Volume 704 Week 11 - Tuesday 17 March 2015Text is incorporated into the Bound VolumeVolume 704 Week 11 - Tuesday 17 March 2015[Sitting date: 17 March 2015. Volume:704;Page:2255. Text is incorporated into the Bound Volume.]Tuesday 17 March 2015Mr Speaker took the Chair at 2 p.m.Prayers.MotionsCyclone Pam—Expression of Support for Vanuatu and Other Pacific CountriesRt Hon JOHN KEY (Prime Minister): I seek leave to move a motion without notice in relation to Cyclone Pam.Mr SPEAKER: Is there any objection to that course of action being followed? There is none.Rt Hon JOHN KEY: I move That the House express its support for the people and Government of Vanuatu and other Pacific neighbours affected by Cyclone Pam. Over the weekend Cyclone Pam cut a path through the Pacific resulting in reports of damage from Fiji Tuvalu Kiribati and the Solomon Islands. However the most severely affected country is Vanuatu. When tropical Cyclone Pam hit Vanuatu it was a category 5 cyclone with winds gusting up to 320 kilometres per hour. In the Efate province where Vanuatu’s capital Port Vila is located 90 percent of structures have been destroyed or damaged in some way. Thousands have been left homeless and sadly there are now reports of 24 confirmed fatalities. The most concerning thing is that reports of damage are still to come in from the outlying islands and remote provinces. Cyclone Pam is already the worst disaster in Vanuatu’s recent history and as we get a better picture of the damage outside Port Vila we cannot rule out the scale of this catastrophe increasing dramatically. The thoughts of all New Zealanders are with the people of Vanuatu at this difficult time and we want our neighbours in the Pacific to know that they do not face this disaster alone.As soon as we were able to on Saturday we launched a Royal New Zealand Air Force P3 Orion to conduct damage assessment flights over Tuvalu the first nation in Cyclone Pam’s path. As the first reports of damage came in we announced an initial $1 million contribution in funding to respond to specific requests for assistance in Vanuatu Fiji Tuvalu and the Solomon Islands and for NGOs in Vanuatu and the Solomon Islands to replenish relief supplies. We also sent a Royal New Zealand Air Force C130 to Vanuatu carrying 8 tonnes of relief supplies and emergency personnel. There have now been two further relief flights to Vanuatu and we have upped our funding contribution to $2.5 million. Additional aid flights will depart today and we will continue to assess how we can best assist the people of Vanuatu. Although we are currently focused on the immediate relief effort it is clear that Vanuatu will need long-term support to recover from this disaster. We already have a significant aid programme in Vanuatu focused on the redevelopment of the port and waterfront infrastructure and we are looking at how we can best support this long-term rebuild.There are a number of New Zealanders in Vanuatu and I know that some families in New Zealand are also facing an anxious wait for news. The Ministry of Foreign Affairs and Trade consular offices are contacting New Zealanders in Vanuatu to confirm their well-being and at this stage the ministry has not received reports of any New Zealand casualties. More than 80 New Zealanders were brought home last night by the Royal New Zealand Air Force and our high commissioner is working to ensure that those who do need to leave urgently can do so now that commercial flights have resumed.Once again the thoughts of this House and all New Zealanders are with Vanuatu as they confront this calamity and they can take solace from the fact that they do not stand alone. The international community is rallying and I can assure the House that New Zealand will continue to do all it can to help the relief and recovery efforts.ANDREW LITTLE (Leader of the Opposition): We support the motion. The destruction caused by Cyclone Pam has been immense and heartbreaking and I would like to say how much our hearts go out to the people of Vanuatu who have suffered such a great loss—a loss of life a loss of homes a loss of food crops a loss of those things that make up communities towns and cities. Our sympathies also go out to the people of the Solomon Islands and Tuvalu and to the people of the Chatham Islands for the tumult they have been through in these last couple of days. To the people of Vanuatu this has been a very hard time for you and in this hard time we in Labour we in this Parliament we in New Zealand stand with you in your loss but we also stand with you as you help to rebuild and recover. This has been one of the worst storms to hit the Pacific in living memory. The scenes of destruction we have seen and the seemingly endless stories of loss will be bringing sadness into the lives of many New Zealanders and immense concern and sadness to those from Vanuatu who are on our shores—many here for work—who will be anxiously waiting for news.But there is little time to mourn. With so much of Vanuatu flattened by this terrible event we need to take action. If we do not the catastrophe of Cyclone Pam will only grow as disease and hunger spread. There is great urgency in our task but by working together with other nations and aid agencies we can ensure that the damage caused by the cyclone does not get even worse. That will mean collective effort to bring food medicine and shelter to those who are hit hardest and to do it quickly. We will do this because we are a family of nations. We are without doubt family. We share so much of our culture so much of our heritage and so many of our people. Now we share loss but with it also the hope that by working together as a family we can rebuild. In this there has been the beginning of hope. The response from the people of New Zealand has been swift and generous as I found out when holding out the bucket up and down Lambton Quay just a short while ago. We have been drawn together in this loss and we will work hard to salvage and to rebuild Vanuatu. It will take time because there is a lot to do and we will do it together.Dr RUSSEL NORMAN (Co-Leader—Green):Mifala i talem sori tumas long yufala evriwan long Vanuatu. The Green Party’s thoughts and condolences are with the people of Vanuatu whose country has been devastated by super-cyclone Pam. Our sympathies are with the families and friends of those who have lost loved ones in this disaster with reports of many deaths and many more injured. We are also thinking about the wider Vanuatu community in New Zealand and abroad. We hope that they have been able to contact their loved ones and be assured of their safety.But as well as expressing our condolences and sympathies today we also express our pain and anger in solidarity with our Pacific neighbours who are bearing the brunt of climate change. Messages of condolences from this House will have no meaningful effect if they are not backed by actions to ensure that such horrors are not repeated. If Cyclone Pam has taught us nothing else it is that the time for leadership on climate change is now. Tropical Cyclone Pam had the strongest winds of any South Pacific tropical cyclone on record. Waiting and doing nothing on climate means bigger cyclones more death and destruction and more speeches in this House while the people of the Pacific plead for action. What our brothers and sisters in the Pacific need to hear from us today is that we take their plight seriously and that we take climate change seriously and that we will take meaningful action to reduce our emissions and show climate leadership on the world stage and actually try to stop the increasing intensity of these super-storms.Vanuatu’s President Baldwin Lonsdale has said that climate change is a key factor in the loss of life destruction and wreckage left in the wake of super-cyclone Pam. He said: “Climate change is contributing to the disaster in Vanuatu.” He was not alone in linking this disaster to climate change. United Nations Secretary-General Ban Ki-moon said on Saturday that climate change is making extreme weather the new normal. Super-cyclones should not be the new normal. Their increasing size is a human-made aberration. There is nothing normal about changing our climate and causing mass devastation as we have seen.But it was not just the President of Vanuatu and the Secretary-General of the United Nations making the link between Cyclone Pam and climate change. There was also the Vice-President of the World Bank Rachel Kyte. She is calling out Governments whose policies do not reflect the urgency that is needed to act on climate change. The President of Vanuatu the Secretary-General of the United Nations and the Vice-President of the World Bank are all making the link and all calling for action.This tragedy is in our neighbourhood and must serve as a wake-up call for real leadership and action on climate change in New Zealand. Our part of the world is uniquely vulnerable to the changing climate. The United Nations World Risk Report systematically considers a country’s vulnerabilities and its exposure to natural hazards. No. 1 on its list is Vanuatu and No. 2 is the Philippines. Vanuatu’s super-cyclone Pam the Philippines’ super-typhoon Haiyan—if we truly want to see the people of Vanuatu the Philippines and the rest of the Pacific live their lives without the constant fear and threat of climate change - related disasters then we need to take action.I would like to commend the Government for its initial response of sending assistance to Vanuatu but in addition to aid and rebuild assistance why do we not also make reducing our carbon emissions at home part of our response to this tragedy? Why do we not commit to showing global readership at the Paris climate conference later this year? Why not make our response an enduring solution to climate change rather than just a dollar donation to clean up its aftermath? Yes we should be sad. Yes we should send condolences and aid but yes we should also lead on solutions. True empathy from this Parliament would involve playing our part in building a safer world and a more stable climate.TRACEY MARTIN (Deputy Leader—NZ First): Kia ora Mr Speaker. On behalf of New Zealand First I join with the rest of the House in expressing our support for the people and the Government of Vanuatu. Cyclone Pam is a reminder of the terror and destruction that extreme weather actually brings.We acknowledge the appropriate increase of New Zealand’s funding to Pacific nations impacted by the storm to $2.5 million. We note that a Hercules aircraft was sent to Vanuatu with relief aid yesterday and that two more leave today. We are pleased to hear that the airport has now been cleared for military aircraft but acknowledge that as of yesterday the control tower and navigational equipment were out of action and that there has been significant damage to the international terminal. We believe that only one ward of the country’s main hospital is still functioning after much of the building’s roof was torn off. We know that the HMNZS Canterbury has the facilities for accommodating up to 250 personnel and can transport and deploy supporting military vehicles and equipment by landing craft helicopters or ramps and has the ability to provide medical support to military and civilian operations from a self-contained hospital with surgical capability. We would like to think that if the Canterbury is available she would be deployed to assist just as she was in October 2009 when the Canterbury was sent to Samoa following the devastating earthquake and tsunami and in 2011 to Christchurch.The nation’s capital Port Vila has been devastated with at least 80 percent of buildings damaged or destroyed. Aid workers describe the situation as catastrophic. Up to 10000 people have been left homeless in the capital Port Vila alone.But New Zealand First also wishes to acknowledge the citizens of Vanuatu working here in New Zealand and commends the seasonal solutions and the growers who are part of a cooperative that is providing support for these workers.We also wish to acknowledge the Kiribati community of central Auckland and Warkworth who are also expressing concern for their loved ones on the island and we hope that all communications can be re-established as speedily as possible.MARAMA FOX (Co-Leader—Māori Party): Kia ora e te Mana Whakawā nei rā te mihi atu ki a koe otirā te Whare. Tēnei mātou o te Pāti Māori e tū nei ki te tautoko i ngā mihi kua mihia ki a Vanuatu tērā o ngā tangata whenua o tērā o ngā motu otirā ngā motu katoa o te rohe.[Thank you Mr Speaker. I really acknowledge you and the House at the same time. We of the Māori Party stand to endorse the tributes accorded to Vanuatu that one of the indigenous people of those islands and all the islands of the region.]We would like to congratulate the Government on its speedy response in sending aid to Vanuatu. In 2008 I had a missionary’s son who served in the Vanuatu islands for 2 years. When I spoke to him this morning he conveyed a sense of loss and a sense of regret for his friends whom he has been unable to contact. We understand that on the outlying islands Tanna has been the worst hit and has almost 98 percent of all its dwellings completely obliterated. An aeroplane that was able to fly over the island could not see one structure that was still standing.The crops have been destroyed the peoples’ livelihood and income have been lost but these are a people who are resilient by nature. They are friendly people. They have lived in what some would consider abject poverty for most of their lifetimes. They are subsistence livers and growers and farmers. With their crops being destroyed there is no hope of being able to feed this community and so the support that the Government has been able to send to Vanuatu will absolutely be necessary now and for the future in restoring the crops to those families. It is not an understatement to say that these people face starvation in the coming weeks if we are not able to get support to them. The aid efforts that have come from New Zealand include temporary housing water purification and just hands on the ground.The people in Vanuatu have not all been able to be contacted; some in the outlying areas remain unaccounted for at this time. We understand that 24 is the current number of those who have been lost but that number may climb yet. Our thoughts and our aroha go to those people in the island of Vanuatu specifically. Last night as I lay in Wellington for one of the first times that I have slept here with the wind blowing I thought to myself “This is nothing but a stiff wind and a small gale.” and Cyclone Pam was 400 kilometres offshore when our city was struck with rain and wind. I could not imagine the terror that would have been on the faces of the families who were cowering under the intense category 5 cyclone that hit their island.I want to commend to the House the motion that the Prime Minister has moved and I look forward to hearing of further support that may come to the Vanuatu the ni-Vanuatu people for the future for restoring their crops their livelihood their food and their sustenance. Kia ora.DAVID SEYMOUR (Leader—ACT): I would like to keep my comments very brief because I feel my sentiments on this topic have been very well canvassed by earlier speakers in particular the Prime Minister and the Leader of the Opposition. On behalf of the ACT Party I would like to concur and add our great sorrow and condolences for the terrible loss of livelihood and worse of life amongst our Pacific neighbours particularly Vanuatu. I would also like to join in commending the many New Zealanders who have taken the initiative and voluntarily given to help our Pacific neighbours in their time of need and I commend this motion to the House. Thank you.Hon PETER DUNNE (Leader—United Future): I want to join with others who have expressed support and sympathy for the people of Vanuatu in their horrific travails in the wake of Cyclone Pam. This storm the greatest of recent years has wreaked devastation at a level unparalleled in the history of the island. It is one that will take many years to recover from and will leave not just a physical scar but also an emotional scar on the people of Vanuatu.In a country like New Zealand we have two responses in situations like this. It is appropriate that we provide what humanitarian and other assistance that we can to help people recover and restore the basic functions of life so that they can get on but it is also something we need to reflect upon—our wider responsibility to all of the countries in the Pacific and those that we have a particular relationship with. We are privileged in this country by our comparative prosperity and wealth and we do not face necessarily the same devastating extremes of weather that they do in parts of the Pacific. Having said that I want to pay tribute to those people in the far north and on the east coast of New Zealand who have been affected by this storm. There has been significant damage but I think the distinction is that it is not of a magnitude that imperils the function of the whole country the way the damage that has struck Vanuatu does. I also want to take the opportunity to acknowledge the people of the Chatham Islands. They have faced in the last 24 hours the brunt of this storm. They are part of the people of New Zealand and we have a responsibility to them as well to make sure that they can recover effectively.We live in a very vulnerable part of the world climatically. One of the other speakers has already made reference to that. Although I do not want to indulge in the politics of the matter in an occasion like this I think it is fair to observe that these circumstances do drive us to reflect upon causes and do drive us to reflect upon what we can do to help island States in such situations and to help our fellow Pacific neighbours get through these terrible tragedies. I support the efforts the Government has made to date. I know that the people of New Zealand will similarly support strong humanitarian efforts to help Vanuatu reconstruct and to help the people of Vanuatu get on with these lives. I hope that that gap cannot be too long because life must continue and they must have the opportunity to put themselves back together and to get their jobs their families and their communities back functioning again. We have the responsibility to do what we can to help them do that.Motion agreed to.Questions to MinistersIraq—Military Deployment1.ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he still believe that people who oppose the deployment of New Zealand soldiers to train Iraqi Government forces need to “get some guts and join the right side” in light of widespread evidence that Iraqi Government forces are committing war crimes?Rt Hon JOHN KEY (Prime Minister): Yes. The right side is the international coalition of over 60 countries that are contributing to the campaign against the Islamic State of Iraq and the Levant (ISIL). ISIL is a brutal threat to stability not only in the Middle East but regionally and locally too. I am advised that the Iraqi Government is investigating allegations of abuses by Shia militia and individuals within the Iraqi security forces. We share the concerns of other partners about these allegations and we will ensure our view is communicated to the Iraqi Government.Andrew Little: Given that everyone in this House agrees that the Islamic State of Iraq and Syria (ISIS) is evil how is it gutsy to force young New Zealanders to train an army guilty of many of the same crimes as ISIS?Rt Hon JOHN KEY: That is not correct; we will not. We will set the terms of the mission including whom we will train how we will train them and when we will train them.Andrew Little: What has the Government done to ensure New Zealanders will not help the Iraqi units that have committed war crimes and been banned from receiving US assistance under Leahy’s Law?Rt Hon JOHN KEY: I think the member has answered his own question. The US has identified those involved. The Government will make it clear to the Iraqi Government as indeed the Americans have that we find that behaviour reprehensible. The Iraqi forces must be consistent with the law; otherwise they stoop to the same level as ISIL. But I go back to the point I made earlier—we will set the terms of the mission including whom we will train how we will train them and when we will train them.Andrew Little: Will he give the New Zealand public a cast-iron guarantee that under no circumstances will our troops work with the Iraqi army units or militia that have committed war crimes?Rt Hon JOHN KEY: What I can guarantee is in terms of our own deployment we are still planning the mission to Taji. However we will set the terms of the mission including whom we will train how we will train and when we will train them.Andrew Little: Why has he declared that the deployment to Iraq will end whether or not its objectives are completed about 6 months before the next election? Is that just a coincidence?Rt Hon JOHN KEY: No.Andrew Little: Is the truth not this: although the goal of defeating ISIS is noble and shared on this side of the House his plan risks our forces mixing with war criminals has a cut and run exit strategy and is timed with a New Zealand election in mind not the Iraqi people?Rt Hon JOHN KEY: The Government is committing to building partner capability in Iraq for 2 years. In our view that is an appropriate step for us to take given the threat from ISIL. The member said in his opening statements that he found the actions of ISIL barbaric or words to that effect. We agree with him. On this side of the House we are prepared to do something about it.Economy—Performance and Risks2.Hon JUDITH COLLINS (National—Papakura) to the Minister of Finance: What recent reports has he received about higher employment consumer confidence and economic growth?Hon BILL ENGLISH (Minister of Finance): I have received Treasury’s Monthly Economic Indicators February 2015report. It notes that retail sales point to solid growth and household consumption supported by reasonable employment growth in the December quarter. It also shows more migration and a pick-up in tourist spending. This report reinforces the unusual conditions we have at the moment with quite low inflation alongside sustained economic growth. These are pretty good conditions for New Zealand families managing their household budgets because low unemployment low interest rates and low inflation make it a bit easier for them to get ahead.Hon Judith Collins: What effect is net migration having on the economy particularly in employment and housing?Hon BILL ENGLISH: Net migration has stayed higher for longer than most people expected with a net inflow of 50900 in the year to December. This is driven by fewer departures to Australia more New Zealanders returning home and somewhat higher inflows from other countries. This is expected to ease though in 2015 with lower net migration. Net migration flows are larger in this cycle than in the 2000s but they are having a smaller effect on house prices for two reasons: first the dominance of 20 to 34-year-olds in this cycle and secondly net migration is more driven by a fall in departures—that is more people staying in their own communities particularly in regional New Zealand—and this has a weaker effect on house prices.Hon Judith Collins: Are there risks to New Zealand’s economic situation?Hon BILL ENGLISH: That is a very good question. There are always risks to our economy which is why no one in New Zealand should be complacent about the progress of our economy. In particular our major trading partners are a critical determinant of our success and as Australia has a higher unemployment rate the Reserve Bank there has cut its cash rate and there is some uncertainty about the Australian growth path. Also in the case of China growth forecasts have been lowered and in the euro area high levels of debt are going to burden their economies for some time although Germany is doing pretty well. In New Zealand the effects of drought might still come through into GDP figures and of course we are expecting some kind of improvement in dairy prices but if that did not eventuate that would represent a risk to the economy.Hon Judith Collins: What reports has he seen on perceptions of higher interest rates and lower growth in the New Zealand economy?Hon BILL ENGLISH: Some people think that interest rates are much higher than they are and that growth is much lower than it is. I have seen one political aspirant who was asked about the official cash rate and answered that he thought it was 7.8 percent when it is actually 3.5 percent—that is interest rates are less than half of what he thought they were. There was another who was asked about growth who thought that it was a bit over 0.25 percent which of course is almost recession when it is actually 2.9 percent or around 3 percent which is moderate growth. These were potential leaders of the Green Party who indicated that they do not really care—Mr SPEAKER: Order!Darroch Ball: Has he received the Northland economic quarterly report stating that Northland still maintains one of the highest rates of youth unemployment in the country with one in five youth not being in employment education or training and that this figure would be even higher if we included those working for just 1 hour a week?Hon BILL ENGLISH: Yes I have seen that. I would be keen to share with the member reports about the Government initiatives in the Youth Service in the Youth Guarantee and in achievement levels at National Certificate of Educational Achievement level 2 which are the most comprehensive and serious attempt by any Government to turn round that long-term problem.Rheumatic Fever—Causes3.Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Health: What advice if any has he received on the causes of rheumatic fever?Hon Dr JONATHAN COLEMAN (Minister of Health): I am advised that rheumatic fever is caused by an autoimmune reaction to group A streptococcus bacterial infections such as a sore throat. It predominantly affects children aged 5 to 14. Symptoms usually start 1 to 5 weeks after the initial infection. We have invested more than $65 million to tackle rheumatic fever which includes a range of prevention and treatment programmes. Although there is clearly more to be done these programmes are starting to make a real difference.Hon Annette King: Does he agree with the recent research published in the Journal of Paediatrics and Child Health that showed there is an alarming rise in the rate of rheumatic fever amongst Māori and Pasifika people and significant and worsening ethnic disparities in New Zealand?Hon Dr JONATHAN COLEMAN: Obviously Māori and Pasifika are one of the target populations for the many initiatives we have but what I can say is the rate of rheumatic fever has dropped by 25 percent in the last year. It shows that compared with when Annette King was Minister and she said that rheumatic fever was a priority but did absolutely nothing about it—Mr SPEAKER: Order! That will be sufficient for that answer.Hon Dr JONATHAN COLEMAN: I raise a point of order Mr Speaker. So I do not get to finish my answer?Mr SPEAKER: No the member does not. The Minister has moved to where he does not need to to answer the question.Hon Annette King: Does he agree with Professor Baker who said in September last year that New Zealand may be throwing money at rheumatic fever and not making an ounce of difference because half of those with acute rheumatic fever do not have a sore throat and we are failing to address the causes of rheumatic fever?Hon Dr JONATHAN COLEMAN: That just is not correct because as I said the rate of incidence of new cases has dropped by 25 percent in the last year. What that shows is that our strategy which is based around prevention and around sore throat swabbing and walk-in sore throat clinics as well as a healthy homes initiative is starting to turn the tide. But there is no doubt there is more that needs to be done. It is a pity Labour never did anything.Hon Annette King: Why have 16 reports by the Ministry of Health and the Housing and Health Research Programme plus two action plans failed to motivate the Government into addressing urgently overcrowded households in New Zealand now recognised in the latest research as a risk factor for rheumatic fever?Hon Dr JONATHAN COLEMAN: I will refer the member to the analysis of household crowding published in December by the Ministry of Health. It shows that actually the only time that the proportion of New Zealanders living in crowded conditions has increased in the past 24 years was between 2001 and 2006 when Annette King was doing nothing as Minister of Health to address rheumatic fever. I would say furthermore that this Government is putting $2 billion into accommodation support and has insulated 300000 houses. We are addressing the underlying causes of rheumatic fever; Annette King did nothing.Hon Annette King: Supplementary question Mr Speaker. In light of—Mr SPEAKER: Order! I have not yet called the member.Hon Annette King: In light of the fact it is 10 years since I was Minister of Health is he aware that the rheumatic fever hospitalisation rate was 3.4 percent per 100000 population in 2014 but the notification rate was 4.5 per 100000 and why does the Government continually use the lower figure to disguise its failure to address the causes of rheumatic fever?Hon Dr JONATHAN COLEMAN: The first thing is look you always have to check Annette King’s figures. But what I can tell you is the figures from the ministry show that last year there were 194 cases of children admitted to hospital for the first time with rheumatic fever. That was 2013. That dropped in 2014 to 153 so that is nearly a 25 percent decrease. I can tell you that our programme is working. Labour did nothing.Hon Annette King: I have some very good information to table—Mr SPEAKER: Order! The member needs to know how to do this. She needs to rise to her feet and seek leave to examine the type of paper. There is no need for further explanation besides what the source of the document is.Hon Annette King: The source of the document is the Ministry of Health’s hospitalisation data showing the increase in acute—Mr SPEAKER: Order! It has now been described. [Interruption] Order! I just need to finalise—is that information publicly available to members?Hon Annette King: It is not easily available. I had to hunt for it.Mr SPEAKER: I will take the member’s word for that. Leave is sought to table that particular—[Interruption] Order! Leave is sought to table that particular information. Is there any objection to it being tabled? There is none. It can be tabled.Document by leave laid on the Table of the House.Hon Dr JONATHAN COLEMAN: I seek leave to table the declining rate of first-instance rheumatic fever between 2013 and 2014. That is a document prepared by the Ministry of Health. I also seek leave to table the analysis of household crowding which shows the increase in crowding between 2001 and 2006.Mr SPEAKER: Order! Again I just need to see—are those two reports freely available for members to obtain?Hon Dr JONATHAN COLEMAN: Not easily. I—Mr SPEAKER: I again accept the Minister’s word. Leave is sought to table those two documents. Is there any objection? There is none. They can be tabled.Documents by leave laid on the Table of the House.Marama Fox: Are you aware of the quote that was attributed to the former Associate Minister of Health Tariana Turia when she was described by an Australian conference as being “a shining light in a wasteland of neglect” for the work that she did in regard to rheumatic fever and is the Government prepared to continue with that work in the coming years?Hon Dr JONATHAN COLEMAN: I was not aware of that but thanks for enlightening me. We are also continuing with that work.Emergency Housing—Community Housing Providers Christchurch and Government Initiatives4.JOANNE HAYES (National) to the Minister for Social Housing: What support is the Government providing to families in Christchurch in need of short-term housing?Hon PAULA BENNETT (Minister for Social Housing): The Government has contracted with two community housing providers—VisionWest Community Trust and Comcare Trust—to provide vulnerable families and single people with short-term housing in Christchurch. The service which is already up and running is targeting people living in insecure housing such as tents and cars who need help to get back on their feet. People will be housed for an average of 8 weeks in individual properties for single people and in a leased motel for families. The community providers will link people with services to help them address issues that are holding them back and that could include drug and alcohol counselling mental health support budgeting or parenting support. This is an innovative solution made possible by community housing providers and the Government working together and being prepared to try new ways to work with people who are disadvantaged.Joanne Hayes: How will this initiative help families get into more sustainable housing?Hon PAULA BENNETT: This support is all about providing short-term relief so that we can then get them into more sustainable long-term housing. Providers work with them to develop plans to help them move into longer-term housing help them look for that home and help them with the bond and with what needs to be done. This includes getting families to pay up to 25 percent of their income while they are in the short-term housing but when they are ready to move on the community providers will give them that money back for use on things such as bond or moving costs. This means that we can actually sort out and clear some of their debt while they are there help them with budgeting pay the whole bill and when they move out they also have some cash.Joanne Hayes: What else is the Government doing to improve emergency housing in places other than Christchurch?Hon PAULA BENNETT: The Government is committed to improving emergency and short-term housing. We recently announced a $500000 boost to the sector and it will be announced shortly which providers that is going to. We are also working through a review of the emergency and short-term housing problems where we will be looking at the Christchurch example to see where else it can be rolled out to in New Zealand.Poto Williams: Does the Minister believe that providing short-term housing for 30 families is an adequate response when the 2013 census shows there are 2200 people living in temporary accommodation and Housing New Zealand has 504 people on priority waiting lists?Hon PAULA BENNETT: Well actually that is 30 at any one time and we envisage up to 240 people getting that short-term assistance over a 1-year period—so up to 500 people over the 2 years. What I would say is that of those who are on the wait list it is 92 of them who are in that kind of insecure housing. Others are in other situations so it is those 92 whom we see as being the most urgent. So I think that providing up to 240 places will make a real difference for those who are in need.Wage Rates—Average Wage5.GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Can workers still expect that the average wage will rise to $62000 in the next three years as he stated during the period of the election campaign in 2014?Hon BILL ENGLISH (Minister of Finance): That depends on whether Treasury forecasts for growth in the average wages from the Pre-election Economic and Fiscal Update actually occur because it forecast in the update that the average wage would grow by $6600 to $62000 by mid-2018. The most recent forecasts which reflect lower inflation push that point out 3 months later—that is they would reach $62000 by the third quarter of 2018 instead of the second quarter. Treasury’s latest forecasts actually show slightly stronger real wage growth over the next few years which would mean households will have slightly more spending power but low inflation which has now been forecast to reach zero this year. That means that the dollar view of wage increases may be slightly less than in that forecast.Grant Robertson: Given that answer when he said in the election campaign “National’s economic plan will make those forecasts a reality.” is he now reneging on that statement about possible wage rises for New Zealanders?Hon BILL ENGLISH: No but we have been very clear that these are economic forecasts. The member may not be aware of this but they will be subject to uncertainty. Inflation may end up being lower than people expected migration figures might change the housing market might alter but I think what is pretty clear is that the forecasts indicate a path of sustainable moderate increases in income—and that is not a bad outlook for New Zealand families. It is not ideal but it is not bad.Grant Robertson: Is it correct that to achieve the wage growth that he promised New Zealanders in the election campaign would require an average wage increase for New Zealanders of 3 percent per annum and is he guaranteeing New Zealanders that will happen?Hon BILL ENGLISH: The member knows that no one can guarantee wage increases and it was not a promise. I simply pointed out a fact that the Labour Party was not happy with and that was that all economic forecasts actually showed average wages rising when it was trying to argue that New Zealand incomes were going down and it was simply wrong. Those forecasts remain roughly on track. New Zealand households can look forward to sustained moderate wage increases if current economic conditions persist and this Government will do its best to reinforce current economic conditions that support higher incomes because we think it is a good idea.Grant Robertson: In light of that answer where he said it was not a promise to New Zealanders that the average wage would rise to $62000 does he recall this graphic being produced by him and the National Party that said “National’s economic plan will make those forecasts a reality.” and why is he once again misleading New Zealanders about wage increases under his Government?Hon BILL ENGLISH: I am not. Actually wages are pretty important to most New Zealanders and I do not think you would be able to mislead them. The Labour Party may try to do that but we do not. In fact many New Zealanders have a degree of confidence that they can look forward to sustained moderate wage increases and actually they voted back in a Government that they think will take measures that may assist that to occur. So we certainly stand by the fact that all economic forecasts show sustained moderate wage growth in New Zealand.Grant Robertson: If when inflation was higher it was too hot for wage increases and now that it is low it is too cold for wage increases can he tell New Zealanders what the Goldilocks solution looks like when it is just right?Hon BILL ENGLISH: I thought the member would have more original lines than those coming straight out of the Post Primary Teachers’ Association. I have not actually said either of those things. His job is to be spokesman for the economy not for the Post Primary Teachers’ Association the secondary school teachers union.Hon Gerry Brownlee: I raise a point of order Mr Speaker. I would ask you to have a look later as you always do at the nature of the exchange that we have just had. Frankly I do not think it worked out terribly well for the Opposition—Mr SPEAKER: Order! Just make the point.Hon Gerry Brownlee: I assume now that you have allowed political points to be made about campaign matters that when reports are received by Ministers that would point out the fallacies of some of the claims being made by the Opposition they may be used by Ministers in answers to their questions.Grant Robertson: This was a question on notice. Authentication was provided for the question. It was accepted by the Clerk’s Office. It noted the fact that the statement was made during the period of the election campaign. All of my supplementary questions drew on that statement so I do not think Mr Brownlee can rule out those sorts of questions.Mr SPEAKER: The member Mr Brownlee has asked that I have a look at the transcript later and I certainly will do so.Health Care Facilities—Wellsford6.BARBARA STEWART (NZ First) to the Minister of Health: Does he stand by his statement regarding the closing down of a health centre published on Newstalk ZBthis morning “there’s no facility in Wellsford that is closing and that is what my officials have told me”?Hon Dr JONATHAN COLEMAN (Minister of Health): Yes.Barbara Stewart: Does the Minister believe that moving the community nurse from the Coast to Coast health care medical centre at 220 Rodney Street in Wellsford to Wellsford School is not a cost-cutting exercise?Hon Dr JONATHAN COLEMAN: What I can tell the