Volume 666 Week 52 - Tuesday 24 August 2010 
Volume 666 Week 52 - Tuesday 24 August 2010 
[Volume:666;Page:13339] 
Tuesday 24 August 2010 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Voting 
Corrections 
Mr SPEAKER 
: Honourable members the result of the vote on the question for the first reading of the Employment Relations Amendment Bill (No 2) was incorrectly announced as Ayes 64 Noes 57. The correct result is Ayes 64 and Noes 56. Further the result of the vote on the motion to refer the Taxation (GST and Remedial Matters) Bill to the Finance and Expenditure Committee was also incorrectly announced as Ayes 69 and Noes 52. The correct result is Ayes 68 and Noes 52. The record will be corrected in both cases. 
Questions to Ministers 
Savings—Appointment of Savings Working Group 
1. 
CRAIG FOSS (National—Tukituki) 
 to the  
Minister of Finance 
: What steps is the Government taking to consider options for improving New Zealand’s national savings? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Mr Speaker—[ 
Interruption 
] 
Mr SPEAKER 
: I apologise to the Minister. We are not going to start the week that way. The Minister had not even started his answer before there was a barrage of interjection from on this occasion the Labour front bench. That is not in order. Interjections should relate to what a person says and should not be just a widespread volley like that. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: I cannot imagine what the point of order is. 
Hon Trevor Mallard 
: The point of order goes to whether in fact this question should have been accepted given that it contains irony. 
Mr SPEAKER 
: I do not think that the Hon Trevor Mallard has any questions on the Order Paper today but even so that kind of abuse of the point of order process will not be tolerated. I guess it might have had an element of humour to it which assisted on this occasion but I do not accept that kind of point of order. 
Hon BILL ENGLISH 
: A focus on national savings is the next step in the Government’s programme for rebalancing the economy towards savings investments jobs and strong economic growth. Today the Government has announced the appointment of an independent Savings Working Group with wide terms of reference. This group will focus particularly on lifting the level of national savings not just household savings. 
Craig Foss 
: Why is it important that New Zealand increase its national savings? 
Sandra Goudie 
: Listen up Labour you will learn something. 
Hon BILL ENGLISH 
: Improving national savings is so important because of the damage that the previous Government did to it—and it should listen. New Zealand has run current account deficits for a very long time and the difference between investment and our savings has been funded by offshore borrowing. That offshore borrowing was $100 billion in 2000 it reached $170 billion this year and it is forecast to rise to almost $250 billion by 2014. If we can lift national savings we will not be as vulnerable to overseas lenders as we unfortunately are after 9 years of economic mismanagement. 
Hon David Cunliffe 
: What did less damage to New Zealand’s saving rate: cutting contributions to the New Zealand Superannuation Fund cutting KiwiSaver incentives or borrowing more for tax cuts for wealthy New Zealanders like Ministers? 
Hon BILL ENGLISH 
: What did a lot of damage to our national savings and our external deficit was the previous Government. In the 4 years to 2008 New Zealand’s balance of payments deficit averaged— 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. My colleague’s question is about 2010. It is about today and the future; it is not about the past. That answer was not about the Minister’s responsibility. The member put to the Minister three different policy options of the current Government and asked the Minister to give an answer based on the current Government’s policies. Instead we get speeches about what previous Governments have done. 
Hon Dr Nick Smith 
: He’s embarrassed about the record. 
Mr SPEAKER 
: Now it is the Hon Dr Nick Smith. It is fortunate that I am in good humour today because a point of order is being heard and he should not be interjecting. I say to the Hon Darren Hughes that the question asked from memory what out of a list of things had caused the least damage. It was seeking the Minister’s opinion. It seems that the Minister did not agree with any of that list and added to the list himself as to what was causing damage. When questions seek opinions there is no precise answer. Members may not like the answers but the remedy is in members’ hands—they should ask tough questions and not just seek opinions. 
Hon BILL ENGLISH 
: What damaged national savings were the policies of the previous Government. Those policies led to a blowout in Government spending a blowout in consumer borrowing and the worst record on balance of payments for decades. The balance of payments deficit averaged over 8 percent of GDP from 2004 to 2008. 
Craig Foss 
: What particular issues will the Savings Working Group consider? 
Hon BILL ENGLISH 
: The working group will consider further the impact of the tax system on national savings but it will not be considering capital gains tax or land tax which the Government has ruled out. It will be considering the role of KiwiSaver in improving national savings but also the role of Government because there is not much point lifting KiwiSaver or household savings at the expense of putting the Government further into deficit. 
Hon David Cunliffe 
: Given the Minister’s fondness for history perhaps I could rephrase my question. What did the most damage to New Zealand savings stock: cutting KiwiSaver cutting the New Zealand Superannuation Fund contributions tax cuts for the wealthy or Robert David Muldoon’s decision to scrap the New Zealand superannuation scheme in the 1970s? 
Mr SPEAKER 
: Did the Minister hear the question? I say to his colleagues that the level of interjection was unreasonable. 
Hon BILL ENGLISH 
: What damaged our national savings was economic policy that in the last 9 years delivered a 3 percent increase in after-tax wages. In 9 years under Labour households had only a 3 percent increase in their after-tax wages which meant they could not save. 
Craig Foss 
: What policies have contributed to the poor performance of New Zealand’s national savings over the past decade? 
Hon BILL ENGLISH 
: The policies that would have contributed to higher national savings are economic growth and rising household incomes which would have given New Zealanders the ability to save. Unfortunately those policies did not happen. From 2000 to 2009 the average ordinary-time weekly wage after tax and inflation grew by only 3 percent in 9 years. How could people save with an increase in their wages of 3 percent in 9 years? 
Economic Initiatives—New Policies 
2. 
Hon PHIL GOFF (Leader of the Opposition) 
 to the  
Prime Minister 
: What new policies has he announced as Prime Minister over the last month to ensure that the cost of living does not rise faster than wages? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Over the last month I have restated many times the Government’s economic programme to get faster growth higher wages and more jobs. The programme is far too wide ranging to list in one go but for a starter for ten here are a few: personal income tax cuts company income tax cuts lower taxes on savings finding billions of dollars of savings in the public sector capping the bureaucracy getting Government debt under control reforming the welfare system raising literacy and numeracy standards in schools increased roading investment upgrading the national electricity grid streamlining and simplifying the Resource Management Act employment law reforms investing in— 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. Apart from the answer being a very long answer the Leader of the Opposition asked what new policies had been announced in the last month. Clearly the policies mentioned by the Prime Minister in his answer were not new policies that had been announced in the previous month. 
Mr SPEAKER 
: Well one thing is for sure: we heard enough about them anyhow. I invite the honourable Leader of the Opposition to ask a supplementary question. 
Hon Phil Goff 
: Why has the Government continued to push up prices and the cost of living through for example increased GST accident compensation increases increases in taxation on rental property and road-user charges when the Department of Labour shows quite clearly that the majority of New Zealanders got no wage rise at all over the last year? 
Rt Hon JOHN KEY 
: Well there are a couple of things. Firstly the CPI rate the inflation rate average increase under the 9 years of the previous Labour Government was 2.9 percent. Under— 
Hon Phil Goff 
: I raise a point of order Mr Speaker. In the light of the answer to the last question which the Prime Minister did not answer I ask you to bring him to the specific question I actually asked which is why has the Government continued to increase things like GST and road-user charges when nobody has had a wage rise? 
Mr SPEAKER 
: I think the member has a legitimate point of order. The answer should not start with what the previous Government had done when the question asked what this Government is doing. I think it is fair enough that the answer should address that. 
Rt Hon JOHN KEY 
: The reason I did not answer it directly was it was a stupid question. We— 
Mr SPEAKER 
: I am on my feet. We will not have that. Question time is not a time to abuse other members. The question asked was a perfectly fair question. It does not deserve that kind of response to be made at all. 
Rt Hon JOHN KEY 
: The reason I answered the question like that is that it was an inaccurate question because we have not raised GST yet. 
Hon Phil Goff 
: I raise a point of order Mr Speaker. How can that answer possibly be right when we have legislated to raise GST? 
Mr SPEAKER 
: The Prime Minister answered the question. Exactly when the impact of legislation comes in is clearly a technical matter. I think the Prime Minister answered the question. 
Hon Phil Goff 
: How can the Prime Minister’s answer possibly be right when under his leadership the Government has legislated to raise GST even though National promised before the election not to do so? 
Rt Hon JOHN KEY 
: I think the salient point here is what the rate of inflation in the economy is at the moment. The answer is that under the National Government it has averaged 1.2 percent; under the previous Labour Government it averaged 2.9 percent. 
Hon Phil Goff 
: I raise a point of order Mr Speaker. The question was very specific. It asked how the Prime Minister’s answer could possibly be right—that is that the Government has not raised GST—when the Government has legislated to raise GST. [ 
Interruption 
] 
Mr SPEAKER 
: The House is being very noisy today and we have to try to bring it under control. There is a dilemma when a member asks another member how an answer can be right. I invite members to think about that question. It invites a member to say a whole range of things when answering such a question because there is no one answer as to how that answer can be right. The question almost expresses an opinion. If the questioner doubts whether the answer that was given is right then naturally the Minister who is being asked to answer such a question will express a different opinion from the questioner’s. It is something that I alert members to think about. When questions ask for opinions there is no way that I can insist on the answer being given that the questioner might have wanted. Asking for opinions is not tough questioning. I do not believe I can insist on a more precise answer from the Prime Minister but I am sure the honourable Leader of the Opposition has further supplementary questions. 
Hon Phil Goff 
: How will a majority of New Zealand wage and salary earners be better off when they got no wage rise last year but the latest figures from Barfoot and Thompson show that in the last year average rents have gone up in Auckland by over $20 a week? 
Rt Hon JOHN KEY 
: That is very simply answered with this graph which clearly indicates that in the 9 years that Labour was in office real wage growth was 3 percent— 
Hon Phil Goff 
: I raise a point of order Mr Speaker. You know well that question time is a time for accountability by the Government. Therefore this House expects that Ministers will answer specific questions when they are asked. That question was very specific. He is now giving us a lesson in history. [ 
Interruption 
] 
Mr SPEAKER 
: On this occasion the right honourable Prime Minister knows that he should not interject while a point of order is being considered. I invite the honourable Leader of the Opposition to reflect on his question. If I recollect it correctly it contained an assertion that wages had not increased in the last 12 months and he asked how people could be better off. As I saw it the Prime Minister was pointing out the pattern of real wage changes over recent years. If one looked at the graph he was holding up one saw that it showed the pattern of real wage increases over recent years—at least that is what I could see from where I am sitting. I am a bit closer to him so I accept that it is easier for me to see that. I think the Prime Minister was going to dispute the assertion in the honourable member’s question about wage increases. The Prime Minister is perfectly entitled to do that in answering the question because he is entitled to challenge the assertion of fact in the question when answering it. Clearly he does not agree with the statement contained in the question and he is about to dispute it. When a question is structured like that I simply come back to my fundamental point that some questions are very hard to answer but by and large questions that seek opinions are not hard to answer. 
Rt Hon JOHN KEY 
: Let us go back to Economics 101. Here is the graph. After 21 months of this National Government we have real wage growth of 8.7 percent which is three times what we had under the previous Labour Government after 9 years in office. But let us go into some of the individual things. The cost of fruit and vegetables which is an interesting topic of debate at the moment rose by 5 percent on average under that Labour Government; the figure was minus 6.5 percent under National. 
Hon Phil Goff 
: I seek the leave of the House to table a document showing that the majority of workers in the last year did not receive any wage increases. The document is an ANZ data review based on Department of Labour figures. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Hon Phil Goff 
: I seek the leave of the House to table a document from Barfoot and Thompson licensed real estate agents which shows that in the year to June 2010 rents on average in Auckland have gone up by $20 a week. 
Mr SPEAKER 
: Leave is sought to table that document— 
Hon Annette King 
: Telling the truth. 
Mr SPEAKER 
: I say to the Hon Annette King on this occasion that she must not interject while a point of order is being heard. Is there any objection to leave being granted for that document to be tabled? There is no objection. 
Document by leave laid on the Table of the House. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. Given some of the disputes we have had about various statistics if the graph that the Prime Minister was holding up was an official document we request that he table that official document with the figures he was just outlining. 
Mr SPEAKER 
: I will check with the right honourable Prime Minister. Was it an official document? 
Rt Hon JOHN KEY 
: No. 
Hon Members 
: Ha ha! Making it up. 
Mr SPEAKER 
: Someone will be taking an early shower if a little more courtesy is not shown in the House. Let me alert members though that this will get serious because the House may or may not go into urgency this week. If I put some members out of the House while the House is in urgency they will be out for the entire period that the House is under urgency and if those members want to speak in debates they will not be able to. I just alert members to the fact that I am not happy with the way interjections are being made while points of order are being heard. 
Hon Phil Goff 
: On that point what was the answer? 
Mr SPEAKER 
: It was not an official document. 
Hon Phil Goff 
: Can the Prime Minister tell the House how the 93000 families who have had the funding by the Government to early childhood education cut—and who will be paying $20 to $30 a week extra for their children—will be better off when over half of them have not had a wage increase over the last year? 
Rt Hon JOHN KEY 
: Well there are a couple of things. Fortunately they have had tax cuts and will have further tax cuts on 1 October. Fortunately they have enjoyed an average wage growth of 8.7 percent. If I could just give the House one reassurance it is that if there does have to be an early shower this afternoon it will be cheaper under National than Labour because electricity prices have gone up by half. 
Hon Phil Goff 
: I seek the leave of the House to table a document from the Living and Learning Foundation whose early childhood centre in Mangere was opened by the Prime Minister last year which has said it will have to raise its fees to low-income families by a minimum of $20 to $25 per child per week. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. The Prime Minister indicated in the last part of his answer that because power prices have gone up showers are cheaper. My request is that he table his document that shows that— 
Mr SPEAKER 
: The member is abusing the point of order process and I will not tolerate that any further. 
Hon Phil Goff 
: If the Prime Minister is intent— 
Rt Hon JOHN KEY 
: I raise a point of order Mr Speaker. I am more than happy to table this bit of my notes which shows quite clearly that electricity prices have gone up by an average of 2.9 percent under National and went up by 5.4 percent under Labour. [ 
Interruption 
] 
Mr SPEAKER 
: I invite the Hon Trevor Mallard to reflect on how that interjection could have been within the Standing Orders. A point of order had been called and it was being considered. To interject loudly like that he knows is totally out of order. I will not actually evict him from the House because I suspect that he probably wants to be relieved of his duties this afternoon. I will not do that. I will make the honourable member stay here and suffer and I will be very hard on him. I warn the honourable member that I will be tough on him. I do not think that a member’s scrawled notes constitute an official document; we will not be tabling that sheet. 
Hon Phil Goff 
: If the Prime Minister wants to close the wage gap and living standards gap with Australia why has he made consumption taxes more than 50 percent higher in this country than Australians pay in theirs? 
Rt Hon JOHN KEY 
: Firstly the Government is closing the wage gap with Australia. I am pleased to report that it has fallen from a peak of 38 percent under Labour to 29 percent under National. That is not bad actually given that we have had just 21 months in office. Secondly we have a different series of taxes here. Australia has a capital gains tax; largely New Zealand does not. New Zealand has much higher personal tax rates than Australia which is why someone in New Zealand who used to earn under $229000 in personal income used to pay more tax in New Zealand than in Australia. After 1 October it will be $55000. 
Hon Phil Goff 
: Why did the Prime Minister tell the country that New Zealand had one of the lowest consumption taxes in the world when on the basis of OED statistics— 
Hon Members 
: OED? 
Hon Phil Goff 
: —OECD statistics of consumption taxes as a percentage of GDP his 15 percent GST rate will now be the fourth highest in the world out of the 30 countries? 
Rt Hon JOHN KEY 
: Well I would have to see the quote in totality but what I can say is that the right mix of taxes has been implemented by the Government. We will have a very effective balance between personal taxes and GST. But if the member does not like the idea of it then he can campaign on changing it—and I bet he will not. 
Hon Phil Goff 
: I raise a point of order Mr Speaker. Maybe you can help me by telling me how in any way that answer addressed the question that I asked. I asked why he told the country that we have one of the lowest rates of consumption taxes in the world when patently that is untrue. 
Mr SPEAKER 
: The Leader of the Opposition must reflect on the questions he is asking. He asked the Prime Minister why he told the country something. I know that the member probably had an answer that he expected when he asked the question but there is any range of answers when a member asks a Minister why he or she told the country something. The Prime Minister if I recollect his answer said he would want to see the quote in totality before he could comment further on it but then he explained why he had a certain view on GST and I do not think that is an unreasonable answer. I keep stressing the point that it is perfectly within the Standing Orders to seek opinions but as Speaker it is extraordinarily difficult for me to insist on any particular answer when an opinion is sought because there is no right answer when an opinion is sought. That is the dilemma I face. 
Hon Phil Goff 
: This House is entrusted with the task of holding Ministers accountable for what they say. If a Minister says we have one of the lowest consumption tax rates in the world yet evidence can be tabled to show that that is untrue I ask why it is that a Minister will not be held accountable to answer that question. 
Hon Darren Hughes 
: That’s not an opinion. 
Hon Phil Goff 
: It is not an opinion. 
Mr SPEAKER 
: I can imagine all sorts of questions that could be asked from a range of questions to test the accuracy of the Prime Minister’s statement asking him point-blank what certain GST rates are and then comparing them. The whole idea of supplementary questions is not to make a range of political statements about an issue but to dig into an issue to test a Minister’s answer. I could think of a whole range of questions that could be asked to test the Prime Minister on that issue which were not seeking an opinion but actually challenging him on facts not asking him why he was saying something. The dilemma is that as soon as one asks why or how that is an opinion and it is very difficult for me as Speaker to insist on any particular answer being given. I realise that members often want to make a political statement in asking a question and that is perfectly legitimate but it is very difficult then for me to insist on any particular answer being given. The political statement that the member was making with that—because I can see he is wondering why I am saying that—in a very subtle sort of way was that the Prime Minister was not basically telling the truth over something. That is not the way to test out some of the facts through supplementary questions. 
Hon Phil Goff 
: Does New Zealand at 15 percent have one of the lowest rates as he alleged of consumption taxes in the world as a percentage of GDP; if so where does it range in the list of 30 OECD countries? 
Rt Hon JOHN KEY 
: I would need to go and check that at 15 percent GST because I simply do not have that information to hand. But in the bulk of Europe the rate is higher than 15 percent. What the Government does know is that we have the right mix of taxes. 
Alcohol Law Reform—Balance of Reduction of Harm and Responsible Drinking 
3. 
CHESTER BORROWS (National—Whanganui) 
 to the  
Minister of Justice 
: How does the Government’s alcohol reform package announced yesterday balance the need to reduce alcohol-related harm with the interests of responsible drinkers? 
Hon SIMON POWER (Minister of Justice) 
: 
 It does so because reducing the harm caused by alcohol is a significant part of the Government’s policy to reduce the drivers of crime. That is why we have adopted in full or in part 126 of the 153 recommendations of the Law Commission’s report. Proposals to restrict opening hours the number of licences and irresponsible advertising will not affect the majority of responsible drinkers. This Government is not in the business of interfering in the lives of those who simply enjoy a drink now and then. 
Chester Borrows 
: Why does the Government’s package have a particular focus on youth drinking? 
Hon SIMON POWER 
: The Government is targeting young people because as the Law Commission reported young people suffer a high and disproportionate level of alcohol-related harm. For example the highest proportion of alleged offenders who are affected by alcohol are aged between 17 and 20. If a new law is to have any impact on the drinking culture we need to start with our young people by putting measures in place to control both the supply of alcohol to youth and the environment in which they are drinking. We have done that by proposing an increase in the age for off-licence purchase limiting the alcoholic content and volume of ready-to-drinks restricting drinking in spaces such as car-parks and school grounds and backing the rights of parents to decide who should give their children alcohol. 
Hon Lianne Dalziel 
: Why has he failed to address the problem of retailers selling dirt-cheap liquor—alcopops at $1.50 a bottle and wine priced as low as $5 to $6 a bottle—which is depicted in the cartoon I am holding as the dead elephant in the room alongside these changes which are depicted as air freshener to cover the smell? 
Hon SIMON POWER 
: We have not ignored those recommendations around minimum pricing at all. In fact we have made substantial inroads into discussing the arrangements that need to be made for the collection of pricing sales figures and data around retailers’ sales of alcoholic products. Those matters will be considered by the select committee as part of an ongoing discussion about alcohol reform and I am pleased to see that the Leader of the Opposition has indicated he will support the bill’s first reading. 
Rahui Katene 
: Does the Minister agree that tamariki do what adults do; if so how will his reforms change the behaviour of heavy drinkers 92 percent of whom are adults aged 20 and over? 
Hon SIMON POWER 
: Yes but there are a couple of issues with the statistic that was quoted by the member. The first is that 96 percent of the population who are legally able to drink are over the age of 20. Secondly setting a culture for young people who will eventually be over 20 is an important part of this package. 
Sue Kedgley 
: What is the Government’s logic for excluding casinos from the restrictions it is proposing to place on selling liquor after 5 a.m. in bars and clubs and will not this exemption simply encourage people in Auckland and Christchurch to head off down to a casino when the local bar has shut and gamble as well as drink? 
Hon SIMON POWER 
: The reason is that Cabinet agreed with the Law Commission’s recommendation that the status quo should remain—that is “The Gambling Act 2003 allows casinos to sell alcohol for consumption in a casino during the hours the casino is open regardless of the Sale of Liquor Act.” But I can assure the member that the Government will listen to public submissions on this and other matters during the select committee process. 
Rahui Katene 
: Will the Minister’s reforms reduce alcohol consumption by Maori and alcohol-related criminal offences committed by Maori; if so what evidence or advice has he received about the degree of such reductions? 
Hon SIMON POWER 
: Yes that is certainly the intention. The Government’s proposals are intended to reduce excessive consumption across the population including amongst Maori and subsequent alcohol-related harm such as criminal offending. As I have said in this House and in other fora alcohol law reform is a key component of the Drivers of Crime programme to reduce alcohol-related offending across the population. 
Chester Borrows 
: When will he introduce to the House legislation to give effect to the Government’s policy announcement? 
Hon SIMON POWER 
: It is my intention to introduce legislation to the House in the middle of October. If the Hon Gerry Brownlee is in agreement it is my intention for that bill to be read a first time before Christmas. The bill will be sent to a select committee for a full 6 months and it is my intention to pass the legislation prior to the end of next year. 
Hon Jim Anderton 
: Did the Minister agree with the co-leader of the Maori Party Tariana Turia when she said: “We know that putting up the price is a powerful tool to reduce smoking”; if so why does he not think the same argument applies to New Zealand’s culture of heavy drinking? 
Hon SIMON POWER 
: Yes because putting up the price of a product that always harms is an effective measure; alcohol does not always harm. 
Hon Lianne Dalziel 
: Why does he not refer a Supplementary Order Paper to the select committee considering the Sale and Supply of Liquor and Liquor Enforcement Bill or would that just remind the public that they have already submitted on local alcohol plans parental consent for under-age drinking alcohol advertising measures and under-20-year-olds having a zero drink-driving limit? 
Hon SIMON POWER 
: I will not be referring a Supplementary Order Paper to the select committee on that bill—which was introduced by the previous Government on 6 August 2008 but was not given a first reading in 12 sitting days including two periods of urgency before the House rose for the election. This Government gave that bill its first reading and sent it to a select committee. Unfortunately it needs to be rewritten. 
Sue Kedgley 
: I raise a point of order Mr Speaker. I seek leave for the Liquor Advertising (Television and Radio) Bill which regulates alcohol advertising to be set down as a members’ order of the day. 
Mr SPEAKER 
: Leave is sought for that course of action to be followed. Is there any objection? There is objection. 
Job Creation—Legislation 
4. 
Hon ANNETTE KING (Deputy Leader—Labour) 
 to the  
Minister for Social Development and Employment 
: When she said last week that “this is a great week for New Zealand with two pieces of legislation encouraging job opportunities and removing the barriers to work” how many jobs does she expect to be created from these changes? 
Hon BILL ENGLISH (Deputy Prime Minister)  
on behalf of the  
Minister for Social Development and Employment 
: The Minister was referring to the Future Focus legislation and the 90-day legislation both of which create more opportunities for jobs. In respect of how many jobs are to be created the member will know that legislation does not create jobs; what creates jobs is businesses making investments and making decisions to hire people. The Government is relentlessly focused on encouraging them to make those positive decisions. 
Hon Annette King 
: In light of that answer if she has no idea how many jobs will be created from her “great week” why should New Zealanders have any confidence in a Government that has no plan for jobs is poll-driven and uses gimmicks rather than substance as an excuse for policy? 
Hon BILL ENGLISH 
: They should have confidence because the Government is executing a wide-ranging plan to manage the economy to achieve two objectives: one objective is to undo the damage done by the previous Government and the second is to get the economy on a path to recovery and the early signs of that are promising. 
Hon Annette King 
: Did her “great week” include help for nearly 40000 people who have had to apply to the Government for assistance to pay for their children’s school uniforms stationery and fees; if so has she factored in the GST increase in 37 days’ time which will further put up the costs faced by those struggling families? 
Hon BILL ENGLISH 
: The Minister is doing a much better job than that member’s Government did. 
Hon Annette King 
: I raise a point of order Mr Speaker. My question was not about the previous Government. It was a clear question about 40000 people who have had to go to the Government for help. 
Mr SPEAKER 
: I cannot help but come back to my fundamental point. If the honourable member really wanted to ask a question rather than make a political statement she would ask a simple straightforward question. The idea of that question was very clearly to make a political statement. The member should not then appeal to me as Speaker if she does not like the political statement made in return. Question time is meant to be a time to ask tough questions and I am very supportive of that. Members have seen me be very hard on Ministers who dodge straight tough questions. But as for political statements do not appeal to me when the Minister does not answer in the way the member would like. 
Hon Annette King 
: I seek leave to table a press report from the  
New Zealand Herald  
showing that 40000 people had to apply to the Government for help with the cost of school uniforms fees and stationery. 
Mr SPEAKER 
: Members are not going to seek leave to table press reports. 
Hon BILL ENGLISH 
: When GST goes up on 1 October beneficiaries will be compensated immediately. Under that member’s Government in 2008 inflation was 5 percent and beneficiaries went for a whole year before they received an adjustment. We are giving them one straight away on a 2.5 percent increase in GST. 
Hon Annette King 
: Did her “great week” extend to places like Wanganui which has seen a number of businesses close recently and what is in the Government’s plans that will see those businesses reopen new ones started and the almost 500 people in that town who went on the unemployment benefit back in jobs? 
Hon BILL ENGLISH 
: The Opposition should get behind the Government’s programme because it is aimed at rebalancing this economy to increase exports savings after-tax incomes and investment. What the Government’s programme will not do is fool people into thinking that jobs based on massive borrowing and Government spending blowouts are real jobs. That is what Labour tried to tell the people of Wanganui. It has turned out they were misled. 
Hon Annette King 
: Did budget advice services tell her that they agree that recent Government policies gave New Zealanders a “great week” or have the services told her what we have heard—that thousands of families are facing severe hardship struggling to pay their mortgage rent and phone and power bills—and how will driving down wages increasing GST and policy gimmicks help them? 
Hon BILL ENGLISH 
: First of all the Minister regularly communicates with all of the services that support New Zealanders in the community and does so very effectively. Secondly the Labour Party might want to ignore one fact but it will undermine its credibility if it does so: all of those families will get a tax cut on 1 October and the average household will be— 
Hon Annette King 
: No they don’t. 
Hon BILL ENGLISH 
: So members of the Opposition say that there is no tax cut on 1 October? Well they are wrong. The average household will be $25 a week better off after paying the extra GST. 
Question No. 5 to Minister 
METIRIA TUREI (Co-Leader—Green) 
: 
 I seek leave to have my question held over until the Minister for Social Development and Employment Paula Bennett is in the House to answer the question. 
Mr SPEAKER 
: Leave is sought for that course of action. Is there any objection? There is objection. 
Child Abuse—Victim Support Initiatives 
5. 
METIRIA TUREI (Co-Leader—Green) 
 to the  
Minister for Social Development and Employment 
: Does she stand by her statement to the iwi leaders meeting last week that “nothing can be more important than dealing with child abuse”; if so why did she also tell the meeting that “the Government doesn’t have all the money for it right now.”? 
Hon JUDITH COLLINS (Minister of Police) 
 on behalf of the  
Minister for Social Development and Employment 
: Yes and that is why recently the Minister and her colleague the Minister of Police witnessed the signing of a child protection memorandum of understanding between Child Youth and Family Services and the Police which will see them working more closely to assist the victims of child abuse. 
Metiria Turei 
: How much will it cost to implement a whanau finder and family group conferences for young children—the two proposals the Minister asked iwi leaders to help fund? 
Hon JUDITH COLLINS 
: A clear and rational review of the Minister’s speech will show that she has said that those are ideas that she has had and she would like to get some feedback from the iwi leaders group. I am sure she would be very interested in hearing from that member. 
Metiria Turei 
: Did the Minister not bother to lobby her Cabinet colleagues for the funding for these services when Cabinet was approving for example the $2 billion for the “Holiday Highway” from Puhoi to Wellsford? 
Hon JUDITH COLLINS 
: I think I have made it perfectly clear that the ideas that the Minister has shared with the iwi leaders group are in their formative stages. 
Metiria Turei 
: Did the Minister bother to argue when Cabinet was approving a $4 billion tax cut for the wealthier families in Aotearoa that perhaps that money might be better spent on child abuse prevention which apparently nothing can be more important than? 
