Volume 706 Week 18 - Tuesday 2 June 2015Text is incorporated into the Bound VolumeVolume 706 Week 18 - Tuesday 2 June 2015[Sitting date: 02 June 2015. Volume:706;Page:4161. Text is incorporated into the Bound Volume.]Tuesday 2 June 2015Mr Speaker took the Chair at 2 p.m.Prayers.Questions to MinistersEconomy—Performance and Support for Vulnerable New Zealanders1.JOANNE HAYES (National)to the Minister of Finance: What reports has he received about the economy’s performance in the lead-up to the Budget last month?Hon BILL ENGLISH (Minister of Finance):I have received a number of reports including Treasury’s Monthly Economic Indicators report for May. It confirms that for the most part the domestic economy started 2015 on a solid footing. Job growth remained strong in the March quarter buoyed by above-average levels of business confidence and activity expectations. Treasury also noted that New Zealand’s robust relative economic performance has strengthened net migration inflows while also enticing more people into the labour force with a record high participation rate.Joanne Hayes: What do more recent trends in business confidence show and how do these trends compare with historical averages?Hon BILL ENGLISH: The ANZ’s latest Business Outlook survey shows that business confidence and firms’ expectations for employment investment and overall activity are easing. However as ANZ noted these indicators are receding from high levels. The lower confidence levels are more in line with the moderate growth outlook underpinning the Budget forecasts. Confidence in the agricultural sector has understandably eased now that lower dairy prices have been confirmed and it looks as if the construction industry is adapting to a flattening out of strong growth.Joanne Hayes: What lessons does he take from recent trends in business confidence in other economic indicators?Hon BILL ENGLISH: I think the main lesson is that when you are a small open economy there are always going to be events happening in the world that are working against economic growth as well as events that are working for economic growth. That is why the idea that the Government should second-guess which industries ought to grow is just nonsense because we could never quite figure out what the right mix is meant to be. Instead this Government is committed to protecting and improving the economy’s resilience so that we can adapt to whatever happens. One of the natural buffers is the floating exchange rate. In July last year the New Zealand dollar reached US88c; today it is around US71c. Even when one sector such as dairy has lower prices other sectors such as tourism international education the wine industry information and communications technology and high-tech manufacturing continue to register strong growth—all of which are creating new jobs.Joanne Hayes: What approach did the Government take to ensure that the benefits of the growing economy were shared by some of the most vulnerable New Zealand families?Hon BILL ENGLISH: The Budget outlines a future of moderate growth in a resilient economy. That gives us the opportunity to make choices that frankly other developed countries do not have. In this Budget we decided to offer some more support to the lowest-income families and also to work to help more of the parents of our most vulnerable children into work. That is why we have increased obligations on those on a benefit to be available for work and why we have provided extra childcare support.Climate Change—Collaboration with Other Parties2.JAMES SHAW (Co-Leader—Green)to the Prime Minister: Does he stand by all his statements?Rt Hon JOHN KEY (Prime Minister):Can I just begin by congratulating the member on his election as co-leader of the Green Party. In response to the question the answer is yes.James Shaw: Does he stand by his statement about the Green Party made this morning that “We’re not saying we’re opposed to working with them on issues but we work with every political party on issues.”; if so does he see climate change as an issue worth working on?Rt Hon JOHN KEY: In answer to the first part of the question yes.James Shaw: Does he believe that the 1993 cross-party accord on superannuation is an example of consensus politics that has been positive for the country; if so why will he not seek to build cross-party consensus on climate change given that both are examples of issues that carry an enormous potential cost to taxpayers?Rt Hon JOHN KEY: I think that the Government has been quite clear about climate change. It has got the emissions trading scheme and it is in the process of going through a consultation process on what our post-2020 targets should be. I think what is very clear is that the Greens’ perspective on what New Zealanders should have to pay when it comes to climate change is far more significant than what the Government believes the economy can bear. A target of a 40 percent reduction on 1990 levels would be disastrous for the New Zealand economy.James Shaw: Which of the following options creates a better framework for New Zealand businesses to thrive: option A a stable predictable and sensible price signal on carbon that is backed by all major political parties; or option B policy settings that change with every change of Government?Rt Hon JOHN KEY: Option C: do not vote for a change of Government and you will get continuity.James Shaw: Is he aware of the cross-party accord in the United Kingdom on climate change signed by David Cameron Nick Clegg and Ed Miliband; and given the success of that accord there why is he not open to negotiating a similar—[Interruption]Mr SPEAKER: Order! [Interruption] Order! The member has every right to ask this question and I wish it to be heard. The member can start his question again.James Shaw: Is he aware of the cross-party accord in the United Kingdom on climate change and given the success of that accord there why is he not open to negotiating a similar arrangement here in New Zealand?Rt Hon JOHN KEY: If the member is going to model himself on Nick Clegg and Ed Miliband I suggest that while he is having his welcoming and congratulatory drinks that he also has his farewell drinks.James Shaw: So is he—Rt Hon Winston Peters: I raise a point of order Mr Speaker. [Interruption]Mr SPEAKER: Order! This is a point of order.Rt Hon Winston Peters: I listened to that question very carefully and to the answer as well. The question was asked twice. The answer in no way sought to address the question.Mr SPEAKER: I have some sympathy for the point of view that the member is raising but the difficulty that I have is that the first question asked which then caused some disorder mentioned some other names that were not in the supplementary question. On that basis—I agree that it was a marginal call—I decided to proceed with the question as asked and the Prime Minister in answering it referred to some parts of the first question that were not exactly repeated in the second supplementary question.James Shaw: Is the Prime Minister saying that we in New Zealand cannot achieve something that bitter rivals in the UK can achieve by putting their differences aside on the issue of climate change and since when did he set his political sights so low?Rt Hon JOHN KEY: It is quite clear that different political parties have different views when it comes to climate change. What is true is the Government is going through a consultation process for the target that it intends to take to Paris. If the member wants to have his political party actually go through the process and put in a submission as part of the consultation process the Government will consider it along with all other submissions.James Shaw: Why will he not put politics aside and seek to work with other parties to reach a lasting and durable cross-party agreement on the climate that puts in place an emissions reduction target that New Zealanders can be proud of?Rt Hon JOHN KEY: It is pretty clear that the Greens want to have a reduction target that is significantly greater than what either the economy or consumers can afford or what would be fair. When the member says that he wants to have discussion and consultation with the Government what he really means is that he wants the Government to see it the Greens’ way and in my view that would be disastrous for the economy.Foreign Affairs Minister—Confidence and Saudi Arabia Free-trade Negotiations3.ANDREW LITTLE (Leader of the Opposition)to the Prime Minister: Did he approve of Minister McCully’s dealings with the Saudi Arabian businessman Hamood Al Ali Al Khalaf?Rt Hon JOHN KEY (Prime Minister):Yes. The full Cabinet agreed to the proposals put forward by Minister McCully in a paper that was tabled in the House last week.Andrew Little: When his Cabinet made its decision to pay $4 million of taxpayer money to private Saudi interests how much of the payment was for intellectual property?Rt Hon JOHN KEY: I do not have those exact details but I am aware that it fitted within the $4 million that went to the business hub part.Andrew Little: When his Cabinet made its decision to pay $4 million of taxpayer money to private Saudi interests how much of the payment was for settlement of the then threatened legal proceedings?Rt Hon JOHN KEY: I do not think it would be right to claim that you could actually compartmentalise it in that particular way. There was a range of different issues and they included the potential exposure of a legal claim wanting to resolve the issues that were holding back the Gulf States free-trade agreement the fact that we thought we could promote New Zealand in an international environment and we thought it was the right thing to do.Andrew Little: Did he know that the $4 million payment which Minister McCully told Cabinet was for intellectual property and settling the legal claim was really a facilitation payment and could he please enlighten the House on the difference between a facilitation payment and a bribe?Rt Hon JOHN KEY: The member is really making some pretty silly statements. The $4 million was paid to Al Khalaf’s company under a contract for services between the Ministry of Foreign Affairs and Trade and that company. It related to costs associated with shifting the operations that were previously based in New Zealand to a new hub in Saudi Arabia.Andrew Little: Given that answer why does Minister McCully’s Cabinet paper state that in return for the $4 million the private Saudi interests would “use their best offices to connect New Zealand Government and trade interests with key Government and commercial decision-makers in Saudi Arabia” and what is that but a bribe by any other name?Rt Hon JOHN KEY: As I said the advice I have had is that the $4 million was paid on the basis of a contract for services. It related to costs associated with shifting. They included the intellectual property and access to a physical location in Saudi Arabia and other items listed in the Cabinet paper that was released last week.Andrew Little: Can he give a categorical assurance that Murray McCully was fully transparent with and did not mislead Cabinet?Rt Hon JOHN KEY: I am quite confident that Mr McCully fully advised Cabinet.Andrew Little: When he said that he wanted higher standards in Government did they include tolerating senior Ministers misleading Cabinet and using taxpayer funds to buy off foreign sheep farmers; and is it not time for Murray McCully to go?Rt Hon JOHN KEY: Someone polling 9 percent might want to reflect on whether it is time to go.Rt Hon Winston Peters: Will the Prime Minister make available to this Parliament and the public all the legal advice and opinion that Cabinet received behind this deal; if not why not?Rt Hon JOHN KEY: No as is consistent with the way legal advice is always treated and was treated when the member was the Minister of Foreign Affairs—if he bothered opening the legal advice I suppose.Social Bonds—Mental Health Services Pilot4.Dr SHANE RETI (National—Whangarei)to the Minister of Health: How will social bonds help deliver better health outcomes?Hon Dr JONATHAN COLEMAN (Minister of Health):Budget 2015 set aside nearly $29 million for social bond pilots that will see the Government paying upon delivery of solutions to tough social challenges. Social bonds will see NGO providers partnering with sources of private capital to deliver on contracted outcomes in health and other social sectors.Dr Shane Reti: How will the first social bond work?Hon Dr JONATHAN COLEMAN: The first social bond will build on a successful pilot where an NGO has placed employment experts into a general medical practice to assist mental health patients into work where appropriate. While the contract details are being finalised an NGO provider in partnership with a private source of finance will agree to deliver an increase in outcomes for this patient group. Payment occurs when results are delivered.Darroch Ball: Is the use of social bonds not simply the Minister’s admission that the Government’s form of investment approach and welfare reform have failed outright and does he think that profit not people is the right motivation to solve our complex social issues?Hon Dr JONATHAN COLEMAN: No absolutely not. This is in addition to everything we have already done. We have tried some very innovative solutions during our time in Government to achieve some of those tough better public service targets and that is why the lifetime liability for beneficiaries has decreased by $7.5 billion under this Government. That is why there are 42000 fewer kids in New Zealand living in beneficiary homes than 3 years ago and we will continue to focus on what works.Hon Annette King: In light of his answer to Dr Shane Reti is he aware that an employment officer was placed within a primary health organisation when we were in Government but his Government cancelled such a project?Hon Dr JONATHAN COLEMAN: No but what I am aware of is that when that person was the Minister of Health she was not successful in getting—Mr SPEAKER: Order! The Minister will resume his seat. He answered the question in the very first part of his answer.Social Bonds—Mental Health Services5.JAN LOGIE (Green)to the Minister of Health: Can he guarantee no NGO that embarks on a social bond contract in order to assist people with the most complex mental health needs into work will go under as a result of not meeting agreed targets; if not why not?Hon Dr JONATHAN COLEMAN (Minister of Health):One of the benefits of social bonds is that they protect service providers by shifting financial risk away from the providers and on to investors who provide the funding and who are better placed to absorb risk. This allows the Government to pay for results and to access the expertise and local knowledge of NGOs and service providers without exposing them to financial risk that they cannot necessarily bear. Although the Government will not provide guarantees to service providers it is taking steps through social bonds and other programmes to pay for better results for New Zealanders but at the same time help service providers to better manage risk.Jan Logie: So I assume that was a no.Mr SPEAKER: Order! That question was answered very fully by the Minister. The member now accepts the answer and just proceeds to ask her supplementary question.Jan Logie: Will he guarantee that no one with high mental health needs will be bullied into an unsuitable job in order to ensure an investor gets a return on their investment?Hon Dr JONATHAN COLEMAN: Yes.Jan Logie: How will the Minister guarantee that?Hon Dr JONATHAN COLEMAN: Through the contracting process.Mr SPEAKER: Sorry?Hon Dr JONATHAN COLEMAN: Through the contracts that we sign.Jan Logie: Does he agree with the Department of Internal Affairs which advised against social bonds because investors by nature are looking to maximise profits while minimising risks and that a low-risk social investment completely defeats the purpose?Hon Dr JONATHAN COLEMAN: No That is not what the Department of Internal Affairs said. I have a report here in front of me—the advice to me from the Department of Internal Affairs—which says that social bonds are “… an exciting financial instrument with the potential to revitalise social policy delivery and inject private sector funding and innovation into the sector.” I thought the Greens would actually be in favour of social entrepreneurship but if it is not their idea then apparently it is a bad idea.Metiria Turei: I raise a point of order Mr Speaker. Given the Minister has just quoted from an official document I suggest that he then table it for the House as—Mr SPEAKER: Order! This is easily resolved. If the Minister is quoting from an official document—[Interruption] He is? Then would it be tabled please. It will be tabled.Document laid on the Table of the House.Social Bonds—Mental Health Services6.Hon ANNETTE KING (Deputy Leader—Labour)to the Minister of Health: What advice if any did he receive on the “Better Public Services Seed Funding: Social Bonds Pilots”?Hon Dr JONATHAN COLEMAN (Minister of Health):I have received a wide range of advice from Treasury the State Services Commission and the Ministry of Health and I have got a feeling that I am about to receive some more advice from the member.Hon Annette King: Why has he not released the KPMG reports into social impact bonds in light of the United Kingdom’s Peterborough prison pilot which his Government called a world leader but which was cut short and investors did not receive a return on investment for the full contracted period?Hon Dr JONATHAN COLEMAN: I think that is very much the point. If these social bonds programmes do not deliver results then the investors do not get the return. So there is no risk for the Government because we are contracting for results and we are saying that we will pay when the results are delivered. If that happened in Peterborough I presume that the provider was not delivering—end of story.Hon Annette King: Why has he chosen mental health sufferers as guinea pigs for the Government experiment when the pilot programme costing at least $1.13 million from the health budget did not recommend mental health for social impact bonds and the Department of Internal Affairs report commissioned by that department which the Minister quoted—but not all of it—said not to engage in trials or implementation but to monitor overseas experience?Hon Dr JONATHAN COLEMAN: The first thing is that these are social bond pilots. The second thing is that we have not shied away from striving to achieve results in areas that are very difficult to make progress in. So that is why with mental health clients we are determined to help them get back into work where appropriate. I think that the Labour Party should actually be getting behind this and giving us a pat on the back because we are going to contract for outcomes that will make a real difference to the lives of mental health patients and I would ask what is wrong with that.Barbara Stewart: Does this move not show a clear privatisation agenda and a move towards an initial public offering as reported by Bloomberg in an article today?Hon Dr JONATHAN COLEMAN: No.Hon Annette King: Has anyone told him that funding for NGOs providing mental health services in the community has not increased for at least the past 5 years and this latest hare-brained scheme is nothing more than privatisation dressed up as social investment?Hon Dr JONATHAN COLEMAN: What they have told me is that under this Government the funding is actually delivering better results than ever. Unlike under the last Government which poured in more and more money but delivered no results we are actually making sure that money is guided where it is needed. We are measuring results and this is part of that. We are not going to pay for it unless we achieve a result. I know it is anathema to Mrs King but that is a fact.Hon Annette King: Is he aware that the barrier to getting mental health sufferers into work now is prejudice so how do social bonds paying a profit to private investors change that prejudice?Hon Dr JONATHAN COLEMAN: That is very much the point: there is prejudice. So we have to use innovative means to actually overcome those barriers. The member would prefer us to do nothing because actually she does not care about employment outcomes for mental health clients. We do.Hon Annette King: What is correct: when he said that social impact bonds will focus on an area where the Government is not currently active—“So actually we’re not getting an employment outcome for people with mental health problems.”