office 3 years ago the country had already been in recession for 9 months and the economy had flattened out completely. Government spending was out of control Treasury’s books showed continuing Budget deficits into the future and Government debt had spiralled out to 60 percent of GDP plus some. Why? Labour’s unsustainable increases in Government spending— 
Brendon Burns 
: Brought on by an international recession. 
JACQUI DEAN 
: —they do not like to hear it—which had risen by an unbelievable 50 percent in the last 5 years of a spend-and-hope Labour Government. 
The National Government has improved our tax system to one that is integrated and balanced. For 3 years the National-led Government has provided the responsible economic management so badly needed after the 9 long years of Labour. It is a tax system that encourages work and savings. It is a tax system where 73 percent of earners are paying income tax at no more than 17.5 percent. Our across-the-board tax cuts the biggest reform of the tax system in 25 years have put more money in the pockets of hard-working Kiwis and more money into households at a time when it is really needed. 
I applaud the Government’s broadband initiative. It is already under way with $1.5 billion being spent on the broadband initiative over the next 5 years. There is also a rural broadband roll-out to rural schools rural communities and rural households. 
The Prime Minister continues to work to open up overseas markets for our New Zealand exporters and New Zealand businesses. John Key’s trip to India was an outstanding success with the export sector and education providers—to name just two sectors—set to capitalise on the benefits in years to come. 
The Government continues its focus on maximising our economic opportunities with a strong focus on lifting educational achievement in schools reforming the Resource Management Act and shifting Government spending to providing services on the front line where people benefit. There are 400 extra elective operations in hospitals per week. There is $1.4 billion for early childhood education this year which is the most ever. There are 300 extra police on our streets and there will be another 300 by the end of the year. 
I am proud to be part of a National Government that values rural New Zealand. The impact of the investment in rural growth research and innovation is considerable with more than $477 million in the Primary Growth Partnership $45 million in the Global Research Alliance on Agricultural Greenhouse Gases $50 million over 4 years in the New Zealand Agricultural Greenhouse Gas Research Centre $321 million over 4 years in research and science and $35 million over 5 years to get irrigation projects under way with a further proposed $400 million for equity investment in regional irrigation projects. 
An increase in irrigation impacts the economy in three ways: an increase in off-farm capital infrastructure costs an increase in on-farm capital costs and an increase in agricultural production. But beyond the economic benefits a number of social improvements occur in communities due to irrigation development and its associated land use changes. I will outline just a few of those. There is population growth there is an increase in the proportion of young and working-age people in our rural communities and there is an increase in the proportion of residents with a tertiary qualification in our rural communities. I commend this Government for its investments particularly in irrigation. Thank you. 
KEITH LOCKE (Green) 
: 
 Good-hearted New Zealanders were shocked when their Prime Minister so bluntly rejected the appeals of Tamil boat people who had arrived in Indonesia on the  
Alicia 
 to come to New Zealand. John Key said: “Our very simple message to them is they are not welcome here”. It is so much against the New Zealand character to be so heartless to people who have probably experienced great tragedy in their lives and are fleeing ongoing persecution. Those Tamils on the  
Alicia 
 probably had family members among the estimated 40000 Tamils killed in the final phase of the Sri Lankan civil war. They may have been displaced from their homes or they may have relatives among the thousands of Tamils still detained in prison camps. 
To add insult to injury John Key attacked the boat people as being “queue jumpers”. This was odd because John Key’s own mother was an asylum seeker who fled from Nazi Germany to Britain in 1939. For Jewish refugees like her there was no queue to join. They simply took their chances and fled often crossing borders illegally and without passports to seek refuge in places like Britain. John Key said yesterday that when asylum seekers “land at our airports”— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I am reluctant to interrupt my colleague at this point but I note that Government members have not. It has generally been a matter of taste not to bring family members into debates in the way that the member has. I think generally it has been frowned upon in the House because members are elected not their family members. 
Mr SPEAKER 
: The member makes a good point. I did not stop the honourable member because I was listening carefully to see whether he said anything negative about the member’s family. Despite that I think the Hon Trevor Mallard has raised a good point. It is best not to bring family members into a debate. 
KEITH LOCKE 
: Speaking to the point of order yes I did think about that when I formulated this speech but I am not in any way criticising John Key’s mother or her relationship; I am just drawing what I think is a friendly parallel. That is all. 
Mr SPEAKER 
: I have not stopped the honourable member; I just ask him to bear in mind the valid point raised by the Hon Trevor Mallard. 
KEITH LOCKE 
: John Key said yesterday that when asylum seekers “land at our airport we turn them back”. It would have been very bad if John Key’s mother had been turned back into Hitler’s Germany. 
Mr SPEAKER 
: That is in my view getting into unfortunate territory. I think that is unhelpful. We do not bring family members into the debate and especially to use it against a member is in my view not good. I ask the member to desist from that. 
KEITH LOCKE 
: John Key has forgotten that we are required under the 1951 refugee convention to process all asylum seekers arriving at our shores and to accept those who are genuinely in danger of persecution back home. There is really no difference between refugees who arrive directly at our airports those who come from refugee camps in Thailand or Kenya and those who are processed by the Office of the United Nations High Commissioner for Refugees when they arrive in Indonesia on boats. 
Last year we took in several Sri Lankan Tamil boat people who had been taken aboard an Australian boat the  
Oceanic Viking 
 
and processed by the Office of the United Nations High Commissioner for Refugees. John Key—and he may not be conscious of this—is in effect playing up to a redneck gallery of xenophobes who see refugees and sometimes all people of other cultures as a threat to our society. The truth is the opposite: refugees starting a new life in New Zealand are highly motivated to achieve and to have their kids achieve. The Sri Lankan Tamil community which has a significant portion of refugees is one of the highest-achieving communities in New Zealand. It is full of doctors engineers and other professionals.  
Campbell Live  
had a story last night on how well the Afghan  
Tampa  
boys boat people who were taken in 10 years ago are prospering in New Zealand. 
John Key also raised the spectre of hordes of boat people swamping New Zealand. He said that: “If you are going to take this boat there are just thousands and thousands of other boats which will come.” That is so silly. Of course refugees want to come to New Zealand; it is a great place. Our reputation as a hospitable place was enhanced 10 years ago when we took in Afghan boat people from the  
Tampa 
 after they had been callously rejected by John Howard’s Australian Government. 
Yet in the 10 years since then not a single asylum seekers’ boat has made it to New Zealand. Why is that? Because it is cheaper and easier to travel in a smaller boat from Sri Lanka to Indonesia or Australia. It is possible that a boat might make it to New Zealand—a couple of boats have made it to Canada—but thousands and thousands of boats? That is not really on. 
We should welcome the fact that asylum seekers want to come to New Zealand. It should warm our hearts to be so appreciated. If one or two boats happen to turn up sometime why should we not give refuge to those on board if they are genuine asylum seekers? There is room in our country for more Sri Lankan asylum seekers. In the last 3 years we have not even filled our annual refugee quota of 750 people. We took in 700 in 2008-09 we took in 709 in 2009-10 and we took in 527 in 2010-11. Why not do it? We can arrange it through the Office of the United Nations High Commissioner for Refugees. It would also be good for us to continue to cooperate with Australian authorities to take in some of the many boat people who arrive in that country’s waters as we did last year when we took in some Sri Lankan Tamils from the Australian customs boat the  
Oceanic Viking. 
CHRIS AUCHINVOLE (National—West Coast - Tasman) 
: 
 I ask members to picture 47 years ago a 19-year-old young Scot called Chris Auchinvole arriving in New Zealand. He came here he joined his brothers because this was a country of egalitarianism and entrepreneurialism it was a country that offered personal reward for hard work—Jack was as good as his master—and there was a supportive hands-off Government. That is where we were and it is where we need to be. It is where we will get to with a National Government and a continuation of the excellent policies we have seen over the last 2½ years. 
The business and aspirational banner of New Zealand under Labour had been battered bruised and trodden on by a Labour Government that used its base to grow government not the wealth of taxpayers. National has picked up the banner. Nowhere have National policies worked better than in the West Coast - Tasman electorate. West Coast - Tasman—that absolute jewel of an electorate—defies a lot of analysis other than that one has to love it and it is a hard-working revenue-generating electorate. 
Labour walked away from the West Coast - Tasman electorate from 2002 through to 2005. In 2008 the electorate responded by voting overwhelmingly for National in the party vote and I was privileged to be elected as the electoral MP in the electorate vote. The West Coast - Tasman electorate voters are a canny lot. They sensed and contributed to a change of Government. They decided that they would be best served by having a Government MP as their electorate MP. They are still clearly of the same mind. 
What are the drivers in West Coast - Tasman? There is tourism dairying modern mining and timber on the West Coast and there is tourism horticulture dairying and timber in Tasman. There are tandem interests. People often say that West Coast - Tasman is an electorate of two halves. In fact there are more similarities between the two regions of the West Coast and Tasman than there are differences. Neither has a tertiary city of its own both are rural and small urban communities and both have similar challenges in topography demography and geography. They do very well because they have entrepreneurial skills. They flourish and have flourished under a National Government and the policies that are offered. 
What are those policies? My colleague David Carter gave voice to them. Let us check them over again. First there is a tax system that enhances growth and rewards individuals. That is nice for the West Coast and Tasman because as people have more of their own money left in their pockets they spend it in their small local communities; secondly we have an improved education system which will continue to improve under a National-led Government; and thirdly we are expanding our infrastructure and we need to expand it further. We have to rationalise government and rationalise and reduce regulation. We need more science innovation and more infrastructure. 
On the West Coast there is a recovery in forestry. That is something Labour largely walked away from. We have brought it back to a point where we are practically breaking even. There has been a large investment in forestry and it is well on the way to giving a solid sustainable service for years to come. Economic recovery is expected within 3 years—the West Coast and Tasman will play no small part in that. Picking up the banner the West Coast and Tasman will raise it restitch it restore it and make it resplendent. They will continue to vote for a National Government they will continue to be canny and they will continue to have their National MP as their electorate MP. Thank you. 
Hon RUTH DYSON (Labour—Port Hills) 
: 
 Coming from Canterbury like many members of this Parliament I know that New Zealand has a lot of challenges ahead of it. To meet those challenges not just in Canterbury as a region but in New Zealand as a nation we need a Government with a plan. We need a Government with courage. We need a Government that gives our citizens leadership and vision; a Government that is prepared to take bold initiatives to get New Zealand back on its feet. We have not got that Government but roll on the end of November and we have a chance to change the Government. 
National has no plan it has no leadership and it has no vision. It is letting down New Zealanders and it is wasting the opportunity we have to be better as a nation. We need coherent and courageous policies from our Government but what are we getting? The great leap back to the late 1980s and the 1990s—asset sales. It really beggars belief that National thinks the failed policies that have people like Sir Roger Douglas and Don Brash salivating should be reintroduced into this Parliament. 
I really thought we had moved on from those tired old failed policies but that is what we are getting from National. Of course those members are dressing up the asset-sales message with their poll-driven slogans. I can tell members that those slogans are just not working with New Zealanders and Steven Joyce Bill English and Tony Ryall know that they are not working because they read more polls than just about anyone else in the country. 
We know that the mums and dads whom Steven Joyce Bill English and Tony Ryall talk about already own the power companies that National wants to sell back to them. We do not want to buy something we already own. We do not want our power companies our lakes and our dams to be bought by overseas companies. We want those assets—our power companies our lakes and our dams—to stay in our ownership. 
The other thing that I think is hugely frustrating is the dishonesty of the Government. It is not being honest about privatisation. Treasury released its Budget advice—which the Government will have received; it may not have read it but it will have received it—which stated: “Significant participation by foreign investors will be essential to achieve the Government’s overall objectives.” 
When we hear from National the mantra that New Zealand mums and dads will buy our power companies we know it is not true. According to the National Government’s own Treasury advice it will need to sell them to overseas investors to make the money that it has put in its Budgets for outgoing years. Last week Bill English misled the House. He said he had not received any advice from Treasury that said exactly the words I have just quoted from the Treasury document. Bill English should have come down in the House at the next possible opportunity to withdraw the comment apologise for it and correct it because it was wrong. He has not done that yet but it is on the public record because it is Treasury’s published advice. 
We should not be surprised by this dishonesty because it is exactly what we heard in 1999 when the then National Government said it would sell Contact Energy to mum and dad investors. What happened was that Edison Mission Energy bought up 51 percent for nearly $1.7 million and made a huge profit on its original purchase. The majority shareholder in Contact Energy is not the mum and dad investor that National promised us in 1999 when it sold it off. The majority shareholder is Origin Energy which is an Australian-based company. 
I do not mind overseas investment in New Zealand. In fact I welcome it. But there are some strategic assets some important parts of our infrastructure that New Zealanders own currently and they should remain in our ownership. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 On the eve of Labour’s big announcement of its big grab to take more from New Zealanders I am proud to say that one of the Government’s key platforms for economic growth is to take less from and give more back to the pockets of New Zealanders. This is good news for the people of New Plymouth because we are an innovative and hard-working electorate and National believes in rewarding people for their effort. We are big employers with one of the lowest unemployment rates in the country. We are big exporters not only of dairy products and oil but also of high-quality engineering and manufacturing. We export education and tourism and shortly we will be the premier arts and cultural attraction in New Zealand. 
We heard Mr Nash today talk with the typical attitude of envy that comes across from that side of the House. He railed against John Key’s mates who Labour says got a tax cut of $1000 a week on 1 April this year. Labour says that is unfair. Mr Nash would have done the figures but he never brings them out: in order to qualify for that level of tax cut one would have been paying in the order of $336000 a year in tax already. What happened to that person in terms of that tax cut is that they are now paying $284000 a year in tax to this country. And Labour talks about fairness! 
Mr English said that 10 percent of New Zealanders are paying 70 percent of our tax. We are saying that in order for this country to get ahead we are putting more money back into the back pockets of New Zealanders. People like that who are relatively few in our country are more likely to invest their money than spend it which is probably why they are high-income earners in the first place. They are the sorts of people who create jobs. Money creates opportunities and these people would do that. 
When one considers the broadness of our tax reform when one considers that 73 percent of New Zealand taxpayers pay only a 17.5 percent marginal tax rate and that a family of four on an income of $50000 after receiving Working for Families effectively pays no tax at all one has to see that we have a fair and robust tax system. The Opposition often quotes the OECD when talking about capital gains. But the same organisation states: “New Zealand’s tax system is one of the most neutral and efficient in the OECD. Bases are generally broad and rates are moderate.” It said that back in 2001 before the taxation reforms came through at the end of last year and started on 1 April this year. That was before we underwent the most extensive tax reform in the last 25 years. 
The Opposition wants to take more of New Zealanders’ money because of its “we know best how to spend it” attitude. You work for it you sweat— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The member is referring to the Speaker. 
JONATHAN YOUNG 
: That is what they would say. The people of New Zealand work for their money. They sweat for it they worry for it they do the long hours of toil and they spend their weekends in their offices and in their workshops but Labour says that it will spend the money because Labour knows best. 
Last Sunday morning on  
Q+A 
 on the innovation episode it was significant when Paul Holmes asked the studio audience of New Zealand’s top innovators and entrepreneurs whether they supported a capital gains tax. Not a single hand went up— 
Jo Goodhew 
: David Shearer. 
JONATHAN YOUNG 
: —with the exception of David Shearer Labour MP for Mt Albert because he had to. Not a single hand moved from the nation’s top innovators and entrepreneurs. There was not a flicker of a finger and not a raised eyebrow. The best that David Shearer could say was: “Wait until Thursday.” New Zealand’s brightest entrepreneurs and New Zealand’s brightest innovators essentially said to the Labour Party: “Don’t take anything more. We can do something better with the funds that we have than you can.” 
When National took the reins of office New Zealand had been in recession for 9 months which was well before other countries and well before the global financial crisis. The BNZ performance and manufacturing index stated that in February 2009 the manufacturing sector went into recession. That was not good for New Plymouth. 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I am very pleased to follow the current member for New Plymouth and to tell New Plymouth that good news is coming in the form of Andrew Little. 
I turn my focus today to an issue about asset sales. As I was preparing for this speech I picked up from my desk an amendment that I put up when we were debating the Canterbury Earthquake Recovery Bill 3 months ago. That amendment states: “In developing the Recovery Plan for the CBD the Christchurch City Council must not propose the full or partial sale of any assets which it or any of its subsidiaries hold.” The reason I put up that amendment was my fear that the Government may well push Christchurch City Council into selling assets to fund earthquake recovery debt. If I needed any confirmation of that fear it came yesterday in the report of the Finance and Expenditure Committee on the estimates for the finance portfolio. It stated: “As the Canterbury Earthquake Recovery Act 2011 allows the sale”—allows the sale—“of Christchurch City Council assets to fund the rebuilding of the city we asked the Minister of Finance whether he could guarantee that this would not happen.” The Minister of Finance did not take up the opportunity in front of the Finance and Expenditure Committee to give an assurance to the people of Christchurch that their assets would not be sold— 
Hon Sir Roger Douglas 
: What? You don’t want it to be rebuilt? 
BRENDON BURNS 
:—as we struggle with the issue of the debt that the earthquake provided. 
I am listening to the member opposite Roger Douglas who obviously favours asset sales. I say this to him: those assets in Christchurch have generated over the last few years a huge flow of income. They have kept down the rates of Christchurch by 15 percent per annum over many years. One asset alone Orion Networks our power network company has in the last nearly 20 years delivered nearly $1 billion—$1 billion—to the ratepayers of Christchurch. That is about $1 million a week of return from one of the assets that the Christchurch City Council and its ratepayers currently own. 
I challenge members opposite from Canterbury like Kate Wilkinson and the junior Government whip to stand up and take a call in this debate or in any debate and say what their views are on whether Christchurch should be forced by this Government—because it has this philosophy—to sell its assets. We know that those comments from the Minister of Finance recorded at the Finance and Expenditure Committee took place before two events. One event was the 13 June aftershocks. The other event was when the Christchurch City Council and the Waimakariri and Selwyn district councils lost their insurance cover. That means that across those three councils is the risk of $5 billion or thereabouts of infrastructure costs. 
This Government has stood up time and time again to defend the rationale of asset sales—time and time again—in terms of Government-owned assets like our power generators. Therefore I ask this question: why would this Government when it is faced with $5.5 billion in rebuilding costs not force the hand of a reluctant Christchurch City Council to divest those assets? Again I ask members opposite like Kate Wilkinson to stand take a call and give us her view. What would she say to the people of Christchurch? Would she support the sale of their assets which have returned in the instance of one asset—one asset—alone over the last 20 years nearly $1 billion? 
Those assets include the port of Lyttelton which is currently expanding by metres a day as the rubble of Christchurch is used to refill the port. They include Christchurch International Airport where a major renovation is under way to cope with its expected and projected growth. They include Enable Networks the only metropolitan broadband network upgrade that did not go to Telecom. It is currently held by the ratepayers of Christchurch. I challenge members opposite again to tell us that they will stand and join the Labour Party and me to say that we will not accept the sale of Christchurch City Council assets because they are too important. We are facing a 7.5 percent increase in rates this year as it is and that is if you like held back by a 15 percent dividend from those assets. 
The debate having concluded the motion lapsed. 
Misuse of Drugs Amendment Bill 
Second Reading 
Debate resumed from 12 July. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 In 1 minute what can I achieve? Last night I was talking about clause 4 of the Misuse of Drugs Amendment Bill and about the fact that Labour has some concerns about clause 4. We will seek to have that clause removed from the bill when we get to the Committee stage. The guts of our concern is that it does nothing to reduce harm. In fact the submissions we heard on the Health Committee said that by broadening out the definition of utensils and including the components of drug utensils we will actually increase the amount of harm as people seek alternatives to those utensils or in fact do not use utensils at all given that the purpose of those utensils is to assist in reducing harm. In summary although the Labour Party supports this bill we think the time for tinkering with the Misuse of Drugs Act is over. We would like to see real change and new legislation on the control of drugs in New Zealand. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 Thank you for the opportunity to speak on the Misuse of Drugs Amendment Bill which is highly important. This bill is part of the Government’s war against amphetamine and part of a five-part plan. As the Law Commission pointed out in its very worthwhile review of the Misuse of Drugs Act 1975 unfortunately there are no silver bullets. It is important that the issues relating to banning drug utensils do not distract from the major thrust of this bill which is to restrict access to the precursor chemicals that pure methamphetamine is made from. The bill will reclassify both ephedrine and pseudoephedrine as class B2 controlled drugs and establish the presumption of supply at 10 grams. 
Everybody in this House knows something of the horrors of P or pure methamphetamine. It is highly addictive it is associated with gang activity and it can ruin young lives. Pure methamphetamine undoubtedly affects every stratum of New Zealand society and certainly it costs. The Business and Economic Research study estimated the cost to New Zealand of drugs other than alcohol to be about $1.58 billion and the accounts were that $1 billion was attributed to methamphetamine. 