Hon JUDITH COLLINS 
: As that member should know all discussions in Cabinet are confidential. I also say to that member that the State does not have—[ 
Interruption 
] The Opposition might find this funny but I do not. The State does not have a monopoly on caring nor on taking action. The Minister has quite wisely asked the iwi leaders group whether they would like to give her feedback on her ideas which they have. 
Metiria Turei 
: When the Minister developed her policy to work test sole parents did she take into account the fact that just in recent years there have been four reported cases of serious child abuse—two of which resulted in the death of the child—because the child had been left with unsafe adults while the mother was working? 
Hon JUDITH COLLINS 
: Fifty percent of sole parents and 68 percent of partnered women with children are in paid work. Being in paid work does not make a mother an irresponsible parent. 
Metiria Turei 
: How can the public have any confidence in a Minister who goes cap in hand to iwi leaders with no costed proposals—but she still wants iwi to fund them—claiming that nothing is more important than dealing with child abuse when clearly her Government will prioritise many more things that it considers more important than protecting New Zealand children from violence abuse and death? 
Hon JUDITH COLLINS 
: Quite clearly that member was not present at the iwi leaders group when the Minister spoke. Any sensible and reasoned review of the Minister’s speech would show that the allegations made by that member are quite wrong. 
Katrina Shanks 
: What is the Government doing to tackle child abuse? 
Hon JUDITH COLLINS 
: In addition to the memorandum that I referred to earlier last year we announced the first wave—the Never Ever Shake a Baby campaign which supports the Auckland District Health Board’s shaken baby prevention pilot and the non-governmental organisation First Response—placed Child Youth and Family social workers in hospitals and introduced multidisciplinary meetings before discharge better data and monitoring systems and an independent experts forum. As part of Budget 2010 we announced funding for extra Child Youth and Family social workers in hospitals teen parent intensive case managers seven supported houses for teen parents and development of parenting support for teen fathers. Last week we launched Home for Life. 
Economy—Recovery 
6. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister of Finance 
: Does he stand by his statement: “we’re getting the right kind of recovery if you take a longer-term point of view”? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes. Although the recovery has been patchy there are early signs that the imbalances that have handicapped this economy through the last 5 or 6 years are unwinding. Those imbalances are pretty straightforward: too much of our resource and borrowing has financed an increase in non-tradables—that is domestically focused activity—and not enough of it has gone on growing our export capacity. When one is a trading nation export capacity is pretty important. 
Hon David Cunliffe 
: How was the longer-term point of view improved by cutting KiwiSaver incentives and deferring for a decade contributions to the New Zealand Superannuation Fund? 
Hon BILL ENGLISH 
: Because we did not have any cash to put into the New Zealand Superannuation Fund—in fact this financial year the New Zealand Government is running a $13 billion cash deficit. If the member is worried about the state of the economy and what has caused it normally I would tell him to look in the mirror but he does not need much encouragement. 
Hon David Cunliffe 
: If there was insufficient cash to pre-fund the retirement plan for New Zealanders why was there enough cash to give tax cuts to his wealthy mates? 
Hon BILL ENGLISH 
: The member has clearly arrived from some other planet— 
Mr SPEAKER 
: The House will display some courtesy. I am extremely disappointed with the quality of questions being asked today and some of the answers being given. The Minister made a very unhelpful comment at the end of his last answer which I ignored; maybe I should not have ignored it. To start the answer to a question with an attack on the questioner is simply not acceptable. It does not show a Minister on top of his or her game at all; it shows a Minister stooping to attack another member of this House instead of demonstrating his or her skill at being on top of the game and answering even a poor question—and I am not saying that that was a poor question—as well as he or she can. 
I must say that today I think the quality of questions has been very poor. They have been more political statements than questions. I could apply the Standing Orders and rule a lot of them out of order and the House would possibly be a lot better for it. I do not want to do that but if members are going to continue to just make political statements instead of asking questions I may have to do it. The quality of question time has to improve. Today has not been a high-quality question time. It is not helped when a Minister simply attacks a questioner like that. It is unacceptable. The Hon Bill English will come to the question asked. 
Hon BILL ENGLISH 
: That question is rather unusual given that this House has spent 3 or 4 months debating a Budget where about half of the funding for the income tax cuts comes from GST increases. I thought that the member knew about the GST increase because his party is campaigning on it. There was also revenue from other sources which made the package broadly fiscally neutral. The result of that package is that 75 percent of earners in New Zealand now have a top statutory tax rate of 17.5c in the dollar. 
Hon David Cunliffe 
: How can he expect to reduce overseas debt through savings when he is planning to further liberalise the overseas investment regime making it easier for foreigners to buy New Zealand land and assets? 
Hon BILL ENGLISH 
: The Government has actually signalled its understanding of the concern about overseas investment and assets. But we need to bear in mind that because we do not save enough in order to have jobs in New Zealand we need overseas investment or we simply will not have the capital coming in to create jobs. We have to strike a balance between our need for overseas capital because we do not provide it ourselves and protecting those things that are very important to New Zealanders. 
Resource Management Act Reforms—Consents for Major Infrastructure 
7. 
CHRIS AUCHINVOLE (National—West Coast - Tasman) 
 to the  
Minister for the Environment 
: How will changes made last year to the Resource Management Act 1991 help the efficient processing of consents for major transport and electricity infrastructure? 
Hon Dr NICK SMITH (Minister for the Environment) 
: 
 The national consenting option provided in the first phase of the Government’s resource management reforms is attracting high levels of interest. The process has the advantage of being a single robust process overseen by the new Environmental Protection Authority. It has a board chaired by an Environment Court judge and up to four specialist members with skills relevant to the application. The one-step process requires a decision within 9 months with limited appeal rights. 
Chris Auchinvole 
: What significant applications have been lodged with the new Environment Protection Authority; and is the Minister aware of other projects being considered for the streamlined process? 
Hon Dr NICK SMITH 
: The Environment Protection Authority has received two major applications: Contact Energy’s $1 billion Tauhara 2 geothermal station near Taupo in February; and Auckland’s $2 billion Waterview Connection on State Highway 20 last Friday. The Environment Protection Authority has also been in dialogue on six other major infrastructure projects that are likely to be lodged over the next year including Transmission Gully in Wellington and the Christchurch Southern Motorway. The expected total investment being considered under the streamlined process during this term of Parliament will involve infrastructure worth over $6 billion. It is an important part of the Government’s economic and job strategy that these are processed efficiently. 
Chris Auchinvole 
: Has the Minister seen reports of the drawn-out resource consent processing that took 15 years in the case of the Wellington Inner City Bypass 12 years in the case of the Whangamata marina 10 years in the case of the Northern Gateway motorway and 6 years in the case of the Wairakei geothermal expansion; and what reports has he seen on actions taken during the last decade to address these obvious problems? 
Hon Dr NICK SMITH 
: Yes I have and both the environment and the economy were the losers from those delays. For instance the 6-year delay from 2001 to 2007 in consenting the Wairakei Power Station contributed to the record high burning of coal at Huntly to generate the necessary electricity. Equally so the delays with the Wellington Inner City Bypass and the Northern Gateway project resulted in years of additional congestion with extra unnecessary emissions and the loss of economic efficiency. No attempt was made to fix these delays during the previous 9 years. 
Question No. 2 to Minister 
Rt Hon JOHN KEY (Prime Minister) 
: 
 My apologies for coming back to this issue so late but it took a few moments to get the data. I seek leave to table the OECD chart listing where New Zealand now ranks in terms of GST. Of the 29 countries in the OECD that are reported on for GST New Zealand is 21st—in other words there are 28 countries above us. 
Mr SPEAKER 
: The House has got enough information. I say to the right honourable Prime Minister that when seeking leave to table a document the entire document is not read out. Leave is being sought— 
Hon Phil Goff 
: I raise a point of order Mr Speaker. I seek clarification as to the nature of the document. Does it show GST as a percentage of GDP? 
Mr SPEAKER 
: I invite the right honourable Prime Minister to reply. 
Rt Hon JOHN KEY 
: No. It is the rate—[ 
Interruption 
] 
Mr SPEAKER 
: I apologise to the right honourable Prime Minister. I extended to the Leader of the Opposition the courtesy of allowing him under a point of order to seek clarification as to the document. That outburst from the Labour front benches was unacceptable. The Speaker has measures available to sort this place out if he needs to and I will not be backward in using them if I have to. The House has been unacceptably disorderly today. The Prime Minister has sought leave to table that document? 
Rt Hon JOHN KEY 
: I seek leave for that to happen. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Rt Hon JOHN KEY (Prime Minister) 
: 
 I raise a point of order Mr Speaker. Earlier in my replies to questions today I raised an issue with the Leader of the Opposition who has come into the House with unsubstantiated quotes. The quote that I gave which I have now checked is in— 
Mr SPEAKER 
: Even the Prime Minister cannot litigate an issue by way of point of order. I sense that the right honourable Prime Minister is seeking by way of point of order to debate an issue with the Leader of the Opposition. He cannot do that. No one in this House can do that. That is not a matter of order; that is a matter of what took place during an exchange during question time and a point of order is not the way to deal with it. The right honourable Prime Minister has two options: he can make a ministerial statement which is debatable or if the matter reflects on him personally he can seek leave to make a personal explanation. But no member can litigate an issue by way of point of order. 
Rt Hon JOHN KEY 
: I raise a point of order Mr Speaker. I am not challenging your ruling Mr Speaker. What I am saying—and I think it is a point you might reflect on—is that the Leader of the Opposition has got into the habit of coming to the House with theoretical quotes. He does not have them in writing and cannot produce them and— 
Mr SPEAKER 
: The right honourable Prime Minister must resume his seat. [ 
Interruption 
] Was that a Ngapuhi war cry? The right honourable Prime Minister must accept the Standing Orders of the House. Any quote contained in a question of a member has been validated by the Clerk’s Office. Although I accept that sometimes the quotes may be a short part of a longer passage where the quote is contained in a question the Minister—as I have heard the right honourable Prime Minister do—in answering the question can point out the rest of the quote and where he or she disagrees with the way in which the quote has been interpreted. But we cannot litigate it in this House. What I would accept is that if the right honourable Prime Minister is saying that the Speaker—and the Speaker is ultimately responsible for this—has failed to properly validate a question then I am prepared to look at the particular question and I apologise in advance if I have failed to have a question properly validated. As for points of order beyond that I am very happy to look at a question if the Prime Minister wishes me to look at a particular question but members should not be debating across the House whether a member has used a quote correctly. It is the responsibility of my office to make sure that any quote contained in a question is correct. 
Rt Hon JOHN KEY (Prime Minister) 
: 
 I raise a point of order Mr Speaker. The question was not a primary question. If it had been a primary question that would be absolutely fine. What the member is doing is in supplementary questions providing quotes that are inaccurate and you Mr Speaker then make me answer those questions and rightfully so. But if the member is not providing proper quotes I cannot be expected to answer things that are actually inaccurate. 
Hon Darren Hughes 
: Speaking to the point of order. 
Mr SPEAKER 
: I will hear the Hon Darren Hughes briefly but I do not want to hear too much argument. 
Hon DARREN HUGHES (Senior Whip—Labour) 
: 
 Sure. There are two points. Firstly the Prime Minister makes a personal reflection on another member of the House—[ 
Interruption 
]—by saying as he has done by way point of order that a member— 
Mr SPEAKER 
: That is not going to help and members will not interject. That is not going to help the order of the House. The Prime Minister has raised something that he feels quite concerned about. I do accept that it is an issue of order because if quotes are used in supplementary questions and Ministers feel they are being used improperly that I guess can lead to disorder. But having said that I must say that when a question contains a quote the Minister gets the final word in answering the question and has the chance to point out that the quote is inaccurate. That is a perfectly good answer to a question that contains a quote—to point out that the quote is selective or is not reflecting the point being made when the statement was made by the Minister. It is a perfectly fair answer to such a question. 
I do not think I have been unduly hard on Government Ministers answering questions today; if anything I have been quite hard on Opposition members over the quality of questions asked where they have sought my assistance and I have not insisted on any particular answers. I feel that today no one could argue that I have been unduly harsh on Ministers by expecting any particular answer; if anything I have been the other way. If the Hon Darren Hughes has a further point I will hear it. 
Hon DARREN HUGHES 
: The second point is on the point the Prime Minister raised about supplementary questions. As you know the point the Prime Minister made is often a point the Opposition feels. We do not see information given by way of answer to a supplementary question as full or consistent with previous answers or accurate in respect of the primary question. We have written letters to you alleging a breach of privilege on those matters that have taken place in answers to supplementary questions. So it is completely open to the Prime Minister: if he believes that the words that have been quoted are not his then he can write to you—go down the privilege line—that a member is alleging that he said words that he did not say. Then it will be up to the questioner to supply the actual quote that has John Key’s words in it and it will be up to John Key as the person alleging a breach of privilege to show that he is not the person responsible for that quote. That seems to be quite a simple way forward. 
Mr SPEAKER 
: I will hear the Hon Gerry Brownlee. I do not want to take too much time on this. 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 I realise that but it is relatively important. Would it be then an acceptable answer for a Minister to say “I cannot verify the quote.”? That is the situation that Ministers are left in. No Minister let alone the Prime Minister who is constantly making public statements about a range of things—as you would except the Prime Minister to do—knows at all times exactly what the context was of the quote that is being put to him. I think the proposal that the Hon Darren Hughes put forward gets to the level of being ridiculous—that we have to start dissecting this issue through letters to the Speaker for goodness’ sake! I think the problem becomes that where Ministers have been confronted with quotes that are out of context and perhaps even off the topic there is still insistence from the Chair that the question be answered. That I think gets to the difficulty of it. If it is acceptable for Ministers to say that they cannot— 
Mr SPEAKER 
: I think we have heard sufficient on this. I would be interested in checking the record today. I do not believe that I have insisted that any Minister answer a question today that contained a quote. I have made it very clear that I do not insist on any particular answer from Ministers where opinions are being sought. I accept that this is always going to be a slightly tricky issue but it is not too difficult. 
Members are perfectly at liberty to include what they believe is a quote in a supplementary question as long as it is crucial to the question being asked not just an additional injection of a statement into the question. As long as it is fundamental to the question being asked they are perfectly at liberty to do that and the Minister being questioned is perfectly at liberty to dispute the quote. That is the risk that members take when they include a quote in a supplementary question that has not been validated; they risk a Minister in responding simply disputing the quote which is a perfectly fair answer to the question. I do not see any great difficulty here. 
I do not think I have put Ministers under undue pressure at all to answer any questions today; if anything I would not be surprised if the members of the Opposition feel that the Speaker was a bit hard on them today. But I do not resile from what I have said. I have heard too many questions today that were simply a quite convoluted political statement rather than a real question. Members need to reflect on that. If they want the Speaker’s assistance in getting answers to questions I will help them when they ask a simple clear hard question but I cannot assist when the questions contain quotes or are convoluted questions seeking opinions and making political statements. I think we are ready to move on. 
Hon PHIL GOFF (Leader of the Opposition) 
: 
 I seek the leave of the House to table a document showing consumption taxes as a percentage of GDP in OECD nations 2007. It was compiled in my office from 2009 OECD revenue statistics. 
Mr SPEAKER 
: This document was compiled in the office of the honourable Leader of the Opposition using OECD statistics. Is there any objection to that document being tabled? There is none. 
Document by leave laid on the Table of the House. 
Rt Hon JOHN KEY (Prime Minister) 
: 
 I raise a point of order Mr Speaker. I draw your attention to Speaker’s ruling 156/3 which states: “When a question is based on a quotation or excerpt from a newspaper article the excerpt must be correct or if the report is paraphrased in the question the paraphrase must be a fair one.” The statement that I made which was paraphrased by the Leader of the Opposition— 
Hon Trevor Mallard 
: What was the Standing Order? 
Rt Hon JOHN KEY 
: Speaker’s ruling 156/3. The quotation that was paraphrased by the Leader of the Opposition I made in relation to GST at the time and it was that we have one of the lowest GST rates. I have proven absolutely that that is correct. The member is now trying to change that and— 
Mr SPEAKER 
: I ask the right honourable Prime Minister to resume his seat because what he is now doing is debating this issue. The Standing Orders cannot be used to debate the issue. I think the members have made their points perfectly clear through the documents that have been tabled. The right honourable Prime Minister sought leave to table a document that showed relative GST rates approval was given and I think the document confirms the point that he was making. The honourable Leader of the Opposition sought leave to table a document that compiled GST data in terms of percentage of GDP and leave was granted for that document to be tabled. The public has heard the exchange and I think they realise the difference in points between percentage of GDP and actual GST rates. I do not think there is any great difficulty here. All I would ask is that for question time to be most effective questions need to be more direct. Political statements are strictly out of order but I do not intervene all the time because I do not want to be disrupting question time in the way I have done today which I regret very much. I do not want to be doing that. But it is in the hands of Ministers. Ministers can hear when a question is a political statement and they know I am not going to do much about the answer. But when a straight clear question is asked that is a different matter. I do not think we need to take the matter any further today. 
Rt Hon JOHN KEY (Prime Minister) 
: 
 I raise a point of order Mr Speaker. I would ask you to go away and later on reflect on Speaker’s ruling 156/3. 
Mr SPEAKER 
: I have the Speaker’s ruling right in front of me. 
Rt Hon JOHN KEY 
: I go back to the point I read out before: “if the report is paraphrased in the question the paraphrase must be a fair one.” That is my point Mr Speaker. The questions coming out of the mouth of the Leader of the Opposition are not fair because they make an assertion that is different from the quote. 
Mr SPEAKER 
: Members asking questions do need to be careful not to be making assertions in the question. A question is meant to be a question not a statement. I accept that there is a point there. What worries me is that if I were to apply the particular Standing Order that covers that issue I would be ruling out more than half the questions and I do not want to be doing that—I do not want to be doing that. But at the same time Ministers need to remember that if they feel that a question made an incorrect allegation about something that they have said they can simply say that in answering the question. They can clear up the matter and deal with it at that time by saying “That is not what I said.” That is a perfectly good answer to the question. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Speaker. I ask you to take your ruling a step further and also reflect on the letters that you have received and replied to on the question of privilege by way of answer. If members on this side of the House are required to be accurate in their questions I ask that the same standards be applied to answers because you have repeatedly ruled that they do not. 
Mr SPEAKER 
: I do not think that is very helpful in terms of where the House has got to now. If one looks at the way in which I am applying the Standing Orders in question time one would have to accept that on a strict interpretation of the Standing Orders I am being somewhat harder on answers than I am on questions. My judgment was that it was preferable for me not to be ruling out questions that do not really comply with the Standing Orders; it was better to leave them in the hands of Ministers to deal with. Ministers are perfectly capable; when they hear a question that is outside the Standing Orders they do not need my help to know how to answer and it makes question time flow better. I do not want to come back to applying the Standing Orders strictly. However if I feel that question times too often end up like question time today I will do that. 
I have to say that it is my feeling that I have been harder on answers than I have been on questions because from time to time I have insisted on Ministers answering questions. But if I am to apply the Standing Orders strictly many questions will be ruled out because many of them contain superfluous statements and are often just purely thinly disguised political statements and strictly do not meet the requirements of the Standing Orders at all. 
All that I ask members to think about in response to the last point of order is that being careful with what one says in this House is important. I have given the matter a lot of thought actually and I will have some discussions with the Standing Orders Committee about it because I am concerned that at times not enough care is taken with what is said in this House. All I would ask is that both sides of the House be careful in what they say and what they allege because this is Parliament we are elected members of the House and we should be careful with what we say in this place. That is just an appeal to members to be careful. I would like us now to move on to try to get through question time. 
Rt Hon JOHN KEY (Prime Minister) 
: 
 I raise a point of order Mr Speaker. I ask you after question time to go away and reflect on this matter. The statement made by Mr Mallard before was in itself an admission that quotes are actually being paraphrased incorrectly because members opposite are not happy with the answers they have been getting from you Mr Speaker. 
Hon Trevor Mallard 
: Speaking to the point of order— 
Mr SPEAKER 
: We will not take that any further. I have to say to the right honourable Prime Minister that that was not helpful. 
Rt Hon John Key 
: Well it’s accurate. 
Mr SPEAKER 
: The Prime Minister will not argue with me in the House. Even the Prime Minister has been known to leave the House. Ministers need to be a little bit realistic about this. There are some components of a question that I cannot judge in the House as Speaker. Sure I can rule out outlandish assertions but if a question contains a quote how is the Speaker to know that the quote may be out of context or may not be strictly accurate? The Speaker cannot judge that in the House and that is why it would be wrong for the Speaker to try to rule in too hard a way on some questions. But Ministers do have the last say. Ministers when they hear a quote that is unreasonable or that has misrepresented their point of view in answering the question can say that and I will absolutely support Ministers in pointing that out; it is a fair answer to the question. I do now want to move on because the House has taken a lot of time on this. I think the exchange has been worthwhile because I have been very disappointed with today’s question time. I think the time taken to sort through this issue has been worthwhile but I will look forward to an improvement in quality as we move forward. 
Question No. 8 to Minister 
Hon DAVID PARKER (Labour) 
: 
 I raise a point of order Mr Speaker. It is a completely separate point of order. I put this question down to the Minister for Economic Development but it was redirected by the Government to the Minister of Finance. I seek leave to put it to the Minister for Economic Development who is in the House. 
Mr SPEAKER 
: Leave is sought for that purpose. Is there any objection? There is objection. The— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: I do not see what the further point of order is. 
Hon Trevor Mallard 
: I think you will have to wait and hear it Mr Speaker. 
Mr SPEAKER 
: I will hear the Hon Trevor Mallard but I am getting a little tired of the time being spent this way. 
Hon Trevor Mallard 
: I would like to refer you to Speakers’ rulings 144/2-3 and 144/5 and ask you whether this is one of those questions where the power taken by previous Speakers to refuse to allow the transfer could be invoked in light of the fact that this Minister— 
Mr SPEAKER 
: The member will resume his seat immediately. [ 
Interruption 
] The member will resume his seat right now. It is absolutely the Government’s prerogative which Minister is to answer a question. This question as I read it contains issues to do with the Budget; Budget 2010 is specifically mentioned in the question. The fact that it has been transferred to the Minister of Finance to answer is nothing unusual whatsoever and there will be no further points of order on the matter. The Hon David Parker will ask his question and we will move on. [ 
Interruption 
] 
Mr SPEAKER 
: The Hon Trevor Mallard will leave the House and he will do so without any scene or I will name him. 
Hon Trevor Mallard withdrew from the Chamber. 
Income Gap Parity with Australia—Non-residential Business Investment 
8. 
Hon DAVID PARKER (Labour) 
 to the  
Minister of Finance 
: Has he received any reports on his statement in Budget 2010 which forecast the growth in non-residential business investment to be 6.2 percent for 2011 increasing to 10.3 percent in 2012 and does he think these forecasts are important components of his Government’s plan to close the wage gap in Australia? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 No. 
Hon David Parker 
: Is the forecast 6.2 percent increase in non-residential business investment by next year a milestone upon which his Government is willing to be held accountable in respect of its election promise to close the wage gap with Australia? 
Hon BILL ENGLISH 
: No. 
Hon David Parker 
: If by June next year his Government has not even restored the wage gap between New Zealand and Australia to what it was when National took office will he accept that his Government has failed in its election promise to close the wage gap with Australia? 
Rt Hon John Key 
: Done that already. 
Hon David Parker 
: That is nonsense Mr Prime Minister. 
Hon BILL ENGLISH 
: No. 
Hon David Parker 
: Why does the National Party economic policy document dated 1 August 2010 make no reference to closing the wage gap with Australia and why has it dropped any reference to the promise of a step change in the New Zealand economy which was in the February 2010 version? 
Hon BILL ENGLISH 
: The document that the member is referring to sets out in detail the Government’s plan for lifting economic growth. We are proceeding with that plan despite two major difficulties. The first is the damage done to this economy by the previous Government and the second is the world economy which is patchy in its recovery. 
Hon David Parker 
: I seek leave to table a February document entitled  
The Economy: Our 2010 Priorities 
; a National Government document that included a step change in the economy more mining and a financial services hub. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Hon David Parker 
: I seek leave to table the 1 August 2010 equivalent which has no reference to closing the wage gap or a step change or a financial services hub. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
“Three Strikes” Legislation—“Strike” Offences 
9. 
DAVID GARRETT (ACT) 
 to the  
Minister of Police 
: How many people have been convicted of a “strike” offence since 1 June 2010 and how many offenders have been sentenced? 
Hon JUDITH COLLINS (Minister of Police) 
: 
 The Ministry of Justice has advised me that as at 22 August 45 offenders have been convicted of a first-strike offence. There have been no convictions of second-strike or third-strike offences. Five of those 45 offenders have now been sentenced. 
David Garrett 
: What effect will the “three strikes” law have on recidivist offenders who under Labour’s legislation could be released after serving just one-third of their sentence? 
Hon JUDITH COLLINS 
: The new law means that the worst repeat violent offenders will not receive parole. Parole is a privilege that must be earned. It should not be granted to those who demonstrate total disregard for the law by continuing to commit serious violent offences despite warnings. Offenders who remain in prison to serve their full sentences will not have the opportunity to commit further crime. This means there will be fewer victims and that is an excellent outcome. 
Grant Robertson 
: I thought ACT was an independent party. Are all the supplementary answers written down? 
David Garrett 
: Does the Minister agree with the ACT Party—and Grant Robertson MP—which recently expressed the view that we should be focusing on zero-tolerance policing which as Mr Robertson noted has been hugely successful in slashing crime rates in New York; if not why not? 
Hon JUDITH COLLINS 
: I am always happy to hear suggestions even when they are from the Opposition. However I would like to say that the police are now implementing a policing excellence programme which has a number of work streams that will change the face of policing in New Zealand. Several aspects of the programme have already been trialled particularly in Counties-Manukau and the programme is already having a marked impact on community safety. The police will be rolling out these programmes nationwide and I expect that they will make a very positive impact. 
Hon Clayton Cosgrove 
: How many cases have there been where a strike should have been recorded against a sentenced offender but has not? 
Hon JUDITH COLLINS 
: I do not have those figures for the member but I am happy to provide them to him should he put down a written question. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. I ask you to reflect on that answer. The Minister obviously prepared a set of statistics very germane to the primary question. Is it the case that this Minister will prepare in a very narrow way and then on a number of occasions simply say— 
Mr SPEAKER 
: The Minister gave a commendably honest answer to the question asked. She told the House that she did not have that particular information. She did not put a lot of political padding round it and I think it was a perfectly fair answer to the question. She would not have known that exactly that question would come up and I think she is to be commended for giving an honest straight answer to the House. 
Pacific Economic Development Agency—Call for Bids for Budget Funding 
10. 
SU’A WILLIAM SIO (Labour—Mangere) 
 to the  
Minister of Pacific Island Affairs 
: Why did the chief executive of the Ministry of Pacific Island Affairs announce last week that a range of organisations will now be asked to bid for the $4.8 million that was specifically earmarked in this year’s Budget for the Pacific Economic Development Agency Ltd? 
Hon GEORGINA TE HEUHEU (Minister of Pacific Island Affairs) 
: 
 It is my understanding that the chief executive of the Ministry of Pacific Island Affairs thought that the public may be interested to know that he is inviting tender applications from a number of Pacific agencies and organisations including the Pacific Education Centre the Pacific Business Trust the Village Trust C-Me Mentoring Foundation and the Pacific Economic Development Agency with the intention of negotiating a package to build skills qualifications and entrepreneurship among young Pacific people. Clearly this is a chief executive with a keen appreciation of the Government’s wish and desire to invest in Pacific people and communities to ensure their future success and prosperity. 
Su’a William Sio 
: Does she now accept that this was a shonky deal from the start which her ministry confirmed by not endorsing the Pacific Economic Development Agency proposal and will she now accept that this was an attempt to use public money for political advantage? 
Hon GEORGINA TE HEUHEU 
: No I do not accept any of those assertions. This was a Budget appropriation made on the basis of the economic development needs of Pacific people in the Auckland region. Certainly the proposals put forward by the Pacific Economic Development Agency coincided with the Government’s appreciation that there needed to be a real focus on young Pacific adults who were without skills and training. From the Government’s perspective what is important is that we have appropriated new money—in fact the largest single injection of funding into the Ministry of Pacific Island Affairs in 10 years—to help some of the most underprivileged and vulnerable members in the community. I would have thought that that member would applaud the Government’s initiative. 
Su’a William Sio 
: Why is she so willing to risk $4.8 million of taxpayer funds by still including the Pacific Economic Development Agency in the tender process announced when her own ministry has warned that this private company has not delivered on any projects of note and is untested and unproven in the ability to deliver on projects of this scale? 
Hon GEORGINA TE HEUHEU 
: As the member knows the appropriation was always subject to the successful completion of a purchase agreement with the Pacific Economic Development Agency. In the meantime the chief executive has now decided to tender out the funding and as we have previously said decisions on purchase agreements are a matter for officials. 
Su’a William Sio 
: Will she tell Parliament who should be held accountable for the shambolic Pacific Economic Development Agency affair: herself as the responsible Minister; Mr English who named the Pacific Economic Development Agency as his preferred provider; Mr Key who stated in the answer to written question No. 12758 that he met with Peseta Sam Lotu-Iiga Michael Jones and Va’aiga Tuigamala at the Columbus Cafe in June 2009 but could not recollect whether J R Pereira was there or whether they discussed funding at all; or all of the above? 
Mr SPEAKER 
: Order! [ 
Interruption 
] I am on my feet and there will be silence. I just ask members to please think a little about the questions they are asking. I listened to a question a moment ago that contained a derogatory statement in it and now this question did not need to contain the assertion that this was a shambolic affair. Those sorts of questions are totally outside the Standing Orders and should not be allowed. I ask what I am to do as Speaker. The question went on and on and asserted all sorts of stuff into the question and that is simply not good enough. I have insisted on Ministers answering straight questions. I have given the Opposition huge power through that and to throw it away with meaningless political statements is a tragedy for this House. 
