Volume 664 Week 46 - Tuesday 22 June 2010(continued on Wednesday 23 June 2010) 
Text is incorporated into the Bound Volume 
Volume 664 Week 46 - Tuesday 22 June 2010(continued on Wednesday 23 June 2010) 
[Sitting date: 22 June 2010. Volume:664;Page:11947. Text is incorporated into the Bound Volume.] 
Tuesday 22 June 2010 
( 
continued on Wednesday 23 June 2010 
) 
Financial Service Providers (Pre-Implementation Adjustments) Bill 
Second Reading 
Debate resumed. 
STUART NASH (Labour) 
: 
 It is a little bit difficult when one finishes at 10 o’clock at night and then starts again at 9 o’clock the next morning. However what I was saying at 10 o’clock last night is that I am very supportive of the Financial Service Providers (Pre-Implementation Adjustments) Bill. In fact I think it is very necessary because what we have seen with the collapse of the finance companies is that many many ordinary New Zealanders have been ripped off and basically taken to the cleaners by a whole raft of people masquerading as financial advisers. I was talking about brands like Colin Meads and Richard Long who were out there touting for these services. They were iconic brands and very good at what they did but they knew absolutely nothing about finances. I was speaking to someone last night after 10 o’clock who said to me that she invested in Hanover Finance because of Richard Long. Here was a man who stood for integrity and trust and who was in our living rooms nearly every single night. So if Richard Long said it was good therefore it must be good! 
Hone Harawira 
: It must be good! 
STUART NASH 
: It must be good! What happened of course was that it was not good at all. Richard Long was a very good newsreader but he knew nothing about financial advice or financial investment. I hope with this sort of financial crisis that iconic New Zealand brands will think very carefully before they start endorsing products that they know nothing about. 
I was also talking about Mark Hotchin’s $30 million house which was built on a graveyard of the shattered dreams and broken promises of thousands of New Zealanders. If that man has any sense he will not return to this country. It is obscene that we see him at the moment holidaying in Hawaii off the money of thousands of New Zealanders who are now broke. I cannot imagine having worked all my life reaching the age of 65 or 70 and waking up one morning to find that all my savings had just disappeared. How heartbreaking would that be? In fact there is evidence out there that ordinary New Zealanders have committed suicide over this. They have got to the stage where there is nothing worth living for. All their savings have gone not only for their own retirement and their grandkids’ education but also to allow them to live and retire with dignity. They have to sell their houses they have to sell all their assets and they find themselves with nothing. This is why the legislation that this bill amends is so good. The original legislation was introduced by the Hon Lianne Dalziel and no doubt she will talk about that a little bit in the future. 
This bill will not stop the sort of obscenity that is Hotchin’s extravagance or stop Colin Meads saying that an investment is as “safe as houses”. However it might mean that the type of person who was promoting Hanover Finance as a safe investment would disappear. Real financial advisers will be able to scrutinise investment prospectuses with more rigour and in more detail as is required I would have thought by such a profession. The reason I say this is that the intent of this bill is to provide for responsible regulation of the financial services sector and robust consumer protection in order to restore confidence and trust in the financial services sector. I do not think there would be a person in this House or anyone watching around this country who would not agree that this is necessary. 
Kiwis need to know that when they take their hard-earned money to a financial adviser they will get independent competent advice from a person who will walk them through the alternatives and know what they are talking about. When we go to a lawyer we expect legal advice. When we go to an accountant we expect that person to be qualified and to give us good accounting advice. When we go to a financial adviser we expect that person to be versed in the ways of financial advice and to give us good advice around that area. The past of the Wild West a city full of cowboys was not a good place for the vast majority of Kiwis and I hope those days are now gone. 
As a collective we need to encourage people to invest in a diversified portfolio into the productive economy. We need financial advisers to be well versed in the various options. I would say there is a long way to go before the industry has the full confidence of the investing and saving public again. But this bill along with Lianne Dalziel’s two Acts is a start at least. I hope when this legislation is passed in line with the other two Acts I have talked about that at least we will begin to see confidence and rebuilding begin with New Zealanders once again able to begin to invest with confidence. That is why I am fully supportive of this bill and I commend it to the House. 
DAVID CLENDON (Green) 
: 
 Ata marie. The Greens are pleased to support the Financial Service Providers (Pre-Implementation Adjustments) Bill through a further stage. We do so with some regret. We regret the necessity for such a bill. One would have thought and hoped that in an ideal world amendments of this nature would be unnecessary that people in the financial industry giving advice to often ill-informed laypeople would have a moral compass and that their own integrity would determine that they actually gave good honest advice and protected the investments and assets of normal New Zealanders. But clearly that is not the case. 
I doubt whether anyone in the House does not have someone in his or her close circle of friends or family who has suffered some loss as a result of what has been quite well described as a Wild West cowboy approach to financial investment which we have seen far too much of over the last couple of years. I myself and my extended family know of a young couple who had accumulated a small nest egg that would have been a deposit for their first home. That is gone. The reason it is gone is that they quite wisely invested in two companies—companies that apparently were very sound and whose advertisements on television were fronted by well-known figures. That money is now gone. Basically they discovered they had invested in a daisy chain of debt speculation and overstated values that were not really there. Essentially their investments were simply taken away by people too greedy and too venal to be honest and up front about what was going on. 
It is really critical that we restore people’s confidence and trust in the notion of investment. People need to know that investing is reasonably secure notwithstanding that there will always be some risk. That confidence has been comprehensively lost as a result of the rorts the dishonesty the greed and the misrepresentation that we have seen far too much of for far too long. Restoring confidence is critical not least to the business sector. It is important that New Zealand business has access to capital and small to medium sized enterprise in particular are identifying that as one of the issues confronting them. Access to capital is an issue. We need to encourage people with capital to think that it is a safe bet to invest and to have a reasonable expectation that that money will be secure. 
I have to say that the select committee process for me as a relatively new member was a very positive process. That quite contentious and complex technical issues can be resolved to the satisfaction of people with quite different ideological positions demonstrated the power of select committees. I acknowledge the chair of the Commerce Committee Lianne Dalziel who had a very useful focusing mechanism. She kept using a phrase along the lines of “What is the harm we are trying to remedy?” which was actually quite a good strategy to keep bringing us back to the point of asking what the problem was what we were trying to resolve whom we wanted to capture and whom we did not want to include in the provisions of this bill. As a result of that organisations like credit unions—which are very robust reliable and straight-dealing organisations—are not unwittingly caught up within this legislation. We are not imposing compliance costs on organisations or indeed individuals who were not targeted because they have not displayed the sort of bad behaviour we are endeavouring to overcome here. 
Organisations like the Citizens Advice Bureaux made very good submissions identifying one or two instances where potentially they could have been captured by the provisions of this bill. Clearly not-for-profits like the bureaux were not the target; if they give incidental advice in the course of assisting people in the community that is well and good; the exemption of not-for-profits is a very sensible and strengthening provision of this bill. 
There was discussion for example about what constitutes a sophisticated investor recognising that we do not need to put many protections around people who are perfectly able to look after their own interests. Some useful and informed commentary—and indeed submissions—from individuals and organisations helped us define whom we were trying to protect and who can actually look after their own interests and be left to get on with it. 
That is probably as much as I want to say at this stage except to reiterate that the Greens support this bill and its intention and we look forward to seeing it progressing and to securing and protecting the investments of people who can expect much better and more reliable advice as a result of this legislation. Kia ora. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I am pleased to be able to speak to the report back and second reading of the Financial Service Providers (Pre-Implementation Adjustments) Bill. When the bill was first introduced I said I was pleased that the Minister had indicated his determination to stick to the time frame that he had announced for implementation. As a result of listening to submissions we have accepted the Minister’s decision to extend the time frame not so much for the registration as for the implementation in its fullest sense post - 1 December right the way through to the end of June next year. I also felt that the proposed changes when they were introduced were in line with the principles and the intention of the legislation which I oversaw as the then Minister of Commerce. It was not until I actually started the somewhat arduous task of reading the submissions that we had received—and we received a significant number of very very detailed submissions—that I realised there were flaws in the original framework that I had introduced that I had not been aware of as the then Minister and that clearly the present Minister had not been aware of either. 
Just to put what the Commerce Committee has done with regard to this bill—because it is virtually a re-write of the bill that was introduced and we need to offer an explanation for that—I want to go back for a moment to the pre-2008 election period. In so doing I confess to the House something that I have confessed to my colleagues—that is I know more about the intricate detail and the potential application of this bill now as chair of the committee than I did when introducing the original legislation as the then responsible Minister. I think there is a reason for that which I think should be addressed and I will come to my suggestion about that later on. What I will propose though in this space is possible only when a non-partisan approach is able to be achieved. I think that the present Government when in Opposition and now the reverse—the present Opposition when in Government—proved that a collaborative approach is what is required and produces the best results. I think this bill and the work that we have done on the select committee demonstrates that and I pay tribute to all of the committee members for what we have been able to achieve on a collaborative basis. 
Returning to the pre-2008 period I know that as the then Minister I put pressure on Charles Chauvel who at the time was the chair of the Finance and Expenditure Committee. I put pressure on him because I wanted those bills back in the House in time to be passed before the 2008 general election. There were two bills that I wanted back in particular. They were the bills in my name but also the bill to provide proper prudential supervision for the non-bank deposit-taking sector which of course had transferred to the name of the then Minister of Finance the Hon Dr Michael Cullen. In many respects I did not mind if the legislation was not perfect and I kept saying that to Charles Chauvel at the time. That was because there was time post-election to undertake any remedial work that needed to be done while getting on with the job of establishing the regulatory frameworks for the new supervisory and dispute resolution regimes to cover what was an under-regulated sector. 
I just want to use the word “under-regulated” again. This was not a totally non-regulated sector but it was under-regulated and I think that was the critical problem. I know that a lot of people have wanted to put blame on those who were responsible for the regulatory frameworks over probably a couple of decades since the stock market crashed in 1987 if we really want to go back to when we were first alerted to the problems that we have to confront today. But the problem was that there were regulatory provisions in place and they offered insufficient protection. I think that our committee has been quite good at getting to the bottom of some of the things that we have not been able to get to the bottom of before. We have an inquiry under way that will continue to work to find those essential gaps in our system and hopefully it will make recommendations to resolve them. 
That was why I wanted the legislation passed before the election. I wanted the work to continue in the period when we went off to do our job applications for our triennial job interview which is I guess what a general election is. I wanted to make sure that the bills were not left at the select committee or remained on the Order Paper past the House’s rising for the election period because nothing would have happened for a very long time if that had been the case. 
If there is a criticism that I have of the current Government and there is one it is that— 
Hone Harawira 
: Just one? 
Hon LIANNE DALZIEL 
: —no—this bill should have been introduced last year. That is the only criticism I will make. If it had been introduced last year we would have had much more time to spend on the detailed analysis that we have had to undertake. I know that members of the committee our advisers our clerks the officials and the Parliamentary Counsel Office were all under pressure. But the pressure that we were under pales into insignificance in comparison with the impact that the time frame had on the finance sector and the finance sector is critical to getting this legislation right. So I pay tribute to the extraordinary efforts that the major stakeholders went to in order to meet the extremely tight deadlines that we imposed on them. We know that people worked over weekends and that people worked overnight in some cases in order to meet these time frames and to deliver what I believe is now much more like the framework that I envisaged 3 years ago when I announced the decisions made by Cabinet back in 2007. Less than a month before Bridgecorp failed I made those announcements and then the domino effect started again. We had had the three failures in 2006. Bridgecorp was really the tipping point as we saw finance companies fall over one after the other. That was what the committee returned to in the end. I acknowledge my colleague David Clendon from the Greens for commenting on that. 
The committee came back to a very fundamental question: what were we trying to do? We brought that perspective to what we were doing. We asked what the risk was that we were trying to mitigate what the mischief was that this bill was trying to remedy and whether the regulatory response was proportionate. We came up with a mixed set of answers depending on whom we were talking about. The legislation is fundamentally about protecting unsophisticated investors. I know that among some of the mum and dad investors as they are called—or probably more aptly in some cases nana and grandad investors—there was a kind of resentment that the language used implied that they were unsophisticated or naive but I reject the view that these were greedy investors as some have said. I want to place on record my abhorrence of the practice of deliberately hiding the level of risk behind a lower interest rate than was required to reflect the actual risk that they were taking with their hard-earned money. People lost their life savings in circumstances where they did not realise the level of risk that they were taking. There was a lack of knowledge and a reliance on financial advisers. 
Our driver as a committee became a single-minded focus on the mischief that we were seeking to remedy. That is why we divided category 1 and category 2 products more appropriately defined financial advice more clearly incorporated the concept of personalised financial advice and tied financial planning to the risk related to investment. We carved out the wholesale clients who can look after themselves and we tidied up the qualifying financial entity provisions. All the committee members worked hard on this bill and I thank them for that work. In the same way that I have acknowledged the stakeholders I also acknowledge our committee clerks our advisers the departmental officials parliamentary counsel and the Minister of Commerce and his staff—his private secretary and his adviser. Finally I acknowledge this House for allowing us to do things differently from usual such as granting us leave to provide the departmental report to stakeholders during the time before we had reported back. 
This has been a very good process. It has been a hard process but it has been made very clear to me that we do need to take up the option of exposure draft bills accompanying discussion documents at a much earlier stage so that the people who work at the coalface are able to give us very direct advice about how legislation will be implemented. In fact they have made it clear to us that they could not have known these things in advance. We have I think made this bill much better and I commend its passage through the House. 
MELISSA LEE (National) 
: 
 It is a pleasure to rise to speak on the second reading of the Financial Service Providers (Pre-Implementation Adjustments) Bill. Thousands of Kiwis have been affected by about 30 finance company failures in the past 4 years. That led to a loss of confidence in the financial services sector and this bill seeks to amend the Financial Advisers Act 2008 and the Financial Services Providers (Registration and Dispute Resolution) Act 2008 in order to give back the confidence to consumers so that they can once again feel secure and place their trust in the financial services sector. This sector is vital in raising capital for businesses. Getting ahead as a nation economically could well mean our having to get the confidence of the mum and dad investors back on dry ground once again. 
It is not often that I agree with the Opposition but it was a pleasure listening to the chair of the Commerce Committee Lianne Dalziel speak earlier and I agree with her that a lot of hard work was put into this bill by the select committee. I would like to acknowledge the chair Lianne Dalziel who just spoke and the deputy chair Sam Peseta Lotu-Iiga who made an amazing contribution during this process. For someone like me who does not come from the finance sector and often even the acronyms meant nothing to me it was bloody hard work—sorry; my apologies. It was amazing learning from them and even Lianne Dalziel admitted that she found out more about this bill and the processes and the sector as the chair of the Commerce Committee than she ever did as the Minister of Commerce. I would like to acknowledge the Minister for having the foresight to bring this bill to the House to see it through its passage and also like Lianne Dalziel I acknowledge all the officials because they have put in amazing work. As she said we have demanded so much from them with sometimes overnight report-back time frames which has been quite tough on them I am sure. I acknowledge all the clerks the Parliamentary Counsel Office and everyone who has helped us through the process. 
During the select committee process we had some major discussions about the shape this bill needed to take but the thing we always came back to and focused on was to always remember that this bill was designed to protect the unsophisticated investors the mums and dads and the retired grandmother who wants to invest so she has a little something to leave as a legacy for her grandchildren. Often they really have no idea where to start when it comes to investments. These are the people who lost money as the result of finance company failures—quite a lot of money. They could have really used some sound financial advice and this bill addresses that issue. 
As a committee we considered a large volume of things in this bill but one of the things I found very interesting—and I am sure we will discuss it further when we go into other stages of this bill—was the definition of financial advice. We were looking to protect unsophisticated investors so we initially got to a point where we wanted to make sure that everything was captured. It got to a point that even a discussion in a taxi on my way to the airport or headed to Parliament about thoughts on whether to invest in or out of the housing market could have been construed as financial advice. A group of friends sitting around a dinner table discussing the merits of a financial institution could also have been deemed to be financial advice. 
The focus of the select committee was to protect the unsophisticated investors but at the same time to provide clarity to the definition so that there was no question as to what financial advice is and who is providing the service. So it was very pleasing and I am sure there would have been a lot of people who were concerned they would be captured by this legislation who made amazing very technical and very detailed submissions to the select committee. Only those people who provide financial adviser services in the ordinary course of their business and those who provide advice in the course of another financial service are captured by this. This means that advice provided incidental to other services as with the taxi driver I mentioned before are excluded. Also excluded is advice on the procedures for the acquiring and disposing of financial products. Also budgeting services are often called financial planning services. So to make sure there is no confusion we have changed the wording in the bill to “investment planning service”. 
The other issue I found very interesting was the need for authorisation. However if we authorise everyone the compliance costs and the stress on the sector would be quite phenomenal. As a select committee we considered that there was no real need for advisers who work only with category 2 products like mortgages and insurances who work for a qualified financial entity—a QFE. They can do this job without the need to be authorised. They can still become authorised financial advisers should they so wish. 
The best thing about this bill is we are giving more power to the Securities Commission. The commission will now be able to ban people for up to 10 years by way of an application to the courts. They have the power to declare that a product of a qualified financial entity must be sold only through individually authorised financial advisers. Before an entity is provided with a qualified financial entity status it must demonstrate the capacity to comply with the regime. This means that the commission does not have to vet every single product a qualified financial entity sells but will allow the commission to step in under exceptional circumstances when there is trouble. 
The expanded powers given to the Securities Commission will go a long way to enhancing consumer confidence which has taken a major setback. It will promote more professionalism from the sector and the serious deficiencies we have seen in the financial advisers industry in terms of disclosure competence and independence will surely improve. I commend this bill; it is a great bill. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 The Financial Service Providers (Pre-Implementation Adjustments) Bill is a very important bill and it is a very good example of how well parliamentarians can work together swiftly to address a critical issue. The issue is to protect ordinary investors—mums and dads—from shonky and irresponsible financial advice to provide responsible regulation and to restore confidence in the financial sector. I am very proud of the work that was done by the Commerce Committee and all of the officials involved. I acknowledge up front the incredible amount of work that was done by the members of the committee particularly the chair the Hon Lianne Dalziel the deputy chair Sam Lotu-Iiga Katrina Shanks and my colleague Charles Chauvel and I thank them for their hard work on this bill. I also acknowledge the long-suffering officials the clerks parliamentary counsel and the work done by the Minister to move this bill ahead. 
Over the past 4 years millions of dollars have been lost as a result of about 30 financial company collapses and www.interest.co.nz estimates that up to 200000 depositors have been affected. Although this may include double-counting—some of those people may have invested in more than one company—even if it is 100000 people that is an awful lot of people who have been affected. Many of those investors made their decisions based on faulty advice from financial advisers. This bill will not stop all of those obscenities such as Colin Meads saying that Hanover Finance was “safe as houses” when clearly it was not but it might mean that the types of people who were marketing and promoting Hanover Finance as a safe investment will disappear. The issue of truth in advertising kept coming up over and over again when submitters came to the select committee. We heard that the advertising was clearly opposite to the reality. Real financial advisers will now be able to scrutinise investment prospectuses with more rigour and more detail as is required I would have thought by such a profession. 
The intent of this bill is to provide for responsible regulation of the financial services sector and robust consumer protection in order to preserve confidence and trust in our financial services sector. I do not think anybody in this House or anyone who is watching would not agree that that was necessary. I will mention one particular recent case study. Jailed Timaru investment adviser Neville Cant was banned from operating as an adviser or investment broker for 5 years. The ban under the Securities Market Act was the automatic result of Cant’s conviction for theft of $100000 by a person in a special relationship theft from clients and two charges of forgery. Cant was sentenced on those charges and Securities Act charges in early June. He received a 14-month prison sentence on the theft charge and was ordered to pay reparation of $100000 and a concurrent 10-month sentence on the two forgery charges. He was also fined $136000 on six charges laid under the Securities Act in relation to charges of offering and allotting securities to members of the public without a prospectus or an offerer’s statement. Securities Commission spokesperson Roger Marwick was quoted in the  
Timaru Herald 
 as saying that the commission had received a number of complaints regarding investment schemes established by Cant who was now banned from acting as an employee or agent of an investment adviser or broker in any way that would allow him to give investment advice or receive investment money or investment property from a member of the public. He was also not allowed to direct promote or manage any investment adviser or broker company for 5 years. The aim of the Financial Service Providers (Pre-Implementation Adjustments) Bill is to ensure that incidents like this are eradicated from our financial services sector. 
Members have heard that the previous Labour Government passed the initial two bills in 2008 in the knowledge that further tidy-up legislation would be required so that work could proceed on the implementation of the financial service advisers regime as quickly as possible. The Government was slow to introduce this bill and we heard my colleague the Hon Lianne Dalziel refer to that earlier. Really that has been our only criticism of this bill as it prolonged uncertainty for the financial services sector. The bill as introduced did not address all the issues identified by the stakeholders and as a result the Commerce Committee virtually had to rewrite it. An enormous amount of good productive work has gone into that. 
There is a fundamental difference between the groups of people who have lost money that they invested. There are savers and there are investors. Investors are those who have or should have knowledge of risk and who seek advice from different sources and make decisions after weighing up the odds. What they did not assess as a risk was the negligent behaviour of people who had no knowledge except that the more they sold the better-off they were which was conflicted in the extreme. Savers however are the ones who put their hard-earned dollars into the hands of the people whom this bill is hoping to regulate to get the rotten eggs out of the sector. With their savings went their dreams of a retirement with dignity a retirement spent enjoying the fruits of their labour only to see that reality cruelly taken away. Savers do not necessarily price-risk as investors do. They pay others to assess the risk and expect competence diligence and honesty. As members have heard this morning we expect that from an accountant a lawyer— 
Hon Clayton Cosgrove 
: What? 
CLARE CURRAN 
: —mostly we expect it from those people—and a doctor and a dentist. Why should we not expect it from a financial adviser? It is not too much to expect and hopefully this bill will go some way to addressing that situation. 
Investors understand that risk equals return whereas savers—the mums and dads many of whom lost all their money in the financial sector—were not pricing risk. They were putting their money away for their retirement their children’s education or their grandchildren’s education. This travesty has resulted in the increase in ill health and decrease in well-being of a huge cohort of New Zealanders. Labour did something about the problem. We passed the Financial Advisers Act and the Financial Service Providers (Registration and Dispute Resolution) Act. This bill makes adjustments that are machinery in nature and there are an awful lot of them but that does not make it any less important in protecting the most vulnerable in our society so it is an extremely important bill. 
The bill is important for other reasons as well. One of the problems in this country is the do-it-yourself mentality to investment and savings. Many people think they know best about how to make an optimal return on their savings without seeking advice from those who are expected to know the markets and the different investment options. It is a double bind in many ways because I guess if we just did it ourselves then we would be taking the risk ourselves. But if we ask for financial advice from somebody whom we think is reputable and then do not get it it is no wonder there is no confidence in the financial sector. Of course it is not that all financial advisers have acted in an unscrupulous manner and not all of those who were operating in an unscrupulous manner were operating out of the back of a tin shed. There were many financial advisers in glass towers whose advice was as devious and self-serving as the advice of financial advisers operating anywhere else. 
This bill I hope will be another step in the process of rebuilding the confidence of ordinary New Zealanders in the investment advice sector because it is what is needed. It is absolutely necessary because it starts to rebuild the confidence of ordinary Kiwis in the financial advisory market. They need to know that when they take their hard-earned money to a financial adviser they will get independent competent advice from a person who will walk them through all the risks and benefits in a transparent and meaningful way. Once again I thank the Commerce Committee members and all of the officials for the hard work they have done on this bill. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I am very pleased to be able to stand and support the Financial Service Providers (Pre-Implementation Adjustments) Bill. I congratulate the Minister of Commerce on the hard work that he and his office have put in and as well I acknowledge the tremendous work that the Commerce Committee has put in. The bill is very complex and the Commerce Committee does handle a lot of complexity. I think back to the Patents Bill and all of the discussions that we went through—and are still going through—regarding that bill. It is important that we collaborate and work together to find solutions that will work particularly in this case for the investment sector of our society. 
Professor David Mayes the new chair of finance at the Auckland University business school has said that New Zealanders are average when it comes to financial literacy. We know that we are above average in many many areas but this is one particular area in which it has been noted we are lacking. But he went on to say this problem is not unique to this country. A lot of finance company collapses occurred before the effects of the global financial crisis were felt here in New Zealand which puts us ahead of the curve on this one. We discovered that people need to have financial literacy and that education in our society in particular has come up as an obvious area where improvement is needed after the series of finance company collapses which has seen as the previous speaker said 200000 people lose money. I heard one report that said that $6 billion of those people’s savings have been lost. The tragedy is that many of the people who lost their funds are in their retirement so they do not have the opportunity to recover. They have no opportunity to go out and work and to find other alternatives or options to raise an income for their retirement. 
This bill seeks to amend the Financial Advisers Act 2008 and the Financial Service Providers (Registration and Dispute Resolution) Act 2008. The intent is to ensure that these Acts provide for the responsible regulation of the financial services sector and bring robust consumer protection in order to restore confidence and trust in the financial services sector. Many of the people who lost their savings in investments did not appreciate the risks that they were taking and would have benefited from receiving knowledgable robust and independent financial advice. Throughout the process of preparing this legislation we continually were aware that there are different types of investors but I will speak on that point later. 
This legislation has been well looked forward to. I think it will bring robustness to the industry and to the sector. It will be good for investors and savers and it will also be very good for the industry. It will bring confidence gradually back—it may not rush in—to this area. That will in turn release capital for businesses including small to medium sized enterprises and bring opportunities for businesses in this country to get ahead. Thank you. 
Bill read a second time. 
In Committee 
CHRIS TREMAIN (Senior Whip—National) 
: 
 I seek leave for all parts of the Financial Service Providers (Pre-Implementation Adjustments) Bill to be taken as one question and in addition I request that members be given multiple calls in this debate. 
The CHAIRPERSON (Hon Rick Barker) 
: Leave is sought for the Financial Service Providers (Pre-Implementation Adjustments) Bill to be taken as a single question and that there be unlimited calls. Is there any objection? There is no objection. Leave is granted. 
Parts 1 and 2 schedule and clauses 1 and 2 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I was hoping that the Minister of Commerce would be here to answer some questions; it may well be that he is in a position to do so at some stage in the near future. 
Given that the advisers have come into the Chamber I take the opportunity to acknowledge them and the work they have done. I know that it is not appropriate to bring the advisers into the debate while they are sitting in the Chamber but they made an extraordinary effort. That effort was acknowledged in second reading speeches but I wanted to acknowledge them while they were in the Chamber. The Minister can be very proud of the efforts made by parliamentary counsel the officials from the Ministry of Economic Development who gave advice and also our committee clerks who under extraordinary time limits worked hard to produce what I think is a bill that better reflects the original intent of it. 
I have already confessed in the second reading of the Financial Service Providers (Pre-Implementation Adjustments) Bill that I now know more about the detailed aspects of this legislation than I ever knew when I was Minister of Commerce. I feel very strongly that in the future in this technical area where there is a non-partisan approach across the House we need to look at getting out draft exposure bills so that people can see the detail. Important stakeholders once they have seen how the bill has been written will be able to say how they consider it will work in practice. A number of people spoke to me during the passage of this legislation through our Commerce Committee. They made the point that they had not understood how the legislation that had been passed prior to the last election would work in practice until they set about the task of implementing it. There really was not any way of their knowing in advance but I think that if they had had a draft exposure bill to look at last year we could have got through this process with a little more time and opportunity to reflect on things in the way that we would normally expect to do. 
The Committee stage is an opportunity to go through some of the detail of the bill. One of the things that I want to query though is a question that was raised subsequent to the bill being reported back. Some people raised concerns one of which related to the Mortgage Brokers Association. A number of members of the association had actually started training that would take them up to the authorised financial adviser level. I want to place on record how much I approve of anyone in the financial advisory space getting himself or herself up to that level and beyond. I totally support those brokers who although not required by the legislation to reach that level of authorisation wished to gain the qualifications in order to reach that level. It was a very good approach for them to take. The position we had put to us after we had reported back the bill was that inadvertently we had prevented those people from becoming authorised financial advisers because the Securities Commission would not have the power to grant them that status. They were ineligible because they did not advise on a category 1 product. I spoke to the Minister’s office and I know that other members of the committee did as well. We realised that if we were to encourage better standards within the industry as a whole then we would not want that to be the case. I think it was a typical lawyers’ interpretation of legislation whereby they look for problems rather than solutions—I personally did not think it was intended to be restricted in that way—but I understand that Supplementary Order Paper 146 now addresses that issue and I would like the Minister to explain it. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I join with colleagues in noting that the Financial Service Providers (Pre-Implementation Adjustments) Bill especially in the current climate—even in the last 72 hours—is extremely important given that large amounts of money invested by a large number of people in a variety of companies and entities over a year or so has been put at risk and lost. We see on television from the latest saga regarding ANZ and ING (NZ) and the rulings that have been made that there is a lot of angst within the community. We can understand it when people’s life savings are invested in good faith in respect of the advice they receive. When it turns to custard they lose those savings. At best in one case reported last night the payout may be 6c or 10c in the dollar. 
For me this bill is interesting because it strikes at the heart of what consumers and the community can expect which is a high degree of professional standards in respect of conduct and in respect of advice. It is quite simple in my view: if people are purporting to promote a product or provide a service or advice they should be qualified to give that advice or produce that product. More especially they should be in a position where they stand by that advice and they are prepared to put their hand up and be accountable in respect of their conduct around it. Obviously there is a difference between providing advice on what sort of product one should buy—what sort of computer or washing machine if you like—and the more fluid environment in terms of providing advice in respect of investments and financial services. We have a thing called a market and it moves and does strange things as it has done in the last 2 years at least. 
I am mindful of a bit of a correlation between this situation and a favourite subject of mine which is real estate agents. We went through a similar debate about standards of performance standards of conduct and standards of advice and about people standing by their work their advice and their conduct. I will not get into that area because it is not exactly on point with this bill but I am mindful of the correlations and similarities. The vast majority of people in the real estate industry are good folk who stand by their work do a diligent job and provide diligent advice but there were issues about a minority. The issues were whether they were qualified and had the professional skill to provide advice and conduct their work. 
Greater risks exist I think in the financial area than in the real estate area. With real estate we have a tangible asset bricks and mortar. In the financial sphere of operations we have a market that moves and does strange things and it is more difficult—a bit like trying to nail a jelly to a wall—when sifting through a financial collapse to determine who is accountable. We then have to go to the tertiary level if you like and make a connection in terms of those who have given initial advice to investors to give something a go and in terms of trying to ascertain whether that advice was given in good faith and with professionalism and whether people are prepared to stand by it. 
The difficulty we face with any legislation is that we are not writing legislation for the vast majority of practitioners who would adhere to best practice—whatever that is—whether or not there was a law but for the minority. We are writing legislation for the minority who purport to be professionals purport to give advice at a professional and qualified standard purport to have skills and then when it all turns to custard—in large part thanks to their advice—cut and run. That is not unique to the financial sector. It happens I think in all professions. My colleague Clare Curran ran through a few. Even in those professions that consider themselves to be quite lofty we have seen people err in terms of both standards of professional conduct and advice. 
It has been noted that Labour contributed in large part to this bill with the passing of twin pieces of legislation establishing the new financial advisers and service providers regime in 2008. We were mindful of the environment that existed then. I note in passing that this bill has been slow in its progress. I do not make that comment as a political point; I simply note that given that even in recent days we have seen further uncertainty around financial services in a variety of entities I think the communities will welcome this bill. It will now move through the House relatively swiftly. I think they will look to this legislation for some degree of protection. 
The final point I make is that I think there is also a responsibility within our communities. There is an old adage: if it looks too good to be true and it smells too good to be true often it is too good to be true. It is a bit like going into a casino and expecting to come out with more money than one went in with. Well the house always wins. I think that there is a duty and an obligation both on legislators in this House and Government and on our communities to improve financial literacy. I do not mean any disrespect to those in our community. People go into financial arrangements in good faith. They believe folk. People go and see lawyers to do their house conveyancing because they are professionals. People believe that because lawyers are qualified things will go right. When people walk into a doctor’s surgery very few of them look up and ask to see the certificate on the wall as proof that the doctor is a qualified general practitioner. We take it as a given. I think that as we go into the future there has to be a greater effort to improve our financial literacy within our school system starting with the young and going right through to our adult population. I am a layman in this area myself. It is a big jump for people from doing their household budget getting their finances right and making sure their taxes are all sorted to then being asked to make judgments about where to put their life savings. As I say the sniff test is that if it looks too good to be true it generally is. 
I think some support needs to be put around this regime in the future to provide financial education and further financial advice for laypeople in our communities and to assist them by ensuring that they have some confidence. When a layperson goes into a professional’s office he or she often feels a bit intimidated because the professional is a sort of “Flash Harry”. The layperson may not want to ask the questions; more important he or she may not know the questions to ask. I think that is where some sort of educational regime in the consumer affairs space could be supportive of this legislation. 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I am pleased to take a short call on the Committee stage of the Financial Service Providers (Pre-Implementation Adjustments) Bill. If ever there was an illustration of the need for legislation like this it came on  
Morning Report 
 this morning where a spokesman appeared for those who had lost money in the debacle around ING (NZ) owned by the ANZ group. The spokesman for that group was himself a financial investment adviser and he was amongst those who had lost money in what had happened with ING. That is because there is not across the financial sector the sort of disclosure that is required for people to know whether they are getting the right advice whether they are making the right investments and whether they are making the right choices to protect themselves and their families when making what can often be long-term investment decisions. So the importance for clarity the importance for transparency and the importance for people to know exactly what they are getting is at the core of this bill and it is to be applauded. It is another signal and message I think that markets do not always deliver everything that people need which is sometimes a mantra we hear. We must have appropriate regulation in place to protect people sometimes from themselves and sometimes from people who are not transparent who are not currently accountable and who sometimes have an agenda behind what it appears they are providing by way of service and assistance. 
Last year my wife and I went to find a financial adviser to give us some advice about our future. We chose a reputable firm. I have no doubt that the adviser we chose gave us good advice but I had no real security around the fact that that was being provided by him. It is a little bit of a lottery so this bill assists in that respect in terms of the transparency and accountability for advice provided. We were not in a situation of requiring any particular financial instruments from the adviser we sought—it was simply in the line of advice—but obviously that can be compounded and present potential conflicts of interest. 
I note that we have seen many many thousands of New Zealand investors who have lost money in the myriad financial company collapses over the last 3 or 4 years sometimes after advice from financial service providers to put investments into a particular organisation and institution—into the likes of Hanover Finance which I seem to recall used to promote itself on State-owned television Television New Zealand as the name one could trust. Of course that turned out to be absolutely not the case. 
I welcome this bill. I think it will help to protect people against some of the slick advertising and marketing that we see and give people more confidence that when they make investment choices guided by financial advisers they have every reason to believe that that advice is provided appropriately and transparently. 
STUART NASH (Labour) 
: 
 As my colleagues and those on the other side of the Chamber have spoken about numerous times we all support the Financial Service Providers (Pre-Implementation Adjustments) Bill. But I think we need to ask why the Financial Advisers Act needs to be amended so soon after it was first introduced. I think as my colleague Lianne Dalziel highlighted this bill was on the legislative agenda that the Labour Government really wanted to push through before the election. Ms Dalziel knew that if it did not go through before the election then nothing would be done for quite a long time. The vast majority of Kiwis were looking to Parliament for direction in this area. It was not a contentious bill at all; it was borne out of the recognition that so many ordinary Kiwis have been let down by a sector that they were not expecting would let them down. 
I gave a couple of analogies in my speech in the second reading and I will return to those. When we want legal advice we go to a lawyer. To practise as a lawyer one must have a law degree and must be admitted to the Bar and if one makes a mistake as a lawyer or is involved in negligence or incompetence one goes to a law committee. A whole lot of checks and balances are in place to ensure that the public are well served by the law profession. The same is true if one wants to talk to an accountant. One goes to an accountancy firm speaks to a qualified accountant and gets good advice from the accounting profession. If people do not get good advice if they feel they have been let down or if they feel that the advice has been incompetent there are ways and means for the public to go to the professional body and get redress. 
The situation with the financial services sector was completely different. People used to joke about it. If it was not such a serious issue for the vast majority of New Zealanders—and more so for a targeted lot who have actually lost everything—then it would be quite humorous. People used to say that as there was no work in the building industry they would become financial advisers. It was a bit of a joke. We saw the growth of an industry where people with no qualifications and no experience whatsoever would tout themselves as financial advisers. 
The thing about New Zealanders is we have a bit of a DIY attitude to investment. We talk to our mates or read the paper and we think we know how to invest our money well. Occasionally if we do not know anything about it we will go to someone who touts himself or herself as a financial adviser. To me a financial adviser should be able to provide sound financial advice on what I should do or where I should invest my money. The lack of rules or regulations requirements for qualifications or any professional body sets off alarm bells. But of course how are the vast majority of New Zealanders to know any better? They do not. A financial adviser was out there to advise them what to do. 
I come back to the question: why does this legislation need to be amended? Well Ms Dalziel wanted the legislation to be passed because it needed to be passed. The building blocks of sound prudential regulation needed to be put in place because if they were not in place before the election it would take quite a while after the election. The Minister of Commerce Simon Power claims that the new legislation we are debating now will actually reduce costs and encourage public confidence back into the industry. I say that it will take a while before the public once again has confidence in this industry. We all know someone who has been burnt and we have all read the stories about people who have been burnt. But the 2008 legislation was a very good first step and this bill is a very good second step. 
The bill basically consists of technical amendments designed to ensure that the new regulatory regime can be implemented efficiently and consistently within existing policy frameworks. It just builds on what is already in place which of course is what a lot of legislation does. But this bill does it in a very positive way. I will give members one example. According to Bruce Kerr who is the executive director of Workplace Savings NZ this bill “will offer more certainty to employers who assist their employees with retirement savings arrangements.” Members may ask why. Well if employees come to an employer and ask where they should invest their retirement savings the employer can now I believe say with confidence: “Here are some sound financial advisers. You can have confidence in these people and you can have confidence in the industry.” So it is a whole flow-through process. Mr Kerr had been concerned that employers who make retirement savings arrangements available to their employees through the workplace would be caught by the definition of a “financial service provider” but this bill avoids this difficulty. It takes out a lot of those anomalies that often occur when legislation is put through—not under urgency but in a hurry—to fill a gap. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 I rise to say a few quick words on the Financial Service Providers (Pre-Implementation Adjustments) Bill and I also echo the comments of the chair of the Commerce Committee to our officials and our advisers. I acknowledge personally the staff of the Parliamentary Counsel Office while they are in the Chamber for the hard work that they did within quite tight time constraints. We thank them salute them and wish them well because a lot of legislation is coming through in this area and they will have to deal with it in future. 
This bill has multiparty support so it has not been contentious. But we have had to work on the detail of the provisions of the bill. We have all discussed the balancing act between protecting vulnerable investors as well as trying not to over-regulate. We heard an earlier speaker talk about under-regulation but we were also careful not to over-regulate in circumstances where regulation would serve no purpose and be imposed on those who do not provide financial advice. 
I have already mentioned in a prior speech on this bill that it is difficult to regulate risk. That is not the role of the Government but it has been quite clear in the last 24 hours in the settlement between the Commerce Commission and ING (NZ) and ANZ that when risk is misrepresented mispriced and inappropriately shown to be something that it is not and when that advice is conveyed by financial advisers or so-called experts we have problems. It is not the role of the Government to regulate risk; risk will always occur. It is just the same as the situation with regard to murder and other such social crimes where the fact that we have laws to regulate those crimes does not stop them from occurring. So we have to be clear that we are here to provide some guidance assurance and confidence to the public who invest their savings in financial companies or other investment products. 
The other issue that has been raised in earlier speeches is one of enforcement. There are moves as many people will know towards having a super-regulator. It is important that the super-regulator has the powers and resources needed to enforce the laws that this Parliament has passed. That is particularly important and we have seen in the last two Budget appropriations more resources being committed to the Securities Commission and other such regulators. I think that all parties support that. The proposed move involves the bringing together in a super-regulator of the different enforcement agencies so that they are not talking above or below one another but are talking to one another within the same body. 
The Hon Clayton Cosgrove also mentioned financial literacy and that is a really key point. When I do my electorate clinics I see some of the issues problems and major difficulties that people seem to have regarding investments housing and the like. Their difficulties are around budgeting financial literacy and understanding where their money goes. We cannot do enough of that type of education and that type of learning not just around basic budgeting but also around financial products. And the issue is not just about disclosure. Another member has already talked about providing for better disclosure but I know people with financial backgrounds who work in the financial industry but who still struggle to get through a 75-page prospectus. I know we have looked at legislation that has simplified prospectuses and simplified disclosure documents but nevertheless it is really asking a bit much to expect ma and pa investors and grandma and grandpa investors to understand complex financial products and financial disclosure documents. 
I want to quickly talk about the process taken with regard to the bill. I thought that the process that we worked through in the committee on this bill was although time-constrained useful and collaborative both across the House and with the industries that made submissions and came to the committee. It was quite useful to have the finance industry and the major players within that industry make contributions as we developed the bill. When we were developing the bill sometimes the disconnection between what we were doing as parliamentarians and the advisers and the industry was such that I kept questioning how measures would work in reality because we did not want to overburden the finance companies and those who work in the industry. The issues were about meeting time frames and about the costs that would be imposed. I think that the credit unions said paying $20000 would be too onerous and there was no ability within their cost structures to pay that for something on which they were not providing financial advice. We asked whether these measures were necessary in the greater scheme of things and we kept asking ourselves that as we worked through this bill. 
I think what we have come to in this bill is very good in terms of carving out the firms that did not need to come under the auspice of this regime but also including those that needed to be regulated because of the history of bad financial advice getting out into the community. I think this bill is very good. However if people out there think that this bill will solve all our problems I would say no. I say that respectfully and I say that truthfully because I know that the finance industry is developing and over time different products will come into being. There are very complex derivative products that may need further regulation. There are further exemption-making powers within this bill and that will certainly allow for the legislation to grow organically over time. I think we have done a really good piece of work. I commend particularly the committee’s chair Lianne Dalziel. I thought she worked particularly hard and guided the committee in the right direction. I certainly commend this bill. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I want to take another call because I am a little disappointed that we have not had any response from the Minister in the chair the Hon Tony Ryall. We have worked very collaboratively on this bill and I do not want it to turn to custard now. I have asked a serious question of the Minister and have not had the courtesy of a response. To be honest it is the Hon Simon Power who should be standing in the Chamber and explaining how the Supplementary Order Paper dovetails into the legislation that we have. I am not referring to anything that is out of order in saying that— 
Chris Tremain 
: I raise a point of order Mr Chairperson. It is taken in good taste that the Standing Orders prevent members from talking about other members who are not in the Chamber. The Minister is at the CER meeting in Australia and is genuinely unable to be here today. 
The CHAIRPERSON (Hon Rick Barker) 
: Firstly that is not a point of order. That is an explanation which is not about the order of the Committee. Secondly the Hon Lianne Dalziel did not say that the Minister was not in the Chamber and was absent. She said it was a pity he was not in the chair and making explanations. Now that is different but anybody who knows the Standing Orders knows very clearly that if the Minister were in the Chamber he or she would have to be in the chair and by joining the two facts together could conclude that the Minister was not. I am not saying that that was wrong but I just encourage the Hon Lianne Dalziel to continue and not to make reference to the Minister being out of the Chamber. But I do not want members to interpret my saying that as having said that the member did because I am saying she did not. 
Hon LIANNE DALZIEL 
: Thank you Mr Chairman. By way of that point of order and I am not referring to your ruling an explanation has been offered and it is one that I was not aware of. I think it is a shame when we have legislation of such significance as this. I am not objecting to the urgency. I have never objected to having urgency for this particular legislation because I know that the desire is to have it passed by 30 June and I have indicated to the Minister of Commerce that the Labour Opposition will support the passage of the legislation. But there is a serious issue to do with two matters in particular that have arisen since the bill was reported back. I have already mentioned the first one which is the question of the Mortgage Brokers Association. The way that this is being dealt with by way of Supplementary Order Paper—which is why I wanted a Minister to stand in the Chamber and put this on the record—is that new paragraph (d) has been added by Supplementary Order Paper 146 to new section 55(1) which is to be substituted by clause 13B. It states: “providing in any case that is specified in the regulations for the purposes of this paragraph services of the kind referred to in paragraph (a) or (b) or both but in relation to any category 2 product specified category 2 products or specified classes of category 2 products.” 
This is the provision that adds into the authorisation provision and I think that having a Minister read this into the record in the Chamber would be useful to the Mortgage Brokers Association. It is a shame that the chair of the Commerce Committee has to do the work of the Minister in the Chamber on this particular occasion. I am a little bit annoyed about that because I think it is discourteous to the Committee not to have the Minister respond to a very technical and detailed Supplementary Order Paper and read into the record which changes are being made. 
A debate is to be had about the methodology chosen by the Minister to address this issue because it requires those operating in the category 2 space to wait for regulations. No others have to wait for regulations in the way that section 55 has been used. So I think we are entitled to an explanation. I think the explanation probably is that it is at relatively short notice and we would like to put a regulation-making power into the legislation so that we can resolve this matter after the fact and do so in a way that indicates to the sector that it will have its needs addressed by way of regulation. That would certainly send a very positive message to the mortgage broking sector. Again I place it on record that I am very happy that it wishes to improve the quality of advice it is providing and that it wants to increase the level of qualifications its mortgage brokers will be providing by lifting those qualifications to the authorised financial adviser level. 
Having section 55 amended in this way may just simply be because of the pressure of time. If that is the case we should have that read into the record. Then there will be comfort going to the sector that the regulations will be forthcoming from the Government in due course and in time for the legislation to be implemented. 
What we do not want to see happen is that the people enrolled for these higher-level qualifications are pulling out of the qualification course because they no longer need to do it. There is a risk of that happening and I have heard that it has happened. Well I think that is pathetic and I do not think that anyone worth his or her salt should even consider contemplating pulling out of a course that he or she has enrolled in. That person has committed to a particular course of action and I think he or she should continue down that path. I want to discourage people from doing that. 
As a result of this amendment in Supplementary Order Paper 146 and once regulations have been passed this legislation will enable those operating in the category 2 space to be authorised financial advisers and to therefore meet the requirements set by the Securities Commission for their authorisation in that space. It means that they will be authorised in that space for the products they are dealing with. I think that sends a very positive and powerful message out there to the wider industry in terms of quality standards and that is a very good thing. But it would be helpful to have a Minister in the chair who was prepared to right the record as it were in the manner I am proposing. 
The second area relates to a concern expressed in an email that has been sent to the Minister of Commerce. It was sent on Monday and it was copied to me other members of the committee and other Ministers. It relates to the concern that we still have not quite carved out those who need to be carved out—and we have done quite a bit of carving out with this bill. We wanted to make it clear that some things in the area of financial service are not really financial advice. We identified services performed by those operating as retail assistants for example. They help people to fill out their applications for hire purchase for the goods they have purchased. This is in the credit space gathering information for an application for credit. It was not seen to be covered by this. Other law deals with that subject. That sits very clearly with the Minister of Consumer Affairs and changes need to be made there. 
I should just put on the record that after the comments we have already heard in the Chamber on this bill the Government should support Carol Beaumont’s member’s bill on loan sharks. We definitely need to have some tightening of the regulations in that area. I think that is important and I will make the point that the Government should definitely support Carol Beaumont’s member’s bill when it comes up for a vote. We will certainly be repeating back some of the comments that have been made today about those who are vulnerable in the financial sector and certainly those who are the victims of loans sharks are vulnerable in that sector. 
The concern has been drawn to our attention—and this is on behalf of Farmers Trading TaxiCharge the New Zealand Taxi Federation and Telecom—that we have not quite undertaken the carve-out sufficiently. Concerns are being raised that we have not quite got that exactly right. I would like the Minister to place on record a response to Marketing Law which has raised these particular issues with us. The first issue is that the Act will apply to many industries that were not contemplated by the Financial Action Task Force on Money Laundering requirements and that have not been consulted. We heard its submission in a very positive way. We took it on board. We were very clear that we had undertaken the carve-out so that is why we need to have it on the record that the Minister agrees that we have appropriately carved them out. 
There is a question around access to justice denied to financial service provided. This is around binding rulings of the dispute resolution scheme which is in new section 49D of the bill. This is where the complainant can apply to the District Court for review of the final settlement. The dispute resolution scheme provider can apply for a review but there is no provision for the respondent financial service provider to apply for a review. Even though the District Court is empowered to amend a manifestly unreasonable provision it can do this only on the application of the complainant or the dispute resolution scheme provider. The District Court said that this conflicts with section 27 of the New Zealand Bill of Rights Act which is why it has copied this to the Attorney-General. That section addresses the right to justice for every person. The District Court said that there is no mutuality of rights and the financial service provider legislation will prevail over section 4 of the New Zealand Bill of Rights Act. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I reiterate what my colleague the Hon Lianne Dalziel said about the importance of the Government supporting Carol Beaumont’s bill on loan sharks. It is a logical progression from this Financial Service Providers (Pre-Implementation Adjustments) Bill. I also reiterate what previous colleagues have said about accountability and that this bill is about providing for accountability on the part of financial advisers just as many other professions are held to be accountable. 
As the law stands anyone can call himself or herself a financial adviser and people do not need to have any qualifications. Advisers do not need any supervision and do not have to belong to a professional body. They do not have to belong to such a body or have a formal way of dealing with disputes. Until 28 February 2008 unless advisers were asked a specific question they did not have to disclose anything other than certain criminal convictions bankruptcy and banning orders. Many of the examples of shonky financial advice have been around the marketing of financial products by people who simply did not know or understand the products that they were marketing. 
Also as has been proved and is being proved in the courts outright lies were being told. We see in the  
Dominion Post  
today a report that more charges are being laid in relation to the Bridgecorp failure case and that Bridgecorp directors Rod Petricevic and Rob Roest are scheduled to appear in the High Court in Auckland this morning to face fresh fraud charges brought about under the Crimes Act. Those charges relate to allegations that the directors lied to investors about Bridgecorp’s financial health in its December 2006 prospectus. It is also alleged that the directors lied to investors by claiming that the company had never defaulted on repaying principal or interest to investors. Today’s charges have been laid by the Crown— 
The CHAIRPERSON (Hon Rick Barker) 
: I caution the member that it is one of the practices of the House that we do not interfere with the courts. I am starting to become a bit worried. You mentioned that a court case is proceeding and I caution you that I do not want to hear any contributions that could be seen to overlap with the activities of the court. It is fair enough to refer to the fact that there is a court case but I am starting to get the hint that you are moving on to some of the substantive issues in the case. 
CLARE CURRAN 
: I will refer to some of the statements that were made by victims of the Bridgecorp collapse that were reported in the  
Sunday Star-Times  
in late 2007 to give an example of the kind of impact that this collapse has had on people’s lives. This has been talked about a number of times in this House and has resulted in this bill. 
The victims included an 81-year-old rest home resident who relied on the interest on her $80000 life savings to pay rest home bills. Another couple aged 93 and 95 were relying on Bridgecorp and Five Star Consumer Finance investments in order to pay their retirement village fees. Another couple aged 67 who lost $160000 across several bust finance companies said “We will never recover from this. We are too old and too tired to fight. We are absolutely devastated feeling that we have been robbed of our life savings by dishonest and unscrupulous investment companies.” Many investors complained that their financial advisors were still spinning them a hard sell despite the collapse and advice from the receivers that the holders of unsecured debentures and capital notes would get nothing. Another quote by one of these people said “(My financial adviser) told me not to believe what the receiver the media and the experts were saying and that we will get most of our money back. I feel that I have been misled by my financial planner. I want them to be held responsible for their negligence.” That is what this bill tries to achieve. 
From 29 February 2008 amendments to the Securities Markets Act of 1988 will change the rules on disclosure by investment advisers but not by other kinds of financial advisers. The Commerce Committee after all of the work that it did on the bill recommended that it be passed with significant changes. The committee received many high-quality submissions and took an unusual step as we have heard a number of times. 
MELISSA LEE (National) 
: 
 The Committee stage of the Financial Service Providers (Pre-Implementation Adjustments) Bill was going so well. As we were all speaking we had agreed that the Commerce Committee worked very well and cooperatively with the sheer volume of paperwork we had to get through. Some 93 submissions came through the select committee and 42 were heard. 
I start off by commenting on the statement of the previous speaker Clare Curran. She said something like anyone can be a financial adviser at the moment. I remind that member that before National became the Government Labour was in Government for 9 years. We had 30 finance companies fail in the last 4 years and the model we are working in is the Financial Advisers Act 2008. Labour passed that Act and we are trying to amend it. 
The committee worked really well. I know Lianne Dalziel worked really hard. She was not in the Chamber when I gave her a compliment but I acknowledge once again the sheer amount of work she did. I thank the officials who are here. I do not know how they did it but they managed to meet all of our deadlines and I appreciate all their hard work. I thank them very much. 
On the back of the global credit crisis encouraging savings to create a greater pool of capital in New Zealand from which credit can be accessed so interest earnings can be retained within New Zealand will enable us to build a stronger economy and a stronger export sector which will be good for New Zealand. This National-led Government is trying to encourage New Zealanders to move from consumption to investment and to bring them from spending money to saving money which will strengthen our economy. We needed good financial advice but we did not quite get it. We are trying to make sure that we have solid financial advice for the mums and dads who made bad choices because they got really bad advice in the past. We need to make sure they have confidence in the advice so they can invest their money and have something for their children and their grandchildren. 
One of the things I talked about earlier was the definition of “financial adviser” but now we are moving on. One of the things we clarified was the whole territorial scope for the financial advisers that this bill covers. When financial advice is given in New Zealand this bill makes sure that those people give good advice—I think I got that right; I hope I am reading this right. I think Lianne Dalziel talked about carving out a whole lot of things. This bill is not about protecting people who are sophisticated or who work in the financial sector and know how to do it. We wanted to know what harm reduction we were going to provide through this bill what mischief we were trying to remedy and who we would be protecting. This bill is about protecting unsophisticated investors who lost a lot of money. Let us hope we do not have that situation once again. 
Hon GEORGINA TE HEUHEU (Minister for Courts) 
: 
 I will make some comments on behalf of the Minister of Commerce that I hope will address some of the issues raised by the Hon Lianne Dalziel. The Commerce Committee made a number of changes to the Financial Service Providers (Pre-Implementation Adjustments) Bill to ensure that the bill is legally effective consistent and works appropriately. Obviously the Government supports the changes made to the bill by the select committee to focus the legislation on the areas we want to ensure are properly supervised. 
Part 1 of the bill is concerned with the provisions of the Financial Advisers Act with two exceptions. The changes to Part 1 of the bill in the Minister’s Supplementary Order Paper 146 reflect matters of detail that have been identified by officials and stakeholders as necessary to give effect to the decisions made by the Government and the committee. It also fixes minor drafting errors. The most notable of these minor changes include firstly clarification of how the certification process will work for wholesale clients wishing to opt into the framework for the treatment of wholesale advice; secondly changes to make absolutely clear that retail staff providing advice on credit in the course of a retailing business is not an activity caught by the Act; thirdly clarifying the manner in which obligations may be imposed on qualifying financial entities; and fourthly clarifying that the Act contemplates that investment planning services may be provided to a class of people as well as specific individuals. 
The Supplementary Order Paper proposes two other changes to the bill that are a little more substantive. The first is to introduce a new regulation-making power that allows transitional arrangements to be made in implementing the new regime. In order to ensure there is an effective mechanism for dealing with any transitional issues the Supplementary Order Paper includes a time-limited transitional regulation-making power that enables the Minister of Commerce to authorise supplementary or replacement transitional provisions. This change will help ensure that the need for urgent remedial legislation to deal with transitional issues is mitigated. 
The other substantive change proposed by the Supplementary Order Paper addresses concerns raised by various parts of the sector that the regime does not allow people to voluntarily opt into authorised financial adviser status. I take this opportunity to clarify that the bill does not prevent any person from becoming an authorised financial adviser where that person has met the qualification criteria. However it has become clear that the Act currently does not allow the Securities Commission to authorise a person to provide services solely in relation to category 2 products. To ensure that consideration can be given to allowing authorisation for the provision of this sort of advice the Supplementary Order Paper enables regulations to be developed to allow the Securities Commission to authorise a person to provide any class of financial adviser services. It should be noted that once the bill has been passed it will be possible to address concerns raised about the ability for category 2 advisers to seek authorisation. 
As a final note the other amendments in the Supplementary Order Paper as already referred to are technical in nature and add details needed to give full effect to the decisions of the select committee. Thank you. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 Unfortunately the Minister in the chair the Hon Georgina te Heuheu did not answer the question I had asked which was whether the Government will put on the record that it intends to regulate to allow the Securities Commission to have authorised financial advisers in the mortgage broking space. That is the question we have been asked and I would like the Minister to put the answer on the record. I assume that the answer is yes that the Government is writing in a regulation-making power so that regulations will be passed. I honestly think that we have had such a good process up until now that it would be a shame to ruin it by Ministers being inadequately briefed to contribute to the Committee stage debate. 
The second question I asked in relation to the question of regulating out or regulating in was not answered at all unless the Minister was answering it by reference to some element of Supplementary Order Paper 146. I tried to capture her attention by asking what clause she was referring to but I cannot see which clause it was. I think that if the marketing law people who represent these businesses have gone to the trouble of providing us with their concerns in writing they deserve to have an answer in the House. 
The final point that I was coming to but was unable to address was the question about the binding rulings of the dispute resolution scheme. It is in section 49D in clause 38B of the Financial Service Providers (Pre-Implementation Adjustments) Bill. I have gone through the Supplementary Order Paper and it looks like the complainant has been taken out so just the person responsible for the scheme can apply to the District Court to make an order requiring a member of the scheme to do either or both of the following: comply with the rules of the scheme or comply with a resolution of a complaint that constitutes a binding resolution under those rules. The point that was being made was that there was concern that that conflicted with the New Zealand Bill of Rights Act because there was no mutuality of rights. Has taking out the complainant resolved that problem or does it make it worse? The question we were being asked was whether people should be able to apply for a review of the final settlement. I cannot find out who has the ability to apply for a review of the final settlement and whether the financial service provider has been given that particular authority to apply for a review. 
