Volume 668 Week 59 - Tuesday 9 November 2010 
Volume 668 Week 59 - Tuesday 9 November 2010 
[Volume:668;Page:15067] 
Tuesday 9 November 2010 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Ministerial Statements 
Kiwifruit—Confirmation of  
Pseudomonas Syringae 
 pv.  
Actinidiae 
 Vine Bacteria 
Hon DAVID CARTER (Minister for Biosecurity) 
: 
 Last Friday at 4 p.m. the Ministry of Agriculture and Forestry was informed of the suspected discovery of  
Pseudomonas syringae 
 pv.  
Actinidiae 
 (Psa) on a single orchard in Te Puke. The ministry and the kiwifruit industry quickly initiated a response to determine the extent of spread and options for dealing with the disease. Last night test results confirmed Psa. 
The immediate focus is on determining what strain of Psa it is and how widely spread the disease is and containing it if possible. The ministry is working closely with the kiwifruit industry on an operating strategy and considerable resources are being made available to the response. Technical experts from the ministry Zespri and Plant and Food Research are on the orchard today. Industry meetings are under way and growers are being briefed and provided with material to enable them to screen their own properties for the disease. Provisions are being made to enable Labtests to rapidly process samples to test for Psa. I am closely in touch with developments and will be in the Bay of Plenty this evening and will be meeting with industry representatives and growers tomorrow. 
The Ministry of Agriculture and Forestry working with the Ministry of Foreign Affairs and Trade has informed our relevant trading partners including Australia the United States and China. We will work to minimise the risk of any trade restrictions by providing regular information and updates. 
At this stage we do not know how the disease arrived in New Zealand. It is possible that it has been here for some time. Psa is spread by pollen heavy rainfall strong winds animals and humans. The disease appears to attack only under certain environmental conditions. It carries no human or animal health risk and does not affect plants other than kiwifruit vines. Kiwifruit remain safe to eat. 
This is a time for a considered and responsible approach and I am encouraged that all primary sector stakeholders are supporting the kiwifruit industry and the Government as we work out exactly what we are dealing with. I reiterate that biosecurity is paramount to a healthy and successful primary sector. Three-quarters of a billion dollars are spent annually on biosecurity in New Zealand and contrary to some claims the Government has not cut funding for biosecurity—in fact spending on biosecurity increased in Budget 2010. Our commitment to providing the most robust biosecurity system possible is unfailing. The Government and officials are treating this matter very seriously. 
I reassure members that the best possible people are working night and day to manage this threat to a crucial primary industry. The best response to this emergency will be achieved by a collaborative approach from all New Zealanders with a genuine interest in protecting New Zealand’s biosecurity. 
Hon DAMIEN O’CONNOR (Labour) 
: 
 I rise on behalf of Labour to firstly offer full support for the kiwifruit industry. It is a very worrying time with the discovery of  
Pseudomonas syringae  
pv.  
Actinidiae  
(Psa) this kiwifruit vine disease. The disease was discovered by an orchardist the Ministry of Agriculture and Forestry was notified and as the Minister of Agriculture said we have had confirmation of it today. This is a $1.4 billion industry and provides 20 percent of the GDP for the Bay of Plenty. It is a worrying time for all of those people involved and I rise on behalf of Labour to support all of the people involved in working through this very very cautiously. 
It is a time not to raise alarm. As the Minister said we have already had contact from our trading partners and we want to reassure them that we are doing everything possible to get on top of—and hopefully eliminate—this disease. 
We can be comforted if it is possible in the knowledge that Psa has existed in Japan for 25 years and production has continued there. We have in New Zealand a very coordinated kiwifruit industry and we have a good biosecurity organisation in MAF Biosecurity New Zealand if somewhat hamstrung by recent cuts. But we are not sure and we will have to wait a week or so until we know whether this is the virulent strain the one that has caused so much havoc in Italy. The potential for loss as I said is huge but at this stage there is no effect on the fruit produced from the vines and we hope that there will be no impact on our trading ability. 
The Opposition would be remiss if it did not identify some of the potential pressures that biosecurity has been under. Although the Minister and the Prime Minister have reassured the House that no cuts occurred the facts are somewhat different. In 2009 54 front-line staff were cut from biosecurity services by that Minister and last year although there was money for biosecurity it went into the joint border management system which is effectively a new computer system. What we saw “reprioritised” to use the Government’s words were cuts to biosecurity policy border security systems development and maintenance border security monitoring and clearance domestic biosecurity surveillance and biosecurity incursion response and long-term pest management. We hope as the Opposition that none of those cuts hinders in any way the ability of MAF Biosecurity New Zealand to get on top of this potentially alarming and drastic disease for the kiwifruit industry. We hope that the Government sees the value in increasing the money for biosecurity to prevent such a horrific disease spreading throughout New Zealand. 
KEVIN HAGUE (Green) 
: 
 The kiwifruit industry is a significant part of our economy and any threat to it must be dealt with with the utmost seriousness. We support the Government’s action to date in responding to this incursion and we also support the Minister’s call for calm. Inevitably there will be questions to be addressed in the wake of this incident about the adequacy of our biosecurity preparedness. MAF Biosecurity New Zealand says it is world leading and as we are the nation in the world with the most biodiversity and arguably the greatest reliance on natural capital in our economy it needs to be. 
The Green Party earlier in the House has questioned whether a biosecurity approach based on risk profiling and selective practices was adequate. We have questioned the appropriateness of cutting funding and front-line staff positions in biosecurity as this Government has done. We have pointed out the gaping hole in our biosecurity defences against micro-organisms. All of these matters will need to be addressed. 
Finally although other parties have tended to ridicule the Green Party’s attitude to free-trade agreements this latest incursion must surely cause everyone to pause for thought. We need to have a smart economy that delivers real benefits for everyone and for the environment. Biosecurity incursions such as this one highlight the extraordinarily high price that can be associated with a policy that has seen hugely increased imports often of goods or products of very limited usefulness. 
In conclusion I wish to offer the Green Party’s support to the Government in the attempts to identify isolate and if possible eliminate the threat posed by  
Pseudomonas syringae 
 pv.  
Actinidiae 
. Thank you. 
HILARY CALVERT (ACT) 
: 
 I rise on behalf of the ACT Party to support the statement of the Minister for Biosecurity regarding the discovery of  
Pseudomonas syringae  
pv.  
Actinidiae 
 in the Bay of Plenty. As others members have said kiwifruit are a vital part of New Zealand’s horticultural industry and despite their ancestry have become a New Zealand icon. Internationally kiwifruit is still an emerging product with exciting innovation and new varietals. In addition to the established Hayward there are the sweet green the Zespri the ENZAGold and the new ENZARed. 
It is ACT’s hope that new kiwifruit varieties regardless of who produces or markets them will soon be able to be freely exported to international markets and that the current situation in the Bay of Plenty will not hinder that export in any way. We join with the rest of the House in expressing our hope that the extent of the outbreak can quickly be established and that the measures taken by MAF Biosecurity New Zealand and those in the kiwifruit industry themselves will be enough to see the contamination contained. 
Hon Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Tena koe Mr Speaker. The Maori Party stands in support of the Government in responding to the urgent need to address the issues affecting the kiwifruit industry. 
Hon Trevor Mallard 
: On a string. 
Hon Dr PITA SHARPLES 
: It is called a coalition bro. This situation has come upon the House with some urgency with the identification last night of the bacteria known as  
Pseudomonas syringae  
pv.  
Actinidiae  
(Psa) as having infected New Zealand kiwifruit vines. This is a major issue that threatens the stability of a key industry and we are certainly keen to provide the support necessary to contain the vine-killing bacteria. As we understand it the identification of Psa has already struck fear in the hearts of this very significant industry not only for New Zealand but also for Maori. At the end of last year kiwifruit packaging company Te Awanui Huka Pak won the rights to a $24.2 million deal with New Zealand’s largest kiwifruit grower. It was a major step forward for Maori businesses so we have been thinking particularly of Tauranga Maori who are now the biggest shareholders of Seeka. In the context of Maori business this is extremely significant. They are a collection of Maori trusts that have invested in primary production and in fact in the whole value chain. We support the Government’s actions— 
Hon Shane Jones 
: What about the yellow one? Brown on the outside yellow in the inside? 
Hon Dr PITA SHARPLES 
: Has the member finished his video? Goodness me! We support the Government’s actions. We want to ensure a healthy kiwifruit export market and we do so by supporting the hard work of all growers who participate in the kiwifruit industry. Boy that was hard work! Tautoko ana i te Pati Maori i te mahi o te kawanatanga. Kia ora ra. 
Hon JIM ANDERTON (Leader—Progressive) 
: 
 As a former Minister for Biosecurity who was constantly under attack by the then Opposition National Party when new incursions occurred in New Zealand I will give the present Government the dignity of my silence on this matter. 
Hon PETER DUNNE (Leader—United Future) 
: 
 I want to join with other members who have spoken and said that this is a time for calm heads but those calm heads cannot become a cover for complacency. We have a situation where a major threat to one of our very large primary industries has emerged. Some 20000 people are employed in the industry and it is worth $1.5 billion in exports to New Zealand. The situation clearly has to be managed extremely carefully. But we cannot afford for the problem to get out of control. We have seen other countries where the situation has arisen and terrific damage has been done both to the kiwifruit vines particularly the gold kiwifruit vines and to the long-term viability of the industry. 
The steps to which the Minister has alluded to date give some comfort that we are approaching the matter in a considered and proper way but I guess that until the results from the tests over the next week or so become apparent there will be a considerable degree of apprehension and anxiety in the industry. I think the best thing we can do to paraphrase the previous speaker Jim Anderton is for this House to give the industry the charity of our concern and perhaps our non-political silence at this time. 
Hon DAVID CARTER (Minister for Biosecurity) 
:  
I take this opportunity to thank the various speakers for their contributions today including the silence from the previous Minister for Biosecurity Jim Anderton. 
No one should underestimate the challenge of biosecurity for this country with 175000 items a day crossing our borders. This is a time for a rational approach armed with the best possible information but we should not underestimate the seriousness of what we are dealing with. We now need to quickly establish what strain of  
Pseudomonas syringae 
 pv.  
Actinidiae  
is in New Zealand because that will tell us the seriousness of the situation. 
I take this opportunity to assure all members of Parliament who have a biosecurity spokespersonship role that I will work closely with them updating them with information as it comes to hand. As I said earlier the best response to this emergency will come if we work collaboratively for all New Zealanders working to make sure we protect the interests of New Zealand’s biosecurity. That is what is at stake today. 
Questions to Ministers 
Unemployment Rate—September 2010 Quarter Compared with September 2009 Quarter 
1. 
Hon ANNETTE KING (Deputy Leader—Labour) 
 to the  
Minister for Social Development and Employment 
: How many fewer people were unemployed at the end of the September 2010 quarter compared to the September 2009 quarter according to the household labour force survey? 
Hon JUDITH COLLINS (Acting Minister for Social Development and Employment) 
: 
 According to the survey no fewer people were unemployed. However 39000 more people have been employed because the labour market grew in the last year. That is the largest annual increase in employment since the year ended December 2007 despite New Zealand experiencing the worst financial recession since the 1930s. 
Hon Annette King 
: Can she confirm that the number of people classified as jobless in New Zealand—that is those who want to work but who do not have a job—is now well over a quarter of a million New Zealanders having gone up by 64000 in the last 2 years; and does she agree with the Minister of Finance that they are considered to be collateral damage in rebalancing the economy? 
Hon JUDITH COLLINS 
: I do not believe for a moment that the Minister of Finance has ever made such a statement. 
Hon Annette King 
: Does she agree with the Minister of Finance that being made unemployed is not “brutal at all”; and does she think that the extra 6000 women who have just been made unemployed in the last quarter will agree with Bill English that they are just part of rebalancing the economy? 
Hon JUDITH COLLINS 
: That is a very loaded question but I am happy to say to the member that we have had 39000 more people employed in the last year which is good news for those people. We would like very much to get more people employed but we have inherited the worst recession since the 1930s. I say to the member that something that is very hopeful for her is that we have had more economic growth in the past 9 months than in the previous 4 years under the previous Labour Government. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. It is a relatively simple point of order. Other than saying that was a very lowly question— 
Hon JUDITH COLLINS 
: Loaded! 
Hon Trevor Mallard 
: Oh loaded—the question was not addressed. 
Mr SPEAKER 
: The member makes a valid point of order. Although the question was somewhat political that does not mean to say it should not be addressed. There is certainly no precise answer to a political question but in that circumstance Ministers should at least address the question. Simply to say it is a loaded question I do not think sufficiently addresses it. I invite the Minister to answer again. If she cannot recollect the question I am happy to have the Hon Annette King repeat the question. Maybe if it was a little less political that would be helpful. 
Hon Annette King 
: I raise a point of order Mr Speaker. I am happy to table the transcript from  
Q 
+ 
A 
 which I am quoting directly from. 
Mr SPEAKER 
: The member will just ask her question. 
Hon Annette King 
: Does she agree with the Minister of Finance that being made unemployed is not “brutal at all” and does she think that the extra 6000 women who were made unemployed in the last quarter will agree with Bill English that they are just part of rebalancing the economy? 
Hon JUDITH COLLINS 
: It is very difficult for people who have lost their jobs in times like this and I think it is unfortunate for the member to try to say Mr English is saying they are just collateral damage. They are not just collateral damage. Every single one of them is a human being and both Mr English and I would agree with that. 
Hon Annette King 
: Is she aware that underemployment—that is people who are in part-time work but who want more hours of work—has jumped by 8000 people or nearly 10 percent in the last quarter; and does she consider this increase to be an indication of an improving economy or of one where employers are being forced to downsize and reduce workers’ hours in order to survive? 
Hon JUDITH COLLINS 
: With more economic growth in the past 9 months than in the previous 4 years we are seeing an improvement in the economy. 
Hon Annette King 
: Has the Minister of Finance raised with her his concern about the jump in unemployment in Southland where an extra 600 people are now claiming an unemployment benefit and does she agree with the chief executive of Southland Chamber of Commerce who said yesterday: “we’re now at the stage where businesses have had to cut back.”; and when will that region see the aggressive recovery that John Key has promised? 
Hon JUDITH COLLINS 
: I am sure that when the October figures come out and the November figures there will be an improvement across the board. As we can see in the October figures that have just come out there has been a modest fall. Overall benefit numbers are down by 332 with unemployment benefit numbers down by 483. 
Economies and Financial Markets International—Current Developments 
2. 
CRAIG FOSS (National—Tukituki) 
 to the  
Minister of Finance 
: What are the implications for New Zealand of current developments in international economies and financial markets? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 It is clear that the global economy is recovering from the recent financial crisis but there are a number of uncertainties and risks. For instance emerging economies are experiencing a strong recovery and our trade with those economies is growing. However developed economies are recovering more slowly and economies such as the UK and the US are adopting policies that tend to devalue their exchange rates and therefore create a headwind for our export recovery. That reinforces the need for New Zealand to continue along a path of improving our competitiveness so that we can achieve faster growth and sustainable jobs. 
Craig Foss 
: What commitments have New Zealand and other Asia-Pacific countries made to help overcome their current economic challenges? 
Hon BILL ENGLISH 
: At a recent meeting of APEC Finance Ministers there were a number of common views—for instance countries with current account deficits should take steps to boost domestic savings and those with surpluses should take steps to increase domestic demand; we should continue moving towards more market-determined exchange rate systems that reflect the underlying economic fundamentals rather than competitive devaluation of currencies; and we should ensure sound fiscal management. There was unanimous support from finance Ministers across well over a dozen economies for those propositions. 
Craig Foss 
: How does New Zealand’s economic programme compare with the approach outlined by APEC Finance Ministers? 
Hon BILL ENGLISH 
: The Government’s current comprehensive economic programme is very much in line with the general international consensus. In particular there is some real interest in New Zealand’s tax package because it is seen as a concrete measure that is helping this country move away from borrowing and consumption towards favouring exports savings and investment and in that sense it is undoing the severe damage done to the economy by the last Government. 
Craig Foss 
: What kinds of economic policies were rejected by APEC Finance Ministers? 
Hon BILL ENGLISH 
: The policies that were rejected not just by the APEC Finance Ministers but I think by most economies around the world were wasteful and fast-growing Government spending ad hoc and opportunistic changes to tax systems larger deficits fiddling with monetary policy and trying to pretend the exchange rate can be fixed. Those are essentially the policies of the current Labour Opposition. 
Economic Performance—Minister’s Statement 
3. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister of Finance 
: Does he stand by his statement: “we came into office with a very sound plan to lift New Zealand’s economic performance”? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes I do stand by that statement. I could outline the six pillars of that plan but what I will say is that there are some early promising signs for the economy. Over the past 2 years we have seen five successive quarters of economic growth real after-tax wages have grown by more than twice the amount they did over the previous 9 years the balance of payments deficit has fallen from 8 percent to 3 percent of GDP tax rates have reduced to the extent that two-thirds of New Zealanders now pay 17.5c in the dollar and over 40000 jobs were created in the past year. These are early and modest gains and we suspect we will build on them with real strength over the next few years as our plan for the economy has more impact. 
Hon David Cunliffe 
: Which part of his “very sound plan” delivered the decline in business tax revenue in the last quarter which is more than 20 percent below the forecast amount and cut the total number of businesses by 1.7 percent for the first time in 9 years? 
Hon BILL ENGLISH 
: In case the Opposition finance spokesman has not noticed there was a recession for the first time in 9 years starting in 2008 well before the global financial crisis. A lot of New Zealand businesses had to deal not just with that recession but with the build-up of red tape and misjudged economic policy over the last decade. This Government is moving as quickly as possible to undo the red tape invest in infrastructure make the public sector more productive reduce tax rates increase education and skills and revamp our innovation system. 
Amy Adams 
: What problems did the Government’s plan have to address when the Government took office? 
Hon BILL ENGLISH 
: I will give only a selection of the large range of problems. When we became the Government New Zealand was already in its third quarter of recession. The export sector had been in recession for 5 years. In this great little export-earning country the previous Government had had the export sector in recession for 5 years. The fundamental problem was that that Government was fantastic at spending and hopeless at earning and we have to turn that round. 
Amy Adams 
: What steps has the Government taken to implement its plan? 
Hon BILL ENGLISH 
: We have reduced personal taxes across the board we have got Government debt and deficits under control we have reprioritised $4 billion that the previous Government was wasting on back-office bureaucracy and moved it to the front line we have introduced national standards for reading and maths we have cut red tape we have injected hundreds of millions of dollars into research and innovation we have invested $7 billion in productive infrastructure we have maintained New Zealand’s high tax rating we have streamlined the Resource Management Act we have reduced taxes on savings and we have streamlined employment law. The result is that real after-tax wages have been growing. 
Hon David Parker 
: Why then will the Government not even belatedly include in its plan to lift New Zealand’s economic performance meaningful milestones upon which New Zealanders can judge National’s success or failure in meeting its election promise to close the wage gap between New Zealand and Australia which even the 2025 Taskforce report notes is growing? 
Hon BILL ENGLISH 
: Because New Zealanders are smart enough to know that if their jobs are more secure and their incomes are rising then this economy is going somewhere. We are very happy to be judged day by day by the voters who threw out that party’s Government because it did so much damage to this economy. 
Hon Clayton Cosgrove 
: Will he rule out selling State-owned assets as proposed in the 2025 Taskforce report and will he rule out campaigning to do so in next year’s general election? 
Hon BILL ENGLISH 
: The Government’s position has been quite clear on that matter. The Government promised that there would be no asset sales in its first term of office and that if it changed that position it would campaign on that change. But I will make this general point. The Government owns $200 billion of assets and that party’s Government left the asset management system in a shambles. So we have been working flat out to try to improve the effectiveness of how we use $200 billion of taxpayer-owned assets and we are starting to do a pretty good job of it. 
Hon David Cunliffe 
: Was the Prime Minister correct when he admitted this morning that the Government has “no plan” to deal with the high New Zealand dollar; if so how much more damage will the volatile dollar have to do before he will act to protect struggling exporters? 
Hon BILL ENGLISH 
: A couple of countries fix their exchange rate and they have two characteristics. One is that they have several hundred billion US dollars in the bank. Well the previous Labour Government made very sure that we did not have several hundred billion dollars in the bank; in fact we have a $150 billion debt to overseas lenders. The other thing is that those countries tend not to be democracies. That was also a trend under the previous Government but without $200 billion in the bank it is actually pretty hard to fix one’s exchange rate. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: A point of order has been called. [ 
Interruption 
] I say to both the deputy leader of the Labour Party and the senior Government whip that they will not carry on interjecting when a point of order has been called. 
Hon David Cunliffe 
: My point of order is that the Minister did not address the supplementary question. At no time did the question mention fixing the exchange rate which of course is not our position; it asked when the Prime Minister or the Minister would act to assist exporters. 
Mr SPEAKER 
: I am not sure that the member did ask whether they would act to assist exporters. I clearly remember the member in his question talking precisely about the exchange rate. The Minister in my view answered that. 
Hon David Cunliffe 
: We did mention the higher dollar but at no point did we suggest fixing the dollar. So what the Minister is doing is painting us in a position we do not hold. 
Mr SPEAKER 
: I do not think the House should take further time on this particular question. The member asked a question in respect of if not fixing the exchange rate taking some action in respect of it. The Minister answered in respect of one aspect of managing exchange rates where he expressed a view that was not very supportive of it and I think the House should not take more time on a question that was not very precise in the first place. 
Kenepuru Hospital—Increased Services 
4. 
HEKIA PARATA (National) 
 to the  
Minister of Health 
: What progress has been made at Kenepuru Hospital to provide more services for patients? 
Hon TONY RYALL (Minister of Health) 
: 
 I can inform the House that in the last 2 years 2008-09 and 2009-10 under this Government the number of surgical procedures carried out at Kenepuru Hospital has increased by 57 percent. In the last financial year 3630 surgical procedures were carried out which is an increase of 1321 on the last year of the previous regime. This is further evidence of improved front-line services under this Government. Unfortunately I regret to inform the House that over the last 3 years of the previous Government 2005-06 to 2007-08 the number of surgical procedures carried out at Kenepuru Hospital actually fell by 13 percent. 
Hekia Parata 
: What other progress has been made at Kenepuru Hospital to provide further services to patients? 
Hon TONY RYALL 
: In the last 2 years the number of out-patient consultations carried out at Kenepuru Hospital has increased by 30 percent. In the last financial year 19635 out-patient consultations were carried out which is an increase of 4500 on the last year of the previous Government. I regret to inform the House that over the last 3 full financial years of the previous Government the number of out-patient consultations carried out at Kenepuru Hospital actually fell by 18 percent. 
Hon Ruth Dyson 
: How many additional Mana residents have joined the surgery waiting list at Kenepuru Hospital because ACC has declined their claim for help and how many extra staff will be needed to care for them? 
Hon TONY RYALL 
: Of course one is not going to have that data with them. But what I can tell that member is that under this Government the people of Kenepuru have enjoyed the introduction of neurology clinics general surgery breast clinics newborn hearing clinics four new observation beds an anaesthetic pre-assessment clinic a pain management clinic psychiatric liaison services and haematology— 
Mr SPEAKER 
: I am sure it is very interesting information but the member did not actually ask for that. The Hon Ruth Dyson— 
Hon Ruth Dyson 
: Are you giving me an opportunity to answer? 
Mr SPEAKER 
: No I am just pulling the Minister up from going on for too long. Does the member wish to ask a supplementary question? 
Hon Ruth Dyson 
: Absolutely. 
Mr SPEAKER 
: She should not push her chances too far. 
Hon Ruth Dyson 
: How many more elderly from the Mana electorate will be seeking treatment at Kenepuru Hospital as a result of his decision to further cut home help for elderly people? 
Hon TONY RYALL 
: What I can tell that member with regard to the older people of the Mana electorate is that Capital and Coast District Health Board has made some changes to its home-care services that bring the same policy there in line with the rest of the country. I can also say that many people in the Mana electorate are not having to be transported to the emergency department at Wellington Regional Hospital because of the urgent-care initiative involving Wellington Free Ambulance which this Government has funded which means that 70 percent of patients are treated at home rather than going to the emergency department. 
Roading State Highway 1—Costs of Consultation Meetings 
5. 
Hon DARREN HUGHES (Labour) 
 to the  
Minister of Transport 
: What is the breakdown of the $22000 spent by the New Zealand Transport Agency for consultation meetings outlining the proposed route of the new State Highway 1 through Kapiti that have now been postponed until possibly after the Mana by-election? 
Hon STEVEN JOYCE (Minister of Transport) 
: 
 I congratulate the member opposite on his sartorial elegance today. The $22000 is made up of postcards at a cost of $10492 brochures at a cost of $9605 five storyboards at a cost of $1150 and finally advertisements at a cost of $1000. 
Hon Darren Hughes 
: Is it his expectation as Minister that there will be meetings before the Mana by-election takes place to inform the community about where new State Highway 1 will go? 
Hon STEVEN JOYCE 
: That is a decision for the New Zealand Transport Agency. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. I understand what the Minister has said—that it is a decision apparently for the agency—and that is why I did not ask him that. I asked him whether it was his expectation as the Minster of Transport that these meetings would take place before the Mana by-election. He did not answer that question; he told me something I already knew. 
Mr SPEAKER 
: After listening to the answer I assume the member would take it that the Minister does not know. He is telling the House that someone else makes the decision; he does not know. If I am wrong the Minister should correct that perception. The Minister is indicating that that is the situation. 
Hon Darren Hughes 
: Have any National MPs contacted him to complain about the agency’s decision not to release this information this week as planned? 
Hon STEVEN JOYCE 
: No. No MPs have contacted me to complain about the delay on the decision; in fact no MPs have contacted me since the decision has been announced. 
Hon Darren Hughes 
: Will the Minister come to a meeting tonight in Kapiti at Southward Theatre in Paraparaumu at 7 p.m. to explain to local people why this information about where State Highway 1 will go is now being withheld from them? 
Hon STEVEN JOYCE 
: No I will not. The point is that the decision is made by the Transport Agency. I think the agency is in the situation where it is balancing the obvious desire for timeliness with the obvious desire for certainty as to where the highway will go. 
Gareth Hughes 
: Does he really expect the voters of Mana to believe that he was not involved in the decision to pull this meeting to avoid announcing in the middle of the Mana by-election that homes will be destroyed by his uneconomic motorway? 
Hon STEVEN JOYCE 
: I should clarify for the member that the Transport Agency briefed me on its proposed documentation before it made its decision. But the agency took its own decision that the consultation should not go ahead because—[ 
Interruption 
] 
Mr SPEAKER 
: I apologise to the Minister. A member of the Green Party Gareth Hughes has asked a question. I doubt that he can hear the answer because of the noise of the Labour Party front bench. That is not fair. I ask them to be more reasonable when a member from another party asks a supplementary question. 
Hon STEVEN JOYCE 
: As I was saying the Transport Agency took its own decision I understand because it was concerned that it had insufficient detail on a section of the road towards the northern end of the alignment that if consulted on as it stood would leave too much uncertainty for local residents. 
Hon Darren Hughes 
: When was he first informed by the agency that it was considering delaying the meetings to inform the people of Kapiti about where new State Highway 1 would go and when was he informed that it had finally made that decision? 
Hon STEVEN JOYCE 
: The chairman of the agency spoke with me on the weekend of 30-31 October. It made the decision I understand at a board meeting on the following Monday. 
Gender Equality—Leadership Roles and Pay Equity 
CATHERINE DELAHUNTY (Green) 
: 
 My question is to the Minister of Women’s Affairs and asks—[ 
Interruption 
] 
Mr SPEAKER 
: I apologise to the honourable member. Members have to be a little more reasonable. Question No. 5 has been dealt with. Members may not be happy with the answers but there is always another day to ask more questions. I have called Catherine Delahunty to ask her question and to keep interjecting is not fair. 
6. 
CATHERINE DELAHUNTY (Green) 
 to the  
Minister of Women’s Affairs 
: Is she satisfied with progress towards her goals of getting more women in leadership and closing the gender pay gap following the release of the  
New Zealand Census of Women’s Participation 2010 
 which records a backwards slide? 
Hon PANSY WONG (Minister of Women’s Affairs) 
: 
 The report raises no new issues and that is why two of the Ministry of Women’s Affairs’ priorities are to increase the number of women in leadership positions and to reduce the gender pay gap. I am disappointed at the dismal increase of 8.6 percent to 9.3 percent of women on the boards of the top 100 listed companies. That is why the Ministry of Women’s Affairs has launched the Women on Boards initiative. As far as the pay gap is concerned when I became the Minister of Women’s Affairs in 2008 the New Zealand gender pay gap had stalled at 12 percent for a decade. Since then the gap has reduced to 11.3 percent in 2009. It is now down to 10.6 percent. 
Catherine Delahunty 
: Has she had any advice to explain why 24 public sector departments have larger gender pay gaps than the gap across the total labour force including a massive 39 percent gap at the Ministry of Defence and even an 8 percent gap at the Ministry of Women’s Affairs? 
Hon PANSY WONG 
: Each chief executive of each Government agency is responsible for addressing any pay discrimination within their own organisation. The National-led Government expected the State Services Commission to be a good employer and to understand that the Equal Pay Act was passed in 1972 by a National Government. The Department of Labour has provided and continues to provide public and private sector organisations with pay and employment equity tools and resources to assist employers to do that. 
Catherine Delahunty 
: Does she agree with the Prime Minister that the best way to measure income in New Zealand is the quarterly employment survey; if so why does she not use this survey to measure the current gender pay gap? 
Hon PANSY WONG 
: Part of the measurement that the Ministry of Women’s Affairs adopted in 2004 is comparing the median hourly earnings of men and women. It is released annually as part of the quarterly employment survey but we rely on the annual figure. That basis needs to be adopted on a consistent base because otherwise it would be distorting and we would not know whether the gap was closing. On this happy occasion I am happy to inform the member that the gap has been closing for 2 years in a row after it had stalled at 12 percent under the previous Labour Government. 
