Volume 678 Week 5 - Wednesday 7 March 2012 
Text is incorporated into the Bound Volume 
Volume 678 Week 5 - Wednesday 7 March 2012 
[Volume:678;Page:887] 
Wednesday 7 March 2012 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Visitors 
Korea—Minister of Government Legislation 
Mr SPEAKER 
: I have much pleasure in informing the House that Mr Jeong Sun-Tae the Minister of Government Legislation of the Republic of Korea is present in the gallery. I am sure members would wish that the Minister be welcomed. 
Questions to Ministers 
Public Service—Prime Minister’s Statements 
1. 
DAVID SHEARER (Leader of the Opposition) 
 to the  
Prime Minister 
: Does he stand by all his statements? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes. 
David Shearer 
: Does he stand by the statement that “I need to be able to look New Zealanders in the eye and assure them that the money they spend in tax is being spent wisely and as much as possible is going to front-line services.”? 
Rt Hon JOHN KEY 
: Yes. 
David Shearer 
: Does he think it is a front-line service for the Ministry of Foreign Affairs and Trade to pay $340000 to a change management adviser to manage the axing of 305 jobs? 
Rt Hon JOHN KEY 
: Governments do take advice from external consultants and when the spend is in the order of magnitude that the Ministry of Foreign Affairs and Trade’s is it may well be absolutely in its interests to have sought that advice so that it can make appropriate changes. 
David Shearer 
: In light of his answer does he agree with the change management adviser’s helpful suggestions to staff facing the loss of their jobs that they take a hot bath pray do yoga or get a pet because “a pet’s love is unconditional”? 
Rt Hon JOHN KEY 
: I have not seen the report nor have I seen the context it was made in. But when it comes to Moonbeam yes her love is unconditional to me. 
David Shearer 
: Does he consider it a wise use of taxpayers’ money when at the same time as he is axing jobs the Ministry of Foreign Affairs and Trade’s spend on consultants has more than doubled from $4.5 million to nearly $10 million since he became Prime Minister? 
Rt Hon JOHN KEY 
: Firstly it is important to understand when the Leader of the Opposition makes the claim about the axing of jobs that we are going through a consultation process at this stage and that decision has not been made. That decision may though lead to savings in the order of $20 million to $25 million—maybe more. We will see that in the fullness of time. In terms of consultants’ fees again there is always a wide variety of reasons. But when it came to spending money on consultants the Olympic gold medal used to go to the previous Labour Government. 
David Shearer 
: Is it wise use of New Zealanders’ money to have three police officers investigating his so-called teapot tapes complaint when police are being told to make savings of around $300 million and burglary clearance rates are around 20 percent? 
Rt Hon JOHN KEY 
: It is my expectation that the police will investigate complaints when they are made by members of the public. I stand by the principle that principles are very important and I say to the Leader of the Opposition that if he was in the position where he was illegally taped we would see how he felt about it. 
Public Service—Performance 
2. 
PAUL GOLDSMITH (National) 
 to the  
Minister of Finance 
: What reports has he received on the performance of the public service? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Today Treasury released a report on benchmarking back-office functions in 31 State agencies. The report shows that in many instances the costs of functions like property management human resources and information and communications technology are higher than international benchmarks and higher than the costs of similar Government agencies in New Zealand. The report concludes that savings of about $250 million could be made if poorer-performing agencies raised their performance to the agency median. Last year we announced that starting from 1 July this year agencies will be required to find $980 million of savings over 3 years. They have had a couple of years of looking at this data to understand their own organisations and work out what decisions to make and now they are starting to make those decisions. 
Paul Goldsmith 
: Why is improving the performance of the Public Service important? 
Hon BILL ENGLISH 
: Simply because New Zealanders expect a good level of public services. We owe it to many vulnerable New Zealanders who are totally dependent on our public services to do a good job and in a time when money is tight we are making every effort to ensure we can continue to deliver a good level of public services even if that has to be done with less money. 
Chris Hipkins 
: Does he stand by the Prime Minister’s statement: “Let me reiterate National’s position. We are in no way going to reduce the number of frontline staff. Let me make this absolutely clear. Under National the numbers of doctors nurses teachers social workers police and other frontline staff will grow.”; and if so how does he reconcile that statement with the recent news that the district health boards are looking to shed medical staff education officials are considering increasing class sizes the police are looking to reduce the number of staff the Housing New Zealand Corporation is laying off staff and replacing them with a call centre and the Ministry of Foreign Affairs and Trade is reducing consular services and replacing them with an 0800 number as well? 
Hon BILL ENGLISH 
: Yes I do stand by the Prime Minister’s statement because since he became Prime Minister there have been 600 additional front-line police 1600 extra teachers over 2000 more nurses and allied health staff and 800 more doctors working in our public health service. But unlike the previous Government this Government is interested in whether those extra staff are achieving what we want them to achieve and if extra staff are fulfilling administrative functions that are unnecessary then we are likely to try to move those resources to the front line. 
Paul Goldsmith 
: What progress has been made in reducing back-office costs? 
Hon BILL ENGLISH 
: The benchmarking exercise released today shows that there has been moderate progress so far but that is because the Government has followed a sensible course of action where after years of getting as much money as they could spend in most cases they needed a couple of years to understand their own organisations so that they could then make sensible decisions about savings. So this Government resisted the temptation of rushing in and grabbing large savings from agencies over its first term of office but now that the agencies have understood how their services work and which bits matter they can now make sensible decisions to maintain public services and save money. 
Chris Hipkins 
: Does he stand by the Prime Minister’s statement that a “National Government is not going to radically reorganise the public sector. … Few problems are solved by significant reorganisations—in fact many more tend to be created.”; and if so how does he reconcile that statement with the reality of 2500 job losses multiple departmental mergers the closure of regional offices and his promise today of yet more to come? 
Hon BILL ENGLISH 
: Yes I do stand by the Prime Minister’s statement and the Government has actually not gone for large-scale structural reform. What we have done is work through with the Public Service a better understanding of its own organisations. We have put a strong focus on maintaining public service on developing the leadership needed to make change and on giving them the tools to do it. The time has come now though where they are starting to make changes. I have to say that the Labour members appear to be the only people in New Zealand who believe that the Public Service is exempt from all the pressures that have applied to households and businesses right through this country. 
Paul Goldsmith 
: What progress has the Government made in improving front-line services? 
Hon BILL ENGLISH 
: Just to use a couple of examples the public health service is now completing 27000 more elective operations this year compared with when we took office and recorded crime rates have dropped by 7 percent in total per head of population. Those are some signs of progress but there are a lot of other areas in the Public Service where we need to make even more progress and we will continue to do that even though money is tight. We are not just making savings; we are also going to improve results. 
Rt Hon Winston Peters 
: Given that Prime Minister Holyoake had about five people in his department and the present Prime Minister has about 126 when are we going to see some cuts from the Prime Minister’s department in terms of staff? 
Hon BILL ENGLISH 
: I would have thought the member would have a slightly better understanding of what the Department of the Prime Minister and Cabinet does these days including for instance the operation of the Governor-General which was handled differently back in Keith Holyoake’s day. But I can assure you that the Prime Minister is cooperating at least as much as every other Minister with the need to be careful how money is being spent. 
State-owned Energy Companies Shares—Prioritisation of Individual New Zealand Buyers 
3. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Prime Minister 
: Does he stand by his statement about asset sales that it was the Government’s intention that “every New Zealander who wants shares gets them”? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 That quote was attributed to me in a Stuff article but is in fact incorrect. The quote was actually— 
Hon Members 
: Oh! 
Rt Hon JOHN KEY 
: Well the quote was actually a question posed to me by Duncan Garner from TV3 to which I responded “That’s what we are working our way through”—obviously—“at the moment. But the intention is that for the retail distribution that opportunity for mums and dads to buy to be absolutely at the front of the queue.” I stand by that statement. 
Dr Russel Norman 
: How will he ensure that every New Zealander who wants shares gets them when half of all adults have an income of less than $550 a week? How will these people be able to afford to buy shares in the newly privatised companies? 
Rt Hon JOHN KEY 
: I say to the member that just because he repeats something that was a question from Duncan Garner does not mean that it was a statement from me. Secondly it is important to understand how New Zealanders might buy shares. Let me run the member through that because it will be useful for him. Firstly they could buy them through an institution like the New Zealand Superannuation Fund and on that basis every New Zealander in the New Zealand Superannuation Fund will be having shares bought on their behalf regardless of their income. That probably answers your direct question. Secondly New Zealanders may buy them through their own funds in the form of the KiwiSaver accounts of which there are 1.8 million and they are growing by a substantial amount each month. Thirdly iwi may buy them collectively through their own resources which may have come from a Treaty settlement. Fourthly we are seeing indications from community trusts that they would want to buy them; again that would probably cover off some quite low-income New Zealanders. Finally there will be a retail offering which is where a New Zealander may buy them directly either through a broker or directly with their own retirement savings. So there is quite a wide range of ways that a New Zealander may choose to buy shares in the mixed-ownership model. 
Dr Russel Norman 
: How will individual New Zealanders be able to buy shares when half of all New Zealanders have an income that is less than $550 a week? How will those individual New Zealanders be able to afford to buy shares in companies that they currently own? 
Rt Hon JOHN KEY 
: I could if the member wanted me to take him through the broad outline of how that process might work but fundamentally the way it would work would be through either a broker or a pre-allocation process and a pre-registration process where New Zealanders will be able to work out how many shares they want up to probably a certain amount. That process would work. We saw that with Contact Energy. It might see tens of thousands of New Zealanders wanting to do that. Secondly when the member says that half of all New Zealanders have an income of $550 a week he must recognise that there are an awful lot of New Zealanders who are for instance on superannuation and therefore their income is relatively low but that does not mean that it represents their asset base which could be considerably higher. Secondly it may mean that the person is at university or at school studying. Again their income levels could be low but that does not necessarily mean that their income in the future will not be high. Thirdly if one has a look at someone for instance who has a KiwiSaver account then they will be having to make investments on a weekly basis. 
Hon Clayton Cosgrove 
: If he cannot guarantee that ordinary Kiwi mums and dads will be able to afford to buy shares how on earth can he guarantee that those same Kiwi mums and dads will be at the front of the queue? 
Rt Hon JOHN KEY 
: I think we will see considerable interest from Kiwi mums and dads. That has certainly been the case when there have historically been floats from Auckland Airport right through to the Port of Tauranga right through to TradeMe which recently had the mixed-ownership model effectively applied to it and it was massively oversubscribed. There is $100 billion in deposit in New Zealand at the moment so we know that there is a considerable amount of cash sitting out there and in my view the risk to this process is not that there are not enough people wanting to buy shares; the risk to this process is that there will be quite widespread interest and making sure everyone gets his or her allocation will be the challenge. 
Rt Hon Winston Peters 
: If it is true that mum and dad iwi and family trusts may subscribe and may oversubscribe then how will corporations foreign or domestic obtain even one share under his promise? 
Rt Hon JOHN KEY 
: Again I would not want to get in front of a process that has not even started yet but if we were to take a hypothetical example I think from memory Contact Energy had about 100000 individual retail investors. I might be wrong but it was in that order of magnitude. Again if you sat around and said that—off the top of my head—they bought up to about $5000 that is normal for a retail offering. I am sure the member can do the maths. Basically 100000 people at $5000 each is $50 million. That is relatively small when you consider that as an example Mighty River Power has a value of about $3.5 billion and the overall offering therefore at 49 percent would be about $1.5 billion. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. I have listened to all the permutations but the fact is I have asked him how if the three categories he has outlined oversubscribe any corporate will get even one share because they after all—the three groups— 
Mr SPEAKER 
: The member’s question was perfectly understandable and the Prime Minister was answering it in what I perceived to be a perfectly rational way explaining how many shares might be sought by different sectors and the overall availability given the size of these assets. It seemed to be a perfectly rational answer to the question. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. My question simply is if a certain circumstance happens then how an overseas or domestic corporate can get even one share. That is the thrust of this question. 
Mr SPEAKER 
: The member may have asked a question that he wishes to get a particular answer out of but there is no guarantee he will get a particular answer out of a hypothetical question. The Prime Minister was answering the question in a perfectly rational manner. 
Dr Russel Norman 
: Does the Prime Minister accept that the vast majority of mums and dads—New Zealanders—will not be able to afford to buy shares in these partially privatised companies? 
Rt Hon JOHN KEY 
: I think it depends on how you define “vast majority” because if you take for instance KiwiSaver accounts there are 1.8 million and that tells you that an awful lot of people actually have a KiwiSaver account. If you consider that the New Zealand Superannuation Fund and ACC are buying on behalf of all New Zealanders then no I do not accept that logic. So it depends on where you are going. But let me raise this one point. It is important that New Zealanders understand what the member is advocating. Russel Norman is saying he wants the New Zealand Superannuation Fund to invest in the Australian economy and not in the New Zealand economy— 
Dr Russel Norman 
: I raise a point of order Mr Speaker. There was nothing in that question that was about Russel Norman. The Prime Minister simply introduced that. It had nothing to do with the answer. 
Mr SPEAKER 
: The member in fairness though has kept repeating—I have listened carefully to his questions and the theme of the questions has been pretty similar right the way through. The Prime Minister has tried to explain in response to the member’s questions the way he sees access to these shares being available to New Zealanders. In that last answer there the Prime Minister went a bit further to explain how he sees the outcome of the implication in the question. I would not let him go on for too long but I think the risk when members keep asking the same question over and over again is that when it is being answered a Minister is going to say—and I cannot stop them from going that step—that the implication of the question is this. I would have stopped the Prime Minister had he gone on for too long but I do not think it was totally unreasonable. 
Dr Russel Norman 
: Does he accept that what John Key is saying is that he will take the assets away from all New Zealanders who currently own them against the wishes of the majority of New Zealanders who oppose the privatisation scheme and when you take property from people against their wishes it is called raupatu? 
Rt Hon JOHN KEY 
: This may come as a huge relief to the member but I am not about to start talking about myself in the third person. I will leave that for other Prime Ministers who used to have that affliction. 
Hon Bill English 
: And thank God for that! 
Rt Hon JOHN KEY 
: And thank God for that yes exactly. Secondly no I do not accept that. Majority control of these companies will be held by New Zealanders. I think the vast bulk of the shares will be bought by New Zealanders and we will be purchasing on behalf of New Zealanders an additional $22 billion approximately of assets over the next 5 years. What the member is saying is he wants New Zealand to go into deeper debt. What the member is saying is he wants to limit the opportunities for New Zealanders to invest in New Zealand. I think on that basis the member is misguided. 
Dr Russel Norman 
: Is it an accurate description of his policy to say that he cut taxes on upper-income earners resulting in an increased Budget deficit and he then used the deficit to justify the privatisation of public infrastructure which will then be sold to the people who can afford to buy it—the very same people whom he gave big tax cuts to? 
Rt Hon JOHN KEY 
: No. 
Youth Guarantee—Increase in Places 
4. 
SIMON O’CONNOR (National—Tamaki) 
 to the  
Minister for Tertiary Education Skills and Employment 
: What progress has been made in expanding the Youth Guarantee Scheme to provide more 16 and 17 year-olds with fees-free tertiary training this year? 
Hon STEVEN JOYCE (Minister for Tertiary Education Skills and Employment) 
: 
 The year 2012 will be the biggest year yet for the very successful Youth Guarantee scheme. A total of 9616 places will be available in 2012 for 16 and 17-year-olds as a result of the Government’s more than $100 million investment in Youth Guarantee in 2012. That encompasses fees-free tertiary places at levels 1 to 3 for 16 and 17-year-olds and the trades academies. The Youth Guarantee scheme gives young people the opportunity to gain practical skills and a career particularly those at risk of dropping out of school. 
Simon O’Connor 
: What are the priority areas for Youth Guarantee places for 16 and 17-year-olds? 
Hon STEVEN JOYCE 
: Youth Guarantee places available through institutes of technology polytechnics wananga and private training establishments will give priority to trades areas such as carpentry engineering horticulture plumbing gasfitting and brick- and block-laying. In addition enrolments have trebled this year with 1936 learners studying at 16 trades academies which is well up on the 625 who participated last year. Numbers are set to increase further when another five trades academies are opened later this year by my colleague the Minister of Education Hekia Parata. I am delighted that different parts of the education community are pulling together to offer more choices for our young people. Over a third of all secondary schools are now part of a trades academy partnership for example. 
Economy—Minister’s Statements on Forecasts 
5. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister for Economic Development 
: Does he stand by his statement that “the global financial crisis and the Canterbury earthquakes were not projected in any of those forecasts”? 
Hon STEVEN JOYCE (Minister for Economic Development) 
: 
 Yes I stand by my full quote in reply to a question about a forecast in Budget 2009. That quote was: “Some of the forecasts since we came to office have changed and the member may well be aware—I am not sure—that the global financial crisis and the Canterbury earthquakes were not projected in any of those forecasts in 2009 to the extent that they have occurred. That is the nature of forecasts.” As the member may recall the first Canterbury earthquake did not occur until September 2010 and the more significant one was on 22 February last year. In addition the global financial crisis has been a moving feast since it began. For example at the beginning of this year there was a whole new crisis in the eurozone. 
Hon David Cunliffe 
: Before the Canterbury earthquakes began was GDP above or below Treasury’s December 2008 forecast and by how much? 
Hon STEVEN JOYCE 
: I do not have that particular example at hand but I am sensing that the member is saying it was below. As I pointed out one of the other bigger things that has been going on is the global financial crisis which has been making it very difficult I am sure for forecasters all over the world to find out exactly how things should go. But the good news for the member is that we have had growth in nine of the last 10 quarters and New Zealand has been seen as riding out these crises relatively well. 
Hon David Cunliffe 
: Speaking of which are the latest GDP figures above or below the forecasts made immediately after his Government came to power in December 2008 during the depths of the recession and by how much? 
Hon STEVEN JOYCE 
: I am sure again by the way the member has asked that question that he is assuming they are below and the point I would make again is the same point as in response to the primary question. It is that the Canterbury earthquake has occurred subsequently and also we have had the situation with the moving feast that is the global financial crisis. I am not sure of the point the member is seeking to make but the point I would make is that the Government under the leadership of the Prime Minister and the finance Minister has done a very good job in managing its way through those crises. 
Hon David Cunliffe 
: If GDP was below those forecasts why did he tell the House in answer to question No. 8 on 29 February that “The pre-election update last year forecast the current account deficit to widen by about just under $5 billion over the next 4 years. The main reason for that apart from export prices coming off their record highs is the Canterbury rebuild” when Treasury’s Pre-election Economic and Fiscal Update ascribes only one-quarter of the change to that? 
Hon STEVEN JOYCE 
: As has been pointed out in response to a question in the House on this matter in 2016 the deficit is projected to be 6.9 percent of GDP of which Treasury now estimates about 1.7 percent is due to the Christchurch earthquake rebuild. But again I would point out to the member that these are all estimates and forecasts and they will no doubt continue to be refined as the years go on. 
Hon David Cunliffe 
: In light of these events in what year did the record number of New Zealanders permanently emigrate to Australia and why did they leave? 
Mr SPEAKER 
: The Hon Steven Joyce is not really responsible for emigration but if he— 
Hon Tony Ryall 
: We want to know every individual case. 
Hon STEVEN JOYCE 
: Yes I think it is reasonably far from the primary question but I would point out again that there have been significant numbers leaving particularly from Christchurch over the last 12 months as a result of the earthquake. I do not have the particular figures. 
Hon David Cunliffe 
: I seek leave to table this document from the Parliamentary Library which indicates that only 25 percent of the deterioration in the current account forecasts can be ascribed to the Canterbury earthquakes. 
Mr SPEAKER 
: Leave is sought to table that document from the Parliamentary Library. Is there any objection? There is no objection. 









Document by leave laid on the Table of the House. 
Hon David Cunliffe 
: I seek leave to table data from Statistics New Zealand which show that the year in which the record— 
Mr SPEAKER 
: Statistics New Zealand always has a title to its data releases. 
Hon David Cunliffe 
: Yes the net permanent migration data series— 
Mr SPEAKER 
: I thank the member. 
Hon David Cunliffe 
: —which shows that the year in which a record number of New Zealanders emigrated to Australia was in fact 2010. 
Mr SPEAKER 
: We are not going to seek leave for that because members all have that information. 
Hon Lianne Dalziel 
: Is he concerned that repeated delays in the rebuilding of Christchurch will threaten the Government’s much-vaunted return to fiscal surplus in 2014 and if so what action is he taking to address the failure of the insurance market which appears to be one of the remaining key problems for the rebuilding effort? 
Hon STEVEN JOYCE 
: That is possibly more of a question for the Minister of Finance. The point I would make is that the reality in Christchurch is as we know that there are a number of factors impinging on the speed of the reconstruction. Not the least of those is the ongoing seismicity that is occurring which the member will be aware of and which has the effect of moving construction back at times. There are also other challenges such as the news that may come out of the royal commission in regard to building codes. All those things have to be worked through. I am confident that my colleague the Minister for Canterbury Earthquake Recovery is right over the top of these issues and is constantly updating his colleagues accordingly. 
Auckland Council—Financial Management 
6. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
 to the  
Minister of Local Government 
: Has he been in communication with the Auckland Council over financial management issues and if so on what occasions this year? 
Hon Dr NICK SMITH (Minister of Local Government) 
: 
 I have not had any communication with the Auckland Council on issues of financial management that the member has been raising in the House. I have met and had discussions with the Auckland Mayor Len Brown on a wide range of local government issues just like I have had meetings with dozens of mayors throughout the country on those issues. 
Rt Hon Winston Peters 
: Relating to his powers under section 254 of the Local Government Act 2002 and his meeting with the council officers last Friday afternoon is he in receipt of reports of Deloitte receiving significant consulting fees and major Auckland Council projects written in the 2012 draft long-term plan containing all major policy initiatives and spending priorities commissioned by the council’s chief financial officer Andrew McKenzie despite Mr McKenzie being the client for both the consultancy work and the audit by Deloitte of the council’s financial affairs? 
Hon Dr NICK SMITH 
: Yes I did meet with Mayor Len Brown last Friday. The bulk of the discussion was actually in my role as Minister for the Environment around the spatial plan. There was no discussion of the abstruse issues that the member has been raising. I have received no documents on those issues as the member claimed in the House. Again I simply invite the member if he has concerns about the financial issues with the council— 
Rt Hon Winston Peters 
: You’re the Minister. 
Hon Dr NICK SMITH 
: I’m actually— 
Rt Hon Winston Peters 
: Do your job. 
Hon Dr NICK SMITH 
: It is ridiculous. On that basis— 
Mr SPEAKER 
: Order! The Speaker is not the Minister. 
Hon Dr NICK SMITH 
: On that basis you could have questions on every one of our 78 councils. The member makes reference to the section in the Local Government Act that has a very high threshold. In fact the major lectures I have had from members opposite have been about intervening too early in councils’ affairs and that is why I say the member should do the responsible thing and lay a complaint with the Auditor-General if he has got real concerns. 
Rt Hon Winston Peters 
: Related again to his powers under the 2002 Local Government Act has he received any reports that the largest projects for Auckland Council consultancy work involve information technology on which Deloitte is charging fees in excess of $3400 plus GST per day per senior consultant and that a further $20 million of Auckland information technology infrastructure which chief financial officer Andrew McKenzie is in charge of will be tabled before the council this week? 
Hon Dr NICK SMITH 
: No I do not have any more knowledge of that matter than of any of the other thousands of matters that are before New Zealand’s 78 councils. If the member has a concern he should take that up with the mayor and elected representatives of the Auckland Council or if he is dissatisfied with their response the proper channel to go to is the Auditor-General. 
Rt Hon Winston Peters 
: Relating to those same section 254 powers does he not understand the massive conflict of interest in being both a consultant on high consultancy fees and the auditor of those consultancy fees—where is the probity in that—and that being the case when he was there last Friday what did he do about the fairness and propriety aspects involving chief financial officer Andrew McKenzie and his— 
Mr SPEAKER 
: Order! We are now departing from what the Minister can possibly be responsible for. The member asked the Minister whether he had received any reports on those matters. It is a perfectly legitimate supplementary question. The Minister has indicated he has not received any reports on those matters and therefore asking him why he did not interfere in the operational affairs of the Auckland Council is nothing to do with the Minister’s responsibility. He cannot interfere in that. I invite the member to rephrase his question. I do not want to deprive him of his question. 
Rt Hon Winston Peters 
: Does the Minister regard himself as having had no reports or information whatsoever on the impropriety of consultants being their own auditors which is surely outside the Local Government Act? 
Hon Dr NICK SMITH 
: The only information that I have had has been the accusations that have been made by the member in the House. I have repeatedly invited him to take those up directly with the Auckland Council or with the Auditor-General and it remains my opinion that that is the proper course of action. The only intervention powers I have as a Minister have a very high threshold and the only times that they have been used in financial affairs is where they have followed a negative report by the Auditor-General. 
Welfare Reforms—Initiatives Targeting Young People 
7. 
MIKE SABIN (National—Northland) 
 to the  
Minister for Social Development 
: How will the Government’s recently announced changes target young people not in education employment or training? 
Hon PAULA BENNETT (Minister for Social Development) 
: 
 The changes we have announced target up to 14000 at-risk 16 and 17-year-olds most of whom are not yet on a benefit but are on a collision course with the benefit system. We are going to contract with youth service providers to work with these young people to place them in work-based learning education or training. Potentially Youth Guarantee places which my colleague referred to in his earlier question will pay providers on their success in working with and placing the young person in education training and work-based learning a financial bonus. 
Mike Sabin 
: What has been the impact of the global economic recession on young people? 
Hon PAULA BENNETT 
: Since the Government took office in late 2008 we have seen those not in education employment or training—“neets”—rise from 10.9 percent in December 2008 to 13.1 percent in December 2011 which is a rise that we would rather not have seen I am sure. However before the opposite side start jumping up and down from 2004 to 2008 the “neet” rate actually rose fluctuating between 10.3 percent and 12 percent when we had a labour market that was essentially crying out for workers which is why we have got to target these young people. They have been left behind. We can and we must do better by them. 
Mike Sabin 
: How will at-risk 16 and 17-year-olds be picked up by the system? 
Hon PAULA BENNETT 
: We know that around 90 percent of these 14000 young people will end up on a benefit unless we ensure they continue in education training or a work-based opportunity or even in some cases get themselves into it. But currently we do not know where they are and that is the reality. In some places we do where we have schools in real time giving that information to service providers but it is patchy and not happening consistently enough. We will be changing the rules so that schools are directly and in real time letting a service provider know when that young person has left school so that we can connect to them quickly and in an appropriate manner so that we can then wrap those services round them. 
Jacinda Ardern 
: Does she accept that her targeting of solely 16 and 17-year-olds is leaving young people behind with Youth Transition Services saying that her changes to their contracts will mean that up to 60 percent of the young people they are dealing with now will no longer be covered? 
Hon PAULA BENNETT 
: I think we have identified why we are targeting those 16 and 17-year-olds and really clearly. Hopefully the member is starting to get that—that they really are those who are most at risk. But different branches of Youth Transition Services work in different ways. For example the one in west Auckland will tell you that 70 percent of those young people they work with are 16 or 17-year-olds. There will also be a small percentage that are able to work outside of that because we recognise there needs to be a little bit of flexibility. But for them to target where we most need it I think is necessary and will give us the right kind of results for those young people. 
Jacinda Ardern 
: How much of the $17.15 million that has already been drawn down to fund information technology changes for her youth package was for her payment card which on her own estimates will affect only 2800 people? 
Hon PAULA BENNETT 
: I do not have the breakdown of that in front of me but what I can tell the member is that the information technology systems that we are building up alongside the youth payment and alongside the sorts of changes in the first bill are also those that will be going into the bigger welfare reforms. So we are actually setting the whole system up. We are using this as the first tranche of that but they will be actually used in the whole reform process. 
Gambling—Government Policy on Gaming Machines 
8. 
DENISE ROCHE (Green) 
 to the  
Prime Minister 
: Does he stand by his comment that the Government has a “sinking lid policy” for pokie machines? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes I stand by my statement that overall there is a sinking lid on pokie machines. The number of pokie machines has fallen since the introduction of the Gambling Act 2003. The number of class 4 pokie machines has declined from over 25000 to just over 18000. 
Denise Roche 
: Will he retract his claim that the Government has a sinking-lid policy on gambling considering that Auckland’s total number of pokie machines has reduced by only 18 machines in the last year while the Government is negotiating with Skycity to increase the total number of its machines by up to 500? 
Rt Hon JOHN KEY 
: No and the member is getting ahead of herself in terms of what negotiations could might or might not be on the table with Skycity. But my point is that in terms of Auckland where there is a sinking-lid policy even if there was to be a slight increase in the number at Skycity as a result of the deal for the New Zealand International Convention Centre overall there has been a reducing number since the 2003 Gambling Act has been in place. 
Denise Roche 
: Does he accept that he is claiming success for the efforts of local authorities to reduce small numbers of pokie machines in clubs and pubs while he is actually undoing their good work by negotiating with Skycity to significantly increase the number of machines in its casino? 
Rt Hon JOHN KEY 
: Firstly I do not accept that Skycity is significantly increasing its machines; secondly I do accept that local government has the primary responsibility in terms of that policy; and thirdly I think if one takes a step back and looks at the environment in terms of harm minimisation certainly the research we have indicates that harm minimisation takes place best if you like or is maximised in a casino as opposed to a licensed pub that preys on low-income people as we see often in South Auckland and west Auckland. 
Denise Roche 
: Why is he increasing the number of pokie machines at Skycity when Health Sponsorship Council research shows that gamblers in casinos are more likely to be at-risk or problem gamblers than gamblers in pubs and clubs? 
Rt Hon JOHN KEY 
: Firstly I do not accept that logic and secondly I think if the member has a look at the proliferation of pokie machines for one moment in Auckland the member will actually see that the vast bulk of them are in low socio-economic areas in parts of west Auckland and South Auckland. In my opinion having the greater concentration of them in casinos makes sense. I also happen to think that the overall economic benefit of a $350 million investment in a convention centre in Auckland makes a lot of sense. You see the people on that side of the House who are making lots of noise are really saying they do not want the thousand jobs for its construction they do not want the 900 jobs to run the convention centre they do not want the 144000 extra visitor nights that will occur— 
Mr SPEAKER 
: Order! I think the answer has gone on for a sufficient time. 
