Volume 688 Week 36 - Thursday 14 March 2013 
Text is incorporated into the Bound Volume 
Volume 688 Week 36 - Thursday 14 March 2013 
[Sitting date: 14 March 2013. Volume:688;Page:8547. Text is incorporated into the Bound Volume.] 
Thursday 14 March 2013 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Business Statement 
Hon ANNE TOLLEY (Deputy Leader of the House) 
: 
 When the House resumes on Tuesday 19 March the Government will look to progress the Appropriation (2011/12 Financial Review) Bill the Minimum Wage (Starting-out Wage) Amendment Bill the Local Electorate Amendment Bill (No 2) and the Marine Legislation Bill. On Wednesday 20 March with the agreement of the Business Committee and effective on Thursday 21 March the House will have extended hours to progress a number of bills on the Order Paper as notified in the determinations of the Business Committee on Tuesday 19 March. 
Motions 
Papal Election—Pope Francis 
Hon CHRISTOPHER FINLAYSON (Attorney-General) 
: 
 I seek leave to move a motion without notice and without debate concerning the election of the new pope. 
Mr SPEAKER 
: Is there any objection to that course of action being followed? There is none. 
Hon CHRISTOPHER FINLAYSON 
: I move  
That this House note the election in Rome earlier today of Jorge Mario Bergoglio of Argentina as Pope Francis I 
. He is the 266th Roman pontiff the first pope from the southern hemisphere and the first pope from the Americas. He has been for some years the Cardinal Archbishop of Buenos Aires and is well known for his humility and commitment to social action. On behalf of the House I wish him the best for his term of office and congratulate the people of Argentina on a hugely significant day in the history of their country. 
Motion agreed to. 
Questions to Ministers 
Solid Energy—Financial Position 
1. 
Hon DAVID PARKER (Labour) 
 to the  
Minister of Finance 
: Does he agree with the Prime Minister that one of the three main reasons for Solid Energy’s precarious financial position was that “they added gearing to a company that historically had not had gearing”; if so why? 
Hon TONY RYALL (Minister of Health) 
 on behalf of the Minister of Finance: Yes I do. The fundamental cause of Solid Energy’s problems is that the investments that the board made did not generate the returns that the board expected and the situation became a perfect storm when coupled with the collapse of world coal prices in 2012. 
Hon David Parker 
: Does the Minister of Finance stand by his own acknowledgment yesterday that in the case of Solid Energy it “would have been better with no debt. In retrospect that is easy to see; at the time it was not.”; if so can he understand why New Zealanders are so disappointed to have a Government that can be wise only with hindsight? 
Hon TONY RYALL 
: Yes and of course that is the benefit of hindsight. At the time that the former Minister for State Owned Enterprises wrote to that company it was clear that as we were expressing to all State-owned enterprises there was a need to lift improvement. 
Hon David Parker 
: Why does his Government continue to deny responsibility for foolishly pressuring Solid Energy to hugely increase its debt and dividends at a time when coal prices were dropping? 
Hon TONY RYALL 
: The Government did not hugely pressure Solid Energy to increase its dividends and its borrowing. The Government is absolutely clear: it is the responsibility of boards to balance dividends debt and capital and that is exactly why in 2008 Mr Mallard wrote to the board of Solid Energy and said that a long-run ratio of dividends to net profit after tax—65 percent—was something that Ministers were not uncomfortable with. 
Hon David Parker 
: Is the Minister aware that Mr Palmer at the Commerce Committee this morning said that he had said to the Government that this call for higher gearing for a company that was exposed to a volatile price for commodities and a volatile exchange rate was wrong and that his Government had said to do it anyway? 
Hon TONY RYALL 
: As the member heard this morning from Mr Palmer dividend decisions are made by the board and the board takes responsibility for those dividend decisions. If asking boards to consider debt and dividend policies is not right why did Mr Mallard do it in 2006 and 2008? 
Hon David Parker 
: Did the Crown Company Monitoring Advisory Unit as it was then and the Minister of Finance’s own Treasury—of which the unit is a subset—say in advice dated 26 May 2009 to the Minister of Finance to Mr Joyce and to the Minister for State Owned Enterprises that setting a blanket 40 percent debt target risked being seen as simplistic and unrealistic? 
Hon TONY RYALL 
: Probably they may have said exactly the same about the Labour Government’s 35 percent debt target which Mr Mallard told them about in 2008. But look let us be absolutely clear here. The board’s responsibility is to manage debt dividends and investment. Clearly wrong decisions were made in terms of some investments that have not generated the return that that company wanted. What the member fails to tell the people of New Zealand is that in the second half of 2009 coal prices strongly rebounded reaching substantial price levels that continued right through until 2011. 
Hon David Parker 
: Does he agree with Mr Palmer that after the then Minister of Energy and Resources Mr Brownlee had put out his “Sexy Coal Brownlee” video after the Minister of Finance turned the first sod for lignite developments and the Prime Minister also expressed support and after the Government said it wanted Solid Energy to expand solid coal production and borrow more money to do it the Government knew it was asking Solid Energy to both increase debt and increase risk after Mr Palmer said that it was wrong to undermine its balance sheet? 
Hon TONY RYALL 
: That member is trying to rewrite history for his silly political purposes. The fact of the matter here is that after 2009 international coal prices rocketed. They went up significantly. In fact under that party opposite the value of Solid Energy went from about $500 million to $2 billion. The fact is that it is not the debt that has caused the problems at Solid Energy; it is the fact that a number of investments have been made that have not generated the return that the board expected and coupled with a major collapse in coal prices in 2012 we have what has been described a “perfect storm”. 
Hon David Parker 
: In respect of one of those failed investments is he aware that Don Elder and Mr Palmer both said that the reason the biofuels investment did not make any money was that Mr Brownlee and his Government removed the biofuels sales obligation that was previously legislated? 
Hon TONY RYALL 
: Mr Speaker—[ 
Interruption 
] 
Mr SPEAKER 
: Order! [ 
Interruption 
] Order! A question has been asked. It requires and deserves an answer. 
Hon TONY RYALL 
: The member seems to be suggesting that this would have been a profitable investment only if it was subsidised by the New Zealand taxpayers. The company must have known about that decision when it was made and it can make investment decisions in response to Government policy change. The fact is that those investment decisions dividend decisions and debt decisions are the responsibility of the board as set out in the State-Owned Enterprises Act 1986—passed by a Labour Government. 
Hon David Parker 
: Did the letter from the Minister of State Owned Enterprises on behalf of himself and the Minister of Finance as shareholding Minister in 2009 ask Solid Energy to increase its debt levels? 
Hon TONY RYALL 
: Together with every other State-owned enterprise Ministers did write and ask the board to consider increasing the debt levels. Mr Palmer recognising that this is the prerogative of boards wrote back to the Minister and said that the board is best placed to understand the earnings volatility and balance sheet risks of the company and I am sure that that is the view that the board had when Mr Mallard was writing to it about dividends and debt in 2006 and 2008. Goodness me have they not forgotten a lot? 
Hon David Parker 
: Would the Minister be surprised that given this company had one shareholder—the Crown—Mr Palmer found very influential the request from the Government its only shareholder to increase production increase dividends and increase debt? 
Hon TONY RYALL 
: Now Mr Parker is saying that the board should not increase coal production when we had record coal prices from the end of 2009— 
Hon David Parker 
: I raise a point of order Mr Speaker. That was not my question at all. My question if I would be able to re-put it— 
Mr SPEAKER 
: Well I think that is the quickest way forward but it would be helpful if I could actually hear the question as well. If we could have a bit of silence from both sides of the House. 
Hon David Parker 
: If I can recall—I will not be able to recall the exact wording— 
Mr SPEAKER 
: Order! The member has—[ 
Interruption 
] Order! 
Hon David Parker 
: Is the Minister surprised that former chair of Solid Energy Mr Palmer said that given that the company had only one shareholder the Crown the request from the Crown to increase production increase dividends and increase debt was very persuasive? 
Hon TONY RYALL 
: It is the responsibility of boards to make these decisions. If they cannot make those decisions why bother having them? Labour passed the Act in 1986 and the fact here is that we are now hearing from Labour that when the coal prices were at astronomical levels in 2009 2010 and 2011 the company should not have increased coal production. That is bad economics. 
Rt Hon Winston Peters 
: Is it not the case that forcing greater debt and extracting excessive dividends from Solid Energy was fraudulent in that there was no real revenue stream behind them— 
Hon Steven Joyce 
: What a load of rubbish. 
Rt Hon Winston Peters 
: I know you are— 
Mr SPEAKER 
: Order! [ 
Interruption 
] Order! That is a good demonstration of what happens when there is an unhelpful interjection across the House. Would the Rt Hon Winston Peters please ask his supplementary question. 
Rt Hon Winston Peters 
: Is it not the case that forcing greater debt and extracting excessive dividends from Solid Energy was fraudulent in that there was no real revenue stream behind them over those years and that the dividends in fact came from increased borrowing because otherwise would Solid Energy be bankrupt today; and why should not we believe an experienced business operator and Government appointee like Palmer rather than a bank teller like you? 
Hon TONY RYALL 
: What I can tell the member is that this is a situation where the board made investment decisions that simply did not generate the rate of return that was expected of them and coupled with a significant collapse in world coal prices the company found itself in the position that it did. There is nothing fraudulent about the behaviour of the board and I think the member should reflect upon that accusation. 
Rt Hon Winston Peters 
: Why should we not believe Mr Palmer who was a serious Government appointee in the past and has a serious business record when he points to the Government using the device of forcing greater debt and extracting excessive dividends from Solid Energy as a deceptive way of massaging and flattering the Government’s true fiscal position; why should we not believe Mr Palmer and not a former bank teller like you? 
Mr SPEAKER 
: Order! Would the Minister answer just the first part of that question. 
Hon TONY RYALL 
: On behalf of the Minister of Finance who I think was actually a Treasury official and did not work at the bank I am sure that Mr Palmer did not say some of the things that Mr Peters has alleged that he said. But I agree with Mr Palmer when he told the committee this morning that dividend decisions are made by the board and he takes responsibility as I am sure Mr Palmer said that the board takes responsibility for its investment decisions. Coupled with the significant collapse in world coal prices that is why the company finds itself in the position that it is in. 
Economy—Monetary Policy Statement March 2013 
2. 
Dr JIAN YANG (National) 
 to the  
Minister of Finance 
: What reports has he received on the outlook for the economy? 
Hon STEVEN JOYCE (Associate Minister of Finance) 
 on behalf of the Minister of Finance: The Reserve Bank today issued its latest Monetary Policy Statement for March. It kept the official cash rate unchanged at 2.5 percent. The Reserve Bank also slightly revised up its outlook for the economy from its projections in the December Monetary Policy Statement. However it did note that the recovery remained somewhat uneven with demand and output expanding and consumer confidence increasing. On the other hand it noted that a continued drought would have a negative impact on economic output. Overall the central bank now expects annual average real GDP growth to rise from just over 2 percent in the year to March this year to around 3 percent in 2014 and 2015 before easing back a little in 2016. 
Dr Jian Yang 
: What are some of the factors driving the Reserve Bank’s forecasts for growth over the next few years? 
Hon STEVEN JOYCE 
: The Reserve Bank notes that reconstruction in Canterbury is picking up and will be a key driver of economic activity over the forecast period. Residential investment in other parts of New Zealand is also expected to increase as a result of mortgage interest rates remaining low. The Reserve Bank also expects export growth to be slightly stronger in the latter part of the 4-year forecast period than it projected in December. It notes that the outlook for growth among our trading partners has improved since that December statement. The bank’s projection for private consumption is broadly in line with its December Monetary Policy Statement forecast. It expects household savings to pick up to 1.2 percent of total disposable income by 2016 from a negative 0.1 percent in 2012. 
Dr Jian Yang 
: What are the Reserve Bank’s latest forecasts for the cost of living over the next few years? 
Hon STEVEN JOYCE 
: The Reserve Bank expects consumer and price inflation to remain subdued through the rest of 2013 before gradually rising to the mid-point of its 1 to 3 percent target band. Headline annual inflation is projected to be 0.9 percent 1.4 percent and 1.8 percent in the March years to 2013 2014 and 2015 respectively. These forecasts of low inflation are good for New Zealand households particularly those on lower or fixed incomes. In addition average floating home mortgage interest rates are now around half what they were 5 years ago in 2008. For a family with a $200000 mortgage that is saving them around $200 a week. 
Dr Jian Yang 
: What alternative economic and monetary policy approaches would put at risk the low inflation and low interest rates currently enjoyed by New Zealanders? 
Hon STEVEN JOYCE 
: Well there are a number of alternative policies that would put the substantial benefits of current low inflation and low interest rates at risk and that would of course cost New Zealand households dearly—for example trying to artificially and substantially devalue the exchange rate or going soft on inflation or for example opposing the Government’s share offer programme and instead borrowing billions of dollars more to pay for priority assets like schools and hospitals or for example just pulling out the photocopier and printing more money. All of those things would send interest rates and inflation through the roof directly affecting New Zealand households and families. They are of course the cornerstones of the Labour-Green opposition— 
Mr SPEAKER 
: Order! 
Hon David Parker 
: How can the Minister of Finance claim to be a responsible manager of the economy when as shareholding Minister of Solid Energy he so clearly mismanaged that at the cost of many many jobs and many tens if not hundreds of millions of dollars just a year after he had the debacle of the loss of hundreds of millions of dollars extra through the mismanagement of the Crown Retail Deposit Guarantee Scheme where they did not even look as to whether there was interest and increased loans on the back of taxpayers following the grant of the guarantee? 
Hon STEVEN JOYCE 
: The member has an interesting take on history given that it was the former Labour Government in 2008 that set up the deposit guarantee scheme with the support of the Opposition at the time because of the difficulties of it. Of course that deposit guarantee scheme has come at some cost to the country as the member points out but has actually helped underpin the New Zealand financial markets which is one of the key reasons why we have come through the global financial crisis alongside Australia in better shape than just about every other OECD country. Once again we learn that the member has very little understanding of finance whatsoever. 
Solid Energy—Financial Position 
3. 
GARETH HUGHES (Green) 
 to the  
Minister of Finance 
: Why did the Government approve increased debt for Solid Energy on 28 May 2009 despite the latest company report at the time stating that coal prices were falling and “we expect this downward trend to continue through 2009 and into 2010? 
Hon TONY RYALL (Minister for State Owned Enterprises) 
on behalf of the Minister of Finance: The Government did not approve the debt at Solid Energy. It is the responsibility of the board to make investment decisions on the structure of the balance sheet. I would say to the member that in fact coal prices bounced back significantly in the second half of 2009 and peaked in 2011 which I think demonstrates the level of volatility in this area. As Mr Palmer said the board is in the best place to understand the earnings volatility and balance sheet risks of the company. 
Gareth Hughes 
: Does he dispute then the testimony of John Palmer this afternoon and why did the Government ignore the clear opposition by the Solid Energy board to increasing the debt loading that has seen its debt just balloon? 
Hon TONY RYALL 
: I cannot comment on the first part of the member’s question but I can say quite clearly that it is the responsibility of the board to manage the balance between debt dividends and capital investment. The problem here with Solid Energy is that a number of investments were made that have not delivered the returns that might have been expected of those. Coupled with the significant collapse in world coal prices that is why the company finds itself in this position. 
Gareth Hughes 
: Is John Palmer then correct in saying that the National Government encouraged Solid Energy to take on debt to adopt an expansionary strategy and if so was it smart to take $164 million in dividends out of the State-owned enterprise in the same period when debt ballooned from $13 million to $313 million over the same period? 
Hon TONY RYALL 
: The level of dividends that were paid by Solid Energy is extremely moderate in comparison with the cash flows that that company was generating during a period of huge international coal prices. Everybody in this House knew about what was happening in Australia—the huge boom in coal prices profits and investment happening over there. The Government did ask for increased dividends but the dividends that it received would not be at all unusual compared with the 65 percent of net profit for dividends that Mr Mallard indicated in 2008 was appropriate for a company like Solid Energy. 
Gareth Hughes 
: Has the Minister subsequently instructed or requested Solid Energy to see a reduction in debt or a reduction in debt expansion? 
Hon TONY RYALL 
: The Government is working very closely with the banks and the board of Solid Energy in respect of the future of the company. The company has been severely impacted by the significant collapse in coal prices—40 percent during 2012. Its export volumes fell 27 percent in one quarter alone. This is the reason why Dr Elder I think it was described the company as facing a “perfect storm”. 
Gareth Hughes 
: I raise a point of order Mr Speaker. My question was not about Solid Energy or the banks. The question was what the Minister is doing about debt— 
Mr SPEAKER 
: Order! And I have listened very carefully to the question and I am quite happy that the question was adequately addressed with that answer. 
Gareth Hughes 
: Was he ever advised that the high New Zealand dollar was to quote John Palmer this afternoon “A major factor in Solid Energy’s demise.” and is this yet another victim of this Government’s monetary policy? 
Hon TONY RYALL 
: The world coal prices and the returns to Solid Energy are impacted by a whole lot of things but the most significant driver was the collapse in world coal prices. There was actually a 27 percent drop in exports in one quarter alone. That is the reason why this Government is now working closely with the banks in respect of how it gets this company moving into the future. I would say that that member opposite has opposed everything that Solid Energy has done to try to get its books back in order. 
Gareth Hughes 
: I raise a point of order Mr Speaker. I do not think the Minister addressed the question at all. 
Mr SPEAKER 
: Yes he did. If you listened to the answer he clearly did address it. He said it was one of the factors and then went on to elaborate with others. 
Gareth Hughes 
: Why does the Minister continue to blame biofuels for Solid Energy’s demise when it was his Government that removed the biofuels obligation it was his Government that reduced the financial support and it was his Government that has seen the carbon price drop from around $20 a tonne to about $1 a tonne? 
Hon TONY RYALL 
: I simply do not believe that a Government commitment to remove the biodiesels obligation is responsible for the collapse of Solid Energy. I would ask the member to look at what is happening in Australia where I think Mr Tinkler is on the verge of being arrested because he will not front up to the collapse of his coal company. A number of American companies’ values have collapsed by almost 70 percent. This is an international phenomenon that has affected coal companies throughout the world. That is the reason why Dr Elder today described the matching of the collapsing coal prices with the investment decisions that had been made as a “perfect storm”. This Government is responding to that by working closely with the banks and the board of Solid Energy to see what we can do because we have got so many people who rely on this company. 
Gareth Hughes 
: Does the Minister think that the perfect storm he is referring to is in fact National Party policy and National Party decisions and that that is the reason we are seeing Solid Energy in such strife? 
Hon TONY RYALL 
: I am sure the Minister of Finance is very impressed to know that his policies have an impact on the coal companies in the United States coal companies in Canada coal companies in China and coal companies in Australia that have all been dramatically affected by the collapse in world coal prices. The problems with Solid Energy come from the investment decisions not generating the returns that were expected together with the collapse of world coal prices during 2012. This Government is responding to that by working with the banks and the board to do what we can to salvage as much of this company as we can. 