Over the last 2 years in Pukekohe part of the area I represent the community was absolutely stunned and shaken when an elder statesman chemist—he was also an elder of the Presbyterian Church and a Rotarian—was convicted of dealing in precursors of pure methamphetamine. As to whether he was coerced by gangs nobody really knows what the circumstances were but it illustrates very much that every stratum of New Zealand society can be involved in drugs however unexpected. Local police tell me that anywhere in the vast rural electorate of Hunua which I represent within 10 kilometres one could probably find a clandestine laboratory. Of course we have heard many stories of explosions from these clan-labs. In fact there was one in Glenbrook in my electorate just some months ago with a loss of life. 
The Health Committee worked collaboratively and well on this bill but there were differences of opinion relating to drug utensils and their parts. But I emphasise that the major thrust of this bill is to restrict methamphetamine precursors. We were informed by the Chief Science Advisor’s report that at least 10 percent of pure methamphetamine in New Zealand had its source from precursors obtained within New Zealand. The police however gave a much higher estimation that something like 30 percent of precursors from cold and cough mixtures etc. were found when they busted the clan-labs around New Zealand. 
Sir Peter Gluckman told us that there were safe and effective alternatives to pseudoephedrine. Phenylephrine is a safe alternative. Anecdotal evidence suggests it might not be quite as good and I would concur personally with that. However there is no doubt in my mind that the overwhelming view of the Government is correct that placing restrictions on these precursors is absolutely justified. The Pharmaceutical Society of New Zealand submitted that there might be options other than restricting it to doctors’ prescriptions only but again I reiterate that I think that the Government’s policy is absolutely appropriate. 
An 8-year jail term is brought in once the drugs are reclassified as class B drugs and this shows the absolute importance with which the Government regards the restriction of these drugs. We were told that packets of cold and flu remedies containing pseudoephedrine can have up to 1.44 grams of active ingredient but that the more common types have much less than that. Even at the higher levels a presumption of supply of 10 grams would allow about seven boxes of pseudoephedrine tablets so it is a fair amount. 
Another important point is that the Attorney-General’s report states that the bill contravenes section 5 of the New Zealand Bill of Rights Act. He cites the New Zealand Supreme Court in  
R v Hansen 
 and states that “The majority in Hansen concluded that the control of the supply of illegal drugs is a pressing social objective which might justify limitations on rights and freedoms affirmed in the Bill of Rights Act.” Accordingly the Attorney-General stated: “I have concluded that the Bill’s objective is sufficiently important and significant.” 
The issues relating to restricting further the importation of incomplete utensils and their parts and banning their advertising were controversial and there were many submissions against those being enforced. There was a fear that these legislative changes would drive underground the trade in these utensils and that unsuitable substitutes could easily be made. I took the trouble to visit the Hemp Store Aotearoa in Auckland and I must admit that I was amazed at the variety of drug utensils and paraphernalia that were available there. In my discussions with the manager of that store Chris Fowlie he made the point that a change in law would be hard to police. However both the police themselves and customs officials were absolutely adamant that such moves as those in this bill will assist them in enforcing our drug laws and in tracking down illegal importations. It is also important to mention the Law Commission’s report  
Controlling and Regulating Drugs 
. This is an incredibly important body of work that needs serious review for the future. 
We have to look at better rehabilitation in New Zealand at the minimisation of harms and at prevention but we must have clear messages in our fight to stop the use of illegal drugs in New Zealand. I am sure that everyone in this House will welcome the Hon Peter Dunne’s announcement last night that he will introduce a Supplementary Order Paper at the Committee stage to deal with synthetic cannabinoids. I know that thousands of parents up and down the country will breathe a sigh of relief when the ever-expanding range of synthetic cannabinoids is banned from being sold in corner dairies. 
The manufacturers of these drugs are cunning intelligent and ruthless. Manufacturers such as Matt Bowden who has appeared before the Health Committee seem to have little regard for the serious harm they are causing but lots of regard for the money they are making. The criminals and business people behind the drug trade are utterly ruthless and will stop at nothing. It is very important to counteract their influence with clear legislation such as the provisions contained within this bill. I look forward to the Committee stage. 
KRIS FAAFOI (Labour—Mana) 
: 
 Labour supports this Misuse of Drugs Amendment Bill but as the member speaking before me Dr Paul Hutchison mentioned we have some differences of opinion about some of its aspects. Dr Hutchison claimed that this legislation was part of National’s war on P. I think that it is more of a skirmish with P to be fair because we on this side of the House do not think that this bill will be effective in making sure we reduce the harm of P and other drugs in our society. As I say Labour supports this bill. However we remain concerned that as it stands now it will not achieve the aims of reducing the accessibility of P and reducing drug-related harm. The purpose of the bill as it is set out now is to reclassify ephedrine and pseudoephedrine as class B2 controlled drugs to remove thalidomide’s classification as a class A drug—and why it was there as a class A drug in the first instance I do not know—to allow hazardous substances to be scheduled as restricted substances to extend the definition of amphetamine analogues and to extend controls over drug paraphernalia. As I mentioned earlier in my contribution we have a difference of opinion with the Government in respect of controls over drug paraphernalia. 
As I said we do not believe that this legislation will reduce harm in terms of the over-the-counter pseudoephedrine accessibility for Kiwis. In a cost of living sense we do not think that enough work has been done by the Ministry of Health or the Government to discover what kind of financial impact it will have on the public or on the workload of general practitioners. Those who are after a stronger drug when they get their winter ills will now have to go through their general practitioners to access pseudoephedrine. We all know just how flat out our general practitioners are at the moment so we do not think that enough work has been done on the cost to go to general practitioners and the demands on them. We still think that that is still a very live issue. 
Overall we believe that this legislation is an example of a bit of a smoke-and-mirrors approach from the Government. As I have already mentioned Dr Paul Hutchison said that this bill is part of National’s war on drugs and part of its five-pronged approach in the war against P. Although the Government is talking tough we do not actually think that this bill backs up the rhetoric. We believe that talking tough and taking some action is a lot different from talking tough and taking effective action. But as we have said taking some action is better than taking no action and that is why we are supporting this bill. We are trying to be helpful so we are supporting this bill. To a degree this bill is window dressing and many others agree with us that it will not achieve the aims and purpose that it sets out to achieve. As I said there are five prongs in the war on drugs. 
A number of institutions and organisations that gave submissions during the Health Committee process did not believe that the rhetoric matched the provisions in the bill. One submission was from the New Zealand Nurses Organisation by policy analyst Marilyn Head. In the organisation’s submission to the Health Committee it was stated: “we strongly suggest that all of these measures some of which will require more police monitoring and all of which will result in increased prosecutions and imprisonment will make very little difference to the significant number of people afflicted with drug addictions and substance abuse. Dealing with the misuse of drugs requires good consistent evidence-based education; having a scientifically-based Misuse of Drugs Act; and improving access to harm reduction treatments. Currently”—and this is the most damning part of this submission—“we seem to be moving against the evidence in the opposite direction on all counts. We do not anticipate this Bill can or will address the fundamental issues causing the misuse of drugs.” That submission is pretty damning and it is supportive of the position of this side of the House that in terms of effectiveness this bill as it stands now does not quite cut the mustard. 
There were other submissions including a submission from the New Zealand Drug Foundation. Its very outspoken executive director Ross Bell said in his submission to the Health Committee that the foundation believed that it was likely that the measures in the bill would “achieve positive results in the short term. However research from the United States indicates that the impact of precursor regulation on its own is temporary. After initial decreases rates of hospital admissions and arrests rebounded in the months and years after regulations took effect. This pattern was reliably repeated over three phases of precursor regulation”. So there we have another submission to the Health Committee that concurs with the belief on this side of the House that this bill does not go far enough despite the rhetoric we have had from the Government. 
Ross Bell did not stop there and we have a Supplementary Order Paper to clause 4 that my colleague Iain Lees-Galloway has introduced which concerns tighter control of the importation of drug utensils. Mr Bell said that this would be ineffective and that the Drug Foundation has some reservations with the proposed legislation for tighter control of the importation of some of these utensils. The first concern was the fact that the Law Commission review was still under way and that it was premature to make such a move. The second and more practical concern from the Drug Foundation was the potential for the criminalisation of these pipes and utensils to increase the risks of drug-related harm to cannabis smokers. The Drug Foundation and Ross went on to say: “Water pipes and vaporisers reduce the risks of respiratory disease from the inhalation of cannabis smoke.” The foundation was of the opinion that further tightening of the laws on pipes and utensils could close the door on interventions that could reduce harm. They believe that taking the action set out in clause 4 could cause more harm to those who are using these pipes and utensils at the moment to use drugs. 
Later on in his submission Mr Bell said—again damningly against the general thrust of this bill—that “the Drug Foundation believes that the proposed provisions are largely symbolic and unlikely to have any impact on actual rates of cannabis use and are more likely to increase drug harms than reduce them.” There we go; that is another opinion from an organisation that made a submission to the Health Committee that this bill does not go far enough and in some places is a little premature in respect of clause 4. A trader who sells these pipes and utensils shared similar concerns to the Drug Foundation. He went on to say that pipes allow the legal herb user to place a safer distance between himself and burning the legal herb which in the manner of one smoking pipe allows the harmful tar to be in the bowl and stem before reaching the user’s lungs. The thrust of his submission in respect of clause 4 is that fools rush into that area. 
As I say Labour supports the general thrust of the bill but we are concerned that it will not achieve its general purpose. We believe there is no merit in placing further restrictions on these drug utensils when there is no evidence base for it. In terms of the cost of living not enough work has been done by the Ministry of Health on the impact on those who are struggling to make ends meet. People who find themselves in need of pseudoephedrine will be negatively impacted when they need to visit their general practitioner to get hold of these drugs. 
I conclude by saying that this is another example of the Government trying to sell legislation as being tough but it does not have the teeth to set out what it promises to achieve. We can call it what we like—window dressing or smoke and mirrors. It is another instance where this National Government has talked the talk with the slogans with the war on P and with the five prongs but it has failed to walk the walk. It has done that on jobs it has done that on GST it has done that on KiwiSaver and it has done that on asset sales with the suggestion that mum and dad investors will be the first ones in the queue and that the shares will stay with mum and dad investors as we go forward. Unfortunately methamphetamine and P is a serious issue. The Government has promised one thing but delivered another. Thank you. 
KEVIN HAGUE (Green) 
: 
 Tena koe Mr Assistant Speaker Robertson. Nga mihi nui ki a koe me te Whare hoki. I want to begin in the usual way by thanking officials from the Ministry of Health who worked with the Health Committee on consideration of the Misuse of Drugs Amendment Bill officials from the Office of the Clerk who serviced the select committee and officials from the Parliamentary Counsel Office. I acknowledge the very many thoughtful submissions that the select committee received and I also acknowledge the non-partisan way in which the select committee went about its work. 
It would be great would it not if we were able to have a cross-party approach to dealing with drug issues. It seemed to me from time to time on the select committee that we were not far away from that. So it is sad in some ways that in this debate I need to speak in opposition to the bill. That is because of two clauses. I also want to comment on the indication that the Minister the Hon Peter Dunne gave last evening about his intention to introduce a Supplementary Order Paper in the Committee stage. 
The first issue I want to draw attention to—and it will be no surprise to the House because many speakers have referred to this provision—is clause 4 which sets out to increase the range of offences associated with utensils. It extends the range of items in relation to which offences exist and it extends the range of offences themselves. In particular there is the worrying extension of the definition of “utensil” to include “identifiable component of a pipe or other utensil”. 
The Health Committee received no evidence that the changes that this clause would bring about would reduce drug use at all. Instead we received many submissions to the effect that harm would be caused. We heard that the new provisions would not reduce drug use. We heard that the utensils provisions might provide a minor inconvenience to those importing and selling them but that they would be very likely to respond in short order with small changes of behaviour that would evade the new law with the result that we would be no further ahead. The utensils provisions are also likely to be applied unevenly based on assumptions about intent. 
Some very interesting submissions were made to the committee. They demonstrated that plumbing fittings could be used in drug-taking utensils so the enforcement of the law would require enforcement officers to make judgment calls about the intended use. That seems to me to be an inappropriate way of going about making law. The potential for this same behaviour to be legal or illegal depending on who does it suggests strongly that the law has been miscast. 
As my colleague Kris Faafoi has pointed out the select committee heard from the Drug Foundation and many others that the use of utensils typically reduces the amount of harm associated with drug use and therefore provisions in law that reduce the ability of cannabis smokers to use such utensils may well result in increased harm.  
In summary I say that the provisions seem unlikely to achieve anything useful. Indeed they seem somewhat likely to increase the harm associated with drug taking. They also seem to be an unhelpful distraction from the Law Commission’s report. They seem to be tinkering around the edges of New Zealand’s drug laws at a time when the Law Commission has been undertaking a major review of New Zealand’s drug laws and making a comprehensive set of recommendations to this House. Why on earth are we making this small tinkering change when we have before us something that would be a very productive use of this House’s time?  
Clause 6 has also attracted much debate. This is the clause that sets out to reclassify ephedrine and pseudoephedrine as class B2 drugs meaning that medicines containing those substances could be supplied only with a prescription from a doctor. There seems no reason to oppose the reclassification of ephedrine. We were told that this drug essentially has no therapeutic value or almost no therapeutic value. On the other hand pseudoephedrine is widely used and it is probably used by members of this House. It has therapeutic value for many people. 
The select committee asked for but could not be given any evidence of the extent to which pseudoephedrine purchased from retail pharmacies has been used for methamphetamine manufacture. The closest we got to it was Sir Peter Gluckman’s educated guess I suppose. None the less the Green Party accepts that this source does play a role in the manufacture of methamphetamine. 
However we are persuaded by the evidence received from the Pharmaceutical Society of New Zealand—and members should remember that this organisation represents the professional expertise and interests of pharmacists—which told us that alternatives to pseudoephedrine were not as effective. Indeed it challenged members of the select committee who had used the alternatives to pseudoephedrine to contradict it if we wished to but not one member of the select committee did so. 
The universal experience I think is that these alternatives do not work as well as pseudoephedrine. So the change that is contemplated in this bill will represent a substantial reduction in the effectiveness of the therapeutic value that New Zealanders across the board gain from the availability of this drug. 
The bill would require people with infectious diseases to visit their general practitioners in large numbers in order to get access to effective treatment with the result that many more of these diseases will be passed on and there will be more morbidity and more sickness. That seems to us to be a disproportionate harm. The Pharmaceutical Society offered several alternatives which would stop pseudoephedrine-containing medicines being available over the counter but allow them to be available from pharmacies without the need for a prescription. That certainly seems to be the more sensible way to proceed. 
Lastly I come to the Supplementary Order Paper that the Minister gave notice of during his contribution yesterday in respect of synthetic cannabinoids and related herbal highs. Most New Zealanders would share the Minister’s concerns about these drugs but we want to draw attention to the fact that the Supplementary Order Paper the Minister proposes has not been put in front of the New Zealand public for submissions and represents a very substantial departure from the scope of this bill. 
We believe that the correct approach—and I challenge the Minister to do this now—is for the Minister to table his Supplementary Order Paper today and move that it be referred back to the select committee so that submissions from the public and interested parties can be sought. Before this bill comes back to the House in essentially 3 weeks’ time there is time for a public process that would enable the public to have its say. 
It seems to us to be bad lawmaking for the Supplementary Order Paper to be put forward during the Committee stage and for the public to be excluded from a debate on those provisions. When people had the opportunity to make submissions earlier they could not possibly have imagined that the provisions in the Supplementary Order Paper would be in the bill that went forward to its third reading. In summary I say that we oppose this bill’s second reading. We invite the Minister to make those changes and table his Supplementary Order Paper today. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 Tena koe. The Misuse of Drugs Amendment Bill is one that the Maori Party feels extremely strongly about and it is timely that it is being debated on the same day that another harmful drug of choice is being debated—that is tobacco. The Maori Party promotes Whanau Ora as the way forward to achieving a future where whanau determine what is in their best interests. Quite simply addiction and the misuse of drugs are not part of that pathway. Controlling the supply of illegal drugs is an important and significant objective and an objective that the Maori Party fully accepts. The production of and addiction to drugs are accepted as not being in the best interests of Maori. 
Apparently the Prime Minister’s Chief Science Advisor Professor Sir Peter Gluckman has estimated that the value of the methamphetamine market in New Zealand is about $1 billion per annum. At least 10 percent of this amount is derived from domestically diverted pseudoephedrine. But of course the greatest cost is the loss of human potential. I remember a case in April 2010 when a Taranaki P dealer handed himself into police and asked to be charged. He was desperate to get away from what he had been involved in and his desperate action indicates that like cigarette smokers people addicted to P more than likely want to quit but find it hard to do so due to physical withdrawals. This case and so many of the tragic situations that we hear of where whanau have been held to account by the impact of illegal drugs have motivated us to really consider carefully the type of bold response we need to take to P—as we have done with cigarettes—given the uniqueness of the problem and its effects on whanau. 
Bulk quantities of pseudoephedrine are now being intercepted in much larger volumes. They are hidden in furniture in cargo ship containers instead of other small-time methods. We can all recall different stories we have been told of drug hawks standing outside chemists and paying elderly women up to $100 to buy them a few boxes of Coldrex such is the grip of the addiction. 
So it is not a question of whether we should or should not do something. It is a question of what we can do what strategies we can introduce and what support we can provide within our families to keep our families drug-free. But in the interim we support the passage of this legislation to prohibit the importation of controlled drugs. We do however question the validity of passing an amendment to the Misuse of Drugs Act while the Law Commission is carrying out a wide-ranging review of that Act. It seems to us that the most sensible course of action would be to hold a comprehensive review which takes all issues into account and scopes out a long pathway ahead and then we look at the law. 
At the end of the day doing something about drug abuse is in line with the Maori Party’s respect for mana whakapapa. Too many young Maori lives have been destroyed by P. This bill supports the strengthening of whakapapa lines. We support whanau-focused drug education whanau-focused drug addiction recovery and restoration services and we support any initiatives that will act to reduce the availability of methamphetamine or drug-related harm. To this end the Maori Party stands in support of this bill. 
NICKY WAGNER (National) 
: 
 I rise to support the Misuse of Drugs Amendment Bill at its second reading. This bill deals with a series of issues to amend existing legislation and to improve the effectiveness of drug control. Its main provisions are to deal with the control of ephedrine and pseudoephedrine and to increase controls on the sale of drug paraphernalia. It also reclassifies thalidomide so that it can be controlled under the Medicines Act and it allows hazardous substances to be restricted substances which will assist with the continued control of low-risk psychoactive substances such as party pills as restricted substances. 
Many New Zealanders are concerned about the use of illicit drugs in our communities. They are particularly concerned about methamphetamine commonly known as P. For some reason New Zealanders have been particularly taken with P. We have one of the highest percentages of P users in the world and the Prime Minister and the National Government have been focusing on combating this addiction. This bill is just another step towards controlling the supply of that drug. 
The bill is designed to close off the source of precursor substances for the local manufacturing of methamphetamine. Ephedrine and pseudoephedrine are the active ingredients used in the manufacture of P. Currently they are available over the counter in cold and flu remedies from pharmacies. We have all heard of the big buy-ups of these products for drug production. The police estimate that up to one-third of methamphetamine produced in New Zealand comes from these previously legal products. The bill reclassifies both ephedrine and pseudoephedrine so that they will no longer be easily available. But they will not be prohibited; patients will still able to obtain them by prescription. 
The bill also increases controls on the sale of drug paraphernalia. That is a difficult area to control because common tools and implements can be used for drug taking and some loopholes in the past have allowed the utensils to be imported in a knock-down format to be reassembled in this country. This amendment has been carefully worded and will help to minimise the availability and the visibility of drug-taking paraphernalia. 
Finally I will talk a little bit about broadening the definition of amphetamine analogues a provision designed to control by default a wider range of emerging designer drugs. We are all aware of the new psychoactive substances coming on to the market and we want to be proactive in dealing with these products before they do harm. This is a first step towards the better control of products such as Kronic but more work needs to be done in this area in the future. I commend this bill to the House. 
LOUISA WALL (Labour) 
: 
 Tena koe. Kia ora. It is my pleasure to stand in support of the Misuse of Drugs Amendment Bill. At the beginning of my speech I will highlight the Law Commission review. The commission comprehensively reviewed the misuse of drugs and concluded by saying that “the most fundamental issue with the Act is that it seems poorly aligned with New Zealand’s current drug policy based on the principle of harm minimisation.” I highlight that we have had a comprehensive review and this was one of the critical findings of the Law Commission’s report. The other thing the commission concluded was that “We think that these changes can only be effected by a completely new Act and the repeal of the existing Act is therefore necessary. A key issue … is how any new legislative framework might better support the pillars of demand reduction and problem limitation in drug policy.” As a party we very much concur with the Law Commission’s position. We support this bill but we remain concerned that the bill as written will not achieve the aims of reducing the availability of methamphetamine or reducing drug-related harm. 