member is that no health centre is closing no service is ceasing and no staff are leaving. All we can find is that one nurse who did admin in her old office is moving to a new office in Wellsford where she will still do admin. Services in Wellsford are expanding not reducing.Barbara Stewart: Is this a dedicated nurse for Wellsford School; if so how will the adult needs of the Wellsford community be met?Hon Dr JONATHAN COLEMAN: They will be just fine.Barbara Stewart: Does the Minister believe that Wellsford School is a suitable venue for a community nurse when any member of the community with physical or mental health needs may enter that school in search of health care from the community nurse?Hon Dr JONATHAN COLEMAN: She is not providing health care services there. She is just doing admin and I would have thought that is a great place to do it.Roading Northland—Bridges Upgrade7.PHIL TWYFORD (Labour—Te Atatū) to the Minister of Transport: Why was the Government’s new policy to double-lane ten Northland bridges not announced by him or the New Zealand Transport Agency?Hon SIMON BRIDGES (Minister of Transport): Because there is a by-election going on and in by-elections you spell out your policies. National has a tremendous candidate in Mark Osborne who is a strong voice for Northland and—wait for it—actually lives in Northland. As transport Minister I think Mark Osborne’s commitment that he has made with me as National’s spokesperson for transport is an excellent one that I wholeheartedly support. On this side of the House we can make political commitments and keep them unlike on that side of the House.Phil Twyford: Who approved the bridges policy and on what date?Hon SIMON BRIDGES: As I have made quite clear in an answer to the member’s question last time in the House before he was ejected I made this decision at the end of last week. I appreciate that the member is a little bit sore about the fact that on this side of the House we have got a strong voice standing for us and the candidate on his side of the House is not even allowed to talk let alone advocate for policies.Phil Twyford: What New Zealand Transport Agency and ministerial resources were used in the preparation and announcement of this $70 million policy as part of a National Party candidate’s by-election campaign?Hon SIMON BRIDGES: We sought general information. But be very clear. On this side of the House we actually like the people of Northland. We go up and talk to them. We find out what they think. We did it in December. We have got a strong voice there. On this side of the House when we make political commitments we can actually follow through on them. The only thing that side of the House has followed through on is throwing its local candidate Willow-Jean Prime under Mr Peters’ bus.Phil Twyford: I raise a point of order Mr Speaker. That was a very specific question about the use of ministerial resources. I do not believe that it was addressed.Mr SPEAKER: Order! On this occasion I am unsure whether it was addressed because I could not actually hear because of the level of noise. I will invite the member to ask the question again.Phil Twyford: What New Zealand Transport Agency and ministerial resources were used in the preparation and announcement of this $70 million policy as part of a National Party candidate’s by-election campaign?Hon SIMON BRIDGES: As I made clear I asked for information. Minimal resources were expended because on this side of the House we actually go out and talk to people in the regions. I did it in December. We have a strong candidate who has been making very clear his priorities on this including—Dr Megan Woods: What’s his name?Hon SIMON BRIDGES: —the need for bridges—Mark Osborne a tremendous—Mr SPEAKER: Order! [Interruption] Order! The question was answered.Ron Mark: I raise a point of order Mr Speaker.Phil Twyford: Mr Speaker—Mr SPEAKER: Point of order—Ron Mark: Oh I am happy to take it after the member has asked his question.Phil Twyford: Has he been advised that the Pipiwai Tītoki Advocacy for Community Health and Safety Group which is campaigning to get more money spent sealing Northland roads allegedly received a threatening phone call from his colleague Shane Reti telling it to tone down its demands or it would not get what it wanted?Hon SIMON BRIDGES: I am not aware of that. I am aware of the general project. It is one that I think does need looking at. Of course if we did that the other side would accuse us of pork-barrel politics. On this side of the House we have got strong voices inside Government who can make a difference on projects that matter to people in the north.Phil Twyford: I seek leave of the House to table the email from the Pipiwai Tītoki Advocacy for Community Health and Safety Group—Mr SPEAKER: Leave is sought—[Interruption] Order! I will put the leave. Leave is sought to table that particular email. Is there any objection? There is none. It can be tabled.Document by leave laid on the Table of the House.Ron Mark: I raise a point of order Mr Speaker. Could I ask you to have a look at that transcript and pay some attention particularly to the first supplementary question which is virtually an identical supplementary question to one I asked the very same Minister last week. The problem is that the answer he gave here is different from the answer he gave last time.Mr SPEAKER: Order! [Interruption] Order! I will undertake to relook at transcripts—I always do—but the member is not raising a point of order. I will certainly have a look at it for him but I do not consider that it is a valid point of order. If the member feels that anybody misleads the House there is a very appropriate course of action which an experienced member like Mr Mark will be well aware of.Cyclone Pam—Impact on New Zealand8.SCOTT SIMPSON (National—Coromandel) to the Minister of Civil Defence: What reports has she received on the impact of Tropical Cyclone Pam on New Zealand?Hon NIKKI KAYE (Minister of Civil Defence): Over the last few days I have received regular updates on both the preparations and response of agencies to the potential impact of tropical Cyclone Pam. Rain wind and heavy swells have caused some damage on the East Coast of the North Island. Very high winds over 140 kilometres per hour heavy rain power cuts large swells slips and road closures have all been reported in affected areas. There has been coastal erosion and flooding of houses in beach communities in the East Cape and southern Hawke’s Bay. More than 100 people were evacuated. They either stayed with family and friends or received support for temporary accommodation. The effects of Cyclone Pam are still being felt in the Chatham Islands.Scott Simpson: How did communities across New Zealand prepare for Cyclone Pam?Hon NIKKI KAYE: Over the last few days civil defence staff and volunteers have been working hard to prepare for possible severe weather. Several excellent examples of local preparedness were in the East Coast where the Defence Force the New Zealand Fire Service St John Ambulance the district health board and local roading and network services moved extra people and equipment into various townships to help keep people safe; and the Hawke’s Bay civil defence groups visited coastal communities in Haumoana and Te Awanga and went door to door to offer advice. Some households were evacuated on Sunday as a precaution. I would like to personally thank all of the volunteers and civil defence staff across New Zealand who have done such a great job. In particular I want to acknowledge Gisborne for their comprehensive planning. As with other emergencies over the last few years I have constantly been impressed with how local authorities emergency services and welfare groups have assisted communities to deal with these events.Scott Simpson: What support has been provided to the Chatham Islands in preparation for the arrival of the severe weather?Hon NIKKI KAYE: On Sunday evening the Chatham Islands controller requested additional civil defence support. At the time I personally spoke with the chief executive of the Chatham Islands. By early Monday morning three civil defence staff had been deployed from Christchurch. Yesterday the Mayor of the Chatham Islands declared a state of local emergency to strengthen the island’s ability to respond to the cyclone as well as several rural fires that were stretching its resources. The islands are currently experiencing severe weather including heavy rain and high winds. I expect to receive an update shortly on the impact on the Chatham Islands. I also expect to speak to the mayor later today. I can confirm that the National Crisis Management Centre is currently activated. Government agencies are ready to further help the people of the Chatham Islands if they need it.Roading Auckland—Pūhoi to Wellsford Route9.DENIS O’ROURKE (NZ First) to the Minister of Transport: When will the detailed plans designations and construction schedule be available for the full Pūhoi to Wellsford motorway?Hon SIMON BRIDGES (Minister of Transport): I appreciate the member’s eagerness but good things take time. I can assure the member though that I am working really hard on bringing forward this road of national significance. One reason for that is the great National Party candidate we have in Northland Mark Osborne who is pestering me in relation to this road of national significance. Unlike other candidates he actually wants this road of national significance. He does not call it a “Holiday Highway” and unlike Winston—Mr SPEAKER: Order!Denis O’Rourke: When will action be taken to appoint a board of inquiry to consider and finalise designs for the Warkworth to Wellsford leg of the Pūhoi to Wellsford motorway?Hon Simon Bridges: It is good to see that New Zealand First takes a keen interest in these sorts of projects. I think you will find we already have had a board of inquiry.Denis O’Rourke: Why has he been making pronouncements about a motorway for Northland as far as Wellsford when the only substantive actions taken so far relate to the route from Pūhoi to Warkworth?Hon SIMON BRIDGES: Because I really like motorways and I back the people of the north.Denis O’Rourke: How can Northlanders trust the Minister and his Government on getting a better State highway for them when the Government’s real interest in Northland has been limited to making belated election promises rather than real preparations for a complete route from Pūhoi to Wellsford?Hon SIMON BRIDGES: Seven hundred and fifty million dollars is not belated. I would call “belated” not even standing a candidate in the last three elections. We have backed the north previously we continue to do so and with a $1.75 billion highway on its way we are doing a great job in Northland.Prime Minister—Climate Change10.Dr RUSSEL NORMAN (Co-Leader—Green) to the Prime Minister: Does he stand by all his statements?Rt Hon JOHN KEY (Prime Minister): Yes like the one that the official cash rate is 3.5 percent the unemployment rate is 5.7 percent the current account deficit is approximately 2.6 percent and the current inflation rate is approximately 0.8 percent and printing money is a really bad idea.Dr Russel Norman: Does he stand by his statement that “We are a fair-minded people … Tackling climate change requires global action and [as a responsible international citizen] New Zealand should stand up and be counted …”?Rt Hon JOHN KEY: Yes.Dr Russel Norman: Does he accept the findings of the latest report from the Intergovernmental Panel on Climate Change which stated that current climate change projections mean that there will be a likely increase in both global mean tropical cyclone maximum wind speeds and precipitation rates or to put it in plain English that climate change leads to more intense and stronger cyclones?Rt Hon JOHN KEY: I think the balance of scientific opinion would support the view that climate change can lead to greater climatic conditions like cyclones but I would just caution the member that there is no evidence to support the view that Cyclone Pam is a consequence of climate change. It is simply mere speculation if he did suggest it is if he is doing that.Dr Russel Norman: Does he accept the findings of climate scientist Dr Nick Klingaman who said: “In a warmer world [the] combination of rising sea levels and more-intense tropical cyclones may increase the damage caused by any individual cyclone …”?Rt Hon JOHN KEY: Could the member just repeat the question sorry?Mr SPEAKER: I can ask the member. Dr Russel Norman supplementary question.Dr Russel Norman: Does he accept the findings of climate scientist Dr Nick Klingaman who said: “In a warmer world [the] combination of rising sea levels and more-intense tropical cyclones may increase the damage caused by any individual cyclone …”?Rt Hon JOHN KEY: I have not seen those particular reports. As I said earlier I think it is well accepted actually that climate change if it continues to become a more and more significant issue has environmental impacts. So that is why New Zealand takes its responsibilities seriously it is why we have an emissions trading scheme it is why we are investing heavily in science and it is why we will be taking a responsible target to Paris. We are a small country but we do our bit.Dr Russel Norman: By how much have New Zealand’s net greenhouse gas emissions increased since he has been in Government?Rt Hon JOHN KEY: Despite the misinformation that the member has been out there saying the advice I have is that New Zealand’s total emissions now are 3 percent lower than they were at their peak in 2005. That is New Zealand’s net emissions are at about the same level as they were in 2007. A National-led Government is doing a pretty good job in this area.Dr Russel Norman: I raise a point of order Mr Speaker. I thank the Prime Minister for his answer—Mr SPEAKER: Can I just have the point of order please?Dr Russel Norman: The question was about since he has been in Government not since any of those other dates. It is about since the Prime Minister has been—Mr SPEAKER: Order! No no. It is not about designing an answer to satisfy the member who is asking the question. The question was asked and without doubt the Prime Minister has addressed the question. If that is not to the satisfaction of the member the way forward is to ask further insightful questions.Dr Russel Norman: In light of the fact that New Zealand’s net greenhouse gas emissions have increased by 20 percent since the Prime Minister has been in office—Hon Member: Not true.Dr Russel Norman: —which is a simple fact—does he think that his Government has been a good Pacific neighbour and a responsible international citizen?Rt Hon JOHN KEY: I think the member is being extremely selective with the truth and his facts are incorrect.Dr Russel Norman: Does the Prime Minister then deny that from 2008 to 2012 according to the official statistics from his Government New Zealand’s net greenhouse gas emissions have increased by 20 percent?Rt Hon JOHN KEY: On the advice I have had the misinformation that the member is putting out is literally that—misinformation. He is being selective with the truth.Dr Russel Norman: In light of the fact that the Prime Minister does not know what the net greenhouse gas emissions are under his Government does he believe he is being—Hon Gerry Brownlee: I raise a point of order Mr Speaker. You have just reprimanded the questioner for his expectation that he should be able to design an answer to a question but then have allowed him to say that given he did not get the designer answer that he wanted that means the Prime Minister does not know. That is a completely unreasonable approach and quite outside the Standing Orders.Dr Russel Norman: Speaking to the point of order Mr Speaker.Mr SPEAKER: I will hear from Dr Russel Norman.Dr Russel Norman: The reason why I did that was that the Prime Minister has been accusing me repeatedly of misleading and I am not. I am simply stating the facts.Mr SPEAKER: That does not mean that the member then has the right to defy the Standing Orders which mean that a supplementary question should be concise and it should not contain imputations. I did allow the question through. I was probably very generous to the member to allow the question through but a question like that then gives very wide licence to the Minister in this case the Prime Minister when he comes to answer the question. Now the member would make more progress as I pointed out to him earlier by trying to make his questions more concise and then I can assist him to try to get the answers he may be hoping for.Dr Russel Norman: Does he believe that New Zealand has been a good Pacific neighbour and a responsible international citizen in light of the fact that since he has been Prime Minister of New Zealand New Zealand’s net greenhouse gas emissions have increased by 20 percent according to the statistics from his Government?Rt Hon JOHN KEY: In terms of the latter part of the question I reject the member’s suggestion. In terms of the former part of the question actually New Zealand has been a very good Pacific neighbour. The member may remember that it was under the leadership of a National-led Government that we hosted the renewable energy conference here in New Zealand where we have been investing heavily in ensuring that Pacific neighbours actually are no longer reliant on the importation of fossil fuels and that over time they will have a variety of options but most likely it will be solar and wind available to them to stop the importation. New Zealand has been doing the same things for instance down in Antarctica. New Zealand has been investing extremely heavily in research when it comes to agriculture and in fact the Government is on track not only to meet its 2008-12 commitment to reduce net emissions to the 1990 levels but we are actually on track to achieve—Dr Megan Woods: No you’re not.Rt Hon JOHN KEY: —the objective of reducing emissions further to a minimum of minus 5 percent and yes we are.Dr Russel Norman: In light of that answer is he surprised then to find that the Ministry for the Environment in its official projections shows that New Zealand’s net greenhouse gas emissions will increase by 48 percent in just 10 years according to the report from his own Government?Rt Hon JOHN KEY: That is assuming no other action. It is one of the reasons why the Government has been investing heavily. The member is aware of the fact that over half of New Zealand’s emissions come from agriculture. If the member is suggesting that New Zealand destocks shoots animals and reduces its world food supply then he is welcome to do that. That is one of his more daft ideas but at least it would have some idea about the economy because any of the people who want to replace him do not even know what the—Mr SPEAKER: Order! That is not going to help the order of the House.Dr Russel Norman: Is he even aware of the comments from the President of Kiribati Anote Tong who said of climate change and its effect on the Pacific yesterday: “It is a catastrophe that impinges on our rights… and our survival into the future.”; and will he take action to actually reduce New Zealand’s emissions in light of those comments?Rt Hon JOHN KEY: I am well and truly aware of the President of Kiribati’s comments. I have had numerous discussions and have been involved in numerous meetings with him. The Government can be proud of the actions it has taken when it comes to climate change. On this side of the House we actually stick to the facts and we know what climate change is. On that side of the House they do not even know what the official cash rate is.Dr Russel Norman: I seek leave to table a research paper from the Parliamentary Library showing net emissions have increased 20 percent under this Government.Mr SPEAKER: Well if it is a research paper that is prepared by the Parliamentary Library it is then available. It was not specifically prepared—I will get the member to clarify.Dr Russel Norman: It was specifically prepared on my request.Mr SPEAKER: OK on that basis I will put the leave to table this source from the Parliamentary Library on the effects of climate. Is there any objection to it being tabled? There is none.Document by leave laid on the Table of the House.Rt Hon JOHN KEY: I seek leave to table a report that shows the official cash rate is 3.5 percent the unemployment rate is 5.7 percent the current account deficit—Mr SPEAKER: Order! No. All that information is freely available. [Interruption] Order!Rt Hon JOHN KEY: I raise a point of order Mr Speaker. It is a different point of order.Mr SPEAKER: If it is a point of order I wish to hear it.Rt Hon JOHN KEY: I seek leave to table a report that shows that 90 percent of New Zealand children are not going without lunch.Mr SPEAKER: And again I think that is a political matter. It is not going to be helped by the tabling of any report.Lending Practices—Responsible Lending Code11.SIMON O’CONNOR (National—Tāmaki) to the Minister of Commerce and Consumer Affairs: What recent announcements has the Government made regarding responsible lending?Hon PAUL GOLDSMITH (Minister of Commerce and Consumer Affairs): The National Government wants to help Kiwi families who need to borrow money get better access to information upfront and give them robust protection from the predatory practices of loan sharks and unscrupulous payday lenders. Today the Government has released the Responsible Lending Code. The code will give lenders principles-based guidance on how to implement the new lender responsibility principles set out in the Credit Contracts and Consumer Finance Amendment Act and comes into force on 6 June this year.Simon O’Connor: How will the code help borrowers?Hon PAUL GOLDSMITH: Under the code and the legislation lenders must consider whether borrowers are able to repay their debt without suffering undue hardship and help them make informed decisions. The code also includes more targeted advice for high-cost credit agreements or where the borrower may be a vulnerable borrower. We know that most lenders already follow responsible lending practices with their customers and we do not want to get in the way of that. However we know that a percentage of lenders loan sharks and unscrupulous payday lenders are not. This code is about providing good principles-based guidance for lenders while maintaining robust protections for consumers. It is just another example of the Government’s ambitious Business Growth Agenda which is working for New Zealand.Environment Canterbury—Statutory Review12.Dr MEGAN WOODS (Labour—Wigram) to the Minister for the Environment: Has he along with the Minister of Local Government released for public consultation the discussion document on the statutory review of Environment Canterbury and options for regional governance as advised to do by November 2014 in the Briefing to Incoming Ministers; if so when?Hon Dr NICK SMITH (Minister for the Environment): The discussion document was approved by Cabinet on Monday and will be released by Louise Upston the Associate Minister of Local Government and I tomorrow. There were post-election changes in both portfolios and the Associate Minister of Local Government and I wanted to consult with the 10 mayors of Canterbury and with Ngāi Tahu before taking a proposal to Cabinet. We will be meeting with all 10 councils across Canterbury consulting on the proposal over the next 2 months and we will also be inviting public submissions by 1 May.Dr Megan Woods: Why did the Minister fail to complete the review by December 2014 as it was stated it would be by the Hon Amy Adams and the Hon Paula Bennett in March 2014?Hon Dr NICK SMITH: It is a pity the member cannot prepare a question when I have just given the answer. There was a change in both portfolios of new Ministers—myself and Louise Upston. We wanted to meet with the mayors of Canterbury and with Ngāi Tahu and get the very best advice on an issue that is of huge importance to Canterbury.Dr Megan Woods: Why has the Minister been delaying the time line against the advice of his officials and the undertakings of his predecessors to begin the process of restoring democracy to Environment Canterbury?Hon Dr NICK SMITH: We do want to give Canterbury people more of a say in the regional council but we also want to make sure it is not the dysfunctional mess that we inherited from the previous Government.Nuk Korako: What progress has been achieved since the 2010 review of Environment Canterbury found the organisation was dysfunctional and failing to meet the statutory deadlines?Hon Dr NICK SMITH: The major failing was having no regional plan for Canterbury’s nationally significant freshwater resources 19 years after the Resource Management Act was passed. Canterbury actually now has one of the most comprehensive water plans of any region in New Zealand. The second failing was the broken-down relationships with the 10 councils and Ngāi Tahu and the message that Ms Upston and I have had is that those relationships are actually now stronger than they ever have been. The third failing was that the statutory compliance with processing resource consents was failing 71 percent of the time. With the commissioners that has been reduced to under 5 percent and I think that has been welcomed by all Cantabrians.Dr Megan Woods: How does he reconcile the answer to the previous question and his predecessor’s statement that under the commissioners there have been significant improvements in freshwater management with the High Court’s recent decision that Environment Canterbury under the commissioners acted unlawfully and failed to take account of the over-allocation of water for irrigation?Hon Dr NICK SMITH: I am yet to meet a single Cantabrian who will not tell me that the commissioners have cleaned up one hell of a mess at Environment Canterbury. I point out the fact that there is actually now a water plan. There are actually now red zones where there cannot be water takes. There are actually now more prosecutions for farmers not complying with resource consents than there were under the failed Environment Canterbury. The only people whom I know now defending the Kerry Burke - led regional council are the members of the Labour Party.UrgencyHon GERRY BROWNLEE (Leader of the House): I move That urgency be accorded the introduction and passing through all stages of the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill and any bills into which it may be divided. The issues that surround the need for this bill to make progress today have been well canvassed by politicians in the media and by many commentators from outside as well. It comes from the decision by the Remuneration Authority to accord to members of Parliament pay increases that are well outside nor in line with public expectations. This bill is proposing to set down a formula that will link the Remuneration Authority’s consideration to the quarterly employment survey for the Public Service. It does need to go through all stages in one hit in order that there is no delay in some of the process issues that will now go with the suspension of the Remuneration Authority’s current order and the return to the 2013 order and therefore in proper instruction being given to those who are responsible for actually providing that remuneration to members of Parliament.A party vote was called for on the question That urgency be accorded.Ayes 106New Zealand National 59; New Zealand Labour 32; New Zealand First 11; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 14Green Party 14.Motion agreed to.Remuneration Authority (Members of Parliament Remuneration) Amendment BillFirst ReadingHon MICHAEL WOODHOUSE (Minister for Workplace Relations and Safety): I move That the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill be now read a first time. In accordance with the Remuneration Authority Act the Remuneration Authority recently released the Parliamentary Salaries and Allowances Determination 2015 which provides for an increase in the remuneration received by MPs of 3.56 percent effective from 1 July 2014. The size of this increase is disproportionate to salary movements in the wider public sector and the current rate of inflation. The Government considers that this is not appropriate.Under the current provisions of that Act the Remuneration Authority is required to review and issue determinations of MP salaries and allowances at least once every 3 years considering information from a range of sources including relativity to comparable positions the need to recruit and retain competent persons and the requirements of the job. These criteria have resulted in an increase that the Government believes is unfair to taxpayers and does not reflect the average wage growth of the wider public sector. It is therefore necessary to make amendments to legislation to amend the criteria that the Remuneration Authority must consider when setting salaries for members of Parliament. The decision to amend the authority’s discretion is not taken lightly. However the change is necessary to ensure that MPs’ remuneration movements reflect those in the wider public sector.This bill is an omnibus bill that amends two Acts: the Remuneration Authority Act 1977 and the Members of Parliament (Remuneration and Services) Act 2013. The first change is to set aside the part of the Parliamentary Salaries and Allowances Determination 2015 that relates to salaries. It then sets out a new requirement on the Remuneration Authority to solely consider public sector wage movements when determining the remuneration of MPs.The bill does this by pegging MPs’ remuneration to the quarterly employment survey or QES for the public sector average ordinary-time weekly earnings for fulltime-equivalent employees. The quarterly employment survey is a sample survey carried out every 3 months by Statistics New Zealand. Each quarter it collects information from organisations in the public and private sectors at 18000 different locations. It captures information on hourly earnings weekly earnings weekly paid hours and the number of filled jobs. Information from the quarterly employment survey is used in the production of Statistics New Zealand’s quarterly gross domestic product and other productivity statistics and for labour market and economic analysis. Changes in quarterly employment survey measures are also used in legislation to benchmark figures such as the level of national superannuation and paid parental leave.The quarterly employment survey measures actual wage growth rather than wage inflation. Using this means that MPs’ remuneration will increase in line with the average public sector salary. Given that the quarterly employment survey measures actual wage growth it is susceptible to potential sudden increases or decreases due to fluctuations in employment. As such the bill also requires that the percentage change for each of the reported quarters for any financial year be averaged out to smooth any such spikes or dips. Under this bill the authority will be required on an annual basis to adjust MPs’ remuneration by the quarterly employment survey public sector index using the June rate from the previous year measured against the current year. For the June 2014 year the quarterly employment survey public sector increase was 1.5 percent.The bill will make a minor change to the formula for determining MPs’ remuneration. The authority will be required to take the previous year’s base salary and superannuation and multiply this by the quarterly employment survey index. This figure will be the remuneration for the current year. The authority will be required to adjust remuneration to take account of personal benefits where there is a change to the level of an existing entitlement provided. A recent example of this is in the 2015 determination where the Remuneration Authority reduced the value of the travel entitlement to account for tightened provisions around the use of travel by family members. In this scenario the reduction in personal benefit created as the result of that tightened provision will be shifted to the cash component of the remuneration—that is base salary. It will not be subject to the quarterly employment survey adjustment in the first year in which it is transferred. There are no changes to how the authority the Speaker of the House and the Minister responsible for Ministerial Services determine the value of personal benefits for MPs and their families such as travel. These changes will also not affect any of the persons that the Remuneration Authority determines remuneration for other than MPs.Although the current practice of the authority is to gazette a determination for parliamentary salaries and allowances on an annual basis it is required to do so only every 3 years. The bill requires that the authority must fix MPs’ salaries on an annual basis to ensure salaries stay in line with annual changes in public sector wages.The MPs’ salary determination that was issued by the Remuneration Authority on 26 February 2015 will be revoked apart from the provisions in this determination that relate to allowances which stay in place. The authority gazetted its determination for the 2014-15 financial year based on existing statutory criteria. So that the new criterion applies to salary adjustments from 1 July 2014 the bill revokes and overwrites the effect of the 2015 determination for salaries. The provision relating to allowances will remain in effect. The 2013 determination will come back into force until the authority is able to gazette a new determination for the period of 1 July 2014 to 30 June 2015 based on the amendments Parliament has made to the Act. Any changes in salaries resulting from the new determination will be backdated to 1 July 2014.This bill responds to the disproportionate growth in MPs’ total remuneration by providing a sensible measure that reflects the average growth in public sector wages. I commend this bill to the House.Hon ANNETTE KING (Deputy Leader—Labour): The Labour Party will support and vote through all stages of the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill. We will do that because like most members in this House we never asked for a big pay increase we never wanted a big pay increase and we do believe there ought to be restrictions on remuneration. Having said that there are a few matters that need to be discussed.The first I would say to the Minister for Workplace Relations and Safety is that I have just received a copy of the papers that go with the bill. I have just received the departmental disclosure statement from the Ministry of Business Innovation and Employment. I had no chance to read it before I stood to speak—in fact I had 2 minutes—because it was so late in being provided. So then I went through what is in that report and I looked at the questions that were asked of the Government and at the responses from the ministry. Here are some of them. “Were any regulatory impact statements provided to inform the policy decisions that led to this Bill?”—answer: “NO”. “Has further impact analysis become available for any aspects of the policy to be given effect by this Bill?”—answer: “NO”. “For the policy to be given effect by this Bill is there analysis available on: (a) the size of the potential costs and benefits?”—answer: “NO”. “(b) the potential for any group of persons to suffer a substantial unavoidable loss of income or wealth?”—“NO”. “Has there been advice provided by the Attorney-General on whether any provisions in this Bill might limit the rights and freedoms etc.?”