Denise Roche 
: Can he confirm his party has received large financial donations from Skycity but not from the trust whose machines— 
Mr SPEAKER 
: Order! I accept the member is a new member and would not be aware that the Prime Minister is not responsible for anything that his party might have done. He is responsible only for matters relating to him as Prime Minister. I do not want to deprive the member of a supplementary question so she is welcome to reword the question. 
Denise Roche 
: I will table some information if I may. One is the Health Sponsorship Council’s  
Casino Gambling in New Zealand  
report which shows that gamblers in casinos are more likely to be problem gamblers than gamblers in pubs and clubs. This is dated February 2012. 
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. 
State-owned Energy Companies Sales—Confidence and Supply Agreement with United Future 
9. 
Hon CLAYTON COSGROVE (Labour) 
 to the  
Minister of Finance 
: Does he stand by the statement made on his behalf in answer to Oral Question No 1 on 1 March 2012 that “I do know what is in the coalition agreement” and if so does he agree that the United Future-National confidence and supply agreement does not require United Future to vote for the Government’s asset sales legislation? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes and no. 
Hon Clayton Cosgrove 
: Does he agree with the Hon Peter Dunne that it would be “unacceptable” for privatised power companies to be able to hock off their assets to foreign buyers and if so why is his Government not including any provisions in its legislation to prevent that? 
Hon BILL ENGLISH 
: That issue has been discussed. The Government has made a number of statements about how these companies would behave under mixed ownership and we do not think they need a legislative barrier. 
Hon Clayton Cosgrove 
: Does the Government intend to even consider or possibly act on the findings of the citizens committee that has been established by concerned citizens in the seat of Ohariu to assess the case for asset sales? 
Hon BILL ENGLISH 
: Well we get the benefit of the Labour Party’s advice in the House every day. Some of it we consider; a lot of it we dismiss just because it is wrong-headed or it comes straight out of the 1970s. 
Hon Clayton Cosgrove 
: Has he been approached by the United Future party or Mr Dunne himself with a request to postpone the asset sales programme in light of the announcement of a launch of a petition for a citizens initiated referendum on that issue? 
Hon BILL ENGLISH 
: I do not think I have been approached on that particular issue by Mr Dunne but we have regular discussions about the policies around mixed ownership. Mr Dunne has taken a close interest in those. We also discuss the progress on both legislation and the commercial processes that go with it and Mr Dunne is doing a good job of representing his party’s point of view. 
Game Animal Council Bill—Benefits 
10. 
TODD McCLAY (National—Rotorua) 
 to the  
Associate Minister of Conservation 
: What benefits will the Game Animal Council Bill bring for recreational hunters? 
Hon PETER DUNNE (Associate Minister of Conservation) 
: 
 The Game Animal Council Bill will bring two main benefits for recreational hunters. Firstly the establishment of the council will improve the management of game animals—namely deer tahr chamois and wild pigs—and will include improvements in hunting opportunities and the quality of the game trophy resource. The second main benefit will be to provide an independent hunting-focused advice stream to the Minister of Conservation on issues that affect that sector. 
Todd McClay 
: What feedback has he seen regarding the introduction and first reading of the Game Animal Council Bill? 
Hon PETER DUNNE 
: The feedback has been extremely positive including support from the New Zealand Deerstalkers Association the Game and Forest Foundation the Fiordland Wapiti Foundation the Game Council New South Wales hunting guides the hunting media many non-affiliated hunters and even non-sector interests such as Fish and Game New Zealand and people in the recreational fishing sector as well. In fact many people have told me that this council is the thing they have been waiting 60 years to see established. 
Kevin Hague 
: Can the Minister confirm that all of the advice received from the Department of Conservation has been that the proposed Game Animal Council is likely to be harmful to conservation and to our native plants and animals? 
Hon PETER DUNNE 
: No I cannot confirm that. But what I can tell the member is that the bill was developed out of a long period of consultation. It began during the term of the previous Labour Government it actually had over 4000 public submissions presented to the game animal panel and the result of that was that panel’s recommendation that a big-game hunting council be established which is given effect in this legislation. 
Todd McClay 
: I am interested to know: what is the background to the Game Animal Council Bill and how did it reach this stage? 
Hon PETER DUNNE 
: This bill is the culmination of work that began as part of United Future’s 2005 confidence and supply agreement with the Labour-led Government to develop a national pest-management strategy. That saw the establishment of a game animal panel chaired by the Hon Margaret Austin and 4000 submissions to it. Its recommendation was that a big-game hunting council be established. During the last term of Parliament under the current Government we have been able to bring that to the point where the bill was introduced last week. So there is widespread support on both sides of the House for this development. 
Housing New Zealand Corporation—Freephone Number for Tenants 
11. 
Hon ANNETTE KING (Labour—Rongotai) 
 to the  
Minister of Housing 
: What response has he received to the “Smarter. Faster. Fairer” tenancy service which provides an 0800 phone customer service centre response to people with housing needs? 
Hon PHIL HEATLEY (Minister of Housing) 
: 
 Since the 0800 service was set up under Labour in 2003 it has now grown to handle almost a million calls a year which seems like a pretty good response to me. 
Hon Annette King 
: Does he stand by Housing New Zealand Corporation’s claim very recently that the new Smarter. Faster. Fairer. 0800 service to Housing New Zealand Corporation clients will provide a better and bigger service through just one phone call and with customers getting help straight away? 
Hon PHIL HEATLEY 
: Well clearly statistically it shows that more and more people are using the 0800 service since it was begun in 2003 under Labour. It is becoming more and more popular. Almost a million people are using it; they are voting with their fingers. 
Hon Annette King 
: What is his response to the social worker who contacted him recently outlining her experience with the new 0800 call centre service under a National Government which involved her making nine phone calls and two personal visits to a Housing New Zealand Corporation office before she got to leave a message on a staff member’s answerphone after waiting 7 minutes on the line to leave that message? 
Hon PHIL HEATLEY 
: As I said there are almost a million calls a year now. In this particular case the corporation shares my view that it dropped the ball. This is unacceptable. It has assured me that it will be working hard to ensure there is a better standard of service in the future. But I have to say that given the amount of calls to the 0800 service this could in fact be Labour’s most popular initiative ever. 
Hon Annette King 
: What impact will the loss of 70 jobs from Housing New Zealand Corporation and the closure of its offices except for arranged appointments for housing needs assessment have on his new Smarter. Faster. Fairer. service to Housing New Zealand Corporation clients? 
Hon PHIL HEATLEY 
: Clients are now getting a much better service. When they want to know how much rent they owe or whether they can get their window fixed they can pick up the phone rather than wander down to the bus stop wait half an hour pay a fare go into the office and wait for an appointment just to say the same thing. So there is much improvement and as I say it is so popular we simply have to take that at face value on the statistics. 
Hon Annette King 
: Does he agree with the Housing New Zealand Corporation spokesperson who said today: “Our customers now feel comfortable. They have a relationship with Housing New Zealand not Mary Brown the tenancy officer.” and if so could he explain how it is possible to have a relationship with a corporation rather than a person? 
Hon PHIL HEATLEY 
: The 0800 number does help with the relationship because people can get answers quickly. I do know there is room for an improvement because her colleague Shane Jones wants it to be changed and improved by turning it into an 0900 number. I actually think that is inappropriate and we will not be doing that. 
Hon Annette King 
: What a weak answer! 
Mr SPEAKER 
: Order! The member knows she should not start a question that way. 
Hon Annette King 
: Is he aware that members of Parliament who carry out considerable constituency work on behalf of Housing New Zealand Corporation clients have been told that under his new Smarter. Faster. Fairer. policy they will no longer have direct contact with a Housing New Zealand Corporation manager and must now deal with the 0800 call centre and is this the more efficient service that he envisaged? 
Hon PHIL HEATLEY 
: For very simple queries I encourage members of Parliament State house tenants and others working on their behalf to use the 0800 number. Where there are more complex queries then they are more than welcome to sit down with tenancy managers and work these through. 
Hon Annette King 
: I seek leave to table an email to the Hon Phil Heatley on 5 March from a social worker expressing her dissatisfaction with Housing New Zealand Corporation’s new processes—not the Labour Government’s; the new processes—under his watch. 
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. 
Safety in the Home Falls Prevention—Idea Nation Programme 
12. 
JAMI-LEE ROSS (National—Botany) 
 to the  
Minister for ACC 
: What initiatives are underway to help raise awareness about falls in the home? 
Hon JUDITH COLLINS (Minister for ACC) 
: 
 Recently ACC announced Idea Nation a competition encouraging people to contribute ideas to help make New Zealand homes safer and reduce the physical social and financial costs of falls in the home. Half of all falls happen in the home and falls make up over 40 percent of home injuries. They can cause significant disruption to people’s lives and lead to lost productivity for thousands of businesses. The competition will be open for 1 month from 12 March until 13 April 2012 and all New Zealanders are invited to send in their ideas. 
Jami-Lee Ross 
: Why is ACC focusing on falls in the home? 
Hon JUDITH COLLINS 
: Good question! Falls are the leading cause of injuries in the home among working-age New Zealanders. Each year more than 100000 working-age New Zealanders fall in their homes. The social and economic cost of these falls is around $1.8 billion a year. Most falls occur when people are doing everyday things such as walking up or down steps carrying the washing or getting in or out of the shower. Idea Nation calls on New Zealanders to apply their No. 8 fencing wire mentality in helping to reduce the physical social and economic costs of these falls. 
General Debate 
DAVID SHEARER (Leader of the Opposition) 
: 
 I move  
That the House take note of miscellaneous business 
. A couple of days ago the Government entered its 100th day in office since the election. It is a pretty shambolic and sorry sight that we are seeing after 100 days: a deficit of $12 billion—$12 billion—which is twice what the Prime Minister believes that the Government will get for our assets if it sells them; I mean that is if it gets anything like $6 billion. That is up to the finance Minister; that is just a best guess and not even a best guess actually—just a guess. So what we have is a $12 billion deficit—a $12 billion deficit—that this country is showing now which is an indication of where the economy is going. Income tax is down GST is down and company tax is 5 percent down. This is a shambolic start to the year. 
The only real offer on the table is to sell our way to this brighter future that we were promised at the election just 100 days ago. You sell your way to a brighter future and how do you do that when you flog off our most valuable farmland? That is a start; the Crafar farm deal is one way. And we know that there are at least 16000 hectares of land in front of the Overseas Investment Office today waiting for a decision—another 16000 hectares in addition to the Crafar farms. In fact thank you to Justice Miller who had the good sense to understand that actually you need to look at this land and understand whether it is in New Zealand’s best interests to sell this land and whether it brings real value to New Zealand. Justice Miller for telling us that actually Ministers do not have their hands tied. They do not have their hands tied when they come to look at these things but in fact they are able to make decisions based on New Zealand’s best interests. These Ministers—and Mr Williamson is here in the House right now—did not do that; he said that his hands were tied. 
But there is more. As I go around the country and I speak to people all over this country all of them say the same thing: why are we selling our land and why are we selling off our assets? That is what they all say. We will get in behind the citizens initiated referendum. We will get in behind that because that is exactly what New Zealanders want to see. They want to have an opportunity to oppose these asset sales. Why should they oppose them? Because they believe—most New Zealanders believe—we already own them. They ask me why we need to buy these assets again. And when you look at the popularity of the sale of these assets when you actually look at how many people really do support the sale you see it is only about a quarter of the people who support them; the rest oppose them. The rest are opposed to these asset sales and they oppose them because they are never going to get a look-in to buy them. That is the real reason. The only people who will are the quarter whom those people on the other side of the House here say they represent: the rich people who are going to be able to put up the money in order to buy those shares. 
The Government is going to sell these assets at the bottom of the market to people who can afford them and most New Zealanders are not able to buy those shares. We know that these people believe that many of these assets were guaranteed by the Prime Minister before the election and that mums and dads—mums and dads—would be at the front of the queue. That is what they were told when these sales came up. We know that none of that is true in the legislation. The legislation was put in front of this House and there is absolutely no guarantee. So we are just going to have to believe this Government that somehow mums and dads are going to be first in the queue. That is absolute nonsense. That is a broken promise and we know it. Not only that but we were promised that there was going to be a cap—a cap—on foreign ownership and we know that that is not going to be in the legislation either. We know that there is going to be no cap on foreign ownership in this legislation. 
Hon DAVID CARTER (Minister for Primary Industries) 
: 
 I am quite happy to compare the first 100 days of the National-led Government and its performance with the performance of that member as the Leader of the Opposition. Every question time you see the dejected looks coming over all of the faces of the Labour caucus as they know they have a problem. The only one who is happy is Grant Robertson. He cannot wait—he cannot wait—to see Mr Shearer take another question because it is only a matter of time. It is only a matter of time. Mr Robertson is knocking close on the door. 
But today I want to talk about the New Zealand primary sector and its contribution to the economy. What we see with the huge performance of the whole of the primary sector is that it makes a contribution of 72 percent of export earnings. I want to compare what National does with the primary sector with what those guys in Labour did. It was David Lange who called agriculture a sunset industry and the Labour Opposition still considers that agriculture is a sunset industry. It is the very saviour of the New Zealand economy. 
I want to take the opportunity to talk about what National has done for the primary sector. We have set up a focus on water and the development of irrigation: $35 million has gone to the Irrigation Acceleration Fund and we have made a further contribution of $400 million to make sure that the infrastructure gets built. We have put a focus on innovation. We now have over $500 million worth of investment in primary sector research through the Primary Growth Partnership. We have led the world with the Global Research Alliance on Agricultural Greenhouse Gases and we are recognised right throughout the world as making real attempts to find solutions to the global greenhouse gas emissions from agriculture. 
We have streamlined the Resource Management Act. Only yesterday in the House we were making sure we got the rental system right for the high country leases. We have invested around $450 million in rural infrastructure including broadband. We have doubled the infringement fine for people breaching biosecurity at the borders. We have brought through a TB strategy committing $30 million each year for the next 5 years. There is so much that we can talk about including the immediate response to the  
Pseudomonas syringae  
pv.  
Actinidiae 
 infestation of $25 million. Compare that with the way the Labour Government sat on its hands when the varroa bee mite first arrived. 
But there is plenty more that needs to be done. We have got to make sure we initiate an emissions trading scheme that does not saddle agriculture in an uncompetitive position. We have got to make sure we never see Labour coming to power and initiating a capital gains tax. We have got to make sure we never see a Labour Government coming into power fiddling with the Reserve Bank of New Zealand Act and driving up interest rates because the confidence of New Zealand farmers has never been higher and one of the reasons for that today is the fiscal responsibility of this National-led Government. We deliver the lowest interest rates we have seen for the last 40 years. 
So out there in rural New Zealand there is a level of confidence. That confidence is delivering right throughout the New Zealand economy and the rural hinterland of this country knows the value of a sympathetic Government that understands its concerns. The last thing it ever wants to see is the election of a Labour-Greens Government because that will mean that irrigation will not get developed. The Greens even talked about putting a tax on water. It will certainly mean that with the expenditure on any proposals Labour makes interest rates would increase and increase markedly. This country relies on agriculture. It is the absolute backbone of the economy and that has stood New Zealand in great stead over the last 4 years. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 Meanwhile primary industries in this country lose billions of dollars every year from a massively inflated dollar which my colleague David Carter who has just resumed his seat maintains for National’s mates in the finance industry in downtown Queen Street. But this is a story of how an Australian bank some Ned Kellys across the Ditch and some local business people robbed a small New Zealand town of its livelihood. It is about how a gang of corporate thugs screwed dozens of people out of their jobs. It is about how the Westpac bank involved itself in shafting an iconic New Zealand company namely Yarrows (The Bakery) in Manaia Taranaki—heartland New Zealand which my colleague did not refer to. We are talking about the receivership of Yarrows in May last year. 
The circumstances in which the company went into receivership were unusual. At the time Yarrows had a valuation of $100 million. The sole shareholder Paul Yarrow had just secured a new international joint venture worth $200 million over 10 years. So what happened? A group of individuals set out to take control of this joint venture and force Mr Yarrow out. It was nothing short of corporate assassination. First the Australian conspirators deliberately overcharged Yarrows in rent to the sum of A$2 million in false leases. These were then charged to the Australian company operation of Yarrows. They then demanded a payment of A$7 million from Mr Yarrow and the price if he did not agree to their demands was receivership. Here are some of the names of the New Zealand and Australian individuals involved: Warren Duncan Trevor Perry Colin Pettigrew and Michael Finnigan—all connected to Yarrows—Brian Mayo-Smith from the receivers BDO; and Nick Hale from Westpac bank. 
These people conspired to bring down Yarrows from within. Where is the evidence? Well some of that will emerge in a court case starting in the New South Wales Supreme Court tomorrow and some will come from a tape-recording of businessmen conspiring to cheat an owner. The House is well very aware of what happens when a tape-recorder keeps running and no one notices it. This is not an English dog’s breakfast tape; this is a “bread-gate” tape. The tape-recording reveals the depth of this plot and what these people conspired to do. For example we have Michael Finnigan former trusted adviser to Paul Yarrow saying: “Let’s threaten receivership.” Then we have Trevor Perry who describes himself as “an angel investor” saying to the Westpac representative Nick Hale: “I never thought I’d be happy to see a demand put on a company by a bank.” All on tape. 
I have just one question for Mr Hale and Westpac and it is this: why? The reason is they wanted control of the planned joint-venture bakery operations with the Japanese company Sumitomo and mostly they wanted Paul Yarrow out so that they could transfer assets from his family company in Manaia to pay for their shares at the discount price in Australia. When Paul Yarrow would not agree they threatened to ruin him and so it transpired. Westpac followed through on the directors’ threat and called in the receivers. Prior to this conspiracy Westpac was on the verge of getting 90 percent of its money within weeks. 
What are the connections between company directors Warren Duncan Trevor Perry and Colin Pettigrew and Westpac officers John Chapman and Nick Hale and Brian Mayo-Smith of BDO? We understand that the Serious Fraud Office in New Zealand is about to step in and tomorrow in the New South Wales Supreme Court in Sydney these New Zealand and Australian directors will be involved in a legal war over the ownership of the company in which the Australian Securities and Investments Commission is involved. 
The case shows what happens when unscrupulous overseas-owned banks and corporate high-flyers get their hands on New Zealand companies. But this a rural company in Manaia in Taranaki a massive subscriber to that community including the local rugby team. Think of all of the benefits it has poured in—millions of dollars over the years. It has provided employment to all those local people in Manaia over the years. A young person there always knew that they would have a job locally. It is an international best-selling company providing its product all over Asia and throughout the Pacific. It also provides the core product for Subway in its contracts here and around other parts of the world. But here is another bit: when it all happened the Westpac bank and these businessmen had no regard for what was being done to local people. And the Government does nothing about this sort of behaviour. 
JACQUI DEAN (National—Waitaki) 
: 
 Meanwhile back in the 21st century I also want to talk about the importance of agriculture to the New Zealand economy. You know a previous Labour Prime Minister once famously declared with great conviction that agriculture was a sunset industry. 
Hon Members 
: Who said that? 
JACQUI DEAN 
: That was former Prime Minister David Lange. I acknowledge that that might have been a few years ago but that attitude in the Labour Party prevails today. Last night in the House Labour list MP Raymond Huo described high country farmers as “the privileged few”. You know they are saying again that Labour hates farmers. Well they could not be more wrong. For the year ended 30 September 2011 the primary sector accounted for 71 percent of our export earnings or $32 billion. So simply put the primary sector has been and continues to be the backbone of the New Zealand economy. The ongoing success of the primary sector is a key part of our plan to build a stronger economy create more real jobs and raise incomes. National is proud to champion farmers and is proud to champion growers. 
 National believes that economic development can go hand in hand with environmental sustainability. Just for a moment have a look at the $35 million Irrigation Acceleration Fund and the $400 million proposed equity investment in 2013-14. Irrigation development creates jobs particularly for young people and is also a fantastic career development in our rural towns of New Zealand. So let us just have a look at the Opuha dam project in South Canterbury and you can see the enormous benefit not just to the local economy but also to water quality downstream from the dam. Irrigators are required to up their game with regard to nutrient outflows and are responding to the call to improve water quality. You know— 
Mr SPEAKER 
: I would ask the member please not to read a speech during this general debate. She is perfectly welcome to keep going but please refer to notes and do not read a pre-written speech to us. 
JACQUI DEAN 
: Thank you Mr Speaker. You know I absolutely back regional councils’ approach and their commitment to improving water quality. Farmers understand very well their responsibilities in terms of the need to protect their environment and to farm sustainably. I will be reading a bit because I will be quoting but I do hope you will bear with me. High country farmers are currently under the spotlight with the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill being debated in the House. The Greens display their usual eco-arrogance in asserting that only they understand—and I am quoting now—“environmentally sustainable outcomes” completely misunderstanding that high country farmers have a multigenerational commitment to improving rabbit-infested  
Hieracium 
-infested wilding pine - infested high country to the point where over the past 100 or so years their international reputation as producers of the finest product and the finest wool including merino wool is second to none. The Icebreaker company sources the finest merino wool from stations throughout the South Island—and I am about to quote another figure—but cannot get enough to meet demand. Unlike Labour we want Icebreaker to succeed—indeed we want it to be wildly successful. If I may quote Icebreaker revenue “is expected to top NZ$160 million” for this fiscal year. It says its aim is to double that within the next 3 years. 
I want and this Government wants small companies like Icebreaker to be wildly wildly successful. When David Parker was the Minister for Land Information he did everything he could to retire the high country from production including ratcheting up the rents to place the farmers into tenure review. Luckily there was a change of Government and we now have returned to a Government that supports agriculture. 
Mr SPEAKER 
: Before I call the next member I am serious about asking members please not to read general debate speeches unless it is a highly technical matter and that was not. There is nothing wrong with quoting and reading out quotes. The only saving grace I can say is that at least it was handwritten so at least I guess it was written by the member and not by someone else. 
Hon MARYAN STREET (Labour) 
: 
 Unfortunately that meticulously read speech from the member who has just resumed her seat Jacqui Dean is not sufficient to gain favour amongst the farming community with the National Party any more. The farming community is so out of sorts with the National Party because of the Crafar farm sales. 
Jacqui Dean 
: No a long time. 
Hon MARYAN STREET 
: Well if that party over there does not know about it then it should do some research of its own because it is blindingly obvious to the rest of us. 
Yesterday the Controller and Auditor-General released the results of the 2010-11 audits of district health boards and that is what I want to turn my attention to today. One of the points that the Auditor-General made in her report was that in 2010-11 $417.3 million of new money was given to the district health boards—$417.3 million—and that was up on the 2009-10 year. The fact that in 2011-12 as the Minister of Health said in the House last week the district health boards got $350 million worth of new money—$350 million as opposed to the $417 million the year before—indicates this Government’s trajectory in the health sector. That is a trajectory that presumes cuts and what we are seeing now are the inevitable results of a pushing down of the funding that goes to the district health boards. As the district health boards get screwed down tighter and tighter with their budgetary constraints they are going to be cutting into front-line and clinical services. The more the Minister protests about that the more one can see that it is apparent that that is going to be the upshot of the Budget. 
If we have a look it is clear from figures that have been released already and also what is widely known out in the district health board sector that the total new money for the health budget coming up in the Budget to be released in May is somewhere between $320 million and $350 million. That is total new money in the Health vote—total new money. In the Auditor-General’s report she makes it very clear that 75 percent of Vote Health goes to the district health boards—75 percent. So if we are generous even and say that perhaps the new money that is coming out of the Budget this year in Vote Health is going to be $350 million then 75 percent of that is $262.5 million. So we had $417 million in the 2010-11 year $350 million of new money to district health boards in the 2011-12 year and now they are staring down the barrel of $262 million in the 2012-13 year. 
This progressive slashing of the health budget is eating into clinical positions. If we have a look at some of the district health boards that have reported recently that they are having difficulties we know that Waikato District Health Board is looking to save $25 million in the next financial year—$25 million—and it knows that it is going to come out of front-line clinical services. One of the things that the Minister is requiring of the district health boards next year is that they absorb KiwiSaver. Instead of that being taken out of the Crown account as it has been until this coming financial year the district health boards are going to have to absorb that. In the case of Waikato District Health Board alone that is a $3.2 million impost. Add on to that minimal salary increases as we have just seen the New Zealand Nurses Organisation sign up to and what we are seeing is serious cuts that are bound to happen in clinical positions. This is the theme of this Government in health: cuts cuts and more cuts. 
CHRIS AUCHINVOLE (National) 
: 
 Let us stay with primary products that essential growth feature of our economy. We have heard what Labour has to say about agriculture and this hurts when I know that a person such as the Speaker dedicates himself to increasing the production from the country’s rural sector in a selfless— 
Hon Maurice Williamson 
: Tireless. 
CHRIS AUCHINVOLE 
: —tireless effort to make sure things go well. Primary products are 71 percent of our exports $3.6 billion up from the previous year. 
National supports farmers; farmers are supported by National. As an ex-farmer myself—and I have milked my share of cows—and as someone who dedicated many years working in harmony with the Speaker in the New Zealand Dairy Board to increase New Zealand’s exports wherever we could I am deeply concerned that Labour is abandoning farmers. 
As we have already heard David Lange said it was a twilight industry. He could not have been “wronger”. But Labour continues to consider that it knows best. Its caucus is almost devoid of farming experience—almost devoid. It only has one person qualified to speak on farming and he was my little gift back to the Labour Party at the last election. We gave him back because we thought it had no rural voice at all. Twenty-one percent was all you achieved from the rural vote; 21 percent. Does that not tell you that you have a problem? But no Labour still considers it knows best. It considers that farmers are not paying enough tax. It considers that farmers should be paying more GST and is this not a sound we know so well from Labour: “Gimme your money gimme your money.”? It just wants to take it. 
Farmers are fighting for New Zealand’s future; they can do without an enemy within and that is what they have on that side of the House the health of the economy versus Labour political point-scoring. Surely I would appeal to the Leader of the Opposition Mr Shearer to take a bipartisan approach and to realise what is best for the country rather than a little political point-scoring. Will Labour do that? I doubt it because it considers that it knows best whereas National’s policies are: just as it wants to put money out we want to put money in. We are investing in the primary sector and we believe in its importance. We know that the primary sector can only be good for our economy and we are committed to policies that will achieve that and David Cunliffe knows that. He knows our Rural Broadband Initiative will be of great use to our rural areas. He knows that we are investing in the Primary Growth Partnership which is now over $5 billion. We are investing in cleaning up our rural lakes our rivers our waterways and our aquifers and we are tackling greenhouse gas emissions through further investment in the Global Research Alliance on Agricultural Greenhouse Gases which you have heard of from other speakers. 
But let us just touch on something that is dear to most New Zealanders’ hearts: foreign ownership. I believe that in his speech Mr Shearer referred to it. Let us give some figures. This is quoting so if I may I will read it lest I have committed it incorrectly to my memory. In 9 years of Labour— 
Hon Maurice Williamson 
: Long years. 
CHRIS AUCHINVOLE 
: —9 long years of Labour how many hectares were sold to foreigners? 
Hon Maurice Williamson 
: Tell us. 
CHRIS AUCHINVOLE 
: No I really do not want to tell you but I shall I shall I shall: 660000 hectares were sold to foreigners over the 9 years of Labour—660000 hectares. After 3 years of National it was a mere 100000 under exceptional circumstances and if that is carried on during 9 years of our time it will still be only half what Labour had in its 9-year period. 
Hon Maurice Williamson 
: So how can they say it is wrong when they did that? 
CHRIS AUCHINVOLE 
: Well Labour members do say it is wrong because again they know best. Just as Labour knew when it was examining the employment relations system for immigrants to pick fruit when it decided that it would determine when the fruit was ready. Fruit does not work like that. Talking of fruit I would just like to illustrate the point: small apples picked from a tree in my own garden we call this “the Labour tree”; large apples picked from a tree in my own garden in Moana we call this “the National tree”. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I think the previous speaker Chris Auchinvole is out of his tree if that is the very best that he could come up with. It is always a privilege to follow the former member of Parliament from the West Coast. 
This is a Government that has already given up a Government that 3 years in has already given up and its plan is simply to cut our way to the brighter future that John Key promised us. We know that if National cannot cut it it is going to sell it and if it cannot sell it it is going to contract it out. This is a Government that is not all about delivering a brighter future for New Zealand; it is a Government that has given up and now it is simply content to manage New Zealand’s decline. It has given up trying to give New Zealanders the brighter future that John Key said he was all about. Now it is simply all about decline. 
Let us go back and remember what John Key promised New Zealanders before the last election. 
Hon Member 
: What was that? 
CHRIS HIPKINS 
: Oh there is so much material. I have got only 5 minutes but there is so much material. He said: “I need to be able to look New Zealanders in the eye and assure them that the money they pay in tax is being spent wisely and as much benefit as possible is going to front-line services from which they will directly benefit.” How has that manifested itself in the last few weeks? Well the Government has spent money on giving staff at the Ministry of Foreign Affairs and Trade who are going to lose their jobs advice about getting themselves pets that offer unconditional love taking yoga classes and meditating. This is what it is spending money on. They are not front-line services by anybody’s definition but that is what this Government seems to think it should be spending the public’s money on. John Key seems to think he can look New Zealanders in the eye and justify that. 
He said National would be going ahead with its programme of tax cuts because these tax cuts would not be at the expense of public services. Well have we seen any evidence of that? No we have not. Two and a half thousand people are out of jobs already and there are more to come—and more to come. 
Many New Zealanders will ask themselves what is wrong with Public Service reform. Well I quote John Key on that one as well. He said that structural change and significant reorganisations tend to create more problems than they solve. It was John Key who said that. The Prime Minister John Key said that. He is not saying that any more. He said there will be no wholesale reorganisation across the public sector and yet what have we seen? Massive reorganisation. 