The trouble is that we have only just received this letter. I thought we would get a more detailed response from the Minister in the chair. Agreeing to have the Committee stage done in an across-the-board way enables us to focus on the different elements of the bill. It is the technical debate. It is where we try to make sure that we have got things right. If we do not have them right in this stage—and I do not want the Committee stage to run into the lunch break—and we move to the third reading we will end up not being able to fix things. Even though there is a regulation-making power in order to resolve things that come up afterwards it will not look very good if we have not addressed these technical matters in the Committee stage. People have gone to the trouble of providing us with some feedback post the report back of the bill. It is not unreasonable that we put on record a response to the concerns they have raised. 
The other matter that I would really like the Minister to address in her comments on behalf of the Minister of Commerce is that at all stages we gave the officials the ability to go back to the stakeholders to get feedback from them and on this technical part of the bill I would like to know whether any other matters raised by key stakeholders are outstanding. Apart from the three that I have raised have any other outstanding matters raised by those important stakeholders whom we have engaged with in a very positive way been addressed in the Supplementary Order Paper? Have issues raised by outside stakeholders been addressed and are there any gaps? Were any other things raised by major stakeholders? I think knowing that would assist the process of this bill. 
STUART NASH (Labour) 
: 
 I agree with my colleague Lianne Dalziel that the Financial Service Providers (Pre-implementation Adjustments) Bill is a technical bill. We are in the Committee stage and some very important technical issues need to be answered. I will address a couple of points made by Government members that I think need a little bit of clarification. 
Melissa Lee said the bill is here to protect people who have lost money. My answer is that it is a little bit too late for a lot of those people. I quote the introduction in the commentary on the bill: “The intent is to ensure that these Acts provide for responsible regulation of the financial services sector and robust consumer protection in order to restore confidence and trust in the financial services sector.” This bill is here to protect every single New Zealander who has any thought of investing money. It is not about those who have already lost money. I hope we do not stand up in this House again at another point in time to talk about another 30 financial institutions or organisations from the financial sector that have cost New Zealanders millions and millions of dollars. 
Another thing I would like to talk about is what Peseta Sam Lotu-Iiga said. He absolutely hit the nail on the head but he got it wrong—and I know that sounds like an oxymoron. Sam said that friends of his with a financial background find it difficult to wade through 75 pages of a prospectus. That is the hub of this whole argument. If friends of his with a financial background cannot read a prospectus in order to advise clients or prospective customers what the hell were people without any financial background whatsoever doing advising people where to put their money? They had no place doing that and ordinary Kiwis trusted them. I say to Sam that if people cannot read a prospectus they should not be investing and they in no way should be acting as a financial adviser to anyone. Prospectuses are put out by law. It is the law that people who offer securities to the public have to put out a prospectus. Every item in that prospectus is required by law—unless the offerer adds additional information. Nearly every single bit of information in that prospectus has been deemed by Parliament to be necessary information when making an investment decision. I say to the member that if his friends have trouble wading through a 75-page prospectus and they are financial advisers they should look at upskilling or look for another job or better understand how to read prospectuses or take a little bit more time before they advise their clients on where to invest their hard-earned money. 
The commentary states that the bill is “about protecting unsophisticated investors.” Those are the words used. Unsophisticated investors go to sophisticated financial advisers to seek advice. Their expectation which I do not think is unreasonable at all is that the financial adviser will have read the prospectus will understand the offering will understand the pitfalls in any investment that the prospective client is thinking about investing in and will be able to advise about the pros and cons. The member needs to advise his friends to get a little bit more education and to take a little bit more time to understand a prospectus. 
The other thing I would like to talk about is risk. Peseta Sam Lotu-Iiga also mentioned that it is not the role of the Government to legislate for risk. Well I take a little bit of issue with that. The development of risk and the understanding of risk are fundamental to the growth of the Western economy. I recommend any reader to a book called  
In the Lap of the Gods 
. It is the history of risk and was written by a man who is a Harvard professor and understands this issue better than anyone in this House ever will. It is a very good explanation in layman’s terms of how the art of assessing risk came about and was developed. It is difficult to regulate for risk but it is vital if we are to get the whole global economy up and running again. This financial crisis has come about due to the misinterpretation of risk or not understanding risk. For example Moody’s which is a credit-rating agency was giving a triple A rating to organisations that were carrying items on their balance sheets that were incredibly high-risk. So not even Moody’s was able to effectively assess the risk of a lot of the offerings. What is taking place is that Governments around the world including our own—and this bill is part of it—now understand that assessing risk and legislating for poor risk are an important part of getting the global economy up and running. 
There is something called the risk-free rate of return. US Treasury bonds are classed as the safest thing any investor can invest in because if the US Government cannot honour Government bonds we are in a hell of a lot of trouble. So that is the risk-free rate of return. Theoretically everything that pays a risk premium over and above US Government bonds has a certain level of risk attached. But I would argue and I have argued that the risk associated with incompetent negligent or unprincipled financial advisers is not a risk that investors should be forced to take on. However it was a risk associated with the financial services sector before this regulation came into place. It is not a risk that people should be asked to assess. 
Peseta Sam Lotu-Iiga 
: Nick Leeson. Bernie Madoff. 
STUART NASH 
: The member makes a very good comment. We should be aware that it was not just people operating out of the back of tin sheds who caused the crisis. People in glass towers were advising ordinary Kiwis on where to invest their money and they got it incredibly wrong—ING (NZ) is a classic case of that. So this bill is not just about regulating the fly-by-night guys; it is about regulating the whole industry. It was not just the fly-by-night guys who got it wrong. The ability to assess risk is vital in terms of having a robust economy. 
I said in the first reading of this bill that different groups of people have lost their money in finance companies and the difference is basically about savers versus investors. Investors are those who have knowledge or should have knowledge of risk and who seek advice from different sources and then make decisions. They are investors and they are after the highest rates of return they can get after assessing their risk. But then there are savers. Savers are people who acknowledge that they do not know much about risk at all. Therefore they seek advice. I am not a lawyer; I seek advice from a lawyer. I am not an accountant; I seek advice from my accountant. People who are savers are not financial investors; they are savers. Therefore they seek advice. It was those people who went to financial advisers and lost all their money—and they may have gone to only one adviser. They had no ability to assess risk. They were like Sam’s friends; they could not wade through a 75-page prospectus. They had no idea of how to assess risk. The prospectuses were there to give financial advisers the ability to assess risk. Savers went to those people because savers do not know how to price risk. They do not know how to price risk; investors are supposed to. Savers pay others to assess risk and they expect competence diligence and honesty. I ask whether that was too much to expect. Was it too much to expect? The answer is that no it was not. 
So this legislation amends a couple of Acts put forward by Lianne Dalziel to ensure that savers who want to put their money away but have no idea how to do it—they do not want to put it in a bank but are seeking a decent rate of return—and who go to a financial adviser will get honesty will get competence and will get diligence. As in any industry there will be unfortunately the odd rogue or two. But this bill promotes registration so that there will be recourse for people who are given incompetent or negligent advice. As with anything though risk is very important but we must come up with a process that allows us either to understand that risk or to go to people who understand that risk. I reiterate that prospectuses are there to allow financial advisers to assess risk and then to offer advice in a timely and correct manner. 
This is very important legislation for a whole lot of people. It will I am hoping allow confidence to slowly return to the investment advice sector and that is why I think it is fantastic legislation. Lianne Dalziel did a wonderful job. The Hon Simon Power by championing this bill has picked up the ball and run with it. As Lianne said it is a bit of a shame that the bill was not introduced under urgency a year ago. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I acknowledge a very good point the previous speaker just made—that this is a very important piece of legislation. I think that the next 12 to 18 months will be a very important time for New Zealand investors and savers and also for the financial advisory industry or sector. We will see not only people coming into compliance but also those who choose not to comply but perhaps leave this industry as well which will give great confidence I believe to investors and savers in New Zealand. I think that one of the most important aspects of that is not just the securing of people’s confidence but the fact that that releases capital into our economy. We know that that is incredibly important. I acknowledge what Melissa Lee said: not only is it releasing capital but also it is retaining interest savings and earnings in this country as well rather than losing those overseas. 
A cornerstone of the Financial Advisers Act is that the professionalism of financial advice is best encouraged by ensuring that it is delivered by competent and ethical individuals. I would say that by and large the majority of financial advisers are applauding this legislation. It ensures and testifies to their integrity their ethics and their competence for the public of New Zealand. We know that through the failure of finance companies over the last number of years many of these financial advisers—some who are my personal friends—have felt that their reputations have been tarnished. But I am sure those people who do their very best in all diligence will find that this sort of legislation will support their integrity. 
We know because I gave the quote in my earlier speech what Professor Mayes said—that New Zealanders are average when it comes to financial literacy which is a problem not just here in New Zealand but in many nations. But here in New Zealand a lot of financial companies collapsed prior to the global financial crisis that occurred which tells us that we had issues. We had had issues within our financial sector for some time and prior to the financial crisis they were obviously starting to affect and hurt many many investors. We know there was a period when the nation of New Zealand went into recession prior to the financial crisis as well so many aspects of our economy needed attention. 
It is very good that the hard work has been done on this bill. As Melissa Lee commented in her speech 93 submissions were received from different interested groups and individuals. We heard 42 of those and we had tremendous support from the officials. I give my congratulations on the work they did and I thank them for the long hours they put in. I think the legislation pushed everybody to the limits of their understanding and beyond that. We received tremendous support and comment from the industry as well. I thank all those who came and brought submissions and who had a part to play in the forming of this legislation which I believe will give a very secure future in going forward for the investment industry and for investors and savers in this country. I was very privileged to be part of the Commerce Committee and I acknowledge the hard work particularly of the chair and deputy chair as well as from Charles Chauvel and Katrina Shanks who in a sense formed the core working-group of people who had a larger level of expertise; members such as I appreciated so much what they were able to bring and that enabled us as a committee to work together very well. I am very happy to commend what we have here to the House. Thank you. 
Hon STEVE CHADWICK (Labour) 
: 
 I have enjoyed sitting listening to the debate. Predominantly the members of the Commerce Committee are reporting back on this bill today. But I felt rather sad actually when I heard a member opposite Melissa Lee talk with that rhetoric about what Labour had done over the last 9 years. Many of us— 
John Hayes 
: Nothing. 
Hon STEVE CHADWICK 
: Well that is not true. The member is a relatively new member. I think that the member firing those barbs across the Chamber when he has just come into the Chamber after we have had 2 hours of fantastic debate and agreement shows his naivety. No one opposes this bill. 
While we are talking about the Minister of Commerce bringing this bill into the House in urgency today I will point out that it is 18 months since the National Government took the reigns of power. That is a long time because Lianne Dalziel as the then Minister of Commerce introduced the first discussion document in 2006. Let us look at the environment at that time. Four years ago we started to feel nervous about the financial market and about investment companies. Since that time 30 companies have gone to the wall and collapsed so it is only in the last 4 years that that environment has started to cause some great unrest. The then Minister of Commerce moved very quickly to get a discussion document moving around the financial and investment sector. As a result of that she introduced two bills into Parliament which were supported by National. That is not doing nothing and it is not sitting back and watching the crash and burn of the financial sector. I wanted to put that on the record and to acknowledge Lianne Dalziel’s contribution. 
I was an electorate MP at the time that the Blue Chip disaster started to occur and I found that investors were travelling over from Tauranga because of the representation there at the time. They came to my office in Rotorua desperately seeking some help. They were not what I would call mum and dad investors. They were sophisticated investors. They had invested up to $100000 but I believe that they had a degree of naivety in the way that they were conned by Blue Chip at the time. The Minister came to a meeting in Tauranga and met with these investors. There was a whole roomful of them. They wanted the Minister to do something there and then to save and protect their money and now they have other avenues of redress to try to recoup some of those massive losses of life-savings which was incredibly sad. 
The Minister moved quickly with the implementation of the Financial Advisers Act and the Financial Service Providers (Registration and Dispute Resolution) Act in 2008. At the same time in that environment the Labour Government was looking at regulating other professions such as the police and we had also carried out a major legislative reform programme on health professionals. Financial advisers were another sector that was ripe for the plucking at that time in that environment. I just wanted to put that on the record. 
I thought it was sad to hear the rhetoric we have heard from National after the consensual way in which the Commerce Committee has worked. That was reflected today by the technical experts in this debate who were clearly on the Labour side of the House. I appreciated the contribution from Sam Lotu-Iiga who put up a perspective and also Melissa Lee. But the actual technical expertise sat with the previous Minister of Commerce who is now sitting on the Opposition benches. I wanted to put that right. 
I am not now an electorate MP but people are bringing their concerns to me as a list MP about loan sharks. That is a category another class that I urge the Government to have a look at. I think this is evolutionary legislation. This bill is amending legislation to allow the implementation of the regime. But I also believe that the Government now has to look at the principles of Carol Beaumont’s member’s bill. Loan sharks are another category that has to be regulated and we have to move quite swiftly on this matter. This bill was the perfect tool to bring in those considerations in the Committee of the whole House through a Supplementary Order Paper. What a missed opportunity that will be. The Labour members in Opposition will be holding the Government to account on that issue. 
Dr ASHRAF CHOUDHARY (Labour) 
: 
 First of all I acknowledge the good work that the previous Minister of Commerce Lianne Dalziel did in this area. I have known her for a number of years and she is Labour’s financial guru. A number of bills in this area were started by her and she is now the chair of the Commerce Committee. I have had the opportunity on at least two or three occasions to sit on that committee. I must acknowledge that Lianne Dalziel single-handedly runs the nitty-gritty of the finance matters in that committee. I have heard even the Government MPs acknowledge the hard work that Lianne Dalziel does on that committee. I also acknowledge that other colleagues such as Sam Lotu-Iiga and other friends have done good work on the committee. 
I will speak briefly about the people who are subject to some of the if you like abuse by financial advisers. I live in Auckland and my colleagues Pansy Wong Melissa Lee and Sam live there too. We are aware of some of the concerns that the ethnic communities—the Pacific communities and the Asian communities—have particularly about this area. Those concerns comprise two parts. One concern is about financial illiteracy if you like. I am aware that a lot of people in Auckland have very little literacy in the area of finance and economics. They are often at the receiving end of wrong information and wrong advice and they get ripped off. At the other end there are unfortunately people in the same communities who have some financial knowledge and literacy but who exploit their own people. I have heard a lot of stories about a number of people who have been exploited by so-called financial advisers. Often they are ripping off their own people in their own communities which is very sad. 
The Financial Service Providers (Pre-Implementation Adjustments) Bill is a technical bill to tighten up the provisions in the current legislation and clearly it is designed to help the people who are at the receiving end of wrong advice from financial advisers. I am very pleased that these issues are being tidied up particularly given the fact that there are loan sharks out there and particularly financial advisers who are ripping off people and selling mortgages that are unaffordable to some of the people who do not understand all the details about those issues. Also in the savings area elderly people who have some savings want to put them in the right place. 
I welcome Ross Robertson to the Chamber and also my colleague Su’a William Sio. They have just arrived probably from Auckland. They have been doing a good job out in the community particularly in the area of the vulnerability of our people. [ 
Interruption 
] I say to John Hayes that I feel he should acknowledge the good work that Lianne Dalziel has done. This is only his second term in the House and he probably does not know about all the hard yards that have been done in the past. I say to John that we should give credit where it is due. Hard work has been done in the past and we should acknowledge that. John Hayes has done some work on foreign affairs; I think we can acknowledge the work that he has done over the years. 
There are risks involved and I think we need to particularly help the people in our communities who have very little knowledge and understanding of financial matters. This bill is designed to help those people. I support this bill. Thank you. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 It is becoming increasingly frustrating to those of us who would like to have some answers from the Minister in the chair the Hon Pansy Wong placed on the record of the House. It is important that the questions that were raised post the report back are answered. We have had a truncated process. We have had really good progress in the Commerce Committee and it has been ruined by the Committee stage where I do not think we are being treated fairly. We need to have answers to those questions because this is the last time that those questions can be addressed. 
I have asked reasonable questions I believe. They were submitted to the Minister of Commerce on Monday by the representatives of Farmers Trading TaxiCharge New Zealand the New Zealand Taxi Federation and Telecom. The questions are about those parties that are not contemplated to be covered by the legislation. All we need is a very clear statement in the Committee from the Minister that the issues in Part A of the email are addressed and also the questions in Part B which are new to me. They certainly are not the ones that I recall being raised at the select committee. I do not really mind how the Minister deals with them whether they are addressed by amendment or by way of explanation but it is important that they are dealt with. This is the last chance to get the legislation into its final technical form for the third reading later this morning. I do not want the Committee stage to go through until this afternoon which is the alternative. We can just keep taking calls until we get the answers. 
The second issue I will raise which I have not spent any time on is the qualifying financial entity model. When I was the Minister of Commerce we designed the qualifying financial entity model in order to provide a structure of responsibility that would sit around those who were employees and also—as this legislation highlights—those who are nominated representatives of the qualifying financial entities. The way it was designed to be structured was that if people were advising in the category 1 space only for products of their own and otherwise advising generally in the category 2 space then they would not have to be individually authorised as financial advisers. 
A number of the banks came to see us at the select committee and they put a tremendous amount of effort into helping us get this legislation right. One of the influences at the select committee was that we kept coming back to the essential question of what the risk was that we were trying to address. One banking case was outstanding and that ruined it for the rest of the banks. Here is the front page of the  
New Zealand Herald 
 this morning as we debate in the Committee stage and final stages of this bill: “$45 million: Investors win record fair trading payout for misleading claims”. This was the advice that we had received at our committee over and over again. People were duped into believing that the risk they were confronting was nowhere near the level of risk that was actually being imposed on them. They were told in many instances that it was as safe as keeping the money in the bank. 
I think that ANZ has let the side down as it were in terms of the banking industry. The banking industry in New Zealand has come out virtually unscathed from the global financial crisis in terms of what has happened with the deregulation of the industry in the international environment because here it was very well prudentially supervised by the Reserve Bank with very strict rules around it. Of course those prudential rules now apply to the non-bank deposit sector. No we did not apply those rules in time but I do not know how one could have applied something in time when one was starting the consultation process on the provisions for the non-bank deposit takers and the review of financial products and providers only in the year that the first three collapses occurred and when one had announced the result of the Cabinet decisions on those matters 1 month before Bridgecorp collapsed. You know I must have been the unluckiest Minister in history I guess to have held the portfolio at that time. But I think it is unreasonable to play the blame game and actually nobody has really done that. 
The previous Labour Government inherited a regulatory wasteland. It took us a long time to put lots of regulation in place and we made a lot of regulations in the financial sector. When it came to the crunch both parties in the House agreed to work together and that is the way we have proceeded. We proceeded that way when we were in Government. We had a letter from the now Prime Minister of New Zealand addressed to the then Prime Minister of New Zealand offering that support. I think that it is not necessary to play the blame game because both of the main parties are responsible as regulators in the parliamentary sense for getting this right and I think that they have worked very well together in order to improve the legislation. 
The qualifying financial entity model was designed to provide a true incentive for organisations to take full responsibility for the training and delivery of financial advice at an institutional level that is appropriate to the needs of customers. We have all sorts of protections written into the law but essentially a qualifying financial entity risks losing its status as a qualifying financial entity if it gets it wrong. I think that is an incredibly powerful incentive and that is why I was very much in favour of finding a mechanism to ensure that the banks and other institutions could take responsibility for what they were doing on the job when it was their own product. We said no to outside products and I think we said no to outside products for a good reason. The headline news in the  
New Zealand Herald 
 is an example of that very good reason. I think there is a risk when we have part-branded products as with the ING (NZ) product from ANZ. We have the real risk that the people who are telling people what to do with their money do not see the degree of risk that those people are actually confronting. 
I would like the Minister in the chair—I am getting a bit depressed about this now—to answer some of my questions. I do so genuinely because it is not a question of satisfying me in my position as chair of the select committee. We have referred the bill back to the House. We have done our work at the select committee. But given that we have virtually rewritten every single clause of the bill if people are still raising some concerns since the report back then this is the right place and the right time to raise them. If the Minister could just read into the record what the answers to those questions are it means that we know where we are going in terms of the future and it means that those who have raised the concerns will know that they have been heard and responded to by the Government. As I said I have read into the record what I understand to be the case in respect of one of those questions but other questions still remain unanswered. I think it is very important that we have those questions answered at this last opportunity before the legislation moves into its third reading where we will be unable to correct it any further. 
That is a reasonable summary of where I am up to. I am not saying that this will be my last call; I actually hope that it is. I hope that the Minister is able to provide us with the advice that I am seeking on behalf of others. I am getting a warm indication that some work is going on that will assist the Committee in the progress of this bill and I am well pleased to see that. Thank you. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I rise to take a brief call in this Committee stage of the debate. I do so for several reasons. The first reason I do it is because many of my constituents in New Lynn are among the thousands of New Zealanders whose life savings have been stolen from them by shonky finance companies. For too many senior citizens for people who have worked all their lives on modest incomes who have scrimped and saved to put aside the pennies and build up a nest egg for their retirement who may not have a high degree of financial literacy or specialist education and who are reliant on the good faith of those who have held themselves out as the intermediaries of the finance sector their life savings have gone. They have been stolen. 
John Hayes 
: Under whose administration? 
Hon DAVID CUNLIFFE 
: If the member opposite disagrees with this analysis then he should say so; otherwise he should listen. It is absolutely reprehensible that the companies that are now filling the front pages of our newspapers like ING (NZ) owned by a major New Zealand bank have now left many thousands of senior citizens bereft of most of their savings—in that case even after the Commerce Commission has had to weigh in. While Mark Hotchin the poster boy of irresponsible greed is building a palace on Paritai Drive—well I say “building”; he has not paid his contractors so building has stopped—tens of thousands of investors have seen their savings disappear. 
John Hayes 
: Crocodile tears. 
Hon DAVID CUNLIFFE 
: These are not crocodile tears. I grew up in a family that did not have money to spare and that could not have saved the way the way these people save. I know what it is like to go without. A lot of my constituents are going without because of the greed the profligacy and the venality of these people. 
It is fair cop though to recognise two things. Firstly there is now a bipartisan effort under way in this Parliament which this bill represents to clean this mess up once and for all. I commend the Government for carrying forward the work that the Hon Lianne Dalziel and the previous Cabinet commenced. Now in the best of all worlds I believe it is fair to say that in hindsight we could have moved somewhat quicker on some of these matters but some of the issues were masked by the property bubble that existed in New Zealand as it did worldwide and hindsight is always 20/20. But I tell you what this Labour Opposition believes this is a hugely important issue and we will not stop until this mess is cleaned up. 
I will give a personal view now. I look forward to the day when it is impossible for financial advisers to receive a fee from a company for a financial product they are advising on. They should be paid a fee for service in the same way as doctor or an accountant is paid. They should not be disguised salespeople for wholesale finance companies or the purveyors of financial products. If in practice they are then they must be held to the highest standards of transparency so that their obligations are transparent. 
I also want to mention in my role as finance spokesperson a macroeconomic implication of this mess and that is that New Zealand has a huge savings deficit. It is killing us. It is the primary reason that our current account is bleeding red and it cannot be solved until we get the savings rate up. New Zealanders are asking what they can save in and with. They say they cannot put their money on the stock exchange because some of them do not understand stocks. They are told they should not put it into real estate for good reason so they put it into finance companies and those companies burnt them. They stole their savings. This bill is essential from a macroeconomic point of view as well as from a fairness and ethics point of view. We need to get our rate of savings up. We need to have high standards of integrity and transparency for the good of the investor and the good of the country. Thank you. 
H V ROSS ROBERTSON (Labour—Manukau East) 
: 
 Kia ora tatou. No reira te Whare e nga iwi e nga reo e nga hau e wha. Tena koutou tena koutou tena koutou katoa. 
In respect of the Financial Service Providers (Pre-Implementation Adjustments) Bill one can only say that it is about time. The National Government has been in office for nigh on 18 months and only now is it bringing forward this legislation. I have to say to the Committee that as Labour’s spokesperson on senior citizens I am appalled at the slowness of the implementation of this legislation. One could say it is too little too late. Even so I have to acknowledge that at least the Government has at last moved on this legislation. Time and time again as I go around this country advocating for and addressing small-business people and Grey Power groups one of the things that I am told about is their concern about the slackness and the sloppiness of the financial sector. 
Why is this legislation necessary? It is simple. It is to protect unsophisticated investors many of whom are elderly and rely on the additional income of an investment to give them some sense of security and comfort in their old age. Why has it taken so long? I have to acknowledge the work of my colleague and friend Lianne Dalziel. She brought legislation into the House in 2008 and she did so because the Government at the time—the fifth Labour Government led by the Rt Hon Helen Clark—recognised that more needed to be done in the financial adviser regime. Thank goodness things are now starting to move. 
The elderly are our most vulnerable and unsophisticated investors and they need proper financial advice. This bill should ensure that robust advice is available for all who need it. I acknowledge the support of the honourable member Sam Lotu-Iiga who endorsed the views of members on this side of the Chamber: it is about time. 
Investors who have lost money in around 50 mismanaged finance companies—including Bridgecorp Hanover Finance St Laurence and Strategic Finance—are up in arms and so they should be. These people want answers from the Minister of Commerce as to why only one finance company has been singled out and put into statutory management. 
The CHAIRPERSON (Lindsay Tisch) 
: I am sorry to interrupt the member. If there are going to be discussions I ask that they be taken outside the Chamber. 
H V ROSS ROBERTSON 
: Thank you Mr Chairman; I appreciate the indulgence of the Committee. Only one company has been put into statutory management—only one. Mr Hubbard a senior citizen down in the South Island has been singled out. Why has he been singled out when others under similar circumstances have been allowed to go into moratorium and receivership? Investors out there tell me that they believe that this move by the Government proves that authorities have been negligent for too long. Investors are asking why it has been only Mr Hubbard. Although it is agreed that statutory management may be necessary to protect the parties in the Hubbard case they ask why it has been only Mr Hubbard. The authorities have evidence that many finance companies have committed offences. Not one of the failed finance companies has been put into statutory management since the finance collapse began yet obvious malpractice has occurred. Who loses out? The unsophisticated investor; the person who is not aware. Many of them are senior citizens whom I represent in this House. 
John Hayes 
: You didn’t look after them for 9 years; you dropped them in it. 
H V ROSS ROBERTSON 
: I did look after them. Thank you. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I feel that I ought to follow up the contribution from Ross Robertson with a mea culpa because if anyone was supposed to put the finance companies that failed in 2006 2007 and 2008 into statutory management it was me. My colleague was inadvertently criticising the former Minister of Commerce. So I thought it was important that I stand up and reclaim my integrity in this matter. 
In respect of the Hubbard case I state for the record and it has been stated by the Minister—and I do not think it is appropriate for us to debate that matter at this moment—that the only way that the Minister of Commerce can put a company into statutory management is on the recommendation of the Securities Commission. There is no right in law for the Minister to operate in isolation of that recommendation and once the commission makes that recommendation there is a requirement really on the Minister to act on that recommendation. That is the appropriate way—my colleague is assisting from the side here. It is the appropriate course of action. 
Charles Chauvel 
: I’m always right. 
Hon LIANNE DALZIEL 
: Of course. 
Charles Chauvel 
: Always assisting. 
Hon LIANNE DALZIEL 
: He is always assisting. But the point I am making is that the reason it has to be that way is that the investigative powers of the Securities Commission have got to be called into play in order to provide a Minister with the advice that is required before placing a company into statutory management. A range of different processes can be put into place in relation to a company that is failing. Statutory management is the most extreme of those. There are also of course receiverships and there has been the development of the model of moratoria. It is the moratoria that have deeply concerned me and I know that members of the Commerce Committee share this concern. I note also that John Boscawen from the ACT Party has raised concerns in this regard. 
I think that one of the problems we have in dealing with this legislation in isolation from what is to come next is the amalgamation of the regulatory functions of the Securities Commission the Companies Office and some aspects of the stock exchange into the new regulator that the Government is proceeding with. I am supportive of that and I think it is a very good move but it has meant another delay in the release of one of the most important discussion documents that we are waiting for and that is the review of the Securities Act. I think that piece of work will bring the whole lot together and this bill is an important component of it. 
People forget—and I know that we chip each other across the Chamber—that the Review of Financial Products and Providers produced nine documents that followed on from the Task Force on the Regulation of Financial Intermediaries. The financial intermediaries document was consulted on when I was not the Minister of Commerce. It was consulted on in 2005. At the end of 2005 I picked up the portfolio and I think one of the first Cabinet papers that I took through Cabinet was the results of the report of the Task Force on the Regulation of Financial Intermediaries. That is when the beginning of the process on financial advisers occurred in terms of the legislative timetable. Then the Review of Financial Products and Providers produced nine documents covering the myriad different components of what makes up our financial sector. It was a considerable amount of work. I think if we had gone straight to regulation in 2006 we would have been rightly criticised for not doing sufficient consultation with those affected. 
I am not shying away from the fact that we would all have liked to see things pan out differently. I must admit that as the Minister of Commerce I had many sleepless nights. There were many times when I woke up in the morning wondering what the lead item would be on  
Morning Report 
. 
CHARLES CHAUVEL (Labour) 
: 
 I want to take just a brief call to go into some more detail on the concerns adverted to by my colleague Lianne Dalziel earlier. Before I do so I remind the Committee of the whole House of the history of this legislative process. The two original pieces of legislation the financial services legislation and the financial providers registration legislation were enacted by the House in 2008. That process was beset by deadlines as this legislation has been. It would be a shame if given all the work that all parties and all members particularly those on the Commerce Committee have put into this legislation we were to fail to get it right at the last hurdle as it were. So I ask the Minister in the chair—I see it is the Hon Pansy Wong—whether she could address the two issues that have been raised with a number of parliamentarians in an email from Rae Nield. 
Rae Nield has sent this email to Simon Power Chris Finlayson Heather Roy Lianne Dalziel me and John Boscawen. I have made a copy available to the National Party backbenchers who serve on the Commerce Committee and to the officials so that they can be clear about the concern. I want to say before I address the two issues that Rae Nield has a very successful legal practice in this area and she submitted to the committee on each piece of legislation. We found her submissions helpful and found that they had force. If she is raising a concern at this stage we must take this last opportunity we have to address it; otherwise we would have to come up with specific amending legislation later in the piece. I signal on behalf of the Labour Party that if the Government needs to take a moment to address the issue—if there is a need to do some last-minute drafting—we will not put any obstacles in the way of that course being adopted or object to any leave application for that purpose. 
The two concerns are that the legislation as reported back from the committee may apply much more widely than intended; that instead of it being restricted to those industries contemplated by Financial Action Task Force on Money Laundering requirements it may go more widely than we intended as a result of the industry not being consulted properly because of the time frames I referred to earlier. There was mention of this point in the submissions to the select committee and at the time the select committee did say to the submitters who raised it that we certainly did not intend to do that. If we have done it inadvertently I think we need to address it. 
The remaining specific issue on this point is that despite the broad coverage of the two pieces of legislation inclusion within the regime is by regulating out not by regulating in. There is arguably still a degree of commercial uncertainty for those businesses that may have been incorporated. The examples in the message that we received are retailers with gift cards prepaid mobile phones and mobile phone billing services taxi billing services and other categories of financial services. Obviously the intention was not to embrace those categories of industry. They would be surprised to be included in this legislation and there is no obvious public policy benefit in including them. So although it appears that there is now provision to make regulations to detach registration from compulsory dispute resolution scheme membership which is in clause 33A and for completely exempting services or classes of service which is in clause 37B for registration and clause 79 for the disputes resolution scheme membership—and for dividing into separate classes clause 37B for registration—these will not in themselves necessarily provide for trader certainty. Traders caught in the broad definitions of the legislation are included unless exempted. They are exempted only if they are not covered by the Financial Action Task Force on Money Laundering as far as registration is concerned and only if the Minister is satisfied that the cost of compliance is unreasonable or not justified by compliance. 
We need to hear from the Minister in the chair whether the bill has inadvertently caught this broad group of traders because if it has most of them will not know it. If they do not know it they will not know that they need to apply for an exemption and the Minister then will not be able to say whether it is too costly for them to comply. 
The second concern that has been raised—and I would be grateful and I am sure the rest of the Committee would be too if the Minister could address this as well—is the issue raised by new section 49D in clause 38B. Under this provision which essentially relates to the binding nature of rulings in the dispute resolution scheme a complainant can apply to a District Court for a review of any final settlement and the dispute resolution service can apply for such a review but there is no provision for the respondent financial services provider to apply for a review. So although the District Court in question could amend a manifestly unreasonable provision it could do that only on the application of the complainant or the provider of the dispute resolution scheme. 
I think it is correct to point out that at least on its face that is a breach of the New Zealand Bill of Rights Act particularly section 27 which guarantees access to justice to every person—every person including obviously legal as well as natural persons. The other issue that is worth adverting to is if that is a breach given that it has come in the bill as it has been reported back from the select committee there will not have been a chance to have it vetted by the Crown Law Office and be the subject of a report from the Attorney-General as to inconsistency. 
If the respondent does not carry out a non-pecuniary order from the dispute resolution system it is committing a criminal offence incurring a fine of up to $200000. I think that shows how serious this potential breach is. I think that if the committee had been confronted with this point fairly and squarely it would have asked the officials to suggest an amendment and strongly urged the House to rectify the apparent error so that all parties to a disputed resolution order could go on to a District Court and have the alleged error heard and if proven rectified. 
Those are the two points that it would be helpful to hear from Pansy Wong on. 
Hon PANSY WONG (Minister for Ethnic Affairs) 
: 
 I thank members for their contributions and questions. I have a collection of four questions; I will try to address them slowly. I think they are good questions and we welcome them and will do our homework to address them. 
I will tackle the first one. I understand it was raised by the Hon Lianne Dalziel and is about the concern that retailers who engage in credit sales may be caught by the initial financial services legislation. She asked whether we have made an amendment to make sure they are not caught under the Financial Advisers Act. The amendment is on Supplementary Order Paper 146 under “Clause 7: new section 13”. I hope that addresses the member’s good question. People whose principal activity is not financial services will not get caught under the new legislation. That is the first question. 
The second question is whether organisations like Telecom TaxiCharge and the like have to be registered as financial advisers. At this stage the Minister of Commerce would consider that and make a decision. There are two parts to the exemption: one is whether they need to register and the second is whether they need to be involved in the dispute resolution scheme. The Minister would make a policy announcement on whether they can be exempt from both of those whether they can be exempt from one or whatever. We undertake to address that issue. We really want to reflect on the matter and to make sure it is right. I understand that if we do need to do anything it can be done by regulation so it would not unduly hold up anything. I acknowledge the effort on both sides of the Chamber. We aim to make the legislation work. Nobody wants to hold up anything unnecessarily but we also want to get it right. 
I understand the third issue that was raised with me is the ability of advisers to opt into the scheme. The Minister has undertaken to consult with stakeholders because we want to make sure that if we go ahead with the provision which will be in the form of regulation we get it right. We are looking at a time frame of around 2 months. We want to do consultation; we want to make the regulation right. So that is the third issue. 
The fourth issue is what Charles Chauvel just raised in terms of new section 49D in clause 38B: why have we crossed out the words “or a complainant”? Section 49D is not aimed to be an appeal section. The purpose of that particular clause is to enforce decisions on people who have a case taken against them—it is an enforcement section. The reason that we crossed out “or a complainant” is that we believe that enforcement action is more effective if it is not taken by the complainant. So it is not dealing with the appeal right; it is more about enforcing a decision that is made under dispute resolution. We thought the power would be better exercised by people who operate the scheme rather than by the complainant. So there is absolutely no intention to create mischief. I emphasise that that section aims to enforce the dispute resolution result and we think it is better that the person who runs the scheme enforce it. It is not conferring an appeal right. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 Not that I am used to having the last word on these matters but I thought I would refer the Committee to the fact that the Government released the discussion document on the Securities Act review yesterday. I am told it is 200 pages long. It seeks views on which financial products are to be regulated and how; tailoring of disclosure requirements to better suit a retail investor audience; improving governance of managed funds which are a key product for retail investors; and possible additional powers for the new financial markets authority. Submissions close on 20 August. I commend the Government for the release at last of the Securities Act review. I appreciate the Minister for Ethnic Affairs taking the time to respond to those questions; I think we are better informed and I think those who have raised concerns will now have some comfort that they have been addressed by the Government. 
The question was put that the amendments set out on Supplementary Order Paper 146 in the name of the Hon Simon Power be agreed to. 
Amendments agreed to. 
Parts 1 and 2 schedule and clauses 1 and 2 as amended agreed to. 
The Committee divided the bill into the Financial Advisers Amendment Bill (No 2) and the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill pursuant to Supplementary Order Paper147. 
Bill reported with amendment. 
Report adopted. 
Financial Advisers Amendment Bill (No 2) 
Financial Service Providers (Registration and Dispute Resolution) Amendment Bill 
Third Readings 
Hon PANSY WONG (Minister for Ethnic Affairs) 
on behalf of the  
Minister of Commerce 
: I move  
That the Financial Advisers Amendment Bill (No 2) and the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill be now read a third time 
. I acknowledge the cooperation of all parties in the House. We all want to ensure that confidence is restored in our financial market and this is a step towards that. This legislation makes a number of amendments to the Financial Advisers Act and the Financial Service Providers (Registration and Dispute Resolution) Act which were passed in 2008 by the previous Government to increase confidence in New Zealand’s financial system. Under the regime financial advisers have to meet minimum standards of professionalism and have to make informative disclosure to clients while being subject to Securities Commission oversight. Furthermore all financial service providers including financial advisers are required to belong to an approved dispute resolution scheme if they offer services to the public. 
The legislation maintains the fundamental framework of registered advisers authorised advisers and qualifying financial entities established by the two primary Acts. However these amendment bills reduce compliance costs and focus the regime on the core area of concern: personalised financial advice to retail clients. Compliance costs are reduced under these bills by clarifying key terms and requirements. Exemption and regulation-making powers are expanded and the qualifying financial entity model is amended to account for the realities of business operations. The Financial Advisers Act is also amended to establish a practical regime for the regulation of money handling by financial brokers. 
These changes respond to concerns raised in the past 2 years about the practicalities of making the regime work as we approach full implementation. Regulatory efficiency is vitally important but as I have consistently stated this regime is about restoring investor and consumer confidence. To this end the bill expands the powers of the Securities Commission so that it can more effectively perform its duties in the specific ambit of personalised services to retail clients. 
I thank the Commerce Committee officials and the wider industry for engaging so conscientiously on this legislation. The next step is implementation and I expect the industry to engage constructively with regulators to ensure that the regime is fully in place on time. I also expect officials to complete the regulations needed to finalise the remaining details in a timely fashion. 
As previously announced financial service providers will need to be registered under the Financial Service Providers Act and become a member of an approved dispute resolution scheme by 1 December of this year. Financial advisers however have until 31 March next year to be registered allowing those seeking approval from the Securities Commission for authorisation status to obtain the necessary approval by 1 July next year. The Government recognises that it needs to rebuild mum and dad investors’ trust in capital markets which has been severely dented by the global recession and finance company collapses. We want everyday investors to feel more confident about putting their savings into capital markets through understanding the basics of investment getting advice they can trust and making informed choices. This regime is an important part of the wide-ranging reform agenda for financial sector regulation which is crucial to economic growth and the well-being of New Zealanders. I commend this bill to the House. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I am very pleased to follow the Minister and offer our continuing support for the passage of the Financial Advisers Amendment Bill (No 2) and the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill. I am very pleased to have been able to play a role as the chair of the Commerce Committee. I am pleased to have worked very closely with members of the Government and with the Minister and the staff of his office and also with the officials parliamentary counsel and of course those all-important stakeholders who make up our crucial financial sector which is so important to our economic recovery and also to our future. 
I have already said in my second reading speech so I probably do not need to repeat—but I will—that I think people worked together in a very positive and constructive way and it would be wrong not to mention it again. I pay tribute to the House for being prepared to set aside essentially a Standing Order to allow for the officials’ documentation to go to stakeholders so that they could remain engaged in the process of deliberating with the select committee in many respects ensuring that we had the best-quality advice on how this legislation would work on the ground. The House gave our committee a fantastic signal of trust but I would like us to consider whether we need to rethink some of our Standing Orders and whether we have too much of a closed environment once legislation goes to a select committee. 
I reflect often on the United States of America where one sees the head of BP before a Senate committee and the person gets grilled. I would like to do that with some of these finance company directors. It would be so neat to be able to hold them to account in our Parliament. Maybe we need a slightly more open process in our select committees and perhaps the media need to take a little bit more interest in the work that we are doing. I have always described our select committees as the engine room of Parliament. They are not the engine room of Government; Cabinet is. Select committees are the engine room of Parliament and I think the work that they do is important. These bills stand tribute to the efforts of our team that supported us and our select committee clerks and I would like the Office of the Clerk to take that comment back to them. We really were incredibly well supported. We worked to impossible deadlines and they really delivered for us so we are very grateful to them for that. We are also grateful to the officials as I have mentioned before and to the wider stakeholders. 
I have already had my little confessional moment my mea culpa where I have confessed that as the previous Minister of Commerce I did not have my head around the technical detail of how the legislation that I was responsible for would work on the ground as well as I do now as the select committee chair. Select committee members are in a privileged position in that they have a higher level of input into the development of that technical detail and of course they have that wider support from stakeholders. I do not know that this is a failing in the system because certainly the feedback from people whom I spoke to was that we really could not tell how it would work in practice until we started implementing the legislation. It was during that phase that people started to say that the legislation introduced by the Government does not actually go far enough and does not address many of the concerns that they had and the difficulties they were coming up against in terms of its implementation. 
Of course the other group is lawyers. I know that I should not be saying this as I am standing next to my very good colleague Charles Chauvel but lawyers—and I confess to being one of those as well—have a habit of looking for problems. That is how they get paid: they get paid to solve problems but they have to find them first. Unfortunately I think that some of the advice given to those in the sector raised concerns that were not really valid in my view. But the fact that lawyers were raising those concerns with those particular companies and individuals meant that they had to take action; they had to prepare themselves for that to be the interpretation just in case. So it was right and proper that they brought those concerns to the select committee in the submissions process. We listened to those concerns and as a result we have better legislation. 
There are not many opportunities in this House for a previous Minister to also have the privilege in a different role as the chair of the select committee of seeing through changes to the original legislation that one has brought in. I make no secret of the fact that I would rather be the Minister but I am not. But in playing that particular role I was very very grateful to be able to make a contribution and I think we did. 
I said in my second reading speech that an exposure draft bill accompanying discussion documents at an early stage of the process in the way that experts in the field are consulted on tax bills would improve the process. I know that some people would be concerned that some of the interests in the financial sector would be self-serving but in the entire time that I was Minister not once did any stakeholders say to me that they did not want regulation. They all wanted regulation in this field. Why? It is because the sector requires confidence. It does not operate without confidence. People do not invest unless they know they can do so with confidence. The sector knows that it needs that confidence restored if it wants our financial markets to flourish. 
The last thing I want to comment on is the people who have lost money. I will never ever in my life forget the meetings that I had with people from one end of this country to the other who had lost money. I do not know how many meetings I had with people who had lost money in finance companies—for instance who lost money in Blue Chip which fell outside the system. We now have a law that will capture the Blue Chips of the future and if the law is not tight enough—there are people out there who are looking to avoid the application of the law; that is their job and they do it every second of every hour of every day—we now have provisions in place that will enable the Securities Commission to haul them into the frame. That will ensure there are better protections in place for the future. 
But I give a warning to people who want to invest and that is to take good-quality advice. People can ask questions of their advisers and ask who is paying the way for them. Issues relating to commissions still need to be addressed but I will never forget meeting those people who lost money. At a time when we want to encourage people to save we are not necessarily providing all the best options for people to consider doing that. The people who lost money were variously described by various media as being greedy as being out for a higher interest rate and as knowing very well the risks that they were taking. I cannot say honestly to this House that I met anyone whom I would describe as greedy. I met people who had been conned. I met people who had been duped. I met people who had no idea of the level of risk that they were taking with their hard-earned money. I met people who were so embarrassed at what they had done that they did not tell their adult sons and daughters what they had done with their inheritance. Essentially the money was all gone and they were embarrassed that they had fallen for it. 
These people require some protection but at the end of the day where there is risk and the rate of return is proportionate it is balanced against that risk the Government cannot make the risk go away because then there would be no financial sector. At the end of the day people need to understand what those risks are and they need to take good-quality advice. This legislation means that they can rely on this sector again and I am very pleased to have played a role in achieving that. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 It is a privilege to speak to the third readings of the legislation arising from the Financial Service Providers (Pre-Implementation Adjustments) Bill. Much has been said this morning and last night on this legislation. I do not want to regurgitate what has already been said over and over again except to say that it was a pleasure to work on this legislation personally speaking. It was a pleasure because members of the Commerce Committee were working effectively as a team. Putting political differences aside we worked together as a team with the clerks the Parliamentary Counsel Office and the industry stakeholders who came and presented submissions and there were many of them. There were also those who contacted us personally through emails and calls. People care about this sector and that is why there was such huge interest in this legislation. 
This legislation is not just a collaboration between the lawmakers the officials and the stakeholders. It is a collaboration with the practitioners. This legislation is designed to provide a degree of certainty and confidence in capital markets because at the end of the day capital markets provide the basis on which businesses thrive through access to capital. Obviously that leads to jobs and opportunities and the prosperity of this country depends very much on our having confident and robust capital markets. 
We had to balance out the competing interests and they were quite clear. There was an interest in protecting investors who were investors of all different classes. They were wealthy investors not-so-wealthy investors elderly investors and investors whom some might call unsophisticated or vulnerable. We sought to protect in this legislation a number of types of investor by regulating the affairs of intermediaries and financial advisers. We were careful not to over-regulate to the extent that some would feel the need not to be part of this industry. So those were the basic competing interests. 
As I said earlier on in the debate I believe that the regulator—or super-regulator as it is about to become—must be well resourced in its role of monitoring the advisers in the industry. It must enforce because enforcement is the key to deterring those who think they can get away with the types of acts that have been talked about during this debate. Enforcement and the imposition of appropriate sentencing and penalties are important. 
This legislation will not solve all the problems in the financial industry; I think we have been clear about that. But certainly this legislation has put together enough submissions ideas and principles of the industry for us to be confident the industry will go forth with some trust and a degree of integrity. I support this legislation. Thank you. 
CHARLES CHAUVEL (Labour) 
: 
 I welcome the third readings of the Financial Advisers Amendment Bill (No 2) and the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill. I echo the comments that my colleagues have made to thank officials and stakeholders for the work that they have put into making the legislation hopefully a success. 
It is true that the members of the Commerce Committee worked hard under the whip of their very diligent chairperson the Hon Lianne Dalziel. The work put in in terms of the number of hours spent sitting beyond normal sitting times reflects the desire to get the legislation as right as is humanly possible so that investors are never again disadvantaged in our financial services market as they have been over the last few years. It is terrible that people have lost their savings as a result of the lack of proper regulation in those markets. Parliament should have regulated the sector earlier. It is good that we are finally doing so and it is to be hoped that the legislation will serve its purpose. 
I pick up on a comment that Lianne Dalziel made about the attempts the committee made to ensure that its process was inclusive. We had a suggested series of amendments from the Government which came to us quite late in the piece. We wanted to make sure that people knew about those suggested amendments so as Lianne Dalziel has indicated we agreed as a committee to try to open up the process more than the Standing Orders would normally allow. We got the House to authorise a process whereby folk who were interested could essentially stay in the loop with regard to the work of the committee and the advice that we were receiving from officials. That is a good process. Sometimes I think we pat ourselves on the back as a Parliament a little too much about being open to public submissions because sure we are open in that way on a comparative basis but we could always be looking to improve those processes. This process certainly provided for a greater public input and a greater interested-person input than would otherwise have been the case if the Standing Orders had been applied strictly. 
I want to say something about the Supplementary Order Papers that were tabled at a very late stage in the piece. We always knew that technical amendments would be coming from the Minister of Commerce to the Committee of the whole House. But I have had texts and emails today saying that there is a problem with the parliamentary website on the Internet. People have not been able to access the texts of the Supplementary Order Papers. They have not been able to make their views known at this late stage as they tend to do via email to members directly when a late Government Supplementary Order Paper comes forward. That also obviously has ramifications for MPs themselves who are relying on remote access and want to see a proposed amendment at a late stage. If we want to be an open legislature we need to use new technologies to make sure that we are accessible to the public. We need to make sure that the technologies are actually working. I see that the Clerk at the Table is making a phone call now and hopefully that will do something to remedy the situation. But unfortunately given that we are now in the third reading debate it is too late. 
I also point to the indisputable fact that there is no justification for legislating under urgency in respect of this bill. The example that I have just used is probably a very good illustration of why we should not be doing this under the extraordinary procedures that the Standing Orders allow to the Government if it has a majority on an urgency motion. If we had had a bit more time so that those Supplementary Order Papers could have been properly considered could have been read by the public and could have had some time for input then we might have been able to make sure and to satisfy ourselves that we were not legislating inadvertently. I do not think any members could put their hand on their heart and say that they have read thoroughly the Supplementary Order Papers that have come in at the last moment. I certainly have not had a chance to. There might be one member who is sitting next to me who claims she can and I would not doubt her word. But generally speaking the Supplementary Order Papers are not accessible in the way they should have been and they certainly have not been accessible to the public. Urgency for this legislation makes it worse. 
I will say a word in defence of lawyers because they have been sorely defamed by my colleague in this process. Of course what participants in the financial services industry have had to do when faced with significant new pieces of legislation from Parliament such as the Financial Advisers Act the Financial Service Providers (Registration and Dispute Resolution) Act and now the pre-implementation legislation is go to their lawyers and ask what the ramifications are for this new set of rules that Parliament is visiting on them. It has to be said that we have a very sophisticated profession in this country particularly when it comes to financial services. We are lucky still to have that level of sophistication. It is something that will hopefully stand us in good stead going forward if the Government’s stated aims to have a financial services hub or industry in this country ever come to anything. I do not see a lot of activity or action in moving that aspiration forward. It would no doubt be a good thing but if we are to have it it will be in part because we have those sophisticated transactional lawyers available to advise such parts of the financial services industry that are still based in New Zealand. 
In that regard I will say a word about the approach that has been adopted by the House in this particular legislation. It was an approach that was taken by the previous Labour Government; this is a conversation I had with the previous Minister of Commerce when I was chairing the Commerce Committee in the last Parliament that heard submissions on the providers and advisers bills. Many of the financial institutions that operate in New Zealand also operate in Australia. Many of them are branch offices of larger entities that have headquarters across the ditch. Why do we not simply adopt a similar or virtually the same regulatory regime that the Australians operate in this area? Why do we not negotiate to have a joint regulatory approach with joint regulators? I understand that there is some proposal that we might take this approach in competition regulation with the chairman of our Commerce Commission being dual-warranted in respect of the Australian Competition and Consumer Commission. That is a very good approach; it is very sensible. It will keep costs down for these businesses because they will have to have just one compliance approach trans-Tasman rather than have one set of rules that they comply with in Australia and another set of rules they have to comply with in New Zealand. 
If we take the single economic market seriously and if we want to give meaning to the idea of Prime Minister Rudd’s visit next week then this is the sort of approach we should be trying to negotiate with the Australians across the board. This should be instead of having things like separate competition authorities separate financial regulators and now for goodness’ sake a separate productivity commission which is a bureaucracy to be created we are told by this Government to perform exactly the same role as its counterpart across the Tasman. Instead we should be cooperating much more and seeking negotiated solutions that do not expose businesses to double sets of compliance across the two jurisdictions. 
That is the not the path that has been chosen by Parliament. The path is the one that we are debating today. I wish the regime well and I hope it makes a difference to vulnerable financial services provider consumers. I hope we will see an end to the ripping off of mum and dad investors. Let us hope it is a step on the way. Let us hope that in a couple of weeks’ time on the next members’ day we will also see the Government taking a consistent approach to financial services regulation and agreeing to support my colleague Carol Beaumont’s bill to regulate the loan shark sector because that is another sector where people are vulnerable and require protection. There is no reason why we should not provide it in one part of the industry as we are today. To deny it to the most vulnerable as it appears the Government intends to in a couple of weeks would be a real shame. It would be a failure on the part of this Parliament to provide the protection that New Zealand consumers deserve. I hope that the National and ACT Party members will rethink their stated approach on that issue. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 E te Rangatu pai mua o te Reo o te Whare tena koe. We all agree that things must change in terms of creating an environment where integrity accountability and transparency actually count for something. One of the clearest indications that things are changing is that we are able to link to the Ministry of Economic Development website—I pick up on what Charles Chauvel said: the site is down at the moment but normally we can do that—and have immediate access to the papers that are on there. I refer in particular to the Cabinet paper that proposed the Financial Service Providers (Pre-Implementation) Adjustments Bill a mere 6 weeks ago. There is no need to apply for material under the Official Information Act or to make panicked calls to the Minister and the Minister’s officials for a briefing; it is all there on the website as clear as day. 
I like the sound of the proposals in the paper dated 3 May 2010. They tell me that under the Financial Advisers Act advisers will now have to register obtain authorisation comply with the competency and conduct obligations and make a full disclosure before providing advice to a client. The paper goes further and promotes the establishment of a regulatory framework that is designed to encourage public confidence in the integrity and professionalism of financial advisers. 
As every member of this House knows the issues of integrity and accountability in the finance sector are absolutely pivotal. Given this fact I was somewhat surprised that out of the 93 submissions received on this bill only one submission came from Maori. Mind you the Maori submission was fairly substantial and came from the Maori Trustee. The Maori Trustee wanted amendments to the bill to clarify and limit the scope of an estate or interest in land and to provide an express exclusion for the Maori Trustee in respect of the Maori Trustee’s core statutory functions. It recommended that in order to limit the uncertainty in respect of an estate and interest in land—and subsequently to lessen the impact this uncertainty has in respect of leases licences and mortgages—section 5 of the Financial Advisors Act should be amended. That amendment would insert a definition for “estate” and “interest in land” that provides that an estate or interest in land does not include advice guidance or recommendations relating to the granting of any leasehold interest or licence right or any form of easement or mortgage in respect of land. That all sounds pretty technical to me but I have it on pretty strong authority—the authority of the Maori Trustee—that such a definition would be a key way of protecting the interest of Maori landowners in respect of estates and interest in land and we therefore want to promote it. 
The other key amendment put forward by the Maori Trustee is to exempt the Maori Trustee in line with its previously accepted statutory functions. These include obligations under the Maori Trustee Act 1953 and Te Ture Whenua Maori Act 1993 in respect of interests in Maori land and the holding and investing of money on behalf of the beneficial owners of such land. The reason put forward by the Maori Trustee is that there is already significant transparency control and oversight of the operations of the Maori Trustee. This is by virtue of the Maori Trustee being a Crown entity for the purposes of reporting. It is also demonstrated through the Maori Land Court’s oversight role in respect of the various trusts for which the Maori Trustee is responsible. Another means of ensuring that there is sufficient transparency control and oversight is through the funding arrangements and reporting requirements with the Crown. I am not an expert on the Maori Trustee by any means but I believe that the issues raised in these submissions are worthy of further consideration by the House. 
Finally I note the concerns that have been raised about some of the changes in the legislation in terms of the impact they will have on consumer protection. Some key stakeholders have been concerned about the flexibility that has crept in through the exemption of financial advice. This would have the effect of excluding a large number of organisations in which financial advice can be justified as incidental rather than core to their business; this could mean anything from a car rental company to a retail firm discussing hire purchase requirements. I think the hub of their concerns rest around what the term “incidental” means and how it is interpreted. In a worst-case scenario that might mean that people can have a tutu with financial advice and get away with shoddy advice on the flawed basis that it is not a central component of their business meaning they do not have to comply with the registration or authorisation process. The last thing we want to see is the very people we are seeking to protect unwittingly being exposed to yet another level of risk without the protection we envisaged would be possible in the legislation. 
Finally I remind the House that Maori-generated economic development will play a significant role in the future of our nation. The last thing any Maori shareholder or businessperson wants to see is another Blue Chip disaster blighting our financial horizons. The Maori Party supports this bill and encourages further debate on and consideration of the range of issues that clearly still require further thought. 
DAVID CLENDON (Green) 
: 
 Kia ora koutou. Comments have already been made this morning that these bills indicate the value of regulation and there was reference made to the fact that the financial advice sector is an industry that was under-regulated. Unfortunately we cannot rely on the goodwill or integrity of a minority of those within the industry and it is necessary to apply some regulation. The market left to its own devices clearly will not protect the well-being or serve the interests of all players in that market; it never has and a completely unregulated market never will. There is simply too much at stake here. We are talking about people who may well be investing all of their life savings or the assets they have managed to accumulate over many years of work and effort and we have a responsibility as legislators to ensure we put the best possible policy settings in place to ensure those people some reasonable protection—again notwithstanding the fact that investment always carries a measure of risk. In order to asses risk intelligently and accurately one needs access to information honest and open disclosure and a high level of transparency about exactly what it is one is investing in. Clearly that was not the case with many of the companies that have now failed and that have left a great deal of not only financial or economic loss but also significant human cost in their wake. That includes ill health the break-up of relationships and even at the extreme end the suicides of people who have lost everything they had and could not see any way forward other than that very unfortunate and tragic end. 