—or when he said in the same interview “There’s been a very successful programme run partnering with a NGO to get people with mental health issues into work. It’s working.”?Hon Dr JONATHAN COLEMAN: Listen to the context of the whole interview. It all is correct and it all makes sense. Go and have a listen to it again.Hon Annette King: I raise a point of order Mr Speaker. I do not think that was an answer. “Just go and listen to the interview.” is hardly an answer.Mr SPEAKER: Order! The member now needs to listen to the answer that was given. The question asked which was correct and the Minister answered by saying both statements were correct.Hon Annette King: How can it be?Mr SPEAKER: That is the need for further supplementary questions.Superannuation—Costs and Eligibility7.DAVID SEYMOUR (Leader—ACT)to the Prime Minister: Does he stand by his statement in the House last week that because New Zealand Superannuation costs are currently less than 5 percent of GDP and are forecast to rise to 8 percent of GDP by 2060 this represents a responsible path for overall Government spending?Rt Hon JOHN KEY (Prime Minister):I stand by my statement which was “We have set out a responsible path for overall Government spending so that current settings for New Zealand superannuation are both affordable and fully factored into our long-term forecast.” That is true as the Budget shows. Other parties in this House from time to time want to cut back on superannuation entitlements while other people want to spend the money on something else. That is a fiscal choice they should put clearly to the electorate including Andrew Little and his idea of means testing.David Seymour: Does it not strike the Prime Minister as odd that he is commending OECD fiscal arrangements given that countries like France Greece Italy Portugal and Spain are all facing a brutal fiscal adjustment that means pushing up the age of eligibility for pensions increasing pension contribution rates and shifting indexation from a wage to an inflation basis? Is that the future we are offering younger New Zealanders?Rt Hon JOHN KEY: No I think it is about correctly reflecting actually on the current position which is that New Zealand superannuation currently costs 4.8 percent of GDP and is expected to rise to 8 percent of GDP by 2050. At the moment the OECD average today is 9.5 percent and is expected to rise to 11.7 percent. So yes although the costs of New Zealand superannuation will rise I think it is affordable and within our projected forecast.David Seymour: Does the Prime Minister plan to still be in office in the 2020s when the cost of superannuation to New Zealand taxpayers rises by $1.5 billion every year?Rt Hon JOHN KEY: I certainly hope so but of course there will be many elections to run on and I look forward to working with the member for as long as he is the member for Epsom which is where I live.Housing Auckland—Housing Developments on Crown Land and Consents8.ALFRED NGARO (National)to the Minister for Building and Housing: What response has he received from Auckland Council and housing companies to the Auckland Crown land programme launched on Friday?Hon Dr NICK SMITH (Minister for Building and Housing):There was a very positive response to the initiative and to the first four sites—the 30 hectares in Manukau Avondale Massey East and also to the west of our Hobsonville development. I welcome the undertaking from the Auckland Council in committing its housing project office to ensure that we achieve pace and I also note that the council announced a similar initiative where it has surplus land with capacity for nearly 3000 homes. It was also very encouraging to have over 250 development companies at the launch—more than double what my officials expected. I am confident that we will have our first development agreement in place by October.Alfred Ngaro: What initiatives prior to this programme did the Government have under way on Crown land for housing in Auckland?Hon Dr NICK SMITH: We already have four such initiatives under way. There is the very successful development at Weymouth involving 282 homes. This was where the Auckland Housing Accord was signed and the first special housing area was launched. This is land that has sat vacant for every one of the 9 years that the previous Government was in office. I am advised the programme is running 3 months ahead of schedule. There is the very substantive development at Hobsonville involving 3000 homes—400 of those have been completed 150 are under construction and 500 are being consented. It is now moving at such pace that all of the properties are being sold off the plans. There is a further project at Papakura on former Defence Force land which involves 600 homes that are currently being built and of course there is the development at Tāmaki where we already have 446 homes completed and another 190 are under construction. Across these four initiatives we have over 12000 new homes being built on public land across Auckland.Alfred Ngaro: What reports has he received on the latest building consent figures for Auckland for the month of April and for the latest year and how do they compare historically?Hon Dr NICK SMITH: There was a very positive figure of 912 homes consented in Auckland in the month of April. I compare that with the last month of the previous Government where it was fewer than 200 for the month. The number for the year was 8155. That is more than double what it was 3 years ago. So we have doubled the house-building rate. I would also draw to the attention of the House that that 8000-plus figure is the strongest rate of house building in Auckland—[Interruption]Mr SPEAKER: Order! Would the Minister resume his seat.Hon David Parker: I raise a point of order Mr Speaker. Once again it was a very long answer and if I could also raise a related point. When the Opposition has even two easily answerable legs to a supplementary question we only ever get one answer. And yet you allow Ministers of this Government to give five or six answers to multi-pronged supplementary questions from the Government.Mr SPEAKER: The member is raising a reasonable point on this occasion. The answer to the previous supplementary question was unnecessarily long and I brought it to an end. This answer too has gone on for too long. The reason I was not responding was that there was a large level of interjection on the question which does not help me bring the answer to a conclusion. The question has been answered at length.Rt Hon Winston Peters: Does the Minister not understand that the 9000 consents about which he boasts do not even cover the housing needs of those immigrants flooding into Auckland at the rate of about 34000 to 35000 every year?Hon Dr NICK SMITH: There has actually been very little change in the number of new immigrants arriving in Auckland. What has changed is that we do not have 30000 people a year leaving for Australia. Members on this side of the House welcome the fact that Kiwis have got confidence in New Zealand and they are coming home. It does raise extra challenges for us around housing but we are up to that challenge.Future Investment Fund—Spending Commitments9.GRANT ROBERTSON (Labour—Wellington Central)to the Minister of Finance: Does he stand by his statement in Budget 2014 “the share sale proceeds saw $4.7 billion go to the Future Investment Fund and we said we would spend $1 billion of that on schools and a further $1 billion on health”; if so as at Budget 2015 how much has been allocated to health and education from the Future Investment Fund?Hon BILL ENGLISH (Minister of Finance):Yes and a good thing about the Future Investment Fund is that the money going in and out of it is completely transparent. As I said in a Budget press release last month $635.6 million has so far been invested from the fund into education and another $684 million into health and that is not counting of course the other investments such as the investment in ultra-fast broadband which is a key technology to advancing both of those sectors. There is a further $726 million remaining in the fund without having to borrow. It is too early to say what all the disbursements from the fund will be as the Government will continue to look for opportunities to reprioritise existing capital to recycle more capital and to fund other initiatives from the Future Investment Fund.Grant Robertson: Is it correct that of the $726 million that he just mentioned already $190 million of that has been pre-committed for spending on KiwiRail?Hon BILL ENGLISH: That may be the case. I am pleased the member drew attention to KiwiRail because one of the calls on the Future Investment Fund has been that KiwiRail now requires somewhere between $200 million to $250 million a year—Mr SPEAKER: Order! [Interruption] Order!Grant Robertson: I raise a point of order Mr Speaker. You will appreciate that that was a very specific question about the Budget that Mr English delivered only last week. He said he did not know the answer which is remarkable—Mr SPEAKER: Order! The member will resume his seat. He was going quite well until then. The member took the opportunity in a supplementary question to mention KiwiRail so I was giving the Minister a chance to respond to that.Grant Robertson: Given that the Budget documents state that there is only $536 million left to allocate from the Future Investment Fund but that he has already committed to spend a further $680 million on education and health is he going to answer this with tricky accounting or is it just another broken promise?Hon BILL ENGLISH: The money will be spent on health and education and if it runs out because of other calls on the Future Investment Fund then we will look at reprioritising existing capital recycling more capital such as the sale of vacant land in Auckland or borrowing to make sure that we do invest appropriately in health and education.Grant Robertson: Is it correct that he has overcommitted Future Investment Fund funding by $424 million?Hon BILL ENGLISH: No and it is a bit rich that the Labour Party is complaining that the Future Investment Fund is too small when it did its best to sabotage the asset sales—Mr SPEAKER: Order! The question was answered right at the start.Grant Robertson: Can I help the Minister out: is 364 plus 316 plus 280 more than 536?Hon BILL ENGLISH: It may or may not be. I was not adding it up but I can assure the member that regardless of his focus on the accounting which makes him sound more like a Treasury analyst than the Opposition spokesperson we will make sure we have enough capital to invest in health and education as required to deliver better services and get better results.Rt Hon John Key: Is it true that if the Opposition spokesman was any good with numbers he would have got them the two times he had a go at the leadership?Mr SPEAKER: Order! That supplementary question will not help the order of this House. Question—[Interruption] No there is no need for it to be answered.Budget 2015—Transport Investment10.JONATHAN YOUNG (National—New Plymouth)to the Minister of Transport: How is the Government supporting the delivery of its Transport priorities?Hon SIMON BRIDGES (Minister of Transport):As part of Budget 2015 this Government is investing some $250 million in strengthening the transport system to increase safety and reliability to improve resilience and to ensure that older New Zealanders have continued access to public transport. Specifically we are spending $209 million investing in KiwiRail with a further $190 million to be funded in Budget 2016 to ensure the continued delivery of services and to maintain the national network. There is $10 million being invested in the SuperGold card scheme to meet strong and growing demand and $15.9 million is being invested in the MetService to replace its meteorological forecasting system to establish a new disaster recovery backup facility and to provide free weather forecasting services for the recreational aviation sector.Jonathan Young: How is the Government delivering on its priorities of supporting the regions?Hon SIMON BRIDGES: Through the Accelerated Regional Roading Package the Government is investing $212 million in accelerating 14 regionally significant State highway projects. This investment underscores the Government’s priority of supporting the regions which are a key driver of our economy and ensuring that we have a modern transport infrastructure.Schools—Northland11.Rt Hon WINSTON PETERS (Leader—NZ First)to the Prime Minister: Does he stand by all his statements with regard to Northland?Rt Hon JOHN KEY (Prime Minister):Yes in the context in which they were given.Rt Hon Winston Peters: Does he think that the Government is delivering for Northland when Northland College is so dilapidated run down neglected mould-ridden and leaky that the police have asked to use the school for training because it is the closest thing available to “a ghetto environment”; if so why?Rt Hon JOHN KEY: I do not have the details on Northland College other than what I read in the paper this—[Interruption] I was going to say other than what I read in the paper this morning. There is a programme to improve facilities at Northland College and I am sure that will be carried out.Rt Hon Winston Peters: Is it not a fact that regions like Northland are the victims of neglect while $350 million in extra funding is going to Auckland schools alone—when the worst classrooms are in provincial New Zealand where principals are saying that the process is “just hopelessly slow” and that “When you are living with it day-to-day it’s tough … I just feel if we were in Auckland it would be done faster.”?Rt Hon JOHN KEY: No I do not think that is correct. I think there are obviously poor conditions at Northland College and that issue needs to be resolved.Rt Hon Winston Peters: How can he explain the over $2.4 million being spent on the failing Whangaruru charter school when just up the road at Northland College we have got pupils who are learning in sheds and staff who are trying to cope with appalling conditions?Rt Hon JOHN KEY: I think that they are slightly different issues. One of them is a partnership school which is one of the early partnership schools to be advanced and that was all about providing ultimately greater choice for children who want to go there. It is a different issue from the conditions at Northland College.Rt Hon Winston Peters: Is it not a fact that the money spent on the Whangaruru charter school could have paid for 45 classrooms and would have provided an extra classroom desperately needed at the school called—Hon Hekia Parata: How long has that school been run down?Rt Hon Winston Peters: Which school are you talking about—Mr SPEAKER: Order! I am going to ask the member to start his question again without interjection from my right. [Interruption] Order! Would the member start his question again.Rt Hon Winston Peters: Is it not a fact that the money spent on the failed Whangaruru charter school could have paid for 45 classrooms and that just down the road at Whananaki School there has been a demand for an extra classroom for over a year and the Minister has failed to do a scrap about it?Rt Hon JOHN KEY: As I said earlier I do not have the specific details for those colleges. I do know that the Government has been investing heavily as you saw in Budget 2015 in new classrooms upgrades and the roll-out of ultra-fast broadband. It is probably a reflection on the member for Northland that he gets involved in an issue because it is in the paper rather than actually leading the charge.Rt Hon Winston Peters: I raise a point of order Mr Speaker. The Prime Minister started off by answering the question so well and then as usual he began a personal attack which was something that failed 3 months ago in the Northland by-election.Mr SPEAKER: The member has made his point but not with a legitimate point of order.Schools—Operational Funding12.CHRIS HIPKINS (Labour—Rimutaka)to the Minister of Education: Does she stand by her statement that “the Government is fully funding the delivery of the school curriculum”?Hon HEKIA PARATA (Minister of Education):Tēnā koe Mr Speaker. Yes.Chris Hipkins: If schools are sufficiently funded to deliver the curriculum why was one secondary school forced to cancel a biology field trip resulting in the teacher having to get special permission from the New Zealand Qualifications Authority to alter data collection requirements so the students would not fail their National Certificate of Educational Achievement because the school could not afford to deliver the learning the curriculum requires?Hon HEKIA PARATA: I am surprised by that because funding for schools has gone up every year since we have been in Government. Operational grants which are fully at the discretion of the school have been at or ahead of inflation. I would be a bit worried about the management by that school.Chris Hipkins: If it is indeed a matter of schools making choices as the Minister seems to suggest why do 54 percent of school principals—more than half—report they cannot afford to comply with the guidelines that prevent them seeking parental contributions to the cost of their kids’ education with some openly admitting they simply ignore them altogether?Hon HEKIA PARATA: The member may have misread the news item because it was 54 principals not 54 percent and of those 54 principals 22 said they had concerns about their spending.Chris Hipkins: Has she discussed the financial pressures schools are under with the finance Minister Bill English who previously claimed that without parental contributions or parental funding schools were “screwed”—his words not mine; if so why do the most recent figures available show that parental donations continue to increase by over $16 million a year?Hon HEKIA PARATA: I have ongoing very robust discussions with the Minister of Finance and they have resulted in a 1 percent operations grant funding increase being made available to schools this year although inflation is predicted to be 0.1 percent. Again I do not know where the member is getting his figures from but the most recent I have say that there is a consistent contribution of donations by parents making 1.8 percent of overall Government grants. Those donations are for extracurricular activities.Chris Hipkins: Does it not say everything about the current Government’s priorities that this year’s Budget pumped a further $53 million into her broken Novopay payroll system while only $42 million was invested in school operations grants—the money that goes directly to kids’ education—which is the lowest increase in school funding in over 20 years?Hon HEKIA PARATA: Again the member might need to learn how to read the Budget because actually we do not just throw money at schools. We look at the operational funding against what the actual costs are. Schools get both operational funding and resourcing for the employment of teachers. Schools have never been more well-funded than under this Government at $10.8 billion.Urgent Debates DeclinedSocial Bonds—Mental Health Service PilotMr SPEAKER: I have received a letter from the Hon Annette King seeking to debate under Standing Order 389 the announcement of the special bonds pilots. This is a particular case of recent occurrence involving ministerial responsibility. The social bond was announced as part of the 2015-16 Budget. The House is this week debating the Budget and the departmental estimates are currently before the select committees for examination. The Budget debate will provide the opportunity to discuss the social bond today and the estimates examination will provide the opportunity to consider it in detail and to debate it further when select committee reports on the estimates are considered in the Committee of the whole House. On this basis the matter raised does not meet