—“NO”. “Has there been any external consultation on the policy to be given effect in this Bill or in the drafting of this Bill?” The answer is “NO”.I go on through. “Does this Bill affect …” etc. etc. Can I say to the Minister that this bill affects everybody in this House and it would have been really good if this sort of information had been made available last week or the week before when this bill was proposed. This must have been available to the Government. Let us get things right. We were meant to debate this last week. We were told we were having urgency last week and then at the last minute the whole thing was pulled. I now note that this is version 7.3 of the Supplementary Order Paper to fix the formula. We have also noted Minister that it is pretty sloppily worded. So there has been a hasty decision to bring this in and we do not believe Minister that you have necessarily done the work on it. Certainly the Ministry of Business Innovation and Employment has pointed out that there are lots of things in this bill that have not been looked at which is the normal practice in any legislation.What we now know is that the sole criterion for setting remuneration under this bill will be the quarterly employment survey for the public sector average ordinary-time weekly earnings for fulltime-equivalent employees using the average for the year to June compared with the average of the previous year to June. Using this measure means the remuneration of members of Parliament will increase in line with the average public sector salary. So what I want to ask the Minister is whether this is different from what was proposed last week and how exactly it is different from what was proposed last week. I will get on to that in a moment.I want to first of all point out that this bill has been a long time in its gestation. In 2010 just before Christmas John Key urged restraint over the setting of MPs’ salaries. That was 5 years ago. In November 2011 John Key said he was disappointed with part of the MPs’ salary increase. That was 4 years ago. In October 2013 John Key said MPs’ salary increases should be small or zero. That was 2 years ago. Come forward to 26 February 2015 when John Key said in Parliament that he may change the law on how MPs’ rates are set in the future. Today we are about to do that but for practically every year for 5 years the Prime Minister was going to do something about the pay rises that MPs receive. The Prime Minister talked about doing it for days when a decision came out from the Remuneration Authority and then he retreated back to the ninth floor to do nothing. Finally he has decided to do something about it. He had the power to do something about it. He had the numbers to do something about it. He had the ability to consult with members of the House to do something about it but it is only now that we have a bill before us rushed into this House to be passed under urgency so that members of Parliament do not receive the increase that was provided through the Remuneration Authority.As I said none of us asked for the pay rise. I have yet to meet one of my colleagues who would want this sort of pay increase. We feel that we should not be getting pay increases that are greater than other New Zealanders’. We all know what happens when members of Parliament are seen to get more than other people; there is a backlash from the public. So we believe that there ought to be a proper way of setting the salaries. Of course that is why we ended up with the Remuneration Authority. There is a history of political meddling in the way salaries and conditions are set. A very good example arose over the last few days over former members. When you look at the history of that it goes right back to the 1970s when MPs were trying not to take bigger increases and it was put into travel.So we have had political meddling going on in MPs’ salary setting for a long time. We do need to have a way that sets it fairly and in line with other New Zealanders. What we want to know from the Minister when he gets into the chair a little later on is whether he has got the formula right. I am not sure because last week when we were meant to be debating this bill I just happened to read David Farrar’s blog. Unlike the Government he had done some work on the methodology that the Government was using to set MPs’ salaries. What did he find? He found in fact that if MPs used the formula put up by the Government last week we would have got a bigger pay increase than what was actually provided. Under the new legislation that was put up last week the average would have been 3.1 percent; under the current law it would have been 1.7 percent. So what we want to know Minister is whether you have got it right now. We do not want to come back into this House to fix up a mistake. So the Minister is saying yes he has got it right—a guarantee from the Minister that this formula will do the job; this formula will be fair. In fact I have to say Minister we would argue that until the Government addresses the very high salaries paid to chief executive officers of Government departments we are not actually addressing some of the problem in New Zealand. So we would like to see how that is going to be addressed in the future.We will support this bill. We want to see our salaries reined in. We also want to see the salaries of chief executive officers in the public sector reined in because they have got way out of kilter with the rest of those who work in New Zealand. So we will closely examine Minister when you are in the chair in the Committee stage exactly how it will work because what we do not want to do is to waste the time of this Parliament fixing up a mistake made in a formula because the work was not done before the Prime Minister rushed out to say he was going to do something. It has to be right. This is not good enough. At the end of the day every member in this House takes the odium from the public when our salaries and conditions are raised in the public media. So Minister I want the assurance later on that you have got this right and perhaps you can explain in detail how the formula works because it is incredibly complex to be able to understand.JONATHAN YOUNG (National—New Plymouth): Before I address this bill I would just like to make a comment that I do hope the Green Party is not getting too encouraged by the colour of my tie today but I would like to acknowledge today is St Patrick’s Day and I wear this in acknowledgment of my wife’s forebears who come from Ireland. I know this has been a very controversial issue over the years—MPs’ remuneration—but how interesting it is today to be standing in the House to debate the decrease of that. Most people would be debating for the increase of their remuneration. Indeed I believe that we are responding to what the Prime Minister has probably properly assessed to be not just public sentiment but just exactly where things ought to be regarding this issue and this debate.As the previous speaker Annette King has said his history of comment around this particular area has been that restraint is very important. One of the criteria that the Remuneration Authority looks at when it makes decisions and recommendations around this is the area of prevailing adverse economic conditions. We celebrate that New Zealand is doing better but it was not long ago that we remember that this country was needing to borrow $300 million a week in order to maintain the services and soften those hard edges of recession for New Zealanders. We are coming out of that dire period of time and this country is starting to do well but we still need restraint and it is unfair—and we would even use that term “unethical”—for us to say to the people of New Zealand to exercise restraint while MPs’ salaries appear to be increasing unrestrained. It is important for us here in this House not only to lead debates but to live debates—to be examples of that which we hope other people will follow. I know that is a conceptthat I think many people would perhaps wonder at but that is the aspiration and the ideal that we would ought to have in this House. So it is important for us to address this matter.One of the other areas that the authority looks at is this issue of fair relativity with comparable positions and no doubt there are discussions decisions and determinations made about what those comparable positions may be. But what this Government and no doubt those who support this bill have determined is to say that the increases should be comparable to that of the public sector. I support that because indeed we are members of the public sector. We do stand in this place to serve the public. We are public servants. Although there are many aspects of our work that may go beyond that which the public sector may do at large there are many demands and many pressures. In terms of the positions that people have they can be very short and often it is very difficult for MPs when they leave this House to find their way back into the workforce. There are all of these factors.The fact is also that the work that we do is often demanding upon our families and upon our time and I have not yet come across an MP who works 40 hours a week. They all tend to work more. They all tend to put in huge effort and I have not come across an MP who does this job for the money. They do it because they believe in New Zealand. They want to improve New Zealand. They do it because they want to make a difference and I know many MPs who work 70-plus and 80-plus hours a week in service of their communities. So to bring down the salary to an hourly rate is not what this is about. Actually what this is about is being in step with the public sector and being in step with New Zealanders in terms of remuneration. I think that around this country New Zealanders by and large will say that we are landing in the right space regarding this bill. I look forward to making comment further on in the process of this bill and I am very pleased to stand in support of it. Thank you.CHRIS HIPKINS (Labour—Rimutaka): I rise to speak on the issue of MPs’ pay with some trepidation. I think it would be fair to say there is not a single vote to be gained in this particular debate. I do not think anybody particularly enjoys these kinds of debates in Parliament. It would be fair to say as the chief whip of the Labour Party that I did not have a queue of MPs lining up outside my office door this morning wanting to speak on this particular piece of legislation and I do so myself with some trepidation.I want to say right from the very outset that I absolutely agree with the principle behind this legislation which is that MPs’ pay should not be out of step with what every other New Zealander is getting at the moment and I think that is an issue that has been spoken about for some time and it is absolutely high time that the Parliament address that so I am pleased that this opportunity has arisen. However I do have some significant concerns about whether the bill is going to actually deliver on that commitment. I want to make it very clear from the outset that the Labour Party will be voting in favour of this legislation and we will be voting in favour of it with all of the reservations that I am about to go through because voting against it would effectively be voting for the large pay rises that we are trying through this bill to decline. So we are going to vote in favour of this legislation but I want to make it clear that we have reservations.We have particular reservations about pushing this bill through all stages under urgency without any kind of proper process around it. The risk of getting it wrong is high in doing that. The risk that we will need to come back and fix it again is high but also the independence of the Remuneration Authority is compromised in the way this bill has been introduced and in the way it is being pushed through. Interestingly by pushing this bill through under urgency through all stages in the way we are today the Remuneration Authority which issued the original determination that gave MPs the pay rises will not get the chance to have any contribution on this debate at all. So the Remuneration Authority will not have the opportunity to come up to the Parliament and say: “OK if that’s what you’re trying to achieve this bill won’t do it.” It will not have that opportunity. So we have no external verification that this bill is actually doing what we want it to do which is that we wanted to ensure that our own pay does not get out of step with the rest of the country. We have no guarantee of that. So although we are supporting it because we want to deal with the immediate issue the long-term issue may well still remain.There have been numbers flying everywhere from different parties different bloggers all of whom come up with a different set of calculations that may or may not demonstrate that over the longer term this bill could give us a lower pay rise or a greater pay rise. There are numbers flying around about various proposals to amend the bill that may or may not give us a lower or a higher pay rise. That is one of the problems with pushing a bill through all stages under urgency in the way this bill is being pushed through today. We absolutely support the principle of the bill but we are not convinced that it is going to be actually delivered on by the words that we have in front of us at the moment.We have had 5 years to deal with this. The Government has known since November that these pay rises were in the pipeline and likely to come up. Why has it taken until now until the pay rises have already been awarded and due to be paid into MPs’ bank accounts next week before we finally get legislation to deal with it? This should have been dealt with months if not years ago and then it could have been dealt with in a proper considered process where it would not be rushed through Parliament.I want to make it very clear that I am also quite uncomfortable at the idea that Cabinet the executive Cabinet sets the policies around MPs’ pay. That is why we have an independent body and the idea that Cabinet can overturn the decisions of the Remuneration Authority when it disagrees with it is bad. It is worrying from a constitutional perspective. I think it is right that Parliament takes another look at the criteria the Remuneration Authority uses but we have to accept that if we want these decisions to be made independently then that is what they are—they are independent decisions. Because here is the question: if it is OK in principle for Parliament to legislate for a decision that we disagree with when we think it gives us too much pay is it OK for Parliament to legislate for a decision that we disagree with that we think gives us not enough pay? Because that is the principle that is being established: that if the authority issues a determination we do not agree with we will simply legislate over the top of it. I do not think that is a good practice. I think it is right that we set clear criteria. It is absolutely right that at the moment the criteria are giving MPs pay rises that are out of step with every other New Zealand and therefore need to be checked and need to be addressed but I do not think it is right that Cabinet effectively mandates legislating over the top of an authority decision that we disagree with.I think this decision should have been taken long before that determination was even issued. For 5 years we have been talking about it. Any time in those 5 years this issue could have been dealt with. To some extent we have no choice now but to take the course of action that we are taking because the Government has dragged its heels on the matter. I think we should certainly give those matters some consideration and I hope at some point there will be the opportunity for some careful reflection on this to ensure that we do actually get this right for the future.I also want to make it clear to the Government that I do not see this and the Labour Party certainly does not see this in any way as a justification for supressing well-deserved and well-earned pay increases for those many people working in public sector jobs like teachers nurses and police all of whom are going to be making their claims to the Government through collective bargaining in this year’s pay rounds. It would be wrong for the Government to interpret our support for this legislation as a signal that we would support simply not increasing pay for people who have gone without pay increases for many many years while we have continued to enjoy them. That would be unfair. There are many in the Public Service—and when I say “Public Service” I mean that in the widest possible sense—who have done their bit who have tightened their belts who have gone without pay rises of any significance for quite some time and who frankly deserve them and I think it is wrong for the Government to try to say: “Well if MPs aren’t getting a pay rise they should not get one either.” That is not right. That is not fair and we are going to be monitoring that very carefully.With regard to the technical nature of the bill we will get into that further in the Committee stage but again I want to come back to that fundamental question of whether this bill is actually going to deliver on its objectives and whether in fact the calculation that is now being made is a fair one. This bill at its essence links MPs’ pay rises to the quarterly employment survey for public servants. The problem with using the quarterly employment survey as a measure is that that also captures people who move into different and higher-paid jobs or who move from part-time to full-time employment and those types of things that actually lift potentially the salary rises higher than they might otherwise have gone. It is not comparing apples with apples. If we were to look at some kinds of standard definitions of what is counted then that might make a difference but under the current formula there is real potential again that public servants moving up the Public Service hierarchy could therefore inflate MPs’ salaries and that is the very thing that we are trying to address with this bill. So there are a whole lot of technical issues in this that we are simply not going to be able to explore in the next 3 or 4 or however many hours it takes for Parliament to pass this bill through all stages under urgency.To recap this first contribution and to summarise the points that I am making first and foremost I do not think that MPs should be getting large-scale pay rises and I am pleased the Government is dealing with it. Second I think we need to be looking at an enduring solution that ensures that our pay—MPs’ pay—is not a subject that we spend time debating in this House but is determined independently on a clear set of criteria and I am not yet convinced that the criteria that this bill proposes are going to be the right ones that are going to deliver the outcomes that we are after. And third I think this process is flawed. It should not be being done under urgency—although now because the Government has left it so long we have no choice and so Labour Party members feel we are forced into the position where we have to support it. And related to that this should not be a Cabinet dictate; this should be based on an independent review. It should be determined independently and this is a very bad process.ANDREW BAYLY (National—Hunua): It is a pleasure to be asked to speak on the Remuneration Authority (Members of Parliament Remuneration Amendment) Bill. We are of course living in difficult international times and although we here in New Zealand are lucky to be enjoying the success of what this Government has achieved over the last 6½ years we need to be cognisant of what is happening. This bill is about being reasonable fair and equitable. It is about providing leadership and taking a stand which affects all 121 members of this House. It is rightly so that all MPs should be concerned about the level of their remuneration at a time when we as a country are looking and trying to be fiscally prudent.I believe that the Prime Minister took an important and courageous stance on this matter on 2 March when he said that it was important that we MPs should show restraint. This is a Government living within its means. A 3.56 percent increase was inappropriate when inflation is at 0.8 percent and expected to decline to zero percent by the end of this financial year. Tying our salary increases to the public sector is the right thing to do especially as a number of significant industries within the public sector are currently about to embark on their annual pay round discussions. It would be wrong for us to accept the 3.56 percent increase and yet see these important public servants—such as our teachers nurses and police—receive increases below what we have accepted.Yesterday I had the pleasure of visiting two schools in my electorate namely Clevedon School and KingsGate School. I saw firsthand what a wonderful job these teachers are doing at these schools—the dedication and the care that they show towards their students both at an academic level but also at a personal level—in trying to create great new citizens for New Zealand. They are all professional people with great skills and training and are entitled to their remuneration. The same goes for those in our nursing and other medical professions who are just as diligent at looking after our sick and infirm.On Saturday I had the pleasure of attending the dedication of a new ambulance at the St John’s Centre in Pukekohe. The ambulance was a gift from Malcolm and Shirley Fletcher to the people of Franklin. These two people have already given a previous ambulance so this is their second gift. It shows what great citizens they are and the caring and generous spirit they have.When we look at our remuneration structure we were right in overturning our increase. The bill provides that the Remuneration Authority must fix the salaries of MPs so that the salaries the superannuation component and the personal benefits are in a combined sense fixed or move up in line with the average ordinary-time weekly earnings for fulltime-equivalent employees in the public sector as shown by the quarterly employment survey. In using the quarterly employment survey it means that the remuneration of members of Parliament will increase with the average earnings in the public sector. Currently the Remuneration Authority Act 1977 requires the authority to make determinations for each position within its jurisdiction at least every 3 years but the amendment will mean that this will occur annually in respect of the salary component.In summary we are here to legislate under urgency firstly to change the criterion for the Remuneration Authority Act to take away the authority’s discretion on MPs’ pay increases; secondly to make the sole new criterion the average of the public sector pay increase for the previous year as the total compensation; and thirdly to backdate the legislation to 1 July 2014. I think that bringing about this change under urgency is right especially when I think about some of the people living in my electorate who expect a hard-working MP to do their bit as a public servant. Receiving a salary rate above the quarterly employment survey does not align with these ideals. I commend this bill to the House.METIRIA TUREI (Co-Leader—Green): The Green Party is opposing this legislation and I will describe why in some detail shortly. We do understand it—and we did consider seriously supporting it—because it does provide a criterion on which the Remuneration Authority can consider MPs’ pay and on that basis it is generally a move in the right direction. It is a publicly available measure that is being used and it could help with transparency with MPs’ pay except of course that the principle is not just that there is a criterion—I mean the Remuneration Authority already has the ability to use criteria for MPs’ pay—but that it is a criterion that constrains MPs’ pay increases. And there is no evidence on the table and I heard nothing in the Minister’s speech—and he may have more evidence to provide us all—to show that this measure will constrain MPs’ pay more than the current provisions provide for.That was our criticism of the previous bill last week—that it did not constrain MPs’ pay increases—and we want to see some evidence that this one will. It is not hard to argue with; it is not a huge issue. If there is evidence we need to be able to see it but there is none and it is very difficult to even do the assessment. We did try to get the Parliamentary Library this morning with the short time we have had to look at the bill to see whether it could calculate it and it is very difficult. And yet we are being asked to support this legislation with no evidence at all that it will actually do the job it is supposed to do. We are not prepared to whitewash this issue. In fact we need to make sure that we have proper criteria that restrain MPs’ pay.The Green Party has put two proposals forward. They will arrive shortly before the House as Supplementary Order Papers. One is where the criteria are based on nominal increases in the median wage which would significantly constrain MPs’ pay increases. That means that if the median wage goes up by a hundred bucks then MPs’ pay goes up by a hundred bucks. It is not percentage-based. The second is based on the labour cost index which is a much better measure than the quarterly employment survey and would also significantly constrain MPs’ pay increases because that is the principle—not just that there are criteria. There are already criteria that the Remuneration Authority uses. So this bill does not provide any meaningful change to what the current situation is so why then would we give it a tick when it does not actually do anything?I am really concerned by what I have heard today so far—we are only halfway through the first reading—about the attitude of MPs to the public. There has been talk about the odium that we all receive as a result of MPs’ pay increases. We do not treat the public fairly in the discussion about MPs’ pay and allowances. We do not make sure that there is an open and transparent system for them to assess the validity of any allowances that we have or the pay increases that we might get or how that pay is set. The Remuneration Authority has been trying to do that a bit better. But to say that MPs get treated with odium and disrespect—and hatred and disgust is what that odium means—is grossly unfair to the public. The public will be pissed off if they think that there is unfairness in our system. It is up to us then to demonstrate that the system is fair and the best way we can do that is not to rush legislation through under urgency because there is a public backlash; it is to have a proper open and transparent system.The Green Party has been arguing now for years and years—it started with Rod Donald—that we should have an independent and full review of MPs’ pay and allowances and ex-MPs’ entitlements and have that fully available for scrutiny by the public so we can have a proper discussion about what it is we need to do our job the kind of job that we have making sure we have the tools to do our job and nothing more. You know—we get paid for the job we do and we have the resources we need to do the job.The public when we have been open and transparent have been really responsive. The Green Party led the transparency move for our accommodation and travel allowances if you remember. We opened up our books and as a result the Speaker then put in a system so that everybody’s travel and accommodation allowances are now known to the public. There were howls of outrage from MPs because they thought that the public would crash in on us from I do not know the gallery and have huge problems with what we were spending. In fact the fact of the transparency gave the public confidence about what we were doing and how we were doing it and it now largely goes unnoticed. We do not need to treat the public with such disrespect and neither should we treat this process with such disrespect.The bill has two parts that I am mostly interested in. The first of course is the criterion which simply does not work to do the job or at least we have got no evidence that it will. The second is that the bill will revoke the Remuneration Authority’s determination of the pay increase. That is what we need to do—revoke that now. We could do that under urgency. It is in the bill. Then we can have a proper process with a select committee and some time to consider what are the best criteria for the Remuneration Authority to use to constrain MPs’ pay. That would do both jobs. We would stop the pay increase now. We could do that this afternoon.Then we would also give ourselves the time to look at what are good criteria for the Remuneration Authority to use and to open it up for public scrutiny so that the public can have a say on what they think the most appropriate criteria should be to use and make sure we have got it right. I absolutely agree with Chris Hipkins and others who have spoken that the chances of us having to come back and fix this are very very high. It has been only a week and a half since the first version of the bill came to Parliament. Then we would know we were doing the right thing for the right reasons and doing a good job. That is what we get paid for. That is what this is all about. If we are going to make law we need to be professional lawmakers and make sure we do a good job and we do not waste time and we do deserve the pay that we will eventually get.But in fact what National and others are showing to the public is that we will be responsive on these issues only when we feel we are under political attack we will not take them seriously as they ought to be taken we will not trust the public to have a say about what our pay and allowances should be and we will be defensive and hurried about it. I think it is very shameful actually what is going on today. It is why we have opposed urgency. It is why we are opposing this bill. It is why we are going to great efforts to find alternatives to put forward to the Parliament so that parliamentarians can consider different criteria and think about what is the best way to proceed. It is why we are going to see whether we can put forward a Supplementary Order Paper that will just revoke the Remuneration Authority’s decision and just that so that we can take time.We will no doubt have some long discussions over the next 24 hours or so about the effect of this bill and the concerns that MPs have about it. I reiterate that I am very much looking forward to the Minister providing the evidence that shows that this constrains MPs’ pay. It may be that the Minister does not intend to constrain MPs’ pay increases but just to set the criteria. If that is the case I think he needs to tell us that. It needs to be made very clear that this is not designed to reduce pay increases; it is designed only to put a criterion in place. I do not agree with that but at least it would be more up front about what we are trying to do and we are being more up front with the public about the results of this bill. I think that is where in this whole process Parliament is really falling down today. It is treating members of the public with such high levels of disrespect. They deserve better from us. Thank you.TRACEY MARTIN (Deputy Leader—NZ First): Kia ora Mr Assistant Speaker. I stand on behalf of New Zealand First to put forward a contribution on the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill. I would like to acknowledge the contribution by Metiria Turei and some very very interesting points that she has raised. At this stage at this first reading New Zealand First will support this bill through but I do believe that Metiria Turei has articulated some really very interesting questions concerns and points that I hope get fleshed out as we have this conversation. I am not confident about that but I would like to think that they might be.I think it has been articulated by the Green Party contribution and by the Labour Party contribution that urgency is not the best way to bring legislation to the floor of the House. It is with serious concern that New Zealand First notes that this bill was supposed to come to the floor of the House a couple of times last week—Hon Michael Woodhouse: Once. Only once.TRACEY MARTIN: Well it depends on your communication I guess Mr Woodhouse. Anyway a couple of times last week and today we finally have it. There was the bill and a Supplementary Order Paper. I have received instructions that they have been combined.Hon Michael Woodhouse: Yes they have.TRACEY MARTIN: They have. So that happened this morning?Hon Michael Woodhouse: Yes.TRACEY MARTIN: It happened this morning. So therefore this bill has actually been available only since just prior to question time which is not the best way to have confidence that what the bill says is what the Minister in charge of the bill says it will do. I do think that the suggestion put forward by the Green Party contribution that as there are quite clearly two parts—in the short period of time I have had to look at the contribution from the Ministry of Business Innovation and Employment there are quite clearly two parts now to the bill. One stops the inappropriate 3.5 percent increase and again we agree with the Green Party contribution with everybody’s contribution that that is inappropriate.However we do not happen to agree with the articulation by the National Party members of the reason why it is inappropriate suddenly—suddenly we are in urgency. I mean there have been 6 years in which the Government could have dealt with this situation. It could have changed the criteria without actually looking like it has hauled the Remuneration Authority in for a good hiding and then sent it on its way. The Government could have dealt with this over the last 6 years as opposed to today.But it is not anything to do—it has got nothing to do—with the global financial crisis. It has more to do with the 40000 members of the Public Service who are about to go into bargaining. It has more to do with the 17000 members in the health sector mostly clerical assistants and public and mental health workers. It has more to do with the 1100 corrections staff 3100 Inland Revenue Department staff and 430 Ministry for Women and Statistics New Zealand staff. It has more to do with the staff at the Artificial Limb Service and the 800 Department of Internal Affairs workers 150 staff from the Blood Service 1650 Ministry of Justice workers 2400 staff from Child Youth and Family 1150 from the Ministry of Business Innovation and Employment and 300 Parliamentary Service workers who are also going to be seeking acknowledgment for their work and what they do and the fact that they deserve a pay rise.We also think the timing is particularly interesting that 2 March was when the Prime Minister made the statement that we were going to be dealing with this now under urgency after 6 years of opportunity—now under urgency—and that a by-election had been called in Northland. We all know that Northland is a place where the majority of the workers—and the majority of the unemployed in the country pretty much sit up in Northland—are also among the most lowly paid inside our nation. So we do not think this has got anything to do with the global financial crisis and constraint from that perspective and that sort of good warm-fuzzy feeling from the Government at all. We think this is a very political move on behalf of the Government. It happens to be the right move; it is just not well done. We will be listening for further contributions from the Government benches as they try to convince us and the nation that the only reason that this is here now under urgency is that the first part must be dealt with under urgency.Again I point to the Green Party contribution around transparency. One of the benefits of the select committee process is the ability for New Zealanders to come in and actually say what they think. I think if there is anything that we should be confident about in this House it is that should the criterion should the purpose should the first part of this bill go to a select committee we should be confident that we can stand in our place and say to the people of New Zealand: “We do this job. We give it our all. We do it for you. And what do you think that is worth? What is that reasonably and honestly and fairly worth?”. If we cannot do that then we have got a larger problem than 3.5 percent. So I think it is very interesting and I will listen very carefully to the rest of the conversation around these issues.I do want to pick up on a point that Ms King said. We are also working on a Supplementary Order Paper because we find it very interesting inside the regulatory impact statement that the bill provides that the authority must fix the salaries of MPs so that they can move up only in line with the movement in the average ordinary time weekly earnings for fulltime-equivalent public sector employees. We would like some clarification around “equivalent public sector employees”—who is that?Hon Michael Woodhouse: It’s defined in the bill.TRACEY MARTIN: Great! The Minister has just said that we will find it in the bill. The fact that we actually had the bill only an hour before question time—thank you so much Minister. It would be nice to actually be able to read it finally.Hon Michael Woodhouse: Barbara had it days ago.TRACEY MARTIN: Not the bill you incorporated into your Supplementary Order Paper Minister but you can keep running that line if you like.We will bring in a Supplementary Order Paper because we are looking at amending the Remuneration Authority Act 1977 to provide a sole criterion for the Remuneration Authority to consider when reviewing the total remuneration of all positions within its jurisdiction. The current bill amends only the salaries for members of Parliament but leaves untouched the remuneration of judges and chief executive officers of local government among others. We see that these occupations also should be considered by this Parliament as to whether they are appropriately in line with the rest of the New Zealanders out there putting in a full day’s work for a fair day’s pay. Our Supplementary Order Paper will address those at that top take level and we believe that it shows leadership. We believe that it would show leadership across the whole of the sector.It was interesting that Mr Farrar David Farrar—he is a well-known leftie I think is he not—has helpfully compared MPs with judges. An MP used to get 73 percent of what a District Court judge gets but today they get just 48 percent. This excludes superannuation subsidies that are far more generous to judges. Then Mr Farrar compared Cabinet Ministers with High Court judges. In 1985 they were paid almost the same. Ministers got $957 more. Today a Cabinet Minister gets just 67 percent of what a High Court judge gets. They get paid almost $150000 less. We are not suggesting that that means we need to go up towards High Court judges; what we are suggesting is that things have got out of kilter.My final contribution about things getting out of kilter would be the fact that in the 1970s the wages of teachers and members of Parliament were similar. In the 1970s the wages of teachers and members of Parliament were similar. Things have got completely out of kilter. We believe that this is an opportunity to bring it back but we are not confident that the Government itself knows what is inside this bill and how it will fold out at the end of the day because it has not taken the time—and it had 6 years to do so—to truly work this through. Kia ora.SARAH DOWIE (National—Invercargill): I rise in support of the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill 2015 for its first reading but before I begin like others I want to extend my support to the people of Vanuatu. My thoughts and prayers are with them as they move through the deaths they have experienced and the destruction. My best to those people.I pick up on the point of the member opposite who said that talking about members’ remuneration has always been a touchy subject. An interesting fact is that until 1950 our predecessors actually fixed their own salaries. I do not quite remember that. I was actually born in 1974 when the Higher Salaries Commission took over the role. I am sure it was to much relief of many members that it was taken out of their hands but it certainly did not remove the fact that the public dislike MPs’ salary determinations.Just before I do talk more about this bill I want to pick up on two things that were said by previous speakers. My understanding is that there was quite a bit of dialogue with the Remuneration Authority to use some of its implied discretion under the Act that if it was going to set an increase to make it appropriate. This is a Government that is talking about having people live within their means. We are asking the Public Service to do more on less. We are asking for better results. It has been said that in support of that a 1 to 2 percent increase is probably the appropriate place for it.The Remuneration Authority has decided not to do that and the 3.56 percent increase is seen on this side of the House as neither necessary nor justified. That is the reason why we have now taken these steps to change the Act to bring this increase back into line.The other thing too is that I am not too young to remember some shenanigans in 2002 and 2005 in respect of MPs’ salaries and their determinations. So to suggest that we are doing things in a rushed way now—what we are doing is we are saying that this 3.56 percent increase is inappropriate. We have had dialogue with the Remuneration Authority. It has chosen not to take that advice so we are going to do something about it. I am in support of that bill. This bill adds to the parent Act and will clarify the Act to make determinations fair to the recipient but also to the taxpayer. These changes will obviously bring that to the fore.As I said before this decision was not taken lightly but we want to peg determinations to the average annual percentage change in the public sector pay as measured by Statistics New Zealand. That means that our pay increase will be in line with the average public sector salary movements. That is only fair because we are public servants. We are bracketed with the people who are nurses who are teachers and who are police officers. They are doing a fantastic job. As I said before this Government is asking our Public Service to deliver more on less. They are doing that. Their work is valued but we need to be walking the talk. We need to be seen as being bracketed with them and the work that they do.I certainly do not question anybody’s motives for being here. We are all here to do a job. We are all here to do the best that we can for our constituents. We may have different ideas about how we do that but I think the motives are pure just as our nurses go on to the front line or our police go on to the front line and work hard. It is appropriate that we are in line with that 1 to 2 percent increase if at all. I look forward to seeing this bill being shepherded through the House. I am in support of it. Thank you.JAMES SHAW (Green): I would also like to start by extending my condolences to the people of Vanuatu. What is happening over there is a great tragedy and I wish them all the best for their recovery. I commend all the efforts of all New Zealanders who have extended their support via the Red Cross and other agencies.The people of New Zealand need to know that the Government is introducing a bill that looks as if it is supposed to contain runaway increases in the pay for members of Parliament but as far as we can tell will not actually do so. Not only that the Government is abusing the parliamentary process of urgency to rush through the legislation before anyone notices how flawed and ineffectual it is. It is a bit like the Government’s approach to climate change. It can claim that it is doing something about climate change because it has got an emissions trading scheme even though emissions continue to rise. The emissions trading scheme is a smokescreen that has no effect other than to enable the Government to pretend that it is doing something.Much like last week’s proposal the latest version of the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill uses a poor linking mechanism. It sounds reasonable in the sense of linking MPs’ pay to public sector pay but we do not believe that it will have any real effect. As a result it seems as though the bill will likely continue the run of large and unmerited pay rises for MPs. So instead of meaningful reform the Government is deploying a smokescreen. It wants to be seen to be doing something the week before a knife-edge by-election in Northland without actually doing anything about the issue. In the process it has actually adopted an approach that precludes meaningful scrutiny. It is not allowing public input. It is not looking for expert analysis. It is jamming through superficial changes under urgency and hoping that nobody will notice. The Greens will not support such contempt for proper parliamentary procedure nor will we support such ineffective changes. We have consistently over many years called for real constraints on MPs’ pay but this is not it.I disagree with the member for Rimutaka Chris Hipkins who earlier claimed that voting against this bill is the same thing as voting for the status quo although I can understand his point. If the bill has no meaningful impact—and the member from Rimutaka also said that we could not have any confidence that it will have any meaningful impact—then voting for it is the same thing as voting for the status quo. It is better to vote against a flawed bill. Passing a flawed bill that has no impact will mean that it may be some years before the matter comes back before the House when we are once again embarrassed by the massive pay rises we