The thing that I want to talk about the most is the hoax that John Key and his party played on the New Zealand public when they said: “We will be putting more into the front line. We will be moving resources from the back office to the front line.” Let us quote from John Key again here: “We are not in any way going to reduce the number of front-line staff. Let me make this absolutely clear—under National the numbers of doctors nurses teachers social workers police and other front-line staff will grow.” Well what have we seen? In recent weeks we have seen district health boards saying they are going to have to lay staff off because they have not got enough money. The police have been told they have to save $360 million over the next 3 years. The Ministry of Foreign Affairs and Trade is having to save $40 million a year in spending putting 305 people out of their jobs. We have got health boards up and down the country talking about cutting medical professionals’ jobs because of this Government’s underfunding of the Public Service. We have got the Government talking about increasing class sizes and having fewer teachers in front of kids because of this Government’s unwillingness to fund it. 
This is not a Government focused on the front line; it is cutting into front-line service. It is removing health board services. I know from my own electorate that literally hundreds if not thousands of older people have found that the front-line staff who deliver their home help have had their hours cut. Older New Zealanders have had their home help cut. Home help is one of the best examples of a front-line service that has been cut under this Government. There is no better example by the very definition of the words “front line” than our Defence Force—our Defence Force. The very nature the very definition of the words “front line” comes from the Defence Force and the Defence Force is being cut under this National Government despite its promise that it would not cut front-line public services. It was a hollow promise that it made New Zealanders before the 2008 general election—one of many. It was one of the many things that National said to New Zealanders in order to get itself elected and now it has given up. It has given up on delivering a brighter future. It has given up on fulfilling its promises. Now it is content to manage our economic decline. 
NIKKI KAYE (National—Auckland Central) 
: 
 I am delighted to be able to speak in this general debate today. I have been waiting to give this speech for a very long time. As the MP for Auckland Central I want to dedicate this speech to the people of New Zealand who work on farms and in forests and those who support the primary industries. As the MP for Auckland Central I have been the subject before of slight jabs from my colleagues in terms of my support for the rural industries. In fact one person said to me today: “You do know Nikki that for a good latte you need milk.” I wanted this to be the discussion in my speech today. 
The fact is that this side of the House has an economic plan that is focused on unrelenting support for our primary industries. We acknowledge that our export-led recovery has been driven by the rural workers of New Zealand. We know that a large chunk of our economic performance is because of the primary industries. Seventy-one percent of our economic performance comes from our exports from primary industries; $32 billion is what it is worth to our economy. 
Where are our exports up? They are up in meat areas and they are up in dairy areas. In fact I will give you the figures here. We were up 12 percent in 2010 in meat exports and dairy exports were up 20 percent. So it is absolutely unbelievable that at a time when New Zealanders are struggling and our country is laden with debt we have an Opposition that is promoting policies that are harmful to this area. 
Let us talk about some of those policies that it has promoted. It has promoted additional costs in terms of the emissions trading scheme. It has promoted additional— 
Mike Sabin 
: Capital gains. 
NIKKI KAYE 
: It has promoted capital gains tax in terms of land. Compare this with our party which has been unrelenting in its support whether it is through science and innovation in terms of the $50 million that we are putting in to key research in climate change or whether it is through all the initiatives that we are trying in order to ensure that young New Zealanders have more opportunities in our primary industries. 
We heard today about the Youth Guarantee places that we are offering. We also know for instance that the Hon Paula Bennett has been working really hard in the area of Auckland to ensure that some of our young people have greater placements in terms of jobs. What we are focused on is ensuring that there are real career options for young New Zealanders in our primary industries. 
When we look at some of the job figures—I think in TradeMe today there are jobs in our primary industries. But unfortunately we are having to get new immigrants to go there because we need to make sure that some of our young people are work-ready. All of this Government’s programmes instead of the rhetoric from the opposite side focus on real pathways to work for those young people to have jobs in our primary industries because we recognise that although we may hear a whole lot of clutter from the Opposition about how we need to diversify our economy the fact is that a major area of our export growth comes from the primary industries. 
I am proud that as the MP for Auckland Central yes I represent an urban electorate but I have also got some rural areas like Great Barrier Island and I am proud to stand here today and give my support for all of those rural workers around the country who have worked so hard for the last 3 years to ensure that we have an export-led recovery. We have got more to do—we have got so much more to do. If you look at some of our achievements whether it is through the $35 million that we have put into the Irrigation Acceleration Fund whether it is through primary sector innovation and the $70 million that we have put into the Primary Growth Partnership or whether it is through the $45 million that we have put into the Global Research Alliance on Agricultural Greenhouse Gases we understand that the way that we are going to improve the lives of so many New Zealanders is to lift our standard of living and have an economic plan. 
You contrast that with the Opposition. Every time Opposition members speak they just talk about what they will not do. They are anti-everything. You contrast that with our party which has good policies in welfare good policies in ensuring young people get into jobs and good policies in investing in science and innovation particularly in areas that are in the primary industry like food innovation because we know our opportunities lie in countries like Asia and we know that if we can increase our exports and we can support— 
Hon David Cunliffe 
: Countries like Asia? Asia’s not a country. 
NIKKI KAYE 
: Countries like China and Singapore that are within Asia. We know that we can improve our standard of living if we can support those rural workers in our primary industries. 
This side of the House has a plan; that side of the House is anti-everything. This side of the House has the support of New Zealanders because we are focused on a strong economic plan. 
JULIE ANNE GENTER (Green) 
: 
 Tena koe Mr Speaker. Tena koutou e te Whare. Today I would like to talk about the importance of transport to New Zealand’s economy and particularly the importance of cost-effective evidence-based transport investment.  
Right now we have an opportunity to solve our transport problems in a way that is going to cost us less money. It is going to help us. It is an opportunity to address the housing affordability crisis in Auckland. It is an opportunity to improve our health and our well-being. It is an opportunity to enable households and businesses to have more money to spend in the domestic economy. I know that this sounds too good to be true—that we can be increasing the choices for all New Zealanders and how they get around by spending less money and changing our current paradigm around transport planning—but it is true. 
 I am sure many members of this House take it for granted that the traffic engineers at the New Zealand Transport Agency or the policy advisers at the Ministry of Transport know what they are talking about when they come to us with their forecasts for traffic growth. But the reality is that the world is changing and a lot of the assumptions that have been used in these traffic modelling and business case scenarios are flawed and we have the opportunity to do things differently. 
I think ordinary New Zealanders are largely aware of this. Widening roads and increasing motorway capacity on the fringe of the city does not address our congestion problems. It does not save people money in the long term because when you make it cheaper and easier to drive at peak hour more people will choose to drive at peak hour. This will make it harder for people to walk to cycle and to take public transport. It actually undermines our investment in buses and trains if we are expanding motorway capacity without fixing the market distortions that are underlying our current transportation system. 
So this traditional approach to traffic engineering has a number of very costly unintended consequences. I have already talked about some of them. It makes it harder for people to walk to cycle and to take public transport even though these are clearly more cost-effective ways for people to move around our towns and cities at peak hour. If members stop and think about it I am sure that will make sense to them. I mean think about it. Cars take up a whole lot of land. They take up a lot of room. They are not the most efficient way of moving large numbers of people around our areas. That does not mean they are bad. There is nothing evil or wrong with cars; it is just that they are not the most cost-effective way for people to move around our towns and cities at peak hour. 
Michael Woodhouse 
: What happened to personal choice? 
JULIE ANNE GENTER 
: Yes that is exactly it. I think the Green Party understands that we do need to increase people’s personal choices. 
The problem is—and I know members are not experts in transport engineering so they are not aware of these flawed assumptions in the traffic engineering models—but the reality is that the traditional traffic engineering approach has undermined people’s choices because it makes it seem cheaper and easier to drive at peak hour. So it is totally understandable that most New Zealanders drive to work because they do not have any other option. That is nobody’s fault. It does not need to be something ideological. We just need to look at why things have happened the way they have and come up with some evidence-based cost-effective solutions. I am sure that the National Party should support evidence-based cost-effective solutions that are going to be good for the economy. 
A concrete example of how motorways are not the most cost-effective way to deal with congestion is clear in the Northern Busway. So the busway right now is nowhere near capacity but it is currently carrying the equivalent of four lanes of traffic over the Waitemata Harbour at peak hour. How much would it cost to put an additional four lanes on the harbour bridge? How much do you think that would cost? It would cost a lot more than the Northern Busway costs. And how much would it cost to provide all that parking in and around central Auckland for the tens of thousands of vehicles if people were forced to drive into the city because we had not invested in the Northern Busway? 
So this demonstrates what an incredible opportunity we have to spend less money and move more people and give people more choices. The people who want to drive and the freight that needs to move at peak hour on trucks are actually going to pay less and they are going to find it easier to get where they need to go at peak hour if we just implement a smart green transport policy and I am very happy to work with the Government on this. Thank you. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 Thank you for the opportunity to stand and speak today. It is great to hear my colleagues talk about the primary industries which are undergirding the export-led recovery that this nation is experiencing. In fact it is good to see that New Zealand is faring far better than many nations overseas because hard-working New Zealanders out there are taking our natural resources and with their innovation with their incredible skill and tenacity and with their hard work against all odds they are making New Zealand a world leader when it comes to primary industries. It is wonderful to see the increase that is happening. But can I also say that alongside this increase we are seeing innovation in how to manage our resources. 
I think of my own province of Taranaki where we have a world-leading riparian planting programme—certainly the best in this nation—which is protecting the streams and the waterways of our province which has 17000 kilometres of waterways all streaming down from Mount Taranaki to the ocean. The farmers without legislation but because of their commitment to the environment have planted every year around 300000 plants on the edges of waterways and have fenced those waterways in order to protect our environment and enhance it not only now but for future generations of farmers who will continue to make New Zealand such a successful place. I think the figure is that around 70 to 80 percent of those waterways have been planted out. Credit goes not only to the farmers but also to the Taranaki Regional Council which has led this tremendous work. 
Many of my colleagues have talked about the comments of Labour members over past years and their attitude towards our primary industries. I guess they would say they are for it they are for us and that they want to see all those areas increase succeed and prosper. We always go back to the comment they have made about the sunset industry of agriculture. Mr Speaker you more than anyone in this House would know how important that sector is to us. We know that back in 1961 the consumption of red meat in the world was at a certain level and it has tripled since then. The opportunities exist for industries in New Zealand not only in dairying and red meat but also in forestry and in food processing and production to continue to forge us ahead in great success. 
One of the members today mentioned a great Taranaki company. I want to say that I know that company. I know those people well. I know what they have contributed to our local economy and also to the whole community of Taranaki. That company is highly regarded in Taranaki. In fact as a young boy on the way out from Hawera where I grew up and lived I would go through Manaia. My brother and I on our way out to our parents’ farm in Pihama about to do some fencing would always stop by Yarrows and buy a dozen doughnuts—I know you can tell. We would buy a dozen doughnuts and we would eat them at morning tea time as we were labouring away in our school holidays fencing. 
Hon Maurice Williamson 
: Is that each? 
JONATHAN YOUNG 
: Was that each? Ha! My family—myself and my brothers—became great fans of that company. I went on to play basketball with the gentleman who was mentioned and he continues to be a good friend of my family. 
I have an interesting story. Noel Yarrow the person who is credited with forging the progress of that company went across to Europe on a trade mission and there met a couple in Belgium who after meeting him decided to come to New Zealand. They came to Taranaki particularly to meet him and they loved it so much they stayed. Last Friday night we were at the expansion of their company. They themselves are now producing incredible quality products—they are bakers—and they also export. They send their product to 54 companies in New Zealand and export to three different countries around the world—such is the great strength there is in Taranaki. 
Hon ANNETTE KING (Labour—Rongotai) 
: 
 I have been fascinated by the National Party putting up such a defence for agriculture today. We can only assume that the National Party is in trouble with farmers around the country. It all comes from their decision to sell off some of our prime farm land. The farmers are now in revolt. The best that National members could do in their defence of agriculture was to go back to the days of David Lange. I have to say why did you not go back to the days of Rob Muldoon? I am sure you would have found even more interesting things to dredge up for the Wednesday debate. Now we know where John Key stands when it comes to better public services—the things he said about public services before the election. It is public service by 0800 number call centres—0800 Government. That is what we have got for public services now. Of course those call centres are in New Zealand at the moment but Mumbai here we come. 
So perhaps John Key ought to take some time to learn what a public service is. You see “public” means relating to people and “service” means an act to help or assist. So the latest public service to join 0800 Government in this “aspirational” way that the National Party is putting forward policy is Housing New Zealand Corporation. It has 69000 people who are its clients and most of them are the most vulnerable people in our society. So I just hope the whole 69000 do not decide to call on the same day. But they have been told that they are now going to get a smarter faster fairer service by an 0800 number. Well it reminded me very much of Tony Ryall’s slogan. “Better sooner more convenient” was his health slogan in the last 3 years. Well of course we have got more people waiting for service we have got more district health boards in debt we have more district health boards not meeting their health targets and we have got more vulnerable people waiting or having their services cut including my colleague David Cunliffe’s own mother who has had her service cut. So this is a Government by slogan. 
Well I have got a better slogan for them for the Housing New Zealand Corporation policy. It is called “dopey dumb and dicey” because 69000 people have been told that all they have to do is just make one phone call on an 0800 number and they can get help straight away. Well does it work? Because when you measure public services you always want to measure if they are working. I heard the Minister of Finance say today that this is how they measure them what they are doing and how well they are working. Let us take a social worker from Glen Innes. She works with the most vulnerable in that area. She decided that she wanted to work on behalf of a client who came to see her. It took her nine phone calls and two personal visits in her car down to the Housing New Zealand Corporation office before she got to leave a message on an answerphone for a tenancy officer. Unfortunately she had to sit for 7 minutes on the phone line before she even got to leave the answerphone message. She is a qualified and experienced person who knows the system and she could not work the new 0800 system. It is not the old 0800 system. It is the new way to provide a smarter faster more convenient service! 
Seventy jobs are to go in Housing New Zealand Corporation and the offices are now to be closed to customers. They open by appointment only. It sounds like something very shady when you have to go in with a sort of bag over your head because you do not want to be seen. It can be opened only by appointment and that is if you are going to have a needs assessment. There was a wonderful cartoon in the paper yesterday where all the Housing New Zealand Corporation officers are hiding behind their desks saying: “No no. We’re not stopping them coming in. We just want them to use the 0800 number service.” There will be staff sitting in offices and people will not be able to go through the door. They can go only if they have made an appointment. 
Then we are told that this will be a very good service because now they will have a relationship with the corporation. I am trying to picture this relationship with the corporation. You know a corporation is a business. So how do you wrap your arms around that? How do you talk to a corporation when you are a tenant of Housing New Zealand Corporation and you want to talk about your housing needs? You normally talk to a person and that is what a relationship is. This is a dopey policy. It is not going to work. It is not faster smarter or fairer. It is going to be hopeless. 
JAMI-LEE ROSS (National—Botany) 
: 
 It is always good to go last in the general debate because you get to fix up some of the misstatements and the problems you hear from the other side. But I want to start with a theme that the Hon Annette King started during her speech. She wanted to talk about slogans. Well let me remind the Labour Party of some slogans. This is a slogan that applies perfectly to it: “You can’t teach an old dog new tricks”. We have apparently got a fresh face in the new Leader of the Opposition. We have apparently got some fresh policies coming along; we have not heard very much any more. They are actually so good that when David Shearer stood up the Hon David Cunliffe left the room and came back as soon as he had finished. That is how much confidence the Labour Party has in its new leader—its fresh approach supposedly. 
But actually we have seen nothing new from Labour. It is back to its old recipe of borrow and hope. It is back to its old recipe of spending up large like drunken sailors although I think that is a bit unfair to the drunken sailors out there. The Labour Party’s old recipe of closing the doors to the rest of the world is apparently going to be the solution to all of New Zealand’s woes. Well under the National Government New Zealanders have far fewer woes than they had in the 9 years under the Labour Government. 
I was getting a bit sick of hearing about Crafar farms. Apparently according to the Labour Party selling assets and seeing farmland owned by foreigners is an appalling thing. Let me remind the House of a few statistics. In 9 years of the Labour Government 660000 hectares of land was sold to foreigners—660000 hectares in 9 years. In 3 years of National 100000 hectares of land was sold to foreigners. If anyone wants to do the maths those figures show that the members opposite allowed twice as much land to be sold to foreigners as this Government did in 3 years. So do not ever listen to the Labour Party saying that farmland being sold to foreigners is evil. I can see those members putting their heads down because they do not like those figures. Those members opposite sold twice as much land to foreigners as this Government did. 
Why does the Labour Party now hate foreigners? When Shania Twain was walking through the South Island with Helen Clark it was OK. When James Cameron was buying land in the Wairarapa we did not hear a squeak. But when Chinese people want to purchase some farmland and invest some money into this country those members scream. In my electorate of Botany a third of the population is Asian and the third of my electorate that is Asian wants to know from that side why it hates Asians. That is appalling. The figures just do not stack up for that side. 
This National Government has been talking this afternoon about the primary industries and we have done a lot in the primary industries. We have reduced taxes across the board and cut the company tax rate. That helps the primary industries. We are cleaning up New Zealand’s lakes aquifers and rivers investing $265 million. We have reduced accident compensation levies—we are reducing them for rural businesses—and we are rolling out the Rural Broadband Initiative. 
We in the National Government acknowledge the heartbeat of New Zealand. We acknowledge the backbone of New Zealand. We are cutting red tape for the rural sector. We have streamlined and simplified the Resource Management Act. 
Hon David Cunliffe 
: The member doesn’t even believe his own notes. 
JAMI-LEE ROSS 
: David Cunliffe wants to talk—the woolly mammoth over there. He could not even get his leader the right figures when he was in a debate with the Prime Minister. So I do not think the “Woolly Mammoth” over there should be speaking. 
Seventy-two percent of exports in this country come from primary industries and one of the things that those primary industries require is an efficient ports system. We have seen some announcements being made today in Auckland about the ports sector. I want to say that I thought it was quite appalling to see people on that side on the picket line opposing a more efficient ports system—opposing some changes that would make it easier for exporters to get their business through. The problem that we have at the port was not because of the port company; it was because of the appalling employment relations legislation that those members passed 12 years ago. Those workers are not redundant because of the port; they are redundant because of the union pushing them over the precipice. Long live the National Government. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I raise a point of order Mr Speaker. I was reluctant to interrupt the member’s most excellent speech but I have to record for  
Hansard 
 that it is inappropriate for the member to refer to the presence or absence of another member from the Chamber as you well know. The reason that I was momentarily absent was to deal with an urgent matter with his colleague the Hon Kate Wilkinson. 
Mr SPEAKER 
: The member is quite correct. I missed that but members should not refer to the absence of a member from the Chamber. 
The debate having concluded the motion lapsed. 
Financial Markets Conduct Bill 
First Reading 
Debate resumed from 6 March. 
A party vote was called for on the question that the Financial Markets Conduct Bill be now read a first time. 
ANDREW WILLIAMS (NZ First) 
: 
 I raise a point of order Mr Speaker. Sorry I heard the wrong name for the bill being called. I was under the impression it was a different bill. 
Mr SPEAKER 
: Does the member wish to change— 
ANDREW WILLIAMS 
: Yes could I change the vote? It should be eight votes in favour. I am sorry; I misheard what was being called. 
Mr SPEAKER 
: The bill being called is the Financial Markets Conduct Bill. 
ANDREW WILLIAMS 
: Yes. Sorry I was listening to the general debate and I did not realise that this bill had been called. 
Mr SPEAKER 
: The record will be changed. 
GARETH HUGHES (Musterer—Green) 
: 
 I raise a point of order Mr Speaker. Does the member not have to seek leave to have a vote changed? 
Mr SPEAKER 
: I think the member misheard the bill being called. It is not unreasonable for the vote to be recorded as the party intended. 
CHRIS HIPKINS (Senior Whip—Labour) 
: 
 I raise a point of order Mr Speaker. It has been the practice in this House—and we had this issue come up last night—that until the result is given any party can change its vote. It is only once the result is announced that you would have to have leave to change the way somebody voted. 
Mr SPEAKER 
: I thank the junior Labour whip for his— 
Chris Hipkins 
: Senior Labour whip! 
Mr SPEAKER 
: Senior whip. 
Hon Annette King 
: Chief whip. 
Mr SPEAKER 
: Chief whip—my apologies. 
A party vote was called for on the question  
That the Financial Markets Conduct Bill be now read a first time. 
Ayes 106 
New Zealand National 59; New Zealand Labour 34; New Zealand First 8; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 15 
Green Party 14; Mana 1. 
Bill read a first time. 
Bill referred to the Commerce Committee. 
Building Amendment Bill (No 3) 
Third Reading 
Hon MAURICE WILLIAMSON (Minister for Building and Construction) 
: 
 I move  
That the Building Amendment Bill (No 3) be now read a third time 
. I moved the original bill back in I think it was November of 2010 and I am pleased to see it having gone through its various gestations through to the Local Government and Environment Committee—which did quite a bit of work and I thank it for that—finally here on the floor of the House for its final reading. 
I want to stress that this bill is the first element in a package of reforms that the Government intends to bring through to achieve improvements overall in the building and construction sector. So I know there will be comments from the Opposition when it speaks that this bill is piecemeal but I want those members to know that this is only one piece of a very large jigsaw. I think it was Lianne Dalziel who said you could not build a house without having all the blocks. Well actually you can. You can build the foundations without having the walls you can then put the walls up without having the roof and you can put the roof on at the end. 
Hon Lianne Dalziel 
: I didn’t say that. 
Hon MAURICE WILLIAMSON 
: Oh all right then it was not—then it was not. 
Hon Lianne Dalziel 
: It was Annette. 
Hon MAURICE WILLIAMSON 
: Oh it was Annette King. It was Annette King—I apologise. 
Hon Lianne Dalziel 
: She was always much more intelligent than me. 
Hon MAURICE WILLIAMSON 
: Well I was going to say the more—no I will get myself into trouble whichever way I go. 
So we have embarked on the reforms and I would have loved to do it as one whole bill. But the fact is that some things need to be done almost immediately some can be done in the medium term and there are some things like the liability stuff that we have put off to the Law Commission for some work—moving from joint and several liability to a different form of liability. It might be to do with proportion or it might be something else but it is going to happen. I say to the members of the Opposition you can use the word “piecemeal” as you like; I am happy to say that this is one building block. 
A productive building and construction sector is indeed critical to the building of this nation and in fact to the rebuild of Christchurch. I think one thing members need to know in this House is that the building and construction sector contributes just about as much to our GDP—in fact almost identical—as agriculture does so it is important. Let me state what the Government’s goal is: it is to have a more efficient and productive sector that stands behind the quality of its work. That is pretty much motherhood and apple pie but how would you do that? 
Well first of all we need a sector with the necessary skills and capability to build it right first time and one that takes pride in its work. Too often I have been to building sites and heard people say: “Oh she’ll be right. If there’s anything wrong with it we will come back and fix it.” and frankly getting it right the first time and taking a pride in your work will be a vital part of the new reforms. 
We need a sector that delivers good quality affordable homes and buildings and contributes to the prosperity of the economy not buildings that need to be rebuilt as we have had for many years now; a well-informed sector that shares information and quickly identifies and corrects problems; a sector where everyone involved in the building work knows what they are responsible for and what they can rely on others for—and those accountabilities and responsibilities being laid out are a vitally important part of this reforms package—and finally consumers in the sector making informed decisions and understanding the risks and consequences of those decisions because there is an element of consumer responsibility. 
I went to a house that some builders showed me that was leaking badly and then they showed me that the spoutings were blocked locked and stocked full of leaves. The homeowner had done nothing in terms of clearing them and the water had nowhere to go but pour back inside the house. So there is an element of homeowner responsibility as part of the overall package as well. 
The current system is not broken—I admit that—but it is badly dented and it does need some quite good fix-ups. So it is about creating the right incentives to improve productivity by making sure that the people who build it as I said build it right the first time. The Government is going to ensure that as much red tape as necessary can be removed from the sector but actually it is adding some new red tape. I hear Labour going on about: “Oh Maurice Williamson is into the free market deregulation.” but I am actually adding some new regulations and some new rules—for example the licensed building practitioner scheme where carpenters and designers will actually have to have qualifications and you will not just be able to have a cellphone a dog and a ute and go out and start building houses. 
The Government has no interest in deregulating at the cost of health and safety standards or at the cost of building shoddy buildings. Quality of building work must come first and all of the reforms that we are embarking on—including this bill; the Building Amendment Bill (No 4) which has already been introduced in this House; and another piece of legislation later on this year—are vitally important building blocks for getting this sector right. 
The Building Act of 2004 will be amended to make it clearer that the buck stops with the people doing the work. The bill will also change the current building consent process to allow for risk-based consenting. I say to members that I think this is common sense. I would hope that everybody agrees with this—that there is a range of risks from building a very simple timber-framed maybe two-bedroomed gottage up to building a multi-storeyed multiple materials unbelievable design with all sorts of weird and wacky bits. There is a different level of risk associated with it and yet under the current building regime—and it has been there for a long time—we have had a one-size-fits-all approach. The same level of consenting scrutiny goes on when the application is made and the same number of inspections are made at the site for those buildings regardless of their risk. 
 Moving to that risk-based consenting I say that it will reduce compliance costs. As for those simple little projects my hope is eventually once we have got enough of a licensed building practitioner pool of resources working there may be even quite a bit of work at the very very low end of the risk curve that will not need consenting at all. It will also provide incentives for builders and designers to ensure that they have the necessary skills because if they do not they will—actually as of 6 days ago—not be legally allowed to do it because the licensed building practitioner regime became mandatory. 
The new risk-based consenting system will allow owners to apply for different types of building consents based on the risk of the work done rather than the current one-size-fits-all approach as I have said. The risk-based consent system will not however come into force immediately. It will not actually come into force until we have some confidence about the quality of building work that can be maintained out there so a lot of this stuff will be triggered by a regulation and it will be triggered by that regulation only once there is some confidence about the industry. 
The Government has identified a number of preconditions that will tell us whether we are on the right track and we will activate the new types of risk-based building consent only once those preconditions are met. On 1 March it did become mandatory to use a licensed building practitioner to carry out restricted building work. Some of the provisions in this bill relate to the licensed building practitioner scheme. The bill will amend the Act to be explicit about the standard of behaviour expected from people working in the sector. Good standards of behaviour will help to restore confidence of the public back in the sector. A code of ethics will be developed as part of the licensed building practitioner scheme and licensed building practitioners will be able to be disciplined for breaches of that code or other behaviour that brings the scheme into disrepute to the point of actually losing their licence—to the point of actually losing their licence. 
The final key change included in this bill is an exemption from that restricted building work for the do-it-yourselfer. We have always believed on this side of the House that we should allow people who want to build their home to do so but it will be recorded against the property so that anyone buying in the future will know it. Do-it-yourselfers will be allowed to do only one every 3 years because as I said in the Committee of the whole House in South Australia it was found they would just build then sell build then sell and some were doing six to eight a year and making out it was do-it-yourself. Genuine do-it-yourselfers will have nothing to fear. Further we need to prevent unlicensed builders from flying under the radar by making out that they are do-it-yourselfers and that will happen. 
During its consideration of the bill the Local Government and Environment Committee heard a lot of submissions and I want to make a comment about that because I know that Raymond Huo has gone on about how a lot of those making submissions were opposed to the bill. Well I will tell you that people who said they made submissions with some concerns such as that the bill is piecemeal are fully supportive of this legislation. I would like Raymond Huo to tell us who it is who now opposes it. 
The Registered Master Builders Federation supports this. The Certified Builders Association supports this. The Building Industry Federation supports this. The Construction Industry Council supports this. All of the major suppliers of product and material from Fletcher’s to Carters support it. So when Raymond Huo says they came to the select committee opposing it I say that yes they came saying they had some concerns about it not all being done as one package but I want Mr Huo to name just one major operation today—one—that is opposed to this legislation. If he can do that I will be really interested to hear the name of it of one—just one Mr Huo—that is opposed to it. 
I think this is great legislation. It is a good step in the right direction. It is a building block to getting our building industry back in some public confidence. I commend the bill to the House. 
RAYMOND HUO (Labour) 
: 
 Ni hao. I would seek to table that report by way of a point of order but that is out of the scope of my contribution. But in light of what the Minister for Building and Construction just said defining this Building Amendment Bill (No 3) as one piece or the very first piece of a package I would like to quote what the Hon Lianne Dalziel quoted in her contribution in the Committee stage last night. 
Mr Peter Mumford said that “Effectively New Zealand moved into an unknown future while burning its bridges to past practices.” Mr Peter Mumford was involved in the 2004 building legislation and his 2010 PhD thesis was referred to in an article that the Hon Lianne Dalziel mentioned in her speech last night. The article commented again: “the 1991 Building Act was a massive reckless nationwide social and economic experiment with a radically new and unproven building-control system for which the public will continue to pay dearly even though the public never asked for it.” 
It is really more in sorrow than in anger that we have no other choice but to oppose this particular bill. We did support this bill to the Local Government and Environment Committee and we are in broad agreement with the direction of the Building Act review which was initiated under the last Labour Government. The aim of the Building Act review was to better allocate responsibility accountability and liability between regulatory authorities building practitioners and consumers but this bill which has been rushed through to meet the Government’s time frame has misplaced this responsibility liability and accountability. 
We listened to the submitters and agreed that this bill shall not proceed. Having said that I do echo what the Minister for Building and Construction has acknowledged in his speeches—that there has been a high degree of cross-party commitment to the Building Act review process going back to the mid-2000s. I want to therefore acknowledge the work and efforts of the current Minister the wonderful Hon Maurice Williamson and also the former Ministers the Hon Shane Jones and Clayton Cosgrove and also former Minister of Commerce the Hon Lianne Dalziel. 