It is appropriate and a good thing that these bills have come to the House and are passing through it. I think it is important to acknowledge that this legislation on its own will not solve all of the problems that can be associated with the industry. There are other issues. One of those is that we—like many on the committee and outside it—have not found it entirely straightforward to penetrate some of the language that is commonplace to the financial sector. It is important that we continue the constant drive to get plain English documents. When people are confronted with legalese or jargon they are at a disadvantage. There was mention this morning of an asymmetry of information understanding and knowledge. Clear plain English documents would be a significant step towards ensuring that people are well informed and that they can make reasonable assessments of the risk of the investment they are proposing to make. 
There was some significant discussion through the select committee process about the value or the integrity of self-certification programmes. I think there is certainly a place for that for people who might otherwise be in a grey area when it is not clear whether they could be reasonably expected to take care of themselves in that place. On the flip side of that international experience shows that some self-certification programmes have been abused and misused and have left people vulnerable. The resolution of that debate was to put a significant onus of responsibility on whoever accepts a statement of certification. If I make a claim that I am able to look after myself then the person accepting that claim needs to have reasonable cause to make a fair and reasoned judgment that I am in that position. I think that was a good example of a negotiated outcome for some of what could have been sticking points within this quite substantive and complex legislation. 
It is interesting to see that just a day or so ago Mark Weldon the chair of NZX made a call for local initiative local institutions and local policies that will reduce this country’s reliance on foreign capital. Indeed putting this bill in place and giving people more confidence that they will receive fair honest and open advice is one step albeit a small step towards us becoming somewhat more self-sufficient in capital. It gives people confidence to invest their hard-earned money. It will also have a positive spin-off as I mentioned earlier in potentially making more capital available to business people and innovators who want to build and develop a local industry in whatever the context might be. 
I think there is more work to be done around financial investment more generally. We need to create policy settings that encourage and improve the landscape for so-called angel investors those people who have funds and are willing to put them into sometimes unproven investments—people who offer venture capital on reasonable terms. Clearly in the New Zealand market place that is a gap that needs filling. We have too little access for many in our creative design sector our innovators who can actually build a sustainable economy in New Zealand. By facilitating the entry into the market of angel investors we would go a long way to resolving that. 
We in the Greens believe there is a significant opening to create policy settings for ethical investment companies the likes of Prometheus Finance which is probably the best known in New Zealand. Those are companies that will guarantee and undertake to their investors that they will invest only in products and services that are deemed ethical. There are obvious things like tobacco arms and various forms of nuclear energy but they actively pursue ethical sustainable investment. Having evened the playing field a bit which we have done with this bill the next steps might be towards facilitating the growth and expansion of that ethical investment community. The Government investing more and putting some of its own funds into these programmes and actively pursuing and supporting these programmes would send a very good signal to the market that this is the way forward. Investing in ethical companies investing in sustainable development and investing in local industry innovation initiatives is definitely the way to forward for this country its economy and indeed the people living within it. 
Finally I simply reiterate what has been said. This has been a very positive process in negotiating a good outcome for these bills despite some initial differences based on ideology or experience or whatever it might be. It has been a very positive process and it has taken us a step closer to assuring New Zealand investors that they can have a degree of confidence and safety in their investments. Kia ora koutou. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I am very pleased to stand to speak in the third readings of the bills arising from the Financial Service Providers (Pre-Implementation Adjustments) Bill. It is critical that we get our regulatory framework right and this has been quite a process. It is a very complex bill and we have appreciated the input from many quarters—particularly from the stakeholders who have been very much part of this whole process of developing the legislation. I think that today there will be people out there in the market place celebrating the passing of this bill. 
One of the balances we had to find was where to regulate and where not to. Whenever we create regulations to protect consumers the consequence is that we constrain providers. We have worked hard listening to consumers and financial service providers to get the balance right between consumer protection and professional efficiency. However it needs to be said that the confidence this legislation will bring to consumers is important. Many many submitters welcomed the compliance this legislation will bring because it will attest to and support their aspiration of professional soundness as an industry. 
In respect of finding this balance between flexibility and constraint we know that both the Financial Advisers Act and the Financial Service Providers (Registration and Dispute Resolution) Act have been made more flexible by adding a number of regulation-making powers. That sounds slightly oxymoronic does it not? The Securities Commission can now provide limited exemptions from financial adviser obligations. The commission is not expected to consider exemptions for every individual adviser who does not consider him or herself to be the true target of the regime. The commission is expected to focus on exemptions for classes of persons for whom the cost of compliance with certain obligations would be unreasonable or unjustified. Those mechanisms are important to ensure that the regime can adapt with the market and impose obligations that are proportionate to the risk created by different services. 
Mr Chauvel talked about the single economic market and as I close I say that a lot of work is being done by our Minister of Commerce Simon Power with his Australian counterparts to make progress on 27 regulatory outcomes identified by the two leaders Prime Minister John Key and Prime Minister Kevin Rudd in a joint statement in August last year. The Trans-Tasman Outcomes Implementation Group co-chaired by a senior official in the Australian Treasury and our Ministry of Economic Development has been working to advance the outcomes identified by the two Prime Ministers. 
I believe this is good watershed legislation which will make a difference to the financial adviser sector and a huge difference to confidence among investors and savers in our country. It is a pleasure to be able to support this bill. Thank you. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I rise to speak in the third readings of the Financial Advisers Amendment Bill and the Registration and Dispute Resolution Bill. As members know Labour supports this legislation. It will simplify the implementation of the Financial Advisers Act and reduce costs while encouraging public confidence in the industry. The amendments discussed this morning will strengthen the Financial Advisers Act 2008 and the Financial Service Providers (Registration and Dispute Resolution) Act 2008 both of which were brought in by the previous Labour Government and ensure those Acts serve their purposes. Public confidence in this industry and robust consumer protection are vital today and we must restore confidence and trust in the financial services sector. 
I will comment on a couple of things that have been brought up this morning by me and others and underline their importance. The first is to do with promoting standards and accountability in the profession. A number of other professions have been mentioned in the House this morning such as the legal and medical professions accountancy and the police. Essentially those are the professions we expect when we go to them to seek advice and information to know that we will get quality and that some sort of standard will be attached. Financial advice should be in that league and hopefully with the passing of this legislation it will have that standing. 
The other thing I would like to mention is the importance of financial literacy which has been talked about as well. Unfortunately it has been talked about in terms of it being a problem rather than our having solutions to that problem. As a country we owe it to the people of New Zealand to really grapple with this issue seriously and work out how people can become more financially literate and what is needed to make them so. 
While that discussion was happening this morning I thought about the medical profession and the increasing trend for people to self-diagnose by accessing the internet and googling their symptoms and coming up with their own diagnoses. I am not being overly critical of people who do that because in many cases it does produce some results and interesting discussions with general practitioners and other specialists. But the issue of people who think they know best on financial matters the range of products out there and how their investment will turn into a bigger investment is a big one because financial literacy is not something that people generally learn at school. Perhaps it should be learnt more at school. There are some serious issues about where we should intervene in society to enable people to have more information about how to best use their money. I certainly think that financial literacy is a major issue in our society right now and we need to grapple with it. 
The third issue is about the vulnerability of investors particularly the people we have been talking about who have been most affected by this issue. They are the mum and dad investors the people who do not have a lot of money and often it is their life-savings we are talking about. I want to draw attention as a number of my colleagues have to the member’s bill of my colleague Carol Beaumont Labour’s spokesperson on consumer affairs the Credit Reform (Responsible Lending) Bill which is really addressing this issue and taking it a step further in relation to how to protect people from loan sharks. There is an extraordinary amount of ripping off by moneylenders going on in our society at the moment of the people who are being most affected but who can least afford to be affected. 
When we take into account the extraordinary amount of cooperation and collaboration that has occurred with this legislation in the Commerce Committee and across this House it would be a show of goodwill if the Government actually showed that it had some responsibility about this issue and showed that it was prepared to consider the importance of the issue and take it a step further—and it would be good to note that some members across the House were actually listening to what I am saying right now. 
The Commerce Committee has focused on protecting retail consumers and on enhancing confidence. The select committee has done an extraordinary amount of work in that area and I pay tribute to the committee and all the officials as has been done a number of times in the House today. But it is really important to do that and particularly to praise the chair the Hon Lianne Dalziel. As I said we were focused on protecting retail consumers and on enhancing confidence and on encouraging participation in capital markets. We were conscious throughout the select committee process of remaining mindful of the harm that the legislation is intended to address and the need for a regulatory response to be proportionate to that risk. I believe that that has been achieved and been achieved after a lot of hard work by all involved. 
So this legislation will ensure that the public are protected from people like Neville Cant a Timaru investment adviser mentioned earlier who just last week was jailed and banned from being an investment broker after offering and allotting securities to members of the public without a prospectus or an offer statement. Worst of all he was convicted for stealing about $100000 from clients. 
As members have also heard this legislation is about protecting ordinary investors like Tom and Ann Cawood aged 78 and 75 who were forced to walk away from their home after losing everything in Blue Chip investments. This couple as has been reported in the  
New Zealand Herald 
 like so many were not foolish with their money but rather received misguided financial advice. Similarly Colin and Bev Mossop after the Blue Chip failure found they were devastated after many years of hard honest work and said that their hopes for their future financial stability and enjoyment of life had been shattered. When Blue Chip collapsed in 2008 it was outside our regulatory system and more than 2000 investors were owed more than $84 million. Founder Mark Bryers has been sentenced on 34 charges most of them relating to inadequate financial reporting such as failing to complete or sign off company accounts. His case has been well documented. He has been banned from being a director or manager of a company for 5 years which is the longest period possible and he is ineligible to run a company until May 2015. 
As Lianne Dalziel has said this law will capture the Blue Chips of the future. This legislation will allow the Securities Commission to bring such companies into the system and I hope that the legislation will today send a real message to financial advisers and the financial sector so that we can truly restore confidence in that sector. That plays an important role for businesses in raising capital and this legislation is about protecting ordinary investors. The sector is supportive of the legislation today. It was apparent from the submissions heard before the select committee that the sector itself wants reform and understands its importance. 
Finally I again thank Commerce Committee members for their hard work particularly the chair. The select committee process was inclusive and such an open and transparent process with stakeholders and officials makes this legislation what it is today. It will not solve all the problems in the financial sector but it promises to make a difference. I want this legislation in order to protect people from the Blue Chips of the future and to reinforce public confidence in the industry with robust consumer protection. We must restore confidence and trust to the financial services sector. I commend this legislation to the House. 
MELISSA LEE (National) 
: 
 It is a pleasure to rise for the third readings of the financial services legislation. We have had quite a robust debate in the House and it has been a tremendous pleasure for me to watch the whole House and to see all the different parties in agreement that we must protect ma and pa investors who have had a bad time and have lost a lot of money. This bill is here to protect the consumers out there. 
I begin by paying tribute to the House for allowing the Commerce Committee to pass official documents to stakeholders in order for them to make comments before we presented this bill. I think it was Lianne Dalziel who said that our select committee was the engine room of Parliament. I would like to add that we were really cooking with gas in that select committee. We were firing on all cylinders. Our deputy chair Sam Lotu-Iiga had a lot to contribute. In fact all the members who participated in that select committee made valuable contributions. 
I must say as someone who did not really know much about the financial sector that I have learnt a tremendous amount from the process. Recognising that we need to return confidence to the finance sector is important and it was one of the issues we worked on. We know it as members of Parliament working on this bill and it seems that the financial sector the people who are in the business of financial advice also knew that they had to work on it. They were not being protectionist when we were talking about wanting them to make submissions. It was not a case of them saying that they do not want regulation. It was about people in the industry and members of Parliament working together to find a balance whereby we can provide protection for consumers yet allow business to get ahead. 
Probably all of us in this House personally know someone who has suffered as a consequence of some 30 finance company failures in the last 4 years. I personally know of someone who has worked as a doctor and helped a lot of people in the community by voluntary work. Her entire retirement savings were lost as a result of a finance company failure. Earlier one member said that some of these people who had lost their entire life-savings were so ashamed of the bad advice they had received or the bad choices they had made that they were too afraid to tell their families. This is what has actually happened. 
One of the major important things that we must achieve is the financial literacy of the people the public so that we all know what we are going into. This Parliament cannot protect everyone. If there is a higher interest rate on an investment then everyone must recognise that there is a higher risk and that the Government cannot protect that investment. This is great legislation and it has been a pleasure to work through the select committee process. It is my pleasure to commend the legislation to the House. 
STUART NASH (Labour) 
: 
 I stand to support the third reading of this legislation. I have given speeches on the first reading second reading and Committee stage of the Financial Service Providers (Pre-Implementation Adjustments) Bill so there is not much that is new that I want to say. But I will sum up the points I have made because I think they are all very important. 
I come back to something that Melissa Lee said; her colleague Sam Lotu-Iiga mentioned it as well. I fundamentally disagree with their point. They talked about the inability to legislate for risk. I do not agree with that. I think that this legislation is legislating for risk. I have talked about the fact that there is something called the risk-free rate of return. It is usually understood to mean US Treasury bills because there is nothing safer to invest in than US Treasury bills. Anything with an interest rate that is higher than that carries an element of risk. But one risk that investors should not have to take into account is the risk of negligence incompetence or very poor form on behalf of financial advisers. When Melissa Lee said that people have to account for risk she was right. But I say that savers the people who go to financial advisers expect advice on different risk types. They do not know how to assess risk properly so they go to financial advisers to ask how to properly assess their risk and have a balanced portfolio. That is the role of the financial adviser. I talked about how the understanding of risk and the assessing of risk is one of the fundamental developments of the global economy. 
This legislation is supported by the industry and there are reasons for that. One of the fundamental reasons is that the reputation and good name of a lot of very good financial advisers have come under attack in the last few years because of the unscrupulous people operating in this industry carrying the name of financial adviser. We encourage the good people to remain in this industry. We want people to enter this industry but only in the knowledge that they will be trained and that they need to be registered. They need to have the education and the skills to be able to offer advice to people who want to invest—to tell them how to do it. People go to financial advisers for advice. 
I remember hearing a case where someone talked about a balanced portfolio being investment in five different finance companies. That is not a balanced portfolio; that is the sort of advice that was given out by those fly-by-night characters who had no education no grounding and no experience in this game whatsoever. It was an absolute travesty for the good people of New Zealand that we allowed those people into the sector. Now with this legislation and the previous two bills that were put up by the Hon Lianne Dalziel those sorts of people will no longer be able to operate in this industry. 
We talked about financial literacy as well and it is a very important point; it transcends way beyond the boundaries of this bill. It is incredibly important. Again I come back to something that Sam Lotu-Iiga mentioned. He said that a friend of his with financial qualifications finds it difficult to wade through a 75-page prospectus. I find that astounding and incredibly worrying. My point is that if someone with financial training has great difficulty wading through a 75-page prospectus how is someone without any financial training supposed to understand the requirements? It is law to put out a prospectus. It must be done if one is offering securities to the public. The inclusion of everything in that prospectus has been deemed by Parliament to be absolutely necessary in order to make a sound financial decision. If people cannot understand a prospectus they go to a financial adviser. A financial adviser is supposed to have read and understood the conditions within a prospectus and therefore be able to offer advice around different risk profiles in different forms of investment. Sam’s point was very clear: friends of his with a legal or financial background have great difficulty understanding a prospectus. So how can ordinary New Zealanders understand? They simply cannot. That is why the financial services sector is a very important part of the New Zealand economy and it is why we need people who are suitably qualified to be operating in this sector. We have now got rid of people who have no qualifications and who have no intention of getting qualifications. 
Financial literacy is a problem. My personal view which is not Labour’s view necessarily is that some form of economics and finance should be compulsory up to the fifth form. New Zealanders need to leave school understanding the basics of economics accounting and finance. It is not difficult but it needs to be part of the prospectus. I wonder what Allan Peachey’s view on that is; I suspect he probably feels the same way. Coming out of school and not understanding a thing about economics or finance is a huge barrier to this country going forward and that needs to be addressed. But like I mentioned it is outside the ambit of this bill. The parties will have to work through it. 
Another point is that New Zealand quite simply cannot afford to have the millions of dollars disappear that have been shed from the balance sheets. Raising capital is vital to the depth and the breadth of business in New Zealand and we absolutely must have a financial services sector that people can operate in can invest in and can raise money from with certainty and with confidence. It is very very important. Our capital markets have taken a huge hit as a result of 30-plus finance companies going under firstly because people now have an inherent distrust of the capital markets and secondly because people are going back to investing in houses. We understand that that is a major problem. It is not part of the productive economy. But New Zealanders have had money gouged out of their accounts by finance companies so where do they turn? A lot of conservative Kiwis will go back to the housing sector. That is not something that we really want to encourage. We really need to encourage an environment in which people believe they can invest. They can assess the risk and can invest in that environment with a level of certainty that the advice they have been given is not negligent or incompetent. 
Finally this legislation is about ordinary New Zealanders. I talked about Mark Hotchin’s $30 million mansion. I will give members a quote from the  
New Zealand Herald 
: “A half-finished $30 million mansion … is big enough to contain 13 average houses just on its floor space. … It will contain seven bedrooms a 25m swimming pool and a garage for 12 cars. Its study games room and home theatre alone are as big as the typical house—without counting any of its living spaces including seven bedrooms.” That house was built on a graveyard of the broken promises and shattered dreams of ordinary New Zealanders. Thousands of New Zealanders out there have lost everything and Mark Hotchin’s mansion on Paritai Drive stands as a symbol of greed and all that was wrong with the finance company sector. 
As I also mentioned I am hoping that New Zealand icons like Colin Meads and Richard Long—their brands are irrevocably damaged at the moment—and other New Zealand icons will think twice before they lend their names to areas that they have no competence in. 
This travesty of the finance companies has resulted in increased ill health and a decrease in the well-being of a huge cohort of New Zealanders. Last year I spoke about two people I know about—and no doubt there are a hell of a lot more—who committed suicide as a result of losing all their money in these schemes. That is why this bill is so important. 
We must remember that not all who acted in an unscrupulous manner were operating out of the back of a tin shed. We need to pass this bill. I commend it to the House. The days of the Wild West are gone. This bill closes a lot of these loopholes. It is a fantastic bill supported by both sides of the House and certainly supported by me. Thank you. 
Bills read a third time. 
Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill 
First Reading 
Hon NATHAN GUY (Associate Minister of Transport) 
 on behalf of the  
Minister of Transport 
: I move  
That the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill be now read a first time. 
 On 24 March 2010 the Minister of Transport Steven Joyce announced that the Government had decided to accede to the Convention on International Interests in Mobile Equipment commonly known as the Cape Town Convention and to the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment commonly called the Aircraft Protocol. 
By taking this treaty action New Zealand will become part of an international system to protect commercial security interests in mobile aircraft equipment. Because mobile equipment such as aircraft move from one country to another international investors in or lessors of such equipment have historically had to rely on different national laws to protect their investments. Consequently financiers seek a premium on their lending as a hedge against the legal risks involved. 
The convention creates a set of international rules governing security interests in mobile equipment including an international securities register. The Aircraft Protocol modifies and supplements the convention to meet the particular needs of those involved in cross-border transactions applying to “aircraft objects” which include airframes aircraft engines and helicopters. The protocol provides the creditor with additional remedies including the deregistration and export of an aircraft. It also establishes a special insolvency regime in relation to aircraft objects to strengthen the creditor’s position against the debtor or the insolvency administrator. It is estimated that the financial savings over the next six years to the aviation industry including Air New Zealand could range from $18 million for savings in export credit guarantees to as much as a whopping $325 million in reduced finance charges. And of course the benefits will continue into the foreseeable future. 
Amendments to domestic legislation are necessary to ensure that it aligns with the Cape Town Convention and Aircraft Protocol when they come into force in New Zealand. The bill amends the Civil Aviation Act 1990 to give the convention and the protocol the force of law in New Zealand to ensure that these instruments prevail over inconsistent domestic law and to require the Director of Civil Aviation to deregister an aircraft when required to do so by a creditor in accordance with the new processes set out in the Aircraft Protocol. The bill also amends several other Acts. 
Debate interrupted. 
Sitting suspended from 1 p.m. to 2 p.m. 
Visitors 
Australia—Parliamentary Committee System Review Committee Queensland Legislative Assembly 
Mr SPEAKER 
: I have much pleasure in informing members that the Parliamentary Committee System Review Committee of the Legislative Assembly of Queensland led by the Hon Judy Spence MP is present in the gallery. I am sure that members will wish that the committee be welcomed. 
Points of Order 
Holidays (Football World Cup) Amendment Bill—Copies for Members 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Speaker. I seek your indulgence in order to inform members that I have placed in their bill box a copy of the Holidays (Football World Cup) Amendment Bill. It is not my intention to proceed with it for another 24 hours in order to give people an opportunity to give feedback. Currently the bill would grant a public holiday on Friday contingent on the All Whites winning. 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 How on earth was that a point of order? 
Mr SPEAKER 
: I have to confess that I am not sure but the member got away with it. 
Questions to Ministers 
 Pacific Economic Development Agency—Contestability of Grant 
1. 
Hon PHIL GOFF (Leader of the Opposition) 
 to the  
Minister of Finance 
: Why did he allocate $4.8 million in the Budget to the Pacific Economic Development Agency rather than making that funding contestable? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 In the first place the appropriation in the Budget does not amount to an allocation of $4.8 million to the Pacific Economic Development Agency. As I have pointed out to the member many times there is a process of negotiation going on regarding a purchase agreement that will meet all the requirements of accountability and transparency. The Government decided to allocate some money to improvement of the skills and job prospects of young Pacific Islanders alongside the tens of millions of dollars that it has allocated to any number of schemes designed to cushion people from the sharpest edges of recession and particularly to help younger people to maintain their connection with the workforce. 
Hon Phil Goff 
: When the Ministry of Pacific Island Affairs reported to him and to his colleague that this agency was unproven and untested constituted a real risk and had not completed any projects of real note why did he decide to maintain the exclusivity of the appropriation to that organisation despite those warnings? 
Hon BILL ENGLISH 
: There is no exclusivity and I think that is where the Opposition is labouring under a misunderstanding. The Government proceeded with the appropriation and I would have thought that the Labour Party would welcome new money in a tough Budget to help young Pacific Island people get skills and maintain a connection to the workforce. The appropriation having been made in the Budget negotiations are going on now with Treasury and the Ministry of Pacific Island Affairs. The member should await the outcome of that to see whether there is exclusivity. 
Hon Phil Goff 
: If what the Minister says is true why is there a single-line item in the Budget for the Pacific Economic Development Agency and why did his Minister of Pacific Island Affairs announce on Budget day that that was exactly where the money was going? 
Hon BILL ENGLISH 
: As I have said before the appropriation process does not guarantee the money to any particular organisation. The appropriation was made with the full knowledge that there would need to be discussion about a detailed business case. This is a completely normal process followed all the time by Governments. 
Hon Phil Goff 
: Why is the mechanism for how the Pacific Economic Development Agency is to report on its spending one of self-reporting as indicated in the Budget document itself rather than the more robust reporting mechanism that generally applies to non-governmental organisations as set out under section 32A of the Public Finance Act? 
Hon BILL ENGLISH 
: The member raised that question yesterday and I can give the member the same answer. There are no special arrangements because there is no contract in place. It is very straightforward. I would have thought the Labour Party would be supporting the Government trying to help young Pacific Islanders maintain their connection to the workforce and get some skills—or is the member unaware that this is the group most affected by unemployment in the recession? 
Hon Phil Goff 
: When will the Minister get it into his head that the Opposition is not concerned about the fact that he might belatedly put some money into supporting the Pacific Island community whose unemployment rate has doubled but is worried about the lack of transparency and the shonky way in which he has put it in place? 
Hon BILL ENGLISH 
: What I have in my head is the alarm among the Labour Party that a National-led Government is talking to the Pacific Island community and doing so constructively. I point out to the member that the kinds of bullying tactics from the Labour Party that failed in the Maori community will also fail in the Pacific community. 
Hon Phil Goff 
: In claiming that the criticism of the Pacific Economic Development Agency is based on party politics and conspiracy theory how does the Minister explain the statement made by National’s pollster and blogger David Farrar that giving the agency $4.8 million when it has no track record is “a reckless decision”? 
Hon BILL ENGLISH 
: I am not responsible for him and he is wrong. 
Hon Phil Goff 
: Did the Prime Minister discuss with him as Minister of Finance any funding proposals that arose out of a meeting in Auckland last year between Mr Key and the Pacific Economic Development Agency director J R Pereira a meeting that was also attended by Inga Tuigamala and Michael Jones; if so what undertakings were made at that meeting? 
Hon BILL ENGLISH 
: I know that the Leader of the Opposition is somewhat resentful of the Prime Minister’s popularity but he— 
Hon Phil Goff 
: I raise a point of order Mr Speaker. That was—[ 
Interruption 
] 
Mr SPEAKER 
: That was totally uncalled for. A point of order was called and the House will hear it in silence. 
Hon Phil Goff 
: Mr Speaker I think you know what the point of order is. It was quite unnecessary to preface the answer to what was quite a straightforward question in the way that the Minister did. 
Mr SPEAKER 
: I hear the honourable member. The Minister was asked whether the Prime Minister had discussed matters with him following that meeting and I think the Minister should attempt to answer that. 
Hon Gerry Brownlee 
: I raise a point of order Mr Speaker. When a question is asked in that sort of carping name-dropping manner I think you need to ask yourself whether the question itself had validity. It was just totally— 
Mr SPEAKER 
: No the member should be careful about what he says. I listened very carefully to that question and I contrasted it with the previous question. In respect of the previous question asked by the honourable Leader of the Opposition the Minister had licence to say almost anything that is permitted in this House because the question was a very loose question with a lot of political comment in it. The question before the House now is a reasonable question: it asked whether the Prime Minister had discussed this issue with the Minister some time last year following a meeting with one Pereira and a couple of other people in Auckland. I do not know whether the meeting took place but the Minister should tell the House whether any discussions took place between the Prime Minister and him on this matter following that meeting. 
Hon BILL ENGLISH 
: I am not aware of the particular meeting but I can tell the member that the answer to that question would be no. There was no discussion about funding until at least about February or March of this year because there was no proposition to discuss funding for. 
Rest Homes—Standard of Care 
2. 
SUE KEDGLEY (Green) 
 to the  
Minister of Health 
: Does he agree that older New Zealanders who live in rest homes are among the most vulnerable in our society and is he satisfied that all rest homes provide safe levels of care for residents as they are required to do under the Health and Disability Services (Safety) Act 2001? 
Hon TONY RYALL (Minister of Health) 
: 
 Yes; and generally yes. I also agree with the Auditor-General who last year issued a damning report that the previous Government did not respond quickly enough to address the weaknesses and risks in the arrangements which it had known about since 2004. The new Government is tackling these years of neglect in a number of ways. 
Sue Kedgley 
: How can he ensure that rest homes provide safe levels of care for residents when there is no minimum training or qualification needed to be a caregiver and when many people literally walk in off the street with no prior training or experience and begin to care for our vulnerable elderly? 
Hon TONY RYALL 
: A number of training programmes are in place for those who go and work in aged care. The Government was also concerned about the lack of investment in nursing quality and supervision in rest homes and that is why we put in an extra $18 million last year as part of meeting that need. 
Sue Kedgley 
: How can he ensure that rest homes provide safe levels of care for residents when according to the Nurses Organisation survey large numbers of unregulated caregivers are doing jobs that would normally be considered to be the domain of registered nurses—jobs such as administering medicines without supervision and even administering drugs like morphine? 
Hon TONY RYALL 
: There are very clear rules about who should be administering drugs anywhere in the New Zealand public health service. If the member has any information about breaches of those rules it should be made available to the authorities. This Government is beefing up the audit and compliance regime associated with rest homes in order to ensure that the problems identified by the Auditor-General are addressed. 
Jo Goodhew 
: What were the conclusions of the Auditor-General’s damning report on the monitoring of rest homes? 
Hon TONY RYALL 
: Last year the Auditor-General’s report identified longstanding shortcomings in rest home monitoring. The Auditor-General’s report found that under the previous Government the Ministry of Health had struggled for years to ensure the quality and safety of the nation’s rest home services. The Auditor-General was highly critical of the lack of action between 2002 and 2008 and the Auditor-General was particularly critical of the agencies that audit rest homes and this Government shares that concern. The same report recognised the action that the new Government has under way. 
H V Ross Robertson 
: Considering that this Government is clearly turning a blind eye to elder abuse in rest homes does it intend— 
Hon Gerry Brownlee 
: I raise a point of order Mr Speaker. I would not normally raise a point of order on a new member but this is a very very experienced member. He has been in the House for some 35 years. I would have thought it is quite inappropriate for him to start a question in that manner. It is question time not statement time. I also want to know whether he has a hat to go with his scarf. 
Mr SPEAKER 
: The member’s point of order is perfectly valid. I do not normally intervene. The more comment like that that a member makes when asking a question the more licence that a Minister has to be political in his or her answer. That is the way that I normally balance it. But the member’s point of order is absolutely correct. The member should ask a question rather than make— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. Before you absolutely endorse the point of order you might want to check the maths of the Leader of the House. Clearly he cannot add without taking his shoes off. 
Mr SPEAKER 
: I am not sure what that has to do with order. 
H V Ross Robertson 
: Indeed he should have his maths checked. Does the Government intend to continue to turn a blind eye to elder abuse in rest homes and does it intend to do anything about the other issues for the elderly that Grey Power raised yesterday—namely cutting home help cutting hearing aid subsidies cutting elder abuse education programmes cutting elder driving courses allowing ever-increasing electricity bills and transferring the financial burden of the emissions trading scheme from the polluter to the taxpayer? 
Hon TONY RYALL 
: I would ask where that member was for 9 years when the Auditor-General was slamming the party opposite for its behaviour when in Government towards rest homes in New Zealand. This Government has done more than any other in the last 18 months to address those issues. We are now auditing the auditors we require the auditing agencies to have international accreditation we are providing additional funding and we have introduced spot auditing. We now have transparent reporting online of rest home quality standards as per the audit which is colour-coded for easy reference. Blue is very good and red is very bad. 
Sue Kedgley 
: How can he ensure that residents living in rest homes now are provided with safe levels of care when nurses who work in the aged-care sector report that they are responsible routinely for the care of as many as 64 residents and are so overworked that they simply do not have time to care for residents properly or safely? 
Hon TONY RYALL 
: What I am well aware of is that the Government put in an additional $18 million last year to improve the nursing quality and supervision in rest homes. We have increased the subsidies a further $16 million this year. We are putting a considerable effort into improving the auditing and compliance regime. As I travel to rest homes around New Zealand nurses are giving me a very clear message that the neglect of the previous regime is being addressed by this Government. 
H V Ross Robertson 
: I raise a point of order Mr Speaker. Given the Government’s barracking during the asking of my question I seek leave of the House to table the media release put out by Grey Power yesterday which the Government did not believe. 
Mr SPEAKER 
: The House is not about to do that. 
Sue Kedgley 
: Is it not the case that as long as there are no minimum staffing levels in the sector or formal qualifications or training required to be a caregiver he simply cannot ensure that rest homes provide safe levels of care for residents; and does he concede it was a mistake for the Government to veto a select committee inquiry into aged care? 
Hon TONY RYALL 
: No it was not a mistake for Government members of the select committee to not have an inquiry into aged care because frankly it saved that member who supported the previous Government for 9 years from a lot of embarrassment. 
Sue Kedgley 
: I seek leave to table four documents. The first document is an email dated 19 May of this year in which a caregiver on $13.26 an hour explained that she gives out medicines for 46 patients including signing for and giving morphine. 
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. 
Sue Kedgley 
: I seek leave to table another email from a caregiver received on 10 June explaining that on many occasions staff have found that residents had been lying on the floor for 2 or 3 hours after a fall before being picked up. 
Mr SPEAKER 
: Leave is sought to table that document— 
Hon Dr Nick Smith 
: Is there a name on it? 
Mr SPEAKER 
: Let me just clarify this for the House. Is the name of the person who sent the email on the document? 
Sue Kedgley 
: No I have removed the name of the person. 
Mr SPEAKER 
: So we have got no idea who is making this allegation. Members are aware of that. I will put the leave. Leave is sought to table the document with no name on it as to whom it came from. Is there any objection? There is objection. 
Sue Kedgley 
: I seek leave to table a Nurses Organisation aged-care survey done in 2009 which points out that medication is frequently administered by caregivers without the supervision of nurses. 
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. 
Sue Kedgley 
: I seek leave to table my final document from 17 May. It is from a nurse who said she has left the sector because she could not stand working in an environment where she was unable to ensure that patients received the care that they are entitled to. 
Mr SPEAKER 
: Is the name of the person who sent that letter attached to it? 
Sue Kedgley 
: I have removed that name. 
Mr SPEAKER 
: Leave is sought to table that document to which no name is attached. Is there any objection? There is objection. 
Economic Position—Current Account Deficit 
3. 
DAVID BENNETT (National—Hamilton East) 
 to the  
Minister of Finance 
: What reports has he received on New Zealand’s economic position? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Today Statistics New Zealand published current account data for the March 2010 quarter. It shows a current account deficit for the year ended 31 March of $4.5 billion which is around 2.4 percent of GDP. It is the lowest deficit in more than 20 years. However the latest figure reflects a mix of permanent and temporary factors. It includes the benefits of recent high commodity prices the revenues from major tax cases and reductions in imports during the recession. Most forecasts show the deficit widening again though not to the previous extreme levels of 9 or 10 percent of GDP. The data reinforced the need for New Zealand to tilt the economy towards savings exports and productive investment and away from excessive borrowing debt and Government spending increases. 
David Bennett 
: What are the main reasons for New Zealand’s current account deficit? 
Hon BILL ENGLISH 
: The current account deficit has become particularly bad through the last cycle partly because of the mismanagement of the temporary boom of recent years. New Zealand’s external liabilities have risen almost 40 percent to $167 billion over the past 5 years. The cost of servicing this is more than 5 percent of GDP. At almost 90 percent of GDP our external liabilities are similar to those of Spain Ireland Portugal Hungary and Greece names the House might recall from recent media coverage. This is why the Government has placed such emphasis on financial stability. We have been successful up until now but there is still plenty of work to do. 
Hon David Cunliffe 
: Why is he attempting to take credit for the recent result when J P Morgan has labelled the improvement as short-lived and both Treasury and the Reserve Bank are forecasting the current account deficit to almost triple over the next few years? 
Hon BILL ENGLISH 
: I am not trying to take credit for it and actually I pointed out in my answer to the primary question exactly that—that the forecasts are expected to get worse. What I have pointed out to the House though is that it is vital we turn round our external position because under the mismanagement of the previous Government our external liabilities have now reached—[ 
Interruption 
] The member should listen. Our external liabilities are now 90 percent of GDP. Other countries with external liabilities at a similar level are Spain Ireland Portugal Hungary and Greece each of which has featured significantly in the international media because of its substantial financial challenges. 
David Bennett 
: What steps is the Government taking to address New Zealand’s current account problems? 
Hon BILL ENGLISH 
: To improve the current account which as the Opposition has pointed out is forecast to get significantly worse again the Government needs to raise exports and save more. The Budget was certainly focused on achieving this with a new operating spending allowance of just $1.1 billion which is about half the level of previous years. We have also set out to rebalance the tax system by increasing consumption taxes and taxes on property speculation and reducing tax on income savings and productive investment. We should also acknowledge the success of some of the Reserve Bank measures in affecting the length of the term of the debt that New Zealand owes to the rest of the world. 
Hon David Cunliffe 
: Given that both the Government and the Opposition are now agreed that the problem is expected to get worse and that the need for rebalancing includes closing the savings gap why did the Government cut in half the incentives for KiwiSaver and continue to defer indefinitely the pre-funding of New Zealand superannuation? 
Hon BILL ENGLISH 
: We have answered those questions before and no doubt Labour will spend the next 10 years trying to justify its policies of the last 10 years. We did that because we had better ideas and actually it was not difficult. 
David Bennett 
: What alternative economic policies would aggravate New Zealand’s current account position and mortgage our families’ futures? 
Hon BILL ENGLISH 
: There are a different set of choices the Government could make. We could for instance increase personal income taxes. We could increase Government spending significantly faster. That would increase the need for borrowing. We could meddle with the Reserve Bank’s toolkit for containing inflation. These are all polices advocated by the Opposition. We disagree with them. 
State-owned Enterprises—Requests for Additional Capital 
4. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister of Finance 
: Which State-owned enterprises have indicated to him a need for additional capital and what options is he considering to meet these needs? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Discussions about the particular capital needs of particular State-owned enterprises are commercially sensitive and I do not intend to divulge the full detail of those here. I can tell the member that State-owned enterprises regularly have discussions with the Government about how much of their profits should be retained in order to allow them to continue investing. Additional capital is considered where there is a sound commercial case. Under the policy constraints the Government has given itself for State-owned enterprises requiring savings we can either lower their dividends or borrow in international markets in order to invest in State-owned enterprises. 
Hon David Cunliffe 
: When did the Minister tell the Minister of Energy and Resources Gerry Brownlee about Solid Energy chairman John Palmer’s intention to call for the partial sale of Solid Energy during a speech last Thursday? 
Hon BILL ENGLISH 
: I cannot recall every discussion I have had with Minister Brownlee about Solid Energy but I assure the member there are regular discussions because Mr Brownlee is a very active Minister of Energy and Resources and a strong advocate of the development of New Zealand’s energy resources. 
Aaron Gilmore 
: By how much does he expect the Government’s assets to grow over the next few years? 
Hon BILL ENGLISH 
: The Budget outlined the fact that the Government owns $220 billion worth of assets which includes something like $70 billion worth of financial assets and over $50 billion worth of commercial assets. The Government expects that the value of that $200 billion portfolio will grow by around $35 billion over the next 4 years. That is if we manage it well. I have to say that the standard of management of some of these assets has been very poor and the Government is working hard to lift their performance. 
Hon Clayton Cosgrove 
: When John Palmer told him he was going to call for the partial sale of Solid Energy did he tell the chairman that the comments were “out of line” and “stepping over the mark” or was the Minister of Energy and Resources Gerry Brownlee wrong when he made those comments and said “No one was particularly happy about it.”? 
Hon BILL ENGLISH 
: The member is continuing the Opposition habit of trying to put words in people’s mouths. That was not the nature of the communication between the chairman and me. 
Hon Clayton Cosgrove 
: Will the Minister rule out ever selling some or all of Solid Energy? 
Hon BILL ENGLISH 
: The Government’s position on asset sales is clear: no asset sales in this term of office and if that changes we will go to the electorate and debate the issues. 
Hon David Cunliffe 
: If the Minister is not ruling out possible future partial privatisation of Solid Energy in what respect did John Palmer “go too far”? 
Hon BILL ENGLISH 
: The member can play the game of ruling out but actually Labour’s policy on these matters is much looser than National’s. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. By attempting to refer a question back to the Opposition the Minister is failing to address it. 
Mr SPEAKER 
: I think it is a fair point actually. The Minister should not comment on the Opposition before attempting to answer the question. 
Hon BILL ENGLISH 
: As I said we are not going to play the game of ruling things in or out. The policy is the same whether for the chairman of a State-owned enterprise or an ordinary taxpayer: the Government is not selling any assets this term and if it changes its mind it will campaign on it in 2011. 
Police—DNA Samples Taken from Young People 
5. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
 to the  
Minister of Police 
: How many DNA samples have the New Zealand Police taken from young people 17 years old and under over the last year; and what type of charges if any were laid against the young people who had DNA samples taken from them? 
Hon JUDITH COLLINS (Minister of Police) 
: 
 Police advise me that there are more than 100000 profiles on the national DNA database and that over the last 12 months only 190 samples have been taken from people aged less than 17 years. In the limited time available the Police have not been able to carry out an audit to establish the exact details of each of those 190 cases. 
Hone Harawira 
: Has she seen the complaint from South Auckland lawyer Shane Tait that three of his clients were told by the police to give a DNA sample voluntarily or face arrest for reporting late to the police station; and what action was taken to discipline the officers for their illegal activity? 
Hon JUDITH COLLINS 
: No I have not seen that complaint but I have seen numerous media comments about that none of which gave any details as to the constables who are alleged to have done that or the clients or anything that could identify them. I invite the member yet again to give any details to either the Commissioner of Police or the Independent Police Conduct Authority. He can always send them to me if he likes and I will pass them on. 
Hone Harawira 
: Has she seen today’s Internet posting which reads: “Full credit to you Hone for bringing to light the Nazi-style tactics used by New Zealand’s biggest gang the police when collecting DNA samples. The issue however seems to be more widespread than just Maori. I am an educated European female who has never been convicted or even suspected of an offence but was subjected to similar bully-style treatment and incorrect information with regard to provision of a DNA sample. I completed a Police Complaints Authority submission on this exact point earlier this month. It’s”— 
Mr SPEAKER 
: I realise that the member is quoting but he cannot quote endlessly like that when asking a question. I believe that he was asking the Minister whether she had seen something. The Minister may answer. 
Hone Harawira 
: I raise a point of order Mr Speaker. I doubt whether my supplementary question was the longest one we have received this week in the House and I am surprised that you have cut me short before I had completed it. 
Mr SPEAKER 
: With respect to the honourable member he does not need to quote endlessly to make a point. I believe that he could have quoted sufficiently from what he wanted to quote and asked the Minister a question. The member could see the House getting restless as he was going on and on and he knows the Standing Orders. Is he complaining that he has not been able to ask his question because I have cut him short? 
Hone Harawira 
: I am complaining that the question I have asked is not as long as other supplementary questions that have been asked this week and not stopped and therefore I should have been allowed the opportunity to complete my supplementary question. 
Mr SPEAKER 
: If the member feels offended I apologise but the Speaker has ruled and that is it. The member will resume his seat and the Minister will answer. 
Hon JUDITH COLLINS 
: I have not seen any Internet blog or comment from a self-described educated European woman who then goes on to make quite atrocious comments about New Zealand police officers. 
Housing—Access to Appropriate and Affordable Housing 
6. 
MOANA MACKEY (Labour) 
 to the  
Minister of Housing 
: Does he believe that all New Zealanders should have access to appropriate and affordable housing? 
Hon TONY RYALL (Minister of Health) 
 on behalf of the  
Minister of Housing 
: As the Minister stated in the House yesterday we are committed to assisting New Zealanders most in need. Budget 2010 contains $1.76 billion for over 300000 households which are provided assistance through income-related rents and the accommodation supplement. That is an increase of 17 percent compared with Budget 2008. In Budget 2009 we also committed $350 million to insulate 180000 homes over a 4-year period. 
Moana Mackey 
: Why when more than 1100 people are on Housing New Zealand waiting lists in the Wellington region 332 in the Hutt Valley alone are more than 40 State houses sitting empty at Pomare? 
Hon TONY RYALL 
: As was made clear on television last night there are matters to be dealt with in the courts in respect of some antisocial residents in that area and at the conclusion of that there will be a redevelopment of those properties in Pomare. As the Minister indicated there is also some difficulty with tenants preferring not to be in the Pomare area. 
Moana Mackey 
: Why does he keep claiming that court action involving three families is preventing him from going ahead with promised renovations to more than 40 properties in the Pomare community? 
Hon TONY RYALL 
: That is because the Minister is concerned that if there is to be redevelopment in Pomare in order to improve the standard of the houses there which the Government inherited from that member’s party then it should be done at such a time when the antisocial element of that neighbourhood has been dealt with. Many people do not want to move to the area because of their concerns about those tenants and until that matter is resolved there will not be the redevelopment that people would want. 
Tim Macindoe 
: What commitment has the Government made to providing appropriate housing for Housing New Zealand Corporation tenants? 
Hon TONY RYALL 
: Left a State housing portfolio in serious disrepair by the previous Government this Government committed an additional $120 million to the housing portfolio in February last year. The corporation has completed over 20000 upgrades to its homes since February 2009 at a total cost of almost $152 million and it will complete another 8000 upgrades in the next financial year. This Government is also committed to increasing the State housing stock by 1550 houses by June 2012. As at 30 April we have delivered 647 of those new homes. 
Moana Mackey 
: Why is he choosing to punish an entire community for the actions of a few; and despite his claims that no one wants to live in Pomare will he allow those people who said on television last night that they would love to live there to have those State houses renovated and to move in? 
Hon TONY RYALL 
: The Minister is not punishing a few people; the Minister is recognising that there is a community there in need of renewal in terms of the housing stock because so many mouldy and unsuitable houses were inherited from the previous Government. People want to know that if they are to bring up their kids in those houses then they should not have to worry about an antisocial element that makes that neighbourhood not what it could be. 
Chris Hipkins 
: Rather than continuing to stereotype the entire Pomare community based on the actions of a few people will he accept an invitation from me to accompany him on a visit to the Pomare community to speak to the local residents firsthand and to see the state of the houses that they are asked to live in; and if he is willing to accept that will he also bring with him the Minister of Health so that he can see firsthand the impact of the $300000 funding cut that has been imposed on the local health service? 
Hon TONY RYALL 
: First of all I am sure it is not a neighbourhood where the local member needs to be accompanied by the Minister of Health to go there to visit it. I can tell that member that we would like the people of Pomare and indeed of the entire Hutt Valley to know of the very poor state of the State housing stock that this Government inherited. That is why we have put millions into upgrading the State housing stock—so that New Zealanders have more home opportunities. 
Workforce Advisory Group—Release of Report 
7. 
ALLAN PEACHEY (National—Tamaki) 
 to the  
Minister of Education 
: Why has she released the report of her workforce advisory group for public discussion? 
Hon ANNE TOLLEY (Minister of Education) 
: 
 Last year I appointed a workforce advisory group to give me independent expert advice on the future of the teaching workforce. The group has produced a report called  
A Vision for the Teaching Profession 
 which I released earlier this month. I have released the report because I believe that this is a great opportunity to have an open discussion about how we can attract and train the very best teachers and ensure that they stay in the profession. 
Allan Peachey 
: How can interested people have their say on the proposals in the report? 
Hon ANNE TOLLEY 
: Submissions can be sent to the Ministry of Education by mail or email until 6 August. The report and a discussion document have been made directly available to schools and education sector groups. Both documents are also available to the wider public online. The Government will consider the advisory group report and outcomes of this consultation process later this year. 
Hon Trevor Mallard 
: Has she read and understood the report; if so what was the main recommendation? 
Hon ANNE TOLLEY 
: Yes I have read and understood the report and I have released it along with a discussion document asking for public input. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. It was a pretty simple question: I asked what the main recommendation was. 
Mr SPEAKER 
: In fairness I think that unlike the question asked by the Leader of the Opposition yesterday this question had two parts. The first question asked whether she had read and understood it; the second question asked what the main recommendations were. The Minister chose to say that she had read it and understood it which meant that she had chosen to answer the first part. 
Hon Trevor Mallard 
: Does she agree with the main recommendation of the Education Workforce Advisory Group that 3 years is not long enough to do a quality basic teacher education programme? 
Hon ANNE TOLLEY 
: I realise it comes as some surprise to the Opposition but one releases a report with a discussion document for public consultation in order to get other people’s input into an issue. That is exactly what we have done. I do not want to pre-empt that public discussion about a very important issue like the training of our teaching force. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I took your advice from the previous question and I asked I think the straightest question I could: I asked whether she agreed with it. She could have said that she did not have an opinion that she agreed with it or that she did not agree with it— 
Mr SPEAKER 
: The Minister’s answer was that her opinion was that it was not in the public interest for her to comment on it prior to getting feedback from the public. The Minister is perfectly at liberty to answer in that way. 
University Courses—Restricted Enrolments 
8. 
GRANT ROBERTSON (Labour—Wellington Central) 
 to the  
Minister for Tertiary Education 
: Does he stand by his statement in regard to restricted enrolments in some university courses that it “would not be ideal to see too much of this at this time”? 
Hon STEVEN JOYCE (Minister for Tertiary Education) 
: 
 Yes. Universities have always had the autonomy to set their own entrance criteria but it would be counter-productive to overly restrict enrolments for 2011. A number of factors will see demand pressures reduce in that year including the effect of some policy changes announced in Budget 2010 plus the 765 new places the Government is funding over and above the record level of provision in 2010. 
Grant Robertson 
: Why is the Minister standing by as Auckland University Waikato University Massey University Victoria University and Otago University all restrict entry far more than ever before; or is he no longer ambitious for New Zealand? 
Hon STEVEN JOYCE 
: Firstly the restrictions on admissions are being caused by the move by the previous Labour Government to cap enrolments and cap spending following its imposition of the interest-free loans policy. Having said that a number of factors will come together next year to relieve that demand pressure including a record number of funded places at universities in 2011. In fact there will be 5600 more than 3 years ago. Secondly there is the easing of the recession. Thirdly there are the changes to student loan entitlements for new residents and Australians and fourthly there is the introduction of a performance element for students already at university. 
Grant Robertson 
: Given that answer does the Minister accept that his plans to relieve demand pressure is another way of saying that some New Zealanders will not be able to go on to tertiary study and achieve their potential? 
Hon STEVEN JOYCE 
: No. I am saying that it is important to consider not just the amount of funding but also how that funding is used which is something that seems to have escaped the Opposition. From the enrolments that are already funded in the university system we are seeking to ensure that people are making good academic progress while they are being funded by the taxpayers of New Zealand to complete their academic education. I think the taxpayers of New Zealand will see that as entirely fair. 
Grant Robertson 
: Why does the Minister think it is acceptable that a policy of open entry to New Zealand universities which had its origins just after World War I is now being cast aside and that he is not taking action to do anything about it? 
Hon STEVEN JOYCE 
: It is interesting to hear the member opposite rewrite history but there has always been restricted entry as far as I can remember—and I remember first going to university in 1981. I had a restricted entry to my vet degree that resulted in my doing the zoology degree that has often been talked about. There have always been restrictions on different courses at universities. The point is that this year we have the highest number of core university places that have ever been funded in this country and there will be a higher number next year. We have the highest number of funded core polytech places this year and there will be a higher number next year. 
Treaty of Waitangi Settlements—Progress 
9. 
PAUL QUINN (National) 
 to the  
Minister for Treaty of Waitangi Negotiations 
: What recent progress has the Government made towards its goal of settling historical Treaty of Waitangi claims by 2014? 
Hon CHRISTOPHER FINLAYSON (Minister for Treaty of Waitangi Negotiations) 
: 
 Last Sunday the Crown signed terms of negotiation with Ngati Koroki Kahukura and Ngati Haua at Pohara Marae. Between the start of last year and June this year the Crown has reached over 30 significant settlement milestones including 14 agreements in principle and six deeds of settlement. This represents great progress especially compared with the previous administration’s average of 1.6 deeds of settlement each year. 
Paul Quinn 
: What support did Budget 2010 provide to help achieve the Government’s goal of settling historical Treaty of Waitangi claims by 2014? 
Hon CHRISTOPHER FINLAYSON 
: This year’s Budget provided an extra $6.5 million over the next 3 years to help achieve the Government’s goal of settling historical Treaty claims by 2014. This extra funding comes on top of the additional $22.2 million in last year’s Budget and illustrates the Government’s commitment to accelerating Treaty settlements. 
David Garrett 
: Will the settling of claims to customary title over parts of the foreshore and seabed under the Government’s proposed legislation impact in any way shape or form on Treaty claims; if so in what precise way? 
Hon CHRISTOPHER FINLAYSON 
: That question raises a number of points. First I have made it clear on a number of occasions that if an iwi has concluded a Treaty settlement it will be able to come and talk to the Crown—for example about extant customary rights it may claim—but the finality of its Treaty settlement will not be able to be challenged. 
David Garrett 
: Will he be advising the Attorney-General that the foreshore and seabed legislation should specifically prohibit any holder of customary title from charging those who wish to enjoy customary recreations such as fishing and swimming for access to areas of the foreshore and seabed held under customary title; if not why not? 
Hon CHRISTOPHER FINLAYSON 
: The Attorney-General and the Minister for Treaty of Waitangi Negotiations exchange pleasantries all the time and I imagine that the issue of the— 
Hon Trevor Mallard 
: When he’s not too busy directing companies. 
Hon CHRISTOPHER FINLAYSON 
: Another day another psychotic outburst from Mr Mallard. 
David Garrett 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: Before I call the honourable member I say that it will lead to disorder if members use an open microphone to make unhelpful comments across House. I recognise that it was done in response to a fairly unhelpful interjection but these things tend to lead to disorder. 
David Garrett 
: My question was carefully worded and it asked whether the Minister would be advising the Attorney-General with regard to the content of legislation. The answer I got was related to social intercourse between himself and that Minister and it has absolutely nothing to do with the question. 
Mr SPEAKER 
: I accept the point the member is making in that I believe the Minister in answering the question was probably a bit sidetracked by the interjection. I think it was a serious question that the member asked and I ask the Minister whether he could answer beyond just whether he talks to himself. 
Hon CHRISTOPHER FINLAYSON 
: Yes there will be discussion between the Office of Treaty Settlements and the Ministry of Justice. I can assure the member that what I said yesterday was right in that there is no question regarding access to the foreshore and seabed. He need not have any worry about that issue. 
Accident Compensation—Acceptance Rate for Counselling 
10. 
LYNNE PILLAY (Labour) 
 to the  
Minister for ACC 
: Did ACC alert him that the acceptance rate for ACC-funded counselling in the 6 months to 30 April 2010 was 11.9 percent and if so when? 
Hon Dr NICK SMITH (Minister for ACC) 
: 
 No but the Accident Compensation Corporation (ACC) has kept me regularly informed. The figure is misleading in that 32 percent of claims are awaiting further medical information for a decision. The main reason for declining claims is that the Accident Compensation Act 2001 which was passed by that member’s previous Government requires claimants to have a diagnosed mental injury for them to be eligible for counselling and most do not meet that legal test. 
Lynne Pillay 
: When ACC released updated figures to the  
New Zealand Herald  
last week was it before or after his written reply of Wednesday 16 June stating he was unable to provide an update on the numbers of people not getting help for sexual abuse crimes and was this a case of deliberately withholding the ugly and embarrassing truth that in the 1 month of March last year 238 people received ACC-funded counselling but under this failed new regime 178 people received counselling in a period of 6 months? 
Hon Dr NICK SMITH 
: The first point I make in the answer that I will provide the member—and she has asked many questions—is that expenditure this year on counselling for sensitive claims is not significantly different from what it was a year ago or 2 years ago. I am not aware of when ACC specifically had the discussion with the 
 New Zealand Herald 
 but I have endeavoured to provide comprehensive answers to the many questions from the member. 
Lynne Pillay 
: When will he instruct ACC to stop using the nonsense statistic of less than 4 percent in data categories for sexual abuse as anyone with a calculator can figure out that in many instances the figure is actually zero and that deliberate delays and fudgey statistics will never hide the fact that the system is not working which sexual abuse experts and survivors tried to warn him of 8 months ago? 
Hon Dr NICK SMITH 
: It has been a longstanding practice in a number of Government agencies when members ask questions about for instance how many claims have been accepted in a region in circumstances where there is a very small number and the agency may risk someone’s privacy to simply list it as less than 4 percent. I have answered many questions from the member opposite and I invited the member to meet with Dr Peter Jansen who is the medical practitioner in charge of that area but the member simply chose to personally attack the doctor. 
Katrina Shanks 
: What action has the Minister undertaken in response to the concerns of some counsellors psychotherapists and others about the clinical decisions of ACC on sensitive claims? 
Hon Dr NICK SMITH 
: I have been very reluctant to interfere in decisions of a clinical nature but noting the concerns I have established an independent clinical review of ACC’s policy and processes which is being led by Dr Barbara Disley and is due to be reported back to me next month. I was disappointed that Labour members refused my offer to be consulted on both the terms of reference and the membership of the review which I believe is the proper and professional way in which to deal with this important and sensitive issue. 
Lynne Pillay 
: Given that Denise Cosgrove of ACC admitted last week that ACC may have moved too swiftly in its failed new process for sexual abuse counselling claims will he now admit that he has been supporting this atrocity against victims of crime in order to save face and that the truth is that even his claims that general practitioners supported the failed pathway is wearing thin in light of the publishing of the general practitioners survey in the Christchurch  
Press 
 today stating that 70 percent of— 
Mr SPEAKER 
: I say to the honourable member that her question is highly marginal. I was going to allow it even though she has made allegations in a question that are totally outside the Standing Orders but she cannot go on any further. I invite the Minister to answer what she has asked so far. 
Hon Dr NICK SMITH 
: I refer the member to the statement from the College of General Practitioners last year in which it indicated support for the clinical pathways— 
Lynne Pillay 
: No no. 
Hon Dr NICK SMITH 
: It was provided by Massey University and I would be happy to seek leave of the House to table that statement. I further say to the member that I have been reluctant to interfere and rightly so. I really think it will be a slippery slope if we have clinical decisions being made by Ministers of the Crown let alone in an area that is as sensitive as that of support for those who have suffered sexual abuse. 
Prisoners—New Drug Treatment Units 
11. 
SANDRA GOUDIE (National—Coromandel) 
 to the  
Minister of Corrections 
: What progress is the Government making on its commitment to increase the number of prisoners receiving drug and alcohol treatment? 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 I am very pleased to report that tomorrow I will be officially opening the first of three new drug treatment units in our country’s prisons. The new unit at the Otago Corrections Facility shows that we are delivering on our promise to double the number of prisoners receiving drug and alcohol treatment from 500 to 1000. Two further units at the Wanganui and Auckland prisons will be completed by 2011. They will bring the number of drug treatment units up to nine. 
Sandra Goudie 
: Why is the Government committed to increasing the availability of drug and alcohol treatment places? 
Hon JUDITH COLLINS 
: The Department of Corrections is now managing an all-time high muster of 8746 prisoners in addition to more than 45000 offenders serving community-based sentences and orders. We know that drugs and alcohol are major drivers of crime in New Zealand and that two-thirds of our prisoners enter jail with drug and alcohol problems. Breaking the cycle of drug and alcohol offending is crucial if we want to reduce the number of people behind bars. 
International Non-aggression Measures—Government Support 
12. 
Dr KENNEDY GRAHAM (Green) 
 to the  
Minister of Foreign Affairs 
: Is the Government committed to ratifying promptly the amendment to the Rome Statute reflecting the resolution adopted by the States parties to the International Criminal Court at their review conference in Kampala on 11 June 2010 incorporating aggression as a justiciable crime? 