I invite Su’a William Sio to re-ask his question in an intelligible way in order to cut out the assertions about what he might think of a programme because that is irrelevant to a question and it is outside the Standing Orders. I invite him to ask a question that the Minister can answer. I call Su’a William Sio. [ 
Interruption 
] I say to the Government benches that they should show some courtesy. 
Su’a William Sio 
: Will she tell Parliament who should be held accountable for the U-turn of this Government on the Pacific Economic Development Agency affair? 
Hon GEORGINA TE HEUHEU 
: I do not accept the premise that there is a U-turn. There is an appropriation of taxpayers’ money here which this Government appropriated to improve the well-being of young Pacific people. That is something that Labour did not do in its 10 years in Government and that member should be ashamed of that. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. There has been a lot of sermonising today about the language used by Opposition members in their questions. That Minister just screamed across the House at my colleague that he should be ashamed of himself. He put down a question on an issue that he has taken up in this Parliament over several days. This issue is very close to the heart of my colleague and his constituents. His commitment to the issue is clear. He has been asking questions of this Minister and instead he gets personal abuse. [ 
Interruption 
] 
Mr SPEAKER 
: There will not be interjections. 
Hon Darren Hughes 
: Well if Tau Henare would not mind not interjecting— 
Mr SPEAKER 
: I have heard the member. Members should know that if a question alleges that the Government has done a U-turn they are likely to get a fairly strong response from the Government because Governments do not like to be accused of having done U-turns. Like it or not that is the reality. I think that members should think about the questions that they are asking if they do not want fairly robust responses to be made. To accuse a Minister of having done a U-turn will invariably elicit a response from him or her. I accept that Ministers should not in any way make a personal attack on the questioner. Members will note that today I have pulled up several Ministers who I feel have made personal attacks on questioners. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. I just seek clarification. We have heard your messages about asking straight questions. The implication of your latest ruling is that we are required to ask the questions that the Government would like to hear in order to avoid personal abuse. I am sure that that cannot be— 
Mr SPEAKER 
: If members would like me to do this I would be very happy to run Questions 101 for them on how to ask tough questions. As a former Minister I have probably answered as many questions in this House as any other member and as a member I have probably asked more questions than any other member of this House. I am very happy to assist members if they want to have a little assistance on how to ask a tough question but it is not very difficult. We will not waste more time on that right now. 
Question No. 2 to Minister 
Hon PHIL GOFF (Leader of the Opposition) 
: 
 I was challenged before as to whether my quote was correct in that the Prime Minister said tax on consumption was at a relatively low rate. I seek leave to table the document where he said that. By the way this is his statement to Parliament. 
Mr SPEAKER 
: If Parliament already has the statement there is absolutely no need to table it whatsoever. It just wastes the time of the House. [ 
Interruption 
] Another point of order is being called but I warn members that my patience is wearing thin. 
Question Time 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I raise a point of order Mr Speaker. I ask you to simply reflect on a matter that I raised with you a couple of weeks ago which has been illustrated today. Without wishing to take the time of the House these matters could be well resolved if you were to revisit your ruling in respect of tabling public documents. The simple dilemma that has been placed before the House today is one of whom we believe without getting into the detail. The member rose to table yes a document— 
Mr SPEAKER 
: I have heard sufficient from the member. I am not about to revisit that decision. The Standing Orders around tabling documents are very simple. Where leave is sought to table documents it is to provide information for the House. Trying to score points—“I’m right; you’re wrong”—is not the purpose of tabling documents. If members do not have the intellect to ask hard questions and to show through their questioning that they are putting Ministers on the spot and to embarrass Ministers they should not be members of this House. They should not waste time—[ 
Interruption 
] The Hon Tau Henare will be silent while I am on my feet. Simply making a political statement by way of a supplementary question then seeking leave to table a document is not what question time is about. If the member does not want to join his colleague this had better be a very good point of order. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I raise a point of order Mr Speaker. My point of order pertained to the longstanding ruling and Standing Order whereby a member’s word if questioned should be honoured. I am not seeking to make a political point; I am asking for your assistance and simply for some consideration of this matter. There have been a number of occasions over the course of weeks where it was a matter of “he said she said”. We members have contested as the Prime Minister did the accuracy of a statement—or whatever. If I could finish— 
Mr SPEAKER 
: I have heard sufficient. The member is questioning my ruling and he will resume his seat. The easiest thing in the world is to ask some questions that put a Minister under such pressure over the facts that if the Minister has been wrong in his or her answer he or she is forced to correct it. That is the toughest way to deal with these things. It is not to make a political statement then seek leave to table a document. I tell members to ask the tough questions. 
Adventure Tourism Sector—Findings of Safety Review 
11. 
DAVID BENNETT (National—Hamilton East) 
 to the  
Minister of Labour 
: What were the findings of the adventure tourism review? 
Hon KATE WILKINSON (Minister of Labour) 
: 
 Adventure tourism is a $3 billion industry; 850000 tourists partake in some form of adventure activity each year. For the most part safety practices are first rate and operators take their responsibilities very seriously. They know that getting people home safely is a priority. Although the majority of operators are managing risks effectively for some activities there are gaps in the safety management framework that could allow businesses to operate at a lower standard than industry experts consider acceptable. The review made a number of recommendations to provide assurance that the entire sector is operating as safely as possible. 
David Bennett 
: What decisions has the Government made to improve safety in the adventure tourism sector? 
Hon KATE WILKINSON 
: The Government has accepted the review’s primary recommendation and has agreed in principle to look at creating a registration scheme with upfront safety audits based on the risks of a particular sector. By introducing a registration scheme we will know exactly what commercial adventure activities are on offer and all users whether they are tourists or New Zealanders can be assured that any associated risks are being managed. I have also asked the department to complete further work on other initiatives discussed in the report. The Tourism Industry Association has offered to work with us to progress these recommendations. Everyone in this industry wants to protect New Zealand’s reputation from any perceptions that safety here is not up to scratch. Some adventure activities like mountaineering come with high risks. No law can prevent every accident from occurring but we can offer assurance that every practical step is being taken to manage the risks. 
Environment Canterbury Replacement of Councillors—Views of Christchurch Householders 
12. 
BRENDON BURNS (Labour—Christchurch Central) 
 to the  
Prime Minister 
: Why is he seeking the views of Christchurch households on the abolition of Environment Canterbury’s elected councillors when this was done 5 months ago? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Because I am interested in their views on what they see as the most topical issues from Environment Canterbury’s directors. 
Brendon Burns 
: What is the cost of the pamphlet and given that taxpayers are funding it are they better to return their answers to MPs who have always opposed the Environment Canterbury legislation? 
Rt Hon JOHN KEY 
: Seeing it is paid out of the leader’s budget I have no ministerial responsibility for that. 
Brendon Burns 
: When the Prime Minister tells Cantabrians in the pamphlet that they should be able to drink from their aquifers and swim and fish in their rivers lakes and streams is that before or after the new irrigation schemes he wants in place in Canterbury next year—before any new environmental controls can be put in place? 
Rt Hon JOHN KEY 
: We would like to see that as soon as possible. That is why we are doing something about the failure over the 19 years that Environment Canterbury had to get an operative water plan. 
Hon Jim Anderton 
: Does the Prime Minister believe that the people of Canterbury would have felt more consulted if he had asked them how they felt about it before he fired the elected councillors of Environment Canterbury under parliamentary urgency rather than asking them 5 months later? 
Rt Hon JOHN KEY 
: I think that Cantabrians support the moves by the Government and that is why over 55 percent of people in a recent poll gave that view. 
Brendon Burns 
: I seek leave to table the pamphlet from the Prime Minister sent to more than 100000 Christchurch homes which includes a question on new elections for Environment Canterbury. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Brendon Burns 
: I raise a point of order Mr Speaker. I seek leave for the Environment Canterbury (Democracy Restoration) Amendment Bill in my name to be introduced and set down as a members’ order of the day. 
Mr SPEAKER 
: Leave is sought for that course of action. Is there any objection? There is objection. 
Questions to Members 
Sale and Supply of Liquor and Liquor Enforcement Bill—Report-back Date 
1. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
 to the  
Chairperson of the Justice and Electoral Committee 
: When will the Sale and Supply of Liquor and Liquor Enforcement Bill be reported back to the House? 
CHESTER BORROWS (Chairperson of the Justice and Electoral Committee): 
 The report back was postponed to allow for the publication of the Law Commission’s paper  
Alcohol in our Lives: Curbing the Harm 
 which was available a year earlier than it would have been on the previous Government’s time line. The committee is due to report to the House by 1 October 2010. The extension was supported by all parties. 
Hon Lianne Dalziel 
: Did the committee resolve to make available the submissions on that bill in order to inform the development of the alcohol law reform package announced by the Government yesterday; if so why? 
Mr SPEAKER 
: This seems to be a matter for the committee and is therefore not a matter for the chairperson. The bill has not been reported back as we have heard and therefore I do not believe the matter is within the Standing Orders for questioning in the House. 
Hon Lianne Dalziel 
: I raise a point of order Mr Speaker. The regulatory impact statement on the alcohol law reform Cabinet paper which has already been publicly released states that the submissions on the bill were considered as part of the package and I would like to know why. 
Mr SPEAKER 
: The chair is not responsible for that matter; it is a matter for the committee. In the House during oral questions to members we can ask the chair only about matters that the chair is responsible for. The chair is not responsible for the decisions of the committee. 
Sale and Supply of Liquor and Liquor Enforcement Bill—Submissions 
2. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
 to the  
Chairperson of the Justice and Electoral Committee 
: How many submissions did the committee both receive and hear on the Sale and Supply of Liquor and Liquor Enforcement Bill that related to the provisions for local alcohol plans and parental consent being required for supplying alcohol to under-18-year-olds? 
CHESTER BORROWS (Chairperson of the Justice and Electoral Committee): 
 Of the submissions received and heard by the committee approximately 59 related to local alcohol plans and approximately 35 related to parental consent for supplying alcohol to under-18-year-olds. 
Hon Lianne Dalziel 
: Have the submitters been informed of the Government’s intention to replace the bill altogether with its own bill; if not why not? 
Mr SPEAKER 
: That would be a matter for the committee; it is not a matter for the chair. The Standing Orders on questions to members who are chairs of committees are very narrow. Questions can relate to matters such as when the bill will be reported back but decisions of the committee are not matters for the chair. 
Sale and Supply of Liquor and Liquor Enforcement Bill—Submissions 
3. 
Hon DARREN HUGHES (Labour) 
 to the  
Chairperson of the Justice and Electoral Committee 
: How many submissions did the committee both receive and hear on the Sale and Supply of Liquor and Liquor Enforcement Bill that related to the provisions to reduce the blood-alcohol content for young drivers? 
CHESTER BORROWS (Chairperson of the Justice and Electoral Committee): 
 Of the submissions received by the committee 31 related to blood-alcohol content for young drivers. 
Hon Darren Hughes 
: Has the committee requested any reports from the Ministry of Transport on clause 56 introduced during the previous Labour Government’s term which prohibits drivers who are under the age of 20 and without a full licence from having any alcohol in their blood when driving? 
Mr SPEAKER 
: That is a matter for the committee; it is not a matter on which the chair can be questioned in the House. Members know that the Standing Orders on questions to members are very tight. 
Urgent Debates Declined 
Pacific Economic Development Agency—Calls for Bids for Funding 
Mr SPEAKER 
: I have received a letter from Su’a William Sio seeking to debate under Standing Order 380 the announcement from the Chief Executive of the Ministry of Pacific Island Affairs that a range of organisations will now be asked to bid for the $4.8 million that was specifically earmarked in this year’s Budget for the Pacific Economic Development Agency. The announcement is a particular case of recent occurrence that involves ministerial responsibility. There must however be an element of urgency for a matter to take precedence over other business. The announcement today is part of a continuing process. Organisations have been asked to submit tenders but no final decision has yet been made by the Government. I am not persuaded that the business of the House should be set aside today. The matter is one that can be considered over a longer time frame. The application is therefore declined. 
Holidays Amendment Bill 
First Reading 
Debate resumed from 19 August. 
KEITH LOCKE (Green) 
: 
 The Green Party is opposed to the Holidays Amendment Bill along with our opposition to the Employment Relations Amendment Bill (No 2) which passed its first reading last week. Together these bills represent a major attack on workers and their trade unions. Kate Wilkinson the Minister of Labour said in her opening speech in this debate that the Holidays Amendment Bill will “improve the balance of fairness” between employers and employees. The Green Party believes that the balance is being tipped strongly against workers. 
We can look at the various provisions of the bill to prove that assertion. For example on the sick leave provision Kate Wilkinson said the proposal will allow employers to request proof of sickness for one day’s absence “without first having reasonable grounds to suspect that the sick leave is not genuine.” That is she explicitly said an employer does not need reasonable grounds for doing so and the employer can be in effect unreasonable and require a medical certificate for any reason no matter how unreasonable that request is. It may be that the employer just wants to encourage workers to stay on the job even when they are sick in order to keep up the numbers in the workforce. That would be an unreasonable approach but it would be allowed under this amendment. It could be done to persecute a particular worker whom the employer happens to want to ease out of the workforce not because the person is performing badly at work but perhaps because the person is more active than other workers in the union and is causing some upset to an anti-union employer because of their strong union advocacy. There are all sorts of unreasonable reasons that could be given for demanding a medical certificate for 1 day’s absence. 
Hon Ruth Dyson 
: Or no reason. 
KEITH LOCKE 
: No reason has to be provided by the employer in that situation. 
Already we had in the law before this bill was introduced a provision that an employer could demand a medical certificate for 1 day’s absence where there were reasonable grounds for doing so. There would be reasonable grounds clearly where an employee had taken consecutive Mondays off and was being unreasonable in the sense that he or she might not really be sick on those days. So there is already a provision to cover reasonable behaviour by employers and employees in dealing with this matter. 
The result of asking for a medical certificate for 1 day’s absence will be that workers will tend to stay at work even when they are sick because they will not want to go through all the hassle of taking the day off then having to go off to a doctor if they can get an appointment etc. By staying on the job when they are sick they will be likely to infect other workmates and that can be a health problem. 
There are three problems with requiring employees to go to the doctor when they are sick for 1 day perhaps with a stomach bug or cold. The first is that it is against good medical advice. The doctor does not want people to get out of bed struggle through the cold and rain and sit in the waiting room for an hour because that only makes them sicker. Secondly there is a problem in getting an appointment with a doctor. When the Green Party did a snap survey by phoning 40 doctors only 12 of them could provide an appointment on that particular day so that is a problem. Then the third problem is that when workers are sitting around in the waiting room they spread sickness to the other patients unnecessarily if they have a temporary stomach bug or cold. This bill is a huge problem for workers and it is a problem in terms of good employment relations and the process of working in the workplace. 
The second proposal in this bill provides the ability for workers and employers to arrange for the selling-off of the fourth week of workers’ 4 weeks of statutory holidays. Firstly I ask what this says about our society. We are in a digital age when the work process is becoming much more efficient. All sorts of labour-saving devices are available in terms of the production process so surely we should be moving further towards a leisure society. It was 170 years ago that Samuel Parnell went on strike for the 8-hour day and now many workers often work longer than 8 hours. Surely we can now have a decent level of annual leave and everyone can take 4 weeks’ annual leave. It is not as though we are ahead of the pack internationally on annual leave. I looked at some of the major countries in Europe and found that Germany has 6 weeks’ annual leave Italy has 5½ weeks France has 5 weeks and Spain has 4½ weeks yet we have only 4 weeks. Why should we reduce that amount down to 3 weeks for some workers? Surely we should encourage everyone to take the full entitlement. It is good for people to do so in terms of their health including their mental health and it is also good for their families and their communities. It means that workers can engage in a whole lot of other activities outside the workforce. 
I will look at the people who are most likely to trade in their holidays. They are exactly the people who need the fourth week of holiday the most. They are generally poorer people who will trade it in just for the money even though they need a holiday. They are usually people from bigger families and those people need the fourth week of holiday for family time. They are people who often happen to work long hours already— 
Hon Tau Henare 
: You could ask them. 
KEITH LOCKE 
: I cannot even hear myself think because of the continuous interjections. 
Mr DEPUTY SPEAKER 
: The member has made a point about the interjections across the House. They should be rare and succinct; that is in Speakers’ ruling 61/5 if members want to look at it. Especially when the member’s seat is adjacent to those of other members who are interjecting it is very difficult for the member to speak. 
KEITH LOCKE 
: It is often people who already work very long hours and who are more likely to work overtime who will be pressured into selling the fourth week of their statutory holidays. Shift workers who need that fourth week will be pressured in that direction also. People who work in manual jobs or who are stressed already will be more likely to be forced to sell off their holidays as will people who work in strenuous jobs and who need the fourth week of holidays. 
In non-unionised workplaces even though selling the fourth week is supposed to be voluntary employers will have a way of putting pressure on workers and there will be an expectation that they will sell off their holidays. Once these holidays are sold off by a certain proportion of the workforce there will be an expectation that in order for the work to continue in the way that the employers want the remaining proportion of the workforce will be required in effect to sell off their fourth week of holidays. 
Another problem in this bill is the provision to transfer one or another of the existing 11 statutory public holidays to another day. The argument is that perhaps it is more culturally or religiously appropriate to celebrate them on another day for someone from a non-Christian religion for example. But the great thing about us all having holidays in common as at present is that it enables families and communities to get together and it means that those days are quiet days. We do not want to destroy a sense of community and family togetherness. If we are to allow for other religious holidays to be taken perhaps it would be good to add to our number of statutory public holidays. We have only 11 of those days at the moment and some other countries have more than that. Perhaps we could have one or two optional holidays in addition to the present number of holidays. I might want to take St Patrick’s Day as a holiday as I am someone with a bit of Irish heritage. But any additional statutory holidays should not be at the expense of the existing statutory holidays that we all so value. We are not just puppets to be pushed around in terms of what is required of us in the workforce. We should all have these entitlements. The Green Party is very much opposed to this bill. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Deputy Speaker. Kia ora tatou katoa i tenei ahiahi. It is interesting to be talking about the Holidays Amendment Bill when two members are absent from the House at this point in time. Compared with the other employment legislation that is being tabled today this bill is relatively straightforward and non-contentious but there are some fish-hooks in it that I hope the select committee process will pull up. 
The key option to exchange the fourth week of leave for cash has received a significant amount of media space in the last few weeks. Basically the bill proposes to amend the Holidays Act allowing employees and employers to agree to the employer paying out up to 1 week of an employee’s minimum entitlement to annual holidays at the employee’s request. I state that today for those who are listening in to the debate as the debate started some time ago. 
There is an important rider to this legislation in that the maximum entitlement of leave that can be applied for is 1 week and it is just a request. Employers may have a policy that the employer does not have to consider the employee’s request. Employers are expected but not required to consult employees when developing such a policy and they also have to advise any potential new employees of the policy before they accept an offer of employment. 
It is good to see written into the bill too that employers are not allowed to encourage or pressure their workers to cash up their holidays. It is entirely up to the employee to initiate. It is an option it might be available to some but it is not intended to be used to coerce employees to sign up to something that they might never agree to. But I guess the key issue when thinking about whether to pay out holiday entitlements all comes back to the whole notion about work-life balance. Work-life balance is different for each and every one of us. I hazard a guess that for many of the people who inhabit the parliamentary complex it is a concept that sounds nice on paper but is almost impossible to achieve. 
All the research tells us that there is a consistent demand for greater workplace flexibility in order that employees can balance their roles in the paid workforce with their other commitments and responsibilities. Other research tells us that when it comes to those other responsibilities perhaps caring for dependants and older family members Maori are very highly represented in the group of carers volunteers who provide the fuel to keep our communities afloat. 
The demanding and never-relenting call to meet one’s obligations and responsibilities has come at a considerable cost. In a 2008 study conducted by Fiona Te Momo she reported on the work-life balance for Maori academic women and noted the rise in cultural responsibilities for this group. She said: “My Maori women colleagues frequently describe being so overcome with work responsibilities that they are unable to balance their lives … they continue to place one foot behind the other to move forward in order to survive in academic life”. We will be particularly looking to hear from Maori women from Maori workers from whanau and from the runanga of Maori unionists to know whether this bill will have a positive effect in terms of providing workers with genuine choice about the way they work enabling better work-life balance between the time and energy they commit to paid work and other responsibilities. 
Parliament has to be concerned that a significant portion of the total workforce are working 50-plus hours per week. We know too that employees in particular industries and occupations are at greater risk of working longer hours and that again Maori are overrepresented in the group most at risk of working long hours without a break. It comes back to the fundamental question of the role of work in the midst of all the other activities that one fits into a day such as community activities and caring for others let alone leisure pursuits. It makes plain sense that any initiative that can help to achieve a better work-life balance will reap rewards for whanau who can see each other far more frequently at dawn or dusk and will also help businesses to increase productivity address skill shortages and retain staff. 
Will the bill benefit Maori? Potentially yes. Being able to choose to cash in a week’s holiday might just help to ease the financial pressure either to take the lump sum for a full week at one time or spread it out and make more than one request during the entitlement year. It might therefore help to contribute to the everyday survival of whanau. But there are some other hooks that need to be scrutinised carefully at the select committee. 
As a result of this bill employers and employees will be able to agree to transfer the observance of public holidays on to another identified working day. That might work for many of our special days that whanau observe throughout the motu such as the days of particular tribal significance that whanau members often have to take annual leave for. But there would be a question in my mind about the power dynamics in the relationship between employers and employees. For instance could it be foreseen that an employer might exert pressure on a workforce to force workers not to observe Waitangi Day as a day of national significance? I am sure I read in the bill’s small print that when it comes down to a dispute and if agreement cannot be reached employers will be able to decide when an alternative holiday will be taken. That is an issue I hope is taken up with a vengeance at the select committee. 
The other issue we hope to see clarified is that employers are now able to request proof of sickness or injury within 3 consecutive days of an employee taking sick leave. The employer will have to cover the employee’s reasonable costs in obtaining this proof such as paying for the doctor but we have some questions around how that will impact on the goodwill between employers and employees. At this stage the Maori Party will enable this bill to be exposed to the rigour of public scrutiny and we look forward to the debate that may well happen as the bill moves through the various stages. Kia ora tatou. 
LYNNE PILLAY (Labour) 
: 
 It will come as no surprise that we in Labour are opposed to the Holidays Amendment Bill. This week is yet another week of shame for the National Government. It is always bad but it is going from bad to worse. This bill is absolutely shocking. The Minister of Labour should hang her head in shame about the stuff she is bringing to this House. She is doing it aided and abetted by her National Party colleagues. I have to say I am very disappointed in the Maori Party for supporting this bill. I wonder whether the previous speaker Te Ururoa Flavell was speaking from a personal perspective or whether the whole caucus is taking that position. Time will tell when we see its votes come in. 
This bill is another attack yet again on workers’ rights in this country. 
Jacqui Dean 
: What nonsense! 
LYNNE PILLAY 
: The member says: “Oh nonsense!” but that is what that Minister’s policies are all about. I can speak on this bill from two perspectives as somebody who has worked at the coalface. First as a former union official I know and certainly acknowledge there are many good employers out there in New Zealand. But for those employers who are not reasonable this bill will be another way to deal to their workers. Second as a former nurse from a health perspective this bill does not make sense. We can work on the basis that there are many good employers out there who will not utilise the provisions of this bill and just focus on the employers who will take this advantage. The Council of Trade Unions has talked about those employers quite openly with the examples it has given. I shall focus on the bad employers and how they will use these provisions against their workers and against the health of their workforce. 
I deal first with the provision to allow the paying out of up to 1 week’s annual leave. When we look at other countries that have handled the recession in a far better way that have looked at job creation that have looked for support and that have looked at workers’ acquiring skills and therefore upskilling in their jobs and remained in employment we see that it is a very sad situation that this National Government is bereft of those ideas. It is so entrenched in the 1990s and in the way that the former National Government did things. National does not put money into innovation and development. It does not do anything to create jobs or allow people to progress in their jobs— 
Michael Woodhouse 
: You mean letting people please themselves? 
LYNNE PILLAY 
: —but instead starts trying to cut wages and conditions. That is the mantra from this Government. The member chants the mantra as I speak. This Government is backward. 
Let us look at the provision of 4 weeks’ annual holiday. Every worker in New Zealand should have 4 weeks’ holiday. This Government should be committed to families and to people spending more time with their families because we all know that in these times workers are working longer hours and that means less time for leisure less time for rest less time for recreation and less time for spending with their families and with their children. We have a situation where employees who are perhaps in a difficult situation financially will be forced to sell that week’s holiday instead of the country having growing wages a growing economy and fair wages and conditions. 
In the former National Government we saw workers in exactly the same position under Max Bradford. The only difference was that it was 3 weeks’ holiday then because the previous Labour Government had not legislated for an extra week’s holiday. That extra week’s holiday was opposed strongly by the National Opposition of the time. This is cutting it down to 3 weeks by stealth for workers who are vulnerable or so lowly paid that they are unable to retain that fourth week. I say quite clearly that although the bill states that it will be by negotiation we all know that in certain situations with unscrupulous employers where that power relationship is different some workers will be forced to give that week up. We all know that and this bill will deliver that to those employers. 
I move on to the ludicrous situation of employers having the ability to demand of employees a sick certificate after only 1 day’s sickness. What is so totally ridiculous is that no reasonable grounds are required. This is again carte blanche from the National Party—“Employers just do as you want.” It is ludicrous. If we look at times of sickness and I speak from a nurse’s perspective if people have the flu or a dreadful tummy bug it is often impossible for them to get out of bed and go to the doctor for the doctor to say: “Yes you are sick and you should stay home and rest.” It may be that people do not have transport so they may have the flu a tummy bug or whatever and they not only have to go to the doctor but also have to get on a bus or train to go to the doctor. 
If their child is sick what will happen? If they use their sick leave to stay at home and care for their sick child what are they expected to do? Are they expected to bundle that child up and take that child to the doctor so the doctor can say: “Yes I confirm that your child is sick.” It is absolutely ludicrous and it is at a time when we know that employment relationships should be based on trust. With sick leave some employers—and there are many good ones—think it is just dreadful to lose that productivity for a day. We are talking about an average of 5 days sick leave a year for most employees. 
Hon Tau Henare 
: About 8 weeks in terms of Chris Carter. 
LYNNE PILLAY 
: I tell the member that I have met workers who have gone for 30 years and have not had 1 day’s sick leave. I really applaud those workers and think that is extraordinary. Tau Henare is chipping in. He has been able to have sick leave and no one was more concerned than we were when he was away sick from work— 
Moana Mackey 
: His pay didn’t get docked. 
LYNNE PILLAY 
: It certainly was not. He was entitled to have the sick leave that was required for him to recuperate and come back to this Parliament in the good health that we see him today and probably a few kilos lighter. That will probably help his recuperation— 
Moana Mackey 
: And smoke-free. 
LYNNE PILLAY 
: And smoke-free! But many employees in New Zealand do not have those rights—and they should not be privileges; they should be rights. For those workers it is absolutely unacceptable that they are required to go to the doctor to have their illness confirmed when it is detrimental to their health to get out of bed to go to the doctor. That is how ludicrous this silly silly Government is. If people are sick and go to the doctor the chances are the doctor will err on the side of caution and say: “I can see very clearly you’re sick. You’ve come out in the cold you’re looking really miserable. I’m going to give you a week off work.”. 
That person may not need a week off work. Anyone who has any common sense particularly anyone who has a background in health—I do not know why Jonathan Coleman has not taken a call to say that this bill is silly—will say that when we have a minor illness we do not need medication we do not need to go to the doctor to have it confirmed we are sick and we do not need to go out in the cold; we need to stay in bed and rest. This bill avoids that from happening. It means that people have to go through the scenario of having it confirmed they are sick for 1 day without the employer having reasonable grounds to make that request. People who have an unblemished work record may come down with the flu so they ring in sick but they are told—again with no redress—that work requires them to go to a doctor to get that confirmed. If they do not get it confirmed what happens? I will tell the House. They will be liable for disciplinary action because they have not complied with what is required of them. This bill is an absolute ass. 
Hon TAU HENARE (National) 
: 
 I will be quick smart. The dragons across the House love to tell workers what to do. But whose week is it whose holiday is it? It is theirs—the workers’ holiday. Do workers get a chance to trade it for cash or to maybe even—how is this—take a holiday? Not under the Labour manual not under the left’s manual. It is all about telling workers what to do. It is all about telling workers how many days off they are allowed. It is all about telling workers “No you’re not allowed to trade your holiday for a bit of cash.” Well I can tell those members across the House that at the end of the day workers will be lining up for this—they will be lining up for this. They will want to trade their measly little week off for a bit of extra cash. It will be a great day when that happens. Do members know why? Because the decisions will be made by workers and not by Labour. 
Let me remind the House that Labour is full of chardonnay socialists. They say “No worker no worker you’re not allowed to do this.” but on the other hand they give one of their mates 8 weeks off for feeling a bit under the weather! That member can take 8 weeks off work. What did those members do? They told him to go; they said to take 8 weeks off. But the worker is not allowed to trade one of their days. In fact members opposite say to the worker: “How about a medical certificate?”. They baulk at workers having to provide medical certificates for 1 day’s leave but where is the medical certificate for Chris Carter? Where is the medical certificate for Chris Carter? Not one of those members is answering. 
Lynne Pillay 
: Where was yours? 
Hon TAU HENARE 
: Where is mine? The nursing staff at Auckland City Hospital were absolutely great. There is my record of service at Auckland City Hospital. That is my evidence. It was not a bit of indigestion; it was a real heart attack—a real doozy 60-odd days ago. Before I finish I tell members that I am still smoke-free. 