Catherine Delahunty 
: I raise a point of order Mr Speaker. I asked her whether she agreed with the Prime Minister that the best way to measure income is the quarterly employment survey 
.  
She did not answer that question. 
Mr SPEAKER 
: I believe the Minister answered why she believed that a certain series should be used in measuring the pay gap. If I recollect correctly there were two parts to the member’s question and the Minister chose to answer that part. 
Catherine Delahunty 
: Is the real reason that she continues to hide behind median income statistics to explain away the gender pay gap the fact that the Prime Minister’s preferred method shows that the gender pay gap is growing? 
Hon PANSY WONG 
: The measurement chosen by the Ministry of Women’s Affairs was adopted in 2004 under the previous Labour Government. If I had wanted to choose to hide behind anything I would shift the base of measurement. The happy news is the gap has now been closing for 2 years in a row. But we are not complacent; we will continue to work on it. 
Catherine Delahunty 
: Why has the number of women on Government and private sector boards decreased when the No. 1 priority of her department has been to get more women on boards? 
Hon PANSY WONG 
: Let me repeat: there has been a very slow increase in the percentage of women on the boards of publicly listed companies from 8.6 percent to 9.3 percent but we are not happy about that. We want to increase it. As far as State sector boards are concerned the percentages fluctuate between 40 percent and 42 percent. I am comfortable with a range between 40 percent and 60 percent in the State sector. Australia has just adopted 40 percent as its target. Norway has legislated for only 40 percent for a publicly listed company. I think we should be proud of New Zealand for what we have done on State sector boards. 
Catherine Delahunty 
: I raise a point of order Mr Speaker. The Minister has not answered the question as to why the number has decreased. 
Mr SPEAKER 
: If the member wants specific answers to questions she must make her questions shorter and ask only one question instead of putting two or three things into the question. I believe that the Minister gave a reasonable answer to the question. The member has a further supplementary question as I understand it. 
Catherine Delahunty 
: Will the Minister commit to the agenda for change outlined in the  
New Zealand Census of Women’s Participation 2010 
 and join with the Green Party in a cross-party parliamentary caucus as that report requests to advance women’s progress inside and outside Parliament? 
Hon PANSY WONG 
: The Ministry of Women’s Affairs has three priorities: having more women in leadership closing the gender pay gap and tackling violence against women. We have the agenda for change and I think it has been embraced by New Zealand women throughout the country. When the chief executive of the Ministry of Women’s Affairs conducted 52 forums—[ 
Interruption 
] 
Catherine Delahunty 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: I think I can anticipate the member’s point of order. Having defended the Minister against the point of order in just the previous supplementary question I would have thought it behoved the Minister to listen to the next supplementary question which sure left the Minister plenty of room to give a political answer should the Minister have wished but to ignore the question totally is not very wise. So I invite Catherine Delahunty to repeat her question and I ask the Minister to listen to it. The Minister should not give the House a mini-speech about what she wants to tell the House but give at least some sort of answer to the question. The question was so political and there were heaps of opportunities to give an answer but I would like to hear some sort of answer. 
Catherine Delahunty 
: Will the Minister commit to the agenda for change outlined in the  
New Zealand Census of Women’s Participation 2010 
 and join with the Green Party in a cross-party parliamentary caucus as that report requests to advance women’s progress inside and outside Parliament? 
Hon PANSY WONG 
: The Ministry of Women’s Affairs sets its own priorities. We have the Government’s priorities—for example I have already given— 
Hon Annette King 
: That’s no answer. 
Hon PANSY WONG 
: If Labour members are not interested in the answer although someone else might be they should keep quiet. For example one of the recommendations in the report called for a range of 50:50 and as I indicated earlier I am comfortable with a range of 40:60. I think that the ministry’s three priorities dovetail with quite a range of the recommendations. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. It is like ibid to your previous intervention. The Minister has yet to answer whether she or her party is prepared to do something with other parties in Parliament and reading out pre-prepared speeches about what her ministry is doing does not even address the question despite I think your latitude and invitation earlier on to give the member a whack. 
Mr SPEAKER 
: It is frustrating. Catherine Delahunty’s question was not unreasonable; it asked the Minister what the Minister was prepared to do—would she commit to something. I am not going to insist on the Minister giving chapter and verse of what she would commit to but some attempt to answer the question would be helpful to the House. This is my third attempt to ask that the question be addressed and we will just have to leave it up to the public to judge if it cannot be addressed. The Minister heard the question so I ask her to try to at least address the question. 
Hon PANSY WONG 
: When those recommendations coincide with the priorities of the ministry we work on those. 
Hon Pete Hodgson 
: Did she discuss the goal of getting more women into leadership roles when she visited Lianyungang Supreme Hovercraft Ltd in China? 
Hon PANSY WONG 
: I am not too sure what that question is all about. The issue of women in leadership relates to New Zealand and I addressed women’s concerns throughout New Zealand. 
Hon Pete Hodgson 
: Was she acting in her ministerial capacity when she signed herself as “Minister of New Zealand Government” on a document for Lianyungang Supreme Hovercraft Ltd and for Pacific Hovercraft Ltd? 
Hon PANSY WONG 
: I was not aware that I signed a document overseas in my capacity as Minister of Women’s Affairs when it had nothing to do with the ministry. 
Mr SPEAKER 
: I call the Hon Pete Hodgson and I remind him of the primary question. 
Hon Pete Hodgson 
: Indeed. Does a woman demonstrate leadership when having reached the status of Cabinet Minister she then witnesses a commercial deal as a Minister even though she is in that other land on a private trip? 
Hon Simon Power 
: I raise a point of order Mr Speaker. Although the member attempted to wind the two words “woman” and “leadership” into the question it is clear that the primary question set down by the member originally related to closing the gender pay gap. That part of the primary question was nowhere near the attempt that that member just made to put a question to the Minister. 
Hon Trevor Mallard 
: The first of the supplementary questions asked by my colleague Pete Hodgson very directly asked whether getting more women into leadership or the issue of the gender pay gap were subjects she addressed on a particular visit to a particular company when she was in China. It is for her to say yes or no but to ask her whether she did that is I think well within her areas of responsibility. [ 
Interruption 
] 
Mr SPEAKER 
: There will not be any comments. On the first occasion when the member asked a supplementary question I allowed it because it was not immediately obvious where the member was seeking to take his questioning. But given this primary question I believe that it is not reasonable to try to link such a totally different issue to it. There is plenty of opportunity in question time. Ministers can be questioned on all sorts of matters and there are all sorts of opportunities to pursue these things but this question is to the Minister of Women’s Affairs and I do not believe that it is reasonable to simply pretend to link it in the way now being attempted. That is why I am ruling out the question. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I listened carefully to your comments. It is my understanding that a direct question to a Minister about the activities of the Minister on a private trip would not get through the Clerk’s Office because it does not relate to ministerial responsibility. You said that there were plenty of opportunities to question the Minister on that. My submission to you is that if members here attempted to ask a question based on the misbehaviour— 
Mr SPEAKER 
: The member will resume his seat immediately. He knows that he is departing from the Standing Orders there. The member is a particularly talented member when it comes to finding ways to achieve things in this House. It is not beyond my simple wit to work out how such a question would be asked so I am sure it is not beyond that member’s wit to work out how to pursue the matter if it is of interest to the Opposition. I am sure that there are all sorts of ways that can be done but this is not an acceptable way in response to this particular primary question. 
Hon Pete Hodgson 
: Does a woman demonstrate leadership when as a Cabinet Minister she witnesses a deal in China to advantage her husband even though both of them travelled to China privately? 
Mr SPEAKER 
: That question is also ruled out. 
Hon Pete Hodgson 
: Inevitably there is a little bit of documentation to table concerning the deal in question and the witnessing by the Hon— 
Mr SPEAKER 
: The member will just describe the documents he is seeking leave to table. 
Hon Pete Hodgson 
: I am trying to do just that. 
Mr SPEAKER 
: Well he had better do it or he will not have the opportunity. 
Hon Pete Hodgson 
: In describing the document in question can I get more generic than that do you think? In particular it is the signature of the witness being the Minister in question. 
Mr SPEAKER 
: For the House to decide whether it will grant leave to table a document it would be helpful for the member to actually describe what the document is. The House does not know what the document is. It might have the Minister’s signature on it but we need to know what the document is. 
Hon Pete Hodgson 
: I was trying to appeal to your need for brevity. The document is a deal between Lianyungang Supreme Hovercraft Ltd and Pacific Hovercraft New Zealand Ltd. It is dated 3 December 2009—in fact it is not dated then; it is dated some other date I apologise. It has given rise to a bunch of legal activity subsequently— 
Mr SPEAKER 
: That does not help describe the document. Leave is sought to table this document or set of documents. Is there any objection? There is objection. 
Methamphetamine Precursor—Importation of Pharmaceutical Products 
JONATHAN YOUNG (National—New Plymouth) 
: 
 My question is to the Minister of Customs—[ 
Interruption 
] 
Mr SPEAKER 
: I apologise to the member. That matter has been dealt with and a member is asking a question from the back of the House. I expect the House—again on this occasion especially the Labour front bench—to display some courtesy. 
7. 
JONATHAN YOUNG (National—New Plymouth) 
 to the  
Minister of Customs 
: What steps has the Government taken to address the importation of pharmaceutical products used to manufacture P? 
Hon MAURICE WILLIAMSON (Minister of Customs) 
: 
 I have recently returned from a very productive trip to China where I engaged in high-level meetings with senior members of China Customs and with the Chinese Minister of Customs Minister Sheng. During those talks I described to Minister Sheng the problem that New Zealand has with large volumes of pharmaceutical products containing ephedrine and pseudoephedrine being smuggled out of China and into New Zealand. Minister Sheng showed genuine concern about the issue and as a result the two countries have now signed a statement of cooperation to tackle the issue. I personally told Mr Sheng about the damage and the danger that these precursors were causing and he has given a very strict directive to his 50000 customs officers to be extra vigilant on the matter and to begin a new period of cooperation. The agreement will see China and New Zealand customs share intelligence identify and develop opportunities to coordinate short-term targeting exercises in both China and New Zealand and increase the disruption of traffic of the drug and its precursor. 
Jonathan Young 
: What success have customs officers had in protecting our borders in the war on P? 
Hon MAURICE WILLIAMSON 
: Well 2010 will be a challenging year given that in 2009 we set an all-time record for interception of the precursor. In fact over 1.2 tonnes of pseudoephedrine was intercepted at the border. However the good news is that this year to October we have intercepted 821 kilos. Also we have started making some quite important interceptions on the actual drug P not just the precursor. Recently some individuals were apprehended at Auckland Airport who held large quantities of the drug P inside their bodies. One Lithuanian individual had 1.4 kilograms of the drug inside his body. So far we have had very good progress but it will be a real stretch to see if by 31 December we can beat last year’s all-time record. 
Education National Standards—Nga Whanaketanga / Maori-medium standards 
8. 
Hon TREVOR MALLARD (Labour—Hutt South) 
 to the  
Minister of Education 
: Does she agree with Te Ururoa Flavell when he said “Unlike National Standards in mainstream schooling Nga Whanaketanga has been trialled and has a direct connection to the curriculum.”; if not why not? 
Hon ANNE TOLLEY (Minister of Education) 
: 
 No; because national standards also have a direct connection to the curriculum. 
Hon Trevor Mallard 
: Is that connection a linear connection? 
Hon ANNE TOLLEY 
: I just happen to have with me in the House a chart that shows very clearly the level of the standards in reading writing and maths and underneath them all where they are connected to the curriculum. If the member asking the question is interested I am happy to forward him a copy. 
Hon Trevor Mallard 
: Does she agree with Te Ururoa Flavell when he said: “The Government bureaucracy must never think that they know more than our communities and I commend them for reaching out to Maori for giving them a real say in the future education of their children.”; if so why does she think she knows more than teachers and parents in Pakeha communities who have been raising concerns about national standards or is that one of the things that happen just for Maori? 
Hon ANNE TOLLEY 
: I agree totally with Te Ururoa Flavell when he said in his press release: “Whanau hapu and iwi have worked so hard for so long to build an entire kaupapa Maori education system from scratch—one that reflects their world view and tikanga and ensures their language and culture are maintained by future generations.” I also agree with him that the community should have a say in the education of their children and that is why it is so important that national standards will deliver good information to parents on the progress that their children are making in reading writing and maths so that they not only can ensure that their children are getting a good education from the schools but also can be part of it and help. 
Hon Trevor Mallard 
: Will the Minister explain in plain English what her writing standards mean when they state that at the end of year 7 a student “plans effectively by using mind-mapping in addition to other planning strategies and uses her information literacy skills to find and make use of relevant information for her writing purpose;”? What does that mean in plain English? 
Hon ANNE TOLLEY 
: I am not a teacher in a classroom. As the Minister I am not required to deliver the curriculum to children in the classroom but I do have a responsibility to ensure that teachers have the resources and the support in order to deliver the New Zealand curriculum to schools. So it is my responsibility to make sure that teachers have the information and the resources that they need to deliver exactly that in relation to the curriculum. 
Hon Trevor Mallard 
: How then can a parent be expected to understand what a standard means if the Minister says that she herself does not have to understand it? 
Hon ANNE TOLLEY 
: I refer the member again to the very good wallchart that I hold up now. For each one of the years displayed on the chart there is a booklet that explains to parents in very good clear language exactly what the expectations are. If they are not explained in language that the parents can understand the most important part is the conversation that happens between the teacher and the parents. National standards are about creating good information that is shared by schools and homes. 
Louise Upston 
: What feedback has the Minister received about national standards in mainstream schooling? 
Hon ANNE TOLLEY 
: Following last week’s reports of a boycott by boards of trustees which was fostered by the Labour Party and unions many upset parents have emailed me about national standards. One stated: “This country really does need to have those national standards. Please put these standards in place and let them be implemented.” Another parent wrote to me and summed up the situation: “Thousands of Kiwi parents simply want to know where our kids stack up.” This Government is absolutely committed to making sure that parents have that information. 
Hon Trevor Mallard 
: Is it still her intention to dismiss boards that do not fully implement national standards? 
Hon ANNE TOLLEY 
: That has never been my intention. In fact the papers that have been taken through to Cabinet—papers that that member has in his possession because I released them to him—show that we have in place a very good process of working with schools that are having difficulty implementing the standards to make sure that they have the support they need that they are assisted by the Ministry of Education and that they get professional development for their teachers wherever it is needed. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I might get myself into trouble here but the Minister told Kathryn Ryan on the radio very clearly that it was her intention to dismiss boards. I do not think she can just deny the fact. 
Mr SPEAKER 
: That is not a point of order and the member knows that. He should not do that. There are other ways of pursuing concern about an answer but he should not use that way. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. Can you outline whether that involves a change in your policy? You have had a policy when we have complained of breaches of privilege in terms of errors that Ministers have made in the past that we cannot— 
Mr SPEAKER 
: The member listened to the Minister’s answer very carefully. What the member can do with his information where he believes that the Minister indicated a different course of action would be taken is question the Minister even more tightly to pin the Minister down. To come back to the member’s exact point of order I say that primary questions are a matter of some formality in this House so Ministers need to be very careful how they answer primary questions. They should be careful how they answer any question but it is difficult for a Minister to be absolutely accurate in response to every supplementary question. But in response to a primary question they must be absolutely accurate so the opportunity exists for the member to pin the Minister down more tightly on the matter. 
Marine and Coastal Area (Takutai Moana) Bill—Customary Title 
9. 
Hon RODNEY HIDE (Leader—ACT) 
 to the  
Attorney-General 
: Is it Government policy through the proposed Marine and Coastal Area (Takutai Moana) Bill to enable the Minister responsible to recognise customary marine title by agreement with an applicant group; if so which parts if any of New Zealand’s foreshore and seabed could not be applied for under the proposed Act? 
Hon MAURICE WILLIAMSON (Minister for Building and Construction)  
on behalf of the  
Attorney-General 
: 
 Yes the Marine and Coastal Area (Takutai Moana) Bill provides for customary title to be recognised either by a recognition order of the High Court or by agreement with the Crown after the agreement is given effect by an Order in Council. In respect of the second element of the member’s question any part of the marine and coastal area that was part of a private title could not be subject to an application. 
Hon Rodney Hide 
: Can the Minister tell the House of any precedent either within New Zealand or in any other Westminster jurisdiction that would enable a Minister of the Crown to transfer valuable title to private groups without involving the courts Parliament or indeed public scrutiny? 
Hon MAURICE WILLIAMSON 
: I doubt whether we could find a precedent anywhere else in the world as there are Treaty obligations under the Treaty of Waitangi and New Zealand is the only country to which the Treaty applies. 
Hon Rodney Hide 
: Does the Minister accept that when we have Treaty settlements that shift property and titles to iwi groups those settlements are brought before the House and select committees for public scrutiny and ratification by Parliament yet when it comes to the foreshore and seabed a Minister by private treaty in his or her office can sign the deal with no public scrutiny and no oversight by Parliament? 
Hon MAURICE WILLIAMSON 
: Yes but the bill does not restrict the rights of groups to seek customary marine title in the common marine and coastal area. It does however have very strict conditions. In order to successfully obtain recognition of customary marine title the applicant group must prove that it has had exclusive use and occupation of that area since 1840 without substantial interruption and that the area has been held in accordance with tikanga. That will obviously rule out many parts of marine and coastal areas. 
Hon Rodney Hide 
: I raise a point of order Mr Speaker. It is very interesting to hear about the thresholds and no doubt there will be more questions on that— 
Mr SPEAKER 
: What is the member’s point of order? 
Hon Rodney Hide 
: He did not address the question of the difference between Treaty settlements which are brought to Parliament for scrutiny and this particular case where those procedures are not applying. 
Mr SPEAKER 
: The member can repeat his question because I do accept the point he makes. That was a very particular question. I invite him to repeat it. 
Hon Rodney Hide 
: I will not get it exactly accurate but I will do my best. Does the Minister accept that when it comes to Treaty settlements where valuable title is transferred across to iwi or other groups they are brought to Parliament for public scrutiny and indeed to select committee for public input and the deal has to be ratified by Parliament; but in this proposed bill when it comes to our valuable foreshore and seabed the deal can be done in the Minister’s office without public scrutiny with no oversight by Parliament; why would the Minister not accept that there is a proper role for Parliament and the public? 
Hon MAURICE WILLIAMSON 
: When the member asked that question the last time I replied as my very first word “Yes” because the question asked whether I accepted that there is a difference between the regime for Treaty settlements and the regime for this. My answer was absolutely specific: yes I do accept that. 
Mr SPEAKER 
: The Minister has definitely answered the question. 
Accident Compensation—Focus of Scheme 
10. 
Hon DAVID PARKER (Labour) 
 to the  
Minister for ACC 
: Is a focus of the ACC scheme still to support the needs of injured New Zealanders? 
Hon PANSY WONG (Associate Minister for ACC) 
 on behalf of the  
Minister for ACC 
: Yes. However I note that a scheme needs to be financially sustainable to achieve this focus which it was not under the previous Labour Government extending entitlements and including— 
Mr SPEAKER 
: The question asked was whether a focus of the ACC scheme is still to support the needs of injured New Zealanders. It did not need an attack on the questioner. I am sure there will be plenty of opportunity in the supplementary questions to get back at the previous Government but not in a simple primary like that. I think we got the answer; I think it was yes. 
Hon David Parker 
: Is the Minister aware that the number of injured New Zealanders whose accident compensation cover has been wrongly denied by ACC but overturned on review is set to double from 897 cases in 2008 to an unprecedented 2000 cases this year? 
Hon PANSY WONG 
: As far as I am concerned every individual who has been turned down by ACC rightly can seek a review and if ACC is found to be wrong it will correct that mistake. But also I say that for the year June 2009 to July 2010 even though the request for elective surgery decreased by 5 percent the approval rate went up by 2 percent. 
Hon David Parker 
: Does the Minister agree with claimants and surgeons that ACC’s deliberate policy of unfair refusal of treatment to thousands of New Zealanders each year is causing unnecessary distress to injured New Zealanders as well as causing a blowout in legal costs for both claimants and ACC? 
Hon PANSY WONG 
: As I have just said although the claims for surgery have decreased by 5 percent the approval rate has gone up by 2 percent. ACC reviews what happened as a result of the review decisions. It has its procedures; what ACC has to do is prescribed by legislation. Under the previous Labour Government there was a huge blowout in ACC’s performance with losses of $2.4 billion followed by losses of $4.8 billion and that is not sustainable. 
Hon David Parker 
: What steps has the Minister taken to ensure that ACC complies with review decisions that go against it given the  
Dominion Post  
article yesterday showing that ACC is refusing to abide by review decisions and is acting above the law even when proven wrong? 
Hon PANSY WONG 
: The Minister for ACC and I expect a high level of performance from ACC and on that particular case we are waiting for a full report. 
Allan Peachey 
: What reports has the Minister seen regarding the improved performance of ACC? 
Hon PANSY WONG 
: The Accident Compensation Corporation’s annual report shows a marked turn-round enabling the corporation to reduce its net liability by $2.5 billion in the year ended 30 June 2010. This has been achieved with a marked improvement in rehabilitation rates—just 1 percent improvement would reduce liability by $500 million—and also is helped by a strong recovery in the investment markets. 
Maori Language / Te Reo Maori—Strategy and Funding 
11. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
 to the  
Minister of Maori Affairs 
: Kei te ngata a ia ki te whakahaerenga o te rautaki me te putea tautoko mo te reo Maori? 
[ 
Is he satisfied with the management of the te reo Maori strategy and funding? 
] 
Hon Dr PITA SHARPLES (Minister of Maori Affairs) 
: 
Tena koe Mr Speaker. Kare ano. Ahakoa nga rautaki o nga kawanatanga o mua kua whakature kia ora ai to tatou reo a kare e whai hua. Penei i tenei kaupapa kua whakaturea e tenei kawanatanga reipa i te tau 2006 kare i whaihua. Iti haere nga tangata e korero Maori ana i tenei wa. 
[ 
Greetings to you Mr Speaker. Not yet. Despite legislative strategies by previous Governments so that our language survives nothing beneficial has accrued. It is like the Labour Government’s policy enacted in 2006—nothing came out of it. As a consequence fewer people are speaking Maori today. 
]  
Te Ururoa Flavell 
: He aha nga rautaki e wanangahia e ia kia toitu te reo? 
[ 
What strategies is he considering to save the Maori language? 
] 
Hon Dr PITA SHARPLES 
: Naku i whakatu tetahi ropu te paepae motuhake kia arotakengia to tatou reo me te whakapaunga putea o te kawanatanga mo te oranga o to tatou reo ma ratou e whakarite purongo me pewhea ta ratau whakataunaki e whakaora ai i to tatou reo. 
[ 
I established a special panel to review our language and Government spending on the revitalisation of our language. It is to produce a report and make recommendations on how our language should be revitalised. 
] 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I know that there are rulings against members shifting seats in order to interject but to follow the cameras around in the way that Ms Parata is doing I think might be something that will bring the House into disrepute. 
Mr SPEAKER 
: There is no need to take this matter any further. And that was not a point of order. 
Te Ururoa Flavell 
: He aha nga whakaaro kua whangaia e nga iwi e nga hapu e nga whanau hoki ki a ia ki te tautoko i te whakapumautanga o te reo Maori? 
[ 
What feedback has he received from families subtribes and tribes that will assist the revitalisation of the Maori language? 
] 
Hon Dr PITA SHARPLES 
: Tuatahi ki mai nga iwi e hari koa ana ratou kua puta mai te purongo o te Taraipiunara nama WAI 262 mo to tatou reo na te mea ko tenei purongo e tautoko ana taku arotakengia o te reo. Tuarua kei te haere au ki roto i nga ropu whakaako i te reo Maori mai i Te Kohanga Reo i tera wiki a i tenei wiki korero au ki Te Aataarangi i tera atu wiki ki nga Kura Kaupapa Maori. Ko enei ahuatanga katoa he ahuatanga Maori kua whakaturia mo to tatou reo kia ora ai to tatou reo. Na reira kei te mohio au nga hiahia o ratou kei te pirangi ratou me kaha tatou ki te mahi kia pakari ai te ako i to tatou reo kei roto i Aotearoa nei. 
[ 
Firstly people said to me how overjoyed they were that the Waitangi Tribunal Report Wai 262 on the language has been published because it supports my call to review the language. Secondly I am out and about at the moment amongst organisations that teach the language. Last week I was with te kohanga reo this week I am talking to the Te Ataarangi people and a week back I was with the kura kaupapa Maori schools. All these institutions are Maori in nature and were established for our language so that it is not lost. And so I am totally aware of their aspirations. They want us to work hard so that the teaching of our language here in New Zealand is at its strongest. 
]  
Police—Digital Radio Network Roll-out 
12. 
Dr CAM CALDER (National) 
 to the  
Minister of Police 
: What reports has she received on the roll-out of the police’s new digital radio network? 
Hon JUDITH COLLINS (Minister of Police) 
: 
 I am very pleased to report that the Christchurch City area successfully cut over to the new digital radio network on 1 November. The cut-over of Christchurch City follows the first transfer from the ageing analog network that took place in the Wellington Police District last year. It means that two of our major cities now have secure radio networks that cannot be snooped on by criminals using scanners. Police are able to detain criminals who previously evaded arrest by obtaining an early warning of police attention. 
Dr Cam Calder 
: What other areas will be upgraded to the digital radio network as part of the roll-out? 
Hon JUDITH COLLINS 
: The digital radio network is scheduled to be rolled out in Auckland City next week followed by Counties-Manukau and Waitemata over the next few weeks. In the meantime North Canterbury and Selwyn will switch over later this month and mid-Canterbury and South Canterbury will do so in February next year. This will complete the roll-out of phase one of the programme and provide three of our major population centres with secure digital radio communication. It will ensure that police communications are more reliable officer safety is improved and the police are more effective in doing their job of keeping our community safe. 
Urgent Debates 
Resignation of Supreme Court Judge—Justice Wilson 
Mr SPEAKER 
: I have received a letter from the Hon David Parker seeking to debate the resignation of Justice Wilson. I have also received a letter from the Hon Trevor Mallard seeking to debate the decision of the Acting Attorney-General to approve a resignation package for former Justice Wilson. 
Justice Wilson’s resignation is a particular case of recent occurrence. It became effective from 5 November. The matter involves the administrative responsibility of the Government in respect of the court system and confidence in it. Given the significance of a decision to accept the resignation of a very senior judge in such circumstances I am persuaded that the matter does warrant the immediate attention of the House. 
However in debating the matter it is important that members have regard to the comity between Parliament and the courts. It is highly unconstitutional to reflect on or speak disrespectfully of the judiciary. The court system may be criticised but such criticism cannot extend to the court itself. Although there is no prohibition on referring to a judge members must not do so in a way that is critical or suggests a judge was unfair or unjust. The conduct of a former judge however is not so protected. 
The two applications are not identical but relate to the same matter. As the Hon David Parker lodged his application first I call upon the Hon David Parker to move that the House take note of a matter of urgent public importance. 
Hon DAVID PARKER (Labour) 
: 
 I move  
That the House take note of a matter of urgent public importance 
. The seriousness of this issue was highlighted by the Hon Judith Collins when she said in her press release that in respect of the acceptance of the resignation of Justice Wilson the payment of close to $900000 to him which comprised a $400000 golden handshake and $475000 in costs was unprecedented and was very relevant to the reputation of the judiciary. 
It is important that we put on record the history of this affair which is long protracted and quite complex. I want to start by recording the background. There was a decision of the Court of Appeal in the case of Saxmere and Radford against the Wool Board Disestablishment Co. where Justice Wilson participated in the hearing and delivered a judgment despite the fact that he had a business relationship with Rich Hill Ltd and a business relationship through that entity with counsel acting in that case. The case went against Saxmere and Radford and they were disappointed in the result. They then got wind of a background relationship between the judge and counsel appearing and expressed their concerns. 
The principle at stake here is not whether a judge is biased or acts in a biased way. For a start that can seldom be proved even if it is the case and I am not suggesting that there is proof of actual bias in this case. But justice has to be done by ensuring that parties to any dispute being settled by the judiciary feel they have been dealt with fairly. For that to be maintained it is clear from the authorities that judges should recuse themselves from a hearing where they have some sort of relationship either with a party to the litigation or with counsel in the litigation that would cause a fair-minded observer to think that they might not be impartial. 
It was against that background that Saxmere and Radford applied to the Supreme Court some time later when they got wind of these things for the decision of the Court of Appeal to be set aside. The Attorney-General decided to take part in that process. The Attorney-General’s submission to the Supreme Court was that there was nothing to worry about that the disclosures that had by then been made by Justice Wilson should be taken at face value that there was no need to look any further and that the case decision should stand. I am not too critical of the decision of the Attorney-General at that stage based on his information at that time. 
On the basis of that and the information that was then before the Supreme Court the Supreme Court rejected the application by Saxmere and Radford for the decision to be recalled. That was on 3 July 2009. As a consequence Saxmere and Radford had a costs award against them of $15000 plus disbursements which would have taken that amount higher. Soon thereafter Saxmere and Radford discovered that there was another provision in legislation governing the duty of judges not to have other business roles and on that basis they went back and inquired of the Supreme Court whether this decision could be recalled. They were not aware of other background information at that stage as to the depth of the business relationship between Justice Wilson Rich Hill Ltd and counsel in the case. 
Indeed I think it was a coincidence that during the intervening period before the case was eventually recalled a second time in the Supreme Court Justice Thomas—I think concerned about the original Supreme Court decision based on his own knowledge—off his own bat wrote a letter to the Chief Justice and the Attorney-General to say that there were other matters relating to Justice Wilson’s business relationships with counsel and a company that they shared ownership interest in that ought to have been disclosed to the court. That was in a letter dated 27 July 2009 sent to the Chief Justice and the Attorney-General. It was known to the Attorney-General and within the Supreme Court to at least the Chief Justice; I suspect—although I do not know—it may also have been discussed by the Chief Justice with other members of the Supreme Court. 