I acknowledge the Hon Lianne Dalziel because I learnt from some of our top structural engineers in this country that she was such a hard-working Minister who like other Ministers or members of Parliament received but read the open letter by Mr John Scarry in 2002. I did not hear Minister Williamson’s comments on television saying that nobody agreed with Mr Scarry but I do agree with my colleague the Hon Lianne Dalziel that there are at least two reports to confirm that there are genuine concerns that Mr John Scarry had raised. I also read the report by IPENZ the Institution of Professional Engineers New Zealand and also a report prepared for the Department of Building and Housing. 
Shortly after the second reading debate Mr John Scarry sent emails around to members particularly to the members opposite who supported this bill. Mr John Scarry said in his email to those members that had they been aware of the state of the construction industry in New Zealand particularly with regard to structure adequacy as opposed to leaky buildings those members would not have supported this bill. This bill does nothing to improve productivity and accountability and it reduces the already poor protection new homeowners have at present. 
We all heard the news or read the report that the main contributing factors towards the collapse of the CTV Building in Christchurch were poor standards of construction and deficient building materials. Specifically hollow core slender concrete walls brittle wire mesh and deficient floor diaphragms are the main issues which apply to other at-risk buildings I believe. It is appalling to read in the  
New Zealand Herald  
that deregulation of the industry had allowed manufacturers to pay for the development of standards to justify their own products. I am not quite sure whether the Minister agreed to that report in the  
New Zealand Herald 
 
otherwise I would seek leave to table that report for his reference. 
Even according to the Minister himself leaky homes are still being built and still being built in his own electorate. I would like to salute the Minister who was quoted in the media as saying that therefore “a ‘dramatic overhaul’ of the Building Act is needed desperately to end the crisis”. However this bill fails to address those issues; rather it is nothing but partial instalments. 
 We also heard comments from Minister Williamson that the defining feature of the construction industry in liability issues through the leaky buildings saga has been that of the councils. The building consent authorities are the only ones that have been left as the last man standing simply because they are the ones who have deep pockets—courtesy of the ratepayers. But if the Minister’s answer in the bill is to scale back the liability of the building consent authorities through new sections—I believe in clause 10—there is no equivalent reallocation or reapportionment of responsibility accountability and reliability. So simply shifting the accountability and responsibility to the other parties no matter whether they are the building practitioners or the consumers is not the answer. 
I do look forward to the progress of the Building Amendment Bill (No 4). In particular I would like to hear more from the Minister in respect of measures such as implied warranty surety and enhanced supervision funded via for instance building levies. 
To summarise under this bill the role of the building consenting authorities is being reduced but until there is a more genuine reallocation of accountability this bill risks exposing the consumer to greater risk. It is our view that it is risky and unwise to legislate such a piecemeal set of measures at a time when the industry is facing a surge in demand from the rebuilding of Christchurch leaky building remediation work and a huge skills deficit. 
I would like to conclude by quoting a PricewaterhouseCoopers report that found that homes constructed after 2005 have a low failure rate of 0.2 percent implying that less than 150 homes built between 2006 and 2008 are likely to be leaky. Does that tell us anything? It tells us that the Building Act 2004 enacted by the Labour Government has worked and has worked to that particular extent. That demonstrated leadership—the leadership that we desperately need now. We need leadership because we are not talking about statistics we are talking about safety and we are talking about human lives. 
NICKY WAGNER (National—Christchurch Central) 
: 
 I rise to support the Building Amendment Bill (No 3) at its third reading. As has been discussed in the House previously this bill is part of a larger suite of legislation for the building industry. The Building Amendment Bill (No 4) is ready to have its first reading in Parliament very soon. 
If you think about the construction sector it is a very important part of our industry. It employs over 170000 people which is about one in 12 New Zealanders. If you think of the future in Christchurch with a $20 billion to $30 billion rebuild in the next decade or so this number can only increase. 
The development of this bill has been a long time coming. Originally work was undertaken by the Labour Government and the new Minister Maurice Williamson and his department have consulted widely. They have talked to everybody in the industry—everybody from the Registered Master Builders Federation the Certified Builders Association the Building Industry Federation the Construction Industry Council and even retailers like PlaceMakers Mitre 10 and Bunnings have had their say. There is a high degree of support for these changes. Even in the Local Government and Environment Committee we continued that process and we managed to iron out some of the finer details at the time. 
I think this bill is both important and necessary. It is absolutely true that our building industry needs to improve. In comparison with what the previous speaker Raymond Huo was speaking about I think this is just the right time—when there is a lot of work to do to repair leaky homes and a huge amount of work to be done in Christchurch. There is a real issue about accessibility and affordability of homes in New Zealand. The demands for the new homes in Christchurch after the earthquakes mean that we must reform our building legislation. We must cut red tape we must cut bureaucracy and at the same time we must increase productivity and improve the quality of all our buildings. This bill is part of the Government’s Better Building Blueprint and that is our plan for a better future for New Zealanders by making it easier and cheaper to build good quality homes and buildings. 
Just to recap the four major points of this legislation the first is to give clearer accountability for building practitioners building consent authorities and the consumer to make sure that the work complies with the building code. By making each contributor individually responsible for meeting those building code standards there is an inherent quality-checking system that will improve the quality of work. 
Secondly the bill creates a new building consent system that is risk based. That means that the amount of checking and inspection is related to the risk and the complexity of the work and the skills and the capability of the people doing the work. It is just a common-sense approach that recognises that not all buildings are equal. There is an enormous difference between the amount of skill and the amount of monitoring required on a simple domestic structure in comparison with a multilevel commercial building. The new consent process will tailor the monitoring and inspecting to the requirements of the project. We need enough monitoring and inspections to ensure good quality buildings without excessive demands that deliver no value and just waste time and money. 
Thirdly the bill introduces a code of ethics for licensed building practitioners to encourage professional behaviour. The construction industry is so important to our economy that it is right to expect a high standard of professionalism and that this legislation has disciplinary teeth. The public want and need to be able to respect and trust building practitioners. 
Finally to respect the great Kiwi tradition of DIY there is an owner-builder do-it-yourself exemption from restricted building work rules. It is the Kiwi way to be able to work on your house and add value to your property. However the exemption is carefully structured to avoid it being used as a back-door way for unlicensed practitioners to obtain work. 
This bill addresses the need for increased productivity better quality and more cost-effective building in New Zealand. I believe that all members in the House support the need for a building sector that is more productive and more effective and that all members understand the urgent need for New Zealand to have a building sector that can deliver good quality and affordability for their homes and buildings. Labour has voiced its general support for risk-based consenting but has raised the issue of the need for a more comprehensive bill. But on this side of the House because this is a part of a comprehensive suite of legislation that is on the way and because we believe that we need to make progress now we support this as a good first step in the right direction. I commend the bill to the House. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 That repeats the consistent message that we have heard from the Government in respect of our concern about the Building Amendment Bill (No 3) being a piecemeal approach. I think the Minister for Building and Construction said that it was one in a series of measures and it was not piecemeal because it was one piece or one building block. He then suggested that I had raised a concern about needing to have all the blocks together— 
Hon Maurice Williamson 
: I withdrew that. 
Hon LIANNE DALZIEL 
: —but he has now reneged on that and understands that it was the Hon Annette King who said it. And Annette King said it for a very good reason and that is that it is true that the foundation needs to be built first. But actually the foundation needs to be built first in the legislative sense as well. This is not the full framework of the legislation and it is not the foundation; it is a component of the framework. And without a foundation to secure it to I believe that many of the risks that currently exist in our regulatory framework will continue to exist. 
When I spoke during the Committee stage I made a point on more than one occasion and I want to repeat it here and now. I heard the Minister chipping our spokesperson in this area Raymond Huo with his comments about the 1991 legislation and making the point that it was a Labour Government that introduced that bill. Yes it was. The point that I am making and have continued to make throughout this debate is that the fact that both of us were culpable in terms of the deregulation of the building industry does not make it right. And the fact that we introduced legislation and National saw it through into its legislative form does not make either one of us any better than the other. In fact it exposes the risk that we have when we pass legislation without recognising what the impact will be. 
This is more than an unintended consequence. I mean we have all brought bills back to the House shortly after something has been enacted and the Supreme Court or the Court of Appeal have told us that it means something different from what we intended. We have all had to bring legislation to the House to resolve interpretive matters where there have been unintended consequences. This is not an unintended consequence; it is a consequence that arose directly because of a number of decisions that all combined and the legislative framework was just one element of it. I heard the previous comments from the member who has just resumed her seat Nicky Wagner talking about the need to deregulate get rid of red tape and reduce compliance costs. It is all very well and good to be speaking about those things when there are no risks but there are significant risks and I do not believe that we are talking about just health and safety when we talk about risks. I know people and obviously people in this House know constituents who face financial ruin because of the leaky building syndrome. I hate calling it a syndrome as well because it is actually a failure of the regulatory framework to provide protections that ought to have been there. 
This is why I have been making this plea on behalf of the people whom I have certainly been privileged to represent for a number of years—that is to make sure that we get this right. That is why I really think that this legislation should have been delayed until we had all of the foundation prepared. I do not believe that the foundation is secure at the moment. I was the Minister as I said in the House yesterday that was responsible for the discussion document going out which ultimately led to the introduction and passage of the 2004 Building Act. But I also made the point that I was the Minister who was in charge of this area when John Scarry wrote his open letter to the Institution of Professional Engineers. He actually wrote his letter to the institution at the request or suggestion of the vice-president of the institution at the time after he had disclosed to him the level of concern that he had around a number of buildings in respect of both Auckland and Wellington which were I think the primary focus of his concern at the time. Rather than raise it as a complaint to the institution the suggestion was that it come in the form of a letter. He wanted to write it as an article for the institution magazine and they said that no he should write them a letter. Well the letter became quite a substantial document in its own right at some 100-odd pages long; I have a copy of it here. It is a major major document. 
This is the point that I think my colleague Raymond Huo has been trying to make in this House: when this individual made his stand as it were in order to bring the politicians’ attention and the professionals’ attention to the parlous state of some practices within structural engineering in this country he was doing so knowing that there were some risks around speaking out. And actually some of the risks have been met in the sense that there is a sense that people who speak out in this area are at risk of being denigrated publicly put down and then told that actually they do not have the backing of the profession. An organisation like the Institution of Professional Engineers has 10000 members; obviously not one of them agrees with him! Well that is simply unfair. 
I think it is a concern when I have a copy of the report that was done for the institution and also the report that was done for the Building Industry Authority as it was in those days and I read that both organisations acknowledged that he had major and very real concerns about the state of some of the buildings. He would not tell me at the time which buildings he was particularly concerned about but because I know what I know I actually know what some of those buildings are. It is very difficult to have that knowledge and know—with Wellington being the seismic risk that it is—that if something happens then you would obviously be carrying that weight if the consequences were as severe as they might well be. 
I guess that is what I took with me when I received this open letter. I could not sleep because it was essentially a warning and once it was in the hands of a decision maker there was an obligation to do something. And so we did do something. We referred it on for advice and the advice indicated to us that the changes that we were to implement in the Building Act 2004 would address the concerns that had been raised. I was comforted by that. We were going down the right track to correct the problem. The problem had been correctly identified; the solution was there waiting for introduction. 
But now having spoken to John Scarry since and having heard him in the media in recent times I hear that the Building Act 2004 did not address all of the concerns that he raised. And that is what worries me. He was right when he wrote in 2002 warning of these issues and what I am worried about Minister is that he might be right again. I do not know because I am not a technical expert in this area and that is why his work needs to be referred for independent analysis so that it can be checked for the concerns that have been raised. As I have said in the House over the last couple of days as well I have spoken to other engineers who totally agree with and support his concerns and they too want to have these matters opened up. I think that we owe it not just to Mr Scarry whose reputation has been tarnished yet again but actually to the people who live and work in those buildings to know that we are taking those claims seriously. I believe that proceeding with changes to our building regulation without getting it right first time is just as bad as building the building and not getting it right first time. 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Assistant Speaker Robertson. Nga mihi nui ki a koutou. I rise to oppose this bill the Building Amendment Bill (No 4) on behalf of our housing spokesperson new MP Holly Walker. 
Maggie Barry 
: No. 3. 
GARETH HUGHES 
: You are right Maggie Barry it is the Building Amendment Bill (No 3)—got to get it right. This is the problem; this is one of the reasons why the Greens along with Labour are opposing it because we have got a proliferation of bills. We have got No. 3; we have got No. 4. My question to the Minister for Building and Construction is what is the rush? Why did we not focus on digging good foundations getting those foundations ready getting the package all together and making sure it was weathertight before we went down this path of passing two separate bills? The Minister himself acknowledged that we are seeing a piecemeal approach in the drafting of legislation and this is not what the sector needs. It is not what the sector wants. Over hours of debate in this House we have seen to-ing and fro-ing between the red side and the blue side saying who is responsible for the leaky buildings crisis and who is responsible for cutting all that red tape that led to all those problems. After hours and hours of debate all we found out was that they were both responsible. The ideologies that captured both parties at that time were responsible for the housing crisis and were responsible for the leaky buildings and the billions of dollars of bills facing our councils our households and the Government. They were both responsible. So I would like to acknowledge the changes we saw in 2004 when the Hon Shane Jones amended the Building Act. What we needed to find was a balanced approach a solid approach and that is not what we have with this bill. It is a piecemeal approach—and that is what the Minister and Nicky Wagner said. 
The key change we are seeing under the Building Amendment Bill (No 3) is the shift in responsibility from councils the consenting authorities towards builders and consumers. The focus is on accountability but the questions arise around liability and responsibility. When you have a $100 fly-by-night building company that is responsible it does not really mean anything to the householder facing the bill. What I think people wanted was a balanced approach where they knew they were going to be covered. If we were going to see problems in the future there was a long-term body like a consenting authority like a council who would be there to support them. We saw in the Local Government and Environment Committee that the Government refused to have the genuine debate around proportional liability or the mandatory warranties. 
A key part of this bill is section 90D in clause 25 which deals with the owner-builder exemption. The Green Party supports this in particular. We like the DIY tradition of Kiwis being able to build their own house. But a note of caution because in the Building Amendment Bill (No 4) what we see is that original owner-builder responsible maybe six or more sales down the line for the original house they built. I do not think we are going to see that many owner-builders building their own homes when they know that six times down the line when the house is sold they are still liable for what has happened to that house. We support accountability but we have some big questions around the owner-builder clause in the Building Amendment Bill (No 4). 
Ultimately though what we see—and I think Nicky Wagner put the hammer on the nail—is that the bill is all about cutting red tape and cutting bureaucracy. It is the slogans we love to hear from that side of the House and I guess the analogy about building is that when you do all those things it is like building a house out of straw. I have a 4-year-old so I am used to reading about the three little pigs and I know what happens when you build a house out of straw and you do not have the solid foundations of a holistic solid build. What you get is your house being blown over. So I would like to thank all the officials who worked on the bill. I would like to thank all the submitters. It is real pity we cannot get consensus in the House— 
Hon Maurice Williamson 
: It was the wooden house that survived in Christchurch not the brick building. So your little pig story’s got to be rewritten. 
GARETH HUGHES 
: I will have to update the story as the Hon Maurice Williamson says for the New Zealand context. 
Just on a final note it is a pity we could not get consensus. I am sure the Minister would have liked to see the whole House pass this bill with all parties in support. It is disappointing that we could not get there but in the future I think what we will need is a solid approach to building. We will be opposing this bill. Kia ora. 
JACQUI DEAN (National—Waitaki) 
: 
 It is a matter of great pleasure for me to be able to stand and speak to the third reading of the Building Amendment Bill (No 3). I will tell you why. It is because I applaud a Minister and a Government that provide for clearer accountability for building practitioners building consent authorities and consumers—the ones who seem to have been forgotten in much of the debate—in making sure that building work complies with the building code. I applaud a Minister and a Government that put in the building code a new regime with a new building consent system that is risk based. This means that the amount of checking and inspection is related to the risk and the complexity of the work and to the skills and capability of the people doing the work. I do not believe that that is at all acknowledged by any members of the Opposition. 
I applaud a Minister and I applaud a Government that will bring to the House a bill that contains a code of ethics for licensed building practitioners to encourage professional behaviour. After all is that not what this is all about? Finally I applaud a Minister and I applaud a Government that have the foresight and the courage to bring in provisions in a building amendment bill that acknowledge that we are a nation of do-it-yourselfers but that at the same time we need to protect the rights of consumers. I commend this bill to the House. 
ANDREW WILLIAMS (NZ First) 
: 
 I rise on behalf of New Zealand First to speak to the Building Amendment Bill (No 3) for the third time. We have already covered a lot of material on this and New Zealand First opposes this bill. We have already heard all the comments in relation to how the leaky homes national disaster came about—because of inadequate building codes and inadequate building practices—and that has ended up with this country and our nation carrying the bill for something like $20 billion in remedial works to sort that building disaster out. 
We heard from the Minister for Building and Construction today as to why this amendment bill is necessary. It is to reduce the red tape reduce the costs of building and reduce the compliance costs around building and to put more responsibility on to the building industry—the builders themselves—and indeed the end consumer so that there is less “buyer beware” and more “buyer aware”. 
However I would like to draw the House’s attention to a situation at Cave Creek in 1995 on 28 April where 14 people died while standing on a viewing platform which collapsed. The inquiry that followed from that particular very sad tragedy at Cave Creek found that the platform collapsed as a result of inadequate building practices. It was shown that because the platform had been constructed poorly with inadequate supports inadequate bracing and inadequate substructure supports for the beams the weight of the people was too great and it collapsed. 
This bill in a sense is going down the same path. It is taking the building industry into areas of self-regulation in a sense—into an area where the building industry will be policing itself on the final construction of properties homes decks and other structures. Leading into the Building Amendment Bill (No 4)—and I have just been reading that bill—there are so many open-ended situations where the building practices will certainly be in perhaps a suspect situation leaving I believe consumers and New Zealanders open to great risk. Although we support reduction in costs as anyone does—trying to find cost-savings across the board to try to lower the cost of housing in New Zealand—at the same time we do not think that should go hand in hand with reducing what should be a very controlled regulatory environment that ensures safety at all times for the property owner. 
We have heard that licensed building practitioners will be required as of 1 March this year to build all structures unless there is an exemption for a DIY person building their property. However there has been great comment about the varying standards and levels of expertise of elements within the building workforce. This country has not been a great one in recent years for apprenticeships. It has not been a great one for training our younger people coming through in these trades. This has been a situation where for more than two decades now we have had a declining number of tradespeople moving into some of these areas and where the skill levels are perhaps not the same as those of the good old builders of days gone by. 
I built my first home myself. It is still standing it is as dry as a bone and it will never leak but I spent the best part of 2 or 3 years of my weekends building that home making sure it was a good home and making sure that I absolutely went over the top in terms of the safety aspects of building that home. I look at the houses some 25 or 30 years later and I look at what is now being constructed and there are still questions about the products going into many of these properties. There are still questions about the method of construction and there are particularly questions about design aspects such as overhangs and making sure there are sufficient safeguards. Too often these days we are seeing things just being bogged up with varying silicones sealants and anything that comes out of a tube with the thought that that will be good and that will keep the property safe warm and dry only to find a number of years later that the sealants have dried and cracked and the water is getting in. We are seeing often inadequate materials being used. We are seeing a cheapening of materials being used. We are seeing short cuts being taken on building materials to try to get an end product as cheap as possible. 
In many respects this is a “back to the future” bill because we have not learnt from the past it would seem. In the 1990s we had the onset of the leaky home situation we had the lowering of the building code and we had the lowering of building standards. Standards New Zealand allowed new inferior materials to be used such as monolithic cladding directly applied to untreated air-dried timber in an unvented situation. Once the silicones the sealants and everything else started to crack and much of that cladding started to crack then the leaky homes the leaky schools the leaky hospitals and the leaky commercial buildings problem commenced. 
In a sense we are going back to that. This country at the moment faces a $20 billion bill for that disaster from the 1990s from previous Governments who should have learnt from that. This Government is now going down the track of basically giving carte blanche open treatment to the building industry to start a whole new potential leaky building situation all over again. New Zealand First is very worried about this bill. 
We are also worried about the next part the Building Amendment Bill (No 4). When I look at that bill I see that it is so open and so open to interpretation of what could be built by varying people within the building industry with next to no compliance requirements and so many different structures that will be permitted to be built without consents in the future. We could see a whole new national leaky homes situation all over again in the next decade or two as a result of the Building Amendment Bill (No 3) and the Building Amendment Bill (No 4) coming before this House. 
New Zealand First will continue to oppose this bill and we will continue to highlight many of the negative aspects of it that really do put us at risk not only from a safety point of view but also from a major financial point of view. This country I think cannot afford once again to be looking down the barrel of a major major problem with our housing with our schools and with our buildings. This Government talks about for instance putting money back into the education system and says that by selling the State assets it is going to put money into the schools. I know for example of one school on the North Shore that is having to spend $20 million to $30 million rebuilding many of its leaky buildings and many of its structures because they have failed. Through this Building Amendment Bill (No 3) and the Building Amendment Bill (No 4) potentially—who knows—we could have this happening all over again. This nation could be up for a very very large bill in the future. 
NIKKI KAYE (National—Auckland Central) 
: 
 I am very pleased to speak on the Building Amendment Bill (No 3). One of my first jobs was working at Parliament and I was here when the first issues were raised around leaky homes. One of the saddest moments that I had when I was working in these parliamentary precincts was when the last Labour Government initially denied the leaky homes situation. I think members across the House now realise the extent of the leaky—and I would say rotting—homes situation but there was initially a denial. I want to say to some of the members who have made comments about the leaky homes situation that I am very proud of our Government’s commitment in this area. We have put in over a billion dollars to help those families and most of us have constituents who have been in terrible situations. 
I think the point that I would make this evening about this legislation is that what we are saying as a Government is that we do have a comprehensive package of reforms but we differentiate between what is a comprehensive package and actually staging it in pieces of legislation because there are certain pieces that we need to get through now. 
There are a couple of points that I want to make in relation to this bill about why it is really important that we pass it now and we do not wait—I know there is a piece of work going to the Law Commission around contracts—because there are several key parts to this legislation. We heard Gareth Hughes the Green Party member talk about why he opposed it. He mentioned a phrase. He said members on this side use slogans like “cutting red tape and bureaucracy”. What I want to say to that member is that he often talks about housing affordability and there is a direct correlation between reducing red tape reducing bureaucracy and the cost of a house. So if we want to get more young New Zealanders into houses then we have to have more pieces of legislation like this. 
A core part of this bill that will lead to more affordable houses is risk-based consenting. I think there is an estimate here that for a simple home it would reduce planning and consenting time by about a third and reduce the number of inspections by about two-thirds. So the point that I make to members this evening is that cutting red tape and cutting bureaucracy have a direct correlation to housing affordability which is good for New Zealanders. 
The second point that I would just like to make briefly is about the fact that it is a great evening for the do-it-yourselfers in New Zealand because there are many New Zealanders who do not have a lot of money but who enjoy doing a little bit of work on their property. What is great is that previously they would have had to employ licensed building practitioners. Now as a result of this bill they will not have to do that and we on this side of the House are very proud to say we are not going to wait a year for that to happen; we want that to go through tonight. 
The final point that I would make has been a theme that we have had earlier in the general debate speeches and that is around the contribution to the economy. There are 170000 people employed around New Zealand in the construction sector and we know that the construction sector is worth about $20 billion. I acknowledge that I think 5 percent of our economy is around construction-related jobs. I acknowledge all those people around the country who contribute and I say that this side of the House does have a comprehensive piece of reform in terms of the building industry. We are not afraid to say that some things need to happen now and that is what this legislation is doing. Tonight is a great night for those do-it-yourself Kiwis. Thank you. 
Hon SHANE JONES (Labour) 
: 
 I will begin my speech by saying taringa whakarongo! Please listen. No. 1 it is with some disappointment but some joy that we stand and speak on this Building Amendment Bill (No 3) because as I said earlier a number of the elements were started with us. So I do not want to focus during this third reading speech on the elements that cause us to be in different camps. I want to draw on a figure that the New Zealand First member put out into the House and I understand it is sourced from the PricewaterhouseCoopers consultation document about the costs of the leaky buildings. I have checked with an august source of information who shall remain nameless that the actual $20 billion figure associated with the leaky homes is verifiable. The figure that I was a tad more familiar with was $11.5 billion which is frightening enough as it is. 
When you add that figure to the $7 billion or $8 billion that the garden-variety Kiwis lost in the debacle of the finance companies and then you add the Reserve Bank figure of $30 billion - odd which is the rebuild costs of Christchurch then you are getting up to a figure arguably well in excess of $50 billion. Then you divide that into $190 billion which is about the size of our GDP and it gives you an indication of how important the construction sector is not only from a carpentry design and architecture point of view but in how we fund that activity. A lot of the funds that were squandered in the debacle of the moms and pops etc. who put their dough into the Mark Hotchin schemes etc. did find their way into property developments some of which are the subject of this bill in the sense that had we had a better level of stewardship a better quality of oversight and better skills the overall costs might have been smaller. 
 So this is very serious business. To quote Mr Williams’ figure—and I am told that it can be attested to by looking at the consultants’ report—of $20 billion - odd the $30 billion that we are talking about coming out of the Reserve Bank and the $7 billion or $8 billion associated with the debacle of the finance industry we are at a figure that is nigh on 25 percent to 30 percent of the value of our GDP and that is an enormous challenge to us as parliamentarians. There are aspects to this legislation that were started in our time but this is not about authorship. This is about showing how grey the experience has been that we have all lived through irrespective of whether we were in Government. Much to our chagrin you are in Government but it is a reminder about the level of pain and burden that has been shouldered by far too many New Zealanders. 
Of course there is another problem that we have yet to get our heads around and that problem is local government’s ability to insure itself. Part of the reason that local government is shy—and Mr Williams will know this—about who ought to stand up and bear the costs of the leaky buildings lies with its own insurance liability. Local government has its own insurance company and that company has sought even in the short but eventful time when I was the Minister to secure reinsurance from one of the large behemoths of that particular obscure industry—i.e. lawyers. It is struggling to do that and that actually drives the behaviour of a lot of the consent authorities and the officers working in those consent authorities. So if we do not get I say to the Minister the actual balance right you can understand how its fears about its own inability to get insurance for consent authorities is driving that kind of behaviour. 
I have no doubt that in short order associated with the role of a consent authority is going to be the challenge that we as a Parliament—and naturally as a first line of defence the Government—are going to have to deal with: can local government building consent authorities ensure that their decisions related to building work are themselves insurable? Rest assured that when in the future problems arise they are going to go for the builders the designers and the architects and they are going to struggle to find suitable insurance as well because insurance is emerging as a new taniwha with long fangs about to create all sorts of problems for the garden-variety Kiwi—make no mistake about that—in this particular sector. 
We need to ensure that the work— 
Hon Maurice Williamson 
: There’s nothing about taniwha in this bill. 
Hon SHANE JONES 
: Well there was one taniwha that did annoy me and it was the one that was stopping the inner-city rail loop which you do not agree with but we kind of like because it is our signature policy. The only thing I said about that taniwha was to ask whether or not it was GST-registered but that is another matter. I am told that that actually cost me votes with my relations in Ngati Whatua but that is another matter; that has come and gone. 
Naturally we will not agree to vote for the bill because of I guess the piecemeal approach. But a lot of the content—we do not want to be too churlish about it—does resonate well with us. We look forward to entering into the debate and hearing the submissions about the Building Amendment Bill (No 4) contribution and we hope that there is a level of coherence when all these things come together. 
The other thing I would suggest is that the references to housing affordability are partly related in our view to the length of time it might take for a council inspection or to the costs associated with the council actually processing the application. But it also depends on the structure of the industry: whether or not there is enough competitive tension and whether or not the mountainous corporate entity known as Fletcher’s with all its tentacles going into concrete construction and building in itself represents an absence of competitiveness. In addition to that the cost of land has got to such an extent in key parts of New Zealand—and I am not talking about the blighted areas of Christchurch; I am really talking about our largest urban area Tamaki-makau-rau. So it is fair not just to look at the building construction costs; it is also important that we look at land. That is a debate that this House at some point in time is going to have to revisit. To what extent do we go up and if we go up as opposed to out in terms of dealing with housing quandaries how comforted can we be with the quality of the work the quality of the engineering the quality of design and how affordable it is? These things are interconnected and whoever has got the responsibility on that side of the House to deal with these things one day might be surprised to learn that we have a great deal of interest and we might have some shared interests in that regard. 
It is disappointing that the bill does not capture our vote but we look forward to working on future contributions to the building sector. I would restate that that is the size of the liability. That is the size of the financial penalty that garden-variety Kiwis have faced and dare I say it also us as taxpayers because we have ended up being the insurer of last resort in this instance. I say that about us not only as taxpayers but also as ratepayers. 
The point I would round up on is that local government reform is obviously not over. In that reform agenda whichever direction the Ministers intend to take it in it is going to be a challenge for each local government authority to maintain a level of confidence and a level of efficiency that gets the investors the property developers—the people who are actually going to have to spend money to redevelop those areas—either to meet the housing needs of Auckland or to redevelop the capital assets of Christchurch. We need to be confident when they implement the regulations—because that is where the power is going to come from—and that the mahi the actual deeds are done after the regulations are passed through this piece of legislation. What types of building activity can be excluded from the process of a building consent and how onerous will the regulations be? I would make a plea to the current Minister that there is a genuine case here for having a balance between those who do not want to repeat this $50 billion experience and at the same time the pendulum not swinging so far that we thwart and we suffocate those who are prepared to take the risk to ensure that the capital assets in the property sector of New Zealand are continually rebuilt. Kia ora tatou katoa. 
PAUL GOLDSMITH (National) 
: 
 I speak in support of the Building Amendment Bill (No 3). I think this is another piece of good legislation and it is a small part of the overall package into getting more productive affordable and better-quality housing stock in New Zealand. I just want to touch on those three areas. 
Productivity I think is one of the biggest issues facing New Zealand generally. How we grow wealth is we become more productive. The construction area is a very large part of the economy and productivity has actually fallen since 1996. When you are dealing with about one in 12 workers working in the construction industry that is a very significant drag on the country. This bill will go some small way to improving productivity in our building area mainly through the risk-based consents system that is being employed which means that the amount of checking and inspection is related to the risk and complexity of the work. That makes absolute sense. If you are just doing a relatively small piece of work on the house it is probably not necessary to have quite so many visits by the inspector. 