the test for me to set aside the business of the House today. The application is therefore declined.Budget DebateDebate resumed from 28 May on theAppropriation (2015/16 Estimates) Bill.JACQUI DEAN (National—Waitaki):When I was making my first contribution to the Budget speech on Thursday—it is obviously going down a treat this afternoon as everybody is leaving but never mind—I was talking about the contribution of the Minister the Hon Amy Adams to bringing in a world-class broadband network which so far as a Government we have invested $1.5 billion into and enabling economic development in the regions. I focused my contribution at that time on regional development and noted that in this Budget an extra $360 million has been set aside to deliver on the Government’s promise of high-speed broadband and rural broadband.I was particularly noticing the impact not only on the education sector and on hospitals but also on the economies of the regions. In particular for the lower half of the South Island it is generally around agriculture it is around IT but it is also around education. I want to turn to that because I was very interested and very proud to hear the Minister of Education Hekia Parata explaining to the House that this Government has invested more in education year on year than any Government previously. I was also very pleased and proud to hear the Minister talking about the fact that to date this year this Government has invested $10.8 billion in education. That includes—Melissa Lee: How much?JACQUI DEAN: $10.8 billion dollars in education. That is investing in our future. That is investing in our young people right from early childhood education. The Budget also made some announcements around early childhood education for our youngest New Zealanders and where is the benefit going to lie? Well again because I am so focused on the regions and the health of the regions I can say that we are of course going to see the benefit of that in the lower part of the South Island. We are going to see our young citizens going through an excellent school system enhanced absolutely by rural broadband.I can even go as far as talking about my own home town which is 100 percent wired up for broadband as are a number of towns around New Zealand.Hon Maurice Williamson: You’d better name this town.JACQUI DEAN: I have named this town and I will happily do so here. It is called Ōāmaru. It is the coolest little town and the sharpest little town and broadband will be a great benefit to the schools the hospital and the businesses all around the region. I would also talk about Wānaka which is a town that came fifth in the Gigatown competition and which is a hub for business start-ups.Small businesses are now being attracted out of the cities and business people are being attracted out of Dunedin. I know of people coming down from Auckland. There is a trend to go southward from Auckland into places like Wānaka. Why? Because they are innovative and they have wonderful infrastructure that includes broadband but most particularly I am so proud of this Government’s investment in education. Thank you.CHRIS HIPKINS (Labour—Rimutaka):The current Government’s Budget has the byline “A plan that’s working”. Most New Zealanders will be asking “Working for whom?” because it is certainly not working for the vast bulk of New Zealanders who go out work hard every day try to get ahead and get pushed back down by the current National Government. It is certainly not working for future generations of New Zealanders who are going to inherit mountains of debt—the highest mountain of debt that any Government has ever clocked up in New Zealand’s history. It is not working for that same generation who cannot get a foot on the property ladder because this Government has done nothing about runaway house prices. It costs nearly a million dollars to buy a house in Auckland and it will top that figure very soon. This Government is not doing anything for the future generations who are burdened by student loan debt.It is not doing anything for the future generations of New Zealanders who are seeing the funding for early childhood education frozen for the entire duration of this Government. What does it mean when it is frozen? It means that in real terms it is going backwards. It means that those early childhood centres are getting less money now than they did when this Government came into office. It means that schools which are seeing their funding eroding away are not able to deliver the curriculum that they want to and that they are required to. It means that we are seeing schools cancelling for example field trips or experiential learning so practical experiences in the classroom are being pushed aside because schools simply do not have the resources they do not have the time and they cannot afford to deliver the curriculum as it is intended to be delivered. That is what is happening under this National Government.It is not a plan that is working for all of those people. It is not a plan that is working for the New Zealand Police which is seeing its funding cut. There is a lot more to come on that. It is not a plan that is working for regional New Zealand which sees jobs disappearing which sees its roads deteriorating and which sees its public services being diminished or disappearing altogether. This is not a plan that is working for the vast bulk of New Zealanders.Of course it is a plan that is working for the merchant banks which now get the opportunity to step in and deal with people with mental health problems. Merrill Lynch is lining up to deal with people with mental health problems in New Zealand. It is a plan that is working for the casinos which get to build convention centres off the backs of problem gamblers. This is probably a plan that is working for them. Of course it is a plan that is working for the Saudi millionaires who get to have sheep flown from New Zealand over to their farms in Saudi Arabia at a cost of tens of thousands of dollars per sheep. Goodness me! I hope they got a meal with that. I hope they got a lie-flat bed and they got to check in their luggage. Actually most New Zealanders could not afford to pay that for their own travel let alone spending tens of thousands of dollars per sheep to transport sheep to Saudi Arabia as Murray McCully has done in his facilitation payment deal which most New Zealanders would look at and regard simply as a bribe.This is not a plan that is working for the vast bulk of New Zealanders. It is a plan that involves broken promises right left and centre. Unfortunately I get only 10 minutes in this debate so I cannot catalogue all of them but let us look at a few of them. Back into surplus John Key promised New Zealanders before the last election. He did not just promise he was going to do it; in fact he promised that he had done it. Then after the election what do you know? The surplus disappears. He says it was only ever an artificial target and it was like landing a 747 on the head of a pin. So how much was that deficit? It was $684 million. That was the deficit. National did not even come close. I am not even sure how that could possibly square up with John Key’s comments. Then of course we do not even know whether it is going to deliver a surplus next year. He promised to create 150000 extra jobs. Will the Government deliver on that promise? No it will not. He promised to increase average wages from $55000 to $62000 a year. Has it delivered on that promise? No it has not. He promised it would not cut KiwiSaver. Has it delivered on that promise? No it has not. It cut the $1000 kick-start from KiwiSaver. He promised no new taxes. Has it delivered on that promise? No it has not. It is going to be introducing a capital gains tax. It whacked up the levies on broadband. It introduced new taxes on people travelling through airports. It promised to improve our export performance. Has it delivered on that promise? No it has not. This is a Budget that is littered with broken promises.This Government got a bit of a pass when it came into office 7 years ago because the global financial crisis was going to put whoever was in Government under a bit of pressure. So the Government got a bit of a pass. It got a bit of leeway. Seven years on things are getting worse not getting better and New Zealanders can rightly say this Government is not delivering. This is a Government that has simply lost its way—a Government that made bold promises that it did not deliver. John Key says we are on the “cusp of something special”. Where have we heard that before? Could it be David Cameron saying that “we are on the brink of something special”? He clearly got the Crosby/Textor memo. Tony Abbott of course did not. He said that the Australian economy was on the brink of devastation. He obviously was not quite so on-message there. But of course we know that actually the Government’s promises are all about campaigning not about delivery because they are all delivered by the same people who are promising the same things around the world.We have got in Australia for example Tony Abbott promising the “foundations of future growth and prosperity”. That was Tony Abbott’s promise to the Australian people. David Cameron of course talks about the fact that they have “laid solid foundations”. You can see a similarity of language here. And what does John Key say? He says “growth … based on the solid foundations”. He is not even that creative when he rips off the other leaders from around the world David Cameron and Tony Abbott. John Key cannot even change the words; he just quotes them verbatim. That just shows how out of touch and how much the Government members have lost their way when all John Key can do is pick up off the shelf the speeches being delivered by David Cameron and Tony Abbott and deliver them as if they were his own ideas because the Government has not got any ideas of its own. That is why the current New Zealand economy is stagnating under this Government and the books are going backwards.Of course it all starts to pile up on John Key and his Government members. They start to get found out. What do they do? Normally they would turn to a debate about the flag but that is already going through a referendum so they cannot do that. So what is the next off-the-shelf crisis that they can create? What is the new diversionary tactic? There is a boat coming! There is a boat coming! Therefore goodness me there is a crisis. We have heard this before when there was a boat coming to New Zealand so the Government had to go into urgency and push legislation through Parliament. The boat did not come anywhere near New Zealand. It went round the other side of Australia. It came nowhere near New Zealand but this is John Key’s diversionary tactic. It shows how desperate the Government is when it goes and pulls that particular card off the shelf. It shows that Government members really have nothing else to talk about and all their broken promises are coming home to roost.The education sector is struggling under this Government. We have seen teachers who have basically had next to no pay increases for 7 years under the National Government. Schools’ funding is not keeping up with the rising cost of education. Hekia Parata said in the House today that the Government did not base its school funding decisions on an arbitrary figure; it based it on what schools actually spend and what the costs of delivering the curriculum are. I challenge her at any point to produce the figures that show that because we know that the cost of delivering education is going up and up the technological costs that schools face go up and up the pressure that they face goes up and up and the funding is simply not keeping up with that. In the early childhood sector it is criminal what is happening at the moment. Increases in participation are a good thing but that is masking the fact that on a per child basis early childhood education funding is going backwards. The result is going to be more cost for parents or lower quality education or in the worst case scenario both. That is simply not good enough.This was a Government that said it was aspirational for New Zealand. Where did that aspiration go? Where did that aspiration go? It has disappeared. This is a Government full of hollow promises hollow rhetoric and spin and when it cannot get away with that it then resorts to smear and it does not deliver what it promises New Zealanders. Government members are simply content to sit there on the Treasury benches and not deliver for ordinary everyday working New Zealanders who are happy to work hard to get ahead but they do not have a Government that is going to back them despite the promises for aspiration and despite the promises about getting ahead. This is a Government that is simply not delivering.Hon Peseta SAM LOTU-IIGA (Minister of Corrections):It is a pleasure to rise and speak in this Budget debate. May I first congratulate the Minister of Finance on another outstanding Budget his seventh Budget in a row and one that actually speaks to most New Zealanders.We are a country that is on track economically we are a country that is on track fiscally for surplus next year and we are a country that is on track to deliver help where it is needed most. I would just like to state upfront that in terms of delivery we have delivered in this Budget $790 million to help children in our poorest households—help children in our poorest households. Mr Hipkins might ask why we are not delivering but I do not hear Ms Ardern complaining about this Budget in terms of $790 million being spent on the poorest households.What does it look like? Well it looks like 160000 of our lowest-income families. Some of those families are in my electorate of Maungakiekie. I know they are in Mr Ngaro’s electorate of Te Atatū. We are helping those families who really need some assistance around their benefit—$25 a week. If they are low-paid families they get up to $12.50 a week in most cases through Working for Families for those with incomes under $36000.It is also about providing more childcare support. It is an extra $1 per week per child. So for different children that is $50 per week. I challenge members opposite who complain about this to show me a family that would not take $1300 in 1 year—show me one family that would not take that money. I do not believe you can come up with that sort of family. I know Ms King brings families to this House—little examples of people who are not doing well—but you bring one family Ms King to this House who would not take the $1300.How do we know that this Budget is successful? How do we know? We held a Budget workshop—Mr Ngaro and I and Mr English—in Manukau in the heart of so-called Labour country last Friday morning. And what positive feedback we received about this Budget from Pacific community leaders from academics from workers and even from unionists dare I say it. Those people were saying to us: “We believe in what you’re doing. We believe in what the National Party is doing. We want to see more jobs we want to see more opportunities but we think we’re doing well under the National Government.”What does that look like? It looks like this in terms of Pacific communities. The current statistics show that over 123000 Pacific people are currently employed in New Zealand. That is more than at any other time in our history. I notice that members opposite have their heads down. They do not want to hear the truth. They do not want to hear the facts around how Pacific communities are doing very well under the National Government. That number is up 17500 from this time last year.We are doing well in our health statistics. Immunisation rates for Pacific people are in the mid-nineties. In fact they are doing better than most of the rest of the population. So we are doing well in terms of immunisation. We are doing well in terms of jobs. In terms of education we now have National Certificate of Educational Achievement (NCEA) level 2 pass rates for Pacific people in the mid-seventies. What was the pass rate under Labour can I ask? The heads are down again. It is OK. They are not proud of their record but I will tell you what it was. It was 51 percent under the Labour Government.Although they rail over there about the amount of spending that goes into education they do not look at the outcomes. The outcomes are quite clear. The pass rates for NCEA level 2 are up by 25 percent. Graduation rates are up by 50 percent. Early childhood education participation rates are up by 20 percent. I hear members opposite groaning whining and moaning but the outcomes do not quite fit with the rhetoric and the misleading representations that are made opposite.This Government has put in place more measures to address the housing problem across this nation than any other Government. Yes we know about the HomeStart package that subsidises our first-home buyers. Yes we know about the release of land and we are working alongside the Auckland Council with the Auckland Housing Accord. We have special housing areas and we are releasing large tracts of land. But in this Budget we also came up with a plan around releasing more Crown land for development. That goes alongside the extra money we are putting into rent top-ups as part of our housing reforms in order to have the income-related rent subsidy for those who are impoverished.We are about providing the community housing sector with the opportunity to actually get alongside the Government and provide some of the housing. I am proud of the announcement that the Tāmaki area will get a $200 million injection. Admittedly it sort of started under the Labour Government many many years ago but we are now implementing that plan to release more land to work alongside communities. At the launch of that plan we heard from a local early childhood education teacher who was talking about how the Tāmaki community was being empowered and given the opportunity for self-determination and to work out their own aspirations and their own goals and that can only come under a National Government. We believe that the answers to our social ills lie in our communities. That is why we support Whānau Ora that is why we support the Tāmaki redevelopment and that is why we support schemes that empower our communities and give them the ability to determine their own successes.This Budget is also about health. Ms King over there is a former health Minister but what she did under her reign was she doubled the spending but the outcomes diminished.Hon Annette King: Not true.Hon Peseta SAM LOTU-IIGA: The outcomes actually got worse under her reign. I like Ms King but her record is poor. She cannot stand on her record. [Interruption] I really admire her but her record is poor. What we have done in the health portfolio is increase spending. We have got immunisation rates up. We have got health outcomes really doing well. I say to members opposite that they should look at our track record. They should look at what we have done in health in education and in housing.I also really admire what our Government is doing in the transport sector. We have funded the electrification of trains in Auckland. We have given some targets around the inner city loop and how we can achieve those targets and where we are going in terms of public transport. But what we have also done is we have invested in highways that actually promote economic growth to our regions. That is what is critical here—economic growth.We know that tourism numbers are up. We know that jobs are being created in the tourism sector. When I make my business visits locally in Maungakiekie I know that the IT sector is actually thriving. We also know that in terms of local manufacturing—and Maungakiekie is the hub of light manufacturing in the country—we have companies like Compac Sorting Equipment and we have companies like Coca-Cola that employ thousands upon thousands of locals. We know that that economic growth is important for our people.This Government has created over 170000 jobs in the last 4 years. We are about to create another 150000 jobs in the next 4 years. We are a Government that is clearly on top of our game—creating jobs providing