I did not have the pleasure of sitting on the Health Committee and hearing submissions on the bill but I want to highlight given the purposes of the bill—I will not read through them again—and linger on the point of extended controls over drug paraphernalia. I highlight that the select committee reported that “Most of the submissions we received expressed opposition to the proposed amendment to the utensils provision. Many argued that prohibiting drug utensils would be ineffective and would increase the harm suffered by drug users because they would make their own utensils or would buy them illegally.” 
I highlight at this point in time the fact that my colleague Iain Lees-Galloway signalled when he spoke on this bill earlier that we will be putting forward an amendment to have clause 4 removed from this legislation. Clause 4 relates to drug utensils. From the information I have no submitter at the Health Committee said that this particular provision of the bill would achieve anything. In fact we heard that potentially we would see an increase in harm caused by people using ad hoc replacements. I think we need to take this seriously. As such we are going to put forward our own amendment to that effect. 
It was very interesting to have an opportunity to speak on this particular bill. I decided to go to the Law Commission as a source of information because I had not been involved in the select committee process. What I find really interesting is that overwhelmingly there is clear evidence that we have a problem in New Zealand. In 2001 and 2003 a New Zealand national household survey looked at amphetamine and methamphetamine use. After cannabis it was the second most widely used illegal drug in New Zealand. So we know we have a problem. 
In 2001 5 percent of New Zealanders who responded to this survey said they had used methamphetamine during the previous year. This definitely concurs with international trends about the prevalence of such use which really started in the late 1990s. The Law Commission reported that “overall levels of use of psychoactive substances are significant … and that overall the proportion of the population using drugs is not really changing.” From one level we have to do something that will reduce the use of drugs but on another level we have to look at how we reduce the harm for people who use drugs. 
There is general agreement from everybody that we have a drug problem in New Zealand but as has been stated quite clearly we do not believe that this ad hoc manner of amendments over consecutive years to this particular legislation will achieve much at all. As I said earlier we concur with the Law Commission report that there should be an overhaul of this entire misuse of drugs legislation. 
The other aspects I want to highlight are the continual amendments to the Misuse of Drugs Act which was first enacted in 1975. It has been really interesting going through the different changes that happened in 1978. Of note was a provision that authorised the detention of a person for up to 21 days without being charged where there was reason to believe that that person had concealed a class A or B drug. In 1988 for example the possession of needles and syringes that had been obtained through authorised needle exchange programmes was permitted. At that time that amendment was to try to reduce the risk of blood-borne infection from dirty or shared needles within the context of a concern over the risk of the HIV virus spreading among intravenous drug users. As we have seen historically we have been concerned about harm minimisation within the context of the evolution of this bill. 
The Law Commission itself was very clear that our approach to various drugs is inextricably linked to our history and our culture and our regulatory framework for psychoactive substances must recognise political and social realities. I guess one of those realities we are facing today is the creation and development of analogues or products such as Kronic which through whatever means are deemed to be legal within the context of that commodity and are able to be purchased publicly. We are now looking at how those substances engage and interact in a society where our young people are at huge risk. 
It is timely we have an opportunity yet again to look at the Misuse of Drugs Act but I contend as my colleagues have contended previously that we should not do it in this band-aid ad hoc way; we should do it in a comprehensive way. It is good that some measures within this bill will address some of the issues we have in terms of the provision of drugs. But we contend that unless we have a comprehensive overview we will not address much at all. 
I really do not have much more to add other than to congratulate all the people who participated in the democratic process and submitted on this bill. I know we must see this issue within the context of substances that people are using today because they have problems in their lives. I think it is very important that we continue to put drugs on the agenda particularly for our young people. I look forward to the continued debate on this legislation and I thank you very much for the opportunity to speak on this bill. 
CHRIS AUCHINVOLE (National—West Coast - Tasman) 
: 
 I rise to speak on the Misuse of Drugs Amendment Bill. We used to be taught that the root of all evil was money but I honestly think that nowadays there would be a general consensus that the root of all evil particularly in this country is drugs. 
I will speak first on the horrors of P. Like the previous speaker Louisa Wall whom I listened to carefully I did not have the opportunity to serve on the Health Committee so I missed the very significant submissions that were made but I have caught up with some of them through the system. I will be taking only a short call but its brevity should not in any way indicate a lack of commitment or interest. We know about the horrors of P a highly addictive drug. It is gang-related in its distribution and thereby the evil starts. The cost to New Zealand is I understand estimated to be $1 billion in turnover. We heard from earlier speakers that this particular plague affects all stratas of New Zealand society. 
Hon Phil Heatley 
: Stratae. 
CHRIS AUCHINVOLE 
: It is “stratae” according to my colleague who is helping me with my Latin. 
Hon Members 
: Strata. 
CHRIS AUCHINVOLE 
: Yes I think it is strata. Let us just say that it affects every part of New Zealand society and that is the worst thing. Having been so proud that New Zealand is free from all sorts of bribery and corruption I remember hearing that in terms of drug dealing someone could be offered a year’s salary to shut his or her eyes to malpractice and bad practice. So it is very hard to think that this evil cannot penetrate everywhere. 
This bill seeks to restrict the methamphetamine precursors. The police estimate that 30 percent of P in New Zealand comes from those. Professor Gluckman states evidence showing that a safe alternative phenylephrine is already used in up to three-quarters of cold and flu medication. I remember that when this whole business started there was concern that we would be taking cold medicines and others off the shelves. It will not be necessary to remove these medications. The bill will change only their manufacture which will be a good thing if it curtails the opportunity of these P lab producers. The offence carries an 8-year jail sentence and that demonstrates that the issue is not being taken lightly by this Government. I was so proud when the Prime Minister announced that we would be declaring what amounts to a state of war against people who peddle these things as we go about protecting the innocent the easily led the improvident and the sad cases of the already addicted. 
Under this legislation we also look to introduce better rehabilitation and that is a necessary part of helping those who have already fallen into this difficult difficult cycle. I personally have no experience of drugs at all beyond tobacco and alcohol. I have though a sense of sorrow— 
Simon Bridges 
: This isn’t a counselling service. 
CHRIS AUCHINVOLE 
: No no—but I have not had that experience and that is just by chance. But I do have absolute sorrow and sympathy for people who are addicted and I have nothing but contempt and disgust for those involved in transacting the sale of drugs. They should feel the full force of the law. Thank you. 
JACINDA ARDERN (Labour) 
: 
 It is my pleasure to speak on the Misuse of Drugs Amendment Bill. I endorse the comments that have been made by some of my colleagues and I would hope that as a consequence of those comments no one would be left in any doubt that of course the Labour Party has seen the scourge on our communities that P represents as do many other forms of drugs some of which are more socially acceptable than others. But I will come to that. 
First I will say that as I was listening to some of the other speakers I was recalling the first time I heard a discussion or any presentation on the issue of P. It might have been as far back as 2003 that I went to a presentation by I think either a drugs specialist or a law enforcement officer from Hawaii. He had come to New Zealand to talk especially about what was then a new drug. He came to New Zealand before the issues with regard to this particular drug were really in the public consciousness—actually it might have been in 2002 now that I think about it. His warning to us was that Hawaii probably much like New Zealand had not experienced the same level of issues with other drugs like for instance heroin. The nature of our borders meant that we were able to protect ourselves much more from the trafficking of such illicit drugs but the ability to manufacture drugs like P within our borders almost anywhere if the right products were available made this drug particularly difficult to control. The second issue that the presenter highlighted was that this kind of drug would have such an impact in terms of social and community harm. It obviously struck me because I remember it to this day. 
No one here denies the issue that P represents for our communities but the debate then comes down to what we do about it. Some of the issues about P have been raised in the House today and I would not want there to be any doubt in anyone’s mind that of course we wish to combat this drug in every way we can but we want to do it effectively. With some of the questions that we have been raising we have been asking—and rightly so—whether we have been targeting our energies in the best way possible. One of the issues we have raised relates to the measures around the sale of pseudoephedrine in particular over a pharmacy counter and whether those measures will have the impact that is needed in order to stop the proliferation of P. That is one of the issues we wanted to raise. 
Another significant issue for us is that if we look across the board at the way we have been approaching the control of drugs across the spectrum within New Zealand we wonder whether it is time for us to take a much more comprehensive approach to the way we control drugs. This is not a debate that is happening only here or that we are urging to happen here; it is happening at a global level. 
Not all that long ago the United Nations commissioned and produced a report on the global trade criminalisation and classification of drugs. As I recall one member of the commission was Georgios Papandreou. He is of course the much embattled leader of Greece. I have worked with him in another capacity and he is a very thoughtful and intelligent man. A range of individuals and politicians from countries we associate with drug issues rightly or wrongly were also members of the commission and the conclusions they came to were bold. They suggested that we have perhaps in the past targeted the wrong people and that was their view in the way we dealt with Afghanistan in particular. But the commission also called on countries to review their own legislation as to whether we were over-criminalising for drugs that were not having the same level of social harm and whether as a consequence of that over-criminalisation we were creating our own social harm by institutionalising prison within some of those communities. That is a big issue and we have denied that issue for a long time. 
I heard one of the most shocking statistics that I have heard in my political career recently and it came from Kim Workman from Rethinking Crime and Punishment. He had questioned the number himself because it was so high. He said that 40 percent of our 15-year-old - plus Maori males have experienced either a form of community detention or prison—40 percent. That is a travesty and a shame on New Zealand. I would be incredibly interested to know how many of those offences are for what we would probably classify as low-level drug offences. I would be really interested to know that. Is it society’s expectation that that is the kind of statistic we want to be dealing with? 
I think it is time for Parliament to be bold and the Law Commission has provided us with the perfect opportunity to do that. The UN has started it and the Law Commission has done so as well with its report on controlling and regulating drugs. It is an excellent starting point for us as a Parliament to review the classification of drugs across the board. But I would also say that in doing so we cannot ignore that alcohol by far causes the most social harm in New Zealand—by far. I would not mind looking at a bit of a comparison as to how much in our communities or in Parliament we have discussed the war on P relative to the war we need to make on the culture of drinking in this country because it has a much more costly impact on our families our communities and our health sector than methamphetamine. That is not to say that we cannot deal with both but at the present time we are paying disproportionately less and not enough time on the issue of alcohol. 
I am glad that the Government has instigated a comprehensive review of alcohol. That review has been going on and a select committee is dealing with that report at present but I think it was neglectful of us to take one of the options off the table as early on as this and that option is the issue of price. I know that we have looked at advertising marketing supply accessibility and the age at which one can purchase alcohol but I think we have neglected our duty to our communities by taking away the issue of price. I know that the Government has said that once it has collected some more data and more information it will come back and look at it. We did not collect the data or information when it came to the legislation we are looking at now. We knew that it was a political hot potato and that no one would stand up and say that we should not be dealing with P so we did it without the evidence. Yet we will not do that with alcohol when actually in my mind we have all the evidence we need. The Law Commission presented all the evidence we needed to deal with alcohol in a much more comprehensive way. 
I want to share one little anecdote. Not all that long ago I visited a drug and alcohol rehabilitation centre and asked those working there whether they had enough bed space to deal with all the patients they needed to deal with. I was told: “We will be honest. We have had additional funding for bed space to deal with those who identify as being methamphetamine addicts but we have been cross-using those beds. We have been putting those who need assistance for alcohol addiction into those beds.” They were able to identify that at some point in the drug-use history of those people they may have once used P and therefore they could legitimately put them into those beds but that was where the demand and the need were. Although the Government is saying that one of its five-pronged attacks is to assist families who are dealing with methamphetamine I would wager there are far more New Zealand families who need assistance in the area of drug-alcohol usage. 
Those are some of the challenges that I wanted to lay out in the mix. I applaud the fact that the Government is trying to look at what it is doing in relation to other topical issues like the restriction of synthetic cannabis and reversing the onus so that these substances are unable to be put up for sale until it is proven that these products are safe and that they can be sold but I think this demonstrates to us that this is a fast-moving area. I remember when I worked— 
Mr DEPUTY SPEAKER 
: I am sorry to interrupt the honourable member but her time has expired. 
Dr JACKIE BLUE (National) 
: 
 I am pleased to speak on the second reading of the Misuse of Drugs Amendment Bill. This bill complements the measures the Government has already undertaken in its strategy to combat the impact of P in our community. The bill amends the Misuse of Drugs Act 1975 and reclassifies ephedrine and pseudoephedrine as class B2 controlled drugs which means they are available only on prescription. Up until now they have been available over the counter and are often used for simple colds and flus. They will no longer be available over the counter and therefore will no longer be a source for those seeking to use them as precursors to make methamphetamine. Of course suitable alternatives are available already for consumers such as phenylephrine. 
The Government is really serious about the fight against the impact of P and we released a strategy a year or two ago. In particular new powers have been given to break the drug supply chain of gangs and criminal organisations. Efforts have been made to ensure that P addicts get the treatment they need that we improve the treatment capacity that we have better routes into treatment and of course that we support families and communities so that people do not become addicts in the first place. 
There is a number of other measures in this bill such as reclassifying thalidomide as a class A controlled drug so that it now comes under the Medicines Act which is entirely appropriate. The bill also broadens the definition of amphetamine analogues and allows greater control over paraphernalia. 
The Government is serious about minimising harm from P and this bill is part of that suite of measures. I commend the bill to the House. 
Hon STEVE CHADWICK (Labour) 
: 
 I am going to take the last call because not all parties have spoken in the House and I think it is important that we take the full complement of calls today. I am disappointed in this bill the Misuse of Drugs Amendment Bill. I chaired the cannabis inquiry and we said then that we needed to have a comprehensive review of the law relating to drugs and this bill just does not cut it. There is a wonderful opportunity before the Government now with the Law Commission report  
Controlling and Regulating Drugs - A Review of the Misuse of Drugs Act 1975 
. I cannot see why other than the Prime Minister’s so-called war on drugs this bill has been brought before the House as a Government bill. 
I think this bill is small. I do not think it will make much difference at all because a lot of the precursors for the manufacture of P are from imported precursors of amphetamine and methamphetamine and that needs to be cut off at the border. But we must also have a far more comprehensive approach than this bill. For a Government bill to go through the stages of being referred to a select committee the select committee calling for responses then to be back in the House today is frankly in my view a rather cynical view of the tools the Government could have used if it truly wanted to look tough on crime and drugs. 
It was interesting to hear Mr Auchinvole say that the root of all evil used to be money but now it is drugs without even mentioning the impact of alcohol on society and the tools that this Government has had in its hands with the Law Commission report to implement comprehensive legislation to curb the harmful effects of alcohol. However I must congratulate Tariana Turia on her comprehensive approach to harm minimisation in relation to tobacco. We have one Minister in this Government doing good things about harm minimisation in relation to tobacco but the Government is actually playing around with being tough on drugs and it is not addressing the impact of alcohol to its full extent. It is now avoiding another opportunity to be tough on the impact of drug regulation and drug control in New Zealand today. I think that is a great pity. I think this Government has wasted 3 years because it has gone soft on bringing in what the Law Commission recommends is a comprehensive overhaul of drug reform. 
One comment I will challenge was made by Rahui Katene about the sale of precursors of P by pharmacists. When we were in Government pharmacists themselves were the first professionals to take a proactive stance and we congratulate the pharmacists who did that. It began in Rotorua where pharmacists clubbed together and put precursors under the counter. They would not sell packets and packets of precursors and common cold remedies to a person without checking out with other pharmacists as to whether they had been asked to sell five boxes of cold remedies. They were truly proactive professionals. That was a great initiative and it certainly saw a curbing of the domestic precursors of methamphetamine. I put on the record that pharmacists were the first proactive professionals and they set up a network. That model caught on in several other communities. I think we ought to look at the Pharmaceutical Society. In its submission it said that alternatives to pseudoephedrine were not as effective yet I heard members in Government say that there are plenty of other cold remedies that are just as effective. 
Also there is an unnecessary level of blockage in the bill—we would not have brought it in as a Labour Government—of having to have a prescription for common cold remedies from a doctor. That will cost people more so they might go without common cold remedies and spread infection. We looked at that from a public health perspective but I also think this will create another unwelcome workload pressure on pharmacists and general practitioners. General practitioners do not want to prescribe for the common cold. They have much more work to do and much higher-need patients coming to see them on a daily basis than having to prescribe for common cold remedies. I think that is an unnecessary barrier. Access to health care is something that we in Labour really do see as a primary public health imperative. I think that measure is silly. I think pharmacists were under way and should have been supported far more comprehensibly by the Government to carry on with their initiatives for getting precursors to methamphetamine out of sight off shelves and under the counter. I think that measure is rather stupid. 
I also congratulate Iain Lees-Galloway who will bring in an amendment looking at—what were they called— 
Iain Lees-Galloway 
: Utensils. 
Hon STEVE CHADWICK 
: —utensils that drug users use. Honestly that is just a waste of time. We learnt on the cannabis inquiry how nimble drug users are at making their own utensils. Drug users will create them out of anything—straws bits of glass teaspoons anything. I cannot understand what the Associate Minister of Health the Hon Peter Dunne was proposing to do about drug utensils. We will never stop them. It is an innovation in technology how users go out and create sometimes quite artful utensils for their enjoyment of these drugs which none of us think are safe to have. 
When members are in Government they are there to do the right thing and they are there to be bold. This bill does not have the boldness that John Key went out in 2009 and said he would have in this Government in its so-called war on drugs. This bill does not cut it. I think that is a lost opportunity which is really sad. 
I am now going around community health providers and mental health providers. There are two in our town of Rotorua that have lost their contracts and they are closing their doors in October of this year. I think that is a disgrace. They are Maori mental health providers. I have been in to see them. They are for people who suffer from chronic mental health problems—not always drug related. They are kept out of acute forensic units by community mental health providers which are shutting their doors because the primary focus is now on youth mental health. I do not say that it is wrong to look at youth mental health but I tell members to not close the doors on community mental health providers who are doing a wonderful job of keeping people well and their family members keeping them well and keeping them out of mental health institutions. 
I think the Prime Minister is no longer sticking to what he said in his five-pronged approach. He said that the Government would support families in the first place. The support for families in the first place is through access to community mental health provisions. That is where these people and their wider families are supported and awhi-ed about the problem that these people and these families have. That is the Whanau Ora approach which we will also support when we get back into Government. 
I think it is very sad that this opportunity is a lost opportunity and that 2½ years later this is the best that this Government can do. When we were in Government we set up the Expert Advisory Committee on Drugs. That was so it could be flexible nimble and fast at rescheduling. I absolutely applaud it for coming back with a rescheduled approach in this bill for the precursors to methamphetamine. But boy it is not as fast nimble or flexible as we intended that committee to be. Perhaps there has been other legislation before the House in 2½ years that was considered to have a higher priority. I think it is a sad opportunity lost. The Law Commission report calls for a comprehensive reform of drug use and of legislation relating to drug use in this country. We will be looking at that reform in our approach to managing the scourge of drugs in our society. We will support this bill—after that little rave; I feel better for getting it off my chest—because it is something but it is small and not too consequential. I am afraid that in 3 years we will be coming back to this House. 
A party vote was called for on the question  
That the Misuse of Drugs Amendment Bill be now read a second time. 
Ayes 105 
New Zealand National 57; New Zealand Labour 42; Maori Party 4; Progressive 1; United Future 1. 
Noes 15 
Green Party 9; ACT New Zealand 5; Independent: Carter C. 
Bill read a second time. 
Smoke-free Environments (Controls and Enforcement) Amendment Bill 
Instruction to Committee 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 I move  
That it be an instruction to the Committee of the whole House on the Smoke-free Environments (Controls and Enforcement) Amendment Bill that it have the authority to consider and if it thinks fit adopt the amendments in my name relating to the registration of tobacco sellers. 
 The reason I am moving this motion today is very simple: the Maori Party is absolutely committed to a smoke-free Aotearoa. We are committed to saving lives. We are committed to a healthy smoke-free environment so we are determined that we will leave no stone unturned in our pursuit of comprehensive and effective solutions to create a smoke-free nation. In January 2010 the  
New Zealand Medical Journal 
 stated that the scale of harm from tobacco use in New Zealand has not been matched by appropriate Government action to advance tobacco control. George Thomson Nick Wilson and Richard Edwards from the department of public health of the University of Otago laid down the challenge fair and square: “New Zealand political parties now need to engage with the idea of the end of commercial tobacco sales in a finite and predictable timetable rather than using small steps to control the tobacco epidemic.” 