Hon CHRISTOPHER FINLAYSON (Acting Minister of Foreign Affairs) 
: 
 The Government supports the resolution adopted by the review conference. The aggression amendment itself provides that the court’s exercise of jurisdiction over the crime of aggression is subject to a decision to be taken by the States parties some time after 1 January 2017. The Government does not intend to ratify the amendment until after that decision has been taken. 
Dr Kennedy Graham 
: Is the Minister aware that the fact that the crime will not become justiciable until after that decision in January 2017 in no way precludes any of the Governments that participated in the adoption by consensus 2 weeks ago from ratifying it quickly before 2017? 
Hon CHRISTOPHER FINLAYSON 
: Yes I am aware of that. The Government wants to be sure that the court which is a very new institution is ready to assume the additional burden of the jurisdiction of the crime of aggression before it supports the activation of that jurisdiction. 
Dr Kennedy Graham 
: When that time comes will such adoption of aggression as a crime leave unaffected the primary responsibility of the Security Council for peace and security including determining that an act is an act of aggression or the right of veto held by the five permanent members? 
Hon CHRISTOPHER FINLAYSON 
: Yes I imagine so although the member is aware of the consensus that was reached on the way in which the jurisdiction is to be exercised. 
Dr Kennedy Graham 
: I seek the leave of the House to table the resolution adopted at Kampala—Resolution RC/Res.6 adopted on 11 June by the review conference. 
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 Maryan Street 
: Does the Government intend to encourage countries particularly Asian and Pacific countries that are currently not signatories to sign and ratify the Rome Statute and the amendment on crimes of aggression; if not why not? 
Hon CHRISTOPHER FINLAYSON 
: I have no direct knowledge of the matter the member has raised although I will say that the New Zealand Government is very pleased that consensus has been reached. Between now and 2017 I think it would make sense to tell other countries about it. 
Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill 
First Reading 
Debate resumed. 
Hon NATHAN GUY (Associate Minister of Transport) 
: 
 As I was saying before the lunch break the bill also amends several other Acts to ensure that the special insolvency regime provided for in the Aircraft Protocol prevails over any inconsistent domestic processes. 
The bill also makes changes to the Civil Aviation Act to streamline the civil aviation rule-making process. Transport legislation including the Act contains provisions authorising the Minister of Transport to make ordinary transport rules. These include requirements relating to public notification of and consultation on intended rules and a mandatory 28-day rule between the gazetting of a rule and when it comes into force. These together with the subsequent addition of a Cabinet process have resulted in a complex and lengthier rule-making process. 
In 2008 the previous Government decided that the rules system should remain but should be more flexible. This Government agrees with that approach and has moved more aggressively to streamline the rule-making process and reduce overall costs. This bill therefore amends the Civil Aviation Act of 1990 to enable civil aviation rules to be made by Order in Council to repeal mandatory notification requirements and replace them with a requirement for notification as considered appropriate by the Minister of Transport and to repeal the mandatory 28-day rule. It will also align the Act with the Land Transport Act of 1998 in relation to incorporation by reference of standards into rules and the power of the director to determine— 
Hon Steve Chadwick 
: I raise a point of order Mr Speaker. With respect to the Minister—oh the microphones have come on. We could not hear the Minister because of the noise in the House. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: The member is quite right. There was noise on both sides of the House and I was waving and gesticulating to people for them to calm down rather than interrupt the Minister’s speech—and now we have interrupted it. Could I just make the point that there is a lot of extraneous noise in the Chamber and could people give the appropriate courtesy to Nathan Guy. 
Hon NATHAN GUY 
: I thank the member for that. As I was saying it will also align the Act with the Land Transport Act of 1998 in relation to incorporation by reference of standards into rules and the power of the director to determine technical matters under these rules. 
The Government would like the potential financial savings to our aviation industry to become quickly available this year. A 3-month time lag before accession to the convention and protocols is effective means that for accession to be in force by 1 October this year the bill would need to progress through all stages by 24 June. Subject to Royal assent occurring by 29 June the instruments of accession could then be lodged by 30 June and accession be in force for New Zealand 3 months later. I commend this bill to the House. 
Hon DARREN HUGHES (Labour) 
: 
 I rise to speak in support of the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill. I congratulate my local MP Nathan Guy on how well his reading is coming on. He read that speech beautifully. Maybe the national standards will help some people after all. In that respect he brought energy to legislation that the House finds itself in urgency to consider today. 
Hon Member 
: Where did you get your suit? 
Hon DARREN HUGHES 
: The question is where he got his suit from. I bet it is a foreign suit. I bet it is an import. I can guarantee that it will not have been made locally. 
This bill as the Associate Minister of Transport explained is highly technical in nature; I think his speech made that pretty clear. It brings New Zealand into line with one convention that presumably we hope will have quite a practical impact for a number of countries including New Zealand in respect of the way in which international financing is handled for assets such as aircraft and aircraft engines. 
Labour will be supporting this bill. It is unusual for Labour to support legislation that is introduced under urgency not referred to a select committee for public consideration and not given the chance for reflection but I am aware that the Transport and Industrial Relations Committee has conducted quite an extensive and I am advised exciting inquiry into the Cape Town convention. The committee has left no stone unturned when it comes to the various clauses that make up that convention. Therefore the legislation that flows from the inquiry that the committee has undertaken will probably on this occasion suffice as enough for the ratification of that convention by Parliament through the legislation. 
I want to speak about only a couple of issues at the first reading. I know that my colleagues who have sat through the inquiry will want to make more fulsome comments on some of the other matters. I know that my colleague Darien Fenton will have some issues around civil aviation safety which I know she is keen to explore with the House as this bill goes through. 
It seems to me that one of the best things about this convention is that it takes an activity that is by definition multinational although there are strong domestic aviation markets. When we think of long-distance air travel it occurs between countries. Therefore it involves many many Governments in many many jurisdictions and different environments where alternative legal operations take place. In an industry where the capital costs of these assets like aircraft and aircraft engines are so significant and therefore the leasing of them is not a cheap action the way these arrangements are arrived at becomes critical for a competitive aviation market for the ability of air travel to take place without the steep costs of compliance because of the concern of creditors for the location of their assets. 
One of the things the convention is doing that is very good is it is recognising the whole point of air travel which is contact. We have economic contact through trade. New Zealand is a small country that exports significantly some our freshest products which need to arrive at market in a fresh condition and of course air freight is very important. There is also people to people contact as people travel as passengers in civil aviation. 
The convention will allow creditors to file directly with an international registry by computer. They will be able to do that electronically thereby cutting enormously the amount of time it would take if this had to be done by another form of civil aviation such as pigeon post or carrier mail. They will be able to do that from wherever they are in the world. Wherever there may be a dispute or a concern about an asset that action will be able to take place. 
I notice that the Irish Government has volunteered to host matters where there is litigation or where there is the requirement of the intervention of a court. From what I have read that seems to have been welcomed by most of the players who take an interest in this area as a way of Ireland’s efficient legal system effectively exporting its skills and the location of Dublin is where any disputes will take place. This will reduce risk and uncertainty and of course that has to be good for New Zealand. 
But this is an international convention and we should not focus only on the benefits for this country. By signing this convention it is hoped that developing countries will be able to take advantage of the lower costs to them by having such a regime take place. Often in those countries where there are fledging markets those costs can be very high barriers for people wanting to enter into international aviation. So our hope would be that not only is this measure good for New Zealand because of our geography isolation and strong dependence on exporting but also it will bring some assistance to other countries around the world—particularly the developing countries where achieving these sorts of arrangements in civil aviation could make quite a difference to those countries. 
Despite its complexity I do not think that the bill will find itself the subject of huge attention this afternoon. Its moment in the spotlight might be more brief than the work that has been done to bring it to this point but that should in no way take away from the fact that it is quite a practical resolution of an issue that every year different companies and countries find themselves dealing with. The Labour Opposition is very pleased to support the first reading of the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill and we will be supporting it as it passes through the House this afternoon. Thank you for the opportunity. 
DAVID BENNETT (National—Hamilton East) 
: 
 In following on from previous speakers in respect of the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill I say that everybody will be pretty much in unanimous agreement that when it comes to our transport sector—especially aviation which is such an international part of the transport sector—we want to have uniform rules that are consistent with other countries so that those who provide those services know they have some security. This bill will give security to those who hold financial security interests in the cross-border transactions involving planes and suchlike. It is an important thing for our international competitiveness for our international connections and for our international transport linkages. 
The fine Transport and Industrial Relations Committee with members from both sides of the House will take an active interest in this bill and make sure that everything is well advanced through this House. We want this process to be successful for all parties involved and for the country so we get those transport issues sorted in order to give security to everybody who will be needing it in the future for their investments. Thank you. 
DARIEN FENTON (Labour) 
: 
 It is an absolute privilege to take a call on the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill 2010. I have been waiting with bated breath and great anticipation to take a call on this bill because it is such a riveting and exciting bill! But you know I do not want to belittle the bill because I know it is important. As other members have said the Transport and Industrial Relations Committee examined the treaty and reported back to the House 4 or 5 weeks ago. I want to thank very much the officials who took us through this convention. It was a very interesting experience and I think the officials did their very very best to try to make it interesting for the members of the committee and I genuinely thank them for that. 
The national interest analysis that is attached to the report from the Transport and Industrial Relations Committee on the treaty examination is very very thorough and perhaps if I have the chance later on in the Committee stage I may talk about some of the advantages. But there are also some disadvantages as explained to us by the officials that I think are worth considering. 
Labour is supporting the bill because it is pretty uncontroversial. It amends domestic legislation so that New Zealand can be party to an international convention on aircraft ownership. I cannot help myself with this legislation because here we are with a convention. I am aware that New Zealand tries to be a good global citizen by participating in global agreements and playing a leadership role in that. So the question comes up again for me as to why we support this convention but not one on fundamental rights for domestic workers which our Government voted against at the International Labour Organization 2 weeks ago. It voted alongside countries like Bahrain Saudi Arabia Iran and Kuwait to prevent an international standard that would provide protection to domestic workers throughout the world but also in New Zealand. We have not received an explanation for why our country voted in opposition to countries like the USA Australia the UK and the Philippines and I think it is very damaging to our reputation. 
As I said although I am pleased that we are supporting this bill across the House I am still very very concerned about our position especially as a former National Party MP Marilyn Waring has offered an apology to the women of the Commonwealth for New Zealand’s vote against the proposed ILO convention. She said that New Zealanders are “ashamed saddened and outraged that the principles which we hold dear and try to live by have been abrogated by the government of New Zealand.” Despite what the Minister says this is a convention that would have affected New Zealand workers. There are around 20000 home-based care workers in New Zealand and thousands more throughout the world. So we talk in this debate about developing countries and how this convention will help them but we do not care about the thousands of domestic workers throughout the world who have no rights. The overwhelming majority of New Zealand domestic workers are very poorly paid and they are excluded from the discrimination provisions of the Human Rights Act. 
Although we support this convention the following question came to my attention when I was thinking about this: how can we agree on this across the House when we have this situation at the ILO? New Zealand has had a good reputation particularly under the previous Government and that is slowly being eroded. 
As other members have mentioned this bill also contains amendments to the Civil Aviation Act. The amendments are designed to introduce more flexibility into civil aviation rule-making. I want to make a couple of comments about air safety. The Minister is not here but perhaps later I can ask him some questions. The Civil Aviation Authority does a good job given its paucity of funding and the challenges of regulating aircraft operation in New Zealand commercial and recreational which is a very wide-ranging operation. An issue that came up recently concerned Queenstown Airport. We wrote to the Civil Aviation Authority asking about safety issues at Queenstown Airport. It is a difficult airport and there have been media reports about a lack of experience in the control tower and an increasing number of safety incidents. The Associate Minister of Transport Nathan Guy will be pleased to know that Airways Corporation of New Zealand wrote back to us on behalf of the Civil Aviation Authority with assurances that staffing and training levels are more than adequate for this particular airport. 
That is all well and good but what happened last week? Two pilots apparently used their airside security passes to sneak on to the Queenstown Airport runway in the middle of the night to race a car. The boy-racer legislation did not apply to them obviously. Needless to say those pilots put the lives of others at risk and they ended up being banned from all airport land for 2 years. OK that is the right outcome. So the authority that Mr Guy is responsible for has provided us with perfectly reasonable answers to our valid concerns but I have to say that these perfectly reasonable answers have not prevented a couple of cowboy pilots from drag racing on the airstrip at Queenstown. I encourage the Minister to be more vigilant about these sorts of things. We cannot have these sorts of security concerns happening at our airports. 
I want to raise another issue in respect of civil aviation. The Associate Minister recently made an announcement about the monitoring of commercial pilots for drug and alcohol issues. There are two things. The Civil Aviation Authority will work with the Ministry of Justice to introduce random checks on commercial pilots for any criminal convictions that have not been declared and secondly it will introduce an electronic database that will enable them to more effectively gather information and monitor any trends. Labour supports these initiatives and I really want to say that Labour members do not believe there is any room for drug and alcohol use among pilots. I do have to reflect though that Air New Zealand has had monitoring systems in place for many years and it was quite aggrieved at the suggestion that it had not. In actual fact the problem is with small aircraft and small commercial airlines. 
It seemed as though Mr Guy was being pretty proactive in terms of his press release of 1 April. But what it did not say was that the Civil Aviation Authority had repeatedly been asking for more powers to identify pilots with drinking problems but unfortunately the Minister had been sitting on his hands. The Christchurch  
Press  
obtained a briefing to the Minister under the Official Information Act. It was written just a month earlier and states that the existing system is heavily dependent on individuals acting responsibly and self disclosing information relating to their drug and alcohol use. But it also shows that the Civil Aviation Authority had proposed a series of measures including limits for drug and alcohol use but that nothing had been done. 
As members will see although Labour supports this convention there are some concerns. If I had more time I would mention many more but perhaps I will get to those during the second and the third readings. We have many concerns around civil aviation the things we need to be doing in New Zealand to ensure the safety of people who fly in New Zealand and of course meeting our international obligations thereby making it easier for our airline industry to operate internationally and to meet our obligations to other countries. Thank you. 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Assistant Speaker. Nga mihi nui ki a koutou. Kia ora. It is a great honour to be here today to talk about the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill. We could hear the passion in the Minister’s voice when he was talking before. As I have been tweeting over the last couple of days about the House being in urgency I have been asked by lots of people in tweets blogs and Facebook messages why the House is in urgency. They are asking about the most important thing that we will be debating and which regional council we are sacking this time. I have been telling them what I will be debating which is the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill. This is an important bill. The Green Party will be supporting it given that we have 4431 aircraft including microlights and balloons in New Zealand and they flew 214 million kilometres in the last year. It is an important bill and the Green Party will be supporting it. But I want to outline a few parts of the bill and a few of our concerns as we go into this debate. 
The bill the convention and the protocol are private legal agreements that will significantly improve the financial security for investors in cross-border trades of things like aircraft railway rolling stock and other large and expensive equipment. The convention enables creditors to access a registry. I wonder whether the status quo actually works all right. We have a register in New Zealand for our aircraft companies. It will be considerably more expensive to register through the new Irish registry under this bill. But I guess the airline companies and other parties who will be using the provisions of this legislation will point to the fact that it will help them with finance when they are purchasing new heavy equipment such as aircraft and that some of the financial benefits could be in the order of $18 million to $325 million. 
We have to question whether we even need this treaty. It is interesting that the House is in urgency to look at this bill. Perhaps we needed urgency to get this done when we consider that the treaty was signed in Cape Town in 2001 and came into force in 2006 that the Ministry of Transport began looking at it in 2004 and that the previous Government agreed in principle to support it in 2005. We are 9 years on from the signing of the treaty so I guess we needed urgency in order to give it a push along. 
My final point and something that I look forward to picking up in my second reading speech is that on the one hand this bill is not controversial. It is logical to establish an international rule-based framework to look at the issue of default. We support having greater international cooperation and reducing the risks for Kiwi and foreign corporates. But on the other hand do we actually want to see a growth in airline emissions? In my second reading speech I will look at some of the environmental and climatic impacts of the worldwide aviation industry and I think an important question is whether we in New Zealand want to support and subsidise the pollution from our aircraft industry when we know that the world is burning and we do not have a “Planet B”. I look forward to addressing that issue in my second reading speech but I say the Green Party will be supporting this bill. 
ALLAN PEACHEY (National—Tamaki) 
: 
 I am pleased to support the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill and I will begin with a couple of remarks. 
Firstly I welcome the support that the Opposition parties are giving to this bill in the House and I express my regret that the Opposition does not find its way clear to support other significant bills that this Government has brought to the House. In particular the significant tax cuts that this Government is to deliver to New Zealanders on 1 October this year come to mind. 
The second observation I make is that the Transport and Industrial Relations Committee was well briefed by officials on the significance of this bill. If memory serves me right I think that I was— 
Hon Darren Hughes 
: It doesn’t. 
ALLAN PEACHEY 
: My memory serves me very very well—I am sorry I have forgotten the member’s name. 
Chris Tremain 
: It’s Hughes. 
ALLAN PEACHEY 
: I apologise to Mr Hughes. My memory serves me very very well sometimes. However I am not very good on the names of Labour Party politicians. As I was saying from my recollection I was the only member of the select committee who asked the officials for explanations. I was particularly interested—[ 
Interruption 
] I ask the chair of the committee whether I am wrong. 
David Bennett 
: No I don’t think so. 
ALLAN PEACHEY 
: Indeed I think I am right. I was particularly interested in knowing whether this bill when it becomes law will reduce the need for lawyers to become involved in this sort of thing and for litigation to occur. I am pleased to report to the House that I was assured that there would be considerably less need for lawyers and less need for litigation. That was a good enough reason for me to support this bill. 
Charles Chauvel 
: You don’t hear me bashing teachers! 
ALLAN PEACHEY 
: From listening to the interjections that are coming from a corner opposite I am almost inclined to take the view that we could do with having fewer lawyers in this House as well. After all our job is to make the law not pontificate about it and there is a big difference between the two in relation to the member. 
This convention is about the financing of mobile equipment and by “mobile equipment” we mean things like aircraft railway rolling stock and even space assets. That is what the bill is all about. The bill is designed to make raising and repaying the finance needed in order to purchase mobile equipment like aircraft much easier. At the moment if there is a dispute over for example payment for release it can involve more than one jurisdiction a whole pile of other laws and far too many lawyers. This bill is designed to simplify the process and to give much greater certainty around it not just to those who lend the money but also to those who borrow it. There will be greater certainty. The ultimate objective of course is to ensure that those who lend the money no longer require a premium charge to account for the risk that they have to take. By reducing the risk the raising of funding to finance the purchase of mobile equipment like aircraft should become simpler and it should be cheaper. Of course for a country like New Zealand which depends on aircraft more than many other countries do anything that makes that dependence cheaper is to be applauded. I commend the bill to the House. 
CAROL BEAUMONT (Labour) 
: 
 It is with great pleasure that I too rise to discuss the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill. I too am a member of the Transport and Industrial Relations Committee and have been briefed on this convention. Labour supports this bill as others have said. It is uncontroversial. It has a couple of purposes one of which is to amend the domestic legislation including both the Civil Aviation Act 1990 and the Personal Property Securities Act 1999 so that New Zealand can become a party to the Convention on International Interests in Mobile Equipment which Mr Peachey just described to us. I will not go into a lot of detail about that but I will reinforce the key points. This convention will standardise transactions involving movable property particularly aircraft and aircraft engines and will set down international standards for the registration of ownership. The second part which I will come back to clarifies some rather convoluted legalese in the Civil Aviation Act relating to the making of rules and who can apply them. 
The Cape Town Convention and its associated Aircraft Protocol were originally negotiated under the auspices of a United Nations agency. I concur with the comments made by my colleague Darien Fenton about the importance of international conventions and of New Zealand playing a lead role in them and making sure that we are at the forefront of compliance with international best practice in every regard including in employment-related matters and transport-related matters which we are currently discussing. Essentially this convention aims to establish a balance between enhancing creditor rights which will as Mr Peachey said help to reduce aircraft financing costs while also improving debtor protections. It is designed to be flexible and it can be applied to any type of high-value mobile equipment. 
The Aircraft Protocol that I mentioned earlier the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment applies to aircraft airframes aircraft engines and helicopters above a minimum size or threshold. I thought that the House might be interested in getting a little more detail on that because it is fascinating. Let me tell members that it applies to aircraft that can carry at least eight people or 2750 kilograms of cargo aircraft engines with a thrust exceeding 1750 pounds of force or 550 horsepower and helicopters that can carry five or more passengers. 
As the name of the treaty probably gives away the treaty resulted from a diplomatic conference held in Cape Town South Africa in 2001. I am sure that members really want to know about the mechanics of the convention! The mechanics of the convention centre on the recognition of international interests in mobile equipment and the creation of an international registry in which creditors will file these interests. As has already been mentioned that registry will be maintained in Ireland. The international interests are secured interests in a uniquely identifiable object. Once those international interests have been filed by a creditor they become searchable in the international registry held in Ireland. The creditor’s interest will have priority over all subsequent registered interests and unregistered interests. The underlying premise is simple: if we can reduce some of the risk to financiers in extending credit we can reduce the financing costs for the debtor and to the industry as a whole. 
Currently the problem is that financiers have to rely on differing national laws to protect their interests. Clearly those laws would be quite variable around the globe. In many countries the risk factors are significant because the local laws are not very useful in protecting lenders in the event of default or bankruptcy or because they are highly unpredictable. Of course as we would expect with regard to aircraft this uncertainty is compounded by the fact that aircraft can move readily between countries. It can be very difficult for a financier to know where an aircraft will be on the date of default or bankruptcy. That uncertainty drives up the cost of aircraft financing which is then reflected in the interest rates that the financier charges the debtor. As I have said the convention will reduce that uncertainty and will provide financiers with a number of key rights in respect of any aircraft. Those rights are should there be a default to deregister the aircraft and procure its export to take possession or control of the aircraft to sell or grant a lease for the aircraft and to collect or receive income or profits arising from the management or use of the aircraft. 
The extent to which the rights that I have just outlined will be a function of the declaration that we in New Zealand make will be seen at the time that we formally ratify this convention. Obviously the international registry based in Ireland as we can expect in the modern age will be able to be directly accessed by computer from anywhere in the world. That will be very useful. 
I will go on to talk about a couple of other matters. The first of these concerns the flexibility of civil aviation rule-making which is the other major part of this bill. The present provisions relating to the making of ordinary rules are not very straightforwardly expressed. The bill specifies that an ordinary rule allows a matter to be determined by the authority the director or other persons. It empowers the authority the director or any other person to impose requirements or conditions. There are consultation requirements there which I am very pleased to see; I am a great believer in consultation. During my short time in Parliament so far I have been disappointed by a number of the consultation provisions that we have seen and particularly the consultation regarding the Auckland super-city. That has been a sham. The legislation that has reduced local democracy and corporatised local government in Auckland has been rammed through by the Government with a mere nod in the general direction of consultation. So I can only hope that in relation to the important matter of the civil aviation rules the consultation requirement will be more robust. 
The second issue that I will also talk to members about relates to helicopters because helicopters are covered by this convention. Those that are certified to transport at least five persons including the crew are included in the Cape Town Convention. A situation has arisen in New Zealand regarding helicopters and it is important to talk about it. A requirement by the Civil Aviation Authority is causing some concern in relation to the work of rescue helicopters. They now apparently have to be twin engined because we cannot afford to take the risk of a machine crashing into a hospital. I note that no rescue helicopter has yet crashed into a hospital in New Zealand. But just to be certain that it will not happen that requirement is apparently now being put in place. The effect of that requirement can be quite troublesome for all of the fine people involved in operating rescue helicopters in New Zealand—something that we are all proud of and reliant upon. 
The upshot is that in quite a few instances single-engine machines now have to operate away from their dedicated helipads. That will require patients to be potentially carried by stretchers for example or ferried by an ambulance at a critical time. We all know about the golden hour—I hope we all do. I hope we have all had our first-aid training and that we understand the importance of the first critical hour after an accident and the need to get medical attention. Any barriers to helicopters getting patients to hospitals are very worrying given that golden hour which is essential in saving the lives of critically injured people. So we are concerned about the directive relating to helicopters helipads and hospitals. We do not think that it is a necessary requirement in terms of safety. We are certainly worried about the implications for a patient’s health. There are of course also implications for all of the good people who raise funds from the community to get the machines that the rescue trusts operate which are so important to us in a country that is not highly populated and where people can be a long way from the nearest hospital. So we question why the Minister Steven Joyce or his Associate Minister Nathan Guy did not step in to show some leadership over this issue of helicopters. These are our rescue helicopters as I have been saying. Perhaps somebody would like to deal with that question in the course of this debate. 
I will leave the bill at this point for now. I do have a couple more speeches members will be pleased to know to give on this matter. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Tena koe Mr Assistant Speaker. Kia ora tatou katoa e te Whare. Apparently this bill the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill is about establishing procedures to protect investments in aviation and to cover the financing purchasing and leasing of aircraft but it also gives the Minister of Transport extra powers in the making of civil aviation rules. That raises a couple of points that I would like to speak to. 
The first is the Manukau claim. When the Waitangi Tribunal first heard this claim in the 1980s it brought to the table the Auckland Regional Authority and the civil aviation division of the Ministry of Transport in order to question them about the site that they had chosen and the site that they used. It was noted back then that when Cabinet made the land available in 1955 there had been no acknowledgment of either Maori land title or the need to protect Maori land interests. Auckland Airport sits on 1300 hectares including reclaimed land that had once been a local iwi fishing bank and that was the basis of the Manukau claim. Expanding airport operations have led to even greater restrictions on other fishing banks and creeks traditionally fished by local Maori and they have also led to the release of excessive levels of pollution from stormwater discharge aviation fuel spills and industrial chemicals and fluids. 
In summing up the Manukau claim the Waitangi Tribunal had some harsh words for the Crown regarding the pollution of the harbour and the loss of tangata whenua lands: “… underlying this claim is an enormous sense of grievance injustice and outrage that continues to haunt the Manukau Maori and bedevil the prospect of harmony in greater Auckland.” Yet for all the laying down of rules of engagement between Maori and the Crown in that case the exact same problem occurred when a local marae raised its own longstanding claim to land and airspace around Rotorua airport. Back in the 1960s local authorities in Rotorua had decided to bulldoze the whare tupuna of the Ngati Uenukukopako people because it was in the flight path. The iwi of course refused. Fifty years on the airport authority builds a new $24 million extension to the runway and again nobody is surprised that there is no regard whatsoever for the impact on the marae the kohanga reo or the iwi itself. 
The Maori Party will be supporting all stages of this bill but the examples I have cited here raise the question again as to when it is appropriate to amend legislation to take into account the circumstances of iwi. It gives us the opportunity to remind the House again of the importance of recognising Maori interests in policy planning and legislation. Kia ora tatou. 
Bill read a first time. 
Second Reading 
Hon KATE WILKINSON (Minister of Labour) 
 on behalf of the  
Minister of Transport 
: I move  
That the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill be now read a second time 
. I understand that Supplementary Order Paper 145 which makes technical amendments to the bill has been lodged following consultation between officials and aviation finance and legal stakeholders. This bill’s amendments simplify or clarify the relationship between the Convention on International Interests in Mobile Equipment the Protocol to the Convention on International Interests in Mobile Equipment and domestic legislation. The rule-making provisions are also clarified. In the first reading debate the Minister advised that accession to the Cape Town Convention and the Aircraft Protocol would bring economic benefits to our aviation industry. Clauses 12 to 14 of the bill come into force on a date to be appointed by the Governor-General by Order in Council and will implement the Cape Town Convention and the Aircraft Protocol when New Zealand’s accession comes into force. It is proposed that that date be 1 October 2010. The rest of the clauses come into force on 1 August 2010 and will implement changes to streamline the civil aviation rule-making process. 
Turning to the provisions of the bill clause 4 amends section 2 which relates to interpretation. The amendment reflects the new section 34A inserted by clause 8 and adds the Governor-General as someone who may make civil aviation rules. Clauses 5 to 11 amend the rule-making parts of the Act including clarifying powers of the Minister to make ordinary rules matters to take into account when making rules and revoking of prescriptive procedural requirements. In addition the Governor-General will be able to make ordinary rules. 
We now come to the parts of the bill that when enacted will enable New Zealand to conform with the provisions of the Cape Town Convention and the Aircraft Protocol. Clause 12 inserts new Part 12 which implements the Cape Town Convention and the Aircraft Protocol. Members should note the principal proposed amendments in this part of the bill. The amendment gives the convention and the protocol legal status in New Zealand and ensures they will prevail over inconsistent New Zealand law. It also clarifies that law that is consistent with but additional to the convention and protocol still has effect. The amendment enables the Governor-General to issue copies of any declarations made by New Zealand. Contracting States are to exclude or modify provisions considered to be incompatible with their legal culture or tradition. The amendment also adds circumstances in which the removal of an aircraft from the New Zealand aircraft register can occur. Under the protocol a creditor can require the deregistration and export of an aircraft in the event of a default. 
Clause 13 via schedule 1 adds a new schedule 7 which sets out the text of the Cape Town Convention and new schedule 8 sets out the text of the Aircraft Protocol. In Part 2 of the bill clause 14 via schedule 2 sets out consequential amendments to other enactments. The key area here is the Personal Property Securities Act 1999. The security interests in aircraft objects covered by the Cape Town Convention and the Aircraft Protocol are one form of security interest in personal property. Therefore there will be situations where both regimes will apply to the same security interest. To avoid the potential for conflict from the existence of two registries the bill amends the Personal Property Securities Act so that it is clear that in relation to aircraft objects the Cape Town Convention and the Aircraft Protocol will have primacy. The effect of that will be that the parties to a transaction will determine for themselves whether they will use the international register the Personal Property Securities Act or both. Finally clause 15 relates to transitional provisions for material incorporated into rules via reference. 
In conclusion it is necessary to pass this bill to enable the aviation industry to access the financial advantages of the Cape Town Convention and the Aircraft Protocol and to streamline the aviation rule-making process so that our rules do not lag behind developments in the aviation sector. I commend this bill to the House. 
Hon DARREN HUGHES (Labour) 
: 
 I have decided to vote in favour of the second reading of this bill. 
Hon Trevor Mallard 
: You had to be woken up to do it. 
Hon DARREN HUGHES 
: Not at all I say to Mr Mallard. In fact I have been very impressed by the way the Government has deployed its most charismatic Ministers to the shepherding of this legislation through the House this afternoon. I realised that they are taking it very seriously. When even an old warhorse like Allan Peachey can find it within himself to muster a bit of praise for a political opponent we know that maybe this is something that we can come together on. Maybe we can unite this lovely land around the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill. So it has been quite an afternoon already. 
The Hon Kate Wilkinson has set out her very clear views on this area. I noticed she touched on some of those issues in her maiden speech so it must be quite a thing to come here today and speak more in favour of it. There are only two issues that I want to touch on in the second reading of the bill but before I do I will pick up on a reference that was made in the first reading by the member for Tamaki Mr Allan Peachey. 
Mr Peachey spent a lot of his contribution saying that if the bill results in fewer lawyers being involved then he was in favour of it. That was the central premise of his contribution to the debate. I thought it was very unusual for the member of Parliament for Tamaki in Auckland to be campaigning so openly against lawyers given what a high proportion of the legal profession reside in his constituency. 
Allan Peachey 
: I raise a point of order Mr Speaker. I explain to the member that three of my four children are lawyers. The message was for them. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: Mr Peachey that is interesting. I am sure there are other family details you would like to share with us but this is not the place and that was not a point of order. 
Hon DARREN HUGHES 
: I am absolutely aware of the fact and I know what those three children say about him! He wants to criticise them on the floor of the House but they have a good old go about him as well. I am sure they will charge him extra when it comes to matters such as his last will and testament which none of his colleagues would be in I suspect going on the terrible way he was been treated. After the 2005 election they all would have got something from the Peachey estate; now I suspect none of them will. He would have asked all three children for different iterations of that particular legal document. 
Mr Peachey said he forgets some things and I will not criticise him for that because that can happen. When he criticised the Opposition for not supporting Government tax reductions I was immediately reminded that as a new member of Parliament he voted against a cut in the corporate tax rate in this country. When the Labour Government reduced it from 33c to 30c he voted against it. He voted against the cut in taxes for savers. He voted against a cut in taxes for working families in our country. So I can understand his difficulty when he spoke in the first reading of this bill and raised those points and I wanted the opportunity to rebut that. The great benefit of  
Hansard 
 is that those things can be checked very very quickly. Despite that in this bipartisan way we do want to focus on that for too long. 
I come to the two points that I wanted to speak about in respect of the convention. The first is that the premise for this bill is quite simple as other speakers have said. This is a high-risk industry. If we can reduce the risk then that should reduce the costs—particularly the financing costs—across the industry as a whole. Those costs are often enhanced even further because so many different local laws operate and they do not protect lenders in a way that is consistent and that multiplies the risk factor and results in higher prices. We are in absolute support of the premise and we are very grateful to those who have negotiated on behalf of New Zealand in order for us to accede to this convention. 
The second point I want to make at the second reading is about the changes to the civil aviation law. Although we are all transfixed by the Cape Town Convention at the moment— 
Hon Dr Wayne Mapp 
: Absolutely transfixed! 
Hon DARREN HUGHES 
: I see that even the former Auckland polytech law lecturer Dr Mapp is transfixed on this point. 
Hon Trevor Mallard 
: No he was an assistant lecturer. 
Hon DARREN HUGHES 
: An assistant lecturer? I thought he was a full lecturer in his own right. He was an assistant lecturer and there is no shame in that I say to Mr Mallard. I want to be accurate for the sake of the  
Hansard  
in that respect. 
This may have been one of his areas of expertise. I recall once visiting Ohakea air base and Dr Mapp arrived by aeroplane which was quite good. In fact I think he flew himself down to Ohakea on that occasion. 
Hon Dr Wayne Mapp 
: I raise a point of order Mr Speaker. I know that the member is having a little bit of fun in this instance but I think he should at least try to make some reference to the facts. I was an associate professor at the University of Auckland. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: Well Mr Mapp that was not a point of order. But as member has made the point to Mr Hughes I am sure Mr Hughes will feel very grateful that his knowledge on these matters has now been improved. 
Hon DARREN HUGHES 
: Thank you Mr Assistant Speaker. I am sure that the member will be rushing off now to correct his Wikipedia entry because I suspect that we are not all as familiar with his CV as he might have assumed. 
I was in the middle of referring to the fact that he flew himself into an air base I was visiting on one occasion. I know he is a very distinguished pilot. When he is buying his next Learjet he can use the Cape Town Convention. He was in Opposition in those days. That was before he became a Minister of the Crown and took to rushing to the scenes of accidents flourishing his business card around and making sure that all the emergency workers knew he had just driven by. Quite how he copes when he flies over accidents I am not too sure. Maybe the copilot has to bungy out with Wayne Mapp’s business card and say: “Did you know that the Minister of Defence just flew by?” because no one else would know. 
I do not want to be distracted in any way from the important changes to the Civil Aviation Act 1990 that this bill takes into account. I see that we have been focusing on the convention but the bill addresses other matters and we should make reference to them in the second reading. There is a fair amount of legalese I guess we would call it with regard to the civil aviation rule-making in our current law. 
In the Committee of the whole House we will consider the clauses that seek to rectify the language to make sure that the rules are expressed in a way that is slightly easier to follow and we will consider the clauses that set out which persons are able to determine particularly those ordinary rules. The legislation sets out what the Minister must take into account when that is happening and also what consultation requirements need to be followed. I think that is quite a good thing to do as well. The less complex that laws like this can be the better I think it is for obviously the industry players—those who have a very detailed technical knowledge—but also for those who have only a passing interest. From the average member of the public’s point of view having legislation that is easier to understand gives more confidence in our civil aviation system. 
So the first reading is down the second reading is still going and Labour members are still in support of the bill. We are walking in lock step with the National Government on this particular item and we look forward to asking the Minister of Transport Steven Joyce some questions in the Committee of the whole House. We will expect those questions to be answered. 
I serve notice of that to the Hon Kate Wilkinson now too. I know that she has been reading through the bill quite a lot so she will have the opportunity to answer our questions then. I am sure that when the third reading comes and people look to see what is happening in the House she will know that if she wants those 43 Labour votes there is a lot riding on her ability to answer these questions during the Committee of the whole House. Thank you. 
DAVID BENNETT (National—Hamilton East) 
: 
 In the second reading of this Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill I think we have strayed a little way off the track of what the bill is about but I think that shows the context—that everybody is fairly much in agreement and that there is not a great deal of debate about it. It is something that needs to be done and needs to be done quickly so that New Zealanders and the industry have the Cape Town Convention as a reality in the way that they do business in this area. 
The nature of this bill has been pretty well exposed by members as have some of the policy drivers behind it. We have also heard about some of the bill’s background such as the naming of the type of aircraft involved and what advantages this legislation hold. Some of those advantages are basically so that the security interests can be registered. We can have security as an investor in those kinds of instruments and we know that it will be internationally competitive. They will apply when one’s plane is travelling from country to country and when it is based in New Zealand. 
I think that it is important when we look at this bill to note that we rely heavily on the aviation industry as a trading country and a tourism destination but also as a manufacturing exporter. In Hamilton we have some very big manufacturing exporters of aviation products especially Pacific Aerospace Corporation which manufactures a lot of planes that are sold around the world. I am sure that those in the New Zealand aviation industry will be very comforted to know that the Government is working hard for them by delivering rules and regulations that will assist them in their work rather than having the rules and regulations that they have had in the past that have been detrimental to them carrying out their business. We look forward to this bill going through its further stages in the House and we thank the other parties for their support so far. 
DARIEN FENTON (Labour) 
: 
 It is great to take a call in the second reading of the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill. As my colleague Darren Hughes said we continue to support this bill. We are supporting it at its second reading. We will see how it goes in the Committee stage but so far so good. One of the things that I forgot to do when I was talking earlier on about the Transport and Industrial Relations Committee was to send my best wishes to the Hon Tau Henare. We wish him a speedy recovery. He plays an important if somewhat belligerent role in the select committee— 
Hon Trevor Mallard 
: Nothing to what he plays in the lobbies. 
DARIEN FENTON 
: —no—and he also played a very key part in the examination of this treaty. I know that he asked some very insightful questions and he will be deeply deeply disappointed that he is unable to be here today to see this bill pass through its stages and go through to its third reading. But as I said we all wish him well. 
As we have all outlined this is not a controversial bill. We are supporting it. It amends domestic legislation so that New Zealand can be a party to an international convention on aircraft ownership. That will be beneficial for developing countries as well as our own country because of the high interest rates that airlines often have to pay. New Zealand by the nature of our geography and isolation has a long and proud aviation history. We have long been part of the international aviation community so it is very sensible for us to be part of this convention. 
I take the opportunity to congratulate Air New Zealand our national airline on its very high standards and on its many awards including the prestigious  
Air Transport World 
 Airline of the Year award for 2010 which is apparently widely regarded as being the Oscars of the airline industry. To the men and women the workers and the management of Air New Zealand I offer my congratulations on that award. I think it is great. I am sure that all members in this Parliament support our national airline. I hope that we all support it by flying with Air New Zealand whenever we can. 
It would also be remiss of me not to remind the House that a Labour Government had to rescue our national airline after the previous National Government wrecked it. I have been a bit concerned over the last couple of weeks that this Government is heading into a whole new era of privatisation of our precious assets. Its half-hearted support of rail speaks volumes about its commitment to the strategic transport assets that are owned by New Zealanders—and proudly owned by New Zealanders. After all if the Government is prepared to flog off Kiwibank who knows whether the national airline will be next? 
Going back to matters of civil aviation I cannot resist the urge to talk about one of the ridiculous situations that has arisen in our own country because of interference by the Civil Aviation Authority. I am talking about the rest and meal breaks dispute between the air traffic controllers and the airports. They reached a sensible agreement about sole air traffic controllers; let us understand that there are only a small number of these. We are not talking about every airport in the country; there are only a small number of them. They have peaks and troughs so there are times when aircraft are coming in and there are times when they are not. The agreement they came to was that they could take their breaks when there was no air traffic. That would work out perfectly well and would fit in with the very flexible and sensible legislation. In fact the current Minister of Labour called it in 2008 common-sense legislation when it was passed by the National Government. However the Civil Aviation Authority said that this was nonsense and that we could not have a flexible agreement where workers who worked 9½-hour shifts with no breaks could have a break when the aircraft were not coming in. It said that they had to have their breaks all at the same time across the country—quite ridiculous. 
Unfortunately the Government used that dispute as an excuse to rush in some very poorly drafted legislation that will essentially allow employers to require workers to work for nothing during unpaid break time including air traffic controllers and I assume pilots. I think that is called slavery; I am deeply concerned about that. What is more the proposed legislation is so crazy that it will enable an employer to take away all breaks and compensate employees with a muffin a cracker or a glass of wine. It is quite ridiculous. 
Carol Beaumont 
: Or a muffin. 
DARIEN FENTON 
: I said a muffin. 
Carol Beaumont 
: Muffin break. 
DARIEN FENTON 
: That is right. 
Returning to the bill the airline industry is an important part of our economy. We have a fantastic national airline. We have good support from the Civil Aviation Authority even though it makes some mistakes from time to time and is desperately underfunded. There are real advantages to us signing up to this convention and that is why Labour continues to support this bill at its second reading. 
GARETH HUGHES (Green) 
: 
 Kia ora. Nga mihi nui ki a koutou kia ora. It is a great honour to speak in the second reading debate of the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill. Today we are seeing why it is so important to have the Greens in Parliament. I have not heard a single member talk about the consequences of this bill on the environment or on our communities. We have talked about how this bill will make it cheaper for aircraft to finance aircraft and other heavy arms but no one has talked about the impacts. The fact is that aircraft emissions have grown by 73 percent in the last 40 years. That is vitally important because climate change is the greatest threat facing the planet. [ 
Interruption 
] I will let the honourable Minister Mapp repeat what he said; I do not know what he actually said. 
Hon Dr Wayne Mapp 
: It’s a relatively small percentage of the global total. 
GARETH HUGHES 
: I would like to touch on that. It is around 3 percent as the Minister will be aware. But the Minister will also be aware that there are significant debates globally about what the actual aircraft emissions are and what the global warming potential of those emissions are for the planet. The emissions are not just carbon dioxide but also nitrous oxide which has a greenhouse potential nearly 300 times worse than carbon dioxide over a 100-year time frame. The Minister may also be aware of the radiative forcing effects from the contrails which are condensation clouds at high levels and the impacts of water vapour. It is estimated that sometimes those could be up to 10 percent of global emissions. I hear what the Minister is saying but I think what we are hearing is— 
Hon Darren Hughes 
: The Minister is slapped down by the youngest member of the House—fantastic. 
GARETH HUGHES 
: I thank my colleague Mr Hughes. But I will get back to the issue of climate change. Today we are discussing how this legislation will make it cheaper for aircraft when aircraft emissions continue to grow. It is a big issue because greenhouse gas emissions in New Zealand and around the world are rising. Ladies and gentlemen it is not just a problem for the polar bears any more; climate change is a problem facing the planet right now. Last year Kofi Annan the former UN Secretary-General published a report saying that 300000 people die every year as a result of climate change not in 10 years and not in 20 years. We are not just talking about the polar bears; we are talking about right now. 
In 2007 Sir Nicholas Stern said in the Stern report that it is cheaper to take action now. It is expensive to tackle climate change and we hear about that almost daily from Mr Boscawen. The cost of tackling climate change is in the order of 2 percent of global GDP which is not an insignificant number. But when we look at the estimates of the costs of climate change in our lifetimes we are looking at potentially 20 percent of global gross domestic product being affected by climate change. The time to act is now and if we keep increasing our emissions from aircraft in New Zealand and around the world I ask where else we will make needed cuts to stay within the safe climatic band which is 350 parts per million. 
The bill makes it cheaper to own and operate an aircraft which I guess we all agree with and which is what we are talking about today. But we are not asking the important questions of whether we want to increase air travel in New Zealand or whether we want to make an essentially unsustainable sector continue to grow when we know the impacts of climate change. We know oil will not get any cheaper. In Louisiana over the last couple of months oil drillers have had to go further and deeper into more extreme environments because the easy sources of oil have already been tapped. We are reaching what is described as peak oil which is the end of cheap oil. The members of the Finance and Expenditure Committee heard about that in a letter from Dr Russel Norman and I hope that the committee will make an inquiry into it. It is an important issue because in New Zealand nearly 10 years ago we sunk over $800 million into saving our national airline. It is an important issue but as the price of fuel continues to increase we will see lessening usage internationally and lessening returns on our considerable investment. 
Climate change is a major issue for the New Zealand brand. The Green Party talks about it a lot because this Parliament is seeing a stark contrast in vision at the moment. On one side we can mine our treasured places try to squeeze more dairy production—4 percent a year of continual growth—and keep investing in mad motorways which do not make economic sense. On the other side we can focus on our “clean green” brand making that a reality and focusing on premium products. Those are the kinds of questions being asked considerably more and more by hundreds of thousands of tourists who are flying here every year. We have potentially 80000 people coming to New Zealand for the Rugby World Cup next year. We will have maybe a billion people watching. But with the Rugby World Cup New Zealand could become like China at the time of the Beijing Olympics with questions being raised on human rights. New Zealand could become like South Africa at the time of the Football World Cup with questions being raised on racism and housing issues. Will the Rugby World Cup highlight our hypocrisy on our green issues? Will it be around the fact that we are not facing up to the growth in our airline emissions and that we are not facing up to any sector growth of emissions in New Zealand? 
I wish that we were debating a bill that would see aircraft become more sustainable. I am not a doom and gloom merchant. There are options available for aircraft industries worldwide. I wish we were discussing the “Wellington Convention”. There is an option going around the world pushing for more stringent aircraft sustainability standards. I wish we were pushing for regulation of greenhouse gas emissions from the aircraft and shipping industries which so far are not counted under the Kyoto Protocol. I wish we were including those gases in our Kyoto register and in our emissions trading scheme. I know it will happen one day but the sooner we face up to the fact that our considerable 3.4 million tonnes of emissions that come from our international aircraft sector is massive and will be counted one day the better. We may as well start facing up to the truth. 
So in summary I am disappointed that no one else in the House has raised these sustainability issues and has asked the core question. Sure we want to make it cheaper for aircrafts to operate in New Zealand and globally but do we want to support and keep subsidising the aircraft industry in New Zealand through our emissions trading scheme? It is being subsidised for its pollution when we know that we do not have a second planet. Kia ora. 
CAROL BEAUMONT (Labour) 
: 
 I will go back to the issues around the civil aviation Cape Town Convention and the Aircraft Protocol that goes with that and I will talk a bit more about that in the second reading debate on the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill. The protocol as I said relates to aircraft that carry at least eight people and helicopters that carry five or more. The treaty resulted from a diplomatic conference held in Cape Town in South Africa in 2001 as the name suggests. I thought people would be interested to know more about the conference. It was attended by 68 countries and 14 international organisations. Fifty-three countries have signed the resolution proposing the treaty. The convention portion of the treaty came into force on 1 April—gee that is a bad date for conventions to come into force—2004 and has been signed by 28 countries. The protocol which is the bit that specifically applies to aircraft and aircraft engines took effect on 1 March 2006 when it was ratified by eight countries—Ethiopia Ireland Malaysia Nigeria Oman Panama Pakistan and the United States. In the US the treaty was approved by the Senate in 2003 and implemented by the full Congress in the Cape Town Treaty Implementation Act 2004. 
The other dimension is the registry of mobile assets. It has been set up under this convention to establish the record of international property interests in the equipment covered by the treaty which is located in Ireland. Mediation cases for leasing disputes are to be heard in the High Court of Ireland. That is just a bit of background. 
When we look at the bill itself we see that the overwhelming portion of it is the convention and protocol which are appended to it in the schedule. We have the full text of the civil aviation Cape Town Convention and the Aircraft Protocol I have just referred to appended to this bill.  
There are a couple of things I would like to cover off. The first is the Civil Aviation Authority itself. It operates in an international system hence the need for conventions like this. The Civil Aviation Authority as it says in its annual report is an international system and it works within frameworks set by the International Civil Aviation Organization. As a contracting State within the International Civil Aviation Organization New Zealand has responsibility to comply with the standards set by that organisation. It has a number of effects. Interestingly in relation to the points just made by the Green member the other strategic objectives—it has a series of objectives for 2010 focused on enhancing global aviation safety and security—include minimising the adverse effects of aviation on the environment in particular aircraft noise and aircraft engine emissions. I think there is an awareness of the problem. It is an issue for a country like New Zealand where we are reliant on aviation. We are a country a long way from markets that we trade with and indeed we are a country of destination for tourists from all around the world so we are highly reliant on aviation to bring people to this country and to get our products to market.  
Mr Bennett the chair of the Transport and Industrial Relations Committee noted that there is another important role in that we export in the aviation area. I was interested to hear him talk about that matter because my late father Ron worked at Hamilton Airport. He was a mechanic but he went on to get his trade certificate in aircraft engineering. He worked there producing top-dressing aircraft and they were world-leading aircraft. I thought it was interesting that Mr Bennett noted that as a small but important part of our manufacturing exports.  
Talking of that select committee I would like to join with my colleague Darien Fenton. She took the words right out of my mouth in that I too wish a speedy recovery to our fellow select committee member Mr Tau Henare who is as we all know unwell at the moment. While I am talking about that fellow member I note that he is in the interesting position of having his own member’s bill before the select committee. That bill is an interesting one. It is in relation to employment rights. We talked in the first reading about the fact that New Zealand is a country that takes international obligations very seriously. We think it is important to sign up to relevant conventions and to play a good role in the international community in regard to many areas. We have often been in a world-leading role and certainly that is the case in terms of international labour standards. New Zealand played a founding role in the International Labour Organization. We have a proud history in that organisation and in any given international labour conference which is an annual process and is in fact going on at the moment often New Zealand will have people who end up chairing committees or who are involved in drafting committees and we are seen as a country that takes these matters seriously. So it is a bit of a shame that Employment Relations (Workers’ Secret Ballot For Strikes) Amendment Bill is one that I think will see us going in the reverse direction from what we would want to in terms of workers’ rights. Whether that will have the effect of our coming up against what would be seen as international best practice remains to be seen.  
Getting back to the this bill as I was saying before the full text of the convention is appended to the schedule of this bill. Members will be pleased to know that I do not want to go through this bill article by article— 
Hone Harawira 
: Oh. 
CAROL BEAUMONT 
: Well OK because there is a desire for that I will just tell members what the respective articles are. I will not read them out to members given they run to many many pages. In due deference to my colleague from the Maori Party let me say that— 
Paul Quinn 
: Just the flavour. 
CAROL BEAUMONT 
: Yes. Article 1 is “Definitions” and that goes to several pages as members can imagine. Article 2 “The international interest” provides for the constitution and effects of an international interest in certain categories of mobile equipment and associated rights. Article 3 is “Sphere of application” article 4 is “Where debtor is situated” article 5 is “Interpretation and applicable law” article 6 is “Relationship between the Convention and the Protocol” article 7 is “Formal requirements” and article 8 is “Remedies of chargee”. As members can see this goes through a range of articles right through to article 39 40 54—perhaps I will not go through the rest of them for members in the House. Seriously these are important matters that will streamline and standardise processes internationally and that hopefully will have an effect that means there is greater certainty for those who are financing aircraft. We are making sure that instead of a wide range of different domestic legislation applying we will have standards. It will be simpler to use the registry located in Ireland to identify what the status of ownership or whatever of a particular aircraft is and I am sure we are all pleased to know that any disputes will be dealt with in the court system in Ireland which I am sure is a very robust one. I will leave my contribution to this second reading there and I look forward to further comment in the third reading. 
Bill read a second time. 
In Committee 
JO GOODHEW (Junior Whip—National) 
: 
 I seek leave for the Committee stage of this debate to be taken as one question. 
The CHAIRPERSON (Eric Roy) 
: Leave is sought for that purpose. Is there anyone opposed to that course of action? There is not. Leave is granted. 
Parts 1 and 2 schedules 1 and 2 and clauses 1 to 3 
Hon DARREN HUGHES (Labour) 
: 
 The Committee of the whole House is now considering the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill and as signalled to the Minister during the second reading the Opposition has some questions on which we are seeking clarification. I have three or four questions and I know my colleagues have some as well. I should say that we are now considering every clause both parts plus the title and commencement as one question so the comments and observations we are making range across the 15 clauses and the various schedules that are set out in the bill. 
My first question to the Minister in the chair Kate Wilkinson is to note that Part 1 as she will be aware inserts a new Part 12 into the principal legislation. I want the Minister to comment on which of those parts will take precedence if New Zealand domestic law goes down a different path from what may be in a clause within new Part 12. Once it is inserted into the principal legislation presumably Part 12 will not be in a position to be amended by the New Zealand Parliament because it will need to reflect the requirements of the Convention on International Interests in Mobile Equipment which have been carefully negotiated by our negotiators and those who participated in the agreement. If Parliament is to consider other matters to do with civil aviation that amend the principal legislation I ask how new Part 12 which we are inserting in Part 1 will make a difference in our law for this country. I think that goes to the heart of economic sovereignty for New Zealand. If the Minister can give us an answer on that matter it will answer some questions we have about how these conventions fit in when they are not stand-alone and end up fitting in with existing New Zealand legislation. I would be very interested in her comments on that. 
Clause 6 sets out matters that are to be taken into account by the Minister when making rules. It is an amendment to section 33(2) of the Civil Aviation Act. I wonder whether the Minister could set out the kinds of matters the Government thinks the Minister will have to take into account when he or she is making any rules or recommending the making of any rules as part of clause 6. I am also interested in clause 7 which is the procedure for making ordinary rules which the Minister must take into account and the question of consultation. I wonder how that was arrived at. Clause 7(1)(b)(i) mentions “the persons representative groups within the aviation industry or elsewhere government departments and Crown agencies;” and it would be helpful if the Minister gave us a flavour of the kinds of organisations we are talking about there. When the Government uses language like that in legislation that of course we are supporting to what extent is it making that consultation as broad or as narrow as possible? Given that we are talking about simplifying civil aviation rules in other parts of this bill it would help if she could clarify for us who will be affected by the consultation provisions set out in clause 7 for the procedure for making these ordinary rules. Those are just some questions I have and if we could get some answers or clarification on them from the Minister I would be most interested. 
I make the observation that new section 34A inserted by clause 8 gives the Governor-General new powers to make ordinary rules in respect of civil aviation and ask whether the Government gave any consideration to the Governor-General’s other role as Commander-in-Chief of New Zealand and whether that vests just far too much power in the hands of one person. Oh my luck has turned: the Minister of Transport has arrived just to take those questions. I hope the Minister of Labour who has been the Minister in the chair will give him the notes she took of my questions. It would be a shame if I was to be seated and he was not in a position to answer my questions. I am not getting an indication from either of them that that is the case. I will update Mr Joyce who was no doubt behind the Cape Town Convention and the suggestion for it because we know from the feature articles that he has arranged to be written about himself what a quite high opinion he has on the world stage. New Zealand would be quite a small market for him so probably in Cape Town he was the guy who sealed the deal. 
I will recap now that the Minister who is sponsoring this legislation is in the chair. I have a question concerning clause 6 which covers the matters that are taken into account when making ordinary rules. I have another question about clause 5 on the power of the Minister to make ordinary rules and a further question on the insertion of new Part 12 which sits in Part 1 into the principal legislation. If there are changes in other civil aviation law that are not consistent with the convention and if the convention is now being codified as the new Part 12 of the law I ask which one takes precedence. I presume the Government is not in a position to make any amendments to new Part 12 which is presumably the text of the convention that we have signed up to at another level. If the Minister could answer those very simple and very few questions that we have put to him— 
Hon Pete Hodgson 
: They are searching questions not simple. 
Hon DARREN HUGHES 
: It is very generous of my colleague to say so. As this Minister is constantly telling his colleagues nothing is beyond his purview remit or ability so we look forward to elucidation by him of the questions I have asked and those of my colleagues Darien Fenton and Carol Beaumont. Thank you. 
DARIEN FENTON (Labour) 
: 
 While the Minister is consulting I ask that he take note of my questions as well because they are serious questions. I will refer to new Part 12 and the interpretation clause. I note that the national interest analysis states that although reservations are not permitted declarations are. It states: “Article 56 of the convention and Article XXX of the Aircraft Protocol provide that States may make up to 20 declarations ‘opting in’ or ‘opting out’ of various articles in the Convention and the Aircraft Protocol. Declarations are intended to allow some tailoring of the Convention and Aircraft Protocol to domestic circumstances.” It goes on to state that some declarations must be made at the time of accession. 
I am very very interested to get information from the Minister about declarations. In new section 104(1) declaration means “a declaration made by New Zealand under the Cape Town Convention and the Aircraft Protocol”. I am very interested to know whether the Government intends to make any declarations on accession in relation to the convention and whether it has any intention to make future declarations. It is a very very important question. I know that the Minister is occupied at the moment but I would like an answer to that because the answer may well make a difference in terms of whether we continue to vote for the bill. A declaration can completely change the nature of a convention so it is very very important that we get an answer to that. 
The other part of my question relating to new Part 12 is that there is a definition of a “Contracting State” which means “a State that is a party to the Cape Town Convention and the Aircraft Protocol”. In the national interest analysis it talks about the “Obligations which would be imposed on New Zealand by the treaty action the position for reservations to the convention and an outline of any dispute settlement mechanisms.” I have read this several times and I appreciate the efforts to which people have gone to try to make this clear to us but I really cannot understand much of what it means. I suppose my question is what it means in terms of the obligations of New Zealand. What will we have to do as a country? Will there have to be Budget appropriations for the implementation of this convention? Will it require more resources for the Civil Aviation Authority? Will the Governor-General need to have more resources? I would like some clarification of what the obligations are for New Zealand and what the implications are in terms of resourcing. Now that the Minister has returned from his distraction I draw his attention— 
Hon Darren Hughes 
: China’s not a distraction. 