for the needs of our less able and for our vulnerable kids. That is what is at the heart of this Budget. I am proud of that. I am proud of the fact that we are helping people who really are at the poor end of the scale. We are helping them lift up and improve their aspirations and their dreams by getting off welfare and into jobs. This Budget is another stellar Budget by the Hon Bill English. It is a Budget that I am supportive of and I commend it to this House.JACINDA ARDERN (Labour):Budgets are not just about the year’s plan and what is going to happen in the next 12 months; they are about vision. They are meant to set out where the Government wants to take the country over the course of a term or if it is indeed being visionary beyond the next political cycle. That is what Budgets are the opportunity to do. I have sat through what feels like more than my fair share of National Party Budgets and I am yet to see any evidence of that visionary kind of statement—the kind of thing that we actually need as a country. We do need it because we are facing challenges that are not challenges on a yearly cycle—they are not even challenges on a term of 3 years; they go well beyond that. This time around I wanted to see a Budget that acknowledged the hard decisions and that acknowledged that doing what is right is not always about doing what is popular. In fact if any Government worth its salt is going to address the issues that are right but that are not necessarily popular it should be doing so in the first Budget after an election year. It should but that is not what we have seen in this Budget.Labour always tried to look ahead. Of course we will always be criticised by members on the opposing side because that is what they do. But we did endeavour ultimately to look ahead. Our policies demonstrated that. Working for Families was essentially about trying to address what we recognised in Government as the inequality that was emerging and that was emerging most for our families and our low-income families. It was a very tightly crafted attempt at redistribution. Working for Families has endured as a mechanism because it has been to date the most successful attempt that a Government has made to achieve that redistribution. That is why National has not got rid of it. We brought interest-free student loans into play because we saw the emerging inequality and growing debt for the next generation and we saw the impact that that was having on them and their ability to own a home to become debt-free and to become contributing citizens. That is what interest-free student loans were all about.We established the New Zealand Superannuation Fund because we could see that we had baby boomers who were moving into retirement that there was growing debt and that we were going to have a spend in the superannuation space that would soon outstrip education—and we were simply not prepared for it. That is what the New Zealand Superannuation Fund—then known as the Cullen fund—was all about. We stopped calling it the Cullen fund when the National Government stopped contributing to it but that is why it was established. And of course that is why KiwiSaver existed. We knew that the universal superannuation scheme that we had was a bare minimum and that if anyone retired without owning a home they might potentially experience poverty in their retirement. That is why we brought in KiwiSaver. And the nine surpluses? Well those were because we could see down in front of us that there was the potential for a global financial crisis and that we would hit on hard times. Dr Cullen prepared New Zealand for that and that is why we ran nine Budget surpluses. I remember all the criticism from the other side of the House for the fact that we did that and for not entering into a lolly scramble with tax breaks at that time.In contrast what have we seen from the National Government? Not one surplus yet. For all its criticism of Labour in Government we are still yet to see one surplus. During our entire time in Government despite the planning that we put in place and all of the thinking ahead about the big challenges that New Zealand was facing the one label that the National Party could come up with was “nanny State”. That was the argument we kept getting—that somehow all the planning we were doing made us a nanny State. If that made us a nanny State then National is in contrast the babysitter who is now absent—the absent babysitter. And not just the absent babysitter; it is the babysitter who nicked the petty cash and left the kids home alone. That is the kind of government we have seen from the National Party. Our nation’s debt is beyond $86 billion and it is debt that we will all carry. Unfortunately as this Budget highlights some will carry that debt more than others. In fact it seems that the very people on whom Labour focused its Budgets because of the inequality that we saw are the very people who will now carry more of that debt under National’s Budgets.Let us start with the next generation. Student debt continues to be an issue but it is not just about dealing with student loans. We now have a National Government that will not even allow students who are for instance in a course of study that requires them to be in university for more than 7 years to be able to access student loans. Medical students cannot afford to complete their degree programmes under a National Government. That is just wrong and we will be paying for that in the future when we do not have enough people in the field who are ready and trained. The next generation is going to be paying for the fact that the kick-start payment for KiwiSaver has been wiped out. In fact under National Budgets we have had eight changes to KiwiSaver since National has been in Government. If there is one thing that I have heard particularly from the business sector and even the banking sector it is that the constant changes to KiwiSaver are undermining the scheme and are becoming genuinely problematic. So I beg the National Government: no more changes to KiwiSaver. We need consistency particularly for the next generation.What else have we done to the next generation? Well if they live in Auckland there is no way that they will be purchasing a house any time soon. We have put multiple ideas to the Government because we simply cannot wait for the next election in order to implement the changes that we need. We have put forward ideas for what we need the Government to do and unfortunately they have still not been adopted and houses continue to earn more than people. The next generation needed this Budget to focus on jobs also. There is almost no mention of any kind of mechanism focused on job creation. Small businesses—the ones that produced 41 percent of our jobs last year—what did they get in this Budget? If I am being generous I might point out that there is some funding that has been put aside for the New Zealand Business Number but that is about it actually. That is it actually. So as much as Craig Foss comes down to this House and trumpets how much his Government cares about small business that is mere rhetoric until the Government does anything meaningful and there was certainly nothing meaningful in this Budget.It is not just about the next generation; it is also about the next generation of children who are living in low-income families currently. We know that children who grow up in poverty bear the effects of that poverty in their adult life even if they get beyond that poverty themselves. Its effects manifest themselves unfortunately in terms of their health outcomes. Yes we on this side of the House welcome absolutely the $25 increase to those families who are living in benefit households but I do want to point out that it was not the first increase in 40 years—far from it. Like the National Government Labour targeted families living on benefits with Working for Families. The family tax credit went to families on benefits. That was the last big increase for beneficiary families with children. You were not in the House Jono Naylor so perhaps you do not realise that.Tim Macindoe: Order—JACINDA ARDERN: He was not elected—not absent Mr Macindoe—so that is why he perhaps was not aware of that fact. So we will be generous to that side. Perhaps the Government might have been able to make that claim if it had made a generic increase to benefits but the National Government has not. The increase is targeted to beneficiary families with children which is what the family tax credit did.If the Government is genuinely focused on raising children out of poverty why are there no numbers on how many families are being lifted out of poverty by this measure? Why are there absolutely no numbers that have been prepared by the Ministry of Social Development or Treasury? I imagine that Jonathan Boston’s quote illustrates perhaps why we have seen no numbers or calculations. He said: “With the exception of beneficiary families who secure income from paid employment for part of any specified period the changes to benefit rates announced in the Budget will not reduce rates of child poverty measured on the basis of family income.” They will not reduce the rates—and why? It is because the gap for those families has become so large that $25 will not do it. The reason I know that is because when we formulated Best Start I did the calculations myself. You need at least something like the Best Start payment which was $60 per child not per family if you genuinely want to make a difference. So I lay down this challenge to the National Party members: if they are serious about changing child poverty amend the bill to make the $25 payment per child. Tell us how many families will be lifted out of poverty and try to do something that is genuine not token. Then I may genuinely believe that you are doing something visionary.JONO NAYLOR (National):I was so wrapped up in that speech by Jacinda Ardern that I thought it was going to keep on going for ever. As the member so rightly pointed out this is the first Budget that I have been able to participate in and it has certainly been a great experience. Last week when we went into urgency again it was the first time that I had been in the House when we had urgency I had a member opposite smugly come up to me and say: “I think we are enjoying this more than you guys.” I could not help but think that every minute that we were there during urgency was a minute we were getting closer to passing really really good legislation that was going to help this country and benefit New Zealanders and it was certainly an exciting time. I thought I would rather be in our shoes where we knew what the outcome was going to be and the outcome was going to be positive rather than being a little bit cocky about how long the process could be drawn out.But turning to this roughly 15 hours—and we are getting to the conclusion now—of the Budget debate I guess that I expected something different from the other side of the House. I expected to hear alternative plans. I expected to hear alternative options. I expected to hear alternatives in some respect so maybe that is a little naivety on my part it being the first time I have been here for the Budget debate. But I have heard nothing. I have heard members dwelling on the past like the previous speaker who has just talked about what happened in Labour Governments gone by of which she herself was not actually a member anyway. We have heard all this kind of talk about what has been done in the past but we have heard no alternatives. All we have heard from the other side is a couple of things.Firstly we have heard claims that there is going to be a new capital gains tax. Well we all know that there is nothing new about the capital gains tax. It has always been there and all we have announced is that we are going to get better at catching out those speculators. So it is not a new tax. Also all we have heard from the other side is people getting really really excited about whether or not we have met our surplus targets this year. Basically for just about every speaker who has got up that is all they have managed to talk about.I want to reiterate something that the Hon Nick Smith referred to in his speech. He did a bit of an analysis of the last 20 years’ Budgets and on average each of those predictions of every Minister of Finance was 4 percent out in their calculations when they were looking at it going forward. This year it looks like we are going to be 1.4 percent out. So on that basis we can draw from that analysis that this Minister of Finance is doing a better job than any of the other Ministers of Finance that we have had in the last 20 years.But of course you do not measure the success of a Budget simply on surplus or not getting surplus by a small margin. You might measure it by whether the country is experiencing economic growth whether or not there are jobs being created and whether or not there are other factors being achieved like the planned decrease that we are going to see in ACC levies. What we have seen from the other side of the House is a complete fixation with money. Well on this side on the House we are fixated with the people of New Zealand. We are focused on ensuring that we are taking people off welfare and into work that we are raising academic achievement and that we are investing where it is going to make the biggest difference. So we are going to be putting in the package which so many people have talked about to increase benefits for families with children. What we know is that two-thirds of children who are experiencing material hardship are in families with people on a benefit.We are not leaving it at just that. There is also going to be an increase for those people who are on Working for Families. We are going to see an increase to the childcare subsidy which is going to make it easier for people to be able to go out and get more work if they need that work to make ends meet for their families. But we have got to remember that these are the new announcements and they ride on the back of everything else that this Government has been talking about over the last little while.And let us not forget that this is in the context over the last little while of also increasing parental leave to 16 weeks. It is in the context of us making free GP visits available to under-13s. It is in the context of the HomeStart loans package which means that younger people in particular who are buying their first homes will be able to access more money through their KiwiSaver contributions and also all the other contributions that have been made to their KiwiSaver account in order to get into their first home. It is in the context of us increasing the immunisation rates amongst our young children. It is in the context of us having warmed up 300000 homes and of us seeing early childhood education participation going up. That is the kind of commitment that this Government has had to families in New Zealand. This Budget is in the context of that and is simply adding to the great work that has already been achieved.But this Budget is not simply about welfare and it is not simply about what we are doing directly for children and for families who are experiencing hardship. It is a well-rounded Budget. It is one that is committed to the regions and we are seeing that through the $25 million that has been set aside to establish new regional research institutions. Living in Palmerston North I can tell you that the benefits that those types of institutions bring to a place are incredible because you have money coming in that is actually multiplied. You have people working in those areas who are often well qualified and well paid—and well educated too I might add—who are contributing positively to our communities and so there is a flow-on effect from that. So we are going to see more of those being established in New Zealand.We are seeing an increased contribution to the ultra-fast broadband roll-out. Again in Palmerston North I can say that we are currently the third-fastest community in New Zealand to take up ultra-fast broadband in the home. I was speaking recently to a business that is doing international IT work with all sorts of people from the big manufacturers of hardware to people like Google and working with DreamWorks Animation and all sorts of places like that. That business can do that because of the connectivity it has. When its staff members need to work from home they can do that because ultra-fast broadband is available to them. That is what these kinds of things can deliver for New Zealand. That is the kind of process that we are working on with these types of initiatives.We are seeing a further $80 million going into research and development. We all know that if we are going to move ahead and if the economy is going to move ahead we need to continue to be more innovative. We need to ensure that those companies that are on the edge of that innovation are getting the assistance they need and that is what we are doing. Again in my home town of Palmerston North we see the impact of that research and development funding going not just to the institutions but also to private businesses.As I said it is well-rounded Budget. We have got help for families we have got help in terms of promoting economic growth and of course the very big thing that New Zealand has faced over the last little while has been the rebuild of Christchurch. This Budget continues to invest in the rebuild of Christchurch. Last Friday I was fortunate enough to be in Christchurch and I witnessed firsthand some of the great work that is being done down there by the Canterbury Earthquake Recovery Authority and the things that are being achieved there. Despite the fact that Christchurch has had such a devastating last few years what we are now seeing growing up out of the ruins is what is going to be a state-of-the-art city—something that the people of Christchurch can be proud of and something that the people of New Zealand can be proud of. I am really looking forward to seeing what is going to rise up from the rubble so to speak. That is the kind of commitment that we have going forward.In summary I just want to add that I believe this is a balanced Budget. It is a Budget that is working towards great things for all of New Zealand. It is going to target those people who need our help the most and ensure they get it. We are not simply going to talk about what has been done in the past. We are looking forward. We are looking forward to seeing New Zealand have a future. We are looking forward to seeing people come out of poverty and into work and make their own way in the world. We are looking forward to an ongoing growing economy here in New Zealand as a result of the great work by this Minister of Finance with this Budget. Thank you.CARMEL SEPULONI (Labour—Kelston):Following on from the last National Party speaker Jono Naylor I just want to refer to what he said. He referred to the fact that the National Government has not reached surplus for the last 7 years and then said that Labour is fixated on money. As a default position because the Government has failed 7 years in a row to reach surplus he said that that is because National cares about people. There is something wrong with that whole picture. It is not that difficult to reach surplus. This side of the House did it for 9 years straight—9 nil; 9 nil. I think that those members need to be reminded of that because they have proven for the last 7 years that they cannot responsibly manage this country’s economy. That is not what I wanted to focus this speech on but I could not help but refer to it after Jono Naylor’s speech.What I want to concentrate on is that the Budget really is a continuation of the Government’s plan to experiment with some of the most vulnerable members of our society—namely sole parents and mental health beneficiaries. What has really upset me from the beginning is the way the Government refers to sole parents and mental health beneficiaries. Under its investment approach it refers to them as a “high liability”—not as people who are vulnerable and need help but as a high liability. That is how it refers to people.Under this most recent