Methanol Production—Methanex Expansion 
4. 
JONATHAN YOUNG (National—New Plymouth) 
 to the  
Minister of Energy and Resources 
: What recent reports has he received regarding increased production of methanol from New Zealand gas? 
Hon Member 
: Speaking of gas! 
Hon SIMON BRIDGES (Minister of Energy and Resources) 
: 
 There is a lot of natural gas over there. I have seen reports that Methanex plans to invest almost $80 million to increase its New Zealand production of methanol. This reflects the improving and secure natural gas supply in this country. This will involve adding capacity at its current Motunui site as well as restarting the Waitara Valley site later this year. By the end of this year its operating capacity is expected to increase from 700000 tonnes to 2.2 million tonnes. I am encouraged that businesses such as Methanex are confidently expanding their operations in this country. 
Jonathan Young 
: How will Methanex’s expanded operations in New Zealand benefit both the local and the national economy? 
Hon SIMON BRIDGES 
: There will be many benefits to the member’s region as well as to New Zealand. There will be more jobs—some 500 more a mixture of contractors and full-time workers—there will be more equipment and materials bought mainly from within this country and of course there will be wider benefits to the economy. The increased scale of Methanex’s business will also generate more taxes over the long term and through increased export revenue assist with the country’s balance of payments. 
Solid Energy—Financial Position 
5. 
Hon CLAYTON COSGROVE (Labour) 
 to the  
Minister for State Owned Enterprises 
: Does he stand by all the statements he his predecessor and other Ministerial colleagues have made regarding the State-owned Enterprises portfolio? 
Hon TONY RYALL (Minister for State Owned Enterprises) 
: 
 Yes within the context they were made though. I suspect in the next 30 seconds I may want to change my mind. I can vouch for most of my predecessors though I probably could not vouch for Mr Mallard when he said: “It will be up to SOEs to come up with robust business plans that can preferably be funded off their own balance sheet …” . 
Hon Clayton Cosgrove 
: If the intent of the 2009 letter to Solid Energy penned by his predecessor in respect of increasing gearing and dividends was not to encourage borrowing by Solid Energy at increased levels or a demand for increased dividends why was it sent? What was its purpose? 
Hon TONY RYALL 
: Letters were sent to all State-owned enterprises in 2009— 
Hon Clayton Cosgrove 
: Solid Energy. 
Hon TONY RYALL 
: —including Solid Energy. They are—[ 
Interruption 
] To make it clear that the Government did expect— 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. My question was about the letter sent directly to Solid Energy—not letters sent to a variety of State-owned enterprises but the letter that was sent which the Minister has to Solid Energy directly. 
Mr SPEAKER 
: I appreciate that and the Minister was answering the question— 
Hon Clayton Cosgrove 
: No he wasn’t. He was talking about the other letters. 
Mr SPEAKER 
: Order! 
Hon TONY RYALL 
: The Government wrote to Solid Energy as it did to every other State-owned enterprise seeking to have improved levels of performance and contribution to the economy. It is up to the boards— 
Hon Members 
: More debt. 
Hon TONY RYALL 
: Members opposite seem to think that the debt is the problem for Solid Energy. I have said so many times today that it is not the cause of Solid Energy’s problem. It is the board’s responsibility to manage the structure of the balance sheet. The purpose of the Minister’s letter was to say just as Mr Mallard wrote to them a year earlier that we expect better performance in dividends. 
Hon Clayton Cosgrove 
: Is he aware of the Treasury proposal document of 2009 the recommendations of which his Government signed off whose purpose was to increase the gearing of Solid Energy and to quote the document was designed to “stretch” the State-owned enterprise; if so has that stretch been successful or has in reality that stretch perpetrated the almost total breakdown of that company at his Government’s hands? 
Hon TONY RYALL 
: No. As I have said earlier on it is not the debt that is the cause of Solid Energy’s problems; it is the fact that a number of investments were made that have not generated the level of return to sustain those investments or their continuing coupled with the collapse in world coal prices. In respect of the Treasury advice it would not surprise me because Mr Mallard in 2008 told the company— 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. The document and advice that I referred to was not from one Trevor Mallard. It was the 2009 advice— 
Mr SPEAKER 
: I appreciate that. 
Hon Clayton Cosgrove 
: —that talks about stretching— 
Mr SPEAKER 
: Order! But if you think about the member’s question it started with whether he was aware of the Treasury document. The Minister was just going on to talk about what was in that Treasury document. If the member is satisfied with the answer we will move to the next supplementary question. 
Hon Clayton Cosgrove 
: Is former Chairman of Solid Energy John Palmer correct when he told the select committee clearly today that contrary to the Prime Minister’s claim that Solid Energy had asked for a billion-dollar capital injection and that the Prime Minister had refused that billion-dollar capital injection no billion-dollar capital injection request was ever made—no figures were mentioned? 
Hon TONY RYALL 
: I would have to accept what the Prime Minister and Mr Palmer said because I do not think they are necessarily divergent. What I can tell you is I do know that the Prime Minister received advice on the financial implications of what was being discussed with Solid Energy. I have got to remind the member again that the company’s problems come from the investments that were made and the lack of return and the collapse of coal prices. 
Hon Clayton Cosgrove 
: Is he aware that former Chairman of Solid Energy John Palmer confirmed to the select committee today that no action none was taken by any Minister in this Government since 2009 to require a change in direction—in business direction—no request was made to change business direction or to reduce expansion and the only action that one can find on the record was 18 months of discussions with the company which generated in zero action by this Government as it was asleep at the wheel? 
Hon TONY RYALL 
: I am advised by comments made by colleagues on this side of the House that that is not a fair representation of what Mr Palmer said and therefore— 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. Nick Smith was not on the select committee other Ministers were not at the select committee and yet again this Minister makes it up. 
Mr SPEAKER 
: Order! But that is very much now debatable. I was not at the select committee—[ 
Interruption 
] Order! The Minister is attempting to answer the question and I would like to hear the answer to the question. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. The Minister has questioned my word. First that is out of order. Secondly he has said that from comments around him— 
Mr SPEAKER 
: Order! Frequently Ministers disagree with words that are quoted by an Opposition member. That happens quite frequently in this House. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: Is it a fresh point of order? I will take a fresh point of order. If the member is intending to continue a repeat of the same point of order then no I have ruled that the question was being answered. I will give the Minister the opportunity to further answer the question if the member so wants. But if he does not want a further answer he does not have to have one. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: Is it a fresh point of order? 
Hon Clayton Cosgrove 
: Yes it is. With respect I am not challenging your ruling at all. 
Mr SPEAKER 
: Would the member just come to the fresh point of order. 
Hon Clayton Cosgrove 
: Certainly. You stated that it is a precedent in this House that members say the member is incorrect and you are absolutely right. That Minister did not say that. He challenged my word— 
Mr SPEAKER 
: Order! I think we are now relitigating what I have already ruled on. I am giving the Minister the opportunity to complete the answer that was interrupted if the member so wants. If the member does not then we will move to further supplementary questions or to the next question. 
Hon Clayton Cosgrove 
: Yes I do. Get him to answer. Yes I do. I have accepted your invitation. 
Mr SPEAKER 
: Does the Minister want to further elaborate on the answer that the Minister had given? 
Hon TONY RYALL 
: The Government has made it very clear and this is certainly my view that following the scoping study in 2011 this Government took action to deal with the issues that were raised in Solid Energy’s scoping study. That scoping study identified a number of issues that made that company vulnerable including investments in a number of areas that were not generating—[ 
Interruption 
] 
Mr SPEAKER 
: Order! 
Hon TONY RYALL 
: It also identified very high head office costs—[ 
Interruption 
]  
Mr SPEAKER 
: Do not continue to ask me what I did. 
Hon TONY RYALL 
: —and vulnerability around the projections for coal prices. And together with the collapse in coal prices during 2012 the company finds itself in this difficult position. 
Neonatal Services—Intensive Care Units 
6. 
BARBARA STEWART (NZ First) 
 to the  
Minister of Health 
: Is he satisfied that the current number of beds and staff in neonatal intensive care units throughout New Zealand is enough to service our growing population? 
Hon TONY RYALL (Minister of Health) 
: 
 Yes. There are six neonatal intensive care units which provide specialised intensive care services for very unwell or premature babies for the whole of New Zealand. From time to time mothers and babies are transferred between the units. This can be a very difficult time for families. The most important consideration is the safety of the baby. A new $7.3 million unit is currently being built at Dunedin Hospital and is expected to be open by the end of this year. 
Barbara Stewart 
: How can he be satisfied when 33 expectant mothers in 2012 were transferred out of the Waikato to a location away from their families; and can he assure the public that the safety of these women and unborn children will not be impaired? 
Hon TONY RYALL 
: The number of these neonatal intensive care unit beds has increased by about 10 percent since 2008; the birth rate has dropped and slowed in those last few years. It has always been the case that babies are moved between these units. I know it is incredibly disruptive. That is why we are investing to improve the one in Dunedin because it was substandard and not up to what you would expect. I am confident that the safety of mothers and their babies is the priority for all of this being dealt with by the national clinical neonatal network. 
Barbara Stewart 
: Does he believe that transferring expectant Waikato mothers to cities as far away as Invercargill at a cost of $8000 to $11000 on air transfer alone is a good use of Government funding? 
Hon TONY RYALL 
: Yes I do because it is about protecting the mother and the baby and that is why they go to a neonatal intensive care unit. I know it is incredibly disruptive for these parents but we have a level across the whole country. It is a network. Mothers and babies at times do need to move around those units and that is why we provide support around that. But the priority has to be the baby and the mother. That is the commitment of this Government and that is why we are moving to improve neonatal facilities particularly in Dunedin that have needed upgrading and improvement for many years. 
Barbara Stewart 
: Does he have any plans to increase the number of beds and staff in other neonatal intensive care units throughout New Zealand to ensure that expectant mothers will not have to undergo lengthy costly and potentially unsafe hospital transfers? 
Hon TONY RYALL 
: Yes. I can tell the member that the Government is investing $7.3 million in the new neonatal intensive care unit in Dunedin which is expected to be open by the end of this year. 
Accident Compensation Corporation—Injury Prevention Programmes 
7. 
CHRIS AUCHINVOLE (National) 
 to the  
Associate Minister for ACC 
: What is ACC doing to encourage safe sporting and fitness practices? 
Hon JUDITH COLLINS (Minister of Justice) 
: 
 ACC is working with industry leaders and other partnering organisations to reduce injuries suffered in sporting and fitness activities. Two examples of this are RugbySmart and ActiveSmart. For example since the inception of RugbySmart serious rugby neck and spinal injuries have gone down from double digits annually to three or fewer per year. The 
 British Journal of Sports Medicine 
 regards this as the world’s best community injury prevention programme. In 2013 RugbySmart has the potential to reach 12000 coaches 2000 referees and 150000 players. 
Chris Auchinvole 
: Is there an initiative that is more widely focused on general fitness? 
Hon JUDITH COLLINS 
: Yes. ACC has also launched ActiveSmart which is a programme for walking running cycling and multisport—although obviously not boxing. ActiveSmart has a free website and smartphone app that give easy access to tailored training plans and tips. The New Zealand Rugby Union has endorsed ActiveSmart—and I understand from the interest shown by members on the opposite side I could arrange a briefing for them. 
Family Court Reforms—Legal Representation 
8. 
DAVID CLENDON (Green) 
 to the  
Minister of Justice 
: Why is she proposing changes that may deny people legal representation in the Family Court? 
Hon JUDITH COLLINS (Minister of Justice) 
: 
 The member’s question is unfortunately misconceived. Where people need legal representation in the Family Court they will get it. This is not changing. 
David Clendon 
: Given research shows 88 percent of New Zealanders in the Family Court—[ 
Interruption 
] 
Mr SPEAKER 
: Order! I am sorry to interrupt. I cannot hear the supplementary question. Could we have a bit of decorum particularly on this side of the House. 
David Clendon 
: Given research showing that 88 percent of New Zealanders in the Family Court elected to be represented by a lawyer why is she denying them that chance when the Family Court’s own website says self-litigation in the court “requires a substantial understanding of the legal process.”? 
Hon JUDITH COLLINS 
: Again unfortunately the member’s question is misconceived. Most of the cases that will come into the Family Court relating to care of children matters will be able to move through to mediation in the family dispute resolution process which was in fact suggested by the expert reference group set up to look at the Family Court system. In fact what we are looking at is up to six different sessions of mediation to help people resolve their issues. Unfortunately that— 
Andrew Little 
: The Minister’s misleading the House. 
Hon JUDITH COLLINS 
: I raise a point of order Mr Speaker. I would ask that the member be asked to withdraw and apologise for that comment. 
Mr SPEAKER 
: If the Minister has taken offence then the member who made the comment should stand and withdraw and apologise. 
Andrew Little 
: I would like to know what the comment is that the Minister has taken offence at. 
Mr SPEAKER 
: I do not need to repeat the comment but I heard it. The Minister has taken offence. The member will stand withdraw and apologise. 
Andrew Little 
: I withdraw and apologise. 
Hon JUDITH COLLINS 
: After six sessions of mediation a judge will then be able to actually triage the matter. So if it were a simple matter about where for instance Johnny is going to spend this weekend— 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. The Minister began by saying for a second time that the question was misconceived. The question regards the issue of legal representation at the Family Court. At no point—even now after that long answer—has she got anywhere near traversing the issue of the absence of legal representation. 
Mr SPEAKER 
: No I think the Minister is certainly attempting to address the question. It is difficult because of the interjections but it certainly is absolutely appropriate for the Minister to stand and start her answer by saying that she does not accept the arguments that have been put forward. I call the Hon Judith Collins if she wishes to finish. 
Hon JUDITH COLLINS 
: Yes I would like to say to the member that if he would like to have a full briefing—and I understand that he is on the select committee and he is working really hard on it—I can provide that to him with more detail that he might not already have. 
David Clendon 
: Although I am sure that the Justice and Electoral Committee and others would appreciate information that is clearly not in the Family Court Proceedings Reform Bill what is her response to the six Christchurch Family Court judges who warn that explosive violent incidents will be more likely to occur leading to an increase in domestic violence and an increasing risk to the safety of court staff and judges? 
Hon JUDITH COLLINS 
: That was an opinion expressed by a judge but there was no evidence to support it and it seemed to be that he was speaking about lawyers apparently stopping their clients from becoming violent in court. Well I have never seen that happen yet. 
David Clendon 
: Why does the Minister dismiss the concerns of Whangarei lawyer Dr Christopher Perry and the 4740 other concerned New Zealanders who signed a petition asking for her reforms to be scrapped? 
Hon JUDITH COLLINS 
: Because the petition included completely incorrect statements and actually I thought that the comments by that particular person were in fact not only misconceived but actually all about self-interest. 
David Clendon 
: I raise a point of order Mr Speaker. [ 
Interruption 
] 
Mr SPEAKER 
: Order! I am dealing with a point of order from David Clendon. Does the member want to table some documents? 
David Clendon 
: I seek leave to table a document. The document is titled “2013 Family Court Reform: The impact on NZ families’ access to justice in an age of austerity-driven reform”. 
Mr SPEAKER 
: The source of the document please. 
David Clendon 
: The author is Maria Kazmierow a family law barrister and mediator and the document is dated 11 March of this year. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There appears to be none. It can be tabled. 









Document by leave laid on the Table of the House. 
Tax System—Proposed Changes to Fringe Benefit Tax 
9. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister of Revenue 
: What reports has he seen regarding his proposal to apply fringe benefit tax to employee car parks in the Auckland and Wellington central business districts? 
Hon STEVEN JOYCE (Minister for Economic Development) 
 on behalf of the Minister of Revenue: Mr Speaker—[ 
Interruption 
] If I could just address the member I have received a number of reports—[ 
Interruption 
] Oh thank you. 
Mr SPEAKER 
: Order! If the Minister would proceed with the answer please. 
Hon STEVEN JOYCE 
: I have received a number of reports. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. I am not offended by the Minister having trouble seeing the questioner but he would not look at the Minister sitting next to him during— 
Mr SPEAKER 
: No that is not a point of order but it is a good example of how points of order can come if the Minister does not get on with the job of answering the question. 
Hon STEVEN JOYCE 
: I have received a number of reports from Inland Revenue Department and Treasury tax officials on proposals leading up to and following the consultation paper for recognising salary trade-offs as income which I note for the benefit of the member in the House was released back in April 2012. Policy consideration of this issue began in fact in 2010. The review was part of a package of base broadening and integrity measures which included other matters such as the treatment of mixed-use assets and widening the income definition for social assistance purposes. As the member will be aware the bill is currently before a select committee and the Government will carefully consider the select committee’s report to the House. 
Hon David Cunliffe 
: Does he agree with analysis by independent accounting firm Lock and Partners that shows that the compliance cost of collecting his car-park tax is over $30 million per annum about double the revenue that the Inland Revenue Department suggests it would collect? 
Hon STEVEN JOYCE 
: On behalf of the Minister of Finance it is fair to say I think that the report is perhaps a bit of a stretch in its estimate of compliance costs. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. To assist the Minister he was asked as the Minister of Revenue but he is replying on behalf of a different Minister. Perhaps he is confused or would like to start again. 
Mr SPEAKER 
: He is to answer the question on behalf of the Minister of Revenue. 
Hon STEVEN JOYCE 
: Can I thank that member for his assistance and say that my view is that the numbers on the report that the member raises are perhaps a bit of a stretch indicating as it does a cost of $5000 per annum for medium businesses and $8000 in compliance costs per annum for large businesses. But nevertheless officials have been asked by the Finance and Expenditure Committee to look at compliance cost issues and it certainly would be unreasonable to have a tax if the compliance costs are very high. So once again we look forward to the response from the select committee. 
Hon David Cunliffe 
: Given these compliance burdens why did he break John Key’s pledge to “not entertain suggestions of applying FBT to on-premises carparks” and to “remove a substantial amount of the paperwork” from the fringe benefit tax system or does he agree with the finance Minister Bill English that Mr Key’s promise is now worthless because “the tax environment has changed”? 
Hon STEVEN JOYCE 
: I would say that I think a fair amount has changed since that statement was made back in April 2005 which was when Don Brash was leader of the National Party. Since that time we have had three leaders of the Labour Party and maybe a fourth leader of the Labour Party— 
Mr SPEAKER 
: Order! That does not help the answer. 
Hon David Cunliffe 
: Does he agree with commentator Vernon Small that the car-park tax is one of “a series of petty tax increases that are more about the elusive Budget surplus than fairness and good tax design.” and includes measures like the paper boy tax increased prescription charges increased petrol excise student loan costs and his equally popular proposals to tax private cellphone use and accommodation for rebuild workers in Christchurch? 