This motion is to ensure that our pathway towards becoming smoke-free takes every contingency into account. We want to broaden the debate today to enable registration to be mandatory and a condition of selling tobacco. The problem my amendment seeks to address is that currently there is not a central list of tobacco retailers. As a consequence of that all national estimates for the number of retailers vary widely. In a letter I saw today from Professor Richard Edwards Dr George Thomson Professor Chris Cunningham Dr Heather Gifford Professor Janet Hoek and Stephanie Erick there was a clear message: with tobacco displays moved out of sight there will be difficulties in identifying tobacco retailers. Their letter makes a very clear statement which I again will cite for the record. “We see such a register as the minimum system necessary to enable health enforcement officers to effectively and efficiently do their job of working with retailers. Furthermore such a register would help to keep track of the growing move by tobacco companies to market tobacco products through temporary outlets at festivals and other events.” I want to make it explicitly clear: we are tremendously proud of the profile that the Maori Party and in particular Tariana Turia in her capacity as an Associate Minister of Health have been able to achieve in the area of tobacco control. The ongoing tobacco tax increases have triggered— 
Mr DEPUTY SPEAKER 
: This is a narrow instruction to the House. You cannot get into the debate on its merits. State just the facts. It is a very narrow instruction that you are asking the House to consider so confine your comments just to that. 
RAHUI KATENE 
: Thank you. Our amendment today is in many respects to supplement and strengthen the rapid progress that Tariana has been able to achieve in tobacco control in general and in this bill specifically. This is ground-breaking legislation to phase out tobacco retail displays—out of sight out of mind. But of course there is the catch-22 dilemma that removing tobacco retail displays— 
Hon Steve Chadwick 
: I raise a point of order Mr Speaker. This does not appear to be a point of order; it is rather more of a speech. 
Mr DEPUTY SPEAKER 
: It is not a point of order. The member has the right to move which she has done—[ 
Interruption 
] No no she can also debate it. This is a debatable motion and she has moved it. She is speaking and she has 10 minutes in which to speak. It is not a point of order. Her comment earlier on was not correct but I have accepted that. She is moving a motion. She is asking for an instruction from the House to the Committee of the whole House to include her amendments. 
RAHUI KATENE 
: Thank you. There is of course the catch-22 dilemma that removing tobacco retail displays might lead to out of sight out of scrutiny. A mandatory register of all tobacco retailers is a perfect response to the declared need expressed by many health enforcement officers to keep track of retailers with complete and current data. 
We understand that ASH Action on Smoking and Health is in full support of these amendments. There are four strong reasons underlying its support: one a register is cost-effective— 
Mr DEPUTY SPEAKER 
: The member is now getting into the debate. As I mentioned earlier this is very narrow. You are asking the House to accept your amendments going into Committee. Members can read what your amendments are because they have been tabled. This debate is very narrow asking permission of the House by way of an instruction to go into Committee. You cannot get into the debate of what the content of the amendments are; they are tabled for members to look at. So just come back to the instruction that you are asking for. 
RAHUI KATENE 
: I am not somebody who randomly stands in this House to put forward points of order and move motions for debate to pass the time of day. In fact in my entire parliamentary career to date I think one would be hard-pressed to find more than a couple of times when I have stood to do something like this. I have taken this action today because the Maori Party is so committed to saving lives and to doing something about the 5000 people this country loses every year under the assault of tobacco harm. We truly believe that this measure is needed now and that this register will significantly enhance the efficiency and implementation of the entire Smoke-free Environments (Controls and Enforcement) Amendment Bill. It should be debated now. 
In closing I return to the submission I quoted earlier. It stated that it is highly anomalous that anyone can set up as a retailer of tobacco products given their highly hazardous and addictive nature and in light of the continued evidence of widespread availability of tobacco products to children. This motion and the amendments it relates to address this deficiency by requiring that at least health officials know who is selling tobacco through a register of tobacco retailers. I implore the House to at least give consideration to debating these amendments at the Committee stage. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I rise to take a brief call on this motion on behalf of Labour. We very much support instructing the Committee to debate Supplementary Order Paper 257 in the name of Rahui Katene. We think this is an important issue that requires debate— 
Jo Goodhew 
: I raise a point of order Mr Speaker. I feel that perhaps the member is under the misapprehension that we are debating the whole Supplementary Order Paper. 
Mr DEPUTY SPEAKER 
: The motion from Rahui Katene asked for an instruction. If we look at Speaker’s ruling 79/3 and Standing Order 172(2) we see that any member has the right to seek by way of an instruction for the whole House to recommend to the Committee as a whole to include an amendment. This is not an amendment that would be done in the normal process of the Committee stage; it is an amendment that adds value in the member’s view. It is debatable and any member can seek a call. At this stage the call has gone to Iain Lees-Galloway. I remind the member as I reminded the mover of this motion that this debate is very narrow. It is not a debate where we get into the details of what is in the amendment that has been tabled. 
IAIN LEES-GALLOWAY 
: Thank you very much Mr Deputy Speaker and I hear what you just said. As I said I rise to speak in support of the motion to instruct the Committee to debate Supplementary Order Paper 257. 
Although the issue is clearly outside the scope of the Smoke-free Environments (Controls and Enforcement) Amendment Bill hence the motion being moved by the member it is a matter that came up a number of times in submissions to the Maori Affairs Committee’s inquiry into the effects of tobacco on Maori in New Zealand. A range of different options were offered. One was to license tobacco retailers and the other was to have a register. I think it is a valuable debate that is worth having. Although it falls outside the question of advertising which is what the bill is about I think the member made the very very good point that one of the unintended consequences of the removal of tobacco displays is that tobacco can be out of sight and therefore might not be watched as closely as we would prefer. This is one mechanism by which that close scrutiny could be achieved. There are a number of mechanisms that might be appropriate but this is certainly one mechanism by which that close scrutiny could be achieved. 
We on this side of the House think that this is a valuable debate that needs to be held. There will be arguments—I have no doubt—for and against such a measure but it would be unfortunate to not take the opportunity to have that debate. I congratulate the member on bringing this matter before the House. I for one would like to see this issue debated at the Committee stage. I would like to have that on the record for the member so that she knows that Labour is absolutely behind her and that we would like to see this debate occur. 
A party vote was called for on the question  
That it be an instruction to the Committee of the whole House on the Smoke-free Environments (Controls and Enforcement) Amendment Bill that it have the authority to consider and if it thinks fit adopt the amendments in my name relating to the registration of tobacco sellers.  
(Rahui Katene) 
Ayes 57 
New Zealand Labour 42; Green Party 9; Maori Party 4; Progressive 1; Independent: Carter C. 
Noes 63 
New Zealand National 57; ACT New Zealand 5; United Future 1. 
Motion not agreed to. 
In Committee 
Part 1 Amendments relating to controls on tobacco products 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 It gives me a lot of pleasure to rise and speak in support of Part 1 of the Smoke-free Environments (Controls and Enforcement) Amendment Bill. It is a very important and comprehensive part of the bill with a lot of detail in it and I expect there will be a lot of contributions from my colleagues on this part. 
Although there is a lot in this part I will go directly to Supplementary Order Paper 256 in my name because I would like the Committee to give this Supplementary Order Paper serious consideration. It is certainly within the scope of the legislation. There were a number of amendments that I wanted to put forward but like Rahui Katene’s amendment which we debated just beforehand— 
Hon Member 
: We didn’t get a chance to debate it. 
IAIN LEES-GALLOWAY 
: —which we will not unfortunately get a chance to debate in the Committee—those changes were outside the scope of this legislation. I suppose that that reflects the need to have a quick follow-up to this legislation with more changes to our smoking regulations in New Zealand. 
The Supplementary Order Paper in my name does two things. The first might initially seem quite inconsequential and to be honest we sort of stumbled across it when looking through the improvements we would like to make to the bill. It is to insert a new clause 7B which would amend section 28 in the Smoke-free Environments Act. This amendment seeks to achieve quite a simple thing. Section 28 refers to free distribution and rewards being prohibited. Subsection (1) states: “No manufacturer distributor importer or retailer of tobacco products may—(a) distribute any tobacco product;”. Basically in a lot of words it says that those people cannot give away tobacco products as a means of promoting their product or promoting their business. But a group is missing from that list and that is wholesalers so the first part of my Supplementary Order Paper seeks to include wholesalers in that list of people and organisations that are prevented from freely distributing or handing out tobacco products as rewards. What we are specifically trying to achieve with that is ensure that there are no loopholes by which wholesalers could give a form of discount to retailers that we do not wish them to give. Obviously if wholesalers were free to give away free product to retailers that would essentially be a form of discount to those retailers. So that is essentially what we are trying to achieve. The bill talks at length about sponsorship and the trade deals available that we are trying to curtail and we felt that that is a potential loophole that really needs to be tidied up. I would appreciate hearing what members have to say about that amendment and I would certainly appreciate support from members for that small change. 
The second part of my Supplementary Order Paper refers to the signage that has to be on display wherever tobacco products are for sale—that is the signage that says “SMOKING KILLS” and informs customers that smoking products are not available for sale to people under the age of 18. My amendment would add a definition of what those signs should look like. Members may wonder why we would want to do that but this was something that we discussed in the Health Committee. Some people have seen those warning signs that say “SMOKING KILLS” in use—I have an example here—and that inform people that tobacco is available only to people over 18; the signs carry out what I suppose could be described as a clandestine form of marketing and advertising. This photo is not the best visual aid I accept and it probably cannot be seen from the other side of the Chamber but here we have the “SMOKING KILLS” sign. Next to it for reasons that are absolutely beyond me we have a picture of a packet of cigarettes. The packet of cigarettes has “R18” on it and I am sure the retailer would say that it is trying to tell people that cigarettes are available only to people over the age of 18. If the thrust of this bill is to get tobacco out of sight and out of mind and to get any visual reference to cigarettes and tobacco out of sight I do not see why we have to have that cartoon picture of a packet of cigarettes on those signs which are actually designed to reduce the harm caused by tobacco. The amendment is a simple amendment that states that the bit that says “SMOKING KILLS” is to be the only bit allowed. The amendment outlines how that sign should appear essentially as this sign appears here but without the little cartoon picture of a packet of cigarettes. 
I also point out as an aside—I took this photo myself—that this particular sign was down at about the level where a 7-year-old would see it. Again it is beyond me why a 7-year-old would need to read that sign. It should be up somewhere where an 18-year-old could see it. A cynic might suggest that that was another form of clandestine advertising to our young people. So that is what the Supplementary Order Paper is trying to achieve. I would certainly like to hear back from members what they think about that and again I would certainly seek the support of members for that Supplementary Order Paper. 
The rest of Part 1 really is as I said the thrust of what this bill is all about. I can say absolutely that the Labour Party fully supports and endorses all the other aspects of Part 1 particularly of course the clauses referring to the display of tobacco products in supermarkets dairies petrol stations and tobacconists. Wherever anybody may go the one thing they have to look at when they go into a dairy is tobacco. Regardless of whatever they have gone into the shop to buy—whether it was a loaf of bread some coffee or some milk—the one thing they have to look at is that power wall of cigarettes behind the counter. Part 1 will see the end of that and that is something we should all celebrate and we should all get behind. 
There is nothing more important that we should be doing right now to reduce the harm caused by tobacco than to get those products out of sight not only to stop young people taking up the smoking habit in the first place but also to support those people who have made that difficult decision to quit. Why should people who have decided to quit smoking tobacco go into a store to get some milk and then be forced to look at the addictive product they are trying to kick? They are trying to get rid of the habit but there is tobacco right in front of them tempting them every single time no matter what they went into the shop to buy. 
I absolutely wholeheartedly support that provision of the bill and I have no doubt that my other colleagues will take calls on the other clauses of Part 1. I will certainly look forward to coming back to discuss the other clauses in Part 1 as well. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 I want to take a very brief call on Part 1 of the Smoke-free Environments (Controls and Enforcement) Amendment Bill. Part 1 outlines the fact that we want to get tobacco right out of sight. Clause 4 talks through the purposes of this part and the general prohibition of displays and it is absolutely great that there is multiparty agreement with the thrust of this bill. 
One of the submissions to the Health Committee was from Action on Smoking and Health and it related to forming a register of outlets. One such register has been formed in Scotland but it has been going for only about 18 months. Yes it is low cost but we really do not know whether it is working. It may be that with time such a register could prove its worth but the Government does not want to have extra bureaucracy. We feel that there has been great consensus on this bill and that is one of the huge strengths of it. So that is the explanation. We do not want extra bureaucracy particularly when there is no proof that it will work in the form of a register but we are absolutely delighted that otherwise there is multi-party agreement on the Smoke-free Environments (Controls and Enforcement) Amendment Bill. Thank you. 
KRIS FAAFOI (Labour—Mana) 
: 
 Thank you very much for the opportunity to speak at the Committee stage of the Smoke-free Environments (Controls and Enforcement) Amendment Bill. I commend the Minister in charge of this bill the Associate Minister of Health Tariana Turia for putting pressure on the Government to push this through. I know that on this side of the House there was some sense of anguish when we left office in 2008 that these measures were up and ready to go and that for 2 years there seemed to be a lack of action on that. But it seems that with the help of the Minister in the chair the Hon Tariana Turia some action has been taken. 
I will concentrate on clauses 4A and 4B in Part 1 which are basically the main parts of this bill. They ban the advertisement or display of tobacco advertising on the interior and exterior of shops. This is all about imagery. It was the last bastion of advertising imagery that the tobacco companies were desperately trying to hold on to. I know from speaking to one manufacturer in my electorate Whittaker’s of the importance of the “golden wall” in supermarkets. To put this in a tobacco context we see that this is exactly what the tobacco companies are trying to protect. I stand here with great pleasure to say that they have absolutely failed. As this bill went through the Health Committee it was one of the first issues for me as a member of that committee that I addressed. The tobacco companies put up a big fight and a lot of resources—not necessarily through themselves but through other means through retailers and other organisations—to vehemently oppose what we are trying to do today. 
We are still getting letters from the tobacco companies saying that we should reject the submissions or the thrust of the work of the Health Committee. I say to one tobacco manufacturer that it should actually check who the members of the Health Committee are before it sends letters to them completely bagging a decision that they have made unanimously but I look forward to meeting with manufacturers. As I said this is about imagery and making sure that we can stamp it out. I attended a Pacific health youth expo today and I got a pen from the Pacific Smoking Cessation Programme which is based in Cannons Creek. That programme is obviously doing great work to decrease the number of young people who are smoking at the moment. This bill in some huge way will make an impact by making sure that these walls of tobacco are no longer in our shops and in our service stations. 
With 700000 Kiwis smoking at the moment and 5000 Kiwis dying each year of tobacco-related illnesses this is one of the most positive things that this House could do to make sure we clamp down on that. As I mentioned earlier there was some vehement opposition to this bill from the smoking industry and from some other agencies that I fear are funded by the tobacco industry. 
As I look at clause 4A I see that the Health Committee made an amendment to the transitional exemption from compliance periods from 2 years down to 12 months. I would like to congratulate all those anti-smoking organisations that made submissions to the select committee. They were vehemently opposed to the tobacco industry and the retailers having a 2-year period to make sure they could comply with the nuts and bolts of this part of the bill. We also made a concession I think in respect of the commencement date of this legislation. Although the provisions are to come into force a bit later the law itself is to be all-inclusive sooner so we moved from the 2-year period into the 12-month transition. 
It is an absolute pleasure to be speaking here today to a bill that prohibits the display of tobacco in our shops and in our service stations. As I said it was an interesting experience to listen to some of the tobacco industry’s submissions on this bill. It is clear that with the huge wave of money and resources the industry has it could put up a huge fight. But I think that in the end common sense won out and the efforts and the passion of organisations such as Action on Smoking and Health won out on the day. I think that was a positive thing. 
SUE MORONEY (Labour) 
: 
 It is a pleasure to stand and speak on Part 1 in the Committee stage of the Smoke-free Environments (Controls and Enforcement) Amendment Bill. At the outset I congratulate the Minister in the chair the Associate Minister of Health Tariana Turia on her success in continuing this very important legacy of having cultural change I guess in New Zealand. We have been very successful over a number of years in having cultural change around the issue of smoking. I think actually in respect of many things that we debate in the House that this bill is a ray of hope in terms of the sorts of legislative and educative processes that if we combine them successfully can make cultural changes and change attitudes. I think this is an area that demonstrates that very well and I hope this gives us all the courage to take bold leadership in the sorts of ventures we undertake as parliamentarians going forward on behalf of New Zealanders particularly in the interests of their health. That is what is fundamentally at the bottom of what we are doing with this amendment bill. 
Before I go on to specifically talk about Part 1 I recognise Steve Chadwick who is in the debating chamber and who did many of the hard yards in this area. I know that Steve Chadwick suffered personal attacks and abuse because of the position that she took some years ago in terms of being a leader in this area and front-footing this issue when it was not popular to do so. I say to Steve that she should wear that as a badge of honour. It is something that she will always have and I congratulate her on that. 
I am not on the Health Committee but I happened to be substituted on to it for another member on the day that one of these clauses was being debated. It was a very interesting debate because it was around the part of the bill relating to herbal products. There was quite a dilemma about whether herbal products were a good thing and ought to be on display because they were a gateway out of smoking nicotine or whether they had harmful side effects as well. It was quite a difficult discussion for the select committee to have because it appeared that there had been no submissions on this issue to guide the select committee. The select committee had to ask questions of the officials who gave very good advice about what evidence did or did not exist on this issue. 
It is interesting to note that since the select committee made I think the right decision to include herbal products in the banning of displays through this bill the debate we have been having in this country about Kronic has been put into even sharper contrast. I believe that Kronic would probably fit the definition of being a herbal product under this part of the bill. What foresight the select committee had! It was guided by the officials to make the right decision and say that we have no evidence that herbal products are beneficial in terms of the whole health harm that is caused by smoking and in the absence of that evidence we will ban herbal products from being displayed in shops and in retail outlets. 
Of course the select committee also had to deal with the very tricky issue of what to do about internet sales. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
SUE MORONEY 
: Having had the benefit of a dinner break I say just how important dinner breaks are. They are important for many many reasons and also for reflection upon a speech one might have been making just prior to 6 o’clock when the Committee broke for dinner—in this instance on Part 1 of this Smoke-free Environments (Controls and Enforcement) Amendment Bill. I got a little bit overenthusiastic in my praise for the Health Committee members about how wise they had been with regard to herbal products. I said that they had actually banned the display of those products. I reflected upon that over the dinner break and have discovered that they did all sorts of good things about regulating herbal products but unfortunately they did not go as far as banning the display of herbal products. I think that now we have learnt and had a debate about Kronic and know that it exactly fits that criteria perhaps in this Committee stage we should be considering the extra step of banning the display of herbal products as well. Kronic falls fairly and squarely into that category. I think it is clear to us now that that particular product be it herbal or not is at least as harmful as cigarettes and tobacco products and that it ought to be included as well. 
None the less the select committee had another tricky issue to deal with in this part of the bill which was the way in which to regulate the internet. That issue has vexed this Parliament on more than one occasion. It has recently been particularly vexing for this Parliament. How do we regulate and seek to have some standards for and control over something that has a life of its own like the internet? The select committee was called on to consider that issue again with regard to the promotion of tobacco products and herbal products. Of course it is almost impossible to ban the display of those products on the internet but the select committee has quite wisely tried to regulate what is in fact allowable in terms of the internet. That applies particularly to some of the health benefits that can be used on the internet to promote particular products. The select committee and this bill has sought to address that issue which is a very tricky one indeed. 
I think it is often said when we talk about this issue of smoke-free environments that it is like a woman scorned is it not? People who used to smoke can sometimes be the most vociferous in terms of defending and promoting strong regulation for tobacco products. I put myself in that camp. I am a former smoker. I feel as if I am making a big confession. I will not say: “I gave it up.” because that would imply that I gave up something valuable. It is not at all valuable. So I say instead: “I stopped.” I stopped smoking took myself away from being controlled by the tobacco industry gave myself a life and ensured that I was a good role model for my children. 
But the struggle with withdrawal from nicotine—and I am sure I am not the only member in this Chamber to have had it—is actually exceptionally difficult to go through. When one is going through that process to have to be in an environment where displays of tobacco and advertising of tobacco are constantly featured is a very difficult thing to do. Clause 7 in Part 1 takes a very important step to take away those displays to actually ban and prohibit the display of tobacco products in the environments we visit all the time. We visit them when we buy petrol when we buy milk and when we go into any retail environment. 
The display of tobacco products has been used by the tobacco industry in lieu of advertising for those products. It came through really loudly and clearly in the submissions we heard on this bill that it is not just a display of goods so that people can see where they can buy the goods from. Display is quite deliberately used as a technique and tactic to replace tobacco advertising which of course a former Labour Government took leadership on and banned some years ago. I think it is really important for us to continue to see that sort of leadership. You know when the Labour Government did that it was very bold. It was a very very bold thing that the Labour Government did. It took leadership. 
I think we are about to see that leadership again this week but I will not talk about that in regard to Part 1 of the Smoke-free Environments (Controls and Enforcement) Amendment Bill. But it does cause me to reflect on how important the bold leadership from Labour has been in terms of changing the environments and culture we have in relation to the issue of smoking in this country. 