DARIEN FENTON 
: I know he is working; I am not being critical. I know he is just trying to get an answer to our questions. My question earlier I say to the Minister was about declarations and whether we intend to make any declarations on accession to the convention because they must be made at the time of the treaty according to the national interest analysis. I would like to know if that is the case what they are and what difference it will make in terms of the international obligations we have as a country under this convention. 
CAROL BEAUMONT (Labour) 
: 
 It is with great pleasure I rise again to speak on the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill 2010. I have focused primarily to date on the actual Cape Town Convention and its associated protocol. I will talk now about the provisions in the bill that provide more flexibility in civil aviation rule-making. Like my colleagues Darren Hughes and Darien Fenton I will also ask the Minister some questions. 
The reason for the changes in Part 1 are to do with making sure that ordinary rules and the making of ordinary rules are expressed in a more straightforward way. New section 28(5) substituted by clause 5 rules that an ordinary rule may allow “a matter to be determined … by the Authority the Director or any other person; or … empower the Authority the Director or any other person to impose requirements or conditions …”. Amendments are also made in clause 6 to provisions relating to “Matters to be taken into account in making rules”. 
The consultation requirements in section 34(1) which must be observed before ordinary rules are made are amended by clause 7(1) to require the Minister to “(a) publish a notice of his or her intention to make the rule;” and to consult certain persons. I will talk a little more about that provision. It is primarily outlined in clause 5 which amends section 28 the “Power of Minister to make ordinary rules”. I am very interested to know in relation to the consultation requirements—and I know that the Hon Darren Hughes has already asked some questions on this—what the Minister of Transport’s view is on what “consultation” really means and how robust I suppose he believes the consultation process needs to be in the civil aviation area. 
When I look at the annual report of the Civil Aviation Authority I see that the authority needs to deal with some very important matters. As I noted earlier the authority is part of an international system. Civil aviation by its very nature is an international system. The role of the Civil Aviation Authority is to provide policy advice and civil aviation rules development; to certify and license aviation participants; to monitor the compliance to civil aviation and security standards by participants; to educate about and promote aviation rules advisory circulars and other safety and security-related information; to investigate aviation incidents and analyse safety trends; to enforce civil aviation legislation and rules; to publish aeronautical information; and to oversee the administration of the Health and Safety in Employment Act and the Hazardous Substances and New Organisms Act 1996 in the aviation sector. That is a fairly significant range of responsibilities that the Civil Aviation Authority has. They are quite critical: the safety of people who are flying the safety of people who work in civil aviation and making sure that we comply with important legislation. 
I am interested in how the new consultation requirements outlined in clause 5 of this bill the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill will work and in how robust the consultation processes are that the Minister is envisaging in relation to the development of rules in civil aviation. We all know that consultation can mean different things to different people. Unfortunately I have had the experience in my working life where consultation has meant that an employer for example might tell a group of workers something and put it in a notice and that was seen as consultation. I am hoping that consultation in this regard will be more robust and I look forward to hearing the Minister’s response to that question. Thank you. 
Hon STEVEN JOYCE (Minister of Transport) 
: 
 I thank Opposition members for their fulsome analysis of this Civil Aviation (Cape Town Convention and Other Matters) Bill. I think it is very important that it be analysed fully. I will offer a couple of matters in response. Firstly the declarations that were the subject of one of Darien Fenton’s requests are contained in the national interest analysis. They are all laid out there for the member and I refer her to them. 
In regard to—working alphabetically is I think the best way—clause 6— 
Hon Darren Hughes 
: That’s not alphabetically; that’s numerically. 
Hon STEVEN JOYCE 
: No clause 6 begins with “c”. The clauses are all alphabetical and they all begin with “c”. Therefore I can put them in whatever order I wish for that member. 
Hon Darren Hughes 
: He’s the Government’s numbers man! 
Hon STEVEN JOYCE 
: Clause 6—alphabetically and subsequently numerically—amends section 33 “Matters to be taken into account in making rules” of the Civil Aviation Act. It aligns section 33(2) with new section 34A and it states that the Minister is to consider those matters when recommending rule-making action to the Governor-General. 
Clause 7 concerns the procedures for making rules and the whole point of this exercise is to streamline and simplify the rule-making process. It provides some flexibility in terms of the notification requirements. Obviously that still has to be appropriate to the rule-making procedure. 
One of the issues we have in civil aviation is the very long time that it takes to make rules and we are trying to simplify the process and speed it up. In fact civil aviation is unlike other industries. The civil aviation industry in the general rules is looking to make civil aviation rules faster to match the International Civil Aviation Organization requirements. 
Clause 8—which Darren Hughes was concerned about with regard to the Governor-General and his unfettered and outrageous powers; I am paraphrasing the member a little bit—refers to the Governor-General making rules on the recommendation of the Minister. The Governor-General does not wander out and make rules on a daily basis to suit the Governor-General. 
Finally clause 12 does give the convention primacy over the relevant New Zealand law. The convention is consistent with and additional to the relevant New Zealand law. That is the point of clause 12. I think that covers most if not all of the matters raised by members opposite. 
The question was put that the amendments set out on Supplementary Order Paper 145 in the name of the Hon Steven Joyce be agreed to. 
Amendments agreed to. 
Parts 1 and 2 schedules 1 and 2 and clauses 1 to 3 as amended agreed to. 
Bill reported with amendment. 
Report adopted. 
Third Reading 
Hon STEVEN JOYCE (Minister of Transport) 
: 
 I move  
That the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill be now read a third time 
. In the first reading of this bill I advised that by accession to the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment New Zealand will become part of an international system to protect commercial security interests in mobile aircraft equipment. Some 34 States and the European Union have already ratified or acceded to the convention and 31 States and the European Union to the protocol so it is clear there is global support for the regime. Likewise the New Zealand aviation sector and the financial sector have supported accession. It is worth repeating that the estimated financial savings over the next 6 years to the aviation industry including to Air New Zealand could range from $18 million for savings in export credit guarantees to a figure as high as $325 million in reduced financial charges. The benefits will continue into the foreseeable future. 
The Government is pleased to be able finally to bring these opportunities to the aviation industry. I appreciate the support given to this bill across the House and therefore to the Government’s intention to accede to the Cape Town Convention and the Aircraft Protocol by members on both sides of the House. Similarly members’ support of the amendments the bill makes to streamline the rule-making process will ensure that our rules do not lag behind developments in the aviation sector. I commend this bill to the House. 
Hon DARREN HUGHES (Labour) 
: 
 The Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill has made good progress through the House this afternoon. It has met with support from right across the political spectrum in a way that we do not often see in the House. Obviously members have reflected on it and believe it will be of practical application to New Zealand to people who travel and to people who export. As I said in my first reading speech I hope it will also critically enable those in developing countries—be they State-run airlines or private enterprise airlines—that face significant barriers to entry into this market to offer airline services for passenger and freight flights around the world. That has to be seen as a good thing; it cuts the cost of business. This bill does not necessarily of itself change the quantity of flights that are taken but it acts as a way of providing security for those who lease out these very expensive types of equipment and for those who seek to operate them to ensure that they are able to offer people all around the world in some of the most impoverished parts of the world access to these sorts of services for their economic and social development. 
I acknowledge the points that the Green Party made in respect of the environment. It is a matter of enormous regret that we hardly ever hear Government legislation explained in any context of sustainability. That seems to be very much out of vogue with the present Government but I hope that with continued activism on these issues by parties on this side of the House we can make sure that those issues are taken into account as legislation is developed. When we are incorporating an international treaty it somewhat limits the ability of the New Zealand Government to make changes but it would have been nice if at least we had heard some reference to sustainability from Ministers as they spoke. That did not happen today. There was more of a limited view on the dollars and cents aspect and not looking at the opportunities this might provide for people in some of the poorest parts of the world. 
During the Committee of the whole House a number of questions were asked of the Minister of Transport. He took the last speech in that part of the bill’s consideration. His answer to some of the questions was to simply reread the clauses that were already published which was not entirely helpful because we already had them. But he did answer questions in a couple of areas. He was silent on the aspects of obligations which my colleague Darien Fenton mentioned. I was interested that he did not pick up the issue of consultation because that is what one of the clauses we debated in the Committee stage was about. As we sum up the bill and sum up what it does one of the reasons we questioned that issue is that we know this Minister has a unique definition of “consultation”. Some of the processes he follows for consultation are not the standard ones that we would see in many other places. 
Hon Steven Joyce 
: That’s unfair. 
Hon DARREN HUGHES 
: Let me give him one example. This is the Minister who rolled up to the Kapiti coast one day and said that despite what his party campaigned for in Opposition he was going to build a four-lane 100-kilometre expressway through the community. He asked them to let him know what they thought about it in 4 weeks’ time as he was not very busy for the next month so he said they could kick the tyres. He asked them to let him know what they thought about it. I suspect as that plan goes through more and more tyres will be kicked and some of them will be on the Minister’s Crown car. 
Hon Clayton Cosgrove 
: What about the optics? 
Hon DARREN HUGHES 
: The optics get worse and worse on some of these things when we do not consult which is why we are pleased that this civil aviation bill is an example of consultation. Parliament has come together united on it. 
The Minister’s other definition of “consultation” is that if he lived in an area 35 years ago and if he heard of something when he was growing up there as a teenage boy he can come back years later and say that they all knew about it because he remembers it from when he was a teenager on roller skates. This is the definition of something that everyone should expect! 
Putting aside what everyone had thought for the previous 20 years would be the case the expressway proposal for Kapiti that he is advancing is a disaster. I am pleased that he has at least one bill on which he is able to bring Parliament together. What we wanted in Kapiti was Transmission Gully; a local western link road; improvements to State Highway 1; a commitment to our rail services to push electrification further north up to Levin Otaki and Shannon; and the electrification and double tracking that would have ensured quality reliable and affordable public transport services. 
I guess what I am saying as we sum up the bill is that there are two ways of operating. The Minister gets a big tick for this bill—10 out of 10. We will all vote for it. But some of the unusual approaches he has taken to other areas of the transport portfolio are I think worthy of mention at this point. 
Labour has offered its support for the bill. The reasons are obvious and manifest so I will not take any more time now other than to say that I hope the kinds of arrangements that should flow from this convention actually do flow. I am sure that the officials who have worked very hard on making this legislation acceptable in the New Zealand context will be monitoring it and will be in a position to offer advice as time goes on on whether it has had the ability to meet its objectives particularly the objectives that members have drawn to the attention of the House and the Committee today which are the things that we see as being most important to the passage of this bill. The Labour Opposition offers its support for the third reading of the bill. 
DAVID BENNETT (National—Hamilton East) 
: 
 I am speaking in respect of the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill. Most members of the House have exercised the debate on this bill very fully today and it looks as though there is full support across the House and that is good to see. 
The bill amends domestic legislation and some company insolvency and statutory management legislation to enable New Zealand to take part in the convention known as the Cape Town Convention and associated protocols in respect of basic aircraft equipment—basically the Aircraft Protocol and the Cape Town Convention. Those two important documents then become part of our legislative framework in New Zealand. 
The bill amends the powers in the Civil Aviation Act in relation to the making of civil aviation rules. New Zealand’s use of the Cape Town Convention and the Aircraft Protocol will support an international legal regime regarding security interests in aircraft and potentially enable most aircraft operators to secure savings in funding and transaction costs in future aircraft acquisitions. 
This bill is important. It gives us some consistency with other countries and with international obligations. It enables some flexibility in terms of civil aviation rule-making to strike a balance between our international and domestic requirements so that we are more responsive to changes that may occur in the aviation sector. All parties look as though they are supporting the legislation so we thank them for their support and for the way that this bill has gone through the House today. I commend this bill to the House. 
DARIEN FENTON (Labour) 
: 
 I am delighted to take a call in the third reading of the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill 2010. I think it has been a very very interesting debate this afternoon. One never knows what topics will come to the House that will take us into all sorts of interesting territories and I think we have had some very good discussions on this bill. I am pleased that the Labour Opposition is supporting the third reading. I want to go back and reinforce the work of the Transport and Industrial Relations Committee and the officials. Obviously a lot of work has gone into this bill; there is no doubt about that. Negotiations have been involved and the officials have been involved in them. I thank the officials who work in our Public Service who work for the people of New Zealand for all of their work that goes on behind the scenes. I also thank them again for their efforts to try to help us understand what is indeed a very technical bill but we all seem to understand that it is a very very good thing and that is why we are supporting it. 
I wanted to pick up my colleague Carol Beaumont’s point about consultation. I think this is a good model of consultation that the Government could consider for future bills. I was looking at the national interest analysis which talks about the consultation that took place. Obviously this was started under the previous Labour-led Government so there was consultation with the aviation sector the Financial Services Federation and Toll NZ in 2005-06 and then in May 2009 further consultation was conducted with a range of parts of the aviation sector and aviation stakeholders. 
It is interesting to go through them. There was a variety of views to start with on this bill. Air New Zealand of course first proposed consideration of accession and as a group of companies continues to support accession. I am pleased just speaking about Air New Zealand that I have had the opportunity again today to commend our national airline to say how proud we are and to say how thankful we are that a Labour-led Government rescued it— 
Hon Member 
: Bought it. 
DARIEN FENTON 
: —bought it for the people of New Zealand and it is a very high-quality high-standard airline. The 8000 workers who work for Air New Zealand do a fantastic job. 
Airwork (NZ) Ltd supports accession to the convention. The Qantas Group is no longer here but its subsidiary Jetconnect was neutral but it has now decided to support accession. Pacific Blue was originally supportive but it did not respond on the subject of internal transactions so I do not know what happened with it. The Aviation Industry Association of New Zealand can see benefits to industry from accession and remains supportive. The Flight Safety Foundation was originally supportive provided that internal transactions were excluded from coverage but it has since agreed to internal transactions being covered. The Royal New Zealand Aero Club which is a general aviation interest group supports accession. Toll NZ supports accession to the convention and it wants to be consulted in the future regarding accession to the protocol on railway rolling stock and KiwiRail has now confirmed that position. Vincent Aviation Ltd supports accession. The Aircraft Owners and Pilots Association was consulted but did not respond and then a range of ministries were also consulted. 
As I have said the Transport and Industrial Relations Committee then examined this treaty. With the assistance of officials we were given a very good explanation. As I said it is a highly technical convention so we really appreciated the fact that there was a briefing to the committee because sometimes select committees can decide that these things are just a little bit too boring and that there should be just a standard report back to the House. We did not do that; we asked for a briefing. As I said we appreciate the efforts that the officials went to in order to help us to understand the convention. 
So I am pleased that Labour is supporting this bill. As I said we have had an opportunity to traverse many areas in this debate. There are some issues that I would like to repeat very briefly on the matters of conventions. We are disappointed that we seem to be able to support some conventions but not others. Other conventions would do something about the fundamental rights and protections for workers in particular and other members have talked about other conventions. There are some civil aviation authority issues there are some air transport issues and there are some safety issues. I am interested in those and again I think the Civil Aviation Authority does a fantastic job with the scarce amount of resources it has. I had a bit of a concern that it would be expected to implement this convention with no extra resources. We asked the Minister about that but we received no response. 
In closing I thank everybody again—the officials in particular. It is good to be part of a bill that the whole of Parliament is supporting and we are pleased to support it. 
GARETH HUGHES (Green) 
: 
 I was not going to take a call on the third reading of the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill but given that Minister Joyce is here I thought I would take the opportunity to do so. 
First of all I would like to send my best wishes to Tau Henare who is a member of the Transport and Industrial Relations Committee. I thank the officials who have worked on this bill for all the hard work that has gone into it. I would also like to thank Darien Fenton for her contribution to this debate. There are other conventions that we probably should be discussing and it would probably be more fitting to be discussing them under urgency rather than this bill. 
I am glad I am supporting this bill and I am glad that the Greens are in this House and are able to raise the environmental issues. It is a pity the Minister of Transport was not here for my second reading speech but I am sure he will eagerly look it up in  
Hansard 
 to find out about the climatic and environmental impacts of our airline industry. 
I heard the Minister pick up on the figure that we could be saving—up to $325 million. That is not a figure to sneeze at but I guess it is in the context of other wasteful spending by this Government including the “Puhoi to Wellsford Holiday Highway” which has a benefit-cost ratio of 0.8 meaning we will not see any extra benefit economically from this one project. I would like to see more prioritising from this Government on where it is putting its transport focus and where it is spending its scarce transport dollars. 
I talked a little bit about the environmental cost but what I would like to touch on now is the opportunity cost of this bill. I would have preferred it if we were discussing the sustainability issues around the aircraft industry because there are things—and I addressed them in my second reading speech—that we could be doing right now to lessen the greenhouse gas emissions and the environmental impacts of aircraft industries on the planet on the climate and also on the communities that are impacted by both noise pollution and particulate soup pollution. 
I think we could have been debating the Sustainable Biofuel Bill which is still on the Order Paper. It was introduced by my colleague and predecessor Jeanette Fitzsimons. Air New Zealand has been using atrophy in its air fleets as a biofuel alternative to kerosene. I think this is something that needs more investigation to make sure for people and the planet that the sustainability of the fuel is ensured. 
I would have liked to be speaking about our rail lines in New Zealand. I would have liked to be talking about a Hamilton to Auckland rail link for example which could help to reduce the demand for air services and be more efficient more cost-efficient and more economically sane than what we are seeing. This is what we are seeing overseas. Governments and private companies are putting more focus on fast and more efficient rail links than on expanding a greenhouse gas - causing aircraft industry. Once again I lament the use of urgency. I feel it is pointless especially in relation to this bill. It did not need to go through under urgency. 
Lastly I challenge other members of this House to be like the Green Party and maybe consider offsetting their flights. It is a privilege as a member to use domestic air travel in New Zealand. We all know that the impact of one flight to the UK is more than a Swedish citizen will emit in an entire year—just one flight. We are spending hundreds of tonnes of carbon on our budgets. I challenge all members to take up the Landcare challenge and think about offsetting their own flights from their own personal budgets and pressuring the Speaker to see whether the House can do it for us. Kia ora. 
CAROL BEAUMONT (Labour) 
: 
 It is with great pleasure that I rise to speak on the third reading of the Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill 2010. I thank the previous speaker Gareth Hughes for his challenge; I will certainly think seriously about it. It has been a very interesting debate. Perhaps if I am honest I would say that it has been more interesting than I expected it to be. 
Grant Robertson 
: But you had low expectations. 
CAROL BEAUMONT 
: Ha ha! 
I am a member of the Transport and Industrial Relations Committee which received a presentation on the matters around the Cape Town Convention. Again I join with colleagues in thanking officials for the work they did on that convention. It is important that New Zealand signs up to relevant international conventions. The convention and the associated Aircraft Protocol deals with a serious matter and that of course is about items that are by their nature very mobile—that is aircraft—and about the fact that those who are financing those aircraft need to know the status of those aircraft. It provides for a simply accessed registry based in Ireland and that is positive. 
The full wording of the convention and the associated protocol are part of this bill and will be included in schedules to the Civil Aviation Act. It standardises transactions involving movable property and sets down international standards for registration of ownership and for securing the interests of all parties. As was said earlier that is important particularly in relation to the fact that otherwise rules are based on domestic legislation in different countries and that is not really very helpful with something like a plane which moves all around the world. 
The other matter the bill contains is of course the ordinary rule which tries to clarify—let us be straightforward about this—how civil aviation rule-making is done. It provides for ordinary rules to be determined by the authority the director or other persons and it imposes requirements and conditions on those rules. As I outlined in some detail consultation requirements must be observed before ordinary rules are amended. Those include the requirement on the Minister to publish a notice of his or her intention to make the rule and to consult. 
I reinforce the point that has been made by a number of speakers including myself that consultation requirements are important. We need to have confidence that consultation is not just window dressing or something done in an ad hoc manner but is taken very very seriously. I hope that the Minister of Transport has taken that on board in this discussion. Certainly in relation to many other matters consultation has been a sham. I use the Auckland super-city as an example of very poor consultation and of disenfranchising the people of Auckland of whom I am one. 
Also I touched on the work of the Civil Aviation Authority and I acknowledge that agency. It is doing a very important job. It is a very serious area with a lot of security issues and safety issues for the travelling public and for the people who work in that industry. They have a wide range of responsibilities which I outlined. 
A number of us have commented on the fact that signing up to international conventions is important in terms of playing our role globally. New Zealand has always taken those responsibilities seriously. The Transport and Industrial Relations Committee of course covers both transport matters and what are called industrial relations matters but are broadly employment issues. I have raised as my colleague Darien Fenton did our concern in relation to employment matters that perhaps New Zealand through various actions of this Government is at risk of getting into difficulty with international best practice in the employment relations area. 
Interestingly enough the Civil Aviation Authority in its annual report covers matters relating to employment issues. I thought it was worth noting that and congratulating the authority on the fact that it has a good-employer programme. The programme covers seven main areas: leadership accountability and culture; recruitment selection and induction; employee development promotion and exit; flexibility in work design; remuneration recognition and conditions; harassment and bullying prevention; and safe and healthy environment matters. So both the transport and employment relations matters are together in one annual report and I acknowledge and thank the Civil Aviation Authority for its efforts in terms of being a good employer. 
It is a pleasure to join with my colleagues and stand to speak on this bill. We are of course continuing to support it. 
Bill read a third time. 
Policing (Involvement in Local Authority Elections) Amendment Bill 
First Reading 
Hon JUDITH COLLINS (Minister of Police) 
: 
 I move  
That the Policing (Involvement in Local Authority Elections) Amendment Bill be now read a first time. 
 Nearly 2 years ago when the Policing Act 2008 was passed there were some provisions within that legislation that set some police staff apart from their fellow State servants. Under section 99 of the Policing Act all constables authorised officers and supervisors without any constabulary powers must be placed on leave if they want to stand as a candidate in a local authority election and if they are elected they must resign from the police. 
Under section 115 of the Act there is an exception for police who were sitting members of local authorities at the time the Policing Act came into force on 1 October 2008 but only for as long as they are re-elected. For other State servants however there is no law that stops them from standing or serving on a local authority. They are simply required to remain politically neutral in what they do and follow any departmental rules that are in place. Any conflicts of interest must be declared but it is up to the individual and the department to manage them. This Government sees no reason why police should be treated any differently and that is what this bill aims to achieve. 
If this bill is passed then police will have in place rules and policies along the lines of those of other Government departments which have to manage any actual or perceived conflicts of interest that may arise. Many members of the police already have strong relationships with their communities. It is common to have area commanders community constables and other police working together with local councils to make their local community safer. Making it easier for police staff to serve on local councils will help strengthen that relationship. This Government is keen to ensure that when it comes to standing for public office all police employees enjoy the same democratic rights as any other State servant. On that basis I commend this bill to the House. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 Let me say from the outset that the Labour Opposition will support this bill. As the explanatory note of the bill states in the original policing Act the Police Act 1958 there was a framework for prohibiting police from standing in local authority elections but as the bill states the additional step required—naming the relevant local authorities in regulations—was never taken. It is a fact that in 2008 the Labour coalition Government at the time with New Zealand First passed the Policing Act of 2008 which as the Minister said put the prohibitions in place. Let me say that one of the primary reasons for that at that time was a political reality—which I am sure all members of the House are aware of—in the form of coalition partners. One has coalition partners and one has demands from coalition partners as this Government has had from its coalition partners. A demand was made by New Zealand First and I think Ron Mark led the charge at the time or was particularly passionate about it for a variety of reasons and it was agreed to. I join with the Minister—I know this is a rare occasion—in expressing— 
Grant Robertson 
: It is noted. 
Hon CLAYTON COSGROVE 
: My colleagues have noted it—another black mark against my name! I join with the Minister in expressing the view that the previous legislation affected about five serving police staff. One of them actually resides in my electorate and is very good—and my view is that all the councillors are very good in the Waimakariri district. He is Constable Robbie Brine. There is the need to manage conflicts of interest around issues of say implementing by-laws that the constable may be voting on as a councillor in a council capacity with the epaulettes off and then having to implement those by-laws as a policeman with the epaulettes and the hat on. I know that Councillor Brine and the other police officers who serve as elected officials manage those conflicts of interest pretty admirably. I am sure though that there will be those in the community who will have a view to the contrary but when I speak for my patch I can say that the police constable who is a councillor manages those roles professionally and does an admirable job as all my councillors do. 
I would say in passing that it is a pity that this bill could not go before a select committee although I acknowledge that local body elections are relatively close. But our side of the House would still argue that there was time and I know we would have cooperated on this issue in respect of if you like a turbo-boosted select committee process to at least examine the issues and perhaps give organisations like the Police Association and others a chance to express a view on this. 
I want to again join with the Minister and say that our police who act as leaders on local authorities within our communities do a pretty superb job. In fact one could argue that the nature of police work means one would bring about a safer community. Certainly if I use the Waimakariri District Council case I can say we have a safer community council as many other districts and cities do. I think it adds to the expertise of a local authority to have a law enforcement officer not only as part of the discussion but as an elected official who can bring his or her—in this case his—expertise to the table especially in smaller towns like in this case Rangiora or Kaiapoi or Oxford in my area where police are community leaders. Whether or not they are elected officials they are treated like elected officials especially in towns like Oxford and they are probably treated with a heck of a lot more respect. But they are on call 24 hours a day and whether they are in the blue uniform or in plain clothes as a councillor people know them because they have a high profile as police officers. As I said they are on call as elected officials are when they wear the blue uniform 24/7 and when they do not. 
I think this bill is a good bill. As I said I would have preferred it to be referred to a select committee for an expedited examination through the select committee process of the issues pertaining to it. I say that for two reasons: firstly it is always appropriate to health-check legislation and make sure we have it right; and secondly it might have demystified some of the criticism from some in the community in cases where police have that dual role. I think it would have given a chance for if not the policemen who are councillors themselves then certainly the Police Association and others to highlight the appropriateness with which those five serving staff act as elected officials and perhaps also highlight some of the advantages in the additional skills that law enforcement officers can bring around the council community board or local authority table. Certainly I do not think it is a disadvantage to have a constabulary staff member on a local authority. I think that it can only add value because local authorities today delve deeper and deeper into social issues especially when it comes to community safety. I have talked about safer community councils. 
When it comes to combating youth crime many of our councils—and again I go back to my own council the Waimakariri District Council—are taking greater and greater responsibility for looking after their own patch assisting the police in law enforcement and engaging in programmes especially around youth crime. They want to take greater responsibility for those issues. To have a police officer who not only assists with advice in that capacity but is also an elected official I think provides some additional mana and a higher level of expertise as one who can stand around the council table and although being careful not to speak as a sworn police officer can speak bluntly as a person who has experience. Treading that fine line can only enhance debate skills and knowledge in local authorities. 
I know there are some who as I said at the start say: “Hey isn’t there a difficulty constitutionally?”. For instance if we take the boy-racer issue councils are implementing by-laws. It may be the case that a police officer is called to vote and speak on a by-law about boy-racing in restricted areas and then to put on the blue uniform on Friday night and go and implement those by-laws. There are those who may say: “Hey isn’t there a conflict of interest in respect of that?”. To my knowledge I do not think there has been a time when those potential conflicts of interest have not been able to be managed either by the local authority itself or the constable who is the elected person. 
I think that common sense prevails. Like any issue where there is a conflict of interest there is the ability to declare it and to walk away from the table to walk out of the room and say: “Hey it is too close to my professional occupation as a police officer.” or any other profession or occupation such as a lawyer a doctor or whatever. Those people can say: “I will walk out of the room and leave those issues in abeyance for the council to decide.” I certainly have not seen examples—although maybe others have—where those issues have not been appropriately managed. Of course if they are not appropriately managed the officers are responsible to their hierarchy. We have had issues of conflict of interest in regional councils—even in my own patch—where the Auditor-General has come in and made judgments about that. I think there are basic and common-sense mechanisms in place whereby if people are concerned about a conflict of interest they can be managed by the common sense of the officer/councillor by the powers under the local government legislation and through the Auditor-General and equally through the authorities disciplinary processes and common sense of the police hierarchy—superintendents district commanders and the like. 
In essence Labour supports this legislation. We believe that it is appropriate. I suppose we would have liked to see it go through the quality-control process of a select committee but we support the legislation. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I am delighted to speak on the Policing (Involvement in Local Authority Elections) Amendment Bill. The objective of this bill is to remove the restrictions in the Policing Act to enable all police employees to stand for local council elections without being placed on leave. If elected they would not need to vacate their position as a police employee. This bill will ensure that police employees are not treated any differently from other State servants who are not prevented by legislation from standing for election and serving on local authorities. 
In response to some of the comments that have been made regardless of whether someone is a police officer a shopkeeper or a Government employee in another capacity if that person is not doing a good job as an elected representative of his or her community then the community will not elect that person next time. That is the discipline for anybody standing for council and it is no less so for someone who is employed as a police officer who stands for council. If the community feels that that person is just not working then that person will not be re-elected to the council but will be left in the police employee position. That is the way of elections for local authorities. It is that simple and I do not think it needs expedited examination as the previous speaker Clayton Cosgrove suggested. I think the legislation is too simple to waste the time of the House on when it can go through the House simply and easily. The bill just corrects one of those anomalies that we often come across in the course of looking at legislation. 
I am delighted to commend this bill to the House and to watch it proceed through its stages. 
Hon GEORGE HAWKINS (Labour—Manurewa) 
: 
 The Labour Party supports this bill and I thank the Minister of Police for bringing it to the House. I will wait for just a second as I thought a bolt of lightning would hit me for saying that but nevertheless it has not. I think this legislation is very important because it will clear up many uncertainties. With the Auckland legislation having gone through the House people who are police officers have been wondering whether they can stand for election and whether the grandfathering rights they had will still prevail. I have talked to people in the House about this and I must say that I am pleased that this has happened. 
We have people in Manukau who serve the council who also serve the community as police officers. Councillor Alf Filipaina is a councillor for Manukau in the Mangere ward and he does great work with young people especially. Being a police officer does not restrict him in his council work. Very sensibly he has the ability to not involve himself in voting on certain by-laws and things like that but also he is a person who does very important crime prevention work. The Counties-Manukau Police District is not the easiest area to police. It needs people who know their community and I think that Alf Filipaina does. It may sound a wee bit like a party political speech to sing his praises but he is a person whom I think the whole of Mangere is proud of. I imagine that when the super-council is selected he will be one of its members and I think that is very important. 
Alf Filipaina gets out in his community but sometimes he goes across the border. He may go away from the Mangere ward and out to Manurewa Papatoetoe Otara or Pakuranga and he joins in things with a spirit that I think should be duplicated by many others. He is the sort of person we call a “decent bloke” and I think it is very important that we allow people like that to be elected. 
The chairman of the Manurewa Community Board is a guy called Mike Bailey who works for the police. He is a police officer. Not only is he the chair of the community board but also he marries people and he dispatches people. He is another person who is totally involved in his community. We have people like Angela Cunningham-Marino on the community board who is also a police officer. She works to help people in the community in many ways. It is these community-spirited people who are working to help people who are suffering from heart disease and helping people who need guidance and strength. Having police officers like that on community boards and on councils is very important. 
Labour as I said will support this bill. I would have liked it to go to a select committee. I know that time is short but I thought a 1-day hearing would not be bad. We could have had the Police Association along and the Police Officers Guild if we had had this bill before a select committee for a day. But that is not to be. I am sure—in fact I am positive—that it will not stop the Police Association from having its say one way or the other. It will do it very publicly. Greg O’Connor is not slow in saying what he thinks on issues that affect his officers. 
It is interesting to have a look at the people who want to serve their community in a way that encourages the community rather than discouraging people. In the Counties-Manukau area we have many many young people who have lost their way. It is the police that we look to to help those people. Yes we know that Child Youth and Family Services do a good job in many cases and we know that there are other agencies but to have people who work for the New Zealand Police and who in their own time get out and support those young people is truly important. They are the heroes of the local community. Whenever I see Alf I see that there is a guy with a big smiley face and a warm handshake. He always greets everyone in the same way. 
Simon Bridges 
: Sounds like me. 
Hon GEORGE HAWKINS 
: No he does not sound like the member for Tauranga who used to try to get people put in jail all the time—in the end I think that people got off because of his skills. When we have people like Alf doing the sort of work he does it is good. We should not be putting obstacles in the way of these people wanting to stand for council. If we put obstacles in their way then of course we lose a lot of talent and a lot of ability. 
When a similar bill that led to this one came before the House it was because Ron Mark the New Zealand First Party member—members will probably remember Winston Peters and one or two others. 
Hon Judith Collins 
: No. 
Hon GEORGE HAWKINS 
: Oh no some people cannot remember Winston Peters. Well I think he is busy working away. For ages and ages Ron Mark wanted no police to be on council. Even when I was Minister of Police he was trying to make sure that police officers could not work as councillors in their community. When one has— 
Dr Cam Calder 
: What was he? 
Hon GEORGE HAWKINS 
: There is the member from the North Shore or somewhere—Cam Calder I think it is. He has woken up. I see the ornament of the National Government is smiling in the back row as well. However in the end we should have people who can be a bit bigger-minded than Ron Mark was. I think Ron Mark took a very narrow view. 
One of the problems when we have coalitions is that sometimes deals are done. It looked as though a deal was done with the Tuhoe people but then all of a sudden it was pulled away. That is the nature of coalition Governments. Coalition Governments make deals and they break deals. People are promised that there will not be any increase in GST and then there is. I am not blaming just the Maori Party or ACT for that; they are all guilty the whole lot. I think that Ron Mark went too far. He went to the stage where he personally disliked a police officer and then came up with the legislation that put on restrictions. 
I am pleased that the Minister has this bill in the House today. The Labour Party will support it. I hope that many people vote for Alf and his team when they stand at the council elections this year. 
METIRIA TUREI (Co-Leader—Green) 
: 
 The Green Party is not supporting the Policing (Involvement in Local Authority Elections) Amendment Bill. We supported the Policing Bill of 2008 which had this change—[ 
Interruption 
] The Minister of Police can cackle all she likes over there but it is important to have a chance to explain why we have decided that we will not be supporting this bill. 
At the time that the original legislation went through in 2008 we agreed unusually with New Zealand First that this issue was about the separation of powers between those who make the law and those who enforce the law and that there was a compelling case to say that those who are responsible for enforcing the law should not be part of the process of making it. There are serious conflict of interest issues. There are issues for constituents who may well need to have a person like a councillor representing them on a matter that deals with a law that that councillor may or may not have made but who is responsible for enforcing. 
There are many areas of our law where we are clear on the separation of powers between those who make the law and those who enforce the law. This seems like an appropriate time to make that similar distinction. Since the time we supported the provision the last time it was put forward by the Labour-New Zealand First Government we have had no evidence or compelling case made to us as to why we should change our position. 
Of course the difficulty is that because this Government is so obsessed with the excessive use of urgency once again the community will not have an opportunity to explore this issue in full. This is the very important issue of the separation of powers. We would have been very prepared to consider the evidence that would have come to a select committee in order to see what the circumstances were and to hear arguments as to whether we should continue to support this legislation. We have maintained an open mind on that basis. But because there will be no select committee process because this Government is pushing through this legislation for no good reason then neither we nor the rest of the community will be able to explore those issues in full. Because we supported the provision constraining police from acting as councillors or local body authorities we can have no other position than to continue to support that. 
Again it is very difficult when legislators such as ourselves and the community are unable to explore important constitutional issues such as the separation of powers and the question of whether those who enforce the law should also be responsible for making it because of this Government’s misuse of urgency and its failure to uphold the democratic right of our community to have a say. We will not be supporting this bill. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 At first glance this bill the Policing (Involvement in Local Authority Elections) Amendment Bill seemed to be one that all things being equal should have been quite straightforward. The bill amends the Policing Act 2008 the purpose being to remove the current restriction in the 2008 Act that does not allow police employees to stand in local body elections. If successful the bill will enable all police employees to stand in local body elections without being placed on leave and if they are elected they will not have to resign from their jobs as police employees. 
When the Maori Party initially read this bill we thought that it was fair enough that the police should be treated like any other employees and should qualify for the opportunity to stand in local body elections. But then two central concepts came into view: the current context and public perception. Today is hardly the best day to be considering the issue of public confidence in the New Zealand Police. Let me count the ways. 
The first count is DNA samples. Firstly in the heat of the debate generated by my colleague Hone Harawira’s claims about the undue pressure brought to bear upon Maori youths to submit DNA samples to the police criminal lawyer Graeme Newell also spoke up about these concerns which he shares. Mr Harawira has supported a number of youths and their families to take the appropriate action by referring their complaints to the Independent Police Conduct Authority. The basis of the complaints is that those rangatahi who are under the age of 17 have been persuaded by the police to submit DNA samples on the pretence that it might help to identify their relatives or would be stored on the off chance that they would be killed and would need to be identified. Mr Newell then came forward saying that he knew of a case where a police officer had offered a boy a cigarette in return for a DNA sample. 
The second count is police pursuits. The second issue to take the headlines in the last 24 hours was a meeting that the Minister of Police Judith Collins had with the Commissioner of Police Howard Broad to discuss police recommendations for vehicle pursuits after two separate reviews. The urgency of investigating the proper procedures around police pursuits came tragically into view through the death of Troy MacKay a Christchurch man who died on Sunday when his car hit a tree after he was pursued by the police. New Zealand now has the unfortunate record of having lost seven lives—people whose lives have gone through the course of their being pursued by the police. 
Of course one can never ignore the need for the police to intervene when it is evident that offending is taking place whether that be on the road or in leaving a criminal scene. But when we are talking about a Government agency we must be painstakingly clear that the protocols and policies that form the operational procedures are adhered to rule by rule. 
We understand that two separate reviews have been undertaken into the situation. One is being undertaken by the Independent Police Conduct Authority and the other is an independent review conducted by the New Zealand Police. The reports have invited further questions about whether it is appropriate for the police to initiate high-speed chases for minor offences such as speeding and property theft or for the suspicion of criminal activity. We need to have that debate as we consider the right balance between the preservation of justice and the preservation of life. The nation has lost seven young men in as many months of whom the youngest was 22 and the eldest was 38. Let not their lives be in vain. 
The third count is sexual misconduct. The final piece of evidence stacking the odds was yesterday’s release by the Controller and Auditor-General of its second monitoring report on the recommendations made by the 2007 Commission of Inquiry into Police Conduct. The letter from Phillippa Smith the Deputy Controller and Auditor-General spelt out clearly why the police force must work hard to implement the cultural changes it suggests are critical after an inquiry was held into allegations of sexual misconduct by the police. The inquiry we recall was established after several allegations of sexual misconduct against police officers were made. The Auditor-General’s report recommended that there be an extensive cultural change in the force. Ms Smith stated: “The benefits of change include the public having confidence in the integrity and conduct of the Police. Public confidence is essential for effective policing.” But another worrying line in the release from the Auditor-General’s office was the revelation that progress would stall unless a more concerted effort was put into making the recommendations work. 
One of the key recommendations from the report is that the police must as an organisation value and use external views on police culture and behaviour. This could be done for example by obtaining more feedback on police officers’ behaviour and service delivery through community engagement and by learning more from complaints information. 
I believe that all those three areas of current controversy—DNA samples police pursuits and sexual misconduct—cannot be ignored when we come to this bill. But there is the broader context too of the longstanding history of police responsiveness to Maori. I acknowledge the absolute commitment that I know the police are making to improve their performance in this regard. We recognise the valuable role that almost 50 iwi Pacific and ethnic liaison officers in the police force play in helping to create purposeful relationship-building with iwi and Maori social service providers. We also acknowledge the quality of the police projects involving partnership with iwi and community agencies that are intended to specifically address Maori offending and victimisation. 
Although the gap between the perception and the reality has been reduced we cannot forget that trust and confidence in the police is lower among Maori than it is among the general population. Countless reports have demonstrated that Maori feel alienated from the police and from criminal justice agencies. The research frequently concludes that a key reason for this lack of responsiveness is that often there is a perception that individuals within the police force lack knowledge of and sensitivity to Maori values culture history and beliefs. I stress that we often talk about perception but as all politicians know only too well perception is everything. When we come to this policing bill we must be mindful of the impact of perception. 
The Maori Party has thought long and hard about this issue and we have greatly appreciated the way in which the Minister of Police has responded to all of our queries about the effect of this bill. We fully understand that any police employees who decide to stand for local authority elections and those who are subsequently elected will still need to abide by any internal policies that the police may have in place. We also accept that such employees must abide by the code of conduct which sets out that where employees participate in political matters in a personal capacity they must not bring themselves into conflict with their primary role as police employees. That is all well and good on paper but when it comes down to the wire we return to the impact of the current context and of public perception. Quite frankly when we talk to our constituency no matter how wonderful the local community cop may be the perception of the police in general is adversely affected by longstanding views about the reputation of the police. Those views are not helped in any way by the events that I mentioned earlier on. 
Finally we were prepared as a party to support this bill’s referral to a select committee but because of the decision to take this bill through urgency we will have to oppose the bill at every reading. We remain convinced that the issues of perception inherent in this bill must be put to the test of public opinion through the select committee process. Thank you. 
MELISSA LEE (National) 
: 
 It is a pleasure to rise to speak to the Policing (Involvement in Local Authority Elections) Amendment Bill. I will begin by declaring a certain fact: I like the police. I tremendously respect our men and women in blue for three reasons. Firstly I was involved with the Asian advisory to the Auckland police. Secondly I was a victim of a crime and the police came to the aid of me and my family. Thirdly I love the Minister of Police and she does a tremendous job. 
But aside from those reasons one needs certain standards to be a police officer —there are standards. One needs to be a good citizen over 18 years of age upon graduation from the police college community-minded fit healthy and bright enough to pass a range of assessments. I suppose police officers also need to be patient because they are involved in highly charged emotionally charged situations when they are arresting people. They must have excellent communication skills and they have to be loyal committed and have high levels of integrity. In their role they influence the lives of many people. So being able to make tough judgment calls as well as establishing strong personal relationships with the community networks that they have and confidence in the wider community is integral to the job they do. As well as responding to crime police officers have to look at the bigger picture. Solving crime is about not just answering the question as to who did it but also why. This requires an ability to understand the community that they serve and more important the ability to identify and examine the problem that leads to crime. 
Surely the skills that police officers possess are excellent skills for someone standing for a local authority. It seems ridiculous to me that at the moment police officers are unable to stand. Removing these restrictions can lead only to a better partnership between the police and local authorities. Furthermore a more ridiculous thing is that some police officers are able to do it yet some are not depending on when they became local authority members. I support this bill and I commend it to the House. 
CARMEL SEPULONI (Labour) 
: 
 I will take a moment to acknowledge our police force and the wonderful work that it does. Often it is a thankless job and the manner in which policemen and policewomen undertake their work is admirable. Members on this side and I think across the House would say that we all have respect for the police force. I will not go as far as the previous speaker Melissa Lee did in acknowledging the Minister of Police; I will leave it there. 
Currently under the Policing Act 2008 if one is employed by the Police as a constable authorised officer or supervisor one must take leave of absence if one intends to stand for election to a local authority or council. If successful that person has to resign from the Police. The provisions of the 2008 Act clarify provisions in the previous Police Act that also prevented police officers from standing in local body elections but that were never fully enacted. The reasoning behind the provisions was that it was perceived to be wrong to have the same people making and enforcing regional by-laws. The Policing (Involvement in Local Authority Elections) Amendment Bill which we are currently debating will remove that restriction. Policewomen and policemen will be able to stand for election to local authorities without taking a leave of absence and if successful they will not have to resign from their police duties. That will put the police in the same position as other public servants. 
I think we need a little bit of background to the legislation that Labour put in place in 2008. Labour passed the Policing Act in 2008 and the restriction on police officers standing as councillors was subject to a lot of debate at that time. We believed then and we still believe now in having a full and transparent democratic process so it is a little concerning that we are ramming this bill through the House under urgency with no select committee consideration. None the less we will be supporting this bill. When we put through the 2008 legislation we ensured that all the provisions would stop conflicts of interest from occurring. Police officers were not discriminated against; they could still be involved in local body politics but at the time that meant standing for election only to a community board because a police officer did not have the same perceived risk of a conflict of interest by sitting on a community board as by being a councillor. It was a difficult decision to make at the time and there was a lot of discussion and debate. In the end Labour decided to enact what the Police Act 1958 had originally intended. 
This Government must ensure that the perception of conflict of interest is safeguarded against. A councillor helping to pass a by-law and then enforcing that by-law in his or her role as a police officer will raise conflict of interest issues. However that can be avoided relatively easily by having the councillor in question declaring his or her conflict of interest when the by-law is being debated in council. We have seen that occur with the five police officers who were councillors at the time that the 2008 legislation was passed. They were allowed to continue in that role and from what we have heard there have been no complaints with regard to those five particular councillors. 
This issue does not affect many people. At the time that the Policing Act 2008 came into force as I said only five police officers were serving as councillors across the whole country. Labour was careful to ensure that those five councillors were able to continue fulfilling both roles for as long as they were elected representatives. I acknowledge the work of those five councillors. Again I say that at no point have there been questions of undisclosed conflicts of interest with regard to those councillors. They have carried out their duties as both police officers and councillors are expected to do and they have done so admirably. My colleague George Hawkins was talking earlier about the example of one of those five councillors Alf Filipaina a Manukau City councillor. Clayton Cosgrove had another example from his area. I have to agree with both of those members and especially with George Hawkins with regard to Alf Filipaina. He has always conducted himself with integrity. Without being politically biased I say that he has fantastic politics and he is a respected member of the community not only as a police officer but also as a councillor. I think that we need those types of people in both those roles so we would not want to take that opportunity away from them. In so many ways they are good examples of why we should support this legislation and of why we are supporting it. 
I spoke to Alf Filipaina about this particular bill and discussed with him whether he has ever been accused of not declaring a conflict of interest and he said: “Not at all. That has never arisen.” Although he was the chair of the transport committee and issues could have arisen there he was very careful to ensure that whenever there was anything to do with by-laws and enforcement he declared that conflict of interest and stepped back. There was transparency and no one could question his integrity with regard to any involvement that he might have as the chair of the transport committee for the Manukau City Council. That seems to be the case across the board for the five councillors who are currently police officers as well as serving as councillors in their areas. 
Labour would have liked to see this bill go to a select committee because we would have liked to hear the opinions of the public and of police officers. I know that this is a big concern for the Green Party which is part of the reason why those members will not be supporting this legislation. It is also our concern that we will not get that opportunity because this bill is being passed under urgency. That is disappointing but we recognise that the New Zealand Police Association and the New Zealand Police Managers Guild have been consulted in the development of this bill. As police officers seem to be largely in favour of removing the restrictions on becoming councillors Labour will be supporting this bill based on that support. 
As I said before police officers regularly demonstrate their commitment to local communities. It is only fair that they get the opportunity as all other public servants do to further demonstrate that commitment by standing for election and by serving on local authorities. Most people who are in the position of being a councillor or a local body representative have other jobs so many of them have declared interests as well. Given that that is the case and that a strong case has been put forward by the police with regard to why they should be allowed to do that we think it is important to support the bill. There is no argument against this Government bill from this side of the House for once which is a very rare thing. We support this bill. Thank you. 
CHESTER BORROWS (National—Whanganui) 
: 
 I am very pleased to see that the Labour Party has been a little circumspect on the decision that it made some time ago and is now listening to Councillor Filipaina and the submissions that he has made. It is a shame that despite his politics in the past those members were not listening quite as well as they could have been and they did not take the opportunity to vote for a sterling amendment—that being the submitted Supplementary Order Paper 213 which would have allowed police officers to continue in that role at the time. However it is great that those members have now come to that position. 
It is interesting to note around the House the number of members who just from my knowledge have connections with the police. Of course we have the Minister of Police here who is the wife of a former policeman. We have the daughter of a policeman sitting over there—Jacinda Ardern—and a former Minister of Police the Hon George Hawkins also sitting there. We have the sister of two policemen sitting over here—Rahui Katene from the Maori Party. 
I think it is great to be able to acknowledge that people within the police bring a lot to the table just as each of us individually as members of Parliament brings something of our experience to the table in this House which contributes to a discussion and brings a different take on life. This is also the case in respect of the council table. The policemen who serve on local authorities around the country are up and about at 2 o’clock in the morning and they see the responsibilities of local people and the issues that they have to discuss around that council table. They have a different view from other people who quite rightly bring other experience to that table. 
I am pleased to see that we pretty much have across-the-board support for the Policing (Involvement in Local Authority Elections) Amendment Bill. I have never ever in my short time in Parliament seen the Greens support one pro-police bit of legislation in this House and I am sure as hell not surprised that they are not supporting this bill. But I am pleased that the rest of us are. Thank you. 
JACINDA ARDERN (Labour) 
: 
 I am pleased to rise to take a call on the Policing (Involvement in Local Authority Elections) Amendment Bill. Obviously I was not a member of this House at the time that the Policing Act was passed but I do remember the work that went into that piece of legislation because for a time I worked in the United Kingdom on a review of the way the police worked over there. There was a lot of interest in the collaborative and comprehensive way in which the Policing Act 2008 was drawn up. So I congratulate those who worked on that original legislation on the work that went into it. It was noticed internationally. 
I think it might be useful to provide a little more context on the original decision not to allow police officers to stand as councillors and on the position that the Labour Party took at that time. I think that looking at some of the statements that were made at that time demonstrates that the decision was very difficult to make and that there were very strong arguments on both sides of the case. I think one of my colleagues has already mentioned that the New Zealand First MP Ron Mark took a very strong view on this issue and was quite a vocal campaigner for restrictions being put in place. Initially Labour disagreed with the position that he in particular had made but later in the piece in the Committee stage we made the change via Supplementary Order Paper. 
I want to reflect on the statement that was made by Annette King at the time in August 2008. She said: “When I introduced a policing bill in my name I raised this as an issue that was worthy of debate. The bill as introduced retained the status quo but I did set out that it was an issue on which we would like to have some debate and some comment in terms of submissions. My understanding is that the Law and Order Committee heard a number of submissions—in fact there was quite a large number of submissions—on this part. In terms of where we should sit in relation to this matter it was the Labour caucus view that the status quo would remain. However on looking further at the issue and on taking consideration of the advice of the Legislation Advisory Committee which was asked by the invitation of the select committee to present to the select committee on this issue the caucus was considerably swayed by its view that we ought not to muddy the waters of political neutrality in our police service.” She went on to say that it had been a hard issue for the caucus to decide on and she knew that other parties in this Chamber looked long and hard at it. I think her comments demonstrate that the decision was very difficult to make. They demonstrate the fact that it was midway through that process that Labour made this amendment originally and that it was made on the advice of the Legislation Advisory Committee—a committee of the House. I think it is fair to say that it was a line call. 
After not only the benefit of hindsight but also taking a further look at the fact that there are already police officers who serve as counsellors we had evidence to suggest that currently it has not proved to be a problem and that perhaps we should reverse the decision that was made in 2008. But I do think that we should always be mindful of the original reasons that it was first put in place. 
I know one of the most important principles of policing and community policing in particular—which is something I am very interested in—is not only the principle of constabulary independence but also that the police really earn their right to police from their communities and with the trust and confidence of their communities. It is up to us in central government to ensure that we create the foundations and the framework for that to happen. At the second tier it is up to the police to make sure that on the front line that trust and confidence is earned and maintained. So I do think central government has a key role to play in that regard. I think that probably the best interest of the police was top in Labour’s mind when it made this decision but on balance we are comfortable with the notion of moving back to the status quo. That is why we are supporting this bill. 
It is always pleasing from time to time to have the opportunity to support a bill that is put up by the Government and to demonstrate that there is support. We get criticism that sometimes we do not agree with the Government. I always point out that it is because the Government gives us so little opportunity to agree. For an example of that I need only look back to the last bill that came through on law and order the “three strikes and you’re out” legislation which was one of the most awful pieces of legislation I have had the unfortunate chance to observe in this House. That was the last piece of legislation put forward by the Law and Order Committee but of course we were not going to agree on it. [ 
Interruption 
] I hear considerable disappointment from the Government benches that I have swayed away from my conciliatory statements. 
I will dwell a little further on the fact that I think it was Clayton Cosgrove who pointed out the interesting history behind that legislation— 
David Garrett 
: It paid for that suit he’s wearing. 
JACINDA ARDERN 
: Clayton Cosgrove pointed out—I think there was a comment made on his suit—the fact that the Police Act of 1958 originally mooted this change and that it was not fully enacted. So in actually enacting it Labour in 2008 put in place something that was considered 50 years prior which I think is an interesting point. Also when this restriction was put in place Labour put in an exemption providing that the police could still sit on community boards. I think that is quite an interesting point because it demonstrates the perception that community boards have a different standing than a local council and that important difference is based on the fact that community boards do not have powers to make by-laws. 
When I read that it triggered my thoughts back to the local boards that the Government has put in place through the super-city legislation. Local boards have no powers to make by-laws either even though they will probably be the most important element of the super-city legislation because that is where local people will have their say. So technically we would not have to make this change for Auckland. Police would be able to stand under this legislation and the exemption for a local board under the super-city legislation because the local boards have no powers to make by-laws. I thought it was an interesting point that was worth raising. Perhaps as a side point it demonstrates again how toothless those local boards are. But by the by I will not dwell on that. 
One of the other issues that has been raised— 
Sandra Goudie 
: Go on don’t disappoint us. 
JACINDA ARDERN 
: If Sandra Goudie would like me to expand on the point further I am most happy to. I am very disappointed that as chair of the Law and Order Committee she will not have the opportunity to look deeper into this legislation. I know she would have provided considerable insight into what we are discussing here. 
One further and final issue I raise which I think is a valid point is that it is important to make sure that police officers who are councillors are protected from conflicts of interest. For instance there may be issues where they have powers to make by-laws that they may have some future enforcement over. That is a point to carefully consider. We have made it work today and I believe we can make it work in the future. But one area that may lend itself to further thought is the proposals that have been put up by Lianne Dalziel on the Sale of Liquor Act which includes the ability for local boards to make by-laws to restrict alcohol sale. 
Sitting suspended from 6 p.m. to 7 p.m. 
Dr CAM CALDER (National) 
: 
 It is a pleasure to rise and speak on the Policing (Involvement in Local Authority Elections) Amendment Bill. Prior to the last election National promised to remove restrictions on police officers standing as candidates in local authority elections and serving as members. We have a proud record of keeping our promises and this is yet another promise kept. The New Zealand Police Association and the New Zealand Police Managers Guild support the removal of restrictions as does Local Government New Zealand. 
We have heard Opposition members talk at some length about how sad they were that this bill did not go through the select committee process. I understand that in 2008 when the Policing Bill was considered there were only two submissions against this course of action. Police are respected members of our communities. They are doing a sterling job throughout all New Zealand particularly in Manurewa where I am privileged to be based. This Government has backed the police with a quiver of new tools to help them in keeping our communities secure and has added to their numbers. We promised 300 more police in Counties-Manukau by the end of this year and already 240 more uniformed officers have been deployed in that area. 
As respected members of our communities it is only fair and right that police officers be allowed to serve in local government should they so wish. I am thinking now of police sergeant Mike Bailey whom I met in the watchtower in Counties-Manukau at about 3 o’clock in the morning when I went out with an incident car overnight in that area. It became clear to me shortly afterwards that he was not only a hard-working police sergeant but also the chairman of the Manurewa Community Board. It is totally appropriate that men and women of such skill application and passion be able to contribute further to the safety and well-being of our communities by building on the existing strong relationships between the police their organisation and many community groups. 
It is pleasing to note that this bill is now enjoying wide support across the House. It is reasonable at this stage to ask how useful the previous legislation was. Well thinking of the Football World Cup in South Africa it was as useful as a vuvuzela to a Trappist monk or as useful as a dead monkey to an organ-grinder. This legislation was of no use and it is wonderful to see that across the House this has been realised by all parties. With the singular exception of the Greens—who I understand have yet to support any motion concerned with law and order—we have unanimous support for this bill in the House. This bill removes an injustice to serving police officers and allows our communities to benefit from their passion and expertise—the passion and expertise of a highly trained group of men and women. I commend this bill to the House. 
A party vote was called for on the question  
That the Policing (Involvement in Local Authority Elections) Amendment Bill be now read a first time. 
Ayes 103 
New Zealand National 58; New Zealand Labour 43; Progressive 1; United Future 1. 
Noes 9 
Green Party 9. 
Bill read a first time. 
Second Reading 
Hon JUDITH COLLINS (Minister of Police) 
: 
 I move  
That the Policing (Involvement in Local Authority Elections) Amendment Bill be now read a second time 
. I take this opportunity to thank the parties who have agreed to support this bill. Their support will ensure that the bill is passed in time for this year’s local government elections. In the short term the bill will give certainty to those police staff who intend to stand for the elections later this year and it will give them time to plan for their campaign. Longer term it will give assurance to all police staff that there are no legal restrictions to their right to stand for local councils in any future elections. 
I think I can safely say that we as a society have high expectations of the way our police conduct themselves not only in the line of duty—that is performed in public view—but also to an extent in their personal lives. But this does not mean that we should take private or democratic rights away from those who choose to take the constable’s oath or make a career serving the police. The police have had various staff serve on local councils for decades without issue. The potential for conflicts of interest whether actual or perceived can be managed so that they do not arise. At the end of the day if a local community is not happy with the way their councillor has performed they will simply not elect them again. The bill will ensure that when it comes to standing for local councils nothing in legislation prevents police staff enjoying the same rights as other State servants. I commend this bill to the House. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 Thank you Mr Assistant Speaker Barker. I know that you have been in the gym so the delay in calling me may be because your eyesight was affected by the amount of weights you were lifting. You are known I am told as a fit person; others dispute that but I am sure it is the case. 