Hon STEVEN JOYCE 
: That was a very long question but in terms of the characterisation reported by the eminent Dr Small the issue in regard to fairness is actually quite an interesting one. I think the officials can make the case that this actually would create more fairness because currently different types of car-parks in cities are treated in different ways. Nevertheless the compliance costs are important. In fact if the Government chose not to go ahead it would actually be I think characterised as not particularly fair in relation to different car-parks. But of course practicality comes into it as well and that is why we are watching closely to see the outcome of the select committee’s deliberations. 
Hon David Cunliffe 
: Does the Minister of Revenue consider that he can now continue in his portfolio given that there are reports that “National Party officials at the very highest levels” have told media that they are “trying to shift the heat to Dunne” and that this is a blatant abrogation of the confidence and supply agreement with United Future which demands “confidentiality collective responsibility and recognition of his position as Minister of Revenue”? 
Hon STEVEN JOYCE 
: I think there is an old statement about believing half of what you hear and a third of what you see and I think it would apply in this particular instance. 
Hon David Cunliffe 
: I seek leave to table analysis by independent chartered accountants Lock and Partners showing that the compliance cost of this tax is twice the recommended— 
Mr SPEAKER 
: And is it available publicly? I suspect that it is not. 
Hon David Cunliffe 
: No not publicly. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? No there is none. 









Document by leave laid on the Table of the House. 
Hon David Cunliffe 
: I seek leave to table a copy of the confidence and supply agreement between the Minister of Revenue’s— 
Mr SPEAKER 
: No that is certainly available. 
Hon David Cunliffe 
: I seek leave to table this rather endearing little moniker “No car-park tax. Stop John Key’s—” 
Mr SPEAKER 
: No. That is not necessary to inform the House. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. This is not yet readily available— 
Mr SPEAKER 
: And it certainly—[ 
Interruption 
] Order! The member will resume his seat. [ 
Interruption 
] Order! And it will not be tabled either. 
Child Health Services—Free General Practitioner Visits for Under-sixes 
10. 
SHANE ARDERN (National—Taranaki - King Country) 
 to the  
Minister of Health 
: What progress is the Government making on access to free GP visits for children aged under 6? 
Hon TONY RYALL (Minister of Health) 
: 
 More children than ever are now able to see a general practitioner at no cost thanks to the Government’s $30 million zero fees for under-sixes scheme. More than 350000 children are now receiving free doctors visits during the daytime and 95 percent of children aged under 6 have access to free general practitioner care after hours. In 2006 under the previous Government only 77000 children were receiving free doctors visits during the day and there was no scheme providing free after-hours doctors visits. 
Shane Ardern 
: How many general practices are now providing free doctors’ visits to children under 6 during the day? 
Hon TONY RYALL 
: Of the just over 1000 general practices in the country 1004 have opted to provide zero fee doctors visits to children under 6. Recently 12 general practices located in the North Shore Auckland Blenheim Templeton Rolleston and Invercargill joined the zero fees scheme which has enabled 3500 more children under 6 to see a doctor during the day at no cost. So that is 96 percent of children under 6 who can go to a general practitioner for free during the day and after hours compared with only 23 percent in 2006. I am sure the member will join with me in thanking general practices around the country for helping out children in this way. 
Education Ministry—Resignation of Secretary for Education 
11. 
CHRIS HIPKINS (Labour—Rimutaka) 
 to the  
Minister of State Services 
: What reasons did the State Services Commission give him for Lesley Longstone’s resignation when he was briefed by them on 6 December 2012? 
Hon Dr JONATHAN COLEMAN (Minister of State Services) 
: 
 On meeting with the State Services Commission on 6 December I was advised that Ms Longstone and the State Services Commissioner were in discussions about her standing down as chief executive. This reflected their joint view that there had been a number of issues that had not gone well during 2012 including the relationship with her Minister and that a change of leadership was necessary to enable the Ministry of Education to move forward. 
Chris Hipkins 
: Did the Minister of Education convey any specific concerns about Lesley Longstone’s performance to the State Services Commission; if so what was the nature of those concerns? 
Hon Dr JONATHAN COLEMAN 
: It made it clear that there were issues in the relationship but I have also had advice from the State Services Commissioner that to discuss performance issues would be a breach of confidence. 
Chris Hipkins 
: Did the Minister of Education indicate to the State Services Commission that Lesley Longstone had undertaken any action that was inconsistent with the Government’s direction; if so what did she do? 
Hon Dr JONATHAN COLEMAN 
: I am not sure whether there was an indication that Ms Longstone had undertaken any such action but it was clear that there were issues in the relationship between the Minister and the chief executive. 
Chris Hipkins 
: Did the State Services Commissioner indicate to him at the briefing that Lesley Longstone’s resignation was contingent upon her receiving a payment; if so did he indicate his agreement that such a payment should be made? 
Hon Dr JONATHAN COLEMAN 
: To the best of my recollection the resignation was not contingent on a payment. However as subsequently became evident there was discussion around a payment. But I would emphasise as I did the other day that I did not sign off on any payment until after the resignation. 
Chris Hipkins 
: When did he indicate to the State Services Commission the Government’s agreement to Lesley Longstone receiving $425000? 
Hon Dr JONATHAN COLEMAN 
: My recollection of it is that it was on 18 December when the package was put to me following her resignation—or following not the public announcement but the formal conveying of her resignation to the State Services Commissioner. 
Chris Hipkins 
: Does he agree with the State Services Commissioner who described Lesley Longstone as “a highly competent and dedicated individual” and stated that she could be re-employed elsewhere within the Public Service; if so why does he believe that the public do not have a right to know exactly why it is that she received a $425000 payout as part of her resignation? 
Hon Dr JONATHAN COLEMAN 
: I am happy to say why she received that payout. As I said the other day there was a certain part that was part of her contract around paying out holiday pay but there was also a view that to move the— 
Sue Moroney 
: She’d only been there 12 months. 
Hon Dr JONATHAN COLEMAN 
: Well it was contractual. There was a view that actually in the context of a $12 billion vote there were things that needed to be done subsequently in education and there was a mutual agreement that a change of leadership at the ministry was necessary in order for that to occur. 
Gambling Regulations—Spot Prize Draws 
12. 
KANWALJIT SINGH BAKSHI (National) 
 to the  
Minister of Internal Affairs 
: What recent announcements has he made about reducing unnecessary red tape under the Gambling Act 2003? 
Hon CHRIS TREMAIN (Minister of Internal Affairs) 
: 
 This week I announced that the Government is considering changes to regulations around spot prize draws. I have released a consultation document which includes a proposal that spot prize draws at these events should not be classified as gambling. This would mean event organisers do not need to apply for a licence to run spot prizes and can focus on their events rather than red tape. 
Kanwaljit Singh Bakshi 
: Why are the changes to the current regulations necessary? 
Hon CHRIS TREMAIN 
: Changes have been called for by organisers of events such as fishing competitions and sports events. Problem-gambling organisations report that there is little risk of problem gambling if any associated with spot prizes at these events so I do not believe that rigorous rules are necessary. Event organisers should not have to worry about complying with the Gambling Act when considering spot prizes. They should be able to get on with providing fun activities for families and for their communities. 
Voting 
Correction—Marriage (Definition of Marriage) Amendment Bill 
JAMI-LEE ROSS (Junior Whip—National) 
: 
 I seek leave for the votes of the Hon John Banks and the Hon Peter Dunne against the amendment in the name of the Rt Hon Winston Peters on the second reading of the Marriage (Definition of Marriage) Amendment Bill to be recorded in the  
Journals of the House of Representatives 
. 
Mr SPEAKER 
: Is there any objection to that course of action? There is none. The result will be recorded as Ayes 33 Noes 85. 
Plumbers Gasfitters and Drainlayers Amendment Bill 
First Reading 
Hon MAURICE WILLIAMSON (Minister for Building and Construction) 
: 
 I move  
That the Plumbers Gasfitters and Drainlayers Amendment Bill be now read a first time. 
 At the appropriate time I intend to move that the Plumbers Gasfitters and Drainlayers Amendment Bill be considered by the Government Administration Committee that the bill be reported to the House by 22 March 2013 and that the committee have authority to meet at any time while the House is sitting except during oral questions during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 188 and 191(1)(b) and (c). 
The bill validates a disciplinary levy and an offence fee set by the Plumbers Gasfitters and Drainlayers Board under the Plumbers Gasfitters and Drainlayers Act 2006 which have been scrutinised by the Regulations Review Committee. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! Members please show some courtesy to the Minister who is speaking. It is contagious and it is within the spirit of the Standing Orders and the Speakers’ rulings. 
Hon MAURICE WILLIAMSON 
: I am not contagious! 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I know that you are not contagious Minister but something else is. 
Hon MAURICE WILLIAMSON 
: The bill resolves the issue considered by the Regulations Review Committee by empowering the board to charge a new disciplinary and prosecution levy to fund the costs arising out of the board’s prosecution and discipline functions. In addition the bill also ensures that all  
Gazette 
 notices containing disciplinary levies set by the board under the 2000 Act are valid. 
 Essentially this bill addresses inconsistencies between the board’s functions and the funding provisions in the Act. All of the board’s functions are funded entirely from fees and levies charged to plumbers gasfitters and drainlayers registered under the Act as is usually the case with other occupational licensing boards within the building and construction portfolio. 
The board regulates the plumbing gasfitting and drainlaying industry so that the public can have confidence that people undertaking those trades are qualified registered and regulated. Therefore it is important to ensure the board has funding for all of the functions it is required to carry out. One of the board’s statutory responsibilities is to prosecute people who carry out illegal sanitary plumbing gasfitting and/or drainlaying work. The board had funded this function through part of the disciplinary levy and then the offences fee. However the Act empowered the board to set a disciplinary levy to fund the costs of complaints and discipline only in relation to registered persons. 
In February 2011 the Regulations Review Committee concluded that the disciplinary levy imposed by the board since 31 July 2010 should be drawn to the special attention of the House of Representatives and the Regulations Review Committee recommended disallowance of the disciplinary levy. As members may remember on 12 May 2011—in fact I am sure they remember it vividly—the chair of the Regulations Review Committee moved a motion to disallow the disciplinary levy with effect from the end of the board’s registration year 31 March 2012. However this motion was not agreed to. As a result the board changed its fee and levy structure and removed the part of the disciplinary levy that was funding prosecutions against non-registered persons and set an offences fee to fund its prosecution function instead. 
The Regulations Review Committee is currently considering the validity of the offences fee prescribed by the board. If the Regulations Review Committee also recommends disallowance of the offences fee the board could be left unfunded to carry out its statutory prosecution functions. Therefore without this validating legislation the board would be placed under significant financial pressure and would be unable to carry out its important statutory functions that directly affect the safety and the well-being of New Zealanders. It is essential that we resolve this matter and resolve it quickly. 
I move that the Government Administration Committee consider the Plumbers Gasfitters and Drainlayers Amendment Bill that the bill be reported back to the House by 22 March and that the committee have the authority to meet at any time—and I think I have already moved all of that accordingly. In fact I had better finish moving it because I think I have to finish the moving. OK? 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Not until the debate is concluded Minister. 
Hon MAURICE WILLIAMSON 
: Correct. That is what I thought—that it should be done at the end but it is in both parts. Someone in my office is doing a bit of a belt and braces here by putting it at the start of the speech and putting it at the end. I will leave it until the end. All I say to the House is that this needs to be done and it needs to be done quickly. 
RAYMOND HUO (Labour) 
: 
 Whenever I have to take a call after the Minister for Building and Construction the Hon Maurice Williamson I feel professionally politically and morally obliged to raise some important points of clarification. The first point of clarification is that the purpose of this bill the Plumbers Gasfitters and Drainlayers Amendment Bill which the Minister has just introduced is to validate some actions taken unlawfully by the Plumbers Gasfitters and Drainlayers Board—namely the board that the Minister appointed. The action concerned referred to the moneys collected by the Minister’s board unlawfully so we are dealing with an ultra vires issue. 
The second point of clarification is that the Minister’s bill will apply retrospectively. The bill in its current form will apply retrospectively in order to address this board’s ultra vires acts. 
The third point of clarification is a bit historical. The Minister lectured the chair of the Regulations Review Committee quite nicely in relation to the committee’s unanimous disallowance motion. However his lecturing in May 2011 was rather misleading. In his speech on 12 May 2011 the Minister said: “I say to the chair of the Regulations Review Committee that … if a small group of people from whatever industry from whatever sector come to a select committee and say to that committee they are unhappy and think something is wrong then that committee has an obligation to go out and ask whether there is any industry association or any large body out there that represents that industry and to get them to find out their view.” and so on and so forth. Of course the committee has such an obligation and as far as the issues were concerned the complaints were not from a small group of stakeholders. The sector is unhappily divided and in the Minister’s own words the whole issue of the Plumbers Gasfitters and Drainlayers Board has been quite shambolic for a long period of time. 
The Minister seems to have criticised the Regulations Review Committee for its diligence and professionalism so the point of clarification here is that the Regulations Review Committee is a very important part of Parliament’s processes. Its decision then in relation to the Plumbers Gasfitters and Drainlayers Board (Fees) Notice 2010 was made unanimously with the support of both the Government and Opposition members on that committee. The committee did give the board the opportunity to reply and it did not consider the submissions in isolation. 
Also it is appropriate for me to point out that there are actually two professional associations representing the vast majority of the sector. The master plumbers association the Minister referred to in his speech the Master Plumbers Gasfitters and Drainlayers (NZ) Inc. is one. The Minister said in 2010 that it had 733 businesses as its members. There is another association called the Plumbers Gasfitters and Drainlayers Federation and using 2010 data it shows that it had 900 or so members. To be fair and scientifically truthful to the sector the Minister cannot support one and ignore the other. 
The federation alleges that the board members are made up largely of members of the master plumbers association. If it is true it may help explain why the master plumbers association was opposed to the disallowance motion of the Regulations Review Committee. It also helps to explain why the Minister has to resort to such a bill to bail out the board. 
Other allegations made so far include that firstly the reason why the Minister has to resort to introducing such a bill which has retrospective effect is to try to stop the federation from taking more legal action against the board. 
Secondly both the board and the Minister knew the money had been taken from the industry illegally and this will prevent the industry from ever claiming that money back. Therefore this bill is nothing more than a cynical exercise by the Minister Maurice Williamson to cover his mistakes of the past. 
Thirdly recent events have revealed that some of the information being supplied to the public by way of the board’s electronic gas certificates is false incomplete and misleading. The federation believes that this affects thousands of gas certificates that were integrated into the current electronic gas certificate system. This is a very serious allegation. The complainant believed that the nature of the false and misleading information places at risk the public and tradespeople alike. 
I agree that the board has a colourful history. It has been the subject of a complaint to the Office of the Auditor-General Parliament’s Regulations Review Committee the Office of the Ombudsmen the Charities Commission and the Inland Revenue Department. I wonder what the Minister might say now in light of his statement in 2011 that the board was poor in the past OK at present and “looking to get the future quite tidy.” Resorting to such a bill to validate unlawful acts does not strike me as something tidy. 
Labour supports with reservations this bill’s referral to a select committee. It is important that concerned parties have the opportunity to debate and air their concerns about the bill at the select committee stage. By supporting this bill’s referral to a select committee Labour is not uncritically sanctioning the board’s conduct in 2010 when it acted ultra vires or beyond the scope of its levy power as defined in section 143 of the Plumbers Gasfitters and Drainlayers Act. Rather enabling the bill to reach the select committee stage will give all concerned parties an opportunity to be heard on these issues. It must be emphasised that validating legislation needs to be approached with considerable caution and this is such a bill. It makes actions that were previously thought lawful and that have since been found unlawful actually lawful. 
As Labour’s spokesperson for building and construction I wish to emphasise that we are supporting the board the master plumbers association and the federation. The sector namely the board the members and all tradespeople involved protect the health and safety of the public and specifically for the board it fulfils its statutory duty by regulating and ensuring the competency of the tradespeople carrying out sanitary plumbing gasfitting and drainlaying work. Although we are facing bigger issues such as the leaky buildings saga I urge the Minister to be cautious because we are talking about the quality of people’s lives. Thank you. 
CHRIS AUCHINVOLE (National) 
: 
 May I say what a pleasure it is to rise to speak in favour of the Plumbers Gasfitters and Drainlayers Amendment Bill as sponsored by the Minister for Building and Construction Maurice Williamson and indeed to follow the previous speaker Raymond Huo who clearly understands the circumstances and the situation of this bill coming before the House. I must say it is a pleasant continuum of my parliamentary career because in 2005 I served on the Commerce Committee. Even though we were in Opposition it none the less had an Opposition chair. At that stage we handled the Gasfitters Plumbers and Drainlayers Bill. I see the Hon Maryan Street nodding. You remember the event? 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: No I do not actually so please do not bring the Speaker into the debate. 
CHRIS AUCHINVOLE 
: Thank you Mr Assistant Speaker. I notice that the Hon Maryan Street does remember and it was a fascinating and very engaging bill. They are a remarkably dedicated body of people and I found the whole thing particularly interesting. They did have problems as an organisation and I like to think that we were able to help them. The problems continued on for a while but consistently there have been improvements in the direction that this very very important industry has been going in. 
I note the concerns of the previous speaker that we should be cautious with this that it is retrospective that it is validating and that sort of thing. He is quite correct but it is a very important bill which we progress none the less. It is a bill that will capture few if any headlines but this does not take away from the importance of its field or its intent. The bill tidies up legislation around the funding of the Plumbers Gasfitters and Drainlayers Board so that it can effectively do its job of protecting public safety. The bill also validates the Plumbers Gasfitters and Drainlayers Board’s disciplinary levy which funds investigations and prosecutions of plumbers gasfitters and drainlayers who are found to have been in breach of best practices or who are practising without the proper skills or qualifications. 
Let us remember the difficulty we had in maintaining the volume of plumbers that we needed. Recently during a prime ministerial visit to the West Coast we visited a plumber’s business that had been highlighted by the development trust on the West Coast as the business of the year. It is fascinating to see the level of skill qualification and dedication that is required to ensure that the services are properly passed on to houses. Plumbers in fact may I suggest do more for longevity than the health services do at a medical level because they look after our well-being prior to illness and disease. 
The amendments that are being proposed are in keeping with the original intent of the law. That is the reassuring bit. It is clear that the Government’s intention was always for the Plumbers Gasfitters and Drainlayers Board’s prosecution function to be funded by the industry. All its statutory functions are funded through fees and levies charged under the Plumbers Gasfitters and Drainlayers Act 2006—that famous one that Maryan Street remembers. The clarifications this amendment bill makes are simply a move to reflect the true meaning and purpose of the law as it should have been put forward. I look forward to working towards this with my colleagues on the Government Administration Committee who have proved over recent months their ability to handle with competence and focus bills both large in prognostication and division as well as those of a forthright and logical nature like this one. I support this bill coming to the committee and I call on the House to do the same. 