are all getting. A completely different approach is needed.According to this bill MPs’ pay would be linked to public sector pay as calculated by the quarterly employment survey. A few other people have mentioned this. It is a bizarre choice. The quarterly employment survey is hardly ever used as a measure of pay. Not even the State Services Commission uses it as an indicator of pay. This is because it fails to control for changes in the quantity or quality of labour. As a result changes in pay as calculated by the quarterly employment survey are not necessarily indicative of what workers are earning.Indeed we do not have any confidence that linking MPs’ pay to the quarterly employment survey would actually prevent large pay rises. We received this version of the bill only at 10.30 this morning. The analysis we did on last week’s version of the bill showed us that taken over the last 6 years MPs’ pay would be almost exactly the same now as it is under the status quo. The Government has not provided us with any evidence that this new version would do anything to the contrary.The Government’s approach to this process shows contempt for the public and for proper procedure. MPs are supposed to represent the people. To that end the people should have the right to scrutinise any proposed changes to MPs’ pay. However the Government members seem to have considered this an inconvenience. They want to be popular and they want a quick fix; they do not want select committee scrutiny. As a result they are rushing the bill under urgency. This is something that the Green Party cannot support so we will not be voting for the bill at this stage. As my colleague Metiria Turei said we will be bringing in three different Supplementary Order Papers during the course of this debate given that we are probably in the minority on the voting front to attempt to fix some of those problems that we see. Thank you.The ASSISTANT SPEAKER (Hon Trevor Mallard): Marama Fox—5 minutes.MARAMA FOX (Co-Leader—Māori Party): Kia ora Mr Assistant Speaker. You know what? We are standing to support this bill as we do with most first readings. We like to do that because we want to hear what the people at the select committee stage think about it. Unfortunately we have some scepticism around the measures that are going to be in place and whether they will do what the bill outlines. We are going to support the bill through at this stage in the absence of something else and I am interested to see what the Greens are going to put forward. In saying that why are we supporting it? Because quite frankly the proposed changes that the Remuneration Authority put forward a couple of weeks ago were embarrassing. They were embarrassing but not because I do not think MPs deserve it and not because I do not think MPs are hard working.In fact I have seen just how hard MPs work. I sat in a meeting with a Minister at 10 o’clock at night—opposite a blood-shot weary and tired-looking Minister—who had not eaten all day so I ordered dinner to his office so we could have the meeting. I know how hard they work. So it is not embarrassing because I do not think we deserve it; it is embarrassing because actually so does the rest of New Zealand. The rest of New Zealand deserves to have a pay packet that adequately pays them for the job that they do. No matter how hard I work—and I work very hard as do other Ministers and others MPs because I am not a Minister not yet. I have got a husband who is a shearer who still leaves home before I do and still works twice as hard and then has to look after all the kids on top of that because I am not there.Jacqui Dean: Sounds like a good man.MARAMA FOX: He is a good man. I have trained him well. I think that we need to be addressing the remuneration of our country. In fact our poverty standards in this country are an embarrassment to us. Two hundred thousand - plus people are living in poverty. The greatest number of people who are affected by abject poverty in this country are the children and families of those on a benefit actually. That group of people deserve to have a rise in the level of their benefit. The hardship on those families is remarkable. We do not understand the hardship that they come into contact with. In fact our minimum wage is set at the rate of poverty. It is 65 percent of the median wage and there is some discussion about what that is. But if we are employing people on a minimum wage in this country to be impoverished then we need to ask ourselves—yes I support this bill because it means we will not get a pay rise that is just frankly embarrassing while our people languish in poverty. Then if we look further at the levels of poverty and if we add hardship to that it increases the impact on those people.This wonderful book here Child Poverty in New Zealand written by Jonathan Boston and Simon Chapple outlines exactly what that hardship means. Hardship is enforced lack of essentials; meals with meat or fish are missed or happen only every second day; you do not have two pairs of shoes in good repair; you do not have suitable clothing for special occasions or a winter change of clothing; and arrears more than once a year for rates electricity water vehicle registration insurance or warrant of fitness. There is a hardship index for people living in poverty in this country and you may or may not be surprised to find out that 100000 of those people meet more than eight to 16 of the 20 indicators for hardship according to this book. So quite rightly we are embarrassed by the proposed changes to remuneration not because we do not think that we deserve them but because we because we think the rest of New Zealand deserves them as well. We need to be addressing the minimum wage in this country and making it a living wage. Do not pay people to be impoverished. Then the people who are receiving a benefit or welfare because of their circumstances need to be supported out of poverty not supported into poverty and extreme hardship.That is why today we are supporting this bill but we are sceptical that the changes are actually going to make the difference that they intend when you think that some chief executive officers of ministries and Governments actually get paid way more than their Ministers. So at this point and at this time we support it. Thank you.Dr PARMJEET PARMAR (National): It is great to be able to speak on and support the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill. First I would like to congratulate the Minister in charge the Hon Michael Woodhouse on the work that he has done on this bill in such a short time. The Remuneration Authority (Members of Parliament Remuneration) Amendment Bill sponsored by the Hon Michael Woodhouse is to amend the Remuneration Authority Act 1977. This bill is going through all stages today under urgency. This is because the latest increase which was determined by the Remuneration Authority was to increase the salary of members of Parliament by 3.56 percent. Although this decision was made independently of members of Parliament we should not be receiving this increase because it is disproportionate to increases in the public sector.When this issue was raised by the Prime Minister the Remuneration Authority referred to a specific criterion in the Remuneration Authority Act 1977 as the reason for this increase and that is why this change is necessary. This change will tie the salaries of members of Parliament to the public sector and will take away the Remuneration Authority’s discretion when setting the salaries of members of Parliament. Given that inflation is 0.8 percent this kind of increase is not necessary. I am really proud to be part of this team that believes in delivering for our Kiwi families and children. We are taking action; it is not just about talking—like the Greens we heard. This is not a new issue. This is not an issue that is raised for the first time. It is about fairness for the taxpayer’s dollar.The amendment will change the process of how the Remuneration Authority reviews the salaries of members of Parliament. So first it will take away the Remuneration Authority’s discretion whensetting the salaries of members of Parliament. Second it will make the average public sector pay movement the sole criterion for determining increases inthe salaries of members of Parliament. This will be backdated to 1 July 2014. This amendment will mean that the average annual percentage change in public sector pay as measured by Statistics New Zealand’s quarterly employment survey will be used to determinea member of Parliament’s salary. Using the quarterly employment survey will mean that the increases that members of Parliament will get will be in line with the wider public sector. The law change will be backdated to 1 July 2014 which means that the determination of 3.56 percent of the Remuneration Authority will not be awarded. This increasewill be somewhere around 1.5 percent.Currently the Remuneration Authorityhas to take into account several factors such as relativity to comparable positions and the requirements of the job. With this change the authority will just need to annually apply the average quarterly employment survey index for the June year to give an increase to members of Parliament. The Remuneration Authoritywill continue to have the ability to change the mix of cash and non-cash items in the overall pay package. This indexing of the salaries of members of Parliament to the quarterly employment survey will be done at the same time every year. This is after the publication of the quarterly employment survey in June every year. This will make sure that the increases we get are in line with those our teachers nurses and other workers get.If we get pay increases that are more than the public sector it is not a good look and this is not what our people expect from us. We need to lead by example—that is to do what we say and that is what our Prime Minister the Rt Hon John Key and the National-led Government are about. Pay and pay increases I understand are rewards for a person’s hard work dedication and commitment to that person’s work. As well as that I know and I recognise that members of Parliament work hard they are committed and they are dedicated. But we are not here for the financial reward. I am here to serve our people; I am here to serve our country. So I am really honoured to be part of this team that believes in delivering more for less. It is about listening to our people and it is about being fair to our people so I support this bill.GRANT ROBERTSON (Labour—Wellington Central): As other Labour members have done in this debate I rise to support the first reading of this bill. I do so because I think what this bill represents is a step in the right direction towards sorting out the issues that lie in the way that MPs’ pay is determined. I do not do it on the basis of the fact that this is a great process or that this is necessarily in a perfect state at the moment. It is not. I think what we have seen over the last week is an indication of the fact that I predict we will be back debating this issue again at some point in the near future.But if we actually look at the principle here I think it is shared by parties across the House. The goal here is that our pay is in some way or other more closely linked to what is happening for the median average—whatever calculation we are using—New Zealandersand their pay and income. That is a goal that I think is actually shared around the House. The difficulty some members are having with this legislation is first whether this is the correct mechanism; and second whether this process is going to deliver that mechanism. I can stand up here today and say I prefer an approach that links us to something like the average wage in the public sector but I see real shortcomings in those particular criteria and I will return to that in a minute.In terms of the process this has been mishandled by the Government. I think we are up to about the seventh or eighth version of the criteria. That is a very hard thing to keep track of—to actually understand exactly where we have got to. It is quite possible that there are unforeseen consequences in this legislation. I am not here you know disparaging the Minister; I just think the pace at which this has happened means that it is likely that not all of those scenarios have been thought through. So I come to this somewhat sceptical around that but acknowledging that we do need to make an effort to show that we know that we in this House are well paid for what we do—every member of this House works hard for that pay—but that when it comes to a notion of what kind of process there should be for increasing pay it needs to relate more to what the average New Zealander is going through than it currently does. That is the issue here.I think the Remuneration Authority has been given a pretty hard rap out of all of this. The Remuneration Authority has done what was asked of it in the Remuneration Authority Act. The Act particularly in section 18 asks it to compare us with what it believes to be the relativity of similar jobs. Over a period of time it has interpreted that to be effectively around executive pay. Once upon a time this was all done—when the Assistant Speaker in the Chair was in the mid-point of his parliamentary career—by something called the Higher Salaries Commission.The ASSISTANT SPEAKER (Hon Trevor Mallard): That’s now.GRANT ROBERTSON: That is now. That is correct. In the early part of his parliamentary career this was done by something called the Higher Salaries Commission. That gives an indication as to what was being thought about in terms of MPs’ pay—higher salaries. It goes off to the Remuneration Authority and it continues to interpret that. So when it came back with a 3.5 percent pay increase plus the extra bits that had been changed around as a result of moving from non-cash to cash recognition it was doing what Parliament had previously asked of it. The reality is that what this has exposed in New Zealand is the fact that executive pay has been rampantly increasing while those on median wages and those on low wages have been struggling. That is actually what the 3.5 percent and 5.5 percent pay increase has led New Zealanders to realise.So you are in a situation now where the average chief executive officer of a company in New Zealand earns 26 times what the average worker in that firm does. That has increased I might add in the last 6 years. It used to be 22 times. It has gone up to 26 times over the last 6 years. Nearly half the population year on year does not get a pay increase. They are the factors that mean people will put their hands up and say: “This is not right.” So the real underlying issue in this bill is actually about the inequality in pay in New Zealand and the fact that hard-working people in New Zealand have not seen a pay increase for many years.Today in the House we heard Bill English tell us once again what people have been told in the past: that they have to tighten their belts that times are tough but that there are good times around the corner. That is what Bill English told New Zealanders before the last election. Today in the House he said: “That promise is off the table now because now we have got low inflation in New Zealand and pay increases cannot be justified.” New Zealanders were promised before the last election an average pay increase of $6600 over the next 3 years and today Bill English wrote that off and said: “Only very moderate pay increases are going to happen.” So this piece of legislation tries to go about correcting a problem that is much deeper. It is a problem about the value of pay for New Zealanders.There was an interesting study by the Productivity Commission released in the last month that shows that over a 25-year period pay for New Zealanders has fallen 16 percent behind productivity increases. We are always told that as productivity increases so will wages because productivity will drive more efficient businesses. Well the reality is that that gap has been created. This is what we are now seeingglobally: the retention by capital of wealth away from those who earn salaries and wages. In New Zealand we now have the evidence and the proof from the Productivity Commission that pay is 16 percent below where it should be. So that is what lies behind the problems that we have experienced in the last few weeks on this issue because for those on high incomes they keep going up. Those on middle and low incomes in New Zealand are stuck and so when our pay is pegged to those on high incomes naturally New Zealanders will react and will say: “What is going on there? That is not the experience I am having in my community.” That is the issue that lies behind this and of course is not being addressed at all by the National Party’s side of the House across the economy.Related to that is a concern I have about the mechanism here. I do believe this is a step in the right direction but I think that by tagging this to public sector pay we reopen another can of worms on this issue and that is we are now tagging this to something that is in the control completely of politicians: public sector pay. It is all very well for Bill English to stand up and say: “Well we’ve got the teachers we’ve got the nurses and we’ve got the police this year. They’re going to have to accept modest pay increases.” Now it is all linked together. My view is that we are taking a step here the next step of which should be a proposal around something that looks across the economy. I know the Green Party has proposed the idea of a median income—that may well be where we should end up. But it needs to be something that looks at the economy as a whole because that is something the Government can influence positively but not control.I think we are getting ourselves back. We are going backwards and forwards if you look back over the decades on whether politicians should be responsible for setting their own pay. No we need to give that job to somebody else. We give that job to somebody else we set the criteria we do not like the criteria and we bring the job back to us again. This is not a sustainable solution. We need a sustainable solution that links this to something that reflects where ordinary everyday average median New Zealanders are—but fundamentally wage growth in New Zealand is unequal. Executive pay has been bounding ahead while those on real wages those on median wages have been struggling. That is the issue this country needs to get its head around. That is an issue the National Party is ignoring. We will support this legislation because it begins the process of more directly linking MPs’ pay with what ordinary New Zealanders are doing. But the process around this bill has been flawed and I predict unfortunately that this is not the last time this Parliament will need to address this issue.JOANNE HAYES (National): I am pleased to stand to take a short call on the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill. I am pleased to see that our members across the way over there are supporting this bill because I can tell you that when I hear the member Robertson talk about executive salaries rising I worked in an industry—in the health sector actually—many moons ago and I saw that. We struggled away with the paltry sums that we got to pay our people. To be honest when I came here I did not expect any pay rise because that is not what I am here for. I am here to work for the people. I am here to represent the people. So when the Prime Minister made the statement that he made about stopping the pay rise of 3.56 percent for our MP salaries I was absolutely delighted.I want to thank Mr Woodhouse for leading this bill and for taking it through to its completion. I also want to commend my fellow speakers behind me who have articulated the appraisal of this particular bill and the work albeit fast that has gone into it to date. I can tell you that the results that we have had out there and the kōrero that is happening out there with the public—they are very pleased to see that this Government is actually listening to them and that we are a responsible Government and are managing the finances of this country with great vigour and responsibility which all people of this country would be looking forward to seeing. So without any further ado—there are a couple more stages to go on this—I commend the bill to the House.A party vote was called for on the question That the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill be now read a first time.Ayes 106New Zealand National 59; New Zealand Labour 32; New Zealand First 11; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 14Green Party 14.Bill read a first time.Second ReadingHon MICHAEL WOODHOUSE (Minister for Workplace Relations and Safety): I move That the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill be now read a second time. I want to acknowledge and thank the members who have made what I believe are very considered contributions on the bill. Although we will in due course be in the Committee of the whole House where I can respond to some of the more technical questions that have been raised in the first reading speeches I do want to touch on a few of the less technical and background questions and challenges that have been raised.Starting with Mr Young I think who made a very salient point that today is St Patrick’s Day. Indeed he quipped that this was a rather Irish thing to do: for Parliament to be legislating for a pay drop relative to what was expected. But I think we all agree that in principle it is the right thing to do—it is just the method and the practice. I acknowledge Mr Hipkins’ point where he asked the very correct question: if it is OK for MPs to legislate to set aside a pay increase that they believe is too high what is to stop MPs legislating to set aside a pay increase they believe is too low? Well the short answer is nothing. Parliament is the architect of its own destiny. But I would say this: the National Party is a minority party in this Parliament and for this legislation to pass it requires the support of other parties which I am pleased to say it has with the exception of the Green Party—and I make no criticism about that because I do understand the principal basis upon which the Greens are opposing this legislation. I will come back and criticise some of the other comments that have been made by the Green Party but certainly not its reasons for not supporting this bill. But I would say to Mr Hipkins that it would be a very brave Parliament—and indeed a very brave Government—that did that. So what we are doing we are doing for I think a considerable period of time.I understand that it is incumbent on me as the Minister sponsoring the bill and on this House to make sure that we get the principles—as articulated by the Prime Minister’s wishes and Cabinet’s decision—clearly laid out in legislation. Mrs King asked me what was different about the bill from what was prepared last week and which necessitated a slight delay while what I described as a technical amendment was put through. The difference was twofold really. One was a minor mathematical change in the algebra which would have had the transfer of non-cash to cash benefit then subject to the quarterly employment survey uplift. I did not believe that was appropriate in the circumstances because indeed that was a current-year valuation of a change in a non-cash entitlement. So the algebra was changed to add that part of it—or subtract it as the case may be—back into the calculation of remuneration salary and superannuation after the quarterly employment survey was applied.The second difference was a transitional provision between the 2013 determination and the 2015 determination which would be an issue going forward but actually manifests in the authority’s determination of the calculation of the value of a self-drive vehicle for Ministers. Ministers have had for a very very long time access to self-drive vehicles—and we can argue and debate whether or not there is a personal benefit and how much of a personal benefit there is—but indeed the authority set a value on that in 2015 that was not included in the 2013 determination. It was therefore a tricky transitional provision.Indeed what we have done by addressing that as it was drafted in the first bill was to remove that altogether from the calculation and simply say this: if an MP is gaining what is perceived to be a personal benefit right now and the value of that benefit in the authority’s estimation is attributed to it or has changed—either because of inflation or something else—then that change would not form part of the calculation. On the other hand if as is the Speaker’s prerogative there has been a reduction in the actual entitlement which has a change in the value as was the case in the 2015 determination when constraints were put on spousal travel for example and there was a reduction in the value of the current perceived value of the benefit if that occurs—and there are very few times now where we have actually got non-cash benefits left—in the future then that will need to be taken into account. But there will be no other change in the value or perceived value of the existing bundle of so-called non-cash benefits because the authority has pointed out that there may be a private benefit—for example for cellphones internet at home those things that we see as tools to do our job. But the authority is actually talking about attributing a personal benefit value to that. My view is that while that is in existence now any attribution of future value should not reduce an MP’s salary. The formula does that—you can feel free to check that in the Committee of the whole House.The next issue—in fact it was raised by both Mrs King and Mrs Martin—is around the Prime Minister’s comments about talking a good game but not doing anything. Well actually the Prime Minister’s comments did have the effect on the authority of reducing the impact of the increases received through what were quite straightened times. It is not my usual practice to disagree with one of my colleagues but Ms Dowie did make a comment about an instance where the Remuneration Authority decided not to heed the advice or the request of the Prime Minister. I am going to partially defend the authority in that regard because indeed what it believed it was doing was applying the letter of sections 16 and 18 of the Remuneration Authority Act. Indeed when I first started thinking about this I misread the difference between prevailing economic circumstances and countervailing economic circumstances. What the authority has determined is that there are no countervailing economic circumstances that would warrant a more modest increase in MPs’ salaries.The authority’s other role as set out in that Act—I am quoting section 18 here—is “to achieve and maintain fair relativity with the levels of remuneration received elsewhere;”. And that is where it gets difficult. Where is there a relative role? What do we compare ourselves with? There have been criticisms of runaway rises in executive salaries in the public sector. Well I do not agree with that. I simply do not agree with that. I am not going to agree with that and we are not changing anything in respect of the Remuneration Authority’s determinative powers to set the salaries for about 80 senior public servants. Indeed Ms Fox talked about public sector pay being well above that of the Ministers. Well so what? The Commissioner of Police has 12000 staff a $1.5 billion budget an incredibly complex organisation to run—and I have got seven staff and I am the humble Minister. It is true. Is that a valid comparison? Because I do not think it is. I would say that the relativity—and this is a personal view not the Government’s view—but I do consider that the relativity is actually around seeing the Minister as the chairman of the board rather than as an executive. We do not do the job; nor should we. We should be nose and fingers out—as good chairs are—not chief executive officers because I am not the chief executive officer of the Police; Commissioner Bush is.I think that underscores the difficulty with the question of relativity—that the Government has said: “You know what? We are paid fairly for what we do now and the level of increase is inappropriate in the circumstances and this is the right thing to do.” I will in the Committee of the whole House address the technical questions around the quarterly employment survey—why we have it what its history is. And indeed Mr Farrar will now be in Hansard because I am going to address his specific blog because I think it is important to understand it in its broader context. In the meantime I do appreciate what I have considered to be very intelligent interventions and I look forward to that continuing.Hon ANNETTE KING (Deputy Leader—Labour): Thank you Mr Speaker and can I thank the Minister for taking seriously the issues raised by members during the debate on the first reading of this bill. It is probably a shame that there are not more people to hear it. Maybe there are many out there in radioland but other members would perhaps be interested in hearing this debate too because it is a very important one. This bill today is one that I believewill at the end of the day receive the majority support of this House. I take the points of the Green Party around process and around the fact that there is no select committee looking at this bill. I noted that New Zealand First also raised particularly the first part of this bill not going to a select committee. But we understand the haste because this bill will be a very very untidy mess if it does not pass all its stages over the next few hours because members of Parliament would then receive their remuneration as set out by the authority and then there would have to be a retrospective clawback of that—very untidy very messy.So I understand the haste but I do go back Minister Woodhouse to the fact that this is not a new issue and you know for the last 5 years as I said whenever this comes up there is a firestorm around it and comments are made about it by the leader the Prime Minister of New Zealand. And we all wear the odium of the fact that nothing has been done to make a fair way of setting parliamentary salaries. We all know that there is opposition to parliamentary salaries and it is one of those very very lively debates that happen whenever there is some determination made. So I think Minister that maybe this is something that as a new Minister last year you might have liked to have raised because we always know there is going to be a Remuneration Authority determination coming out at a particular time and to have got ahead of it and to have got it into a select committee to allow some public input into it would have made this process so much better. It would have also had proper scrutiny because let us face it the job that was donewas hurried—and I am not blaming you Minister. I realise that you had to bring forward a bill when the Prime Minister had made the announcement of what the formula would be. But then you had to make the formula fit his commentary and it did not work.We got an algebraic formula that when your own National Party blogger did the work that should have been done by the Prime Minister’s advisers and by the Minister’s advisers—when that work was not done we found that we would have ended up using that formula having got more money. What a lot of fools we would have looked if last week we had hurriedly gone through with what was—Hon Michael Woodhouse: That’s not true.Hon ANNETTE KING: So you are going to address David Farrar’s blog? That is good because I want to know where he got it wrong and others who have read that and have looked at the figures have supported it. So Minister when you get in the chair I want you to go through step by step how it was wrong last week but it is right now; and why if it was right last week it is not the same now. You see it was either right or wrong last week and we could have gone ahead with it. So there was something seriously wrong with it.So Minister the new part of this—and I am struggling to understand it but I would like you to give an explanation when we get to the Committee stage—is the new Part 2? You talked of it being a non-cash benefit versus a private benefit and of how that will be calculated in the future and I think we need to understand with better examples perhaps what you mean. You mentioned ministerial cars but this covers all members of Parliament not just Ministers. So Minister could you come back with examples of what you mean in terms of how this change would work—what could not be changed and what could be changed? I do not get this from the bill. I do not understand it from the bill. So I think we would be better informed if you could come back Minister with those answers.I do agree with the Minister that it is no good having the Prime Minister jawboning the Remuneration Authority. That just does not work. The authority was put there in good faith with an independent role and it was carrying out its role as it was asked to do. So it is not the villain of the piece; it was doing the job that was given to it. And jawboning over 5 years was not going to change what it was required to do by law. It did not change that. So it became a media exercise I think rather than a serious exercise by the Prime Minister.I do not believe Minister that your argument around chief executive officers and relativities is a fair one. You see I think that chief executive officers are paid too much. I cannot believe that we have got chief executive officers now being paid well over half a million dollars in salary. I do not care how big their department is or how small it is—and you could look at some pretty small Government departments that are getting very hefty salaries indeed. There has been no talk of doing anything about that and that is part of the overall picture that does need to be addressed.Minister you talked about being the Minister of Police and about how the Commissioner of Police has 10000 staff—men and women—working hard on the front line. I totally agree with you having been a Minister of Police but I also know that as the Minister of Police the buck stops with you. So the commissioner may well carry out the policy requirements and the operational requirements but the policy comes from the Government of the day. The policy comes from the Minister and the accountability as the Minister has found out comes right back to his plate at the end of the day. So it is not just a matter of being like the chairman of a board overseeing everything that happens around them: “Your turn to speak. Your turn to speak. What are your suggestions?”