MOANA MACKEY (Labour) 
: 
 Mr Henare has just demonstrated why he carries the mantle of the worst union organiser in the history of the universe—in the history of the universe. I know he wears that mantle with pride. His speech showed everything that is wrong with the current National Government. He just does not get it. If he asked workers whether they would like to be allowed to keep their 4 weeks’ annual leave and be able to afford to pay the bills he would hear that that would be their preference. Tau Henare has the gall to get up in this House and brag about the fact that this National Government has made it so hard for hard-working Kiwi families to pay their bills. It will be harder when the rate of GST goes up in October and when the inflation rate hits nearly 6 percent as Treasury says it will. Well I tell Mr Henare that he should not be proud of the fact that workers feel that they have to cash in a week of their holidays in order to be able to pay the bills. There is nothing to be proud of when workers have no choice but to trade in holidays—time with their families time with their friends time to recharge so that they can be more productive in the workplace—because they cannot afford to pay the bills. 
The tax cuts that Mr Henare’s National Government recently passed do not benefit the average working family; they benefit overwhelmingly the top 5 percent of income earners. In this debate we are not talking about those people who will benefit most from the tax cuts; we are talking about the average working families who will get all of the cost increases. In a desperate attempt to deflect any kind of criticism about that the great answer from the National Government is that workers can cash in a week’s holiday. 
I think we need to come back to the really fundamental point of why we have annual holidays. Why do we have them? There is absolute silence from National members—absolute silence. We have them because we realise that people need downtime. 
Jacqui Dean 
: Sorry sorry! 
MOANA MACKEY 
: Oh now they are pretending that they were not listening. 
Hon Gerry Brownlee 
: Never repeat a question. 
MOANA MACKEY 
: I say to Mr Brownlee that I can repeat my question but I guarantee that he will not answer it. In fact he would probably pass it off to Bill English because apparently the Minister for Economic Development does not have to answer questions about economic development anymore. I ask why he is paid quarter of a million dollars a year when he will not set milestones for economic development or answer questions on economic development. That is a question that the voters of New Zealand will have to answer. 
We need to ask why we have annual leave. We have annual leave because we recognise that it is crucial for productivity in the workplace. Workers need to be rested. They need time with their families. They need time with their children. Countries around the world have recognised those reasons in far greater measure and they have greater annual leave entitlements than New Zealand has. We had to fight very hard to get a fourth week of annual leave. So we must agree that annual leave has value in terms of productivity in the workplace and the health and well-being of our families. 
John Key said that long hours at work having both parents in employment childcare shortages growing interest rates and rising bills can create a far from ideal environment for good parenting and healthy family relationships. If the Prime Minister thought that a couple of years ago then why he does now think those healthy family relationships and those relationships with children are less important when because his own actions childcare shortages are increasing? The cost of childcare will increase because of the Government’s cuts. Interest rates will grow. The cost of living is increasing. Household bills are rising. All the things the Prime Minister talked about 2 years ago are far worse under this Government. I ask why he now thinks that time away from work is no longer important for good parenting and for healthy family relationships. Everyone knows that it is. 
The reality is that this legislation is a smokescreen. Our workers need decent wages. Then they would not feel as though they have to cash in 1 week’s annual leave because they cannot put food on the table or a roof over their children’s heads. That is not a choice but this Government says that this is about choice. National members need to get out into the real world and talk to people who have no choice. The Minister of Labour can sit in her ivory tower in Wellington and say that this is about choice and workers being allowed to decide between annual leave and the money— 
Hon Kate Wilkinson 
: It’s voluntary. 
MOANA MACKEY 
: It is not voluntary. If people are living day to day on the breadline if they are running the risk of losing their homes if they cannot put food on the table then it is not a choice. It is not a choice. This Government has never understood that fact when it comes to industrial relations because its members have always had choices. They have always had choices so they believe that everyone else must have the same choices that they have. As I said they need to get out into the real world and talk to people who do not have the choice. Workers will not want to cash in their annual leave; they will do it because economically they have no other choice and because this Government has abandoned them. This Government did not give them significant tax cuts. Someone on the minimum wage will get only $3 a week. That will be more than swallowed up by the increase in GST let alone inflation rent and all the other cost increases that have come under this Government’s watch. Yet the Minister of Labour says that those people have choices. Well the Minister needs to get out and talk to a few more people. I very very strongly feel that she does not know what she is talking about in this regard. 
It is interesting that the Government says that this measure is voluntary and that it cannot be a condition of employment. Well that is exactly what the Minister said about the 90-day trial period legislation which says that just because an employer does not like a worker the employer can get rid of the worker even if that person is doing a fantastic job. That bill has legitimised discrimination in the workplace—that is all it has done. Trial periods have always been in New Zealand law. The only thing that this Government has done in respect of trial periods is say that employers can now get rid of employees for being pregnant for being gay or for a number of other reasons. As long as employers do not give a reason to employees they cannot complain about it. The Minister said that that provision would be voluntary just as she is saying that this provision is voluntary. In respect of the 90-day trial period employers were actually advertising jobs by saying that employees had to agree to a trial period to take the job. The Minister said that the choice was to have a job or not to have a job. That is not choice I say to the Minister just as this is not a choice. 
I would like to know from the next National speaker how the Government will guarantee that this will not be used as a condition of employment. We know what will happen. It will be used in lieu of a wage increase. There will not be a wage increase. Instead employees will be told that they will get their fourth week of annual leave cashed up or nothing. That is what they will be told. We know that will happen. The Minister knows that will happen. She does not care. She will stand up and go on about how this provision is all about choice when she knows that it is not about choice and when she knows that it will only drive wages down further and make workplaces less productive. 
As it is we work our workers to the bone. Our workers work really really hard for the money they earn. They do not earn a lot of money and under this Government they expect to earn even less. We are falling further and further behind Australia which this Government used to hold up as the promised land that we were going to catch up to. Well the Australian public knows that undermining workers’ rights and entitlements does not lead to productivity and does not lead to wealth. The Howard Government was kicked out when it brought in work choices because workers knew the value of those entitlements. 
Hon Gerry Brownlee 
: That’s why they embraced Labor last weekend. They just reached out and loved them to bits—unbelievable! What an incredibly trite analysis that is. 
MOANA MACKEY 
: That is why the current Liberal Party I say to Mr Brownlee has not said that it will bring back the work choices policy; it knows how unpopular it was. The Liberal Party said that it would not bring back that policy because the Australian public spoke very strongly about it. They knew the value of those entitlements for their families and for their workplaces. 
My colleague Lynne Pillay talked about the new requirements for sick leave. Under the current law employers can require a medical certificate for sick leave. If employers have reasonable grounds to believe that someone is rorting the system or is not actually sick they can require a medical certificate. That seems fair enough if there are reasonable grounds. As with a lot of things that this Government does all it is doing is removing reasonable grounds. Under this legislation an employer can require a medical certificate on unreasonable grounds or on utterly ridiculous grounds; in fact any grounds whatsoever can be grounds for a medical certificate. If employees do not get the certificate they can face disciplinary action. Does the Minister know how hard it is to see a general practitioner in winter? It is even harder now that they are all leaving under this Government’s watch because it is far too difficult and because the Government is unwinding primary health organisations. But for workers to face disciplinary action because they cannot see a doctor when they should just be at home in bed getting well and not going to work and making everyone else sick shows how illogical this legislation is. 
Hon Sir ROGER DOUGLAS (ACT) 
: 
 We should be very clear in this House exactly what Labour is saying to workers. They are saying to workers that they are not able to make up their own minds that they are not smart enough that they are not intelligent enough to be able to make up their minds so Labour will do if for them. Labour is saying very clearly that average workers cannot be trusted to make up their own minds as to whether to take a week’s holiday or take pay in lieu. Labour says that Big Brother knows best and that no workers cannot be trusted to make the right decision for themselves and that Uncle Phil or Uncle Trevor knows best. If we cut everything else away that is essentially what Labour is saying. It is saying to workers who might be $600 or $700 in arrears on their mortgage that they cannot clean up that debt by taking pay in lieu but that they should go on holiday and get further in debt. That is essentially what Labour is saying. 
The truth is that as far as Labour is concerned we have two classes of citizens in New Zealand not because the Government is not doing enough for the less well-off but because Labour wants to deny them that choice. The Holidays Amendment Bill is about giving average New Zealanders that choice. Labour wants to deny their right to make their own decisions and their own choices. It wants to destroy that incentive for workers to get ahead and that would subject them to political abuse. 
MICHAEL WOODHOUSE (National) 
: 
 I also want to comment on the aspect of the Holidays Amendment Bill relating to the ability of employees to request that a portion of their annual leave be paid out in cash. I listened very carefully to the chorus of disgust from my friends on the other side of the House in particular Lynne Pillay and Moana Mackey who as we know are at odds with the leader of the Labour Party who thought that the policy was pretty reasonable as long as employees entered into the arrangement willingly. 
We well know what the unions think of this policy simply because a National Government brought it in but I have a recollection of unions taking quite a different view in the past. I am sure that my colleague Tau Henare will remember that if one goes back to the award negotiations of the late 1980s a good number of the agreements registered with the Department of Labour provided for staff to receive a fourth week’s holiday—usually a reward for longevity of service of around 5 years or so. It was also very common for those agreements to contain a provision for the fourth week to be paid out in cash. Why? It was because not only did the unions accept at that time that it was OK to trade the fourth week but on many occasions they actually asked for it. Unions asked for the fourth week to be traded in for cash. So it was OK in the 1980s but now it is a hanging offence. 
I ask members to spot the difference because I cannot. The only difference I can see is that a National Government thought of it and for that reason Labour will oppose the bill vociferously. That is a shame because it is a very sensible measure and I look forward to hearing more about it in the select committee. 
A party vote was called for on the question  
That the Holidays Amendment Bill be now read a first time. 
Ayes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 52 
New Zealand Labour 42; Green Party 9; Progressive 1. 
Bill read a first time. 
Hon KATE WILKINSON (Minister of Labour) 
: 
 I move  
That the Transport and Industrial Relations Committee 
 consider the  
bill that the committee report finally to the House on or before 5 November 2010 and that the committee have 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 and to meet outside the Wellington area during a sitting of the House despite Standing Orders 187 189(a) and 190(1)(b) and (c). 
Motion agreed to. 
Urgency 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 I move  
That urgency be accorded the passing through their remaining stages of the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill the Trans-Tasman Proceedings Bill and the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill; the first readings of the Legal Services Bill the Misuse of Drugs Amendment Bill and the Insolvency Practitioners Bill; the passing through their remaining stages of the Limitation Bill the Insurance (Prudential Supervision) Bill the Motor Vehicle Sales Amendment Bill the Privacy (Cross-border Information) Amendment Bill the Trade Marks (International Treaties and Enforcement) Amendment Bill and the Human Assisted Reproductive Technology (Storage) Amendment Bill and any bills into which any of those bills may be divided; the first reading of the Lawyers and Conveyancers Amendment Bill; the second reading of the Antarctica (Environmental Protection: Liability Annex) Amendment Bill; and the second reading and remaining stages of the Inquiries Bill.  
Urgency is being moved in order to gain extra sitting hours so that the House might be able to deal with a range of Government business where there is essentially quite a large amount of support from other parties in the House beyond those that are just part of the Government confidence and supply arrangements. 
Periodically the Order Paper will be crammed up with legislative requirements that the wider number of people in the House can support. In the end the orderly function of the House is assisted as the year progresses by occasionally having an extension of hours. I point to Government notice of motion No. 2 on the Order Paper where there has been an expression of desire by the Government to get more hours. I accept that for Opposition parties granting the extension of hours is quite an extraordinary thing. So we have developed a practice in this Parliament of notifying well in advance of when we intend to take urgency for this type of motion—a motion that has a number of bills well supported. How far we get through that motion is a matter for discussion. With those brief explanations I put the motion. 
MOANA MACKEY (Labour) 
: 
 I raise a point of order Mr Speaker. Sorry I apologise to the Leader of the House if I missed this: did he confirm that we would be having question time each day? 
Hon Gerry Brownlee 
: It comes after. 
MOANA MACKEY 
: Thank you. 
A party vote was called for on the question  
That urgency be accorded. 
Ayes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 52 
New Zealand Labour 42; Green Party 9; Progressive 1. 
Motion agreed to. 
Business of the House 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 I seek leave for there to be a question time at 2 p.m. on Wednesday 25 August and on Thursday 26 August and for questions to be lodged in the normal manner pursuant to Standing Order 372 notwithstanding that the House is sitting under urgency. 
Mr DEPUTY SPEAKER 
: Is there any objection to that course of action being followed? There is no objection. 
Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill 
Second Reading 
Hon JOHN CARTER (Minister of Civil Defence)  
on behalf of the Minister of Trade 
: 
 I move  
That the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill be now read a second time 
. I thank the Foreign Affairs Defence and Trade Committee for its consideration of the bill and for reporting the bill back to the House. The committee’s recommendation is that the bill be passed with no amendments. 
As the committee noted in its report the closer economic partnership—CEP—with Hong Kong will provide an important trading platform for building trade with the wider China market and indeed throughout the Asian region. New Zealand’s economic future points increasingly towards this vibrant region. The linkages through our high-quality trade agreements are increasing the opportunities for business. In the first year following entry into force of the China free-trade agreement the increase in New Zealand exports to China was NZ$1.1 billion. China is now our second-largest export market and our second-largest overall trading partner. Through the closer economic partnership with Hong Kong we are hopeful that this growth will continue and that the closer economic partnership will also facilitate the growing provision of New Zealand goods and services throughout the wider region. 
Unlike New Zealand’s other concluded trade agreements the closer economic partnership that we have negotiated with Hong Kong is not primarily about tariff barriers. The fact is that New Zealand and Hong Kong already have two of the most open economies in the world. Given the relatively low levels of tariff barriers between our economies—at zero in the case of Hong Kong—this agreement will secure New Zealand’s position in the Hong Kong market and underpin Hong Kong as a trading platform for our exporters into the wider region. We want to make it easier for New Zealand companies to do business in and through Hong Kong. This closer economic partnership will encourage New Zealand companies to integrate into global supply chains because that is crucial to our future prosperity as a trading nation. Hong Kong’s location its knowledge of China and its links into the mainland position it perfectly for New Zealand’s rapidly expanding trade with China and the wider North Asia region. 
Increasingly New Zealand’s trade agreements acknowledge the importance of global supply chains. As with previous free-trade agreements that New Zealand has entered into the rules of origin negotiated in the closer economic partnership will allow Hong Kong and New Zealand companies to make greater use of each other’s products in manufacturing. The closer economic partnership will also help to secure access into Hong Kong for New Zealand’s service suppliers into the future. As identified by the select committee report the ratchet clause means that any future unilateral liberalisation by Hong Kong in certain sectors will be applied for the benefit of New Zealand services exporters. A most favoured nation clause will future-proof the access into Hong Kong of our services exporters by enabling them to benefit from the same treatment that other countries negotiate with Hong Kong in the future in key sectors of interest to New Zealand. It is a significant commitment that this is the first free-trade agreement that Hong Kong has signed outside mainland China. 
Consistent with our existing approach to free-trade agreements New Zealand has been careful to ensure that the removal of our remaining tariffs is phased out over time to allow for the affected industries to adapt to the new settings. For the closer economic partnership this phasing has been deliberately matched to the phase-out delivered under the China free-trade agreement which means that there is unlikely to be any additional material impact on New Zealand companies. 
The Green Party in its minority view included in the select committee report on the bill has questioned the balance of consultation around the free-trade agreement commenting that there is bias towards exporting interests. The opportunity to make submissions request meetings and attend briefing sessions was open to all businesses sectors and stakeholders. The national interest analysis also cites specific consultations about tariff reduction and rules of origin. These were conducted by Ministry of Foreign Affairs and Trade and Ministry of Economic Development officials to assess industry views on tariff reduction in respect of potential free-trade agreements including that with Hong Kong. There was in addition a series of consultations with Textiles New Zealand and a range of clothing manufacturers specifically in relation to Hong Kong. Consultations were also held with the Employers and Manufacturers Association which is the key representative body for the manufacturing sector and it included the Hong Kong negotiations. 
In respect of investment the select committee report acknowledges that the investment screening regime in New Zealand will continue to apply to prospective investors from Hong Kong. Quite simply the outcome of the closer economic partnership will not materially alter the way in which the overseas investment screening regime applies to investors from Hong Kong or exempt them from any aspect of it. 
The minority view in the report of the select committee expressed by the Green Party questioned the basis upon which the Government rests its commitment to trade liberalisation. That commitment rests on a conviction that export growth is critical to New Zealand’s overall economic performance. The Government’s full agenda of trade negotiations in the Asia-Pacific region is central to this strategy and places us at the heart of the world’s economic growth engine. 
This bill will amend the Tariff of New Zealand by inserting Hong Kong China and a list of preferential countries in note 3 of the Tariff. This is the only statutory amendment required to give effect to the closer economic partnership. Following this amendment certain amendments by regulation will also be required in order to enable the application of preferential tariff rates under the closer economic partnership. The Government would like to see the bill enacted by October so that New Zealand can be ready to bring the closer economic partnership into force therefore ensuring that New Zealand business can benefit from this agreement as soon as Hong Kong has also completed all of its internal procedures. I commend this bill to the House. 
Hon MARYAN STREET (Labour) 
: 
 I rise to speak on the second reading of the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill which will put in place the free-trade agreement with Hong Kong. The Minister of Trade has elsewhere noted that the benefits of this free-trade agreement with Hong Kong—or closer economic partnership as we are calling it—have many aspects to them. He has said previously that this closer economic partnership complements our free-trade agreement with China and there is no doubt that it does. In fact when I finished my speech on the first reading of this bill I was at the point of saying that this closer economic partnership agreement rationalises and allows businesses to springboard between Hong Kong and China. New Zealand businesses will be better able to move seamlessly between Hong Kong and China with their trade and business arrangements. 
The Minister who presented the first speech on the second reading the Hon John Carter referred to the fact that this closer economic partnership breaks new ground for Hong Kong. It is the first agreement of this type outside its agreement with Mainland China. For New Zealand it adds to a growing list of free-trade agreements that are both high-quality and comprehensive. But it is worth noting that the novelty of this closer economic partnership was the item that took the media’s attention when at the time of signing at the end of March earlier this year the media reported this new free-trade deal. They said that New Zealand and Hong Kong signed a free-trade deal—the city’s first outside China. Clearly Hong Kong is looking at it as a model and as a template for other such agreements and that is good. Hopefully it is of benefit to them. For us there is a whole panoply of new high-quality free-trade agreements that we have achieved over the years between successive Governments I might add as I do not think there is yet one free-trade agreement that has been signed by this National Government that began with it; they all began with the Labour Government. 
I draw attention to a couple of points and one that is particularly apposite is the trade in services. Usually we are accustomed to looking at tariff reductions and trade in commodities but the trade in services is of real benefit to New Zealand. The securing of access should allow a whole range of services to maximise trade with Hong Kong. First the closer economic partnership protects existing access for services. It is good to have that cemented in but it is simply the status quo. The agreement goes on to talk quite comprehensively about the range of services now covered by this closer economic partnership such as professional services business services education construction and engineering logistics air services environmental services computer and related services tourism sporting and other recreational services and so on. The list is expansive. 
One of the most exciting things about this closer economic partnership is the ability of New Zealand to trade on its strengths not just in commodities but in the provision of high-quality services. It is something that will become increasingly important if we are to improve the economic status and wealth of this country. We need to look further to the exporting of services and look past the exporting of commodities alone. So trade in services is significant. 
The second point I draw attention to is noted in the national interest analysis. We have labour and environment agreements as part of this closer economic partnership. For a long time—certainly for the last 10 years anyway—we have insisted on labour and environment clauses first of all being attached to our free-trade agreements but more latterly becoming integral parts of our free-trade agreements and that is a good thing. The national interest analysis states that the New Zealand study on the benefits of a closer economic partnership between New Zealand and Hong Kong identified sustainable development as a core national objective for both economies. I think we are getting to the stage with trade agreements where they cannot be seen in isolation. Trade agreements impact upon and are impacted by labour standards. They impact upon and are impacted by climate change agreements and by emissions trading schemes and global efforts to reduce the carbon footprints of industry in particular. The fact that this agreement identifies sustainable development as a core national objective for both economies may come as news to some members of the National Party but it is an important and forward-looking element inside this closer economic partnership. 
The labour memorandum of understanding and the environment agreement provide an opportunity for New Zealand to seek input from non-governmental sectors in identifying and developing potential areas for cooperation. If there are areas where we can cooperate with Hong Kong over labour standards—they may be health and safety standards they may be more than that they may be to do with income levels—or if we can assist with environmental protections and production of goods and delivery of services in a way that minimises the emissions impact of those commodities and services then both economies and even in a very small way the world the global environment are enhanced. These things are now no longer simply clip-on elements. An agreement about labour standards and an agreement about environmental standards have become an integral part not only of this closer economic partnership but of other free-trade agreements. This is the way for the world to move forward. Free-trade agreements can be used for more than simply free trade. Thank you Mr Deputy Speaker. 
JOHN HAYES (National—Wairarapa) 
: 
 I suggest that we on this side of the House did not find it surprising at all that this bill referred to sustainable development and the importance of having sustainable economies. In fact this bill had its gestation in 2001 but it hit the wall in 2002 when the Government of the day—I think they might have been people from the other side of the House—decided to abort the dialogue between New Zealand and Hong Kong. It was only in 2009 when we had a new Prime Minister the very active non-bogged-down-in-process John Key who engaged in dialogue with his counterpart in Hong Kong David Tsang that at a meeting in Singapore effectively this agreement was concluded. It will bring huge benefit to every New Zealander and particularly to all the exporters in the Wairarapa electorate that I represent. For 9 years we sat here—9 years of frustration—while that Government took no action at all. But—hello—John Key our very excellent Prime Minister has been given the opportunity to drive this country ahead and that is what he has done. If we look at the record of that previous Labour Government through 9 long years we see that it lifted our wages in this country by a magnificent 3 percent in real terms— 
Todd McClay 
: Is that all? 
JOHN HAYES 
: —3 percent in real terms. 
Hon Phil Heatley 
: Each year—it must be? 
JOHN HAYES 
: No no not each year—3 percent in 9 years. There was a 3 percent increase in GDP in 9 long years. 
Hon Phil Heatley 
: That’s a third a year. 
JOHN HAYES 
: That is dead right. But I draw this country’s attention and particularly the attention of that party to the activities of John Key in 18 months. He has lifted real wages in this economy by 8.7 percent in the last 18 months. How has he done that? He has done it by refusing to get bogged down in process and arguments and he has driven this country forward in a very practical way. This bill is a part of that process. This bill will boost innovation and it will improve export access to world markets which is one of the National Government’s six policy drivers for a step change in our economic performance. 
The agreement with Hong Kong a market of 7 million people is an important part of our focus on free trade and the improvement of access for our exporters to world markets. That is very important in my electorate. The agreement is a priority and it was included in the Prime Minister’s statement to this Parliament in February. Our Prime Minister has made it very clear that it is only by lifting our economic performance that we can create jobs boost incomes improve living standards and provide the world-class Public Service that Kiwi families deserve. I am fully in support of this bill and will support it through its second reading stage. Thank you. 
STUART NASH (Labour) 
: 
 There is a saying that most people will know. It goes along the lines of “lies damned lies and statistics”. The economy grew by 25 percent under Labour so when the previous speaker John Hayes talked about John Key increasing wage growth I can tell that member that in the 9 years before the previous Labour Government came into office National had increased the minimum wage by $1—$1—over 9 years. Labour took the minimum wage from $7.50 an hour to $12.75— 
Mr DEPUTY SPEAKER 
: This is a second reading of a bill. I refer the member to Speakers’ rulings 105/5 106/1 and 106/2. Although one can mention what the Opposition has said in terms of the debate one cannot dwell on that at length. 
STUART NASH 
: When we look at New Zealand wages in comparison with those of Hong Kong we see that we are in fact quite a low-wage economy. The reason why we are when compared with Hong Kong and our other Asian neighbours is that the former National Government increased the minimum wage by only $1 over 9 years. 
If people had been living in Hong Kong there would have been a revolt—even in a country like Hong Kong. And there was; New Zealand elected a Labour Government that took the minimum wage from $7.50 an hour to $12.75 an hour. When National members talk about Mr Key and his active agenda in terms of going to Hong Kong I say that he has increased the minimum wage by only 50c an hour. If people are earning a million dollars a year—and about 350 people in New Zealand earn a million dollars a year—they are about to get another $1000 a week. But if people are on the median wage in Hawke’s Bay they will get only about $3 a week. That is a travesty. 
I stand in support of this Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill because bilateral trade agreements are vital to the country’s sustained economic development and growth. The previous speaker knows because he was involved in the trade game for a long time that every single free-trade agreement and closer economic partnership that has come before this House was negotiated by either Phil Goff or Jim Sutton. Labour started every single negotiation that has come through this House that we have passed into law. Mr Groser has taken the ball and dotted it down. He has received the final pass and crossed the try line just as that great Hawke’s Bay player Israel Dagg—great Magpie man that he is—did in the recent test against the Springboks. That is all that Mr Groser has done. Phil Goff and the previous Labour Government were the team that actually took the ball and ran with it. 
I will outline just two points. The first is the necessity of negotiating sound free-trade agreements. The second is the fact that this National Government is simply not doing enough to ensure that New Zealand companies can take advantage of new opportunities like the one we are passing into law tonight. Closer economic partnerships or CEPs as they are known are a vital part of New Zealand’s economic development policy. They break down tariff quotas and custom duties that restrict access and profitability for New Zealand exporters and importers. They will hopefully lead to increased imports and exports and to potential added wealth for both countries. New Zealand signed the closer economic partnership with Hong Kong on 29 March 2010 and this bill will implement that agreement. 
Hong Kong is currently our ninth-largest export destination accounting for $823 million last year in exports. New Zealand imported $199 million worth of merchandise goods from Hong Kong last year making Hong Kong the 31st largest source of imported goods. However let us put that into perspective. Hong Kong accounts for only 1.9 percent of New Zealand’s total exported goods and only 0.4 percent of our total imported goods. Therein lies the challenge to this economy going forward. New Zealand’s ninth-largest export destination accounts for only 1.9 percent of our total exported goods. If there were ever a case for global diversification those figures are it. There is a very strong argument for this type of free-trade agreement. It puts potential trading partners on the map and on the radar of New Zealand Trade and Enterprise as well as of potential exporters. Despite Hong Kong’s small size it is a market that is already rapidly expanding. Last year’s total exports increased by 33.6 percent compared with the figure for 2008. However total imports declined by 2.5 percent compared with the figure for 2008. 
The largest area of export growth by percentage was actually that of apples the value of which increased by 122 percent. It is good for the people of Hawke’s Bay considering that that province is “the fruit bowl of New Zealand”. Members can believe it or not but the product registering the second-highest percentage growth is offal which was up by 66 percent over that 2-year period. However the product of the largest value by far—by almost four times that of the next largest—is crustaceans. The value in 2009 was about NZ$200 million free on board. To put that into context sheepmeat exports were worth about $42 million. In terms of imports the largest area of imports is machinery parts which account for about $16 million worth but that dropped by about 15 percent. 
I note that the closer economic partnership does not provide Hong Kong investors with an exemption from New Zealand’s investment screening regime as set out in the Overseas Investment Act 2005. The Act requires overseas investors to apply to the Overseas Investment Office for consent to invest in New Zealand fishing quota sensitive land or business assets over $100 million. The screening threshold for Hong Kong however is $20 million which is well below the threshold of $100 million applicable to other overseas investors. New Zealand service exporters as was mentioned by my colleague the Hon Maryan Street have also secured strong future-proofing of their position in the Hong Kong market through the most favoured nation treatment and a ratchet clause. The most favoured nation treatment means that New Zealand exporters will automatically benefit from any preferential treatment that Hong Kong provides to future free-trade agreement partners subject to certain reservations and exceptions. The ratchet clause means that any future unilateral liberalisation undertaken by Hong Kong in certain sectors will be bound in and committed to New Zealand. 
My second point is the fact that this Government is simply not doing enough to ensure that New Zealand companies can take advantage of any new opportunities generated by this and other free-trade agreements and closer economic partnerships. Prime Minister Key came away from China and said that he wanted trade to that country doubled in 4 years’ time. Well the vast majority of us want the same. Increased sustainable trade is a necessity for New Zealand’s future economic growth and development but the difference between National’s approach to trade and Labour’s approach to trade is quite stark. Under trade Ministers the Hon Phil Goff and the Hon Jim Sutton Labour increased the budget for market development and access opportunities by millions in the knowledge that operating in a foreign environment like China requires very specific skills knowledge and support. 
I ask members to imagine going into a country like Hong Kong where the language the customs the laws the business practice etc. are completely different then take into account that 97 percent of New Zealand’s businesses are small to medium sized enterprises. This means that 97 percent of New Zealand businesses employ 19 people or fewer. They simply do not have the skills competencies or resources to employ a full-time international marketing or market development manager. Labour recognised this and built a support network around key markets to help businesses optimise their opportunities. National under Tim Groser and Gerry Brownlee has instead cut the budget. When questioned about this Mr Groser said: “Our plan is to do more with less.” That is not even a decent slogan—“more with less”—let alone a goal or a plan and it is certainly not a strategy. That is why I say that this Government is not doing enough to help the country and its companies to take advantage of this type of free-trade agreement. 