This is the mistake that was made then. No one told Radford or Saxmere. So Radford and Saxmere who as we now know had suffered the injustice were not told what Justice Thomas had told the Chief Justice and the Attorney-General. That was a bad mistake made by the system—a bad mistake—because the litigant who was adversely affected by the decision and who was complaining about the appearance of bias and the refusal of the judge to recuse himself from the case had the greatest interest in knowing. When this matter came back before the Supreme Court Saxmere and Radford still did not know what was in the letter from Justice Thomas to the Chief Justice. The Chief Justice had responded to Justice Thomas and the Attorney-General saying that the matter was in hand but it seems that if it was in hand it must have been through some separate process which I suggest was improper. It should have gone in a process sense through the Supreme Court and been openly shown to counsel acting for Saxmere and Radford so they could protect their clients’ interests. 
What else was happening during that period? Well I know from having spoken to one of the counsel for Saxmere and Radford that they were under pressure from the Wool Board Disestablishment Co. not to push this matter any further. They were having threats made against them that costs would be sought both against Saxmere and Radford and personally against counsel if they pushed this any further despite the fact that they were pursuing something that was their right to pursue and that we now know the Supreme Court agrees was a just complaint because eventually the Supreme Court decided that Justice Wilson should have recused himself and that accordingly the Court of Appeal decision could not stand and the matter was remitted to the Court of Appeal. 
The other thing that went wrong was that the Attorney-General having received the information from Justice Thomas and the information from the Chief Justice took part in a titular sense in respect of the second Supreme Court application for the judgment to be set aside but did not correct the information that lay on record from the first application for rehearing as part of which as I have already said the Attorney-General had said all was well. The Attorney-General did not correct the record in light of what he subsequently knew was the depth of the relationship between Justice Wilson and counsel. 
Where does this lead us? I do not have time to go into all of it but some things here need to be tidied up in the judicial branch of government. This has been a very difficult issue for the Supreme Court to deal with but it does have some expertise in this matter. How do I know? Because the Court of Appeal in the case  
Muir v Commissioner of Inland Revenue 
 has considered what the appropriate test is for judicial bias in New Zealand. That decision was delivered by one of the world’s experts on judicial recusal. Indeed Justice Hammond is the author of a book entitled  
Judicial Recusal: Principles Process and Problems 
 which came out within the last year. It is an internationally regarded text on this very issue. He wrote the judgment on behalf of the Court of Appeal in  
Muir v Commissioner of Inland Revenue 
. Who else sat on that case? Justice Wilson. So Justice Wilson knew the rules or should have known the rules. He should have known the rules. I find it very hard to believe that he did not know the rules but if he did not then he sure as heck should have known those rules. Justice Hammond has expertise in these issues. These issues need to be sorted out. 
Still at large in New Zealand is the issue of business relationships between judges and counsel. Judges may have friendships with counsel—that is obviously not a step too far—but if one goes further and has a business relationship is that too far? This is a very difficult issue for the judiciary to deal with in part because New Zealand is a small country and in part because we now know from things we have seen in the media that there are business relationships between other judges including the Chief Justice and senior counsel relating to horse partnerships. The courts have to ask themselves what a fair-minded third party would believe when the decision in their case goes against them and they discover that counsel for an opposing party had a relationship through a horse partnership with a Supreme Court judge. I have to say that if I were a litigant who lost I would be questioning whether I had been dealt with fairly. I think that as a reasonably fair-minded third party I would be asking that question. 
It is time for there to be some transparency in these rules. We have somewhat belatedly discovered that New Zealand does have some rules surrounding judicial conduct. They were promulgated in 2003 but were for some reason kept secret in New Zealand until last year. Indeed the decision of the Court of Appeal in  
Muir v Commissioner of Inland Revenue 
 did not make reference to the New Zealand guidelines; it referred instead to the Australian guidelines which happen to be very similar. It is strange that the New Zealand guidelines were not referred to in the Muir decision. So I call upon the justices at the most senior level in New Zealand to be reasonably transparent about where they get to as to what level of relationship between judges and counsel is appropriate or inappropriate when it involves business relationships. I suggest given we have this expert Justice Hammond in the Court of Appeal that they involve him. I think they also have to include all of the justices of the Supreme Court and perhaps they should also take some advice from the Law Commission. 
Some mistakes have been made with regard to the Hon Judith Collins. The judicial conduct complaint report by Sir David Gascoigne was imperfect. It did not deal with some of the complaints that had been made by Saxmere and it was too general in respect of the complaints it made of Justice Wilson in respect of those that it did consider. It was on that later ground that the courts and the judicial review proceedings brought by Justice Wilson said that the findings of the judicial conduct complaints process were deficient. That could have been fixed by the Hon Judith Collins because she was warned of that very issue by counsel for Saxmere and Radford after the Judicial Conduct Commissioner’s report came back. 
It is a very sad day when we have this taint on our judiciary—and it is a taint. We have to acknowledge that it is a taint. I think in the end we came to the right decision whereby the judgment was recalled. There is a question as to why it is taking so long for the Court of Appeal to deliver its judgment in respect of the rehearing of the Saxmere and Radford case against the Wool Board Disestablishment Co. I do hope the occasion of the delay is not the resignation of Justice Wilson. 
I also say it is inappropriate to pay golden handshakes and large amounts of costs on a solicitor-client basis. The costs of $475000 seem patently excessive to me and a $400000 golden handshake in respect of someone who it appears has erred is inappropriate. This is a very serious matter. There are issues as to whether the Attorney-General should have gone back to the Supreme Court and said he had more information and that Saxmere Radford and the court needed to know it officially rather than just through back-office routes. There is also the issue as to whether Judith Collins should have listened to the warning she received from counsel for Saxmere and Radford that the judicial complaint that was going to be forwarded was sufficiently particularised and did not cover some of the issues that have been raised by Radford and Saxmere. 
The other issues that need to be looked at are what happened to the Wool Board Disestablishment Co. money—there is still some murkiness around that—and also why the Solicitor-General the Attorney-General or some arm of Government took this case out personally on the person who was doing a public good and caused the dismissal of Sue Grey. 
Hon JUDITH COLLINS (Acting Attorney-General) 
: 
 Thank you for the opportunity to speak on this matter. The member who has just resumed his seat David Parker a former Attorney-General has raised some issues. I will not deal with all of them because some of them relate to issues that he has stated as fact but also he has asked some questions about issues relating to the former Justice Wilson and my actions. 
I took over this matter on 19 April this year when the Attorney-General the Hon Christopher Finlayson transferred it to me under section 7 of the Constitution Act. Later on I was granted a warrant to be the Acting Attorney-General in relation specifically to this matter. At that stage the Attorney-General the Hon Christopher Finlayson had already referred this matter to the Judicial Conduct Commissioner. The commissioner was already dealing with the matter. He presented a finding to me on 7 May recommending that I appoint a Judicial Conduct Panel under the Judicial Conduct Commissioner and Judicial Conduct Panel Act 2004 to further investigate the complaints against Justice Wilson. I accepted that recommendation. At that stage I had received many unsolicited submissions from many members of the senior Bar including Queen’s Counsel and Senior Counsel. I had also received submissions from people who felt that they had been badly disadvantaged by the judge staying on the court when their matter was dealt with and I took advice from the Solicitor-General. The decision I made was that the matter should proceed and that I should appoint a panel. 
This is the first time that this Act has been used and it is the first time that we have come up against certain issues in it. For instance when appointing the panel I was not able to appoint an overseas judge. I was not able to bring some semblance that we had people from overseas who were not part of the judiciary in New Zealand or part of the New Zealand senior Bar. That was an issue that I think should be considered in future. I was one of the people who spoke against getting rid of our right to appeal to the Privy Council and this was one of the reasons. The fact is that New Zealand has a very small senior Bar and a very small judiciary and great care needs to be taken in relation to any matters. I support what the member who has just resumed his seat has said about great care needing to be taken in relation to appointments and judges’ behaviour. 
A judicial review was brought by the former Justice Wilson a full bench of the High Court heard the review on 1 to 3 September and it gave its judgment on 28 September. The court noted that the commissioner carried out an appropriate evaluative exercise in relation to the complaints and found that there was a legal basis upon which aspects of the judge’s conduct might properly be the subject of inquiry by a panel. It also dismissed the judge’s allegations concerning breach of natural justice and the taking into account of material that was hearsay or obtained in breach of confidence and legal privilege. The court directed the commissioner to conduct any further preliminary examination of the complaints that he considered necessary to form an opinion under section 15(1) in relation to the judge’s conduct including the period between the Supreme Court decisions  
Saxmere Company Limited and others v Wool Board Disestablishment Company Limited 
 and  
Saxmere Company Ltd v Wool Board Disestablishment Company (No. 2) 
 and if recommending the appointment of a panel to the Acting Attorney-General to identify the matters concerning the judge’s alleged conduct that met the requirements of the Act. 
This must surely rank as one of the most worrying matters that the very new Supreme Court and the judiciary have had to deal with. It has been a very difficult time for the judiciary and also I believe for the senior Bar to have seen this matter progress. Some comment has been made about the settlement arrangements that I made on behalf of the people in relation to the former Justice Wilson. I am happy to take full responsibility for those decisions and I believe that they were the right decisions. I am happy to speak to the House about how I came to those decisions. 
On 4 October this year the judge’s counsel approached the Solicitor-General to discuss whether and on what terms the judge might tender his resignation. The terms offered by the former judge were extremely excessive and I would not countenance them at all. 
Hon Pete Hodgson 
: Would you reveal them? 
Hon JUDITH COLLINS 
: I am not prepared to reveal them at this stage given that they were made in confidence. I would need to seek advice on that. However I can say that they were absolutely excessive and I would not take them further. After discussions and there were many discussions—not with me and the former judge because I did not meet the former judge and I do not believe I have ever met him in my life; if I did it obviously did not leave an impression—he tendered his resignation on 21 October with effect from 5 p.m. on 5 November on the following terms: that he receive payment of his existing entitlements and I am sure nobody would disagree with that; and that he receive payment of 1 year’s salary which is taxable being $410000 gross from 5 November. I bore in mind when I agreed to that that this matter could drag on for another 2 years or more. I was advised that there was something like six different appeal opportunities along the way. 
Despite the fact that there were all sorts of suggestions at various times that the judge might resign of his own accord there seemed very little reality that that would ever happen unless the matter was settled. It was not my intention to bring about the resignation of a judge. I think it is an extraordinarily difficult thing to ever have to oversee. However the judge made this offer himself. It was not asked of him. We also had to agree to pay his solicitor-client costs and like the speaker who has resumed his seat I thought they were very high. I was however informed that they were reasonable in the meaning of the word and in the meaning of what had gone on and the matter of proceedings. I was also fully aware that it is a constitutional principle that the Crown should meet at least part of the reasonable costs of counsel for a judge in complaints proceedings. I refer to section 27 of the Judicial Conduct Commissioner and Judicial Conduct Panel Act 2004 which made it very clear that it was expected that the judge’s expenses would be paid. 
Of course the Crown also has to meet its own costs in this matter. The costs for judicial proceedings of this nature if they had been allowed to continue because I did not feel able to accept the judge’s offer to resign could have been far more severe. The costs in my view looked very much as though they would continue into stratospheric levels. I was not prepared to have that happen if there was an opportunity to cut the losses for such for the Crown and the taxpayer. I also noted that all the way through these proceedings the judge would be entitled to be paid his full salary even though he was in effect on garden leave and I did not think that that was a useful spend of the taxpayer’s money either. 
This has been an extraordinarily difficult time as I have said. I however believe that I have made the right decision and that this matter had to be brought to an end. We have a very new Supreme Court. We have a court that is still working very hard and is trying very very solidly to build its reputation. It did not need this matter continuing. Comment has been made—I think not today but certainly in the media—about whether we will know what actually happened and whether we will find an end to this and to the effect that if the Judicial Conduct Commissioner had been allowed to continue with his second report it would show it. Actually as soon as the judge resigned then that report had to stop and the investigation had to stop. There was no guarantee at all that that would come out. Yes we could have continued on. Yes I could have said that we were not going to pay the judge anything and that we were not going to settle the matter. But I believe that that would have been at a far greater cost. 
There is a matter that I am aware of which the next speaker Dr Kennedy Graham is going to raise and that is the issue of pecuniary interests for judges. I think it is quite important to note that the former judge was appointed straight to the Court of Appeal by the previous Attorney-General the Hon Dr Michael Cullen. That was in 2007 and that was without the more traditional apprenticeship of being on the High Court. Ten months later he was elevated to the Supreme Court. I do not know whether that had anything to do with the matters that then proceeded but I do think that it is very difficult sometimes for people who have come in from very high positions in say the legal profession to suddenly know that every matter that they do will be scrutinised. Many people come to Parliament from very high positions and suddenly find that all their actions will be scrutinised and the subject of debate. 
Hon David Parker 
: But what if you’ve sat on  
Muir v the Commissioner of Inland Revenue 
? 
Hon JUDITH COLLINS 
: Well that is a point raised. But I would have to say that that was very concerning and it is a point. 
Although this matter has been very unfortunate I believe that there are some positives to be found in its entrails. It has shown that judges of even the highest court in New Zealand are open to scrutiny. It shows that they can be held to account and therefore find their continued hold on office untenable; I believe that that is what has happened here. I took absolutely no pleasure whatsoever in receiving Justice Wilson’s resignation. I thought it was an extraordinarily sad day that we had got to that situation and I do not think that anybody in this House would find it a very edifying situation. As I said I could have kept the matter going but I chose not to. I believe that that was the right decision based on the cost to the public and the Supreme Court which is very new and needs to have a lot more years under it before it sees anything like this again. Hopefully it never will. 
I know that there are people who have felt that this matter has hurt their feelings about and confidence in the judiciary of New Zealand. They should not—because the judiciary in New Zealand has felt this more strongly than anybody else. 
In essence this matter is something that nobody would wish on the judiciary of New Zealand again. I would hope that the matter of pecuniary interests will be addressed in some way shape or form. I know it is a matter that the judges feel very keenly and it is a matter that nobody ever wants to see repeated. 
Dr KENNEDY GRAHAM (Green) 
: 
 The Green Party notes with considerable sadness the resignation of Justice Bill Wilson. Justice Wilson had built up a brilliant reputation in the course of his legal career. It is a personal tragedy that an unexpected event of this nature should put to such an abrupt end the work of such a talented individual. We wish him well on a personal level. We trust that Bill Wilson still has a major contribution to make to New Zealand. 
The Green Party has no doubt that it is proper for this Parliament to debate standards and conduct affecting the judiciary just as it is in order for the courts to scrutinise the legality of the actions of members of Parliament and the executive as my colleague the Hon David Parker pointed out in his request. What we are doing here is debating the conduct of the executive and the principles by which the judiciary functions in our society. The Acting Attorney-General herself has described this case as “an unprecedented situation in New Zealand’s legal history.” I advance no judgment on the conduct of the executive at this stage—the Attorney-General or the Acting Attorney-General who I gather took over the matter in mid-April. I prefer to focus on the broader implications for the judiciary of this particular episode. That is why it is critically important for this House to debate matters of constitutional significance such as this. That said we need to be circumspect in what we say and we should maintain the due deference that this House pays to the judiciary. 
The circumstances that led to Mr Wilson’s resignation are complex. They do not warrant detailed investigation here in this debate. Suffice it to say that they expose a number of the characteristics of the judiciary in a small country such as New Zealand—and perhaps even in countries that are not as small as New Zealand—and the rather intimate circle of acquaintances that go to make up the higher echelons of the judiciary. In such circumstances there exists an even greater than usual responsibility on the part of all the individuals involved to ensure that the integrity of the system is not in any way compromised. That is achieved through a strict respect for the principles of openness and transparency. 
It is a time-honoured principle of Western democracy that public servants of every kind must be beyond reproach. Public confidence in the standards of behaviour and conduct observed by leading servants of the people is a cornerstone of social harmony and political stability. The threshold of confidence should ideally be enshrined in constitutional and legislative form. Little scope should be available for individual discretion or subjective perception. The principle of transparency in this respect pertains in particular to issues of financial interest. Nothing undermines public confidence in a nation’s institutions and procedures more than suspicion that a public servant may have or especially proof that one has suffered a conflict of interest arising from a financial interest in a particular case in which he or she was professionally involved. 
In New Zealand members of the executive have been required under statute since 1990 to provide statements of pecuniary interests pertaining to their personal financial affairs. Such statements are submitted to the Speaker and these are made available for public consumption. In 2006 this practice was extended to all members of Parliament. Since then members of Parliament have been required to submit annual statements of pecuniary interests to a registrar who makes the information publicly available. The legislature’s version of pecuniary interest statements was modelled along the lines of that of the executive. In both cases a careful balance has been struck between transparent public knowledge of an individual’s financial affairs and the preservation of personal privacy. The correct balance in this respect appears to have been achieved over the years. The public interest in such annual statements is significant without appearing prurient and few complaints have been voiced by those on whom the obligations are placed such as ourselves. There seems to be a general acceptance that such exercises are in the public interest and are neither unduly onerous nor revealing. 
No such practice however has been observed in the case of the judiciary. This recent development within New Zealand’s judicial conduct processes suggests to me that the application of the same practice observed by the other two branches of Government might assist in the protection of the judiciary in the future. Being obliged under law to declare pecuniary interests that might be relevant to the conduct of a future case in which one is involved would relieve a judge from the repetitive weight of responsibility of having to make discretionary judgments about his or her personal affairs as each case arises. A judge having declared his or her pecuniary interests once in a generic manner independent of any particular trial could freely proceed in the knowledge that if he or she was appointed to adjudicate public confidence in his or her participation would have already been met. Yet care has to be exercised to ensure that the final decision is left to the individual judge as to whether to accept a case. There should be no intention of external interference into the self-regulation of the judiciary by the judiciary. 
This is the reasoning behind the draft legislation that I developed some months ago as a member’s bill which has been in the ballot since August. The Register of Pecuniary Interests of Judges Bill has as its purpose the promotion of the due administration of justice. It requires judges to make returns of pecuniary interests to provide greater transparency within the judicial system and to avoid any conflict of interest in the judicial role. The bill would require returns of pecuniary interests from judges and would establish a register of such returns. It would impose a duty on all judges to make an initial return immediately upon being first appointed and on an annual basis thereafter. Information pertaining to relationship property settlements and debts owed to certain family members would not need to be disclosed nor would short-term debts for the supply of goods and services. The actual value amount or extent of any relevant matter under the bill would not be required to be disclosed. 
My bill is not designed to imply any right of the legislature to intervene in the affairs of the judiciary. Nothing in the bill would be interpreted as compromising the constitutional principle of judicial independence guaranteed by the Constitution Act 1986 and respected by constitutional convention. There is a clause to that effect in my bill. The intention of my bill is simply to facilitate the promotion of the due administration of justice by requiring a similar financial return by judges to that already required by both the legislature and the executive of this country. If this sad occurrence of Bill Wilson’s resignation results in such a development something positive will have been gained from this whole episode. 
HILARY CALVERT (ACT) 
: 
 I agree with the previous speakers that this has been a very worrying and difficult position for the Government and in fact all of us to find ourselves in. When the judiciary is challenged and does not appear to be meeting the standards we expect then all of us have failed to some extent. Serious constitutional issues are arising and although we would like to turn back the clock we cannot do that. We can do our best to right any wrongs that were done if they were ever done. 
In this case a judge has been found wanting. The judge has been dealt with in two manners. One is that he is no longer a sitting judge. The second is that the judge has been made some payments. They arose really as a matter of practicality; some of them were due to him and some of them were made probably because they were the most cost-effective way of finishing what is a sad and sorry affair. I think we all agree that there has been a suggestion of the possibility of bias in this case. That is what started our position. 
There are a variety of parties to this issue. One of them is the Government and one of them is the judiciary—and in fact Justice Wilson. But also there is the person who had the issue whom the wrong thing happened to. In my opinion we have done the best we could to deal with the problem that was before us and stop it happening again. We have not done the other thing to the best of my knowledge—maybe the Hon Mr Parker knows more about this matter than me. We have dealt with the person who may have been part of the problem but we have left the person who was wronged with the wrong still done. 
Hon David Parker 
: It’s been reheard by the Court of Appeal but they are awaiting judgment. 
HILARY CALVERT 
: Yes. So to me the important thing is to finish this sorry affair by making sure that the people who were wronged are put back in the best position they can be in the most appropriate way we can to give them their recourse. We should deal with people in the usual manner which in this case means making sure that financially—as we have done with the judge; we have done the appropriate thing financially—we deal with the victims in at least as sympathetic appropriate and effective a way as we have dealt with the judge. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 The Maori Party stands to take a call in this urgent debate around the appropriate call of judicial bias in New Zealand. There are many issues embedded in the situation around Justice Bill Wilson which cut to the thrust of issues around justice and injustice—around the proper application of the law. The injustice we are dealing with today is more along the lines of the perception of injustice: the question of perceived judicial bias. I have to agree with other members that there are certainly issues around the supposed golden handshake of a year’s salary of $410000 as well as solicitor-client costs which are calculated at $475000. Of course on top of that there are the additional legal costs that come with the work of the Judicial Conduct Commissioner and the Judicial Conduct Act. It is not appropriate for me or for the Maori Party to make comments about this situation related to the individual—Justice Wilson. These matters have been dealt with appropriately by the Acting Attorney-General Judith Collins and indeed before her by the Judicial Conduct Commissioner Dr David Gascoigne. 
Justice Wilson has been through the process that was outlined by previous speakers. He has taken a decision to tender his resignation and the matter has therefore been brought to an effective resolution. But I want to comment on two issues that have stood out in the way in which this situation has been dealt with. First I commend Minister Collins for her brave decision to call on a judicial conduct panel to investigate the longstanding issues associated with Justice Wilson’s conduct in the Saxmere wool case. As I understand it in the opinion of Auckland University law professor Bill Hodge this was the first time such a panel had been appointed. The Minister determined that a panel was necessary to follow up on an investigation into the situation following inquiries about complaints against Justice Wilson. 
The second bold determination was to work towards the resignation of the judge in the best interests of New Zealand’s legal standing and legal history. I heard the Minister say earlier that that was an independent decision from the judge but I commend her for taking a very strong line in the situation and as such preventing even more excessive costs to be spent if the case had proceeded even further. The Minister has suggested that carrying on with the case just for the sake of taking the case to court would have caused incalculable damage to confidence in the judiciary. So I commend her for a solid decision in bringing this matter to a speedy resolution and to this end helping to both safeguard the judicial reputation and save inordinate expenses for the taxpayer. 
We believe that in this case justice has not only been done but been seen to be done. To this end we support the decision taken by Minister Collins for the long-term interest. We cannot have a judiciary in which there are any questions of bias or perceived conflict of interest operating. Indeed it is one of the most significant issues impacting upon the experience of Maori in the justice system. There is another debate to be had that might bring to the House the question that bias operates within the criminal justice system such that any suspected or actual offending by Maori has harsher consequences for those Maori resulting in a gross overrepresentation within that system but that is not a debate to be had today. For the purposes of this debate we support the actions of the Acting Attorney-General and the Government in relation to Justice Wilson. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I will make a few points but I start off by saying that this situation is very sad. It is sad for former Justice Wilson. I am not a lawyer—although learned colleagues eminent lawyers are seated to my left and my right—but I know that Justice Wilson had a very good mind and a good reputation as a jurist. So it is sad to lose him. There is also some sadness in my view for the position that the Saxmere Company has been put in as a result of the lack of disclosure in this matter not only on the part of Mr Wilson originally but also subsequently on the part of the Chief Justice and the Attorney-General. 
In this debate I do agree with my colleague David Parker about the inappropriateness of making a payout but I disagree with him in that he focused in particular on the amount of money. My view is that the judiciary and the court system in New Zealand would have been better served by letting this matter run its course because at the moment there is a reflection on the Chief Justice and on the Attorney-General in New Zealand for their involvement. In my opinion that is not a good position to be in and my view therefore is that if a process had been followed things would have been clearer. 
I will make two or three points. I preface them by saying that in the United Kingdom the Attorney-General is not a member of Cabinet; the Attorney-General is independent. In New Zealand in my time in Parliament we have had an Attorney-General who was not a member of Cabinet. Having some sort of independence in that way I think would be useful. I notice that my learned colleague on my left is not very keen on that approach; it might be that he covets both jobs! 
I make the point that on 25 February 2009 the Attorney-General filed a written submission in which he said: “As Justice Wilson’s statement must be authoritative on the matter the Crown adopts his description of those interests.” Chris Finlayson aligned himself with the judge and said that it was a correct position. Subsequently on receipt of correspondence from the Rt Hon Sir Edmund Thomas QC Chris Finlayson became aware of the fact that Justice Wilson’s description of his interests was not accurate but he did not do what was appropriate and file a corrective statement in the court indicating that he was aware of that fact. 
Neither was there a formal approach from the Chief Justice. It is now a matter of public record that the Chief Justice was written to by Sir Edmund and she replied to him that the matter was in hand. We do not know how the matter was in hand or what she did. The problem I have is that a party to the proceedings—Saxmere—was totally excluded from the knowledge that apparently through an informal channel the Chief Justice was putting before justices. She did not do it in a proper manner such that the parties to the case were aware of it. 
She should have done her job properly. The Attorney-General should have done his job properly—in fact he should never have filed the first submission. As he made clear to Mr Colin King and to the Prime Minister he was either a close friend or a friend of Mr Wilson’s. The Attorney-General should not have been involved; he should have asked a colleague to make those submissions. This is not a good day it is not a good period for the judiciary and I hope that the matters can be clarified as soon as possible. 
PAUL QUINN (National) 
: 
 I rise to support the Acting Attorney-General in the decision that she made to settle this matter with former Justice Wilson because it was in the interests of all parties that this matter be brought to an expeditious close. 
To that extent I pick up on a comment that the mover of the debate the Hon David Parker alluded to. He said that if this matter showed one thing quite publicly it was the closeness the intertwining of senior counsel and the judiciary in New Zealand. This was certainly one of the reasons why I like the Acting Attorney-General was not in favour of getting rid of the Privy Council as the last court of appeal for this country. This case has clearly demonstrated the simple fact that all senior counsel in this country—certainly all of the good ones—and most of the judges are on friendly terms. 
I also like Kennedy Graham record my sadness about what this has done to Bill Wilson’s career. I know Bill; he is not a friend but none the less I can share and enjoy an ale with him from time to time. It is sad because as Kennedy Graham said Bill Wilson has an outstanding record before the Bar. I guess that is one of the reasons the previous Attorney-General elevated him first straight to the Court of Appeal and then 10 months later to the Supreme Court. 
The sadness in all of this is that for Bill Wilson notwithstanding—as the previous speaker Trevor Mallard alluded to—his outstanding mind all of his dealings were done in a traditional way where a man’s word was his bond if you will. In this instance as I understand many of the facts this has led to his downfall. He relied on his traditions in the fact that he had previously in an informal sense made it known to the parties that he was in a business relationship with Galbraith but had not formalised it in the court records. So it is sad and the previous speaker alluded to other incidental matters that other people knew about these facts. It is sad. 
I also support the Acting Attorney-General in the fact that she reached a settlement. Members of the Opposition have questioned that settlement but it pales into insignificance compared with some of the settlements that occurred during their time in Government—and I start with John Hawkesby’s $6 million settlement with Television New Zealand and Peter Doone’s settlement when he was put on gardening leave and then paid off. How can members on that side of the House criticise an excellent settlement by the Acting Attorney-General? In terms of opportunity cost it saved the country hundreds of thousands of dollars—of that there is no question. I support the Minister in all of those actions. Thank you. 
CHARLES CHAUVEL (Labour) 
: 
 I want to make four points in my contribution to this debate. The first one is by way of tribute to Mr Bill Wilson QC because New Zealand has been extremely fortunate to have had his service first in the Court of Appeal and then in the Supreme Court. His service in those capacities was all too short. Bill Wilson as has been recorded rightly by some speakers in this debate already was an outstanding member of the commercial Bar and he was a highly regarded company director—including I recall on the board of Air New Zealand. Prior to that he was an extremely well-thought-of partner and a senior partner in one of New Zealand’s most illustrious law firms Bell Gully a firm that is rightly known to have contributed some of the country’s leading lawyers to the bench to the Bar and even to this place—I speak of course of the historical precedent of Dillon Bell a former Attorney-General and others who have come from that firm and become members of Parliament. 
It is apparent from any reading of any of Bill Wilson’s judgments that he brought a degree of commercial acumen to the senior reaches of the New Zealand judiciary that must have been welcomed by any objective observer of these matters. But more than his commercial acumen—because there are many people who will attest to that—I think it is appropriate to also record that Bill Wilson brought to the task of appellate judging a liberal and humane approach that we certainly want to see more of in the senior reaches of judicial decision-making. 
The second thing I want to say on the record because an error has been made already as far as at least one speech that we have heard in the House is concerned is that Bill Wilson has been found to have committed no wrongdoing in his time on the bench. The complaints against him were found to be lacking in substance by the investigator appointed by the Judicial Conduct Commissioner; and on judicial review despite the carefully worded speech we heard from the Acting Attorney-General the full court of the High Court granted Bill Wilson’s judicial review application. It sent the matter back to the Judicial Conduct Commissioner and directed the commissioner to reconsider his decision to recommend that a judicial panel should be convened to investigate Mr Wilson’s conduct. 
So although discussion on this matter has proceeded in public on the basis that Mr Wilson’s resignation is some sort of admission of guilt it is not; and it is important in my view that this should be reflected in the record on this debate. 
I said I would make four brief contributions. The third point I want to make is that having pointed out that Mr Wilson was found guilty of no wrongdoing I am not standing in this House today to pretend that it might not have been wise to give full disclosure of the matters complained about. But that is a reflection more of the mores of the times more of the fact that we are in a transitional phase from the way things used to be done for want of putting it in a better or more elegant fashion at the bench and the Bar to a more open more divisive more litigious society that demands and requires transparency particularly now that we have repatriated the right of appeal from a foreign court and decided that those rights should be exercised here in Wellington—a decision I wholeheartedly support. 