Budget the Government is trying to introduce an experimental and untested system of social improvement bonds for mental health beneficiaries. We have very real concerns. We do not even know what the outcomes or results are from the mental health employment and sole parent employment trials which have cost taxpayers a total sum of $5.9 million over the last 2 years. These trials involved the contracting-out of case management which would otherwise have been undertaken by Work and Income. It involved support for employment placements to 25 private sector providers two of which—APM WorkCare and Mental Health Solutions Ltd—received almost $1 million each. But where are the results? Where is the so-called return on investment from these trials?According to the social development Minister 3377 individuals were referred to the mental health employment services trial in which only 998 individuals were enrolled as at the end of February 2015. As at the end of February 2015 414 of those individuals had been placed into employment of which 63 individuals exited the service after achieving 12 months’ continuous employment. One hundred and seventy-one of those individuals were still in the service having achieved 6 months’ continuous employment and 180 individuals were still in the service and yet to achieve 6 months’ continuous employment. What happened to the other 2379 individuals who were referred as part of the trial?Our concern is that that same model will be carried over to the social impact bonds. Who will these providers or organisations choose to take on? What does it mean for those who are not taken on? What does it mean for the 2379 out of 3377 who were not picked up by these providers to place in employment? What were the criteria for trying to place them in employment? Who do we think the providers would have chosen? They would have chosen the people who were experiencing mental health difficulties or mental illness but who were the most employable. Why? Because they wanted to see their outcomes attained. So that Government is going to use that kind of measure to say that the private sector is better at doing this than the State but it is jigged—it is a complete jig-up. We can see that just from the employment trials that have been undertaken for those who are experiencing mental illness.Further the Ministry of Social Development has said that it does not hold information in relation to the roles and qualifications of staff from contracted providers delivering either trial. So here it is contracting providers to work with some of the most vulnerable—we are talking about people with mental illness—but these providers have no qualifications or no experience that the Government knows of to be able to work with people who have mental illness. That is irresponsible. Going back to the Government’s own language—that these clients are high liability—well I just want to say that I think the only liability for this country is the National Government.When we look at sole parents we see that sole parents and their children will bear the brunt of this Budget. We hear from that side of the House that it is giving $25 to sole parents or to beneficiaries. This is not per child but per family. It is something but it is not enough. As the Children’s Commissioner has said it is a surprise but it is not a plan. It is not a plan to address the issue of poverty which we are facing as a country. Under this Budget yes the Government has said that it will give an additional $25 per family not per child on benefit but we have also seen the work obligation extended for sole parents from 15 hours a week to 20 hours a week.I have had lots of constituents contact me with their concerns about this. The major concern is that what the Government is not taking into consideration is that what is subsidised is 20 hours and even those 20 hours cannot always be accessed. The Government has not taken into consideration that not only do the parents need to put their children into early childhood education but they need travel time to be able to get there to drop their children off and then pick them up. Many of these parents are saying that 15 hours a week if they can access the subsidy for 20 hours is just enough because it includes the time they need to work as well as the travel time for getting their children to the early childhood centre and then picking them up afterwards. That was not taken into consideration.On top of that sole parent support beneficiaries have to reapply for their benefits every year on that anniversary. They also have to go back to work when their child turns 3 as opposed to 5. Some of us women in caucus talked about this amongst ourselves. Some of us had gone back to work but circumstances are very different for different people in terms of the work they go into. Some of us have flexible working arrangements. Some of us are able to because of the amount of money we earn but that is not going to be the case for every parent. What also does not seem to be taken into consideration by what the Government announced in its Budget is the number of children these sole parents have. If you are looking at a sole parent with one child maybe—just maybe—it is more possible for them than for a sole parent who has two three four or five children. It becomes more and more difficult when you look at the number of children. So just to have this kind of blanket approach to things is actually really irresponsible and not fair to the parents we are talking about.The change that the Government is looking to introduce is going to affect 70373 sole parents. I just want to point out actually that approximately 90 percent of those parents are women. They are women raising children by themselves. What does that say about the way that the Government thinks about those women or addresses the needs of those families? What does it say about Government members? It says they do not really care. They are punitive they are judgmental and they are just saying “We don’t care about your circumstances. Get out and work regardless of how things are for you.”There was a lot in this Budget from a social development perspective to be concerned about. Looking at the reprioritisation of funding to the social sector and the impact that will have on NGOs is another big issue. We already see this with the demise of Relationships Aotearoa and we know already that there are NGOs out there that have very very good reputations in their local communities and have served their local communities and vulnerable people for decades many of them; and yet they are feeling the brunt of this Budget as well. They are concerned about what this Budget will mean for them and their ability to continue doing the important work they have been doing for many many years.This Budget is not about people unlike what Jonathan Naylor has said; it is not even about money. The National Government has failed on both fronts in this Budget and it will not take long for the rest of New Zealand to see through that.Dr SHANE RETI (National—Whangarei):It is a pleasure to speak to Budget 2015. There were many highlights in Budget 2015 and one of them was clearly the $25 increase in benefits. I want to focus on this for a moment and allay some of the fears of the previous speaker Carmel Sepuloni. I want to focus on the benefit increase because in fact many more will benefit. In fact maybe 100000 beneficiary households are going to do even better than the $25 increase some by as much as a further 30 percent or on average $8 up to $33 a week. The reason for this is that it turns out that a majority of beneficiaries also own motor vehicles. They will also benefit from the good work of Nikki Kaye and her team with the ACC reduction on the motor vehicle and petrol levy which is decreasing by an average of $135 a year. This will apply to 100000 beneficiary households.So let us look at that a little bit more closely. Let us see who and how they will benefit. If we look at New Zealand households and household income from the last census the smallest household income category is $20000 or less. There are 146000 households in this category. It is highly likely that a household with $20000 or less has a number of beneficiaries in it so we could reasonably call that a beneficiary household. When you analyse the data for beneficiary households it turns out that 70 percent of those households across New Zealand also own motor vehicles—54 percent own one motor vehicle 12 percent own two motor vehicles and 3 percent own three motor vehicles. The 100000 beneficiary households will therefore receive the direct Budget benefit of $25 per week and the indirect benefit from the motor vehicle ACC levy reduction. It will be an indirect benefit because unlike the core $25 it will not go directly into their account. It is an indirect benefit because it is a cost they will no longer have to bear; therefore their annualised weekly costs will go down.If we put some numbers around this and add the direct $25 benefit increase and the indirect ACC levy benefit what we actually see is this: 78954 beneficiary households with one vehicle will receive an increase of another $3 a week to $28 a week; 17545 beneficiary households with two vehicles will benefit by $5 a week to $30 a week; and 4386 beneficiary households with three motor vehicles will benefit by $8 a week increasing to $33. For this group that is a 30 percent increase over the core Budget announcement of $25. If we look at that last group—the group with three motor vehicles—a little bit harder and extend that thinking it gets even more interesting. The household income for a beneficiary household with three vehicles—and again there are 4386 of them—is less than $20000. Well it is probably unlikely that one person is driving all of those three vehicles. You could reasonably say that there is one person per vehicle and therefore there are three beneficiaries in that household. There are a few assumptions there. If we work through those assumptions what it means for those 5000 households is this: three benefit increases at three times $25 is $75; three ACC levy improvements at three times $8 is $24. If you put those two together that is a $99 per week increase for 4386 beneficiary households. That is a number. This Budget is good for beneficiary households and the data holds true.In fact Whangarei and Northland will do even better because Whangarei and Northland have a higher vehicle ownership ratio than the average across New Zealand. So they are going to do better. In fact the New Zealand average for one vehicle—just to focus on that—is 54 percent in Whangarei it is 58 percent and in Northland it is 59 percent. So the indirect benefit from the ACC levy decrease is going to disproportionately advantage Whangarei and Northland. That is a good thing for them. The motor vehicle levy decrease will continue to contribute in outgoing years because it is projected that there is going to be a further drop to $120 down from $195 in the outgoing years.The data speaks and people speak and they are saying this is a good Budget. People such as those in the Whangarei Child Poverty Action Group which had its post-Budget lunch on the Friday said what others are saying—that this is a significant start but there is work to do. I get it; we get it. There is more work to do but this is a significant start. I have focused on benefits but there are other things of course in the Budget that are helpful and useful.Transport—Northland is benefiting from the Akerama curves realignment and the loop road to Smeatons Valley. The road changes there the transport changes there are significant. Millions of dollars are pouring into Northland there. What was also announced pre-Budget was funding for the Northland cycle trail. A further $3 million will fund the Pou Herenga Tai—Twin Coast Cycle Trail. That is going to allow the development of the cycle trail from Hōreke in the Hokianga to the Bay of Islands. That will be a total contribution of $7 million.There are so many things in this Budget. I have focused on the benefit increase and made the point that it is going to be way more. In fact it is almost a hidden number—another 100000 are going to benefit more. I make my point again: the data speaks and the people speak. This is a good Budget I believe it is a good Budget and I think Northland and New Zealand are going to do well from it. Thank you.MAHESH BINDRA (NZ First):I am pleased to take this call with my colleague who spoke earlier Ria Bond. However it is not very pleasant to speak about the Budget because there is nothing pleasant about this Budget.Just last week we had a visit to Rimutaka Prison. We were hosted by the prison manager Chris Burns and his great team. Chris Burns and his team are doing a great job there. They have a very dedicated rehabilitation team and their officers know what they are doing. They are doing a great job in keeping those prisoners within the wire. They are keeping them safe. They are also implementing programmes and courses that help prisoners to rehabilitate. We also visited the drug treatment unit which is one of a kind in the country and although small that unit is doing a great job. We do not think there is any need to privatise the hard work that Chris Burns and his colleagues are putting in. This is not about cost cutting; it is about the rehabilitation of New Zealanders—New Zealanders who have gone off the track. Chris Burns and his team are doing a good job to bring them back into mainstream society. However privatisation of their work does not help the prisoners nor does it help the corrections system in our country.The visit was very educational and that enforces the danger of assumptions. This Government has assumed that outsourcing is a viable way ahead for our prison system. We believe it is not. It is wrong on many levels. Our call is to invest in the likes of Chris Burns and his team and not in Serco. Serco is a large corporate and it is all about profits. It is a matter of public record that prisoners were removed from prisons like Rimutaka and certain other units such as Tongariro/Rangipō and Manawatū and those units were closed to create the business case for the $400 million Serco-run corrections facility in Wiri a South Auckland corrections facility.Given the housing issues in Auckland we wonder how many houses could have been built there on that 17-hectare site that is accommodating the Serco-run corrections facility. This according to us is an opportunity lost for us. There was no need at all for that prison and there was no need to close down the units which were working perfectly fine with dedicated officers and rehabilitation case managers there.Serco is a foreign corporate managing Wiri. Serco also runs the UK’s Yarl’s Wood immigration detention centre. I recommend that members google the Channel 4 investigation as Serco has run that facility since 2007. Just last Saturday we were told that a violent offender escaped from a Serco-managed facility in the UK. He just walked out just testing the system. He claimed that he was just testing the system and Serco in this test has failed miserably to keep those prisoners inside the wire.This is the nub of the issue for us. Serco may appear to be a great operator this year and even next year but Yarl’s Wood revealed true abuse 8 years in and that is not the only problem that Serco has given it has written off over £1 billion worth of contracts in its latest financial year. Then again given the approach of this Government with the holiday tax it would not surprise us to see it also sell the Customs Service to Serco next. We keep wondering what is going to happen next. Is it going to privatise the police? It is going to privatise the whole judicial system? Where will it stop?Barbara Stewart: Mental health system.MAHESH BINDRA: And the mental health system as my colleague here says. This Government has a strong desire to shed itself of the core responsibility of governance. Corrections is a core responsibility for any Government. It is what the taxpayer expects from our justice system. They do not want overseas-owned publicly listed corporates to make margins off their taxes while Kiwis get laid off.New Zealand First is also puzzled about how an ice cream top-up in Budget 2015 will do anything to stop offending. It is very easy for the so-called financial wizards to calculate but there were 8303 prisoners in our system last week. The additional $6.5 million that was allocated for rehabilitation in the Budget—it calculates down to $2.02 per prisoner per day. That is the cost of a scoop of ice cream. We do not expect people to change their behaviour for the sake of a scoop of ice cream. We can do better than that I think. But no this Government just believes in giving ice creams to Kiwis and millions to Serco. That is what it is.We do not believe that prisons should be sold off to the highest bidder when that bidder has less than a savoury reputation as Serco regretfully does. Just $2.02 a day extra for each of the 8803 prisoners will make a scant impact unless the plan is managed—the decline of our prisons that Serco will magically fix. I do not believe in conspiracies but there is a plan to sell off our prisons. This goes against the claims of the Minister of Corrections Peseta Sam Lotu-Iiga that rehabilitation is a key focus of the National Government. How could it add $2.02 a day extra—how can we fix the system with $2.02 a day? This goes against the claims that the Minister has made. Unlike England’s Moeen Ali who I hoped would drop Trent Boult in the first test the other day this Minister has dropped the ball on corrections big time as has this Government.Coming back to the cost-cutting in prisons we demand that the likes of our own people our own corrections staff and rehabilitation set-up get more funding and not Serco. Thank you.MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti):Tēnā koe Mr Deputy Speaker. Tēnā tātou katoa. Before I make my contribution can I first extend my congratulations to the new co-leader of the Green Party Mr James Shaw. Congratulations I look forward to your contribution in this House.I am happy to take a call on the Appropriation (2015/16 Estimates) Bill. I have been listening since the Budget was announced last week and all through the debate listening attentively for some offerings that I as a representative of Ikaroa-Rāwhiti can honestly say will make a difference in my electorate. I also say as a former senior public servant and a chief executive of the third-largest iwi that long-term and medium-term planning is critical. I was also listening for the plan—the big plan—that is going to take this nation forward. I was disappointed on both accounts that there was nothing in the Budget that could address the pressing issues of the people of Ikaroa-Rāwhiti which I will touch on shortly—namely housing and employment.Listening to the contributions from members on all sides of the House I think that this Budget is clever politics. It has no plan to address the long-term challenges facing New Zealand and it is a Budget of squandered opportunities. When Labour becomes Government in 2017 we are going to invest in diversifying the economy and prepare for the future. We are going to ensure that the gains of economic growth are shared among all New Zealanders and not just with the few.Scott Simpson: Who will be leader?MEKA WHAITIRI: Do not you worry; you will be surprised. Much has been said about the Labour Party’s inability to manage the economy. I have heard speakers on the Government side talk about celebrating that this is the seventh Budget delivered by the Minister of Finance the Hon Bill English and they are very happy about that. But my issue is this: how can you be happy with a Budget that continuously gives deficit announcements in this House? You cannot be proud to say that you want to belong to a party that has not delivered an ounce of surplus in the Budget in this House.We on this side as has been heard by previous speakers have delivered—how many people? Nine surplus Budgets—nine surplus Budgets—in this House and yet we hear members on that side of the House talk about Labour’s