Su’a WILLIAM SIO (Labour—Mangere) 
: 
 Talofa lava Mr Assistant Speaker. I want to say to the member who just spoke Chris Auchinvole is this it? Is this all we have? On this Thursday we are debating plumbers drainlayers and gasfitters? Is that all there is from this Government? What about unemployment? What about the 16 percent of Pacific Island people who are unemployed? It would not be so bad if we were talking about injecting money to create more jobs. It would not be so bad if we were injecting money for the education of young people so that we would have more plumbers drainlayers and gasfitters. But is this it? 
I say that because earlier this week we had a petition of the people—boxes and boxes of thousands of petitions signed by over 390000 people who are saying to this Government: “Stop the sale of assets.” And yet on Thursday instead of debating that we are having to debate the Plumbers Gasfitters and Drainlayers Amendment Bill— 
Hon Maurice Williamson 
: This will lead the news. This will lead the news. 
Su’a 
 WILLIAM SIO 
: Ha ha! I would say I think it is the wrong priority for this Minister for Building and Construction to introduce this bill. It may be important and it may be necessary but in so far as the New Zealand public are concerned this is not the priority—this is not the priority. 
As my colleague Raymond Huo has outlined it is unfortunate that the Plumbers Gasfitters and Drainlayers Act of 2006 after so long now requires amendment in order to correct some anomalies that have occurred. I suppose to be fair the board protects the health and safety of the public by regulating and ensuring the competency of persons carrying out sanitary plumbing gasfitting and drainlaying work. The board is funded entirely by the fees and levies charged to plumbers gasfitters and drainlayers registered under this Act and it is very similar to other occupational licensing boards. 
But the board made a mistake. Although I am not a member of that particular select committee I have to ask why it was that the board did not recognise the mistake that it had made. If it were not for the vigilance of the Regulations Review Committee which in 2011 picked up on what had occurred and concluded that the board appeared to have made an unusual or unexpected use of the levy power it would not have been picked up I suspect. 
In so far as Labour is concerned there are some issues in this bill that we have reservations about but we will support this bill going to the select committee because I think the select committee is probably the more appropriate place for those who are directly going to be affected by the bill those who are in this industry and all other interested parties to raise their concerns to raise their questions and to allow members of that select committee to critique analyse and make appropriate recommendations with regard to making sure that the bill achieves its particular purpose. 
I understand that the purpose of the bill is to get rid of the uncertified practitioners in the industry. I am sort of surprised that whilst collecting moneys from the plumbers gasfitters and drainlayers solely for the purposes of prosecuting them that the board also started using this particular money to prosecute those who are not registered. That is of concern. 
Hon Maurice Williamson 
: Well every other profession does that. Architects do it. Electrical workers do that. This only brings them into line with everyone else. 
Su’a 
 WILLIAM SIO 
: Yes. I understand that the board imposed a disciplinary levy to fund the enforcement of its activities against those who breached the law but it went outside that law and began to then also look at those who were not registered. 
So I think it is a good thing that we do bring it in and ensure that the industry maintains its credibility. It is about ensuring that the New Zealand public are protected—and we see it on television time and time again. In fact I have had some dealings in my own personal situation where one plumber came in and carried out some work and a few months later I had to call another plumber and that particular plumber raised the fact that the first plumber had been using the wrong materials. So in terms of making sure that we have got protection for our consumers and our communities I think that is particularly important. 
I think what needs to be made clear though is that Labour is not uncritically sanctioning the board’s conduct—that it acted ultra vires or beyond the scope of its levy power. Rather I think it is going to be particularly important that this bill goes to a select committee and that anybody and everybody who has an interest in this ought to be given an opportunity to submit. 
In essence one thing that really I have difficulty with—and I made this point earlier—is that what this bill does is takes actions that were previously thought lawful and have since been found unlawful and tries to make them lawful again. There are some other cases around this country that I think will cause some serious concerns in local communities. 
I think that the work the Regulations Review Committee did when it first considered the Plumbers Gasfitters and Drainlayers Board fees notice in 2010 ought to be commended. The select committee considered that the board had made “an unusual or unexpected use of the levy power in section 143 of the Act.” as the board used the disciplinary levy to fund enforcement action against non-registered persons. I note that section 143 provides for the board to set a levy to fund only the cost of complaints and discipline in relation to registered persons. I also note that the disciplinary levy validated from 1 April 2007 to 31 March 2008 inclusive is $25. Look at how this quickly picks up. From 1 April 2008 to 30 July 2010 inclusive it becomes $50 and then from 31 July 2010 to 11 January 2012 it is $266. 
Regarding those who are in the industry and those who are practising their craft I would call on all of those organisations to make sure they have a say because I think that they would be seriously concerned about the quick movement of those particular levies particularly when there is such high unemployment currently in our country. Despite the job opportunities that this Government attempts to spin to the media the fact remains that we still have high unemployment. It is the highest in 13 years. In fact for Pacific communities it is 16 percent. 
But as I said is this all that this Government has for us to debate? Is this it—that despite the worst economic history in 51 years we are here tonight debating the Plumbers Gasfitters and Drainlayers Amendment Bill? I think the public listening in to this will be saying to every member of that Government there: “Is this what we put you in there to do?”. It is tweaking all around these plumbers and gasfitters these little things that the board itself should have taken care of. Instead we are here on Thursday debating this when there are the more serious issues of families struggling to make ends meet. This Government should have made that the priority rather than plumbers gasfitters and drainlayers. How sad is it that this Government is debating this when there are so many people looking to it for leadership. I think that they will be very very disappointed not only in this Minister but in the entire Government on that particular side. 
HOLLY WALKER (Green) 
: 
 When we were first approached by the Minister for Building and Construction Maurice Williamson about this Plumbers Gasfitters and Drainlayers Amendment Bill the Green Party was prepared to indicate our tentative support for the changes that it made. However we did have substantial concerns about the process including the constrained period of time for the select committee to consider the bill and at this point we have to say that those concerns remain and are so substantial that we are unable to support the bill at this time. 
We know in the Green Party that the grievances and complaints concerning the levies and fees charged by the Plumbers Gasfitters and Drainlayers Board have been ongoing for some time. As we have heard in the past that board used to charge a disciplinary levy to all those registered under the Plumbers Gasfitters and Drainlayers Act and this levy was used to fund the board’s complaints and disciplinary processes. In 2010 after considering a complaint the Regulations Review Committee recommended that this levy be disallowed as it was being used to fund complaints and disciplinary processes against unregistered people as well as those registered under the Act while only registered people were paying the levy. In response to the report of the Regulations Review Committee the Plumbers Gasfitters and Drainlayers Board replaced that levy with an offences fee which carried essentially the same function. Now as we know a second complaint about this offences fee is currently before the Regulations Review Committee and although that committee is yet to report on this complaint there is a risk that if the offences fee too is disallowed then the Plumbers Gasfitters and Drainlayers Board will be required to refund the moneys it has collected under both the levy and the fee and that will leave it in a financially unviable position. 
When the Act that created the board was passed in 2006 it was arguably and quite likely the intention of Parliament that the board’s disciplinary and prosecutorial role would be funded by a levy of this nature paid by those registered under the Act as is the case in other construction industry boards. However the Act as it is currently worded seems to fall short of this. [ 
Interruption 
] 
I raise a point of order Mr Speaker. I am finding myself rather distracted by interjections flying between other members of the House. If we could have a stop to that it would be great. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Yes can I just advise the member that interjections from one side to the other are perfectly in order. However I recognise that because of where the member is sitting—and the member should know this now; she has been here long enough—any interjections from the cross benches can affect the microphone. 
HOLLY WALKER 
: As I was saying the Act as it is currently worded seems to fall short of what Parliament intended in 2006. So this amendment bill would fix that loophole by retrospectively validating the funds collected through both the levy and the fee and allow the board to continue to collect in this manner. As I mentioned at the beginning when approached about this the Green Party was prepared to offer tentative support to allow this bill to be sent to a select committee so that the issues could be traversed. The amendments in this bill are we believe potentially sensible and they may settle what has been a long-running dispute between the board and some of its members. 
However I think all members of this House would agree—at least I certainly hope they would—that legislation with retrospective application should be approached very carefully indeed and with meticulous precision and scrutiny. The Green Party has serious concerns about the process and time frames proposed for this bill to allow that level of scrutiny to occur. We know that the bill has had to be drafted quite quickly and although that is no criticism of the drafters simply a statement of fact when legislation is drafted very quickly it can often contain errors or omissions. These are picked up ideally by the scrutiny applied at the select committee hearing. However in this case that hardly seems likely given that the time frame proposed for the select committee to consider this bill is just 1 week. I believe we will have a chance soon to debate this shortened time frame when the Minister seeks permission from the House for that. But for now suffice it to say that especially because of its retrospective nature this bill requires very close scrutiny and it will not get that from a 1-week select committee process. 
Furthermore as a number of speakers have already noted the issues and complaints regarding the levies or fees raised by the Plumbers Gasfitters and Drainlayers Board have been controversial and the source of much strife and division over a number of years. So therefore there are likely to be many individuals affected by this bill not least the authors of the most recent complaint to the Regulations Review Committee who deserve to be treated with natural justice and due process. The rushed process followed with this bill I believe risks creating a new injustice that will only compound the strife and bitterness now so ingrained in this sector. Given that this bill is designed primarily to put a stop to that we should be very careful about risking compounding the sense of unfairness and injustice in that sector. 
It may very well be that we need to fix the messy situation that the board has now found itself in. The Green Party could support fair thoroughly drafted legislation to achieve this provided we were satisfied that a proper process has been followed. But we cannot be confident of that at present. We have indicated to the Minister our willingness to support changes like those proposed in the bill but our concern is about the time frame as proposed. Retrospective legislation should not be entered into lightly. It should be very rare and when it occurs it should be meticulously drafted and scrutinised. In our view the bill at the moment does not meet this test. The 1-week select committee time frame proposed would not allow for the appropriate level of scrutiny for a retrospective piece of legislation and the Green Party therefore cannot support it. 
JAMI-LEE ROSS (National—Botany) 
: 
 I am happy to support this piece of legislation the Plumbers Gasfitters and Drainlayers Amendment Bill. Clearly it is a piece of legislation that we wish we did not have to deal with right now but it is important because when Parliament made some decisions in 2006 on the existing Act it made some mistakes. [ 
Interruption 
] I hear the member from New Zealand First calling out. I might remind her that it was a Labour - New Zealand First coalition at the time that it was in place so hey if she wants to take ownership of the mistake she is welcome to. But it is clearly a mistake that we have to fix up. 
The reason why we have to fix this up is that the Plumbers Gasfitters and Drainlayers Board is an important occupational licensing body that is in place to protect New Zealanders. We need to give it the mandate and give it the ability to fund an important part of its job which is keeping the public safe by ensuring that plumbers are doing their jobs properly and that gasfitters are not operating without a licence and in an unsafe manner. There have been situations where members of the public have been put at risk have had their lives put in danger because unlicensed individuals have not been doing work appropriately. We expect this body that we are debating to be able to go out and do its job look after the public and ensure that unlicensed individuals are not putting lives unnecessarily in danger. It has to be able to fund that work. 
Clearly there was a situation in 2006 where an incorrect clause in a piece of legislation was put in place which has led to us now having to fix it up. It is not good but we have to do it. I say to the members who are opposed to this bill that opposing it and potentially getting into a situation where the board is unable to fund its activities if the regulations were ever to be disallowed would lead to a very precarious financial situation for the board. The board could potentially become insolvent and then it just could not operate at all. 
It is not desirable to do this on a regular basis but sometimes it is important to do so. We are doing it to protect the public and to ensure that the board can do its work properly. That is what the legislation is all about and this party supports that. 
Hon MARYAN STREET (Labour) 
: 
 It seems to me to be one of the great unanswered existential questions as to why the Plumbers Gasfitters and Drainlayers Board has had such a fraught and wretched history because every time I have ever employed a plumber a gasfitter or a drainlayer they have turned out to be perfectly jolly men and have got on with the job. So to have this level of controversy bedevil this board over many years is something that some of us in this House find fairly inexplicable. I do want to make a reference to the fact that this goes back to 2006 legislation as the previous speaker who has just resumed his seat Jami-Lee Ross said. That is absolutely true. It was a complex piece of legislation at the time. I remember it well as the member Chris Auchinvole referred to earlier and it had to be divided into two parts in order to try to get it right. But the interesting thing perhaps for the member who has just resumed his seat is that the fault with this bill did not become apparent to either Labour or National until 2010. So this is not something about which the National members can say “Oh we spotted this years ago and you guys just didn’t do anything about it.” It did not come to light. They were not aware of it. We were not aware that the provision would be misused in this way until 2010 when an additional levy was applied by the Plumbers Gasfitters and Drainlayers Board in order as I understand it to try to get the cowboys out of the industry and that is the purpose of the bill. 
But the purpose of the board was to gather revenue in order to prosecute and investigate any breaches of the Acts that covered their activities. But the Act applied to registered people only. So perhaps another lesson in this for the public is: for goodness’ sake make sure you get a registered plumber gasfitter or drainlayer and do not go for one of the cowboys who say “Oh I’ve got a spare piece of that in the back of my van—it’ll just do the trick.” So the lesson to any householder at home is to make sure that you get a registered person. However that is not the subject of the bill although it is the purpose of the bill as it says quite clearly to get rid of uncertified practitioners in the industry. As I understand it this is what the board was attempting to do with this levy which has turned out to be illegal. 
That discovery came through the application of the Regulations Review Committee. At the time that the original legislation was going through the House I was also on the Regulations Review Committee in 2005 and 2006 and most of 2007. I remember this coming there and I remember complaints and the board appearing in front of the Regulations Review Committee as well. But this has come to light because of the scrutiny of the Regulations Review Committee which goes to underscore just how important that committee is because it scrutinises things that otherwise do not get any parliamentary scrutiny. That is its purpose and it performs a hugely important function in that respect. Everything we vote on comes to this House for a vote. The things we do not vote on that are exercised by regulation promulgated by Ministers and Orders in Council do not get scrutinised by this House. So we need to respect the view of the Regulations Review Committee—not only respect its view but also respect its function. 
I need to say that I dislike to my core retrospective legislation and this is the second time in 2 weeks I have got up to make a speech about retrospective legislation. The last time was on the Tasman District Council validation of rates that had been misapplied. I hate it but we are in the situation where this House has very few alternatives. We either bankrupt the Plumbers Gasfitters and Drainlayers Board which is in nobody’s interests—not the industry’s interests not the members’ interests and not the interests of ordinary people who require the services of these tradespeople. So I have to bite the bullet on this one. I do not like retrospective validating legislation. It is correcting an error. Somebody has done something illegal and Parliament has to fix it otherwise people will suffer as a result. So for that reason Labour is supporting this bill but not without reservation. 
There is one other item that I want to bring to the House’s attention. I bring it to attention in this first reading because there is such a short time frame for the Government Administration Committee to consider this bill—and the previous speaker from the Green Party Holly Walker referred to that substantially—but there are some things in the content of the bill itself that require some reconciliation. I hope that the officials of the Minister for Building and Construction will during the week that the bill is in front of the select committee provide the select committee with some way of resolving new section 143(1) in clause 4 which provides the new process by which the board may legitimately apply a levy for disciplinary and prosecution purposes with the new section 171B which comes under clause 5 in Part 2 of the bill and refers to the fact that any amendment on the date or after the date that this bill comes into force will render the previous validation ineffective. So the validation that we are trying to pass here will cease to apply if the board moves to make an amendment to the fee on or after this bill has come into effect and become an Act. I think there is a contradiction between those two things. 
I think that if the section 142 power that was used by the board to prescribe the original offence fee was dubious enough to require validation by this bill then surely it cannot be a lawful basis for the board to use in amending the fee. If the bill is enacted an argument can be made that the section 142 power in so far as it was applied in prescribing the offence fee is implicitly repealed by the new empowering provision inserted into clause 4 of the bill. I do think that the policy intent behind new section 171B is to tell the board that if it amends the offence then it will not have the protection of the validation provided for in the bill. I think this sends confusing signals. I know the Minister’s office and the Minister are aware of my concerns in this regard and I would hope that officials would be able to mend what I see as a difficult set of competing signals before the bill is passed into law. Thank you. 
IAN McKELVIE (National—Rangitikei) 
: 
 This vexing issue has been before the Regulations Review Committee for the entire time that I have been part of this House which is a bit over a year now. Certainly as the previous speaker the Hon Maryan Street alluded to it has been before the Regulations Review Committee since around 2010. 
Before I make a few comments on that I do want to comment on a couple of issues that Su’a William Sio raised because I think they need some addressing. One could be depressed by the current cricket score but also you could definitely have been depressed by the first minute or so of his speech. He clearly lost his way as the policies of this Government will almost certainly provide more and better-paid jobs for people and certainly for plumbers gasfitters and drainlayers in New Zealand. 
Having got that off my chest I just want to go on to make a few points about this bill the Plumbers Gasfitters and Drainlayers Amendment Bill because it is quite important I think. Although I am not keen on retrospective legislation and I do not think anyone in this House is keen on it it is at times necessary to put in place legislation that tidies up some issues for us. All boards in the building and construction sector are funded by fees and levies charged to their industry. This bill validates that situation for the Plumbers Gasfitters and Drainlayers Board and puts it on a par with other industry bodies. The matter arises from its desire to rid the industry of unskilled and unqualified operators. There is no way to protect its members and clients from what may be termed unskilled or shonky operators other than for the Plumbers Gasfitters and Drainlayers Board to pursue and prosecute as required. We need to remember that this activity also protects the consumer from this danger or shonky work and that is certainly a very important part of this Parliament’s work. 
As I have said the bill has arisen after a number of attempts by both the Regulations Review Committee and the Plumbers Gasfitters and Drainlayers Board to rectify the situation. I must also defend the Minister for Building and Construction because I do not recall him ever criticising the Regulations Review Committee as Raymond Huo stated earlier. This is a pragmatic approach to a problem that was clearly an error in earlier drafting of the Act both in 2000 and in 2006. It was clearly the intention of the Government of the day that the Plumbers Gasfitters and Drainlayers Board have the ability to police its own industry to keep it under control and to make sure that it was run rationally and in a manner that certainly protected its clients and the public from what was going on. 
I have got no problem in recommending that this bill go to the next stage. I am also pleased to see that it will be back in the House very quickly as I think it is necessary that we get this sort of work done quickly tidied up and moved on. I also have some sympathy for the complainants in this matter as they have spent a lot of time and energy putting those complaints to the Regulations Review Committee. I am sure that this solution will overcome those problems for the industry. Thank you. 