I briefly reiterate what I said in the first reading touching on one point. We will support the Policing (Involvement in Local Authority Elections) Amendment Bill. As I say the issue arose out of a coalition partner who was zealous in his approach to wanting police not to participate in elections. I note in passing that a certain number of public servants are not permitted to participate in elections. This is enforced not by legislation but I am told by their own internal law if you will. For instance the military to a certain level I am told are not permitted to stand for election to this Parliament and that is by their own arrangements within military law. 
I address one issue that I think was raised by Metiria Turei in the first reading and that is the issue of conflict of interest. I had a chance to have a chat to a colleague opposite who has been a member of the constabulary to check the history on this issue and neither of us could remember a time when a conflict of interest had arisen. Metiria Turei raised the issue that a conflict of interest could arise where a police officer in a dual role—as an elected councillor community board member or local authority member and as a member of the constabulary—could not manage that issue. She suggested there could be some sort of great constitutional issue of moment. I have to say from having police officer Robbie Brine as a councillor on the Waimakariri District Council that I cannot recall that situation taking place. My colleague across the aisle having been a serving police officer cannot recall either. 
I think as with all elected roles—even members of Parliament from time to time whether it be Cabinet Ministers or members of select committees—conflicts of interest arise. There is a simple way to deal with them and that is that there are rules in this place and there are rules under the Local Government Act. There are also sanctions that can be imposed by the Auditor-General; we saw the Auditor-General give Environment Canterbury in my own area of Canterbury some scrutiny over a number of perceived or otherwise alleged conflicts of interest by non-serving police—ordinary folk that is—who still trod that fine line in respect of a conflict of interest. That was dealt with by the Auditor-General. So there are safeguards on that side and equally—again taking some counsel from my colleague across the aisle a former serving police officer—I would wager that there would be a great deal of interest taken by the hierarchy from the Commissioner of Police down if a serving police officer was to cross the line or in any way compromise the department or his or her own standing in the way by which that officer approached the decision-making process in a local authority. I argue that serving police officers who are elected—and in general 99.9 percent of folks who are in elected office—know when they have to withdraw from a process and when they have to leave the room or declare an interest. These things can be managed. 
I disagree with our Green colleagues that somehow the world as we know it will end the veil will fall the constitution will be torn asunder as it were and there will be a great series of injustices put forward because serving police officers are enabled to stand in local body elections. It is right to raise the issue and I accept that. I am sure there will be one or two letters to the editor and one or two in the community who will have a go from time to time at serving police officers who have the dual role but there are enough safeguards on both sides—both on the blue uniform side and within the elected local body—through legislation and the Auditor-General to ensure that people can have the confidence that those issues will be dealt with. Such people will be dealt with in the same way if you like as business people who serve on local authorities and may have an interest in property. When local authorities are making decisions on zoning arrangements irrigation issues or whatever decisions local authorities make those business people too have an obligation to ensure that those conflicts of interest are declared and appropriate measures taken so there is transparency. 
I like the Minister of Police commend the bill to the House. I will not go as far as her colleague Melissa Lee who expressed her love and admiration for the Minister but I am advised there is a lot to love. I commend the bill to the House. 
KEITH LOCKE (Green) 
: 
 The Green Party opposes the Policing (Involvement in Local Authority Elections) Amendment Bill just as we supported the provision that was put in the Policing Act a year or two back with the support of New Zealand First and Labour and I am not sure who else. We supported the exclusion of police from serving on local bodies and I think there was a good reason at the time. The reasons were well outlined not only by the Greens but by Ron Mark; I think the previous speaker referred indirectly to him. Ron Mark of New Zealand First was very keen on that legislation. The Police Association was at that point and I think still is quite strongly against the exclusion of police officers and is quite in favour of the current bill. So the lines are pretty much the same. 
I think that essentially we have to have a clear separation of powers between the legislators—and that includes the local body legislators—the judiciary and the police as the implementers of the law. I do not think too many sitting judges have run for Parliament or local bodies and served on them. I think they see that they are bringing down decisions on cases of all sorts of citizens who come before them and that they should not confuse that role with being in charge of bringing in laws or by-laws as either parliamentarians or local body councillors. I think the police as the people who implement the law day to day have to be removed from any suspicion that they may be acting in a partisan or political way. That is the particular reason for serving police officers to be excluded. 
It is not like Clayton Cosgrove said just like other conflict of interest situations. Police officers are potentially in a conflict of interest every day they are on duty because during policing they could come across any other citizen including people who voted for them their colleagues on the local body etc. In some ways the provision that was put in the original law which we supported was put in also to protect the police themselves from any suspicion. If for example they told a car that was speeding down the road did not have its registration or was parked in the wrong place to stop and the driver happened to be some political antagonist another councillor or the wife or husband of a councillor there would be no suspicion that the police were acting in a partisan political manner. In most cases they would not be but the suspicion might be that that police officer who is a serving councillor is out to get this other officer who is also a sitting councillor. I think that provision avoided that situation. 
In no way is this a criticism of officers who have served on councils. I know that when the original bill came up I had a chat to Alf Filipaina whom I know well. He is a serving officer who was on the Manukau City Council. He is a great chap and a great community constable and has done tremendous things. If we look just at him and how he has managed the situation we might say there is a bit of an argument to not stop him doing both jobs. But if we look at it at a deeper level and in terms of wanting to remove the conflicts of interest then we should not allow that situation to take place. 
There was reference to the military before and how the military by their own internal system do not allow people to run for office and I think there is a good reason for that. But if it is good enough for the military there is even more reason for the police to do so. The military are not dealing with people day to day on the streets and are less likely to be in a conflict of interest situation than the police are. 
If we add it all up we see that it is important to keep that separation of powers among the judiciary the police and the legislators and not to confuse the roles. For that reason the Green Party is opposing this bill. 
A party vote was called for on the question  
That the Policing (Involvement in Local Authority Elections) Amendment Bill be now read a second time. 
Ayes 108 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1. 
Noes 14 
Green Party 9; Maori Party 5. 
Bill read a second time. 
In Committee 
CHRIS TREMAIN (Senior Whip—National) 
: 
 I seek leave for the debate on the Committee stage of the Policing (Involvement in Local Authority Elections) Amendment Bill to be taken as one wide-ranging debate with unlimited speaking slots. 
The CHAIRPERSON (Lindsay Tisch) 
: Leave is sought for that purpose. Is there any objection? There is no objection. 
Clauses 1 to 5 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I take just a short call to reiterate Labour’s support for the Policing (Involvement in Local Authority Elections) Amendment Bill mindful that local body elections are upon us very soon. I note in passing that an expedited select committee process may well have been profitable in that it may well have put to bed some of the myths and legends that a Green member has talked about. 
In touching on the conflict of interest issue I think there is a need to deal with evidence. Given that the Policing Act has been around in some form since 1958 and given that members of the constabulary force have been elected as local body officials at least since then and possibly prior to that if there had been stark examples of conflict of interest if there had been a threat to the constitution if there had been a threat to Parliament or if there had been insurrection or otherwise I suspect we would have examples of that. Neither Mr Borrows a past serving police officer nor I in in-depth talks could dredge our memories back to a time when there had been; neither could Mr Hawkins or other colleagues I consulted. The Minister of Police has not touched on any examples so I assume there are none out there. 
There is a difference—a very big historic constitutional difference that is held amongst most if not all Commonwealth countries—between current military serving officers seeking elected office at a parliamentary level and those in the constabulary seeking to be members of community boards for goodness’ sake regional councils health boards latterly or district and local authorities. There are safeguards in place whether they be from the Auditor-General or the Local Government Act on the elections side. In a practical sense if a police officer was to go a bit troppo and do something unusual in his or her role as an elected local authority member I suspect—and the Minister may want to contradict me or she may want to agree with me—that the Commissioner of Police would come down on that officer like a ton of bricks because the police hold dear the sanctity of the nature of policing and its independence. 
I can provide as evidence of that the example of my own serving councillor Constable Brine who as Mr Locke said is required every day in part to administer and enforce local body by-laws and regulations. Some may dispute it but I believe that Councillor Brine has shown incredible integrity in the way that he has acted both as a councillor—and I am not endorsing anybody; that would not be appropriate—and as a member of the constabulary force. 
There is general agreement in the debate that we have to become a little rational. If there is evidence to substantiate the fears that Mr Locke has it is appropriate we deal with it in the debate. In my brief researching of history I cannot note an example where serving police officers who are elected officials have abused their position and put the department themselves or the local authority in a position of embarrassment or worse. As such I think this legislation is appropriate. 
As I have said the current restrictions were born out of the zealotry of one former member of Parliament Mr Mark who for whatever reason felt it was very very inappropriate— 
Hon George Hawkins 
: Utu. 
Hon CLAYTON COSGROVE 
: Well I could not comment on that. Mr Mark felt in a zealot-like way that it was inappropriate for police officers to serve as local councillors. For whatever reason those restrictions were a coalition demand and that is the nature of being in Government. 
I say to Mr Locke that he has raised points that are legitimate to debate but if he has examples evidence or facts to lay before the House as an illustration of what he claims may happen and of the fears he claims may manifest in the future it is right that this Committee examine them debate them talk them through and propose alternatives. If they do not exist we should get on and pass this bill. 
CARMEL SEPULONI (Labour) 
: 
 I stand to support the Policing (Involvement in Local Authority Elections) Amendment Bill. I want to talk about some of the aspects of the bill that Labour members are supportive of and to provide a little bit of history with regard to why restrictions on our police officers being able to stand for council were enforced in the first place. It was not an easy decision at the time. 
As most of the Committee should know a New Zealand First MP Ron Mark was a vocal campaigner for these restrictions to be introduced. Initially the Labour Government was not supportive but at the Committee stage of the Policing Act the Labour Government put forward a Supplementary Order Paper to ensure that in the future police officers would not be able to also be councillors. However those already fulfilling the dual roles could continue to do so. We have heard a lot of discussion about the five police officers who have continued in their roles as councillors and we have heard that they do so without any problems at all. There was concern—and this is why the restrictions were brought in to begin with—that there would be a conflict of interest for those police officers with regard to their having to enforce by-laws but the five particular councillors who are also police officers have been very careful to declare any conflict of interest that arises over their time as councillors. That serves as a good example that it can work that the police can fulfil those two roles without any problems occurring. 
One councillor I know of who has done it very well is Alf Filipaina a Manukau City councillor and police officer. He is respected by the community he has huge integrity and he has done a fantastic job. Even prior to the restrictions being brought in in 2008 he was very careful to make sure he declared any conflict of interest when it came to enforcing by-laws. He has a good track record. Since the passing of that legislation there has not been any problem with the five councillors and that is a big part of why Labour members are supporting this bill. We have seen that the police are able to conduct themselves in a professional manner with regard to fulfilling the two roles. That is part of the reason that we are supportive of this bill. 
Ideally in our minds it would have been better if the bill were not being rammed through in urgency. It would have been good to get the views of the public of the police and of anyone who had concerns or was particularly happy about the bill being passed. Unfortunately we will not have the opportunity to do that because the bill is going through the House in urgency. 
Labour is supporting the bill. It takes off those restrictions and allows the police to hold both positions. Regardless of the fact that they are police officers they will be able to stand as councillors. It seems only fair given the examples I discussed before and given that other public servants are provided with the opportunity to run for council despite their role as public servants. 
I want to take the time to acknowledge the police force and the outstanding work they do. I think all of us across the Chamber share that view. Without these restrictions they will be able not only to fulfil their role as police officers well but also to perform an outstanding role as councillors. That is why we are supportive of the bill. There are some significant barriers that the Government will need to overcome in order to make it work without a perception of conflict of interest and that will be one of the challenges the Government needs to face. For example a councillor helping to pass a by-law then policing that by-law in his or her role as a police officer could raise a conflict of interest. 
I will end my call there but only because I have a cold. Thank you. 
KEITH LOCKE (Green) 
: 
 I think the previous two contributions were very useful and I agree that the five existing police officers who are also councillors—and I only really know of Alf Filipaina—appear to have conducted themselves with honour and in the correct manner. But when we write legislation in this Parliament we are not writing it for the better people in society—the ones who are well motivated and have good morality and everything else—we are writing legislation to cover situations where people are not so well motivated and might act in self-interest or meanness or get involved if they are on a local body in political fights. They might act in a way through their other role—in this case that of a police officer—that is not in accord with best practice. I do not think we can just think that in the future everyone will be angels and everything will be great. 
We have to look at the background of local body politics. Watching local body politics in Auckland in particular in the last few years we have seen quite a bit of not only political conflict but also personal conflict. People have been getting quite nasty to each other including in Manukau City— 
Hon Clayton Cosgrove 
: You don’t have to be in the police for that to happen. 
KEITH LOCKE 
: —yes—and in North Shore City. I have seen quite a few personal clashes mixed up with political clashes of late. Therein lies the problem: it is not necessarily true that police officers who cover both positions will act in a bad way but they can be perceived as acting in a bad way if they are involved in these conflicts in their local bodies. They can be put in a very tricky position if they happen to stop a car for example that is driven by the son of one of their antagonists on the local body. What will they do in that situation? They will be caught in a bind. If they proceed with the ticketing they could get it back from the faction in the council that they disagree with who might say they did it because they were trying to get at the family. If they go the other way and say that they do not want a fight so they will not write out a ticket they get it from the police saying that they are not acting in a politically neutral way. So it is very difficult for them. 
There is also a question of a conflict of interest when bringing in by-laws. Alf Filipaina has stood aside when his council is making decisions on particular by-laws in order to remove a conflict of interest. That is often difficult where there is a very factional situation on a council such as there may be soon in the Auckland Council where two camps are developing in the electoral campaign. They might end up very finely balanced with just one vote between them. If all of a sudden a person in one camp happens to be a police officer and has to absent himself or herself from the vote it changes the whole balance of power on the council. 
A whole lot of problems can arise through having a potential conflict of interest and the easiest way to overcome it is to retain the original law. 
Hon JUDITH COLLINS (Minister of Police) 
: 
 Some very good points have been raised in the debate on the Policing (Involvement in Local Authority Elections) Amendment Bill and I think it is beholden on me to answer some of those questions. With police employees now being able to stand for local authority elections obviously there will have to be some changes made to the internal policies of the police to deal with that. Some of the things that may need to be reviewed include some aspects of the Police’s code of conduct. I will read to the Committee a couple of those points. The first is a provision that states: “Where employees do participate in political matters in a personal capacity they do not bring themselves into conflict with their primary role as Police employees.” That is already part of the code of conduct. Another provision states that employees should remain politically neutral in all of their dealings in the workplace. Some comments have been made about a particular Manukau City Councillor Alf Filipaina who is known to many of us particularly in the Manukau region. I cannot think of one instance when his political situation on the council has had anything to do with his policing other than that he has probably brought a lot of his knowledge from policing to his role on the council. Certainly he is not standing for the National Party last time I checked. As Minister of Police I have had plenty of dealings with Alf and have never had any worry at all about his ability to do his role professionally. 
The Police manual that sets out police policies and procedures will also need to be reviewed. There are obviously some issues relating to the internal policies to make sure that any conflicts of interest are managed. There have been some issues raised about the potential conflict of interest and how terrible this would be and of course it would be terrible if it ever eventuated. In fact the affected police officer could end up in an employment situation that also involves his or her elected situation but so do lots of other councillors. For instance as a lawyer I can think of a time when a lawyer who may be acting for developers might be elected to a council. Should that person be precluded from election to the council because it may be making decisions about development? The fact is that the lawyer has to point out that he or she is in a potential conflict of interest situation and exit the decision-making process. That is the sort of thing police officers can and already do when they serve on councils. They are aware that they are in potential conflict of interest situations. 
There might be some situations for instance when they would not be involved in the approving of some by-laws such as liquor licensing noise control determining zones in which brothels can and cannot operate and the removal of gang fortifications. Those are all issues that involve enforcement by police. Obviously they are probably better not to be part of that decision-making process. Those are not potential conflicts that cannot be managed; they can be managed by people who are sensible and those people are sensible by virtue of the fact that they have been serving police officers and elected by their communities. If they are not aware of that then like anybody else who has a potential conflict of interest they must take the consequences if they do not heed it. It is the same way for any member of Parliament. I do not think we should have a situation where we preclude police officers by law—not through their employment situation but by law making them the only people we preclude. That is a ridiculous situation and that is why I am very pleased with the support we have had from other parties in the Committee to get this bill through in urgency. 
One of the reasons we are debating it in urgency is because those officers need to be able to plan a campaign. They need to be able to make decisions and talk to their families and employers. The New Zealand Police also needs to be sure it gets its own code of conduct in line with this law change. We do not want police officers being precluded from being able to stand because they have taken their constabulary oath or are in a senior position. I support this bill obviously but I am also very aware of the fact that it is righting a wrong that was done let us say in a mean spirit. I think many of us here in the Chamber accept that a mean spirit was pervading at the time the change took place. Democracy is not just for everyone else in the world; it is also for New Zealand police officers. 
A party vote was called for on the question  
That clauses 1 to 5 be agreed to. 
Ayes 108 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1. 
Noes 14 
Green Party 9; Maori Party 5. 
Clauses 1 to 5 agreed to. 
Bill reported without amendment. 
Report adopted. 
Third Reading 
Hon JUDITH COLLINS (Minister of Police) 
: 
 I move  
That the Policing (Involvement in Local Authority Elections) Amendment Bill be now read a third time 
. I take another opportunity to thank those members who have constructively supported this amendment bill and to thank the whole House for the way it has allowed this debate to be conducted. 
This Government is committed to supporting our police and their rights as private citizens in a democracy. The bill achieves this objective when it comes to police employees standing for local councils by putting all police staff on a level playing field with other State servants. The bill is a small amendment to the Policing Act 2008 but as it will help strengthen the strong ties that police have with their local councils the bill is important for all local communities throughout the country. I commend this bill to the House. 
KEITH LOCKE (Green) 
: 
 The Green Party will continue to oppose the Policing (Involvement in Local Authority Elections) Amendment Bill for the reasons we have outlined. It is with a certain degree of sadness; I think that we would like a democracy where everybody including judges the military and the police could contest every position. But there is a case for the separation of powers with national and local legislatures as it were being separated off from people who either stand in judgment over the law like judges the people who enforce the law like the police or the people who are in a particular position as potential enforcement agencies both domestically and internationally like the military. 
I am pleased with the way the debate has been conducted since I have been here. I think that it has brought out the useful points. I think—and I support Carmel Sepuloni on this—that it would have been good to have had a select committee consideration particularly so that the advice of some of the finest legal minds like those of the Law Society could have been brought to bear. The question of separation of powers and of not having a conflict of interest is something that perhaps bigger legal minds than mine could exercise their brains on. I was a little disturbed that there was a comment which might be referring back to Mr Ron Mark who was a New Zealand First MP in the previous Parliament that somehow his bill was a result of his having a bit of meanness a personal agenda or something like that. As I recall his comments at the time both formal in the House and informal were that he was genuinely exercised by the political arguments for this. He did that very vigorously and I think he had good reasons for going down that track. So I am standing up for him to an extent in this Parliament today and saying that there are real arguments for being against this legislation. I think that Ron led the way on them in the last Parliament. Thank you. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I rise to take a brief call on the third reading of the Policing (Involvement in Local Authority Elections) Amendment Bill and to endorse the bill. I will address a couple of points that the member Keith Locke has made. 
I make the point again that if there is a fear in respect of the future maybe we should look at the past and look at fact evidence and example. It is right that the member Mr Locke raises these issues but I note for the record that in the debate not one example or one piece of evidence has been put forward to show that a serving police officer elected to a local authority has compromised his or her position or that of the department or local authority. I think we should be mindful in this place—to be honest I suspect that often we are not on certain occasions—that when we make these decisions we should deal with evidence and example. I say to Mr Locke that it is right that he raises the issue but I also say to my colleague that he should live in hope—live in hope. 
I suspect that for the people who are serving as both constabulary staff and in local authorities the counterfactual we have is stark real and lively examples of where those five officers have acted absolutely appropriately as far as I am aware in all circumstances in their dual roles. So if we are after evidence to back up our argument then that evidence stands before us. 
I note with interest that the Maori Party is opposing this bill. I will not deal with the notions that its members have put forward. Suffice it to say that I my Labour colleagues and others completely distance ourselves from the language and the venom that was visited upon the New Zealand Police by Mr Harawira—the language and venom. Again I say to Mr Harawira who has chosen not to take a call that if there is example evidence case or allegation he should bring it forward. He should not stand on the sidelines and throw horrific slogans and language at serving police officers members of the Public Service and others. Those slogans and language are deeply offensive to all members of our community because of historical events. We distance ourselves as my colleagues have from those offensive remarks. If that is the basis for opposing this bill then I invite Mr Harawira and the Maori Party to look very carefully at the statements he has made. He is a member of the Maori Party so those statements appear to be representative of the party itself. 
I commend the bill to the House. I commend the members of the police force serving on local bodies. One in my area Councillor Brine has that dual role. They tread a very difficult path from time to time in managing those inherent conflicts in relation to by-laws and various things but as other speakers have said lawyers property developers business people and—I would wager—the odd publican who have stood for and gained elected office have also had to tread that path of managing conflicts of interest as do all elected folk including us in this Chamber. There are processes safeguards and mechanisms like the Local Government Act the Office of the Controller and Auditor-General and the Commissioner of Police’s office. They can and are willing to deal with those conflicts in order to ensure there is transparency and integrity in that democratic process. 
My plea to Mr Locke on these occasions is that when he is making statements we should deal with facts and evidence not hyperbole and hypothesis. Let us deal with the facts and the evidence. The truth is that since 1958—and I beg for someone to provide evidence to the contrary—serving officers who have been elected officials have acted appropriately and have not crossed the line that Mr Locke fears they will. I along with colleagues commend this bill to the House. 
A party vote was called for on the question  
That the Policing (Involvement in Local Authority Elections) Amendment Bill be now read a third time. 
Ayes 108 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1. 
Noes 14 
Green Party 9; Maori Party 5. 
Bill read a third time. 
Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill 
Second Reading 
Hon PANSY WONG (Minister for Ethnic Affairs) 
 on behalf of the  
Minister of Justice 
: I move  
That the Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill be now read a second time 
. In effect this bill extends the Prisoners’ and Victims’ Claims Act 2005 for 2 more years following the current expiration date of 30 June 2010. The bill ensures that the current restrictions on prisoners’ claims are retained and that prisoners are awarded compensation only if no other remedy is appropriate. It also ensures that the victims of those prisoners awarded compensation continue to have priority to claim against that compensation. In addition the bill clarifies a potential ambiguity in one of the Act’s provisions. The bill makes it absolutely clear that the victims’ claims process applies to compensation payable for claims made by prisoners before 1 July 2012. 
I thank the Justice and Electoral Committee for its consideration of the bill in the short amount of time available. The committee received six submissions on the bill and has recommended that it proceed without amendment. That is not surprising as this bill simply maintains the status quo for a further 2 years and ensures that the application of the victims’ claim process is clear. The effect is a transition period that gives prisoners particularly those with historic grievances 2 more years to make their claims before a second bill which the Minister of Justice intends to introduce before the end of this year takes effect. That legislation will mean that if compensation is awarded to a prisoner then anything remaining after the prisoner’s victims have sought redress will be redirected to the broader victims’ services appropriation. The victims’ services appropriation is currently holding the revenue generated by the Government’s offender levy initiative and the funding from the disestablished Criminal Justice Advisory Board and the Sentencing Council. That money is already being put to good use by funding five new or enhanced entitlements for victims of serious crime. 
From 1 July 2010 three more initiatives will be rolled out. A new court support service for victims of sexual violence will be introduced as well as an enhanced homicide support service. More comprehensive information resources for victims of crime will also be available from July. This will provide a guide to the criminal justice system and explain the support that victims and their families can get. 
The bill before us and the new legislation to come will not prevent prisoners from seeking to uphold their rights through the courts; nor should it. Agencies responsible for wrongdoing will still be held to account and required to pay compensation where a sufficiently serious breach of a prisoner’s rights has occurred. That is appropriate because prisoner mistreatment should not be tolerated. However I make no apology for ensuring that where compensation is necessary victims of that prisoner have every opportunity to benefit from that compensation and seek redress for the harms committed against them. I commend this bill to the House. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 The Labour Opposition will be supporting the extension set out in the Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill. It is a technical amendment. Why are we supporting it? Quite clearly we are supporting it because we in 2005 put in place the Prisoners’ and Victims’ Claims Act whilst in Government. This is Labour Government legislation that the current Government is seeking to extend for 2 years from 1 July until 30 June 2012. So on the basis of an extension of the legislation that the previous Labour Government passed of course we would support this legislation. 
This bill is designed to assist victims. The aim of course is to extend those restrictions in awarding compensation to prisoners for a further 2 years as I have said so that the victims’ claims process also applies to compensation awarded in or to be paid pursuant to an out-of-court final settlement in respect of a prisoner’s claim made on or after 1 July 2010 but before 1 July 2012. So in essence this amending legislation bridges a gap. Labour agrees with this. We wrote this legislation—that is the primary Act—and we agree with its extension but I would make a couple of points in passing. 
This Government has made many lofty claims in respect of assisting victims. I suspect that we putting aside our political prejudices all support that ethos of supporting victims who have been subject to either heinous crime at the horrific tragic end of the scale or even so-called minor crime smaller incidences at the other end of the scale. But I make this point. If this Government was serious about assisting victims this legislation would be followed by legislation that does away with what is happening with accident compensation whereby sexual abuse victims are no longer able to get the support they need thanks to the changes made to our accident compensation system by this National Government. This issue is germane to this legislation because we are talking about victims of crime. That member over there might have a bit of a peck as she is wont to do but this is the truth and I challenge this Government. If this Government is serious about assisting victims I ask every member of the Government about the men and women who have been subjected to horrific crime through sexual abuse and other sexual crime and who formerly under the previous Government could get the assistance they needed. There is no dispute in my view about the crimes committed against those people. They will live with the horrific nature of those crimes for the rest of their lives. They need counselling perhaps psychological assistance perhaps medical assistance and other support. 
We know that under the previous Government those victims of sexual abuse and sexual crime were getting the assistance they need. Under this Government many of them most of them are not getting that. I challenge the ACT Party because we know of the affiliation between the ACT Party and the Sensible Sentencing Trust through Mr Garrett. He was intimately involved with the Sensible Sentencing Trust. I challenge the ACT Party. I ask Mr Boscawen to get up in this debate and challenge the Government that he and his colleagues prop up every day. If that party is serious about assisting and supporting all victims of crime I ask Mr Boscawen through you Mr Assistant Speaker Barker whether he will get up and challenge this Government and demand that it change its policy so that victims of heinous sexual crime can get the assistance they need through accident compensation. 
Hon Dr Wayne Mapp 
: Leave it to you. 
Hon CLAYTON COSGROVE 
: What? Oh the shell of the defence Minister has been burst. 
So I challenge the ACT Party member to get up and challenge his own side in the debate. I challenge the Sensible Sentencing Trust which has not at any time—and I could be wrong; I stand to be corrected—put out a statement decrying this Government for the changes to accident compensation policy and for the lack of support that victims of sexual abuse and sexual crime receive thanks to this Government. Most of them are not receiving that help and I challenge Mr McVicar who has very strong views on the rights of victims many of which I agree with to perhaps put out a statement and decry this Government for the withdrawal of services to victims of sexual abuse. When we talk about victims at the top of the scale in terms of the offending they suffered—whether it be the tragic circumstances of murder rape or sexual abuse—I do not think we do think of sexual abuse victims as second class to any others. 
Although Labour supports this legislation there is a wider issue. In the crime of sexual abuse those crimes have been dealt with and there is a guilty party. A jury has rendered a verdict and somebody is in the clink or paying the price for abusing and violating a member of the community. So there is no dispute that the crime happened. Then the question is what we as a Parliament a people and a community do about it. How responsible do we feel for aiding and assisting those victims of sexual crime? I know that a speech was made by Chester Borrows I think—if I am wrong I apologise—in which he asked whether it was appropriate that victims of sexual crime get help from the Accident Compensation Corporation (ACC). I will say what is appropriate. What is appropriate is that they get help—full stop. The bickering over the pot it comes out of has to stop. If the Government feels that ACC is not the appropriate place to assist victims of heinous sexual abuse then I ask those members and I ask Mr Borrows where the replacement funding comes from. Where does the funding for those victims come from? Is it from the Ministry of Health or another Government department or agency? Let us stop the bickering about whether the money should come from the ACC pot or another pot and whether sexual abuse is deemed to be an accident under the definitional rules of ACC. If it is the Government’s judgment that ACC is not the appropriate place to help the victims of tragic and heinous sexual crime then I challenge those members to tell us what they are doing about it what they are replacing it with and where the money is to help these people. 
The Minister for ACC has been derelict in his duty. He has been deficient in his job. He has not as a member of our Parliament and as a member of our community stepped forward and made a case in Cabinet. If he does not want these compensatory benefits to come out of Vote ACC then he has a duty as does every member of Cabinet and the National caucus who bleats on those organisations and support parties such as ACT and those organisations outside this place like the Sensible Sentencing Trust and others that purport to stand by victims—and I take them at their word and I respect them for those views—to hold this Government and Cabinet to account and to demand that the resource is provided from some vote from some agency from some department to assist those men and women who live with the crime of sexual abuse for the rest of their lives. I am told that many of them are not with us in our community any more. They have passed on by their own hand through suicide because they could not get the assistance they need. The acid test in this debate the acid test of this Parliament’s and this Government’s commitment to assisting victims is not in this bill. 
We support this bill we wrote the Act we came up with the idea and this Government—and fair enough—is extending it. I commend it for that. But the acid test as to whether we are truly in support of victims and are committed to that is what we do to assist the most vulnerable. I would argue that children young men and women and old men and women who are victims of sexual abuse and sexual crime who under the last Government received the assistance they need but who were denied that assistance under this Government for petty bureaucratic reasons or cost cutting are some of the most vulnerable of our citizenry. Although we have had days weeks months and now years of this issue not being addressed by members opposite the acid test for this Government is what it does and what it proposes to do to assist those victims and whether its support parties stand up tonight if they truly believe in victims’ rights and hold the Government to account along with others outside this place like the Sensible Sentencing Trust which in my view have been somewhat quiet on this issue. We support this bill. We wrote this bill. We support the extension to it but I am serious when I invite members opposite to tell the victims of sexual crime how they will assist them as a Government. 
Mr DEPUTY SPEAKER 
: I am sorry to interrupt the honourable member but his time has expired. New Zealand Maori are 17; Wales are 13. 
CHESTER BORROWS (National—Whanganui) 
: 
 It is always gratifying to hear one’s words come back to one. I believe that I was the person in the first reading of this debate who told my friend who has just resumed his seat that yes the victims of sexual abuse and child abuse need to be supported and it has to come out of the taxpayers’ pocket. We do not care what bucket it comes from. That is a firm priority. 
But the point I want to make in respect of this bill is that it seeks to put victims at the heart of the justice system. I believe that victims are at the heart of the justice system but what we need to recognise as a community and as a civilised society is that some of the victims at the centre of the justice system are there as complainants as victims of crime and as witnesses and other victims of crime are in the court system as offenders. When we talk about abuse and when we talk particularly about sexual abuse and violence those victims can go on to become offenders. It is very very easy for some of our lobbying groups within this country to regard everyone as a victim up to a certain stage and as soon as their victimisation is shown in their own offending behaviour automatically all sympathy is chopped off. They become labelled as offenders and that is it. They are due absolutely no regard whatsoever and that is wrong. It is uncivilised to treat people in that way. 
This bill recognises that if people who are in prison and who have grievances against the prison system—whereas those grievances may well be upheld and may be compensated in some way—owe outstanding debt to society or to their own victims directly as the result of their own behaviour then they will not be able to access any financial compensation but they will still get regard in other ways in terms of redressing the wrongs that have been made against them. 
I am pleased to see that we have support from the other side of the House. I acknowledge that it was Labour when in Government that started the work on this bill. We look forward to the upcoming legislation that will replace it. But before I sit down I reiterate that if we are going to call ourselves a civilised society we need to recognise that the vast majority of people in our prison cells at the moment have been offended against in heinous ways and their resulting behaviour is to be expected. We need to show some understanding of that and treat them accordingly in the way they deserve to be treated. 
Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) 
: 
 I am pleased to follow the erudite challenge set out by the Hon Clayton Cosgrove. His challenge puts the responsibility of victims’ rights squarely in the hands of the Government which does need to do more. 
Labour’s record of standing up for victims’ rights is clearly set out by our commitment and by our actions in the past to address the interests of victims. I will outline that for the record. We introduced and passed the Sentencing Act in 2002 which introduced a presumption in favour of reparation and resulted in that sentence being used more frequently. The same Act also recognised the potential of restorative justice processes to make offenders more accountable to victims. It enabled courts to take both financial and non-financial offers of amends by an offender into account. 
Labour introduced and passed the Victims’ Rights Act in 2002 which extended a number of rights to victims such as the right to information and the ability to have an input into sentencing decisions through victim impact statements. That in itself had a transformative effect on addressing the rights of victims. In terms of the practical examples that have come through my office I have seen that it has made a big difference. 
In 2003 the Ministry of Justice launched a campaign to trace those owed money. It introduced an 0800 number and it also established new collection centres to further bolster the collection and disbursement of reparations. In 2005 we passed the Prisoners’ and Victims’ Claims Act as Clayton Cosgrove has mentioned. It ensured that the victims of inmates who were awarded compensation could claim against the inmates’ compensation. 
Labour introduced the Pay or Stay initiative in September 2006. It enabled the Ministry of Justice to stop those people who had unpaid fines or reparations from travelling overseas if they attempted to leave New Zealand. 
The changes we introduced in the Evidence Act in 2006 provided for the needs of vulnerable witnesses and victims by making provision for witnesses to give evidence in alternative ways such as giving evidence from behind a screen via closed-circuit TV or pre-recorded video. Victims of sexual offences for example have utilised this particular mechanism. 
When we amended the Children Young Persons and Their Families Act we included a provision to ensure that victims of youth crime could attend Youth Court hearings. We also put in place provisions to ensure that these victims were kept informed of proceedings. In 2008 a Victims Charter was developed to build awareness of the standards of service that victims could expect from Government departments. We know that the Accident Compensation Corporation in particular was one Government department where a number of concerns were raised with regard to the handling of sensitive cases. An 0800 victim helpline was also introduced in that same year as was a website for victims and a boost in funding for Victim Support which offers much-needed services in many communities. All these types of initiatives built a profile of ensuring that the rights of victims continued to be addressed. 
We also announced that we would provide additional services in 2008 through the Family Court such as the introduction of an independent victim advocate or support person to provide support and assistance to victims of domestic violence. I know that in many of the communities I support this important service is heavily utilised to ensure that those suffering from domestic violence are supported. 
Labour also asked the Law Commission to look at how to set up proper victim compensation schemes. I understand that that work is still continuing. 
We know that this particular bill is an extension of the gains that Labour made and we are happy to support it. It is considering a minor technical change. 
We want to ensure that the big picture in terms of how National addresses victims’ rights will have to supersede the record that has already been established by Labour. It is just not good enough in terms of the accident compensation issues raised by Clayton Cosgrove not to provide an avenue for those who have suffered sexual abuse and for them not to have a remedy for reparation or to have their needs addressed. I know from the particular cases I have dealt with that the ongoing support provided by mental health and counselling services are very much needed services. It is absolutely reprehensible that this type of support might not continue to be available. 
I did not intend to take a long call on this reading of the bill. As we have said this is a minor technical change but let the case state that Labour’s record of advocating for victims’ rights stands in its own right. 
DAVID CLENDON (Green) 
: 
 Kia ora koutou. When the Prisoners’ and Victims’ Claims Bill was first proposed prior to 2005 the Greens opposed it essentially on the basis of its effect on human rights—that is its reduction of human rights—because it was likely to be ineffectual as has now proven to be the case and because most of the effects would be negative. It had very few positive elements or redeeming features. We were at the time persuaded to support the bill through its final stages on the understanding that it would be quickly followed by a major reassessment and a major overhaul with significant attention being paid to the whole issue of victims’ rights. Clearly everybody in this House is supportive of finding ways and means of compensating the victims of crime—of getting redress for them—as well as punishing and rehabilitating those people who cause problems and who create victims. However we cannot in all conscience support this bill the Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill at its second reading which would mean the continuation of what is essentially a flawed and indeed a failed Prisoners’ and Victims’ Claims Act. 
The Act has two features. It intends to restrict the circumstances in which courts can award compensation to persons under the control of the State whether in prison or through some other means and it intends to provide a simplified process for allowing victims to make claims on compensation awarded to prisoners. In fact that has been more symbolic than real: there have been remarkably few successful instances where victims have had any benefit from this legislation in the 5 or more years since it has been enacted. 
The Act denies prisoners the possibility of redress for wrongs done by the State. Why would one continue with legislation that has failed? The victims in this case can benefit only if a prisoner or an inmate—somebody under the control of the State—has a windfall or if the State abuses the human rights of that prisoner. That is about the only mechanism through which a victim can get any redress. Is it not perverse to create a situation where imposing on the human rights of one person is the avenue to rewarding another for wrong done to that other person? It is simply a peculiar and perverse model and it would be better to simply remove it from the books and go looking for a proper solution. Part of the solution could be to establish a fully independent prison complaints authority. Such authorities are known to work successfully and are quite commonplace in other jurisdictions and in other countries. Absent such an authority we need to be very sure that there is a very robust set of circumstances where prisoners can rightfully be awarded some compensation if their human rights are abused while they are in the control of the State in prison. If there are no checks on abuses in prisons then inevitably prisons become more dangerous places—they become more dehumanising environments. The flow-on effect of this is that prisoners become more brutalised more dehumanised and therefore more dangerous to society when they are released. It increases the likelihood of recidivism. 
There is no value in the Act. It has not worked for victims and it has certainly not worked for prisoners; it can work only through a very perverse link of abuse recompense and secondary recompense to victims. The recent move to such unhelpful strategies as double-bunking to deal with the increased prison numbers is increasing tension in prisons. It is increasing the likelihood of tension and stress and the violence that inevitable follows from that in our prisons. We know that there are better ways to deal with crime. We can reduce recidivism. We know that there are strategies that work strategies such as the faith unit at Rimutaka Prison which has had an extraordinarily good success rate at reducing recidivism. The rate of recidivism is down to perhaps less than 10 percent for inmates who have been through that programme compared with something like 50 percent otherwise. We know that mechanisms are available to us today that could be applied within existing budgets by moving budgets away from concrete steel and wire towards serving the needs of the community by reducing the likelihood of recidivism and by healing prisoners. They are damaged people in the same way that their victims are damaged. We know that there are better strategies than continuing the failed strategies of the past. 
If the Government wants to get serious about crime about reducing the prison population and about reducing the knock-on and flow-on effects and the social environmental and economic costs of crime then we know there are strategies and mechanisms available to us. Inhumane treatment of prisoners is effectively protected under this bill because it takes away the likelihood of prisoners claiming compensation or objecting to the fact that their human rights have been taken away from them. We will continue to oppose the Act. It does not work; it was flawed at its enactment. It has proven itself ineffectual and it would be a much better situation simply to start with a clean slate and look for a set of solutions that will deliver good outcomes. Kia ora. 
Hon TARIANA TURIA (Co-Leader—Maori Party) 
: 
 Tena koe Mr Deputy Speaker. Tena tatou katoa. I start off by stating up front that I am opposed to the victimisation of any people whether they are inside or outside of prison. 
On the global website called Restorative Justice Online 
there is an article that is entitled “Can prisoners also be victims? Promoting injustice through legislation.” The article is written by Kim Workman the very person who began the faith-based units in prisons that we have just heard spoken about by the Green Party. He was the head of prisons at the time of the Mangaroa assaults a period of time that Workman described as one of the most shameful incidents in the history of New Zealand’s prison system. He proceeds to discuss the situation that unfolded at Mangaroa Prison in January 1993 when three young inmates were systematically beaten and tortured by prison officers. The article is gruelling in its detail recalling the way in which the officers held the young men naked in outside exercise yards and used hit squads to repeatedly beat them over a 3-day period. We need to be thankful that none of those three were one of our own sons. The prisoners were initially denied access to health professionals for the injuries that they had sustained including bruising and cracked bones. Those 3 days from hell might have ended there. Fortunately they did not. An inquiry was initiated and it led to the dismissal of 12 prison staff but it was a long time coming. 
Over a decade later the 2004 United Nations Committee Against Torture reported the significant level of concern it had about the findings of the Ombudsman regarding investigations of alleged assaults on inmates the reluctance to confront such allegations promptly and the quality impartiality and credibility of investigations. Now 17 years later with the Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill we are still dealing with the after-effects of that initial assault at Mangaroa Prison and the subsequent introduction of the Prisoners’ and Victims’ Act 2005 which we heard the Hon Nanaia Mahuta speak about. 
Let us go back to those three young men in 1993. Those men continued to wait for an appropriate response to such a vicious assault for 7 long years. During that time some of the prison officers who had committed the criminal acts were re-employed within the prison system. Eventually the Crown accepted liability and paid compensation to those inmates for the injuries that they had suffered. The public reaction was intense intimidating and aggressive. The Minister of Justice at that time the Hon Phil Goff cast aspersions on the original incident by referring to it as an alleged assault and to the victims as a pack of scumbags. Suddenly the gates of hatred were unleashed. There were calls for the maximum use of custody and the maximum deprivation of liberty. The three prisoners who had been victims of the assault were described only in terms of their own offences. Members of the public claimed that because of their classification as offenders prisoners were no longer entitled to be treated with respect or decency. Letters to the editor urged the Government to make sure that prisoners not have the same rights as any other citizens who are victims of State brutality and violence. In essence there are two categories of New Zealanders: prisoners and everyone else. The overriding philosophy of that era was that prisoners should not have the same human rights as others in this country. They should certainly not be compensated because in many respects so the public record went they should be considered less than human. 
Like Mr Workman I consider the Mangaroa incident and the horrific backlash that followed when due compensation was awarded as one of the most shameful incidents in the history of New Zealand prisons. The 2005 Act further entrenched that shame this bill prolongs it and all the indications are that a further even more punitive bill is waiting in the wings. 
But there is still one fundamental question waiting to be addressed: what are we doing to address the abusive nature of a system that is supposedly meant to demonstrate justice? In responding to this bill the New Zealand Law Society endorsed the views of the Ministry of Justice that the best way of preventing future claims arising from breaches of prisoners’ human rights is to ensure that incidents leading to such claims are kept to an absolute minimum. I could not agree more. Justice is not about handing out punishments and inflicting numerous abuses upon a perpetrator for the rest of their living days. I am becoming increasingly worried about the relentless hostility of the public and political attitudes towards those who inhabit our prisons. Caritas Aotearoa - New Zealand told the Justice and Electoral Committee that “Denial of basic human dignity and revenge does not make for good legislation.” This view was endorsed by the Human Rights Commission who warned the select committee that “concern about the victims of crime should not override the importance of ensuring that prison conditions respect minimum human rights standards.” 
The United Nations Special Rapporteur on Torture in 2010 urged States to respect the right of victims to an effective remedy and reparation. The report recommended that each State party should ensure that the victim of an act of torture must be able to obtain redress and have an enforceable right to fair and adequate compensation including the means for as full rehabilitation as possible. The special rapporteur did not take the step of making an exception for those who are in prison to render them ineligible. 
What is the reason that we are taking such a harsh line here in Aotearoa? One of the signs of a mature and inclusive society would be the adoption of a less punitive criminal justice system. But if we were to read between the lines of this bill and all the discourse around it we would pick up a message that going to prison is no longer sufficient punishment on its own. Clearly a climate is developing amongst some parties in this House in favour of shifting the emphasis away from rehabilitation and humane treatment of prisoners to a lifelong sentence in which State brutality is permissible. 
There are victims beyond the victims who deserve to have a voice. There are always the children and family members waiting on the outside. They also suffer if their loved ones are subjected to any cruel inhuman or degrading treatment. 
Mr DEPUTY SPEAKER 
: I am sorry to interrupt the member. The levels of discussions that are going on are such that I am having difficulty hearing the Minister. We have lobbies if people want to go out and confer. I ask members to keep the noise level down because I think it is very unfair to the member speaking. 
Hon TARIANA TURIA 
: Our greatest fear is that this legislation will influence the prison environment to such an extent that inmates will be less likely to complain jails will become increasingly dangerous and that danger will go unchecked. The system must be refocused to consider the needs of families and communities and to abide by the common law standard. It would ensure that inmates are treated with some dignity. 
We are aware that Tony Ellis barrister has decided to make direct communication to the United Nations Committee Against Torture to Amnesty International and to the Association for the Prevention of Torture for injustices that were formalised in the Prisoners’ and Victims’ Claims Act 2005. He has also drawn attention to the fact that the Committee Against Torture recommended an inquiry in 2004 in respect of the claims laid by Chris Taunoa and others. 
We have a chance tonight to put things right and stop this ongoing abuse of power by the State. The Maori Party will not be supporting this bill. We believe that the bill does not work in the best interests of prisoners victims nor the common good. Tena koutou. 
SIMON BRIDGES (National—Tauranga) 
: 
 If we are upfront as members as I am sure we all are we can accept that all political parties from time to time are somewhat simplistic and reductive in the way they deal with crime from really all manner of viewpoints and persuasions. We can sometimes take the view that all prisoners are bad and all serious punishment is good. Members on the other side can sometimes say that any more punishment is bad and that we should not be doing anything. I think we have to guard against that. The sad reality is that no party in this House and no set of laws—even the best set of laws—will see a New Zealand without victims and without crime. There will always be serious harm caused to victims and suffering for years and years to come whatever the Government response. That is the reality of crime and it goes back effectively to Adam and Eve. 
I have to say that I think nevertheless this is a very good bill. We are doing a strong thing and I will come to that later. I will also say with reference to thoughtful speeches by David Clendon and the Hon Tariana Turia that I accept that prisoners can be victims and I accept that certainly in serious abusive cases there is a need for the vindication of their rights sometimes with significant compensation. But I also say that it is my understanding of this bill—which was introduced by Labour and is now supported by the Government which wants to extend it—that it does not take away prisoners’ human rights. If I can put it crassly—at a basic moral level I think this is right—the legislation creates a debt collection mechanism for victims who have been knowingly wronged often grievously so by offenders who were later imprisoned to receive compensation from their offenders. The bill in no way shape or from states that prisoners should not have their rights vindicated nor receive compensation. But where victims of their crimes have been put to cost and they have not received what is their due from prisoners the original 2005 Act the Prisoners’ and Victims’ Claims Act goes some way at least to righting that wrong. 
Effectively what we are doing tonight is extending the expiry date in the Act out to 2012. We are allowing the restrictions on the circumstances in which courts can award compensation to prisoners to continue and we are providing a simplified process for victims of prisoners to make claims against prisoners’ compensation before the prisoners fritter it away to put it frankly. I am pleased to say that we are going further than that with another bill later this year. 
I do not think that the members in this House can do everything required to right all wrongs to ensure that there are no victims or to ensure that victims never suffer but I think that through this bill and quite a number of other bills that Parliament has passed this term we are certainly going a good way towards getting better justice for victims in this country. 
CARMEL SEPULONI (Labour) 
: 
 The Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill extends the restrictions on the awarding of compensation brought in by the Prisoners’ and Victims’ Claims Act 2005 for a further 2 years from 1 July 2010 to 30 June 2012. Labour’s position is that basically we passed the Act that this bill is seeking to extend and as this bill is only making a technical change to the date of the Act as an interim measure then of course we will be supporting this bill. This bill will ensure that victims will continue to get access to prisoners’ compensation. This temporary measure is to make sure that victims’ access to prisoners’ compensation does not lapse between the expiry of the Act and the commencement of the new bill that the Government intends to introduce later this year—so we hear. The aim of this bill is to amend the Prisoners’ and Victims’ Claims Act and because it is just a minor and technical change we support it. The current Act states that the awarding of compensation to victims expires on 1 July and that the victims’ claims process applies only to compensation in respect of claims made before that date. This bill will extend that application to June 2012. 
An interesting thing that has come up about this relates to the protection of victims’ rights. I will touch on some of the things that Labour did whilst in Government to ensure that victims’ rights were protected. We took that matter seriously and I think that is proven by our track record with regard to the legislation put into place by the previous Labour Government. We introduced and passed the Sentencing Act in 2002 which introduced a presumption in favour of reparation and resulted in this sentence being used more frequently. The Sentencing Act also recognised the potential of restorative justice processes to make offenders more accountable to victims and it enabled courts to take both financial and non-financial offers of amends by an offender into account. Labour introduced and passed the Victims’ Rights Act in 2002 which extended a number of rights to victims such as rights to information and the ability to have input into sentencing decisions through victim impact statements. In 2003 the Ministry of Justice launched a campaign to trace those who were owed money and it spent $385000 on advertising an 0800 number for people to call. The establishment of new collection centres further bolstered the collection and disbursement of reparation. In the 2003 Budget $9 million was allocated for that purpose. Labour passed the Prisoners’ and Victims’ Claims Act in 2005 which ensured that the victims of inmates who had been awarded compensation could claim against that compensation. The previous Labour Government has a proven track record with regard to taking the rights of victims seriously. 
I will now touch on the lofty promises made by the National Government post the 2008 election with regard to the rhetoric that it has put out about the protection of victims’ rights—because it has been rhetoric. The Government has had a whole line on being tough on crime and protecting the rights of victims. It has purported to represent victims at some sort of level that has never been reached before but unfortunately I think that its track record over the last 18 months shows that that is not the case. We need to look not only at what that Government has done in law and order but also at what it has done across the board. One area where it has failed to protect the rights of victims and failed to provide the necessary services required by victims to help them move on and progress in their lives is accident compensation. I think that this is relevant because when we hear the rhetoric going around about protecting victims and then we see that this other stuff is happening in relation to accident compensation we have to question whether that Government is fulfilling its promises to the New Zealand public. I am talking about sexual abuse victims who are no longer able to get the support that they need under the accident compensation scheme thanks to the changes that National has made. That is something that all of us on this side of the House have seen with regard to the constituents whom we are out there supporting advocating for and representing in this House. We have seen how the changes in policy that that Government has put into place with regard to accident compensation have failed those particular victims. 
I can think of one story I heard when I was in Waitakere recently—maybe a month ago—when I was meeting with different groups that provide counselling services for sexual abuse victims. This case was brought to my attention when I was meeting with those counsellors. It was in respect of a woman who had been sexually assaulted. It was a while ago but she was still suffering from that sexual assault. She had been receiving counselling that had been funded by the Accident Compensation Corporation and the counsellors were concerned that she would lose that funding. This particular victim and her family was very aware of this. The counsellor told me on that day that the woman’s son even rang the counsellor and said that she could not stop providing those counselling services to his mother. He did not think that his mother could do it without the counselling and he thought that she was at risk of committing suicide if she did not receive the service. 
On the same day that the counsellor was telling me the story someone else walked into the room and let her know that the corporation had declined to fund that woman’s counselling. We sat there and I asked the counsellor what she would do. She said that her group would continue to provide the service without the funding. There would be no support from the Government and no support from the Accident Compensation Corporation. The counsellors would keep giving the woman the counselling but they could not sustain that for a long period of time. That is only one example of a person who is a victim and who has been affected by the changes in accident compensation that that Government has put into place. Her right to counselling to recover to move on and to get the care that she needs has been taken away by a change in policy from members on that side of the House. Going back to what I was saying before we are concerned that what that Government says is purely rhetoric about the protection of the rights of victims. 
In that instance it was definitely not something that that Government saw as being a priority. Instead it has left that woman at risk having to look after herself and in potential danger. Talking about that issue a little more over the last couple of years the number of approved claims for counselling were between 200 and 300 each month. The number of approved claims for the whole of New Zealand in January this year was 11 and there were only six in February. So members on that side of the House cannot say that the policy changes they have put into place with regard to accident compensation have not had an effect at all. It is obvious that the care provided to these victims has shrunk to almost nothing. That is only one example of where that Government has failed to protect the rights of victims. 
There are many others. We could talk about the “three strikes” bill and about how some of the submitters on that bill told us very clearly that it would only see victims re-victimised. They would be at risk of having to go through longer court proceedings because of appeals and other things. Those were the things that came through very strongly in the submissions. The last thing that I will touch on is preventing more victims of crime. That is something that this Government over there has failed to do also. The latest crime statistics showed that the number of crime victims are growing not decreasing under National. As the Government’s response the Minister of Police has cut police numbers in a number of areas. We have seen in Waitakere that crime has gone up and violence has gone up yet recent information shows that the Waitemata district will lose 10 police officers. So that will not help with regards to the number of victims we see. We support this bill but we question the Government with regards to its ability and its track record to protect the rights of victims. Thank you. 
KANWALJIT SINGH BAKSHI (National) 
: 
 I am privileged to participate in the second reading of the Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill. The bill extends the restriction on the awarding of compensation for a further 2 years starting from 1 July 2010 and going to 30 June 2012. The second amendment is that the victims’ claims process applies to compensation awarded or to be paid pursuant to an out-of-court final settlement in relation to a prisoner’s claim made on or after 1 July 2010 but before 1 July 2012. The Government wants to eliminate the all-too-frequent horror stories where victims are forced to relive traumatic events simply because the system has been deficient or has let them down. Invariably the offenders are getting a better deal than their victims. Since this Government took office it has been working hard to improve the law and order situation in New Zealand. It has also given victims’ rights top priority. I commend the bill to the House. 
A party vote was called for on the question  
That the Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill be now read a second time. 
Ayes 108 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1. 
Noes 14 
Green Party 9; Maori Party 5. 
Bill read a second time. 
In Committee 
CHRIS TREMAIN (Senior Whip—National) 
: 
 I seek the leave of the Committee for the Committee stage of this debate to be taken as one debatable motion and that there be unlimited speeches. 
The CHAIRPERSON (Eric Roy) 
: That there be one debate and unlimited calls. 
CHRIS TREMAIN 
: Limited to the scope of the bill of course. 
The CHAIRPERSON (Eric Roy) 
: Could the member restate the leave so that I understand it. 
CHRIS TREMAIN 
: I seek the leave of the Committee for the debate on the Committee stage of this bill to be taken as one question and that the number of speeches are unlimited but limited to the scope of the bill. 
The CHAIRPERSON (Eric Roy) 
: Leave is sought for that purpose. Is there anyone opposed to that course of action? There appears not to be. Leave is granted. 
Parts 1 and 2 and clauses 1 to 3 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 Given the wide-ranging nature of this debate but within the scope of the bill that the Government whip has indicated I want to touch on a couple of things that were said that are germane to this Committee stage which were noted in the previous debate. We touched on a number of points. We said that Labour would support this legislation. Why? Because we wrote it. The extensions to it are technical in nature. They simply extend the provisions and the timing provisions for 2 years which were put in place by the previous Labour Government. I listened to the debate with interest but we noted that if this Government was serious in respect of how it deals with victims the acid test was not a technical extension to this bill. The acid test as colleagues on this side of the Chamber have alluded to is how we deal with victims as a whole. The most germane example that members on this side used was the lack of resources that have been cauterised by this Government in respect of victims of sexual abuse and sexual crime. I waited and watched other members and I noted Mr Borrows’ contribution on two points. I invite the Minister to rise and enlarge on Mr Borrows’ point. He said he acknowledged the lack of funding and the denial of funding to victims of sexual crime. He went on to say because I wrote it down: “This will be a priority for this Government.” 
I commend him for the sentiment but the victims are still waiting. They waited at the last Budget they waited at the Budget before that and they wait tonight. They are sitting in dark and cold places waiting for a Government to stump up with some sort of money so that they can get the counselling and the help that they so desperately need. If funding is a priority I say to the Minister I would be very interested to know when where which agency if not the Accident Compensation Corporation how much and how the wrongs that this Minister and this Government have perpetrated will be put right in the denial of funding for victims of sexual crime and sexual abuse. 
I listened with interest to the contribution from the ACT Party members—those bastions who say that they stand beside victims more than anybody else in this Parliament. Was there a contribution? Well I listened very diligently. There was no contribution from the ACT members—none zip silence. What does that say? I then listened to the Maori Party members’ contribution. It was an interesting one. There were some fair points made I have to say about some very tragic and appalling circumstances many years ago. But I also waited for that Minister and that support party to get up and also say: “Hang on. We think that the Government that we aid and abet every day has done wrong by pulling the rug out from under victims of sexual crime and abuse by cutting their funding by not allowing them to get the help that they received under the previous Government.” There was not a word. Oh no. That would be a bit of a tough one would it not? It would be tough to stand grit one’s teeth and criticise the governing party that stands over us every day and demands our vote demands our support and demands our accountability. 
What about the Maori victims of sexual crime who are denied funding under this Government? Did we see the Minister and the co-leader of the Maori Party stand up for her constituents and the constituents that her party purports to represent and say it is wrong that her constituents who are victims of heinous and tragic crimes that they live with every day are denied the funding that they need because of this Government? Oh no. That would be a bit tough would it not? We can talk about history. We can talk about other injustices that occur and we pay respect to them. But oh no it is being a bit meek and a bit mild. It is a bit tough to stand up and say: “We don’t agree with what they have done.” 
I challenge Ms Turia Mr Boscawen and others who were very silent on this issue because of course every day they aid and abet the injustice that is perpetrated by that party. I acknowledge that at least Mr Burrows addressed the issue and at least he said it would be a priority for the Government in the future. The difficulty for Mr Borrows is that he does not sit in Cabinet; maybe he should because at least he is prepared to address it in the debate. His Cabinet colleagues every day on a Monday morning sit there and do nothing about it. I say to Mr Borrows good on him! He said it would be a priority for this Government. I take him at his word that he is knocking down the doors of Nick Smith’s office and other colleagues and asking what priority means. When? Where? What agency? How much? When will we help these people? 