The second area is affordability and we hear no end of concerns from people on all sides of the House and throughout the country about housing affordability. It always strikes me as strange that particularly members on the other side worry about housing affordability but when it comes to local councils there is a tendency to do everything they can to drive up the cost of land which is an important part of housing affordability through restrictive district plans. We see that at the moment in Auckland where it is a very large part of the problem. Rates are also an important part of housing affordability and again in Auckland we are looking at potentially more than 30 percent rate increases in some parts of the city over the next 3 years. So affordability is a broad issue. When it comes to the housing construction side of that this bill again makes a small improvement in that area around reducing the costs of housing through this risk-based system. 
 Finally in quality we all know the horrors of the leaky building systemic failure that we had over a long time. This bill again is a part of the response to that particularly in giving clearer accountability for building practitioners and giving a clearer description of where accountability lies between building practitioners building consent authorities and consumers in making sure that a new house complies with the building code. I think that clearer accountability will lead to a better result in the long term. 
So I commend this bill to the House and that it be read a third time. Thank you. 
MOANA MACKEY (Labour) 
: 
 It is actually with great disappointment that I have to stand to speak against the Building Amendment Bill (No 3) because of course this work started under the previous Labour Government. With the greatest of respect to the member who just took his seat Paul Goldsmith who said that we have learnt from the experience of the leaky buildings saga I say to him that I do not think National has. That is one of the core reasons that Labour is opposing this piece of legislation. It is because those who do not learn from history are doomed to repeat it. Once again we see the kind of ideological knee-jerk reaction to regulating this area that actually led us into this territory in the first place. 
I want to make some general comments first about this pattern that is emerging under this National Government which is to push as much as possible into regulation. That means that when we are passing primary legislation we cannot really ascertain the full impact of it because it is going to be in the regulations and that is where the rubber hits the road. It has become common practice under this National Government. I spent the last 3 years on the Regulations Review Committee and we saw it time and time again particularly in areas where there was any controversy. Everything was pushed to regulation because that meant you did not have to get votes for it in the House it did not go through a select committee process and it did not come to this House to be debated and amended. The only protection is the Regulations Review Committee but even the Regulations Review Committee—as important and as wonderful as it is—is limited in its ability to change regulations. It can review regulations in terms of process it can hear from people who are unhappy about certain regulations and it can hear from people who think they are unfair but it is limited in its powers to change them which is something we saw on many issues—like folic acid for example. It seems to me that more and more the more controversial the issue the more likely it is to be dealt with by regulation rather than primary legislation. That is a bad precedent that is being set in this Parliament. It is not good parliamentary practice and it is something that should be reversed. And here we see it again with an issue that is undoubtedly controversial and that is the Building Amendment Bill (No 3) which is trying to address some of the structural issues that led to the leaky building crisis. Again everything is being pushed into regulations. 
The second pattern we are seeing emerging—and I saw this again today when I sat on the Health Committee—is also limiting people’s ability to challenge decisions limiting people’s ability to question and to challenge when something has gone wrong. I want to come back to issues of liability in this legislation later on but that is certainly another thing that we seeing. When you move towards putting the onus on the builders themselves and on the consumers and away from putting it on the building consenters you are removing an entire level of appeal and those processes that are available to consumers and to those who have been affected. Again we are seeing this more and more often. We are seeing it in the exclusive economic zone legislation right now which is removing appeals to the Environment Court and heading them straight to the High Court and they can only be on points of law not on points of substance. I subbed on to the Health Committee this morning and we were talking about the Natural Health Products Bill. Again appeals are allowed to go to the High Court only on points of law not substance. Again all the guts of it is in regulation as with the exclusive economic zone legislation as with this legislation and as with the Food Bill. A pattern is emerging that is actually reducing the power of this Parliament to pass good legislation reducing the power of this Parliament to stop bad legislation and shifting it all into regulations which can be changed by a Government with very little notification. They are just gazetted with no public input. And unless someone happens to catch it— 
Hon Maurice Williamson 
: Shock and awe. 
MOANA MACKEY 
: —and speak up on it then it is shonky lawmaking—shonky lawmaking Mr Williamson. He called it shonky law maybe. 
Hon Maurice Williamson 
: Shock and awe. 
MOANA MACKEY 
: Oh shock and awe—shock and awe. Well I do not know whether I would go so far as to call it shock and awe but it is bad parliamentary process. 
The third pattern we are seeing emerging is this constant reliance on future legislation. Again this is like shifting everything into regulations. If you are constantly saying “Trust us because the next piece of legislation is going to fix it.” that is not good lawmaking process. What Labour members throughout this entire debate have been asking is why are we doing it in such a piecemeal fashion. This is too important for us to get it wrong. Work is ongoing at the moment on other areas around liability. The Law Commission is doing some work. Let us slow this down let us get some idea about what the draft regulations are going to look like let us get some idea about what the next building amendment bill is going to look like and let us make sure that we have all the ducks lined up so that we do not end up in the same situation we were in before. 
You often hear when people talk about what went wrong with the leaky buildings issue that it was the Swiss cheese approach. Just enough holes were lined up for homeowners to fall through that gap. It was not that any one particular piece of legislation was to blame for what happened; it was that there were enough holes that unfortunately when they lined up the consumers fell through the gap. We are in danger of that happening again if we continue to pass law in this fashion where we do not know what the regulations are going to do where we do not know what the future legislation we are being told to rely on is going to do and where once again we are restricting people’s access to appeals. 
The issue of liability is incredibly important as you can see if you look at the case of Pepperwood Mews in Auckland and the ongoing fight those people have about the role that the Waitakere City Council played when it issued the certificate of compliance for Pepperwood Mews. 
Hon Maurice Williamson 
: I want it changed. 
MOANA MACKEY 
: But this is why it is so important to get it right. This shift away saying that the councils are going to have less liability makes it even more— 
Hon Maurice Williamson 
: No it doesn’t. 
MOANA MACKEY 
: Well no one knows. I mean this is the problem. We have not addressed the issue of liability. It is no clearer now than it was under the previous regime. The Minister for Building and Construction might not like it but he or the Minister of Housing should have bothered to spend some time with those people to talk through from their point of view what happened. When someone from the council says “This is code compliant. This is code compliant. We signed off on it.” as a consumer you do not have the level of knowledge to be able to know whether they are right or wrong; you just hope that your elected officials and the people who are paid from ratepayers’ money to make those decisions and provide advice are doing so in a proper fashion. When it all goes pear-shaped the consumers come back and say “Well surely the council had a role to play in it because it is the one that said it was all OK.” 
Those people also say that surely the Housing New Zealand Corporation had a role to play in it because it promoted the mews as a really good investment because it was going to tenant it for 10 or 15 years. So there was going to be guaranteed income but the Housing New Zealand Corporation bailed the minute it all went pear-shaped. It got out as quickly as it could. The Pepperwood Mews owners—these are 32 mum and dad investors; we love talking about mum and dad investors—have lost just about everything they had in this investment. They say that they were not told about problems with the building before the unit titles were signed off and that had they been told they might have reconsidered their decision. Issues of liability go to the very heart of when things go wrong so it is important that we get them right and do not do them in the piecemeal fashion we have been seeing happen today. 
A lot has been made of housing affordability and how we need to do this legislation to reduce the cost of homes. I suspect that Government members are over-egging the impact of this legislation on housing affordability. There are so many aspects to housing affordability none of which the Government is really doing anything about. The issue that my colleague Shane Jones raised I think is a very interesting one and one that has been relatively unexplored in New Zealand and that is the cost of building materials here relative to other countries—the cost of actually building the home. I do know that for example before the Auckland super-city was formed when you talked to developers up in Auckland about building houses you found that their one complaint was that all the different local authorities had different rules. They said that actually some local authorities were very very good but some were not so good. I am not going to say which local authorities were which but developers said that if for example they had a development of 60 houses some councils would put all of them through in one process but others would make them file for each individual house. There were different practices from different councils and that could have been dealt with without our completely removing levels of protection for consumers—the kind that we are seeing removed here. 
The Government really needs to play a much more active role in housing affordability across the board rather than picking and choosing rather than using housing affordability as an argument when it is useful to it to use it but then doing other things that completely undermine what it is doing about housing affordability—like for example the fact that it has done nothing about the community housing sector trusts losing charitable status under the Charities Act. That is something that is costing the Queenstown Lakes Community Housing Trust millions of dollars a year that it could be spending on building affordable houses. The Government sat on its hands and did nothing. Phil Heatley was told about it miles in advance of it happening. It went through the courts. The Government could have made a simple amendment to the Charities Act that would have meant that those organisations would be able to keep money earmarked for affordable housing and spend it on affordable housing but it has done absolutely nothing. So to say that this bill is going to be a panacea for affordable housing when there are so many other things out there that the Government could be doing such as properly investing in community housing organisations advertising the products that are available—unlike what it did with shared equity which was refuse to advertise it then complain— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: I am sorry to interrupt the honourable member. Her time has expired. 
MAGGIE BARRY (National—North Shore) 
: 
 I spoke in the second reading of the Building Amendment Bill (No 3) when I signalled my support in particular around the measures changing the law relating to DIY projects—something close to my heart. After 12 years on the garden show I can say that DIY does not need to be stifled. It does need to have some controls around it and to be done to standards but we do not need to hold back a great New Zealand pastime. I think the bill has got that balance very correct and I am happy to speak today at the third reading of this bill. 
Already the Minister for Building and Construction Maurice Williamson has eloquently signalled that there has been wide support from the sector from the industry for this. All the major players have been consulted. The Local Government and Environment Committee heard submissions. The bill has been very widely looked at consulted on and thought through. I commend this bill. I think it is the result of a very comprehensive review of the Building Act 2004 and it does form part of a package of changes that have been aimed at lifting the overall performance and productivity of the building and construction sector which is something that I would think everyone in this House approves of. 
The changes are intended to encourage those working in the sector to improve their skills and their capability and to build right first time and that is the essence of it. Building it right first time is the key. We need to increase efficiency and productivity but it has to be done correctly. The changes that have been put forward in this bill have of course not been taken lightly because although there has been gradual improvement in the building industry since that Building Act was introduced in 2004 the Building Act review did find that the current system is more costly than it needs to be that it is less efficient than it could be and very important that it does not provide incentives to improve productivity. So the review that was conducted by the Department of Building and Housing which also consulted widely with the industry combines with the process that Parliament has applied to it. 
Other members the honourable Nicky Wagner and Nikki Kaye have detailed the four main key changes in this. I have spoken before with great approval of the DIY aspects and I like the fact that they are exempted from the restricted building work rules that have now come into effect. Risk-based consents are not going to be introduced until we are entirely confident that there is a very strong base of licensed building practitioners strengthened contracting requirements and greater consumer protection measures so that we can all ensure that building quality and public safety are maintained. So we are not doing this in haste and we are not doing it lightly. 
This is a Government that prides itself on its record of cutting red tape and improving efficiencies and productivity. I think this bill is a very good estimate of it and it does that very well. But it is important to note that we are going to achieve the savings only once we activate the risk-based consenting system and as I said that is going to happen later when we have confidence. We are not doing this in haste; it has been done with due consideration almost exhaustive consultation and a great deal of thought and deliberation. Therefore I commend the Building Amendment Bill (No 3) to the House. 
A party vote was called for on the question  
That the Building Amendment Bill (No 3) be now read a third time. 
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 57 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1. 
Bill read a third time. 
Search and Surveillance Bill 
In Committee 
Part 1 General provisions 
Hon JUDITH COLLINS (Minister of Justice) 
: 
 The first part of this bill contains the preliminary and interpretation provisions and provides that the Act will bind the Crown. One of the most important aspects of lawmaking is to ensure that any bill is consistent with human rights values particularly when there is some concern about the powers that a bill may grant. 
The purpose clause was inserted in the bill by the Justice and Electoral Committee which acknowledged that the bill required clarification as to how it interacted with the New Zealand Bill of Rights Act 1990 and other Acts that conferred rights. The insertion of the purpose clause ensures that the rights affirmed in the New Zealand Bill of Rights Act 1990 the Privacy Act 1993 and the Evidence Act 2006 are recognised in conjunction with the law enforcement powers granted under the bill. The inclusion of this purpose clause highlights the importance of human rights values in the context of search and surveillance powers. 
The purpose of the bill also makes the necessity of this bill clear by recognising that investigative tools must be effective and adequate for law enforcement needs and the need for modernisation. Search and surveillance powers were spread across the statute book in 69 different statutes and the powers these statutes authorised did not take into account technological developments in methods for the high-tech environment within which criminals now operate. 
Law enforcement must be able to combat offenders by using methods that are able to overcome evasive techniques that criminals use. The bill allows the police and regulators to do this provided that the techniques used are reasonable and regulated. In the light of the Supreme Court decision in the  
Hamed 
 case last year which questioned the lawfulness of covert surveillance Parliament passed the Video Camera Surveillance (Temporary Measures) Act 2011. I appreciate the way in which members from the other side of the House worked with the Government to pass that Act. 
The expiry of the temporary legislation on 17 April this year means that the Search and Surveillance Bill must be enacted by then to prevent a number of ongoing investigations from being jeopardised. To that end I have tabled a Supplementary Order Paper to provide for the relevant parts of the bill to commence on 18 April 2012 as well as a number of other amendments. 
I would just like to take the opportunity to thank those members of the House who worked on this bill in the select committee. Also since then I have been working with Charles Chauvel from the Labour Party and I thank him for his cooperative manner. I have also been able to send to each party a copy of the major Supplementary Order Paper that I have tabled. I would like to hope that people now feel far more at ease with some of the amendments that have been made. So thank you and I will enjoy hearing everyone else’s contributions. 
CHARLES CHAUVEL (Labour) 
: 
 I would like to begin by agreeing with something that the Minister of Justice said and that is that the process by which parliamentarians have sought to make this a better bill is to be commended by the Committee at this point. In my second reading speech I recounted the history of this measure and I think nobody could dispute the proposition that the Justice and Electoral Committee chaired by Chester Borrows at the time with the Labour team led by my colleague David Parker paid exhaustive attention to improving this bill. The select committee members really did take their parliamentary duties very seriously in trying to fashion a better measure so I think what the Minister says in that regard is correct. This bill has had a long gestation period. We can see from the amendments to Part 1 of the bill that the select committee did not simply take a once-over-lightly approach. It did look long and hard at how it could make a better bill. 
I think one of the best examples of that is the purpose clause that the select committee inserted clause 4A where the select committee clearly thought it needed to provide some guidance to the courts. Members will know that courts look increasingly at purpose clauses when Parliament inserts them for guidance about how the rest of the Act should be construed. The purpose clause here is instructive. It speaks about “(a) modernising the law of search seizure and surveillance to take into account advances in technologies and to regulate the use of those technologies;”—I think the next paragraph is the most important paragraph—“(b) providing rules that recognise the importance of the rights and entitlements affirmed in other enactments including the New Zealand Bill of Rights Act 1990 the Privacy Act 1993 and the Evidence Act 2006;”—and lastly—“(c) ensuring investigative tools are effective and adequate for law enforcement needs.” 
The primary importance of this purpose clause as I have noted is paragraph (b) because the importance of the specific freedoms that are affirmed by the New Zealand Bill of Rights Act the Privacy Act and the Evidence Act are repeated. The courts are to have regard to these freedoms when construing the rest of the legislation and this is of cardinal importance. 
The Minister in her introductory remarks mentioned that this is a Law Commission - prompted attempt to bring into line the search and surveillance powers of the State that are currently scattered across nearly 70 pieces of legislation—69 I think was the number that the Minister mentioned. With that being the status quo if the Committee reflects for a moment on how difficult it is for enforcement agencies let alone the courts let alone any other participant in the system to know just what search and surveillance powers exist in respect of any particular Act or any particular agency it will become apparent that it is a generally desirable exercise to bring those powers together in one statute and that is what this legislation will do if it passes. 
But there is one omission in the bill—one significant agency that is not brought within the purview of the legislation—and a number of speakers on the Labour side tonight intend to do their best to persuade the Committee that this is an omission that ought to be rectified. We will be tabling amendments as we go through the debate part by part where those amendments relate to the parts under discussion and we will be attempting to bring into the legislation the Serious Fraud Office. This is a matter that I have had some discussions with the Minister about. David Parker has had extensive correspondence with the Minister’s predecessor about it. The reason that it is relevant to the debate in this part is that David Parker intends if he has not already done so to table an amendment— 
Hon David Parker 
: It’s done. 
CHARLES CHAUVEL 
: —he tells me he has—that brings the definition of the Serious Fraud Office and its director into the interpretation provisions of the bill. 
My understanding of the reason that the Serious Fraud Office was not originally brought into the bill is that there was previously a Standing Order that provided that if a bill was not amended by the introductory version of a bill then it was very difficult without for example suspension of the Standing Orders or the unanimous leave of the House to deal with that legislation by way of amendment in later stages. That Standing Order has not been re-enacted in the current version of the Standing Orders. So what I am really putting to the Minister in the chair the Minister of Justice is that given that this procedural difficulty was said to be the prime reason for not being able to bring the powers of the Director of the Serious Fraud Office into line with the 69 other agencies that are going to be dealt with by this bill it seems that we in the Committee stage now have a last opportunity to do that and to standardise this one last great standout of enforcement powers. The amendments that my colleagues and I will table during the course of the debate will seek to do that. 
Here is why this is important. The Director of the Serious Fraud Office by sections 5 and 9 of the Serious Fraud Office Act has the most extraordinary powers. He can without a warrant without the permission of any other official politically or otherwise appointed require the production of any document and he can require any person to come before him and answer questions. These are very very wide powers. The Minister will tell us later in the debate about her Supplementary Order Paper 12 which is designed to try to overcome some of the concerns we have raised about media freedoms and the reason why unfortunately her Supplementary Order Paper does not quite get there is because the powers of the director remain untrammelled and unfettered. So what I am really asking the Minister and the Committee to do in this debate is to use this final opportunity to bring those powers into the standardised regime that we are considering tonight. 
What the amendments that we will deal with later starting with the amendment to the interpretation clause that David Parker has tabled would do is do away with the powers that I have described. They would retain the powers that the director has currently under sections 6 and 9 of the Serious Fraud Office Act 1990 to go to court and seek by warrant the extensive range of powers that he needs to do his job—we all acknowledge that—and those powers would be then controlled by Part 4 of this bill. In other words they would be brought into line with all the other enforcement powers that we are conferring on every other agency by every other statute. That means not only that the media freedom issue that we have raised which is a very serious one would be comprehensively dealt with pretty much by the amendments put forward by the Minister in Supplementary Order Paper 12 but also that media freedom would not be threatened by the standout Draconian powers that would be left with the Serious Fraud Office if we do not deal with them in the way that I have suggested. 
My concluding plea to the Committee is to have a good think about this as we remind ourselves that the only reason that the Serious Fraud Office is not in the legislation apart from the Standing Orders accident that I referred to earlier is that there was a proposal by the last Labour Government to merge the Serious Fraud Office and the police. Because that proposal as I understand it was on foot when the Law Commission considered this issue it did not deal with the powers of the director. Well that is a historical anomaly. It is one that we have the chance to rectify and if we do it will go a long way towards meeting our concerns. 
Dr CAM CALDER (National) 
: 
 It is a pleasure to rise and take a brief call in this Committee stage of the Search and Surveillance Bill. I would like to compliment the Minister of Justice the Hon Judith Collins on the work she has done and her collaborative approach to this very important legislation. I have in my hand a 93-page Supplementary Order Paper that has been created to update the amendments necessary in the numerous statutes covered by this bill. The amendments take into account the developments since 2010 when the bill was reported back to the House. 
I was speaking briefly earlier on protecting human rights. It has been a concern in respect of the discussion around this bill. The Search and Surveillance Bill explicitly states that its purpose is to balance law enforcement and investigation powers with human rights and there are a number of safeguards in the bill to achieve this. First of all we all realise that the bill adheres to the basic concept that independent authorisation is needed before exercising search warrants—independent authorisation is needed before exercising search warrants and search powers. Enforcement officers must justify the exercise of the search powers to neutral issuing officers. They must justify these powers to neutral issuing officers which is an important safeguard. There are detailed reporting requirements to the issuing officer the chief executive of the relevant agency and to Parliament on the exercise of the search and surveillance powers and these thus allow the search powers to be monitored to ensure that they are used properly and not being abused. The Act of course as is noted will be reviewed in 2016 to ensure that it is operating properly. Thirdly and also very importantly this bill does not affect New Zealanders’ right under the New Zealand Bill of Rights Act to be free from unreasonable search and seizure. 
Other safeguards are also important. Enforcement officers who make false search warrant or surveillance warrant applications will be penalised. More serious powers like examination orders may be authorised only by judges and that is an important thing— 
Charles Chauvel 
: I raise a point of order Mr Chairperson. I apologise for interrupting Mr Calder. I wonder whether he might be giving the speech that he intended to give about the short title and commencement rather than about the provisions that are under debate at the moment. 
The CHAIRPERSON (Lindsay Tisch) 
: I just remind members we are on Part 1 and to concentrate on Part 1. 
Dr CAM CALDER 
: I just make the final point that issuing officers may be removed from office for neglect or misconduct. Thank you. 
DAVID CLENDON (Green) 
: 
 I am pleased to speak in this Committee to this bill the Search and Surveillance Bill which the Greens are opposing. We have opposed up to now and will continue to oppose—no surprises there I am sure. 
Simon Bridges 
: Name some bills you’ve supported David. 
DAVID CLENDON 
: It would take a great deal for the Greens to support this bill. I think it would require amendments to the extent that it would no longer be the same bill. 
The reason we are opposing clearly is that this bill goes far too far in terms of compromising people’s reasonable expectations of privacy in the name of apparently protecting our rights as citizens enabling the police and other agencies—many other agencies—to go about their business. We recognise yes there is a legitimate requirement for surveillance for observation for recordkeeping for being quite intrusive in the interests of us all but this bill goes many many steps too far in terms of what it allows. 
This bill clearly is written to be as inclusive as possible. One only has to begin with Part 1 “General provisions”. The interpretations which are clearly modelled are designed to enable rather than to restrict or to control. They are quite simple things. In clause 3 in paragraph (b) of the definition of “business context” the definition of some of the people who may be investigated includes an employee. An honest innocent employee of an entity being investigated can find themselves subject to the provisions of this bill. A person’s private personal information may be compromised simply because they are an employee of an organisation an entity that may for some reason be of interest to one of the many State agencies that get powers under this bill. “Evidential material” again in the interpretation clause includes “evidence or any other item tangible or intangible of relevance”. That is an extremely broad-brush interpretation. It allows for virtually anything tangible or intangible—we assume that means of course electronic data—that may be of relevance. Who makes that test of relevance? 
With regard to the definition of what constitutes or may constitute an “interception device” I do not think it will give much comfort to any of us to know that hearing aids are specifically excluded and may not be used to spy upon us. 
Charles Chauvel 
: And spectacles. 
DAVID CLENDON 
: Or spectacles—yes. It includes “any electronic mechanical electromagnetic optical electro-optical instrument … [any] other device that is used or is capable of being used to intercept or record a private communication”. These are incredibly broad wide-ranging inclusive interpretations. There is no reasonable effort made here to limit the powers that are offered by this legislation; to the contrary. 
We heard a reference by the previous speaker Dr Cam Calder to the issuing officer role. It is interesting to note that clause 106 allows the Attorney-General to nominate—to empower—people like judges and justices of the peace as issuing officers. It also allows the Attorney-General to nominate any other person for a period of 3 years meaning issuing officers may be virtually anybody. The Attorney-General of the day decides who would be an appropriate person to sit in that role. I will speak more in this context later when we consider the Minister of Justice’s very substantial Supplementary Order Paper in terms of the inclusiveness and the broad-ranging nature of the definitions the interpretations. 
There are already very significant powers available in terms of electronic investigation particularly. I was in a court earlier in the week and without needing to comment on the substance of that hearing— 
Simon Bridges 
: What were you up on? 
DAVID CLENDON 
: No I was observing Mr Bridges. I was simply observing as one does. It was interesting listening to the evidence of a computer forensics specialist who was revealing some of the capacity that already exists within existing law and legislation to investigate what has gone on on people’s computers. This legislation if it is passed in the form the Minister wishes will capture not only computers; it will capture phones it will capture iPads. Virtually any electronic device will be fair game for any person who wants to investigate. These are extraordinarily broad-ranging powers. 
We are told clause 4A “Purpose” clearly defines the purpose of the Act. “The purpose of this Act is to facilitate the monitoring of compliance with the law and the investigation and prosecution of offences”—it certainly does that—“in a manner that is consistent with human rights …” and there is specific mention in paragraph (b): “providing rules that recognise the importance of the rights and entitlements affirmed in other enactments including the New Zealand Bill of Rights Act …”. 
I take issue with that. It is good yes as Mr Chauvel noted that reference to the New Zealand Bill of Rights Act is in there but we need to concede that the New Zealand Bill of Rights Act in itself is an extremely weak document in terms of—if you do any sort of international comparison—a section of the existing New Zealand Bill of Rights Act that denies any court the right to overturn or annul any enactment that may be at odds with the provisions of the New Zealand Bill of Rights Act. We routinely see reports to this House that say particular proposed legislation is at odds with the New Zealand Bill of Rights Act does not meet those provisions and yet we are able to enact those provisions. That is a fundamental weakness in the New Zealand Bill of Rights Act. Reliance on it is clearly not sufficient nor indeed with other privacy legislation the Evidence Act and so on. We can take very little comfort from the fact that the New Zealand Bill of Rights Act for example is referenced in this bill. We know that this House can very readily—and routinely does—subvert the good intention of that Act. We tend to wear our freedoms very lightly in New Zealand. 
We have a history I guess of trusting Governments and legislation and indeed enforcement agencies. The provisions of this bill I believe play on that trust in a very unhelpful manner. I think people will be astonished when they discover just what the level of intrusion is that this bill will allow that these parts of the bill will allow. There is very little in this bill that increases the protection the rights of citizens to be secure in their homes in their privacy and in their private communication even between family members between spouses and certainly in a business context. There is virtually nothing that will be sacrosanct that will not be amenable to the intrusive powers given to such a wide range of agencies within this bill. 
There are later parts as I said but I do think that right up front in the bill the purpose of the bill is spelt out very clearly. It is intended to make it easier for New Zealanders’ privacy for their private communications for their private business and their day-to-day activities to be observed recorded and imposed upon. There is very little if anything in this bill that we see that adds appropriate balance to the protection of our civil liberties and human rights. Thank you. 
TIM MACINDOE (National—Hamilton West) 
: 
 I am happy to assure the previous speaker David Clendon that the rights of law-abiding citizens are not infringed by the Search and Surveillance Bill. In fact on the contrary this represents a very elegant solution to a significant problem and one that is of considerable public interest. I too would like to join my colleague Dr Calder in commending our new Minister of Justice for the considerable body of work that she has done on this bill since she assumed her new portfolio and for the very detailed Supplementary Order Paper that she has produced to respond to some concerns that had been made apparent to the Justice and Electoral Committee when it looked at the earlier version of it. The important thing is to ensure that we get it right so that the provisions and the impact of the bill are appropriate in the modern context. 
I am very happy to speak on Part 1 of the bill. The previous speaker has just referred to clause 4A which is the purpose of the bill. It is important to have that purpose clearly understood—that the Search and Surveillance Bill will provide a comprehensive regime of search and surveillance powers under a single statute. Let us not underestimate how important that is because the many bills that have existed and have come together in a piecemeal fashion over five decades now have become as the Law Commission pointed out a bit of a jumbled mess. It was the Law Commission that recommended—in fact it urged in 2007 during the period of the previous Government—that there should be one bill “to bring order certainty clarity and consistency to the sprawling mass of statutory powers of search and surveillance scattered throughout the statute book.” And the Law Commission identified a need to address the glaring gaps where the law has failed to keep up with changes in modern society; we all know that it is a vastly different society even from 10 years ago with the rapid speed of technological development. It seems that every year there are new gadgets that open new possibilities for things that could be— 
Simon Bridges 
: Evil—evil-doing. 
TIM MACINDOE 
: —as Mr Bridges is pointing out in the wrong hands used to ill effect. So we need to ensure that our laws are relevant but also as Dr Calder has pointed out that we are mindful of the human rights provisions—the important human rights of all law-abiding citizens. I have to say I do not have a lot of interest in the human rights of those who are not interested in obeying the laws because quite often they threaten our safety our security our homes our elderly and the vulnerable in our society. Everything that we can do within lawful means to give our law enforcement agents the ability to apprehend them is vital. 
The Search and Surveillance Bill consolidates police powers from several different pieces of legislation as well as case law. There are also some new powers such as examination orders production orders surveillance device warrants and a warrantless power to preserve evidence of serious offences punishable by 14 years’ imprisonment or more. Those are very serious offences that we are considering here and we need to be mindful of just how important it is for us to deal with them to provide our law enforcement agents with the ability to apprehend such significant criminal offending. 
But these new powers are balanced by safeguards to protect human rights and the right to privacy. How does it do that? Well my colleague Dr Calder began to speak about that. The bill explicitly states that its purpose is to balance law enforcement and investigation powers with human rights values. There are a number of significant safeguards in the bill to deal with that and I am sure that those who are listening will be reassured by this. First the bill adheres to the basic concept that independent authorisation is needed before exercising search powers. Enforcement officers must justify the exercise of search powers to neutral issuing officers. Secondly there are detailed reporting requirements to the issuing officer to the chief executive of the relevant agency and to Parliament on the exercise of search and surveillance powers. These allow search powers to be monitored to ensure they are being used properly and not being abused. And as Dr Calder mentioned the Act will be reviewed in 2016 to ensure it is operating properly. So there are quite a number of reassurances and safeguards there. Thirdly the bill does not affect New Zealanders’ right under the New Zealand Bill of Rights Act which was mentioned by Mr Clendon a few minutes ago to be free from unreasonable search and seizure. 