PHIL TWYFORD (Labour—Te Atatu) 
: 
 I am willing to lay a bet that when the Hon Maurice Williamson took up his warrant as the building and construction Minister sorting out the Plumbers Gasfitters and Drainlayers Board was probably not high on his list of strategic priorities—Maurice’s to-do list. I guess one late night 4 years ago he was sitting in the Bolton Hotel scribbling a list of things he wanted to achieve as Minister and sorting out the Plumbers Gasfitters and Drainlayers Board probably was not one of them. 
It is fair to say that the problems of the plumbing gasfitting and drainlaying industry and the problems associated with that industry’s board have been the bane of the lives of a number of building and construction Ministers over the last few years. It is a troubled industry. The dysfunctional relationships in that industry—I think it is fair to say—have plagued the operation of the Plumbers Gasfitters and Drainlayers Board and that sort of entrenched animosity between members of the board and people involved in I think two different industry associations has tied up what should be an effective mechanism to regulate and clean up an industry. It has been plagued by fighting and animosity for some time. This bill the Plumbers Gasfitters and Drainlayers Amendment Bill is not the first plumbers gasfitters and drainlayers legislation to come before this House in the last few years. I think we are probably all hoping that it will be the last. 
Darien Fenton 
: Oh no! 
PHIL TWYFORD 
: Labour supports this bill. Well you know I have a lot of sympathy for the remarks of Su’a William Sio who pointed out—I think quite rightly—that the people of New Zealand would like this Parliament to be focusing on things that are more of a priority for them. They want education sorted out. They want jobs. They want child poverty dealt with. They want Auckland’s housing crisis addressed. Instead the Government Ministers like the Hon Maurice Williamson and this Parliament are having to spend time on what for most Kiwis is a pretty obscure piece of legislation. 
 I want simply to underline some of the comments that my colleagues Raymond Huo Maryan Street and Su’a William Sio have already made and that is that Labour is supporting this bill going to the Government Administration Committee because we feel that the issues deserve to be aired and that the various warring parties in the industry deserve the opportunity to come along have a say and see whether or not this bill can sort out the mess that the Plumbers Gasfitters and Drainlayers Board has got itself into. 
We have rehearsed already our discomfort with the fact that this is retrospective legislation that is seeking to validate a practice that should never have taken place. The Plumbers Gasfitters and Drainlayers Board should never have been using a levy that it extracted from registered members of its industry to prosecute and discipline members of the industry who are not registered members. As the Minister said earlier it is perfectly normal in this kind of situation for an industry body like this which is charged with maintaining standards and regulating the industry to exercise a disciplinary role for registered and non-registered members. The problem is that the enabling legislation for this board restricted its purview to registered members of the board. So the board has got itself into a real pickle here and it needs this House to retrospectively validate those levies that have been spent in a way that they were not supposed to be. As Maryan Street said we can thank the Regulations Review Committee which has done its job well. It identified what I think it described as an unusual or unexpected use of the levy power and it has pursued this issue with some diligence over the last year or so. So we owe thanks to the Regulations Review Committee. 
My colleagues have pointed out also that Labour by supporting the bill at this stage is not uncritically supporting the conduct of the board. We are not endorsing the behaviour of the board in acting beyond the law—acting in fact beyond the scope of its levy power. Rather what we want to do is send this bill off to the select committee try to get the problem sorted out and give all the parties a chance to get in the room and express their views. 
I want to just provide some background about the Plumbers Gasfitters and Drainlayers Board for those people listening. Its job is to protect the health and safety of the public by regulating and ensuring the competency of people in trades carrying out sanitary plumbing gasfitting and drainlaying work. This bill allows the board to continue to collect offence fees. Currently it is about $600000 a year from registered persons for this 2013 licensing year. This bill validates both the disciplinary levy and offence fees in the past and changes the rules for the future. The effect of this is that the board cannot be required by registered persons to refund the moneys that were collected unlawfully by the board. I think as Maryan Street pointed out if we do not do that basically the Plumbers Gasfitters and Drainlayers Board will go belly up and that will make a complicated and difficult situation much worse. So we support the bill on the basis that it is a necessary evil and something that needs to be done. 
The last thing I would like to do is just touch on the main provisions of the bill. Section 143 of the Plumbers Gasfitters and Drainlayers Act is the empowering provision allowing the board to impose a disciplinary levy on registered plumbers gasfitters and drainlayers. The board is allowed to use that levy for investigations into allegations or complaints against registered persons only and for disciplinary proceedings. Well what this bill does is it empowers the board to impose those levies against registered members but it enables the board to use those levies for prosecuting or disciplining any—either registered or unregistered—players in the industry. So it extends the purpose for which the board may impose the levy and clause 4 of the bill amends section 143 of the Act in that way. 
Finally Part 2 of the bill is the validation clause. What it does is it retrospectively validates the disciplinary levy and offence fees that were imposed between 1 April 2007 and 11 January 2012. 
MIKE SABIN (National—Northland) 
: 
 Although I am happy to take a call in support of this bill the Plumbers Gasfitters and Drainlayers Amendment Bill it is fair to say that no one takes any pleasure from speaking to a bill that seeks to validate essentially mistakes of this House. All that said this is not a situation where the intended purpose of the original Act drafted in 2006 has not been sought to be achieved. I am one of the members of the Regulations Review Committee which has tangled with this issue over the past year or certainly since I have been a member of this House and it was obviously a problem long before that. 
It is fair to say that the Plumbers Gasfitters and Drainlayers Board has had its fair share of challenges and troubles over the years and this has certainly complicated the challenges that it has. Having said that it is quite clear that the board which is funded entirely through levies has gone about executing its role in terms of disciplinary prosecutions and procedures in the best interests of the entire industry and in fact in the best interests of all New Zealanders because of the inherent dangers that would come from shonky practices as alluded to by the Minister. Where the difficulties have arisen is that in the original drafting of the law there is some degree of difficulty about the difference between a levy and a fee and the fact that the Plumbers Gasfitters and Drainlayers Board sought to take prosecutions against people who are not actually registered plumbers. Submissions by plumbers and gasfitters to the Regulations Review Committee certainly alluded to their concerns about this but I think it was generally accepted by all that it is actually in the best interests of the industry as a whole that those who are not registered and who are bringing the industry into disrepute and putting members of the New Zealand public at risk are actually held to account and the board is really the only body that is geared up to achieve that. 
So what we have in this validation legislation is retrospectively dealing with the ultra vires problems that have arisen through a board that has actually followed the intent of the law but the law in itself has not provided the appropriate platform. It sounds black and white talking about it here but I can absolutely say that it is not and that is something that the Office of the Auditor-General has also had some challenges in tangling with. But I think the important thing in terms of supporting this bill in a timely manner is that what we are doing here is validating practices that were in line with the original intent. It is very important to give this industry some certainty to New Zealanders and this board and in that I am happy to commend this bill to the House. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: I am going to give the call to the Green member. This is normally a 5-minute call but you can actually take 10 minutes if you wish. 
STEFFAN BROWNING (Green) 
: 
 I will not need 10 minutes but I am pleased to speak to this Plumbers Gasfitters and Drainlayers Amendment Bill. It is unfortunate that there is a retrospective aspect to it but it would seem appropriate if this organisation the Plumbers Gasfitters and Drainlayers Board is going to keep its funding. We oppose this bill at this point but look forward to engaging at the Government Administration Committee because we think that if this works well we might be able to revisit our opposition to it. 
There is clearly a gap in the legislation but there is also clearly a dysfunctional board as well. The industry is somewhat split. There is some resentful membership and it seems like in some cases it is the small operators versus the larger operators that the board seems to look after in a much better way. This might be an opportunity for some amendments that can send signals about the functionality of that sector. 
There is the membership of course but there are also outliers who still practise under a mate’s ticket or registration. In some respects the board and maybe some of this legislation have helped drive that. There are part-timers or tradespeople who are working a range of different skills who are not just drainlayers for example or plumbers. I was speaking to one as recently as yesterday who pointed out that he pays a $300 levy. It might not matter to some people across the House—it may seem a drop in the bucket—but for someone who is doing only drainlaying— 
Hon Maurice Williamson 
: That’s a good expression for plumbers. 
STEFFAN BROWNING 
: —it is a good pun—and who is working only occasionally but is still very skilled and has to travel and then has to pay on top of that a further $380 to do the refreshers to brush up for the registration this is driving skilled people out. And it is getting into the grey area of operating under someone else’s registration and ticket. The board in keeping its—let us call it—“disputed funds” will need to look at it. I dare say that the board is listening and I am hoping that it is listening to the debates that go on through this rather shortened process. 
The board needs to better reflect on what it needs for the whole industry to be fairly introspective to make sure it is not operating with conflicts of interest and to look after New Zealand in total by looking after all the tradespeople so that we can have good tradespeople who are able to afford to retain their registration and be kept up to date at an affordable rate so that everyone in the community can benefit. 
We oppose the bill at this point to a fair degree because of the shortened process although understanding that there is some rationale behind it and we look forward to how that is distilled through the select committee process. Thank you. 
LOUISE UPSTON (National—Taupo) 
: 
 I am pleased to stand as the final speaker on this side of the House for the Plumbers Gasfitters and Drainlayers Amendment Bill. One of the things that has disturbed me in this debate was the opening contribution by the Labour member of Parliament Raymond Huo who was so disrespectful to this industry that I was quite shocked. I was quite shocked and I was very disturbed at the tone in which the first Labour speaker spoke about this group of people who are hard-working New Zealanders who contribute to the economy who are local employers who have trained hard to do the work they do and who have a really important job in terms of the health and safety of New Zealanders and the sanitation that is available to each and every one of us and to suggest that this was not important work for the Government I find quite horrendous. 
One of the things that I do not know whether I do or do not enjoy about being the final speaker on this side of the House is that I follow some very able colleagues who have spoken at length about the bill particularly my colleagues whom I want to commend for being on the Regulations Review Committee. It is a committee that is not often given high profile in this House— 
Mike Sabin 
: We’re the unsung heroes. 
LOUISE UPSTON 
: —but it does do very important work. Unsung heroes—that is correct Mr Sabin. Those on the Regulations Review Committee are the unsung heroes of the parliamentary select committee process and have the very important job of looking at regulations that are put in place. These ones with the plumbers gasfitters and drainlayers are particularly interesting and the fact that there has been an issue in terms of the levies that they have been charging and the work that they are using as a result of the levies charged. It is an interesting group because I have had very very lengthy conversations with a Taupo constituent about this exact organisation about the work they do about how they are registered and how their fees and levies are applied. It is one of the things that as a member of Parliament you have the opportunity to get involved with and learn about organisations trades and employers in areas that you have not really had the opportunity to learn about before coming to this House. 
This bill will tidy up a piece of legislation that has been challenging those important people who work in the plumbers gasfitters and drainlayers field. It will be very important for them that the board is able to do the work that it is put in place to do and this piece of legislation that is brought to the House by the Hon Maurice Williamson enables it to do that. Unlike the other side of the House I think the work that the plumbers gasfitters and drainlayers do for this country is important. It is important for our Parliament to support the work they do to support their board and to make sure that they are able to undertake the work that they need do. I am pleased to support this bill at its first reading. 
A party vote was called for on the question  
That the Plumbers Gasfitters and Drainlayers Amendment Bill be now read a first time. 
Ayes 98 
New Zealand National 59; New Zealand Labour 34; Maori Party 2; ACT New Zealand 1; United Future 1; Independent: Horan. 
Noes 22 
Green Party 14; New Zealand First 7; Mana 1. 
Bill read a first time. 
Bill referred to the Government Administration Committee. 
Hon MAURICE WILLIAMSON (Minister for Building and Construction) 
: 
 I move  
That the Government Administration Committee report the Plumbers Gasfitters and Drainlayers Amendment Bill to the House on or before 22 March 2013 and that the committee have the authority to meet at any time while the House is sitting (except during oral questions) and during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 188 and 191(1)(b) and (c).  
The shortened select committee report-back period is essential as the new licensing year commences on 1 April and practitioners are already making licensing payments to the Plumbers Gasfitters and Drainlayers Board. This legislation will provide practitioners and the board with certainty. May I say that if the Regulations Review Committee does actually disallow the old fees and payments it could be that the board would find itself completely insolvent and there would be no regulatory body controlling the industry. That is why there is a shortened period. 
HOLLY WALKER (Green) 
: 
 I will take just a brief call in this debate on the shortened process for the Government Administration Committee’s consideration of the Plumbers Gasfitters and Drainlayers Amendment Bill. As I mentioned in my substantive contribution on the bill the Green Party is concerned about this shortened select committee process. 
Having sat on a select committee dealing with a bill in a shortened 3-week time frame and having found it impossible in that case to do justice to the complex issues or apply the appropriate level of scrutiny to the bill I cannot imagine how that can be achieved in the 1 week proposed for this bill. In our view 1 week would be insufficient to adequately deal with any bill through the select committee let alone one that has retrospective application. In such cases an even greater level of scrutiny should be applied than to a normal bill and this will be impossible for this bill in 1 week. 
Furthermore we can predict that because of the long-running issues and complaints that prompted this bill there will be a significant number of affected parties wishing to make submissions and follow the select committee’s process. These people deserve the opportunity to do so because in many cases the changes proposed in this bill will impact directly on their daily lives and their businesses. One week is not sufficient for these stakeholders to prepare present and submit on this bill. 
So the Green Party remains strongly opposed to this shortened select committee process. Although we understand that there is some rationale for that shortened process those concerns are very fundamental. However we will as always engage with the bill at the select committee as constructively as possible. 
A party vote was called for on the question  
That the Government Administration Committee report the Plumbers Gasfitters and Drainlayers Amendment Bill to the House on or before 22 March 2013 and that the committee have the authority to meet at any time while the House is sitting (except during oral questions) and during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 188 and 191(1)(b) and (c). 
Ayes 97 
New Zealand National 59; New Zealand Labour 34; Maori Party 2; ACT New Zealand 1; United Future 1. 
Noes 23 
Green Party 14; New Zealand First 7; Mana 1; Independent: Horan. 
Motion agreed to. 
Minimum Wage (Starting-out Wage) Amendment Bill 
Second Reading 
Hon SIMON BRIDGES (Minister of Labour) 
: 
 I move  
That the Minimum Wage (Starting-out Wage) Amendment Bill be now read a second time 
. I thank the members of the Transport and Industrial Relations Committee and its chair David Bennett for dealing with this bill so swiftly and efficiently. The select committee reported back to the House on 26 February and recommended that the bill proceed with some amendments. I agree with the amendments proposed. In addition I intend to make some minor technical changes to the bill through an amendment to be tabled at the Committee stage. These technical changes will provide further clarity around the meaning of continuous employment clarity on the timing for which a person is no longer eligible for a starting-out wage and changes consequential to the Minimum Wage Order 2013 coming into force. 
In New Zealand and worldwide young people have been severely affected by the recession. The household labour force survey shows that young people under the age of 20 have been more negatively affected in employment terms than older groups of workers. In the past 5 years there has been a drop in employment for young people aged between 15 and 19 years of about 42 percent. 
International research shows that long spells of unemployment and inactivity may permanently lower young people’s future employment prospects particularly where they are low skilled and inexperienced. Like other OECD countries New Zealand is responding to the negative effects of the global recession on young people. A reduced minimum wage is used in several countries including Australia and the United Kingdom to encourage youth employment. We need to ensure that young people are ready and equipped for work as the economic recovery gains momentum. 
I am confident that the Minimum Wage (Starting-out Wage) Amendment Bill will assist young and inexperienced workers to gain a foothold in the labour market. To achieve this aim the bill will enable the setting of reduced minimum wage rates by Order in Council for certain groups of young people aged 16 to 19 years. 
The rates will be set at no less than 80 percent of the adult minimum wage. It is intended that three groups of young people be targeted for the starting-out wage. These are 16 and 17-year-olds in their first 6 months of work with a new employer 18 and 19-year-olds who have been paid a benefit for 6 months or longer and who have not completed 6 months of continuous work with any employer since starting on the benefit and 16 to 19-year-olds in training in a recognised industry training course involving at least 40 credits a year. 
The intent of the starting-out wage is to support young people who are new to the workforce into long-term sustainable employment by providing incentives for employers to take them on. For young people the starting-out wage will provide them with an advantage in the labour market so they can gain the necessary skills and work experience that will assist them throughout their working lives. 
The bill limits the period for which an employer can pay a starting-out wage to a young person working for them who is not supervising or training others to a period of 6 months. After this time the young person will be entitled to be paid the adult rate by that employer. This bill encourages continuity with the same employer. Young people—like all employees—with a steady work history are seen as less risky for employers to take on. This puts a focus on young people gaining work experience at a steady job and becoming better equipped for their future employment. 
This Government recognises that there is a need to provide for more vocational training opportunities for 16 to 19-year-olds. It is important that young people are given opportunities to engage in training for industry. Employers so far have indicated that they are not using the training minimum wage. The bill provides for young people aged between 16 to 19 years who are required to undergo training as a condition of their work to be paid the starting-out wage rather than the minimum training wage. 
The number of annual training credits will be changed from 60 to 40 through an Order in Council for 16 to 19-year-olds to give them the flexibility to choose a range of courses without having such a heavy workload. Reducing the credit requirements to at least 40 credits per year for 16 to 19-year-olds will support more young people to gain skills in their chosen industry. The lower credit requirement means that more people will qualify for the starting-out wage than did for the training wage so more employers will opt to train young people. 
The select committee received a range of submissions on the bill and it has given thorough consideration to the issues raised by submitters. As a result some minor amendments have been recommended. An amendment is proposed to clause 2 of the bill which provides the date on which the bill comes into force. The select committee recommends changing the commencement date of the bill from 1 April to 1 May 2013 to provide sufficient time for employers and young people to be fully informed about how the starting-out wage will affect them. 
This will not affect the making of this year’s minimum wage order which as it did last year is intended to come into force on 1 April. Nor will it affect those on the new entrants wage who will receive the higher of the new entrants rate or the new starting-out wage rate for 16 and 17-year-olds until they have completed their 3 months or 200 hours of employment under the current law. 
Clause 4 replaces section 4 of the principal Act which authorises the Governor-General by Order in Council to prescribe minimum rates of wages with new sections 4 to 4B. The select committee proposed a small number of technical amendments to the bill under clause 4 to clarify its operation. One amendment clarifies that when the bill refers to “continuous employment” continuous work counts from the worker’s first day on the job and is taken to mean any amount of work regardless of hours per week done on an ongoing basis for an employer. Another amendment clarifies that the time before a young person turns the age specified in the starting-out wage Order in Council would count towards their eligibility for the starting-out wage. These are sensible recommendations and I thank the select committee. I would also like to thank the people who took the time to make a submission on the bill. 