But I challenge every member over there Mr Bakshi and others to stand up and tell us what they will do to assist the victims of sexual abuse and sexual crime. Because of their Government their vote and their aiding and abetting of their party when will those constituents actually get assistance? It is not good enough to say that it will be a priority in the future. I say again that these people waited in the Budget before last. These people waited in the Budget we have just had. These people waited tonight and every night this week and will wait next month and the months after. They have their own nightmare every day and every night as they live with what was done to them and they live with the fact that because they do not have the means they cannot access the resources that they desperately need even though there is probably somebody in the clink and there is no dispute that a crime was perpetrated against them—there is a verdict that says they were done over assaulted maligned and treated tragically and disreputably. No one disputes that. 
The acid test is not this legislation; this legislation is about extending what we did when we were in Government. The acid test as to whether the Government is committed as I have said before to assisting the victims and the most vulnerable is what it is going to do about those victims whose funding those members over there in that Government cauterised. Oh no. Members can hear a pin drop in here can they not? There is not a word. Mrs Turia smiles. Well I say to Mrs Turia as she grins away at me that when she does her next clinic and a member of her constituency Maori or Pakeha walks into her office and says: “I need help; I was raped I was assaulted I was abused.” and that constituent cannot get the assistance that he or she had in years past because of the vote that that member and her ilk give that Government every day I wonder whether Mrs Turia will sit there quietly meekly and mildly as she does in that Mother Teresa - like way and grin at that constituent. I wonder whether she will. 
I think better of that member actually; I suspect she will not. But again it is the acid test. She is a Minister. She has incredible power. She actually has the power as a coalition partner to not only stamp her feet but to say that she and her party are out of here that she is not going to tolerate this. But no they are—to use the biblical phrase—like lambs to the proverbial slaughter. Well I say to Mrs Turia Mr Boscawen Mr Garrett and the Sensible Sentencing Trust that those who stay silent and do not protest this injustice against protecting the most vulnerable those who stay silent and bear witness to it will have to be accountable to their various constituencies both at an election and in other places and other times. 
I invite the Minister in the chair to deal with Mr Borrows’ pertinent point: he said this will be a priority for the Government. I invite him to get up—we will give him as long as he wants—and tell us when this injustice will be righted when the money will flow and become available and what agency will administer it. These poor folk live with it every day and every night. As I think my colleague Lynne Pillay said some are no longer with us. They have taken their own lives because they cannot cope they cannot deal with the crime that has been perpetrated against them and they receive no assistance from this Government. How many lives could we have saved if we had ensured despite the bureaucratic bickering over there from Nick Smith and others that—to hell with it—these people would get the assistance they need? How many victims’ lives could we have saved? 
I say to people who get up and make lofty statements about victims that here is where the rubber hits the road. We will wait and see what happens in the lead-up to the next election because I suspect all of us on all sides of the House have had victims of these crimes come to us in terrible circumstances begging for assistance. They should not have to beg. The Government that they are governed by in this country is there to assist them support them stand by them keep them alive and give them the assistance they need. 
KEITH LOCKE (Green) 
: 
 One of the problems with the Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill—and it is a problem with the Prisoners’ and Victims’ Claims Act which it amends and which came into force under the last Government—is that it gives the impression that victims are getting serious financial compensation. In fact they are not. It is just crumbs from the table for a few victims. The real question of proper compensation for all victims of crime is not addressed in the bill. 
It is interesting that when the original bill came through under the Labour Government and became an Act the victim support organisations were amongst the harshest critics of it because they saw that it would give some pretence that there was real compensation for victims when there was not any universal scheme for providing appropriate financial compensation. There has been some development—and the police have done a good job in this area—of victim support immediately after a crime is committed when people are suffering badly from psychological trauma. There is a great volunteer system across the country of people who give freely of their time to help the police and to be with victims at their time of greatest trauma. But when we come to the follow-up system of proper financial compensation to put people back on the road and to compensate them for what they have suffered we find that it is not really there. 
In fact as has been commented before there is a perversity in the legislation in terms of the crumbs from the table that some victims might get. Victims almost have a vested interest in criminals in jail being beaten up then making a compensation claim because the victims will get a little bit of the compensation themselves. It is a twisted way of a victim of crime getting compensation. The whole concept of punishment is distorted by this bill. When people commit crimes they are sentenced to be punished by a term in prison. That is the punishment—the term in prison. They are not sentenced to have other things done to them like being beaten up or anything like that. There is almost a concept behind this bill that they deserve a bit of beating up a bit of punishment because if that happens they will not be rewarded so much in terms of any compensation. 
There is the concept that prisoners are lesser beings in fact with lesser rights and that is a very bad concept that eats away at our ethics. The root of all prejudice is defining a category of people as lesser beings and perhaps subjecting them to mistreatment and beating. In extreme cases we have fratricidal conflicts and ethnic conflicts where people beat up and kill each other because they treat the other lot as lesser beings. Prejudice in this society towards prisoners—and Tariana Turia mentioned this in her very good speech—carries over to prejudice against other races particularly races that are more highly represented in the prison population. This bill by treating prisoners as lesser beings with lesser rights including lesser right to compensation is feeding that stereotyping of people in a negative way. It cannot be tolerated and that is why the Green Party is voting against the bill. 
CARMEL SEPULONI (Labour) 
: 
 We support the Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill. As has been discussed it is just a technical change. It amends the Prisoner’s and Victims’ Claims Act which was an Act that Labour brought in in 2005. We support it because it addresses the rights of victims. 
I will touch on something that my colleague Clayton Cosgrove discussed earlier with regard to the absence of the ACT Party in the debate on this bill. That is concerning because so often we hear from its members about the protection of victims and the rights of victims. We heard that rhetoric over and over again in relation to the “three strikes” bill. Yet when there is genuine legislation before us that actually addresses the rights of victims those members are nowhere to be seen. That is concerning because it shows that ACT really is not about the rights of victims or the protection of victims; it seems that it is more about punitive measures for offenders with no real compassion for victims fuelling that. That is of concern to members on this side. 
The bill addresses the rights of victims to any compensation that prisoners may have access to. Victims will be able to make a claim on that money. So the bill addresses the rights of victims. But this side of the House has an overwhelming concern that although the bill does that it is only one part of what needs to be done. A lot of other things need to be done. A lot needs to be done by the National Government to protect victims’ rights but unfortunately over and over again it has failed to do that in so many ways. 
One of those ways is the Government’s changes to accident compensation policies. It has failed to protect the rights of sexual abuse victims and it has failed to provide the support that those victims require. It has let down those victims and it has let down the extended families of those victims. This side of the House feels that that is intolerable. It is hard for us to listen to members opposite say they support this bill because they support the rights of victims. We know that on the one hand National is supporting this bill that it has introduced this technical change so that the legislation Labour introduced in 2005—the Prisoners’ and Victims’ Claims Act—can be extended yet on the other hand National has denied sexual abuse victims their right to accident compensation services to the counselling that they require. That is a concern but it is only one example. There are other examples. 
I will touch on the increase in crime that we have been experiencing across the country over the last couple of years. There has been an increase in violent crime and in crime generally. One of those places that has experienced that increase is Waitakere but unfortunately the Government cut the number of police in that area by 10 officers. It is difficult to comprehend how we can assist victims of crime or stop there being further victims of crime when we see actual cuts to the number of police available to address call-outs to ensure that those things do not happen or to address them when they do. That is another area where we have seen the Government fail to protect victims. It has avoided doing anything about the increasing number of victims and it has not represented them by making sure that whatever policies whatever measures whatever actions it takes are supportive of victims. 
Labour members support this bill. We support it because we introduced the Act in 2005 and we know that it is good legislation. It does all of those things that I said the National Government should be doing in other areas but has failed to do. The bill protects the rights of victims and it addresses the rights of victims so we are supportive of it. We are happy that the National Government is extending the Act. It is good to see the Government doing something right. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 It seems a little odd that all the speakers in this Committee stage so far have come from the Opposition and that this Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill essentially just extends a provision that the Labour Government brought into effect back in 2005. That seems odd because National campaigned so heavily at the last election campaign on being tough on crime on being the law and order party and on being the party that would put victims at the centre of justice and law and order policy. Of course its campaign was all about what a bad job Labour had done. Well if National were really serious if National actually had some ideas and if National were to follow through on its campaign promises then it would not be extending something that Labour had already brought in back in 2005. 
The party that has had some success in pushing through harsh and Draconian law and order legislation is of course the ACT Party which is also stunningly silent this evening. David Garrett was the architect of the “three strikes” legislation and I was lucky enough to have an interesting debate with Mr Garrett not so long ago. He came up to Palmerston North to extol the virtues of that legislation and we talked about all the ways in which that legislation has also failed to put victims’ rights at the centre. We will see victims going through much longer trials as the incentive comes into place to encourage those who have been charged with a crime to fight it to the bitter end by appealing against their sentence because it will be so harsh. We will see victims dragged through all of that. 
The “three strikes” legislation did nothing to support victims in the way that the forerunner of this bill the Prisoners’ and Victims’ Claims Act 2005 went a small way towards doing. We talked about the fact that the “three strikes” legislation has absolutely no preventive character about it whatsoever. Mr Garrett even accepted that the Ministry of Justice figures were right in that we would see more people going into prison because that legislation simply would not be effective in actually preventing any crimes or in preventing any more people from becoming victims. It was “ambulance at the bottom of the cliff” stuff which in a way I suppose this legislation is as well. That is why it was always only a temporary measure. Labour brought it in as a temporary measure only but National is so devoid of ideas and so shallow in its campaigning that it has nothing to follow it up with. The ACT Party the party that is supposedly tough on crime—it is even tougher on crime than National; they are trying to outdo each other as to who is tougher—has absolutely nothing to say about this bill whatsoever. 
Given that this bill is an extension of what the Labour Government introduced perhaps it is worth reflecting on what a good job Labour did in putting victims’ rights at the centre. Back in 2002—as long ago as that—the Sentencing Act was adjusted to introduce a presumption in favour of reparation and that resulted in reparation being used as a sentence far more frequently. In 2002 we also saw an increase in the use of restorative justice so that offenders would actually be more accountable to victims. That legislation really put victims at the centre of sentencing and of law and order policy. 
Labour introduced the Victims’ Rights Act back in 2002 as well. Moving forward to 2008 Annette King introduced the Victims Charter to develop and build awareness about the standard of service that victims of crime could expect. Of course Labour promised to put a significant amount of money—about $1.5 million or more than that I think—into Victim Support to boost that organisation’s ability to provide services to victims. That is the kind of policy the kind of legislation that puts victims’ rights at the centre. 
This bill is perfectly reasonable and that is why Labour will support it but the legislation it amends was only ever something temporary. It was a temporary measure with a view to doing more. Frankly the National Government midway through its term has had plenty of time to think up new initiatives to show that it had more to its campaigning more to its rhetoric than just a shallow knee-jerk reaching out to those who felt affected and abused by crime if they had been victims of it. This is a nothing bill. We will support it but really it does nothing for victims. 
CHESTER BORROWS (National—Whanganui) 
: 
 It is interesting to hear the tirade that is coming from the other side of the Chamber as Opposition members seek to elevate themselves in terms of the issue of protecting victims’ rights just as when previously in Government they sought to elevate themselves by claiming to be harder and harder on crime. It is very interesting to note the number of things that they did not do along with the number of things that they have not supported when they have come up within the House to actually address things such as preventing crime preventing the causes of crime and looking after victims. 
For instance we remember the tirade that we heard about the introduction of the DNA legislation which provided for the taking of DNA samples from everybody who was arrested for an imprisonable offence. We remember the long speeches that we heard from for instance Moana Mackey who told us what terrible things one could do once one had secured the DNA from somebody who had been arrested for an offence. That legislation allows us to isolate the DNA profile of somebody who has been arrested for a minor offence so that at some stage in the future if further and more serious crimes are committed against victims that person can be identified early. That is probably the single most significant legislation that has been introduced to this House in 100 years to prevent victims from being violated in very serious ways. All that we received were brickbats from the Labour members in respect of that. 
The previous speaker Iain Lees-Galloway talked about this Government having done nothing for victims. I ask what about the Child and Family Protection Bill? The Opposition members will very quickly say they drew up the provisions that are now in that bill introduced them in the House and did a whole lot more than we are doing. But I ask when Labour’s bill was introduced to the House. It was 4 days before the Parliament adjourned for the 2008 election. It was introduced then because Labour had been too busy self-promoting in terms of the Electoral Finance Act to get on with the business of protecting the citizens of this country. Although in the whole course of this debate those members have banged on and on about victims they failed throughout the whole term of the previous Government—9 long years—to address the prisoners who are languishing within our cells and the victims of their crimes. The previous speaker talked about the Victims’ Rights Act 2002. That Act replaced the Victims’ Rights Bill which had been introduced by the former National Government prior to its leaving office in 1999. Labour waited 2 years before it did anything about replacing that bill. It is all very interesting to hear the Opposition members accusing us of doing stuff while we are in Government in respect of victims yet Labour wasted and squandered the opportunities that it had to do things while it was in Government. 
The Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill maintains the integrity of those people who are in jail by making sure they receive the best treatment and punishing those who would keep them in a manner that does not give them the best treatment which they deserve as inmates being held at the bequest of the Crown. But having been sentenced for a crime it prevents them from accessing big amounts of monetary compensation that should rightfully find its way to the victims of their crimes. The Opposition members will vote for this bill; in fact almost everyone in the House will vote for it. We have not heard one single reason why the Labour Party supports this legislation other than that its members bang on that they might have thought of it first. Any sensible Government would have done so. We do not try to claim lots of points for promoting legislation that Labour put in. Labour agreed with this bill and it transitioned through the Justice and Electoral Committee very speedily because of the ability that we have on that committee to compromise and understand one other regardless of which side of the House we come from and because of the sterling work of that committee. 
Hon DAMIEN O’CONNOR (Labour) 
: 
 I will give the previous speaker Chester Borrows one reason why Labour is supporting the Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill: this is transitional legislation and it relies on the National Government bringing legislation to this House soon or so those members say. We do not trust the National Government to bring in sensible legislation that will follow on from this. As has been said before this bill flows from an idea when Labour quite rightfully identified some problems with victims seeing themselves as being ill-treated when compensation was paid out. As a former Minister I agree that the Mangaroa situation referred to by the Hon Tariana Turia was a sad state of affairs. The process was a lengthy one and compensation was paid out to prisoners. People at that time said it was rather unfair that prisoners got compensation but they or their family member as a victim of crime were unable to get any assistance. 
In principle as the speakers before me have said Labour supports this but the devil is always in the detail. The fact that the bill and the Government state that we will be bringing back into Parliament later this year another victims’ claims amendment bill makes us wary. That is why we will support this bill but we have reservations. The question that the Minister in the chair the Hon Nathan Guy might be able to answer is this. Today we have a prisoner on the run. The Minister of Corrections and the Minister of Police are one and the same so maybe she can talk to herself and work out who is responsible for this prisoner escaping; but he is on the run. I suppose we can assume that he is under State responsibility and if he commits a crime does this bill kick in? Does this bill provide a process for anyone—victim or prisoner—who may be hurt in the pursuit or the recapture of that particular prisoner? 
Unfortunately we are seeing too much of this. I suggest that we will see a whole lot more problems with prisoners under National Government control under the care protection custody or security of the Minister who has double-bunked up and the down the country and who in my view is creating for herself a powder keg. We will see more problems for prisoners themselves we will see more victims—and many of them will be prisoners because they may have been assaulted by other prisoners. We know there is a huge gang influence in the prison system. 
The question I ask of the Minister in the chair is how this legislation will affect prisoners who might be dealt to or severely harmed in prison under the control of the Government. Does this mean they receive compensation; if so where should it go—to their family? Perhaps the Minister can take a call as there is plenty of time for the Minister who I am sure has some idea of whether this bill will address the issues of compensation that might be claimed by a prisoner who is severely beaten by another prisoner. 
Paul Quinn 
: Come on. 
Hon DAMIEN O’CONNOR 
: Mr Quinn knows that that happens quite a lot. 
Paul Quinn 
: Do I? 
Hon DAMIEN O’CONNOR 
: Yes out at Rimutaka close to his home. He knows— 
Chris Hipkins 
: He doesn’t live anywhere near the Hutt. 
Hon DAMIEN O’CONNOR 
: Is he not near the Hutt? 
Chris Hipkins 
: He doesn’t live anywhere near the Hutt. 
Hon DAMIEN O’CONNOR 
: No I suppose he never is out there; I guess that is right. Perhaps he lives in Rimutaka Prison. No I cannot say that. There are some legitimate questions that the Opposition has about this legislation. The previous speaker asked why Labour is unsure about this. I tell the member that it is because it is being passed on the basis and on the assurance that the next legislation coming through will address and assist victims. We have already heard from my colleagues that if someone is a victim of sexual assault then he or she is likely to continue to be a victim because no assistance will be provided by the National Government and its accident compensation system. Maybe the Minister can take a call and answer some of the questions I have for him. 
The CHAIRPERSON (Eric Roy) 
: While we are here working under urgency the Committee might be interested to know the rugby score is England 28 and New Zealand Maori 35. 
MOANA MACKEY (Labour) 
: 
 I am very happy to take a call on the Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill in the Committee stage. Of course Labour is supporting this bill. I was interested to hear the member Chester Borrows comment that he did not know why Labour was supporting this bill. I tell that member that it is because it is an extension of the legislation the Labour Government passed the Prisoners’ and Victims’ Claims Act 2005. I remember that I was at that time a member of the Justice and Electoral Committee which considered the Labour legislation and National Party members were very critical of it. I am very pleased to see that they have seen the error of their ways and have decided to extend the legislation Labour put in place. 
Labour’s legislation attempted to address a very very difficult problem. I recall members of the National Party saying that we should have taken away the right to sue altogether. That view ignored the reality that we were dealing with a range of issues from the very ridiculous to the very serious; we felt that that was the best way to address them. I am pleased that Chester Borrows has confirmed that National has seen the error of its ways. 
I will also address comments that Chester Borrows aimed at me in regard to DNA legislation. Again it just confirms that National has absolutely no understanding of this issue at all—no understanding. Chester Borrows criticised me for raising very valid concerns about the funding of increased powers for DNA use by the police and the funding of the Institute of Environmental Science and Research. The point I was making was that when Labour introduced extended powers for DNA use by the police and the criminal justice system we could be assured that Labour would properly fund the police and the Crown research institutes to carry out that work and avoid a miscarriage of justice in the use of this very powerful technology. Yet under this Government we have seen a broken promise on the funding of Crown research institutes—a broken promise. We have seen science funding slashed and we have seen scientists let go. The point I was making which appears to have evaded Mr Borrows was that if the Government will not fund DNA legislation properly it opens up the very real possibility that there will be an enormous miscarriage of justice. 
I remind Mr Borrows of the case that happened right here in New Zealand when a man in Christchurch was arrested for a homicide. He had given a DNA sample because he was the victim of an assault. Fortunately he had a very good alibi for the homicide which was that he was in Christchurch being assaulted at the time of the homicide in Wellington and therefore could not possibly have committed the crime. That case highlights why DNA legislation needs to be backed up by funding. If Mr Borrows does not understand that fact I am concerned about what it means for our police Crown research institutes and the citizens of New Zealand who could be wrongly convicted of crimes they did not commit. 
I also point out to Mr Borrows that it worried me that the Government seemed to think that DNA testing was foolproof. It is not. If the Government thinks DNA testing is foolproof that having DNA evidence means an automatic conviction and that not having a DNA sample means we will not it is a very dangerous situation. It concerns me that the member seems to be so scientifically illiterate that he would attack me for raising those very valid concerns in the Chamber as we extended powers of DNA legislation beyond that which already existed. All a DNA sample at a crime scene proves is that someone’s DNA was at a crime scene. It is then up to the rest of the evidence to prove that the person was there and that what the prosecution says happened actually did happen. It is up to all the other evidence. The flip side is that the fact that there is no DNA evidence at a crime scene does not mean that we cannot get a conviction. I know it has been frustrating for prosecutors around the world that because of what is called the  
CSI  
effect people seem to think that if there is no DNA evidence we cannot possibly get a conviction. 
This goes to show why as my colleagues have been saying this Government seems to have absolutely no understanding of those issues. 
Chester Borrows 
: Which ones? 
MOANA MACKEY 
: All of them I say to Mr Borrows—all of the issues that have been raised tonight. We are pleased that the Government is carrying on a piece of Labour legislation as it has in so many other areas despite saying that Labour’s time in office was the worst 9 years in the entire history of the universe. It seems to have carried on with most of Labour’s legislation and changed hardly anything. The fact is that the comments made by Mr Borrows which inspired me to come to the Chamber and respond show just how out of touch this Government is when it comes to victims of crime. 
DAVID CLENDON (Green) 
: 
 Kia ora koutou. The purpose of the Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill and the Act that it seeks to extend is clearly about compensating victims and indeed that is appropriate. Victims suffer loss of property they suffer physical damage and they suffer emotional and mental injuries and it is appropriate they should be compensated for that. The Greens have been very happy to support legislation that is effective in compensating victims for the wrongs done to them. 
That raises a question that I would like to pose to the Minister or to any of his Government colleagues who would like to comment. How many individual victims have received compensation in the 5 years that the Act has been in place? How much money have those people received? Give us some ballpark figures. Approximately how many victims have actually benefited and to what extent have they benefited? It is a fairly simple question but it would be interesting to hear the answer. 
There has been quite a lot of activity around the Department of Corrections this year. We certainly cannot accuse the Minister of Corrections of being idle. We have seen legislation that enables the use of court cells as holding cells for sentenced prisoners despite the fact that we know from the UK and elsewhere that that is quite a dangerous mechanism that inevitably reduces prisoners’ access to rehabilitation. It removes them from their families and at worst makes it difficult for them to be provided with basic adequate food and sanitation. We have seen an active move towards double-bunking in our prisons. Prisons that were designed for a certain number of inmates now carry significantly more than that number and that inevitably will raise tensions in prisons. It will make them potboilers and will increase the likelihood of violence and more victimisation both within and outside those prison walls. We have seen the “three strikes” legislation which takes away the opportunity for judges to make considered judgments on individual cases. It effectively takes the mandate away from judges and puts it on to Parliament. Again that is an imposition on people’s rights to be heard fairly and properly in a court and to be sentenced by that court. We have seen the way opened for private management of prisons and once again we know from international experience that that will degrade conditions within prisons. Inevitably the profit extracted from them will mean there are fewer services available to prisoners and there are fewer staff. Prisons will become more dangerous more violent and less humane places. 
A week or so ago the Law and Order Committee was treated to a show-and-tell from the Minister and her chief executive officer. We saw a demonstration of the equipment being given to guards to protect them such as helmets stab vests heavy boots batons and pepper sprays. The Minister’s solution to more violence in prisons is equipment to defend or rather to protect the officers who have the unenviable job of going in after violence has broken out to try to clean up the mess to try to resolve an incident that has already occurred. 
All of those measures are reflective of a very busy and active Minister who has a very busy portfolio. But where is the legislation that would return some justice to the victims of crime? Amongst these bills and these new policy moves it is very difficult to see anything that will contribute to the well-being of victims. We are all committed I am sure we agree to compensation being given for harm done. But where is the proactive policy where is the drive to find solutions to crime to find solutions to victimhood to recompense victims to reduce the likelihood of reoffending and therefore to reduce the creation of more victims? We are simply not seeing it from this Government. What we are seeing is activity legislation and policies that are symptomatic of a view that prisoners should lose their rights that they should be locked up for longer and that they should suffer tougher sentences. That is despite the evidence and the common-sense assessment that those strategies will simply lead to more violent societies and less safe societies and will leave the victims of crime out on a very long limb with very little support and very little likelihood of recompense. Kia ora koutou. 
STUART NASH (Labour) 
: 
 I have one question for you Mr Chairperson Roy. The New Zealand Maori rugby game against England: where was that played? In Napier I think; the lucky city is in Hawke’s Bay. The Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill is a very interesting bill. Chester Borrows talked about DNA. I think that every now and then the Government has to take a DNA sample to check whether Chester is still alive. Well he may be at the moment but I can tell members that the word on the street in Whanganui is that Hamish McDouall is ahead in a poll that was taken recently. He is storming ahead in Whanganui. Here is a tip: if members have a spare $10 they should put $5 on the All Whites and $5 on Hamish McDouall. Hamish is safe odds in Whanganui. It used to be our seat and it will be our seat once again so I say “Go Hamish!”. 
This bill is about the victims of crime. Of course it contains provisions that were introduced in 2005 by a hard-working Labour Minister. It is hard to know which one it was because they were all very hard-working. As we all know after 9 years Labour had got through one hell of a lot of legislation. It changed society for the better without a question of a doubt for victims as well for other people. Chester Borrows stood up and said the Labour Opposition has not given one reason why we support this bill. Well I will give National one reason why we support this bill: because we support victims’ rights as well. Who would not? Of course we support victims’ rights. New Zealanders support victims’ rights because New Zealanders support justice against inequity. 
But I will give members a story about how this Government is eroding the rights of victims. There is a house in Napier called Serenity House. It is on the hill. Anyone knows Napier at all will know that the hill is a beautifully treed place. People would not know that this house was beside them if they lived beside it. It is a house where five women stay for a period of on average about 18 months. They are women who suffer from a severe lack of self-esteem and confidence. Eighty percent of those women are victims of sexual abuse. But that house is scared that its funding is to be cut. I ask members as I asked the Serenity House manager where those women would be if they were not in Serenity House. There are three places that they would be: firstly in the psychiatric ward of the mental health unit of Hawke’s Bay Hospital; secondly perhaps living on the streets and occasionally working on the streets; and thirdly dead from suicide. That is the stark reality when we take away the rights of victims and when we cut accident compensation funding. When I mentioned to the manager that funding for the counselling of the victims of sexual abuse was being removed from the accident compensation scheme she said she knew that but she was horrified. She could not believe that any Government could be so heartless as to do that. I know that the women on the Government side of the Chamber must agree with me. How could they not? 
Serenity House has been going for a while now and once the five women pass through their course—these are mothers and there is a registered nurse in there; a lot of them are educated women—they go out and become productive members of our community. That house does a fantastic job for those women and a fantastic job for our community but there is a possibility that its funding will be cut. I challenge the members over there and I challenge Nick Smith to organise a meeting with women’s groups—with the Women’s Refuge; with the women from Serenity House and from DOVE for example—to front up to these women and to tell them why he is cutting the funding for counselling. Why is Nick Smith doing that? Then in the same breath the Government says it stands up for victims’ rights. That is an oxymoron. I do not understand it the women who are affected do not understand it and New Zealanders do not understand it. 
Chester Borrows stood up and asked what Labour had done with regard to crime. Well I will tell him what we did: we reduced crime. That is what New Zealanders wanted to be done. We reduced crime. As Chester himself will know we sent the police out into the community and we set up community police stations. When I talk to the police officers of Napier they say they think that was a fantastic initiative because it allowed the police to communicate and integrate with their local communities and boy that has made a huge difference. That “us and them” mentality between the police and the community has all but disappeared in Napier. The police are now part of this community; they are accepted. The community goes to them if it has any problems and the police are proactive about going out to the community. It is a wonderful initiative and Labour set it up. 
We talk about being hard on crime—like David Garrett and his “three strikes” policy. That harks back to the 19th century when in England paedophiles were put in the same prison cells as the young children who had stolen loaves of bread. Is that what Mr Garrett wants this country to head back to? Mr Garrett is the voice in Parliament of the Sensible Sentencing Trust. Is that not an unusual name—the Sensible Sentencing Trust? We all want there to be sensible sentencing. Garth McVicar is from the Bay as well; sometimes we throw up interesting characters in the Bay. He is passionate but he gets it wrong and that is a shame. Unfortunately for him he ends up with people like David Garrett in the House trumpeting the “three strikes” legislation which evidence has proven does not work. In fact Mr Garrett himself stood up in this Chamber and said he acknowledged that it would not work but he thought we should still go ahead with it. National with its blind faith in the ACT Party said it would support that measure because it had said in its supply and confidence agreement that it would do so. Where is the ideology? Where is the evidence? That legislation will not help ordinary New Zealanders. It will not help the victims of crime; in fact more than likely it will create more victims. It is a travesty and it is not what sensible sentencing is all about. It is not about that philosophy; it is about how we deal with those people. But no we do not lock them up in cells now. 
I will tell members what England used to do. Before it sent prisoners away to the colonies it stuck them in decommissioned warships out on the Thames. Then they were sent across to Australia. Well we are not putting prisoners in decommissioned warships these days; we are putting them in decommissioned containers. That is not a far cry is it from what England used to do in the old days. I think that if Mr Garrett had his way he would actually stick prisoners in decommissioned warships. How does that help the victims of crime? It does not help them. 
I plead with the Government to think about whom it is harming when it takes away accident compensation funding for the victims of sexual abuse. I would love to take any member from the Government side of the Chamber to Serenity House to see the good work that that organisation and its staff do and to see the difference that they are making in our communities with damaged women 80 percent of whom are there because they are the victims of sexual abuse. I am a huge supporter of the victims of crime. I think anyone who doubts whether any MP on this side of the Chamber supports the victims of crime needs to have his or head read and does not understand what the Labour Party is about. We support this bill but we have serious reservations about the words that are coming from the Government benches. Thank you. 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I am very pleased to take a call as we debate the Committee stage of the Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill which deals of course with the victims of crime and tries to ensure that they get some justice from the processes of the courts. 
The bill picks up on some good Labour legislation that was brought about by the quite notable Taunoa case where compensation was awarded to a murderer and others. The Government of the time—with Mark Burton as a Minister and Phil Goff as the Minister of Justice—was determined to bring in legislation that ensured that although we met our international obligations and did not deny those in prison the right to the justice system where compensation was provided to offenders inside the prison system it would not mean that those who had been the victims of violence by those offenders would be excluded from benefiting from that compensation. This bill is about extending the date for a couple of years while the Government looks at a replacement model—and that is fair enough. But I would like to comment—and my colleague Stuart Nash touched on this issue—on the difference between the Government’s approach in respect of this legislation and the treatment it has given to victims of an equally serious heinous part of a judicial system and that is sexual abuse. 
I was interested to note that the number of people seeking counselling support for the trauma of sexual abuse was 200 or even 300 a month last year. Then suddenly with the changes that were introduced in February by the Minister for ACC Nick Smith we saw six people being awarded compensation in the form of sexual abuse counselling. I think about an organisation in my electorate the Male Survivors of Sexual Abuse Trust. It is headed by Ken Clearwater who does an exemplary job and who was a victim of sexual abuse in the past. The sorts of people who come through his office have often been in court have been damaged at an early age and are now perpetrating offences against others as they lash out to try to find some kind of redress for the abuse they suffered sometimes many decades before. 
The idea that we can be a just and humane society but not provide those people with the only support that we can provide—that is counselling and assistance—that we can cut the number of people being granted counselling support back from 200 or 300 a month to just a handful is an indication of this Government’s lack of commitment despite it talking the talk about supporting victims and about how it really is providing support. We can recall Nick Smith maintaining the pretence that the new guidelines had been conceived under the previous Labour Government by Massey University but Massey University blew the whistle on that and said that no the new guidelines were not of its initiation; they had been devised by the Accident Compensation Corporation (ACC). We had months and months of Nick Smith trying to say that the new pathway that had been developed was perfectly fine and was based on evidence but only last week an ACC manager finally admitted to Mary Wilson on  
Checkpoint 
 that the changes might have been introduced far too fast for sexual abuse victims. The numbers very much make that very very clear. 
I think also of the double-bunking that has been introduced under this Government. We know that crime and punishment— 
Hon Member 
: Wonderful! 
BRENDON BURNS 
: Oh it will be! We need only think about the poor lad in the back of the van in Auckland and what happened to him. When we start putting violent criminals with others it is a recipe for disaster and the price will be paid very very quickly. 
We know that crime and punishment is about the scales of justice and they have to be balanced and they have to be balanced on an ongoing basis. When we see what is happening with sexual abuse victims we see that the balance is certainly not there and if the Government is going to do more than pay lip-service to the victims of crime it needs to acknowledge that it has made a ghastly mistake in respect of savagely cutting back counselling services for victims of sexual abuse both male and female—both male and female. The Government needs to acknowledge that the least we can do as a decent just and humane society is to continue to provide support to people who have been subjected to trauma. 
We are beginning to celebrate some of the people who have gone through that kind of abuse. I heard Louise Nicholas on the radio this morning. She is an outstanding New Zealand woman who stood her ground and brought to the attention of the public some of the abuses that can happen when people are not called to account. I think that most people regard her very very highly. Aaron Gilmore—the dancer not the politician—was recently in the media relating his story. Abuse happens to males and females and both sexes need access to counselling. We have heard this Government talking the talk about victims’ rights but when it comes to delivering services to them we have seen the numbers receiving help fall from hundreds to a handful. That is an illustration of the fact that this Government will talk the talk but not walk the walk in respect of delivering for those who are the victims of violence in New Zealand. 
Labour’s record on this issue goes right across the board. We introduced the Sentencing Act in 2002 with its presumption in favour of reparation. We introduced the Victims’ Rights Act in 2002 which extended a number of rights to victims. We introduced the legislation that is being amended by the Government now—the Prisoners’ and Victims’ Claims Act—in 2005 and of course in 2008 Annette King announced that the Victims Charter would be developed to build awareness of the standard of service that victims can expect from Government agencies. Those victims include those who have been the subject of sexual abuse and I would like to see the Government reinstate the counselling that was available to those poor people who have been the subject of sexual abuse trauma and who deserve every bit of support that can be mustered by the State. Thank you. 
A party vote was called for on the question  
That Parts 1 and 2 and clauses 1 to 3 be agreed to. 
Ayes 108 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1. 
Noes 14 
Green Party 9; Maori Party 5. 
Parts 1 and 2 and clauses 1 to 3 agreed to. 
Bill reported without amendment. 
Report adopted. 
Third Reading 
Hon NATHAN GUY (Associate Minister of Justice) 
 on behalf of the  
Minister of Justice 
: I move  
That the Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill be now read a third time 
. This bill is straightforward. It prevents significant parts of the existing Prisoners’ and Victims’ Claims Act 2005 from expiring on 1 July 2010. The bill maintains the status quo for 2 years giving the Government the opportunity to pass new legislation that will direct compensation payable to prisoners to the victims’ services appropriation after any victims have claimed against it. This bill ensures that compensation payable to prisoners for claims made before 1 July 2012 continues to be subject to the existing restrictions on awards of compensation. Those restrictions require prisoners to make use of the many existing complaint mechanisms that are available to them before they seek compensation through the courts. 
If a claim is made through the courts compensation can be ordered only where it is absolutely necessary to redress the harm done. If compensation is ordered victims of the prisoner may first seek redress for the harm they have suffered. The prisoner can access the compensation only once the victims’ claims process is fully complete. In effect this bill creates a transitional period whereby prisoners with outstanding grievances have an incentive to seek resolution before the second set of planned changes comes into force. If their claims are made before 1 July 2012 they will be subject to the existing regime. However prisoners who make a claim after that date will not receive the benefit of compensation if it is awarded. Their victims will still be able to claim against it and anything remaining will benefit victims generally through the victims’ services appropriation. Let me restate that prisoner mistreatment should not be tolerated. However it is time to resolve historical grievances and ensure that where compensation is necessary victims have an opportunity to seek redress for the hurt they have suffered. I commend the bill to the House. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 This has been an interesting debate. Mr Guy—the second or third Minister I think who has dealt with this piece of legislation tonight—described the Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill as straightforward. He is right; it is a straightforward piece of legislation which in theory given that everybody in this House apart from the Greens and the Maori Party supports it should have flown through the House with a high degree of ease. The bill may be straightforward but the issue of assistance and support for victims is not. 
I say again that the Labour Party is supporting the passage of the bill for a very simple reason: we wrote the Act it amends. A member opposite said we helped it go through the House. No no we wrote it and we passed it when we were in Government. The Government today is extending its provisions by 2 years and we have no problem with that. This bill extends the provisions we put in the Act which we wrote and passed. 
The bill is straightforward but the issue is not. Throughout this debate it has been very instructive to listen to the words that have not been spoken to listen to the silence exhibited by especially the ACT Party. We have raised an issue as an acid test of one’s commitment to victims. I agree with my colleagues who say they suspect that no one in this Parliament does not have a genuine belief that victims should be supported despite all the political gasbagging that we have heard from some people on the other side of the House. The ACT Party believes that it has a monopoly on supporting victims that it comes from a higher plane and that everybody else’s commitment to victim support is lower than its commitment. I say to those members that their silence on this issue tonight has been absolutely deafening. On the one hand Mr Garrett and those members say that they support victims; on the other hand on the issue raised tonight that this Government which ACT props up has pulled the rug out from under victims of sexual crime and sexual abuse by cutting their funding aided and abetted by the ACT Party which purports to support victims we have not heard one word tonight about that policy stance. 
It is interesting that every Minister who has been in the chair or who has introduced a stage of this bill has not made one contribution that addresses that issue. The only member who had the guts to raise it and at least address it was Chester Borrows and I think he made a reasonably robust contribution. Chester Borrows said—and it was tantamount to admitting that his Government had cut funding—the Government will make addressing the issue a priority. He said that and I respect him for it. But not one other member opposite did so. 
Government members prattled on and listed all sorts of legislation that they had passed and that is an undeniable fact in this House. The quality of much of that legislation is in question as is its effectiveness or lack of it to support victims but it is an undeniable fact that this Government has fired through various Acts that it claims will assist victims—and the jury is out on that. But that does not negate the issue that has been raised time and time again tonight about the lost souls and there are a number of them who have committed suicide because they could not get the support and the funding that they needed and that they used to get under the last Government and that is an undeniable fact— 
Hon Tariana Turia 
: Prove it. 
Hon CLAYTON COSGROVE 
: The member should look at the last Budget and at the general policy statement on the bill. That is the first time the member Tariana Turia has squeaked any words in this House about that issue. All she has done tonight is grin about it and laugh about it. I say again to the member that when a constituent comes to her office who is a victim of sexual abuse and cannot get funding because Nick Smith and the National Government have cut that funding I wonder what she will say to that woman man or young person. Will she grin and say as she did tonight “Prove it.”? Thanks to her vote she could say that she is part of the problem because she voted for that cut she aided and abetted it and she supports it today. The proof of that is that not once in this debate did she get up and express even mild disapproval on behalf of those lost souls the men and women who every day and every night wait for some assistance. 
Mr Borrows said that the Government will make it a priority. Good on him. At least he is prepared to say that. But sadly the problem with Mr Borrows is that he ain’t in a position to deliver. I am sure that he is knocking on the doors of his Ministers and saying that they have to do it they have to make it a priority an agency has to fund those people and something has to be done. He is a constituent member; he has probably had these folks in his office. But not one other Government member has addressed the issue. Government members talk about everything else. They talk about the fact that they have passed legislation for victims’ rights and other things. That is all well and good but not one member from any party opposite will address this issue apart from “Miss Laugh A Lot” down there who has grinned and laughed about the issue throughout the debate. Not one of them will say that they will make it a priority that they will make it happen tonight tomorrow or on Monday at Cabinet. 
My colleague Brendon Burns mentioned Ken Clearwater a constituent of mine who is doing the Lord’s work with male survivors of sexual abuse. Ken Clearwater and his clients wait for help every day. They waited for help in the Budget before last and they waited for help in the last Budget. Every man woman and young person who is the victim of a sexual crime has waited for the help they used to get under the last Government. And I say to Ms Turia that I do not have to prove it. The proof is every person who got counselling psychological assistance and their medical needs met by accident compensation over the 9 years of the Labour Government. The proof is the men and women who survived the trauma of sexual abuse and sexual crime because over the 9 years of the Labour Government they got accident compensation funding and they got assistance. I say to Ms Turia that that is the proof—that they are alive today. That is the proof that the system is broken. 
An injustice has been perpetrated and it has been aided and abetted by every last one of the members opposite who would not stand up to take a call—there is a word for that and I would love to use it—to even talk about the constituents who have walked into their offices. They will talk about everything else. They will talk about legislation the Bail Act or anything else. I ask them what they will say to the constituents in their electorates who walk into their offices. Many will not walk in. Because of the shameful acts that were done to them they will hide in places they will hide from their families and they will not ask for help. They hope and pray that the Government will stand by them. Because of the nature of the crimes perpetrated against them they feel ostracised and they rely on the Government to protect the most vulnerable. 
I would have thought there was not a lot of politics in this issue. I would have thought there was a lot positive politics to be gained for a Government and a Minister that did as Mr Borrows did and said that that assistance should be made a priority. But not one Minister—not the Minister for ACC not the Minister of Health and not Nathan Guy—did that nor any member of the two parties that are led by the nose like lambs to the slaughter including the “tough on crime” party. Not even the Sensible Sentencing Trust has ever decried the fact that the National Government has cut the funding for the victims of sexual crime. I wonder why it would not make a comment. Why would it not express anger? I challenge members opposite to use Mr Borrows as an example and at the conclusion of this debate get off their chuffs go to their various Ministers and demand funding for those victims. I do not care whether it comes from the Accident Compensation Corporation; I do not care where it comes from. But they are the victims. That is the acid test not a couple of clauses to extend the Prisoners’ and Victims’ Claims Act. The acid test is whether that crew over there will help the most vulnerable who have nightmares every day and night because of what was done to them. 
CHESTER BORROWS (National—Whanganui) 
: 
 It is good to come to the third reading of the Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill and to see it progress. I was pleased to hear the member who has just resumed his seat the Hon Clayton Cosgrove say that there is not a lot of politics in the bill; I thought he actually beat quite a bit of politics out of it. 
I am pleased that the bill will progress through the House tonight and that people will be in a better situation as a result of it. I am disappointed that it is only interim legislation until another bill comes in to fix the problem on a permanent basis. I am very sorry that although the Prisoners’ and Victims’ Claims Act 2005 could have been fixed before 2008 it was not. It is one of this Government’s priorities to deal with it. This bill is one of a number of very worthy bills that address the range of issues affecting victims offenders and their behaviours in our communities. 
I look forward to the bill being passed and I commend it to the House. 
Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) 
: 
 I rise to speak to the Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill and to say why Labour will be voting for it. As has been expressed previously the bill comprises a technical amendment to extend restrictions on the awarding of compensation brought in by the Prisoners’ and Victims’ Claims Act 2005 for 2 years from 1 July this year until 30 June 2012. The Government has indicated that this is an interim measure. It is interesting that the Government member Chester Borrows said that he is disappointed that that is the case. We understand that a more comprehensive bill may be introduced later this year. 
Contributions on this side of the House have raised a flag and asked the Government to think about the victims of sexual abuse and to reinstate funding to the Accident Compensation Corporation to support those victims through counselling and support services. Members of the Labour team have given numerous local examples expressing just how important those services are to women and men throughout the country. It is not good enough for members on that side of the House to purport to listen to the rights and interests of victims when those who have suffered sexual abuse and are vulnerable are suffering both physical and mental abuse and continue to do so. They are not able to receive accident compensation funding to break through some very dark places. A number of us have been told at a personal level some stories that we would not repeat in this House. Suffice it to say they are the types of stories that would urge this House to think again and certainly urge members of the Government to get their Ministers to act now address this issue of funding and ensure that women can get the types of support and counselling services that they need—women and men. Men are victims too I say to the Minister of Justice and they need help. 
I have also listened to other views expressed in the House. I agree that the Government must not create further victims as a result of its policy flaws and the flaws in some of its thinking—policies like double-bunking which increases the risk to both prisoners and security guards. I say to members to go and visit a prison and look at just how small those rooms are with single beds let alone double beds. None of the prisons were designed to be double-bunked; they are such small closed and confined spaces. Policies like container cells are creating conditions that I believe are inhumane no matter how we dress it up. If one puts lipstick on a pig it is still a pig. These are inhumane conditions and I do not think it is the way to go. 
The Government has policies like profit-driven incentives through private management of prisons where the bottom line is more important than rehabilitation initiatives and programmes aimed at reducing long-term recidivism—yes it takes investment. The Government needs to rethink its “three strikes and you’re out” policy which is just a dumb policy. Those policies are all a range of measures that the Government has introduced creating victims in some sense but also not creating a very good approach to a way forward that supports restorative justice supports rehabilitation reduces recidivism and promotes greater investment in the system. 
I raise these issues to draw attention to the numerous matters resulting from the Government’s broader policy ambitions. At the end of the year the House will be waiting to see how the Government intends to stitch together a comprehensive approach to addressing victims’ rights—we cannot wait. However this country can ill afford to take a “lock ’em up and throw away the key” approach. Restorative models of justice are necessary; long-term rehabilitation to reduce recidivism is absolutely critical. Investing at the front end of youth development initiatives will go some way to making a long-term difference to the lives of many New Zealanders and will make for a better New Zealand. But will the Government listen? That is the question. 
This bill contains one minor technical amendment; the bigger debate is yet to come. We can already see the writing on the wall in terms of the policy ambitions and the devastation that will result from them. The country deserves more from this Government and it should do more. 
DAVID CLENDON (Green) 
: 
 I must begin by acknowledging the Minister in the chair during the Committee stage the Associate Minister of Justice for his very prompt and complete answer to the question I posed as to the number of victims who had been compensated under the terms of the Prisoners’ and Victim’s Claims Act 2005 over the last 5 years and the amount of that compensation. I am now informed that a total of $25000 has been awarded to the victims as reparations and a total of four victims have been awarded a total $38000 under the provisions of that Act. So we know that in 5 years some $65000 in total has found its way into the hands of victims who otherwise would have received nothing. That is an extraordinarily small amount of money. My expectations were not high; I have not been disappointed in those expectations. I would have thought it not beyond the wit of this House to come up with a mechanism that would deliver a great deal more real practical compensation to victims than a very paltry $65000 over 5 years. It seems hardly worth the time of this House to extend the life of this Act in order to perpetuate legislation that has clearly failed in its intention to return even a small amount of compensation to victims. 
Clearly the Greens and the Maori Party are alone tonight in this House in terms of our opposition to the extension of this Act through the Prisoners’ and Victim’s Claims (Expiry and Application Dates) Amendment Bill. But we know that others outside this House support the position we are taking. We know this in part through the submissions that were made to the Justice and Electoral Committee. I will quote from a couple of those submissions firstly from Caritas the agency for justice peace and development that is the social services arm of the Catholic Church in New Zealand. It is quite clear: “Caritas opposes the bill. We originally opposed the 2005 Act on which it is based because victims of crime will only benefit and be compensated if the offender is mistreated by the State and awarded compensation as a result of this mistreatment.” A point that has been made tonight is that it is a very perverse mechanism to award compensation to a victim only if the human rights of another person an inmate have been transgressed. That is a very strange daisy chain and a very peculiar mechanism for delivering compensation to people. 
The Caritas submission goes on to say: “We still believe that under this legislation … few prisoners will pursue complaints of abuse and violence and even fewer victims are likely to receive compensation payouts.” Clearly that expectation is borne out by the history of the last 5 years—a very paltry $65000 of benefit. Caritas further points out that “There is no incentive for prisoners to be compliant with prison authorities. A situation in prisons is created where there is nothing left to lose … The Act creates an environment where prisons are potentially more dangerous and the extension of those provisions in this Bill repeats that risk.” Caritas is an organisation that is not self-interested; it has no axe to grind. It is an organisation concerned only with peace and justice in this country. It is making very clear and well-informed statements that this legislation is not worthy of extension and that it sees no value in it. 
The Human Rights Commission in its submission supported the continuation of the Act but only rather tentatively and on the grounds of an assumption that there would be a full review of this legislation and that by 2012 we will have legislation in place that is more compatible—to use the commission’s language—with article 2 of the International Covenant on Civil and Political Rights. In the body of its submission it makes the point that in its opinion the process of awarding compensation in this Act does not amount to an effective remedy in terms of article 2 of the International Covenant on Civil and Political Rights. The Human Rights Commission went on to say that proposals to deal with the capacity crisis in our prisons—such mechanisms as double-bunking two to a cell—are short-term remedies and are likely to increase the number of human rights issues that will need to be dealt with and the likelihood of transgressions of human rights. It goes on to say: “the State faces fewer adverse consequences when it fails to meet its obligation to prisoners.” under this legislation. 
The Law Society is an organisation that cannot be trifled with. It is a highly credible organisation with a long history of analysis and commentary on legislation and law. It noted that in 2005 it opposed the Act being enacted. It quoted the United Nations Committee Against Torture as having expressed concern that the 2005 Act limited the award and the payment of compensation to prisoners. The society agrees with the Minister of Justice quoting him as saying that “The best way of preventing future claims arising from breaches of prisoners’ human rights is to ensure that incidents leading to such claims are kept to an absolute minimum.” 
Would it not be more sensible to put our energy and our efforts into minimising and reducing the offences against inmates while they were in prison—to get that unlovely proposition out of the way? Would it not make a great deal more sense to put effort into finding and applying the known mechanisms for reducing crime and recidivism therefore reducing the number of victims? It is about finding real mechanisms and restorative justice processes that will enable victims to feel that they have experienced some closure and received some compensation be it of a financial sort or simply in being able to let go of the emotional mental and occasionally physical trauma that results from crime. 
We know that programmes that work are in place. The Sycamore Tree programme works with high-end offenders and has achieved remarkable outcomes in turning round lives and giving victims an opportunity to see that their concerns have been heard and that their issues have at least been confronted by the perpetuator of the crime against them. I mentioned earlier the faith unit that manages to deal with some 60 people a year but probably could offer useful service and better outcomes for some 2000 prisoners—that is the estimate of the Prison Fellowship. Some 2000 prisoners would get benefit would improve their behaviours and would reduce the likelihood of recidivism if they were able to get access to programmes of that nature. 
We know the solutions that work and this bill is not one of them. The Act that it seeks to extend is not part of the solution; it is part of the problem. For that reason we will vote against this legislation. Kia ora. 
SIMON BRIDGES (National—Tauranga) 
: 
 I have respect for the previous speaker David Clendon and I think he has raised some valid points. But I think he has at base proceeded from a misguided sense of what this bill is doing. He is essentially saying to this House that the human rights of the prisoner will be transgressed by this bill. Well I say to him and to other members of the House that that is not actually what this bill does at all. 
Carmel Sepuloni 
: Didn’t the Nats vote against this in 2005? 
SIMON BRIDGES 
: I will give Carmel Sepuloni a little bit of advice on this bill. I agree that it was originally her party’s bill and I am supporting it so there is not really any need for heckling. But I say to David Clendon that he comes from a misguided position. In fact this bill does not take away any prisoners’ rights. Let us say that a prisoner is wronged in a serious way by a prison guard and the prisoner receives compensation. I agree that that prisoner should receive the compensation. But the issue then is what happens with that money. Rightfully and morally the guard owes the victim of the prisoner’s crime some money. Perhaps the victim has been seriously and substantially put out of pocket because of the wrongs the prisoner has done. Well I say that morally that person deserves some of that money. That is what this bill does. His rights have been vindicated because the State has had to pay out for argument’s sake $25000 to him. It could be a “her” but it is more likely be a “him” going on the numbers of men and women in our prisons. But then from that his victim of crime is also vindicated. 
The idea that the State pays out for its wrongs is not without controversy. I happen to agree with that. But it was something that the courts did without reference to Parliament and I think it was through Baigent’s case in the early 1990s. It had another name— 
Simpson v Attorney-General 
. That case was not without controversy. I personally agree with it. But it is controversial to argue that somehow dishing out compensation is a basic fundamental right. It is not necessarily the absolute truth. But I come back to the point. This is a good bill and it does the right thing. I think David Clendon although working from good motives is misguided when he says that the human rights of prisoners are transgressed with this bill. 
Hon DARREN HUGHES (Labour) 
: 
 Thank you for the opportunity to speak on the Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill. I want my colleagues to listen very carefully to my views on this bill because the words I am about to express are not necessarily the same ones that my colleagues have expressed. I am told that this bill is an appalling fraud that is being committed on the people of New Zealand. I am told that the fraud being perpetrated on the House and on the public will only re-traumatise victims. Those are not my words or my beliefs. 
Hon Member 
: Whose words are they? 
Hon DARREN HUGHES 
: They are the words of the Hon Tony Ryall. In 2004 the Hon Tony Ryall in the most extraordinary pantomime way possible told the House that this kind of legislation was an appalling fraud that was being committed on the public of New Zealand. Mr Ryall in response to an interjection from Labour members about what he would do said: “I will stop this kind of legislation when I get into Government.” That is what Tony Ryall said. That is the kind of consistency in the justice portfolio that we see from Tony Ryall. In the same way in the health portfolio at question time today we heard that in Opposition it is very important to close the wage gap with Australia for doctors and in Government it is an impossible thing to do. 
I will give the Hon Tony Ryall one piece of credit which is more credit than his own colleagues give him. He said that he only stopped these kinds of payments under a Government led by Don Brash—he regaled the country in December 2004. But of course do not forget that Tony Ryall was the man who used to scarper along the parliamentary corridors with a big folder under his arm saying “Te Puke bypass”. That was when he was organising the coup for Jenny Shipley to roll Jim Bolger. So he was on Jenny Shipley’s side. When it came to this legislation before Parliament he was on Don Brash’s side. He thought he should be the Prime Minister of New Zealand in respect of this bill. But now that it is back before Parliament all of a sudden he is in favour of it. But the most amazing thing is that not only did he say those things in Opposition but he sat in the chair tonight as Minister in charge of the bill pushing it through Parliament; that is what he did. 
I want to say one thing. When Dr Wayne Mapp who is a Minister I know that members opposite are so proud of gets up in the House to answer questions we can feel the pride radiating from Government members. It is like a rerun of the great BBC drama when the Rt Hon Jim Hacker Minister of Administrative Affairs gives his answers. Wayne Mapp said that this bill is a bizarre lottery. Wayne Mapp probably never having won many prizes in life would know. Georgina te Heuheu is an extraordinary answerer of questions with regard to legislation on appropriations. No one is better in the House. In fact to be fair the only place where the Minister of Pacific Island Affairs is better at answering questions is on  
Morning Report 
. She is pretty good there; she answers good questions on that programme. But in the House she tells it like she sees it. She said this was a fraud perpetrated not only on the House but on the public. 
In 2005 Simon Power got up in the House as the Opposition shadow spokesperson on justice. By the time Simon Power spoke there had been yet another leadership change in the National Party. Don Brash had gone and John Key had arrived. Simon Power was reinvented in the justice portfolio. He said that the problem with this bill is that it re-traumatises victims and National will have no part of that as he led the National members into the Noes lobby. Do members know what Tony Ryall said? He said: “I will not let a figment of the United Nations decide what happens in New Zealand.” Well the United Nations was going to decide whether we passed the original legislation which through this bill we are now turning into a revalidation. We were not going to kowtow to the United Nations convention on torture. But of course when it came to the United Nations Declaration on the Rights of Indigenous Peoples not only were we going to sign up to it but we should do it in secret. We had the stealth jet flying from Mangere Airport and landing at John F Kennedy International Airport in New York and the Minister of Maori Affairs scurrying across the tarmac and signing up to this declaration because by that stage Tony Ryall believed that declarations like this were aspirational. But of course when it came to this bill he was not going to have a figment of United Nations law taking any part in what we should say about this. He said legislation like this was window-dressing. 
I am trying to explain why members before they commit to the third reading should decide whether they vote for it. Members opposite I know are such staunch researchers of their own party’s history. The great thing about the 2005 and the 2008 intakes is that they have no idea what National has done before which is why they clap and cheer like performing seals whenever their leaders speak; it is because they are hearing everything for the first time. 
One man with a future in the National Party—and I say this to make sure he does not have one—is Simon Bridges whom I endorse. He spoke with such pride on the Government’s bill but he would have no idea that his neighbouring MP Tony Ryall had said those things in 2004 and 2005. Get this. Do members know what Tony Ryall of all members said? He said of this legislation: “This is nothing more than a public relations exercise.” yet here we are today passing this law. At least our bill was several clauses and several parts long. This bill has only two parts and seven discrete clauses—seven deadly sins one might say. 
National finished up by saying that this bill should be blocked stopped and wiped which is exactly what the Prisoners’ and Victims’ Claims (Expiry and Application Date) Amendment Bill does does it not? Oh no sorry. What it does is to give the Act new life. It resuscitates and breathes new life into it. I tell you what I would not want to take any advice from him. 
I will finish by saying that we should quote somebody who is a man of great substance and a person who is always over the detail. I can quote no other such person than the Leader of the House Gerry Brownlee. He said: “Why would you vote for a bill that just lines up New Zealand with other countries? This bill is out of touch and should not be supported.” He also said that this bill was a load of rubbish. Well we have heard a lot of rubbish from members on the other side of the House tonight as they have got up and tried to say why they are revalidating legislation that just a few years ago they said they were against. I do not mind that they do things like that. I understand that conservative politicians are always years and years behind where they need to be. No matter what the issue is they wait 10 or 20 years and then they say: “Oh yeah that is status quo now. I am conservative. Status quo is for me. I am all for it.” All that the Opposition asks tonight is if those members are going to flip-flop on a bill then they should at least have the good grace to get up and say that they might have been wrong. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I intend to take just a very short call on the Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill. All night we have been asking why the Government has been so quiet on this bill and why the ACT Party has been absolutely silent on it. Of course now we have figured out what that was all about. They were not prepared to put themselves in the position where they had to accept that actually this bill which extends legislation that the previous Labour Government brought in turned out to be extending legislation that the National Opposition had voted against at the time. 
It was interesting that the one member of the National Government who got up and spoke on this bill during the Committee stage was Chester Borrows. His contribution was quite good; it was quite a reasonable and measured contribution to the debate. Interestingly from what I have been able to find in the last few minutes—although I am not sure about it—Mr Borrows did not make a contribution to the debate when the legislation was first debated. But Tony Ryall spoke for him. Tony Ryall spoke on behalf of Mr Borrows and he stated: “… Chester Borrows will tell the people in Wanganui that under this legislation offenders will still get the money.” and that is why people like Mr Borrows and Mr Ryall were going to vote against it. 
Hon Darren Hughes 
: What’s he saying now? 