In conclusion I say that I support this bill. It is a Labour bill of course; it was negotiated by Phil Goff. It is another important step in the process of growing opportunities for New Zealand companies. However as I said that Government over there is simply not doing enough to allow New Zealand companies New Zealand businessmen and businesswomen to take advantage of this. One cannot do anything with a “more with less” strategy. This Government needs to engage more with the business community in terms of allowing these companies to take advantage of the opportunities generated by this agreement which was negotiated by the next Prime Minister of New Zealand the Hon Phil Goff. Thank you. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I stand to speak on behalf of the Green Party on the latest round of preferential trade agreements that National and Labour have been signing us up to. This is not a free-trade agreement as the previous speaker Stuart Nash and other speakers have said; it is actually a preferential trade agreement—that is it is a preferential trade agreement between two countries or rather in the case of Hong Kong a kind of subset of a country. This is a preferential trade agreement. Like all of the preferential trade agreements that have been signed up to by Labour and National it has some real problems for New Zealand. I will talk in general terms about some of the problems with these preferential trade agreements and then talk specifically about why signing a trade agreement with the Chinese Communist Party is a particularly stupid thing to do as if all the others were not stupid enough. 
One of the issues with these preferential trade agreements is the investment clauses within them. In this particular preferential trade agreement with Hong Kong the investment clauses are to be negotiated by an exchange of letters rather than be included in the agreement itself but I think that the best way to understand the framework within which this agreement is operating is to look at the parallel agreement that goes alongside this which is between China and New Zealand. Chapter 11 of the New Zealand - China preferential trade agreement looks at issues to do with investment clauses. Basically it says that investments in each country have to be given national treatment—that is under article 138 we need to treat Chinese investors in New Zealand the same as we treat New Zealand investors in New Zealand except where we have non-conforming measures as they are called. Non-conforming measures are addressed under article 141 of the New Zealand - China free-trade agreement which is the parallel agreement to this one. 
Basically as is the case with most of these preferential trade agreements it operates as a ratchet. It says that whatever non-conforming measures we have on investment at the time that the treaty was signed we can keep them. We cannot make them any tighter but we can weaken them. Our overseas investment laws as they currently exist place certain constraints on incoming investment from foreign countries. Those laws can remain in place but they cannot be tightened. They can be weakened and that acts as a ratchet. The overseas investment laws as they currently stand whether they are to do with sensitive land—that is blocks of rural land over 5 hectares—or business investments of over $100 million can be weakened as if they are not weak enough already but they cannot be strengthened. 
These trade deals try to freeze the existing overseas investment laws in place. They say that we can weaken those laws further but we cannot strengthen them. Labour and National are signing up to what should really be called “sell the family farm trade agreements” because that is what they are designed to do. The way that these agreements are negotiated say that our current investment laws cannot be strengthened. We know that under the current investment laws we have sold off maybe 150000 hectares of farmland into foreign ownership over the last 5 years although the figures on it are a little unclear because it is not all recorded. Under Labour’s watch we sold large chunks of the country into foreign ownership. These agreements say that we cannot tighten the laws any further so that the laws currently in place which enable very large amounts of New Zealand land to be sold into overseas ownership cannot be tightened. That is exactly what is explicitly stated in these agreements. 
In the Hong Kong agreement it is to be done by an exchange of letters which operates in parallel with the agreement and is currently being negotiated. In the agreement with the Chinese Communist Party it is in chapter 11. I invite members to look seriously at chapter 11 of the New Zealand - China free-trade agreement—or preferential trade agreement as it actually is—and they will see the provisions that prevent us from exercising our democratic rights as a sovereign Parliament to change the rules on foreign investment. Goodness knows it would take quite some doing but if this Parliament were to find the courage within itself to strengthen the rules around overseas investment to stop family farms being sold off—because this Parliament has overseen a massive sell-off in family farms and is planning to continue doing that—and if it were to find the moral courage to say that we do not want all of our family farms to go into overseas ownership in Hong Kong China or any other country then we would find ourselves in breach of the investment treaties that Labour and National are so intent on signing the Government up to. 
Article 141 of the New Zealand - China free-trade deal which will be paralleled by the exchange of letters in the Hong Kong deal says that the national treatment does not apply to any existing non-conforming measure. Our overseas investment laws are a non-conforming measure. It says that we can continue with that but we cannot increase the non-conformity of the measure. Article 141(3) of the New Zealand - China free-trade agreement which will be paralleled in the Hong Kong agreement very clearly states that we cannot increase the non-conformity of these measures. That means that if we want to increase the restrictions on foreign ownership of New Zealand land then we will be breaching the agreements that National and Labour are so intent on signing us up to. 
Over and over again National and Labour are tying us into that situation. With China and Hong Kong that means making a deal with the Chinese Communist Party an authoritarian capitalist regime that imprisons people who disagree with it that locks up people if they do not agree with it. That is the deal we have signed in this particular case with the Chinese Communist Party. China is a one-party State and that party controls the Chinese Government. The President of China Hu Jintao is not the President because he was elected; he is the President because he is the Secretary-General of the Chinese Communist Party which of course appoints the President of China. 
By signing up to these agreements we have locked in place the current overseas investment regime. If we wanted to tighten the overseas investment regime we would be breaching the terms of the agreements that Labour and National have locked us into. We have heard a lot recently from Labour and National about how they have somehow decided that they do not like the sale of family farms to foreign owners even though they have both been overseeing it for a very long time. In particular Labour as the previous Government was very keen on selling off the family farm; that is why it sold literally hundreds of thousands of hectares into overseas ownership. It has locked us into an agreement that means that we cannot tighten the rules on overseas investment. Chapter 11 of the New Zealand - China free-trade agreement which parallels the exchange of letters that is to come in the Hong Kong free-trade agreement says that we can have measures that treat overseas investors differently like our overseas investment laws do now but we cannot tighten them. We can weaken them but we cannot tighten them. If we decided that we did not want any further family farms over say 500 hectares to go into overseas ownership we would be breaching the terms of the New Zealand - China free-trade agreement and no doubt the terms that will be in the exchange of letters with the Hong Kong - New Zealand free-trade agreement. 
When National and Labour members sit in this House as they do day after day and pretend that they are worried about the sale of foreign land we have to wonder why they are signing us up to agreements that lock in the current rules that enable the sale of land to foreign owners. I think that that is something that is unexamined. In these debates about free-trade agreements anything called a free-trade agreement immediately gets support from National and Labour. They just vote for it. They have a reflex reaction. If it is called a free-trade agreement they vote for it. They do not think about it or read the treaties. They do not read chapter 11 of this treaty which covers all the investment clauses. They think “Oh free-trade agreements! We must vote for them.” regardless of the fact that they are constraining the ability of this Parliament and future Parliaments to regulate in the democratic interests of people in this country. If we democratically decided that we wanted to tighten overseas investment laws beyond those that currently exist we would be breaching chapter 11 of the New Zealand - China free-trade agreement and no doubt the exchange of letters required by the Hong Kong - New Zealand free-trade agreement. 
That is why the Green Party will not be voting for this. Unlike National and Labour we are not happy with the sale of New Zealand land being completely unregulated and we think that we need to tighten the laws around investment in New Zealand in order to do what is in the best interests of this country rather than being bound up by some kind of ideological position in favour of anything called a free-trade agreement whatever the content of that agreement is. 
JACQUI DEAN (National—Waitaki) 
: 
 In my contribution on the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill I speak strongly in favour of it. I was interested in the contribution from the co-leader of the Green Party Dr Russel Norman. I think it is a shame that the permanent Green member on the Foreign Affairs Defence and Trade Committee Keith Locke has not had an opportunity to speak on this bill because at least he has gone through the select committee process and scrutinised the bill along with the Labour and National members on that committee. Although I accept that he will not vote in favour of this bill at least he has taken the time unlike the co-leader of the Greens to scrutinise the bill and its impact on New Zealand. 
Rather than playing the blame game about who first started the process of this bill—which Minister started the negotiations and who signed it—apart from congratulating the Hon Tim Groser on signing the deal I want to focus on the benefits for New Zealand and in particular on the benefits for the agricultural sector. I want to zero right down to a paddock of lambs that are being born in—well it is a bit early for Central Otago—the North Island where we now see lambs being born in the Bay of Plenty. We know that in little over a year a good proportion of those lambs will be on their way to the wet markets and supermarkets of Hong Kong courtesy of this closer economic partnership agreement the endeavours of the farmer and the processing and marketing industry in New Zealand. New Zealand lamb and sheep meat is highly valued in Hong Kong. We could probably supply more of it but with flock numbers falling unfortunately we seem to have a bit of a crisis in the sheepmeat industry in New Zealand. Things like this free-trade agreement can only do benefit to the health of the New Zealand agricultural sector. For that reason for those paddocks in the North Island and in Central Otago and for the farmers in that industry I believe that the closer economic partnership agreements with Hong Kong and China can only bring benefit to New Zealand. Thank you. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 The Government is indeed to be congratulated on the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill. It is very much in line with the Government’s aim to expand our trade. After all we are an exporting nation. That is something that has escaped previous speakers. We are absolutely dependent on our exports and we need to take every advantage we can. This partnership agreement with Hong Kong enables us to do so. It is part of a network that has been established over the years that includes our free-trade agreements with Thailand Singapore China Malaysia and Brunei and of course the ASEAN-Australia-New Zealand Free Trade Agreement. 
It was interesting to hear the previous speaker the excellent Jacqui Dean from Otago talk about how vitally important this partnership agreement is to our primary products. I can say that the spring lambs are frolicking in the fields around Pukekohe Franklin and Karaka where I live. They along with the great produce that comes from the vegetable basket of New Zealand from the rich fertile soils of Franklin are the sorts of things that will benefit from this partnership agreement with Hong Kong. 
I want to make two particular points. First this closer economic partnership will ensure that New Zealand’s exports to Hong Kong are locked in for exporters. Only 14 percent of New Zealand’s current exports to Hong Kong are in tariff lines that are unbound. This means that Hong Kong is currently free to increase tariffs to any level without breaching its World Trade Organization commitments. Locking in New Zealand’s duty-free access will provide New Zealand exporters with certainty on tariffs that their competitors do not enjoy. Second the closer economic partnership contains phasing of the elimination of tariffs that exactly mirrors that in the New Zealand - China free-trade agreement in order to avoid creating any incentive for Chinese manufacturers to route their products through Hong Kong in order to take advantage of the more favourable access enjoyed by Hong Kong. This of course is crucially important. Although Hong Kong has a population of only 7 million people by about 2050 China will have a population of 1.5 billion people with a much higher per capita income than they have today. Naturally they will be hugely important for New Zealand exports. 
I too commend this bill to the House. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 Without wanting to derogate from the importance of the Tariff (New Zealand-Hong Kong China Closer Economic Partnership) Amendment Bill one iota it is probably worth recording that there is a certain sameness about debates on trade agreements. It is a good thing but there is a certain sameness because after the arguments of the 1970s and more particularly the 1980s this country seems to have embraced free international competitive trade as a hallmark without any hesitation. It has been quite open to it. As a result the two big blobs of the political spectrum Labour and National go around saying how good it is and what potential— 
Jacqui Dean 
: Who are you calling a blob? 
Hon PETE HODGSON 
: Well it is the two-big-blob theory of politics unlike the model in Scandinavia for example or wherever. 
Jacqui Dean 
: Unfortunate. 
Hon PETE HODGSON 
: If the member does not want to be called a blob I withdraw and apologise. It was not meant as a nasty comment; it was just a way of describing the political landscape. We go around talking about the importance of trade the rules of origin how we are very pleased about it and the ratchet clause. Then we say that this trade Minister that trade Minister and the one before him—because I think they have always been “hims”—were very good trade Ministers and no doubt trade Ministers yet to be born will be very good trade Ministers too. Then we say that in respect of the Greens we understand and respect their differentiated position but we notice that first of all they are in a minority and secondly they are not exactly against trade. The Greens then get up to say that verily they are not against trade but they are just against trade in this or that circumstance. That is what I mean about the sameness of trade debates. It is something to be celebrated because little enough in politics is agreed across the House and it is better that instead of fighting over everything we fight only over stuff where there is genuine disagreement. This is one area where there is not disagreement. 
However I will make two points which are slightly unrelated. The first is that the Holy Grail of Doha appears to me to be not making so much progress. We are always talking about another trade agreement with a country in South-east Asia North Asia East Asia or wherever it might be or we might go across to South America and fold in the Chileans and so on—and so too with this agreement in Hong Kong which is an advance on an earlier agreement we had with that part of the world. But we notice that the agreement relates to Asia. We notice that it is not to do with Europe or North America. 
I do not want to name-drop but I had dinner on the Saturday before last with a woman called Ann Veneman who was Secretary of Agriculture under President Bush. I do not want to quote her at length because it was a private meeting but she knew trade Ministers from long ago in New Zealand and had met one or two them; she met Jim Sutton for example. That former Secretary of Agriculture was much more interested in trying to get free trade running than was the populace she represented. Deep within those nations is a resistance to trade and it will cost those countries sooner or later. That is my first point. By a mistake of geography we do not sit where Iceland or Cyprus are we sit where Asia roughly begins or ends and therefore we are caught up in the maelstrom of trading activity that is reshaping global economics and where the new hegemonies are rising. 
The second thing I want to say—I will be critical of the Government and its members will no doubt get up to say I have been unfair and unreasonable—is about the support being given to our exporters. Notwithstanding the fact that they are doing famously well at the moment—we have had trade surpluses for the last 6 or 7 months in a row which is excellent news—over the decades our export performance has been less than it might have been. That is why we are facing things such as the Crafar farms debate which we will always face as long as we have a current account deficit. If we cannot pay our way in the world we will start selling parts of our country to the world—there is nothing surer in economics than that. 
With that in mind I wonder whether the Government would consider recommitting to some more effort in this area both through Trade and Enterprise and through other means as well. Notwithstanding the great work done by Tim Groser and no doubt other Ministers from time to time I do not see great effort in many of the great South-east Asian nations. I do not see us moving in a very determined way towards Thailand for example or Viet Nam yet those are parts of the world where the emergence of the middle class is startling. I do not think we are doing enough even in China where under the previous Government plane-loads of business people went before during and after the signing of the free-trade agreement with China. Despite the fact that there are beachheads and offices for New Zealand Trade and Enterprise in various cities around China and despite a great improvement I still do not think it is enough. 
Of course many private sector companies do not need New Zealand Trade and Enterprise or some Cabinet Minister to go there to give the Government imprimatur and to open the door. I understand that but for those who can be assisted and who need the assistance that assistance is not always timely or on the mark. I think we should adopt a different approach to exporters. Let us not tell them but rather quietly treat them as heroic people. They often spend 100 days a year off-shore with their heads on someone else’s pillow not their own and that needs to be rewarded. Exporters are different especially small or medium sized exporters that are going through a growth phase moving into new markets or “kicking butt” basically. They really need a good deal of support. I do not think the current Government provides it. The wind-down of some of the New Zealand Trade and Enterprise stuff in the last 2 years has not been a good thing and on that matter I am critical of the Government. That said I think this legislation is great. The people who negotiated it are great. I pay my respects to the officials who led it and I hope it has speedy passage. 
TODD McCLAY (National—Rotorua) 
: 
 It gives me pleasure to rise to speak on the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill. I believe this is a very important bill before the House. A number of previous speakers have raised the issue of the work the previous Labour Government did in trade. I think it is very important to clarify for a moment that with the exception of one all parties in this Parliament have generally been in favour of trade free-trade agreements and the promotion of New Zealand businesses and their interests overseas. It is important we recognise at the forefront that the previous Government held trade as a priority. Where that priority fell down for our exporters in New Zealand was the speed with which the previous Government was able to get results from the rhetoric of Cabinet where somebody would say in a very deep voice that it would be a very good idea to have more trade with countries overseas and a trade Minister would say in a squeaky voice that he or she would go overseas to have a look and see whether he or she could do some trade-agreement deals. Of course 9 years later very few agreements were in place but the system was started by at least one or two of the members opposite. 
Who has delivered on this legislation? We have heard some analogies of rugby and I would suggest that in some years to come when we think of that wonderful game of rugby that happened in South Africa the other day it will be the last 3 minutes that will be remembered. Of course there was a lot of very hard work in the lead-up to the half-hour before that but the last 3 minutes were when the tries were scored and it was our hard-working Minister of Trade Tim Groser who earlier this year on 29 March was able to make sure this agreement was signed. Five short months later this agreement is about to enter into law in New Zealand. 
It will be good for our exporters for the people in forestry and certainly for farmers. In my electorate the kiwifruit producers and orchardists think it is a wonderful thing. People in my electorate and in other members’ electorates who like to buy goods that are imported from overseas will enjoy the benefits that this agreement will deliver to them. 
I support this bill fully and look forward to diving into it in greater depth in the Committee of the whole House. Thank you. 
RAYMOND HUO (Labour) 
: 
 I rise to speak in the second reading of the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill. Labour supports this bill as it will lead to increased opportunities for New Zealand exporters in the Hong Kong market as well as strengthening our relationship with the Greater China and Asian regions. There are three issues that I wish to talk about as part of my contribution. 
First of all as the Labour spokesperson on trade the Hon Maryan Street said earlier in her first reading speech this initiative is really interesting and quite exciting because it will help to herald a significant move in the export of both goods and services to the Hong Kong market. Secondly for a small economy like New Zealand’s growing a sustainable and export-led economy is vital. This bill is however a timely reminder that an export-led recovery has not eventuated and it is a missed opportunity to address one of the critical economic issues that face New Zealand which is our monetary policy setting. Labour believes that that policy is in need of reform and that it has been one of the underlining limits on economic reforms versus other OECD or wealthier developed countries. Thirdly labour rights and environmental sustainability are core New Zealand values that should not be sacrificed for the sake of increased trade. When undertaking negotiations they need to be held high on the agenda. Reading the speech notes of the Council of Trade Unions president Helen Kelly in July this year on the relevant issues has reinforced my position on that. 
I have recently posted an article on the Labour MPs’ blog Red Alert. I said that on our regular weekly radio show the Minister for Ethnic Affairs and I receive questions and messages from the Chinese constituency. In answer to some of the questions the Hon Pansy Wong stated that exports had decreased under Labour and have increased since National came into office. She neglected to mention that it was the then Minister of Trade Phil Goff who signed the free-trade agreement with China. This opened up the floodgates to trade with China making China our second-largest trading partner. In the first year of the free-trade agreement trade with China increased by 62 percent and National was in office for less than 4 months of that period. On the issue of the spiralling Asian unemployment rate which has just hit a record high of 10.5 percent Minister Wong said “although unemployment is increasing so is the rate of employment although the speed of job creation is slower than that of the number of people who are losing their jobs.” I am not sure whether that statement even makes sense but it shows that the Minister has no answer to the now more than 23000 Asian New Zealanders who are unemployed. 
Minister Wong’s answer also ignored the fact that bilateral or multilateral agreements on trade are often the product of joint efforts and collaboration. For instance the origins of the New Zealand - Hong Kong China closer economic partnership go back to as early as 2001. The idea was first mooted by the Hon Jim Sutton who was the Minister for Trade Negotiations at that time. In 2002 the talks were suspended when New Zealand and Hong Kong became bogged down in discussions around rules of origin and problems with labelling regulations. The talks were subsequently revitalised under the Hon Phil Goff as Minister of Trade and were pursued by the current Minister the Hon Tim Groser. 
Hong Kong is our ninth-largest export destination accounting for $823 million last year. Just as important it is our eighth-largest source of foreign direct investment. New Zealand imported $199 million of merchandise goods from Hong Kong last year making it the 31st-largest source of imported goods. Hong Kong accounts for 1.9 percent of New Zealand’s total exported goods and 0.4 percent of total imported goods. This market is already rapidly expanding with last year’s total exports increasing by 33.6 percent compared with 2008. However total imported goods declined by 2.5 percent last year compared with 2008. 
To summarise closer economic partnership agreements are a vital part of New Zealand’s economic development policy. Closer economic partnerships break down tariffs quotas and customs duties which restrict access and profitability for New Zealand exporters and importers. Closer economic partnerships lead to increased exports and imports and have the potential to add to the wealth of both markets. I acknowledge that New Zealand signed a closer economic partnership with Hong Kong in March 2010 and this bill implements that agreement. 
The latest release from the New Zealand Manufacturers and Exporters Association shows that an export-led economic recovery has not eventuated. While domestic sales increased by 19 percent in April 2010 export sales decreased by 5 percent. The signing of free-trade agreements and closer economic partnerships is important and this particular closer economic partnership will boost the economy but that is only part of the solution. The Government needs to support New Zealand businesses to best exploit the opportunities that free-trade agreements present. Sadly the National Government has failed to assist New Zealand exporters. Its refusal to even consider examining monetary policy highlights that. 
In 2009 the Labour Party withdrew from the cross-party consensus on monetary policy. Labour believes that the policy is in need of reform. Back in March 2004 Labour introduced an important change to enable the banks to pursue a more active role in the foreign exchange markets. This assisted the economy by tempering exchange rate volatility and by moving New Zealand’s monetary management closer to Australian practices. Another important change would be the idea of amending the Reserve Bank of New Zealand Act in order to broaden the Reserve Bank’s objectives. The objectives of the Reserve Bank of Australia are not only to maintain the stability of the currency of Australia but also the maintenance of full employment in Australia and of the economic prosperity and welfare of the people of Australia. In contrast our Reserve Bank is tasked solely with maintaining stability in the general level of prices and that is not helpful to our tradable economy. 
Although free-trade agreements and closer economic partnerships come with undoubted benefits we must not ignore the reality that for some businesses and sectors they can cause harm. This closer economic partnership has been evaluated as having a low negative impact on New Zealand business largely because Hong Kong specialises in services rather than in cheap manufactured goods that could undercut local businesses. New Zealand manufacturers of footwear textiles etc. are most at risk from free-trade agreements and closer economic partnerships and I am very glad that this closer economic partnership has given those sectors the longest phase-out period for tariffs in order to allow them time to adjust. 
I reiterate that labour rights and environmental sustainability are core New Zealand values that should not be sacrificed for the sake of increased trade. When undertaking negotiations they need to be held high on the agenda. Thank you very much. 
A party vote was called for on the question  
That the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill be now read a second time. 
Ayes 110 
New Zealand National 58; New Zealand Labour 42; ACT New Zealand 5; Maori Party 3 (Flavell Sharples Turia); Progressive 1; United Future 1. 
Noes 11 
Green Party 9 Maori Party 2 (Harawira Katene). 
Bill read a second time. 
In Committee 
CHRIS TREMAIN (Senior Whip—National) 
: 
 I seek leave for the Committee stage of the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill to be taken as one question with a wide-ranging debate. 
The CHAIRPERSON (Lindsay Tisch) 
: Leave is sought for clauses 1 to 4 to be taken as one question. Is there any objection? There is no objection. 
Clauses 1 to 4 
JOHN HAYES (National—Wairarapa) 
: 
 It is good to be able to support the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill in the Committee stage and I will do it fairly briefly. One of the things I draw the Committee’s attention to is the constant negativism and opposition of a misled Green Party which has a minority view in the Foreign Affairs Defence and Trade Committee’s report. I simply say to the Green Party that as a specific result of our free-trade agreement with China New Zealand increased its exports to China by $860 million in the last 12 months. I ask members to think about the number of jobs that that is creating but the Green Party would like us to shut that down. A new market of $860 million is roughly the equivalent of finding a new market like Indonesia because our total exports to Indonesia are about $860 million. I say to this Parliament and to this country that when it comes time to tick the box for the party we want to vote for in the next election we should remember that the Green Party would like to close this down and close job creation down. When the select committee considered that issue we said it made no sense in our heads. 
This is a very brief bill. I draw the Committee’s attention to two points. First the bill includes a ratchet clause. This means that should there be any future trade unilateral trade liberalisation by Hong Kong in certain sectors such as education the Hong Kong Government will automatically be obliged to pass those benefits on to us. We believe that the most-favoured nation status and the ratchet clause will future-proof access for New Zealand for the service sector particularly to the Hong Kong market. 
Second over the last few months voters in my Wairarapa electorate have felt considerable concern about people coming into this country and buying up land. Two of the Crafar farms are located near Norsewood in my electorate. This agreement does not allow Hong Kong investors any exemption from the screening process and the regime set out in the Overseas Investment Act 2005. The Act requires overseas investors to apply to the Overseas Investment Office for consent to invest in New Zealand in respect of fishing quotas sensitive land or business assets over $100 million. However I stress to the Committee that the screening threshold for Hong Kong is $20 million. It is well below the threshold of the $100 million that is applicable to other overseas investors. With those few words I stress our total support for this bill. Thank you. 
STUART NASH (Labour) 
: 
 I find myself agreeing with the previous speaker John Hayes because free trade is one of those things where one has to be in the game if one wants to be part of the new world era. This day and age of globalisation is very real and it will affect New Zealand. It can be seen either as an opportunity or a threat. If we see it as an opportunity and grab it with both hands as this bill has done then there is a real chance for New Zealand to go out to the world and be a world leader. In this day and age not just companies but countries are striving for competitive advantage. We suffer from the tyranny of distance; it is difficult for us to go out there and find our way in new markets. We need these sorts of free-trade agreements if we are to achieve sustainable economic growth. 
This bill is most important as are all free-trade agreements that come before the House. It is a short bill as the previous speaker alluded to although there is a national interest analysis that runs to about 58 pages. 
I must admit that I took slight offence when the speaker from the Green Party Russel Norman stood up and said that Labour passes any legislation that has “free-trade agreement” on the front of it without understanding national interest analyses. We understand national interest analyses. Labour members sit on the Foreign Affairs Defence and Trade Committee which deliberates on these sorts of bills. Labour understands free-trade agreements. We understand the ramifications the risks and the benefits. This bill is important and we very much support it because it gives our exporters an opportunity to get into markets that were closed to us or were limited due to unrestricted tariff barriers. We already know that Hong Kong offers duty-free imports for all countries but this closer economic partnership will ensure that New Zealand’s existing duty-free access is locked in for our exporters which will give our exporters an added certainty that competitors other than Mainland China do not enjoy. 
This bill is important for the future of New Zealand trade. We are an exporting nation. Exporting is the only way that we will grow our economy. We have a small population of about 4.5 million and if we want to rise up the OECD rankings which seem to be most important to some politicians then we really need to engage our export markets. 
We have the most favoured nation treatment which means that New Zealand service exporters have also secured strong future-proofing of our position in the Hong Kong market through the most favoured nation treatment and a ratchet clause which actually is not that bad. Most favoured nation treatment means that New Zealand exporters will automatically benefit from any preferential treatment that Hong Kong provides to future free-trade agreement partners subject to certain reservations and exceptions. The ratchet clause means that any future unilateral liberalisation undertaken by Hong Kong in certain sectors will be bound and committed to New Zealand. 
This bill is about New Zealand going out into the world and developing agreements and relationships with countries that it otherwise would not have. As my colleague Pete Hodgson mentioned this bill takes the lead. We can wait until all those multinational World Trade Organization agreements come into place but if we wait for them we could be waiting for a long time. This bill is a proactive response to what is happening around us at this point in time. 
We have a long tariff phase-out. New Zealand will be using the same tariff reduction schedule as the New Zealand - China free-trade agreement for imported products from Hong Kong. In order to help mitigate the potential for any negative adjustment effects associated with the phase-out of these tariffs the longest tariff phase-out periods apply to industry sectors in New Zealand that are particularly sensitive to imports from Hong Kong. So when a Green member stands and berates Labour for not understanding this free-trade agreement I take exception. 
As I mentioned in my second reading speech I do not think the National Government is taking this issue seriously enough. It is cutting the budget to New Zealand Trade and Enterprise initiatives that the previous Labour Government ramped up. I do not think that New Zealand is resourced enough to take full advantage of the effects of this and other free-trade agreements or closer economic partnerships or whatever you want to call them that are before the House. If we are to really take advantage of them the Government needs to fund them. The Government needs to understand that this is the future of the New Zealand economy. Thank you. 
KEITH LOCKE (Green) 
: 
 The previous speakers have talked essentially about the upside of the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill—that is the expansion of particular dairy products in Hong Kong and related to that in China. They talked very little about the downside in terms of the effect on New Zealand manufacturing which continues to be undermined by cheaper products from China. It is not a level playing field for New Zealand manufacturers. 
I will address the question that John Hayes raised. His concern—and I am glad that he has the concern—was about the sale of the Crafar farms and perhaps other dairy farms to overseas interests. In this case we are talking about Chinese or Hong Kong interests. We are left with the problem in the dairy sector of perhaps expanding the exports to China and Hong Kong but perhaps losing the land to foreign ownership—to China or Hong Kong—that those dairy products come from. Let us look at the investment provisions—and they have been described by many speakers—the $100 million limit and under this agreement the $20 million limit. Unless a dairy farm is sold for more than $100 million it just goes through the system and a high proportion of our land can be onsold to overseas interests. We end up with our dairy farmers being tenant farmers on land owned by Chinese Hong Kong or other overseas owners. 
The Government and Labour should take note of the campaign started up by some very prominent Auckland business people to try to deal with this and to essentially say that we should not sell our farmland in this way. Other countries do not do it. China does not do it; it allows only leasehold. I think the very fact that quite prominent members of the business community are promoting this campaign and are getting some momentum should wake up both Labour and National. One of the problems is how under the ratchet clauses in this agreement as was explained by Russel Norman we can legally get the result that these Auckland business people want under what we have committed to in terms of the two agreements and other free-trade and investment agreements. It is very hard to legislate without violating what is written in the free-trade agreements. That is a quandary that I wish Labour and National would address. 
Hon MARYAN STREET (Labour) 
: 
 The very few clauses that exist in the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill belie the expansiveness and the potential of this closer economic partnership. 