. As a Minister it is actually a matter of driving and leading. That is how I have always seen it. What has happened here is we have got a huge discrepancy now between the chief executive officers and their Ministers. But even worse there is a huge discrepancy between public and civil servants and their chief executive officers and a huge discrepancy between those in the workforce who are working in the private sector and those in the hierarchy of the Public Service. We need to address those issues.Today we are addressing this bill and will support it because I have yet to meet any members on our side of the House in the Labour Party who have said: “I want a pay increase. I asked for a pay increase. I advocated for a pay increase. I want more.” That is totally untrue. In fact we have had many discussions on how we wished there were not those levels of increase and on how we would rather be benchmarked or judged by what was going on perhaps in the public and private sectors rather than just in this formula that we have got. But what we have got is what we have got and Minister we will be holding you accountable for getting it right because none of us—not one not even members of your backbench—want to be back here again fixing up a mess that has not been properly thought through. So let us put it on record: the Minister is going to tell us in the Committee stage that he is absolutely certain he has got it right and that we will not have to fix this as a mess by next year when a determination is made.So we look forward to some really comprehensive answers from the Minister when he is in the chair and hopefully he is able to be in the chair for the whole debate because when you get a substitute Minister they cannot answer the questions that have been raised in this very good debate here today. So Labour supports the second reading of this bill.JONATHAN YOUNG (National—New Plymouth): Thank you to our two previous speakers—the Hon Michael Woodhouse and the Hon Annette King—for the comments that you have made. I think they are very important and I do concur with the Minister for Workplace Relations and Safety on what he has just shared regarding the level of responsibility—which is quite different from his responsibility—of chief executives of major Government departments who work very hard for the benefit of the public. We know that the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill has come to the House because the Remuneration Authority chair John Errington referred specifically to the criteria set out in legislation as the reason behind the increases. As the Hon Annette King just referred to the authority was doing its job as the legislation directed it to.There come times when the parameters and the requirements that have been set need to be reviewed. That is the job of Parliament. This is what has happened. The time has come. It is due season that we look at this because the resonance of that increase that the authority recommended be put in place in due diligence of its job was not perceived by the general population nor by members in this House to be appropriate. We live in a climate where the inflation rate is 0.8 percent. The authority by due determination of all the difference factors that it has considered says that the increase to come to members of Parliament to Ministers to the Prime Minister should be 3.6 percent when the Government itself is saying to our employers and certainly to the public sector that what we need to see are restrained increases over the years to come—not lacking generosity but being responsible being prudent knowing the situation of our recovery.As I said in my first reading speech it was not long ago when this country borrowed $300 million a week to continue the services that New Zealanders needed during that time. Since then we have come through to a modest surplus but we have built up debt. It is not just a matter of a surplus; it is also a matter of the solvency of our country which is incredibly important and so this country needs to be prudent in terms of its growth and its progress. It was deemed that the example being set by members of Parliament in terms of the remuneration they were about to receive was counter-culture and against every conventional wisdom that we have been articulating regarding wage increases in our economy at this present time. So this is how this bill came to pass. The chair John Errington and those who are supporting his decision made that decision specifically according to the criteria set out in the legislation as the reason behind those increases. So it is prudent and proper that if this Parliament wants to see a change—a change that we believe to be needed—then this Parliament needs to determine the criteria which is what this bill is about. Thank you.GRANT ROBERTSON (Labour—Wellington Central): I rise to speak on the second reading of this bill. This would normally be the point at which we would be reflecting upon the interesting and diverse submissions that had come to the select committee that would have been set up. I imagine a bill of this type would have attracted a lot of interest actually. There would have been a lot of hearings. There would have been the traditional argument between Opposition members and Government members about whether 5 minutes or 10 minutes is actually enough for a submitter to make their point. We would have jousted over that and got our way through. I predict that the select committee probably would have travelled on this bill and gone to Auckland and Christchurch and taken on board the views of people from right across the country.Hon Michael Woodhouse: It’s such a burning issue.GRANT ROBERTSON: Well the Minister for Workplace Relations and Safety interjects and says: “It’s such a burning issue.” Actually it is. It actually is something that worries and concerns New Zealanders and that is because I believe of the reasons I mentioned in my first reading speech. The concerns are not so much about what we as politicians are being paid but actually about what ordinary working New Zealanders are being paid and the fact that they have not had a pay increase. In the last year 40-odd percent of them have not had a pay increase. That is what drives the anger the concern—the fact that there is a greater disparity being created yet again by this. So I do want to make the point in all seriousness that clearly it is less than desirable to have now moved immediately to the second reading of this bill.I think everyone in the House would recognise that a piece of legislation like this would benefit from having a select committee process. Any time you see an algebraic equation show up in a piece of legislation it should go to a select committee and I think it is really important that when we are—Hon Michael Woodhouse: The member should’ve paid more attention at King’s High School in fourth form. He’d have got it right.GRANT ROBERTSON: Well no actually—things went wrong for me in maths when they started including letters with the numbers Mr Woodhouse. But no the fact is that when we get a piece of legislation like this with a formula-based approach it would be better if it was before a select committee. What we know—and the reason the Labour Party is supporting this piece of legislation as I said in my first reading contribution—is that we share the goal that the kind of pay increase that was put forward for us by the Remuneration Authority is not right. It is not acceptable. We want to see MP pay much more closely aligned with what average workers are getting in terms of pay increases and this bill takes us a step in that direction. It is not to my mind the end of this discussion but it is a step away from the kinds of pay increases that were proposed in recent weeks.I want to take a moment to talk about some of the issues that the Minister raised in his speech at the start of the second reading. The first of those is around the whole question of what has happened to chief executive pay. This is relevant because that is the relativity that is going on here—or with executive pay more broadly shall we say. That is the relativity that the Remuneration Authority looks at under section 18 of its Act.There is no doubt that we have seen massive pay increases for chief executives in the public sector and the private sector and the Minister is actually just plain wrong to assert that that is not what has happened in New Zealand. Actually my own view is that no Public Service chief executive should be paid more than the Prime Minister. I do not understand that. I think that that sends the wrong signals. I simply do not believe when we are getting up to the $400000 $500000 or $600000 area that we are in a situation where there is some kind of concern about recruitment of quality people for those roles. I think that is wrong. You know we have got the State Services Commissioner who got a 9 percent pay increase after a shocker of a year frankly. What kind of situation are we in when those kinds of pay increases are going on?As I said earlier when we get to the point in New Zealand workplaces where we have got a chief executive being paid 26 times the average worker’s pay we have got ourselves out of whack. I note that if you look at the ANZ with a $4.1 million salary for the ANZ chief executive the ANZ’s chief executive is paid 120 times what the lowest-paid worker within the ANZis paid. That is out of control. That is disproportionate.What we need in New Zealand is a sustained programme of lifting the wages of ordinary New Zealanders and that comes through a variety of means. It does come through productivity increases—there is no doubt about that—but the disjuncture that I mentioned in the first reading between productivity growth and wage increases in New Zealand in the last 25 years needs further exploration and that is around some questions about the bargaining power of workers and the real value of the minimum wage. Those are the real considerations around wages in New Zealand that are being ignored by this Government and now we have this piece of legislation to paper over the cracks that we have got here.The Minister did not in his contribution address to my satisfaction—and I hope we come back to it in the Committee stage of this debate—the question of the particular mechanism being chosen here the quarterly employment survey for public service workers as the best benchmark we can have. There are two concerns I have about that. The first of those is the fact that public sector pay is in the control of politicians in all sorts of ways. We had Bill English saying on the television on Sunday that 4 percent is out for teachers nurses and the police. We can certainly debate the merits of whether that is fair or not but that indicates the level of control a politician has about that. We all know that. We all know that when the Ministry of Education sits down with the teacher unions later this year what they negotiate will come back to the table of the Ministers.So the very thing that we are about to benchmark ourselves to is in the control of Ministers and that takes us back years in terms of whether or not we should be setting our own pay. As my colleague Chris Hipkins said earlier you know we can put it up or we can put it down. This provides me with my biggest issue with this bill and I want to hear from the Minister in the Committee stage why the quarterly employment survey for public sector workers is being used. Why not look across the whole economy? That takes that out of the equation because there are public servants all over New Zealand who are now thinking: “Well this is just going to mean an absolute certainty that we are down to 1 percent or lower in pay increases because the politicians will be too scared to put the pay up because it will lift their pay as well.”On the other side of the fence there are committees of Parliamentdebating these issues all the time. So the Officers of Parliament Committee is right now debating pay and salary around the Ombudsman and around other Officers of Parliament as well. As politicians we are constantly involved in what it is that makes up public sector pay and I think the Government needs to explain very carefully to us why it is limiting this to the public sector. If we looked across the economy more broadly then I would have more comfort. As I say I think it is a step in the right direction because it delinks us from the runaway executive salaries but it does not in my view provide a broad enough look across the economy at wage increases and I think we need to take another look at that. I think it is really important also that we go back to asking the Minister to describe in some more detail the difference between the quarterly employment survey as a measure and other measures of public sector pay as well and I am sure he will do that as those concerns have been raised online.So in the second reading of the bill once again we on the Labour Party side find ourselves in the position of supporting a piece of legislation that takes a step forward to ensure that we do not get silly disproportionate unrealistic pay increases like that proposed by the Remuneration Authority and that we are drawn closer to the experience of working New Zealanders in terms of the kinds of pay increases they have got. But it is highly suboptimal to be here today having not had this go to a select committee having had year after year of the Prime Minister telling us we must do something about this and then we have to rush this through because as my colleague Annette King said the shambles that would be created about that pay going into our accounts and then coming out again would be ridiculous. So we have to get this done but the fact is that the Government has dropped the ball around this issue consistently now and it now brings to us something where there are still many many questions outstanding which we will take up in the Committee stage.ANDREW BAYLY (National—Hunua): It is a pleasure to again talk to this bill at the second reading of the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill. It is certainly interesting to hear the diverse submissions from a number of the members and particularly the revelation from the previous speaker Grant Robertson who is obviously the Opposition spokesperson on finance that he has trouble with algebraic equations. I would have thought that he would have revelled in those calculations and would be looking forward to running his calculator over the sums but obviously not.The argument seems to have been slightly diverted. This bill is actually about us as MPs and I think personally that the Prime Minister was particularly courageous in making this change which he announced on 2 March. It is all about showing restraint. It is also about members of Parliament showing leadership. It is about the Government continuing to live within its means. I also would like to reiterate that the Prime Minister has a number of times previously discussed this issue and it came as no surprise that he finally had to act on it. The aspersion that this is a sudden rushed response is not correct. The Prime Minister has been clear about his position on this over a number of years and ultimately we have got to a point today where we as MPs are doing what is right.As most people know the bill has three parts. The first bit is about changing the criteria in the Remuneration Authority Act 1977 to take away the authority’s discretion on MPs’ pay increases. Secondly it puts in place a sole criteria that when determining pay increases it will be the average of the ordinary-time weekly earnings for a fulltime-equivalent employee in the public sector using the quarterly employment survey. Thirdly the changes of course will be backdated to 1 July 2014.In essence the bill provides for the Remuneration Authority to fix the salary of MPs having regard for their salaries having regard for their superannuation subsidy and thirdly having regard for their personal benefits—a combination of all three—in line with public sector pay increases. The law will come into force immediately following Royal assent and as I noted before will be effective from 1 July last year. The result will be an increase of 1.5 percent versus the 3.56 percent that was proposed.Using the quarterly employment survey will mean that the authority no longer has to take into account other factors such as comparable positions and there has been a number of speakers talk on that about other industries. We are public servants and we are here to serve the public and it is probably appropriate in this case that we have a different perspective on what our salaries and remuneration should be.The Remuneration Authority will just need to apply the annual quarterly employment survey amount. This will give certainty. It will be clear to everyone what our remuneration is and how it has been based and of course it is referenced back to the public sector. The Remuneration Authority can still look at the elements of our pay whether it has cash or non-cash elements and the indexing will occur at the same time every year.I commend this bill to Parliament. Thank you.JAMES SHAW (Green): I just wanted to pick up on something that the member for Wellington Central Grant Robertson said in his comments a few moments ago which is that this is a burning issue that people do care about it and that it is therefore appropriate that we are dealing with it. I agree. I mean this is a burning issue and it has been a burning issue for years and years and years. So it seems strange that given that it has been a burning issue for all of this time we cannot take a few weeks—or as the Attorney-General likes to call it 6 months of chit-chat—to do this properly to actually consider this properly.Mr Robertson also referred to the problem of some of the links between public sector pay versus the whole economy. He talked about the income gaps between people who are earning—also between people who are earning versus earners and those who own capital. I wanted to just reflect on that a little bit at the moment because it does have implications for why this bill is the way it is—in fact why our pay has been organised the way that it is.Since the early 1970s the gains of productivity have accumulated more to capital than they have to labour. That is just a straight economic fact. It was about 1990 when that really took off in New Zealand. That was I think the last year that wages in New Zealand rose at the same rate that our productivity did and as a natural consequence of that as the proceeds from productivity have accumulated more and more to capital the gains from that have accumulated more and more to chief executives’ pay because they are awarded more and more on the shareholder returns.So how that is affecting us is that in order to get public sector chief executives they also have to get paid at a level that can compete with private sector chief executives. That has been behind this huge drive to pay chief executives more and more and more while everybody else has kind of largely flattened out. So this is one of the reasons we think that linking it in the way that it is linked is not a great one.I said that we are going to be introducing some Supplementary Order Papers later on. I thought I would just introduce them now to kind of warm everybody up to them. So the first would see MPs’ salary movements being indexed to movements in the nominal median individual income as determined by the New Zealand Income Survey published by Statistics New Zealand. So that means that if the median income of New Zealanders goes up then MPs’ salaries would go up by the same dollar amount. If the median income of New Zealanders goes down then MPs’ salaries would similarly go down. That then ties our interests to the economic interests of New Zealanders rather than having them bifurcated. It is a simple and transparent way for the Remuneration Authority to calculate MPs’ salaries and it would focus our minds. More important it is a fairer system. Percentage increases just widen the gap between top earners and everybody else. So since the 2007-08 financial year MPs would have received an increase of only $4276 under this Supplementary Order Paper as opposed to $29800 under the current system. So if we are serious about tackling this then we need to take some initiative.Our second Supplementary Order Paper does not go quite as far as that one but it is still better—we believe—than what the Government is proposing. So instead of tying MPs’ pay increase to the public sector pay increase as calculated in the quarterly employment survey we would be using the labour cost index. The labour market statistics are a truer measure of the actual rate of increase than the quarterly employment survey because they measure what people are actually paid by employers rather than income. Under that system since the 2007-08 financial year MPs would have received an extra $14514 rather than the $29800 that we have actually received since that year. So if the Government is determined to use a percentage-based system then that we believe is superior to the quarterly employment survey.I will just repeat those. Under the status quo under the current system since the 2007-08 financial year the increase has been a total of $29800. That is why the public are getting—we think rightfully—outraged about that; very few other people have had that kind of increase in that short a time. Under our Supplementary Order Paper in which we are linking the increase to the median income that would have been only $4276. So instead of $29800 it would have been $4276. Under our second Supplementary Order Paper it would have been $14514. So we have run the numbers on these and we are confident in them and we believe that the Government can be confident in them as well. The problem that we have got with the bill as it is presented of course is that we do not have anything that we can really compare it with because of the process as we said that has been rushed.Just to sum up as I was saying I just wanted to reflect on the points that have been raised by some of the other speakers about the widening gap in New Zealand that has been driven largely by the changes in which the rewards of productivity are accumulating to capital over labour and the effect that that is having on chief executive pay and the effect that that is having therefore on the benchmarks that we have historically been measured against and that is why we are kind of in the pickle that we are in. So we believe as Mr Robertson said that tying it to something that is going on in the broader economy—not just one sector of the economy but the broader economy—and tying it to the economic interests of all New Zealanders makes far more sense than the proposal as it is.We will be introducing both of those Supplementary Order Papers as soon as we can because as we have noted before we are struggling to keep up with this truncated and unfortunate process. Thank you.TRACEY MARTIN (Deputy Leader—NZ First):Kia ora. I rise on behalf of New Zealand First. Yes it is a very difficult thing to keep up with this legislation; it is quite truncated. I appreciate the contribution of the Green Party member James Shaw and also the contribution of the Labour Party members. This has been one of the more educational debates to take place in this House for quite some time. That is because it is a burning issue. If it was not a burning issue if the people of New Zealand did not care about it then believe me we would not be here talking about it. It is my understanding that the Government actually knew about the announcement before the announcement was going to be made. It had an opportunity to actually take advice prior to the Remuneration Authority coming forward with its recommendation but Christmas is not really a good time to actually make these announcements. So we end up where we are now.Again I think all of us have said how unfortunate it is that we are in this place and this moment without the true ability to even just give it full attention. It is around algebra. I mean I do not know how many people in this House who would stick their hand up and say they are brilliant mathematicians when it comes to algebra. I am looking; there is nobody. That is good.Hon Michael Woodhouse: I am now.TRACEY MARTIN: Mr Nash has put his hand up. We will be testing Mr Nash in the dinner hour. And the Minister has said that he has very quickly learnt an awful lot about algebra—so there you go. I have to admit that I have been upstairs working through it myself trying to figure out what those letters actually mean. I think what has been most valuable about the contributions for me anyway to date is one the contribution from the first Green Party spokesperson who asked why we do not consider splitting this out. Minister why do we not consider splitting this out? Let us put a stop to the 3.5 percent. We all agree that the 3.5 percent is just out of whack and is not acceptable. Why do we not consider actually splitting it out then and taking a moment? Let us just go back to what we had before. None of us that I can pick up was gagging for an increase in pay. None of us was lobbying. None of us was trying to actually get more money because all of us are very aware of people inside our areas who live on a heck of a lot less or who are trying to live on a heck of a lot less than what we get paid to do our job.There would be no argument. We would probably not even need to take any more calls if we actually split that bit out and said: “Stop the 3.5. Go back to what it was prior to the Remuneration Authority.” And then let us take the next year to put the new equation the new criteria through a select committee process. Let us take some time and allow this voice of New Zealand—the voice of New Zealand—which we know is out there to actually come and submit around a select committee process because then we would have an enduring solution and I think that has been what has been pointed out by previous speakers as well. We have no doubt that this will come back. We often get pieces of legislation that have been pushed through. Let us give the benefit of the doubt. You know the staff who write the legislation are doing their best under time pressures. There is an outcome that is being desired and it is algebra.The equation was not right last week so are we sure—are we sure are we sure—that the modelling done this week is right? Are we sure that the quarterly employment survey is the thing that we should be working on? Are we sure that when we say in the legislation that “the Quarterly Employment Survey for the public sector average ordinary time weekly earnings for fulltime-equivalent employees using the change for the average for the year to June compared with the average for the previous year to June.” that that is going to give us the outcome that we seek? And what is the outcome that we seek? What we seek is that we do not want to be treated—I believe this is what we seek—unduly better than any other New Zealand worker out there. We want to be treated fairly just as they wish to be treated fairly. I do think that Mr Robertson’s point reiterated by Mr Shaw around the inequality that has grown between the average worker’s salary or wage and that of chief executive officers has contributed to this issue and yet we are not addressing it. I do think that that is something that if we were able to take more time we could have a really good look at it. I think this has highlighted that major issue.It just struck me that when the National Party member for the Wairarapa spoke last week he spoke on a bill where he argued about the need for the capacity for employers in his area to bring in workers who would work for the dollars they were offering as opposed to the member for Wairarapa standing and arguing that the employers of the Wairarapa needed to be supported to be able to pay the dollars the workers required and the dollars they would take that work for. Too often we are hearing about this. Too often we are hearing that New Zealanders will not take the job; whereas in reality New Zealanders will not take the job for the pay and conditions that are offered. And then there is an argument often from the Government benches that we therefore must bring in people to fill those positions that New Zealanders will not take. So I think it is a valid statement a valid comment that the lower pay scales and the higher pay scales inside the public sector area of New Zealand have got completely out of kilter.Are we appropriately attaching our pay to the right criteria through this bill? I would say that there is some mood that perhaps we are not. New Zealand First is also working to try to get a Supplementary Order Paper into the House—I am not sure how successful we will be—to make this bill which is to amend the Remuneration Authority Act 1977 cover all the people whom the Remuneration Authority has to consider not just members of Parliament. We think that that recognises how out of kilter these payments have become.There have been a couple of contributions from the Government benches. They have given the impression that we are voting for a pay cut and that is not the case. The words “pay drop” were used by Mr Woodhouse and I believe by Ms Dowie and also by Mr Young in the first contribution if you go back. They gave the suggestion that we were voting to give back money or to have a pay cut. Actually we are not. We are voting against an increase that was inappropriate. I just want to be really clear. We are not being that magnanimous. We are voting against an increase that is inappropriate. I would not want anybody to think that there are all these shining halos all over the place. What we have found ourselves in is a situation that reflects a problem in the wider society. We are not addressing the problem in the wider society and we know that that problem affects the lower-paid workers in New Zealand. It affects every other area of their lives.New Zealand First is not confident that this bill is going to do anything about that. It is not part of the criteria. It is not part of the brief. We get it. But maybe just maybe if we could take the first part to select committee maybe just maybe we might be able to have a conversation about the wider issues. Kia ora.SARAH DOWIE (National—Invercargill): In this second reading of the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill I just want to clarify a couple of points raised by me in the first reading. In doing so I agree with the member opposite the Hon Annette King that there is certainly no point in jawboning the authority. There certainly is not. But as part of this amendment I believe that the criteria not only needs to be clear but needs to be fair in the grand scheme of things when we look at the economy in New Zealand and obviously globally. As part of that I agree with what the Minister for Workplace Relations and Safety said. It is incredibly difficult to make comparisons between an MP’s role and other comparable roles. What is comparable when you take into account staffing levels accountability skills and results? That is not necessarily underselling us either but it is just incredibly hard to do when you look at the differences in the roles.I do believe that aligning us with the public sector the quarterly employment survey and the average salary movements and bracketing us with those hard-working individuals and officials who work for the Public Service is fair. We are experiencing 0.8 percent inflation. As has been mentioned by the Prime Minister if any increase is appropriate a 1 to 2 percent increase is appropriate in these times as we are asking our officials to live within their means and do more on less. With that I commend this bill to the House.Debate interrupted.Amended Answers to Oral QuestionsQuestion Nos 7 and 9 to MinisterHon SIMON BRIDGES (Minister of Transport): I seek leave to make corrections to answers I gave to question Nos 7 and 9 earlier today.The ASSISTANT SPEAKER (Lindsay Tisch): Leave is sought for that purpose. Is there any objection? There is no objection.Hon SIMON BRIDGES: During an answer provided to the House today in response to a supplementary question on question No. 7 I referred to decisions on the 10 bridges programme being made “late last week” when in fact I meant late in the week starting Monday 2 March. During an answer provided to the House today in response to a supplementary question on question No. 9 I referred to the board of inquiry process having been completed for the Pūhoi to Wellsford road of national significance. I have since been advised that the board of inquiry has consented only the Pūhoi to Warkworth section of the road.Remuneration Authority (Members of Parliament Remuneration) Amendment BillSecond ReadingDebate resumed.The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call. Metiria Turei—5 minutes.METIRIA TUREI (Co-Leader—Green): I just want to follow on from my colleague James Shaw and also to acknowledge the contribution from Grant Robertson who particularly focused on both inequality and that being the driver of increased pay and the driver of the concern about it but also his I think very clear description of the fact that this change means that the Government is in control of MPs’ pay. That is exactly the opposite of what many years of work have led to. It is exactly the opposite of the last Remuneration Authority bill that we dealt with in the Government Administration Committee a couple of years ago which was designed to give it more authority over MPs’ pay and allowances. So we are going backwards very quickly here.I do note that the Minister for Workplace Relations and Safety did not answer my question in his last contribution as to whether the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill would constrain MPs’ pay increases. I can assume only that is because either he does not know because they have not done the modelling or he knows that it is essentially the status quo.Hon Michael Woodhouse: I will address that in my speech.METIRIA TUREI: Well you had the opportunity Minister to address it earlier.Hon Michael Woodhouse: I didn’t have the time. Sadly I didn’t have the time.METIRIA TUREI: You did have the time. It would be good to do so quite soon because otherwise there is no assumption we can make except that the reason why the Government has chosen the quarterly employment survey as the criterion for the Remuneration Authority is that it makes no change and that that was politically palatable to National Party MPs. But actually they do not want to find any means of constraining MPs’ pay. I would like to think that that is not the case but until we see evidence to the contrary that really is the only assumption we can make.There was a very good discussion earlier about inequality and the fact that part of the reason why MPs’ pay is such an issue is that there are massive increases for people who are being paid high wages and basically wages are static and going backwards for many on lower incomes. That is certainly true. The Green Party has been very clear about policy on that as well. Our Supplementary Order Paper 57 which we are putting forward today to link MPs’ pay to nominal increases in the median wage is the one that we put forward last year so it has been on the table and available for the Government to take up for 12 months now. We have also very clearly set out issues around chief executive officer pay—for example the requirement for companies to disclose chief executive officer salaries more clearly define them and provide rationale for those pay increases; to have staff members on the committees that set those chief executive officer pay increases; to require New Zealand’s large companies to report on the pay ratio between their highest-paid and lowest-paid staffers; and to include pay ratios in Government procurement and for Government agencies.Pay ratio is a major issue here. It is the increasing gap between those on the lowest rates and those at the top. We see more information coming out today from the Council of Trade Unions describing how those in the top 1 percent have increased their income by around $100000 between March 2011 and March 2013 meaning that the increase is now 9.7 times more than that for the average worker. This is what is being seen daily by ordinary New Zealanders who are doing their best to get ahead. We have a country of two halves. The bottom half are static or going backwards fighting every day to have a good job and to do their best but still are not getting anywhere. We have the other half who are slowly moving forward and then at the very top there is the 1.25 percent who are moving ahead in leaps and bounds. For as long as MPs attach their salary to those top levels we will continue to be part of the problem.We can solve it. We can be part of the solution by attaching our salary increases to the nominal increases in the median wage which means that we link ourselves to the bulk of the New Zealand population and we have fair pay increases based on a criterion that is not determined by Government but determined by our overall approach to our economic and social policy. That is where the Green Party would like to see this Parliament go. We think it is the fairest thing to do. Thank you.The ASSISTANT SPEAKER (Lindsay Tisch): Iain Lees-Galloway—5 minutes.IAIN LEES-GALLOWAY (Labour—Palmerston North): This is my first opportunity to speak on the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill. I have not been following the debate this afternoon so I apologise if I traverse—Hon Ruth Dyson: What?IAIN LEES-GALLOWAY: I know. It is a shock. I apologise if I traverse material that has been traversed by other members previously. Let us be honest about why it is that we find ourselves debating this legislation. It is because the independent Remuneration Authority in determining the salary increases that MPs should receive determined a level that it believed was fair but was significantly out of kilter with what ordinary New Zealanders have received in terms of pay rises over the last 6 years or so. We have heard on a number of occasions that the Prime Minister has said that in his opinion MPs’ pay does not need to rise as much as it has done and that people would feel aggrieved about the pay increases that MPs get but that is in the context I say to the Prime Minister of ordinary working New Zealanders not getting ahead under his Government. I appreciate that the Greens have offered a Supplementary Order Paper linking MPs’ pay to median wages because median wages have barely moved under this Government certainly in real terms. Most people who are on the median wage actually in real terms find themselves worse off today than they did 6 years ago.It is interesting that the Government often talks about “average” wages which are pulled up by those at the very top getting proportionately very large pay increases whilst those who are in the middle and on lower incomes are not really getting pay increases that allow them to get ahead. That is why I think this Government so studiously avoids talking about the median wage but if it did and if it actually talked about what ordinary people who are on this middle income are getting then the story would not be nearly as rosy as it makes it out to be.We agree with and we will vote for legislation that perhaps tries to pare back the increases to our salaries to make them align more closely with what ordinary working people get but we really just do not think the process around this has been all that clever. First of all as we said the Prime Minister has been talking about this for years and years and years and yet suddenly he felt the need to act. I think the suddenly came along after some polling a couple of weekends ago. The focus groups probably told the Prime Minister that he needed to act and he needed to act fast. And this is a Prime Minister who is in need of some good news. Let us be honest. It has been a pretty rough start to the year. The Prime Minister was in need of something to demonstrate that he was in touch with the voters and this one suddenly popped out of the box. It was going to be debated last week but after it was tabled it was discovered that there were a few flaws. The Government went back to the drawing board and it has come back to this this week—Hon Ruth Dyson: What were the flaws?IAIN LEES-GALLOWAY: Ruth Dyson asks what the flaws were. It is hard to know even where to begin but I think the fundamental flaw was possibly that we could have ended up with a greater pay rise as a result of the legislation than we originally were. There were problems with it clearly. That is what happens when legislation is drafted after a focus group on a Sunday afternoon and tabled at the beginning of the week and then the intention is to put it through under urgency. So now we are back here this week hopefully with an improvement to the legislation. We will vote for this because we think this is hopefully going to move things in the right direction but we suspect that we will be back in the future. If we do have to come back in the future we hope that we do this with an appropriate process that actually gives the full machinery of government and all the officials the opportunity to have input into the drafting of the legislation and that it gives the public the opportunity to offer their thoughts so that we can actually build a piece of legislation like we do normally. This is why we have the process we have so that we can build good robust long-lasting legislation that is actually fit for purpose and does the job it is meant to do.We are concerned that we are likely to find ourselves having to come back and address this issue again in the future. We also have concerns—I know that others have traversed this—around the fact that this links MPs’ pay to the public sector. The public sector is actually the group of workers whose pay MPs have the most influence over. I can see that the Assistant Speaker is indicating that I am coming close to time so I will take my seat but I look forward to the Committee stage.The ASSISTANT SPEAKER (Lindsay Tisch): You will take your seat yes.Dr PARMJEET PARMAR (National): Thank you for the opportunity to speak on the second reading of the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill. As we have heard the Minister has addressed various issues raised by the Opposition. The main issue is that this issue cannot be addressed without changing the legislation. The sole criterion that will determine a member of Parliament’s pay increase has been debated and the sole criterion in the bill is the right one which I will address later on.The Remuneration Authority (Members of Parliament Remuneration) Amendment Bill is to amend the Remuneration Authority Act 1977 to require the Remuneration Authority to solely consider public sector wage movements when determining salary increases for members of Parliament.I am taking a short call to say that I am fully supportive of this bill. This bill is about fairness. This bill actually helps the Remuneration Authority so that the salaries of members of Parliament assessed under section 16(2) of the Members of Parliament (Remuneration and Services) Act 2013 can move up in line with those in the public sector. This bill sets the frequency of these adjustments. It also clarifies for the Remuneration Authority if there is no movement in the average earnings in the public sector.There has been criticism from other parties of rushing this through. This bill has been thoroughly thought through. It is time we address this issue and not just talk about it. The criticism from members of the public normally is that the pay increases of members of Parliament are higher than those in the public sector. This bill is to address that issue. As we know this bill is going through all stages today under urgency. This is because there is no justification seen in the Remuneration Authority’s determination of an approximately 3.5 percent increase in the salaries of members of Parliament.There were some comments from the Opposition about some positions in the public sector and even the private sector being very highly paid. Those salaries are decided by the market. Why would people work in a country if they are not rewarded for the value they add to the organisation? We need to be able to recruit and retain good people but this bill is not about their salary; this bill is about addressing the salary increases of members of Parliament only.The Government must ensure that people are listened to and are treated fairly and that is what this bill is about. We must lead by example and that is why I support this bill. I look forward to contributing more on later stages. Thank you.Hon RUTH DYSON (Labour—Port Hills): Once again at peak listening time I get the opportunity to take a call in this second reading of the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill. I just have to acknowledge the member who has just resumed her seat and say that that was a courageous attempt to defend what has been a series of amazing errors on behalf of the Government. We were told on Monday last week by the Leader of the House: “There will be urgency tomorrow to pass the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill.” So we were all prepared. There was no sign of the bill. Actually there was no sign of the Leader of the House either but that is not always a bad thing. Then we were told on Tuesday that the plans had changed and there would now be urgency on Wednesday to correct the MPs’ pay issue. Wednesday came and went. We were then told it was going to be Thursday. So in a 3-day sitting week we were told that all 3 days would be the day for urgency and then on Thursday we were told it would be this week.We received yesterday—or perhaps even earlier today; yesterday I think—version 7.3 of the Supplementary Order Paper that has now been incorporated into the bill. This is not a well-considered well-thought-through piece of legislation. The original draft risked parliamentarians—Hon Michael Woodhouse: I’m hurt.Hon RUTH DYSON: I do not hold responsible the Minister who is braving it and fronting it in the House. He may not have had the opportunity to read the latest version. I am not sure whether it has been run past him actually. But take the chance to before the third reading. It would be worth it. It would be worth it from our point of view to have this bill which is designed to correct the decision of the Remuneration Authority—and I say “correct” in the broadest terms because it has now become a political exercise—to make sure that MPs do not get a huge pay rise when clearly other people deserve it much more. That is the point of this legislation.The original legislation the Government was going to bring in several times