Just prior to the dinner break I was reminding members about our colleague Steve Chadwick; I will repeat that in case members missed the contribution before dinner. I think that as an individual she took absolute leadership for the betterment of the health of all New Zealanders. I really congratulate her on that because she was brave she was bold and she took a lot of personal flak over leading the charge on making smoke-free environments in New Zealand. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 I rise to take a brief call on my Supplementary Order Paper 257 in relation to my new clauses 5A 6A and 9A to amend the Smoke-free Environments (Controls and Enforcement) Amendment Bill. Again I will wrap some context around the reason why the Maori Party has been so consistently united in our determination to rid this nation of tobacco. I believe that every New Zealander should know the ghastly reality that about 5000 deaths each year in this country are attributable to direct smoke or second-hand smoke. I say “ghastly” deliberately as smoking harms nearly every organ and system in the body. It is the cause of 80 percent of lung cancer cases and is linked to many other cancers. It is a major cause of heart attacks and heart disease stroke and respiratory diseases such as emphysema and chronic bronchitis. Smoking can also cause blindness impotence and infertility so there should be little explanation needed about why we are so fiercely in support of tobacco control initiatives. 
I place on record my admiration for the way in which the honourable member Tariana Turia has maintained such steady progress in reducing smoking prevalence and tobacco consumption. It is an inspiration to us all and I have seen that reflected also in the commitment of others around the House particularly Iain Lees-Galloway and Paul Hutchison as well as all of the members of the Maori Affairs Committee who really have become very strong advocates of tobacco reform. The onus is on us all to live up to this nation’s reputation of trying to eliminate tobacco harm. Clauses 5A 6A and 9A on my Supplementary Order Paper simply place on record that we should be concerned not only about supermarkets and dairies but also about the internet tobacco pushers which we need to be aware of. My amendments place them and us on alert. 
I will also speak very briefly to Iain Lees-Galloway’s Supplementary Order Paper 256 because I think it really is necessary that not only is it retailers that we are targeting in relation to free distribution and rewards but also in his new clause 7B that wholesalers are brought within the legislation. I think that this Supplementary Order Paper is a good one and it makes it very clear that wholesalers as well as retailers need to be very careful about the promotions they run. There is one little problem I say to Mr Lees-Galloway that I have with the spelling. 
Iain Lees-Galloway 
: We’re fixing it. 
RAHUI KATENE 
: The member has fixed it? OK so it is “Ka mate” not “Ka Mata”. That is very good. I am pleased to see that the member has picked that up. It is really important that when retailers put up advertising they are not managing in some way to limit the message that we are trying to get across that smoking kills. It does and we need to be very clear about that. We need to put the onus on those who are selling the drugs and they must live up to their civic duty. Kia ora. 
The CHAIRPERSON (H V Ross Robertson) 
: I call the honourable member Raymond Huo. Ni hao ma. 
RAYMOND HUO (Labour) 
: 
 Xie xie Yizhang. Thank you very much. Relevant to the greeting I have learnt that many Chinese Kiwis are “Puff the Magic Dragons” or enjoy being “Puff the Magic Dragons” so the Smoke-free Environments (Controls and Enforcement) Amendment Bill is very important. 
Todd McClay 
: Is that Kronic? What a Kronic statement. 
RAYMOND HUO 
: I wish the member would take a call on that particular point. My colleague Sue Moroney mentioned internet sales in her speech. I would like to touch on some experiences from other jurisdictions to assist in better appreciating what our bill has to offer. Earlier this year US President Obama signed the Prevent All Cigarette Trafficking Act legislation to regulate the sale of tobacco products over the internet and through the mail. The law also makes it harder for vendors to avoid paying federal state and local taxes and enforces internet retailers to comply with other regulations of tobacco products including selling to minors. Among the measures two aspects are particularly worth noting—first the ban on delivery of tobacco products through the United States Postal Service; and second requiring age verification upon both the purchase and the delivery of tobacco products. 
Across the Ditch in Victoria retailers selling tobacco have been banned from displaying tobacco products from 1 January this year. Tobacco products cannot be visible from anywhere inside or outside a retail outlet. Tobacco products are also banned from being displayed on vending machines which pretty much is along the lines of Supplementary Order Paper 256 which was submitted by my colleague Iain Lees-Galloway. Some key changes to the tobacco laws in Victoria have included firstly banning smoking in cars carrying children under the age of 18 years and secondly implementing improved cessation services with an emphasis on supporting pregnant women Aboriginal people and other groups with high smoking rates. 
I come back to the bill. A few submitters argued for the banning of online tobacco sales on the basis that such sales are inconsistent with the aims of the bill because of difficulties in verifying the age of purchasers and the difficulties of enforcement. Regarding enforcement it is very interesting that in Turkey for instance the Government is tightening its grip even more by preventing the sale of tobacco products on the internet and through other electronic communication methods. Those who sell tobacco products online on television by fax by phone or through the post will pay a hefty fine. The company selling tobacco products will also have its internet access cut off. More interesting is that the smoking ban will be supervised by the police instead of by municipal boards. Those who do not comply with the initial written warning will receive a hefty fine. 
It is very interesting and also very encouraging to note that our select committee proposed that online sales should be subject to any regulations made concerning signs notices health information or warnings. A number of amendments have been made to the bill to ensure that sale controls will also cover internet sales offering tobacco products. On that note I congratulate the Minister in the chair the Associate Minister of Health the Hon Tariana Turia on such good initiatives. Thank you. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 As a member of the Health Committee that heard the Smoke-free Environments (Controls and Enforcement) Amendment Bill I think this is a great opportunity for me to take a call—my first call—on the bill. First I will do as other members have done and recognise the Minister in the chair the Associate Minister of Health Tariana Turia. There is no doubt as to Minister Turia’s commitment to this issue and to dealing with the scourge that is cigarette smoking and tobacco products in New Zealand. She has had that commitment and has steadfastly put through various pieces of legislation including this one and I congratulate her on that. 
The select committee was fairly unified in its consideration of the bill. It was not an easy consideration. There were a lot of technicalities and in that regard I certainly thank the officials for their assistance in helping us to understand all of those technicalities. It is good to see the National Government is on side on this bill. It has not always been so with National when it comes to measures to curb tobacco smoking. 
Dr Paul Hutchison 
: Always was with me. 
GRANT ROBERTSON 
: Dr Paul Hutchison certainly always was; that is a very good point. He stood up against the rest of his party including the now Minister of Health Tony Ryall when they opposed the banning of smoking in bars and restaurants. I am sure that Dr Hutchison’s colleagues now look to him as a man of wisdom when it comes to these matters. 
The select committee certainly had an interesting array of submissions and submitters appear before it and there were strong views on all sides. There were especially strong views from public health physicians and academics from those involved in the anti-smoking groups and from the friends and families of those who have died from smoking-related illnesses. It was difficult to listen to those submissions and know that we had the responsibility to take this small but significant step in reducing the harm caused by cigarettes in New Zealand. 
Equally on the other side of the argument we had submissions from retailers who were very concerned about the impact on their business. We also had some slightly odd submissions in that regard. I do not think I will ever forget hearing the evidence from the specialist tobacco retailer who spoke to us by phone. Extraordinarily we asked him questions about what he knew about some of the people who came in and bought products from him to the point that he told us that he was well aware how sick some of them were that they were in the advanced stage of illnesses that had been caused directly by smoking yet he seemed to think that was OK. It was quite extraordinary to listen to those submissions. I feel good that today we are back before Parliament with a bill that is rigorous and puts in place the regime that it does. 
Hon Dr Wayne Mapp 
: We’ll have to have the Royal Society in the next couple of weeks. 
GRANT ROBERTSON 
: We will have more thorough examination of the activities of the Royal Society in the coming weeks and months. I am pleased that that will occur but I will not be diverted on to that. 
I want to speak briefly about Supplementary Order Paper 256 in the name of my colleague Iain Lees-Galloway because I think it does two important things that we seek the support of National members on. It adds to what has already been done and I do not think in any way that National should see this as a hostile Supplementary Order Paper. In fact it very much supports the direction of the bill. 
The first of those amendments was just mentioned by Rahui Katene in her intervention. It is about extending the prohibitions that have been put in place concerning free distribution. People might think that the tobacco companies are not up to this nefarious kind of activity where behind the scenes they are trying to develop a relationship with a retailer who will put their products forward. They are. This is what the tobacco industry does and it is doing this. Iain Lees-Galloway’s Supplementary Order Paper has a clause that makes not only retailers but also wholesalers deal with this. I think it is very important that the way in which tobacco products are distributed is taken into account in this bill and in this particular clause. I urge members on the other side of the Chamber to realise that all Iain Lees-Galloway’s Supplementary Order Paper is doing is extending the ambit of this clause to take into account the way in which tobacco products find themselves into people’s pockets and that is through a retail setting but also through wholesalers. I think it is very important that we support that amendment. 
The other new clause that Iain Lees-Galloway suggests in his Supplementary Order Paper is around the kind of signage that is available at point of sale. The committee talked at some length about this because it is possible for a tobacco company with its back against the wall having lost the ability to have colourful displays that promote— 
NICKY WAGNER (National) 
: 
 I rise to support the Smoke-free Environments (Controls and Enforcement) Amendment Bill and I thank the Hon Tariana Turia for all the work that she has done in this area. This bill sends an important message to the public that the Government is committed to reducing the harm caused by smoking. We want people to quit smoking and we are so serious about the issue that we have designated helping smokers to quit as one of the six health targets of every district health board across the country. 
We are also assisting district health boards to help patients quit smoking by spending $50 million a year on tobacco control and smoking cessation. The money is used to fund the nationwide Quitline and to target smoking for Maori Pacific and pregnancy services. Importantly the Government has mandated a sharp increase in the price of tobacco. 
Grant Robertson 
: I raise a point of order Mr Chairperson. The member has been speaking for a couple of minutes now— 
NICKY WAGNER 
: Thirty seconds. 
The CHAIRPERSON (H V Ross Robertson) 
: The member will be seated please. I say to the member on my right that when a point of order is taken it is to be terse and to the point and there are to be no interruptions. It is heard in silence. 
Grant Robertson 
: My point of order is that the member in the brief time she has been speaking has not managed to talk about the bill but rather about various other aspects of National policy. You sat me down when I was part-way through talking about a Supplementary Order Paper on this bill. 
The CHAIRPERSON (H V Ross Robertson) 
: The member makes a valid point. The member had been speaking for only a minute. I was giving her an opportunity but she should focus on the bill. 
Chris Tremain 
: I raise a point of order Mr Chairperson. This is somewhat rich. We have listened to a number of speeches from the other side of the Chamber that have swayed into all manner of different policy areas. Sue Moroney was getting into the area of capital gains tax and all sorts of things but that was not pulled up by members on this side of the Chamber. It is a broad-ranging debate and if we are to get into that space we will be happy to stand up and make sure that Opposition members are closer to the bill. Thank you. 
The CHAIRPERSON (H V Ross Robertson) 
: I thank the member for his contribution. We need to look at the context in which the bill is heard and that means looking at how the Committee is operating as well. I ask the member to try though to speak to the bill because that is why we are here. 
NICKY WAGNER 
: The main purpose of this bill is to prohibit the display of tobacco products and to increase and enforce controls on tobacco. The aims are twofold: to reduce the uptake of smoking and to help smokers quit. I have made a comment that the increased tobacco tax has driven a real change in behaviour to force people to quit. The number of calls to and quit attempts coming through Quitline have increased by 50 percent since the tobacco tax was introduced and the number of people accessing smoking cessation treatments is up 82 percent in 18 months so that is real progress. 
Research clearly shows that display and advertising promotes the attractiveness of smoking and encourages more people to smoke and more people to smoke more often. Most smokers take up smoking when they are young and perhaps most vulnerable to advertising. Virtually no one takes up smoking after they are 25 years of age so it makes sense to try to prevent young people for as long as possible from taking up the habit. This bill will help to do that. 
The prohibition of the display of tobacco products comes into force 12 months after the bill becomes law but there is a further 12-month transition period for particular classes of business. But in a very short time we will expect to see the delivery of no advertising and that will lead to a further reduction of smoking in New Zealand. I commend this bill to the Committee. 
DARIEN FENTON (Labour) 
: 
 I have been dying to take a call on this Smoke-free Environments (Controls and Enforcement) Amendment Bill but I have been happy to defer to the members of the Health Committee who have done all the work on it. I congratulate the Minister in the chair the Hon Tariana Turia on her commitment to the bill. Wonderful work is going on here and Part 1 is the main part of the bill. 
The previous speaker Nicky Wagner talked about the purpose of the bill which is to prohibit retail displays of tobacco products the aim being to gradually reduce tobacco uptake particularly among young people and to help smokers to quit. 
I will bring some context to this bill as a former smoker if I may. I will stick to Part 1 as much as I can but I think it is really important to note when looking at this bill how far we have come as a nation on the issue of smoking. As I said I am a former smoker so I take a particular interest in Part 1. I recall way back when Labour embarked on changes to smoking environments particularly in the workplace. I never dreamt that we would get to the point where we would agree as in Part 1 to ban displays of tobacco advertising. I remember the angst that went with that issue but it did help me give up. That was the time when I started to give up smoking and I think all of these measures—with this one adding to them—have helped smokers like me make the decision that smoking is not for them. Of course I had a bit of agitation from my family—my husband and son. 
As others have I acknowledge my colleague Steve Chadwick for her work on this matter. 
Todd McClay 
: Who? 
DARIEN FENTON 
: The member opposite said “Who?”. Well I think that is very ignorant actually. He should study history because there was huge angst about it. In fact National voted against Steve Chadwick’s member’s bill the Smoke-free Environments (Enhanced Protection) Amendment Bill as I recall which was about banning smoking in restaurants and workplaces. I remember that and I remember that National voted against it. I remember the angst. I was involved in it because I was representing Sky City union members at the time and they made submission on it. They said that smoking was bad for them and it hurt— 
Hon Tau Henare 
: Whose bill was it? 
DARIEN FENTON 
: It was Steve Chadwick’s bill I say in answer to that member. 
Hon Tau Henare 
: Rubbish. Stop telling porkies. 
DARIEN FENTON 
: It was Steve Chadwick’s bill during the 9 years of the last Labour Government. 
Hon Rick Barker 
: I raise a point of order Mr Chairperson. A member made an interjection. I do not want to repeat it but it clearly implied that the member was telling a lie. It was unparliamentary and it will bring disorder. 
The CHAIRPERSON (H V Ross Robertson) 
: The member is absolutely right. The member on my right will stand and withdraw. To imply that is incorrect and it is not permissible. 
Hon Tau Henare 
: I withdraw. 
Todd McClay 
: I withdraw as well. 
The CHAIRPERSON (H V Ross Robertson) 
: That is trifling with the Chair. 
DARIEN FENTON 
: Returning to Part 1 if I may I think there is a very interesting history lesson in Part 1 particularly in respect of— 
Hon Tau Henare 
: Get your facts straight. Who was it? 
DARIEN FENTON 
: I am happy to do that; it was Steve Chadwick. I raise a point of order Mr Chairperson. That member continues to interject on the same line that he has already withdrawn. He continues on that line of saying that I am not telling the truth. 
The CHAIRPERSON (H V Ross Robertson) 
: The member is entitled to make reasonable interjections provided he is doing so from his own seat. If he moves to facilitate interjection he is out of order. This is a debating chamber and I would add that it is not a public house. It is the debating chamber. 
DARIEN FENTON 
: I turn to Part 1 again— 
Hon Tau Henare 
: Whose bill was it? 
DARIEN FENTON 
: —if the member will let me. I hope he will take a call as a person who has recently given up smoking. In clause 5 the interpretation clause is a very interesting lesson in history. It amends section 2(1) of the Smoke-free Environments Act by repealing a number of definitions including the definitions of “children’s product” and “pouch pack”. That brought quite a lot of memories back to me—the days of roll-your-own. I remember a doctor saying that roll-your-owns and smoking tobacco in a pipe were actually better for people than smoking cigarettes. So it is good to see that the definition of “pouch pack” is disappearing—and “tobacconist’s shop” too. It is a long time since I can recall a tobacconist’s shop. I was interested when I visited France a few years ago to see that they still had tabac shops. They would argue that it is much more important to have a specialist shop but I do not know of any such thing as a tobacconist’s shop any more. 
Then “tobacco packages in a visible stack” is being repealed. “Tobacco package” was used to mean “a box carton pack packet pouch tin wrapping or other package that— (a) contains a tobacco product or products;”. “Tobacco packages in a visible stack” means “2 or more tobacco packages”. 
Clause 5 the interpretation clause in Part 1 demonstrates that things have changed a lot. Although we have changed our smoking habits and although this bill really contributes and builds on the work that has been done in the past it also shows that we have come an awful long way in respect of products and the various ways that tobacco has been sold in the past. So it is good to see the pouch pack the tobacconist’s shop and tobacco packages— 
Hon TAU HENARE (National) 
: 
 Here is the history lesson that all members should know which I am gobsmacked they do not know: the member responsible for the gestation of the Smoke-free Environments (Controls and Enforcement) Amendment Bill was a former member of this House Mr Tuku Morgan. It was his bill. He was responsible for the gestation of what we are doing here tonight. It was his bill and I am absolutely gobsmacked that none of the members on the other side of the Chamber could get it right. I expect Darien Fenton not to get a few things right; the whole of west Auckland feels that way. But I am gobsmacked that the Hon Rick Barker sits there—and he is a learned member of this Committee—and even he did not know. Well I think he did but he was just being mean. 
It is a bit like what is going to happen on Thursday with the “jealousy” tax. But I digress. Mr Chairperson Robertson if you put your hands together you will get a clap. 
I thank Tuku Morgan I thank Stevie Chadwick—you see I can be gracious—and I thank the Minister in the chair the Associate Minister of Health the Hon Tariana Turia. But here is something else. 
Hon Member 
: Is this a point of order? 
Hon TAU HENARE 
: Does the member want me to take a point of order? I want to thank the Maori Affairs Committee and Hone Harawira. We do not see eye to eye on a whole lot of things—milkshakes included—but he was the one who had the guts to get up and bring the inquiry and the terms of reference to our committee. We all had a hand in the writing of what I still consider to be one of this House’s very very good reports. It has had repercussions around the Pacific and around the globe. I thank the Minister for going the extra mile as well. 
I have one final thing to say to the Imperial Tobacco Group which had the gall to write to me—me—and ask me to vote against this legislation. Later on I might even table both its letter and my reply. 
Hon Member 
: No bad language! 
Hon TAU HENARE 
: No it is OK. It is all good. I too commend this bill and the work of the Hon Tariana Turia to the Committee. Kia ora. 
MOANA MACKEY (Labour) 
: 
 Certainly I have to agree with the speaker who has just taken his seat the Hon Tau Henare that anyone who has had the courage to try to bring about any kind of legislative change in this area deserves to be recognised. There is no question about that. I was not aware of Tuku Morgan’s bill to ban tobacco displays but that is fine—that is great. I know from Steve Chadwick’s experience of personal threats made against her and her family that it is not an easy area to get into. Where I have an issue with the honourable member who has just taken his seat is that some members of National are now making out that it is all because of them that the Smoke-free Environments (Controls and Enforcement) Amendment Bill has come about. I recognise the Minister in the chair the Associate Minister of Health the Hon Tariana Turia for all the work she has done. To be fair this issue has been around for a long time and our local National member refused to turn up to events to support the banning of tobacco displays. She refused to accept the postcards that the youth ambassadors for the Cancer Society had collected and she refused to provide support. So from my personal experience of having supported those young people and the Cancer Society in Tai Rawhiti to ban tobacco displays I have not seen up until tonight a lot of support from National but I welcome it and I think it is very important that these issues have cross-party support. 
Part 1 of the bill which I shall speak to is about exemptions from the prohibition of advertising of tobacco products. We know that the tobacco companies themselves will be looking for other ways they can get the advertising of their products out there. I remember when I was at high school I worked in a dairy a lotto shop and a superette not long after the changes had been made to ban tobacco advertising. Suddenly we saw these displays come in because the tobacco companies saw the loophole: they could not advertise but they could use the packaging itself as an advertisement and they could use the displays that hold the packages as an advertisement. 
I very much remember having people from the industry come into the business I worked in looking at the area behind the counter right next to where all the lollies were stacked up and seeing how they could get the best value out of that display. There is a serious question to be asked as to whether Parliament ever intended that. I think that when Parliament banned advertising of tobacco products back in the late 1980s it did not intend that these power walls would become the de facto advertising. But that is in fact what happened. When one works in retail a lot of industry representatives come into one’s shop to see how their products are placed in the business. The business I worked in had quite a high turnover and I never saw as many representatives from any other area of industry as I did from the tobacco industry when I was doing that after-school job. They were in on a regular basis. I never saw as much turnover of advertising displays as there was in the tobacco area. 
So clearly—and we know because billions of dollars have gone into developing power wall displays and getting the best value out of them—those displays have an impact because these companies would not spend the money on them if they did not. But I am very very pleased to see the closing of that loophole in this legislation. 