I listened with great care to the Green Party members’ speeches about this. There was an earlier occasion when we were debating the Malaysian free-trade agreement I think when there was very useful dialogue amongst the parties in the House about what potential pitfalls there might be and how the whole trade process might be improved. It seems to me that the Green Party contributions have misfired in respect of the New Zealand - Hong Kong China Closer Economic Partnership. When I look at the national interest analysis particularly the bits that relate to the clauses on investment I find that the only disadvantage that is noted about the clause relating to investment and the exchange of letters on investment is that at the moment there will be no investment chapter in the closer economic partnership because that issue is being resolved by an exchange of letters over a 2-year period. So within 2 years of the entry into force of the closer economic partnership a comprehensive investment protocol will be agreed by an exchange of letters and added to this closer economic partnership. What remains in place is the current New Zealand - Hong Kong Agreement for the Promotion and Protection of Investments. That investment protocol does exist. It provides some minimum protections for investors including national treatment fair and equitable treatment and also some disciplines on expropriation. I think the Green Party’s objections to the clauses on investment are somewhat overstated. 
Labour welcomes this bill and the closer economic partnership because they develop what is already a very close relationship with Hong Kong and they give us and our businesses the opportunity to maximise not only opportunities within Hong Kong but opportunities in China as well. As I alluded to earlier this very short amendment bill is deceptive in its brevity because it encompasses an extraordinary range of things particularly services that we will be able to trade in and benefit from as we go forward with this closer economic partnership. 
It is the services component of this legislation that I celebrate the most because I think it is the thing that will have the most vitality for New Zealand businesses. But I would ask that New Zealand businesses in their efforts to maximise the opportunities that this closer economic partnership provides are not hampered by a lack of resources being appropriated by this Government to allow encourage and facilitate businesses to take advantage of business opportunities in Hong Kong. It is one thing to have a closer economic partnership in place and all the tariff reductions in place such as they are—and all gone by 2016. It is all very well to have greater trade in services. But if the Government is not prepared to assist businesses to maximise those opportunities then this bill is hardly worth the paper it is written on. There are wonderful opportunities but not all of our services and our manufacturers are geared up to take advantage of those opportunities. Thank you. 
JACQUI DEAN (National—Waitaki) 
: 
 I will explore a bit further the opportunities that will arise for New Zealand and particularly the agricultural sector as an outcome of the New Zealand - Hong Kong China Closer Economic Partnership Agreement. I note the stress that New Zealand sheep and beef farmers have been under for a number of years. Although this agreement provides an opportunity for that sector I believe that it is up to companies such as Silver Fern Farms and the Alliance Group to make sure that they maximise the opportunities and the returns for their shareholding farmers. Maybe that goes a little bit beyond having market access to Hong Kong and China; maybe it goes as far as branding New Zealand sheepmeat and beef which are highly regarded in that market. Making sure that they are fully signed up for things like— 
The CHAIRPERSON (Eric Roy) 
: I am sorry to interrupt the member; it is time for dinner. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
JACQUI DEAN 
: I will just finish off because I was mid-sentence. If I recall 1½ hours ago I was talking about the opportunities and the challenges for the New Zealand primary production sector and I was talking in terms of the sheep and beef industry capturing the value of their product. It is not good enough merely to grow it and ship it; it is about capturing the value. There are a number of Government initiatives and one of them is National Animal Identification and Tracing or NATE which tags an animal from pasture to market which is becoming increasingly valued in overseas markets. It is opportunities like that that the agricultural industry would do well to buy into in order to maximise the opportunities presented by things such as this free-trade agreement. Having finished that train of thought I will leave it at that. Thank you. 
Hon DAVID PARKER (Labour) 
: 
 I rise to take a call in respect of the Committee stage of the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill. As prior speakers have said Labour supports this bill. Of course Hong Kong is increasingly integrated into the China Hong Kong having been returned as a colony from the British Government to China in—someone else can help me here when did Hong Kong go back to China? 
Hon Dr Jonathan Coleman 
: 1997. 
Hon DAVID PARKER 
: It was 1997 so in the last 13 years we have seen the relationship between Hong Kong and China become stronger and given the importance of China to the trading relationship with New Zealand things that improve the gateway that Hong Kong provides into China for our goods and services are also in the interests of the New Zealand economy. The closer economic partnership agreement that we have here is another example of bilateral deals that are in the interests of New Zealand notwithstanding the fact that New Zealand believes in multilateral agreements under the framework of the World Trade Organization (WTO) as perhaps being the more ambitious and desirable outcome of international trade talks. But given that the Doha round of the WTO seems to have stalled or at least is at serious risk of stalling the importance of bilateral agreements heightens as a replacement for multilateral agreements. So although multilateral agreements would be better bilateral agreements have to do if the world cannot come to some agreement under the WTO talks. 
In terms of the benefits to New Zealand it is worthwhile that the $4 million of tariffs currently paid by New Zealanders exporting goods to Hong Kong can be avoided through this agreement but I am advised by my colleague Maryan Street that perhaps the greater potential lies in relation to service industries. Service industries providing services through Hong Kong stand to benefit more from the liberalisation of rules that apply to their conduct when trading in Hong Kong. The benefit of that is probably greater than that that accrues from the reduction in tariffs. 
I know that in terms of some of the more populous provinces of China adjacent to Hong Kong Hong Kong is indeed the point of entry into a lot of trade with China nearby. Increasing integration of Hong Kong and China in their commercial affairs means that if we are to have closer economic relations with China—truly one of the world’s superpowers now—facilitating that through the linkages we have through Hong Kong also seems to be a very good idea. It is already on record that the most significant free-trade agreement that New Zealand has entered into in decades is the free-trade agreement with China which was negotiated by Phil Goff when he was the relevant Minister under the previous Labour Government. The statistics in respect of the outcome of the Chinese free-trade agreement show what the economic potential can be for a country like New Zealand to improve our economy with the free-trade agreement. Trade with China has boomed and the profitability of that trade has increased as a consequence of the reductions in tariffs that New Zealand exporters to China have benefited from as a consequence of the free-trade agreement with China. The Hong Kong agreement will bring similar benefit but will be of a scale that is far far smaller given the relative size of the Hong Kong economy compared with the Chinese economy. 
None the less Hong Kong is not a small destination for goods; it is our 10th-largest export market worth $783 million in the 2009-10 year. It is the world’s second-largest service economy and acts as a hub for the provision of services in the region adjacent to Hong Kong as well as Hong Kong itself. If we look at that part of the world as a tapestry of areas where we have different sorts of trading relationships we will see that there are various countries in the Asian region where we have free-trade agreements. There are other countries where we have more restrictive trade arrangements. 
Hon MARYAN STREET (Labour) 
: 
 There are two areas of the closer economic partnership with Hong Kong that I am particularly interested in exploring in the Committee stage of the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill. They are the labour memorandum of understanding and the environment cooperation agreement which are outlined in the national interest analysis that accompanies this closer economic partnership. In fact the national interest analysis effectively does the job of a regulatory impact statement so there is no regulatory impact statement on this legislation. This is one of the few occasions when we forgive the Government for not attaching a regulatory impact statement to one of its pieces of legislation. The reason is that the purpose of a regulatory impact statement has been covered in the national interest analysis. 
The first point I want to make about the labour memorandum of understanding with Hong Kong is that it commits New Zealand to cooperating on labour issues including participating in a cooperation programme and to holding meetings on a regular basis with senior Hong Kong officials on the area of labour and also the environment. The labour memorandum of understanding contains generally understood or recognised core trade and labour principles and is consistent with the policy framework for integrating labour into free-trade agreements. These principles include explicit recognition by both Hong Kong and New Zealand that labour laws regulations policies and practices should not be used for trade protectionist purposes nor should they be weakened or reduced in order to secure trade advantage. In other words a country cannot deliberately beat down its labour costs in order to undercut goods that are being imported or exported. So there can be no contrived trade advantage by the repression of labour standards. 
The specific reciprocal obligations for New Zealand under the memorandum of understanding on cooperation and related matters are first to maintain close dialogue with the stakeholders in the formulation of labour policies and practices. The second is to promote public awareness of labour laws and regulations that apply domestically. The third is to cooperate with Hong Kong on labour matters of mutual interest and benefit. The fourth is to designate a national contact point for labour matters to facilitate communication between the parties and to establish the cooperation programme that I alluded to earlier. The fifth one is to seek to provide funding to support mutually agreed cooperative activities and the sixth is to meet within the first year of the labour memorandum of understanding’s operation and thereafter as mutually decided by the parties. The final obligation is to consult the other party in the event of an issue arising over the memorandum of understanding’s interpretation or application. 
So it is quite an active memorandum of understanding. It is not simply about having a talkfest; it is about making sure that there is a programme of meetings that these meetings are held regularly and that there is in effect a dispute resolution process in terms of differences in the way in which each party interprets or applies the memorandum of understanding on labour issues. Any differences or issues between the two parties Hong Kong and New Zealand should be settled by mutual consultation and negotiation. The memorandum of understanding does not allow for any differences to be referred to any third party or international tribunal. So we have here a concrete example of an agreement being examined on a programmed basis to confirm that labour practices are not being used for protectionism or to undermine or confer any trade advantage on either party. So there is a dispute resolution process which I have alluded to already. 
That this closer economic partnership with Hong Kong and the free-trade agreement with China have labour and environment clauses built into them is an advance. The Committee will recall that the free-trade agreement with Malaysia that was recently debated in the House represented the very first time that Malaysia had had a labour clause inside a free-trade agreement which is an improvement. 
The second point is the environment cooperation agreement. The environment cooperation agreement between Hong Kong and New Zealand is consistent with the policy framework of integrating environment objectives into free-trade agreements and includes the core principles that establish a foundation for the bilateral relationship. These include explicit recognition by both parties that environmental laws regulations policies and practices should not be used for trade protectionist purposes nor should they be weakened or reduced in order to secure a trade advantage. This takes on very significant meaning when one applies it to such things as the fishing industry. It can be used to ensure that there is no cutting of corners within practices in the fishing industry in order to undercut a trade advantage or to secure an extra trade advantage. Again there are some specific reciprocal obligations for New Zealand under the environment cooperation agreement such as cooperating with Hong Kong on mutually determined environmental issues of common interest providing a list of areas of New Zealand’s interest and expertise encouraging and facilitating information and cooperation activities between relevant experts which is significant and again designating a national contact point so that there can be free-flowing conversation between the two parties and the ability for the parties to meet to establish oversee and evaluate cooperation activities. 
There are some other points in the environment cooperation agreement. I think it is a suitable addition to the closer economic partnership with Hong Kong. I look forward to such agreements becoming standard practice—and only being strengthened—in our trade relationships and our trade agreements with other nations as we proceed. Thank you. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I rise to speak in the Committee stage of the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill which deals with the Hong Kong preferential trade agreement. What is interesting about this deal is that aside from the purely voluntary environmental and labour side agreements which are not binding there has been much talk in this discussion about the tremendous advantage that New Zealand has received as a result of the free-trade agreement between New Zealand and China. It is used as a kind of model in some ways to justify this. It is a very common and convenient rhetoric but it is worth looking at the details of how the trade relationships between China and New Zealand have changed after the New Zealand - China free-trade agreement. 
If we look at the detail and try to use this as an argument for all the different preferential trade deals the Government is signing including the one before us we see that the big increase in New Zealand exports has been in dairy produce and in wood and articles of wood. There is a very simple reason for that. What China really wants from New Zealand are these basic commodities: dairy produce and wood. China wants wood for its booming commodity sector. As Tim Groser described it there is a giant sucking sound from China because China is sucking in completely unprocessed wood from New Zealand. It is a very cheap commodity. It had nothing to do with the New Zealand - China free-trade agreement whatsoever. The reason why we are sending a lot of wood to China is China wants wood not because we have some piece of paper that some people happened to have signed and think is significant. 
The second big increase has been in dairy produce. The reason that there has been a big increase in dairy produce is the San Lu disaster with the contaminated milk which was a catastrophe for many millions of Chinese parents and families. As a result they wanted clean green produce. The place they went to get clean green dairy produce was New Zealand. They perceived New Zealand’s food products to be environmentally sound which in turn means they are safe for their children. 
So the two great increases in exports from New Zealand to China have absolutely nothing whatsoever to do with the New Zealand - China free-trade agreement. Even though it is used constantly by those who support an ideological position in favour of free trade the truth is that the two big increases in commodity exports to China from New Zealand have nothing whatsoever to do with the free-trade agreement; it is simply used to justify the ideology of it. In understanding our relationship with China we must not take a naive position. I think that a lot of the debate in this House is extremely naive in its attitude towards China. 
The San Lu disaster is a very good example of that. We saw that the head of San Lu Tian Wenhua was both the chairwoman of San Lu and the head of San Lu’s Communist Party of China branch and the reasons for that were intimately connected. The Communist Party of China is the puppet master that runs all of the large corporations in China including San Lu. In the lead-up to the Olympics in Beijing there was an edict from the propaganda department. It said that people could not discuss food safety issues in the lead-up to the Olympics. It was produced by the propaganda department. Each week in China the propaganda department of the Communist Party of China sends out a list of topics that will not be discussed in the media that week and one of the issues that were not allowed to be discussed in the weeks leading up to the Olympics was food safety issues. So Tian Wenhua who was the chairwoman of San Lu— 
John Hayes 
: What’s this got to do with the bill? 
Dr RUSSEL NORMAN 
: I can tell Mr Hayes that it has everything to do with the bill. This is about the effectiveness of these free-trade agreements. I am trying to explain to the Committee that this particular free-trade agreement with Hong Kong like the one with China is not very effective. If we look at the increase in dairy exports to China we see it had nothing to do with the free-trade agreement and everything to do with San Lu. We can only understand San Lu if we understand the way in which the Communist Party of China controlled the company. In the lead-up to the Olympics the Communist Party said “Do not discuss food safety issues.” so the chairwoman of San Lu had a choice. She could either obey the Communist Party of China which said “Do not discuss food safety issues in the lead-up to the Olympics”— 
JACINDA ARDERN (Labour) 
: 
 I was willing to listen to Dr Norman continue his speech so I hope that he takes another call. It was not my intention to thieve the call from him. 
In beginning my address I acknowledge that a lot of cooperation generally sits around trade matters within this House and I think it is worth noting that for the wider public. When all the politicians from this House are out and about we consistently hear people asking why we do not agree more often on various issues. Trade negotiations are an area where we tend to see a certain level of cooperation for the benefit of New Zealand ultimately and I want to acknowledge that first up. However I do also point out that even though this is an area in which we probably have some broad agreement cross-party John Hayes can still find several areas where he would like to chip in with interjections and I am sure that I will not be safe from that either during my address. 
I also acknowledge that this trade agreement is unlike I believe one of our last agreements where we had a significant amount of debate and discussion within this place and in the media. That was in relation to New Zealand’s free-trade agreement with China. Obviously there are significant differences between that agreement and what we are looking at here. In particular Hong Kong already has very liberal trading laws that offer duty-free imports for all countries. But the closer economic partnership we are discussing today still offers additional benefits for New Zealand. However I will highlight a little later on those areas that were identified as being of some risk to us and acknowledge those areas. 
It is also important to note that Hong Kong is our ninth-largest export destination—at least it was in 2009. I think we frequently tend to home in on large Asian export destinations for New Zealand but it is important to acknowledge that there are particular industries that benefit from our arrangements with places like Hong Kong despite it being much smaller in comparison with the Chinese market. 
A significant amount of time goes into these negotiations. Although in this Chamber we might be presented with a relatively small bill at the end of the work this particular trade agreement held its roots as far back as I believe Jim Sutton originally. That alone points out— 
John Hayes 
: Yes he sat on it and did nothing. 
JACINDA ARDERN 
: —it did not take John Hayes long—the amount of work that goes into these agreements. Of course Phil Goff who has his stamp on a number of these agreements from when he was the trade Minister put a lot of work into this agreement and I want to recognise that at this point. 
Although we have already acknowledged the benefits of this particular closer economic partnership it is important to note the challenges that such partnerships can pose for our own internal markets. This one is different in that it has been acknowledged up front that Hong Kong as a market is more heavily focused on services rather than on the cheap manufacture of goods which has in the past been an area where we have seen our local manufacturers undercut. Very early on in the piece New Zealand acknowledged that in order to survive in an increasingly globalised world we were going to have to accept that that was going to happen and not only try to cushion that as much as possible but also identify those niche markets where we could continue to carve out a space for New Zealand as a value-added economy and one that can focus in on those areas where we have real strengths. I believe that research and development is emerging as one of those areas for this country. I would touch on the dairy industry but perhaps I will wait for Dr Norman to continue his contribution on that area instead. 
We must acknowledge that New Zealand manufacturers of footwear and textiles are probably the ones that will be facing the greatest risk from this closer economic partnership. Some of those manufacturers have already fallen on hard times during the recession. Some local members of Parliament would have seen the pressures that those companies are facing. Historically those pressures have been accumulating through various other trade agreements and I do not think we could say that any one of those agreements in particular triggered them but they do have a cumulative effect on some of our manufacturers. [ 
Interruption 
] 
Dr Russel Norman 
: I’m not rude like that member; I let people finish. I have manners. 
JACINDA ARDERN 
: And very soon I will give the member a nod when I am handing back the baton to the Greens. I have one final point that I want to draw further on which was a point made by my colleague Maryan Street in relation to an aspect of this closer economic partnership. The partnership has an environment agreement with shared objectives between New Zealand and Hong Kong that are aimed at improving the environment and enhancing the capacity and capability of each country’s Government agencies research organisations academic institutions and businesses in order to address trade and environment matters. I would like to hear a little more discussion within the Committee of what in practical terms that will mean for New Zealand but as a starting point I think it is incredibly important to acknowledge that we need to negotiate and entrench in these agreements those areas of most value and worth to us not just in economic terms but in terms of our country’s ideology. Environmental issues are some of those but also our labour laws and practices and our values in that area must be entrenched in these agreements. 
That is why I am particularly pleased that the closer economic partnership contains a labour memorandum of understanding. It states that although labour laws should not be used for protectionist measures—obviously there are a number of reasons why that cannot be the case—they should also not be weakened or reduced in order to increase trade and investment. Obviously that refers to the undercutting or loosening of labour laws or a race to the bottom as it were. It also provides a framework for New Zealand in which to raise concerns on labour issues with Hong Kong. 
I am particularly pleased to see this because whilst spending some time doing work with an international non-governmental organisation in a voluntary capacity over the years I saw numerous cases of very loose arrangements by corporates in the US in particular. For example corporates that had significant contracts with companies operating in the Philippines stated within their own internal organisation that their expectation was that labour laws be upheld within the company they were contracting in and that the labour laws of that country be upheld but we frequently saw that that was not the case. Yet who has the greatest lever to ensure that even the Philippines’ labour laws are upheld other than the company that is holding that contract in its hands? Who has the power to say that if labour laws and minimum wage terms and conditions for workers are not upheld it will not continue to maintain the contract? Obviously it is the company and if it is not the company it must be the country that maintains that level of responsibility. 
I am loath to burden or load too much weight on to the notion of corporate responsibility because I think there is a fine line between corporate responsibility and State neglect so I think it is important that we have equal measures of both and I think this closer economic partnership proves that it is possible to insert a country’s values around labour laws as a whole into one of these agreements. On that note I am pleased to make a contribution to this debate. I look forward to hearing the remainder of the contribution from my colleague Dr Norman. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 We were talking about the role of free-trade agreements and the increase of the sale of dairy into China—via Hong Kong but also directly into China—and the fact that the New Zealand - China Free Trade Agreement has nothing whatsoever to do with the fact that we have had an increase in dairy being sent to China. In fact it is all to do with the San Lu disaster. One of the things that people do not realise is that San Lu was working jointly with Fonterra when basically it was directed by the Chinese Communist Party not to talk about the fact that it was killing children with the melamine-infected milk products it was selling to Chinese parents. The products were killing children across China and making many children in China very very sick. But the Chinese Communist Party directed that the company was not to discuss anything to do with food safety in the lead-up to the Olympics because the party did not want any disturbance of the positive propaganda it was getting around the world with the Olympics. So the Chinese Communist Party committee that controlled San Lu decided that it would not do a full recall. There was then a board meeting of San Lu where there was a Fonterra representative. At that board meeting which was the legal formal structure that controlled San Lu a decision was made that there would be a full recall—or at least that is what the Fonterra representative said. The Fonterra representative was on the phone at the board meeting. 
At that point the Chinese Communist Party then overruled the board and in fact decided not to have a full recall. That is the reality that stands behind our dealing with China. Many people look at the formal legal structure such as of the board of San Lu but in fact if we want to have a proper understanding of what kind of relationship we have with China then we need to look at the fact that it is the Chinese Communist Party— 
The CHAIRPERSON (Eric Roy) 
: Leave was sought for a wide-ranging debate over the four clauses within this bill but I am struggling a wee bit to see the relevance of the member’s point. 
Todd McClay 
: So’s everyone on TV. 
The CHAIRPERSON (Eric Roy) 
: The member will take a walk if he is not careful. I am being as lenient as I can but I ask the member to make the speech relevant to the four clauses. 
Dr RUSSEL NORMAN 
: The relevance for those who are struggling to see it is that there has been much discussion in this debate—which Mr Chairperson has allowed—that these free-trade agreements increase trade with China. That has been the argument made. In fact that is not true; it is just what people argue. If we look at the facts of the matter we discover that the increase in trade to which people have been referring in the debate that Mr Chairperson has been allowing is due to the fact of the San Lu disaster and it has nothing whatsoever to do with the argument that people have been making—which is that it is because of the free-trade agreement. 
We can understand the San Lu disaster only if we understand the role of the Chinese Communist Party within that company. The disaster had nothing to do with the formal legal structures that people imagine they are working with in China such as the board of San Lu—and those are the kinds of legal structures we are dealing with—because in fact the real people who controlled San Lu were the Chinese Communist Party. 
It may be of interest to people in trying to understand the kind of relationship we are developing with China through these free-trade agreements and other kinds of relationships to know that in fact San Lu then paid an organisation called Baidu to censor all of the Internet searches for San Lu and milk powder. So all of the searches by parents inside China who were trying to understand what was going on were censored because San Lu paid for them to be censored. If that is the basis on which people became poisoned and if that then resulted in a big increase in New Zealand’s sales of milk products to China it had nothing whatsoever to do with the free-trade agreement. People think that it had something to do with it but Chinese parents were desperate for safe food to give to their children because of the San Lu disaster. The San Lu disaster happened because of the control of the Chinese Communist Party over the board of San Lu. Even though formally speaking the board was in control in fact the Chinese Communist Party branch within San Lu controlled that organisation. 
If members do not believe me then I suggest they read something about it. A very good book called  
The Party 
 by Richard McGregor explains the role of the Chinese Communist Party. He was a journalist for the  
Financial Times 
 and spent many years living in China. If members read that book they will see that it mentions San Lu at some length and explains why the New Zealand Government was duped into believing that the board of San Lu controlled that organisation when in fact the Chinese Communist Party controlled it. 
Labour and National do deals with what they think is the Government: the President the Prime Minister and all the rest. Of course the people who control what happens in China are the Chinese Communist Party; Government officials are merely the front. So the people with whom Labour and National are doing deals when they go to develop free-trade agreements or think they are doing a deal with—say Hu Jintao the President of China—are not the real powers. In fact Hu Jintao has his power because he is the Secretary-General of the Chinese Communist Party. 
Dr Paul Hutchison 
: I raise a point of order Mr Chairperson. I just note that the member persists in talking of a free-trade agreement with China. The bill we are on is about the New Zealand - Hong Kong economic partnership agreement. He is out of order. 
The CHAIRPERSON (Eric Roy) 
: Yes— 
Dr RUSSEL NORMAN 
: Speaking to the point of order— 
The CHAIRPERSON (Eric Roy) 
: I will hear the member. 
Dr RUSSEL NORMAN 
: The Hong Kong free-trade agreement will be brought into force as a result of this bill; this is one part of bringing it into force. It is the parallel agreement to the China agreement so all of us have been discussing both together because they are intimately connected. 
The CHAIRPERSON (Eric Roy) 
: The member is entitled to discuss other things for comparative purposes but the whole thrust of the member’s speech is not relevant really to the bill. Unless he comes back to the bill I will terminate his speech. 
Dr RUSSEL NORMAN 
: This bill by changing the tariff regime in New Zealand implements the content of the Hong Kong deal—the so-called free-trade deal. But it is not actually a free-trade deal. Anyone who knows anything about trade policy knows that this is a preferential trade deal but that is kind of irrelevant because most people voting on this do not know anything about trade policy. It is actually a preferential deal—that is it creates a preferential treatment of goods and services between New Zealand and Hong Kong and this bill implements that preferential trade deal. 
The parallel agreement that goes alongside that is the New Zealand - China free-trade agreement which is also a preferential trade deal between New Zealand and China. Those two agreements sit side by side and this bill implements some components—only a small element—of the Hong Kong - New Zealand preferential trade deal because only a small element requires legislation to be changed. The large bulk of the Hong Kong - New Zealand preferential trade deal does not require legislation. It is only the parts about tariffs in particular that need changing. Of course we already send our goods into Hong Kong tariff-free so although we are reducing our tariffs they are not reducing theirs. They do not need to because we do not need any of this agreement to be able to get our goods into Hong Kong tariff-free. But let us put that to one side because we all like to believe in the myth that we do. 
The problem we have when we are signing up to these agreements with China is that we imagine that with this deal we are signing up with something that looks like our Government. So we think that our Government is signing an agreement with the Hong Kong Government or with the Chinese Government as the case may be but in fact in China things do not work like that. The Governments there are actually the puppets if you like of the Chinese Communist Party. The leaders of the Chinese Communist Party are the puppet masters and anyone who knows anything about the way China works will know that in fact it is the Chinese Communist Party that determines what happens. When we look at the parallel structures that look like New Zealand Government structures we think they are very similar on the face of it. But they are not; they are quite different structures which are secretly and entirely under the control of the Chinese Communist Party. 
I will just give members one example just in case there are some doubters about this. Luo Gan who was on the Politburo Standing Committee—the body that controls the Chinese Communist Party—until 2007 said: “There is no question where legal departments should stand. The correct stand is where the party stands.” That means that courts in China are required to give verdicts that the Chinese Communist Party directs them to give. The courts are entirely under the control of the party. If we do not understand that the nature of China is different from the nature of New Zealand and that all of the institutions—the media the courts—are all under the control of the party and not separate institutions then we do not understand what we are dealing with when negotiating deals like this one. That is what happened to Fonterra with San Lu. Fonterra did not understand that that is what they were dealing with. In negotiating this deal some do not understand that we are not negotiating with a Government that works in the same way as the New Zealand Government does. 
So when we sign up to this deal we are not getting what we think we are getting; the way China works is very different from the way in which New Zealand works. That is why New Zealand has made so many mistakes in dealing with China and San Lu was simply the worst of them. That is why we will continue to make mistakes until we understand exactly what we are dealing with when we sign up to treaties like this one. 
A party vote was called for on the question  
That clauses 1 to 4 be agreed to. 
Ayes 110 
New Zealand National 58; New Zealand Labour 42; ACT New Zealand 5; Maori Party 3 (Flavell Sharples Turia); Progressive 1; United Future 1. 
Noes 8 
Green Party 6; Maori Party 2 (Harawira Katene). 
Clauses 1 to 4 agreed to. 
Bill reported without amendment. 
Report adopted. 
Third Reading 
Hon Dr JONATHAN COLEMAN (Minister of Immigration)  
on behalf of the Minister of Trade 
: 
 I move  
That the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill be now read a third time 
. On behalf of the Minister of Trade I am pleased to move this third reading. The bill received its second reading and underwent its Committee of the whole House stage earlier today. It amends New Zealand’s domestic legislation so that the New Zealand - Hong Kong closer economic partnership is ready to enter into force as soon as the Hong Kong Government has completed its internal processes on it. 
The closer economic partnership agreement with Hong Kong is a further achievement in New Zealand’s trade agenda. It stands to deliver real benefits to New Zealand businesses by guaranteeing tariff-free entry into the Hong Kong market securing more certainty of access for our services suppliers and providing a framework for regulatory cooperation and consultation. It is the first free-trade agreement that Hong Kong has signed outside mainland China. 
New Zealand has been striving to secure a trading agreement with Hong Kong for a number of years including under previous administrations for several reasons. Firstly Hong Kong is an important business hub in Asia. Asia is increasingly important to New Zealand as a partner for regional trade integration and it is a growing market for our exports. New Zealand’s trade with the Asian region grew by 5 percent in the last 12 months and it represents a massive $15 billion in annual export earnings for this country. Secondly Hong Kong is strategically important as a platform from which New Zealand companies and products enter mainland China. This closer economic partnership complements our free-trade agreement with China which was signed in April 2008 and is already delivering substantial benefits. Together these two agreements deliver a golden opportunity for New Zealand businesses to launch or continue to expand into the growing and dynamic Chinese market. New Zealand will be the only country in the world to have free-trade agreements with both mainland China and Hong Kong. 
Hong Kong’s wealth of experience in doing business with China and its connections to the Chinese and other Asian markets are unrivalled. At the same time it has a legal system very similar to that of New Zealand and an open transparent business environment. This makes Hong Kong an excellent location for New Zealand businesses that are looking to launch into a complex and sometimes daunting Asian market. Hong Kong is a significant market in its own right. It is currently New Zealand’s ninth-largest export destination. Merchandise trade between our two economies has been growing at an average of 7.5 percent per year for the past 5 years and last year it was worth almost NZ$1 billion. 
The closer economic partnership locks in duty-free access for all New Zealand exports to Hong Kong. This is a significant advantage over other countries with which Hong Kong is able to raise tariffs on 14 percent of import lines at any time. In return New Zealand is committed to phase out tariffs on imports from Hong Kong according to a schedule that is identical to the phasing under our free-trade agreement with China. The closer economic partnership is not just about goods; it also creates improved access for New Zealand service providers to Hong Kong. New Zealand providers will benefit from greater certainty of access into the Hong Kong services market including private education business services environmental services and logistics. This access is also future-proofed under the most favoured nation clause. Any preferential treatment that Hong Kong accords to other trading partners in future agreements in particular sectors will automatically be extended to New Zealand services suppliers. The closer economic partnership also extends the benefit of any liberalisation that Hong Kong makes domestically to New Zealand services suppliers in some currently reserved sectors. 