history of poor management. But bring on one surplus—just bring on one—and then we may have a debate around whether we are even in the same ballpark. But 9-0 as a former sporting person is a loser in my part.Let us turn to the Budget. We on this side commend the $25 extra payment for working families. Clearly—as commentators have announced since the Budget was announced—that is equivalent probably to two extra meals in the House per week. But we applaud the Government’s move in that way. When Labour is in Government we are going to raise it to $60 per week but you know we will work with $25.This Budget also fails to deliver on housing. Releasing Crown land for housing is a no-brainer but the Government cannot tell us how many houses will be built or whether any will actually be affordable. The Government must commit to all of the houses being affordable and the best that Mr Nick Smith can offer is that they will be affordable for someone.Cutting KiwiSaver demonstrates the short-term thinking of this National-led Government which I alluded to earlier. This move will hurt our national savings rate and reduce future investment in our productive Kiwi businesses.Surplus—the Government broke its promises for surplus despite making it its No. 1 election campaign promise last year. Its promise of a surplus next year based on rising dairy prices is fiction. Not reaching surplus means not paying back any of the $88 million—I say that again $88 million—of debt we currently have. A $7 billion hole was caused by a drop in dairy prices and the Government has failed to react and diversify the economy. It is out of ideas clearly.The $30 billion looming superannuation cost—the Government has not addressed this issue either. It is irresponsible short-term thinking. Labour has a strong record in pre-funding the cost of superannuation through the New Zealand Superannuation Fund and in ensuring Kiwis have a retirement nest egg with KiwiSaver.In terms of the issues that I mentioned I would raise in this House around the benefits or the not-so-benefits for Ikaroa-Rāwhiti can I mention that in Gisborne and Hawke’s Bay turning to the issue of housing there is no emergency housing available in Napier or Hastings despite being the fifth-largest metropolitan area in the country—zip zero not one emergency house in Napier or Hastings. There is no emergency housing available in Gisborne despite increasing inquiries to the Gisborne Citizens Advice Bureau. The nearest emergency housing to Napier is in Palmerston North 2½ hours away. It is approximately a 5-hour drive if you live in Gisborne.Homelessness is up in Ikaroa-Rāwhiti. We are probably at about 15 people but those are just the people who come down to us. Kiri Swindell from Napier’s soup kitchen was reported as saying in Hawke’s Bay Today on 22 May 2015: “This shortage of emergency housing is putting pressure on council and State social housing which in turn sends more people to the private rental market and pushes up rents for everybody.” The situation in Hawke’s Bay reflects the sad state of affairs across the country. Provision of emergency housing is random patchy and far below what is needed. National’s State house sell-off which is already under way with large numbers of State houses being sold off locally will only make matters worse and asking about how many are being sold in my electorate is like trying to get blood from a stone.Labour believes that the level of homelessness we are seeing now is unacceptable in New Zealand in the 21st century. Our policy when we are in Government in 2017 is to commit $5 million-plus a year housing from Housing New Zealand to house 1000 homeless families and individuals per year in support of emergency housing. People who are homeless will be housed. The funding will be used to pay social service NGOs and to provide wraparound services to help homeless people get their lives back on track and then find sustainable long-term housing. We will also undertake a ministerial commission working with the community to develop a New Zealand strategy to eliminate homelessness. [Bell rung]Those 8 minutes have gone way too fast but I do want to acknowledge the Minister for Māori Development the Māori Party co-leader when he spoke in the House in his speech about being happy to deliver goodies to the people of New Zealand. I want to commend the Hon Te Ururoa Flavell for the work that he has done in securing the budget he has for our people but I would not call them “goodies”. It is giving on one hand and it is definitely taking on the other hand.Under Labour you will see a return to surplus Budgets. Under Labour we will fix New Zealand’s housing through KiwiBuild. We will invest in our regions to grow real jobs and we will restore the impartiality of the public service. We will also invest in and value our NGOs and communities to deliver fairer and more detailed social services. Kia ora.The ASSISTANT SPEAKER (Hon Trevor Mallard): Alfred Ngaro—a 5-minute call.ALFRED NGARO (National):I thank you for the call and look forward to having this call in this Budget debate even if it is only 5 minutes. I just want to commend the previous speaker Meka Whaitiri because when she was talking it was actually the first time I have heard the strategies coming from the Opposition and from the Labour Party. She was talking about the things that they will actually do rather than just opposing us. So I can commend her for putting up the strategies. I do not always agree with all of them but I think it is great that actually we are hearing strategies that are being put forward.What I want to talk about is this Budget of 2015 and the responses not from the House but actually from the community from the heart of the people who are out there and from the people who work every day with our communities and with our families whether it be in business tertiary training education health or other forms of services as well.On Friday we were with the Deputy Prime Minister the Minister of Finance himself. We were in South Auckland at the Auckland University of Technology at the Manukau campus and we were holding a post-Budget forum with the Pasifika community. What was encouraging were the comments that came afterwards and also when the Deputy Prime Minister spoke. He said: “This Budget tries to move forward.” It makes changes for instance in regard to the baseline of benefit changes and the increases that are there. Seven hundred and ninety million dollars over a period of 4 years is significant and though it has been said that that $25 is not much that increase has not happened in 42 years so that is significant as well.Kris Faafoi: And it won’t happen for 10 months.ALFRED NGARO: The reason why there are comments about 10 months—let us talk about that just really briefly. Part of that process as the honourable member Mr Faafoi will know is that first of all you have to go through legislation. Then you have a process—and this is for the listeners out there to hear—and then there are submissions to be heard over 3 months. After that the legislation comes back into the House has its second and third readings and then after that it then goes through the administration changes after the Royal assent. And so therefore 16 April is an appropriate date. It is no different from the GP visits for under-13s legislation. We announced this measure in 2014 and it was enacted in 2015. It is appropriate because we need to make sure we have the administration side and we have the commitment there to achieve that so it is actually no different from that process as well. We believe that process is appropriate it is adequate and it is meeting the needs. Like we said when you have not changed something for 42 years you have got to do it right. You cannot say: “Why is it taking 10 months?” when you have not done it—even in Labour’s time—in 42 years. I think that is quite significant and we think that it is important as well.What is not often talked about—and I just want to make some comments about this—is that the economic growth forecast is at 2.8 percent and that is significant. We have heard others in the Opposition and even internationally call it the rock star economy but we know that our Minister of Finance has said it is a rock-solid economy. Therefore we are not trying to be flashy and we are not trying to pretend that we know all things. However we are making sensible and stable decisions hence the reason why even in the latest poll from Television One 48 percent still prefer National as a Government. That is significant as well and so that is important. The deficit of $684 million is forecast for 2014-15 and will move to a surplus—and a question was asked about a surplus—of $176 million in 2015-16 growing to a $3.6 billion surplus in 2018-19. We think that is quite significant. We think that is really important as well.I also want to just talk about how average wages are expected to rise to $63000 a year by mid-2019 at an increase of 12.5 percent. That is significant because we still know and we are still clear that the average wage increase is above inflation. That is significant as well because we know that what is important to our families and to our homes is to ensure there are enough resources coming in. Unemployment—Mr Faafoi was actually talking and asking questions about that. Unemployment is forecast to fall to below 5 percent in 2016. There are 194000 new jobs that are there. It is nearly 23000 more than what was forecasted by Treasury which talked about 170000. We think that is significant—194000 jobs are significant to what we are talking about.In the remaining moments that I have I just want to talk about—just finally in wrapping up—for vulnerable children the other part of the Budget that is part of the $790 million child hardship package proposal the $36 million to support the Children’s Action Plan including for new and existing Children’s Teams. We know they are out in Whangarei; we know they are in Rotorua. We have seen that the Children’s Teams have begun to work. It is an intersectional sort of collaboration that is making a difference for the children—for the young people and their families—and we know that this $36 million is important. In the Budget there is $23 million to bolster the work of Child Youth and Family and $8 million to help vulnerable students to participate more in education or training and to lift achievement. These things are absolutely significant and important as well. We have been talking about early childhood education in schools. We see the total spend is $10.8 billion.Scott Simpson: How much?ALFRED NGARO: $10.8 billion by 2015-16 on early childhood primary and secondary education—and at the moment there is $74.9 million for early childhood education to enable more children to be able to attend. We know that when children go to school they are well-equipped and prepared by their being in the early childhood education sector. We have increased the participation rates to up to at least 25 percent from what they were before. We think it is making a difference and it is quite significant.The other one—which is dear to my heart—is there are 300 extra trades academies places being added to support students to achieve National Certificate of Educational Achievement level 2. This is a great opportunity to be able to—[Interruption] Sorry?The ASSISTANT SPEAKER (Hon Trevor Mallard): The member can keep going if he wants to for a little while yet. I will tell him when to stop.ALFRED NGARO: Thirty seconds.In the brief moments that I have then Mr Assistant Speaker I just want to touch on a couple of things and they are particular to health. I think that these things are quite important. There is an additional $1.7 billion for new public health services which over the next 4 years will increase the Government’s total health investment. I think that is important. I am a member of the Pacific Prostate Cancer Foundation and getting health messages out to our community is critical. I know issues around non-communicable diseases are also placing an important burden upon a number of our communities. Therefore I believe that the health spend is significant in the primary care space—that it is important. So there is $320 million per year to district health boards and $1.3 billion over 4 years for extra services to help meet cost pressures and population changes. I could go on but I will not I think.The ASSISTANT SPEAKER (Hon Trevor Mallard): Consider it a challenge.ALFRED NGARO: Consider it a challenge—would you like me to continue? Thank you very much. I commend this Budget this excellent Budget to the House.TIM MACINDOE (National—Hamilton West):I could listen to my admirable colleague Alfred Ngaro all day and in fact for a while I thought I was going to. But I do want to commend him for a very fine address which I know he spent a considerable period of time preparing late this afternoon.We have come into the home straight of the debate on an excellent Budget which started 15 hours of debating time ago. This is a Budget that is exactly right for the times in which we live. This is a Budget that justifies the faith that New Zealanders resoundingly put in the John Key - led National Party at the polls last September. It also reflects the considerable plaudits that some very distinguished international commentators have uttered about the work of the New Zealand Government in recent years.Scott Simpson: Tell us about them.TIM MACINDOE: Particularly—Mr Simpson—the IMF and some of the leading economists who write in very reputable journals and who have said that New Zealand is following a pathway and has set a model that many other countries should follow. Most important in my view this is a Budget that is really genuinely helping our families that is helping those who most need help from a Government and in particular that is working for New Zealand.As we are nearly at the end of a debate that has focused fully and widely on all of the key provisions that were announced by the Minister of Finance just under a fortnight ago it is really time for the adjudicators I think to deliver their verdict and of course they are the public of New Zealand. The public of New Zealand who have been watching—and who no doubt are watching in great numbers right at this moment—will note the cohesion of the Government team in this debate and acknowledge as I do the strong contributions of our confidence and supply partners the Māori Party United Future and ACT. Each of those parties brings a fresh perspective to the table and each has secured in this Budget and indeed over the last 7 years some significant wins in their areas of influence. I want to applaud them and thank them for their contribution. They play a vital role in this Government.The public of New Zealand—the adjudicators of this debate—will have looked across the House throughout the last 15 hours and followed with interest the contributions respectively of the Green Party New Zealand First and the Labour Party. I am sure that they will share my views that the Greens often bring an interesting perspective to our debates in this House. At times I have to say it really does feel as if they occupy a different planet from the rest of us but even though they also have a long way to go before their aspiration of advancing economic credibility can be achieved they do bring something of value to the table.They were not helped of course at the start of this debate by a very poor opening gambit on Budget day from Metiria Turei who delivered a speech that she had clearly written 3 days earlier in order to lament the things that were not going to be in the Budget and then did not have the wit to think on her feet and acknowledge that actually most of those things were there. Instead she could have delivered a much more complimentary speech saying “Thank goodness.”This is the first Government in a very long time that has really substantially delivered for the people she keeps on talking about day after day in this House. But there were some considered speeches from many of her colleagues. I acknowledge that they do have the ability to articulate a theme and in most respects to develop it in some consistent detail. So I think that the adjudicators of New Zealand might give the Greens seven out of 10 for their performance in the 2015 Budget debate. And could I just briefly as others have done acknowledge today the election of James Shaw to the co-leadership of the Green Party. I congratulate him on that and wish him well. I also want to acknowledge and commiserate with Kevin Hague Gareth Hughes and Vernon Tava.Then we go to New Zealand First. Well New Zealand First got off to a slow start and there certainly was not a lot of depth evident in its contributions. Clearly it is missing the intellectual grunt and leadership that Le’aufa’amulia Asenati Lole-Taylor gave it in the previous Parliament. But like the Greens New Zealand First too can actually advance and develop a theme even though it depends too greatly on populism xenophobia and Luddite economics rather than on clear principles and an understanding of contemporary challenges and solutions. Most of the New Zealand First MPs gave it a reasonable shot and some of them would have held the public’s attention. I think overall New Zealand First scraped together a creditable pass mark of five out of 10.But what of the hapless Labour Party? Clearly it got off to an appalling start when its current leader delivered the worst Budget reply speech by an Opposition leader in at least 50 years. The pained expressions on Labour members’ faces when that ordeal was over spoke volumes and the public definitely noticed. Yet incredibly things seldom improved for them over the 13 hours of Budget debate that have followed. Labour’s woes are numerous readily apparent and well documented. To be sitting at 25 percent in the polls nearly 7 years after they were ejected from the Treasury benches must be devastating for those members and their dwindling band of union backers and party members yet they need only reflect upon their lamentable contributions in this Budget debate for compelling reasons for their continuing decline in public estimation.Unlike the Greens and New Zealand First the Labour members have failed to grasp a theme or even a few connected ideas and stick to them. Although the leaders of the Greens and New Zealand First made less than memorable speeches the speech of the current leader of the Labour Party was memorable but for all the wrong reasons. In the months and years to come he will no doubt look back on that contribution as the beginning of the end of his brief tenure as leader of the Labour Party.Despite being well into their third consecutive period in Opposition Labour members have no more idea today than they did nearly 7 years ago of how to improve their performance. In this debate Labour speaker after Labour speaker has failed to grasp what it is actually about. New Zealanders know that it is about the responsible management of our economy; reducing debt; delivering better public services—boy we are and that is one of the things that I am most proud of as a National MP; standing by Canterbury which I am very proud of too given the challenges there; and doing more for our most vulnerable families.That is why New Zealanders are saying that this is another great Budget from the National Government. Labour members do not know how to deal with that. They have substituted volume for persuasiveness throughout this debate. They have also tried to substitute clichés for substance. Well that will not cut it. That will not reconnect them with the public of New Zealand. That will not even inspire their own members let alone the public who are waiting to be swayed. I have to say that I think the New Zealand public if they were being charitable would give the Labour Party two out of 10 for its performance in Budget 2015. And that is why we are seeing in both the Greens and New Zealand First day after day emerging leaders of the Opposition. I predict that one of those two parties will be the main party in the Opposition after the next Parliament unless this Labour Party which is doing so badly can actually start to learn