The question then comes about exemptions and I note the extensive work that the Health Committee did on new sections 22 and 23 which deal with the exemptions. There have to be exemptions obviously: internal company pamphlets or information needs to be exempt from this. There will be some artworks that involve using tobacco insignia of tobacco products and we would not want to see them exempt. There is also the very fraught issue of all the television radio magazines and newspapers that originate from outside New Zealand. We cannot begin to tell CNN that it has to adhere to this law as well. The select committee has drawn a very fine line and I think it has done it particularly well in saying that provided a particular form of media was not specifically meant for New Zealand or the New Zealand market then obviously it would be exempt as well. 
There has been an enormous argument internationally about the use of tobacco products and tobacco advertising in the movie industry. For a while there was a real move away from showing any form of use of tobacco products. I think that has gone back the other way. These are not things we can control in New Zealand nor should we try to but they are things we need to be aware of. From my own experience of seeing how the tobacco industry was able to use power walls as a loophole with the previous legislation I have no doubt that it will be looking for loopholes in this new legislation. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 I want to take just a very brief call regarding Mr Iain Lees-Galloway’s Supplementary Order Paper 256. He made a great contribution during the Health Committee. Oh the lights temporarily went out—hopefully not permanently! I am informed that the—[ 
Interruption 
] Ha ha! 
The CHAIRPERSON (H V Ross Robertson) 
: We have one speaker in the Chamber at the moment. 
Dr PAUL HUTCHISON 
: This was to be a short call indeed. As I was about to say the issue we have with this Supplementary Order Paper is that new clause 7A has been inserted in the provisions of the amendment bill to prohibit wholesalers from offering trade discounts on tobacco products so this matter is already covered. 
His second amendment to clause 9 amends new section 29AA which has certain provisions concerning signage but as currently drafted the amendment will not prevent retailers and wholesalers from creating personalised signs that could contain favourable or misleading images. In fact in the Smoke-free Environments (Controls and Enforcement) Amendment Bill as currently drafted the signs may do no more than communicate health information or warnings and must comply with regulation and those regulations will ensure the tobacco industry does not personalise the signs to contain favourable or misleading images. The Government’s approach in the bill also enables more flexibility in terms of making the signs more effective and having them put in the right places. The danger of the proposed changes in the Supplementary Order Paper is that they could restrict the ability to regulate for the best outcome. In view of that we believe they are totally unnecessary. 
If I may I want to make just one other point and that is on the to-ing and fro-ing on the glory in respect of who has been responsible for this bill whether it be Tuku Morgan or whoever. But I would make this one point: it goes back to 1960 when Sir Richard Doll an epidemiologist from Oxford realised there was a connection between tobacco smoking and morbidity and mortality. Since that time legions and cohorts of people—non-governmental organisations organisations like Action on Smoking and Health (ASH) and many many people—have tried to get to where we are now. I absolutely celebrate the leadership of the Hon Tariana Turia of Hone Harawira of the Maori Affairs Committee of Tau Henare and of everyone in this Chamber who has agreed that this legislation is worthwhile. Thank you. 
The CHAIRPERSON (H V Ross Robertson) 
: Just before I call the next member I advise members that there has been a major power outage and it will be some time before lights return to normal. 
LOUISA WALL (Labour) 
: 
 Kia ora Mr Chair. Thank you very much for the opportunity to contribute to the korero tonight. I will follow on from Dr Hutchison by remembering the champions who have created the bill the Smoke-free Environments (Controls and Enforcement) Bill that we have before us today. I thank the Hon Tau Henare for his history lesson because I think it is important at this point in time that we acknowledge the people who have brought to fruition what we see today. I particularly want to honour the work that Hone Harawira has done in bringing this kaupapa to the Maori Affairs Committee and I particularly acknowledge the work that the Hon Tariana Turia has done to ensure that this kaupapa was brought before the House in this parliamentary term. I think it is important to make a comment about leadership. 
This bill is a very big bill. It will save many lives and the lives I want to focus on are the lives of our babies. I was particularly taken with the submission made by the group at the University of Auckland dealing with sudden unexpected death in infancy. It was astounding for me to read the statistic that between 2003 and 2007 328 of our babies under 1 year of age died. Of those 328 babies 202 were Maori babies and of the mothers of the 328 babies 75 percent smoked. So the correlation between smoking and infant mortality in our country is so explicit that to not do what we are doing today would have been completely unethical. 
I want to talk particularly about the prohibition of displays. I think that this bill has de-normalised smoking for our children and it will continue to do so in the future. When we look at the statistics we can see that having an environment where smoking is not normal is incredibly important. When we look at the fact that we have 5000 premature deaths per year because of smoking—whether it be people who smoke or people who live in environments within whanau where people smoke—we can see that it is relevant to all of us. 
I think all of us would have a family member who has died as a consequence of smoking. I will talk about someone close to me my father who at 63 died of coronary heart disease. He had a massive heart attack. He was a chain-smoker; he smoked two packs of cigarettes a day. I grew up in an environment where I could not breathe actually. As a young child I remember not being able to breathe. For me that meant that I was never going to smoke. I listened to my body. My body rejected smoke so I did not smoke. 
I have been fortunate. I smoked once in my life because of peer pressure because I grew up in a community where smoking was normal but I decided I would not smoke. The first cigarette I had was at the lake in Taupo. I threw the cigarette in the lake and my family chased after me to give me a hiding because I had thrown the smoke away. 
I inherently knew that smoking was bad but a lot of children grow up in environments where smoking is normal. They do not know that smoking is bad. They may have had the first response that I had which was to choke and not to breathe but they persist because their peers smoke and because society says to them that smoking is normal. 
The potential I see with this bill is amazing. It is amazing because we will create an environment where smoking is not normal and smoking is not cool. That translates to our children growing up and having the opportunity to not be influenced by the fact that when they go the dairy for example cigarettes are there on display and are encouraging them whether or not they know it to take up smoking. 
I am very pleased to belong to a Parliament that sees a bill like this before the House and I am pleased that we have cross-party support for such an initiative. I wanted to comment on something that Dr Hutchison said which was that because we will be prohibiting the display of tobacco it is out of sight and out of mind. 
Dr JACKIE BLUE (National) 
: 
 I am pleased to speak in the Committee stage of the Smoke-free Environments (Controls and Enforcement) Amendment Bill. Part 1 is about transitional requirements and extending them to internet sales. The bill also talks about sponsorship. But I thought the Committee—and I ask the Chair to give me a little leeway—would like to hear of an update. 
As of 1 July prisoners in New Zealand are no longer able to smoke because prisons are smoke-free. There are 6000 prisoners on nicotine replacement. Today is day 13 in terms of prisons being smoke-free. The planning for this has taken a year and there has been education obviously and prisoners have been given nicotine replacement to start on and on day 13 it is going extremely well. There is no rioting. There is no burning of beds or anything like that. It has gone extremely smoothly so I congratulate the Minister of Corrections on her work in this area. I think it is very indicative of where the momentum is going as far as smoking and the damage it does to our society is concerned. Certainly the Government made an excellent initiative early in the year by increasing the excise tax on tobacco products by an unprecedented 30 percent over time. That really is an extremely effective way of reducing cigarette smoking. The use of Quitline has increased dramatically and people are giving up in droves. That is excellent indeed. 
This Government is extremely serious about reducing the harm from cigarette smoking and this bill will go one step of the way by getting rid of displays of cigarettes in retail stores. I commend this bill to the Committee. Thank you. 
KELVIN DAVIS (Labour) 
: 
 Tena koe. I have absolutely no time for the tobacco industry. I have an absolute loathing for that industry and the havoc it has caused. In my short time here in the Committee stage I want to touch on the devastation this industry has caused to us as Maori. I think of my two uncles—Hau Davis and J J Johnson—who died 10 years ago in their early 70s. They both died of lung cancer. They were both smokers probably from about the age of 7 or 8. So they had close to 60 years of smoking. Their premature deaths have robbed us and our hapu of probably 10 or 15 years of their knowledge their language and their understanding of te reo Maori and culture. I will narrow this speech down slightly soon Mr Chairperson but I think it is really important to say that this has meant that people like me have been left to cover the role that they once covered woefully inadequately prepared for that task. So it has had a devastating effect on us as Maori on our culture and our language. 
I applaud any move to remove incentives such as tobacco displays in shops and sponsorships. I do not care who dreamt up the idea 30 or 40 years ago or who carried it through. The fact is that this Parliament is making something of it now and that is what is most important. We cannot afford to carry on for another 10 15 or 20 years providing these incentives. Every time we walk into a dairy or a service station we see the power wall of tobacco products on display and it makes it so easy for children to come in and instead of looking at lollies which are bad enough in themselves all they can see is a big power wall display of tobacco products the colourful packages and the names that are meant to excite and entice them such as “Holiday” or some brand like that. It is meant to appeal to young teenage girls. “Slim” is another one. To me it is despicable that the tobacco industry has absolutely no conscience about the damage it has been doing to generations of New Zealanders—generations of Maori and of people right throughout the world. 
I want to go back to a story that was told during the tobacco inquiry. I acknowledge Hone Harawira who drove that tobacco inquiry for the work that he did. I have to add this plug: it is amazing what he can do when he works within the system—he is actually very very effective—instead of railing against it all the time. There was a story about a family who went to hospital because their mum their nana was in hospital dying of cancer as a result of smoking. This whanau because of— 
The CHAIRPERSON (H V Ross Robertson) 
: There is a debate going on between two members who do not have the floor. I have called the honourable Kelvin Davis. 
KELVIN DAVIS 
: Thank you Mr Chairperson. Because of the stress this family was under nursing their dying mother they had to go outside and have a cigarette themselves. They sat on a park bench in the smoke-free hospital grounds and had a cigarette. Right next to that park bench was the maternity ward. Pregnant mothers were coming out and sitting on that same bench having a cigarette with these people. The point of the story is what is the bet that in 20 or 30 years’ time it will be those unborn children who will be sitting on that same park bench having a cigarette while watching their mothers who were pregnant back then dying of cancer in hospital? 
It is a circle not of life but a circle of death that the tobacco companies perpetuate and they need to be held to account. The way to hold them to account is to cut their profits and the way to cut their profits is to make smoking less attractive. This is one of the steps that this Parliament is taking to remove those power displays and sponsorship so there is not the incentive for young kids when they go into dairies or service stations to see those tobacco displays. 
I acknowledge everybody who has brought this bill to the House and brought it to this stage. We are sending a message to the tobacco companies that we will not tolerate their insidious product. 
CHRIS TREMAIN (Senior Whip—National) 
: 
 I move  
That the question be now put 
. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I have a few things I would like to discuss in this call on Part 1 of the Smoke-free Environments (Controls and Enforcement) Amendment Bill. First though I would like to respond to Dr Paul Hutchison. In fact when he started to address my Supplementary Order Paper 256and the lights went out I thought that maybe he was going to woo me. Unfortunately I was quickly rebuffed. That was sad and I was disappointed. I would argue particularly in relation to the second amendment in my Supplementary Order Paper that there is a need to be quite restrictive as to how the signs can be displayed. Although the intent is clearly there in the bill as it is written at the moment I think there is still the opportunity for a creative person to find a way to manipulate it and to use the signage as a form of covert advertising. 
In a way I am a little bit disappointed that I got the call right now because I was in the middle of a text conversation with Carrick Graham. People will know who Carrick Graham is—he is the public relations man for the tobacco industry—and we have been having a little conversation about what is going on tonight. He has just sent me a text saying that Foodstuffs will be—and pardon my language this is a direct quote—“spewing” about my Supplementary Order Paper. I was just about to write back and say “Really? Why?”. That suggests to me that maybe there is something underlying here about the way in which supermarkets use this signage as a form of covert advertising. If Foodstuffs will be upset about my Supplementary Order Paper then maybe— 
Dr Paul Hutchison 
: He hasn’t told you why. 
IAIN LEES-GALLOWAY 
: No I wanted to get to the bottom of why it was but given that it is Carrick I think I might know why it might be. If there is some discomfit about what my Supplementary Order Paper would achieve then maybe we need to delve a little bit further into why the retailers might be uncomfortable with it. I implore the National members to reconsider their position particularly in relation to the second amendment on the Supplementary Order Paper. 
However what I really want to talk about in this call is the issue of herbal smoking products. It was a decision that took a lot of conversation at the Health Committee. We were all really on the same page. We see getting rid of the point-of-sale advertising of herbal smoking products as something that is a positive move. But I have to admit that when the Ministry of Health brought this issue to the select committee—and it was very much at the last minute—the late arrival of this suggestion did not help in terms of the select committee getting to the decision that the Ministry of Health wanted us to make. My initial response was “Hang on I don’t think this is a matter for the smoke-free environments bill because the bill is about tobacco.” The Minister in the chair the Hon Tariana Turia has wanted to focus on tobacco and I felt that this might be a distraction from the issue. In a way it was a learning experience because I discovered through that process that herbal smoking products are already covered by the Smoke-free Environments Act. We eventually came to the decision that because we had not had public consultation about what to do with herbal smoking products it was better to not include it in this bill but to make a strong recommendation to the Government that it was something we wanted to move on as quickly as possible using the right legislation. 
I note that further restriction on advertising of herbal smoking products is something that Associate Minister of Health Peter Dunne is wanting to achieve through the Misuse of Drugs Amendment Bill which is also progressing through the House at the moment. I suppose that reflects the crossover whereby tobacco is essentially a drug and in different times we might have thought that maybe we should put tobacco into the Misuse of Drugs Act rather than have separate legislation for it. But it does get confusing and it is a bit messy. Ultimately that led to why the select committee chose to not include herbal smoking products in the display ban. However we did decide to include herbal smoking products in some of the other restrictions that this bill brings in. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Noes 52 
New Zealand Labour 42; Green Party 8; Progressive 1; Independent: Carter C. 
Motion agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 257 in the name of Rahui Katene to clause 5A and to insert new clause 6A be agreed to. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I raise a point of order Mr Chairperson. My recollection is that the Committee was not instructed to consider that amendment. 
The CHAIRPERSON (H V Ross Robertson) 
: The rest of the amendments were not part of the scope but these ones here that we have are OK. It is up to the members to vote how they want to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 56 
New Zealand Labour 42; Green Party 8; Maori Party 4; Progressive 1; Independent: Carter C. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendments not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 256 in the name of Iain Lees-Galloway to insert new clause 7B be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand Labour 42; Green Party 8; Maori Party 4; Progressive 1; Independent: Carter C. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment in the name of Iain Lees-Galloway to the amendment set out on Supplementary Order Paper 256 in his name to clause 9 be agreed to: 
to omit “Mata” in each place where it appears and to substitute in each case “mate”. 
A party vote was called for on the question  
That the amendment to the amendment be agreed to. 
Ayes 56 
New Zealand Labour 42; Green Party 8; Maori Party 4; Progressive 1; Independent: Carter C. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment to the amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 256 in the name of Iain Lees-Galloway to clauses 9 and 10 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 56 
New Zealand Labour 42; Green Party 8; Maori Party 4; Progressive 1; Independent: Carter C. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendments not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 257 in the name of Rahui Katene to insert new clause 9A be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand Labour 42; Green Party 8; Maori Party 4; Progressive 1; Independent: Carter C. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
Part 1 agreed to. 
Part 2 Amendments relating to offences regulations and purposes 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 Part 2 of the Smoke-free Environments (Controls and Enforcement) Amendment Bill relates to amendments relating to offences regulations and purposes. Of course we have brought in a whole range of new regulations in Part 1 and now we have the offences for breaking those regulations. Clause 12 creates an offence where a person without reasonable excuse allows a tobacco product tobacco package or tobacco carton to be visible in contravention of new section 23A on the display of tobacco products. A person who commits such an offence is liable to a fine not exceeding $10000. 
The Health Committee heard a range of submissions about where submitters thought the fine level should be at. Obviously some people thought it should be very low and others thought it should be extremely high. The select committee went for something that was at the higher end and I think that is an important move to show just how seriously breaches of the tobacco display ban will be taken. The incentive is certainly there for retailers to ensure that they get it right that they make sure they do not breach the ban and that nobody who goes into a store will see any tobacco products on display. I think it would be pretty easy to find out whether someone has breached that ban. The penalties are to say the least quite significant—certainly for a small-business person. I imagine that $10000 would be a very significant penalty for someone who owned a dairy. So that is quite clear. Hopefully nobody will be tempted to breach the ban given that the penalties are so severe. 
Many submitters supported increasing the maximum fine for a sale to someone under the age of 18 from $2000 to $10000. Again that is understandable because there is nothing worse really than a retailer selling tobacco products or cigarettes to someone who is under the age of 18. We know that young people from the age of 9 through to 18 are at their most vulnerable and that is when to be honest most people take up the smoking habit. Many submitters were very very keen that we take a much much stronger stance on people who supply tobacco products to people who are under age. 
Several of the tobacco industry and retailer groupings suggested that it was wrong to focus on increasing penalties when what was required was better retailer education compliance visits and enforcement of the current law. Well that is always the bastion of those who are opposed to regulation. They always say that education is the answer. I agree that retailers do need to be educated about what the new law will say and what the new penalties will be but that education has to go hand in hand with a real incentive to stop retailers from being tempted to breach the new regulations that this bill brings in. Clearly the select committee did not agree with the tobacco industry on much to be fair including the suggestion that there was no need to increase fines or to bring in a large fine for people who break the display ban. 
The Ministry of Health’s advice was to establish two different penalties for sales to under-18s: a fine not exceeding $10000 in the case of a seller who is a body corporate and a fine not exceeding $5000 for a seller who is not a body corporate. The Ministry of Justice advised that it may be more appropriate to have a lower penalty for a person who is not a body corporate. I suppose that is understandable if one is a sole operator; perhaps one does not have the means to address such a large fine. Some comparisons were made. In the Alcohol Reform Bill the penalty for sale of alcohol to a minor by a person who is not a licensee or a manager is a fine not exceeding $2000 and for a licensee or a manager the fine must not exceed $10000. So there is a lower fine for someone who is not the owner of the business but is simply working in the business. 
Dr JACKIE BLUE (National) 
: 
 I am pleased to speak on Part 2 of the Smoke-free Environments (Controls and Enforcement) Amendment Bill. Part 2 refers to penalties regulations and the infringement notice scheme. 
The Health Committee made a number of amendments to the penalties regime. They include raising the maximum fine which is quite significant and there are details about an expanded infringement notice scheme. The interesting thing is that currently if cigarettes or tobacco are sold to a minor the fine is about $2000 but the reality was quite revealing. The average fine was usually about only $300 which is really quite a small amount when one considers what had happened. 
As the previous speaker Iain Lees-Galloway mentioned we had a number of submissions on the range of where we should pitch the fine. We settled on a fairly high amount. It is quite a significant fine. The fine we decided should be up to $5000 for an employee while a body corporate would be fined up to $10000. These are not insignificant amounts of money. I think they send a very strong message to people who think they might want to sell to a minor that that will cost them—and cost them dearly—in the pocket. There is also an amended infringement notice scheme. If there is a failure to display health warnings at the point of sale or one sells over the internet without the appropriate warnings or information about the purchase age an infringement notice will be given. There are also regulation-making powers provided so that regulations can be made from time to time as seen fit on the display of notices and about health information. 
In the debate on Part 1 I mentioned that prisons have gone smoke-free. Today is day 13 and it has gone very well. I also spoke about the fact that the increase in tobacco excise had made a huge difference in the number of people accessing Quitline and taking nicotine-replacement therapies. That is making a huge improvement. 
It is important to have a strong and robust penalty scheme. There is no point in having a law that says that one cannot sell to minors but not follow that up with a fairly strong message. Part 2 certainly provides a very strong message. I commend this bill to the Committee. 
KRIS FAAFOI (Labour—Mana) 
: 
 Thank you very much Mr Chair for giving me the opportunity to speak to Part 2 of the Smoke-free Environments (Controls and Enforcement) Amendment Bill. It is nice to have the lights back on and to have a chance to talk in this debate. It is nice to have the lights back on! As I was having a Twitter debate with Tau Henare after the lights went off I will take this chance to touch on a couple of notes from his history lesson earlier—and it is good to see the Minister of Health the Hon Tony Ryall in the Chamber right now. Tau Henare might want to add just one aspect into his history lesson: about 2½ years ago the Minister of Health said there was no evidence to support the removal of tobacco advertising from our displays. I tell Mr Henare that he should add that one to his history lesson. I also received a letter from Imperial Tobacco; this is one instance where I will agree with Tau Henare. The fact that the company had the nerve to send us a letter that asked for its company to have more input—because it had the resources—with the Ministry of Health in order to discuss issues about tobacco laws is a bit on the nose. If the company is going to be so open let it open up everything it has on the research it has done into tobacco. 
Part 2 sets out amendments relating to offences and regulations further to Part 1. It sets out the penalties that are available to authorities if people are seen to be in breach of the new display regulations. I think it is good that this bill has teeth. There is a $10000 fine for anyone who is caught transgressing these measures. As a number of members have said there were a number of submissions on what the appropriate level of fines should be for both front-line staff and proprietors. I thank the officials for the work on that because we traversed a number of difficult issues. Getting the appropriate level of penalties and fines right in relation to this bill was difficult because we had a number of different submissions. So I thank the officials for that. 