Transparency is important; no one should deny that. What would be helpful for this House to now do is to take up the exhortation that we heard from Kennedy Graham and from other speakers in this debate and think about what can be learnt from the circumstances the sad and tragic circumstances that we currently find ourselves in. What can be done realistically to enhance transparency in terms of judicial appointments and judicial tenure and of the interests of the judges so that public confidence in the judiciary is maintained and enhanced but in a way that does not drive away the brightest and the best commercial and other litigators at the Bar in universities and other places from where we want to draw appointees to the Court of Appeal and to the Supreme Court—to our highest courts—because there is an excessive level of transparency or scrutiny imposed on them such that it is discouraging to want to take on high judicial office? We have an excellent legal profession in this country and the last thing we should do is make judicial office unappealing to people who are eminently qualified for it. 
Fourthly and finally having sat here and heard the contribution made to the debate by the Acting Attorney-General Judith Collins I say that I think we have lost an opportunity here to protect the reputation of our new Supreme Court and to make it clear to the public that there is every reason that they should continue to have the utmost confidence and respect in and for the New Zealand judiciary its independence and its lack of corruption. We are so lucky to live in a country where we do not have to worry about graft in these institutions at these levels because we do not. Here there is an allegation of the appearance of conflict. As I say it has never been made out; it is an issue of appearance. That is the worst that can be said about the allegations that are being dealt with here. We are lucky that this is as bad as it gets in New Zealand. This is something the Acting Attorney-General should be celebrating. It should be made very clear to the public that there is every reason to continue to maintain the utmost confidence in the judges of New Zealand. 
Instead the Acting Attorney-General failed to protect publicly the independence and the integrity of the judiciary. She maintained that she did not know why Mr Wilson resigned when it is obvious that she has had the facts all along. After his resignation she welcomed it and said: “It was the best thing for the judiciary.” Well that will have a chilling effect on judges and judicial candidates for office who think they are entitled as they are under our constitution to the full protection from the Attorney-General of their independence and their integrity when they are accused but not yet found guilty of any wrongdoing. 
I conclude by saying that perhaps Mr Wilson would have been better advised to disclose his business relationship with Mr Galbraith; he did not. Perhaps there should have been some consequence but should that consequence have been the forfeiture of his office? Should it have been at the price of being hounded from that office in a hail of bad publicity with no real public opportunity to put his side of the case? Should it have been at the price to New Zealand of the loss of an extremely able judge 6 years before his retirement was due by statute? I think that puts into context the opportunity cost point that was rightly made by Mr Quinn earlier. 
This matter has been poorly handled. It has left the judiciary and the new Supreme Court damaged. It has left Mr Wilson without a career and it has made becoming a judge in New Zealand noticeably less attractive to the many excellent barristers we have in practice here. If we do nothing else as a result of this fiasco we need to learn the lessons and put some remedies in place so that we do not find ourselves in this situation again. 
CHESTER BORROWS (National—Whanganui) 
: 
 It gives me some heart to note the tenor of the debate in respect of the issue currently before the House. It seems to be that the damage to public confidence has been because of the perception of a conflict of interest rather than because any actual corruption has been found. I agree with the previous speaker Charles Chauvel who said we must do all that we can to protect confidence in our court system. 
I want to recall to the House a paragraph from an article in the  
Press 
 that speaks to this issue. It states: “Some erosion of confidence must have already occurred because the primary facts of Wilson’s behaviour—his failure to recognise immediately the extent of his personal and financial connections with a lawyer arguing a case in his court room and to remove himself from the case—raise serious doubts about his judgment. So do his failure to realise the grievousness of his mistake and fully account for his relationship with the lawyer. An offer to resign should have followed.” 
Of course we now know that Justice Wilson’s resignation did follow. It is a shame that it has occurred because by reputation we know that Justice Wilson did a lot of work pro bono for interests groups such as Maori to promote the interests of various iwi. We need to respect him for the fact that he did that as well as for the public appreciation of what he brought to the table in terms of his experience his candour and the gravitas that he brought to his role. 
It is important to make just a couple of points too in respect of speeches that have been made. One is to acknowledge the openness of the Acting Attorney-General the Hon Judith Collins in respect of what occurred and what finally occurred by way of the settlement. She did not seek to hide that and that has been a matter of public record. It is important for the public who are watching on to note that openness and to note what the expenses were to the Crown on behalf of the taxpayer. The other point that needs to be made is in respect of comments made by the Hon Trevor Mallard I think who said submissions should not have been filed by the Attorney-General and the Attorney-General should have had another colleague file them for him. For the sake of clarification it is important to point out that the submissions that were made were prepared by the Solicitor-General. They stated the Crown’s position on this matter and they were filed only nominally by the Attorney-General as a party to the proceedings. 
It is important to note that in these legal processes the law is an unusual sort of environment for lay people to get their heads around. It appears that when there is a conflict of interest or it appears that there may be a conflict of interest lay people are very quick to make leaps in their decision making as to whether there is an element of corruption. In other words they are prepared to say that if something is smelly there is definitely something wrong. In fact the different arms of Government under the separation of power are loath to point the finger at one another because it is important that confidence remains for the people who have to live under the law: under the adjudication of one branch of the law and under the laws created and enforced by the other two branches of the law. 
I see no reason to go much further in this speech other than to say this is a sad day for New Zealand because of the loss of an esteemed member of the judiciary. At the same time I recognise the need for that to happen in order to preserve the perception of openness. Maintaining integrity within our judicial system involves making sacrifices for the sake of the greater good. The public perception that our legal system is above reproach is something that we must jealously guard and work strenuously as a House to protect in the future for the good of all New Zealanders. Thank you. 
The debate having concluded the motion lapsed. 
Rugby World Cup 2011 (Empowering) Bill 
In Committee 
Debate resumed from 27 October. 
Part 5 Rugby World Cup liquor licences ( 
continued 
)  
Hon DAVID PARKER (Labour) 
:  
Part 5 of the Rugby World Cup 2011 (Empowering) Bill deals with Rugby World Cup liquor licences. I will ask the Minister in the chair the Hon Dr Wayne Mapp to address a couple of issues. 
The first point I make is to agree that there was a need to make some changes to liquor licence laws. One reason was the decision from some branch of the liquor licensing authorities stating that where an event is to be held outside of the normal terms and conditions of liquor licences—a situation that is the subject of a special licence application at the moment—and where the grounds for that application are to replay or play contemporaneously in another venue televised coverage of a match that is on elsewhere it is not within the jurisdiction of the authority to grant the application. That may well be a fair rule normally but the view of the Government—and the Opposition agrees—is that in respect of the Rugby World Cup when there will be a lot of people in town who for some matches will not be able to get a ticket and who will want to go along and watch the game somewhere else those people should be able to do that on licensed premises. Those licensed premises should be able to get a variation of their licence to enable that to happen and this bill enables it to happen. 
The other question I would like the Minister to answer is whether he is willing to express an opinion based on the experiences that we had at Eden Park over the weekend about whether we need to take a bit of care here. People getting too tanked up booing during the Australian national anthem and throwing bottles on to Eden Park is not a good look. I am sure that none of us in this Chamber want to see that repeated in the Rugby World Cup. Given that the authorities said that the rugby league match on the weekend was a bit of a dress rehearsal for what will happen at the Rugby World Cup there might be a need to look at some of those licensing conditions as they apply to Eden Park. 
Personally I have always thought that it is a nonsense that in New Zealand we can buy cans and bottles at such venues. They cannot in America. Why not? Because personal injury cases were taken in America and won when the relevant counsel took out of a paper bag the simple solution of a paper or plastic cup which of course avoids injury to people. It is pretty hard to throw a paper cup very far—the liquid falls out—compared with a full bottle which can hurt someone. I hope that consideration is given to moving to that sort of a regime in New Zealand where we consider at least—and I am not sure what the right answer is—whether under liquor licensing conditions we can protect the public from injury by making sure that liquor is served in a vessel that cannot be thrown. It is a pretty simple advance that seems to have been made in other Western democracies including the United States and I hope that through this legislation we can achieve something similar. 
I ask the Minister in the chair whether the provisions of Part 5 on Rugby World Cup liquor licences can be used to impose reasonable conditions that are better for members of the public. It would also mean that someone cannot walk back with a dozen secreted around different parts of his or her body because it is pretty hard to carry a dozen open vessels of beer. I ask that the Minister in the chair address that issue which arose out of the experience that we had in Eden Park over the weekend. 
KEITH LOCKE (Green) 
:  
Following on from David Parker’s speech I think the question of liquor licences and the containers used for liquor is very important. I was present at the rugby league test between New Zealand and Australia on Saturday night so I had a very good on-the-spot experience of what went on. Thankfully I bought a $5 programme prior to the event which I could put over my head to protect myself from any falling missiles. 
I read that for the Rugby World Cup itself Heineken will be one of the official sponsors and Heineken is demanding that there be cans of beer for sale no doubt because it wants to advertise its products. What is happening is that we are being driven by multinational sponsors to sell the beer in cans. The sponsors demand that in return for their sponsorship and the millions of dollars or whatever the amount may be that they are paying for it even though the cans will potentially injure people at those games. We are losing control over the situation. It is a bit like the old  
Hobbit 
 furore when we were driven by Warner Bros; now we are being driven by Heineken. The cans will no doubt be even more dangerous than the plastic bottles were last Saturday night particularly if the cans still have a bit of beer left in them. 
That is one of the problems with the Rugby World Cup 2011 (Empowering) Bill as a whole and with this particular part. The power given to the Minister for the Rugby World Cup is a bit like the power given to John Key to negotiate with Warner Bros. The decision will come out on the side of the stronger party which will be the multinational company backed up by the International Rugby Board and all of its official sponsors. We will have to have cans even if there is a risk of injury. I agree totally with what David Parker said when he asked why we cannot serve the liquor in paper cups or whatever. We will never overcome completely the problem of drunkenness. When I was walking to the game on Saturday night every bar in the Mount Eden area was packed to the gunnels with people tanking themselves up prior to the game. We cannot really control the fact that there will be drunken people at the games so we will have to handle the situation in the best way that we can. 
The other thing that David Parker mentioned was the booing that went on. I put the prime responsibility for that—and I have been along to watch Warriors games at Mount Smart Stadium—on the organisers of those contests. The thing I notice at rugby league games as compared with some other codes is the great partisanship on the part of the person on the loudspeaker the MC who rarks people up to support the Warriors and in effect encourages people to boo the team playing the Warriors. That behaviour carries over to the tests. Responsibility is not on “rugby league louts”; the responsibility is on the people who organise the loudspeaker system at Mount Smart Stadium. 
Really what happened on Saturday night was more of an issue of crowd behaviour. The first Mexican wave went round and a few people threw plastic bottles in the air. Then the more that it went round the more people understood that that was the thing to do and threw things up in the air wrongly failing to take into account the danger to people. The situation should not be seen completely out of proportion. Crowd behaviour can be controlled with proper control of the loudspeaker system and that was lacking in the first two or three Mexican waves last Saturday night as well. If the people who were running the show had intervened on the loudspeaker to tell people to calm down and that Mexican waves were all right but that people should not throw their stuff into the air that could have controlled the crowd’s behaviour as it was controlled at a later point by interventions on the loudspeakers. 
It is important not to give the powers available under this legislation to Ministers and particularly not to give them to the Minister concerned because the Rugby World Cup will be driven by multinational sponsors at the expense of the safety of the people who are participating. Thanks. 
JACQUI DEAN (National—Waitaki) 
:  
I rise to speak to Part 5 of the Rugby World Cup 2011 (Empowering) Bill. I note that when the international media covers images of football fans rioting in the streets of a city somewhere in the UK the international community takes a very strong view of it. It certainly does not reflect well on that particular country. Although it might be a very isolated event in France and other parts of Europe those things happen and those of us who are watching from New Zealand think it is a pretty bad thing to happen. We wonder whether we really want to go there. We do not want that sort of occurrence happening in New Zealand. 
I think this bill addresses the concerns that I have expressed and that have been expressed by other members in the Chamber. I do not know whether I necessarily agree with the contribution of the previous speaker Keith Locke; I am not sure that the commentator at the park has as much influence as that in inflaming or controlling a crowd. But certainly the Rugby World Cup liquor licensing regime aims to do that. It is certainly not the only aspect that will maintain good crowd-control and I acknowledge that the person on the end of the loudspeaker might have a slight effect. 
I think we need to take note of what happened at Eden Park in the rugby league game last week and do whatever it takes to make sure that kind of behaviour is not repeated at the Rugby World Cup next year and that we do not have those images broadcast around the globe on which people may base their decisions on whether New Zealand is a good place to come to. Obviously one of the good side effects of the Rugby World Cup will be the promotion of New Zealand as a desirable destination. 
I will address the issues of liquor licensing. This bill does not change the criteria of liquor licensing; in other words it certainly does not make it any easier to get a liquor licence just because we have a large sporting event and want to provide some hospitality to New Zealanders and visitors. What it does is speed up the process for getting liquor licences and ensures that the significant volume of applications that we expect will be processed in time. 
I do not think it would be true to say that this bill goes soft on liquor licences. In fact the bill provides for some additional requirements which traverse things like providing food and having free drinking water available. It also gives police more powers to remove licences if conditions are breached. If members turn to clause 59 they will see that the suspension of a Sale of Liquor Act licence will continue for the duration of the Rugby World Cup. So if a Rugby World Cup liquor licence has been suspended for non-compliance the operator cannot then turn to the licence provisions under the Sale of Liquor Act and continue to trade. I would have thought that was a strong incentive to maintain good host responsibility and compliance. 
It is disappointing that we have had events at Eden Park such as those on Saturday night. We simply cannot tolerate— 
Paul Quinn 
: Rugby league. 
JACQUI DEAN 
: Whatever—it was a game of sport. We simply cannot tolerate that kind of behaviour. The stakes are too high for us in New Zealand. Next year’s Rugby World Cup needs to be different. The management needs to be stricter and there needs to be more proactive alcohol management planning. I note that in Wellington when people go to the Sevens as I have on several occasions the rules on— 
Grant Robertson 
: How did you dress? 
JACQUI DEAN 
: I was stunning. In fact I will give you a rundown. I was a potted plant one year and another year—well never mind. I particularly enjoyed the occasion but was not able to buy bottles of liquor. The liquor licensing requirements are already tight for some events in New Zealand. Many many people flock to Wellington for the whole Sevens weekend and the event is run successfully. I hope that kind of liquor licensing regime will prevail throughout New Zealand for the Rugby World Cup. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I would like to pick up from where the previous speaker Jacqui Dean left off on the Rugby World Cup 2011 (Empowering) Bill. She brought up the Rugby Sevens— 
Jacqui Dean 
: The potted plant was it? 
IAIN LEES-GALLOWAY 
: —and potted plants as well. 
Craig Foss 
: What did you go as? 
IAIN LEES-GALLOWAY 
: I have never actually been to the Sevens sadly enough. It is something I would like to fix. 
Paul Quinn 
: As a Bucket Head! 
IAIN LEES-GALLOWAY 
: I have never been to a Turbos match as a Bucket Head either. Moving on the question was raised about the Sevens and I think that was a really good point. At the Sevens the entertainment that goes on around the rugby is often really more of the event than the rugby itself. Whereas I hope that people who are heading along to the Rugby World Cup would want to make the rugby on the field itself the centre of entertainment. Perhaps the alcohol is more of a side issue. It is something that goes with the rugby rather than the other way around with the rugby going alongside the alcohol. The Associate Minister Turia is making some interjections; maybe she will take a call and we can hear her views on this. 
But the point I am getting at is a point I was talking about a couple of weeks ago on this bill when we were debating about what sorts of vessels we should have the beer and whatever else in. I am absolutely of the view that a paper cup would be absolutely fine. People are not there to focus on the drinking and they are not there to brand Heineken; they are there to watch the rugby. Maybe just for a couple of hours they could put up with drinking out of a probably inappropriately sized paper cup while they watch the rugby and then we could overcome some of the issues we saw at the weekend. 
Mr Quinn suggested those issues were because it was rugby league crowd. I am not quite so divisive; I am a bit more inclusive. I think it does not really matter what sport one is watching that sort of mixture of alcohol and crowd mentality can make good people do things that the next day they wake up and think they probably should not have done and do not feel too flash about. But in that environment cans whether or not they brand Heineken or bottles can turn into missiles and they can do a lot of damage. What the Government is saying by saying no to paper cups is basically that corporate sponsorship comes ahead of public health and safety. That is really the sum total of that message. 
I think that is something that would be good given the incident over the weekend which occurred in the middle of the reading of this bill for the Minister for the Rugby World Cup to get up and talk about. It would be good for him to talk about how those sorts of situations will be mitigated and minimised by the bill or any of the amendments that the Minister might want to put up to the bill at this stage. That leads me to the amendment in my name. It is an amendment to clause 72(1)(a) in subpart 3 that would require the signage in a licensed venue to carry information about the transportation options available nearby the premise for patrons which would encourage them to choose safe transportation. 
I was listening to the radio this morning and I heard a Mount Albert resident someone who lives close to Eden Park complaining not only about what happened in Eden Park but what happened when everybody poured out across their lawn and did things on their lawn that probably were more appropriate for a public toilet. That upset that resident who felt that things should be put in place to ensure that that does not happen. If we have information in public venues about transportation options that are available then people might not be walking blind drunk along the streets annoying the local residents getting into trouble and perhaps doing something they will not be so proud of the next morning. They can get themselves into a cab they can get dial-a-driver they can get on to a shuttle and whatever options are available they can take that option— 
Jacqui Dean 
: The train. 
IAIN LEES-GALLOWAY 
: The member opposite mentioned the train—a good option. I would be very pleased if more people took the train in Auckland getting from Eden Park back to their homes or back to the central business district—that would be fantastic. My amendment suggests that that information should be a requirement for venues to have available for their patrons. All the other stuff is there. The free water is a requirement under this bill which is a fantastic measure and food and low-alcoholic drinks are available. Those things are right there in front of those patrons and they can see the options that are available to them. Transportation is not right in front of them. It is not an option that is immediately obvious and available to them. So we should take the opportunity seeing as a sign has to be there anyway to add this information to the sign in order to improve public health and safety. Seeing as we have parked health and safety for Heineken when it comes to the vessels inside the park when we are outside maybe we could bring this little measure in to improve public health and safety. 
DAVID SHEARER (Labour—Mt Albert) 
: 
 I want to mention that for the last couple of days I have been speaking to a number of constituents in my electorate of Mt Albert who have been very very concerned about what has happened in and around the Sandringham area. Obviously that concern is largely due as other speakers have said to the excessive presence of alcohol. So I have real concerns about Part 5 of the Rugby World Cup 2011 (Empowering) Bill which in many ways speeds up the process of opening new outlets and makes alcohol much more available and easier to get. This legislation will increase the number of outlets and that will make alcohol more available. 
What I do not like about Part 5 is that the time in which one can protest or object to an outlet being opened is a matter of only 5 days. The process is very ad hoc and moves very quickly. Yes the legislation does keep in place the same rules and regulations that would apply under any other system but the fact that the process is to be sped up I believe is probably not necessary. The period of the Rugby World Cup is really from 9 September through to 31 October. If we cannot plan for the number of liquor outlets that we think we will need before that time then it really is hard for me to understand why we will suddenly come up with the idea that we need to have an ad hoc liquor outlet here or there or a licence here or there for other purposes. 
I was appalled like many other people to watch the scenes on television during the test match. The point has been made that it was a rugby league test. I have been to many many rugby league test matches at Mt Smart Stadium etc. and I have never seen anything like that so I really hope that it is a one-off incident. The overwhelming conclusion was not only that what happened inside the stadium was bad enough—people throwing things and people have talked about glasses and softer containers for beer—but also that what happened outside the stadium was of concern to my constituents: bottles thrown all over the road fighting and loutish behaviour. 
Those people live in an area where they know there is a stadium. They bought property in the area knowing that Eden Park was there. Most of them did not know that Eden Park would be expanded to the extent that it has been. I do think that although the Rugby World Cup is incredibly important to us and is very important to the surrounding businesses in the area the rights of the residents need to be protected. I am not sure whether this part of the legislation does anything to give those residents comfort that they will be better served by having more outlets than they already have and by having a process that speeds up the granting of liquor licences. 
I have some concerns about this part. I have looked at the comments made by the police. The police at first voiced some concern about this part. They then relooked at it and decided not to protest against it. Certainly the St John Ambulance service said it did not support this part. In fact it believed that it would be to the detriment of the game and certainly to the image of New Zealanders if people needed to drink in order to watch sport. I want to see a Rugby World Cup where everybody enjoys themselves and where people can have a drink—and I certainly will be drinking—but I do not think we want to see a repeat of what we saw at the test match the other night. I have some concerns about this part of the legislation. In particular my concern is that there will be an increased number of liquor outlets in an area that already has a huge number of outlets and that the process of approving new outlets is likely to be sped up so that they are pushed through. Thank you Mr Chairperson. 
KELVIN DAVIS (Labour) 
: 
 I agree with the member Jacqui Dean that the stakes are high here in terms of alcohol and the Rugby World Cup. We need to strike the right balance to make sure that our image as a country that can go to sports games and not get carried away with alcohol is intact. But we cannot be prudes because alcohol like it or not is a big part of the whole tourism deal. A lot of rugby supporters will be coming here next year for the Rugby World Cup and drinking will be part of that. We have to find the right balance between having a great time and getting carried away with the drinking. 
I suggest that amongst all the hysteria of what happened at Eden Park on Saturday there was a bit of a perfect storm in terms of the conditions. One of those conditions was the lack of policing of people who brought alcohol to the park. We saw the news reports of people carrying boxes of bottles of beer and preloading on the way in. I suggest that the phenomenon of preloading that we see now whereby people drink cheap alcohol before going to events could possibly have occurred because of the cost of the alcohol being sold at Eden Park. I have also heard—and I do not know whether this is true—that because of the queues people had to buy a minimum of four containers of alcohol at one time. I have been told that we could not afford to have one person buying one bottle of beer so people had to buy a minimum of four containers of alcohol to take back for their mates to reduce the queuing time. 
I go back to the perfect storm. Two games were being played which will not happen at the Rugby World Cup. To be honest most people would not have been going to Eden Park to watch the first game which was the curtain-raiser between Papua New Guinea and England. They would not have cared about the result; they knew that England would give Papua New Guinea a hiding. They would have been sitting there drinking and enjoying the occasion—again to excess filling up before the main game. Then of course with the main game everyone was hyped up and ready for a great contest and quite frankly it was a dud. The Kiwis were shocking. The frustration in the crowd built so they were drinking and getting amped up. When crowds are frustrated and bored they start the Mexican wave which was part of the condition when we saw plastic beer bottles chips and the like being thrown. It was a bit of a perfect storm and that storm will not occur at the Rugby World Cup. There will be one game at a time a venue and as a colleague has already mentioned people will be there for the rugby and not for the drinking per se. 
I want to touch on the fact that Heineken wants its product to be sold in cans. I think that is ridiculous and it brings me to clause 62. Clause 62(1)(b) states: “(ii) any conditions that he or she considers should be imposed on the licence.” Also clause 62(1) states that when: “… the persons referred to in section 60(6) receive an application from the administrative secretariat each must—(a) inquire into the application; and (b) report to the Authority in the form and manner prescribed by regulations”—just moving on quickly—“…(i) whether there is any matter on which he or she opposes the application: (ii) any conditions that he or she considers should be imposed on the licence.” I think that if conditions are imposed on the licence such as that alcohol should not be served in cans it is important that the Minister for the Rugby World Cup does not have the right to override that. We have been arguing from the start of the consideration of this bill that it gives the Minister unfettered powers to override decisions of the Rugby World Cup Authority. If a company came in and insisted that its product be sold in a certain way and the authority believes that that is inappropriate this bill should not give the Minister the right to override that decision. 
Again we need to make sure that we are not prudes. We do not want people to come here and say that there are too many restrictions on the drinking of alcohol but we have to strike a balance so we do not have people getting carried away. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I want to pick up where my colleague Kelvin Davis left off. On this side of the Chamber we have been making the point throughout this debate on the Rugby World Cup 2011 (Empowering) Bill that we are greatly concerned about the ability of the Minister for the Rugby World Cup Murray McCully in consultation with Gerry Brownlee and Nick Smith to override the decisions of the Rugby World Cup Authority. 
On this side of the Chamber we have been quite comfortable with the idea of the authority existing and being there for urgent approvals but setting up a process whereby the authority’s decisions can be ignored by the Minister is one that we believe is dangerous in particular in relation to Part 5. As my colleague Kelvin Davis has just mentioned clause 77 refers to “Variation suspension or cancellation of licence”. All of those things fall into the authority’s ability to look after and therefore in turn put in place a situation where the Minister could undermine a decision of the authority in relation to a liquor licence. I think that is a great example of why we are concerned about the undermining of the Rugby World Cup Authority’s powers by effectively giving the Minister the right of veto. Clause 77 is quite interesting because it allows an inspector or police constable to at any time apply to the authority for an order to vary or revoke a condition of a Rugby World Cup licence or impose a new condition. Obviously that is something someone would do only if he or she were seriously concerned about a licence yet the authority’s power to consider that is automatically undermined by giving the Minister the ability to veto what it says. On this side of the Chamber we think that Part 5 includes a number of examples of where the clause that was unfortunately passed in Part 4 allowing the Minister to veto things is wrong. 
I say to the Government Administration Committee that I think it made some good changes in Part 5 relating to liquor licences. There has been some clarification to ensure for instance that we now know these licences are very much limited to the time of the Rugby World Cup and that is important. That change also puts in place the ability to clarify that the suspension of a Sale of Liquor Act licence will be just for the duration of a Rugby World Cup licence. A new clause 60A has been inserted to provide the authority the ability to grant licences concurrently so that we know that all of the venues will be operating under similar arrangements. That is important. I draw the distinction here between the Rugby World Cup arrangements and what happened on Saturday night at Eden Park. The Rugby World Cup is a bigger and greater event. It will be one where people will be moving from ground to ground. Visitors from overseas will be getting used to consistent conditions and I think it is unlikely that we will see a repeat of what happened at Eden Park. But that does not mean that we should not set in place cautious measures because we need to do that to protect our reputation. 
I return to the question of whether a legacy investment from the Rugby World Cup in the form of wet-pour facilities at Eden Park is justifiable. We saw on Saturday night the dangers in a situation where alcohol is being sold in bottles or cans. We know from papers that have been previously discussed during this debate that the police recommended that wet-pour facilities be provided at Eden Park and we know that Rugby World Cup Ltd and the Government have opposed that. The police are reflecting the health and safety concerns that we saw at Eden Park on Saturday. Having wet-pour facilities means that beer is provided in cups. It reduces the danger of the kinds of missiles and projectiles that bottles can become. 
Wet-pour facilities are quite slow. Kelvin Davis has just mentioned that if people have to go up and take cups of beer away that is much slower than carrying bottles and cans but that has to be balanced against the safety concerns that the police have been raising. We have heard from a number of residents around Eden Park and from people who attended the game that serious consideration should be given to the installation of wet-pour facilities at Eden Park. Gerry Brownlee dismissed those things when the police came to him three times to ask him to reconsider that and I think the Government now needs to seriously reconsider whether a legacy investment is possible for Eden Park. It is a facility that no doubt will be used in the future for major events and it needs to provide a safe environment for everybody who goes there. Although I think that some things in Part 5 are good and useful the Government needs to consider its options for Eden Park and how it serves alcohol in future. 
PHIL TWYFORD (Labour) 
: 
 I was one of those who began this debate with some real concern about whether the provisions in this bill relating to liquor licensing would open the door to a liberalisation of the availability of liquor at the very time our community is showing great concern about the drinking culture in this country and is discussing debating and coming to grips with the recommendations of the Law Commission on alcohol in our society. I expressed some of those concerns in the first reading debate. Since then they have been part of many of the discussions at the Government Administration Committee and I have to say that I have changed my view on this issue. 
I am generally of the view now that the provisions in this bill for liquor licensing for the Rugby World Cup are reasonable comprehensive and appropriate and I support them. Other speakers have pointed out that the provisions in this bill are largely lifted from the Sale of Liquor Act that they are primarily designed to expedite the granting of licences and that the fundamentals of the regulatory framework for liquor licensing are reproduced in this bill and in fact there are one or two improvements. Whether these provisions amount to a liberalisation is an interesting question. I guess one could make the case that the intent of this legislation is to allow a faster licensing process and arguably a much greater volume of liquor outlets being licensed for this very defined period of time. 
My colleague Trevor Mallard makes the argument that not one extra person will get a drink because of this legislation because there will be plenty of liquor outlets anyway. I am not sure that I entirely go along with that. I think that with 70000 visitors to Auckland during the Rugby World Cup and with many New Zealanders flooding into the city for the big games the sheer volume of people in Auckland going to the big games many of whom will want to have a drink before and after the games will mean a pretty dramatic expansion in the number of liquor outlets and the number of drinks being sold. 
The question is whether if we accept that that amounts to a liberalisation it is reasonable in the context of the fact that we are putting on this event and whether it is reasonable when we balance it against the huge benefits that we hope New Zealand and our communities will get from hosting the Rugby World Cup. Given what I said before about the fact that this legislation has been carefully thought through with regard to liquor licensing and the fact that there are a number of controls and safeguards in place my view is that a reasonable balance is being struck and I do not think we have too much to be concerned about. 
I am pleased for instance that outlets with a Rugby World Cup liquor licence are required to provide water free of cost for the punters. A number of conditions are set out in clause 73 that will give members of the authority the tools to require tailored licensing for particular times and places and I think that is a good thing. Some of those conditions relate to the hours and the days that liquor can be sold the supply of low-alcohol beverages the provision of food and the maximum number of patrons. Those are all useful provisions. Under this bill the police will have extra enforcement powers that are not available to them under the Sale of Liquor Act. That is useful. 