The Minimum Wage (Starting-out Wage) Amendment Bill is the latest in a series of steps the Government is taking to get more New Zealanders into work and into jobs. The Government’s continued focus on getting young people off benefits and into work has already seen thousands of young people benefit from subsidised work placements and pre-employment training. The Minimum Wage (Starting-out Wage) Amendment Bill is part of this wider package to help get more young New Zealanders into work or training. It provides real incentives for employers to take on young people and give them the opportunity to gain work experience and skills that will stand them in good stead for their future working lives and careers. I commend this bill to the House. 
DARIEN FENTON (Labour) 
: 
 Well I do not think there is anything for that Government to be congratulating itself on when the time frame for the submissions on this Minimum Wage (Starting-out Wage) Amendment Bill has been shortened. When we are considering something as important as cutting workers’ pay the least the Government could have done was give the normal period of time and not rush it through the Christmas period when people did not have the chance to make submissions. Needless to say there were more than 500 submissions—531 actually—received on this bill of which 522 were opposed; only nine were in favour. The reason for that is that this bill is going to put young workers back on the scrap heap of youth minimum wages. It is the economic failure of this Government and it is putting its failures squarely on the shoulders of our young people. 
This bill reinstates youth rates not only for 16 and 17-year-olds but also for 18 and 19-year-olds—something we have not seen in New Zealand since last century. Rather than making bold plans to tackle the urgent crisis of youth unemployment—27000 under-20-year-olds are not in employment education or training—the Prime Minister and the Government have once again demonstrated their contempt for young people and also the fact that they have no ideas. This bill is based on the flawed idea that cutting wages is a way to grow jobs; it is a tried and failed policy of last century. 
We all know that there is a problem. No one is denying that. There is a national crisis in youth unemployment. But we do not agree that cutting wages for 16 and 17-year-olds or 18 and 19-year-olds who have been on a benefit for 6 months will make the difference that is needed. Cutting wages and making workers easier to fire as this Government has been doing has not created jobs in the past for young people and is not creating jobs now. There are now 90000 young people out of work education and training. That is an increase of more than 10000 in the last year alone and that is shameful. That is despite the fact that Government members get up every time they have the opportunity and boast about the 90-day trial period. It has done nothing. It has done nothing to help youth unemployment. I find it very astonishing that the Prime Minister admits he could not live on the minimum wage of $13.50 an hour—soon to go up by a paltry 25c an hour—and as he admits at the same time he still expects young people young 16 to 19-year-olds to live on something like $10.80 or $10.90 an hour. 
What young people need is hope. They need hope and the skills to succeed in the job market and achieve higher incomes and better jobs. Creating a high-skill high-wage economy is the way to go about this to give our kids hope for the future not cutting pay. We all know that the next generation of this country is hollowed out. Numbers of our kids are getting on the plane for Oz. Numbers are already saving up their airfare to go to Australia because they know that even there where there is a youth minimum wage it is going to be a lot higher than here. But this Government does not listen it did not listen to the submitters and it just blunders blindly on. 
You know what was interesting during the submissions was that even employers were less than enthusiastic about sub-minimum wages. In a survey done by the Ministry of Business Innovation and Employment last year it found “a key theme arising from the quantitative interviews was a lack of incentive that reducing the cost of labour or wage rates was for employers in hiring staff or filling vacancies. In fact only a small number of employers suggested reintroducing youth minimum wages would improve their likelihood of employing 16 and 17-year-olds.” The employers are saying that they are not going use this so it is going to fail in its aim of cutting youth unemployment. The Employers and Manufacturers Association submission was interesting. It told the select committee that cutting youth pay is not a silver bullet and that there needs to be a whole range of measures of changes rather than this single one-eyed approach. 
The fundamental question that goes to the heart of this bill however is whether it is fair or right to pay workers less because of their age—to discriminate against them. The implication of this bill is that the work of younger workers is of lesser value than that of older workers it perpetuates its stereotype of young workers as being unreliable and incapable and it ignores the fact that many young workers have already had considerable work experience at the age of 16. 
Many people who support youth rates say that young workers need more training and support when they start a new job. But that same logic applies to anyone who starts a new job. There was a time in this country when people said the same about women and indeed Maori. They said they were worth less because they were women and because they were Maori. In fact up until the early 1970s women on the minimum wage were paid less than men. In the early 20th century Maori were paid less than other workers. No one today would imagine tolerating that type of discrimination but here we have the Minimum Wage (Starting-out Wage) Amendment Bill which perpetuates discrimination on the basis of age. We cannot discriminate against older people. We cannot discriminate against people on the basis of being older. Some argue that older workers are less productive yet there is no age-based minimum for them. 
As I said at the beginning this bill will not achieve its aim. It will not deliver on its stated aim of reducing youth unemployment. The regulatory impact statement which was very interesting said that “the precise nature and extent of the policy’s expected benefits are uncertain.” All the Ministry of Business Innovation and Employment could do was guess. And its best guess is that this bill will create only 400 to 1100 net new jobs. Even if true and that is taking into account the displacement that will occur for older workers this is only a drop in the bucket compared with the 250000 sixteen to 19-year-olds in New Zealand. Even those figures have to be treated with extreme caution. The Ministry of Business Innovation and Employment said it cannot project the impact of the policy. It cannot tell us that this policy will work. It cannot do it with any accuracy and it was quite explicit that it did not have the information it needed to make a credible estimate. 
Despite the Minister claiming that youth rates are voluntary and that workers do not have to accept sub-minimum wages under this bill if they do not accept a job—these are 18 and 19-year-olds who have been on a benefit and let us remember we are not talking just about the unemployment benefit here we are talking about sickness and invalids benefits—and Work and Income judges it to have been a suitable job they have to be stood down. They can be stood down from any support from Work and Income for 13 weeks. Poor young worker gets out of bed having been sick or having been injured manages to apply for a job and then— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Order! I am sorry to interrupt the member. [ 
Interruption 
] No I am on my feet. The interjections across the benches are unacceptable. I want to hear what the member is saying. If there are interjections they should be on what the speaker is saying and not this other dialogue that is going on. 
DARIEN FENTON 
: As I was saying the poor young worker who drags himself out of bed having been on a sickness benefit or an invalids benefit has to accept a job at sub-minimum wages or he will be stood down with nothing from Work and Income for 13 weeks. What is fair about that? 
Cutting young people’s pay is just the tip of the iceberg of this Government because of course we know that changes to the labour laws including meal breaks and rest breaks are on their way. 
Hon Simon Bridges 
: You bet they are. You bet they are. 
DARIEN FENTON 
: Yes you bet they are. 
Hon Simon Bridges 
: Then why’d you put out that press release? 
DARIEN FENTON 
: Because I was hoping the Minister of Labour would show some sense unlike his predecessor because that is a stupid bill. This is all going to hit Kiwi workers across the board but this bill in particular is going to hit young workers. It is going to make it much more difficult for them to survive. It is not going to make it easier for them to get work. The Minister’s own department could not verify that the aim of this bill of cutting youth unemployment would be delivered. So it is a bill that just goes back to the tradition of the National Party—back to the 1990s. Let us cut people’s pay. It does not work. It did not work then and it will not work now. 
Hon JOHN BANKS (Leader—ACT) 
: 
 I want to address what the Labour member Darien Fenton has raised. She has raised two very important issues. She raises the issue of so-called sub-minimum wages and she talks about hitting young workers. The ACT Party supports this Minimum Wage (Starting-out Wage) Amendment Bill and supports this young Minister of Labour. It is an opportunity for young people to get their foot on the first rung of employment opportunity. We support the intention but the ACT Party is on record as saying we need to go further. Since Labour and the Greens abolished youth minimum wages in 2008 youth unemployment has reached crisis levels. This is the key point I want to put to the Labour Party Opposition today. 
The member talks about sub-minimum wages. I want to talk about the $4.50 an hour paid every fortnight electronically at midnight from Work and Income to the 40000 young people between the ages of 15 and 19 who get the dole—$4.50 an hour on the dole. This is an opportunity to pay young people a fair rate of pay for the dignity of a working opportunity. Statistics New Zealand put youth employment in December at 30.9 percent. That is the highest rate we have had in three decades. Over 40000 young people who want to work cannot find a job and I rise in this Parliament today to represent them. It is worse amongst young Maori it is worse amongst young Pacific and it is worse for young Asian. Forty percent of Maori aged 15 to 19 are on the dole 47 percent of Pacific youth are unemployed and on the dole and 55 percent of Asian 15 to 19-year-olds are consigned to the dole—55 percent. So we are talking about 48 percent of Pacific Maori and Asian youth on the dole. Of course it also has encompassed in that young European and others. 
But we cannot sit back as a Parliament as a country and pay so many people 30 percent of our youth aged 15 to 19 $4.50 an hour to do nothing—$4.50 an hour. I say to the Labour Party list member opposite who resumed her seat Darien Fenton what about talking about and thinking about the 40000 young people aged 15 to 19 who desperately need the dignity of work and a job opportunity to get on with their lives? Too many of these young people are starting lives with poor education no jobs no hope and few opportunities. 
Le’aufa’amulia 
 Asenati Lole-Taylor 
: Whose fault they’re getting poor education? 
Hon JOHN BANKS 
: I say to the yapping member opposite that I have been in business for 50 years this year. I have employed tens of thousands of young people in the restaurant chain that is 50 years old this year Tony’s at 27 Wellesley Street. 
 In December 2007 before Labour and the Greens abolished youth minimum wages Maori youth unemployment was 22 percent. Maori youth unemployment before Labour and the Greens abolished youth rates of pay was 22 percent. Today it is double that figure and the member who resumed her seat has the temerity to criticise the Minister of Labour for trying to do something about getting the dignity of work for so many people who feel helpless and hopeless without a job. Deliberately legislating to stop young people from making a successful transition from school to jobs is a violation of their right to make their own decisions. Deliberately doing that by legislation is a violation of young people’s right to make decisions for themselves and have a working opportunity. The Labour Party’s short-sighted policy has had a devastating effect on our young people’s morale and sense of self-worth. Morale and self-worth—any member in this House who has had a young boy or girl between 15 and 19 sitting at home desperately wanting a job and without the dignity of work knows exactly what I am talking about. 
Do not be hypocritical I say to members—please do not be—by suggesting that this is not going to work because we pay $4.50 an hour to 40000 young New Zealanders between 15 and 19 every second Wednesday night from Work and Income by way of the dole. We believe that 80 percent is still too high as a minimum rate. In the UK the rate for 16-year-olds is 60 percent. In Australia the rate for 16-year-olds is 48 percent—much lower than what is proposed today. I would pay those 40000 young people looking for work $25 $30 or $40 an hour if we thought we could afford it. The fact of the matter is the country cannot business is struggling working opportunities are not there so what we are trying to get here is a measure of sensibility. 
Andrew Little 
: Make the young people pay for it. 
Hon JOHN BANKS 
: That member across there has witnessed a doubling since the Labour Party and Greens abolished minimum rates of pay. There are twice as many young Maori on the dole—twice as many young Maori on the dole. 
David Bennett 
: It’s a shame. 
Hon JOHN BANKS 
: It is a shame. These countries that I am talking about obviously understand that it is important for youth to get their feet on the employment ladder. We want to see every young man and woman with their feet on the employment ladder and with the dignity of training of work of opportunity of earning a living and of making a contribution. Members on the other side of the House have as statistics have proven wiped out so much of our youth. Not only is the proposed rate too high but the conditions of this bill are too strict. The 6-month limit is not long enough to gain work skills and experience. It is not long enough. As someone who has been in business employing people for 50 years I say it should be 12 months or longer. Forcing people to be on a benefit for 6 months before they are eligible for a starting-out wage again is far too long. Why would this Parliament force young New Zealanders to stay on a benefit for 6 months before they are eligible for the starting-out wage to get some dignity in their lives? Why would it do that? 
ACT strongly supports a return to the situation pre-2008 before we doubled youth unemployment for Maori before we doubled youth unemployment for Pasifika and before we doubled youth unemployment for Asian people. These people opposite these members of Parliament opposite have never employed anyone have never had to pay a wage to anyone and have probably never had the indignity of joblessness. I say to the yapping members opposite that they should think about the indignity of joblessness—think about the indignity of joblessness. For once in their lives they should think about the 40000 fifteen to 19-year-olds in this country who are crying out for an opportunity to work. They look to Labour and the Greens and what Labour and the Greens have left us is a legacy of doubling unemployment for Maori youth doubling unemployment for Pacific youth and sending unemployment for Asian 15 to 19-year-olds to 55 percent the highest in any OECD country. And now they do not want to give employers the opportunity to give them some training and some work. We believe it is important that youth have the opportunity to work to learn to gain skills and to gain habits and experience that will set them up for their future careers and for a more prosperous future. Why would these people opposite vote against that? 
ANDREW LITTLE (Labour) 
: 
 I rise to speak on the Minimum Wage (Starting-out Wage) Amendment Bill. That last speaker John Banks was absolutely correct in one thing he said—that this bill is an opportunity for employers. That is all it is about. I rise on a day when some in this country are celebrating the arrival of a new pope. Cardinal Jorge from Buenos Aires—Pope Francis I—has committed himself to alleviating the burdens on the poor. So those of that faith now have a new champion on their side and the Catholics in this House will know that they have as their religious leader someone who is committed to alleviating the burdens on the poor. This legislation is no way to go about it. 
The Minister of Labour Simon Bridges is new in that role. He is learning a lot about the labour market. He has been to the home of the high-skilled high-wage economy in this country and that is Taranaki. He had a look around at the oil and gas sector last week and he came back brimming with ideas and realising that what is happening in Taranaki is unique to Taranaki. But here is the thing about the way the labour market operates. Passing laws does not create jobs. Passing laws does not make work. What does make work is economic activity. 
David Bennett 
: Oh! This can’t be the Labour Party. 
ANDREW LITTLE 
: It is pretty simple economics and even David Bennett from the Waikato understands it. In order for jobs to be generated there needs to be economic activity. People do not sit around saying: “Gee I’m not an employer today but if I could get away with paying nothing or next to nothing I will employ a whole bunch of people.” What are they going to employ them for? People take on labour people engage workers when there is work to be done. That is the first part of the equation Minister. There has to be work to be done. 
 The second part of the equation is that there has to be value that can be generated as a result of it. We can go back to the old surplus value theory of labour which is that providing you take somebody on and the return on the value of that work can pay for the worker and provide the employer with something then you pretty much have what it takes to create work. Creating an environment where you just reduce the price of labour is not about creating work. It is simply about opening exploitation. When the Hon John Banks said that this is an opportunity for employers there is only one meaning you can attach to those words and that is that this is an opportunity for employers to further drive down the cost of labour jobs and work that they already engage. It is not going to create a single extra job in this country. It will not help a single extra person. All it will do is mean that those people who are employed under it will get paid less than they would otherwise have been paid and who knows about the quality and the training under it? 
The law is very clear and the conditions for engagement under this legislation are simply any training. Well I met an employer recently and so did my colleague Darien Fenton who lamented the fact that the minimum wage that is in place at the moment meant that it was getting harder and harder for his friend who runs a business that requires a lot of envelope stuffing to engage people. He wanted an even lower wage so that young people could be in his words trained up to stuff envelopes and they would have work. Well actually I am not quite sure whether that is what this bill is about and what its objective is. That is not work that we want. The challenge for New Zealand and the challenge for this Government and any Government is to encourage and incentivise that sort of economic activity that is going to encourage or create those jobs that are high value that are higher wage not minimum wage jobs. 
The reality is that there are parts of this country now where we have a two-speed economy operating where we do have jobs that are well paid well remunerated. I am not talking about the chief executives of Government departments when they get well paid and they get paid even more when they leave their job. I am talking about people who leave work in the morning or might leave at the end of their shift come home from doing an honest day’s work and get an honest day’s pay to look after their family have a few hobbies and stuff. There are some people who live that sort of lifestyle and do very well. There are a growing number who have that sort of life—a 40-hour-a-week job or longer—and can still barely make ends meet because they are on the minimum wage. There is a growing number of sectors where that is happening. It is no longer just the service sector either. It is in important industries of ours—for example forestry where a growing number of the workforce are on the minimum wage. This bill will do nothing to help that. What it will do is give a signal to those employers that if they can dress up an induction to the workplace as training they can get away with 6 months of paying an even lower wage than they have to pay as the minimum wage now. That is all it will do. It will cheapen labour make it easier for the ruthless employers and the employers that we actually do not need more of and make it even worse for those workers who are struggling to get work. 
This is not going to help young people. The old canard is trotted out every now and again: “Oh but what about the 90-day trial?”. The most dubious piece of labour market research we have seen in a generation from the NZIER calling itself the New Zealand Institute of Economic Research came out and said: “Oh it created 13000 jobs.” The research was done within months of the legislation coming into effect and every other worthwhile and self-respecting—actually decent—economist who ever looked at that piece of research said that it was a load of bunkum. It failed to take into account the fact that there were other measures in place to help young people. But it did not even take into account the displacement effect—the fact that employers were getting rid of some workers and employing them under the 90-day law because they could get away with it because it was low-skilled work and they could manage a high-rotation workforce and they did it. There was no evidence that making things worse for younger people whether it is in terms of their security of employment à la the 90-day legislation or lowering the minimum wage is going to help young people into work. The labour market does not operate that way. Economics 101 does not operate that way. You do not have to be very smart to realise that simply lowering the price of labour does not create a single extra job. What creates jobs is economic activity and that is what this Government has singly failed to do to achieve and to do anything about. 
So despite all the arguments that were trotted out by employers by the less than half a dozen employer representatives who fronted up to the select committee to say that the current minimum wage is a barrier to work that this will not create work they knew when pushed that they could not sustain that argument. They did not believe in it—they did not believe it. I think this Minister when he is pushed and when he looks into his heart and when he looks to Pope Francis I will know that this legislation will not achieve the objectives that he claims of it. That is why we will be opposing this legislation. There are fortunately other members in this House who know that cutting the minimum wage reducing it even further does not help. 
Darien Fenton 
: David Bennett. 
ANDREW LITTLE 
: David Bennett for example said that when there was an attempt previously to reduce the minimum wage through legislation we are by doing so denying young people their success by holding them at a lower rate than their ability shows as individuals. David Bennett was right. That was David Bennett National MP for a Hamilton seat either east or west—but anyway one of the Hamilton seats. He knew then; he was right then. It will be interesting to see whether he takes a call today to talk on this bill which he knows is wrong. 
We are opposed to this legislation. It will do nothing for New Zealand. It will do even less for young people. What we need is a real plan that is going to create jobs and lift incomes in New Zealand. 