Section 36(1A) amended in clause 12 sets up a $10000 fine for anyone who has transgressed in relation to display. But I will concentrate on new section 36(3A) inserted by clause 12 which states: “Every manufacturer importer distributor or retailer of tobacco products who in contravention of section 25A(1) sponsors … any organised activity commits an offence and is liable—(a) in the case of a manufacturer an importer or a distributor to a fine not exceeding $50000; or (b) in any other case to a fine not exceeding $10000.” This relates back to clauses 4(cb) and 4(cc) of Part 1. 
We should take notice of that because we should not underestimate just how sneaky the tobacco industry has been in relation to some of the ways it has tried to market without bending the rules. Tobacco companies have been very creative about how they promote themselves at various activities. They have entered into exclusive-sale arrangements with people who are holding activities and also into exclusive promotional rights. Although they do not explicitly say how they are pushing their products—and they cannot say because it has been illegal—they have been very particular about making sure they push their brand’s colours and their tobacco brands in that way. As a non-smoker I have been oblivious to these kinds of things but I know that it is amazing what lengths tobacco companies will go to in order to take promotion absolutely to the wire. As they sign up for these exclusive sole arrangements and covert sponsorship deals using brand colours I think this law will tighten that up and it will also put in a pretty hefty penalty of $10000 or $50000 as I mentioned earlier to make sure this kind of thing is cracked down on. 
As we sit here today and all support these changes I think we should also send a message to the tobacco companies that we will continue to be vigilant because as we change the rules here today they will be looking for ways to manipulate the new laws we are bringing in to make sure they can push their products and to make use of their vast resources to jump through loopholes. I am sure that the Minister in charge of this bill will be very aware of that and that all members of the House will be vigilant on that note. Part 2 as I said sets up the penalties and I think it is great that it has teeth. 
Hon TAU HENARE (National) 
: 
 I too want to reiterate what the member who has just resumed his seat Kris Faafoi said about the issue of having a reasonable fine. It is not a slap on the hand with a wet bus ticket; it is a reasonable hefty fine. I think it is about time that we had a reasonably hefty fine for those who transgress and even more so in the case of the tobacco industry. Let me put that in context. This debate is not about just some normal business in New Zealand paying its taxes and going about its job. This debate is about the tobacco industry which has for years and years found ways of sliding and sliming like a little old snake out of its responsibilities. 
Just over 12 months ago I had a heart attack. I can guarantee that that was because of my own stupidity—I smoked. But I also put some responsibility on the tobacco industry for peddling that sort of nasty product. Until the 1950s and 1960s we did not know much about the effects and the causes of smoking but in the past 30 or 40 years we have obtained enough scientific evidence to warrant imposing a $10000 fine and a $50000 fine on those who transgress the regulations that we have before us. That provision shows the feelings that members of the House of Representatives have about this issue. It is not a party political stance; it is actually a House of Representatives stance. We all agree on imposing a hefty $10000 fine on those who display the nasty products. 
I will take a minute—if I have one—to say that a whole lot of us used to say that smoking was not bad for people until an event happened. So I think it is a bit unfair for the member for Mana to have a go at the Minister of Health about what he said. Until 12 months ago—and I was a chairperson of an inquiry into tobacco—I was still a smoker. I refused point-blank to hear what was going on until I picked myself up off the floor and on the day after my heart attack when somebody asked what we should do I replied: “I’m buggered if I’m going outside for a smoke.” and that was it. 
It is unfortunate that that event horrific as it was was the thing that made me stop smoking. I am not a zealot by any stretch of the imagination but the time has come. The time has come for the tobacco industry to start seriously thinking that its business is about to close and most New Zealanders even those who smoke would agree with that. It is not about having a go at legitimate business; it is about the safety of the next generation. Kia ora. 
Hon STEVE CHADWICK (Labour) 
: 
 I wanted to speak on Part 1 of the Smoke-free Environments (Controls and Enforcement) Amendment Bill but I will have a crack at weaving in something on Part 2. And I wanted to congratulate the Minister in charge of the bill Tariana Turia. I heard little snippets when I was not here about the journey. We would not be at the stage Tau Henare acknowledged today when he said that the door was closing on an amazing chapter if Labour had not opened the book and started it in the first place. I acknowledge Tukoroirangi Morgan and also Judy Keall who later picked up the original bill. I was given sponsorship of the bill because I was a midwife and it looked a good fit with a health professional to then sponsor that next leg of the journey but I could not have done it without the leadership of Helen Clark. It was Helen Clark who was brave and I remember— 
Hon Rodney Hide 
: She was great. Bring her back. 
Hon STEVE CHADWICK 
: I must tell Mr Hide that in this Chamber when I sat for hours and hours in the chair for the Smoke-free Environments Amendment Bill it was he who said one day that I was a hairy-legged feminist from Helengrad which was hardly the case for a dear old midwife and granny supporting smoke-free legislation. I took it; I took lots of offensive remarks because I knew it was the right thing to do. I just smiled at Mr Hide and let him blither on because we were on a journey. We knew we were doing the right thing in our chapter— 
Dr Paul Hutchison 
: I raise a point of order Mr Chairperson. However interesting this may be we are on Part 2 “Amendments relating to offences regulations and purposes”. 
Hon STEVE CHADWICK 
: I am about to get there. 
The CHAIRPERSON (Lindsay Tisch) 
: I know the member is and we had a slight diversion. 
Hon STEVE CHADWICK 
: A slight tolerance there but I was also going to acknowledge that Tony Ryall now supported Tariana Turia. I think that is the growing awareness and I do not think Dr Hutchison will call a point of order when I say something nice like that. In fact Dr Hutchison was the only National member in the House who voted for the smoke-free environments amendment legislation and I congratulate him— 
Dr Paul Hutchison 
: And Lynda Scott. 
Hon STEVE CHADWICK 
: And Dr Lynda Scott that is right. We never forget that—doctors health professionals and health practitioners. 
Public health—and this is about Part 2; Mr Chairman you will be pleased—is not just about penalties offences infringement notices and regulations. Public health is also about education and bringing society along with us on this journey of change. Part 2 is about excise tax and then there is this little bit at the end of it about offences. I do not think we want to get too hung up on the offence provision at all. This is a small part but we cannot bring any public health change into effect without having that carrot-and-stick approach. I think the Health Committee has done a great job and has the level of offences about right. There is now a $10000 fine which is an increase from $2000. People laughed at a $2000 fine in the past and I think it is about right to put it up to $10000. In our pursuit of this legislation we have seen tobacco sold to young people who then leave the shop to onsell it outside. They break down a packet of cigarettes and sell those cigarettes individually for quite some profit. I do not think penalties are always the answer to reducing smoking over time but they give a societal sanction that if a person breaches the provisions in this legislation and gets caught that person will be fined. 
I will mention clause 14 which the Committee quite rightly recommended should be amended to give effect to the proposal to remove the specific requirement for the Minister of Health to consult with tobacco retailers manufacturers importers or wholesalers. I think the provision that forced the Minister to consult with the industry was outrageous. In this case the industry is peddling something that harms society on a very high scale of harm. I think this amendment will better align with article 5.3 of the World Health Organization’s Framework Convention on Tobacco Control which is about the protection of tobacco policy. I think these provisions are right. We will be back in this House in about 5 years’ time looking at the next stage of legislation we bring in. I was sorry that certain things were not brought forward in this bill: plain packaging banning vending machines and other little bits and pieces. In about 5 years’ time we will be back in the House and another Minister will be promoting that next leg of the journey. But I think the regulations in Part 2 are fitting. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 I will take a very short call on Part 2 of the Smoke-free Environments (Controls and Enforcement) Amendment Bill “Amendments relating to offences regulations and purposes” to reiterate the fact that there is consensus that the penalties relating to not obeying the law are certainly pretty stiff. One fine will go up to $50000 and that should hopefully send a very clear message to tobacco manufacturers although they are a very very powerful lot and have millions of dollars at their disposal. I am sure the consensus in this Committee is that if need be we would raise the penalties if manufacturers did not respond because this Committee is incredibly serious in terms of its messages. I think that is one of the great things about the consensus that we have had in the Committee. 
I will make one point about what the effective measures have been for decreasing smoking. One of them certainly—believe it or not—has been raising tax. Under the 9 years of the Labour Government I think there was only a 10 percent tax rise. Under the National Government and the leadership of Tony Ryall there has been a 30 percent tax increase over a series of years and undoubtedly might I say— 
Hon Dr Nick Smith 
: She bullied us. 
Dr PAUL HUTCHISON 
: She bullied them. Ha ha! As I said before everybody extends their huge congratulations to the Hon Tariana Turia on the persistence and wonderful leadership she has shown in this respect. 
I will make one other point and it relates to herbal smoking products. Kevin Hague who has left the Chamber brought the matter up earlier. Under the Smoke-free Environments Act it is an offence to sell herbal smoking products to a person younger than 18 years old and this was pointed out in the commentary on the bill. Section 39(1)(e) of the Act confers the power to make regulations to require that health warnings be displayed on herbal smoking products but no such regulations have been made. This bill ensures that all the health warnings and offences are now applied to those products. I think that is yet another step forward in the progress that we are making in our aspiration to have a smoke-free Aotearoa. 
Part 2 agreed to. 
Clauses 1 to 3 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I will take a brief call on the commencement clause in particular and that is because a change was made at the Health Committee. If one simply read the commencement clause as it is written one might think the Health Committee sought to delay the introduction of this legislation by changing the date on which it comes into force to being “at the end of the period of 12 months” as opposed to the original 6 months. 
I do not want to venture too far into Part 1 but there are transitional matters in Part 1 and the overall effect of the change to the commencement clause is that all retailers will fall under the Act over a slightly shorter period of time as a result of the changes. The select committee heard from a number of submitters that perhaps the 6-month period for the initial commencement of the Act was too short a period of time for retailers to be able to comply. 
I suppose there probably was not an awful lot of sympathy for the position but we did hear some arguments about the changes that retailers would have to make to their display stands to their stores and what that would entail. We wanted to work alongside retailers to get them on board and to try to make this transition as easy for them as possible. The transition period has been reduced from 2 years to 12 months. So within 2 years all-up of this bill receiving Royal assent every tobacco retailer in the country will have their tobacco products out of sight. 
I have to say that I am really looking forward to the day when we can all walk into a dairy or a service station or a supermarket and not notice that tobacco is even there and available for sale. I would like to congratulate Tariana Turia on getting us to this point where we are just at the most 2 years away from that being the way things are in New Zealand. Of course one day a few short years after that people will look back on the thought of advertising tobacco in any form whatsoever and think it was absolutely ludicrous. 
It has been a journey and this bill in itself is of course another step on the journey towards having a smoke-free New Zealand. I would like to congratulate Tariana Turia on getting the Government to support it. This will be my last call at the Committee stage of this bill and I just want to say that I am very pleased to be able to support this legislation. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 I will make just a few comments on the title and on other areas of this bill. Undoubtedly the title of the Smoke-free Environments (Controls and Enforcement) Amendment Bill is totally appropriate. Indeed we are all aiming for a smoke-free environment. This bill is imposing controls and we have pretty tough enforcements as well. 
However one alternative title could have been the “Pavlovian Dog Reflex Bill”. The only reason I say that is that we very much wanted to be convinced that there was an evidence base behind these measures that we have taken and as we know over the last 10 years or so there has been accumulated evidence from a whole variety of jurisdictions where they have started removing displays. It has taken some time to make sure that it is absolutely obvious. But what we do know is this: when smokers go into a store for the purpose of purchasing something else and they see signage all over the place or they see their favourite cigarettes sitting in front of them they have a Pavlovian dog reflex and they buy those as well. Clearly that is not a title that is appropriate but the evidence was made very clear in the literature right around the world. 
Indeed this is yet another step in this very very important public health effort to try to reduce smoking in our country. We still have a long way to go. The leadership of the Hon Tariana Turia has been absolutely superb. It has been wonderful that we have had a consensus in this House. The aim of course is to make our country smoke-free. Thank you. 
Clause 1 agreed to. 
Clause 2 agreed to. 
Clause 3 agreed to. 
Bill reported without amendment. 
Report adopted. 
Taxation (Tax Administration and Remedial Matters) Bill 
Second Reading 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Taxation (Tax Administration and Remedial Matters) Bill be now read a second time 
. This bill is important for New Zealand as it introduces crucial changes to the tax system which are needed to support economic growth and to ensure integrity and fairness within the system. A good tax system encourages economic endeavour by eliminating unnecessary hindrances and limiting compliance costs and these themes run through this bill. 
A key feature of the bill is the abolition of gift duty. Gift duty is a relic of the estate duty era which is long since passed. It has continued to impose $70 million of compliance costs on New Zealanders each year while no longer serving its intended purpose and raising less than $1 million in annual revenue. About 99 percent of annual gift duty returns are nil returns which further illustrates the pointless nature of this tax. So it is time to abolish gift duty once and for all. 
Since the notion of abolishing gift duty was first aired last year some concern has been voiced about the consequences for the tax system. There have been predictable amounts of criticism that there has not been enough analysis. Well let me assure members that the decision to proceed with the abolition of gift duty was taken following considerable research. Eight Government agencies were involved in consultation on the likely consequences of abolition and the Inland Revenue Department was at the centre of the review. The decision therefore has not been taken lightly. 
Members will note that the accompanying regulatory impact statement goes into some depth. That is because it is dealing with an issue of great moment: the abolition of a tax. So comprehensive was the regulatory impact statement that it has been described as a model of what a regulatory impact statement should be. It deliberately outlines the problems with gift duty and considers a number of options for addressing them before coming down in favour of repeal. 
The potential for tax avoidance was one of the key areas considered during the gift duty review. The review concluded that gift duty is not an effective way to target tax avoidance. A range of existing rules in the Income Tax Act better target avoidance arrangements involving gifts. These include rules for gifts involving companies and employers in addition to trusts. Last year’s Budget further reduced opportunities for avoidance by aligning the top personal tax rate and the trust tax rate. Trusts therefore can no longer provide a tax shelter as was previously the case. The Inland Revenue Department will continue to monitor the situation and a post-implementation review will be undertaken to ensure that existing measures are operating as intended. 
The move to abolish gift duty is part of a carefully constructed package that has seen all marginal tax rates fall substantially and the top personal and trust rates aligned. Any moves to unpick this package by introducing either new taxes on capital or differential rates for trusts and the top personal rate would inevitably raise questions about the need not only to reinstate a form of gift duty far more stringent than the one this bill repeals but to maybe restore estate duty or indeed introduce some other forms of wealth tax to prevent significant avoidance occurring. An equally unpopular and cumbersome alternative would be to continue the alignment of the top personal and trust rates but at a significantly higher level than is currently the case. The House should give careful consideration to those points as this debate unfolds and as subsequent events unfold as well. 
This bill also includes a number of proposed changes to the rules relating to the tax disputes process which complement major changes made by the Inland Revenue Department to the way it administers that process. Our tax system relies on voluntary compliance and it is therefore appropriate that the disputes that inevitably arise are resolved quickly and efficiently for both parties. 
The bill also introduces changes to the secrecy provisions in the tax administration rules to help to bring the Public Service more into line with today’s customer service expectations and to improve efficiency across the Public Service. Overall these amendments will result in improvements in service provision including improved accuracy improved efficiency by eliminating duplication of effort and increased detection and prevention of fraud. 
A Supplementary Order Paper that was referred to the Finance and Expenditure Committee provides for the removal of the overtaxation of non-residents’ investment through portfolio investment entities. A number of useful submissions were received and considered by the committee and the legislative changes have now been incorporated into the bill. Those changes will facilitate the development of New Zealand as a financial hub. 
Earlier today I released a further Supplementary Order Paper to provide roll-over relief for depreciation recovery arising from the Canterbury earthquakes. This will make replacement of assets lost in the earthquakes more feasible for Canterbury businesses and is another step towards providing taxpayers with relief from taxation on windfall gains from depreciation resulting from the earthquakes. 
The Supplementary Order Paper also addresses the issue of the timing of deemed sales of destroyed insured assets allowing the time of sale to be deemed the point when insurance proceeds can be reasonably estimated. The Government is seeking to encourage productive investment in Canterbury and these depreciation measures will help to achieve that. As further tax issues arise in response to the earthquakes the Government will assess them and respond accordingly as indeed we have been doing throughout the course of this year. 
The Government cannot of course control the business sector but we can support it by providing an environment that creates jobs and wealth. By improving efficiency and removing undue compliance costs this bill will help to create that environment while also ensuring the maintenance of the integrity of our tax system. It is therefore with a great deal of pleasure that I commend the Taxation (Tax Administration and Remedial Matters) Bill to the attention of the House. 
STUART NASH (Labour) 
: 
 The Finance and Expenditure Committee spent a lot of time and heard a lot of submissions on various parts of the Taxation (Tax Administration and Remedial Matters) Bill. There is some very good law contained within the pages of this bill. However there is one glaring addition in this bill one glaring part that Labour simply cannot support. It is a real shame that the abolition of gift duty was not brought to this House as a separate piece of legislation because what will happen is that all the other good law in this bill all the other remedial matters will get lost in the arguments about the abolition of gift duty. 
It is my contention and it is Labour’s contention that the abolition of gift duty will open the door to massive tax avoidance and make the defrauding of creditors including the Inland Revenue Department vastly easier than it is at present. My belief is that the Government has misjudged this one and that the Minister of Revenue is out of his depth. The Inland Revenue Department was given about $100 million recently to chase those people who use various schemes to perpetrate avoidance. Well that department will need a hell of a lot more once this bill comes into force because the day after this bill becomes law without gift duty to slow things down people will instantaneously move valuable assets more or less without restriction and without tax implications. Not all of those people will do that for the wrong reason; in fact not many will do it for the wrong reasons. But some will do it and enough will do it to cause concern. 
The change to abolish gift duty was proposed as a way to simplify tax law and remove a $70 million burden and seemingly unnecessary compliance costs on taxpayers plus about $500000 of costs to the Inland Revenue Department. However many submitters on the change and lawyers in private practice believe the impact of this change goes too far. Although in theory there are provisions to undo gifts in the event of insolvency in practice one can move assets between entities and one can move them down a chain of entities and that becomes very hard to undo. The change therefore has very wide-ranging implications for the law of trusts the law of taxation and the practicalities of debt enforcement including in relation to wills and matrimonial property disputes. 
Tax avoidance is a problem in this country. At the moment there are over 325 fraud cases totalling about $450 million under investigation by the Inland Revenue Department. This bill will add to that problem. In our minority report we state: “The analysis upon which the gift duty abolition proposal is based is fundamentally flawed because it does not adequately take into account the full range of potential tax avoidance opportunities. Trust structures are one subset of possibilities but these members do not accept that the analysis has been comprehensive. Accordingly the cost-benefit analysis upon which the bill rests must also be seen as fundamentally flawed as no attempt has been made to quantify the counterfactual of avoidance risk pertaining to the full range of structures available. These members note that no sensitivity analysis has been provided. No options analysis has been provided. The policy process would not meet the standards expected under a thorough Regulatory Impact Statement.” At the least: “any legislation proposing the abolition of gift duty should be delayed until the Law Commission’s review of trust law is complete.” Contrary to what the Minister outlined in his speech it is Labour’s contention that the analysis undertaken in this bill is not thorough enough to convince us that we should abolish gift duty at all. 
Under present taxation law if someone gifts assets of more than $27500 to anyone any being or any entity then that gift will attract taxation. Most people do not know this and almost no revenue is ever collected even though large gifts to trusts or family members are fairly routine. I was talking to a friend about this. This friend said to me: “I gave $100000 to my son to help him get into his first house.” I said to this person: “Did you pay gift duty on that?”. He said: “No.” The awareness of gift duty was minimal and for that I suppose we have to look at the Minister for not communicating the taxpayers’ obligation. 
The reason gift duty is so easy to avoid is that the law has evolved a mechanism for circumventing gift duty in almost all circumstances. It is administering this mechanism which looks a little like a sleight of hand that costs taxpayers about $70 million a year. There are tens of thousands of trusts in New Zealand that have been set up in this fashion. Many professionals working in areas where they may be sued by their clients have trusts set up for this purpose. Rich individuals families and corporate entities of all kinds also use trusts to manage their property and wealth. Companies and corporates use them also for a variety of purposes including creating structured tax arrangements designed to minimise tax liabilities. 
The abolition of gift duty was considered when death duty was abolished in 1992 but ruled out in 1992 due to concerns about enabling tax avoidance. Various Government agencies will be responsible for monitoring the effects of gift duty abolition and the Inland Revenue Department has agreed to initiate a post-implementation review to ensure there are no unintended consequences. But I am very fearful that it is not this law but legal precedent that will decide many cases that are brought before the courts in respect of this bill. 