why it is doing badly and turn things round. Labour members need only look further down the Chamber to get a few clues of how it is done.Let me finish today by saying that as the MP for Hamilton West I am very very proud of what this Government does—in particular to help our vulnerable families. I represent a marginal electorate. It is good to see you Mr Assistant Speaker Mallard smiling at me because you too know what it is like to represent Hamilton West. We have a microcosm of New Zealand. There are many families in New Zealand who have done it tough through the recession. There are many who need some support. There are many who have struggled to make ends meet during the global financial crisis and the domestic recession. So I want to say that I am deeply proud not only of the fact that as a National Government we have perhaps confounded the punters and delivered something that a lot of people did not expect but that we have acknowledged the fact that there are people who are doing it tough who need some extra support.As has been acknowledged by many on this side of the House we have in this Budget delivered the first real increase—a significant increase—in incomes for people at the bottom of the heap in a very long period of time. But of course it is part of a much wider overall package. We saw other measures designed to help families last year in the Budget and in previous years. The reform of the tax system despite the bleatings of members opposite is genuinely fairer for everybody and gives people more hope to the point where the vast majority of taxpayers in my electorate—more than three-quarters of them—are paying less than 20 percent in income tax. That is a terrific incentive to them. But these measures that the Minister of Finance has announced in this Budget are making a huge difference and will make a huge difference. [Interruption]The ASSISTANT SPEAKER (Hon Trevor Mallard): The member does not need to wake up the House.TIM MACINDOE: As you have just rightly said this speech is so riveting that no one needs to be woken up. But I am really proud of what this Budget does for families. I want to say that I believe that this Minister of Finance will go down as one of the greatest Ministers of Finance of our lifetime. I want to say that I will go to my grave immensely proud to have been a member of the John Key - led National Government because we are delivering the things that matter to New Zealand because we are making real improvements across the board because people will be better off because things are getting better because things are getting fairer and because our achievements in health and education and across a range of areas are clear for all to see.That is what being in Government is about. That is why this Budget continues a very impressive record since the National-led Government came into office. That is why John Key and Bill English and their Ministers can all hold their heads up high. I say to them “job well done” and in a few minutes’ time I will have great pleasure on behalf of the Government in giving the confidence vote an emphatic expression of support because I know that it is felt not only on this side of the House but overwhelmingly throughout the country.KRIS FAAFOI (Labour—Mana):It is a pleasure to speak as Labour’s last speaker in this Budget debate. I would like to thank Tim Macindoe for two things. The first thing is that he realised that well within 8 minutes of his own speech he would be asleep so he set himself an alarm. He set himself an alarm. He fell asleep but with 2 minutes to go Tim Macindoe’s alarm went off. That tells you the story of this Budget. This is a tired Budget from a tired Government that has fallen asleep not only just at the wheel but at the chief whip’s speech. Eight minutes into it he had enough. He had to set an alarm and that speaks volumes for this Government and this Budget. I would also like to thank Tim Macindoe and wish him well for his career post the 2017 election as a standby judge for Dancing with the Stars—as a standby judge for Dancing with the Stars. Because with his performance of scores out of 10—inaccurate by the way; inaccurate—that is pretty much all the chief whip for the House has got.Accuracy is something that is very important to me. I want to be accurate in the way that we have described this Budget. Some of my colleagues have said that this Budget lacks vision. I do not think that is quite precise. If your vision is that you can tax it you can sell it you can charge for it and you can make a profit out of it then this is the Budget for you. I thought I had seen everything in this Budget but to wake up this morning and to hear about this Government with its plans for social bonds I thought “This has gone too far.” This is a serious issue. This is a Government that wants to help people make profits out of the treatment of mental health patients. I have thrown some accusations at the National Government before but to think that this is not a good old-fashioned Tory Government when it wants to charge or help companies make profit out of mental health provisions in our communities—it shows you just how true Tory this Government is. It shows you just how true Tory this Government is.Where is the vision in this Budget for children in my electorate of Mana to dream to succeed? For those children who are vulnerable for those children who come from Housing New Zealand homes and private rental homes where their families are struggling there is no vision in this Budget. Let us look at those many thousands of constituents of mine who live in Housing New Zealand houses. Where is the vision for them? There is none. The only vision for those families is that this Budget allows this Government to sell off swaths of Housing New Zealand homes. I came from a State home too just like the Prime Minister who sits over there. I am proud to say I grew up in one. That State home let me get here. It was an anchor in my community. But that Government over there wants to take that away. That Government wants to take that away—to take that opportunity away from many of those families from many of those children who want a good affordable warm house to live in. Those members sit over there and they are quite happy to do that.Where is the vision for helping our families save? Well there is none. It is the eighth time in this Budget that this Government has taken a crack at KiwiSaver—the eighth time. All those 2.5 million people saw the benefit and the incentive of the $1000 kick-start that is now gone for anyone who has not already signed up. I made the point during the Budget debates that some of the members across the House have already signed up to KiwiSaver. I know we are not allowed to read speeches but for the purposes of accuracy I want to read the roll of honour of people who voted for getting rid of the KiwiSaver kick-start but who have probably already taken that $1000. So here it is: Amy Adams Todd Barclay Maggie Barry Andrew Bayly Chris Bishop Simon Bridges Gerry Brownlee David Carter Matt Doocey Sarah Dowie Te Ururoa Flavell Craig Foss Paul Foster-Bell Marama Fox Paul Goldsmith Jo Goodhew Joanne Hayes Brett Hudson Nikki Kaye Nuk Korako Barbara Kuriger Melissa Lee Tim Macindoe Todd McClay Ian McKelvie Mark Mitchell Todd Muller Jono Naylor Alfred Ngaro Simon O’Connor Hekia Parata Parmjeet Parmar Alistair Scott Scott Simpson Stuart Smith Lindsay Tisch Nicky Wagner Maurice Williamson Michael Woodhouse and Jian Yang.Those people have already signed up to KiwiSaver. They have signed up to KiwiSaver and they have got their $1000 but they are going to deny future generations of this country their incentive to start their KiwiSaver programme. They have taken your $1000—they are all sweet they are good but they are not going to let future generations of Kiwis sign up to KiwiSaver and have their incentive to start their savings regime from a very young age. My simple message that I will continue to say to that side of the House is “Give it back.” Give it back. Give it back. If you are quite happy to sit in this House and say that we do not need this anymore—that is not an incentive. There is not an incentive anymore to sign up to KiwiSaver. Give the money back. Give the money back. There is a deafening silence from that side of the House. There is a deafening silence.Is it not a strange strange coincidence that the first year of savings from getting rid of the KiwiSaver kick-start is about $175 million? What is Bill English’s proposed surplus for the next financial year? It is $176 million. So with one fell swoop getting rid of that KiwiSaver kick-start the Government has landed itself on a surplus. But hold on a minute. We have been here before. The Government has said that we will get to surplus. Again this is a Government that has said we are in surplus. It is a complete and utter fallacy that this Government has ever delivered a surplus. Again for the records and for accuracy it is not 9 nil; it is 9 negative 7. The Government has been there for 7 years and has not delivered one surplus. Government members sit over there saying that they are the great economic managers of New Zealand and this Government is working for a better New Zealand but they have not managed to deliver one surplus. This Government has not delivered one surplus. So in the interests of accuracy it is not 9 nil. I want it put into Hansard that the last Labour Government delivered nine surpluses and Bill English has not delivered one. In fact he is on negative 7—that is how bad this Government is.We were told just before the election that there would be no new taxes. Well in this Budget there are three new taxes. If you are going to go overseas and come back you are going to get charged a new tax. Of course the Government calls it a levy—let us google “levy”. Let us take the chance to google “levy” as the Prime Minister said. Is it a tax or is it not? Well that was the debate. Google “levy”—bang! It is a tax. If you go through the airport you are going to get charged $22. Were Kiwis told about that? No. If you have got a broadband internet connection or you are a mobile user you are going to be paying a levy or tax on that. Also we can go into the debate about a capital gains tax. The list member from Palmerston North has already said it is a capital gains tax when the Prime Minister and the Deputy Prime Minister said it was not.This is a tired Government. This is a tired Budget. It is a tired Budget from a tired Government that has fallen asleep at the wheel. I want to thank Tim Macindoe. We had to wait 15 hours to get to the truth and his alarm went off because he himself had fallen asleep. That is what happened 8 minutes through the speech—I think he was probably asleep for 15 hours especially through his own members’ contributions. This is a Budget that lacks vision. It is not tackling the real issues that matter to Kiwis. They are around housing—and if you want to know our plan make sure you do something about investing in Housing New Zealand and building some houses. Nick Smith would not know a thing about that. I would love to go to one of Nick Smith’s consent-warming parties because that is all he has delivered. That is all he has delivered. In education we are seeing Government members crowing about extra investment. The Government cut the education budget. What we have seen today—and this is a serious issue—in health is where this Government’s real DNA lies. It wants to help people make profit out of looking after people with mental illness. Is that the kind of Government that New Zealanders want? I do not think so. We know what is going to happen there: the easy cases get taken and the profit gets made and those that are too hard get left and nothing is done with them. That is the real DNA of this Government. This is a tired Government. It has run out of ideas and is asleep at the wheel and Tim Macindoe’s alarm clock absolutely confirmed that.Hon BILL ENGLISH (Minister of Finance):That speech was better than Andrew Little’s. It was energetic by comparison. It had a lot of insight and vision by comparison. And it had more support in the Labour caucus by comparison.It is a pleasure to be able to stand and wind up this Budget debate. What a good Budget it was. I want to acknowledge the National Party team and our coalition partners because that team put together in somewhat trying circumstances a Budget that many New Zealanders are pleased with. In the last week or so I have been out giving speeches and presentations about the Budget and actually it did not matter whether I was speaking to iwi Pasifika businesses the social sector the education sector or the finance sector they all thought the Budget was good—the whole lot! They all thought it was good even when they disagreed with us because even when they disagree with us they can see that the Government is grappling with the broad economic and social challenges that they think a Government should be dealing with and they pay us the respect of engaging and giving us alternative arguable propositions—not just whingeing. The Labour Party should be worried because a lot of those people are on the face of it Labour supporters and Labour voters. I want to come back to that.As we have said for some time the outlook for the economy is positive in this Budget with moderate growth consistent job creation and increases in incomes year on year—2 to 3 percent; moderate but sustained. And the Government’s economic policy some of which is expressed through further measures in the Budget is to support the sustainability of that economic growth. There are some potential imbalances—the housing market in Auckland for instance—but there has been a series of measures over the last month that take the Government’s efforts further towards achieving a balance between supply and demand.In the Budget the Government has laid out further its progress on how to control Government spending which amounts to a view that if the Government does its job better then it will need to spend less. We do not measure the Government’s success in its own business by the fact that it spends more all the time because more Government expenditure is often a signal of failure not of success. It happens because the last 15 programmes did not work.In the face of that Budget the Leader of the Opposition got up and gave one of the worst Budget reply speeches that we have heard.Hon Paula Bennett: The worst.Hon BILL ENGLISH: Well no to be fair some of the others of the four previous Labour leaders were pretty bad. Honestly they were. The real question is: why was it such a bad speech? He made one mistake among many—probably the biggest mistake—and that is—Hon Maggie Barry: Standing up.Hon BILL ENGLISH: Well standing up—that was a bit of a problem but at least he got to sit down at the end. That fixed that problem. No his other big mistake was listening to Grant Robertson. It really was because Grant Robertson—Hon Paula Bennett: Other leaders have too.Hon BILL ENGLISH: Well other leaders have made the same mistake and look what has happened to them. In fact Grant is probably surprised how quickly his strategy is working. It has worked three times before and they are all on the bench over there and there is room for one more I am sure.One of the reasons why he gave such a bad speech is actually that Labour members do not have anything to say. Look it is not what the Government says about Labour that is most devastating for Labour members it is what they are saying about Labour. Here is a question that every heartland Labour supporter is asking: why did the Labour Government not put benefits up when it had the biggest surpluses a Government has ever had? Why did it not? Why did it not put benefits up? Every Labour caucus member was asking themselves that question. It is not our doubts about Labour that are going to be so hard on this Labour Party through a long cold winter; it is Labour’s doubts about Labour. Because if Labour could not put benefits up for the poorest when it had the money what is Labour for? The conclusion that we came to long ago—which Labour voters are starting to come to now—is that it is not for anything in particular.I will give them one reason why Labour did not put benefits up: it was because the political judgment of its previous leadership was that no one trusts Labour on welfare. They see the Labour Party as a one-way cash machine. It takes the money—the fruits of successful capitalism—and uses it to buy political power. That is the modern Labour Party and how it is perceived and the previous Government leadership was right. That is why it did not put benefits up. It knew that Labour would lose votes if it did. And now we have the irony of a National Party that can put benefits up and we will win votes because we have. We will win votes. Why? Because we do not treat the lowest-income people like meat to be ground in our political machine. Most of them do not vote or will not vote and certainly will not vote for us.But the New Zealand public trusts us with their money. That is what it comes down to. People who are working in the cold weather today who at the end of the week pay over their PAYE will vote National because they know that we will use that money responsibly and when we are alleviating hardship in the lowest-income families we will treat those families with the respect of creating some kind of reciprocal obligations. We will think about requiring them to turn up to a work test because we think they are capable of work. The Labour Party never thought that they were capable of work. It treated them as if they were helpless. The public knew that and believed that if Labour gave them more money through their benefits it would make dependency worse not better. And that is the question that Labour members are asking themselves. What are they for if they could not lift the incomes of the lowest-income New Zealanders?It is summed up in their argument against social bonds today. There is not an enterprising innovative lefty in the developed world who is not excited by the possibilities of social bonds. If you are a social enterprise if you are green if you know about Grameen Bank if you have been in the development unit of some UK local council you are pumped up and wanting to do it. One group of left-wing politicians in the whole world is against it.Hon Steven Joyce: Who are they? Who’s that?Hon BILL ENGLISH: The New Zealand Labour Party. It simply sums up the political time warp that they are in. This lazy Labour Party this uninspiring Labour Party this Labour Party that sucks hope from those who need it most has been waiting around to be able to say “The nasty Tories cut everything. Vote for us; we’re kind and caring.” It is not happening so they are marooned. They do not know what else to do. They have not done any of the intellectual work to test themselves so they have nothing to contribute to the issues—more tax deductibility for research and development credits or something is about their only policy; and they have had that same policy for six elections. It is not just about the broader economy; it is worse than that because they have nothing to contribute in areas where they are supposed to be the experts. They are meant to be the defenders of low-income New Zealand. They have nothing to say about social investment except “Don’t do it.” They have nothing to say about social bonds except “Don’t do it.” They have nothing to say about the reform of State housing except “Don’t do it.”The ASSISTANT SPEAKER (Hon Trevor Mallard): The time for this debate has expired. The question is that the amendment in the name of the Leader of the Opposition be agreed to.A party votewas called for on the questionThat all the words after “that” be deleted and replaced with “this House has no confidence in a government which has failed to deliver the jobs the incomes or the surplus they promised; squandered the economic golden weather; failed to diversify our economy; failed to fix the housing crisis; neglected regional New Zealand; and is tired out of touch and out of ideas.”