In finishing I will echo Grant Robertson’s comments. Again members on this side of the Chamber are concerned about the urgency powers. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I intend to vote in favour of this particular part Part 5 of the Rugby World Cup 2011 (Empowering) Bill although I still have reservations about the bill overall consistent with the concerns that Labour members have raised during earlier stages of this debate. I followed the debate over the weekend’s events at Eden Park with some interest. It would be fair to say that I have mixed views on these matters because although there are clearly some issues with our current laws on the sale and supply of alcohol I believe that a great amount of personal responsibility is involved. Although a small minority made a mess caused disruption and so on the vast majority of people who go to these events and have a few drinks there behave very responsibly. We should not punish the vast majority who behave very responsibly because of the actions of a small minority. I think that Parliament has always faced this dilemma when it is dealing with issues like the sale and supply of alcohol. That is the perspective I bring overall to the question of whether the new powers in this bill are appropriate for the sale and supply of liquor during the Rugby World Cup. 
One thing we need to be very clear on is that these provisions do not apply just to stadia; they actually apply across the board to any liquor licences associated with Rugby World Cup events. It is not just stadia we are talking about and that is an important distinction to make. The provisions can apply to pubs and they can apply to temporary venues that are established specifically for the Rugby World Cup and so on. They will all be covered by these licensing requirements. One change however that the select committee made which I think is important to understand is that all stadia will be required to have Rugby World Cup liquor licences even if they already have an existing liquor licence. The select committee wanted to ensure that there was consistency in the licensing at stadia throughout the country and that police had access to those extra powers they have under a Rugby World Cup liquor licence. Basically we have effectively said that if there is a liquor licence already in existence for a stadium and that stadium is hosting a Rugby World Cup match a Rugby World Cup liquor licence will still be needed. I think that is really important. It will allow the Rugby World Cup Authority to impose a standard set of conditions for example around the drinking vessels to be used such as plastic cups. 
I am a regular attendee at the Westpac Stadium in Wellington and it already has a policy of having only plastic cups. Bottles cannot be taken into the stadium and I think that works fine. I see no reason why it cannot work at other stadia around the country. We have to recognise that cans and glass bottles and even heavy plastic bottles can be really dangerous if they are hurled through the air and they hit somebody on the head. Plastic cups can cause a limited amount of damage—at most people will get a bit wet if somebody decides to start throwing around plastic cups full of alcohol. But we are limiting the risk of innocent people who are behaving responsibly having what would otherwise be a perfectly enjoyable event spoiled by a very small minority who behave irresponsibly at these events. I come back to the comment I made at the beginning. The vast majority of people who want to watch a Rugby World Cup match will behave responsibly and we should not punish them because of the irresponsible actions of a small minority. 
One of the other provisions in this bill that differs from the Sale of Liquor Act is that anyone holding a Rugby World Cup liquor licence will be required to have water freely available for people who are drinking at those venues. I think that is a huge advance. Parliament may well have the opportunity to consider this when we look further down the track at wider amendments to the laws pertaining to the sale and supply of liquor. At the moment there is no obligation on those selling liquor in a pub or a bar to supply water free of charge and there are some extreme examples of establishments going out of their way to prevent people from getting water out of taps so that they can extract a significant amount of money out of the sale of bottled water. Maybe it should be a requirement overall for pubs to have a free and ready supply of water. That is something that Parliament may have the chance to consider further down the track. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 This will be my last call on Part 5. In my first call I suggested that I was looking around for arguments to decide where I would come down on this part so let me state for the record that I am in favour of this part. 
Chris Hipkins 
: Was it my speech that clinched it? 
IAIN LEES-GALLOWAY 
: Well I think it was Mr Hipkins’ speech that clinched it to be fair. But there were a number of excellent contributions from a number of members that I listened to closely. 
I would like to advance the debate a little towards clause 79 “Suspension of licence for public health or fire precaution requirements”. The reason I draw the Committee’s attention to this clause and its various subclauses is that this is a fundamental part of the health and safety regulations. If a venue is deemed to be unsafe in terms of public health especially with regard to fire precautions then the medical officer of health or a member of the New Zealand Fire Service has to apply to the authority for immediate suspension or cancellation of the licence or immediate variation of the conditions of the licence. This is of course the authority that is established by this bill but which Part 4 states may as well not exist because the Minister can override every single decision made by that authority. 
This is a particularly dangerous little part of the bill. If in the opinion of the medical officer of health or a member of the Fire Service a venue needs to be shut down but that is contrary to the Minister’s opinion and the Minister decides to step in and halt that process we have a potential disaster zone. A venue that is unsafe could be allowed to remain open because of the power that is vested in the individual Minister who may be lobbied or may be contacted through processes other than the authority—people who choose to circumvent the process of the authority and go directly to the Minister. He—and I say “he” advisedly as I suspect we know who it will be—may not have the information available to him that the medical officer of health or the New Zealand Fire Service may have available to them. 
Clause 79A refers to the suspension or cancellation of a manager’s certificate. In this case an inspector or constable may at any time apply to the authority for an order to suspend or cancel a manager’s certificate. The grounds on which this may be sought are where a manager has failed to manage the premises or area subject to a Rugby World Cup liquor licence in a proper manner in accordance with the provisions of Part 5 and the conditions of the licence. Again this is where the authority must use its processes. It is required to make a decision within 24 hours. It is required to cross-examine witnesses and time must be given to the inspector the constable or the manager or if appropriate to the licensee and I have no doubt to any witness or anybody who is available to give evidence. But the entire process that the authority is allowed to undertake could again be completely undermined thanks to Part 4. 
It is Part 4 that the Labour Opposition has problems with and we have been pointing this out throughout this bill. 
The CHAIRPERSON (Lindsay Tisch) 
: We are on Part 5. 
IAIN LEES-GALLOWAY 
: Part 4 affects Part 5 because these provisions in Part 5 are completely undermined by Part 4. Although I suspect there will be a personal vote on Part 5 as far as the Opposition is concerned I personally am in support of Part 5. I cannot agree with the bill as a whole as long as Part 4 stays there. Although Part 5 has some excellent clauses places some excellent requirements on the authority and sets up a fantastic process for the authority to maintain public order public safety and public health they are completely undermined by the provisions included in Part 4. 
In my previous contribution I was interjected upon by Minister Tariana Turia. I do not want to misrepresent her but I believe she said that alcohol should not be part of rugby fixtures whatsoever. I would be interested if she could rise and make a contribution on this part because if that is a misrepresentation then she needs to clarify it. If it is not a misrepresentation and that opinion is held by a Minister of the Government when we consider what is in this bill I think it would be quite important if the Minister could rise and give a contribution on Part 5 because it is all about making sure that liquor is safely and appropriately available during Rugby World Cup matches. If the Minister holds a contrary point of view then I think it would be important if she could rise and make a contribution. 
This is all about balance. It is not about taking the fun out of the games. 
JACQUI DEAN (National—Waitaki) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 92 
New Zealand National 58; New Zealand Labour 23 (Ardern Beaumont Chadwick Cunliffe Curran Davis Fenton Goff Hawkins Hipkins Hodgson Horomia Hughes Huo King Lees-Galloway Mackey Mallard Nash Parker Prasad Robertson G Twyford); ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 21 
New Zealand Labour 11 (Chauvel Choudhary Dalziel Dyson Mahuta O’Connor Ririnui Robertson R Sio Shearer Street); Green Party 9; Progressive 1. 
Abstentions 4 
New Zealand Labour 4 (Burns Cosgrove Moroney Sepuloni). 
Motion agreed to. 
The question was put that the following amendment in the name of Iain Lees-Galloway to clause 72 be agreed to: 
to add the following subparagraph to subclause (1)(a): 
(iii)must display details of various transportation options available nearby the premises for patrons to encourage them to choose safe transportation. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 53 
New Zealand Labour 38; Green Party 9; Maori Party 5; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
A party vote was called for on the question  
That Part 5 be agreed to. 
Ayes 92 
New Zealand National 58; New Zealand Labour 23 (Ardern Beaumont Chadwick Cunliffe Curran Davis Fenton Goff Hawkins Hipkins Hodgson Horomia Hughes Huo King Lees-Galloway Mackey Mallard Nash Parker Prasad Robertson G Twyford); ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 21 
New Zealand Labour 11 (Chauvel Choudhary Dalziel Dyson Mahuta O’Connor Ririnui Robertson R Sio Shearer Street); Green Party 9; Progressive 1. 
Abstentions 4 
New Zealand Labour 4 (Burns Cosgrove Moroney Sepuloni). 
Part 5 agreed to. 
Part 6 Miscellaneous 
JACQUI DEAN (National—Waitaki) 
: 
 In speaking to Part 6 I just reflect that we are now through the major provisions of the bill and I come now to the part that deals with regulations the serving of documents and those sorts of things. It is interesting is it not that even this late in the passage of this bill which will enable the smooth running of the Rugby World Cup 2011 the Labour Opposition members are all at sea. They neither support it nor not support it; they are not quite sure how they really feel about this Rugby World Cup event that we are having next year. I think that is a shame because the rest of the New Zealand community is gearing up for this Rugby World Cup— 
Craig Foss 
: They must have had an interesting caucus. 
JACQUI DEAN 
: Well I would say they always have an interesting caucus. Some do not know how they feel about this event because they have abstained from voting and I think that that is a shame. I think that is a shame for all of the New Zealanders all around New Zealand who are gearing up to make this the world-beating event that it should be. The provisions of this bill which will make those processes smoother and easier are relatively non-controversial and simple but cannot be supported by the Labour members in this House. I think that is a shame and I say that for the record of the House. 
Part 6 deals with regulations and is very much a procedural part. It deals with the method of calculating deposits for people who wish to make applications to the authority that determines liquor licences and other provisions. It covers the recovery of costs the charging of costs and the methods by which documents can be served. So it is very much getting down to the nuts and bolts of things. 
I want to finish my short contribution by reflecting that for most of us in this Parliament this bill reminds us of the exciting opportunity we have in New Zealand. The National Government supports rugby. It supports all of New Zealand getting behind the Rugby World Cup. All the members of the National Government are vitally interested and do hope that the Rugby World Cup will be the marvellous event it promises to be. I am just sorry that that desire is not shared by the Opposition. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 What a vacuous load of nonsense we just heard from Jacqui Dean. The suggestion that the Labour Opposition not supporting the giving of absolute power to Murray McCully means that Labour is somehow opposed to rugby is extrapolating things just a little bit too far. I can assure the Committee and anybody listening or watching on television that the Labour Opposition is 100 percent behind the Rugby World Cup 2011. We are 100 percent behind the Rugby World Cup and we are very much looking forward to seeing it successfully hosted in this country. 
Let us not forget how we ended up with the hosting rights to the Rugby World Cup in the first place. Helen Clark flew with the Kiwi crew all the way to Dublin in order to secure the hosting rights. The Labour Government was behind it— 
The CHAIRPERSON (Lindsay Tisch) 
: We are debating Part 6. 
CHRIS HIPKINS 
: —and the Labour Party remains behind it. I turn now to Part 6 of the Rugby World Cup 2011 (Empowering) Bill which Jacqui Dean was just speaking to. Part 6 deals with the remaining technical aspects of the legislation including the regulation-making power of the Governor-General by Order in Council on the recommendation of the Minister for the Rugby World Cup. Now of course we come back to the concerns raised by the Labour Opposition in terms of the regulation-making powers that the Minister will have effectively to overturn recommendations given by the Rugby World Cup Authority. The Minister will not have to follow the recommendations of the Rugby World Cup Authority. The regulation-making powers that this part gives to the Governor-General—because the Governor-General will be acting on the advice of the responsible Minister; in this case Murray McCully—effectively mean that the Minister will have absolute power to do whatever he likes. He will not have to be guided in any way by the decisions of the Rugby World Cup Authority and that is the reason the Labour Opposition is voting against the remaining stages of this bill. 
It is not as Jacqui Dean suggested because we do not support the Rugby World Cup; we do. We are 100 percent behind the Rugby World Cup but we on this side of the Chamber support democracy. We believe that the provisions of this bill could easily have been remedied if Murray McCully had agreed to support the amendments put forward by Trevor Mallard. This issue could have been resolved and this bill could have been passed with much broader cross-party support than has been the case. But Murray McCully rejected the approach by the Labour Party and that is why we continue to oppose it. 
Finally I want to talk to some of the clauses in this part listed on page 83 of the reprinted bill as tabled in the House. They concern the service of notice and documents. I am not a lawyer and I do not usually pay much attention to these types of matters but I think it is important that when we are talking about the service of notice and documents and about ensuring that processes operate fairly transparently and so on there is real clarity around what will be deemed to be a service of notice or a document. Can it be done electronically or by fax and so on? Clause 89 as set out on page 83 makes it very clear when a notice will be deemed to have been issued or served. I think that it is really important that the Committee is very clear on that. Clause 89(4) states “If a notice or document is to be served on a Minister of the Crown service on the chief executive of the appropriate department of the State is service on the Minister.” This comes back to this ultimate power that Murray McCully will have under this legislation. He can be sending off missives to departmental chief executives serving notices on all of his ministerial colleagues. That is just a further example of the ultimate power that Murray McCully is being given in this legislation which is why the Labour Opposition is opposed to it. 
We do not have anything that we are really opposed to in Part 6. Part 6 is a pretty technical non-controversial part of this legislation. It is primarily Part 4 that we have our concerns about but I think Part 6 gives further examples and further elaborates why it is that the Opposition has expressed so many reservations and how easily that could be resolved if the Government was willing to take a more democratic approach to this legislation. 
DAVID SHEARER (Labour—Mt Albert) 
: 
 I reinforce what my colleague Chris Hipkins just said about Part 6 which is largely an administrative miscellaneous part of the Rugby World Cup 2011 (Empowering) Bill. Nevertheless clause 88 states: “The Governor-General may by Order in Council made on the recommendation of the Minister make regulations that prescribe—” and it goes through those prescriptions. That comes back to the point that we raised before about the Minister which cuts to the chase of what we were talking about in Part 4. 
Why do we have that problem? One of the issues that has come up in the last few days with regard to the debacle that happened on Saturday at Eden Park is that the trustees at the Eden Park Trust Board were all replaced by Minister McCully. Minister McCully changed the trustees who then went on to change the management team. The management team has not yet been in contact with the local residents. Certainly Mr David Kennedy the chief executive officer has not yet made contact with the local residents who were the people who bore the brunt of what happened on Saturday. That is a direct consequence of a lot of the changes being made by the Minister. 
Part 4 as I said before gives the Minister the ability to override and take an enormous amount of licence— 
The CHAIRPERSON (Lindsay Tisch) 
: We are on Part 6. 
DAVID SHEARER 
: I beg your pardon Mr Chairperson. Part 4 gives the Minister a lot of licence and that is reinforced at the beginning of Part 6 as I just quoted. 
I come to clause 88(i) in Part 6 which states: “the form contents colour and size of print of a Rugby World Cup liquor licence including the form and other matters required for licences issued in respect of a group of applications:”. That relates back to what we were just arguing in the debate on Part 5. That again is about the speeding up of liquor licences which have to be advertised as per clause 88(i). The process can be sped up. A lot more liquor licences can be given out in a very short space of time giving people who object only 5 days’ notice in which to do so. Around this area—and around Eden Park in particular which is the area I am specifically concerned about—we will have the capacity to have more outlets and more drinking in an area that has copious numbers of drink outlets already. 
Coming back to Part 6 clause 88(i) goes to the issue of liquor licences. It is something I have a real concern about. I do not think that we need to be promoting rugby on the basis of whether we can drink copiously or have an enormous number of drink outlets for this occasion to be a real success. 
I point out as my colleague has done that we oppose this legislation on the basis of what it allows the Minister to do—on the basis of what it allows the Minister to do. We are completely supportive of the opportunities that the Rugby World Cup gives to New Zealand. I am certainly supportive of what this world cup gives to the people in the area that I represent around Eden Park. Businesses there will be booming. Obviously they will have to be in compliance with Part 6 clause 88(i) and I remind people about that. 
Once again I say that it is a mistake to give the Minister more or less carte blanche to make decisions that override the authority which will then be set up and in place and that override many of the decisions that have been made through good procedures and regulations. It is something that members on this side of the Chamber oppose. 
Part 6 is largely miscellaneous. It is regulations but nevertheless it still speaks to and supports the other parts of the bill that we are not very happy with. 
JOHN HAYES (National—Wairarapa) 
: 
 I move  
That the question be now put 
. 
KELVIN DAVIS (Labour) 
: 
 I know that we are talking about Part 6 but I have to get this off my chest—it comes down to what Jacqui Dean said about Labour not supporting rugby. What she said is ridiculous. I bet anything that Jacqui Dean is one of those chardonnay supporters who are there just for the moment. I bet you anything that Jacqui Dean did not get up at 3 o’clock in the morning on Saturday to watch New Zealand versus England. I bet you she has not cried herself to sleep. 
Craig Foss 
: I raise a point of order Mr Chairperson. I am just interested that the member is trying to wager bets with you as Chair. He kept saying: “I bet you that x y z.” I do not think that is appropriate. 
The CHAIRPERSON (Lindsay Tisch) 
: Thank you. I am a betting man and I took it in good faith. 
KELVIN DAVIS 
: I will bet anybody that Jacqui Dean has not cried herself to sleep every night since 27 October 1991 the day that we lost our world champion title to Australia in Dublin. To say that Labour does not support rugby and does not support the Rugby World Cup is an absolute joke. I bet anybody in this Chamber anybody in this country that we know more about any form of rugby or any sort of situation around rugby than that member. A true supporter knows stuff about rugby that nobody else does. I ask that member to name the All Black lock who in 1979 scored the only try for the All Blacks at Twickenham. 
The CHAIRPERSON (Lindsay Tisch) 
: We are on Part 6. 
KELVIN DAVIS 
: Yes Mr Chair; I just had to get that off my chest because as a rugby fanatic I do not think there is anybody in National who cares about rugby more than I do. 
I come to Part 6. As Chris Hipkins said the Governor-General may by Order in Council and on the recommendation of the Minister make regulations. That is the part of this bill that we are upset about. It is the unfettered power of the Minister that we are concerned about. To say we do not support rugby because we are challenging this part of the bill is absolutely ridiculous. The Labour Party has had great discussions and has allowed some members to vote one way and some members to vote the other way and that is democracy in action—something of course that that party on the other side of the Chamber would not have a clue about. 
Jacqui Dean 
: Which way did you vote? 
KELVIN DAVIS 
: I voted for it; in support OK? 
Jacqui Dean 
: Who was against? 
KELVIN DAVIS 
: Look it does not really matter who was for and who was against. What matters is that we are concerned that the Minister has unfettered powers—[ 
Interruption 
] 
The CHAIRPERSON (Lindsay Tisch) 
: We do not want that dialogue—it is not relevant to Part 6. 
KELVIN DAVIS 
: Thank you Mr Chair. We have a concern that the Minister has unfettered powers to override the Rugby World Cup Authority. The Labour Party supports rugby and supports the Rugby World Cup. In our party we are allowed to have robust debate and discussion and on this issue we voted as we saw it. Some supported it some were against and some abstained. The Labour Party is right behind the Rugby World Cup. We have given it a lot of thought and consideration. 
As someone mentioned earlier Helen Clark flew over to Dublin—the city where the All Blacks lost in 1991—and because of her contribution and her support for Tana Umaga and the rest of the Kiwi contingent this wonderful event will happen in New Zealand next year. It will be a great thing for New Zealand. It will put us on the world stage. But we do have to be concerned about this issue and it is right that Labour as a party has challenged parts throughout this bill to make sure that everything goes right during the Rugby World Cup. 
I finish my contribution by challenging Jacqui Dean and the National Government to come up with any evidence that they support rugby and the Rugby World Cup more than the Labour Party. Members of the Labour Party are true fanatics and true supporters of our national game not chardonnay supporters such as Jacqui Dean. 
CRAIG FOSS (National—Tukituki) 
: 
 I move  
That the question be now put 
. 
PHIL TWYFORD (Labour) 
: 
 We are in the dying minutes of the Committee stage of the Rugby World Cup 2011 (Empowering) Bill and it is fitting that we should finish by responding to the excruciating speech made by Jacqui Deans. We are finishing as we started— 
Jacqui Dean 
: I raise a point of order Mr Chairperson. I would be grateful if the member addressed me by my correct name which is Jacqui Dean. 
The CHAIRPERSON (Lindsay Tisch) 
: I am sure the member has taken that on board. 
PHIL TWYFORD 
: I apologise. I should have said we were responding to an excruciating speech from the member Jacqui Dean. She is the member who cannot understand why Labour voted against the odious Part 4 which gives the Minister— 
The CHAIRPERSON (Lindsay Tisch) 
: We are on Part 6. 
PHIL TWYFORD 
: I am getting to that Mr Chair. She cannot understand why Labour voted against Part 4. She cannot understand why we would take a conscience vote or a personal vote on the alcohol provisions in this bill. The members on this side of the Chamber unlike the member Jacqui Dean have not put their brain into neutral while they have been debating this bill. The best argument that she could come up was that we do not like rugby—woo hoo! 
Part 6 is interesting because it reflects just how well thought through much of this bill is. The detail and thought that have gone into Part 6 are extraordinary. I draw the Committee’s attention to subclause 5A of clause 89 where no detail has been overlooked. Subclause 5A states: “A notice or document is deemed to have been received as follows: (a) if sent electronically when acknowledged by the recipient or when an automated delivery receipt … is received by the sender:”. Subclause 5B states: “If a notice or document is required to be served or delivered on or by a particular working day—(a) it must be served or delivered by 4.00 pm on that day;”. If a notice or document arrives after 4 p.m. it is deemed to have been received on the following day. That is extraordinary. 
No detail has been overlooked in Part 6 yet Part 4 hands over to Murray McCully the Minister for the Rugby World Cup extraordinary powers to override the recommendations of the eminent appointed members of the Rugby World Cup Authority. All of the detail all of the thought that have gone into this bill could count for nothing because Murray McCully the Minister for the Rugby World Cup can completely disregard all of the thought that has gone into setting up the systems structures and procedures for the Rugby World Cup Authority. 
That is why the Labour members of Parliament will ultimately vote against this bill. We will not do that because as Jacqui Dean thinks we do not like rugby are unpatriotic or do not care about the success of the Rugby World Cup. We do. We have made it abundantly clear that we support the Rugby World Cup. We want it to be a fantastic success for New Zealand. We want it to be an unforgettable moment for all New Zealanders to savour the beautiful game. But we will not countenance the bad law or bad systems that are being put in place by this Government to completely disregard the normal conventions of accountable Government and to hand over to Murray McCully the unfettered power to disregard the members and the advice of the Rugby World Cup Authority. The sublime elegant detail contained in Part 6 provides that if a notice is received after 4 p.m. it is deemed to have been received on the following day. But in spite of the beauty elegance and simplicity of Part 6 Labour will vote against this bill. 
We have not given up hope that the Government may see sense finally before this bill is passed. 
David Shearer 
: I don’t know about that. 
PHIL TWYFORD 
: Some of my colleagues have given up hope. I have not; I have an open mind and a good heart. I live in hope that the members on the other side of the Chamber will reignite and reawaken their commitment to the conventions of accountable Government and will not give Murray McCully the extraordinary powers that are contained in Part 4. 
AMY ADAMS (National—Selwyn) 
: 
 I move  
That the question be now put 
. 
Motion agreed to. 
A party vote was called for on the question  
That Part 6 be agreed to. 
Ayes 108 
New Zealand National 58; New Zealand Labour 38; ACT New Zealand 5; Maori Party 5; Progressive 1; United Future 1. 
Noes 9 
Green Party 9. 
Part 6 agreed to. 
Schedules 1 and 2 agreed to.  
Clauses 1 and 2 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 Clause 1 refers to the title of the bill and as we all know the title offered up by the Government is the Rugby World Cup 2011 (Empowering) Bill. On the surface that seems perfectly sensible. The title refers to the period of time during and around the Rugby World Cup 2011. It empowers the Rugby World Cup Authority which is created by the bill the Government of course and a Minister—we are not quite sure which Minister; it might be the Minister for the Rugby World Cup or another Minister—to do more or less what the Minister likes. In those terms one might think the title is fairly appropriate because the bill vests an enormous amount of power in one individual Minister. It empowers that Minister to do more or less what the Minister pleases. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
IAIN LEES-GALLOWAY 
: It is nice that the Minister in the chair Jonathan Coleman could amble his way down to the chair to join us for this debate. We are on clause 1 the title of the Rugby World Cup 2011 (Empowering) Bill which before the dinner break I was saying seems superficially like a fairly reasonable title for the bill. I note that the Government steered away from using in the title the word “enabling” instead of “empowering”. Enabling bills were of course favoured amongst some of the 20th century’s better dictators and the word “enabling” might have alluded to some of the dictatorial powers included in Part 4 of this bill so it was probably wise to steer away from it although it would have been a sensible word to have included rather than “empowering”; “enabling” might have been a bit more appropriate. 
The “Rugby World Cup 2011 (Elected Dictatorship) Bill” would have been quite good because essentially Part 4 offers a Minister of the Crown absolute complete total authority over what goes on around the Rugby World Cup and all the provisions within the bill and the authority that has been set up are just about completely meaningless because of the elected dictatorship that is established in Part 4. 
Another title could be the “Rugby World Cup 2011 (Vesting Total Authority in One Minister) Bill” which is essentially what this legislation does. It could be the “Rugby World Cup 2011 (Establishing an Impotent Authority) Bill” because the vast majority of the bill—Parts 1 2 3 5 and 6—deals with establishing an authority to deal with a range of aspects of the Rugby World Cup from liquor licensing through to venue establishment through to events that occur around the Rugby World Cup. This legislation establishes an authority that is supposed to have control over those events grant liquor licences give people authority to hold those events and run test events in the lead-up to the Rugby World Cup but in fact all of that authority is completely undermined by Part 4. The bill establishes a completely impotent authority. In the case that the Minister disagrees with the authority’s position he can just come straight in and overrule anything that the authority does. Although the bulk of the bill—many many clauses and many many pages—is turned over to establishing this authority the real crux of the bill is Part 4 which says that even though we have an authority it is completely impotent and completely useless in the event that the Minister disagrees with what the authority says. 
Given the nature of the debate thus far from the Government benchers few and far between as it has been Government members have not looked to engage in the debate as much as all that but they have tried to say that Labour members hate rugby that we do not want to have a good event and that we do not want to run a good event. I would say that that would make this the “Rugby World Cup 2011 (Short-term Memory Loss) Bill”. They forget about the previous Labour Government and Helen Clark who as we all well know now flew to Korea via Ireland. Who does that I do not know but it showed how keen she was and how much she had vested in being part of the delegation to the Rugby World Cup to make sure that New Zealand got the Rugby World Cup in 2011. The Government has conveniently forgotten all of that effort put in by Labour and all of the support that Labour would continue to offer for this bill if the Government could just make some tiny amendments to Part 4. We wanted to build a consensus and be able to have a bilateral approach to this but the Government refused to take that up. 
CRAIG FOSS (National—Tukituki) 
: 
 I raise a point of order Mr Chairperson. I have a question. Prior to the dinner break when we were voting on various parts—4 5 and 6 I think—Labour gave split votes which is absolutely fine of course. But I bring your attention to Standing Order 139(2) which states: “If a party casts a split-party vote the member casting the vote must deliver to the Clerk at the Table immediately after the vote a list showing the names of the members of that party voting in the various categories.” I recall that there were votes for votes agin and abstentions from the party opposite. I ask whether those names have been tabled yet and whether they are available to the Committee. 
JACINDA ARDERN (Labour) 
: 
 I am happy to respond that the proxies have been taken from Labour and will be provided to the Clerk in due course. We are just locating those in the handover between whips at this time. I am sure that the Government will be patient with us while we locate the relevant names but we have it in hand. 
CRAIG FOSS (National—Tukituki) 
: 
 Are we to expect those names forthwith? I notice that it has been 2 hours since the first split vote that I am aware of from the other side. That seems ample opportunity. What would be a normal time frame? When should we expect that? 
The CHAIRPERSON (Hon Rick Barker) 
: I do not know what an ample time frame would be. “Immediately” sounds like it will be pretty prompt. The Chair of the Committee cannot force people to do things. We have an assurance from the whips that the names will be produced and that the paperwork is being resolved. I expect that the whips for Labour will produce the paperwork very quickly. I have that assurance and I accept the whips’ assurance. 
KELVIN DAVIS (Labour) 
: 
 As we debate clause 1 which is the name of the Rugby World Cup 2011 (Empowering) Bill we obviously know that we are talking about the Rugby World Cup and that it will be held in 2011. But whether it is an empowering bill—empowering for the Rugby World Cup Authority—is the point that we want to make. It is a moot point because the Rugby World Cup Authority set up under Part 2 is eclipsed by the powers given to the Minister for the Rugby World Cup under Part 4. So a possible name for this bill could be the “Part 2 is a Waste of Time Bill” because the bill goes through the whole description of setting up the Rugby World Cup Authority and then in Part 4 totally ignores it by giving the Minister unfettered power to do what he wants. 
Let us remember that the Rugby World Cup Authority is an authority in which a retired judge or a lawyer of at least 7 years’ standing has to be appointed as the chairperson and another member who is a lawyer of at least 7 years’ standing has to be the deputy chairperson. The Minister must ensure that the authority has available to it sufficient members with the knowledge skill and experience relevant to the authority’s function. I think it is really good that the authority should have that but then the Minister who does not necessarily have the knowledge skill and experience can come and override the decisions that the Rugby World Cup Authority makes. So this bill could also be called the “Put Murray McCully on a Pedestal Bill” because that is really what is happening. He is being put up there with this unfettered power to override any decisions that the Rugby World Cup Authority makes. 