last week ran the risk of increasing the pay of members of Parliament even further than the Remuneration Authority had proposed.Sitting suspended from 6 p.m. to 7.30 p.m.Hon RUTH DYSON: As I was saying prior to the dinner adjournment it is a good opportunity during the second reading of the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill to compare the actions that are proposed in this legislation with the portrayal by the Government of why it is taking this action under urgency and actually what is happening in the rest of the world.I certainly support this legislation and all Labour members will be voting for it but I have to say that it is a bit of a mess. We had on three occasions last week actually four counting Monday the Leader of the House saying that this legislation would be introduced under urgency the next day. The Minister Gerry Brownlee Leader of the House said that to us on Monday. Tuesday came and went. It did not happen. On Tuesday he said it would be introduced on Wednesday. Wednesday came and went—no legislation. On Wednesday he said it would be Thursday. Thursday came and went. Members returned home after the House rose—still no legislation.Then today we have the legislation with version 7.3 of the Supplementary Order Paper. This has gone through a lot of changes. Now we are going through all stages under urgency. The Supplementary Order Paper has now been incorporated into the bill. It is another structural change to the legislation that we are considering rather than having that as a Supplementary Order Paper and none of the opportunities of the usual consideration of a select committee.Even though it has taken the Government 6 years to decide that the process of the Remuneration Authority for setting MPs’ wages is not what it likes—it has been in power for 6 long years—now we get under urgency through all stages a bill that has clearly been problematic. The bill that was going to be introduced last week could not be introduced for a very good reason. The errors in it were detected at the last minute—I do not know who detected them. It was possibly the Hon Christopher Finlayson. He seems to be one who actually reads legislation; he is the only one whom I have noticed actually out of the entire Cabinet. Somebody picked up the fact that the proposed legislation ran the risk of actually increasing the salaries of members of Parliament by more than the Remuneration Authority had suggested and clearly that was not a runner.Although we support this legislation I have to say that the Government portraying itself as being fairer is a total nonsense. I do not think it is good practice to put in rushed legislation through all stages under urgency if you are serious about fixing a problem. It certainly could have been done some time ago. We knew that this issue was going to come up. Again prior to Christmas last year there could have been some proper cross-party talks about an alternative mechanism for fixing the salaries of members of Parliament that could be open and transparent and that the public could have some confidence in.At the same time as this legislation is going through and the Government is saying: “We are doing this because we want to be fair.” the Prime Minister and the Minister of Finance are announcing via the media to the public servants of New Zealand that they are going to have their wage increase promised by the Prime Minister and the Minister of Finance during the 2014 election campaign evaporate. Suddenly that promise like many of National’s promises is worth absolutely nothing. Actually the National Party campaigned on a promise of a good increase in the wages of public servants and now it is saying: “No we cannot afford it.” I guess it wants to put some of that money into its made-up surplus as well.The Government has increased the minimum wage by a measly 50c an hour—50c an hour—for the lowest-paid workers in New Zealand and it is trying to portray itself as fair and considerate. Well it is obviously a nonsense. The Government is ripping off New Zealand workers and New Zealand businesses to the tune of—not a little bit—$350 million a year the equivalent of 700 jobs that New Zealand workers and employers are paying in overcharged ACC levies. They do not need to be charged that much. They are paying too much in their ACC levies and that money is being taken out of ACC and put into a surplus. We have not seen that sort of behaviour since the Rt Hon Robert Muldoon. This legislation is being portrayed as: “We want to be fair. We want to make sure that MPs do not get huge salary increases while we are giving tuppence-ha’penny to the people on the minimum wage.” But the truth is that is exactly what this Government is doing.This has been quite a hashed process as I indicated. Last week we had several indications from the Leader of the House about this legislation being introduced under urgency and it has come in only today. We did have over seven versions of the Supplementary Order Paper none of which made sense. There has not been any public debate on what should be the core principles if the Remuneration Authority regime is going to be changed. In my view they are that the setting of any salaries for members of Parliament should not be made by members of Parliament; they should be independent it should be publicly transparent and accountable and it should have fair considerations. Part of that should be the consideration of what other people in our society are getting in terms of their wage remuneration.I remember in the 2009 Budget the first Budget that this National-led Government brought in there were massive tax cuts for the wealthiest people in New Zealand and at the same time there were cuts to home-care services for older New Zealanders. There was also nothing to help the wages of the people on the lowest income the minimum wage workers in New Zealand. Bill English said during that debate in Parliament that if people in New Zealand wanted to earn more money they should work harder. That is what he said in this House—if people wanted to earn more money they should work harder.I know that all members of Parliament work hard and come into this House to do better for their country. It is the highest form of public service but it is by no means the only form of public service. So we should not get paid more than we are worth. Public servants in New Zealand should get paid what they are worth and they are not and people on the minimum wage deserve to have their contribution valued more. Thank you.A party vote was called for on the question That the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill be now read a second time.Ayes 106New Zealand National 59; New Zealand Labour 32; New Zealand First 11; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 14Green Party 14.Bill read a second time.In CommitteeHon MICHAEL WOODHOUSE (Minister for Workplace Relations and Safety): I seek leave for all parts of the bill to be taken as one question.The CHAIRPERSON (Hon Chester Borrows): Leave is sought for that purpose. Is there any objection? There is none.Parts 1 and 2 schedule and clauses 1 and 2Hon MICHAEL WOODHOUSE (Minister for Workplace Relations and Safety): It is my pleasure to take the first of what I hope will not be too many calls because the bill is so well worded clearly articulated and mathematically correct that I am sure members who are of a mathematical bent will have no problem understanding it. On the other hand there may be some questions from other less erudite mathematicians in the Chamber including—and I must acknowledge one of my colleagues whom I just cannot remember who pointed out in the second reading that the person who aspires on behalf of Labour to be the Minister of Finance in a future Labour Government does not understand any of the algebra that was put in the bill. So I do hope that he has had some remediation over the dinner break.I do want to touch on a couple of the points that are specific to clauses in the bill and were made in both the first and second readings. I want to commence by touching on an issue raised by Tracey Martin in respect of equivalency in the question of the definition of “full-time equivalent” as described in new section 18B(2) inserted by clause 7 relating to how the average ordinary weekly earnings of fulltime-equivalent employees in the public sector is determined. Her question indicated or perhaps suggested that equivalency was “equivalent roles” in the public sector. The definition in that clause is very clear that that is not what is being suggested. Indeed “full-time equivalent” is a very well-used nomenclature not only in the public sector but in all sectors to describe that which is full-time not that which is equivalent. So it is not as if the Remuneration Authority is having to determine equivalent roles and then take a quarterly employment survey stratification of that. The quarterly employment survey as published quarterly and smoothed in the way that the bill describes it is the method for calculating. It is very straightforward; it does not require any great leap of faith or determination by the Remuneration Authority.I also want to touch on the issues raised by a number of members in respect of the use of the public sector quarterly employment survey as the determining calculation of the increase. In particular reference was made—at least by Mrs King—to a blogger’s analysis which she described as highlighting an error in the bill as it was introduced and she suggested that it was the formula that somehow would have resulted in MPs’ pay being higher had that original bill been passed. That is simply not correct and indeed that was not what the blogger was saying either. All the blogger was saying was that if one calculates the quarterly employment survey from 2009 to 2015 the term of this Government the average—Hon Annette King: That’s what I said.Hon MICHAEL WOODHOUSE: No that is not what Mrs King said. Mrs King said that the formula was flawed and resulted in the withdrawal of the bill last week. That is not accurate.Hon Annette King: Why was it withdrawn then?Hon MICHAEL WOODHOUSE: I mentioned why it was withdrawn. If the member had been listening to my second reading speech—and I suggest she goes back to Hansard—that was very clearly articulated. If she wants me to answer the same question a second time because she is mathematically challenged I am very happy to do that. But let us look at the annual quarterly employment survey as analysed by that blogger because indeed it is true that the average—Clare Curran: Name the blogger.Hon MICHAEL WOODHOUSE: Mr Farrar on Kiwiblog. I can give that member the date if she wishes. It is true that the average increase were it calculated over that period of time would have been higher than the actual increases that were handed down by the Remuneration Authority under the current legislation. Why was that? There were straitened times.The Remuneration Authority quite rightly interpreted the legislation in the way that it was intended. Indeed this is the only increase for all the tub-thumping and rhetoric from the other side about the Prime Minister talking a good game and not acting. In fact the Remuneration Authority listened very carefully and this determination set out in 2015 was the first increase of over 2 percent since this Government came to office. In 2009 and 2010 the quarterly employment survey increases were 4.8 percent and 5.5 percent. Why was that? It was because that was the ongoing sequelae of an out of control Labour Government that taxed and spent and taxed and spent and built up the Public Service until it was out of control in terms of numbers and salary growth and that locked this Government in to wage increases that went out years ahead. That was the parting gift—that was the parting gift to the incoming National Government. Ten years of deficits and salary increases that the Labour Government arranged before it left office—4.8 percent and 5.5 percent.Hon Annette King: So it’s a wide-ranging debate is it?Hon MICHAEL WOODHOUSE: Well I am addressing the questions and the challenges around the quarterly employment survey Mrs King. But if one looks at the moderate sensible serious analysis and control of Government spending as has been the case since this Government came to office and as articulated in the quarterly employment survey from 2011 to 2015 one paints a very different picture which is why the quarterly employment survey and the salary increase that is the consequence of this bill when it is passed will be 1.5 percent. I suggest to the Labour Opposition members that if they aspire to the Treasury benches again they will do so knowing that their profligate spending will have direct benefit for them and the public will have no truck with that. They had no truck with it when Labour did it as the Government—it was rightly thrown out as a consequence and it looks a long long time away from getting anywhere near the Treasury benches again. The quarterly employment survey is an appropriate measure for that purpose.Ms Turei challenged me to say whether the bill was designed to restrict or constrain MP pay increases and she said that if that is the case the Minister should say so. Well I say this: it is designed to constrain members’ pay increases to the same pay increases that are possible in the public sector they run. I think that the public understands that and says that that is fair enough. It is true that the circular argument could be: “Well the higher the public sector pay is the higher the MPs’ pay is.” And the counterfactual is also true. But I say good luck to any Government that wants to run that argument or to any Opposition that wants to run that argument lest they be in Government in the future.The last thing I will say is in relation to Grant Robertson’s intervention in the second reading around public servants’ pay being linked to ministerial pay. He said that he did not believe that public servants should be paid any more than the Prime Minister or other Ministers in their charge. It may be that the member was aware that the Remuneration Authority is actually aligned with him in that thinking. But here is the paradox in the member’s intervention. For all the tub-thumping about the scale of public sector executive pay increases the independent body that sets the pay for the public sector senior staff is the Remuneration Authority. If the Remuneration Authority thinks those people are worth that amount of money by the best analysis it is able to make in accordance with the law and if Mr Robertson thinks that the pay of the Prime Minister should be no less than that of any other public servant then I think we have started to come to the reason why we are here. Those relativities and the direction in which the Remuneration Authority was heading would have seen massive increases in MPs’ and Ministers’ pay which I think—the Government thinks—are not acceptable to the New Zealand taxpayer and are not acceptable to the Government.These are very sensible changes that actually take away some of that tension rather than add to it. The changes leave the Remuneration Authority free to continue to determine the salaries of those senior public servants and judges in an unfettered manner. That is what the public wanted; that was very clearly the response that we had on 25 February when the Remuneration Authority sent out its determination. The bill will achieve that and I think it is a very sensible response. I stand ready to answer any technical questions—technical questions—that the Opposition may have.Hon ANNETTE KING (Deputy Leader—Labour): We are down to the business end of this bill and it is time for some answers from Minister Woodhouse because in effect he has become the select committee the public the officials the arbiter the judge and the jury on this bill. He started his contribution in the Committee stage by telling us it was a very well-worded bill. We would first of all say: “Minister if that is well-worded it reflects your muddled thinking.” It is a very woolly worded bill. He also said it is grammatically correct. I am sure we have got some people on this side who can go through and see whether we have got the apostrophes in the right places. Maybe Hekia Parata our Minister of Education might like to go through it but maybe she does not need to because the Minister was crowing about how it is grammatically correct as if that was very important. He then said there are some less mathematically erudite people amongst us. I say to the Minister that if he is so mathematically erudite can he please explain the missing “p”. That is what I want you to explain to us Minister. Tell us about the missing “p” in your formula. The first formula you put up had two “p”s in it and now you have one “p”. So for those who do not know what the formula is the formula that we now have is: Sr + Sur = (Sp + Sup × (a ÷ b) – P.Hon Michael Woodhouse: “Pr”.Hon ANNETTE KING:But in the old one there was another “p”. I do not know where your “r” is at the last bit.Hon Michael Woodhouse: It’s in here. On page 3 at line 20.Hon ANNETTE KING: On page 3? I am on page 1 and I am reading out your amendments Minister—your amendments. So I want you to tell the Committee and the listeners—who will be very interested in how mathematically erudite you are—what the missing “p” meant. Why were there two “p”s in the old formula last week and only one “p” this week? I think this is important because the Minister told us how erudite he is that he knows algebra and that he could tell us what it meant. So Minister in a minute get on your feet and tell us about the missing “p” because I thought that was a pretty arrogant sort of a speech—telling people in here that you understood it and they did not. Maybe there are people here who do not. That is not a criticism of them and everybody has a right to question you Minister on what your legislation means.You also said Minister that David Farrar the trusted blogger of the National Party is now at this very moment polling up in Northland to see whether they are going to win or not. When National’s very reliable blogger its pollster put up a blog according to the Minister he got it totally totally wrong. He said he used Statistics New Zealand’s quarterly employment survey. He also said to his surprise it did not save any money. He was talking about the brains trust in the National Cabinet which put this together. He said MPs would have got even larger pay increases using the Prime Minister’s preferred methodology. Under the new law Minister if this law had been in place for the last 6 years or 5 years there would have been an average increase of 3.1. Is that right Minister?Hon Michael Woodhouse: I explained the—Hon ANNETTE KING: Is that right Minister?Hon Michael Woodhouse: The member wasn’t listening.Hon ANNETTE KING: No it does not matter. You are there to answer the questions; my job is to ask them. He cannot answer it. Under the current law the average would be 1.7. That is what David Farrar said. He has not withdrawn it—he has not withdrawn it. I would like the Minister to give David Farrar a little tinkle on the phone and tell him to write a new blog because thousands of New Zealanders read that and laughed. They laughed at a Government that brought in a bill last week and had to put it on the shelf for a week because it had not got something right. But we are not allowed to know what we did not get right in that bill because the Minister has not explained what went wrong last week. So Minister when you get a chance can you stand up and tell us why we were not debating the bill last week? Apart from the missing “p” there has been very little it seems to me that has changed. The member has got some answers he needs to give.I want to also address some of the issues he then diverted into. I thought “Well this must be a wide-ranging debate.” because he then could go back 7 years to talk about the previous Labour Government. He said that we were a Government that spent spent spent. Well can I say to the Minister that you have been a Government that has cut cut cut. You have had tax cuts—not for the ordinary people who are on low wages and who do not get big pay increases but tax cuts for those who already had the most. But worse than that you reduced the Public Service with lots of smoke and mirrors. The way you do it with smoke and mirrors is to say you are reducing the total number. “We are taking the back room to the front office.”Then we go to our financial reviews we go through the financial reviews and we find out that—oh yes—the Government might have reduced some numbers from the back office. They have now been relabelled and they have got new names and we have now got a whole lot of consultants who have taken over from the Public Service. So when you see the actual figures the number of public servants who are now employed by the National Government is slightly higher than it was under a Labour Government. The Minister just made a lot of noise about it.I have to say Minister that you know when a Government is not in control and it is what I call the “couch measure”—the expenditure on couches. You see under a National Government thousands was spent on couches for the bottoms of the Health Funding Authority people and for its former Minister Jenny Shipley. And what do we have now? We have the Ministry of Business Innovation and Employment spending thousands of dollars on couches. That is how the Government is hiding its expenditure—by putting it into fancy fittings. So Minister do not give us a lecture on what happened in the past because we can give you one right back and I think ours is probably a better one.Can I just conclude by saying that the Remuneration Authority was given a job to do. Today it has become the whipping boy—the whipping boys and girls—for the Minister because it did the job as it was required to under the law. It made a determination. We do not like the determination. We do not want its determination but it made a determination. Then the Minister said that by the Remuneration Authority’s best analysis it gave pay increases to chief executive officers. And what are we complaining about? Well it did the same for members of Parliament and we are complaining.Why not fetter the Remuneration Authority’s ability to give big pay increases to chief executive officers? That would be fair. This bill is to make it fair for members of Parliament when it comes to their remuneration. It should be fair. We should not be getting greater pay increases than other New Zealanders but neither should chief executive officers. That part is not being addressed by this Government. It is running away and running scared from it. So I say we will support this bill but I believe and I predict that the Minister will be back in a year’s time—Hon Ruth Dyson: Doing a Simon Bridges.Hon ANNETTE KING: —yes doing a Mr Bridges—correcting yet another mistake in rushed legislation that has not had the scrutiny it ought to have. It could have achieved what the Government wanted if it had not spent 5 years talking about it. The Government could have brought in legislation that went to a select committee but it has to pass this bill so it can stop members getting the pay increases that were given by the Remuneration Authority. So perhaps better planning and being a bit more mathematically erudite in terms of working out your timetable in Parliament might work.METIRIA TUREI (Co-Leader—Green): I just want to ask a couple of questions to get some clarification from the Minister in the chair Michael Woodhouse before I talk about the three Supplementary Order Papers on the Table under my name. The first thing is I think he was saying earlier that under National’s watch there has been no increase greater than 2 percent in MPs’ pay except for this most recent one. Am I right Mr Woodhouse that that was your comment? Because that is certainly not what the Parliamentary Library has said. It has described the percentage increases in MPs’ pay under the current regime as being from 2010-11 2.9 percent; 2011-12 5.2 percent; 2 percent in 2012-13; and 2.2 percent in 2013-14.There have been significant increases in MPs’ pay and they are percentage increases which means of course that compared with those on lower incomes who are getting a similarincrease—and it is very rare that they would—MPs’ pay is still going up considerably more in cash terms.That is where there is a significant failure in this bill that the Green Party intends to remedy with our Supplementary Order Paper 57 because this bill still applies a percentage increase. So if there is a 1.5 percentincrease or whatever it is arising out of the quarterly employment survey calculation and that is applied to MPs we still get more cash in our pockets than most of the rest of the public sector. That is the problem. Our wages will continue to grow and the gap between MPs and the rest of the population will continue to grow when you use a percentage formula because percentage formulas when you are talking about pay increases are very blunt tools. Percentage increases sound good because everyone is in theory getting the same but in fact when you have an increasingly divided society it means that those who get rich get richer faster and those at the bottom stay stuck.The Green Party solution to this which we announced in March last year—so it has been available for the Government to consider for some time—is to attach MPs’ pay not to percentage increases in the median wage but to nominal increases. So if the median wage goes up by 50 bucks a year MPs’ wages go up by 50 bucks a year. If it goes up by 200 bucks a year MPs’ wages go up by 200 bucks a year. Under our Supplementary Order Paper if it goes down if people lose forward momentum in their wages and in the median wage then so do MPs. Some of you will have seen the calculations that we sent out. In at least one of the years 2010-11 if our proposal was in place and had been in place since 2007 then in 2010-11 MPs’ pay would have gone down because the nominal median wage went down.We think it is so important to attach it to real income and the real lives of ordinary New Zealanders so that we are directly connected to their lived experience of their place in the economy. For MPs it might not be a problem. Losing 500 bucks a year in our pay is not necessarily going to mean that we are going to have problems buying milk and bread right? Because we all get paid pretty bloody well in this place. But for those on low wages and particularly on the median wage and wages lower than that it does make a difference. Every dollar makes a difference and we are shielded from that.We make the decisions about the dollars that they get and we are shielded from the reality of that. Hell I cannot even get the Prime Minister to come to a decile 1 school to meet with the kids there who do not have lunch every day. If we are that separated from the community we are supposed to be here to represent then of course we are going to make decisions that are not in its best interests but are instead in ours—which is exactly what the Minister’s bill as he has put it forward is doing. It makes it look like he is doing something useful; it is essentially the maintenance of the status quo. It locks in increases in MPs’ pay on a percentage basis and thereby increases the inequity between MPs and the community we are here to represent. We can change that at virtually no cost to ourselves. I agree with whoever it was on the National side who said we are not here for the money. Right? I totally agree with that. If that is the case then why are we so concerned to make sure we lock in pay increases for ourselves? Nobody else gets anything like that kind of certainty in their pay including the staff who work in this place. Nobody gets that level of certainty. Why can we not allow ourselves to be connected in this way to the rest of the community?I strongly urge members to look at our amendment Supplementary Order Paper 57. I just want to acknowledge the staff from the Clerk’s Office who have managed to prepare these three Supplementary Order Papers for the House in a very short period of time. Have a look at the calculation there—yes it uses algebra too; no I do not pretend to understand it. I am very grateful for those who do and are able to interpret our intentions into this technical bill. It does mean that we would have a direct pay-relationship with the majority of the community. It would be in our best interests then to improve the circumstances of everybody in our community not just the wealthy few. That is our responsibility. It is our responsibility as the Government on that side of the House and it is our responsibility as a Parliament to always be making decisions in the best interests of the majority of New Zealanders and particularly in the economic interests of the most vulnerable. This bill gives us a chance to do that in a very demonstrable physical way where we are affected—MPs would be affected—by our poor decisions that leave poorer New Zealanders worse off. That would be a true connection that we could make with our community. So I urge members to support this Supplementary Order Paper. Thank you.CHRIS HIPKINS (Labour—Rimutaka): I am very happy to take a call during the Committee stage of this bill. I listened very carefully to the contribution of the Minister Michael Woodhouse. I thought he made some interesting points and I thank him for the clarifications that he made during that speech at the beginning of this Committee stage. I would of course point out to him that questioning the numeracy skills of other members in a bill that he had to withdraw and then reintroduce because the numeracy in it was wrong was probably not such a good approach to opening the debate. However I do accept what the Government is trying to achieve. I think it would be wrong for us to come here and say that what the Government is trying to achieve is wrong. In fact it is what we all are wanting to achieve which is actually to bring MPs’ pay increases in line with everybody else’s.There is of course significant heat in the debate around the best way to do that. Unfortunately this is not the best forum in which to tease that out because we simply do not have the time or access to the expertise in order to be able to weigh up and assess the various options before us so that we actually get a solution that works. I for one would very much like to hear from the Remuneration Authority the people who have to actually implement this bill because what we are doing is constructing a new set of criteria that they are going to have to take away and figure out how they are going to interpret and how they are going to implement. But we are not giving them the opportunity to come to us and say that this is what this will actually mean in regard to their interpretation of the legislation that we are now passing.I do not think that is a good thing because I think it could mean that we will get something at the end of this year—or in a couple of months once the authority has issued a new determination—that is not what we are anticipating in this bill. It is also quite conceivable that in a year or two’s time the authority will be making determinations that we did not envisage as we passed this legislation. The only way that we can know those things is by actually getting the authority to come in and explain to us how it will interpret this. Unfortunately there is no opportunity for it to do so because this is being debated under urgency.I think it is very concerning that the Government is dismissing what are quite legitimate concerns being raised both in Parliament and outside of Parliament about the linking of this to the average of public sector pay. It is based on full-time equivalence but there are some issues within that. Let us take for example the restructuring within the Public Service. If you take a bunch of Government departments and amalgamate them together what tends to happen is that the number of managers and people on higher salaries increases because people who are going into managing a Government department of several thousand employees typically want to be paid more than if they were going in to manage a smaller Government department with a couple of hundred employees. We have seen significant reorganisation in the public sector over the last 6 or 7 years. In fact there was a reorganisation under the previous Government as well and in almost all of the instances where Government departments were amalgamated together the number of employees earning six-figure salaries significantly increased.So what this means by linking to the average overall is that we are not taking into account the fact that management salaries can increase significantly while the salaries of those on modest incomes can stay the same or in real terms in fact can even go backwards. So we could be getting a pay rise while the vast bulk of people working in the public sector are actually staying the same or going backwards because the management salaries at the top end are going up not just because they are getting big pay rises but because the overall composition of the way the Public Service is structured is changing and there are more managerial positions than there were previously because Government departments are getting bigger as a result of what has been in some cases I think some quite useful rationalisation.There has of course been management creep as well. The number of management roles stepping up over for example that $100000 a year threshold has actually increased quite significantly over the last 4 or 5 years despite the wage constraint within the Public Service. What that means of course is that those who are on modest incomes—the vast bulk of people—are either staying relatively stagnant or going backwards. The pay rises in 2009-10 that the Minister mentioned in his contribution included some pay increases for teachers nurses people working in other health professions the police—Hon Michael Woodhouse: Oh that’s all right then—runaway inflation’s OK.CHRIS HIPKINS: So is the Minister saying that he thinks there is not a single teacher in the country who should be paid more?Hon Michael Woodhouse: More than what? More than they are?CHRIS HIPKINS: No no the question—it is quite a simple question. Are teachers paid sufficiently or should they be paid more? There is no answer from the Government. The Government thinks that every teacher and nurse and police person—policeman or woman—is paid perfectly sufficiently and should get no pay rise and I think that is reflective of the attitude of the current Government. It has no answer—no answer. Dead silence when asked whether teachers or nurses or doctors or police should be paid any more.Ron Mark: How much are they getting?CHRIS HIPKINS: Absolutely no answer whatsoever. And that is a very good question that Ron Mark has asked: how much are they actually going to get? They have got pay rounds coming on this year and of course we know that the Government wants to dampen down expectations around that. Having gone with next to no pay rises for the last 4 or 5 years there are some expectations that—in fact Bill English promised them at the last election National promised at the last election to raise average wages significantly—the Government is going to deliver on that. Silly old public for believing what National had to say.Of course I do want to also note that two of those professions within the public sector—two of the largest of those professions teachers and nurses—are dominated by women. Would we in fact be that willing to suppress their pay if they were male-dominated professions? Would they be doing better? We know that overall men tend to do better and women’s pay has been suppressed and that has certainly been the case within the public sector.I want to just turn briefly to the Supplementary Order Papers introduced by the Green Party before I finish this particular contribution. I have had a chance to skim the Supplementary Order Papers that the Greens sent through. We did not get them until this afternoon and we did not get the final versions until just recently. That is not the Green Party’s fault; that is the Government’s fault for introducing this legislation late and only giving clarity around what we were actually going to be passing quite late. So we have not had the chance to go through those Supplementary Order Papers to tease them out and to be able to test them in the way that we would like to if we were going to give our support to them.I absolutely accept that there is a very real possibility that the Supplementary Order Papers that the Green Party is putting forward may be much better than the bill that we are debating but we simply do not have the opportunity given this urgency to go through and tease that out and test that properly and we would want to do that before we are willing to lend our support to them. So it is not a reflection of the fact that we do not agree necessarily with what has been drafted by the Greens; it is simply that we do not have the opportunity to go through it and test it properly. I absolutely appreciate the goodwill that the Green Party is showing in trying to come up with a solution that might actually deliver a better outcome than what the Government is proposing with this legislation.So overall I think it is important when we take away all the heat that we get back to the principle of what we are debating here: MPs’ pay should not be out of whack with the pay of every other New Zealander. Every New Zealander has had to tighten their belt over the last—well every New Zealander except for those on the highest incomes who generally have done pretty well over the past 4 or 5 years. But the vast bulk of working New Zealanders have had to tighten their belts over the last 4 or 5 years because of the economic climate and because their salaries have not been increasing in the way that they would hope.But I actually think that there is an expectation amongst New Zealanders now that National was to be believed when it promised significant salary and wage increases at the last election because it was in the National Party manifesto. I am happy to go and print it off for those members on the other side who did not read their own manifesto. New Zealanders expect to have some pay increases. The Government suppressing public sector wages for valuable public sector jobs—and we are not talking just about people who sit in offices in Wellington but we are talking about front-line people like teachers nurses doctors police and people who work in the Defence Force; those roles that we think are absolutely front-line services—means that those people are going to suffer if the Government continues to suppress wages in the way that it does.This should be a high-wage economy not a low-wage economy. The current Government’s aspiration seems to be that it is quite happy for it to be a low-wage economy. I would love to see MPs’ salaries going up in a few years’ time because everybody else in New Zealand is doing so well. That should be the aspiration of the current Government. It is not the aspiration of this Government.JAMES SHAW (Green): I would like to start by just responding to one of the comments from Mr Hipkins and thank you very much for your acknowledgment. You said that the Labour Party was not going to be supporting our Supplementary Order Papers because you had not had time to test and tease out the Supplementary Order Papers but of course you have not had time to test out the primary legislation either. So I say take a punt because it is not going to be any different from voting for the legislation as it stands. Nobody really knows how this is going to turn out so you might as well take a chance on us as they say. I think that I heard the Minister in his earlier comments talking about the reason for tying the MP remuneration to the Public Service. I believe I understood you correctly when you said that one of the reasons to do that is to make sure that a future Labour Government or a Labour-led Government would have the incentive to hold down public sector pay because it would be so ashamed of the consequences of having its own pay—Hon Michael Woodhouse: No that’s not what I said.JAMES SHAW: That is what I understood you to say before and I think that using the public outrage at MP pay increases to score a political manoeuvre to restrict public sector pay increases is kind of sneaky to tell you the truth. I would also just say that that could actually backfire. So what you are relying on is the fear of the opprobrium that future members of Parliament could attract in terms of their own pay increases to hold down public sector increases but I have a suspicion that the reverse could actually happen. So yes there