Under the closer economic partnership New Zealand business people will benefit from the faster processing of applications for business visas and short-term business visitors will be able to get a 90-day visa. Other aspects of the trading environment such as customs procedures sanitary and phytosanitary measures technical barriers to trade intellectual property competition and e-commerce receive comprehensive coverage in the closer economic partnership. 
Alongside the closer economic partnership New Zealand and Hong Kong have also entered into a memorandum of understanding on labour cooperation and an environmental cooperation agreement. I would also note that contrary to Mr Russel Norman’s assertion that the side agreements on labour and the environment are not legally binding I can confirm that these agreements are in fact legally binding. These agreements complement the content of the trade agreement and reinforce issues of importance to both countries. 
As part of the negotiations New Zealand and Hong Kong have also agreed to negotiate a comprehensive investment protocol within 2 years of the closer economic partnership’s entry into force. Although it is envisaged that the investment protocol will provide strengthened disciplines and protections for investors there is no intention that the protocol will alter the categories of investment that are subject to screening under the Overseas Investment Act. 
In summary this closer economic partnership with Hong Kong brings about significant advantages for New Zealand. It establishes a clear certain and effective framework for New Zealand companies to operate in a dynamic and rewarding market. It also complements our ground-breaking free-trade agreement with China. In other words we now have an unparalleled opportunity to increase our exports to a region that will continue to be of central importance to our economy in both the short and long term. I acknowledge the efforts of the officials of former Ministers of Trade and also of the stakeholders who contributed to this excellent outcome. I also acknowledge and thank the members of the Foreign Affairs Defence and Trade Committee for their consideration of the Hong Kong closer economic partnership bill. 
This bill will amend the Tariff Act 1988 by inserting “Hong Kong China” into the list of preferential countries in note 3 of the Tariff. This is the only statutory amendment that is required to give effect to the closer economic partnership. Following this amendment other amendments by regulation will also be required in order to enable the application of preferential tariff rates under the closer economic partnership. 
Our prosperity as a nation depends on our ability to trade and invest on the world market. We also depend on there being robust rules to govern trade and remove barriers so that our traders can compete fairly. These goals are embodied in this closer economic partnership which will benefit New Zealanders and which is supported by the majority of members in this House. I commend the bill to the House. 
Hon MARYAN STREET (Labour) 
: 
 I rise to speak to the third reading of the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill. I suppose that one of the dangers of taking an agreement like this and a bill of this nature through the House under urgency is the temptation to simply repeat what one has said in one’s first reading speech or in the case of today one’s second reading speech. So I will try to say some different things from what I said in my previous speeches. 
First of all I acknowledge all of the trade Ministers who have had a hand in this matter from Jim Sutton through to Phil Goff and now Tim Groser. Each of these trade Ministers has served New Zealand interests well and has got this closer economic partnership to the point where we can now pass its third reading this evening. I commend all of those Ministers for the assiduousness with which they pursued New Zealand’s interests. 
I also recognise officials who have provided a lot of the backbone to the negotiations. I particularly mention Julian Ludbrook as an official who has been intimately involved for many years in the development of this closer economic partnership. His expertise and his knowledge are both legendary and encyclopaedic. It is fitting that this House acknowledge his efforts on our behalf. 
The critical points of this closer economic partnership go to the relationship between New Zealand and Hong Kong. A school of thought abroad that is often given witness to by this Government is that foreign affairs equals trade and trade is foreign affairs. This party begs to differ. Foreign affairs is about relationships. It is about developing the kinds of trusting and constructive relationships that allow trade agreements to be struck. Those trade agreements are never struck in a vacuum; they are always agreed on in the context of ongoing relationships. 
New Zealand has had a relationship with Hong Kong for a very long time. I think it is currently our ninth or 10th largest export destination; it accounted for something in the order of $800 million worth of trade last year. New Zealand imported $199 million of merchandised goods from Hong Kong last year making it the 31st largest source of imported goods. 
Hong Kong is important because of not only the volume of trade that is conducted which has been increasing over time but also its geopolitical significance. This closer economic partnership hopes and intends to capitalise on Hong Kong’s regional and geographical presence in order to smooth the way of businesses into trade in China. More than that Hong Kong has for a long time been a very significant regional presence because it is a hub. It works as a shipping hub a financial transactions hub and a gateway to China. It has a deal of significance on many levels but each of them that I am describing at the moment are particularly practical. They are about facilitating trade not only into China through Hong Kong but also elsewhere in the Asia-Pacific region for New Zealand producers and manufacturers. It has regional geographical and facilitating significance which should not be ignored. 
One of our largest exports to Hong Kong is live crayfish. I think that that industry will benefit from the conditions that are contained in this closer economic partnership. As the tariffs reduce to 2016 it will signify a considerable improvement in profit and effectively productivity for our exporters. A small but extremely efficient export business in South Auckland is busy putting out as many crayfish as it legally can to Hong Kong. The crayfish are in a very good state which makes them a highly desirable commodity for Hong Kong. 
Amongst the top 20 imports from Hong Kong into New Zealand are of course machinery parts telephone equipment and computers. That will come as no surprise to anybody who picks up a mobile phone in New Zealand. This closer economic partnership will enhance mutual benefits not only by the reduction in tariffs which align with the free-trade agreement with China and its regime of tariff reduction but also—in the case of this closer economic partnership—with trade in services. We are able to trade a vast array of services with Hong Kong on a regular and an improved basis that will enhance New Zealand’s profitability and wealth and will serve to exchange knowledge and services in a way that can do both parties only good. 
I welcome this closer economic partnership. I pay tribute to those who have contributed to it and I thank the chair of the Foreign Affairs Defence and Trade Committee John Hayes for his part in shepherding this closer economic partnership through the select committee process. 
We are a trading nation. We have for decades traded in commodities. We are good at it and we need to consider how to add value to our commodities in order to improve the wealth that we can gain from trade. With this closer economic partnership we are seeing a new opportunity something quite expansive in terms of business services communications services and all kinds of services apart from education which already exists in Hong Kong as a substantial service from New Zealand. That makes this closer economic partnership something that I think can be a model or a template for future trade agreements. The concentration on services gives me great heart for the future of our country. There is a limit to how much we can produce in the way of agricultural produce and we should be getting smarter about the goods and services that we export. 
I join with the Minister of Immigration who is acting on behalf of the Minister of Trade tonight and commend this closer economic partnership agreement to the House in its third reading. 
JOHN HAYES (National—Wairarapa) 
: 
 It gives me considerable pleasure to stand in the House now in the third reading of the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill. I join with those who have already congratulated the Prime Minister and Tim Groser on their work in activating this bill after 8 years of stagnation following Jim Sutton’s intervention in 2001. We are doing this because it is really important that innovation provides access to world markets. Many of those crayfish that Maryan Street talked about actually begin in Ngawi or somewhere off the Wairarapa coast so this is immensely important to my electorate. It is also immensely important because the comparative advantage of this country is in exporting food whether it is dairy products meat vegetables horticultural products or even wine. That is really fundamentally important to people living in provincial New Zealand. 
This agreement is incredibly important because it is part of the Government’s focus on free trade and on improving access for our exporters to world markets. As I said earlier today that is a priority of the Prime Minister’s. He mentioned it in this Parliament in February in his Prime Minister’s statement. He knows and we on this side of the House know that it is only by lifting our economic performance that we can create jobs boost incomes improve living standards and provide the world-class services that Kiwi families deserve. 
I must say that the Green Party has got it wrong. The Green Party may have got it right in Australia but the Greens are seriously wrong here. The reason is that Green members do not seem to understand that these agreements lead to jobs employment and to the buying of things like Herceptin and other expensive drugs for use in our communities. We have to accept and the Green Party must accept that there is a huge change in the world’s geopolitical tectonic plates. China is on a growth curve and we need to understand that by 2050 China’s average standard of living will be half that of America’s. We need to understand that even in the period of the next 12 years if China’s average growth is only half what it is today there will be hundreds of millions in the middle class and tens of millions in its upper class. The purpose of this agreement is to give our producers access to those people. Even now—and I accept some of the Greens’ assertions about the difficulties of dealing with China—the Communist Party of China will have to deal with issues such as providing retirement benefits health insurance and access to health care. It will have to build infrastructure deal with a lack of drinking water and sewerage systems fight corruption and find work for hundreds of millions of people. It is fundamentally important that New Zealand stays linked to those processes and that is why I support this agreement and the Government supports it. We look forward to passing this bill at its third reading. Thank you. 
DAVID SHEARER (Labour—Mt Albert) 
: 
 It is with some pleasure that I rise to speak on the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill. Like some of the speakers before me I acknowledge those Ministers who have contributed to this bill over a number of years starting with Jim Sutton and including Phil Goff and Tim Groser. I also acknowledge Julian Ludbrook who as my colleague Maryan Street said has been in many ways a font of knowledge and an extremely wise asset to the Ministry of Foreign Affairs and Trade in being able to shepherd this sort of negotiation through quite a complex phase. I do not forget the Foreign Affairs Defence and Trade Committee or John Hayes’ ability to take on some of these issues to question rigorously the ministry and to ensure that we have a very good agreement. 
As other speakers before me have said this is an important bill because it will enable an application of preferential tariff rates under the closer economic partnership. Hong Kong already has as many of us know very liberal trading laws that offer duty-free imports for many countries and this closer economic partnership will add additional benefits. Not only is Hong Kong an important market in its own right as our ninth-largest export destination in 2009 but also it provides strategically—and I think John Hayes touched on this—a vital foothold for New Zealand businesses in gaining access to an expanding greater Chinese market. As has been said we are the only country in the world to hold an agreement of this nature with both China and Hong Kong. It amplifies the important position the two countries occupy in terms of what our economy will face in the future. Building economic relationships with Asia in general but specifically Hong Kong is vital to New Zealand’s future economic prosperity. Those are the major developing and expanding markets and as New Zealand depends so much on our exports the closer economic partnership is another step in that direction. 
The agreement has been evaluated both positively and negatively by the Ministry of Foreign Affairs and Trade. One of the negative impacts it could have is an impact on manufacturers of footwear and some textiles. That is something that has come up in other free-trade agreements before it. I think that with the degree of phase-out period for the tariffs in this particular case it will allow those businesses in New Zealand to be able to adjust and hopefully maintain and develop into a higher-niche occupation in terms of our manufacturing. In terms of both labour rights and environmental sustainability again they are most important values to New Zealand and to New Zealanders. They are core values that should not be sacrificed in the pursuit of increased trade. Under the closer economic partnership from what we can see much of that issue is contained in the environmental agreement with shared objectives and the labour memorandum of understanding which states that labour laws should not be used for protectionist measures and that they should also not be weakened or reduced to increase trade and investment. That too is locked into this agreement. 
There are a range of advantages for New Zealand. Many of them have been traversed earlier but they include better access and service in the key sectors of business communications and environmental services. We will achieve through this agreement favoured nation status enabling New Zealand exporters to benefit from the preferential treatment that Hong Kong provides to its future free-trade agreement partners. That will certainly ensure that we have a much better more sustainable and stronger relationship as we go into the future. The closer economic partnership as others have mentioned is future-proofed to a large degree by the ratchet clause which states that any future unilateral liberalisation in Hong Kong such as in education will apply under this agreement. Although not included in the closer economic partnership New Zealand and Hong Kong have agreed in a legally binding exchange of letters to negotiate an investment protocol within 2 years of the partnership coming into force. In a sense we are gaining advantages ensuring safeguards and ensuring that the agreement is robust enough to be able to be taken forward into the future. 
New Zealand has been at the vanguard of many of the free-trade agreements throughout the world. As many people know we were the first to make such an agreement with China and under this bill we now have a free-trade agreement with Hong Kong. Our exports to China have increased by 65 percent in the short time since 2008 when Phil Goff negotiated that agreement with China. It was historic and it has meant that China is now our second-largest export market. It is likely to become even more important into the future. If we look back it is a long way from 1972 when New Zealand shipped practically two-thirds or three-quarters of its exports to the UK. When the UK joined the European Economic Community we were suddenly faced with the reality that we needed to find other markets. In under 5 years the proportion of exports that we were sending to the UK was under 20 percent. That in a sense is a remarkable achievement when we look back in history. It shows that when New Zealand faces adversity like that we are able to respond and be flexible. I think those were the historic antecedents that formed the basis for our looking outward and our capacity to look at other countries in terms of free-trade agreements. 
We are very good at diversifying our trading partners but I would argue that we are not so good in terms of diversifying our economy. Our economy has largely stayed reliant on those same products that we once exported to the UK back in 1972. If there is one weakness and one underlying factor of the way in which our economy has been declining over the last few years it is the fact that the relative wealth we are achieving from our exported commodities in particular is not keeping pace with the imported manufactured goods that we need for our economy. I will give just a small anecdote. A couple of weeks ago I was visiting Scion the Crown research institute in Rotorua that does research into forestry and our forest products. It has developed amazing products such as plastics made out of wood biofuels made from wood products etc. The biggest failing of course is that right now most of our forests are effectively owned by foreigners. Although much of that technology could not increase our value-added exports it is not even able to be applied. Instead as Russel Norman mentioned we are shipping logs offshore to China in an untreated unfinished and unprocessed way and we are not achieving what we could be from our primary products. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I stand to speak on the third reading of the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill which implements some parts of the Hong Kong - New Zealand preferential trade agreement. 
I will touch on a couple of issues raised in the last speech on this bill which was from David Shearer. The first is some of the broader problems with these kinds of treaties particularly the investment clauses. Secondly why doing a deal with the Communist Party of China is particularly naive and stupid. 
In terms of the investment clauses in these treaties currently there is an exchange of letters developing the investment parts of this treaty but no doubt it will be very similar to the New Zealand - China free-trade agreement and will be modelled along the same lines. Effectively the investment clauses in these treaties lock in existing overseas investment rules so we cannot tighten the overseas investment rules beyond what they currently are without breaching the terms of the investment clauses within these treaties. So if we as a democratically elected Parliament were to decide that we want stronger rules around overseas investment than we currently have and we changed those rules we would be breaching the terms of the treaty we have signed with China and the terms of the treaty through the exchange of letters that is very likely to be signed with Hong Kong. In spite of all the rhetoric from Labour and National that they are concerned about the sell-off of farms tonight they are supporting a bill that locks in the current investment rules and means that we cannot tighten them. If we look at article 138 or article 141 of the New Zealand - China free-trade agreement we will see that that is exactly what that agreement says. We cannot tighten those rules without breaching the terms of the agreement. 
Secondly I would like to draw attention to the clauses on expropriation. In the New Zealand - China free-trade deal and there are parallels with the Hong Kong deal there are clauses about expropriation particularly indirect expropriation. That means that if we tighten the rules on environmental regulation with the result that a foreign investor in New Zealand loses money then New Zealand is required to compensate that person for the loss of the value of his or her business. These cases go to an international tribunal and the case is decided on by a three-person panel. That panel can decide that in fact the New Zealand Government has indirectly expropriated from a particular business by changing for example environmental rules or by tightening environmental rules. 
These treaties are set up to tie the hands of democratically elected Governments to make it harder for those Governments to regulate capital and business activities. I have no idea why Labour and National wish to restrict the ability of democratically elected Governments to regulate to protect the environment or to protect labour standards but there we have it. Why we would want to sign up to a treaty that means we cannot tighten overseas investment rules to stop the sell-off of farms to overseas owners is beyond me but that is what Labour and National want to do. Well if people vote for Labour or National then that is exactly what they will get. 
The other issues are labour and the environment. Much has been made of the side agreements on labour and environmental issues. We have seen side agreements with lots of these free-trade deals and they mean nothing. These side agreements mean absolutely nothing. Let us remember that the Chinese Communist Party is right now locking up trade unionists who are independent of the All-China Federation Trade Unions. There is an organisation called the All-China Federation Trade Unions which is the union controlled by the Chinese Communist Party. If people step outside of that union and become independent unionists they are locked up and put in jail—literally. These side agreements about labour mean absolutely nothing because the Chinese Communist Party has made it very clear that it is extremely hostile towards independent trade unionists. People whom we would consider legitimate like members of the New Zealand Council of Trade Unions would all be in jail if they lived in China. That kind of independent trade union activity is absolutely illegal in China; people cannot do it. So let us stop pretending that somehow there is some kind of independent trade union movement in China. Well there are people trying to have an independent trade union movement but they are the ones who are locked up and put in jail. So side agreements around labour and environmental standards mean very little. 
What really stands behind this kind of negotiation between Labour and National in New Zealand and the Chinese Communist Party is an incredible naivety and maybe a wilful ignorance about the nature of the Chinese Communist Party that Labour and National are negotiating with. Let us remind ourselves of the nature of the Chinese Communist Party that we are negotiating this treaty with. 
The Chinese Communist Party has eradicated all political rivals. There are no political rivals in China; it is a one-party State—try to do something different! It has eliminated the autonomy of the courts. The courts must implement the decisions of the Chinese Communist Party. China does not have an independent judiciary. That is what we are dealing with. It has eliminated the autonomy of the press. Every week the propaganda department of the Chinese Communist Party literally puts out instructions as to what can and cannot be covered in the media in China. The Chinese Communist Party which Labour and National are so intent on negotiating this treaty with has restricted religion. Of course it has locked out the Falun Gong. Civil society is extremely restricted. It has centralised all political power it has extensive networks of security police and dissidents are routinely sent to labour camps. But Labour and National are very happy to negotiate with the Chinese Communist Party— 
Mr DEPUTY SPEAKER 
: I am sorry to interrupt the member but I am having difficulty hearing him. Can I ask that the other discussions that are going on be held at a lower level or out in the lobbies please. I want to hear what the member has to say. 
Dr RUSSEL NORMAN 
: It is very important when negotiating this treaty that we understand the kind of organisation we have been negotiating with. We also need to understand what the Chinese Communist Party wants from New Zealand. What the Chinese Communist Party wants from New Zealand is raw commodities. That is actually what this treaty is about. The treaty is about getting access to raw commodities coming out of New Zealand. What China particularly wants access to is dairy and lumber—timber products—and other kinds of commodities. The whole purpose of negotiating this treaty from the side of the Chinese Communist Party—both the Hong Kong one and the Chinese one which work in parallel—is to get access to New Zealand’s primary commodities. People say that the treaty is about something else but from the Chinese Communist Party’s side that is what it is all about. 
The strategy of the Chinese Communist Party has been incredibly intelligent. China has had extremely low wages it has built up enormous reserves and now with those enormous reserves it is going out and buying up commodity producers and natural resources all around the planet. That is why we see the current interest from Natural Dairy in dairy farms in New Zealand. China is trying to buy up farms in New Zealand so that it can send commodities back to Hong Kong. The treaty that Labour and National are so very keen on negotiating will facilitate the ability of Natural Dairy to buy dairy farms in New Zealand and export the dairy produce back to Hong Kong. Natural Dairy is a company listed on the Hong Kong Stock Exchange and this treaty that Labour and National have signed with the Chinese Communist Party will facilitate the ability of Natural Dairy to buy dairy farms in New Zealand because we will not be able to tighten the overseas investment rules. This treaty puts a ratchet clause on the overseas investment rules. According to this treaty we cannot tighten the overseas investment rules. So Natural Dairy will have increased ability to buy up dairy farms. The treaty also makes sure that the goods coming out of those dairy farms that Natural Dairy buys in New Zealand are exported back to Hong Kong and ultimately China. 
From the point of view of China and Hong Kong—Hong Kong is part of China—they want access to these kinds of commodities. They are in a process of buying up farmland all around the planet—not just in New Zealand but all around the planet—and buying up mineral reserves in order to get access to them. 
People may remember the controversy about Rio Tinto and the fact that Chinalco the big Chinese aluminium company tried to prevent the amalgamation of BHP Billiton and Rio Tinto. That was part of the same strategy. The Chinese Communist Party wants to get access to natural resources all around the planet in order to get them back to China which makes perfect sense. This treaty is part of that strategy. Why would the Chinese Communist Party not sign it? Of course it will sign up if New Zealand is silly enough to sign a treaty that makes it easier for the Chinese to buy farmland in New Zealand and get access to dairy products. Of course it would sign it; it makes sense for the Chinese Communist Party to sign it. The question is whether it makes sense for New Zealand. Of course the answer is that it does not. 
That is why the Green Party will not be voting for this bill. It is a silly treaty and we should not be part of it. It is bad for New Zealand. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Deputy Speaker. Kia ora tatou katoa i tenei po. The mere fact that we have a split vote in the Maori Party obviously indicates that there is a degree of support but also that an opportunity has arisen through our vote to register some serious issues we had raised. I cannot say that they align with Dr Norman’s too much but certainly there are some concerns nevertheless. 
The Maori Party is on record as having a range of concerns about the impact of free-trade agreements. Our major concern is the long-term prosperity of workers and businesses. We are concerned also about the protection of New Zealand’s markets tariff rates biosecurity environmental issues including climate change and overseas investment. 
As has been spoken about this bill implements a bilateral trade agreement—namely the New Zealand - Hong Kong China Closer Economic Partnership Agreement. The amendment to the tariff will enable the application of preferential tariff rates to be applied to goods imported from Hong Kong. The New Zealand - Hong Kong China Closer Economic Partnership Agreement largely mirrors as Dr Norman talked about New Zealand’s prior free-trade agreement with China. 
Due to liberalising our laws we have a concern about businesses and workers including Maori that may be forced to produce their goods at the lowest cost by taking production offshore. Of course the logical consequences of taking production offshore are both job losses at home while also willingly providing New Zealanders with an opportunity—as if they needed it—to buy overseas goods rather than those made in New Zealand. 
So where will the impact be most profound? Well the free-trade agreement’s greatest negative impact has been on the manufacturing sector which has a high Maori and Pacific Island workforce. Although there has been some comment passed that Maori businesses may stand to be disadvantaged by this approach the impact is felt more by Maori workers in the manufacturing sector regardless of who owns the businesses. From what we can work out the loss of the manufacturing base has had an impact only on Maori businesses in the manufacturing sector. Two examples I can cite are those located in Opotiki owned by Te Whakatohea and in South Auckland. The name of the firm is KT Footwear and the person who led the company was Karroll Brent-Edmondson. Both firms manufactured footwear and both closed as a result of cheap imports. 
By far the most enduring legacy of the free-trade agreement will be on the Maori workforce. As at June 2008 12000 Maori were employed in the agriculture forestry and fishing primary production area; and 29000 Maori were employed in the manufacturing area. Maori laid off from a factory in New Zealand did not get jobs in New Zealand - owned factories that relocated to low-wage Asian economies. 
We know full well that the huge appetite the world has for primary produce in emerging super-power Asian countries like China will not change as a result of some of the Maori Party voting against this bill. We also know that many Maori businesses are looking to advance the promise of prosperity. This is a key objective of our policy manifesto  
He Aha Te Mea Nui? He Tangata He Tangata He Tangata 
; we will incentivise whanau and family businesses to grow. We want to see Maori businesses develop and also to increase employment but we cannot ignore the fact that in the latest household labour force survey Maori unemployment went up from 14.2 percent to 16.4 percent. That means 26400 Maori are now without jobs—an increase of 3600 since the previous quarter. 
I need to say that another part of our  
He Aha Te Mea Nui? He Tangata He Tangata He Tangata 
 manifesto was to invest in development programmes that will forecast the long-term opportunities and skills required to increase productivity and economic growth. This is where we get caught between a rock and a hard place. Maori concerns in regard to manaakitanga and how workers in both countries are being treated in regard to workers’ rights and minimum standards on labour issues have long been an issue for our party. The lack of recognition of tangata whenua in free-trade agreements and in incidental tariffs with overseas partners undermines the Treaty of Waitangi but on the other hand we will never stand in the way of allowing Maori businesses to thrive. That is why we obviously have arrived at a position of voting: two members opposed and three members in favour. 
JACQUI DEAN (National—Waitaki) 
: 
 The Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill is an excellent bill and represents a huge opportunity for New Zealand exporting business. My speeches in this debate have focused on the agricultural sector because that is the nature of the electorate I am proud to represent. I conclude my contribution to this debate by saying once again that this free-trade agreement with Hong Kong and China presents New Zealand with an opportunity and it is now up to the agricultural sector to take advantage of that opportunity. I have talked about sheep and beef farmers and I quickly mention our dairy industry which takes up a third of the world’s dairy trade. We are a significant international player in the dairy sector and this free-trade agreement presents a further opportunity for Fonterra in New Zealand. Food is valued by the world. We in New Zealand tend to take that for granted but our food our milk products our sheep and beef products and all the other products we produce are a valued commodity. I say again in commending this bill to the House that this represents an excellent opportunity and builds on the excellent work of the Minister of Trade Tim Groser and the Prime Minister John Key. I commend this bill to the House. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 It is indeed a pleasure to speak on the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill. It is an excellent piece of work and it is clearly supported by both the major parties. I was particularly interested in hearing the Hon Pete Hodgson wax philosophical for a moment pointing out that the two major parties agree and have agreed for a long time on the huge value of expediting and ensuring greater trade and greater exports because they are the lifeblood of our country. But I was concerned to hear the Hon Peter Hodgson in some respect excuse the Greens for the stance that they take. I must say that it is some concern to read the Green Party minority view which suggests that the Government theory on trade is flawed. It has been a pleasure from time to time to hear the sonorous if not soporific speeches of Dr Kennedy Graham. But tonight unfortunately we had to listen to the nasal narrative of Dr Russel Norman and that is simply another matter. 
There is no doubt that as time goes on China’s exports to New Zealand will increase in both quality and in price. In fact the other day when I was down in Newmarket one of the furniture manufacturers told me that some of the more expensive Chinese products are actually more expensive than the New Zealand - made ones. So there is no doubt that as time goes on it is very important to have this continual ability to improve our products to have the constant need to keep on our toes to constantly innovate so that we improve our products and to improve our trade. I commend this bill in its third reading to the House. 
A party vote was called for on the question  
That the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill be now read a third time. 
Ayes 110 
New Zealand National 58; New Zealand Labour 42; ACT New Zealand 5; Maori Party 3 (Flavell Sharples Turia); Progressive 1; United Future 1. 
Noes 7 
Green Party 7; Maori Party 2 (Harawira Katene). 
Bill read a third time. 
Trans-Tasman Proceedings Bill 
Second Reading 
Hon CHRISTOPHER FINLAYSON (Attorney-General) 
on behalf of the  
Minister of Justice 
: I move  
That the Trans-Tasman Proceedings Bill be now read a second time 
. The bill contains a package of new measures aimed at resolving civil disputes involving both the Australian and New Zealand jurisdictions more effectively and at lower cost. It will also improve regulatory enforcement between New Zealand and Australia to the benefit of both countries. The bill implements the Agreement between the Government of New Zealand and the Government of Australia on Trans-Tasman Court Proceedings and Regulatory Enforcement a document signed by the previous Government in 2008. The Australian Parliament passed the equivalent Trans-Tasman Proceedings Act 2010 in March this year. The Australian Act mirrors this bill as introduced except where differences were necessary due to different legal and political contexts. The new regime to be created by the bill and the Australian Act is one of several initiatives that the Government is progressing to help bring about a single economic market between the two countries. As the Prime Minister said in his statement to Parliament in February the single economic market is to be given a new impetus this year. 
I thank the Justice and Electoral Committee for its consideration of the bill particularly within a shortened time frame. The committee made a number of recommendations to improve the operation of the new regime on both sides of the Tasman and aligned the bill more closely with the Australian Act. For example proceedings filed but not served before the legislation comes into force will be able to be served on defendants in Australia under the new service arrangements in the bill. However the bill as introduced meant that those defendants would not have been able to apply for the New Zealand proceedings to be stayed using the new test in the bill. They would also not have been able to appear by video link as of right at a hearing of their application. The committee recommended a change to ensure that all defendants served with proceedings under the bill are able to apply for those proceedings to be stayed under the new arrangements. I expect that the Australian Act will be amended to reflect that change and other changes recommended by the committee where necessary for the two statutes to remain aligned. The committee recommended for example that the purpose clause of the bill be changed to mirror the purpose section of the Australian Act. This is important because purpose sections are used as an aid to interpretation by the courts. 
The committee also recommended that a provision be inserted to clarify that the trans-Tasman evidence regime which is being extended to criminal matters will operate in parallel with the Mutual Assistance in Criminal Matters Act. There is already an equivalent provision in the Australian Act. The committee also made recommendations to ensure that the bill worked in the New Zealand context. The New Zealand Law Society submitted that it was important that the bill allow rules to be made to implement the new regime not only under the Judicature Act and the District Courts Act but also under the Family Courts Act because aspects of this bill will apply to many Family Court proceedings. The committee agreed and recommended that the bill allow rules to be made using any power to make procedural rules for a court or tribunal. That raises an important point namely that the bill is relevant to business and personal civil disputes. Australia is the biggest market for our manufactured products a crucial source of our foreign investment an important source of our skills and a significant source of our tourism earnings but with more than 460000 New Zealanders living in Australia our personal relationships also bridge the Tasman Sea. This bill will span those different spheres by making it easier to resolve disputes that arise with connections to both New Zealand and Australia and will allow a greater range of judgments to be enforced. 
The Trans-Tasman Proceedings Bill is an example of the level of integration that can be achieved between these two civil justice systems where both countries share a common legal heritage and each country has sufficient confidence in the other’s judicial and regulatory institutions. I commend the bill to the House. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 My involvement in the Trans-Tasman Proceedings Bill which we have before the House dates back to 2003 when I was an Associate Minister of Justice and was instrumental in establishing the Trans-Tasman Working Group on Court Proceedings and Regulatory Enforcement. That is where the whole process began. It is therefore particularly satisfying that I am able to contribute to the final set of legislative steps that need to be taken for it to be enacted. 