The Institute of Chartered Accountants submitted that although it welcomed the abolition of gift duty in its view there were “a number of tax avoidance opportunities that may arise in the absence of gift duty.” The institute went on to list five. The Institute of Chartered Accountants the National Council of Women and the Law Society all expressed concerns regarding the impact of the abolition on family protection and relationship property proceedings. 
The Family Protection Act protects children and spouses who are excluded from inheritance from wills. By allowing full gifting prior to death the interests of children who miss out on any inheritance will be extinguished. In the case of relationship property a non - property-owning spouse or partner may find that the matrimonial home has been gifted into a trust without their knowledge and is therefore out of reach when they separate or divorce. A third major area of concern is creditor protection. Officials stated that there are three existing provisions in law that allow for gifts to be clawed back for the benefit of creditors. However as I am sure the Inland Revenue Department would attest itself the provisions that allow for the claw-back of assets passed between entities are very hard to enforce mainly because by the time one can find a court to address the location of an asset it has moved somewhere else. 
In theory tax law is there to collect tax so a tax that collects very little tax and costs millions to administer is on the face of it something of an aberration. Yes gift duty was not intended to protect creditors make tax avoidance more difficult or protect children and spouses from losing family property. However at present it does play a role in all three. The relatively few submitters to this bill argued pragmatically that the unintended consequences of this reform meant that any policy move in this area should be accompanied more slowly and carefully because of this. All of them can see the potentially huge implications that this change will have in several areas of law. 
In practice sophisticated tax avoidance involves the use of deliberately confusing structures to hide the true effect of financial arrangements. The removal of gift duty will make the design construction and execution of these arrangements easier. It will therefore make the enforcement of anti-avoidance law harder. On the issue of trusts officials clearly pointed to the Law Commission’s work as did Labour. We requested that this part of the bill the abolition of gift duty be delayed until at least the Law Commission had finished its work. 
Why is the Government doing this? The beneficiaries of the law as it stands are the wealthy who have to pay fees in order to organise their affairs to protect and administer their assets. The removal of gift duty is bad law and I am afraid that I cannot support it. Thank you. 
AMY ADAMS (National—Selwyn) 
: 
 I am very happy to take a call this evening on the second reading of the Taxation (Tax Administration and Remedial Matters) Bill. 
Before I talk about gift duty which obviously is one of the key elements of this bill I will touch on the other major aspect which is the changes being made around information sharing and secrecy. That is certainly an area that the Finance and Expenditure Committee spent quite a bit of time considering. Certainly we concur with the Minister of Revenue that there is a need for the Inland Revenue Department to share its information more efficiently and easily with other agencies but of course we were very concerned to ensure that that is done in a proper and carefully controlled way. I think the balance that we have reached within the legislation as it is before the House is good and robust. One of the components we have built into the bill is a reporting back to the House on how that information sharing works so that this House can continue to monitor the way in which those new powers are set out. 
I will touch briefly on gift duty and in particular respond to some of the comments of the speaker who has just resumed his seat Stuart Nash. The contentions Labour Party members are putting up in relation to this aspect really reflect more than anything their lack of understanding about how this area of law works. The reality is that trusts already exist people can already put their assets into trusts and they can already avoid tax. Tax avoidance is a serious issue but the abolition of gift duty will not make any significant difference. 
The member referred to the concerns of the Institute of Chartered Accountants and the Law Society being on record but it is worth pointing out that the beneficiaries of the $70 million of compliance costs that this outdated and useless regime imposes are the lawyers and the accountants. It is lawyers and accountants who get to charge that $70 million in compliance costs to their clients every year to comply with a system—and let us be very clear about this—that generates less than $1 million but costs nearly half a million dollars a year to run. So we have a tax that is generating almost nothing and on which there is almost zero enforcement. 
If we ask the Inland Revenue Department for records of gift statements for a transaction going back the department can barely give us that information. There is no follow-up. This is not a highly enforced tax and 99.6 percent of all transactions that go through the department are time-wasting for everyone involved because there is no duty payable. 
This tax has long since run its course. The costs imposed on the private sector—with the beneficiaries of those costs being the sector’s lawyers and accountants—are unnecessary. They are not serving any public good. They are not in fact protecting the beneficiaries that Labour claims they are protecting and it is time this outdated duty was abolished. It is long overdue and I am very pleased to commend the bill to the House. 
Hon DAVID PARKER (Labour) 
: 
 The Taxation (Tax Administration and Remedial Matters) Bill is another example of how this Government rules for the interests of a very very narrow class of New Zealander. The previous speaker Amy Adams rose to her feet and did not address any of the issues that were raised by my colleague Stuart Nash. Already under current law there is no limit on gifts to a charity. Already under current law any person can gift $27000 per annum without paying gift duty; a couple can gift $54000 per annum without paying any gift duty. 
This law creates a number of injustices. Peter Dunne believes in income splitting. The Government said it would not agree to income splitting. Editorials in this country said that income splitting was unfair. This legislation enables income splitting for people who can split assets and therefore the income from those assets. Wealthy people can avoid tax through splitting their assets and dividing their income. 
Mr DEPUTY SPEAKER 
: I would like to hear what the member is saying. 
Peseta Sam Lotu-Iiga 
: Well we don’t. 
Mr DEPUTY SPEAKER 
: That will do; I am on my feet. Just calm it down a little so that I can actually hear the debate. 
Hon DAVID PARKER 
: Everything I have said so far is correct. An even more shameful example—[ 
Interruption 
] Amy Adams knows this; an incest victim in New Zealand can be cut out of a will. It happens quite often. The people who perpetrate the crime against the young person who is an incest victim blame the child sometimes. I have seen this in my own legal career. The Family Protection Act states that that child can make a claim against the estate for a fair share of the estate. This legislation prevents that because in the week or decades prior to the death the older person can gift their estate beyond the reach of that child. They could give it all to the Filipino wife and the incest victim who currently has a remedy under the Family Protection Act is being completely set aside by this Government. This is outrageous legislation. The Law Society came to the Finance and Expenditure Committee and told it that fact and National has ignored it. 
I will give another example. Matrimonial property can be put beyond the reach of the courts through gifting. That is another example of the injustices that can be done under this ill-considered legislation. I will give members another example— 
Mr DEPUTY SPEAKER 
: Interjections are fine but where a member shifts seats—and members know who I am looking at—to gain an advantage that is unacceptable. I ask members again to calm it down. Otherwise I will ask members to go out to the lobbies. 
Hon DAVID PARKER 
: Every one of the examples I have given so far is factually correct. Amy Adams knows they are. There were leading submissions to the select committee. Great injustices are being caused as a consequence of this bill. 
I will give members another example. The Institute of Chartered Accountants and the Law Society came to the select committee and said that the bill would put more assets beyond the reach of creditors. In other words a creditor will have less of a remedy because the assets will have been transferred by gifting. In this situation there are some theoretical rights if it is done 2 years prior to the date of insolvency. If it is done more than 2 years prior to the date of insolvency there are not. If Mr Petricevic started to put assets beyond the reach of creditors more than 2 years prior to his going bankrupt his assets would be beyond the reach of any creditor under New Zealand’s law following the enactment of this bill. That is another example. 
I will give another example of how the tax base is being eroded. At present there are continuity of shareholder requirements in respect of losses in a company so if a company makes a big loss—for example a company might make a $10 million loss on a bad investment—that loss is not carried for the future benefit of shareholders unless there is a continuity of shareholders. That rule can be worked around now because assets can be gifted to that company to take advantage of some of those tax losses. 
That is not the worst example. The worst example here in my opinion is what the Government is doing to an incest victim. 
Hon Members 
: Oh! 
Hon DAVID PARKER 
: National members might deny that but that is what the Law Society told them and it was right. If assets are gifted out of the estate of someone who has perpetrated a crime of incest against his or her children there will now be no remedy under the Family Protection Act. That is what the select committee was told and that information was right yet the Government is pushing on with this bill because it has another objective and that is to serve the interests of the very narrow class of people who will benefit from this legislation. Those are the people who will benefit from income splitting who will benefit from some of the continuity of shareholder rules and who will benefit by effectively reducing their taxes. Bear in mind that if they reduce their taxes someone else has to pay them. Who is that someone else? That someone else is someone less wealthy. 
This legislation is terrible. We heard from Stuart Nash that at the time when death duties were abolished the Government of the day—it was actually a National Government—said it would not abolish gift duty because there were all of these other potential problems with abolishing it. Since then it has done nothing to cure the other problems. National members just come here with a very simplistic logic saying that the Government does not collect much in duty and therefore it is not important. They miss the other important factors: income splitting creditor protection and the protection of estates for people who have been abused by their parents. There are lots of other cases where people have not been abused by their parents but they have fallen out with them for some reason. It might be that a parent has married for the second time and the children do not get on with the second wife and therefore for whatever reason they are disentitled under the estate. That person could have a serious illness there could be a moral duty owed by the deceased the testator to the surviving children and this legislation means that they will not have an effective remedy. 
I have already mentioned the concerns around matrimonial property or other non-matrimonial partnerships. Again this is something that both the Law Society and accountants warned about and it is not even referred to by National in its commentary on the bill. It does not even address the issue. National pretends that the issue does not exist because it does not meet National’s prescription. This is bad law. This Government plainly governs for the interests of a narrow section of the population and it is causing injustice. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 The Green Party will not be supporting the Taxation (Tax Administration and Remedial Matters) Bill for similar reasons to Labour. In my first reading speech on this bill I raised the concerns the Greens had at that time about the abolition of gift duty and nothing we heard at the Finance and Expenditure Committee has led me to change my views about the abolition of gift duty as a major problem for the New Zealand tax system. 
People need to understand that a bit of a cat and mouse game gets played between the Inland Revenue Department and trusts because trusts are systematically used to avoid tax in New Zealand. We have a systematic tax avoidance problem involving trusts. It is very hard for the Inland Revenue Department to know what goes on inside a trust. There is some information about what goes on inside trusts but often trusts are quite invisible to the tax department. It is difficult to crack down on tax avoidance activities without information about what is going on inside trusts. 
Gift duty is important because fundamentally it provides a lot of information about what is happening to trusts in New Zealand. Even though on the face of it it does not appear to do much about 220000 statements on gift duty are provided each year. Very little tax is actually being raised but there are considerable compliance costs. People said: “Hey look. You’re not raising much money in tax. There are a lot of compliance costs here. Why on earth are you keeping this thing?” The reason gift duty plays a very important role is that it provides a lot of information about what is going on with regard to trusts which will not be available once gift duty is abolished. The reason it provides information is that people can transfer only $27000 per person per year as a gift without attracting gift duty and they have to register that they are doing that so a bunch of information is provided. Once gift duty is abolished people can transfer very large amounts of money into trusts hide it away and move it around so this bill will facilitate tax avoidance in New Zealand. 
It is quite important for people to understand that this is quite a serious problem. The Minister of Finance even just today in the House was talking about the tax avoidance problem in New Zealand and how it is a significant problem. He talked about a number of changes he has made to the tax system to try to reduce the incentives for tax avoidance and I acknowledge the work he is trying to do there. However by abolishing gift duty we are actually reducing the tools we have available to crack down on tax avoidance. As Mr Nash said earlier $450 million is currently under investigation because of tax avoidance. 
We have some real opportunities with gift statements to track what is happening with assets going into trusts. It is also a great way of defeating creditors. Currently if someone slips some money—quite a lot of money—into a trust if their business goes belly up and their creditors come after them they can hide their money in the trust. At the moment we have quite a lot of information about the money flowing into trusts because of the gift duty statements; once gift duty statements are abolished we will have a lot less. It will also be harder in matrimonial property disputes to track where the money has gone. Currently through gift duty statements we have quite a lot of information about the flow of assets into trusts that are tucked away and hidden away. 
Most of all given all of these concerns about the abolition of gift duty and about the relationship between the abolition of gift duty and the use of trusts for tax avoidance it seems to us to be particularly foolish to rush into this decision to abolish gift duty at a time when the Law Commission is currently undertaking a review of trust law. Trusts are of course very extensively used in New Zealand—more so than in other countries. They are used very widely for tax avoidance as well as for lots of perfectly legitimate purposes. The Law Commission is currently conducting a review in relation to trusts which includes issues such as how much transparency there is around trusts and how much we can see into them. At the moment it is hard to see into trusts let alone to know they exist. If we do not know they exist and we cannot see into them then it is very difficult to figure out whether they are being used for tax avoidance activities or for legitimate activities. 
The Law Commission is currently conducting a review in relation to trusts to try to figure out whether we should be changing the rules around trusts whether there should be greater transparency whether there should be some kind of register and whether there should be a central register of information about the assets being held in trusts and who the beneficiaries of trusts are. If this central register of information were to come out of the review of trust law then it would actually provide an alternative way for the tax department to keep track of what is going on with regard to assets trusts and tax. There is a logic to that. 
If the Law Commission came out with such a recommendation and such a register was set up I think the Green Party and Labour would take quite a different view of this issue. But at the moment that has not happened. We are rushing through this change which will potentially open the floodgates to tax avoidance in New Zealand before the Law Commission has completed its review of trust law which might actually ameliorate the whole problem. For that reason we are not supporting this bill. There are of course lots of good things about this bill and it is a pity that this particular highly contentious issue has been included within it but there we have it. 
As we said in the first reading debate we will not be supporting this bill. I know that National will rush through with this bill with the support of ACT and no doubt United Future—Peter Dunne has been a champion of this bill. I think National members need to look at themselves and ask whether they are absolutely certain in the absence of the Law Commission review of trust law that this bill will not create opportunities for increased tax avoidance. Of course the written advice from the Inland Revenue Department was that it could not be absolutely certain. To be fair the department said it thought the probability was low but it also said it did not really know. It was uncertain what the downstream impacts would be. Given the problems we already have with tax avoidance in New Zealand why would we open another door to tax avoidance when we are not sure of the outcomes? 
DAVID BENNETT (National—Hamilton East) 
: 
 I want to take just a short call on the Taxation (Tax Administration and Remedial Matters) Bill which we are dealing with tonight. There are two main aspects to it—gift duty and the information-sharing and secrecy provisions. Gift duty is an old tax that has had its time and for the compliance costs involved it does not generate much revenue for New Zealand’s taxpayers. It is another compliance cost on the productive sector of the New Zealand economy. So this bill is another example of the Government delivering a more efficient system in which people can get on with doing business and making the most money for this country to go forward. The information-sharing and secrecy provisions are very important provisions that I think all parties in the House will support in the sense that they will help the Inland Revenue Department in its relationship with other departments and also it is in the best interests of the New Zealand taxpayer that the department be able to access the information that is needed to make sure taxpayers are paying their fair due. National supports this bill and I recommend it to the House. 
RAYMOND HUO (Labour) 
: 
 The purpose of the Taxation (Tax Administration and Remedial Matters) Bill is to abolish gift duty and among other things amend the Tax Administration Act 1994 in order to improve the ability of the Inland Revenue Department to disclose information in the course of good tax administration practice. 
There are two main reasons why Labour opposes this bill. Politics is all about priorities but under National hard-working Kiwi families have been struggling to keep up with the increasing cost of living and their power bills and food prices are increasing as the cold of winter bites. 
Mr DEPUTY SPEAKER 
: This is a second reading debate—like last night’s debate was a third reading debate. We must confine ourselves to what is in the bill. Other things are irrelevant and should not be discussed. 
RAYMOND HUO 
: Thank you Mr Deputy Speaker. The reason I decided to say this was that I wanted to share with members and demonstrate that the National-ACT Government has its priorities wrong. 
The second reason we oppose this bill is more of a technical nature. It is wrong to use a bill that is supposedly for administrative and remedial matters to push through the abolition of a tax. Such legislation should be reserved for technical changes and would usually be non-controversial. Therefore apart from the provisions relating to gift duty Labour supports the content of this bill and in the normal course of events would vote for it. However due to those concerns we have to vote against the entire bill. 
The Law Society and a number of other submitters raised a further concern that the abolition of gift duty would create problems for the enforcement of claims under the Property (Relationships) Act 1976 and the Family Protection Act 1955. Poorly thought-out legislation will simply require further amendments in the future. It is a waste of this Parliament’s time and will create huge legal uncertainties. 
Further the abolition of gift duty may create just another avenue for tax evasion. The submission from the Institute of Chartered Accountants of New Zealand noted a number of tax avoidance opportunities that may arise in the absence of gift duty. Even the Inland Revenue Department officials cautioned in the regulatory impact statement that tax avoidance could increase in the absence of the duty. It is no wonder that New Zealand Trustee Services called for any changes to gift duty to be delayed until the Law Commission’s review of trust law is completed. 
The Law Commission has embarked on an in-depth review of trust law in New Zealand. The first issues paper was released in November 2010 and this year the Law Commission will release its fourth and final part on trust law. As Labour spokesperson for the Law Commission I find it a bit odd that the Government has ignored the fact that the review of our trust law is under way and has still decided to go ahead and abolish the gift duty that has existed for 125 years. 
I note that the reason for the decision is that the revenue from gift duty is about $1 million a year but it costs the Inland Revenue Department about $500000 to administer. On the other hand the compliance costs on the private sector amount to $70 million each year. The fact that people currently spend $70 million every year on gift duty compliance to achieve something is no reason per se for removing it. I acknowledge that the original purpose was to protect the estate duty base by discouraging the gifting of assets prior to death and to raise revenue and it has applied in some form since 1885. But again I am not convinced that gift duty should be removed on the basis that the original rationale is no longer relevant. More important gift duty actually exists to prevent tax avoidance and so-called structuring. The scrapping of gift duty opens the way to tax avoidance and structuring. 
Estate duties were abolished in 1992 but gift duties remained in place to prevent people from hiding assets in order to defeat creditors avoid tax liabilities and obtain access to Government benefits such as rest home subsidies. This was one of the major concerns in reviewing whether gift duties should be abolished at all. But the Minister Peter Dunne in his speech earlier assured us that adequate measures are in place to prevent such manipulations and protect creditors. The Government will monitor the effect on the economy and the tax system to ensure there are no unintended effects or unexpected oversights that arise. I invite the Minister to advise us in more detail of the “adequate measures” at some later stage of the development of this bill. Naturally once gift duty is abolished new assets can be transferred to a trust without the need for a gifting programme and existing debts can be forgiven in full. 
According to George Tanner QC who is in charge of the Law Commission’s inquiry into trust law which I wish was granted the attention of this House New Zealanders must have a solid reason why they are so passionate about establishing trusts. In New Zealand there is one trust for every 18 people in Australia it is one for every 34 people in Canada it is one for every 148 people and in the United Kingdom it is one for every 294 people. 
The abolition of gift duty will have far-reaching consequences. The bill as introduced by Minister Dunne is very simple but the change will have ramifications in other areas of law as I covered earlier—for instance relationship property creditor protection and insolvency. The Law Commission has proposed that the existing Trustee Act which was passed in 1956 be reviewed and modernised. One of the outcomes is likely to be stricter compliance requirements for trusts. Here again are “stricter compliance requirements”. Will the stricter compliance requirements for trusts be warranted for the Government to reject those recommendations? We will see. 
We also learnt according to the Minister who introduced this bill that Government agencies such as Work and Income and the Inland Revenue Department could potentially establish new rules and procedures for how gifts to family trusts are treated. This could mean a trust settlor may not be able to simply gift the assets in one transaction then expect wider benefits to accrue as a matter of course. Again I invite the Minister to advise us of those possible measures especially how gifting to family trusts is to be treated. As I said given that the Law Commission’s review of trusts is in progress will the Government implement the Law Commission’s recommendations especially those recommendations that are contrary to what the Government has already done? 
Some legal experts have already argued that if the Government abolishes gift duty then it must amend the law to allow the courts to order a division of trust capital to achieve a fair and equitable settlement. My question to the Minister again is whether his Government will amend relevant law to achieve that purpose. I have outlined what George Tanner QC cited as why New Zealanders are so passionate about establishing trusts. This is all about trusts. Indeed the general election this November is about trusts. Thank you. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 It is a real pleasure to take a short call at this time of night on the Taxation (Tax Administration and Remedial Matters) Bill. We have heard why this legislation is being put forward. It is about abolishing gift duty and about the sharing of information between Government departments which will lead to more effective outcomes for the Government. 
We have heard tonight from speakers opposite why they are not voting for this bill. We heard them say that gift duty raises $1 million for the Government and it costs the Government $430000 in added administration. However the private sector spends up to $70 million on compliance. We heard the last speaker Raymond Huo say that is no reason to change the law. That is unbelievable. Those members wonder why they are sitting in Opposition when there are effective compliance costs of $70 million and they do not want to change the law. 
We heard his colleague talk about incest and we heard him talk about Filipino wives. We heard him talk about income splitting which is not within the realms of this bill. And those members wonder why they are sitting in Opposition. It is because of the financial illiteracy and incompetence that has been demonstrated tonight from that side of the House. They will bring out their policy of a capital gains tax tomorrow yet they do not understand that $70 million of compliance costs going to lawyers and accountants is a waste of money. 
Debate interrupted. 
The House adjourned at 10 p.m.