IAIN LEES-GALLOWAY 
: Well this is the thing. Just a few years later Mr Borrows got up and did not tell the people of Whanganui that this is a terrible bill at all; he got up and told us why it is such a fantastic bill and why it represents such progress from the Government on law and order issues. Tony Ryall said that he would stop these payments. Of course he did say as my colleague Darren Hughes pointed out that he would stop them under a Don Brash Government so he has managed to keep that promise. But he also said that the Labour Government was prepared to mislead the public about the effects of this legislation. Well I ask what is more misleading to the public than standing up and abusing legislation and telling the country that it will do nothing for victims’ rights that it will simply be in favour of offenders and that it is misleading legislation. And what do we get from a National Government just a few years later? National members have finally figured out what good legislation it is and why they should vote in favour of it. 
The ACT Party was doing exactly the same thing. It was pointing out all the areas in which it thought this bill was so deficient but very quietly—silently in fact—it has supported the Government. It has bowed down done as it was told and done what the National Government has told it to do and it has allowed this bill to go through. It is amending legislation that ACT members such as Stephen Franks got up and spoke so vehemently against when it was first mooted. 
As we have said throughout the night this bill is a nothing bill. It is quite innocuous and it really does nothing harmful so Labour is happy to support it. But we have been asking all night why the Government is so quiet. Why is the Government so quiet? It is because it was not prepared to tell the New Zealand public just how much it misled them and how much of a U-turn this is. That is why this Government will never be the Government that puts victims’ rights at the centre of its policy. It has no ideas on victims’ rights. All it can do is regurgitate the ideas of the previous Labour Government that National thought were so bad when it was in Opposition. We are happy to see this bill go through but this Government has been found out tonight. 
A party vote was called for on the question  
That the Prisoners’ and Victims’ Claims (Expiry and Application Dates) Amendment Bill be now read a third time. 
Ayes 108 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1. 
Noes 14 
Green Party 9; Maori Party 5. 
Bill read a third time. 
Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill 
First Reading 
Debate resumed from 2 June. 
Hon MARYAN STREET (Labour) 
: 
 The Tariff (New Zealand-Hong Kong China Closer Economic Partnership) Amendment Bill provides the legislative framework for what is essentially a free-trade agreement with Hong Kong but it also rationalises the approach between Hong Kong and China. 
The New Zealand - Hong Kong China Closer Economic Partnership Agreement will allow businesses from New Zealand and those New Zealand businesses that are currently in Hong Kong to move freely and without any impediment by regulation or legislation between Hong Kong and China and between Hong Kong and New Zealand. In other words this agreement provides part of what will be a seamless network I think of free-trade apparatus that allows New Zealand business interests to springboard out of Hong Kong and into China because the conditions surrounding that export trade have been rationalised and evened out. 
This is a significant move not only in the export of goods but also particularly in the export of services. In this respect some high-tech industries already have a foothold in Hong Kong. These industries are New Zealand - owned and operated and are being run out of Hong Kong and I think particularly of some high-tech industries that are based in Tauranga. 
JOHN HAYES (National—Wairarapa) 
: 
 I thought that I might quickly traverse for the benefit of “Dr No Man” some of the issues relating to the importance of China. In 15 years’ time— 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. The member Mr Hayes referred to the leader of another party by a name that is not that member’s name. He made a comment about another member and pronounced his name in a way that was clearly intended to deride that member. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: I recall the name but I did not quite get the significance of whom Mr Hayes was referring to. I was confused about that myself. If Mr Hayes made reference with an inappropriate name to a person then I ask the member to withdraw and apologise. If he did not I accept his word. 
JOHN HAYES 
: I did not notice myself doing it but I will withdraw and apologise to remove any doubt. 
In 15 years’ time in 2025 with 1.5 billion people China will be the world’s second-ranking economic power. At its present growth rate its GDP will outstrip that of Japan in 5 years’ time in 2015. It will outstrip that of America in 30 years’ time in 2040. Its share of world GDP currently 4.5 percent will rise to 7 percent in 2015 and will be close to 15 percent in 15 years’ time in 2025. China’s average standard of living should be by 2050 half that of America’s standard of living and even if China’s average growth rate is half that of today it will have a per capita income of US$6000. Hundreds of millions of Chinese will by then belong to the middle class and tens of millions will belong to its upper class. 
We can expect China to continue to finance US deficit for some years to come. We can expect China to become the leading investor in Asia ahead of Japan and the United States. Despite the efforts of the Communist Party of China it will eventually have to pass power to elected officials. Unless there are reforms China will have to face many difficulties. Ninety percent of Chinese people have no retirement plan or health insurance. Half the urban people and fourth-fifths of rural people have no access to health care. Half of China’s 500 biggest cities lack drinkable water and sewerage systems. China will have to build urban infrastructure fight corruption and put a stop to corruption in public finance areas find work for hundreds of millions of people flowing into towns improve education reduce income gaps train managers reform an obsolete public sector and establish judicial systems capable of protecting private and intellectual property. By 2025 the Communist Party of China will have been in power for 76 years. No other political party in the world has lasted in power for more than 70 years. We can expect it to fade in importance. 
To the west India has 1.4 billion people. It should be the most populous nation on the earth by 2025 and the third-ranking economic power after America and China. I was at the launch of the Wellington chapter of the India New Zealand Business Council earlier this week. The Indian High Commissioner at the meeting talked about India having 9 percent compound GDP growth for the next 20 years. India’s democracy will have to meet and deal with very similar challenges to those facing China. These developments will result in a doubling of urban populations within 10 years—that is 2025—and a doubling of the demand for raw materials. 
Against this global background we must position New Zealand to place our trading relationships on an open and secure footing. New Zealand companies will want to market produce and also services into China. We must ensure certain access to the Chinese markets and to the Hong Kong markets to allow the export of services because our companies can benefit from liberalisation of both the Hong Kong and the Chinese markets. These are the key reasons behind New Zealand entering into the New Zealand - Hong Kong China Closer Economic Partnership Agreement. We want secure more certain access to the Hong Kong services market and we want to ensure that New Zealand service providers benefit from future liberalisation by Hong Kong in particular sectors. We want to enable traders to benefit from trade-facilitating rules of origin accompanied by robust verification systems. We want to provide a framework for regulatory cooperation and consultation and we want to allow for more effective discussion and cooperation on labour and environmental matters in line with New Zealand’s sustainable development and economic growth objectives. 
With those few words I commend the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill to the House. 
STUART NASH (Labour) 
: 
 I stand to speak in support of the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill—quite a long name. The reason I support the bill is it will hopefully lead to increased opportunities for New Zealand exporters in the Hong Kong market as well strengthening our relationships in the Asian region in general. Closer economic partnerships or CEPs—trade is full of these acronyms—are a vital part of New Zealand’s economic development policy as they work to break down tariff quota and customs duties which restrict access and profitability for New Zealand exporters and importers. They tend to lead to increased exports and imports and have the potential to add wealth to both countries. 
New Zealand signed a closer economic partnership with Hong Kong on 29 March 2010. This bill implements that agreement. The closer economic partnership agreement had its roots in the work of a former Minister of Trade Jim Sutton and the next elected Prime Minister of New Zealand the Hon Phil Goff during his tenure as Minister of Trade. Whilst we tip our hats to Mr Groser for getting this bill across the finishing line I think that even he would admit that it is a result of the work of his predecessors and we must recognise the efforts of those who worked on this issue in the past to get it to this point. Trade is one of those wonderful areas where we all work together when it comes to securing the national interest. How to grow trade is the real challenge which the National Government does not seem to get as is evidenced by the latest Budget. However that is a story for another day. 
So what are we talking about when we debate the closer economic partnership with Hong Kong? Well Hong Kong is currently our ninth-largest export destination accounting for $823 million last year. New Zealand imported $199 million of merchandise goods from Hong Kong last year making it the 31st-largest source of imported goods. However to put it into perspective Hong Kong counts for only 1.9 percent of New Zealand’s total exported goods and 0.04 percent of our total imported goods. Herein lies the challenge for this economy going forward. Our ninth-largest export destination accounts for only 1.9 percent of New Zealand’s total exported goods. If there is ever a case for global diversification then 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 potential exporters. Despite Hong Kong’s small size it is a market that 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. 
What sort of things do we export to Hong Kong? We export about $200 million worth of crustaceans to Hong Kong. The area of largest growth is apples which is good for the people of Hawke’s Bay considering that it is the fruit bowl of this country. Other things that increased were milk powder and venison. Frozen meat and frozen beef were second and third in terms of export value. Milk powder exports had dropped which I was interested to see and cheese had dropped. But some interesting products are exported there and we are doing quite well. In terms of imports the largest area of imports is machinery parts which accounted for about $16 million but it dropped by 15 percent. The area that increased by 217 percent was printing machinery. 
Hon Darren Hughes 
: Yeah? 
STUART NASH 
: Yes. I suspect there were one or two capital purchases but I am not too sure. Insecticide imports were worth $4 million. They increased by about 400 percent. Believe it or not spectacle imports increased by 118 percent. Some of the guys on the benches opposite need some spectacles from Hong Kong because they see the world through rose-coloured spectacles and do not understand reality. 
Hon Darren Hughes 
: They need rear-vision mirrors. 
STUART NASH 
: Absolutely. But Hong Kong not only is an important market in its own right as outlined a couple of minutes ago but provides a vital foothold for New Zealand businesses wanting to expand into the much larger Chinese market. Building closer economic relationships with Asia is vital to New Zealand’s future economic prosperity because it is the major market of the future. This closer economic partnership is another step in that direction. So hats off to Jim Sutton and Phil Goff. 
Although free-trade agreements and closer economic partnerships come with undoubted benefits we must not ignore that for some businesses and sectors they can potentially 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 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 this closer economic partnership has given those sectors the longest phase-out period of tariffs to allow them time to adjust. 
We also need to be aware that fiscal costs are associated with this sort of agreement and they need to be fully understood to ensure that they are outweighed by the benefits. As with any free-trade agreement that results in a reduction in tariffs there will be lost tariff revenue. In 2008-09 the estimated tariff revenue collected on imports from Hong Kong was around $4 million. This will be phased out by 2016; no revenue will be collected from Hong Kong imports. 
I would like to outline some of the advantages of the closer economic partnership agreement. Although Hong Kong already offers duty-free imports for all countries the closer economic partnership will ensure New Zealand’s existing duty-free access is locked in for New Zealand exports giving New Zealand exporters added certainty that competitors other than Mainland China do not enjoy. The phase-out of certain remaining domestic duties may also reduce some costs for New Zealand producers who use imported Hong Kong components or capital equipment—for instance components or equipment relating to electrical transformers whiteware and steel products. It is interesting to note that one of our largest exports is recycled plastic. Obviously Hong Kong turns it into added-value products and brings them back here; it is a pity we cannot do it here. 
The closer economic partnership provides New Zealand with the early harvest of most of Hong Kong’s Doha service commitments—that is Hong Kong is offering New Zealand through the closer economic partnership most of what it is offering the World Trade Organization membership in the yet to be concluded Doha negotiations. The commitments that Hong Kong makes to New Zealand in the closer economic partnership address service sectors of key export interest to New Zealand including education business environmental and logistic services. New Zealand service exporters have also secured strong future-proofing of their position in the Hong Kong market through the most favoured nation treatment and a ratchet clause. Most favoured nation treatment means that New Zealand exports 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. We do not lose; we cannot lose. New Zealand will be using the tariff reduction schedule in the New Zealand - China free-trade agreement—which was also negotiated by the Hon Phil Goff—for imported products from Hong Kong. As I already mentioned the longest tariff phase-out periods will apply to industry sectors in New Zealand that are particularly sensitive to potential imports from Hong Kong such as textiles clothing and footwear. Delayed tariff phase-outs will apply to other products such as steel furniture plastics and rubber products. 
I will very quickly go through some of New Zealand’s legal obligations under the closer economic partnership. These include tariff reduction phasing-out identical to that provided to China; market access and national treatment commitments to Hong Kong service providers similar to those provided in the P4 agreement—which is an agreement between New Zealand Brunei Chile and Singapore—along with some elements provided in other recent free-trade agreements and a few commitments drawn down from New Zealand’s Doha offer all within domestic policy settings of course; a reciprocal commitment to extend most favoured nation treatment to Hong Kong in relation to services subject to specified reservations; doubling the overseas screening regime threshold from existing World Trade Organization levels of $10 million to $20 million; a commitment not to take trade remedy actions in an arbitrary or protectionist manner and to carry out trade remedy actions in a transparent manner; specific rules of origin to accommodate part-processing of certain clothing products in Mainland China with robust verification procedures to mitigate any risks from this approach; and commitments on temporary entry of Hong Kong business visitors that go beyond New Zealand’s existing World Trade Organization commitments. 
This is a good bill. It is a cross-party bill; we will all support it. I think it will benefit New Zealand and for that reason I commend it to the House. 
Dr KENNEDY GRAHAM (Green) 
: 
 With respect to the previous speaker Stuart Nash—and I do have respect—I say that he is incorrect. This party will not be supporting the proposed Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill. On 30 March the Minister of Trade Tim Groser signed the New Zealand - Hong Kong China Closer Economic Partnership Agreement. He said at the time that it was “a significant achievement that further strengthens the economic links between New Zealand and the Asia-Pacific region.” He said that it complements the existing free-trade agreement with China. Given Hong Kong’s position as a regional trading and investment hub he said that it would support business engagement with Asia and the Pacific. He recalled the 43 percent increase in exports to China in the last 12 months which brought in an extra $1 billion worth of export income and he said that the agreement would add “to a growing collection of high quality and comprehensive FTAs in the region.” 
We know all about high-quality comprehensive free-trade agreements. A veritable raft of free-trade agreements have come down the track over the last 2 or 3 years as a syndrome of a failed global World Trade Organization agreement that is better known as the “spaghetti bowl” or to give it an Asian flavour “noodle soup”. We have free-trade agreements with Thailand Singapore ASEAN China Malaysia and now Hong Kong. We shall have the Trans-Pacific Strategic Economic Partnership—the TPP—and we will have Korea India and the Gulf States. 
I have scrutinised the national interest analysis of each one of these six Asian free-trade agreements. Essentially they amount to a template. The wording is essentially the same. The reasoning is the same. The underlying beliefs are the same. All that has been changed by officials is simply the names of the countries pretty much and little more. That is not I think a genuine analysis. Analysis requires objectivity; it requires intellectual rigour. There is none of that in these documents. These documents are more of a credo—let us call it the “Free Traders’ Creed”. 
Let us look at the template. There are essentially 10 sections or so. Let us look at the first two sections. The first is the reasons for becoming a party; the second is the advantages and disadvantages of free-trade agreements. 
Let us explore the advantages. Almost without exception there are generally about 10 bullet points lined up and usually nine or 10 out of the 10 pertain to export interests. Let us look at the disadvantages. The disadvantage will even take the form of a lament that the other side was too timid with our exports. I quote the ASEAN agreement national interest analysis: “A more ambitious outcome on the elimination of tariffs was preferred but was simply was not possible.” 
Occasionally—just occasionally—there is an opaque reference to imports and to the effect of imports on New Zealand. The phraseology used is “negative adjustment effects” which basically is a euphemism for company collapse and job loss. I will quote from a few. 
This is from the ASEAN analysis: “The removal of tariffs on products imported into New Zealand can result in negative adjustment effects for import-competing sectors. AANZFTA does however attempt to mitigate these impacts by delaying tariff elimination on imports of acute sensitivity to particular New Zealand industries.” 
This is from the analysis of the agreement with China: “The removal of New Zealand’s tariffs on imported Chinese products can create adjustment effects for import competing sectors. The FTA attempts to mitigate these effects with various protections”. 
The analysis of the agreement with Malaysia states: “Any trade agreement involving reciprocal tariff removal may have implications for domestic producers as a result of increased exposure to foreign suppliers. In order to mitigate the potential for any negative adjustment effects in New Zealand the [agreement] includes longer phase-out periods for imports in sensitive sectors in New Zealand relative to other sectors of the economy.” 
The analysis in the Hong Kong agreement states: “Any trade agreement involving reciprocal tariff removal while providing better access for exporters can create adjustment costs for domestic producers.” These are euphemisms used in the national interest analysis for company failure and job losses. 
Let me give this challenge to this Government as we prepare for an analysis of the Hong Kong agreement and further readings of the bill in this House. I challenge the Government in the Hong Kong agreement if not the previous agreements and if not the Malaysian agreement all future free-trade agreements to name the New Zealand companies that will face negative adjustment effects to estimate the loss of income they will suffer to estimate the loss of jobs that this will incur for New Zealanders to be a little more intellectually honest in the national interest analysis to show a little more moral integrity and to show a little more political courage. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 This is probably not the best time to be considering a bilateral trade agreement between New Zealand and Hong Kong. If we were to ask Hong Kong - based Natural Dairy (NZ) Holdings about its perspectives on the viability of the New Zealand - Hong Kong China Closer Economic Partnership Agreement it would probably raise the context of the $100 million deal it was attempting to seal with the bid to purchase the 16 New Zealand farms formerly owned by the Crafar family. The receivers handling the sale of the farms had already signed a sale agreement with Natural Dairy (NZ) Holdings conditional on our Overseas Investment Office approving their application. Suddenly out of the blue Landcorp chairman Jim Sutton suggested it might put in a tender because of the reputational risks to the New Zealand dairy industry and New Zealand Inc. He referred also to concerns in the wider community about the sale. We in the Maori Party have raised particular concerns around one of the Crafar farms which is part of the Maraeroa A and B blocks over which Ngati Rereahu has a settlement interest. The 16 farms are located in the Waikato the King Country the Bay of Plenty Whanganui Taranaki and Rangitikei. Other iwi with significant interests yet to be settled may well be watching the events unfold with great interest. 
The next turn of events for the Hong Kong - based company was that the Minister of Agriculture David Carter stepped into the ring saying that a sale to that company was unlikely to go through. The Prime Minister publicly censured his freethinking Minister but the damage had been done. I remind the House that this company had already signed a conditional purchase contract for the farms. It is no wonder that Natural Dairy (NZ) Holdings now says Landcorp’s interests look like the result of political interference. 
I thought that the Crafar farms context would be a very relevant setting in which to consider the environment for a free-trade agreement with Hong Kong. It underlines the range of interests that the Government must consider when we look at the prospect of trade with overseas jurisdictions. The Hong Kong - based company Natural Dairy (NZ) Holdings was also involved in the separate purchase of farms in February this year at Norsewood in southern Hawke’s Bay Waitotara in South Taranaki and the Manawatu. That purchase is now under investigation by the Overseas Investment Office which is questioning whether the required consents were in place. This action led company director May Wang to retort: “The plain fact is if New Zealand does not welcome the investment it is inevitable the company will take its $1.5 billion to another dairying nation that does want it.” 
None of this is the greatest public relations for the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill which we are debating tonight but it provides us with an opportunity to address some of the longstanding concerns that the Maori Party has raised in the past about the nature of free-trade agreements in general. We have raised concerns that although free-trade agreements are established to protect investors and their investments they have the potential to threaten our own domestic programme raising concerns for Treaty settlements between Maori and the Crown. In the case of the 16 farms formerly owned by the Crafar family it should be noted that they employed nearly 200 staff on 8000 hectares. Our concern then with free-trade agreements is to always consider how such relationships impact on the long-term prosperity of workers here in our land. We hope that if such an arrangement was to take place with a Hong Kong company following the passing of this bill the local mana whenua would be approached with a view to working together collaboratively on employment opportunities that might arise. 
The Crafar farms issue has raised some concerns around this agreement but also I bring to the House the very real value that Maori businesses have talked to us about of having the opportunity to go out and explore international economies. There has been a growing interest from Maori businesses and from iwi leaders in being able to have access to the international market. I was interested to read some of the comments from Te Horipo Karaitiana who is chair of the Awatoru Maori economic transformation initiative and a director of a successful Maori agribusiness with activities in Aotearoa and overseas. Te Horipo recently participated in the Food and Agribusiness Market Experience programme studying global food value chains and has shared his enthusiasm for working to expand opportunities from the China closer economic partnership agreement. If we consider that the majority of the Maori asset base is in the primary industries—seafood forestry and farming—we see that they all have major implications for how we operate in the international arena. It is Te Horipo’s experience that Maori involved in the primary industries should look upon trade with the Asian economy as an opportunity to participate in the value chain rather than remaining at the production or farm-gate end. 
A classic example is that provided by Patrick Watene of Ngati Tamatera Hauraki who is the founder and executive director of Global Horticulture (Xi’an) Ltd which specialises in horticultural consultancy and bare-land orchard development. Based in China GlobalHort provides expertise in value-adding through an integrated value chain from orchard to market. It was because of the example provided by the range of Maori businesses already developed in the Asian economy that in this year’s Budget the Minister of Maori Affairs announced investment in developing a Brand Maori to gain premium prices for Maori-produced goods exported to niche markets. 
There was also investment in a delegation of Maori business leaders heading over to the World Expo in Shanghai in September. The key purpose of the delegation will be to help Maori businesses enter growth industries to increase Maori exports and to increase the profile of Maori tourism experiences with overseas providers and visitors. This is really important not just for relationships with China and Hong Kong but for the wider growth of the Maori economy. Maori economic development is important not only for Maori but for New Zealand’s overall economic performance. Maori can represent a considerable source of future growth and if they do it is our view that Maori must take a lead role in determining their economic development aspirations and fostering development that works for them. Trade is all about building and sustaining relationships. Maori businesses have been telling us that they believe that the culture of Te Ao Maori connects and resonates particularly with places like Hong Kong Shanghai and Greater China. 
The Maori Party does not want to close the door on those opportunities. Although we acknowledge that there are a range of strongly held views that we ourselves have put forward about free-trade agreements in general the reality is that Maori are already confidently and enthusiastically conducting business throughout the world. Maori businesses and all those who invest in them also deserve our support to benefit and develop the unique indigenous point of difference they contribute to business activities. 
These are the two views that the Maori Party brings to this bill: fair trade and protection of our domestic programme particularly the Treaty relationship or encouragement of the development of a trading partnership based on dialogue transparency and respect—a partnership that tangata whenua will also be able to benefit from. We look forward to hearing what the public has to say about this bill. 
JACQUI DEAN (National—Waitaki) 
: 
 I rise to speak to the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill. I note that Hong Kong is New Zealand’s ninth-largest export destination and that New Zealand’s trade with Hong Kong is currently worth $823 million a year. The first reading of this bill is indeed exciting for New Zealand. 
I want to comment on the contribution of the previous speaker Rahui Katene. I note that nothing in this free-trade agreement supersedes the provisions of the Overseas Investment Office so the issue of the purchase of New Zealand dairy farms by Chinese companies is completely unrelated to the contents of this free-trade agreement. 
New Zealand farmers depend on trade particularly sheep and beef farmers. For example 90 percent of the Alliance Group’s product coming out of freezing works up and down the South Island is exported and a lot of it goes to Hong Kong and China. So this free-trade agreement is pretty crucial to the health of the New Zealand sheep and beef industry—not to neglect our dairy industry as well. 
This free-trade agreement is all about boosting innovation in New Zealand and improving export access to world markets which is one of the Government’s key policy drivers for New Zealand’s export performance. This closer economic partnership is Hong Kong’s first free-trade agreement aside from its closer economic partnership agreement with Mainland China and that is pretty significant. The closer economic partnership also complements New Zealand’s free-trade agreement with China and enhances the potential for Hong Kong to be used as a platform for trade with Mainland China—a point not lost on a speaker from across the House. That makes Hong Kong a strategically important trading partner for New Zealand—as if we did not know that already. This deal will help New Zealand businesses boost trade with Hong Kong and take further advantage of growing opportunities for New Zealand in the region. 
I briefly note that the closer economic partnership will ensure that New Zealand’s existing duty-free access is locked in by binding in place duty-free access for all New Zealand exports. The tariff reductions that New Zealand has provided Hong Kong with are the same tariff reductions in the New Zealand - China free-trade agreement. Tariffs are eliminated on 54 percent of exports upon the agreement’s entry into force and the remaining 46 percent will progressively become duty-free by 2016 which in export terms is not very long in the future. Longer tariff phase-out periods will apply for import-sensitive sectors such as textiles clothing and footwear and also on products such as steel and furniture. It is also worth noting that the closer economic partnership provides for 48-hour customs clearance of New Zealand exports. An easing of those provisions will make trade more possible and more timely with both Hong Kong and Mainland China. 
With those few comments I commend the bill to the House. 
SU’A WILLIAM SIO (Labour—Mangere) 
: 
 Mr Deputy Speaker may I greet you by saying “Ni hao ma.” I think it is important on this occasion to greet you. I am laughing because my colleagues are making fun of my Chinese when I am trying to get into the mood of the occasion. I have never been to China but I know many many wonderful people out in Manukau who are of Chinese heritage and who give and contribute significantly to the local community in Manukau and no doubt throughout this country. In fact I have met a couple of mayors of Chinese heritage—one in the area of Gisborne who speaks Maori fluently and the other in the South Island who is from Dunedin or Christchurch? 
Hon Maryan Street 
: Dunedin—Peter Chin. 
SU’A WILLIAM SIO 
: Dunedin. They are wonderful people and wonderful friends. Peter Chin showed me the Chinese garden in Dunedin. 
We are debating the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill which is a mouthful. I know I have relatives who are of Chinese heritage. In fact more recently there was the addition to our family some years ago of my sister-in-law—although originally from China she comes from Malaysia and we will be talking about the Tariff (Malaysia Free Trade Agreement) Amendment Bill later on. 
In the past 6 or 7 months my office has been assisting a young man from Manukau who has a girlfriend living in Hong Kong and who has been attempting to bring her over here. For some reason it has taken close to 7 months before agreement by our immigration authorities for her to receive a visa to be able to visit this young man in Manukau. I thought I would say those things by way of preface as we debate this bill. As a young man I always wanted to go to China and I wanted to be around Hong Kong. In fact when Bruce Lee came out we all thought he was a relative. Nevertheless I know that some members of this House are planning to go to China later on this year or next month particularly to the Shanghai Expo which I understand is an expo that will probably be receiving many heads of State from throughout the world. 
This is a Government bill that has been introduced by the Hon Tim Groser the Minister of Trade and it is about a closer economic partnership agreement. Closer economic partnerships are a vital part of New Zealand’s economic development policy. We in Labour are supporting this closer economic partnership because we believe it will provide increased opportunities and certainty for New Zealand exports to an important market. It is a market that will be very critical for the rest of the world simply because of the sheer size of its population and with that population will come significant demands for goods—food in particular. It is also a market that is of concern in terms of other aspects and I will get into that at a later stage. 
Closer economic partnerships lead to increased exports and imports and the potential for added wealth to both countries. I understand that New Zealand signed this closer economic partnership with Hong Kong on 29 March so this bill now implements that agreement. The bill amends the Tariff Act. That is part of the implementation of the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill. The amendments will enable the application of preferential tariff rates under the closer economic partnership. Not only is Hong Kong an important market in its own right our ninth-largest export destination in 2009 but also it provides a vital foothold for New Zealand businesses expanding into the much larger Chinese market. With the number of New Zealand citizens of Chinese heritage living in this country I think it bodes well that we are developing relationships not only on the human level but also on the business level and the cultural level. As I have always maintained New Zealand is a much richer country by accepting that it is not just about business but about building on and developing people and relationships. 
No doubt these things as I understand them take time. The closer economic partnership agreement had its roots in the work of former trade Minister Jim Sutton and it was reinvigorated by the Hon Phil Goff during his tenure as trade Minister. I think it is important that we recognise the efforts of those who have worked on this in the past to get us to this point. I suspect that we will see in the future the fruits of the work that Mr Tim Groser is doing as Minister of Trade—or maybe we will see no fruit whatever the case may be. The point I am making is that often working towards signing these trade agreements takes some time. It takes some work on people relationships because if we are not able to build trust how can we trade? 
From Labour’s perspective we welcome this bill and the closer economic partnership as it further develops our already close relationship with the people and Government of Hong Kong. It is important from our perspective that we build closer economic relationships with Asia as that is a vital market for New Zealand’s future economic prosperity and will be a major market in the future as I have said. This closer economic partnership is another step in that direction. 
I listened to the Green members and they raised some concerns that I think are fair enough. Although free-trade agreements and closer economic partnerships come with undoubted benefits we cannot ignore the fact that for some businesses and sectors free-trade agreements and closer economic partnerships can cause harm. This closer economic partnership has been evaluated as having a low negative impact on New Zealand businesses largely because Hong Kong specialises in services rather than cheap manufactured goods which could undercut some of our local businesses. New Zealand manufacturers of footwear textiles etc. are most at risk from free-trade agreements. This closer economic partnership has given those sectors the longest tariff phase-out period in order to allow them time to adjust. 
Labour rights and environmental sustainability are core New Zealand values which should not be sacrificed for the sake of increased trade so when we are undertaking negotiations they need to be high on the agenda. I understand that we are supporting this closer economic partnership because it enhances labour rights and environmental sustainability. The closer economic partnership contains an environment agreement with shared objectives between New Zealand and Hong Kong aimed at improving the environment and enhancing the capacity and capability of each country’s Government agencies research organisations academic institutions and businesses to address trade and environmental matters. 
Finally the national interest analysis states that the closer economic partnership is “not expected to have any negative effects on the environment in New Zealand that cannot be managed using existing policy frameworks. Its provisions may encourage improved productivity in the use of natural resources.” The concern that I raise initially really has to do with our customs portfolio. Our country has been working quite strongly to ensure that we detect illegal drugs crossing our borders and I think there will be others who have some concern about that. When we enter into these relationships I think it is to the benefit of our country that we develop them slowly and that we ensure that laws are in place to implement and enhance them but I think we also need to be letting the rest of the world particularly our partners know that we have certain core values here that we respect. 
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. Trade agreements are very much about building relationships and I was thinking a moment ago that it is a good thing for our country that this is an economic partnership with Hong Kong and not England. I congratulate the New Zealand Maori on beating England tonight. The score was 35-28 which was a great victory. 
Hon Nathan Guy 
: Were you there in Rotorua? 
TODD McCLAY 
: I was in Rotorua last week when they beat the Welsh but no I was here in Parliament working hard on behalf of my constituents when they won this evening. It is a great victory for them. Therefore it is a good thing that we are not debating an agreement with England because that good relationship has been ruined for another week. 
I will touch on a couple of points that are important but first I will recognise what S’ua William Sio said earlier on the importance of China as a nation with a large number of consumers who are increasing their income. Mr Sio said that when he was younger he thought that Bruce Lee was a cousin or a relation. I am reliably informed that Bruce Lee also thought that Mr Sio was a relation although one who had done a little less exercise than he had. But I agree with everything Mr Sio said. 
This agreement as with the other trade agreements that have been brought before this House since we came into Government is about boosting innovation and improving export access to world markets. It is one of the National Government’s six policy drivers for a step change in New Zealand’s economic performance. This agreement with Hong Kong is an important part of National’s focus on free trade and on improving access for our exporters to world markets which is a priority included in the Prime Minister’s statement to Parliament in February of this year. 
In my electorate of Rotorua a number of producers primarily in the primary sector will benefit from this agreement when it enters into force. There are some opportunities in forestry but certainly there are opportunities in the production of kiwifruit agricultural products dairy products sheep and beef and so on. Currently we have $823 million worth of trade a year between New Zealand and Hong Kong and we can expect that amount of trade to increase when this agreement enters into force. It will increase to the betterment of our producers which will be a very good thing. 
The bill enhances our economic integration with the Asian region and it follows from a great number of other free-trade agreements that have been put into place since we have come into Government: agreements with Thailand Singapore and China have come into force there is an agreement with the ASEAN countries and agreements with Malaysia and Brunei as well. That is very good for New Zealand producers and I know that everybody but a few in this House support those fully. 
Hon Maryan Street 
: All your own work. Come on—a little bit of graciousness across the House. 
TODD McCLAY 
: I do recognise as graciously as I can that members opposite played a small part in this work and we thank them for that. 
I will also touch on a point made by Rahui Katene about the involvement that this agreement might have in the future with Chinese companies and others that will want to come and invest in New Zealand. The closer economic partnership does not provide Hong Kong investors with preferential access to the New Zealand investment screening regime. As with any other company or person in the world wanting to invest in New Zealand very strict and stringent procedures are in place and they will apply under this agreement as they do to others. I think it is important that we recognise that. 
This bill is a very good piece of work. I look forward to its referral to the select committee tomorrow morning and I look forward to supporting it further. Thank you. 
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 first time. 
Ayes 111 
New Zealand National 58; New Zealand Labour 43; 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 first time. 
Hon Dr JONATHAN COLEMAN (Minister of Immigration) 
 on behalf of the  
Minister of Trade 
: I move  
That the Foreign Affairs Defence and Trade Committee consider the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill 
 that the committee report finally to the House on or before 29 July 2010 and that the committee have authority to meet at any time while the House is sitting (except during oral questions) during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 187 and 190(1)(b) and (c). 
Motion agreed to. 
Tariff (Malaysia Free Trade Agreement) Amendment Bill 
Second Reading 
Hon Dr JONATHAN COLEMAN (Minister of Immigration) 
 on behalf of the  
Minister of Trade 
: I move  
That the Tariff (Malaysia Free Trade Agreement) Amendment Bill be now read a second time 
. 
Hon Darren Hughes 
: “I would like to thank the Foreign Affairs Defence and Trade Committee.” 
Hon Dr JONATHAN COLEMAN 
: The member has been listening! 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 Malaysia - New Zealand Free Trade Agreement will serve to benefit New Zealand merchandise exporters that target Malaysia as well as provide new opportunities for service providers particularly in the areas of educational environmental and engineering services. 
Malaysia is already our tenth-largest trading partner. Two-way trade between our countries is now approaching $2 billion and the trajectories are all in the right direction. Over the last 4 years goods exports to Malaysia have grown by over 50 percent. This free-trade agreement therefore comes at just the right time to give our exporters a chance to consolidate their positions within a priority market. 
On day one of this agreement entering into force approximately 95 percent of New Zealand’s merchandise exports to Malaysia will immediately be duty-free. This is a terrific head start for our companies competing in Malaysia against firms from Europe the United States Latin America and even Australia. And it will get better for New Zealand companies; by 2016 99.5 percent of our exports will be duty-free which will be 5 years earlier than the time secured under the free-trade agreement concluded by Australia and New Zealand with the 10 economies of the Association of South-east Asian Nations or ASEAN. That free-trade agreement is already a high-quality and comprehensive free-trade agreement. It placed New Zealand and Australia ahead of the queue of ASEAN’s other free-trade agreement partners including Japan Korea China and India let alone those who have yet to negotiate a free-trade agreement like the European Union and the United States. 
The elimination of tariffs is just one part of the story. The enhanced rules of origin negotiated in the Malaysia free-trade agreement will encourage Malaysian producers to make greater use of New Zealand products for imports and manufacturing. This will benefit a whole range of small and medium sized enterprises producing what are known as intermediate goods. Recent OECD research has shown that 56 percent of overall goods trade flows are in intermediate products. This is the way that modern trade is done. That is recognised in the rules of origin provisions in modern free-trade agreements including the one we are considering today. 
This free-trade agreement is not just about eliminating barriers to the export of New Zealand products. Trade in services is an increasingly important element of New Zealand’s trade profile particularly in the case of Malaysia where areas such as information and computer technology and engineering are expected to grow over time. Education in particular is an area of growth potential with growth of over 70 percent in fee-paying Malaysian students studying in New Zealand between 2003 and 2008. New Zealand delivers high-quality education services including training literacy programmes for schoolchildren and so on across the Internet and in-country in Malaysia. This free-trade agreement ensures that this trade is now protected and secure from Government intervention which might have wanted to limit or prevent that access. 
Better still and in addition to all these upfront benefits for New Zealand this agreement has been future-proofed. Specifically most favoured nation treatment in key sectors of commercial interest has been secured for New Zealand service suppliers. This means that if any future free-trade agreement partner with Malaysia is able to negotiate benefits that improve on what New Zealand has gained in a range of services sectors and investment we will automatically get the same benefits. If we combine that with our first-mover advantage of having preferential access for our exporters immediately members can see that this agreement is a very strong outcome for New Zealand business that sets us up well for the future in Malaysia. 
As with previous free-trade agreements that New Zealand has entered into the Malaysia free-trade agreement protects New Zealand’s most import-sensitive industries. New Zealand has left the elimination of existing tariff protection for its most import-sensitive industries to the end of the tariff phase-out in 2016. That is exactly the same date at which Malaysia will eliminate its tariffs on New Zealand products. 
The minority view in the Foreign Affairs Defence and Trade Committee report questions the effects of the investment provisions of free-trade agreements on the New Zealand economy. Increasingly New Zealand investors are looking to countries like Malaysia to enhance their global competitiveness. It is not surprising therefore that between 2003 and 2008 New Zealand’s total stock of investment in Malaysia increased by 77 percent. Our investors need to be sure that their investments will be satisfactorily protected. This free-trade agreement delivers that by offering additional and improved protections for New Zealand investors and their investments in Malaysia. In this way the agreement protects a New Zealand company’s ability to transfer its profits protect itself from expropriation and be assured of fair and equitable treatment—all of which are supported by a robust effective and legally binding dispute settlement mechanism. For its part New Zealand in respect of inwards investment from Malaysia has retained the flexibility to continue to apply the existing Overseas Investment Act and regulations regardless of the origin of any prospective investor. In other words the current investment screening regime in New Zealand continues to apply to prospective investors from Malaysia. This free-trade agreement has not changed the Overseas Investment Act in any way. 
The Malaysia free-trade agreement is expected to have a positive effect on exports gross domestic product and employment in New Zealand including in the manufacturing sector. The reality is that improving market access for New Zealand firms through a progressive trade agenda that includes free-trade agreements like this agreement ensures that we continue to stimulate economic growth and helps to safeguard the jobs of the many thousands of New Zealanders who work in or support export-oriented industries. 
The bill amends New Zealand’s domestic legislation so that the Malaysia free-trade agreement can be brought into force. The bill amends the Tariff Act 1988 in order to implement preferential tariff rates on imported goods from Malaysia and to enable transitional safeguard measures to be applied in appropriate circumstances on such imports. The Government would like to see the bill enacted on 24 June 2010 so that New Zealand can be ready to bring the Malaysia free-trade agreement into force on 1 August 2010. This will ensure that New Zealand business can benefit as soon as possible from this new addition to our free-trade agreement stable. I commend this bill to the House. 
Hon MARYAN STREET (Labour) 
: 
 I rise to speak to the Tariff (Malaysia Free Trade Agreement) Amendment Bill. I have prepared a substantial speech about the detail of the agreement but I will pick up a couple of comments made by previous speakers on the Tariff (New Zealand-Hong Kong China Closer Economic Partnership Agreement) Amendment Bill. They are apposite to any free-trade agreement. In fact the Green Party member Kennedy Graham made a point of referring to a template for free-trade agreements. He said that the language was the same the structure was the same and the underlying premises were the same and therefore the Green Party had the same criticisms of each one of these bills. In fact there is a Green Party minority report in the select committee report back to the House. 
I will pick up on some good points Kennedy Graham made in respect of those matters. It may be to do with the lateness of the hour—I am not sure—but in departing from what I had prepared to say I commend him for bringing those issues to the House. Similarly I commend the Maori Party member who spoke Rahui Katene for reminding us of other issues that impact on our free-trade agreements. 
Life is complex and we try to pursue our way in the world achieving the best we can for New Zealand’s interests but not at the expense of others and not at the expense of any of our own. There are often issues that conflict and that people consider to be mutually exclusive propositions like free trade and human rights or free trade and indigenous industry. We in the Labour Party have promoted free trade for a long time but not at all costs. The gradual movement over time to include for example labour and environment side clauses as we see in the Malaysian free-trade agreement are important and they will improve over time. 
I acknowledge the concerns that Kennedy Graham raised about the national interest analysis apropos of the New Zealand - Hong Kong China Closer Economic Partnership Agreement and I relate them to the Malaysia - New Zealand Free Trade Agreement. I think there is a point to be made about the need for an honest appraisal in the national interest analysis of any negatives to New Zealand. I for one would be keen to see more open processes around our trade negotiations so that there might be some robust and public consideration even more robust and public than we have at the moment. That process surrounds this House. The free-trade agreement should be referred to the select committee because it needs to be ratified in law and the public would then have a chance to speak on it and to contribute to the discussion about it. Yet usually only a very few people are interested and wish to participate. I wonder whether making that process broader would get more input closer analysis greater justification and perhaps even more care about indigenous or New Zealand industries and the impact of free-trade agreements on them. That is all for the future but it is something I think we need to take care of; I acknowledge the points that the Green Party made in that respect. 
It still remains that this is a high-quality free-trade agreement. If one compares it with the ASEAN-Australia-New Zealand Free Trade Agreement one sees very clearly that it moves further and faster than that agreement. For example under the Malaysia - New Zealand Free Trade Agreement this year at the point of implementation 95.1 percent of tariffs on New Zealand exports will be eliminated. Under the ASEAN-Australia-New Zealand Free Trade Agreement that figure is 94.8 which is close but not quite as good. I could track the years of the Malaysian free-trade agreement compare it with the ASEAN free-trade agreement and demonstrate that it goes further faster so that by 2016 99.5 percent of New Zealand exports to Malaysia will be tariff free. All tariffs will be eliminated. By that time only 98 percent of tariffs under the ASEAN free-trade agreement will have been eliminated. The remaining 0.5 percent under the Malaysian free-trade agreement is in fact wine and pork products which have some religious and cultural prohibitions around them. 
What do we export to Malaysia that will be so generously and helpfully affected? Well 54 percent of what we export to Malaysia is dairy products. Another 10 percent is petroleum products which is interesting because we import slightly more than that from Malaysia. In addition to that we export cereals minerals metals wood pulp paper furniture meat fruit vegetables and a few other things besides. How will each of these different sectors be affected? First let us go to the immediate winner in this agreement. As soon as this legislation passes—and it coincides with the passing of the same legislation in Malaysia—the kiwifruit industry will experience a huge gain. Currently there is a 15 percent tariff on kiwifruit imports. Despite that tariff I have to say New Zealand exports of kiwifruit to Malaysia have grown by 123 percent in the last couple of years. But at the moment that this agreement comes into force that 15 percent tariff drops to zero and that means that a lot more earnings are retained in New Zealand. In 2010 other key export products are liberalised in addition to kiwifruit. These are butter cheese milk-powder honey wool apples and some manufactured products. 
Let us look at some of these products. In respect of meat wool dairy fish and forestry we find that the Malaysian free-trade agreement confirms the outcome that is also arrived at in the ASEAN free-trade agreement which is the interesting one of binding in existing duty-free access for New Zealand meat wool dairy fish and forestry product exports. This particular provision means that Malaysia cannot legally change this duty-free level of access for New Zealand exporters although it can change it for others. That simply means that our exporters have a greater degree of certainty around their exports. 
Coming from Nelson where all those primary products are in abundance—whether we are talking about kiwifruit meat dairy products fish or forestry—I know that this free-trade agreement will have a direct and immediate beneficial impact on those New Zealand industries. I commend the bill to the House. 
JOHN HAYES (National—Wairarapa) 
: 
 I am pleased to have the opportunity to speak in the second reading debate on the Tariff (Malaysia Free Trade Agreement) Amendment Bill. I will begin by thanking colleagues on the Foreign Affairs Defence and Trade Committee for the good work they do in a very collegial way. I refer particularly to Maryan Street Pete Hodgson and Keith Locke and to my National colleagues some of whom are in the House tonight. I also congratulate our Ministers Phil Goff and Tim Groser on leading the work that has been done and while I am in a thank-you mode I also thank Vangelis Vitalis from the Ministry of Foreign Affairs and Trade who was the lead negotiator and who did an excellent job. 
When I listened to the last speaker Maryan Street and my Green colleague speaking on the previous China free-trade agreement I think the one thing that really demonstrates above all else that these agreements are worthwhile is the fact that in the year ended April 2010—that is 2 or 3 months ago—the value of our export trade with China has increased by $860 million over that 12-month period. That is about the value of our total exports to Indonesia. So the free-trade agreement with China gave us effectively another market the size of Indonesia in 12 months. 
We will not get that with this Malaysian agreement but that is because we are operating on a different scale. Malaysia has a slightly bigger land area than we do. We have similarities as we were both British colonies. Malaysia has a population of about 28 million whereas our population of about 4.2 million is probably smaller than that of greater Kuala Lumpur. Eighty-seven percent of the people in New Zealand live in urban communities and the drift from rural areas to urban areas is growing at a rate of about 1 percent a year. In Malaysia about 70 percent of people live in towns and that rate of drift is about 3 percent a year. Important for the business community is the fact that both of us have legal systems based on English common law. There is quite a big difference in GDP per capita. New Zealand is sitting on around $28000 per capita growing at around 2 percent; Malaysia is sitting on $15400 per capita growing at about 4.6 percent. 
There is another very interesting statistic which is in relation to Internet users. Of Malaysia’s population of 26 million people 17 million are using the Internet. We have a rather smaller proportion of our population using the Internet—3 million people are using it. So the Malaysians are ranked for Internet usage at 22nd in the world; we are at 58th. 
I think that this legislation puts both economies in much more balance but still we have one-sixth of Malaysia’s population. When we considered this bill at the Foreign Affairs Defence and Trade Committee we came to the conclusion collectively that one of the reasons for signing this agreement was that all of us in this Parliament wanted to see a boosting of innovation and improved export access to world markets. It is those two things that will give us a step change in our own economic performance and everybody will benefit from that. This agreement with Malaysia is a very important part of National’s focus on free trade and improvement in access for our exporters to world markets. It was a priority included in the Prime Minister’s statement to Parliament in February this year. Only by lifting economic performance can we create jobs boost incomes improve living standards and provide world-class public services that our New Zealand families need. 
We heard about our trade figures from the previous speaker and I reiterate that over the past 4 years the quantity of New Zealand goods exported to Malaysia has grown by more than 50 percent making Malaysia New Zealand’s tenth-largest trading partner. I think that those things will bode well for the future but the real driver will hit the pockets of kiwifruit farmers. At the moment we are paying a 15 percent tariff on every kiwifruit exported into Malaysia; in 2012 that trade will become duty-free. Based on the most recent trade figures our kiwifruit exports to Malaysia have grown by 173 percent since 2007. As my colleague Maryan Street said meat wool dairy—excluding liquid milk—fish and forestry products are bound in so Malaysia cannot reapply tariffs on New Zealand’s agricultural exports; that is very important to my electorate. Liquid milk has a significant improvement on in-quota duties which will be eliminated and in-quota volumes which will increase by up to 5 percent a year. 
The Malaysian free-trade agreement includes an agreement to establish mechanisms that allow for the recognition of the equivalency of each other’s qualifications. That will improve New Zealand’s professional service suppliers’ ability to deliver services in Malaysia—that is people like architects and insurance companies. New Zealand provides access duty-free for about 72 percent of imports from Malaysia and under the free-trade agreement this will increase to 90.8 percent this year graduating to 100 percent by 2016. 
Only one area of the agreement I felt could have been more rigorously negotiated and that was the area of company ownership. Any Malaysian company is allowed to buy 100 percent of a New Zealand company—and Opus construction would be a very good example of that—but the Malaysians have given us the capacity to buy only 70 percent of a Malaysian company. I think that as we look into the future and at other free-trade agreements we could think about a greater principle of reciprocity and that was something acknowledged by the committee. 
With those few words I tell members that it is very pleasing to bring this legislation back to the House without any amendment; I commend it to the House for passing. Thank you. 
STUART NASH (Labour) 
: 
 Am I wrong? Have we just heard from the chair of the Foreign Affairs Defence and Trade Committee? I know it is late and he is probably tired. It is probably past his bedtime but goodness me that was the most lacklustre speech I have heard in this House for a long long time. Jonathan Coleman is very lucky because we thought his speech was bad but then John Hayes stood up and Jonathan Coleman’s speech looked fantastic. His speech was a piece of oratorical art compared with that member. It was outstanding. John Hayes stood there; it was a long low cold boring quiet monologue about nothing. We try to listen to some of these speeches because some of these things are quite interesting. They are in the national interest. The Tariff (Malaysia Free Trade Agreement) Amendment Bill is good for New Zealand; it is great for New Zealand. It is not like some of the other bills. They are important but this is good for New Zealand. It is good for trade and it is good for the economy. The chair of the select committee—I think he was standing; it was hard to tell—spoke in a low quiet monotone. It was painful. Thank God that is over! Thank God we are almost at the end of the night. It was like pulling nails. 
I do stand in support of the Tariff (Malaysia Free Trade Agreement) Amendment Bill in its second reading. This is the fourth bill that I have spoken on today that is Labour legislation. This is something that Phil Goff did. This is Jim Sutton’s work. This is in fact the third bill in a row that Labour has done all the work for. It is unbelievable. We are in urgency 18 months later on Labour bills. Where is the innovation? National members have the nerve to say that Labour did nothing in Government yet we are on the third bill in a row that was a Labour bill. 
This bill amends the Tariff Act 1988— 
John Hayes 
: He’s worse than his Uncle Walter. 
STUART NASH 
: The member has come to life! It is about time. Why did he not do that 5 minutes ago? As I was saying this bill amends the Tariff Act 1988 in order to implement the Malaysia - New Zealand Free Trade Agreement signed in Kuala Lumpur last October. The bill’s amendment will allow for transitional safeguard measures to be applied in appropriate circumstances to imports from Malaysia. [ 
Interruption 
] The member has no right to criticise anyone’s speech yet he is sitting there doing so. It is unbelievable. Someone should send him the YouTube clip or wherever the debate is shown and show him how bad his speech was. I think he needs a few lessons. 
Malaysia has a large and growing population of more than 28 million people and it presents ample opportunities for additional trade investment and other economic linkages. We all know that if New Zealand is to develop sustainable economic growth then it must follow a policy of export-led growth like that promoted with this agreement. It must work to foster an economic environment whereby key competencies around export strategy are encouraged in any way shape or form. Mr English has stated that it is his Government’s goal to drive an export-led recovery and I quote: “We’re looking for how to make sure we get a sustainable export-led recovery.” In my view three things are holding back New Zealand companies from optimising their export growth in countries we have free-trade agreements with like Malaysia which this bill fosters. The Government’s actions are increasingly suboptimising any chance New Zealand has of increasing its economic growth through further development of the export sector into countries like Malaysia which this free-trade agreement is about. There are three things holding back New Zealand: one a lack of affordable capital; two a lack of true export competency; and three an outdated monetary policy. 
Let me expand on these a little more. The first is a lack of affordable capital. 
John Hayes 
: No no don’t bother. 
STUART NASH 
: Mr Hayes may learn something. He may have been in foreign affairs for a long time but he did absolutely nothing. It took a Labour Government to negotiate all the free-trade agreements that have been passed since National has been in office. Every single free-trade agreement that has been passed under the National Government is as a result of the work that Phil Goff and Jim Sutton did. How dare the member sit there like a big oaf going on about how Labour does nothing. They were all done by Labour and Mr Hayes knows that. 
I turn to the lack of affordable capital. Only 10 percent of all business loans are unsecured in this country. That means that 90 percent of all loans are secured against the assets of the owner of the company often being the family home. This attitude and access to capital will never allow the country to address the issue of the fact that we overvalue capital and undervalue labour in this country. Basically that means that we prefer to employ cheap labour rather than spend money on capital in order to improve productivity. My question is how New Zealand companies wanting to expand and to take advantage of the Malaysia - New Zealand Free Trade Agreement can access affordable capital. Investment in capital does not lead to fewer jobs but rather to greater efficiencies more jobs as companies grow and more important a greater propensity to scale up for export growth into countries like Malaysia which is what we are talking about at the moment. That is fundamental if the vast majority of companies are to take advantage of this Malaysia - New Zealand Free Trade Agreement. 
The second thing the Government has suggested it will do is sell Kiwibank. This is the Government-owned bank set up by the last Labour-led Government that by its own admission in the banking inquiry has saved New Zealanders about $1 billion in interest—about $1 billion due to competition—and this Government wants to sell it. Selling Kiwibank will be a huge disservice to the people of New Zealand and to companies in the export business hoping to establish a beachhead in Kuala Lumpur. 
John Hayes 
: I raise a point of order Mr Speaker. Selling Kiwibank has got nothing to do with the Malaysia - New Zealand Free Trade Agreement. 
Mr DEPUTY SPEAKER 
: Thank you for that. I did indicate to the member to bring it in. The member John Hayes is exactly right so come back to the subject. 
STUART NASH 
: Thank you Mr Deputy Speaker. I am talking about the free-trade agreement between New Zealand and Malaysia. I think it is a very important agreement. I think it has the opportunity to really grow our economy. But I see that in terms of optimising this agreement and allowing New Zealand companies to grow there are three barriers to real market optimisation. They really need to be addressed or this free-trade agreement will really not benefit the vast majority of New Zealand companies that could be in line to do so well out of this agreement. 
As I was saying 97 percent of New Zealand businesses are classed as small to medium enterprises. That means they have 19 staff members or fewer. Very few of these companies can afford to employ full-time international marketing or marketing development managers let alone open an office in Malaysia a country with a different language legal system and business culture. So we need an agency that is our eyes and ears in the global markets. I ask members to tell me whether this Government is taking any action to help New Zealand businesses make the most of this opportunity in Malaysia. No it is not. However let me tell members that Labour understands the value of assisting exporters to get into markets like Malaysia and optimise their ability to take advantage of this free-trade agreement. In its last term the Labour Government increased New Zealand Trade and Enterprise’s funding for market development assistance from $6 million to $54 million. Now there is only just under $10 million available in the International Growth Fund. About 6 months ago I asked the retiring chief executive officer of New Zealand Trade and Enterprise whether his organisation was New Zealand’s international marketing and market development organisation. His response was: “If only.” 
The third point holding back New Zealand’s economic and export market development into Malaysia is our current monetary policy. Can anyone in this House tell me how a company can effectively forecast and business-plan when it does not know whether the exchange rate will be at 0.55 0.65 or 0.75? 
John Hayes 
: Have you heard of forward cover? 
STUART NASH 
: They cannot and if Mr Hayes thinks they can he should take his head out of the sand. No wonder we had such poor performance when that man was in the Ministry of Foreign Affairs and Trade. Goodness me that is a bloody disgrace! The Labour Party has made a commitment to business to review current monetary policy legislation because we believe that it is not beneficial to New Zealand’s economic growth it will not allow companies to take advantage of this free-trade agreement and it is not relevant to New Zealand’s economic future. 
The time is now right for change. Business understands that. Labour understands it. The only people in this country who do not understand it are the members on that side of the House. I ask the House who really is the true party of business. Who is the true party of trade? As I mentioned the work for every single free-trade agreement that has been passed while that party has been in Government was done by Jim Sutton and the Hon Phil Goff the next Prime Minister of New Zealand and the only future Prime Minister who knows anything about international relations. He has been at the coalface negotiating contracts on behalf of this country. 
I support this bill for a variety of reasons but I ask members to please not confuse my support for free-trade agreements with support for that Government which lacks any discernable policy that would allow this country to optimise its economic advantage. I commend this bill to the House. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 E te rangatu pou mua o te reo o te Whare tena koe. In November 2006 a group of Malaysian non-governmental organisations came across to Aotearoa with the explicit purpose of being able “to learn how the Maori people of New Zealand have brought their culture back from the brink of extinction”. The delegation represented several ethnic minority groups including four tribal members from the United Saba Bajau Organisation—I apologise if I have the pronunciation wrong. The Bajau people are one of the most well-known populations in what we might describe as the endangered ethnic groups of Malaysia. The Bajau are traditionally seafaring people and possess an incredible range of skills in the construction of fishing canoes and vehicles. They came here to learn together and to consolidate and develop a partnership between indigenous peoples. 
I raise this experience today because it would appear to me that international exchanges such as the one with the Bajau community might be the type of relationship we might expect to see as a benefit of a relationship with Malaysia. The Tariff (Malaysia Free Trade Agreement) Amendment Bill amends the Tariff Act 1998 to implement the Malaysia - New Zealand Free Trade Agreement which was agreed to in Kuala Lumpur on 26 October 2009. It enables the application of preferential tariff rates for imports originating from Malaysia. The bill also amends the Customs and Excise Regulations 1996 to give effect to rules of origin applicable to imports originating from Malaysia. Finally the amendments will enable transitional safeguard measures to be applied in appropriate circumstances to imports originating from Malaysia. 
I will place this free-trade agreement in some context for the benefit of the House. The Maori Party has previously voted against all free-trade agreements. Our rationale for doing so is that we believe the economic benefits of international trade agreements need to be balanced with consideration of our own local regional and national social progress and environmental enhancement. Our key position has been that we support fair-trade agreements as opposed to free-trade agreements. We want to use the opportunity of any trade relationships to advocate also for the support and implementation of indigenous international agreements such as the Declaration on the Rights of Indigenous Peoples International Labour Organization Convention 169 the Mataatua declaration the declarations of the United League of Indigenous Nations and suchlike. We also seek to establish trade relationships with other First Nations peoples. 
We have been approached by Maori businesses in the past that have shared with us their genuine enthusiasm for any opportunity to take advantage of international markets. I think this is where the rubber hits the road for a party like ours because although some people have contacted us with their deeply held concerns about the impact of free-trade agreements others also see great potential in arrangements such as this. We speak for those innovative Maori businesses who want to seek new international challenges and develop a position as a significant player in our export growth but we speak also about our fundamental right to determine our own sovereignty rather than to surrender it to the march of overseas investors. We stand for the incredible diversity that characterises Maori economic activity from Maori individuals in the labour market to self-employed people running their own Maori businesses to tribal and pan-tribal Maori commercial entities. 
But we are concerned also about the loss of jobs. We also acknowledge that one of the consequences of the global market is that businesses and workers including Maori— 
Mr DEPUTY SPEAKER 
: I am sorry to interrupt the honourable member but the time has come for me to leave the Chair. 
Debate interrupted. 
Sitting suspended from 12 midnight to 9 a.m. (Thursday)