There obviously has been a lot of water under the bridge since 2003. It was just a matter of luck or chance that I was able to step in for the Attorney-General at the time and sign the Agreement between the Government of New Zealand and the Government of Australia on Trans-Tasman Court Proceedings and Regulatory Enforcement. I have even brought a copy of it down to the House because it does have my signature on it—and I am kind of proud of that—on behalf of the Government of New Zealand. The Attorney-General of Australia at the time Robert McClelland signed for the Government of Australia. 
Charles Chauvel 
: He still is. 
Hon LIANNE DALZIEL 
: He still is the Attorney-General at this stage. 
The reason I mention that is that I had the wonderful opportunity of being at the signing ceremony which was conducted at the High Court in Christchurch which of course is my home town. There are not going to be many opportunities in my life to sit on the bench of the High Court but I had the opportunity on that occasion and it was a great honour to be able to do that. 
I think it is worthwhile reading out the preamble to the agreement that we signed that day because the preamble encapsulates the essence of the legislation that we have before the House and that will conclude its stages while the House is in urgency. “The Government of New Zealand and the Government of Australia … Conscious of their long-standing friendship and close historic political and economic relationship; Recognising the development of that relationship through the framework established by the Australia New Zealand Closer Economic Relations Trade Agreement done at Canberra on 28 March 1983 and subsequent arrangements and agreements developed within that framework of which this Agreement forms a part; Acknowledging each Party’s confidence in the judicial and regulatory institutions of the other Party; Affirming their shared commitment to appropriate and effective resolution of trans-Tasman civil disputes and increased regulatory cooperation; Desiring therefore to establish a new trans-Tasman regime building on the existing cooperative regime covering the taking of evidence and associated court procedures to further streamline aspects of civil court proceedings and regulatory enforcement and reduce unnecessary procedural and regulatory barriers to the conduct of litigation; Have agreed as follows:”. And there follow the pages of the agreement including the articles that have now been translated into the legislative form before the House. 
What we have seen happen over the period I have mentioned from 2003 to 2010 has been a significant step because there has been willingness on both sides of the Tasman to place trust in each other’s judicial and regulatory processes. I think that is absolutely fundamental to the development of the single economic market that the Attorney-General spoke about. The proposals in that agreement took the innovation and cooperation that had already existed with the CER to a new level and I think it has established itself as a very important fundamental from a civil justice perspective as it will improve the resolution of legal disputes that involve parties and/or assets on either side of the Tasman. 
Looking at the magnitude of the problem I reflect back on the regulatory impact statement. Tragically in a way this was one of the last pieces of legislation to be tabled in this House that had the regulatory impact statement included in the explanatory note. The useful thing about having this information at hand when we are debating legislation is that it states the problem that the legislation is designed to address. I think it is instructive to look at what that actually means in the context of this legislation. Here we have a statement of the magnitude of the increase in the movement of people assets and services between New Zealand and Australia and I think those figures are worth recalling for the record. In 2006 over 900000 Australians visited New Zealand and well over 1 million New Zealanders visited Australia almost 450000 New Zealanders live in Australia and around 60000 Australians live in New Zealand. In the year ended June 2006—it is a little out of date now—goods exported from Australia to New Zealand came to NZ$7.641 million and goods exported from New Zealand to Australia came to NZ$6.806 million. In the year ended September 2006 New Zealand exports of services to Australia came to NZ$2.387 million and Australian exports to New Zealand came to NZ$3.588 million. As at 31 March 2006 total Australian investment in New Zealand was in the region of NZ$68 billion and total New Zealand investment in Australia was in the region of NZ$25 billion. 
The point is made in the regulatory impact statement that “This leads inevitably to a greater number of disputes involving individuals or businesses with a cross-border element. Under the Australia New Zealand Closer Economic Relations Agreement (CER) and the work around achieving a Single Economic Market with Australia (SEM) each country also has a significant interest in the effectiveness of existing regulatory regimes such as the Commerce and Securities Acts and their Australian equivalents to ensure that limits to the reach of each country’s regulatory system are not exploited and that consumers have effective redress.” I think the fact that the regulatory impact statement actually mentions the importance of ensuring that the reach of each country’s regulatory system is not exploited points out the reality of the situation. We have to rely on one or the other because there can be an element of regulatory arbitrage to avoid the enforcement of proceedings in one jurisdiction by simply removing oneself to the other and expecting the matter to be addressed in that context. 
When I signed the agreement on behalf of the New Zealand Government I commented that in my role as Minister of Commerce I could see some very broad benefits in the approach that was being adopted. As well as facilitating the effective resolution of legal disputes the arrangements for regulatory enforcement are very important in that CER context and will certainly support the then recently implemented arrangements for trans-Tasman securities offerings the operation of the Trans-Tasman Mutual Recognition Arrangement and future coordination initiatives. So the agreement not only deals with current situations in terms of proceedings on both sides of the Tasman but is a good platform for other initiatives taken under the umbrella of the CER and single economic market agenda. 
The last thing I will mention is that although I did not sit on the Justice and Electoral Committee that considered the bill it is clear from the report back from the select committee that it undertook quite detailed analysis of the legislation picked up some of the issues that the Attorney-General mentioned in his comments in the House and considerably improved aspects of the bill in order to address concerns raised in submissions. One of the concerns which had been previously raised by way of public comment on the legislation was about the proposed recognition and enforcement of regulatory sanctions. They had been identified as potentially the most controversial part of the regime. The argument was that they partially displaced the longstanding rule that domestic courts do not enforce penal as opposed to compensatory laws of foreign States because to do so is contrary to the principles of independent sovereignty. But given that that is rather a big issue I might leave it to the Committee stage. 
CHESTER BORROWS (National—Whanganui) 
: 
 The Trans-Tasman Proceedings Bill is a product of the highly efficient Justice and Electoral Committee—a committee that does all its work in good faith and with esprit de corps apart from the days when we do not get on and give each other a slap. But there have been no toys on the floor or anything else of late. 
The bill a key priority for the National-led Government will enable New Zealand to work with Australia to create a single economic market to provide a seamless operating environment for business. Enhancing international legal cooperation is also a vital part of this Government’s broader economic reform agenda reducing the costs of doing business in the international market place. Our wonderful Prime Minister John Key emphasised the importance of the single economic market when he outlined the Government’s programme for the year in February saying that we were giving the single economic market new impetus. 
The Trans-Tasman Proceedings Bill reflects the commitment both the New Zealand and Australian Governments have made to enhance the operation of the single economic market. Australia is often the first stop for New Zealand businesses looking to expand into an overseas market but getting to grips with different federal and state regulations can sometimes be a challenge for us all. The single economic market is about aligning the regulatory environment in New Zealand and Australia so that a New Zealand company can do business in Palmerston Northern Territory as easily as it can in Palmerston North New Zealand. I commend this bill to the House. 
CHARLES CHAUVEL (Labour) 
: 
 It is a pleasure to rise today to speak on the Trans-Tasman Proceedings Bill and also to have heard what members so far have had to say about this legislation in particular the Attorney-General on behalf of the Minister of Justice and my colleague Lianne Dalziel. I mean no disrespect to the chair of the Justice and Electoral Committee but his was a brief contribution. 
I think the praise that the legislation has had from both sides of the House is testament to the hard work started by Helen Clark and Lianne Dalziel in 2003 and the agreement worked on by Lianne Dalziel in 2008 which resulted in the bill that we are debating today. Good on the Government for progressing it! It is an important piece of legislation. It is a shame that it is being progressed under urgency; there is no particular requirement that it should be. None the less we are where we are. 
In 2003 as we heard from Lianne Dalziel Helen Clark and Australia’s then Prime Minister John Howard—my how time flies—signed off on the Trans-Tasman Working Group on Court Proceedings and Regulatory Enforcement. That group reported back in 2006. There were a range of recommendations in the report back such as increasing the use of new video technologies and increasing the types of judgments that can be enforced in both Australia and New Zealand including civil pecuniary penalties and criminal fines. 
As Lianne Dalziel told the House an agreement reached with Australian legislators in 2008 under her guidance saw this bill drafted. I note with interest that some of the changes in it have been praised by David Goddard QC one of our leading litigators as the furthest-reaching proposals between any two sovereign States with separate legal systems. Those in the House who know the barrister whom I have just quoted will know that he has a particular interest in comparative law. If he said that that is the case as far as mutual commercial arrangements are concerned then there is a very good chance that he is right. So it is interesting to look at the scope of the arrangements that are in contemplation by the House. Achieving a change this significant really is something quite noteworthy. I say that it is as a testament to the work that Lianne Dalziel did when she was a Minister. 
It is also worthwhile to look at the work that the Law and Order Committee did. It concluded that the recommendations of Lianne Dalziel’s agreement as set out in the bill will make trans-Tasman proceedings simpler and more affordable for businesses and individuals. They will support a successful trade relationship between New Zealand and Australia. They will expand the range of enforceable judgments. Very importantly they will avoid any incentive for people to move along with their assets to one country or the other in order to try to evade the execution or the commencement of legal proceedings in the other jurisdiction. Well that is the background to how the bill originated. 
I will give a brief description of some of the comments that we have had from the select committee as well as look at some of the changes that have been recommended by it along with Supplementary Order Paper 160 which the Minister plans to move during the Committee stage. The committee’s changes are largely minor and technical in nature. For example there is to be a new clause 22(1A) inserted to make sure that a person served in Australia in respect of New Zealand proceedings can apply for a stay of proceedings if the person wants to argue that the matter would be better dealt with or more conveniently dealt with in an Australian court. There is clarification of regulation-making powers to provide sufficient rule-making ability so that the courts can ensure that the bill can be implemented properly. 
The committee has also recommended that there should be an ambiguity removed. When somebody in New Zealand appears by an audiovisual link in Australian proceedings Australian law applies to the remote appearance. The committee has also recommended minor tweaks to ensure that the bill is consistent with the relevant Australian legislation relating to contempt of courts and tribunals and to ensure consistency between the purpose of the bill as set out in its third clause and that of the agreement between Australia and New Zealand. The Courts (Remote Participation) Act is a recent law. The committee has taken care to recommend that its provisions will not apply to remote appearances made under this bill and that the trans-Tasman evidence regime will operate in parallel with and not override or be subject to mutual assistance in criminal matters legislation. Overall these amendments appear sensible. I think members on this side of the House intend to express their support for them. They are technical changes that largely leave intact the hard work done by the previous Minister of Justice and the previous Labour Government. 
The technical amendments that the Minister will move in Supplementary Order Paper 160 at the Committee stage are again ones that seem worthy of support because of their technical nature. Clause 26 is to be amended to align its wording with that of clause 24. Clauses 31(2) and (3) are to be omitted by the Supplementary Order Paper because they are unnecessary in a trans-Tasman context and may discourage New Zealand courts from giving interim relief and support of proceedings in Australian courts. Clearly that would not be desirable in the sort of regime that we are trying to set up here. Finally new clause 33A clauses 39 40 54 and schedule 2 are amended to correct errors. 
This is a good bill. As I said earlier I am pleased that the present Government is adopting and expediting the good work that was done by Lianne Dalziel as an Associate Minster of Justice. The bill recognises our increasing closeness with Australia and it eases economic interaction as well as interaction between our justice systems. This is sensible given the close relationship between our people and given the fact that the legal system that we currently have originated as part of the jurisdiction of New South Wales back in 1840 and has diverged since. In a sense we are correcting some of that divergence through this legislation hopefully for the benefit of ordinary New Zealand citizens taxpayers and business people. 
If someone sells their house in New Zealand and moves to Australia and there is a problem with the house or the settlement later court proceedings will take place in New Zealand. But if a judgment is made and fines imposed the person in Australia will not simply be able to ignore those with ease under this legislation. Under the new regime proposed in this bill an Australian court will be able to enforce the judgment made in New Zealand. That is a sensible thing. It is actually a shame that we have not done this before. 
The bill is a good step along the way to creating a single economic market. There is much more that we need to do as a Parliament if we are serious about this relationship. Even if David Goddard is right and this is the most ambitious alignment of legal systems between two sovereign States there is so much more we could do to make business easier between the two countries. I lived and worked in Sydney for a couple of years when I was a partner in my old law firm and I know there were real frustrations that business people and travellers between the Tasman experienced. One cannot get a single mobile phone account or a single bank account. Those are the sorts of things that we absolutely need to correct if we are serious about the single economic market. Members on this side of the House certainly are and we have a very ambitious set of plans for advancing the agenda. I hope the fact that the Government is advancing this bill indicates that it is similarly ambitious although I have to say the evidence in respect of that is so far lacking. 
This bill does work to make our changing situations in Australia and New Zealand easier for everyone so I do look forward to hearing further debate on the bill in the Committee stage. I commend the bill to the House. 
KEITH LOCKE (Green) 
: 
 The Green Party will be supporting the Trans-Tasman Proceedings Bill as a way of improving the trans-Tasman cooperation on civil proceedings and on business proceedings. It builds on some of the existing trans-Tasman legislation. As Charles Chauvel has said it makes some of the procedures simpler and more affordable. As Charles Chauvel said it will enable people to choose the most appropriate jurisdiction in certain circumstances—Australian or New Zealand—and expand the range of practical and enforceable judgments. I will be interested to listen to Lianne Dalziel’s comments on the use of penal sanctions across the two countries and who can apply what. It is not a straightforward issue. There are questions of basic sovereignty as well. There is often a bit of conflict between the sovereignty issues and practical issues in order for us to conduct trans-Tasman business in the best possible way and avoid people escaping civil jurisdiction by running across the Tasman in either direction. 
There is a lot going for this bill but that being said there is another side to it that Kennedy Graham referred to in his first reading speech. There can be upsides and downsides in the single economic market as has been referred to by previous speakers. It can work two ways. As Charles Chauvel said if there are similar jurisdictions on both sides of the Tasman then people will not necessarily lift their assets from one country and take them to the other country thus disrupting the economies of one or both countries. 
But on the other hand what we have seen with the development of the single economic market is in some ways a greater domination of New Zealand by the Australian banks and the Australian-owned supermarkets. Many head offices disappear to Sydney or Melbourne and more and more the Auckland Wellington and Christchurch offices become branch offices of trans-Tasman companies. That has its upsides but there can be downsides. Sometimes the Australian-owned supermarkets that are part of a trans-Tasman operation will source from Australian producers and leave the New Zealand producers aside not because the New Zealand producers are necessarily less efficient but because of economies of scale they deal with just Australian producers for their supermarkets on both sides of the Tasman. 
There are problems like that and we have had problems linking up other regulations in relation to food standards and therapeutic products which are still a matter of ongoing dispute between Australia and New Zealand. Often we have somewhat different interests so we have to be a bit careful when we adopt common procedures that we do not do so in a way that disadvantages New Zealand as the smaller player. 
When we talk about a single economic market it can mean various levels of integration and we have to be careful that we do not just slip into a common currency or a common Reserve Bank which in some ways is a logical consequence of a single economic market. When we get down to that level we are getting into problems of economic sovereignty and problems of different dynamics operating in the economies between the two countries. The Australian economy is governed particularly by the cycles of prices for minerals—the stuff they get out of the ground—whereas the New Zealand economy is to a significant extent governed by the prices we get for our dairy products. Those cycles may not synchronise exactly and we have seen the problems Europe has. I am not necessarily against the euro but we can see that certain problems have developed with the application of the euro in Europe with different dynamics in relation to interest rates and the operation of the euro which have meant that what is happening to the euro might suit Germany but may not necessarily suit Greece. That is a problem with a common currency before one goes to some greater political or economic unification. 
As we make these changes to improve our relations across the Tasman and our trans-Tasman coordination of law we have to look at whether we are giving up too much sovereignty. Of course in some trans-Tasman areas we have been successful. We now have sporting teams competing in virtually every Australian sport from netball to rugby to rugby league to soccer; you name it we are in an Australian competition. New Zealand teams such as the local team here in Wellington the Phoenix are doing quite well in those competitions. The Warriors might get in the top eight in the NRL and perhaps go further. There is a lot of trans-Tasman activity that is very useful. I can see from looking at other MPs that they are very intrigued by this ending to my speech but I indicate that the Green Party will be supporting this bill. 
SIMON BRIDGES (National—Tauranga) 
: 
 The Trans-Tasman Proceedings Bill is part of a much broader picture. We have very very close relations with our Australian cousins. 
Hon David Parker 
: Except on wages. 
SIMON BRIDGES 
: This morning on television and it might also have been in the newspaper there was some navel gazing about whether Tony Abbott or Julia Gillard would be better for our country and our economic relationships. Well that just shows insecurity because the reality is that we have a very close relationship at all levels. 
To answer David Parker’s interjection we stand to benefit the better Australia does and vice versa because we are so close. In recent times we have economically become ever-closer in terms of the movement of peoples and the interaction of peoples and in terms of assets and services. Charles Chauvel talked about the ever-increasing number of property deals purchases and so on that go on across the Tasman not to mention matrimonial issues and the like. That is really where this bill comes into play. It is about making sure that the court processes in each country as we work together keep up with those ever-increasing relationships and interactions. Australia of course will be passing a near-identical bill to this one so that our two court systems as far as this bill goes will be in sync. 
I will quickly read from the bill’s explanatory note: “The objectives of the Agreement are to streamline and simplify the process for resolving civil proceedings with a trans-Tasman element to reduce costs and improve efficiency; and minimise existing impediments to enforcing certain judgments and regulatory sanctions.” For example the issuing of proceedings the enforceability of judgments and the like will be streamlined—made better—between the two countries. 
This bill is an important step towards closer integration between the justice systems of Australia and New Zealand and it is another marker of a very close very secure relationship between our nations. 
Hon DAVID PARKER (Labour) 
: 
 As Lianne Dalziel and Charles Chauvel have both said Labour will be supporting the Trans-Tasman Proceedings Bill at this reading as we did in the earlier reading. Just following on from the previous speaker Simon Bridges in respect of how close things have become between New Zealand and Australia I say there is of course a notable exception to that which relates to the ever-increasing wage gap between New Zealand and Australia. Important though this bill is in making court proceedings easier in each country it is not as important as closing that wage gap. 
Of course at the last election National promised that it would close the wage gap with Australia. But the problem is that it said it would do that by 2025 and we cannot get any particularity from the Government as to an intermediate milestone. We might say that that does not matter very much because as long as we are going in the right direction we will get there eventually. But the reality is that we are not going in the right direction and the wage gap is growing ever wider. Unfortunately the National Government does not understand that because it had Gerry Brownlee in the House trying to palaver that the gap was growing narrower and John Key was doing the same thing only to be called “slippery” by TV3. It is a terrible thing when our Prime Minister so misrepresents statistics that he is called “slippery”. 
This bill will not make a difference to the gap between wages in Australia and New Zealand— 
Hon Lianne Dalziel 
: Will they let Gerry Brownlee speak on this bill? 
Hon DAVID PARKER 
: Well they might let Gerry Brownlee speak on this bill but they have not let him answer questions on the more important issue about what is happening to that wage gap. The National members have not given us any milestone that New Zealanders can judge their performance against between now and 2025 and we all know that 2025 is a decade and a half away. Most of the National people who are currently here will be superannuitants by that time unless of course they change the qualifying age for superannuation by that time. 
The Trans-Tasman Proceedings Bill which simplifies— 
Simon Bridges 
: Why is this member wearing his raincoat in the House? 
Hon DAVID PARKER 
: Look sartorial elegance is obviously something that would be new to Tauranga but we celebrate it on this side of the Chamber occasionally. 
This bill essentially makes it easier to carry out civil proceedings in Australia or New Zealand. A number of changes are made. For example we are making it easier to serve documents in Australia in respect of a proceeding that has been initiated in New Zealand and the quid pro quo for that is that if a civil proceeding is appropriately commenced in Australia we are making it easier to serve those documents in New Zealand on New Zealand - based parties to that litigation. Equivalent provisions are in the comparable legislation that is being passed in Australia. In addition to that provisions in the legislation on both sides of the Tasman say that if a proceeding is inappropriately started in one country then a stay of proceedings can be applied for in that country while the people involved go to the other country and initiate proceedings there. That guards against people picking what might be the most convenient jurisdiction for them in which to start their proceedings. It might be convenient for them but it might be inappropriate in the context of the case. So a party can then go to the court seek a stay of proceedings— 
Hon Tau Henare 
: What’s written on the back of the jacket? 
Hon DAVID PARKER 
: Cutler a good brand. Let us return to the more important issue which is when we are to get some milestones from the Government on which it can be held accountable for real progress in closing the gap with Australian wages. That was the foundation principle on which National fought the last election. The National members told New Zealanders that they should be jealous of the position of Australians and that they would fix that problem. They said they would fix it by closing the wage gap but it is now going in the opposite direction. We have asked National time and again for milestones but it has declined to provide them. The latest two iterations of economic policy that we have seen from National were dated 1 August this year and the one that predated it a February iteration of the same document. There was no reference to this bill in either of them because of course it is peripheral only to economic performance. But in the February document the Government said it would cause a step change in the economy. It was going to open up further areas like schedule 4 areas for mining and it was going to have a financial services hub. None of those plans— 
Mr DEPUTY SPEAKER 
: We are in a second reading. 
Hon DAVID PARKER 
: —appear in the latest iteration and this bill will have absolutely— 
David Garrett 
: I raise a point of order Mr Speaker. I am not entirely comfortable with raising this point but it is the second time I have done so regarding the Opposition. David Parker appears to be dressed in some kind of safari jacket. I notice that the Standing Orders require members to wear business attire. I personally would welcome a ruling that did not require us to wear these silly things around our necks. But I invite you Mr Deputy Speaker to make a ruling on what is appropriate. I certainly do not see that what Mr Parker is wearing right now is business attire. 
Mr DEPUTY SPEAKER 
: Order! [ 
Interruption 
] A point of order is being considered. I thank the member for that. In terms of wearing ties our Standing Orders require business attire to be worn and that is what we have to comply with. That is the standard set in this House. In terms of the jacket that the Hon David Parker is wearing in my view that fills the bill as business attire. I am quite comfortable with his wearing that jacket. That is acceptable. 
Hon DAVID PARKER 
: Thank you Mr Deputy Speaker—a man of discerning taste unlike the member for Tauranga. 
The bill makes a very small contribution to the efficiency of the New Zealand and Australian economies. It will help the New Zealand economy to catch up with Australia’s by a very very small amount but no meaningful step has been taken by this Government in terms of bridging that gap. Indeed the  
New Zealand Herald  
has stated in respect of the Government’s economic policy that it has not done much more than some “tinkering with the Resource Management Act and suchlike.” Those were the words I think—“tinkering with the Resource Management Act and suchlike.” It also said that if small steps are taken then only small progress is made and things can go backwards. That is what is happening under this Government. The economic performance of this country relative to that of Australia is worsening. The wage gap is getting bigger. This bill will not be the answer because it does not have much of an effect on the economic performance of New Zealand. Although the bill is a good one it goes to issues of legal process rather than to the economic performance of this country. 
I hope that subsequent speakers from National will get up and tell the country what milestones those members are willing to set that would allow them to be judged on whether they are achieving the step change in the economy that they promised everyone even as recently as February this year that they would achieve—but the phrase “step change” has dropped out of their current rhetoric—and tell us what they are doing to bridge the wage gap with Australia. I am afraid that I am not willing to wait until 2025 to judge whether they are succeeding in delivering on that promise and I do not think that most New Zealanders are either. 
The other changes made in the select committee in respect of this legislation were largely technical. We approached the Australian legislature to see whether we could have the wording of some of its legislation changed as well. As a consequence there is a better alignment of both bills on each side of the Tasman. I commend this bill to the House. 
KANWALJIT SINGH BAKSHI (National) 
: 
 I am pleased to take a call on the Trans-Tasman Proceedings Bill which focuses on New Zealand’s very special relationship with Australia. With Australia being our biggest trade partner it is very important for us to build cordial relations with that country. The bill will confirm the strong relationship between our two countries. This bill will ensure that disputes can be resolved through a cheaper faster and more efficient process. 
The National-led Government under the able leadership of the Rt Hon John Key is working hard with Australia to create a single economic market that will provide a seamless operating environment for businesses and individuals. New Zealand and Australia have mutual interests in the efficient working of each other’s regulatory regimes particularly those that move towards our having a single economy. This bill will make it easier to resolve civil disputes between parties with connections on both sides of the Tasman. It will benefit both individuals and businesses. Just as with earlier bills it will allow court appearances by audiovisual link and it will also allow for better enforcement of the regulatory regime. 
I join with others in commending this bill to the House on its second reading. 
RAYMOND HUO (Labour) 
: 
 I will follow the Leader of the House’s spirit and say: “Let’s dig it up.” 
Hon Member 
: What? 
RAYMOND HUO 
: Let us dig it up. The Trans-Tasman Proceedings Bill together with the equivalent Australian legislation will integrate the New Zealand and Australian civil justice systems and simplify the resolution of legal disputes with a trans-Tasman aspect. The bill simplifies the trans-Tasman service of court proceedings and the enforcement of judgments. It expands the range of enforceable judgments and improves regulatory enforcement of civil pecuniary penalties and certain criminal regulatory fines. 
The Hon Lianne Dalziel when signing the treaty in July 2008 on which this bill is based called it “an unprecedented level of cooperation between Australia and New Zealand in civil court proceedings.” Indeed without those initiatives the civil pecuniary penalties that are imposed on one country are not enforceable on the other. Nor are criminal fines imposed in one country enforceable in the other due to obvious sovereignty concerns. Interim relief such as freezing assets can be obtained in one country in support of proceedings in the other. 
This bill results from a work programme started by the Rt Hon Helen Clark in 2003. The Trans-Tasman Working Group on Court Proceedings and Regulatory Enforcement was established to examine the relevant issues. It recommended that a simpler more efficient trans-Tasman regime would significantly benefit both countries. As a result both the Trans-Tasman Proceedings Bill and the Australian Trans-Tasman Proceedings Bill were introduced in November 2009. The measures introduced were to enhance the efficiency and efficacy of commercial litigation in respect of parties services of proceedings witnesses assets and events concerning both jurisdictions. The regime is modelled on Australian law namely the Commonwealth Service and Execution of Process Act 1992 which regulates legal proceedings between Australian states and territories. 
There has been a significant increase in the movement of people assets and services between New Zealand and Australia. Consequently there is naturally an increasing number of disputes involving individuals or businesses with cross-border elements. In the year to June 2010 nearly 1.2 million Australians visited New Zealand and the number of New Zealanders who visited Australia was well in excess of that. Australia has remained our largest trading partner. 
The main features of the bill are reflected in five aspects. Firstly the bill allows initiating documents to be served in Australia in the same form as is required in New Zealand. Therefore service of civil proceedings between trans-Tasman parties is more efficient under the bill. However a party served in Australia will be able to make an application to stay the New Zealand proceedings if the party considers it more appropriate for an Australian court to hear the dispute. It is proposed that New Zealand and Australian courts apply a common test when considering whether they have jurisdiction to hear a dispute. 
Secondly the bill encourages greater use of video and audio facilities allowing parties and counsel to appear remotely in proceedings with the leave of the court. Thirdly the bill enables parties to seek interim relief from a New Zealand court in support of an Australian proceeding with the leave of the court. Fourthly trans-Tasman subpoenas will be able to be issued by judges of lower courts and similar subpoenas may be issued for some tribunals by the District Court. Subpoenas in criminal proceedings will also be able to be served with the leave of the court. 
Lastly—and this is perhaps the most important feature of the bill—a broader range of Australian judgments are able to be enforced in New Zealand if registered in a New Zealand court. Currently final money judgments are enforceable. This bill will extend the coverage to include final non-money judgments. The provision will only be applicable where the Australian judgment is final and conclusive. Some types of Australian judgment will not be enforceable—for example if the judgment involves a civil pecuniary penalty if it is an order under the proceeds of crime legislation or if it relates to a guardianship or property protection order. In a similar vein the regime will also make it easier for Australian parties to commence proceedings against New Zealand parties in Australia and allow Australian parties to enforce a large range of Australian judgments against New Zealand parties. 
An interesting point is worth noting. Chapman Tripp lawyers questioned in their witty opinion the wisdom of the difference between the two approaches. Under the bill sanctions framed as civil pecuniary penalties will be directly enforceable unless specifically excluded by Order in Council—namely a negative list approach. Sanctions framed as regulatory regime criminal fines will be directly enforceable only if declared to be so by Order in Council—namely a positive-list approach. “The net effect”—according to Mr Daniel Kalderimis—“is that regulatory regimes based around civil penalties will achieve instant cross-border reach unless expressly excluded whereas regulatory regimes based around criminal penalties will retain a domestic ambit unless expressly included.” Mr Kalderimis concludes by stating: “It is not obvious that this difference in treatment is warranted … civil penalties are penalties nonetheless and in many commercial cases the distinction between civil and criminal penalties may be little more than nomenclature.” He cites as an example the fact that a fine under section 40 of the Fair Trading Act 1986 is a criminal penalty but a fine under section 80 of the Commerce Act 1986 is a civil penalty. 
To conclude this bill seeks to streamline the process for resolving civil proceedings with a trans-Tasman element in order to reduce costs improve efficiency and minimise existing impediments to enforcing certain judgments and regulatory sanctions. I commend the bill to the House. 
Bill read a second time. 
In Committee 
Part 1 Preliminary and general provisions 
KANWALJIT SINGH BAKSHI (National) 
: 
 I am pleased to take a call in the Committee stage on the Trans-Tasman Proceedings Bill. New Zealand has a very special relationship with Australia and this bill will help us to streamline the regulatory regime. The bill will ensure that disputes can be resolved through a cheaper faster and more efficient process. 
Debate interrupted. 
Sitting suspended from 10 p.m. to 9 a.m. (Wednesday)