We on this side of the Chamber have said that that is not right and that the Rugby World Cup Authority made up of these experts—lawyers and judges—with the knowledge necessary to make decisions around the Rugby World Cup should have the unbridled power. That group should be able to make those decisions and those decisions should stand. Labour does not agree that the Minister should have the power to override the authority. This bill could be called the “Clayton’s Empowerment Bill”—with all due respect to our colleague Clayton Cosgrove—because it is the empowering bill one has when one does not actually have an empowering bill since the only person being empowered is the Minister. Again as I said Labour disagrees with that. 
There is also the whole issue of forgetting that it was Labour that made sure that New Zealand won the right to host the Rugby World Cup. That issue has been continuously downplayed and overlooked. It was Labour that got the Rugby World Cup to come to New Zealand. So perhaps it could be called the “Acknowledge the Great Work Done by the Previous Labour Government Bill” as Labour made sure that the Rugby World Cup came to New Zealand. We could go through this bill and give it any number of names. They pop into our minds quite easily because of the unfettered overriding power that the Minister is given in Part 4. We could call it the “Take Part 4 Out of this Bill Bill” because as I said it is not right that the Minister has all this authority to override any decision of the Rugby World Cup Authority. That is not good lawmaking and it is not good democracy. I guess we could call this the “Labour Party Really Does Support Democracy Bill” because we are talking about setting up this authority to represent people and make sure that the unfettered and unchallenged power that the Minister has will not be misplaced or abused. 
Again I say that we need to make sure everyone realises that it was the previous Labour Government that got this event here through the great work of our previous Prime Minister. Labour still disagrees with Part 4. The Minister should not have this power to absolutely override anything that has been decided by the Rugby World Cup Authority if he so decides. 
JOHN HAYES (National—Wairarapa) 
: 
 I rise to speak on the Rugby World Cup 2011 (Empowering) Bill to discuss the title. As all of my colleagues on this side of the Chamber would understand I am Murray McCully’s greatest fan. In almost every situation I would totally agree with everything he said but on this occasion I wonder whether the Minister for the Rugby World Cup has the correct title for the bill. I wonder whether it should be called the “Labour in Chaos Bill”. It occurs to me that the title of this bill may be being used by competing factions in the Labour Party to begin to run a coup against Mr Goff. We had a split vote on the bill just before tea and the Labour Party is unable to name the people who abstained from voting on it. 
Is it that we have the Mallard faction? Is it that we have the Goff faction? Is it that we have the Shane Jones faction? Is it that we have the Mr Cunliffe faction? Clearly there are four people on the other side of the Chamber who have voted or at least abstained from voting in a way that does not support their leader. This is a very surprising development. 
It may also be that this bill could be called the “Mallard (Sour Grapes) Bill”. I suspect that if Mr Mallard were the Minister for the Rugby World Cup today he would be entirely supportive of the empowering of the Minister to make sure that the Rugby World Cup event is absolutely successful because its success is really important for New Zealand’s global brand and for our economy. 
It is quite interesting to look at the scrambling that is going on on the other side of the Chamber and work out who is in what faction because clearly there is a lot of disharmony on the other side. Four people have moved from the main reason that the Labour Party was voting and they are abstaining presumably because they do not agree with Mr Goff or Mr Mallard or Mr Jones or Mr Cunliffe. I invite the whip on that side of the Chamber to put us out of our misery or at least tell us what is going on. 
I come back to the point of this empowering bill. I am quite sure that if Mr Mallard were the Minister concerned with 85000 people coming from overseas and millions of people watching on television he would not allow New Zealand to be showcased in a way that was not appropriate. The point of this bill is that it does not change the criteria for issuing liquor licences. It will allow the temporary streamlining of Government regulatory processes to ensure the tournament and the many activities that support it can be organised as effectively as possible. When discussing this issue earlier in the House I have drawn attention to what has happened in the Wairarapa with the La De Da concert which was scheduled to take place in Martinborough on New Year’s Eve. We do not want the circumstances affecting the Martinborough concert to happen with the Rugby World Cup. 
In the Martinborough case a council initially told the organisers of this concert that they would not need resource consent as would have been the case if this event had been run in Masterton but now the council has suddenly discovered that it can ankle tap this concert. It will ankle tap the 12000 people who have paid more than $100 and up to $350 for a ticket and it will say that resource consent costing $50000 is needed. 
We cannot afford this situation to arise with an event as important as the Rugby World Cup which is why we must empower the Minister to break through the bureaucratic nonsense nanny State-ism and red tape that could potentially stand in the way of this event which is vital for the New Zealand economy. I particularly want to say that we are not going soft on the liquor process; in fact the bill provides additional requirements for that. Thank you. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 It is a pleasure to take a call in the debate on the title of the Rugby World Cup 2011 (Empowering) Bill. The title is simply not generous enough to the Government. I think it needs to really capture John Hayes’ passion for this issue. Possibly that member could call it the “Rugby World Cup 2011 (Let’s Forget About Health and Safety) Bill”. Mr Hayes has just been telling us all about things being nanny State but those things on Saturday were bottles flying in the air and landing on people. That image of New Zealand which Mr Hayes seems so concerned about will be projected around the world. 
Mr Hayes was also concerned about Labour’s voting. On this side of the Chamber we are always worried about whether Mr Hayes is confused. He is frequently confused and we are always worried when he is confused. To clarify for that member I say that when it comes to debating and voting on issues to do with liquor Labour has a proud tradition of conscience voting. Occasionally in the past National has had a proud tradition of letting its MPs follow their consciences but now members on that side of the Chamber have only one conscience. 
We have noticed this because we on this side of the Chamber know that on another issue relating to liquor—that of the drink-driving rules—there are members of the National caucus who want to back a change to the drink-driving laws. 
Craig Foss 
: Jumping the shark. 
GRANT ROBERTSON 
: I know that Craig Foss wants to back a change. He is looking for stricter drink-driving laws. He is looking for the blood-alcohol limit to be lowered from 0.08 to 0.05. That is right is it not? I ask Mr Foss whether that is correct. I ask Mr Foss whether it is true that he wants to lower it. He wants to lower it but he is not allowed a conscience vote. On this side of the Chamber we are proud of the fact that Labour allows people to express their consciences on one part of this bill. 
Mr Foss may not have noticed but on every other part of this bill and on the final vote on this bill Labour is unified in saying that we are not prepared to back a bill that gives Murray McCully carte blanche to make whatever decisions he likes in the run-up to the Rugby World Cup. The Government has set up an authority to do what it likes the authority comes forward and then Gerry Brownlee Murray McCully and Nick Smith can override it all. Mr Foss can rest assured that Labour is unified in opposing this bill but we are very clear that on issues involving liquor we allow our MPs to have a conscience vote. 
The shame in this Chamber is that MPs on that side are no longer able to express their consciences. They are not able to express their consciences on the drink-driving limit and they are not able to express their consciences on this change to liquor laws. We on this side of the Chamber stand proud of the fact that we give our MPs the ability to speak freely on matters of liquor law change. 
Mr Hayes might be confused but we know that passing this bill in its current form is not right. Iain Lees-Galloway has already stated that with a simple amendment this bill could have been supported by Labour and Murray McCully would not have a veto right over the Rugby World Cup Authority. National failed to take up that amendment and that means Labour will be voting against this bill having given its members the right to have a conscience vote on alcohol issues. 
Clause 1 agreed to. 
The question was put that the following amendment in the name of the Hon Murray McCully to clause 2 be agreed to: 
to insert in subclause (1) “Sections 1 and 2 and” before “Parts”. 
Amendment agreed to. 
Clause 2 as amended agreed to. 
Progress reported. 
Report adopted. 
Taxation (International Investment and Remedial Matters) Bill 
First Reading 
Hon Dr JONATHAN COLEMAN (Minister of Immigration)  
on behalf of the  
Minister of Revenue 
: I move  
That the Taxation (International Investment and Remedial Matters) Bill be now read a first time. 
 At the appropriate time I shall move that the bill be referred to the Finance and Expenditure Committee for consideration. The bill before us today introduces a number of important business tax reforms that are variously aimed at helping New Zealand businesses to compete internationally and at reducing business tax compliance costs. They complement other recently enacted reforms such as the reduction of the company tax rate from 33 percent to 30 percent and the introduction of the new research and development tax credit which was designed to encourage companies to invest more in research and development. The focus of other reforms in the bill is on updating tax law to align it with today’s commercial environment ensuring the law works effectively and as it was intended to work protecting the revenue base and further strengthening New Zealand’s culture of charitable giving. 
The central feature of the bill is the proposed reform of New Zealand’s international tax rules to help New Zealand - based companies to compete more effectively overseas. In my view this is one of the most important taxation reforms to come before this House. What is being proposed is a complete change of direction in the way we tax the offshore income of our controlled foreign companies—by which is meant foreign companies that are controlled by New Zealand residents. At present New Zealand taxes all the offshore income of those companies with the exception of income from operations in the so-called “grey list” of eight countries that our law singles out as having taxation systems comparable to our own. In that respect we are completely out of step with what happens in much of the rest of the world. Many other countries including our main trading partners distinguish between passive income—such as that from interest dividends rent and royalties—and active income such as income from manufacturing and exempt the latter from tax. Therefore the fact that our controlled foreign companies are taxed in New Zealand on their active income puts them at a competitive disadvantage internationally. 
The cornerstone of the proposed reform of our international tax rules is to exempt from domestic income tax the active income of controlled foreign companies of New Zealand - resident businesses. That is intended to encourage businesses with international operations to remain in New Zealand as well as to enable them to compete effectively in foreign markets. The passive income of those companies will still be taxed as it is earned although there will be some exceptions to the rule. For example it will not apply to passive income for controlled foreign companies in Australia which is usually the first port of call for our smaller businesses that want to expand overseas. There will also be an exemption for passive income that is less than 5 percent of a company’s total income. Other important features of the reform include an exemption from tax for most foreign dividends paid to companies as well as measures to protect our revenue base when the active income exemption comes into force. 
The bill also introduces further measures aimed at reducing tax compliance costs for small and medium sized businesses of which there are many in New Zealand. Lacking the resources of larger companies smaller businesses tend to bear a disproportionate tax compliance cost burden. Reducing tax-related compliance costs is an incremental process consisting of many small steps. There is no single solution to the problem short of abolishing taxation. A measure that will help one small business may not help another since businesses vary significantly in their needs problems and operating styles. Compliance cost reduction measures introduced in recent years have included for example the alignment of payment dates for provisional tax and GST. That change was designed for small businesses that prefer to make smaller and more frequent payments of provisional tax to help with their budgeting. Likewise some of the fringe benefit tax rules were changed with smaller businesses in mind. For example the minor benefits threshold under which the tax is not payable was raised and a tax exemption for business tools was introduced. 
The changes proposed in this bill raise several other tax thresholds. They include for example the PAYE threshold above which employers must file and pay deductions from employees’ salaries twice a month. That threshold is being raised from $100000 to $250000 a change that will allow a greater number of small employers to pay their deductions to the Inland Revenue Department once a month thus saving them time and money. 
The bill clarifies the law to ensure that employer payments for employee relocation and overtime meal allowances are exempt from income tax and fringe benefit tax if certain criteria are met. Those changes which were announced last year simplify the law and remove longstanding uncertainty about the tax treatment of those payments which will save time and money for everyone involved. 
The bill modernises the tax rules relating to the life insurance business which date back to 1990. Since then products and business practices have changed significantly with the result that the tax rules are out of date in several areas. For example many term insurance profits are under-taxed today with profitable business often leading to tax losses. The reason is that term insurance was a very small part of the business in the late 1980s so it was not a big consideration in developing the rules. Today term insurance is a major part of the business and by being under-taxed it enjoys a considerable subsidy under the present tax rules. A further anomaly in the rules is that people who save through life insurance products face a heavier tax burden than do savers who invest directly or through managed funds that become portfolio investment entities. Under the proposed reform the term life insurance business will be taxed on actual profits as other businesses are taxed and many of the tax benefits of the new portfolio investment entities will be extended to all savers in life products. 
The petroleum mining tax rules are also being updated to remove potential disincentives to further investment in oil and gas exploration and development in New Zealand. At the same time the bill introduces measures to ensure that New Zealand receives its proper share of the benefits from our growing petroleum mining industry. In order to safeguard New Zealand’s taxing rights on its own petroleum resources the changes will allow expenditure on petroleum mining operations undertaken through a foreign branch to be offset only against income from petroleum mining operations outside New Zealand. 
As a further measure to protect the revenue base the bill introduces a number of changes to strengthen the definitions of associated persons in income tax law. The definitions are used primarily to counter tax practices that could undermine the intent of our tax laws because of the closeness of the relationships of the people or entities involved whether they are relatives trusts partnerships or companies. The definition relating to land sales is in particular need of strengthening in order to prevent land dealers developers and builders circumventing the land sale tax rules by operating through associated persons. It is not new law that gains on land sold by dealers and others in the business are taxed if the land is sold within 10 years of acquisition. That was clearly stated 35 years ago when Parliament enacted the current land sale tax rules. This bill closes the gaps in the definitions of associated persons that allow that tax obligation to be sidestepped. The bill also makes the other definitions of associated persons more robust. For example it will no longer be possible to use certain trust structures to circumvent the tax rules. Similarly it will not be possible for companies and shareholders to avoid being associated by fragmenting shareholdings amongst closely related people and entities. 
The bill introduces further measures designed to strengthen the climate of charitable giving in New Zealand. The measures build upon related tax changes that came into force this year that removed the caps on the dollar amounts of charitable donations that are eligible for tax relief. As a result individuals can now claim tax rebates for donations up to the level of their taxable income and companies and Maori authorities can claim deductions for donations up to the level of their annual net income. The bill introduces a voluntary payroll-giving system that will operate through the PAYE tax system. People whose employers adopt payroll giving will be able to donate regularly to charitable and philanthropic causes of their choice through work-based payroll deductions. They will receive the tax benefit of their donations each pay day without having to present donation receipts. The voluntary scheme will be open to employers who file their employer monthly schedules with the Inland Revenue Department electronically. Growing numbers of employers in New Zealand see social responsibility and good corporate citizenship as an important part of their business. I have met many of them including some who have already adopted a form of payroll giving for employees who want to participate. They will undoubtedly be interested in the payroll-giving scheme introduced in this bill. 
On a similar theme the bill also clarifies the law relating to the tax treatment of honoraria for voluntary work and the reimbursement of volunteers’ expenses. That will make life easier for both volunteers and charitable organisations which often incur unnecessary compliance costs in trying to understand their tax obligations. 
These are brief descriptions of some of the main reforms that are proposed in this omnibus taxation bill. Time does not permit a description of every measure contained in the bill so I refer members to the separate 160-page commentary on the bill which describes the changes in detail and has been distributed to members. I commend the Taxation (International Taxation Life Insurance and Remedial Matters) Bill to the House. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I raise a point of order Mr Speaker. I hesitate to interrupt proceedings. The Opposition’s understanding is that we are currently debating the Taxation (International Investment and Remedial Matters) Bill. Without being able to be conclusive about this it appears that the Minister has been addressing a different bill. Would it be possible to request the Minister to table his notes so we can ascertain— 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: That is not a point of order. A point of order is about the procedure of the House. What the Minister says in introducing the bill is what the Minister says and that is on the record. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 The Taxation (International Investment and Remedial Matters) Bill is a most interesting bill and it is a complex bill. I will state Labour’s position in respect of this bill in three parts. In the first part I will briefly summarise the key provisions of the bill; in the second part I will outline Labour’s position on the bill; and in the third part I will outline some of the reasons for Labour’s position. 
Let us first summarise the objective of the bill and its key provisions. We believe the objective has some merit which is that it is timely for there to be an overhaul of the controlled foreign company and the foreign investment fund regimes. There is merit in encouraging further outbound investment by New Zealand companies. The reason for that is as everybody knows we have a very substantial international investment deficit in respect of New Zealand’s balance of payments that feeds into and indeed is the largest part of the financial deficit that is responsible for our persistent and deteriorating current account. There is merit in examining the issue of whether the playing field can be levelled so that New Zealand companies operating overseas do not find themselves in the position of paying tax twice: once in the jurisdiction in which they and their foreign competitors are operating and a second time in respect of New Zealand tax on the active income part of those transactions. It therefore may make sense to restructure the law in the way that is proposed in this bill. 
Second of all it is timely for there to be a further examination of the old “grey list” exemption. The “grey list” is a bit of an anachronism in the Opposition’s view. It is made up of eight countries mainly the old Commonwealth countries that were deemed to have similar tax laws once upon a time which were carved out from the international tax rules and for which equivalence is deemed. We are willing to explore in the Finance and Expenditure Committee whether this bill adequately deals with any residual issues with regard to the treatment of the “grey list”. 
Certainly it is appropriate to remove competitive disadvantage for New Zealand companies in respect of their active income through a range of trading structures. However we are concerned firstly about the exemptions that are carved out of this bill in respect of the Australian market. As the Minister said the Australian market is the jumping-off point for many small New Zealand businesses and it is the Opposition’s concern that a blanket exemption for the Australian market may be too wide. We look forward to hearing submissions on that point at the select committee. Secondly we would expect to see submissions upon the issue of whether the de minimis threshold of 5 percent is appropriate. Thirdly we would also expect to see submissions upon the blended hybrid approach that this bill encapsulates between having either an entity base or a transaction base to the tax rules and we will be very interested in those submissions. 
Those being fair and charitable to some extent are the reasons why the substance of this bill merits consideration and why the Labour Opposition will be supporting the bill’s referral to a select committee in the first instance. We believe it is appropriate that the Finance and Expenditure Committee calls for submissions and hears from the public and from the professionals on the proper way that the tax process works. 
Labour has two overriding objectives in respect of policy. The first is of course to grow the export economy. Our criticism of the Government is that it is been like a deer caught in the headlights of the global recession. That growth is not returning to the New Zealand market and the Government is caught somewhere between wanting to cut its way out like ACT would have us do and like the Conservatives in Britain are doing or to perhaps leverage or spend its way out like the US Government is doing. But it is taking neither of those courses and is showing no new ideas. The Government is stuck and our economy is stuck and as the weeks pass and successive rounds of data come out we all understand that the recovery has not come to main street New Zealand to the towns and villages of our country. 
But the greatest reservation we have—and why we are not at this stage able to confer support for the bill beyond its first reading—is that we have learnt unfortunately to be very sceptical of the intentions of this Government in respect of taxation measures. History shows why. I think that is made clear to anyone listening in to this debate if they cast their minds back over the last 2 years. National came in and immediately under urgency passed tax reform to drop the top tax rate and to deliver gains to the top end of income earners. Then in Budget 2009 it admitted that it could not afford the fiscal cost. Having passed $8 billion worth of tax remission to the top income earners in the first year it then decided it could not go through with years two and three. 
In Budget 2010 however while the recovery was still nowhere to be seen the story changed again. The Government broke its promise not to bring in an increase in GST which has been absolutely punitive to lower and middle income New Zealanders who see their small tax breaks washed away in inflation and who are still short at the checkout queue. They are struggling. But in Budget 2010 the Government dropped the top tax rate again—all the way to 33c in the dollar. 
No sooner was the ink dry on that $14 billion tax transfer mainly to the upper end than we saw a little thing called gift duty was coming up. When the Government on its own admission is already running a cash deficit per year of $13.5 billion or so obviously having broken its promise to be revenue-neutral on the tax package I ask why it would be a priority to then find other taxes it can cut that specifically benefit the top end. The Minister would say in fairness that there is not much money in gift duty—only a few tens or hundreds of millions. Well in real New Zealand that is real money. The point is that it would be a lot more if it were not for the protections that gift duty places upon high-wealth individuals transferring income to lower tax structures like those that might be in their children’s names were they not facing some compliance cost and some additional duty for doing so. 
The point is that in the history of this Government it has had two rounds of upper-income tax cuts and it has abolished gift duty. Is it little wonder that the Labour Opposition has a healthy scepticism about its real intentions in regard to maintaining the tax base and protecting Government services from yet another loophole for high-wealth individuals? 
The principle on the Labour side of the fence is very very simple. In these tough times when money is scarce and every penny counts everybody pays their fair share. That is the decent thing to do. That is the Kiwi way and that is what we call for. That means no avoidance structures for high-wealth individuals. It means send away the army of trust lawyers and fancy corporate lawyers who are dreaming up tax-avoidance structures for the few while the many bear the load. The burden of proof is on the Government to show precisely why the measures in this bill will not make those avoidance loopholes worse. 
How bad are those loopholes? I will give but one example. Loss attributing qualifying companies—the much loved or hated LAQCs—which result in $2.3 billion per year of tax avoidance are one of the key reasons why half of the top income earners are not on the top tax rate. Half of the top 100 income earners are not on the top tax rate because they use structures like loss attributing qualifying companies. Why if the Government was sincere about fairness did it not simply ring-fence loss attributing qualifying companies so that nobody could write off on his or her personal income the losses made on a company? Instead it has brought in some fancy new structure called a look-through company which allows the lawyers yet another round of field days yet another round of high fancy-pants pricing as they dream up new structures to stay one jump ahead of the taxman for their high-wealth clients. 
We will be putting the ruler over this bill to make sure that it does not make the problem worse—that it does not create another exemption set where a high-wealth individual can create a company call it a controlled foreign company place income or assets in that company and then make use of a tax exemption to avoid paying tax in New Zealand. We will be looking at the exemptions. We will be looking at the Australian exemption. We will be looking at the 5 percent threshold. We will be looking at why the Inland Revenue Department’s recommendation of a 20 percent threshold was not followed under lobbying pressure from business. This is a bill that has some merit but which deserves close consideration. 
STUART NASH (Labour) 
: 
 I raise a point of order Mr Speaker. I know this is a little bit retrospective but I ask whether the Minister who put the question to the House on this bill could please clarify the bill he mentioned. I do not think he spoke on the correct bill. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: I have already ruled on that matter. I ruled on the matter when the Hon David Cunliffe raised it. The member is relitigating a point I have already ruled on. I say to the member in generosity of spirit that I take a dim view of that. Once a matter has been ruled on it is final; that is the end of it. But having put that one down there is something else that has been brought to my attention by the Clerk. The Minister in moving the first reading of the bill appears to have made an error in the title of the bill in relation to that on the Order Paper. He did not correctly state the title of the bill as the Taxation (International Investment and Remedial Matters) Bill. Before I put the question on the bill I ask the Minister to confirm that we have the exact title. 
Hon Dr Jonathan Coleman 
: It is as printed on the Order Paper. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: That is correct. It is just a minor technical detail and it is nothing of substance. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 In view of the clarification that you have just made Mr Assistant Speaker I seek the leave of the House for the Minister to table his speaking notes from the first reading speech so that we might reflect upon whether the substance was— 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: I say to the member that that is exactly the same matter that the member raised— 
Hon DAVID CUNLIFFE 
: No. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: The member shakes his head but in substance he asked for the information to be tabled. I said it is in the member’s speech. The member is traversing exactly the same ground again. The member can shake his head but that is my impression and I say to him that my impression is the only one that counts on this. 
CRAIG FOSS (National—Tukituki) 
: 
 It is a pleasure to speak to the Taxation (International Investment and Remedial Matters) Bill. [ 
Interruption 
] Obviously I have found some more Twitter followers over there. I acknowledge the previous two speakers in this debate Dr Jonathan Coleman and David Cunliffe. I am sure that this bill will be sent to the Finance and Expenditure Committee. The issues raised by the previous speaker do of course deserve a lot of attention. The Finance and Expenditure Committee will work through some of the key changes in the bill. There are not too many—there are a lot of remedial matters—but there are some and we will give them fair due and the sector will submit on them as normal. 
This bill must be seen as part of a journey. To be fair much of that journey started under the previous administration. These changes—the foreign investment fund changes the portfolio investment entities the tidy-ups the fix-ups the clarifications and the widening—all reference back to previous tax changes that came about mostly under the previous administration. So I welcome the magnifying glass that Opposition members have said they will be putting over this bill to make sure that it is in tune with where the original bills started out and with some of the issues that have arisen after they have come in. In particular foreign investment fund stuff has arisen since about 2007 I think. It brought in the 5 percent rate of return which is not quite the risk-free rate of return. It is all those changes around the “grey list” and the Aussie-listed companies—Aussie is essentially the one “grey list” country—and all those kinds of things. To be fair to the sector there has been a huge change and there has been quite a large impost of administration and compliance around those changes. I am glad to see that that has been acknowledged in the lead-up to this bill. The very good commentary which is about 80 pages goes on to explain many of the key aspects of the bill. 
As I noted the bill builds on and extends earlier legislation in particular the international tax reforms and reforms around passive and active income—what might be interest and what might relate to the ongoing activity of the business. The whole mission here is to create and encourage an environment where New Zealand companies that may be doing well around the globe can feel comfortable that they can stay tax resident in New Zealand particularly for earnings that would apply under New Zealand taxation law and not to put them at a disadvantage in some other jurisdiction which may have slightly different tax arrangements from ourselves. At the end of the day New Zealand will not change tax law in other countries but we can acknowledge the differences in the various tax treaties we have. 
This legislation will put “New Zealand Inc.” on a fair playing field with other entities. New Zealand has a sad track record of New Zealand companies moving offshore basically to chase capital and to get closer to the capital they require to grow. This bill starts to address that alongside other changes that came through in 2007; in particular in the large tax bill we passed in 2008; and in a recent bill that again clarified a lot of the issues. 
I want to concentrate on one thing in particular because I think it might get the attention of some members. I am looking forward to discussing this particular part at the Finance and Expenditure Committee. It is in relation to the zero rating of the approved issuer levy on bonds. The monetary policy inquiry that began under the previous administration in the Finance and Expenditure Committee and which was delivered in September 2008 just before the election spent a bit of time on this issue. As a headline everyone would often think that those who are issuing bonds into New Zealand should be subject to the same tax rates the same interest rates the same resident withholding tax etc. as others. In one sense that is fair enough. But if we tunnel down into the issues around it we see that at the end of the day this makes the interest rates that New Zealanders pay higher than they need to be. I will touch on some of the caveats related to that later. If the offshore investor who is issuing into New Zealand is asking for some returns of 6 7 8 9 or 10 percent—or whatever it might be; let us just use 10 percent—and if the approved issuer levy is two points 20 points or whatever it might be then that is added on. Therefore the end borrower in New Zealand is facing 10.2 percent as opposed to 10 percent. 
That must be seen in the context of where New Zealand is at. We are a debtor nation unfortunately; I think we all acknowledge the many issues to do with a lack of savings. But the reflection of the fact that we are a debtor nation is that we need to welcome foreign capital at least for the moment to help get us through this current situation and to put our economy on a better footing that may allow us to become a creditor nation and to start to deliver on some of our wants for this new millennium. 
I will just touch on some of the caveats. They are very tight but I see that they are getting the first cut analysis or one-dimensional analysis if you like. The approved issuer levy will be at zero percent. Issuers will still have to file a return on the 20th of every month to make sure that they qualify but it will be rated at zero. 
I will quickly touch on some of the caveats just to allay any fears that something untoward is going on. Among the key features of the changes to the approved issuer levy is that the security—that is debt by the way—is denominated in New Zealand dollars. The security is offered to the public for the purposes of the Securities Act 1978 which is another catch. The security is not issued as a private placement so nothing untoward is going on with dodgy partnerships or anything like that. The security is not an asset-backed security so there is no double leverage out of New Zealand or some equity funding something offshore. The registry and the paying agent activities for the security are conducted through one or more fixed establishments in New Zealand—that is it stays within these borders. And the security is listed on an exchange registered under the Securities Market Act 1988 such as the NZDX Debt Market or satisfies a widely held test because we do not know what might develop as far as exchanges go in the future. I particularly wanted to concentrate on that feature in my last few minutes because the amounts involved are huge. At the end of the day the $180 billion or $200 billion that New Zealand owes offshore all came through vehicles such as the Eurokiwi the various issuances out of Japan etc. 
This bill is essentially remedial. It makes it cleaner and better in recognition of New Zealand’s place in the world. It ties up with all the other tax agreements that New Zealand has signed to help New Zealand. Regardless of whether we acknowledge that we have to borrow the capital—we do—the intention is to at least try to make it as cheap and crisp as possible for “New Zealand Inc.” as we try to fund our way and build our way out of the economic quagmire that we are currently in. I look forward to discussing this bill further at the Finance and Expenditure Committee if the House so wishes. 
STUART NASH (Labour) 
: 
 I rise to take a first reading call in support of the Taxation (International Investment and Remedial Matters) Bill. But before I do I would challenge Minister Coleman who brought this bill to the House to show me the clauses that talk about payroll giving associated persons insurance companies and all those sorts of matters that he brought to the House in his first reading speech. I would not mind knowing where those clauses are. But I know members all know and everyone in this House knows that there are no such clauses because the Minister gave the wrong speech. We all know that Jonathan Coleman will not have written that speech. This is not Jonathan’s area. Jonathan was the Minister in the House at the time and he was told: “Here is the speech on the bill you have to introduce.” Someone on that side of the House is trying to stitch up Jonathan Coleman. I say to Jonathan that if I were him I would watch my back. One of his colleagues over there has stitched him up. It might have been Amy Adams. She wants his place. It could have been Craig Foss but someone gave you the wrong speech and you— 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: No one gave me the wrong speech. 
STUART NASH 
: I am sorry Mr Assistant Speaker. Someone gave the Minister the wrong speech and he spoke for 10 minutes about a bill that was passed 12 months ago—12 months ago. 
Hon David Cunliffe 
: Did he notice? 
STUART NASH 
: He did not notice. But with all due respect to Jonathan it is not his portfolio area. I do not expect Jonathan to know this but someone did know. Someone handed that Minister the wrong speech and that person is sitting up there saying: “Ah look what we have done to Jonathan Coleman.” I wonder which of the Minister’s colleagues gave him the wrong speech. I know that Jonathan will get to the bottom of that. 