There are other safeguards in the bill which include the provisions that enforcement officers who make false search warrant or surveillance warrant applications can and will be penalised that more serious powers such as examination orders may be authorised only by judges not just by any issuing officer and that issuing officers from an agency cannot issue warrants to enforcement officers from the same agency to ensure neutrality and impartiality. 
Hon DAVID PARKER (Labour) 
: 
 Can I first respond to something that the Green Party member David Clendon said. You know it is actually wrong to say except in respect of production and examination orders that this Search and Surveillance Bill extends Crown powers. For the Green Party member to stand here and tell New Zealanders that it does is wrong because it actually undermines public confidence in important democratic institutions including the police. So please do not make wrong accusations in respect of what I think is important law. You can say that you do not think the Crown should have those powers and that therefore they should not be carried forward but please do not pretend that these are new powers except in respect of the powers of examination orders and production orders for the police. 
Everything else is a carry-over and indeed there are areas in which powers are being constrained that were not previously constrained. The police gave up some of those powers. One example is that at the moment the police when they pull over a vehicle have got a right to search the vehicle even if they were pulling the driver over for a traffic offence. That is wrong. You should not have unreasonable search and surveillance and the police going on a fishing expedition in respect of a car. If my memory serves me right—and the Minister of Justice will correct me on this one—my recollection is that the police gave up that power which they currently have because they thought it was not appropriate. They agreed with the Justice and Electoral Committee that it was not appropriate. 
There is one other general thing I will say and that is that at the select committee we were told that there were new technologies pursuant to which search and surveillance powers were being exercised. The advice we had at the select committee was that the use of those powers was unregulated because they were not covered by old search and surveillance laws that were promulgated or passed by this Parliament before those new technologies came along. Between that time and now we have had the  
Hamed 
 decision of the Supreme Court which said that the advice that we were getting from officials was wrong and that in the absence of specific statutory authority the exercise of those new technologies was illegal. What the process threw up was that there are new technologies that I think everyone in this House agrees should at times be available to the police—for example video surveillance technologies. And the example that was used at the select committee by the Law Commission which was in favour of the extension of this power to the police was in respect of drug syndicates who draw the blinds and do not talk when they are describing where they are going to distribute their drugs. The only way that the police can get evidence of that activity is through video surveillance and that video surveillance technology is a form of technology that was not properly covered by prior technology. So either you do not have these powers at all or you have them and you regulate them properly so as to safeguard civil liberties and to protect the public from inappropriate intrusions by State agencies into their privacy. And what this bill tries to do is get that balance right between those two competing objectives. 
I would like to thank the select committee. I thought Chester Borrows was a very very good chair. He brought the experience of policing as well as his legal experience as a lawyer plus his experience in life. Together with other members of the select committee we sorted through a very very complex series of issues. We actually went to the extent of producing another draft of the bill. It was so complex that we thought we should put it out to a second round of consultation after we fixed up some of the things that were of particular concern to submitters because you do not want people having unnecessary concerns that the State is getting unwise powers of search and surveillance. So I would thank the Government for that. But there is one glaring issue in this and in all of these pious talks about how we are rationalising the powers of search and surveillance for all agencies. Well we are generally for the police and most other agencies but not for the Security Intelligence Service which has got separate legislation which was tidied up last year. 
The other glaring anomaly is the Serious Fraud Office. The Serious Fraud Office has got broader powers than any other State agency. It does not have to get a warrant to exercise its powers to issue a production order or an examination order. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Hon DAVID PARKER 
: I had just turned to the issue of the Serious Fraud Office just before the dinner break and I was responding to one of the claims made by Mr Macindoe from National that this law was standardising rules relating to different arms of the State whether it is the Pork Industry Board—I think that was one of those listed—Housing Corporation New Zealand or the many statutory bodies that are listed at the back part of this schedule where the different powers of the Meat Board and the board for health practitioners’ competence assurance are allocated the different powers that arise from the bill. They do not all get the same powers but one way or another all of the powers of these various arms of the State are regulated through this legislation. Of course the most important of all of those for most investigative processes is the police but excluded from this is the Serious Fraud Office. 
The reason that Part 1 has got an amendment in my name to add the Serious Fraud Office director into the interpretation section is that we need to have the Serious Fraud Office brought into this. As my friend Charles Chauvel has said this was blocked by Government members and by the then Minister of Justice’s refusal to cooperate through alternative processes that could have fixed this under the old Standing Orders. Those Standing Orders said that a matter was outside the scope of the bill even if it was within the scope of the subject matter if the Act that was to be amended by the bill was not listed in the bill that was before us. We could not have an amendment that effected that other Act that is not listed even though it was within the scope of what we were talking about. That silly rule within the Standing Orders has not been carried forward into the Standing Orders for this Parliament. That is a good change and can I thank members from all sides of the House for cooperating on that change in the Standing Orders. What it effectively means is we can now fix it in this bill. We actually do not need to have any special process other than a vote in this House to say we can fix the Serious Fraud Office powers at the same time because it is within scope. 
Why should we be concerned about this? Media freedoms are absolutely essential to the health of democracy. Media freedoms are necessary to maintain public institutions. Countries that do not have media freedoms have more corruption they have less public confidence in public institutions they have poorer outcomes they have poorer societies and they have more human rights abuses. So we must be very very careful to protect media freedoms. 
In New Zealand there is one glaring exception to pretty good laws in terms of media freedoms and that relates to the Serious Fraud Office. The Serious Fraud Office can issue a production order or an examination order against the press from its own office. It does not need any judicial oversight which was one of the things that was referred to by Cam Calder in his contribution when he was saying why people should have confidence in this law and that people had to have judicial oversight to get a warrant. The Serious Fraud Office does not have to. It has got two routes it can go: a warranted route or a production order examination route. What does it do in practice? It takes the easy route and it does not get a warrant. 
By an internal administrative act of the Serious Fraud Office it can tell the media that it wants them to hand over their documents—that is what a production order does. It did not happen since the Serious Fraud Office legislation was passed until 2 years ago when under this Government the Serious Fraud Office issued a production order against the  
National Business Review 
 ordering it to produce its documents in respect of the  
National Business Review 
 inquiry into the failure of South Canterbury Finance. The  
National Business Review 
 was then faced with the situation that if it refused to comply with that production order then it would be in breach of the law and committing a criminal offence. It would be subject to fines plus other criminal penalties both the journalists if they were the ones who got the production order and the owner of the  
National Business Review 
. So immediately the  
National Business Review 
 is put in breach of the law. What did it want to do? It just wanted to protect its source. Why should it protect its source? Because if the sources of the media are not protected they do not talk to the media and there is a public interest in the media being able to report things that are adverse to governments or to politicians. We might not like the times when we think the media’s criticisms of us are wrong when we think they are a bit superficial or where they are a bit hurtful. We might not like it but we must always defend the right of the media to do that because that is what protects the health of our democratic institutions—rooting out corruption and rooting out mistakes when they are found. In the case of the  
National Business Review 
 there were hundreds of millions of dollars of wasted money. 
SIMON BRIDGES (National—Tauranga) 
:  
I want to take I hope a reasonably short call just in regard to Part 1 of the Search and Surveillance Bill and really elaborate on the commonality National members have with Labour members but also I suppose underscore some of the differences. I want to start as I say by really agreeing with what the Hon David Parker said at the start of his contribution before the dinner break where he said that actually the Greens are entirely wrong to say that we are not united on most of this. The fact of the matter is that there was an exceptional select committee process. I know that this is the kind of thing that is often said in this House perhaps by some somewhat insincerely but it is true to say that when members of the Justice and Electoral Committee sat around—and I agree with David Parker on this and commend the then chair the now Hon Chester Borrows for the way it was handled—we went into it very much with a view that we were not going to increase the powers of the State. I remember sitting down with charts and diagrams and we went through the various agencies and their powers before and after and I think we were scrupulous in that regard to have here a bill that does not—and contrary to what the Greens say—essentially increase the powers of the State. To some extent— 
Hon David Parker 
: Except for production. 
SIMON BRIDGES 
: I will come to the Hon David Parker’s point; I am not going to short-change him on that. 
Hon Lianne Dalziel 
: Because you are actually nailing the point. 
SIMON BRIDGES 
: I am going to come to that. The basic point still holds though that actually in relation to the vast majority of this bill most of this Parliament is united. We are not trying to increase powers. We are trying to bring this law into the modern day to as Cam Calder has spoken about keep up with this ever increasing flow of technology. 
I do want to deal with the Serious Fraud Office because yes there is some disagreement. David Parker and I do not criticise him for this has given can I say a Labour version of the history of the Serious Fraud Office. That is fine but the fact of the matter is the Serious Fraud Office was originally as I understand it set up by a Labour Government by Sir Geoffrey Palmer. 
Hon Lianne Dalziel 
: Actually it was Richard Prebble. 
SIMON BRIDGES 
: Back then they gave—OK Richard Prebble good friend of Lianne I am sure. 
Hon Lianne Dalziel 
: He is—we’re very close. 
SIMON BRIDGES 
: Lianne and Richard share the same sort of general philosophy of politics and life in general. Coming back to the point it was set up by a Labour Government. The powers that were given then were generally seen as right and they increased the powers for the Serious Fraud Office. They gave the Serious Fraud Office more powers—to do the sorts of things that David Parker was talking about—than were given to other authorities. I accept that Labour perhaps had a change of heart in Government and we know that David Parker’s Government with I think the assistance of New Zealand First wanted to disband the Serious Fraud Office. I am not going to go into the reasons for that but that is— 
Hon David Parker 
: No to merge it. 
SIMON BRIDGES 
: Well they wanted to disband—they say merge with the police I say disband—the Serious Fraud Office and have the police running this sort of thing and as I recall it with the same powers that the Serious Fraud Office have actually. But in any event the point is that is the history. So I think we do need to be clear on the history. 
 But I want to say this: there are actually very good reasons—there is a strong rationale—for giving the Serious Fraud Office different and in fact increased powers than a whole lot of other State agencies such as the police have. And the reason for that is this. Day in day out the Serious Fraud Office is dealing with exceptionally complex white-collar crime that cannot easily be solved. It is being perpetrated by very sophisticated customers and the Serious Fraud Office does need I am sorry to say when it is dealing with these people the sorts of powers that it has had and I think should continue to have. 
I do not want to become a legal historian but I know that earlier when we debated I think the second reading of this bill Denis O’Rourke talked about the Star Chamber. I think it is right to remember that the rationale for the right to silence and many of the I suppose now fundamental tenets of our legal system came from a system where in the United Kingdom illiterate people could not defend themselves. They were being bamboozled they did not understand what was going on and from that we got a right to silence so they would not have words put in their mouths and they would not be signing things that they did not understand. That is a world away from what the Serious Fraud Office is dealing with day in day out. It is dealing with sophisticated white-collar criminals and the rationale for the right to silence and many of those things just does not hold up at quite the same level when we are talking about those kinds of people as it does when we are talking about the sorts of people Denis O’Rourke was talking about in his speech in the second reading. 
In summary what I am really saying to this Committee is that actually the vast majority of members in this Committee agree with most of this bill. They believe that we are not increasing vastly the powers of the State. I accept there are differences when it comes to the Serious Fraud Office’s powers but what I am saying is that when you look at the history you see that Labour in fact was the one that signed us up to a Serious Fraud Office with increased powers. The rationale for giving the Serious Fraud Office powers that other State agencies do not have is pretty strong. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I kind of want to thank the member for attempting to put some history on the record but he is actually quite wrong. I think it is important to highlight the major difference. He said that a Labour Government had introduced the Serious Fraud Office and had given it extended powers or had increased its powers. We established the powers for the Serious Fraud Office and we did not give it powers that were currently held by the police. It had a special status in the legislation because it was dealing with such high-level fraud. 
When a Government establishes a new agency with significant powers as we did with the Serious Fraud Office it does actually pay to have a look at how that has operated in practice. Actually I do not think that anyone was very satisfied with how the Serious Fraud Office had utilised some of its powers. We have heard some discussion around the media which is why— 
Hon David Parker 
: Law Commission said take them off them. 
Hon LIANNE DALZIEL 
: We will deal with that when we get to the wider part of the bill but the reason we can focus on the Serious Fraud Office is my colleague’s amendment where he brings this into the definition section. I think that what the Law Commission actually recommended—and I think Simon Bridges might do well to reflect on what he tried to advise the Committee—was taking the powers away from the Serious Fraud Office. It was not saying to extend the powers to the police; it was saying to take them away from the Serious Fraud Office. 
But as it turned out there was a very simple solution to all of this because the previous Government which was the initiator of this legislation actually wanted to re-merge the Serious Fraud Office into the police. 
Simon Bridges 
: Disband—disband. 
Hon LIANNE DALZIEL 
: Disband the Serious Fraud Office and put all of its functions within the police. And I will tell you what: there are a lot of people in the police force who believe the decision to separate it off from the police should never have occurred in the first place. 
Simon Bridges 
: They don’t want to be dealing with white-collar crime. They can’t be bothered. 
Hon LIANNE DALZIEL 
: I am getting chipped by the member across the way that the police do not want to be involved with that sort of crime. I think a former chair of a select committee who is a former police officer and a former lawyer will actually tell you exactly what I am telling you and that is that the police never recommended it. I can tell the member that the amount of concern that was expressed to a previous Labour Government when Richard Prebble was the Minister of Police was extraordinary. The point that I want to make is that it was made very clear by the Law Commission that there was no need to expand these powers. In fact it recommended that they not be carried over. That was the decision that we made. 
Let me just read this out. This is the history as written to the previous Minister of Justice by our own shadow Attorney-General at the time: “The genesis of this lies in the proposal by the last government to merge the Serious Fraud Office (“SFO”) into a new Organised Crime and Serious Fraud Unit within the Police. At the time the Law Commission advised the then cabinet that the SFO was in the habit of routinely using their powers to use production and examination orders. These orders do erode the right to silence and should be used sparingly. They were never intended to be a substitute for normal investigative practice but rather were intended as a reserve power to be used to unpick serious fraud when normal investigative means will not suffice. They enable information to be gathered from mainly third parties who hold information as agents who owe their principals a duty of confidence but who are able to cooperate given the legal authority of a production or examination order. … Largely because these powers had been overused by the SFO the recommendation was not to carry these powers over into the new combined agency. The proposal to completely remove these powers was criticised.”—and I actually think members of the then Opposition were among the chief critics—“In response I with the approval of my then cabinet colleagues went to see various Queen’s Counsel in Auckland who worked on SFO cases. I met with various prosecution and defence counsel. All of those I met with agreed the SFO was overzealous in its use of their powers but all but one also thought it would be wrong to remove the power entirely.” 
I hear members asking when this letter was written. It was written on 9 November 2010. It then went on to say: “There was in the end widespread agreement that the power for the SFO should be constrained but carried forward. We then in cabinet concluded that if the powers were necessary in a constrained form for the SFO then a constrained version of the powers was justified for Police investigations of serious organised crime some of which bears similarities with the complexity of serious fraud and can be more pernicious.” The point was made that the National Opposition at that time campaigned against the merger of the Serious Fraud Office into the police and upon election halted that merger. The letter then continued: “The proposal to confer upon the Police powers to obtain production and examination orders when investigating serious organised crime continued and is being given effect to by the SSB.”—this Search and Surveillance Bill. 
That is where I totally disagree with Simon Bridges. This is extending the power of search and surveillance the production and examination orders. It is for the police and they are matching it with a power that has been overused and abused by the Serious Fraud Office. That is this Opposition’s objection to this part of the bill going through without reintegrating the Serious Fraud Office into the legislative framework. The way that the legislation was originally framed was based on our assumption that there would be a merger between the two organisations and those powers would be carried forward but in a modified form. But what has really happened is that the Government has said “Well these are the Serious Fraud Office powers; we will just give those powers to the police.” 
Hon David Parker 
: More constrained. 
Hon LIANNE DALZIEL 
: They are more constrained for the police. 
Hon David Parker 
: Which makes a nonsense of not— 
Hon LIANNE DALZIEL 
: It does make a nonsense of bringing the whole thing together. 
So it is really important that the Serious Fraud Office is included as part of this legislation. It is important because I think that the Government has agreed simply to subject the Serious Fraud Office to reporting conditions. But the bottom line is that that does not solve the problem we have got in terms of the way the Serious Fraud Office has been operating. And to have it excluded from the operation of the bill actually prevents us from using this one opportunity to resolve the outstanding issue which is that the Serious Fraud Office has been using the examination orders that were supposed to be used in a relatively rare environment in a way that was totally unexpected by the Government of the day and it was expedient too in terms of its real obligations to investigate matters. 
And if people think this does not matter I point out that it does tie back into this whole question of access to information that has been collected for example by the media. The one thing that protects people from being ripped off by finance companies and things like that is when the media is threatened with defamation suits if they are to expose these goings-on. If they know that information they have received in confidence can in fact be disclosed to the Serious Fraud Office and held by it then that will make it very very difficult for people to come forward and be as open with them as they possibly can. 
So I think that this is a very simple amendment that was not possible when the bill was in front of the Justice and Electoral Committee essentially without an instruction from the House to the select committee to make the amendment. That is no longer the case and I therefore think that there is really nothing standing in the way of making the expansion to cover the Serious Fraud Office as mentioned in the amendment put forward by my colleague the Hon David Parker and then also at that point of addressing the anomaly that then exists between the two. I think there is an important reason why we need to have a uniform approach in this particular area and the Serious Fraud Office approach is not the one that we in this House want to see continued. That is why we are not supporting the passage of the bill. I do agree that there is not much left that divides us but this is a critical point of division. If we could find a resolution to this and the other matter that is standing before us but is not subject to this particular part of the bill then I believe we would be able to get the level of passing in this House that we should find acceptable in this arena. 
Hon PHIL GOFF (Labour—Mt Roskill) 
: 
 I would like to add my voice to those of my learned legal colleagues who have spoken on this bill the Search and Surveillance Bill and to pick up Lianne Dalziel’s point that it would be a very good thing if this House could pass legislation of this nature which finds a fine balance between the need to give powers to the State to carry out its task of crime fighting and the need to protect fundamental individual liberties. If we could find common ground on this and pass this legislation by an overwhelming majority I think that would be good for the country. 
Clause 4A sets out the purpose of the bill and it sets out the need to balance those two factors. I would remind Simon Bridges that of course this legislation was introduced under a Labour Government. It was introduced for a very good cause and it was not done in haste. I think the Law Commission started looking at this issue in 2001 and finally reported in 2007. There was nothing rushed about that process and I think it did a good job. We recognise the need for comprehensive reform and we recognise that you cannot have 69 different Acts some of them up to 50 years old and out of date and have a cohesive and coherent law on the very important areas of search and surveillance. 
It is because we wanted a cohesive and coherent approach that it is really important that the Serious Fraud Office should not be left as an outlier in this area. The amendment in the name of I think my colleague David Parker is that we should apply the same controls on the Serious Fraud Office as this bill now applies to the police. It is impossible to make the argument that there should be a differentiation. Are the Government members really saying that the serious crimes being investigated by the police are less serious and less complex than those that the Serious Fraud Office is working on? I do not think you can sustain that argument. 
Hon David Parker 
: And the media should be protected in those cases. 
Hon PHIL GOFF 
: The other issue I am going to come to in a moment which my colleague remarks on is the question of media freedom. All of us in this Committee probably have at some time in our career good cause to resent the media—I probably ahead of many in recent times. But I have to say notwithstanding that that I recognise the need absolutely to protect the role of the fourth estate. It concerns me hugely when a reputable international agency downgrades New Zealand in terms of its record of media freedom from eighth in the world to 13th in the world as it did late last year. That is a bad reflection on what is happening with media freedom in this country and we need to address that. 
There are a whole range of things that have been done—and the Government has to bear a lot of the responsibility for this—as to why we have been downgraded. One is the teapot affair. To have as we learnt from the police today in a select committee three senior officers spending months investigating a public conversation done as a media hype in the election is crazy. But to have newsrooms subject to search to get information on that is something that damages our reputation internationally. 
It is damaging too that the Serious Fraud Office under its current powers was able to exercise those powers against the  
National Business Review 
 in terms of its own investigation of South Canterbury Finance. I do not think that any member of this Committee should feel at ease with the fact that New Zealand is now being seen by international experts as a country that does not value and protect media freedom. So what we are suggesting in the amendment is both to ensure that we can restore our reputation in that respect that the newsrooms of this country— 
Hon JUDITH COLLINS (Minister of Justice) 
: 
 There has been a very interesting debate tonight and I would like to thank all participants for their contributions. I think there have been some intelligent contributions from both National and Labour and I think they have been very helpful. However there are a few things I want to talk about just to respond to some of the comments. The first is around the Serious Fraud Office and its powers. As has been rightly said these powers have actually been in place for 22 years. This is not a recent phenomenon. It has been around for 22 years with wide-ranging powers. The previous Labour Government did as has been noted wish to merge the Serious Fraud Office into the police and those members clearly thought that that was going to continue to happen because that is the rationale they tell us for the way they first initiated this Search and Surveillance Bill that we are debating tonight. However the National Party campaigned in 2008 on keeping the Serious Fraud Office and frankly in hindsight that was a very good thing to do. We did not know at that time—I do not think anyone in this House would have known—that we were about to walk into one of the biggest financial messes in finance companies that we can remember since the 1980s; and frankly that was when the need for the Serious Fraud Office was first apparent. So it was in fact in hindsight a good thing to do. 
In terms of issues around media freedoms I think media freedoms are extremely important and I actually was a little bit concerned to hear some contributors tonight talk about a couple of issues. The first was around the police investigating the so-called teapot inquiry. The Hon Phil Goff who has just resumed his seat was talking about that and using that as an example of something we should be concerned about. Well actually we should be concerned if a Government instructs police to do things like that and we should be concerned if a Government instructs police not to do things like that. Under this Government—and I am sure under previous Governments—Ministers did not instruct police to do things like that. I note that when I was Minister of Police there was in fact— 
Hon Phil Goff 
: The Prime Minister laid the complaint. 
Hon JUDITH COLLINS 
: Yes and as any citizen can and the police do not have to investigate it any further than they choose to. Just as when the Hon Darren Hughes was involved in media and police investigations I was instantly accused by some in the Labour Party as being involved in it. I did not even know about it. I found out like everyone else did by gossip around the place. So let us be very clear here that this Government did not tell the Serious Fraud Office to go “charging into the  
National Business Review 
” to use the words that have been used about it. We did not ask the office to do production orders. What we ask people to do is to actually perform in accordance with their obligations. 
The Serious Fraud Office at that time was investigating South Canterbury Finance. Frankly there has been one fraud after another just recently shown in some guilty convictions around South Canterbury Finance. This is a very difficult situation and I would have thought that most people here would think about why we have those powers. 
The other point I want to make really about this evening’s debate is that what I am hearing from the Labour Party is that it in essence agrees with this bill. That is what I am hearing except for the fact it does not include the Serious Fraud Office. That is it in essence. I have worked with Charles Chauvel to get some amendments through which we are putting in our Supplementary Order Paper to try to help the media freedoms and deal with some other issues. The Minister responsible for the Serious Fraud Office the Hon Anne Tolley has agreed to make sure that the Serious Fraud Office reports in its annual report about its examination orders production orders and what it does and when so that we as a Parliament can have some confidence in that these are not being overused. I think that is a very good thing and I thank the Minister for that. 
But I think it is important to understand that if this bill does not get through on 17 April all police covert surveillance is turned off—all of it; that is it. There is nothing else—that is it. It is gone. What we have is a major party like the Labour Party saying that yes it agrees with the bill and thinks it is a great bill and in fact it started it but because the Government is not including the Serious Fraud Office—which by the way this party has never intended to do and has never said it would—Labour will not vote for the bill. So I hope that after this debate common sense will reign and that this Parliament can come together with the major parties which in my opinion are the parties that have to actually look to responsible Government because they have in the past and they will in the future. I think that we need to actually come together and say what is really important here—and this bill is. 
Hon PHIL GOFF (Labour—Mt Roskill) 
: 
 Frankly the last comment from the Minister in the chair the Hon Judith Collins is straight scaremongering. It is the same sort of scaremongering that led National in Government before the election to attempt to ram through this Parliament without even going to the select committee the legislation regarding covert surveillance. The Minister must now surely admit that the National Government then got it wrong. 
The Justice and Electoral Committee with a majority of National people on it explicitly said that the legislation was wrong and that the appropriate balance had not been found. If it was not for the Labour Party and other parties standing in the way of ramming the legislation through before the election without any consideration from the select committee then as the select committee itself has acknowledged—and Mr Borrows has acknowledged as chair—the Government would have got it wrong. The Government would have got it wrong because it would not have found that appropriate balance. 
Another red herring is that somehow we were accusing the Government of instructing or not instructing the police to do an investigation into the teapot affair. No member said that Minister. No member did—but use your common sense. Why were the police investigating a case they would not normally have wasted their time on? Because the Prime Minister of New Zealand laid a complaint. And are the police going to ignore a complaint from the Prime Minister of New Zealand? Of course they are not. 
Ask 90 percent of New Zealanders whether they think that when 21 percent of burglaries are resolved the police should be following up the teapot affair for the Prime Minister which was just a media stunt and they would say: “No the Government has its priorities wrong and the Government is asking the police to waste their time when they have far more important things to do.” 
So Minister do not come into this Chamber with that sort of nonsense—that somehow video surveillance is going to fall over tomorrow because we are saying you should apply the same laws to the Serious Fraud Office as are applied in this bill to the police. Of course the Government should be applying the laws uniformly. The Minister was once the Minister of Police. She knows that the cases that they deal with are at least as serious are at least as complex and are at least as important as those dealt with by the Serious Fraud Office. So what the Minister has just said is absolutely wrong. 
What we have had from the Labour Party tonight are three people who have spoken very eloquently from a legal background as to why we need to change this bill—backed up the Law Commission itself. And Minister please tell the Chamber why you think that we should ignore the recommendations of the Law Commission—that the Serious Fraud Office should be dealt with in exactly the same way as the police that it should be constrained in order to find that very important balance between it having appropriate powers and protecting individual liberties. The Law Commission after 6 or 7 years of looking at this came to the conclusion that that should happen but the Minister is saying that she knows best. The Minister is rejecting the opportunity to get the overwhelming majority of the Chamber to support an important but contentious piece of legislation because she will not change her mind. 
I urge the Minister to think seriously about what she said in her speech to think seriously about what harm would be done and what good would be done if the amendment being put forward by the Labour Party in Opposition were adopted. We would create one law across the agencies in an appropriate way. We would be dealing with the problems that the Law Commission itself emphasised of the overuse by the Serious Fraud Office of powers that are unprecedented in this country compared with any other agency including the police. 
Yes those powers may have been there for 22 years and yes they have been overused in recent times but being there for 22 years was never a good argument for not considering change. We are putting this bill through because some of that legislation Minister has been there for 50 years and it has been proven to be inadequate and so has that clause in terms of ensuring the proper rights of the media and not having another incident where the Serious Fraud Office can go in and demand the production of documents by an outlet from the news media in a way that challenges the role of the fourth estate. 
JAMI-LEE ROSS (National—Botany) 
: 
 I move  
That the question be now put 
. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 When the Minister in the chair the Minister of Justice spoke before she talked about the powers of the Serious Fraud Office producing a result because of the guilty plea in relation to South Canterbury Finance. But my reading of that and I have had to look it up on my mobile phone says that it is not the South Canterbury Finance case that has led to a guilty plea. It has an impact on the South Canterbury Finance case in that the director of a company called Datasouth Group pleaded guilty to charges brought by the Serious Fraud Office in relation to a $103 million fraud involving a Ponzi-style scheme. It had an impact of about $23 million on South Canterbury Finance but the point that we were making was that the pursuit of  
National Business Review 
 by the Serious Fraud Office for the production of evidence that it had was in relation to the South Canterbury Finance allegations of fraud. So that has not produced any guilty pleas. There is obviously a lot of water to go under the bridge yet on that particular issue. 
But because the Minister is not the Minister of Commerce as well as the Minister of Justice as her predecessor was I just thought I would give her a little bit of history in relation to where my thinking developed on where the Serious Fraud Office powers should sit in relation to the changes that have been made under the Financial Markets Authority legislation. In fact the Commerce Committee did an inquiry into the finance company failures and one of the suggestions to look at was the question of whether these particular powers of the Serious Fraud Office which the Minister sort of says require this very special set of powers to be continued sit better within the framework of the Financial Markets Authority. The Financial Markets Authority process is actually a really good one. It has brought together a range of different agencies that all have a different function and often one takes precedence over the others. But by not bringing the Serious Fraud Office function into that firstly the Financial Markets Authority is deprived really of the enormous investigative background and ability that the Serious Fraud Office function would bring to the agency and would give it real teeth but secondly it has not resolved the precedence problem. That is that the Financial Markets Authority like the Securities Commission before it could not act until after the Serious Fraud Office had investigated and completed all that work. I know they work alongside each other with a degree of cooperation but the truth is that there is a hamstring effect on both the now Financial Markets Authority and previously the Securities Commission. 
I know that the Government campaigned on retaining the separate status of the Serious Fraud Office— 
Hon Anne Tolley 
: And we won. 
Hon LIANNE DALZIEL 
: OK well that is fine. You can say that you won. We know that. That is not the point. We are trying to actually have an intelligent debate about matters that really— 
Hon Anne Tolley 
: No you’re not. 
Hon LIANNE DALZIEL 
: If you are suggesting that I am not trying to contribute to this debate in a genuine way then I think that reflects more on the Minister than on me because I am actually trying to contribute to this debate in a serious way. We all on this side of the Chamber would like to reach a point where we would get such a degree of support for such a major measure as this as we could easily achieve. There is only an element of difference between us and I believe that with some goodwill and some contribution to the debate that would take into account these views we could get there. 