would be some kind of reticence about allowing public sector pay to increase too much in case that means that MP pay goes up too much and therefore you get a public backlash—I can see that rather unfortunate logic there—but in time with the economic incentive of doing that to public sector pay you are actually saying to future MPs: “Increase public sector pay and your pay goes up.” Right? That is the actual economic incentive that you are saying to future Governments. So there is actually an economic incentive for MPs to increase public sector pay enormously. That would be quite convenient actually for MPs at an economic level at least.This is one of the reasons why we think that MP remuneration should not be tied purely to the public sector but it should be tied to that of the population as a whole and why it should be tied to the median income as we have laid out in our Supplementary Order Paper 57. I would like to get a response to that in the next round. The other thing is that I just wanted to say that we do have an opportunity given that just about everybody except for those on the Government benches has spoken about what a poor process this is—and this is not exactly lawmaking at its finest I think you will agree Mr Chair—that the third Supplementary Order Paper that we have got—The CHAIRPERSON (Hon Chester Borrows): Order! Please be seated. I have given the member quite a bit of latitude when he has referred to “your” but asking me whether I would agree with what he is saying—he cannot do that and bring me into the debate. Please carry on.JAMES SHAW: I beg your pardon Mr Chair. So we are looking for support for the third Supplementary Order Paper Supplementary Order Paper 58 which would ensure that members of Parliament did not receive the most recent round of pay increase as outlined by the Remuneration Authority but would give us time to actually go through a proper process with this legislation so that we can have a select committee process so that we can hear from experts so that we can hear from the Remuneration Authority and so that we can actually do a decent job of lawmaking around this. So if we cannot get support for our first Supplementary Order Paper which would tie MP remuneration to the interests of the population as a whole and if we cannot get support for the second Supplementary Order Paper which would use a better measure of public sector pay than the one that has been proposed then perhaps we could have support for our third Supplementary Order Paper the principle of which is to not take the pay increase that we were given and to give ourselves the time to do this properly.IAIN LEES-GALLOWAY (Labour—Palmerston North): I have learnt something interesting during the course of this debate and over the last few days and that is that according to the Minister for Workplace Relations and Safety pay rises in the public sector are a bad thing.Dr Megan Woods: What?IAIN LEES-GALLOWAY: Pay rises in the public sector are a bad thing according to Minister Woodhouse. This came up when the National Party’s pet blogger David Farrar started blogging around the issues of connecting MPs’ pay to public sector salaries. In particular he identified that there were periods of time in recent history when MPs’ pay rises would have been higher had they been tagged to the pay increases the public sector got. The Minister turned round and said that that was all Labour’s fault—that that was the result of a profligate Labour Government that seemed to believe in this bizarre notion that nurses and doctors and teachers and the Defence Force—Sue Moroney: And the police.IAIN LEES-GALLOWAY: —and the police force deserve a pay rise and that it is somehow a bad idea that these people should be paid a reasonable wage for the work they do. Of course one of the things that is important to note about a lot of those professions is they are quite heavily unionised which means that these are people who have got—[Interruption]—I do not know whether or not that means that the National Party thinks they are bad people but it does mean they have got the strength of collective bargaining. So if some of those groups did well in their bargaining—Paul Foster-Bell: Union thugs. Hired goons and the union thugs.IAIN LEES-GALLOWAY: So teachers according to Paul Foster-Bell are union thugs. The police are union thugs. Firefighters are union thugs. Nurses are union thugs. That is the language we get from the National Party—even the quiet little church mouse Paul Foster-Bell calls nurses “union thugs”. There you have it ladies and gentlemen. That is the approach we get from the National Party. The fact that these unionised workforces were able to negotiate for themselves good pay rises and the fact that the National Party thinks that that was a bad thing give us I think some insight into some of the employment relations legislation changes we have seen over the last few years deliberately designed to suppress wages by curtailing the influence and the bargaining power of the unions. So that I think tells us a lot about what the National Party thinks about the public sector getting pay rises.Hon Paula Bennett: Give it a bit more—you haven’t quite exaggerated enough. Take it to another level. Take your exaggeration to another level.IAIN LEES-GALLOWAY: Paula I simply quoted your own member back to you. I cannot exaggerate his words. I cannot exaggerate his words. He told me what he thought. He told me what he thought and I repeated those words back to him. I would hardly call that ramping it up.This bill does seek to do a good thing. The problem is that the mechanism it uses is poor and the process that has been used to bring this legislation before the House is extremely poor. This is an issue that has been around for a long time. As soon as John Key became the Prime Minister one of the first things I remember him talking about was the issue of MPs’ pay rises and them potentially being disproportionate when compared with the pay increases he expected ordinary working people—people who depend on work to make a living—would actually be able to get in New Zealand. So he has had 6 years—getting on 7 years—to do something about this issue.The latest round of pay increases obviously did not do very well in the polling. When David Farrar went out there and did the polling when they ran the focus groups over the weekend clearly there was a significant backlash from the public around the latest pay increase and so they felt they had to do something. So after the Sunday afternoon focus group quickly they ran off to the officials and got a draft bill organised and it was quickly introduced to the House. As we know that draft bill was then sort of left on the table for a while as all the issues with it were sorted out. The National Party went back to the officials and tried to figure it out. It tried to figure out how to do this properly without a proper process where we actually hear from as Chris Hipkins said the Remuneration Authority.I would actually genuinely like to know whether the Minister has consulted with the Remuneration Authority and for that matter who else the Minister has consulted with about this. What outside advice has the Minister actually sought in order to get this legislation as right as possible given that it will not go to a select committee? We are not giving the officials the proper length of time to actually closely examine this legislation and make sure it is fit for purpose. The public have no opportunity to come and give us their view on this legislation. Organisations like the Remuneration Authority have no opportunity to come to a select committee and give us their views to make sure this legislation is fit for purpose. We have had experience in this House under this Government of rushed legislation in the past and we have had the experience of having to come back to the House sort it out and make it right. There are a number of ways in which members in Parliament tonight have questioned the mechanism that is being used.I would like to turn to the Green Party’s Supplementary Order Papers. As Chris Hipkins has outlined because the legislation in its final form arrived late the Supplementary Order Papers then came after that and we really have not had time to consider them. I take James Shaw’s sort of wheel of fortune approach. I appreciate his view that we are taking a bit of a gamble on the Government’s legislation—why not take a gamble on the Greens? The simple fact is that the Government does have the machinery of Government behind it. It has the best opportunity to get this right.Actually we in the Labour Party were looking at some similar Supplementary Order Papers particularly around the labour cost index. I think we were going in the same direction as the Greens were. We decided we did not want to muddle the process any more than it already was and we were going to have to rely on the Government and its superb officials who have been put under a lot of pressure to try to get this legislation right. That is the benefit of being in Government—you have the whole operation behind you to get these things right. We do not have the same level of support in the Opposition. So we will take a gamble on the Government’s legislation. We suspect though as I am sure the Green members suspect that although this might be a step in the right direction we are going to be back looking at this again some time in the near future.The fact is that the reason there is so much discontent out in the general public about what MPs get paid is that essentially people who work for a living have been under a pay freeze for the last 6 years. As costs have gone up—many of those costs driven by decisions made by this Government when it cut taxes for the extremely wealthy put GST up put the petrol tax up and put ACC levies up so it could achieve a phoney surplus. All of those things are driving costs up for working people; meanwhile they are not seeing their wages go up at the same rate. That is where the distress about MPs’ pay actually comes from. So if this Government wanted to do something about the things that are driving people’s concerns about MPs’ pay it would actually have a laser-like focus on ensuring that people who work for a living and who are on median wages actually saw some progress actually felt as though they were getting ahead in life and actually felt as though their wages and salaries were sufficient to make ends meet to pay the bills to put a roof over their heads to feed their children and to try to get ahead in life. If the Government had a focus on those things we probably would not have to be here debating this legislation tonight.I agree that actually tagging our wages to what the general working population gets would be a good incentive for us to have our focus in the right place. I think we will be back having a look at mechanisms like that sometime in the future. This is a step in the right direction as a response to the outrage cried out by the New Zealand public but it is legislation by focus group. It is rushed and it is muddled and my fear is that it is going to be just another mistake on this path and that we are going to be back trying to fix it up again in the future.Hon MICHAEL WOODHOUSE (Minister for Workplace Relations and Safety): It is not my normal practice to challenge some of the outrageous things that our friends on the other side say—Hon Members: But.Hon MICHAEL WOODHOUSE: —but I do feel it is important to put some of the more outrageous comments in context. I can actually solve a mystery. I now know why the media thought that a technical problem with the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill was going to result in MPs’ salaries going up more than was expected and that is because Iain Lees-Galloway told them. He admitted as much in his second reading speech that why the bill was delayed was because the salaries would have inadvertently gone up. Well he made that up. He madeup a lot of his intervention. He talked about the National Government thinking that pay rises in the public sector are a bad thing that I as Minister have no time or inclination for unions. Nothing could be further from the truth. As the chief executive officer of Mercy Hospital I worked very closely with the New Zealand Nurses Organisation; the Amalgamated Engineering Printing and Manufacturing Union; and the Service and Food Workers Union and I had a very good working relationship with them. They are an important part of the employment relations landscape.Mr Shaw twisted words as well which I need to clarify—very very important. He has suggested that what I said was that this bill when passed would provide an economic incentive for keeping a lid on public sector wages. That is not what I said. What I said was that it would shine a second light on profligate spending increases by irresponsible Governments and I stand by those comments.Dr Megan Woods: What does that mean?Hon MICHAEL WOODHOUSE: It means stop spending so much because it is a proper discipline for Governments to have.Hon Member: How much is too much?Hon MICHAEL WOODHOUSE: How much? That is a very good question because that was the question I asked Mr Hipkins when he asked me whether public sector employees should get more. More than what? More than they are currently getting? More than inflation? More than the private sector? More than MPs? More than 4 percent? It was a rhetorical and stupid question. The one thing I will agree with Mr Hipkins on is this: we do want we all want a high-wage economy but one cannot legislate for a high-wage economy. One creates the climate to enable businesses to have the confidence to invest grow employ upskill and pay more and then gets out of the way and leaves businesses to get on with it and the public sector which I have to say is responsible for the same fiscal disciplines that the private sector is. We know that the public have had to tighten their belts through straitened times and they expect the Government to do the same.Now to the mystery of the missing “p” and Mrs King’s challenge. It is the one technical question I have been asked in the Committee stage and of course that is the purpose of the Committee of the whole House. The first bill when drafted had two “p”s in the equation in new section 18B set out in clause 7. One “p” referred to “personal benefit determinations in the previous year” and the other “p” referred to “personal benefit determinations in the current year”. Subtract one from the other effectively in amongst the algebraic equation. There was an issue in the transition because of calculations in 1 year that were not made in the other. So two “p”s became one and that is defined as the sum of the parts. There is no missing “p”. In the second bill one “p” does the work of two and I think that is a great metaphor for this Government. Productivity is up in the “p” sector. One “p” is doing the work of two under this Government and I think that is a really good metaphor for this bill.SUE MORONEY (Labour): That last speech was from the Minister the Hon Michael Woodhouse who lives just down the road from Wendy’s which has opened up in Dunedin using zero-hour contracts and he is all good with that. That comes from the Minister who is actually allowing aiding and abetting zero-hour contracts.I want to speak about the amendments to the Remuneration Authority Act 1977 because that Act has been a longstanding convention as to how we set MPs’ pays in this Parliament. The idea that we have an independent authority that actually undertakes an analysis of similar occupations and similar work that is done in New Zealand compares it with what MPs do and then makes a determination based on that is actually quite an interesting notion. In tearing that down the question that I want to ask the Minister is whether he is also attacking the Court of Appeal which has asked actually that a very similar process to this be undertaken to determine equal pay for rest home workers. In fact the Court of Appeal has asked that in the Kristine Bartlett case—where she has contested very bravely yes with her union the Service and Food Workers Union the idea that rest home workers are not being paid fairly—the parties come together and actually run through a process that is pretty similar to what the Remuneration Authority currently does; that is to look at similar work that has been done by male-dominated occupations and to see whether in fact the very low pay that is paid to rest home workers is the pay that it should be.So the question I have to ask the Minister is that in repealing and changing the process that the Remuneration Authority has been through is he also preparing to amend the Equal Pay Act 1972 so that rest home workers cannot get their equal pay issues attended to in the Court of Appeal? I seriously want the Minister for Workplace Relations and Safety to rise in terms of this debate and answer that question because there are tens of thousands of New Zealand women workers in low-paid industries who are going to be dependent on the outcome of that particular process. I want to know whether this is actually the stalking horse for making that change to the Equal Pay Act 1972. The Remuneration Authority and its processes are very similar to the sorts of processes that the Court of Appeal has asked the parties to go through in that case.I really want to turn this debate a little bit on its head. Yes absolutely I agree and we in the Labour Party agree that MPs’ pays should not be disproportionate to the pay of people in New Zealand generally. That is something that we strongly believe in because we believe in more equality and we in the Labour Party do not want growing inequality. So really what we should be thinking about if we want a high-pay high-skills economy is whether we should be actually tossing out these sorts of processes or should we be saying that perhaps those processes should be open to other groups of workers other groups of female-dominated occupational workers because that in fact is what the Court of Appeal is asking for in that event. I hope that this bill is not the forerunner of the Government cheating New Zealand women workers out of their day in court and out of actually having a fair process for setting their wages and conditions.I also want to raise the issue about the gender impact of the insinuation that the Minister has put before the House that this bill is a way of dampening down Public Service pay expectations because we know that some of the very big contracts up for negotiation this year involve tens of thousands of female workers of women workers—teachers and nurses. If this is the stalking horse for the Government dampening down the expectations of those workers who let us face it through the years of this National Government and the global financial crisis have sacrificed wage increases for the good of the country—they have sacrificed wage increases for the good of the country and it is their timenow.DAVID CLENDON (Green): I am pleased to be able to speak to this very bad piece of drafted legislation. It is a very disingenuous bill I should say. I think my favourite part of it is in new section 18B(2) which is to be inserted in the Remuneration Authority Act by clause 7. We get this wonderful formula that purports to be an objective formula intended to produce a transparent measurable non-arbitrary outcome. I had the privilege and benefit of studying economics as part of my Master’s programme at Lincoln University. Part of the discovery for me in terms of discovering economics was the extent to which economists rely on what are apparently very complex and convoluted formulae—and indeed they are—but inevitably they rest on a very dodgy basic assumption that is almost inevitably flawed. I think of that when I see this because this formula purports to produce a way of establishing income changes for MPs that is not arbitrary and that is transparent. What it endeavours to disguise is the political opportunism that lies beneath this bill.I have seldom seen a piece of legislation that was such a pure expression of political opportunism. The PM and his cohort saw an opportunity to capture the public outcry—the annual public outcry—following the announcement from the Remuneration Authority that MPs were going to get another pay rise.This cannot have been news to this Government that the public has been unhappy about the way in which MPs are awarded annual pay rises. The Green Party has been ringing this bell for many years and highlighting the importance the necessity of finding a non-arbitrary means a fair and reasonable means of establishing what is appropriate remuneration for MPs. We are absolutely in favour of linking it to something in the real world. The point about this legislation is that it has chosen something more or less at random—in this case Public Service increases or not. That is a defensible proposition. There are many more other defensible propositions and Mr Hipkins touched on this in his contribution earlier. The Greens have put forward our ideas about what we could link it to. I know that the Public Service Association and the public sector unions have offered a solution—something we could link to. I am sure that if the Remuneration Authority itself had the opportunity to speak to a select committee it actually might come up with some pretty sensible ideas about how we could do something better than simply sending the authority away to come up with a number every year having the public outcry and then getting on with business as usual.This is an appalling abuse of parliamentary process. There is no urgency underlying this legislation. It is not news that the public gets unhappy every year. It is not news that the way in which we set MPs’ salary conditions benefits and the like has been a debatable question and a point that has been contested for a very long time. I defy anybody to say that there is genuine urgency to resolve this matter here today.The point has been made several times that we thought we were having this debate a week ago but then with no notice the urgency motion that we expected on I think Wednesday afternoon simply did not eventuate with no information coming to at least two of the parties in this House representing about 20 percent of its membership. We actually did not know what was going to be going on that afternoon because the Leader of the House did not deign to tell us what was going to be going on reflecting the utter confusion of this Government which had this bright idea that it would ride this populist wave by coming out and speaking against the proposed increase in MPs’ salaries but then it suddenly realised that actually it is not as simple as that. You need some smart thinking. You need some information some analysis. You need input from expert authorities organisations and interest groups—it is called a select committee process. It is called a sensible deliberate sober addressing of a problem to come to the best solution.I have to say I have been surprised to hear from our other Opposition parties today a very good critique of this bill. There have been some very accurate and clear critiques of it highlighting its many flaws. Again one speaker—a Labour speaker I think—highlighted the fact that inevitably we will get unexpected outcomes and we will get perverse outcomes because we do not really know what we are signing up for tonight. The point has been made that some people actually trust that the Government has got it near enough right to merit having this bill supported today. We do not think it has got it anywhere near right. We think that given a proper parliamentary process we could probably come to a robust position that would actually endure over time and that would be fit for purpose none of which you could say about this bill.Any legislation that is drafted in a great rush based on an enthusiasm to appeal to populism to the public mood and to have a crack at MPs—and fairly so—is almost inevitably doomed to fail. What is the urgency around this? I would be interested to hear from the Minister what the reason for urgency on this is—the real underlying reason. Yes there was public outcry as there was last year and the year before that and the year before that. Why was a bill to change the process to change the system not brought to the House 3 years ago or 5 years ago by his Government? Why did it wait until there was an outcry—a big media storm about it—and suddenly decide to resort to this very shabby process to make law in the course of 5 or 6 hours that inevitably will deliver suboptimal outcomes?This is a very poor way to make law. The content is weak. It has obviously been thrown together in great haste. The process is appalling. It is anti-democratic and we are pleased and proud to be opposing this abuse of parliamentary time.Hon RUTH DYSON (Labour—Port Hills): I want to make just a brief contribution in the Committee stage of this legislation. The first point I want to make is to just express my disappointment in the Minister given that this is an issue that has had extreme public interest and actually he has got an overwhelming majority of members of Parliament supporting it. I would have thought that it would be a better approach to the Committee stage of the House during what is clearly rushed legislation—it is being put through under urgency; we have not had any consultation—to answer questions seriously and to listen to the comments particularly members like the co-leader of the Green Party Metiria Turei. She has three Supplementary Order Papers in her name. She has put up some arguments that should be considered. This is the only opportunity we have got. Instead the Minister has really made arrogance an art form tonight. There are better ways of doing that sometimes. I know that the Minister likes that approach but I do not think that it is always the best way. So I just caution him that at times like this when there is a lot of public interest—not just in the outcome but in the process as well—it is worth putting a little more effort in and trying to get it right.The second point I want to make is to reinforce the concern that Iain Lees-Galloway expressed in his earlier contribution—that is the dismissal by the Government of the use of median wage and its insistence on looking at average wage. It distorts what is happening in the real world. It undermines exactly what should be the purpose of this legislation which is to provide a fair basis for relativity when looking at the increase in wages for members of Parliament compared with other people. By using the average it always looks at what is often the result of an increasing number of people on much higher wages rather than what is happening to people on lower wages.The final point that I want to make is just to express my shock at a National Party member tonight who referred to public servants as “union thugs”—people like firefighters teachers nurses doctors a lot of caregivers in public hospitals and some really good people actually who we have argued during this debate should be getting a fair increase in their wages after having sat on the side line and waited for the last 6 years under a National Government. It is quite an inappropriate term. It was quite a surprising term. For somebody who stood in Wellington Central seeking votes it was quite a stupid thing to say actually. But I just want to express my sorrow that that sort of terminology is used in a debate that is actually not heated. This has been a pretty calm debate. It has been one where lots of different perspectives could have been listened to respectfully and could have been considered and answered and they were not.My concluding comment is to really tease the Minister for winding us up about saying how bad the seven first drafts of this legislation were. He was accusing us of making that up. It was his own blogger and pollster David Farrar who alerted the public to the fact—not the insinuation the fact—that the first seven versions of this legislation were all considered and thrown out by somebody in higher circles than the Minister. It was probably the Hon Chris Finlayson I suspect who is regarded as being the single member of Cabinet who actually reads his papers and draft legislation. All those seven versions were thrown out. It is widely known that the reason for them being thrown out was that instead of making sure that members of Parliament got a lower salary increase what they actually risked doing was giving members of Parliament a bigger salary increase. I find that point amusing. I think the Minister has been suitably embarrassed by it but he should not resort to name-calling. He should not accuse other members of Parliament of making things up which is what he did. We all know that it is true. He may not have ever read that earlier legislation and that is why perhaps he is remaining in ignorant bliss.I just return to the first point I made. This is a bill we support. It could have been proceeded with tonight with a little more dignity and I regret it was not.JAMES SHAW (Green): I would just like to respond to some of the comments of the Minister earlier. I think he may have misunderstood me so I just want to clarify. I think it is an important point for the passage of the bill. We were talking about the incentives that are contained in tying MPs’ remuneration to that of the public sector versus the wider public. The Minister for Workplace Relations and Safety clarified that his comments were that in tying MPs’ remuneration to the public sector it would shine a light on profligate Government spending in the future. I understand that. I just want to talk about how that works. What are the mechanics of shining a light on profligate Government spending? What that is saying is that if the Government allows public sector pay to increase therefore MPs’ pay will also increase and there will be a public backlash against members of Parliament for getting increased pay. Therefore there is an incentive for MPs to hold down public sector pay. That is how it works. It is relying on MPs being afraid of a public backlash so I understand what the Minister is saying when he says that.What I am saying is that that is one incentive that is pulling in one direction but that there is also another incentive pulling in the other direction which is an economic incentive. Tying MPs’ remuneration to public sector pay gives members of Parliament the economic incentive to increase public sector pay because when their pay increases so does that of members of Parliament. There are two incentives and they are pulling in different directions. I was suggesting to the Minister that if he is relying on using public outrage over MPs’ remuneration to hold down public sector pay which is I think an outrageous and very sneaky move given the current climate that may not actually work for the Minister because MPs also have another incentive in the other direction which is to increase public sector wages. They may choose to allow public sector wages to increase and just wear the outrage that we get from the public for allowing our own pay to increase along with it.There are a couple of things that I want to say about that. The primary one is that New Zealanders as I understand it do not want us to pass this bill in order to hold down the pay of teachers nurses doctors civil servants police officers and firefighters. They want us to hold down our pay. The point of the bill is to hold down MPs’ remuneration not that of the public sector and using the public outrage over MPs’ pay to hold down public sector pay is I think itself an outrageous move. The Minister’s approach using the fear of the public backlash is one incentive pulling in one direction and there is another one at play. By the Minister’s own admission shining a light on profligate Government spending may not actually work as far as the Minister is concerned. The bill is flawed in so many ways but part of the Minister’s own reasoning as I understand it is to use this bill to hold down other people’s pay other than our own pay. In fact according to his own logic it may not work because of the law of economic incentives which is that tying MPs’ remuneration to that of the public sector gives MPs the economic incentive to allow public sector pay to increase.I think public sector pay should increase. I think that would be a good thing right? You are going to have a Government at some point that does think that is a good thing—sometime soon we hope. But the Minister’s own logic which is that this is an opportunity to hold down public pay may not work according to his own plans. Thank you.RON MARK (NZ First): I rise to take a brief call basically just to get a few of my thoughts on the record. I have sat here quietly and listened to this debate as it has progressed and a couple of statements have stood out really glaringly to me. I think New Zealand First has made its view very clear. We support this legislation. We are not unhappy with the moves to curb the level of increase that members of Parliament have been accorded by the Remuneration Authority. It does not go far enough. It does not focus on the top end of the Civil Service—those chief executives and those people such as the Commissioner of Police who the Minister for Workplace Relations and Safety says thoroughly deserve their $300000 or $400000 a year that they get paid. We do not accept that.Actually if I was to take the Minister’s own words that it serves as an opportunity to shine a light on public expenditure then we would say to the Minister that he is absolutely right. It does serve as an opportunity to shine a light on public expenditure. It is an absolute opportunity to look seriously at what senior civil servants are being paid. We have had many opportunities to listen to the National Party whilst in Opposition over the years saying exactly that and saying exactly that about the chief executive officers of—oh what was one—Environment Canterbury for example and the Christchurch City Council. So it really is time for some people to put their money where their mouth is and actually move on those things that once before seemed to be quite abhorrent to them and yet today they seem to want to justify.The bottom line is that New Zealanders the very people whom the Minister says they are seeking to listen to in this legislation are saying this as well Minister. The levels of pay of some of our senior civil servants are unacceptably high to them. So I expect this Government will come forward with another piece of legislation to deal with that matter as well. If it means curbing the way in which the State Services Commission or the Remuneration Authority sets measures and determines those salaries then let us have that. Let us get on with it. And while we are there let us have a look at how they deal with the salaries and the allowances that are paid to officials elected to local government.The remuneration levels of some of the mayors in rural provincial New Zealand—and I can speak with authority because I have been one for 4 years—are pathetic in comparison to the duties and responsibilities that those mayors hold. The amount of money that some of our councillors are being remunerated for 6 days a week 7 days a week being on call 24 hours a day just like any MP would not even cover the cellphone bills that some of the National Party members were spending when I was in coalition Government as a junior Government whip. I can say that with clear authority because I was there as a whip you know. The Minister himself has been a whip and he knows the exact expenditure levels of each and every MP both outside Cabinet—The CHAIRPERSON (Hon Trevor Mallard): I would like the member to sit when I stand please. What I am going to give now not so much to that member but to the Committee generally is a warning that we have had quite a wide-ranging series of second reading speeches in the Committee stage of this bill. The Committee has accepted at the second reading the general direction and principles of the legislation. We are now talking about the technical details within the clauses and I would like members from now on to speak to them. Thank you.RON MARK: Thank you for the guidance Mr Chair. Like I said I just wanted to speak to some of the comments that had been made. I think Tracey Martin has already expressed New Zealand First’s view. We are comfortable with the legislation going forward. We are comfortable with supporting it. We do caution and I would add to the chorus of caution here that legislation that is moved in haste is often legislation that is technical in detail.I am not a mathematician by any stretch of the imagination although I did study engineering and I worked very hard at that. But I worry—and I would endorse the concerns of some people who have spoken earlier—about legislation that is technical in this nature fiscally technical and about the potential for error and that we might end up having to redress this all again. I do think that we have moved with haste. I understand the Minister’s need for doing that but I do think there is a danger here particularly given that the legislation has not gone through the scrutiny of a select committee for finding ourselves back here redressing this again.I want to finish by addressing with your tolerance Mr Chairman a comment made by the Minister in the chair himself: “We all want a high-wage economy.” Well zero-hour contracts do not give you that manipulating employment statistics for people who work only 1 hour a week do not give you that and driving down wages by employing foreign students and misusing and abusing foreign labour do not give you that Minister.METIRIA TUREI (Co-Leader—Green): I just wanted to address the other two Supplementary Order Papers in my name which I have not talked about yet but also just to note for the public two things. First the Minister has confirmed that this bill will not constrain MPs’ pay. What it does is it locks in increases. It will not constrain MPs’ pay. MPs’ pay will continue to grow at a percentage level and therefore increase the gap between MPs and the lower-paid workers in this country. That is what this change will do. It is one of the reasons why we are not supporting this bill.The second thing I would say is that the Minister went on at length in the Committee stage about constraining Public Service pay constraining Government spending which clearly demonstrates the purpose of this bill. This bill is not designed to meet the public’s concerns about MPs’ pay increases; it is designed to have a mechanism to justify keeping Public Service pay low. That was clear in the reasoning. The Minister has spent more time talking about this as a mechanism to keep Public Service pay low than about the public concern around MPs’ pay increases which clearly shows the purpose of this bill.I have two Supplementary Order Papers still. I have described one; I have another one Supplementary Order Paper 59 which uses a different mechanism in terms of the Public Service. What this one does is it uses the labour cost index from the labour market statistics. This Supplementary Order Paper is an alternative to the first one. It would mean that since 2007 MPs’ pay instead of going up by $30000 which it does under the current regime would have gone up by only $14000. So we would have had half the pay increases over the last few years than we do have under the current situation. It is a means to constrain MPs’ pay and is a much better measure for Public Service pay than the quarterly employment survey because this bill bases the change in salary and wage rates for the Public Service but it is a better measure.The labour market statistics are a much truer measure of the actual rate of increase than the quarterly employment survey because they measure what people are actually being paid by employers. This would mean it is a much fairer approach to using the Public Service as some kind of measure. It does mean there would have been a significant decrease in MPs’ pay over the last 6 years so it is a genuine constraint. The quarterly employment survey can be used but it is a very crude measure. What it does in the Government’s bill is it essentially maintains the status quo and locks in increases.Employers ask Statistics New Zealand about information on pay rates and they ask about the labour cost index. It is a truer measure of public sector pay. The State Services Commission uses the labour cost index. Its Human Resource Capability Survey of Public Service departments uses the labour cost index. Even the State Services Commission thinks it is a better measure for looking at pay rates across the public sector.Importantly we have also linked this to the changes in salary and wages for the Public Service as opposed to the public