I would like to make two points. The first is that Labour supports any tax legislation that reforms and streamlines our tax system that promotes equity and that closes off tax avoidance opportunities. Labour has always supported such legislation. The second point is that we will support this bill’s referral to a select committee. However at the Finance and Expenditure Committee Labour members will scrutinise this bill very closely and the reason we will do so is that the National Government’s track record on recent tax bills has been very poor in terms of promoting fairness and equity. As mentioned Labour supports any reforms that streamline our tax system close off tax avoidance opportunities and build on fiscal equity. This bill on the surface does appear to do this. It builds on recent changes to the tax treatment of international investments that were contained in a substantial tax bill that has been considered—a bill that was passed about 12 months ago I say to Mr Coleman. 
Specifically this bill changes the rules relating to foreign investment income by aligning it with the current method for calculating attributed controlled company income. The bill means that New Zealanders holding stakes of 10 percent or more in offshore companies will not be subject to New Zealand tax on interest unless the companies earn passive income such as interest royalties and rents. The bill replaces the current exemption for non-portfolio foreign investment funds in the eight “grey list” countries with an exemption of non-portfolio foreign investment funds that are resident and subject to tax in Australia. The bill makes changes to the thin capitalisation rules. Just for clarification a company is said to be thinly capitalised when its capital is made up of a much greater proportion of debt than equity—that is its gearing or leverage is considered high. I understand that what has been happening is that overseas companies have been gearing up to high levels in New Zealand and then claiming back deductions against interest payments. On paper as an individual entity the company may look a little shaky. However on a global basis the company is in no trouble at all and although I would not go so far as to say that this is a tax rort but it is certainly a way that multinational companies minimise their global liabilities. The bill provides for the delayed abolition of branch equivalent tax accounts for companies and the abolition of conduit tax relief accounts. It also makes some remedial amendments to the changes already made to controlled foreign company rules as mentioned in the big bill that the Hon Jonathan Coleman talked about tonight and which we passed last year. As mentioned Labour does support legislation that improves the integrity of the country’s tax system as well as closes down loopholes through which people are able to freely jump and avoid paying their fair share. 
My second point is that we in the Labour Party will support this bill’s referral to a select committee. However at the Finance and Expenditure Committee we will scrutinise this bill very closely because the National Government’s track record on recent tax bills has been very poor in terms of promoting fairness and equity. I will outline a couple of examples highlighting what I mean by this. The first example of a Government tax bill that pulled the wool over New Zealanders’ eyes was the bill that increased GST. John Key stood in front of New Zealanders looked them in the eye and said: “National will not increase GST.” and he did. National increased GST after he told New Zealanders that he would not. That Government raised GST when that Government’s leader had said that he would not do that and that is simply wrong. It is an example of a tax bill put forward by the National Government that is not good for the people of New Zealand. To tell New Zealanders that the price of items would rise by only 2.2 percent was always going to be wrong. Even the cost of Government-owned Lotto tickets has increased by around 10 percent. Another piece of tax legislation put up by this Government that was completely wrong in terms of promoting fairness and equity was the revision to the personal income tax rates. 
I do not think there is any doubt that as a country we are in the middle of a recession. No matter what the figures show one has only to talk to businessmen and businesswomen to the retailers and to the workers around the country to understand that the economy is suffering. So what did the National Government do? It did what no other OECD country has done and that is provide tax cuts to the most advantaged at the expense of the majority. The few did very well at the expense of the great majority. Someone earning a million dollars and there are about 650 people in this country who earn over a million dollars has just received a tax cut of $1000 a week extra in the hand. It is $1000 a week. Someone on the medium wage in Napier gets a tax cut of about $5 a week. It is $1000 versus $5. Is that fair? It simply is not fair. This tax bill in Budget 2010 cost about $14 billion and the National Minister of Finance the head of Treasury and the Governor of the Reserve Bank have all said that these tax cuts are not stimulatory. That means that the National Government has just spent $14 billion in the middle of a recession on a package that will not create economic growth at all. In fact it will have no impact whatsoever on economic growth. That is why this Government is the only Government in the world that has done this. The Minister said it will not stimulate the economy yet he spent $14 billion. We all know that in the last 3 months tax revenues have been down by a billion dollars. I ask the National Minister of Finance what he was thinking. I ask Treasury where the hell it got its forecasting from. 
In conclusion Labour will support any tax legislation that reforms and streamlines our tax system promotes equity and closes off tax avoidance opportunities. However we will scrutinise this bill very closely because the National Government’s track record on recent tax bills has been very poor in terms of promoting fairness and equity. Thank you. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I rise to speak on the Taxation (International Investment and Remedial Matters) Bill. If people have been listening to the debate they may be somewhat confused as to which bill we are talking about. The reason they might be confused is that the Minister when introducing the bill read the wrong speech. The Minister the Hon Jonathan Coleman for 10 minutes gave a speech about a bill that we are not currently considering before the House. That bill has gone through the whole process and been referred to the select committee. We are sitting here tonight discussing the Government’s technical competence to run taxation policy but the Minister in a 10-minute speech introduced another bill not the bill that is before us tonight. Can we be confident that the National Government knows what it is doing about taxation policy when the Minister does not even check that the bill name at the top of his speech notes matches the name of the bill that he is supposedly introducing into the House? He read a 10-minute speech about a bill that he is not introducing into the House. 
What we are actually considering tonight even though the National Government is completely unaware of it—even though it is a Government bill—is a bill called the Taxation (International Investment and Remedial Matters) Bill. If people want to look at the bill in more detail I suggest they go online because they will not get any information from the Minister’s speech. The Minister gave a speech about a different bill not the one that is before us tonight. 
I turn to the bill before the House tonight. The Green Party will support the bill being referred to the select committee but we have a lot of reservations about it and we will seek to redress those concerns at the select committee to see whether we can improve the bill. The bill does a lot of things. It is a pretty complex bill. I could have understood if the Minister had been confused about the bill. It is a complex bill; there is no question about it. But it was not that the Minister was confused about this bill. He thought he was introducing a different bill. It was not that he was a bit confused about the detail of this bill because it is a complicated bill; I give members that. He actually thought he was introducing an entirely different bill not this bill. Jonathan Coleman stood and gave a 10-minute speech about a different bill not the one we are looking at tonight. 
The bill we are considering tonight is a complicated bill but the long and short of it is that it is a trade-off. Basically it says we will effectively cut some of the corporate taxes in order to try to encourage New Zealand businesses to stay here rather than relocate overseas. That is the long and the short of it. There is a lot more to the bill. It is a long bill but basically it says that there is a bit of a trade-off in that we will accept some lower company tax revenue in New Zealand in the order of tens of millions of dollars. This will be done on the basis that by doing this we are more likely to keep these New Zealand businesses in New Zealand rather than their locating themselves overseas. 
The Green Party accepts that we live in a globalised world with a globalised economy. We have to be competitive and that means looking at the tax system. However the measures that promote tax equity with other countries and encourage New Zealand - based companies to stay here bring jobs and they keep expertise here but there is a trade-off in terms of loss of tax revenue. The problem for us is whether this is a clever response to the challenge of globalisation; that is the real question. It seems to us that this bill is a pretty blunt response. It is largely ideological in fact. There is very little evidence that these tax changes will stop companies from moving offshore. 
The regulatory impact statements—of this bill I say to Mr Coleman; not another one—prepared by Treasury and the Inland Revenue Department are very thin on hard evidence of the threat of companies moving overseas. In fact the Inland Revenue Department says in one of its regulatory impact statements on this bill: “A key gap in the analysis is that it is not possible to quantify the economic benefits of fairer tax treatment. Quantification would require knowledge about the sensitivity of business-location choices to tax which is not directly observable.” That is we are not exactly sure what would happen if we did not introduce these tax changes. Would any New Zealand businesses relocate overseas? We do not know. The Inland Revenue Department and Treasury are saying that there is very little hard evidence to know. 
The other thing about this bill is that it does nothing to promote better business outcomes through tax treatment that backs winners. This legislation will do nothing to drive the New Zealand economy to deliver more sustainable outcomes. Although there is a hope—and it really is only a hope because there is no hard evidence that this bill will help to keep businesses in New Zealand—it does not actually drive us towards what the Greens think we should be embracing which is the green economic wave. 
The next economic wave is the green economic wave and if New Zealand wants to prosper we must write our laws in a way that prioritises the development of sustainable industries like renewable energy sustainable agriculture green technology high technology green design and energy efficiency. Those are the kinds of tax measures that could be introduced if we want to be competitive in a globalised world in order to make sure that the kinds of businesses that will prosper in the future base themselves in New Zealand. We could have tax law that targets tax breaks to those kinds of businesses. This bill has a generic tax break in the hope that by giving away a few tens of millions of dollars we will keep these New Zealand businesses here. It would be much better in our view if we were to target those tax breaks towards the kinds of industries that we want to encourage and have prosper in New Zealand. 
This bill adds about another $30 million to the Government’s $1.5 billion corporate tax cut package. None of the package that the Government has promoted picks winners and none of it promotes more sustainable economic outcomes. We think there is a strong argument for supporting and targeting tax breaks towards the industries of the future which will be the cleantech and greentech industries. Obviously the Green Party’s approach is to reform the tax system to encourage those kinds of industries. 
So although the detail is complex the majority of the tax measures in the bill involve a similar trade-off: lower company tax revenue versus the risk of company emigration offshore. This creates a problematic tension between racing to the bottom with company tax breaks—a race we simply cannot win in the long term—and the losing of tax revenue and jobs as companies move offshore motivated by tax reasons. 
The labour law that we recently saw passed through the House under urgency to secure the filming of  
The Hobbit 
 was a disturbing example of this kind of bidding war in a race to the bottom. The danger with this kind of tax legislation is that sovereign nations all around the planet compete with each other to have lower and lower corporate taxation in order to try to keep businesses or get them to locate to a certain country. We do not think that this race to the bottom is a very clever strategy in terms of trying to support New Zealand businesses and encourage sustainable New Zealand businesses that embrace the green wave here. 
Each tax measure in this bill is slightly different. There is a whole bunch of them and we may support some measures while not supporting others. However as a Parliament we should not in principle support the slow erosion of our tax base for these kinds of unquantifiable theoretical gains and as the regulatory impact statement states it is very hard to quantify. New Zealand would do much better to understand our natural advantages and play to them while simultaneously extending our efforts abroad in international forums to agree to satisfactory environmental labour and tax standards. We would do much better to work with other countries to agree on some minimum standards around tax labour and environmental standards so that we do not compete with each other on environmental standards labour standards or tax rates. This is a relatively small sum in this bill—maybe $30 million a year. So it is small compared with the nearly $100 million that was given away to encourage  
The Hobbit 
 to be filmed here. But it is still part of the overall trend of the race to the bottom. 
So for these reasons the Green Party will be supporting the bill’s referral to the select committee. We understand the basic intent of the bill and the bill has a lot of components that we do support but we do raise a flag and we are not guaranteeing our support further because of the whole problem of the race to the bottom that is encapsulated in this bill. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Assistant Speaker. Kia ora tatou katoa. I am pleased to take a short call on the Taxation (International Investment and Remedial Matters) Bill on behalf of te Pati Maori. Three weeks ago the Minister of Finance told the House that New Zealand’s economic recovery is vulnerable to any kinds of price shocks including oil price shocks. At the moment there is evidence of increases in commodity prices which suggests that there could be risks in the future and of course we come to this bill aware of the impacts of what many economists consider to be the worst financial crisis since the Great Depression of the 1930s. We have been through a time marked by a failure of key businesses declines in consumer wealth estimated to be worth hundreds of trillions of US dollars and a significant decline in economic activity. In this context then we are interested in the impact of the proposed introduction of an active income exemption for foreign investment funds. 
Basically this bill aims to reduce compliance costs by offering transparency in the current law by streamlining the process around the taxation of income from foreign investment funds. It does this in an attempt to encourage New Zealand investment in offshore investment funds. In terms of the extent to which such a proposal may incentivise small businesses to grow by reducing compliance costs the Maori Party is definitely interested in seeing how this plays out over time. The Maori Party places particular priority on the need to support the development and innovation of small businesses including minimising taxation and compliance costs. In this bill that goal will be achieved by simplifying the number of calculation measures. Apparently six different measures are currently available. Under the act of income exemption for foreign investment funds only passive income such as interest royalties and rents derived by New Zealand shareholders in offshore companies will be subject to New Zealand tax. 
The key problem the bill is seeking to address is the inequity experienced by foreign companies offshore in having to pay New Zealand tax as well as comply with the tax rules of their particular country. New Zealand’s international tax rules can often impose higher tax or compliance costs on offshore operations than those faced by competing businesses operating in the same country. Any New Zealand business that invests in a foreign company must not only comply with the tax rules of that country but also attribute income and potentially additional tax in New Zealand. Such a situation can tend to create an incentive for New Zealand companies seeking to establish business ventures outside of Aotearoa to relocate their headquarters to countries that have far more favourable tax rules. 
So a very clear benefit in the proposal in this bill is that although we are unable to stop the seemingly unstoppable drive to expand offshore at least we will not be threatened by the possibility that New Zealanders will sell up and leave Aotearoa for good because of an unforgiving tax regime. The Maori Party is happy to support this bill at its first reading to enable the korero to be had. Kia ora tatou. 
DAVID BENNETT (National—Hamilton East) 
: 
 I rise to take a short call on the Taxation (International Investment and Remedial Matters) Bill. 
H V Ross Robertson 
: Sure you’ve got the right bill David? 
DAVID BENNETT 
: I am sure I have the right bill and members on the other side of the House should take note of this bill. It shows that the Government is working effectively to provide the economic base that will deliver this country the brighter future it was promised. 
H V Ross Robertson 
: Tell that to Jonathan Coleman. He needs to know. 
DAVID BENNETT 
: Members of the Labour Party get a bit interested when they hear those words about a brighter future as those words put them in their place in this Parliament. 
This bill is an important taxation bill. It extends the active income exemption introduced in 2009 to offshore subsidiaries. Essentially controlled foreign companies or CFCs as they are known in taxation terminology are the subject of this bill. The other name that is used is foreign investment funds which also are part of this bill. It applies to joint ventures and other significant shareholdings in foreign companies that are not controlled by New Zealanders—non-portfolio foreign investment funds. Effectively this means that the active income exemption is now being extended to joint ventures and other significant shareholdings. That is in contrast to the other form of income known as passive income which is typically interest royalties and such like. Under the rules only passive income derived by New Zealand shareholders in offshore companies will be subject to New Zealand tax. 
For those looking at the bill for the first time I say that the point of difference with this bill is the active income and passive income distinction. Active income would be a company that is earning money from producing a product—for example manufacturing it overseas—and passive income means income that one receives without actually having to do anything to get the money except to have it invested through something like interest royalties or rents. That is the important first distinction the bill applies to. The second part of it is the nature of the ownership and the taxation of that ownership. Essentially for active income the point of taxation will be in the country where that active income is earned rather than being treated as taxable in New Zealand but passive income will be taxed in New Zealand. That is the general thrust of what this bill is about. 
The reason it is being done in that way is that passive income is typically seen as investment income so New Zealanders would be taxed on it. That is a choice that investors have when making those investment decisions. Active income is seen as probably needing to be on a more level playing field taxation-wise in the countries in which one is earning that active income because one has effectively got a manufacturing or other kind of service site there. With the measures in this bill we are giving a stronger and more sustainable tax system to New Zealand and we are providing an impetus for growth. We are putting New Zealand taxpayers on a level playing field with their international competitors. It is important for the economic growth element of a better future for New Zealanders that we make these changes. 
There are some other changes in the bill as well. The bill extends and rationalises the 2007 international tax reforms so that there is consistency between types of foreign investments. There is a percentage that is used as a threshold to determine the 5 or 10 percent thresholds for taxation whether the bill will apply to the form of income or not. Another big part of the bill is the exemption for Australia. Previously we used to have a foreign investment fund that had a “grey list” of countries. Typically the eight “grey list” countries were ones that were typical New Zealand trading partners. This bill is taking that down to just Australia as the exemption. That is in line with modern practice within this country. There are also some rules on capitalisation to avoid the incentive for people to stack debt against New Zealand operations overseas. That is part of stopping any taxation or tax planning where people try to avoid taxation by taking advantage of these rules. There are a few other minor amendments in the bill as well. 
Essentially this bill will create a level playing field for a taxation base—and active-passive income is a huge part of that—and to make sure that controlled foreign companies and foreign investment funds are treated in a manner that enables New Zealand investors and businesses to grow. Thank you. 
RAYMOND HUO (Labour) 
: 
 I rise to take a call in support of the Taxation (International Investment and Remedial Matters) Bill. Labour supports this bill’s referral to a select committee. Deloitte published in March of this year an article on proposed further changes to international tax regimes. I would like to borrow part of the title of that article: “the good the bad and the ugly”. It is very fitting that I borrow that title to describe the various aspects presented by this bill and the priorities the Government has taken. 
The Minister responsible for the bill the Hon Peter Dunne in his recent speech at the 2010 New Zealand Institute of Chartered Accountants tax conference explained that the bill was a good bill. He said the bill “provides consistency of tax treatment between similar types of foreign investment by extending the active income exemption and active business test (with some small modifications) to non-portfolio foreign investment funds (FIFs). It also extends and rationalises the portfolio FIF reforms so that those investors who are unable to use the active income exemption (due to having an insufficient shareholding or access to information) will generally be taxed on an assumed 5% rate of return (fair dividend rate method).” 
I also note his statement that his Government intends to make New Zealand a more attractive place to invest by lowering withholding taxes through double tax agreements. From the Government’s point of view this bill means that New Zealanders holding stakes of 10 percent or more in offshore companies will not be subject to New Zealand tax on those interests unless the companies earn passive income such as interest royalties and rents. The bill replaces the exemption for non-portfolio foreign investment funds in the eight “grey list” countries with an exemption for non-portfolio foreign investment funds that are resident and subject to tax in Australia. 
As I said Labour supports this bill’s referral to a select committee. This bill is large and complex and it reminded me of the days when I was at the Finance and Expenditure Committee. It is a large and complex bill that warrants careful consideration and the scrutiny of a select committee is necessary and most appropriate. Concerns such as those raised by Deloitte are good examples. Commenting on the discussion document that gave rise to this bill Deloitte stated that the removal of the “grey lists” would expose investors to income attribution when they have previously been exempt. The corresponding tax compliance burden and possible inability to access the required information to meet the alternative exemption may make some New Zealand investors comparatively worse off. This is amplified when we consider that a number of other major trading nations have or are in the process of introducing a form of “grey list”. 
I will remain very interested in the development of this bill and I wish that the Minister would take a call at some later stage and enlighten us as to what he believes to be the best way to address those issues. From a technical perspective this bill follows the Taxation (International Taxation Life Insurance and Remedial Matters) Act 2009 which the Government kindly and inadvertently reintroduced tonight. That legislation changed the way in which a resident’s attributed controlled foreign company income is calculated. 
This bill aligns the method for calculating foreign investment fund income with the current method for calculating attributed controlled foreign company income. It also makes two changes to the thin capitalisation rules. This bill introduces an optional test based on the ratio of deductible interest expenditure to net cash flow. It also changes the rules relating to the grouping for the purposes of the thin capitalisation rules of a registered bank owned by the Crown. Further the bill introduces a zero rate for the approved issuer levy on payments made by approved issuers to non-residents under some debt instruments. The bill introduces other measures as well. 
Although I commend the Minister of Revenue for his obvious contribution towards this bill I cannot help but note a report released yesterday that stated that tax revenue was over $1 billion lower than expected. The Government knew or must have the required knowledge to know that the upper-income tax cuts were unaffordable meaning the Government is having to borrow even more to make up the shortfall for its tax cut to the highest-income earners. That meant the Government broke its promise not to raise GST. It meant huge cuts to our health system to adult education and to early childhood education. Huge cuts to early childhood education funding mean that parents with young children will have to find extra each week. The $1.2 billion hole in health spending over 4 years will hit the elderly and the sick very very hard. 
The National-ACT Government does not seem to be interested in investing in our future either. It is turning students away from universities and polytechnics and it is cutting research and development investment. It even cut the much-needed refugee study grant. I attended the Mangere Refugee Resettlement Centre annual general meeting last Saturday. One could feel that this cut will be felt very hard in the refugee community. Since National has been in office the migrant and refugee community in New Zealand has taken a number of blows. The fact that the unemployment rate amongst the ethnic community has skyrocketed in the past 2 years has been compounded by a number of short-sighted negligent decisions from the National-ACT Government. 
Funding has run out for the refugee study grant and it was axed in the 2009 Budget. The grant was established by the Labour Government in 2003. It created a direct pathway for many hundreds of refugees to get into work. [ 
Interruption 
] Politics is all about priorities. From this move we can see that the National-ACT Government is focused on delivering tax breaks for the privileged few at a time when the majority of ordinary New Zealanders are struggling. A tax switch is no substitute for a real economic plan. 
I support the bill’s referral to a select committee. I look forward to more debate on the various aspects of the bill and the priorities of the Government which will reveal the good the bad and the ugly. Thank you very much. 
Debate interrupted. 
Points of Order 
Rugby World Cup 2011 (Empowering) Bill—Split-party Votes 
CHRIS TREMAIN (Senior Whip—National) 
: 
 I raise a point of order Mr Speaker. I draw your attention to a point of order that was raised earlier in the Committee stage of the Rugby World Cup 2011 (Empowering) Bill. It was with regard to Standing Order 139(2) about split-party votes. The Labour Party cast a split vote and immediately after the vote the Labour Party was required to deliver to the Clerk at the Table a list showing the names of the members who voted in the various categories. It has been another hour since that occurred and I want to make sure that the list has been tabled. 
Mr DEPUTY SPEAKER 
: I thank the member. I am informed that those names are with the Clerk. 
Taxation (International Investment and Remedial Matters) Bill 
First Reading 
Debate resumed. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 It is my privilege to speak on the first reading of the Taxation (International Investment and Remedial Matters) Bill. This bill is another demonstration of the Government’s focus on lifting New Zealand’s economic performance. It has been 2 years yesterday to the day since this Government took over the Treasury benches and it has been a busy Government. It has been a busy Government that has taken on a number of pieces of legislation particularly in the area of enhancing the tax system and promoting economic growth. The Government has been busy promoting better smarter public services and lifting the education standards of young New Zealanders. The Government has also boosted infrastructure in those 2 years through spending on roads warmer homes and the broadband plan. 
This bill builds on and extends earlier international tax reforms. Some of them as has already been acknowledged in this House tonight first came to this House under the last Labour Government but a substantial number of them have come in under this Government in the 2 years since we took office. The main proposal in the bill is to extend the active income exemption introduced in 2009 to offshore subsidiaries. As has already been stated they are controlled foreign companies or CFCs in the tax parlance that is used within the Finance and Expenditure Committee. The proposal also applies to joint ventures and other significant shareholdings in foreign companies that are not controlled by New Zealanders. 
The act of income exemption brings New Zealand’s tax rules into line with other countries and in terms of best practice it is something that the Government is here to promote. Although our colleagues across the benches have said that they will scrutinise this bill in the select committee it intimates to me that they do not scrutinise other legislation that has been put through the House. All three speakers from the Labour Party used the word “scrutiny” and that indicates that they are all reading from the same research notes that were handed out prior to their coming to this House. We thank them for their contributions on that subject. 
Grant Robertson 
: Wrong message. 
PESETA SAM LOTU-IIGA 
: Yes Mr Robertson. This bill also helps New Zealand - based businesses to compete more effectively in foreign markets by freeing them up from a tax cost that similar companies in other countries do not face. So it is about competitiveness and about promoting New Zealand companies and promoting our industries in foreign lands. 
We heard the arguments from members opposite that they do not see the promotion of exports through a number of our tax policies yet for 5 consecutive years under the Labour Government export volumes decreased. That shows Labour’s commitment to the promotion of exports the promotion of jobs and opportunities and the promotion of our industries. We also heard from Mr Cunliffe about the possibility of reforming loss attributing qualifying companies. I find that rich coming from the Labour spokesperson on finance given that Labour had 9 years within which to regulate such companies. Those members sat on their hands and knees and failed to do anything about it. 
In terms of productivity we will be deliberating on the New Zealand Productivity Commission Bill in the Commerce Committee and that is another change that we expect will promote productivity and exports from this country. We know that under the 9 years of the Labour Government productivity increased by 1 percent year on year. Labour’s track record is nothing to be proud of. The Government has had to turn round this economy with the policies that I have outlined in terms of infrastructure innovation and cutting red tape and regulations. I look forward to the select committee process where we will discuss the details of this bill. I commend the bill to the House. Thank you. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I rise to speak in the first reading of the Taxation (International Investment and Remedial Matters) Bill. It is important to pause briefly to note the name of the bill—the Taxation (International Investment and Remedial Matters) Bill. The bill is not called the Taxation (International Taxation Life Insurance and Remedial Matters) Bill which was the title given in the speech that Jonathan Coleman gave to open the first reading. He gave the same speech that the Hon Peter Dunne gave when he introduced the Taxation (International Taxation Life Insurance and Remedial Matters) Bill. So Dr Coleman gave the wrong speech but I ask whether members know what makes it more interesting. The speech that Peter Dunne gave which Jonathan Coleman read out again tonight was given on 23 July 2008 when Mr Dunne was in fact a Minister in a Labour Government— 
Carol Beaumont 
: An oldie but a goody. 
GRANT ROBERTSON 
: An oldie but a goody indeed. I have Peter Dunne’s speech of 23 July 2008 in front of me and can clarify for Dr Coleman that it is word for word. 
Hon Dr Jonathan Coleman 
: I’ll have to have a word with him about that. 
GRANT ROBERTSON 
: I think Dr Coleman probably delivered it with slightly less enthusiasm than Mr Dunne certainly when Dr Coleman worked out that the speech was not actually about the bill we are debating tonight. I certainly will table that speech at the end of my speech just to make sure that we can all see that Dr Coleman read out the same speech that Peter Dunne did except it was about another bill. 
John Hayes 
: It’s consistency for you. 
GRANT ROBERTSON 
: Mr Dunne is the one who has been inconsistent I say to Mr Hayes. He was a Labour Minister when he gave the speech the first time anyway. I say to Dr Coleman that I am sure that we are all grateful for hearing that great speech from Mr Dunne from July 2008 once again in the House tonight even if it is not about the bill that is before us tonight. 
As Labour colleagues have said we certainly are supporting this bill to go to the Finance and Expenditure Committee. It is a dense taxation bill; it is not a bill that I would normally have much time to focus on but I have been pleased to look at it tonight. I can see elements in this legislation that look like they will be worthwhile and will make reforms in the way that New Zealanders are taxed for income from interests in overseas entities and the gains of foreign residents from interest in New Zealand companies. That is a difficult area of taxation and a complicated area of taxation and it therefore deserves select committee scrutiny. It aims to provide consistency of tax treatment between similar types of investment and it achieves that by extending the active income exemption and the active business test with some small modifications to non-portfolio foreign investor funds. This side of the House can certainly understand that the bill will be welcomed by a number of investors and that it deserves the attention of a select committee but some of the questions we will be asking on this side of the House are around just who will benefit from the changes. 
We have become suspicious over time about the way that National constructs its taxation programme and its taxation legislation. We certainly saw that when the tax switch—or the tax swindle as some people have called it—was brought into this House essentially tilting the tax system in favour of the top earners in this country. We heard from the previous Government speaker Sam Lotu-Iiga about the great programme that National has had in office and its fantastic track record when it comes to taxation. But all this side of the House sees in terms of a track record on taxation is taxation policy that favours the wealthy in our society. Although National might be prepared to go back two decades to trickle-down economics and hope for the best that that will lead to an economic recovery for New Zealand we do not believe that is so on this side of the House. We believe that when we look at the overall economic programme—and taxation policy is part of that—we have to adjust ourselves to a modern world; we will not go back to failed economic policies like trickle-down economics. We need a taxation system and an economic policy that will deliver for the exporters of New Zealand that will deliver high-quality jobs for New Zealanders and that will deliver high-tech clean green industries. 
Mr Lotu-Iiga stood up and talked about the changes that National had made. One thing that he did not talk very much about was the change to the research and development tax credits—the removal of the research and development tax credits. There are varying views about tax credit systems around the world but one thing is absolutely clear when it comes to research and development tax credits: Australia has a tax credit system and many people I spoke to when Labour brought in our tax credit system said that the best thing about it was that we were matching the Australians. It meant that the incentive to take their business—the research and development part of their business—offshore had gone. But National came into office and got rid of the research and development tax credits and that was a negative moment for businesses in this country. It took away an incentive to improve what most people acknowledge has not been a great record on research and development in this country. Mr Lotu-Iiga might be proud of National’s tax record but the truth is that National walked away from an opportunity to enhance investment in our businesses and increase research and development which is so vital for New Zealand. 
When Labour members look at this bill we are concerned about the way that National has gone about some other major elements of its tax policy—GST being the obvious one. On 1 October GST went up by 2.5 percent and it is worth reminding the House that John Key went into the 2008 election saying that GST would not increase. He said that GST would not increase. The video is out there for anyone who wants to watch it. Mr Key has stood up in this House and said that it all depends on what context he was talking in. The context he was talking in was whether GST would go up under a National Government and he said that it would not. 
David Shearer 
: You can’t get around it really can you? 
GRANT ROBERTSON 
: He cannot get around it and that kind of broken promise on taxation policy is the very reason why people on this side of the House look very closely at all taxation bills that come before this House to see who will benefit from them. We know that the people who will be most affected by the increase in GST are those on the lowest incomes. They got the least out of the tax cut package and they are most affected by the increase in GST. It is a double whammy and we know from talking to families all around New Zealand that the impact of this Government’s tax policy has been negative for those on the lowest incomes. Families who thought that they would be better off because the National Government had promised them tax cuts are actually finding themselves worse off—in some cases up to $50 a week worse off when we build in the impact of ACC levy rises and the cuts to funding for early childhood education. Those families are already struggling with cost of living increases. 