DENISE ROCHE (Green) 
: 
Tena koe Mr Assistant Speaker Tisch. Tena koutou katoa. The Green Party opposes this bill the Minimum Wage (Starting-out Wage) Amendment Bill in its entirety. It is ironic—it is totally ironic—that the second reading of this bill should come to this House 20 years and 1 day after the Rt Hon Don McKinnon on behalf of the New Zealand Government signed the United Nations Convention on the Rights of the Child. Yesterday I would remind the House this House unanimously supported this motion: “That this House notes that today is the 20th anniversary of New Zealand ratifying the United Nations Convention on the Rights of the Child”—UNCROC—“that it is the most well-supported human rights treaty in history that it committed this country to consider the best interests of the child in all activities and make children’s rights known as a priority and that the House recognises children as full citizens of our nation deserving of our most ardent attention to make the world fit for them to inherit.” In 1993 we committed to bringing our laws into line with this convention. That convention applies to all young people who are under the age of 18. So why are we today attempting to pass a law that allows for some of our young people—those aged between 16 and 20 who may be on a benefit—to be discriminated against in their pay rates? 
The explanatory note in this bill right at the beginning says: “Minimum starting-out rates of wages are designed to support young people entering the workforce including those who have been on a benefit and young people who are undertaking industry training for their work. Starting-out wages provide an incentive for employers to take on young workers at a reduced rate of pay while foundational work skills experience on the job or training is gained.” We do not believe that this bill will support young workers. What it is is a new take on the carrot-and-stick approach. The employer gets the carrot and the young worker gets the stick. Paying low wages is an incentive for employers to keep wages low. The only incentive that young workers new to the workforce will get from this law will be the incentive to join the 50000 or so New Zealanders every year who leave this country for Australia for better-paid jobs. Certainly in this bill I see no incentive for a young worker to get a job especially when they are going to be paid poverty wages. But then this bill is more in line with the Government’s approach to punish young people especially young people who may be receiving State support. That includes the young mothers and other young beneficiaries who now have less decision making around their own finances and it includes university students who are being increasingly shut out of allowances that would enable them to finish their studies. 
If we are looking at incentives in this bill then we need to look at what this bill offers employers. I agree with the Council of Trade Unions which said in its submission that this bill will incentivise poor employment practice: “There is a clear encouragement for some employers to sack young staff after 6 months—and they can do so at 90 days without any justification—in order to continue to get labour at a 20 percent lower cost.” The Council of Trade Unions was one of 529 submitters on this bill. Of them only nine submitters were in support. Surely that tells the Government something. Of those nine submitters in support seven of them came from employer groups and industry organisations—that is parties with a vested interest in keeping wages low. Among the 520 submitters who opposed this bill were parents unions community groups charitable organisations NGOs the Human Rights Commission and hundreds and hundreds of young people many of whom submitted in person. And I might add some of them were not treated with the respect that they deserved by the chair of the Transport and Industrial Relations Committee. The chair of the— 
Hon Members 
: Oh! 
DENISE ROCHE 
: The select committee heard from economists. We had reports from economists. There was conflicting evidence from economists and I was reminded while I was looking at the evidence and the different opinions from economists that economics is not a science. There were even two submissions from employer groups who did not think that this bill would help with the unemployment rate either. We could be doing more. 
As for the young people we heard from they were really worried about reducing the wages from one category of worker and displacing the work for others for those in the next age category the 20 to 24-year-olds. Those ones are at least protected at the moment by the minimum wage although it is very paltry I agree with Darien Fenton. Really we did not hear any concrete evidence or promises for that matter from employer groups that this bill would increase jobs. We did not get that assurance. The way to get young people off benefits and into work is by creating jobs. Simply lowering the price of labour does not do it. Creating a low-wage economy does not alleviate poverty and it brings absolutely no new ideas into the mix. 
It has been proven that the way to reduce the number of people on the benefit—and that is whom this bill is targeting—is to get them into jobs and jobs where they have a decent job and can support themselves. In 1999 there were 160000 unemployed people. By 2007 that figure was down to 17000. Why? Because there were jobs. Forcing wages down under the guise of doing young people a favour by getting them into work where frankly they will be exploited does not help the economy as a whole. Doing something for the manufacturing industry in this country where 40000 jobs have been lost in 4 years would help. The Government could assist by diverting some of its resources away from offshore interests that demand law changes in exchange for a few thousand short-term and low-paid jobs and into local industry that is struggling with the high exchange rate. The Government could also help by ensuring that local companies get Government contracts because that creates local jobs. 
We reject the notion that this bill is needed because young people are a risk to businesses. That is discriminatory. All bosses take a punt on any new worker. We do not need this bill. We have sufficient legislation in place to mitigate that risk. That is what the 90-day rule is all about. It enables employers to deal with substandard workers and it reduces their liabilities. For employers who are genuinely—genuinely—offering training to young workers there is already the training rate which gives an 80 percent pay rate to young workers in training. We could be doing more for our young people to get them into work and training. The Government could be following the lead of the Mayor of Otorohanga Dale Williams who has with his entire town created a wraparound service that mentors and supports young people into work. This model is also working in Buller and it could work everywhere else too. I note that the speaker from ACT the Hon John Banks was the Mayor of Auckland City and was one of only two mayors in New Zealand during his term in office who declined to join the Mayors Taskforce for Jobs. That was a shame. 
This bill sends a really really negative— 
Colin King 
: Positive signal. 
DENISE ROCHE 
: —really negative—signal to young people that they are not valued that the Government will not invest in them and that the Government is willing for them to be exploited and discriminated against. 
DAVID BENNETT (National—Hamilton East) 
: 
 I just want to congratulate members of the Transport and Industrial Relations Committee on the way this bill the Minimum Wage (Starting-out Wage) Amendment Bill went through the select committee process. I think it was very well done. I would like to pay special tribute to the fine young Minister the Minister of Labour who led this great debate today. He is doing an excellent job in his ministerial roles— 
Simon O’Connor 
: Inspirational. 
DAVID BENNETT 
: —and is inspirational to young people as many people through this country know. This is another fine piece of work from that young Minister who is doing so well. 
I want to take just a short call on this bill. It was an interesting speech that we just heard from Denise Roche of the Green Party. That was the economic rationale from the Green Party. It does not have any economic rationale; it just tells you a lot of weasel words. But we did get some economic rationale from the guru Russel Norman today. Russel Norman has given breaking news about the economic policy of the Green Party. It is no longer printing money. 
Chris Auchinvole 
: What? 
DAVID BENNETT 
: At the Finance and Expenditure Committee—no no no it is not going to print money any more; it is going to do it electronically. The Green Party is going to make money electronically now instead of printing money. You would think it is doing that for green purposes to save trees. It is not. It is doing it so that it does not have to take the hassle of being asked how you print money and change the economy how you print money and reduce the exchange rate and how printing money electronically now actually means that you are going to provide jobs for young people. The economic rationale of the Green Party is rubbish. Everybody knows that. It is rubbish and it will never work. 
To prove that we had a speech from the Labour Party from Andrew Little. Andrew Little gave a very good speech. He had one line in his speech that I think we should all take to heart: “Passing laws does not make jobs. It needs economic activity.” That is what Andrew Little said in this House 10 minutes ago. The leader of the Labour Party union movement came to this House and said: “Passing laws does not make jobs.” What does that do for the whole Labour Party whose whole life is about trying to get in this place and pass more laws? That is Labour’s answer to making jobs. It does not believe in people it does not believe in the economy and it certainly does not believe in our young people. 
The Opposition is portraying this bill as anti young people. That is not the case. This is giving young people a chance. Young people need that chance. They need to get in the workforce and this gives them that opportunity. In a perfect world we would want our young people to be getting an education. The days are gone when you could leave school just walk into a job and think that was going to be for life. The modern world will require those young people to get an education. Everybody in this House should be saying that and should be believing in that because that is those young people’s future. In some cases some people will leave school and they will be looking to go into the workforce when they probably should be going to get higher education. The main thing we can do is give those young people the confidence and the ability to get a job. This bill helps them to do that. It gives them the chance to get their foot in the door to prove themselves and to move their way up the economic scale. That is good for New Zealand’s young people it is good for this Parliament and it is good for the future of this country. Thank you. 
BARBARA STEWART (NZ First) 
: 
 On behalf of New Zealand First I rise to speak to the Minimum Wage (Starting-out Wage) Amendment Bill. New Zealand First opposes this bill. We oppose it on the grounds that it is an attack against young vulnerable workers who are just starting out on their working careers. Young workers who want to be independent and self-sufficient often move away from home and they have very high ideals and hopes. But with this legislation keeping them right down there on the poverty line they just cannot afford to have this hope or any future plans. 
We at New Zealand First ask the National members where the demand is for this change. To date we have heard absolutely nothing from the other side that will help change our minds or ensure that we know why there is going to be this change. Who out there apart from National and ACT really wants to rob young workers of an extra 20 percent of their wages? The fact of the matter is that there is no real demand for this change. Youth rates were done away with in the 1990s and as we have heard employers are not entirely ecstatic over this change either. 
With this bill the Government is taking another step towards a low-wage economy—something that we want to move away from. Hard-working Kiwis have faced numerous attacks from this Government. It has sold out workers to foreign corporations it sells off the assets it changes the labour laws to suit its ideology and now it has mounted an attack on young working New Zealanders. It taxes all fringe benefits—looking for money everywhere—and now we have got young people. Is this truly a part of the Government’s plan to catch up with Australia? This bill is creating a further disincentive for young workers. Is it the way to get ahead? No. Is it the way to bridge the gap between our two countries and entice our young people to stay here and work? Definitely not. 
 Jobs are generated by economic activity and the reality is that that is not happening here in New Zealand. The National Party and ACT like to talk about bludgers and laziness and people doing nothing. Mr Banks was talking about paying $4.50 an hour to people who are on the dole for doing nothing but the bottom line is that he has created this situation of no employment and it needs to be sorted out and pretty promptly too. 
They like to talk about welfare dependence and people relying on the State. Our young workers— 
Hon Simon Bridges 
: Brendan Horan is not that bad. 
BARBARA STEWART 
: We are not talking about Brendan Horan here. Young workers are not bludgers and I would say that the Minister the Hon Simon Bridges would say that they are not bludgers. They are not out milking the system; they are industrious young Kiwis and they are trying to get ahead. They are young people trying to get a foothold in the working world which is not easy in today’s world of fewer and fewer permanent career jobs. Learning life’s lessons and learning what money is all about and what it buys is what every young person wants to do. 
What is this piece of legislation? A slap in the face for young workers. It is an affront to their dignity. Cheap labour is not the silver bullet that is desperately needed. It will not help young people to be independent and keep a job and get a job. We know in New Zealand First that this is going to do absolutely little to nothing to encourage economic growth which is what we want as well as the creation of more jobs. We are not alone with this particular viewpoint. The Salvation Army too rejected suggestions that this bill will support more young people into employment. So if it does not believe it we definitely do not either. It also rejects the viewpoint that this bill will provide more incentives for employers to take on younger workers. On this occasion we agree with it. 
It is our belief in New Zealand First and on this side of the House I would say that irrespective of age anyone who turns up and puts in the hard work deserves a decent wage. It is the Kiwi way. Here in New Zealand we were a country that was founded on egalitarian principles. From the very beginning New Zealanders recognised talent. They recognised good ideas and hard work irrespective of where it came from. In New Zealand First we believe in giving credit too where credit is due. We believe in rewarding the hard-working the industrious and the innovative and we believe totally in encouraging New Zealanders into their first jobs. Where are the jobs? This bill is not creating them. They are getting harder and harder to find. 
Throughout New Zealand the National Government has been out trying to woo mums and dads. It has been telling them that it understands how to sort out the Government’s books because after all it comes from a business background—it understands business. But although it might understand business this bill shows it does not understand people. It shows that National basically does not care about people’s kids. It shows them that it is nasty and mean. National is not providing the brighter future that everybody wanted to believe was coming. We all started off very optimistic looking for this brighter future but it is not here. 
Le’aufa’amulia 
 Asenati Lole-Taylor 
: Where is it? 
BARBARA STEWART 
: Gone—gone. 
The reality is that mums and dads do not want to be paying their kids——the 16 17 and 18-year-olds—extra money to top up their wages. They cannot afford to pay the extra money. People are poor out there. Groceries are going up power is going up petrol is on the rise all the time and they want them to be independent and able to support themselves and I know that Mr Macindoe agrees with me there totally. They want their kids to be getting after-school jobs. They want them to be having jobs in the weekend and in the holidays. It is what has always happened. We have always had weekend jobs and holiday jobs. They expect them to be learning how to pay their own way—slowly but surely. In this way this bill is merely an attack on young workers. It is also an attack on the entire family unit. The bill does nothing to instil young Kiwis with confidence for the future. What it does is denigrate them as having the status of second-class workers. What it does is play off 20 to 24-year-olds against 16 to 19-year-olds. What it does is get parents—all those infamous “mum and dad” Kiwis—questioning the brighter future that was promised by the National Government. 
New Zealand First is firmly opposed to this piece of legislation. It will not support young people entering the workforce in this way. It is an absolute affront to young industrious New Zealanders. It is discriminatory and unfair. It runs contrary to the Kiwi notion of giving everyone a fair go and a fair day’s pay for a fair day’s work. We need a real plan to get the economy going again and this is not that plan. On these grounds we are proud to oppose this piece of legislation. 
CHRIS AUCHINVOLE (National) 
: 
 I was going to say what a pleasure it is to follow Barbara Stewart as always but I am finding that a little bit difficult because—I am sure she did not mean her last remark when she said that New Zealand First will not support young people entering the workforce. Did you hear her say that? 
Colin King 
: I did. I did. 
CHRIS AUCHINVOLE 
: Mr King heard you say that. I am sure she did not mean that but in effect that is what her speech said. She said throughout the speech: “We would prefer people to be staying on welfare on the dole sitting and waiting for a job.” Young people love to work. That is what they want. But what did we hear? New Zealand First said: “No we will not support this new opportunity that is being put forward for a brighter future by National. We will not make it easier for employers who are doing their level best to employ people just to make it that skerrick easier for them. No we will not support this.” And I am astonished—I am astonished that the Greens said it too. I would have thought they would be very pleased to be involved in this and give us a bit of backing. “No it is preferable that young people stay out of work.”—that was the message we got. That is the message we got. 
Barbara Stewart 
: We want jobs. 
CHRIS AUCHINVOLE 
: Would you like some of my speaking time to correct your statement? I will sit down and let you— 
Barbara Stewart 
: No we just want jobs. 
CHRIS AUCHINVOLE 
: You do not want to do that. All right. Perhaps a future speaker from New Zealand First will withdraw the remark and correct it. 
I am rising to speak on the Minimum Wage (Starting-out Wage) Amendment Bill in the name of the Minister of Labour the Hon Simon Bridges who is providing such inspirational leadership on this issue. It is great to see. This bill seeks to deal with what is an assuredly important issue. It is an issue so important that Su’a William Sio decided to bring it up during his speech on the Plumbers Gasfitters and Drainlayers Amendment Bill—a speech that should have been on ensuring the best practices of an industry that is vital to the safety of our homes. No Su’a William Sio decided to bring up the issue of employment and getting people into jobs. I thank him for the opportunity because you see that is exactly what this bill is about. He asked what we are doing about jobs. Now we are able to respond to him. 
The bill is about ensuring that starting-out workers can get their foot in the employment door. A low wage is surely better than no wage. It is indeed better than young people having to languish on welfare. I have not heard the phrase “dole-bludger” from this side of the House. Have you heard that phrase? 
Colin King 
: No. 
CHRIS AUCHINVOLE 
: Have you heard it from the other side of the House? 
Nicky Wagner 
: Yes. 
CHRIS AUCHINVOLE 
: Yes. That is what we heard this afternoon. We heard it from Barbara Stewart. So not only are young people dole-bludgers but they are not allowed to work because New Zealand First is not prepared to see people on starting-out wages—the incentive for employers to take a chance on a younger worker and it incentivises these young people to seek out work or training or both. Dave Bennett made the very good point that you cannot be dependent just on muscle for job security now—you really cannot—you do need training. However we do have this system coming forward. 
I would like to talk about it at greater length but I think we need to give the other side of the House the opportunity to correct its mistaken approach to this bill. Let us see whether it does not just swing around in support of it. I commend the bill to the House. Thank you. 
PHIL TWYFORD (Labour—Te Atatu) 
: 
 We took the mickey out of the Hon Maurice Williamson earlier this afternoon for bringing the Plumbers Gasfitters and Drainlayers Amendment Bill to the House. A number of us commented then that it was a curious use of the House’s time to be dealing with the minutiae of plumbers gasfitters and drainlayers when there are so many pressing economic social and environmental problems facing the country. But to be honest compared with that bill this bill the Minimum Wage (Starting-out Wage) Amendment Bill is the work of an intellectual midget. 
Hon David Cunliffe 
: Pygmy. 
PHIL TWYFORD 
: Pygmy—midget—pygmy. Chris Auchinvole would have us believe that the choice facing this country is between no work and work on reduced wages. Is that really what John Key’s brighter future has come to? This is the choice we face as a country: our young people either should be paid to stay at home all day or they should be prepared to take a cut in wages and be paid less than the next person for doing exactly the same work. 
That is the kind of vision that Chris Auchinvole has for this country and that is where John Key’s brighter future has got to. It is depressing. It is depressing to be standing in this House on a Thursday afternoon debating a bill brought to this House by a political party that is so bankrupt of ideas. National is so utterly lacking in any kind of creative thinking about this country’s future how we build prosperity how we increase productivity and how we unleash the potential of our young people that this is the best—this is the best—it can do. 
If this is Simon Bridges’ attempt at a career-advancing move then I hope he has got some other ideas in his back pocket because this bill is based on the flimsiest of logic the flimsiest of policy. The idea that if you cut the wages down from $13.75 to $11 for 16 17 18 and 19-year-olds who have been on the dole for 6 months somehow you will create new jobs is what this bill is based on. It is pretty simple for the folks at home who are listening to this. If they have just tuned in that is really all they need to know. The National Party is cutting the take-home wages down to $11 an hour for young people between the ages of 16 and 19 who have been on the unemployment benefit for 6 months. That is National’s solution to the unemployment crisis that is facing this country. What a depressing depressing thing—to create a financial incentive for employers to hire one group of workers over another. It will not create a single new job. It will simply displace employment from one group to another. This is the extent of the National Party’s vision for tackling the jobs crisis. 
The other thing that I find really dispiriting about this bill is that people in this country need hope. They need hope that there is a place for them and that there is a future for them and their families in this country. The fact that so many people are heading to the airport and heading off to Australia and further afield looking for opportunity and looking for hope is surely a wake-up call. One hundred and eighty thousand people have left this country under the National Party’s policies of the last 4 years. It cannot find a stadium big enough to fit in the equivalent number of people to signify how many people have gone to Australia. 
Interestingly we do not hear much from John Key these days about how many New Zealanders are heading to Australia but 5 years ago that was all he wanted to talk about. Now we see a bill that comes to this House to cut the wages of our young people. What will be the result? Surely they will save up their $11 an hour so that they can buy an airfare to get to Australia. 