It is not unreasonable for us to use the Committee stage of the debate in the Chamber to actually try to persuade the Government to finally reach that point of view. I have stood in this Chamber with a Minister of Justice from that side of the Chamber and pleaded a case in a particular matter and the Minister of Justice has listened and overnight had his officials draft the instructions and the amendment still stands today. The record will show that except that in those days the Committee stage was not included in the  
Hansard 
 recordings which had only the votes on them. But the record speaks for itself and the amendments that we achieved in the Births Deaths and Marriages Registration Bill all those years ago when I was a brand new member of Parliament. It was the Rt Hon Doug Graham who was sitting in the chair as the Minister does today. 
Dr CAM CALDER (National) 
: 
 I move  
That the question be now put 
. 
STEFFAN BROWNING (Green) 
: 
 The Search and Surveillance Bill is effectively an “anyone anywhere anyhow” bill. Privacy is actually cheated in a major cut in civil liberties and later as we get into the parts regarding production and examination provisions that will be shown more fully. Many people whom I know are very concerned about this bill because of its very wide-ranging powers. These powers are an increase on anything that has been in legislation before and I notice even through Supplementary Order Paper 12 just little bits more sneaking in. There have been some improvements but I notice that even on evidential material there in the definition of it we now add in “or a suspected offence”. I have mentioned before that I have been involved in some activities that would theoretically possibly trigger this under the purposes—positive societally helpful environmentally helpful activities that are actually beneficial to this country. The purpose in fact as stated in Part 1 is actually a contradiction when you look through the rest of the bill. It says it “is consistent with human rights values” and we will see clearly where it is not. 
I will give just a little example of something that happened today of how actual people might feel if they are not actually involved in an offence but get hooked up in this. I noted in question time today when that dear subject the teapot tapes was mentioned that the Prime Minister in response to the other side of the House around illegal taping said: “How would you feel about it?”. Well that was in terms of being recorded against his theoretical will so that is just a hint of what numerous people engaged in far more positive activities could get caught up with. 
So the Green Party will be opposing this bill particularly on the basis of human rights and civil liberties. 
TIM MACINDOE (National—Hamilton West) 
: 
 I move  
That the question be now put 
. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I speak firstly in respect of the many legal specialists who have preceded me here and I aim only to provide a layperson’s view. It is a privilege to speak to the Search and Surveillance Bill because it is one of those bills that go to the heart of our democracy. There are a number of ways in which we have seen media freedoms and the rule of law curtailed in recent months. We have seen the Serious Fraud Office use production orders against the  
National Business Review 
. We have seen the calculated refusal of the Government to address the Serious Fraud Office powers and media protections as part of the negotiations around this bill despite media calls for protection and Opposition efforts. We have seen the Government’s attempt to overrule the Supreme Court decision in  
Hamed 
—that is the Tuhoe case—rather than the more limited fix agreed by Parliament after all other parties rebelled. Of course as my colleague Phil Goff has very eloquently put it we have seen the use of the police and the Solicitor-General by the Prime Minister over the teapot tapes after a campaign media stunt went wrong. Priorities are all out of whack. Priorities are all out of whack. 
Simon Bridges 
: You’d be complaining. 
Hon DAVID CUNLIFFE 
: The perma-tanned member opposite argues that this is a legitimate power of Government but he flies in the face of the fact that 90 percent of New Zealanders would say that when only one in five burglaries is being closed by our boys and girls in blue— 
Hon Judith Collins 
: I raise a point of order Mr Chairperson. I do not think it is appropriate for a member of this Committee to refer to a member who happens to be Maori as perma-tanned and frankly I think it is offensive. 
The CHAIRPERSON (Eric Roy) 
: I nearly pulled the member up. It is out of order and I would ask him to desist from using that kind of referencing to another member. 
Hon DAVID CUNLIFFE 
: I withdraw and apologise and it was absolutely nothing to do with the member’s ethnicity of which I was henceforth unaware. So there we go. The appointment of the National Party electorate chairman of Helensville Mr Stephen McElrea to the board of NZ On Air—the Broadcasting Commission—is yet another consistent erosion of the freedoms of the media which this bill once again keeps eroding. 
Much of the debate so far has turned on the issue of the extension of the powers to the Serious Fraud Office. The importance of that has been seen in relation to South Canterbury Finance the largest corporate failure in New Zealand history. We have to strike a balance in this Committee between the protection of public freedoms and the discharge of the responsibilities of public office. South Canterbury Finance has been a litany of failure by the current Government to address in any sensible and strategic way the need to have placed that company into a statutory management regime well before the problem blew out to the multi-hundred-million-dollar problem that it has become. To use that as cover for giving the Serious Fraud Office licence to exercise powers more akin to those of the Security Intelligence Service without due checks and protections is frankly an abuse of process. It has long been a protection afforded to mum and dad New Zealanders that the less well-known but most powerful organs of the State such as the Security Intelligence Service have needed to use in all but the rarest exceptions a judge’s warrant to execute their responsibilities in respect of phone taps and the like. It is extremely important that no lesser protections are afforded through the provisions of this bill. 
Much of the bill is bipartisan much hard work has gone on between our legally qualified colleagues on both sides of the House and much of the bill is in conformity with those principles. But there are some remaining parts of the bill that are not and it is upon those parts such as those relating to the Serious Fraud Office that this debate is now engaged. The Minister sniggers. Why are we debating this now? Because this part of the bill relates to the purpose of the legislation—the purpose of the legislation—and the fact that this will be an Act to bind the Crown. It must therefore responsibly bind all arms of the Crown and there should be consistency of the public protections that are offered across all those arms. The average New Zealander wherever they are in the provinces or in the cities is more interested in paying their mortgage getting a job keeping— 
Dr JACKIE BLUE (National) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 69 
New Zealand National 59; New Zealand First 8; ACT New Zealand 1; United Future 1. 
Noes 50 
New Zealand Labour 34; Green Party 14; Maori Party 2. 
Motion agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 12 in the name of the Hon Judith Collins to Part 1 be agreed to. 
Amendments agreed to. 
The question was put that the following amendment in the name of the Hon David Parker to clause 3 be agreed to: 
to insert the following definition after the definition of  
rub-down search 
: 
SFO Director  
means the Director of the Serious Fraud Office as defined in section 2 of the Serious Fraud Office Act 1990. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 48 
New Zealand Labour 34; Green Party 14. 
Noes 70 
New Zealand National 59; New Zealand First 8; Maori Party 1; ACT New Zealand 1; United Future 1. 
Amendment not agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 59 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Maori Party 2; Mana 1. 
Part 1 as amended agreed to. 
Part 2 Police powers 
Hon JUDITH COLLINS (Minister of Justice) 
: 
 Part 2 of the Search and Surveillance Bill contains a number of powers specifically for the police. One of the most contentious of these powers is examination orders. Examination orders are included as a police-only power to reflect the need for the police to have similar powers to the Serious Fraud Office as both agencies investigate very serious and complex offences. 
The powers in the bill were examined closely by the Justice and Electoral Committee which made a number of recommendations ensuring that rights and protections available to people were maintained. It is expected that privileges such as a journalist’s right to protect their sources legal privilege religious privilege medical privilege and privilege for informers will be considered by judges and issuing officers in determining whether an examination order should be made. This is consistent with the balancing of interests currently undertaken by judicial officers when issuing a search warrant on media premises or other premises where privileged information and material are likely to be found. 
Examination orders may be made in the business context only where there are reasonable grounds to suspect that an offence punishable by imprisonment for a term of 5 years or more has is or will be committed. In the non-business context the use of examination orders has been further restricted to reflect the special relationships at risk in this context. Examination orders in the non-business context may be used only when the offending in question is a serious or complex fraud offence punishable by imprisonment for a term of 7 years or more or the offence has is or will be committed wholly or partly by an organised criminal group. The application process further restricts the use of these powers as examination orders may be applied for only by an inspector or more senior officer and the making of the application must be approved by a deputy commissioner assistant commissioner or the district commander of police. These restrictions ensure that this power will not be used on a regular basis. 
Protection offered under section 68 of the Evidence Act 2006 whereby a journalist cannot be required to reveal their source except under restricted circumstances is carried across to the Search and Surveillance Bill as is the privilege against self-incrimination. Examination orders may be issued only by a judge who will consider rights including freedom of expression when assessing whether an examination order should be made. A journalist who is presented with a production order or an examination order can refuse to reveal their source by claiming this protection. Any person can refuse to answer a question or produce documents if it would incriminate them. 
If the police dispute any claim of privilege they may apply to a judge for a determination of its validity. A judge will require a source’s name to be provided only if the name itself is required to assess whether the claim is valid. Similarly the judge will require this evidence only if it is necessary in order for them to assess whether self-incrimination is reasonably likely. If the judge upholds a claim of privilege the privileged material such as the source or name is inadmissible in any proceedings. 
The examination order powers have been subject to careful consideration by the Justice and Electoral Committee and to robust controls governing their use. This provides protection to those subject to these orders and restricts utilisation of the power to offending that warrants their use. Examination orders are also subject to a strict reporting regime in order to track the use and effectiveness of the power. 
Hon DAVID PARKER (Labour) 
: 
 The irony of this is that the Minister of Justice has just listed a large number of protections in the Search and Surveillance Bill that surround the use of examination order powers that are being conferred to the police. The first point Mr Bridges is that those powers do not currently exist in respect of production orders for the police. This is a very very significant new power being conferred to the police. It is a very important exception to the right to silence. At the moment in New Zealand we have a right to silence. We do not have to cooperate with the police and answer their questions. There are lots of reasons why that historically has been the case. There are lots of societal reasons why it is that you do not want to compel people to give evidence against their friend. They often choose to do so but you do not force them to because you create tensions in society that amongst other things bring the police into conflict with the population and therefore the population is less likely to cooperate with the police in the future. There is an overriding objective that we want to maintain cooperation with the police. That is but one reason. You do not want to be pushing members of the family against another member of the family. So we do not compel people to talk to the police. We encourage them to do so but we do not compel them to. 
Another reason is that if you compel people to talk to the police it does not mean to say that you can compel them to tell the truth. You are more likely to get fictitious evidence if people are forced to talk to the police or to the other authorities than if they do so voluntarily. So those are the reasons why we do not normally compel people to talk to the authorities. Those are some of them; I do not have time to go into all of them. 
But there are occasions when it is important that the police release people from obligations of confidence that they owe to their principal. For example an accountant who is involved quite innocently in a money-laundering operation for a drug ring cannot disclose that information voluntarily to the police and some of it might not be recorded in a way that can be obtained through a search warrant getting documents. So you release the accountant or the lawyer from their obligation of confidence and they will be willing to talk but they cannot talk without being released from that obligation of confidence. That is why on occasions it is appropriate to have examination orders. 
This can be justified in some circumstances but you have to be very careful that you are not opening this gate too wide as we found with the Serious Fraud Office. What are we doing here? Well the bill came to the Justice and Electoral Committee already with more protections than exist in respect of the Serious Fraud Office but the select committee added even more. The Minister’s Supplementary Order Paper adds more protections still in respect of the police which is a good thing. What did we add? We were already saying that it had to be through a warrant. It had to be through a warrant. It is now made clear that the warrant can be issued only by a judge not by a registrar. The Serious Fraud Office does not even have to get a warrant. It is done by internal administrative acts. What a nonsense—what a nonsense! 
I come to the second protection. The bill came to the select committee saying that the offence that was being investigated had to be imprisonable. We upped that in the business case to something that had a period of imprisonment of 5 years or more. So it is a lot more serious than when it came to the select committee. There is no equivalent provision in the Serious Fraud Office legislation. The next thing the select committee did is in respect of a non-business situation. The threshold is even higher: it has to be 7 years or more of imprisonment as the penalty under the offence before you can get an examination order. 
Then as the Minister said if this is ever used against the media—and it should not be generally but if any of it was—you have to close off the potential that it could be. You cannot have an absolute prohibition because actually it is possible that members of the press can be corrupt and involved in criminal conduct themselves. It is very rare but it can happen so you have got to leave that possibility open. You have got to put protections around it so that it is not abused. How do you do that? Well you actually say that anything that comes of it can be objected to through this process that the Minister referred to. By relying upon privilege they can claim that they should not be forced to give evidence. We have heard reference from the Minister that there are various sorts of privilege that could be claimed—legal professional privilege I think was one of them. Was medical privilege mentioned? I do not know that it was. There was legal professional privilege and also the interests of media freedom. How do you assess that? You actually put it in front of a judge to make that assessment rather than letting the police make the assessment themselves. How is that different from the Serious Fraud Office? The Serious Fraud Office does not have to do that. It does not have to do that. So at the moment we have got the Serious Fraud Office being able to go to the media force them to answer questions and put the journalists and the news media company at risk of criminal prosecutions because their refusal to answer questions—unless they are claiming the privilege against self-incrimination—and their protection of a source is illegal. It is illegal in terms of the Serious Fraud Office legislation and that exposes them to criminal penalties. 
How can that be right? It is not right for the police. The select committee the Government and the Minister have already agreed that we need protections and more protections but the Government will not move on this protection for the media. Why will it not? There is no principle behind this. Ask yourself why it will not. The answer is that it is trying to position the Opposition—and we heard the Minister in the chair the Hon Judith Collins say this in her second to last contribution—and say that because we oppose this bill we are soft on crime. That is what the Government is trying to do here. That is what it has been trying to do for 2 years. It has been trying to say that because we are taking a principled position for the protection of the media through making sure that the same protections that are in the bill in respect of examination orders for the police and media protection also apply in respect of Serious Fraud Office actions. The Government says that because we are taking that principled position we are soft on crime. No Minister what we are doing is protecting civil liberties. 
One of the most important civil liberties is maintained through a free media—a free media who are unconstrained in their ability to investigate things that have gone wrong to investigate corruption and to make sure that corruption does not happen again. That is what happens if you investigate and shed light on it: people get prosecuted Governments fall and there is a disincentive to corruption. That is how you keep a clean democracy. If you cannot investigate corruption properly because the media sources will not speak up because that source could be disclosed under an examination order by the media or be forced to be disclosed by the Serious Fraud Office you undermine democracy and that is precious to me. 
That is really precious to me and that is why I am quite happy to say that the existing law is wrong and that the Law Commission was right to recommend to the prior Government that this power be constrained. In fact the Law Commission originally recommended that it be taken away completely from the Serious Fraud Office. After it considered again and there were submissions it actually got to the point where the Law Commission and the department—I should not forget the Ministry of Justice—agreed that there should be a constrained version of this power eventually. But this Government will not do it. This Government says that it is not going to. It is not going to because for political advantage it is trying to position the Labour Opposition which is trying to protect media freedoms and our democratic institutions and trying to say that that makes us soft on crime. What is soft on crime Minister is your Government which does not see that this sort of law exposes our democratic institutions to the risk of corruption to the risk of negligent behaviour not being exposed and to the risk of losses such as we had with South Canterbury Finance when hundreds of millions of dollars in extra money was lost because of according to the Auditor-General Government inaction in terms of letting the loan book grow and that sort of thing. 
That sort of thing cannot be as well investigated by the media if their sources are at risk. That is why this bill is so important. The amendment that is in my name extends the same protections that are there for the media in respect of the police—now that they are getting this additional power—and says that those same controls should be on the Serious Fraud Office. I think it is patently clear that they should be. I think that most people think that. The media freedom committee thinks they should be all of the newspapers think they should be the radio thinks they should be and the TV thinks they should be. That is why this game that the Government is playing trying to say that our actions on this are soft on crime is actually not working for it. Instead the Government looks shady as it is. This lines up— 
Simon Bridges 
: Every time you say it David people at home think you’re soft on crime. 
Hon DAVID PARKER 
: Mr Bridges’ contribution is to say that this does show us to be soft on crime. This is the man who just told this House there was no extension to police powers in this legislation which was completely wrong. 
Dr JACKIE BLUE (National) 
: 
 I am very pleased to speak to Part 2 of the Search and Surveillance Bill. I was not part of the previous Justice and Electoral Committee in the last Parliament—I am a new member on this committee—but it is clear from the bill and the Supplementary Order Paper that this is an incredibly substantial bill. I must compliment the previous select committee and also the officials. 
When you look through and see what changes the select committee made and then the changes the Supplementary Order Paper makes you can see that a really painstaking process has gone on to ensure that there is clarity and certainty for New Zealanders so that they can feel safe that the police have the right powers that it is appropriate that there are safeguards and that there are checks and balances. So my congratulations go to the select committee which everyone seems to be acknowledging as having done a wonderful job and to the officials. I am sure on this bill that common sense will prevail as the Minister said and that other parties will support this bill through the different stages. 
Part 2 is about police powers and as I say it is disappointing that we have not got the support of other parties at this stage because it is very serious. I mean if we do not get this bill passed by the middle of April surveillance cameras will go off and police powers will be seriously curtailed. Quite frankly criminals are going to get away with crime and I am sure none of us wants that so I really hope that common sense prevails. 
There are in fact about 12 subparts to Part 2 all describing very different situations where the police can act and how they can act. It is prescriptive. It covers a lot of different situations. It is very thorough. I will go over just some of them but I will not go into detail. Subpart 1 is about internal searches search warrant powers in relation to places vehicles and other things. Subpart 2 is about warrantless powers when you do not have a warrant but you need to go into a place or search someone to effect an arrest and that includes vehicles and so forth. 
Subpart 3 is about when you do not have a warrant but you need to actually search someone who is going to be locked up in police custody. And of course Subpart 4 is about warrantless powers when you have an urgent situation. There are a number of subparts all going right through to Subpart 12. So I am really impressed with the comprehensive nature and the detail that the Supplementary Order Paper has brought out of the select committee. 
The Minister touched on examination orders and these are clearly a very serious power that will be given to police. It is something that the Serious Fraud Office has the ability to use—examination powers. But because it is quite serious it has been carefully laid out that there need to be safeguards so there will not be an abuse of power. Obviously the Serious Fraud Office has this ability to use examination orders but this bill will allow police to apply for them. Other members have talked about it but it will mean that those people can cooperate with the police without in any way compromising their own situation without any adverse consequences. 
In a business context examination powers can be used only in offences punishable by 5 years’ imprisonment or more and in a non-business context examination orders can be used to investigate serious fraud punishable by 7 years’ imprisonment or more. So there are really quite defined situations where examination orders can be used. There are safeguards; there are checks and balances. It has been very thorough and painstaking and again my compliments go to the select committee and the officials. Importantly only a judge can make an examination order and that has to be on the application of a high-ranking police officer. So again there are criteria as to when the examination order can be asked for and only a judge can provide one. 
I just want to talk about the journalists. I am sure that this part of the bill will be welcomed by journalists. We are a democratic society. People who feel they should be speaking out under cover of anonymity should have that ability and journalists often have sources they wish to protect. I know we have the ability to have free media and reporting in our country and long may that continue. I am sure this part of the bill will be welcomed by journalists and media. The bill will improve journalists’ ability to protect the identity of their sources. Thank you. 
CHARLES CHAUVEL (Labour) 
: 
 I just want to respond to some of the comments that were made by the previous speaker Jackie Blue because a lot of what she said was absolutely right but there is a falsehood woven through the debate and it is this: that the Serious Fraud Office already has production and examination powers so it is all right for it to keep those powers and it is all right for us to give those powers to the police and other enforcement agencies. What Jackie Blue just said was “It’s all right because of all the safeguards that are in the Search and Surveillance Bill.” The problem with that argument is that the Serious Fraud Office continues right outside the parameters of this legislation and it does not have any of the safeguards that are being put in place for the other agencies. 
I agree that the Minister of Justice has done a good job—she knows that; I have told her that and I have said it publicly—in terms of putting safeguards in Supplementary Order Paper 12 that are better than what was there in the past. She knows that I think that is a forward step and I am pleased that we are where we are with that. But before I come to explain why it is fallacious to pursue the argument that the member did I do want to respond to another point that she made and that is for her to somehow be critical that we are where we are and yet the Labour Party the major Opposition party retains its objection to the legislation because of its failure to deal with the Serious Fraud Office. This is an objection that has been known and on the record now for more than a year and it has been the subject of many attempts from our point of view to resolve the matter in good faith. We tried with the Minister’s predecessor and we were stonewalled. So notwithstanding the progress that the Minister and I have managed to make on a host of issues responsibility for the fact that we are now at the threshold and still cannot agree does not lie with the Labour Party and that is an important point to put on the record. 
I want to explain once and for all I hope why it is not accurate to say “Oh well the Serious Fraud Office has already got extensive powers but the bill puts safeguards in place so everything is all right.” As I said before the safeguards do not apply to the Serious Fraud Office. We have already heard from David Parker that there is concern real concern about the way in which the Serious Fraud Office has used its powers in the past particularly in respect of the media. Mrs Tolley can smile and scoff all she likes but that is the case and we are serious about making sure that the media can do their job in this country. This is a Government that has presided over declining media freedoms—we are 13th now internationally whereas we were eighth the year before. She has sat on the Treasury benches in senior ministerial positions while that has happened. This is our opportunity as a House of Representatives to fix the matter and I would have thought we might have actually had a bit more good-faith debate across the House in the sort of spirit that I have tried to have with the Minister. 
Here are the powers that the Serious Fraud Office has got now which it will keep because we are not dealing with the Serious Fraud Office powers in this legislation. Under section 5(1) of its Act the director may write to any person and at the time and place specified in the notice that the director writes require that person (“(a) to produce for inspection any documents which are specified in the notice and which the Director has reason to believe may be relevant to any suspected case of serious or complex fraud: (b) to answer to the best of that person’s knowledge and belief questions with respect to the whereabouts or existence of any further documents that may be relevant to the investigation.” So there we are. This is the only example that we are going to have assuming that this bill passes in our law and on our statute book of an official an appointed official accountable politically to no one able to write to anybody and say: “You must appear at my office at 2 o’clock tomorrow and you must produce the following documents.” There is nothing anybody can do about it. That has to happen. There is no way to meaningfully object to it and there are no safeguards around it in the way that there will be when this bill if it becomes law is enacted. 
Section 9 goes even further. It actually does away with the right to silence when it comes to— 
DENIS O’ROURKE (NZ First) 
: 
 New Zealand First still does not support this bill the Search and Surveillance Bill in its present form nor the amendments that have been put forward which we do not think have addressed the fundamental issues. It has been somewhat amusing to observe the jousting between the members of the Labour Party and the members of the National Party especially over the Serious Fraud Office. However New Zealand First does not regard that issue as being central to this legislation. It is rather peripheral and is not something that we wish to deal with at this stage although I think it is something that needs to be considered at some other time. 
New Zealand First does acknowledge however that the process has been comprehensive for this bill. Unfortunately many of us in New Zealand First were not here for most of that process. However we do think that the Justice and Electoral Committee in particular has done a good job of considering the safeguards to some of the personal rights and freedoms that are actually attacked by this bill. In particular I refer to the fact that it is good that the bill does consolidate and improve the powers that are current in 69 different Acts. It removes many inconsistencies. It is good that it codifies the existing law and clarifies powers that are often unclear it provides a regulatory regime for high-technology devices used in surveillance it seeks to ensure judicial oversight where it is needed it places issuing functions for warrants in experienced hands and it provides for public reporting. But none of that really is enough to ensure that New Zealanders’ fundamental rights are preserved and I refer in particular to the police powers for examination orders in the bill which are of particular concern to New Zealand First. 
Apart from the current Serious Fraud Office powers the law has protected the right to silence for a very long time and that right should continue to be protected. We do not want to move in New Zealand towards a police State. I refer to what I said in my earlier speech on this which is that requiring people to answer questions puts them in a difficult position—what has in the past been referred to as a cruel trilemma—because they may be punished for their silence they may be punished for perjury if they do not tell the truth or if they do tell the truth they may find themselves incriminating themselves or breaching the confidentiality of others. It is not right that that will not happen; even though the bill says that their right to avoid self-incrimination is protected the practical effect is not that. 
Apart from those powers of the Serious Fraud Office I read that clauses 31 and 32 of the bill would allow senior police officers to apply for examination in a business context on reasonable grounds if they believe that there is an offence punishable by more than 5 years’ imprisonment. Those are similar powers to the Serious Fraud Office’s powers in serious fraud cases but it is a serious step we think to extend those powers to the New Zealand Police. Clauses 33 and 34 extend the police powers even further to non-business cases involving serious or complex fraud punishable by imprisonment for a term of 7 years or more or if the offence has been committed by an organised criminal group as defined in the Crimes Act. This opens up a very wide area for police use of compulsory examination and for that reason it really does go too far to achieve the desired balance that many have talked about between the need for better police and agency enforcement of the law and the right to silence and other important rights. 
The line may already have been crossed with the Serious Fraud Office having rather Draconian compulsory examination powers but at least the Serious Fraud Office is experienced and is specialised in the area of serious fraud. The police are not as experienced in those areas and I believe there should be a distinction between the powers of the two. There are requirements in the bill of course for reporting on the use of these powers but I do not believe that they are likely to be a serious brake should the police over time get into the habit of using those powers. 
DAVID CLENDON (Green) 
: 
 Mr Chairman— 
Hon Member 
: He’s been waiting as well. 
DAVID CLENDON 
: I certainly have. I would like to just begin by reflecting on a couple of comments from the Government speakers who have referred to the timing of this debate. The fact is yes we understand that on 17 April the police lose the powers they currently have under the Video Camera Surveillance (Temporary Measures) Act. Apparently if that happens anarchy will run loose in the world and it will be a tragic thing. 
I think it is worth commenting on the fact that this Government set the timing for this shift—for the 17 April changeover—but this Search and Surveillance Bill has been around in some form or other for quite a number of years. I do not suggest it is not a complex bill—it is. We absolutely support the notion of bringing together what has been described as a jumble of legislation. Bits and pieces of rules and provisions spread across what 50-odd pieces of legislation is seldom helpful. Nevertheless there has been significant time available to the Government and I think I object to the fact that somehow the Opposition speakers are having blame sheeted home to them because this Government now has only a couple of weeks to sort itself out and get some legislation in place. I do not personally feel any responsibility for that. This Government has been in control of the House programme for over 3 years and I think it would do well to recall that. 
This part deals substantially with police powers—the powers the police will have under this legislation. A great deal of this part refers to the actions that the police may perform without warrants. It is entirely appropriate that the police should of course be able to conduct some activities to act on the spur of the moment. Crime and offending does act in real time and it is inappropriate to constrain the police too much but it is all about the question of balance. How much is too much? As I have said all the way through this bill seems to lean towards enabling the diminishing of people’s rights rather than having a clear sense that there are some absolute limits to that. 
I was concerned by an earlier speaker from the Government who made a comment in passing to the effect that he did not have a lot of interest in the human rights of those who are not interested in obeying the law. A similar sentiment seems to pervade this bill—that somehow people who offend or even who are accused of offending should have their basic human rights compromised. Of course when people have offended or are accused of serious offences we do put limits on their liberties. We collectively exercise the right to restrain them and in some cases to imprison them—take away their personal liberty—and that is as it should be. But the notion that somehow even people who are imprisoned do not retain human rights is absolutely anathema to me and I suspect to most other people in this House. I suspect that if we found ourselves one day in a society where people’s rights are diminished simply because they have committed crime I think that is a society none of us would actually want to live in. Human rights are fundamental to being human. We need to recognise that and understand that and act accordingly in all of these legislative measures that we are putting through. 
I would like briefly to reflect on one particular clause in this part—clause 5—which is a couple of paragraphs. The heading of clause 5 is “Internal searches generally prohibited” and then subclause (1) goes on to say: “A constable must not conduct an internal search of any part of the body of any person except for with the person’s consent” the constable may look into the person’s mouth when looking for presumably concealed drugs or whatever it may be. I note that the Minister of Justice’s Supplementary Order Paper omits that clause in its entirety. It takes away the general prohibition on internal body searches and I would be very interested in finding out from the Minister why she has chosen to do that. I would hope it is for the reason that the prohibition on internal searches is covered off in some other provision. I would hope that she has found it is unnecessary. I sincerely hope the Minister is not proposing that constables should have the right to conduct internal searches of people in the way that is prohibited currently in the bill and I would be very interested in hearing some commentary on that. 
The extent of the warrantless provisions in this section is extensive. They are comprehensive. There is reference to issues about weapons—about knives guns and all the rest of it—and I think generally yes we can accede to that. 
TIM MACINDOE (National—Hamilton West) 
: 
 I would just like to return to the contribution from the New Zealand First member who spoke a few minutes ago Denis O’Rourke and put two things on the record. The first thing is that I emphatically reject the idea that this Search and Surveillance Bill in any way moves New Zealand towards the concept of becoming a police State. That is an utterly ridiculous suggestion and the member said nothing at all to substantiate that claim. 
The second thing I would like to point out to that member is that through successive elections the party that he represents New Zealand First has lectured the electorate continuously on law and order issues and consistently told the rest of us that we are not strong enough on law and order; that we need to give the police more powers; and that we need to crack down on this that and the other thing. And when they get their first opportunity in the new Parliament to demonstrate their convictions what happens? They run the other way. They completely turn tail on it and I hope that the electorate is listening to them because when they get given the chance to demonstrate the courage of their convictions they are shown not to have it. 
We have had a number of Opposition speakers this evening especially those from Labour telling us that they are concerned about what New Zealanders will perceive of their stance on this bill. They are particularly concerned that they might be portrayed as being soft on crime. Well I want to make a point that if there are intelligent people listening they will reach their own conclusions about that without us having to tell them. But what is really significant is that this was a bill that largely originated on Labour’s watch and they suddenly turn out now and are distancing themselves as far as possible from it. They forget that this originated as a result of a very clear recommendation from the Law Commission back in 2007 while Labour was in Government and that much of the work we are seeing through to its completion now originated on its watch. 
I want to correct David Parker’s assertion that the member for Tauranga when he was speaking earlier suggested that the bill does not extend police powers. In fact the point that Mr Bridges was making was that the Government has been at pains throughout this process and in the Justice and Electoral Committee to avoid extending police powers unjustifiably and without adequate constraints. That is a very different position from the one that Mr Parker was trying to pin on to Mr Bridges because that is exactly what Part 2 of this bill is all about. 