Here in Wellington people have come to see me about something as simple as bus fares going up. When bus fares go up it puts huge pressure on people who rely on buses as their mode of transport. In Wellington bus fares effectively went up for some people by $40 a month if they caught the bus every day—$40 a month. That is a big chunk out of people’s disposable income. Their power prices may have gone up; here in Wellington customers of two or three of the power companies have had letters telling of a 6 percent increase in power prices. That is an added increase for families who are struggling and not benefiting from the tax policy of this Government. 
I do not claim to be any kind of expert on taxation but as my colleague Raymond Huo said before it is about priorities. It is about the priorities this Government gives in terms of where it wants to take New Zealand into the future. I ask whether the priority is investing in people in skills in training in supporting people into work and making sure that all New Zealanders can achieve their potential or whether the priority is making decisions about trickle-down economics hoping for the best and rewarding the privileged few rather than developing the potential of the many. 
It is sad for me that we have a taxation bill here. Jonathan Coleman has nearly caught up now with which bill we are actually debating. But this taxation bill is fine it should go to the select committee and it should be discussed. But when it comes to tax policy this Government has sadly broken its promises as part of an economic plan that it has not provided to New Zealanders. What we see is a Government without vision and in the case of tax policy favouring the privileged few over struggling New Zealanders who need support. 
AMY ADAMS (National—Selwyn) 
: 
 It has actually been a little while since I have risen to take a call in this House. I have been sitting here hoping that it is like riding a bike and that I will remember how to do it. 
It is an interesting time to take a call on the Taxation (International Investment and Remedial Matters) Bill. The first trick with this legislation is not to get it confused with the Taxation (International Taxation Life Insurance and Remedial Matters) Bill which of course went through the House earlier last year and is now law. I tell Mr Robertson how much I enjoyed sitting through the Finance and Expenditure Committee when we worked through the detail of that bill. In actual fact the process of working through that earlier bill has been quite helpful for me in framing the debate around this legislation because it looked at the same core issues that this bill is addressing: in essence the proper way that we tax in New Zealand income both passive and active from foreign entities. 
With that bill the select committee worked through the process and saw the wisdom of moving away from the old “grey list” test by which we exempted income earned in certain qualifying countries but which was very unfair and unclear as to how everything else was taxed. We moved instead to a much simpler test where Inland Revenue would look at whether the income was actively earned in that country and whether the company was actively trading in which case it made sense to put them on a similar footing to local companies in that jurisdiction or whether that revenue was earned on a passive basis in which case fairness suggested that it should be taxed here in New Zealand according to New Zealand rules. That made sense to the committee it was subsequently passed by this House and as far as I know it is working very well. 
With this bill before us tonight we see the extension of that regime to non-controlled foreign entities owned by New Zealand residents. On the face of it that extension seems to make a lot of sense to me but of course if this House approves the first reading tonight we will have to work through in select committee exactly what impacts that extension will have why those entities were originally left out of the regime and what any unforeseen aspects might be. 
I will touch very quickly on two other matters in my contribution tonight. One is around the changes to the thin capitalisation rules which are probably a little-known pointy-head aspect of taxation law but are actually rather important. This bill proposes changes to the thin capitalisation rules for non-residents. One important change is providing an alternative test which on the face of it seems to be a very sensible alternative allowing an assessment of interest expenditure as a proportion of income for companies that are not State-owned banks. That seems to make a lot of sense in ensuring that those thin capitalisation rules work well; again I will be very interested to hear from officials and submitters as to the impact of that change as we work through the process. 
The final point I want to pick up on is about looking back into the dark old ages. Reading through the explanatory note I saw a reference to the Stamp and Cheque Duties Act 1971. I have to say that in my early days of practising—and Minister Wilkinson will remember those days—we had to collect stamp and cheque duty in all conveyances. I was surprised to see that it is still active. But yes we indeed have a requirement under that Act that for approved issuers there is an exemption from non-resident withholding tax and that the rate for those approved issuer levies is set under the Stamp and Cheque Duties Act. This bill would see that rate reduced from the current 2 percent to a robust rate of zero percent. I am very pleased to see that my old friend the Stamp and Cheque Duties Act still breathes life. Again I will be very interested in talking to officials about how reducing that rate to zero percent will affect the situation. 
I support the bill. It seems to be a sensible extension of the regime previously approved by this House but of course until we hear from submitters and until we work through the process we will not know exactly how it will apply. At this stage I am very happy to commend the bill to the select committee. Thank you. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I seek leave of the House to table the speech made by the Hon Peter Dunne on 23 July 2008 on the Taxation (International Taxation Life Insurance and Remedial Matters) Bill which is the same speech that Jonathan Coleman gave at the start of this first reading. 
Mr DEPUTY SPEAKER 
: I cannot accept that because it is already in  
Hansard 
. [ 
Interruption 
] I think the member has made his point. 
Bill read a first time.  
Bill referred to the Finance and Expenditure Committee. 
Governor-General Bill 
Third Reading 
Hon PHIL HEATLEY (Minister of Fisheries and Aquaculture) 
 on behalf of the  
Prime Minister 
: I move  
That the Governor-General Bill be now read a third time 
. The bill repeals and replaces Part 1 of the Civil List Act 1979 with new financial arrangements for the support of the Governor-General and his or her programme including removing the tax exemption for the Governor-General’s salary. Although the bill will simplify the financial arrangements for the support of the Governor-General and for his or her programme and will modernise the antiquated drafting from the part on the Governor-General in the Civil List Act it will not affect the constitutional position of the Governor-General in any way. 
The Law Commission considered a number of options on how the legislation supporting the Governor-General should be framed. It ultimately concluded that there is symbolic importance in setting out the provisions relating to the Governor-General in separate legislation. The Governor-General Act will enhance the apolitical role of the Governor-General in our constitutional arrangements and align the New Zealand statutory arrangements with those in Australia and Canada. 
The key reforms of the bill relate to the changes to how the office of the Governor-General is funded. The bill will consolidate all funding for the Governor-General’s programme with a single permanent appropriation leaving annual appropriations to account for Government House’s operational budget only. The Governor-General’s international travel will be provided for under a separate appropriation. These arrangements will be much simpler and easier to administer than the current system under the Civil List Act. Although permanent appropriations remove certain payments from annual parliamentary approval separating out the existing permanent appropriations into distinct categories provides additional transparency in so far as each appropriation will show up as a different line item in both the estimates and the annual reports from the Department of the Prime Minister and Cabinet. 
The Governor-General’s salary and allowance are exempt presently from income tax under the Income Tax Act 2007. The salary is calculated on this basis. This is a historical anomaly which the bill rectifies. The bill contains savings and validations clauses to ensure that the relevant provisions of the Civil List Act and any determinations of the Remuneration Authority or Orders in Council made under the Act continue to apply to the incumbent Governor-General and previous Governors-General and their spouses. Only the annuities provisions which remove outdated restrictions on the availability of annuities already discussed will apply to the incumbent Governor-General and his spouse. I thank the Law Commission and the Government Administration Committee for their work on this issue. 
Hon DAVID PARKER (Labour) 
: 
 First of all I congratulate the Minister of Fisheries and Aquaculture on behalf of the Prime Minister on reading out the right speech. I was somewhat amused to learn that in respect of the previous bill the wrong speech was read out. In fact it was one that is already in  
Hansard 
. I would like to put on record that one of the reasons that the Deputy Speaker declined our application to seek leave to table the earlier speech was that the fact that it is already in  
Hansard 
—and it is now in twice. 
The Governor-General Bill is a relatively simple bill. It is supported by the Opposition. The bill as the Minister said updates the way in which the Governor-General is remunerated. It updates that and makes it clear that the salary of the Governor-General ought to be taxed and grosses it up so that after tax it is roughly the same amount that the Governor-General currently receives. It clarifies how allowances are to be paid and it does that in a way that the Opposition agrees is appropriate. I think it has already been put on record in earlier stages of this debate that the old legislation is so antiquated that it refers to the fact that the Governor-General upon appointment who way back then was often appointed from the United Kingdom had a right to a trip by boat— 
Phil Twyford 
: Sailboat. 
Hon DAVID PARKER 
: —sailboat—from the United Kingdom to New Zealand as part of his or her conditions of appointment. Obviously that is a bit out of date. 
Another matter I would put on record once again is the constitutional importance of the position of Governor-General. It is a very important position. The Governor-General stands as the Queen’s representative in New Zealand. The Queen is the head of State in New Zealand and her representative in New Zealand is the Governor-General. The Governor-General holds a very important constitutional position both in the day-to-day administration of justice and in the various reserve powers and prerogative powers that sit with the Governor-General. 
Hon Phil Heatley 
: This is breaking news! 
Hon DAVID PARKER 
: Well it might not be important to Mr Heatley but Mr Heatley does not understand these issues very well. 
Phil Twyford 
: No respect for the monarchy! 
Hon DAVID PARKER 
: No respect for the monarchy! Various submissions made to the Government Administration Committee suggested that the mode of appointment of Governor-General ought to be changed. Those submissions generally came from people who thought that New Zealand should move from having the Governor-General as a representative of the Queen to having the Governor-General appointed as a New Zealand official by some process that would effectively move New Zealand from having a monarchy-based system to having a republican system. That was obviously outside the scope of this bill. I am not a person who has a strong view about that but I do have a strong view that if there is ever a move to republicanism the appropriate method of doing it will be by way of having a Governor-General with the same form and functions as the current Governor-General rather than moving to an elected or presidential system which would cause all sorts of changes and problems including bringing to a head constitutional issues such as the proper place of the Treaty of Waitangi in a constitutional sense when these issues are perhaps best worked through gradually as they currently are through the Treaty settlement process. 
I will not say much other than that. Labour supports this legislation. I thought it was appropriate that the Prime Minister attended Parliament and spoke on the first reading. He has not made contributions to subsequent readings which is not all that unusual for the Prime Minister since the Prime Minister is obviously very busy. Perhaps given the controversy we had around Paul Henry’s comments that were quite insulting to the current Governor-General it would have been appropriate for the Prime Minister to take a call and show his support for the Governor-General. Having made those comments I say that Labour will be supporting the third reading of this bill. 
JACQUI DEAN (National—Waitaki) 
: 
 I stand in the third reading of the Governor-General Bill. This bill is timely legislation and it is important for New Zealand as the Governor-General plays a very important role in New Zealand’s constitution. The bill implements the recommendation in the Law Commission’s report 112 which reviewed the Civil List Act subject to minor changes of a technical nature that the Government Administration Committee made. The bill repeals and replaces Part 1 of the Civil List Act 1979 with updated financial arrangements concerning the allowances salary taxation and travelling expenses of the Governor-General and the administrator of the Government. 
As noted by David Parker the chair of the Government Administration Committee the committee received submissions on this bill and they were interesting and thought-provoking—for example some submitters believed that a proper process should be defined for the dismissal of a Governor-General; some submitters wanted to set a fixed term for which Governors-General are appointed suggesting that a maximum of 5 years or a term decided by Parliament would be appropriate; and some submitters wanted the Governor-General to become the head of State of New Zealand. The committee determined that although those submissions were interesting and perhaps could be picked up at another time they were outside the scope of the bill. A couple of minor technical amendments were noted for which the committee did not feel it was worth reprinting the bill but they are noted in the commentary. 
I will make just a few comments to finish off my contribution on this bill. As the Sovereign’s representative in New Zealand the Governor-General helps maintain the legitimacy and continuity of Government. The Governor-General has a very important role in New Zealand society and it is a position that is well regarded. The office of the Governor-General makes a symbolic link between the community and the State and the Governor-General also represents the New Zealand public in a non-partisan way on important public occasions. As those of us who are privileged to have seats in this House will know the current Governor-General Sir Anand Satyanand fulfils his duty with a good deal of grace. 
New Zealand Governors-General always support many community organisations. That is also noted and important. It is vital for us in New Zealand that the office of the Governor-General is properly supported in those important roles. With those remarks I commend the bill to the House. 
PHIL TWYFORD (Labour) 
:  
It is my pleasure to contribute to the third reading debate on the Governor-General Bill. Labour is supporting this bill. It is quite a non-controversial bill which streamlines the financial arrangements for the office of the Governor-General. It brings in an element of transparency and the new arrangements are clearer and simpler. The bill will also modernise some of the language that is found in the parts of the Civil List Act that deal with the office of the Governor-General. 
It is our view and I think it is on the record now that we believe it is no longer appropriate for the Governor-General to be exempt from paying income tax. That change is an important piece of symbolism in modernising the office of the Governor-General and it carries with it the symbolism that the Governor-General is the first among equals if you like in New Zealand and the idea that we are all equal under the law. 
The origin of this bill was a request by the previous Labour Government to the Law Commission to consider the arrangements surrounding the office of the Governor-General and make recommendations on how they could be modernised and improved and we are pleased that the findings and recommendations of the Law Commission are being implemented in full. As my colleague David Parker said we welcome the progress of this bill. 
The bill achieves a number of things that I think are worth mentioning in this third reading speech. The definition of the Governor-General’s family was not clear in the existing legislation but in this bill “family member” is now defined as meaning a partner or spouse or a child aged under 18 and that is important in terms of the funding arrangements. The salary of the Governor-General will now be set by the Remuneration Authority and that is also an improvement. There is a new sum payable after the Governor-General leaves office and there has been an interesting exchange in the  
Dominion Post 
 in which the Cabinet secretary wrote to explain that the change made here from a lump sum equivalent to 3 months of the Governor-General’s salary to a sum that is now doubled to 6 months’ salary reflects the removal of the tax exemption. We then saw the political editor of the  
Dominion Post 
 point out that the Cabinet Office had failed to explain how 3 months’ untaxed pay is roughly equivalent to 6 months’ taxed pay at a 33 percent tax rate. But I do not think anybody in this House begrudges this Governor-General or future Governors-General that payment. 
Clauses 8 and 9 deal with the annuity for a former Governor-General or spouse payable 6 months after a Governor-General leaves office. The bill also provides for the expenses for the Governor-General and his or her family for fulfilling the duties of office including travel and so on and provides legislative authority for that funding. Finally the Civil List Act has been amended and this bill establishes stand-alone legislation which I think is an appropriate way to recognise the importance of the Office of the Governor-General. All that I think is good and satisfactory. 
This debate as it has progressed through the stages has provided a welcome opportunity for some debate and discussion on the office of the Governor-General in New Zealand in the 21st century. I will say again that Labour welcomes the chance to begin a conversation about the future role of our Governor-General and the future status of our head of State. Phil Goff and others in the Labour caucus have said that now is the time to begin a conversation about our constitutional arrangements. Many people believe that the current Queen Queen Elizabeth II popular as she is occupies such a place in the hearts of New Zealanders that not many people really want to begin a conversation about shifting to a republic during her reign. But there are also many people who believe that when the current Queen leaves office—dies or abdicates—that will be a time when many New Zealanders would in fact like to have that conversation about our future constitutional arrangements. Michael Cullen’s recent intervention sparked a useful public debate about the need to have this conversation in advance of the current Queen’s death or abdication. We may need to do that. 
In modernising the arrangements for the office of the Governor-General it is appropriate that we should begin to kick off a conversation about what true modernisation would look like for the Governor-General and indeed for our head of State. I am glad that submitters to the Government Administration Committee came along and proposed some simple amendments to this bill that would have modernised it even more than these provisions do. We believe as many people do that it is inevitable that New Zealand will become a republic. There are many in this House across a number of parties who believe that it is something we should begin to talk about now and not put off into the never-never. 
So Labour supports this bill. It fully implements the recommendations of the Law Commission and we appreciate the work of the officials and of the select committee in getting the bill to this stage. 
I suppose the other thing finally that I will mention is that the public debate around the racist and offensive comments made by the broadcaster Paul Henry really shone the spotlight on the office of Governor-General when this rather technical and uncontroversial bill was proceeding through the House. I think those comments stirred up quite a useful and healthy debate about how we feel as a nation about the office of Governor-General and the institution of our head of State. Paul Henry perhaps inadvertently cut right to the heart of what is important about the office of the Governor-General which is that the office is a symbol of who we are as a nation who we are as New Zealanders and it gives us our sense of national identity. By attacking in such a nasty and cheap way the current incumbent Governor-General Sir Anand Satyanand and questioning whether he looked and sounded like a New Zealander Paul Henry stirred up a real debate about the office of Governor-General and what it means to us as a nation. Thank you. 
KEITH LOCKE (Green) 
: 
 The Green Party is supporting the Governor-General Bill. It modernises and normalises a lot of the arrangements around our Governor-General in terms of making his or her income taxable and things like that. I tried to modernise the bill even further by moving an amendment to remove the specification in the bill that the Governor-General will have the use of chauffeured cars when he or she no longer holds office as it seemed a bit excessive to specify that in this legislation. Unfortunately it only gained the Greens’ votes. I tried to move another two amendments on Supplementary Order Paper 173 which rose out of submissions to the Government Administration Committee. There were three submissions to the select committee with two oral submissions. The two oral submissions were by the Republican Movement of Aotearoa New Zealand represented by Lewis Holden and Dean Knight and there was also a submission by Derek Round. The two oral submissions both proposed that the nomination to the monarch for Governor-General be from a 75 percent majority of Parliament rather than just determined by the Government of the day. 
Unfortunately it did not proceed to a vote in the Committee stage. Although I moved a motion to say it be an instruction to the Committee on the Governor-General Bill that it have the power to consider it and if it thought fit adopt the amendments set out on Supplementary Order Paper 173 it was not supported by the other parties in the House. That amendment was just to make the procedures more democratic. The Labour members said that they could not vote for it even though they were a bit sympathetic to those amendments because they would have to be referred back to submitters and another lot of submissions would have to be called. Well it is a pity if that was the case as when they were on the select committee they did not push for that extra submission process to take place. 
In the first part of my Supplementary Order Paper proposed new clause 4A on the appointment of the Governor-General simply read: “The Governor-General is appointed by the Sovereign on the recommendation of the House of Representatives. The recommendation must be agreed to by at least 75 percent of all members of Parliament.” It was a very simple proposal and I wish the vote had been in favour. The second part of the Supplementary Order Paper was clearly in my view and in all respects very relevant to the bill. It was also a proposal that came from the written and oral submission by the Republican Movement of Aotearoa New Zealand. It must be said that neither of the two proposals it raised were specifically republican; they were about democratising the institution of the Governor-General in terms of a recommendation to the Queen. 
The second part of the Supplementary Order Paper was about the term of appointment of the Governor-General. My proposed new clause 5A said: “Term of appointment of Governor-General (1) The Governor-General is to be appointed for a term not exceeding 5 years. (2) A person who has been appointed as Governor-General cannot be reappointed as Governor-General.” I thought that was quite important because there is no set term for Governors-General in legislation. There is nothing to stop Governors-General being reappointed forever. That amendment was very relevant to the bill because in the bill there is a section on annuities and clearly annuities should be based to the length of service. In fact in clause 8 on the annuity for former Governors-General it states that to get an annuity one has to have completed 2 years or more in office. What happens if the Government appointed a Governor-General for 1 year? He or she would miss out on an annuity altogether. There is absolutely nothing in the present legislation to stop the Government from appointing the Governor-General for 6 months 1 year 3 years or 10 years. It could be anything because there is no legislative control over that. Not having a specified term for the Governor-General mucks up the whole of clause 8 on annuities. 
The other thing the bill talks about is the Remuneration Authority and how it determines things in relation to the level of annuity for former Governors-General or their spouses if the Governor-General dies early on. That is good because one of the things the Green Party has been proposing is a greater role for the Remuneration Authority in determining MPs’ salaries and allowances and putting them all together and giving them over to the Remuneration Authority rather than us determining things ourselves. In that context with all this debate about perks and MPs determining their own perks clause 11 seems very odd. We as MPs have voted for particular specified perks for the Governor-General in relation to domestic travel and even down to the detail of the use of chauffeured cars when he or she no longer holds the office of Governor-General. That is repeating the error we made in relation to our own salaries and allowances. 
John Hayes 
: Of course it’s not. Mean-spirited Green Party! 
KEITH LOCKE 
: It is not a question of being mean-spirited. I am not saying that the Governor-General does not deserve some consideration of free travel. If a former Governor-General who is living in Auckland has to go to a function in Christchurch in his or her role as a former Governor-General I am not saying that their travel costs should not be covered in some respect. But to actually specify it as chauffeur-driven cars is I think going beyond our democratic mandate particularly in this era when there is so much concentration on privileges. 
It is true that in terms of travel privileges the new Green Mayor of Wellington Celia Wade-Brown is setting the standard. When she met Hillary Clinton the other day she did not go to the expense of charging up a big bill to the Wellington City Council for a taxi; she biked around to Wellington Airport to meet Hillary Clinton. I think that sets a very good example. There is a parallel here that we can specify in general that there should be an entitlement to travel but exactly what that is should be left up to the Remuneration Authority. That is all I am saying. 
Overall yes we are modernising the role of the Governor-General. Phil Twyford talked about this as preparing to move to a republic. As members know I had a bill that unfortunately did not succeed which would have moved us to a larger discussion on whether we should have a referendum on a republic. This bill before us today is not particularly relevant to a republic at all but it is true that republicans are often interested in democracy and democratising institutions which is one reason why I am personally quite keen on this bill. I just wish it could have gone a bit further. It is part of the democratic constitutional debate that we are involved in day by day. With those few words the Green Party will support this bill. We had hoped that it would go a bit further. Thank you. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Deputy Speaker. Kia ora tatou katoa. Members will be aware that there has been a lot of korero recently about entitlements the appropriate use of expenses and reimbursements related to the role of a politician. The Governor-General Bill fits within that broader context of public accountability and transparency for a prudent use of the public spend. This bill in itself as other speakers have alluded to is pretty innocent. Its purpose is to simplify the funding of the office of the Governor-General and to bring the taxation treatment of the Governor-General’s salary into line with that in other Commonwealth countries. 
This bill is a consequence of the 2007 Law Commission review of the operation and provisions of the Civil List Act 1979. The bill provides that the Governor-General must be paid a salary at a rate determined from time to time by the Remuneration Authority and that rate must not be reduced during his or her term. The bill also concludes that the Governor-General must be paid an allowance at a rate fixed from time to time for official expenses. The bill has many other aspects to it. There are provisions for compensation for superannuation rights lost during the term of being a Governor-General; for the annuity that is paid to the surviving partner of a Governor-General who has died after or during his or her term of office; and for other benefits or privileges by way of payments in respect of domestic travel and the use of chauffeured cars when a Governor-General no longer holds the office of Governor-General. 
Like the Hon David Parker I say it is important that we recognise the role of the Governor-General within the constitutional framework of Aotearoa a context that was shaped by the Declaration of Independence Te Tiriti o Waitangi and the relationship between the Crown and the Treaty partner tangata whenua. 
Ara ano atu tetahi take kua puta mai e hangai tonu ana ki a ngai Maori ara ko tera ko te tu o te tangata whenua me ki hei Kawana-Tianara mo Aotearoa. Ki ta matou e kite nei mena ka whakaturia tetahi Kawana-Tianara Maori he mea awhina tera ko te noho tahitanga o te Ao Pakeha me te Ao Maori i te mata o te whenua i Aotearoa nei. Ko te mea pai o tera momo tu ka noho he Maori me ki hei kanohi hei waha korero mo te Kuini o Ingarangi. Me maumahara ano tatau ko te Kawana-Tianara te kau ma ono o Aotearoa ko Ta Paora Reeves ko ia tera i tenei wa tonu nei ko ia anake o nga Kawana-Tianara katoa he whakapapa Maori tona a ko ia tera i whakaturia ki tera o nga turanga whakaharahara. I te wa i whakaturia a ia i te 22 o Whiringa-a-rangi i te tau 1985 e hia ke nei nga Maori i mihi nei i whakanui nei i te ahuatanga o ta Paora tu hei Kawana-Tianara mo Aotearoa. Ko Ta Hemi Henare tetahi ko tana korero e penei ana: “It must be a fruit of the Treaty of Waitangi to see a person from our people.” 
Ara koia tera te korero a Ta Hemi Henare. Ko Ta Paora he uri o roto o te hapu o Puketapu o Te Ati Awa o Taranaki a he tangata me ki i roto i nga take nui o te wa ko ia tera i kaha whakahe nei i te haerenga mai o te tima whutuporo o Wherika ki te Tonga ara ko te Springbok Tour i te tau 1981. Ko ia tera i whakaturia hei Pihopa mo Aotearoa a ka mutu ko ia tera ano hoki i haere hei tumuaki mo te Whare Wananga o te Rau Kahikatea mo te Pihopatanga o Aotearoa. 
No reira he aha te tikanga o tera korero mo Ta Paora ki tenei pire? Ka mutu ko ta matou e whakapono nei me whakaaro tatou mo tera ahuatanga o roto i tenei momo pire. 
[ 
There is another matter that has emerged relating directly to the Maori people and that is for someone of indigenous descent to become Governor-General of New Zealand. In our view if there were to be a Maori Governor-General it would improve relations between Pakeha and Maori. The great thing about that is that a Maori would become the representative and spokesperson for the Queen of England. We must not forget that the 16th Governor-General of New Zealand was Sir Paul Reeves who remains the only person of Maori descent to have been appointed to this highly significant role. At the time of his appointment on 22 November 1985 many Maori groups welcomed the appointment with Sir James Henare saying: 
“It must be a fruit of the Treaty of Waitangi to see a person from our people.” 
So that is what Sir James Henare said. Sir Paul Reeves is a descendant of the Puketapu subtribe of Te Ati Awa of Taranaki and opposed the 1981 Springbok Tour. He was an ordained bishop later serving as dean of the St John Evangelist Theological College or the theological college of the Te Pihopatanga o Aotearoa.  
So how does all this fit into this bill? In the end we believe that in a bill of this type we should take that situation into account. 
] 
We believe that this bill in maintaining respect for the position of the Governor-General maintains respect for the core elements of our constitutional understanding that have retained an importance in Maori consciousness. In many respects until the constitutional review is in progress the Governor-General must stand as the representative of the Queen the embodiment of the Crown. In doing that we will continue to place that role in the context of respect for the Treaty of Waitangi as the nation’s founding document and constitutional blueprint. Despite the policy and legislative changes of the last 35 years to better recognise the Treaty of Waitangi shortfalls remain that adversely affect the lives of hapu whanau and iwi. These shortfalls also affect the quality of cross-cultural relationships and the operations of society more generally. Enhancing respect for and giving better effect to Te Tiriti o Waitangi will enhance the quality of life for all. 
This bill does not do any of that by a long shot of course but it is a part of the conversation that must be had as a nation. In that sense we support this bill at its third reading. 
JOHN HAYES (National—Wairarapa) 
: 
 Before speaking on this third reading of the Governor-General Bill I will do something that I probably should have done previously which is to declare an interest. My interest is specifically that I belong to a group called the Monsoon Munchers a group that includes the Governor-General. We are a lunch group of people a mixture of diplomats journalists and others who have lived and worked in Asia. I just declare that interest. 
I turn now to the comments of Phil Twyford. It seems to me that it is worth reflecting on where we have come from in the last 160 years when Hobson was appointed as the first Governor of New Zealand and thinking about how the role has changed from the days when New Zealand was a dependent colony to our present situation as an independent nation that is able to make its own decisions. In the beginning Governors-General were appointed on the advice of the British Government not only to undertake the duties of the Sovereign but also to represent the interests of the British Empire here in New Zealand. The Statute of Westminster in 1931 which came after the 1926 Balfour Declaration changed that. No longer could the British Parliament make laws for New Zealand unless it was at our request as we are doing tonight with this bill. 
That declaration also changed the role of the Governor-General. Instead of simultaneously representing the Sovereign and the British Government the Governor-General became just the Sovereign’s representative here. That continued until about the late 1960s with Governors-General who were mainly drawn from the minor aristocracy or the British military. Following the appointment of Sir Arthur Porritt who as I recall was the first New Zealand - born Governor-General back in 1967 we have had the first Maori Governor-General Sir Paul Reeves the first woman Governor-General Dame Cath Tizard and the first Governor-General of Asian-Pacific descent the present Governor-General who does a very fine job—the Rt Hon Sir Anand Satyanand. 
Dr Rajen Prasad 
: All New Zealanders. 
JOHN HAYES 
: He was appointed as that member would well know in 2006. The backgrounds of those Governors-General have also been varied. 
At the request of the Government over the years Governors-General have increasingly travelled overseas apolitically representing New Zealanders at major international events and in general promoting New Zealand interests abroad. We have moved from a situation—and I think the bill reflects this—of being an agent of a once-global empire to a situation now in the 21st century where the Governor-General is a New Zealander who represents the head of State in New Zealand and represents New Zealand to the rest of the world. I do not think we should get too tangled up with the views of Mr Twyford or Mr Locke as to where this constitutional arrangement should head. 
Overall this bill represents a great leap forward in the way that the Government supports the office of Governor-General. Apart from one or two exceptions in the new legislation it will not apply to Sir Anand Satyanand but it will apply when the next Governor-General is appointed. The bill creates a new funding structure for the office of Governor-General. Currently the Governor-General’s personal allowance pays for a variety of official functions that would be better paid for by a separate programme and appropriation. International travel that the Governor-General undertakes at the Government’s request is provided for in the new travel appropriation and domestic travel will form part of the programme’s appropriation. The present exemption of the Governor-General’s salary from income tax will be removed by this bill and there will no longer be justification for it. Successive Governors-General have requested that this exemption be discontinued. The Queen after all has chosen since 1993 to pay income tax on her private income and the Aussie Governor-General and state Governors have paid income tax on their salaries since 2001. The Minister of Finance’s power to exempt the Governor-General from paying any public or local taxes and other State duties will also be removed. 
With those words of support I commend the bill to the House. 
JACINDA ARDERN (Labour) 
: 
 I think that was a great example from John Hayes of filibustering. If not I have to say I did not otherwise feel the need to know about the Monsoon Munchers. 
Debate interrupted. 
The House adjourned at 10 p.m.