It should not surprise us that the National Party’s first response to any major problem is to cut wages. It is what the National Party has always done. If you go back through the history of this country to the predecessors of the National Party you will see that their idea for a Depression-busting policy was to create work camps in the countryside and they shipped unemployed men and women off to those camps to work at starvation wages. That was their idea of a policy to deal with the Depression. 
Hon David Cunliffe 
: Now they’re paying fringe benefit tax on accommodation. 
PHIL TWYFORD 
: Yes that is right. As Mr Cunliffe says now workers are paying fringe benefit tax on the accommodation—exactly. 
It was the National Party that was responsible for the policies of the 1990s to smash the trade union movement of this country to get rid of the minimum wage and to drive down wages. And my God it succeeded and we are dealing today with the legacy of those policies that made a low-wage economy. Yet when the election campaign came around in 2008 the National Party of the time under John Key campaigned on the idea of closing the wage and salary gap with Australia. Yet time after time after time National members do whatever they possibly can to drive down wages. We have seen the pathetic increases to the minimum wage that this Government has presided over. We have seen the 90-day bill which surely has one objective in mind and that is to create insecurity for New Zealand workers to make them fear for their jobs and in so doing to drive down the cost of labour. 
This bill is another example in that great National Party tradition to lower the cost of wages because National has only one tool in the tool box: “Whatever the problem—whatever the problem—let’s cut the cost of labour.” That is all National members know how to do. What an irony that they campaigned so hard about closing the wage gap with Australia! We have been hearing day after day in the House that the wage and salary gap under National—the gap between New Zealand and Australia—has actually increased. 
What we need is bold leadership in this country to tackle the jobs crisis and I am going to tell you some of the policies that National would be contemplating if it had any kind of curiosity about the policies that would solve the jobs crisis. For example it would be restoring the research and development tax credits so that New Zealand companies had the incentive to lift their game and invest in innovation and productivity through research and development. The members on that side of the House would be considering reform to monetary policy that would stop the endless round of squeezing the lifeblood out of our exporters every time the economy showed some kind of life. 
Instead of the Reserve Bank Governor having this single focus on controlling inflation the National MPs would be considering a monetary policy that took into account economic growth jobs and exports. But no they will not consider that. They would be considering skills and apprenticeships that would invest in our young people—not cutting their wages and taking away their employment rights but actually investing in skills and apprenticeships. There is no reason in today’s world that young people should only either be paid to stay at home or go to work and have their wages cut. 
We have seen an increase in the number of young people who are not in education employment or training: 30000 under-20-year-olds are not in education employment or training and that is 4000 more than when this Government took office. If this Government was interested in a jobs policy it would be far more wholehearted about tackling the procurement policy that sees jobs shipped offshore constantly and the gutting of New Zealand’s high-value manufacturing industry. It would consider a capital gains tax that would tilt the playing field back in favour of the productive economy away from wasteful investment in rental real estate and into businesses that will produce jobs and livelihoods for New Zealanders. But no National members are not interested. 
National members are not interested in industry policy that would look at how the State can actively partner with New Zealand firms and exporters to grow jobs and grow productivity in this country. Their idea of an industry policy is getting problem gamblers to fund Auckland’s new convention centre. That is their idea. Selling out employment law to Hollywood corporations and taking away the work rights of New Zealand workers at the behest of Hollywood is this Government’s idea of a jobs policy. It is not good enough and New Zealanders demand something better. 
SIMON O’CONNOR (National—Tamaki) 
: 
 What an array of contradictions we have just heard there from Phil Twyford. We know that under this Government take-home wages are increasing. Regardless of the fact that it is by 25c the minimum wage is going up. We protected jobs around  
The Hobbit  
and so forth—you know we reacted there—but that is somehow a problem. One of my colleagues pointed out to me a bit earlier that this hands-on approach of the Labour Party is really around your throat and in your wallet. What is the solution? What is the solution for more jobs? A tax—a tax. Let us have more taxes. Boy what economic policy there! 
Dr Cam Calder 
: Around your throat and in your wallet. 
SIMON O’CONNOR 
: Absolutely. It is a slap in the face and a kick in the guts to New Zealand. That is the Labour approach: hands-on Government. 
This bill the Minimum Wage (Starting-out Wage) Amendment Bill is a good opportunity and I want to acknowledge the Minister of Labour who is here in the House supporting this bill. This bill is really about opportunities and incentives to get young people into work. What we have heard from the other side can be best defined as utopianism a world where everyone is perfect everyone can be paid the same amount of money for whatever they do and everything is perfect. Well some of us live in the real world. Some of us do not believe in utopianism. We believe we have to do something. 
Someone talked a little bit earlier about oh my Lord how dare we pay them a little bit less. The key comes down— 
Hon David Cunliffe 
: I bet you love Charles Dickens. 
SIMON O’CONNOR 
: Oh Mr Micawber’s quote does come well to mind again if Labour wants to start talking about Dickens. Go and look up Mr Micawber. The key here is that we want the dignity of work and a lot of people submitted that to us—the dignity of work. Andrew Little tried to quote the pope. Well maybe he should go and read  
Rerum 
Novarum 
 some time. At the end of the day the dignity of work comes first and foremost. This party the National Party is behind the dignity of work. We want our young people to get into jobs and if part of that facilitation in the real world is giving them a slightly more minimum wage to start on then we are behind that. I support the passage of this bill. 
Sue Moroney 
: Mr Speaker— 
Mr DEPUTY SPEAKER 
: Is this a split call? 
Sue Moroney 
: It is indeed a split call. 
Mr DEPUTY SPEAKER 
: 5 minutes. 
SUE MORONEY (Labour) 
: 
 I would like to say that I normally start off my speeches by saying it is a pleasure to rise and speak but quite frankly I am getting tired of rising and speaking to these bills that have absolutely no vision for a better and brighter future for this country. 
When Simon Bridges was promoted recently in Cabinet I think the media thought: “Look here’s a bright new guy he might have some new ideas. He’s fresh he’s got a bit of energy.” Well sadly here he is bringing back the same old tired rubbish to this House that National has been trotting out for decade after decade after decade. There is no shiny bushy energetic new thinking from that side just the tired old wage-cutting regime that National members have rolled out for decades now. So they have not learnt a thing. Once they used to be ambitious for New Zealand. Do people remember that? We have not heard it for a while but when they were in Opposition John Key claimed that he was ambitious for New Zealand. I notice that as soon as he got into Government he stopped saying that. Here is the reason why. They absolutely lack ambition for New Zealanders and this bill the Minimum Wage (Starting-out Wage) Amendment Bill proves exactly that point. It is not about creating jobs; it is all about lowering wages. 
I listened to a very good speech from my colleague Andrew Little earlier where he outlined exactly why of course it does not create jobs. Work creates jobs not lowering wages. Having work to do creates jobs. That is what employers employ people for. They are not benevolent societies and charitable organisations that employ people because they just want to help them out. They do it because there is work there to be done. The real tragedy of this piece of legislation is that in fact this will ensure that there is less work—fewer jobs in our economy. 
When that Government lowers wages it will reduce the amount of spending power that New Zealanders have—in this case those aged 16 to 19 years of age. But if anyone listening to this debate thinks it stops here think again. They are coming after you next. They are coming after other New Zealanders after they have lowered the wages of 16 to 19-year-olds because this is the only thing a National Government knows how to do. The only answer it has to any economic circumstances whether they be good bad or ugly is to reduce wages. That has always been its only answer. When wages are reduced in New Zealand that reduces spending in our economy. When spending reduces in our economy guess what? More jobs go. Jobs are lost through ill thought through pieces of legislation like this. They certainly are not created. 
Hon Simon Bridges 
: This is real Labour Party 1990. 
SUE MORONEY 
: He is showing a bit of energy now that Simon Bridges but why did he not show a bit of energy when he was drafting this legislation? Why did he not stand up to his tired old party and tell them that this is the pathway to a downwards economic cycle not an upwards economic cycle at all? All it does is introduce more exploitation and more discrimination into our workplaces and that is something we definitely do not need. 
I would like to invite Simon Bridges to have a look at the coverage from  
Campbell Live 
 the other night of the hundreds of people lining up for seven jobs. They were stores jobs and not very highly paid ones. They were pretty ordinary stores jobs but a job none the less. His piece of legislation is inviting that employer to actually exploit people to actually say to most of the people in that queue: “Actually don’t even bother lining up because I’m not going to employ you. You are a bit dearer than the other people.” That is not going to actually fix the deep problems that we are experiencing with the New Zealand economy. It is no wonder that the economy is going nowhere under this Government that it is flatlining because this piece of legislation is just another hopeless piece of legislation that does nothing to lift economic performance. In fact it does quite the opposite. 
HOLLY WALKER (Green) 
: 
 Last night this House took a significant step towards ending discrimination and eliminating a serious inequality in our law. That of course was passing the second reading of the Marriage (Definition of Marriage) Amendment Bill. Many of those who supported that bill including many Government members talked about the message it would send to young people about their importance their value their human rights and their mental and emotional well-being to remove that discrimination. It was a great moment in this House and it made me very proud to be a member of it. But in that context it is particularly distressing that the very next day after sending such a positive and affirming message to young people about their value and their future we are undermining that message with this discriminatory and damaging Minimum Wage (Starting-out Wage) Amendment Bill which sends exactly the opposite message to young New Zealanders. 
What this bill says to young New Zealanders is that they are not worth as much as older New Zealanders that their work and their labour even if employed doing exactly the same job as an older counterpart or managing them—[ 
Interruption 
]—that is right is not as valuable as that older person’s labour and that their needs their expenses and their rent food and living costs are not as important as those of older workers—that their rights are not as important as those of older workers. 
It is no wonder that young people are disengaging in droves from politics and Parliament and voting when this House passes legislation like this that disempowers and discriminates against them en masse just when we might have convinced some of them of our relevance our value and our commitment to them and their future with the marriage equality bill last night. If you looked around the gallery here last night it was young people whom you saw. Just at that point we slam them with this bill and undermine all of that good work. 
The discrimination inherent in this bill is not acceptable in just the same way that it is no longer acceptable to pay women less than men for doing exactly the same job—although arguably that does still take place in some cases—and just as it is not acceptable to pay workers of one ethnicity less than workers of another ethnicity. When these things occur and they come to light we are rightly outraged we prosecute offending employers we shake our heads we tut-tut and we talk about discrimination. Yet here we have a Government that is prepared to introduce comparable discrimination against young people into our employment law. 
On the basis of human rights and discrimination alone this bill should be dead in the water but as this Government has demonstrated with a number of other pieces of legislation—like the current welfare changes which impinge on the rights of women young people and children—rights-based arguments do not have a lot of impact on this Government. So let us have a look at its own economic rationale for this bill and see how it stacks up. This Government says that this bill will support young people entering the workforce and encourage employers to take on young workers. What a joke! Combined with its other discriminatory policy against young workers of 90-day trial periods this legislation means that at most young people can expect to be hired at below subsistence wages for 3 months and then flicked on in favour of another new cheap young worker. 
I was not on the Transport and Industrial Relations Committee but I have heard that it heard no evidence that introducing youth rates would decrease youth unemployment. In fact there was conflicting evidence from Government departments and economists on exactly that point. Even two submissions from employers did not think that the bill would actually help with youth unemployment. What the bill will do is incentivise employers to keep wages low keep New Zealand a low-wage economy and continue to encourage the 50000-plus New Zealanders every year who leave permanently for better wages and opportunities overseas. If this Government really cared about youth unemployment it could invest in skills training and apprenticeships more than it has. It could improve access to student support. It could support the manufacturing sector and it could look at what is working in places like Otorohanga with the mayors task force. But it has not done that. 
This bill does not make economic sense it will not help youth unemployment it is discriminatory and it sends a terrible message to young people about the value that this Parliament places on them. I am ashamed of this House for passing it. 
Dr CAM CALDER (National) 
: 
 My dad died when I was 6 years old. I was brought up by my mum and she used to call me her right-hand man. The reason for that was that she got me to rake up the leaves and mow the lawns. I mowed the lawns with an old push mower and I can remember to this day the joy I saw when I came downstairs and there was a new Briggs and Stratton 4-stroke Kingfisher mower which I was able to use. I fired it up and mum came out in great concern because I was throwing lemons through the side to see them explode into a myriad pieces. I am telling you this story because that was my first entry into earning money—earning money. I used to do my own lawns then we would tie the mower to the back of the bike we would ride around lower Westown in “Taradise”—New Plymouth—and I would sell my labour and mow old people’s lawns. I learnt to realise that mum was right: money does not grow on trees. Money does not grow on trees and I think that if she said that to me once she probably said it to me 500 times. But I learnt the lesson. What I learnt also was the dignity of work—that you get out of life what you put into it. If you want to make a metaphor you can say that we got a foot on the pathway to personal responsibility. I got a chance to get the keys to the Zephyr buy a surfboard or nowadays get the keys to a Nissan Skyline. 
This bill the Minimum Wage (Starting-out Wage) Amendment Bill is about young people getting opportunity young people getting skills and young people getting the money to survive in a difficult labour market. The axing of the youth wage by Labour cost up to 9000 jobs. The Ministry of Business Innovation and Employment suggests that the starting-out wage in the first 2 years could provide 2000 jobs for 16 to 19-year-olds. I commend this bill to the House. 
The question was put that the amendments recommended by the Transport and Industrial Relations Committee by majority be agreed to. 
A party vote was called for on the question  
That the question be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 59 
New Zealand Labour 34; Green Party 14; New Zealand First 7; Maori Party 2; Mana 1; Independent: Horan. 
Question agreed to. 
A party vote was called for on the question  
That the Minimum Wage (Starting-out Wage) Amendment Bill be now read a second time. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 59 
New Zealand Labour 34; Green Party 14; New Zealand First 7; Maori Party 2; Mana 1; Independent: Horan. 
Bill read a second time. 
Building Amendment Bill (No 4) 
Second Reading 
Debate resumed from 28 February. 
NICKY WAGNER (National—Christchurch Central) 
: 
 I support this Building Amendment Bill (No 4). 
PHIL TWYFORD (Labour—Te Atatu) 
: 
 Well that is one of the better contributions we have heard from Nicky Wagner recently. Thank you Mr Deputy Speaker. It is a pleasure to spend the dying moments of Thursday afternoon with the National backbenchers. We are coming to the end of what has been a fantastic week for the Opposition. They are reeling punch-drunk from the blows on that side of the House. They have wheeled out the junior Minister Simon Bridges to keep an eye on the backbenchers this afternoon. 
Hon David Cunliffe 
: He’s on youth rates. He’s on youth rates. 
PHIL TWYFORD 
: That is right: he is on youth rates. That is right—he is. We are here to speak to the Building Amendment Bill (No 4). It is my pleasure to make a few comments about this bill. We have said many times that we are broadly supportive of the Building Act review process. It was begun under the last Labour Government in the wake of the leaky buildings crisis. There has been a fair measure of cross-party support for the Building Act review process as together we try to fine-tune and develop the Act to protect consumers more and to tackle some of the deep-seated problems in the building and construction industry that were behind the leaky buildings catastrophe. 
We have not supported all of the measures that this Government has taken. Indeed the last couple of bills including this Building Amendment Bill (No 4) Labour has not supported because we feel that the Government has really fallen down on the job. In a nutshell we believe that this bill is part of a piecemeal and uncoordinated approach to the problem and that is not worthy of support. 
For the folks at home who may be just tuning in given that this is an interrupted debate I want to just summarise briefly some of the key provisions of this bill. It is the second of two bills that are part of the Building Act review process. It attempts to introduce enhanced consumer protection measures including mandatory written contracts for work valued over a particular amount and mandatory disclosure of certain information by building contractors. It has a set of requirements around that including penalties for breaches of those provisions. 
Secondly it clarifies exemptions from the building consent requirements in the Act by rewriting the whole schedule. It adds some new exemptions as well. So it is a bit of tidying-up work there. It adds a new power for territorial authorities to deal with buildings that are at risk because they are adjacent to dangerous buildings. That is particularly relevant I think in Christchurch as it deals with the post-earthquake recovery. The bill increases the maximum penalty for the offence of doing building work without a consent. It doubles it from $100000 to $200000. It has got a whole section on dams and it introduces the concept of a classifiable dam and a referable dam. It basically applies a risk-based approach to the regulations around dams which I think the Local Government and Environment Committee has been in agreement is a pretty sensible approach. It makes a number of other minor and technical amendments. 
I want to go back to our criticism and why Labour is not supporting this bill. First it has a very narrow focus on residential properties and it fails to address the wider concerns that affect the whole of the construction industry. In the recent case dealing with Spencer on Byron that hotel or apartment complex in Takapuna basically the Supreme Court held that the council owed a duty of care for all buildings irrespective of whether they were residential or not. I think that is a good pointer or should have been to the select committee that the focus on residential buildings is far too narrow here. 
The other thing that it does is replace the old code compliance certificate with a consent completion certificate and what this does is attempt to reduce some of the burden some of the liability that councils face which has left them so often as the last man standing with the ratepayer being expected to pick up the tab for deficiencies in work that possibly in many cases should be the responsibility of builders or designers. We believe as do a number of submitters—in fact the Home Owners and Buyers Association of New Zealand made this point very eloquently at the select committee—that this is a step too far until some of the quality improvement and accountability measures come to maturity particularly for instance the licensed building practitioners scheme. Until consumers can have more confidence that they are going to have accountability and high-quality work done then actually removing some of the responsibility from local government is going to have the effect of reducing the protection for consumers. That is really the opposite of what this bill is supposed to be doing. 
The two really big issues that I think have been hanging over the whole Building Act review process are a consideration of joint and several liability which is the legal doctrine that we have in New Zealand and there has been a lot of debate about whether we should shift to one of proportionate liability. This debate has been one of the big kind of ripples after the leaky buildings disaster. That issue was deemed to be in the too-hard basket by the Hon Maurice Williamson. It has been flicked off to the Law Commission which is currently looking at whether or not New Zealand could shift to a system of proportionate liability. That would mean for instance that the different players responsible for for example a leaky home would be financially liable only proportionate to their share of responsibility for the work done. The other idea that has been proposed by many many people is that of mandatory insurance—mandatory warranties backed by insurance. That would be probably the single biggest thing that would clean up the industry and give consumers protection and accountability. That has also been put in the too-hard basket by this Government. So there is a lot of twiddling of the knobs with this bill and not much that addresses the real issues that are affecting the very low levels of productivity in our building and construction industry and the great vulnerability that consumers have in this country. 
The one provision that we would support—and we think it should probably be sliced off and dealt with separately as a bill in its own right—is the provision dealing with dams. That is pretty straightforward and we do not see why that should not go ahead. We just think along with a lot of the submitters who came to the select committee that this bill does an injustice to the Building Act review process. It is tinkering with a whole lot of small things including the liability of local government. It is not likely to enhance protection for consumers and it needs a rethink. 
Debate interrupted. 
The House adjourned at 6 p.m.