I want to place on record for those who are listening what some of those powers are and to return to Mr Parker’s concern about the examination orders. I think that when New Zealanders understand what the powers in Part 2 are they will be very supportive of them. Let me just give you a few examples. Clause 6 provides that an issuing officer may issue a search warrant for a place vehicle or other thing on application by a constable if satisfied that there are reasonable grounds to suspect offending punishable by imprisonment and reasonable grounds to believe that the search will find evidential material related to the offending. 
Clause 7 specifies that a constable who has reasonable grounds to suspect a person is unlawfully at large may enter any place or vehicle without a warrant in order to search for and arrest that person if they have reasonable grounds to believe that that person is there. 
Denis O’Rourke 
: Get on to the real issues. 
TIM MACINDOE 
: Clause 8—Mr O’Rourke I am dealing with the clauses of this part. That is what we are debating at this stage in the debate. That is what you have just spoken in opposition to and I am letting New Zealanders know what you have just opposed. 
Clause 8 authorises a constable to enter a place or vehicle without a warrant to search for and arrest a person if they have reasonable grounds to believe that the person is there and reasonable grounds to suspect that the person has committed an imprisonable offence and believes that immediate entry is necessary to prevent the person from leaving or interfering with evidential material. And so it goes on. That is what this part is all about. That is what we are debating at this point in the debate. 
New Zealanders will welcome these measures as sensible and appropriate for public safety and the effective administration of justice. So let me turn to the examination orders that Mr Parker was so concerned about. The bill has an examination order regime that allows the police to apply for a court order requiring a person to answer questions where they have previously refused to do so. Examination orders are intended for use to investigate particularly complex crimes and we have had some discussion of what some of those are in our recent history and just how important that issue is. The Serious Fraud Office currently has the power to apply for examination orders and the bill will also allow police— 
CHARLES CHAUVEL (Labour) 
: 
 Thank you for the opportunity to take another call on Part 2 because what I want to do is just finish briefly the point that I was making earlier and it has just actually been reinforced by Tim Macindoe. The point about the orders regime in this part is as he says that it involves going to the court and applying for an order from a judge that somebody ought to be compelled to do something. A judge is going to have to think very very carefully about issuing a compulsive order because obviously when you think about the consequences of defying a compulsive order in these circumstances they are extreme. 
There are safeguards and there is a judicial procedure and that is the very point that I was trying to make in response to Dr Jackie Blue’s contribution. Those safeguards just do not exist in respect of the Serious Fraud Office regime and I just would like some indication if it is possible that that is understood on the other side of the Chamber because we are not saying the regime proposed by this Search and Surveillance Bill is wrong. We are not saying— 
Denis O’Rourke 
: Yes we are! 
CHARLES CHAUVEL 
: Well some people may be; the Labour Opposition is not. What we are saying—as the Minister of Justice knows because I have said it to her myself—is that there is an insufficiently broad and comprehensive regime here because it is very obvious that one agency remains outside it. It is not good enough frankly to say “Well it’s all OK because the regime’s protective.” It is protective but the Serious Fraud Office is outside it and until it is actually included that is a problem. 
David Parker has amendments that he has spoken to. I think he spoke quite eloquently about the consequences of being compelled to produce a document or to forgo the right to silence. What he has done through proposed amendments to clauses 31 33 37 38 and 40 is simply apply the regime with all the protections that Dr Blue described and that Tim Macindoe was speaking about to the Serious Fraud Office’s exercise of powers. We have simply taken the time to go through the bill and to work out how it is that you would bring the Serious Fraud Office in and it is actually not a complicated exercise. As I said in my earlier contribution the Standing Orders now do not bar it—and that has been throughout the correspondence with Simon Power and with Judith Collins the reason advanced largely for not doing it in this bill. So again I simply ask that Government members turn their mind to the problem that we are going to be left with if we do not use this opportunity. 
I have amendments that address some issues in this part as well. Again they deal with an issue that I have talked to the Minister about and that is whether or not having a 5 and a 7-year threshold in respect of the orders that can be given either in a business or a non-business context is sufficient. I have suggested a couple of solutions. One is that the Minister might have a power where she could specify offences that were sufficiently serious they could go in the schedule to the Act and we could have a look at them at the Regulations Review Committee so there would be parliamentary scrutiny of the proposals rather than having this blunt instrument of basically a numerical test—5 or 7 years it is in otherwise it is not. 
One of the other proposals which was advanced by David Parker in the correspondence then by me and which I put up by way of amendment is to raise the threshold to 10 years. What I want to say is that I have had a look at the Crimes Act in this regard. There is in New Zealand a technique that is used with sentencing. If you have a look at for example perjury—the sort of offence you might want to have included—for very serious perjury in respect of an offence punishable by over 3 years of imprisonment punishment is 14 years. For lesser perjury it is 7 years for mere false oaths it is 5 years for judicial corruption under section 100 it is 14 years but for simply trying to corrupt a registrar or a non-sworn officer with tenure it is 7 years. 
Likewise for Ministers of the Crown it is 14 years and for mere MPs or officials 7 years. So this is the way in which we have crafted our sentencing science if you like. And what I am asking is for the Minister to consider this sort of flexibility. 
Hon JUDITH COLLINS (Minister of Justice) 
: 
 I just want to answer a few of the questions that have been raised. The first one I need to deal with straightaway is the contribution from the member from the Green Party who as I recall stated that the Supplementary Order Paper was removing the general prohibition for internal searches. Actually that could not be further from the truth. 
I refer the member to page 15 of Supplementary Order Paper 12 in my name which makes it very clear that it does not in fact do that; it in fact ensures that now a general prohibition on internal searches applies to all enforcement officers not just police constables. So it actually extends it. This is the sort of nonsense that I think we have heard from the Green Party tonight and I do not normally say that sort of thing but frankly it is the sort of scaremongering that one would expect. 
I am however appalled by New Zealand First the new “soft on crime” party after that contribution. I say that for a reason. I note that the new member Mr O’Rourke said that they are new members and they have not been through the select committee process. I took that into account when I offered that party a full briefing on the bill. I said they could come along to my office and hear from the officials anything they wanted to know. Did they take that up? No. I guess they were too busy. 
However Mr Chauvel was very happy to come and talk to me about the proposed changes and we brought some of those changes through and we discussed them. They are not everything that Labour wanted but I will say this for Mr Chauvel: at least he came and talked. At least we could talk about what we could do and I think that is a very responsible thing to do. 
That however does not deal with the fact that we will still not agree with everything that he talks about. This evening Mr Chauvel suggested that we might want to change the level of seriousness of offence for which an examination order for instance could be applied for. One of the issues was around maybe making it a 10-year penalty for it to apply. But the advice that I have is that if we had anything over the 5-year maximum it would actually exclude in the business context possession of property with intent to engage in money laundering. It would exclude injuring with intent to injure. It would exclude being armed with a weapon with intent to commit aggravated robbery. 
If we took out the 7-year exclusion for non-business situations that would also take out engaging in money laundering dishonestly taking or using a document obtaining benefit or causing loss by deception accessing a computer system to dishonestly obtain a benefit or cause a loss. That would actually by reducing the threshold undermine the primary rationale for having the powers in the first place. 
But I do take his point about whether we can have a schedule and add particular things to it. There is a reason not to go down that route and the reason is this: this Parliament spends day in day out changing laws. We make amendments to Acts like the Crimes Act. We constantly do so. If we were to amend any of the laws relating to these offences we would need to make sure we carried it through to the next Act because otherwise suddenly these powers would fail. 
That has happened in the past where we have had Parliaments with the very best will in the world going through the select committee and something falls through the gap. I think really when we look at these levels of sentences available they are all for serious offences. So that is why we are not going to support that. But I would say of Mr Chauvel that at least he talked to me about it at least he put it down for me and at least he did not turn up on the night and say that that party like New Zealand First is soft on crime—because by goodness they are now. 
Hon DAVID PARKER (Labour) 
:  
I was going to on this call address a different issue and that was just to emphasise that the Justice and Electoral Committee has been careful to limit some of the powers that were proposed in this Part 2 of the Search and Surveillance Bill. I will mention a couple of examples. 
As the Greens have acknowledged in one of their recent contributions there are occasions where there are things that are going down that require the police to do things in a shorthand way without actually going through the formalities of getting a warrant. I thought that was a proper acknowledgment by the Greens. The bill allows warrantless surveillance in some situations. The bill came to the select committee recommending that it could happen for up to 3 days—72 hours. The select committee said: “No that is too long; the police should be able to get a warrant within 48 hours. If they cannot get a warrant within 48 hours they should desist.” So that was changed in the bill; it was shortened from 72 hours to 48 hours and at the same time it was made clear that the 48 hours had to start from the time of the surveillance. That would mean that they could not have repetitious 47-hour periods. The way it was drafted when it came to select committee you could monitor for 47 hours turn the camera off for an hour and you had not breached the 48-hour period. You could start again and do it for another 48 hours. The select committee really was alert to trying to limit these matters. 
In terms of the retention of data when you have a surveillance operation you do not catch just the criminal—or the alleged criminal he or she might not even be a criminal they are an alleged criminal. You do not get just them on their tape; you gets lots of other people. So if this is in a private situation or even if it is in a public situation people have got a right not to be under surveillance by the State and that sort of thing ought not to be kept for ever. So again the select committee— 
Hon Tau Henare 
: Wind it up mate. 
Hon DAVID PARKER 
: Wind it up Mr Hayes says. 
John Hayes 
: It was Henare. 
Hon Tau Henare 
: It was Hayes. 
Hon DAVID PARKER 
: Oh Mr Henare. Oh well wind it up. 
Iain Lees-Galloway 
: He wants to get on with his honeymoon. 
Hon DAVID PARKER 
: That is right; he wants to get on with something that to him is more important than the proper balance between civil liberties and State powers. I suspect— 
Hon Tau Henare 
: I’m with you bro. 
Hon DAVID PARKER 
: Oh you are with us? OK I thought you might want to have a debate on the Sale of Liquor Act or something like that tonight instead. In terms of the retention on data the select committee has said that there should be further limitations on the period for which that data can be kept. That is strengthened as well. 
There are a number of other strengthening measures. The reporting requirements for surveillance device warrants have been strengthened by the select committee. Again the Government cooperated on these things and therefore I find it absolutely impossible to understand why it will not tighten up the Serious Fraud Office powers. Can I acknowledge the contribution from New Zealand First. I actually agree with a lot of what New Zealand First said there in respect of examination orders. It is a line call as to whether they should be permitted at all. I agree with that. I can actually argue both sides of that case because it is a line call. 
Simon Bridges 
: That’s a flip-flop. 
Hon DAVID PARKER 
: No it is not a flip-flop. It is actually acknowledging that in this Parliament we have to draw very difficult lines on difficult issues and we can actually agree to disagree as to where that line can be drawn. I respect the views which I thought were quite principled and I admire that principle. I could actually see the Minister coming out here and arguing for matters of principle that I would disagree with her on and I could have a reasoned discussion with her. What I cannot understand is that in the case of media freedoms we are not protecting the media in respect of the issue of examination orders that require the media to talk to the police but with protections. Why can we not have those same protections afforded to the Serious Fraud Office? 
So Minister I ask you again to respond—because you were not in the chair when I took my last call. In your call prior to my last call you accused us of effectively being soft on crime because we will not back these unprincipled changes to the law when you will not move on the tightening up of the Serious Fraud Office. I suggest to the Minister that it is inappropriate to make that accusation because there is a serious debate going on here as to the proper balance between civil liberties and State powers. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I was going to comment on the Minister of Justice’s comments on the contribution from New Zealand First because probably there was no one more surprised than me to hear the contribution. It did surprise me somewhat that that really strict line had been taken particularly in relation to the Serious Fraud Office and the production of documents. I seem to recall that the leader of their party himself voluntarily produced documents that the Serious Fraud Office did not want in a wine box. Perhaps that is a long time ago and it is something that may have been lost in the annals of time. But I was here in the House when those documents were finally tabled in Parliament after several attempts and I know that there were some very interesting views expressed about the lack of use of particular powers at that stage. 
Charles Chauvel 
: A non-production order. 
Hon LIANNE DALZIEL 
: Yes a non-production order might have been a little bit more on the mark in that particular case. 
But I am possibly making light of what is an underlying serious issue—that is why the Serious Fraud Office had the particular examination order powers. I think they were expressed quite well by a couple of colleagues who have commented on why the Serious Fraud Office was able to call upon these powers in circumstances that the police were not. In fact the very best summary of the reason for it is in the letter that we received from the previous Minister of Justice the Hon Simon Power back in—when was it? It must have been November last year. 
Hon David Parker 
: Received the day after the election. 
Hon LIANNE DALZIEL 
: Oh that is right—received the day after the election. That is right. But it was quite good. What he said was this: “One of the primary rationales for examination orders is that investigations involving complex financial transactions will benefit from requiring a person involved (such as an accountant) to assist Police in unravelling the documents that relate to those transactions.” The whole purpose of it is that in order to break some of those lines of accountability within organisations where you have people with other obligations such as an accountant you can actually require them to explain the detailed transactions to the police—well in this case the Serious Fraud Office—in order to assist them with their investigations. The letter goes on to say: “It is also important that examination orders should be available in the business context to investigate offences committed by organised criminal groups. Offences that may be committed by such groups … are punishable by 5 years’ imprisonment”—and obviously there have been some changes in that regard in the bill; in the non-business context it talks about 7 years’ imprisonment. But it does actually identify in here what the history was for the use of examination orders which are now being expanded to the police. 
I acknowledge that both the Justice and Electoral Committee and the Minister herself by way of a Supplementary Order Paper have been open and able to address some of the concerns that we have raised. But it still leaves us with this sense of disquiet about why the Serious Fraud Office then sits outside the structure that is being put in place. It is an opportunity to get this right. I think it is important to remember that the Justice and Electoral Committee reported this bill back from the select committee back in 2010 so it actually sat on the Order Paper for months on end. In fact we were going to go into the 2011 general election with it still sitting on the Order Paper with nothing having occurred in between. But then there was the Supreme Court decision which required Parliament to take some action in order to prevent what would have been well a travesty really in that situation: existing cases could not proceed in those circumstances. 
The law was basically suspended for a period of time—I think 6 months was the period—which is why we are under some pressure now to pass this bill by mid-April. So I think it is a bit unfair to say that the reason we are under pressure to pass it is because we will be exposing the situation where all the cameras will have to be switched off. Actually all the cameras had to be switched off because of a court case. 
SIMON BRIDGES (National—Tauranga) 
: 
 I move  
That the question be now put 
. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I was just going to give a very good quote from Justice Tipping so I am pleased that— 
Hon Amy Adams 
: Well in that case carry on! 
Hon LIANNE DALZIEL 
: Yes he is a very special individual. He was talking about the reason for the court case decision going the way that it did. He spoke of “a deliberate or at the very least a reckless disregard for the boundaries of legal power …”. You know it was the correct decision to make on the basis of what had occurred. What I am worried about here is that when the bill was originally introduced into Parliament we were going to fold the Serious Fraud Office into the police. There was going to be the Organised and Financial Crime Agency or OFCANZ. 
Simon Bridges 
: The CIS. 
Hon LIANNE DALZIEL 
: It was not the SIS was it? But it was a particular structure at the head of the police and I know that the police were very pleased to be taking over that role because of so much of the organised crime swaying into this financial area for a whole lot of different reasons. 
But the point that I want to make is that that is why the legislation was framed as it was—without the Serious Fraud Office—and that is actually now why the Serious Fraud Office must be brought within the range. We are not objecting to the extension of powers to the police; we just believe that the powers for the Serious Fraud Office need to be brought within the framework of this legislation. The whole purpose of the Law Commission review of all of these matters—I cannot remember the exact words. I cannot imagine that Sir Geoffrey Palmer used the words “dog’s breakfast” but all of the different laws that existed around the place made no sense. It needed some clarity brought to the picture so that we could get some consistency across the search and surveillance provisions. That was what the legislation was designed to do. 
And I think that unfortunately at the time our Standing Orders prevented the select committee from doing the job that I actually believe it would have done. I believe that the Justice and Electoral Committee would have recommended the extension of this bill to the Serious Fraud Office. It would have dealt with that issue at the select committee and it would have come back in that frame except that it could not do that simply because it was advised at the time that the Standing Orders prevented it because it was out of scope. But actually if we fast forward to today that out of scope question would not exist. The debate would have occurred in a much more robust way and there would have been a decision made not on procedural grounds but on whether or not there was enough power of persuasion at that select committee to get that changed. I think that the process of the select committee has actually been extraordinarily good and the ongoing engagement between the Minister and our spokesperson on justice has also been good. We have acknowledged how well the Minister has been prepared to engage on these issues and we pay credit to her for adopting that approach. This is a good way for Parliament to do the right thing. 
If we are not going to be back in this Parliament looking at this issue again for a long time which is the Minister’s argument for not having a schedule of offences then why would we let this opportunity go by and not address the question of the Serious Fraud Office coverage? I am afraid the Serious Fraud Office has not served us well in terms of this Parliament’s expectations of its role and the way that it has used that power on a far more frequent and actually spurious basis than it ought to have used it. I believe we almost would not be having this argument if it had not used its powers in the way that it had. That has been the primary objection that we have had: holding this back for another opportunity for the House to look at it some time in the future. I think this is the opportunity that the House has to fix this problem and to fix it now and then we get agreement across the House. 
TIM MACINDOE (National—Hamilton West) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 63 
New Zealand National 59; Maori Party 2; ACT New Zealand 1; United Future 1. 
Noes 57 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1. 
Motion agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 12 in the name of the Hon Judith Collins to Part 2 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 59 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Maori Party 2; Mana 1. 
Amendments agreed to. 
The question was put that the following amendments in the name of Charles Chauvel to Part 2 be agreed to: 
to replace clause 32(a) with: 
(a)there are reasonable grounds to suspect that an offence punishable by imprisonment for a term of 10 years or more has been committed or is being committed or will be committed; and 
to replace clause 34(a)(i) with: 
(i)involves serious or complex fraud that is punishable by imprisonment for a term of 10 years or more; or. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 49 
New Zealand Labour 34; Green Party 14; Mana 1. 
Noes 70 
New Zealand National 59; New Zealand First 8; Maori Party 1; ACT New Zealand 1; United Future 1. 
Amendments not agreed to. 
The question was put that the following amendments in the name of the Hon David Parker to Part 2 be agreed to: 
to replace the heading to Part 2 with “Police and Serious Fraud Office Powers”; 
to insert after clause 31(1): 
(1A)The SFO director may apply to a Judge for an examination order against a person in a business context if the SFO Director is satisfied that the conditions specified in section 32 are met in respect of the person.; 
to insert in clause 33(1) before “A constable” “The SFO Director or”; 
to insert in clause 33(1)(a) before “the constable” “the SFO Director or”; 
to insert after clause 33(1)(b)(iii): 
(iv) the SFO Director. 
to insert in clause 37(1)(a) after “or a delegate of the Commissioner”’ “or the SFO Director” 
to insert in clause 37(2)(d) after “a delegate of the Commissioner” “or the SFO Director”; 
to insert in clause 38 after “the Commissioner’s delegate” “or the SFO Director”; and 
to insert in clause 40A(1) “the delegate of the Commissioner” “or the SFO Director”. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 49 
New Zealand Labour 34; Green Party 14; Maori Party 1. 
Noes 70 
New Zealand National 59; New Zealand First 8; Mana 1; ACT New Zealand 1; United Future 1. 
Amendments not agreed to. 
A party vote was called for on the question  
That Part 2 as amended be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 59 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Maori Party 2; Mana 1. 
Part 2 as amended agreed to. 
Part 3 Enforcement officers’ powers and orders 
Hon JUDITH COLLINS (Minister of Justice) 
: 
 Part 3 of the Search and Surveillance Bill contains the surveillance device declaratory order and production order regimes. This has been subject to much debate and it was not clear that the bill as introduced struck the right balance between human rights and enforcement needs. The Justice and Electoral Committee therefore very carefully considered this part of the bill. The amendments it has made are astute sensible and valuable. 
The select committee has amended this part to limit the use of visual surveillance devices in circumstances that involve a trespass and every use of an interception device to offences punishable by 7 years’ imprisonment or more. This means that such devices will be used only to investigate serious offences ensuring that the investigative benefit justifies the level of intrusion involved. There is an exception for certain Arms Act offences that are punishable by less than 7 years’ imprisonment. This recognises that these offences can have very serious consequences to people’s safety. 
As a further protection the use of such surveillance will be limited to the police the Customs Service and the Department of Internal Affairs—the only agencies who currently investigate offences punishable by 7 years’ imprisonment or more. The Customs Service and the Department of Internal Affairs will be authorised to carry out this surveillance only if they can demonstrate they have developed this capability to a satisfactory standard and can do so in a manner that protects human rights as provided by the regime. A statutory amendment would be required if any other agencies wished to be authorised to use such powers. This means that the appropriateness of other agencies to conduct such surveillance will be determined by Parliament. This ensures that such a potentially intrusive power is granted only after full debate and careful scrutiny by the House. This is an important protection that I welcome. 
This part also protects citizens by regulating the use of surveillance devices that are currently unregulated. There is currently nothing to stop any agency from using a tracking device so long as it does not commit a trespass nor is this use regulated now except in the case of police and the Customs Service. The use of visual surveillance devices is subject to even less regulation. All agencies can use a visual surveillance device such as a camera or binoculars providing they do not commit a trespass. This means that police can currently set up a camera that looks directly into someone’s home without any limits other than a possible claim after the fact under the New Zealand Bill of Rights Act 1990. The bill regulates such visual surveillance by requiring enforcement officers to apply for a warrant. This requires enforcement officers to justify the use of such surveillance before it is used protecting citizens from unjustified invasions of privacy. 
This part also contains an innovative regime that recognises the pace at which technology is advancing: the declaratory order. Declaratory orders allow agencies to obtain a judicial view as to the reasonableness of a new device technique or procedure before using it. This gives agencies a degree of comfort about the admissibility of such techniques and devices although it is not determinative. Such declaratory orders are also subject to reporting requirements to Parliament. This enables Parliament to keep track of the use of such techniques giving it the option to regulate if appropriate. 
Finally this part also includes the production order regime. A person presented with a production order is required to provide the documents that are described in the order. This regime reflects a current and common practice of police in executing search warrants against occupiers willing to assist. The courts have held that a search warrant may be executed by the police sending a copy of the search warrant to a company and the company sending the documents to the police. The production order regime therefore is effective and efficient. It allows the people with the best knowledge about where a document is to be found to locate it so that enforcement officers do not have to search through irrelevant and potentially confidential information. The fact that companies organisations and individuals may refuse to comply on the grounds of self-incrimination or a recognised privilege such as the right of journalists to protect their sources provides adequate protection for those who receive production orders. This part really does strengthen all of the powers of people to in fact resist unlawful searches. 
CHARLES CHAUVEL (Labour) 
: 
 I want to start by saying that when the current legal regime applicable to search and surveillance is compared with the regime that is set out in Part 3 then what the Minister of Justice says is right. This is a much better regime. It does call as she correctly described for approval prior to the fact and that will be judicial approval. This is the element that was missing in the matter that was decided by the Supreme Court late last year. It is a shame Parliament did not manage to get this regime in place prior to that decision but the reality is we are getting it in place now and that is something that I think we should all be reasonably pleased about. 
The matters that I particularly wanted to draw attention to in this part and I would be grateful if the Minister would have a think about these are first of all the typescript amendment in the name of my colleague David Parker which would continue the process that each of the three Labour typescript amendments have started which is to mainstream the protections that appear in the Search and Surveillance Bill by applying them to the Serious Fraud Office. 
In respect of this part of the bill the way in which that would occur is that clause 69 would be applied to the Serious Fraud Office because the Director of the Serious Fraud Office would be for the purposes of the Act an enforcement officer who would be entitled to apply for a production order. So just as we have begun to build in or attempted to build in the Serious Fraud Office right from the beginning in the interpretation clause so that exercise continues in a necessary clause in respect of this part. 
 The other matter that I want to draw the Committee’s attention to is one that was referred to by the Minister in her introductory remarks. It might also be interesting to hear from a member of the Justice and Electoral Committee on this because it relates to the regime that would be set up by clauses 57 through to 61 the declaratory orders provisions. On my reading of the reported-back bill what was originally proposed was a residual warrants regime. So a law enforcement agency would have to obtain a residual warrant if it wanted to obtain evidence relating to an offence and the agency wanted to use a device technique procedure or activity that might constitute an intrusion into the reasonable expectation of privacy of any person. All that has been struck out by the select committee and it has been replaced with this declaratory orders regime. 
I have some concerns about the way in which this might operate in practice. What would happen is as the Minister has said if there is a new type of device that law enforcement agencies want to use they can go to a judge and seek effectively an opinion about the propriety of the use of that device. But there are some fish-hooks I think in the regime as it is set out. The application will be made to a judge. A judge is defined now in this legislation as either a High Court judge or a District Court judge. It is expressly provided in clause 57(2) that “A declaratory order is advisory in character and does not affect the jurisdiction of any court to determine whether the activity that was the subject of the order”—of the court—“was reasonable and lawful.” That is going to put a District Court in some difficulty I imagine if on some previous occasion an opinion—advisory only but none the less from a higher court such as the High Court—has been obtained. If the High Court purports to give one of these advisory opinions in circumstances that are very similar to those that then come before a District Court it is difficult to imagine circumstances in which the District Court is going to be able to feel free to depart from the views that were expressed on the earlier occasion. 
The other concern about the declaratory orders is really that it is a novel procedure. We have a declaratory judgments procedure in our Judicature Act at the moment whereby on a set of existing facts it is possible to go to the court and ask for the law to be declared on those facts. But they are real facts not hypotheticals which seems to be the situation that this regime contemplates. We have never put our courts in the position of having to decide on hypotheticals put to them by a law enforcement agency. Our courts generally decide contentious litigation based on real-world facts. Where in the adversarial model does the evidence to contest what is put up by the enforcement officer come from in this envisaged regime? How does the court undergo an adversarial process in order to come to the view that is envisaged it would by this procedure? Why on earth would we not just do what we expect agencies to do at the moment? They get an opinion from the Solicitor-General the Crown Law Office or on occasion a Crown solicitor on the legality of a proposed method of surveillance and they proceed on the basis of that opinion. 
I think we are putting the courts in an odd position where we say the courts can pass an advisory view—and it is expressed to be just an advisory view—yet we are not clear in the legislation about any procedure that would have to be engaged in by the courts particularly where the “hearing the other side” practice would come from. We say that they would be advisory only so presumably in real-world facts that came before the court that were very similar to the theoretical position that was put to the court the court would still be free to come to a different view. If that is the case what is the utility of this procedure is it likely to ever be used and what sort of comfort is it likely to be able to give enforcement agencies in the ultimate analysis? 
Those are the particular concerns that I wanted to raise about this part. I commend the amendments in David Parker’s name. I think the general regime that the part sets out is a great improvement as far as protections for our people from potentially unlawful search and surveillance is concerned but I do wonder whether the declaratory orders regime is in the end going to be worth the paper it is written on. 
Dr JACKIE BLUE (National) 
: 
 I am very pleased to speak on Part 3 of the Search and Surveillance Bill. I would like to congratulate the officials and the Justice and Electoral Committee because again this is another substantial part of this very good bill. Going through and looking at the changes the select committee made changes in the Supplementary Order Paper and changes that have been made by officials it is clear that it has been very carefully scrutinised. It is also clear that there has been a concern about getting that balance right between privacy and using the powers in an appropriate way. I am very pleased to see that that has been addressed. 
There are four subparts to Part 3: Subpart 1 “Surveillance device warrants and declaratory orders”; Subpart 2 “Production orders”—which I will talk about a little bit later on—Subpart 3 “Police and Customs officer powers to search in relation to delivery under section 12 of Misuse of Drugs Amendment Act 1978”; and the last subpart Subpart 4 “Warrantless powers of entry and search incidental to arrest or detention”. 
Just talking about the bill’s surveillance regime initially this covers the interception devices that can interpret communications otherwise known as audio surveillance; tracking devices that can detect where things are located or whether a thing can be opened or tampered with; and visual surveillance. Only a judge importantly can issue a surveillance order a warrant and they have got to be satisfied that all the conditions are met. I think the thing that impresses me in this particular bill is that it is very prescriptive. There is a recipe you have got to follow there are criteria that have to be met and there is a high level of scrutiny. I am very pleased to see that. 
Not being a legal person and speaking as a member of the public as I am when I am not in Parliament I am pleased to know that we have these protections here. I think the degree of intrusiveness of surveillance will depend on obviously the circumstances. So for example video surveillance will not always be more intrusive than searching a house under a warrant but there are significant privacy concerns with regard to visual surveillance involving trespass and audio surveillance so these methods are limited to very serious offending. I think it is entirely appropriate that they are used only in very serious situations and are not used frivolously or with a very low-level hurdle to cross. 
I will speak a little bit about production orders. This part of the bill also introduces the production order regime and that means really that when a person is presented with a production order they have got to produce the goods that are described in that particular document. It is something that the Serious Fraud Office has been able to do but this is now going to be extended to the police. Importantly there is going to be provision for people who feel that they cannot comply and that they must refuse for reasons such as self-incrimination or recognised privilege. 
We talked before in the debate on Part 2 about journalists and about how they want to protect their sources of information. New Zealand is a country of free speech and I feel that all of us here if we were in a situation where someone had to blow a whistle or wanted to say something using anonymity would respect that. 
Similarly I know that it will be welcomed by journalists that they can protect their sources. Indeed there has been a real improvement in that power for journalists to protect their sources. So in a situation where there is a production order the journalist can invoke this situation and not divulge their source at all. Again I think that this is another substantial part. There are a number of subparts. It is very prescriptive and very comprehensive and I applaud the committee and the officials in respect of this section. Thank you. 
Hon DAVID PARKER (Labour) 
: 
 I want to come to production orders but one of the great benefits of these sorts of debates is that Parliament sometimes actually comes up with issues that officials have not thought of. Charles Chauvel raises a very important point in respect of the declaratory orders in respect of new technology. 
Progress to be reported presently. 
House resumed. 
The Chairperson reported progress on the Search and Surveillance Bill and no progress on the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill. 
Report adopted. 
The House adjourned at 9.56 p.m.