sector. The public sector is not an exact group to use for something this important. It is a much wider pool and includes higher wage movements in health education and local government. The Public Service is narrower and it puts MPs in a much closer position to public servants as they are more commonly understood so it is a better measure. If the intention of the parties is to have a measure that is related to the Public Service then ourSupplementary Order Paper59 is a much better clearer measure and it actually will constrain MPs’ pay increases.Our thirdSupplementary Order Paper which my colleague James Shaw has also touched on is the one that essentially removes everything in the bill except for the bit that revokes the current determination. So thisSupplementary Order Paper58 if it went through would mean that the current determination of the Remuneration Authority to increase MPs’ pay would be stopped. It would mean that this new determination would not proceed so MPs would not get their pay rise. But it would also mean that there is no additional measure so the current pay and conditions that MPs are working under would remain. Doing that would give us time to look at this bill through aselect committeeprocess and to have an opportunity for MPs and parties to look at each other’s alternatives.I do accept that for other parties that have looked at ourSupplementary Order Papers I understand their concern that they simply have not had time to assess them properly because there has not been time as part of the bill because we are in urgency. So it would mean that there would be alternatives other than the Greens’. TheMāoriPartyNew Zealand First theLabour Party ACT—I do not know whether it is supporting the bill; I would be very surprised about that but ACT may have ideas about how to constrain MPs’ pay. All of those ideas would be able to be put on the table and presented to the public. The public would have a chance to investigate and interrogate those ideas and to come to us and tell us what kinds of conditions what criteria and what constraints they would like to see and we would be able to come up with an enduring solution.So there is an option on the table tonight for political parties to stop the current pay increase—that isSupplementary Order Paper58—and then for us to step back a bit have another look at the Minister’s bill take it through aselect committeeprocess properly and have a fuller investigation as to what is the right measure because I agree there is no doubt that there are going to be mistakes in this and we are going to have to come back. And as can happen the mistake could be a significant embarrassment to theGovernment. It is the kind of thing where you could see where maybe there will be significant pay increases instead which is not theGovernment’s intention and it will have to come back to us and ask us to support fixing its mistake. Frankly that would be extremely difficult to tolerate and stomach because the Government has been well warned—the Minister has been well warned—that a mistake is likely and that there were alternatives on the table to prevent that from happening. So I would urge members to vote in favour of the preferred option which is tying MPs’ pay to the nominal median wage.The second option is tying it to the labour cost index which is a Public Service measure but a more appropriate tighter Public Service measure. And third if you do not like either of those measures then at least vote for the thirdSupplementary Order Paperto stop the current pay increase so that we can go away and have a good and decent look at this legislation.The fact is theGovernmenthas got the numbers. TheGovernmenthas got the numbers to pass whatever legislation it chooses—at least for the moment; that is true—so there is no need for urgency. The Minister has made no argument at all for urgency. He has not said a single thing about why it all has to be done tonight while the rest of the country is watchingThe Bachelor New Zealand and is very distracted I understand. There is no justification for doing this in urgency and he has made none because there is none. So it really is shocking that something so serious could be treated so trivially but given his own argument that the core reason for this bill is actually to constrain Public Service pay then I guess we cannot be surprised. It is a shame that National would treat both the Remuneration Authority and the New Zealand public and particularly the Public Service in such a shabby way. Thank you.MARAMA FOX (Co-Leader—Māori Party): I just wanted to rise and take a call on this at this stage because I wanted to assure the New Zealand public who are watching—because this is far more riveting than The Bachelor New Zealand—that in fact we have considered Supplementary Order Papers 57 58 and 59 that the Green Party has put forward and discussed them in the length of time that we have been given to discuss them at length and come up with what we think are our answers to this. The Greens have suggested in Supplementary Order Paper 57 that the median wage be the determining factor for whether we go up or go down. If the median wage goes up $100 then our MPs’ wages go up $100. Essentially the idea is not a bad one but there is just not the time in the shortened period that we have had to look at it to put enough detail around that and what about this what about that and what other factors might then impact on that.In a different Supplementary Order Paper they have suggested attaching MPs’ wages to the two indexes the quarterly employment survey and the labour cost index. The quarterly employment survey is based on actual real people. In fact if we look at it consistently we also have the paid parental funding and the superannuation determined by the quarterly employment survey and it is about actual people. We actually think that that is OK. The labour cost index is about wage inflation and it is done on a statistical theoretical basis so we are happy to support the Supplementary Order Paper which talks about the quarterly employment survey. This is because I am an expert in these fields and I have taken all the due consideration of the time given to us to consider this. We have rung people. We have gone out to our constituents. We have discussed it. We have tried to do what we need to do to ensure that we are supporting something that we can hand on heart say that we think this is what we should support given the circumstances that we are in.According to the Remuneration Authority apparently the Remuneration Authority could not use its discretion because of a piece of legislation that talked about equality. If we talked about setting our wages at the same level as people who work in a similar area across the public and private sectors then MPs’ wages would go up and that is what it determined. There was no appetite for that and that is why we are here having this conversation under urgency. The whole country stood up and said: “Please do not do this. That is ridiculous.” The reason they did it is because we do not give the same urgency to low incomes the minimum wage and the levels of benefit which need to have some urgency applied to them. That is why our people are living in poverty and we need to adjust that.I want to assure the public that we have considered the Supplementary Order Papers that the Greens have put forward. I want to thank the Greens for putting them forward because at least they have given us some options to look at. In this stage we think that we are happy with the legislation that has been put forward as it stands given the short period of time. We would have liked some more time. We would have liked the opportunity for the public to have submissions around this. Given the circumstances we are happy to support it. Thank you.DAVID CLENDON (Green): I just wanted to briefly make a couple of further points firstly about the commencement which of course is the day after a procedural assent etc. but in fact this is retrospective legislation. The effect of this legislation is to take us back to a day or a week before the Remuneration Authority fulfilled its mandate to come up with a proposal about an increase or a change in MPs’ salaries and to pretend that never happened.We generally are very suspicious of retrospective legislation. I am not blind to the fact that our third-choice Supplementary Order Paper—I think—also suggests a retrospective move to basically overturn the decision that was made. But not then to endeavour in the course of a week to cobble together in haste an inadequate substitute for that decision-making process which flawed as it may be—and we do agree absolutely that is has been flawed for a very long time. We wonder why the Government has not taken steps if it is genuinely concerned that that process of setting remuneration is flawed. Why has it waited until this moment to shove through a bill in the course of a few hours on a Tuesday afternoon? I do think that that is a point that we have yet to hear an answer from the Minister about. What is the basis of the rationale or the excuse for urgency?The other point I would like to comment on again is that the bill talks about a 12-month cycle. If we had the luxury of a proper parliamentary process if we could take advice from elsewhere and listen to submissions we might hear an argument—and it has been put before—that ought we not perhaps put this on a 36-month cycle rather than a 12-month cycle so that MPs come into this House at each election knowing roughly what their income their package of benefits and so on is going to be for the next 3 years? I would argue that might take some of the heat out of the public objection. At least it would be 3-yearly rather than an annual circus. I would suggest that if we do benchmark MPs’ salary movements to some average then you have got a 3-year average rather than a 12-month one which I think would make it more robust potentially more reliable and longer lasting.Again these are symptoms of something that has been cobbled together in great haste without adequate thought and without drawing on the undoubted expertise that is available in the communities of interest—be they specialised or simply the members of the public who might want to have a say. I wonder whether part of the Government’s determination to have this done and dusted in a few hours on a Tuesday is because it is unwilling to expose itself to the public to public input because undoubtedly a select committee looking at some alternative proposition would take the opportunity to have a crack at MPs. You would hear a lot of opinion a lot of rhetoric undoubtedly and that is fair comment. Maybe we ought to simply expose ourselves to that have a proper process and think about things like whether we should look at a 3-year rather than a 12-month cycle and whether we ought not underline the public outcry about MP remuneration. Should we not stop and think to ourselves: “Why is it that the public objects so strongly to MPs getting paid a bit more?”Maybe it is something to do with the behaviour that is routinely displayed in this House not least of all at question time—the yelling the shouting the behaviour that ought not be accepted in a third-form English class in any college on a given afternoon. Perhaps we need to look a bit more closely at ourselves our own behaviours and our own practices for an explanation of why the public does get so very angry when they see MPs apparently getting an increase in pay. I think—to channel our former colleague Mr Robertson—that maybe we need to think again about a code of conduct for this House. Maybe if the public saw us behaving in a way befitting members of this Chamber more often and more routinely maybe some of the heat would go out of this debate and it would become more rational more focused and a little bit more objective than it currently is. Thank you.MELISSA LEE (National): I move That the question be now put.Motion agreed to.A party vote was called for on the question That the amendment set out on Supplementary Order Paper 57 in the name of Metiria Turei to clause 7 be agreed to.Ayes 14Green Party 14.Noes 106New Zealand National 59; New Zealand Labour 32; New Zealand First 11; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.A party votewas called for on the question That the amendments set out on Supplementary Order Paper 58 in the name of Metiria Turei to clauses 5 6 7 8 11 and the schedule be agreed to.Ayes 57New Zealand Labour 32; Green Party 14; New Zealand First 11.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendments not agreed to.A party votewas called for on the questionThat the amendment set out on Supplementary Order Paper 59 in the name of Metiria Turei to clause 7 be agreed to.Ayes 14Green Party 14.Noes 106New Zealand National 59; New Zealand Labour 32; New Zealand First 11; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.Parts 1 and 2 schedule and clauses 1 and 2 agreed to.Bill reported without amendment.Report adopted.Third ReadingHon MICHAEL WOODHOUSE (Minister for Workplace Relations and Safety): I move That the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill be now read a third time. The bill is the Government’s response to the most recent determination of the Remuneration Authority which provides for an increase in the remuneration received by MPs of 3.56 percent effective from 1 July 2014. The Government considers this increase to be disproportionate to the salary movements in the wider public sector and unfair to taxpayers. The bill limits the Remuneration Authority consideration to applying the wage growth in the public sector as measured by the quarterly employment survey to MPs’ remuneration. The bill provides a fair response to the disproportionate increase in MPs’ remuneration by providing a measure that reflects the average growth in public sector wages. This ensures that the taxpayer is not unfairly burdened by any unwarranted increases in remuneration. In summation the Government believes that these alignments will align MPs’ remuneration with that of the wider public sector and will strike the right balance between the interests of taxpayers and those whose remuneration is being assessed. I commend the bill to the House.CHRIS HIPKINS (Labour—Rimutaka): That was a slightly shorter contribution from the Minister for Workplace Relations and Safety Michael Woodhouse than I was anticipating. I am happy to rise to do my final contribution in this debate on the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill. I want to just first of all say that the mechanism that this House establishes for determining how MPs’ pay should be set is a very important one constitutionally. It is not good practice for Parliament itself to be voting on debating and setting effectively what the taxpayer should pay us for doing this job. It is important that we put in place a robust mechanism that removes those decisions from this House and places them with an independent body that can make those decisions rigorously and independently.I think the public of New Zealand would like to have that reassurance that in fact we are not here feathering our own nests and debating things that are going to be in our own best interests and that there is someone independent making decisions about what a fair rate of pay for members of Parliament should be. This is in fact an important issue. No one here is arguing for a significant pay increase at the moment but ensuring that MPs receive a sufficient and appropriate level of remuneration is actually important for the transparency and integrity of the democratic system of government. It is actually one of the guards that we have against corruption. Making sure that MPs are appropriately remunerated for the job that we do is one of the ways that the public of New Zealand and the taxpayer can have the reassurance that we are working for them and not for other people who are paying us and giving us money for the work that we do. The only way that the public can have the assurance that that is what is happening is when those decisions are made completely independently of this House and when there are robust criteria for doing so.It has been apparent for some time now that there were issues with the criteria that the Remuneration Authority had in determining what MPs’ pay should be and it is high time that the House resolved those issues. This is not a good process for doing that. We have had 5 years of concerns. We have had 5 years where the criteria could have been properly and appropriately amended without the need to resort to urgency. It is therefore unfortunate that we now find ourselves in this position where if we do not conclude this debate this week under urgency—through all of the bill’s stages—then MPs will get the significant pay increases next week that we are here tonight trying to stop from happening. That could have been avoided if this had been dealt with through a much better more rigorous and proper process. Unfortunately that has not happened and therefore urgency is the only way now to stop those pay rises going through and being in MPs’ bank accounts next week.We on the Labour Party side have listened very carefully to the debate and we have engaged with it in good faith with the principle being that we wanted to stop those rises going through and we wanted to make sure that the criteria are amended in a way that is robust and that will provide an enduring and independent solution for how MPs’ pay is set. That is the reason that we voted in favour of the legislation and in favour of urgency because without urgency as I have said there would have been no way to stop those pay increases.However having listened to the debate we did vote in favour of Supplementary Order Paper 58 put forward by Metiria Turei which would have resulted in the legislation being passed now but stoppingonly those pay increases and leaving for another day the decision around what the new criteria should be because we do not think that this is a good process. We would rather that it went through a more rigorous process particularly and this is a big issue for me because I would like to ensure that the Remuneration Authority—the experts on this; the people who have to actually implement it—is able to provide some scrutiny of the legislation that we are now passing. It has not had the opportunity to do so and it will not have the opportunity to do so. As a result we cannot be sure that the legislation that we are passing now is actually going to do what it purports to do in the short term and in the long term. There is a possibility that in the long term this will give us bigger pay increases than the existing criteria that we have which we are now replacing. That is one of the reasons there needs to be greater scrutiny of these matters—so that we can be sure that the bill does what it is supposed to do. We do not have that because of the way this process has been rushed.One of the concerning things that became very apparent during the debate is that this debate is in fact only partly about MPs’ pay and that actually the wider agenda from the Government is to suppress the pay overall across the whole of the public sector including teachers doctors nurses police prison officers and so on—we could go on and on through all of the professions. It is very disappointing to hear members from the National Party referring to those who work for the good of the public and who want pay increases as union thugs. I think that is very disappointing. I think that after a long period of time when their pay rises have not kept up with inflation—in fact in real terms their salaries have gone backwards—it is fair enough that they are asking for a pay increase.I heard Bill English claiming—I think it was either today or yesterday—that in fact teachers for example have had pay rises above inflation. So I went and looked at the top of the teacher salary scale. These are the most experienced teachers the longest-serving—teachers the ones who do not have any other management roles or whatever and who are just simply at the top of the teacher salary scale. Here are the real numbers: in 2009 they were paid $68980 and as of last year they were paid $72646. So let us be clear. These are the most experienced teachers. That is a 5.3 percent pay increase. What did inflation do during that time? It was 9.3 percent during that time. Actually in real terms a teacher who has no management responsibilities and who is at the top of the salary scale has gone backwards in the last 4 or 5 years under this National Government and yet Bill English is saying that they should not be getting any pay increase at all. They have seen the real value of their incomes eroded during that time.So the Government is up against the wall this year when a lot of these big public sector collective agreements come up for negotiation because actually people have been promised for 5 years by this Government—and maybe longer—that there will be jam tomorrow but jam never actually comes and they are saying that they have had enough of that. I think that is quite understandable. I think it is wrong that the Government uses this debate on MPs’ pay to try to suppress the debate over wider pay issues within the public sector. I do not think MPs should be getting significant pay increases of the magnitude that were recently awarded but I actually do think it is probably time to look at some of those pay rates in the public sector because there has been a lot of belt tightening.Finally I just want to make one last contributionin this debate and that is around the actual formula that this bill is now establishing which links MP pay increases to the average increases within the public sector. As I have raised during earlier parts of this debate that can create some unintended consequences because the overall average increase in the public sector can be distorted by higher-than-average increases in managerial salaries for those at the top of the salary scale and lower increases for those who are on regular and low incomes. As a result our pay will go up while the pay of the people whom we are most interested in protecting—the people out there who are not getting pay increases—continues to go backwards. So this formula does not necessarily deliver on the sentiment and the value proposition that the Government is putting forward which is one of the reasons why this rushed process is not acceptable. The Labour Party has supported this bill going through simply because we had no choice. It was the only way to stop those significant pay increases going through next week. It is not good process. The Government could have and should have acted on this much much earlier.JONATHAN YOUNG (National—New Plymouth): Thank you for the opportunity to speak on the third reading of this bill. Can I just say there were some pertinent points that Chris Hipkins the previous speaker made and thank you for the support that he and his colleagues have given to this bill. I think when we look at how the Remuneration Authority determines its salary bands and settings one of the things that it does do is look at fair relativity with comparable positions the need to be fair to both individuals whose pay is being set and to taxpayers the requirements of the job the need to recruit and retain competent individuals and any prevailing adverse economic conditions.I guess in many regards the mystery of the magic of how all of this comes together is now being faced with a different process which I believe brings transparency.Every year the salaries are set in accordance with this formula so that we are not going to get any big surprises and huge headlines. It is going to be predictable. It is going to be something that the public sector across the board has already received the previous year. I think in many regards people in our country will say this is a process that is going to work and brings that degree of transparency certainty and I would say even equivalency through this process. I am very happy in the final reading of this bill to commend it to the House. Thank you.IAIN LEES-GALLOWAY (Labour—Palmerston North): I support this bill and commend it to the House.ANDREW BAYLY (National—Hunua): It is a pleasure to rise to lend my support to this Remuneration Authority (Members of Parliament Remuneration) Amendment Bill of 2015. This bill is all about MPs showing leadership. We as MPs need to demonstrate restraint. It is only appropriate that this bill makes these changes. The Prime Minister foreshadowed some of his concern and the outcomes are just. Aligning our pay to the public sector is a good way to go. It is fair it is equitable and it is reasonable. I commend the bill to the House. Thank you very much.METIRIA TUREI (Co-Leader—Green): The Green Party will continue to oppose this legislation. I want to thank Labour and New Zealand First for supporting Supplementary Order Paper 58—the one to restrict MPs’ pay rises so that it would have given us a chance to deal with the substantive legislation in a more timely and democratic manner. I really do appreciate that support. I also understand how difficult it is to have to deal with Supplementary Order Papers at such short notice for parties so thank you for your consideration.We are opposing this legislation because it does not do what the Government says it wants it to do. It is actually designed for an entirely different purpose. The purpose of the legislation as we have seen described by the Minister in his contributions during the Committee stage is to constrain public sector pay. That became very very obvious from the Minister’s statements. He talked about “profligate public spending”—is that right? There were comments from the National Party about “union thugs”. I think both of those comments just in such a short debate on what should otherwise have been quite a tight conversation about MPs’ pay increases just go to show that there is no intention by National to constrain MPs’ pay. It is simply using the political opportunity of this supposedly huge public outrage to attack ordinary workers—people like teachers and nurses people who are involved in the Public Service people who dedicate their lives to helping New Zealanders get through the various circumstances that they have to get through. National is clearly intent on attacking them. It follows on from other legislation that National has put forward that has taken out the tea breaks for example for New Zealand workers and that has continued the plan of National since it took Government to erode the conditions of workers in the private sector and increasingly in the public sector. This legislation has been used to do exactly that.New Zealanders should rightly feel that they have been manipulated by National through the use of this bill and that their concerns about MPs’ pay rises have been trodden on by National with this bill because this bill does not constrain MPs’ pay but is being used to attack their own people. When we are talking about New Zealanders in a context like this we are talking about people who are in the Public Service or have dedicated their lives in some form to the public sector. We are talking about family members of people who work in the Public Service. We are not that far removed from each other in this country. We are a little tiny country and we are very connected to each other. There is no real “us” and “them” and so when Government uses legislation and manipulates legitimate public concern for nefarious political purpose—that is keeping pay low for workers—every MP in this House should be seriously concerned and prepared to tell the New Zealand public what is being done to them by this Government.Our initial assessment of this legislation was that it failed to do the job that it was supposed to do. Our committed opposition to this bill continues and is strengthened because it is so clear that this was a manipulative exercise by the Prime Minister the Minister for Workplace Relations and Safety and the National Government and we will have no part of it. The Green Party is opposed to this bill. Thank you.TRACEY MARTIN (Deputy Leader—NZ First): Kia ora Mr Assistant Speaker. I rise for the final contribution of New Zealand First on the bill and I pick up on the comments made by Metiria Turei. It is unfortunate that it appears the Government has taken an opportunity to actually step on the workers of New Zealand. New Zealand First is very disappointed that Supplementary Order Paper 58 which the Green Party put up and which would have split off and therefore stopped the 3.5 percent increase for MPs here tonight—but that Supplementary Order Paper would have sent the conversation about the Remuneration Authority’s set of criteria by which it sets the pay of members of Parliamentthrough a much longer process. It would have sent that back and into another bill that would have gone through the select committee process which the New Zealand public would have had the opportunity to speak about.If the purpose here today is to say to the New Zealand public that we the members of Parliament understand that times are tough—and they are tougher for some than they are for others—and if the purpose of this moment in time is to say that we understand that that could have been done by a single piece of legislation that said: “We will not accept that.” It was not a requirement for us to actually come up with another formula here tonight. New Zealand First agrees with the Labour Party—we are concerned about the formula. The fact that it was version seven by the time we got to 10.30 today with people manipulating algebra here there and everywhere gives nobody any confidence that this is right. Not a single one of us—and actually not a single backbencher—understands that equation I guarantee it.Paul Foster-Bell: That’s not right.TRACEY MARTIN: Guarantee it—you might not be sitting on the backbench tonight Mr Foster-Bell but I will guarantee that the ones who are do not understand that equation. But that is not the point.It is really unfortunate that the conversation ended up going down to comments like “union thugs”. It is very very unfortunate. That was not the purpose that we were all here for tonight. It was unnecessary. This was supposed to be about us making sure that the New Zealand public—and Mr Bayly keeps saying it—saw leadership from us. It is very unfortunate that as it would appear through the statements made by the Minister for Workplace Relations and Safety and through other members this is actually not about us. This is about controlling New Zealanders as they enter into what are supposed to be negotiations. It is a great shame that that is where this Parliament has come to—that we are prepared to legislate now to stop free and frank and honest negotiations between workers and ourselves. It is an indictment upon this Parliament.The other thing that we do need to be careful of—and New Zealand First again agrees with the contribution by Mr Hipkins; it has been particularly enlightening Mr Hipkins’ contribution and it has been very worthwhile listening to—is around the word “corruption”. I know it is hard sometimes but sometimes the truth has to be said and in this moment with this contribution Mr Hipkins has been enlightening. It is around the word “corruption” and it is quite a serious thing to be frank. It is around the word “corruption”. There was a time in this Parliament when the only people who could come to it were rich white men who had independent means. They were the only people who could come here. The only reason we have the diversity we have today is that we have a system that supports a variety of representation. We must make sure that we the Parliament do not turn this thing so far back that we end up with rich white men as representatives for us all because we know how badly that works.New Zealand First is disappointed. We will support this bill. We will support it because we must stop the 3.5 percent pay rise for ourselves when we cannot share it across our nation with other people. That is true. But we also would reiterate again that we would have preferred the criteria to be set with the public not by us on the public because at the end of the day they pay us and they should have had a voice in that algebraic equation. Kia ora.SARAH DOWIE (National—Invercargill): I commend this bill to the House.JAMES SHAW (Green): I would like to start by thanking the public servants who helped to draft the legislation and who were in here later tonight after hours to help guide it through the House. It must have been hard for them to hear the Minister say that one of the motivations for this bill was to hold down their wages in the future.I think that there are a number of flaws with this bill. The Government’s motivation for tying MPs’ remuneration to that of the public sector specifically is one of them. In saying to public servants and teachers and firefighters and doctors and nurses and so on that we are going to tell members of Parliament that they should be afraid of the public backlash on their own pay in order to hold down your pay is I think absolutely outrageous and it is one of the reasons why we are opposed to this bill.It is poor-quality legislation—we can see that. We have no idea what the actual impact of this will be. There was no regulatory impact statement. We brought numbers to this House analysing what we knew of the bill last week. We brought numbers to the House that showed what the changes would have been under both of our Supplementary Order Papers but the Minister did not do that. We have actually not been shown by the Government what the actual impact of this legislation would be. So we are about to pass a bill and we do not actually know what it is and as a number of people have said most people in this House who are voting for it do not know what the algebraic equation in the bill actually means—what it says. It is a shocking piece of lawmaking.That is in large part because it is being passed under urgency and I would like to say that the National Government has had 6 long years to do something about what is now considered a burning issue. Six long years—long years—in which it has done absolutely nothing until the last 10 days when all of a sudden it was so important it was so important that we had to use urgency as if this was some kind of national emergency. It is not a national emergency; it is an emergency for National. This is not worthy of an abuse of this process. The Minister has provided no case for this bill to come through under urgency. We could have put this through under a normal legislative programme. We could have had select committee stages we could have heard the evidence we could have heard from the public we could have weighed the options and we would have had a much higher-quality bill where people actually understood what the impact was going to be when they voted for it. They would have actually understood that but tonight instead we are going to vote on a bill it is going to pass and we have no idea what it is actually going to do except in some kind of theory.I would like to thank Labour and New Zealand First in particular and I would also like to thank the Māori Party for its gracious words about the Supplementary Order Papers that we put forward in Metiria Turei’s name. We know that because this is such a poor-quality piece of legislation—a number of MPs have said this—we will be back in the House talking about this legislation before too long because we know that it is busted. So we will be fixing it and we will be calling on those who supported us tonight on those Supplementary Order Papers for their support to fix the legislation and to tie MP remuneration to the New Zealand median wage which would tie MPs’ economic interests to those of all New Zealanders. If we were to do that our pay would rise and fall with the pay of the country as a whole.So we have made that case we appreciate that it has been listened to by both sides of the House and we have done everything that we can on this one. We will continue to hold that flame alive. We will not be voting for this bill although some people have said that this is some kind of improvement on the status quo. But we will not be voting for something that is such an appalling abuse of process and such a poor-quality piece of legislation. It is better to retain the status quo and to allow that to happen than it is to put through such a shoddy piece of legislation. We will be looking forward to the next time—and I cannot imagine it will be too long—that we have to address this. Thank you.MARAMA FOX (Co-Leader—Māori Party): Although the Māori Party congratulates the Prime Minister on moving at lightning speed to address the obvious anomalies and although we are about making change—and this is one that we support—while we are at it let us be bold. Let us have the courage to take a fresh look at the bigger picture of income inequality. I am reminded of the wisdom of Dr Martin Luther King Jnr: “The ultimate measure of a man is not where he stands in moments of comfort and convenience but where he stands at times of challenge and controversy.” The challenge and controversy has to be in tackling head-on the widening income inequality and in particular to understand the financial material hardship of whānau Māori.A recent study by Lisa Marriott and Dalice Sim revealed that although New Zealand has had some success in reducing inequalities the gaps in inequality among the majority of the indicators investigated in this study show worsening outcomes for Māori and Pacific people. A total of 21 indicators were investigated including health knowledge skills employment standards of living cultural identity and social connectedness. Of those 21 12 indicators—57 percent—reported increasing gaps between Māori and non-Māori over the last decade.So this is where we come to whānau ora. One of the six outcomes that we might expect to see whānau succeeding in under favourable conditions is wealth creation so we want to add that concept into the discussion. How is it fair that on one hand we can give out 50c and on the other hand we still will see an increase of about $5000 and more under this piece of legislation? Let us not just settle ourselves into being satisfied with that new public sector index while that means that MPs’ salaries will still increase in line with average public sector salaries because all that those parallel increases will do is sustain and retain the existing inequalities of remuneration.We all know that inequality has a long-term effect. Income inequality experienced early in life leads to reduced social mobility later in life. I understand that we are running out of time. I know that we want to get this through and we have come here under urgency but I want to make these points. We could investigate having a living wage. The Māori Party thinks it should be $18.80. We currently have a minimum wage that is set at a level of poverty. We are paying people to be impoverished and that needs to change. We should add urgency to that. Let us address income inequality in this country. I like the fact that we are doing something about this and we are taking it seriously but there is so much more that we need to take seriously in regard to income.I will finish with this: successive parliaments have created abject failure in addressing income inequality in a meaningful way. Labour or National Māori Party or the Greens—whatever ideas have come up through members’ or Government bills through select committees or question time the point is we still have not fixed the widening gaps. We are pleased that we have moved quickly and clearly to fix the issues around the remuneration of MPs but if we can move that rapidly for this issue why not apply the same rigour to looking at the issue of income inequality and addressing the enduring circumstances associated with whānau poverty in a sustainable effective and mana-enhancing way? Kia ora Mr Assistant Speaker.Dr PARMJEET PARMAR (National): I support the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill and commend the bill to the House. Thank you.A party vote was called for on the question That the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill be now read a third time.Ayes 106New Zealand National 59; New Zealand Labour 32; New Zealand First 11; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 14Green Party 14.Bill read a third time.Sittings of the HouseJOANNE HAYES (Third Whip—National): Members have made excellent progress with our business this evening and there are only a few minutes to go. I seek leave for the House to rise early.The ASSISTANT SPEAKER (Hon Trevor Mallard): Is there any objection to that process? There appears to be no objection.The House adjourned at 9.54 p.m.