.Ayes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.Tim Macindoe: I raise a point of order Mr Speaker.The ASSISTANT SPEAKER (Hon Trevor Mallard): The member will resume his seat. I just want to remind members of the very good ruling last week from my colleague Assistant Speaker Tisch as to what happens to members who interject during party votes.A party votewas called for on the questionThat the Appropriation (2015/16 Estimates) Bill be now read a second time.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Bill read a second time.Accident Compensation (Financial Responsibility and Transparency) Amendment BillFirst ReadingHon NIKKI KAYE (Minister for ACC):I move That the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill be now read a first time. I nominate the Transport and Industrial Relations Committee to consider the bill. At the appropriate time I intend to move that the bill be reported to the House by Tuesday 3 November 2015. This will help to ensure that the provisions of the bill if enacted by the House can come into effect before ACC consults on levies in 2016. The Government is committed to ensuring that the ACC scheme remains sustainable and effective so that ACC can continue to provide comprehensive no-fault cover to injured New Zealanders long into the future. This bill will amend the Accident Compensation Act 2001 to improve the governance and transparency of ACC funding and the setting of levies. The ACC scheme is a longstanding and critical part of New Zealand’s social and economic fabric. It has served generations of New Zealanders well. The Government is committed to strengthening the ACC scheme for our most vulnerable and for all New Zealanders. We want to reduce the incidence and severity of personal injury. To achieve this we are focusing on better injury prevention improved disputes resolution for injured people improved management of our most complex and serious claims and more consistent and timely decision-making on claims.In addition to this work it is also vital that we consider the framework in which ACC funding and levies are set and that we better meet the public’s expectations that ACC should be responsive and transparent. In 2008 the Government inherited a $4.8 billion hole in the ACC accounts. Over the last 6 years we have worked really hard alongside ACC to improve the scheme’s finances. As a consequence for the first time in history ACC’s three levy accounts hold or will soon hold enough funds to meet the expected lifetime of all existing claims. This is a significant achievement that reflects the work undertaken by our Government to turn things round. However we cannot be complacent. Continued improvement is crucial to maintaining levy stability and avoiding volatility. ACC’s $30 billion balance sheet is subject to frequent shocks including changes in investment discount rates claim numbers and medical costs. Interest rate movements alone can have a significant impact on ACC’s balance sheet at any one moment. For example a recent decrease in the discount rate over the period of 1 month was estimated to have increased ACC’s outstanding claims liability by almost $3 billion. These shocks can impact on ACC’s solvency.As ACC’s accounts have approached full funding over recent years this Government and officials have been considering how to best manage the inherent economic volatility to which the ACC scheme is exposed. A delicate balance needs to be struck. On the one hand the public needs to have assurance that levies reflect underlying costs and that ACC will have sufficient funds to pay ongoing entitlements to claimants. On the other hand volatility in levy rates can undermine public confidence in the ACC scheme and create uncertainty for business and individuals. When levied accounts are at or approaching full funding they may appear to have an excess of funding. However returning to what appears at one particular point in time to be an excess of funds could result in a reduction in solvency and create a need to collect more funding in the following years. As such we need to ensure that successive Governments have an appropriate range of tools to enable them to make funding and levy decisions in a principled and equitable way and to smooth out the effect of economic shocks over time to maintain both the solvency of ACC’s levied accounts and provide levy stability.For these reasons two of my key priorities for ACC are to create a more financially responsible and transparent levy system and to enable more sustainable and stable levy reductions. The bill represents a significant step towards the achievement of these priorities and addressing the issues that I have just outlined. The bill takes this step through making two key changes to the ACC scheme. The first and most significant change in this bill is to introduce greater clarity and transparency to the approach for funding ACC and the levy-setting process. The bill achieves this through three key measures. First the bill establishes a robust framework for funding and levy setting. It does this by requiring that levies must be set in accordance with the following three principles: meeting the lifetime costs of claims in a particular year reasonable stability in levy rates and long-term solvency of the levied accounts. These principles will promote relatively stable levies that reflect underlying costs.Second the bill will require the Government to set the overarching funding policy which ACC will be required to give effect to when developing and consulting on levies. The funding policy will need to be consistent with the principles of financial responsibility included in the bill. This contrasts with the current approach where the Government’s role generally involves making a decision on levies at the end of the levy-setting process after ACC develops its own funding policy and presents the Government with levy recommendations based on this policy. Responsibility for setting levies ultimately lies with the Government of the day as it must for levies of this kind. The mandate for collecting levies has been given to the Government by Parliament and the Government must make the final decisions on levies that the public will be charged. The responsibility needs to be properly reflected in the process for setting levies from the very beginning and outset not just at the end. The bill establishes a more robust governance structure where the Government sets the policy and ACC as the responsible Crown agent implements and is held accountable for it. Ultimately this will support a closer match between the levies that ACC consults on and recommends and the final decisions on levy rates made by the Government. Taken together these two measures will increase the stability and transparency of the levy-setting process.Third the bill increases the reporting requirements for ACC so that the public is better informed about the impact that the new levy rates will have on future levy rates and other aspects of ACC’s funding. More transparency is needed so that we can ensure that the downstream consequences of funding decisions are clear and that both the Government and the public are fully aware of them and that we do not repeat the history of the last Labour Government with a $4.8 billion hole being handed to this Government. As well as ensuring that levies are set through a robust process the bill includes the kind of accountability and transparency requirements that already apply to the operation of the Government’s core budget under the Public Finance Act.The second change in the bill is to ensure that the residual levies are not over-collected by allowing for their collection to be discontinued sooner than currently required in legislation. It may be helpful to provide the House with some context about this proposal. In 1999 ACC moved to a system of fully funding the lifetime costs of an injury claim. Prior to this levies covered only the costs of a claim in a given year. Residual levies are therefore required to meet the ongoing costs of historical claims. However we need to ensure that the payment of residual levies continues only as long as there are outstanding liabilities for residual levies to be offset. This bill provides for residual levies to be discontinued from a set date by Order in Council. This will allow the collection of residual levies to be discontinued earlier than the end date currently set out in the Act which is the 2018-19 levy year.Residual liabilities will continue to fluctuate so a decision to discontinue residual levies needs to be made closer to the time at which it is appropriate to discontinue them. In practice the removal of residual levies will have no impact on the overall amount of levies collected but it will have some impact on the distribution of those levies right across New Zealand businesses. The $500 million of indicative levies announced in the Budget allows for the change in the bill which could see the collection of residual levies discontinued earlier than the date currently required in the Act. This will allow the actual end date to align with the best estimate of when residual levies will have been fully offset by the change outlined in the bill. Just to be clear: the bill allows the Government to manage only the timing of when the distributional impact occurs not whether it occurs.The measures I have outlined form an important part of the Government’s vision for the ACC scheme. It is important to have consistency transparency and stability for levy payers and stability for the hundreds of thousands of small businesses in New Zealand. It is important to continue to strengthen the public’s confidence in the ACC scheme. There has been significant leadership by people like the chair of the board Paula Rebstock and the chief executive Scott Pickering as was actually outlined today but there is a need to do more and it is important that the ACC scheme continues to be fit for purpose and that we support people to be as safe and as healthy as possible. Alongside the Government’s work that is under way I consider that this bill represents the beginning of a new era of financial sustainability and high performance for ACC. Of course many fundamental aspects of the levy-setting process will remain in place once this bill becomes law. In particular when considering changes to levies ACC will still need to consult with levy powers and make a recommendation to the Government on the levies. Certainly the changes in this bill will complement these existing processes but more important the changes in this bill will allow us to realise the benefits of improving the Government’s—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! The member’s time has expired.ANDREW LITTLE (Leader of the Opposition):I rise to take this call because the ACC scheme is very important to the Labour Party and has been since its inception nearly 41 years ago. It had a long gestation arising out of the Woodhouse commission. It was hotly contested and hotly debated. It was supported by the Labour Party in Opposition and then by the Labour Party in Government after the 1972 election which made some very important changes to make it the scheme that it was when it came into force in 1974. This bill prescribes or creates a process that the corporation and the Government of the day can do already. There is nothing in this bill that cannot already happen.If we have a look at section 6 of the existing legislation—the Accident Compensation Act 2001—and the definition of “fully funded” we see that that definition encapsulates the very thing that this bill says it is doing. It takes into account the fact that the scheme has to be fully funded and defines what that is and requires the corporation to take into account that there can be fluctuations from one period to the next. We have this process already when it comes to levy setting that involves the corporation itself that involves the ministry that gives policy advice—the Ministry of Business Innovation and Employment—that involves Treasury and that involves a public process and it ultimately ends in Cabinet taking in all that advice and making a decision reflecting and representing that a political decision is taken because ACC levies are so widespread and important to the economy. That is all there at the moment. What this bill does is add a process whereby the Minister gets involved in a preliminary climate setting if you like which can happen already and indeed may already happen.The one thing that this bill will not do which is actually the most important thing is stop National Party interference in ACC and levy setting which is the real problem that we are desperately in need of a remedy for. The Minister’s account of the background and the need for this legislation demonstrates the problem. She cannot even give a straight account today of the history of the issues behind ACC levy setting.So let us get it straight. In the 1990s the then National Government and the then Minister Bill Birch ran down ACC levies. ACC under its old pay-as-you-go levy-setting process had built up reserves as was always intended. You read the Woodhouse commission report and the late Sir Owen Woodhouse was very clear about the way ACC would operate. It was a social insurance scheme and the corporation was expected to put aside reserves of levies—it would build them up over time—and that is in fact what happened under successive National and Labour Governments. And then the 1990s National Government came in and its members never liked ACC. They hated ACC. That is why they ran it down precipitated a crisis and said: “This is no good. We have to hike the levies.” and then they embarked on the campaign to privatise ACC because that is what National Governments do. They do not like social providers. They do not like the State being involved in social provision. They ran it down and they mounted the case for privatisation.But it did not last. The Labour Party at the time in Opposition was very clear that when it took Government it would not accept privatisation and it would reinstate the corporation as a proper publicly owned publicly run corporation doing what was required to prevent accidents and provide a basis to assist people who had been victims of accidents. Then it was fine and under the Labour Government of the 2000s the corporation went back on to its steady footing. It maintained the levy-setting process put in place in 1999 precisely so it could build up reserves. It maintained the full-funding model so it could build up reserves and its reserves were built up. By the end of that Labour Government it was generating surpluses of around a billion dollars a year—modest in the scheme of things but entirely appropriate to ensure some financial certainty and security for the corporation.Then there was a change of Government and then perhaps the biggest economic shock to hit the corporation hit in the form of the then Minister Nick Smith who could not be relied upon to keep his sticky paws off ACC. He mounted a silly campaign about a crisis. Nick Smith had not realised that New Zealand and the rest of the world were going through a thing called the global financial crisis. It was very interesting that in Minister Kaye’s account of the history of the justification of this bill she never once mentioned the global financial crisis. Well ACC as one of the top-performing managed funds of the country suffered the same fate as every other managed fund in the country privately or publicly managed—that is its balance sheet took a hit. The valuation of equities took a hit and went down. That was termed by Nick Smith and his National Party counterparts in Government as somehow a crisis caused by the previous Labour Government. It was not. It was typical National Party rubbish—nonsense trotted out to justify what National Government members really wanted to do and that is to hike ACC levies. They either got very poor advice or the advice they got they did not listen to or they just did not understand how financial markets worked which is surprising given the Prime Minister and his background. But anyway that is what they did.So ever since that time for the last 7 years they have left ACC levies artificially inflated not because it is good for the corporation but to meet their political agenda. The truth is we now know because we have had the independent research done on it that ACC is now over-levying New Zealand businesses and workers to the tune of $350 million—$350 million.Hon Nikki Kaye: Publish it. Where is the Infometrics report? Where is it? You’ve never published it.ANDREW LITTLE: The Minister is uncomfortable because she knows that is right. She knows that she has had advice and her predecessors have had advice that they are over-levying New Zealand businesses and New Zealand workers and she will not do a thing about it. So to give the appearance of doing something she then contrives this legislation to put in place this extra process so that she can sort of say “Oh no we want stability of levies and we want to make sure we’re doing it right. It’s going to take us another 2 years before we start doing the right thing by New Zealand businesses and New Zealand workers.” Here is the reality: the Government could do that now. It could do it now—reduce ACC levies. ACC is in a very healthy condition not because of anything that that Government has done but because ACC has been very good at retaining outstanding financial managers who have made good investments wise investments which have built up the reserves built up the value of the reserves of ACC to the point where now they are worth over $30 billion.I look at the title of this bill and it is hard not to break out in a wry smile when you look at a bill called in part the “Financial Responsibility” Bill and that fact that this Government when the work accounts and earners accounts are funded to the tune of 130 percent calls it financial responsibility. Well it is irresponsible to take levies off businesses and workers when you do not need to do so. Then the other word the Government uses in the bill is “transparency”. This is from a Government that cannot be open and transparent about things like its deal with Skycity over the convention centre. It still cannot be transparent over its deal with a Saudi businessman flying sheep around the world at New Zealand taxpayers’ expense. And Government members want us to take them seriously.This bill looks like it is doing something that is unnecessary. We will consider this bill in the select committee. We will support this bill in its first reading so it can be closely examined in the select committee and so New Zealanders can have their say and can say “Tell us whether this is needed or not.” and the experts can come in and say “This Government has got its history wrong.” We can do this. We do not want to be overpaying our levies. We just want a corporation that can act properly ideally independently of the Government and that can do the job it has been doing: looking after New Zealand workers’ interests when it comes to accidents; looking after New Zealanders’ interests when they are in their leisure time and have an accident; and levy them fairly responsibly and properly which is not what this Government is doing. Let us have a look to see whether this process adds anything. If we are not satisfied that it is going to add anything of any value at all then we will not support it beyond that. Let us have it examined—let us have it examined—but we will not support yet another convoluted process to protect this Government from the reality of its actions which are that it is continuing to over-levy and overcharge good businesses and good workers right across New Zealand.JONATHAN YOUNG (National—New Plymouth):Well just to colour in perhaps the historical picture that the previous speaker Mr Little spoke about when he referred to for example the global financial crisis and the effect that may have had in creating the $4.2 billion hole the other side of that story is that under Labour the cost of claims increased by 57 percent in 4 years. So there was an opening up of the floodgates of people who came and used that scheme. It was used as a welfare programme rather than an insurance scheme. That is what happened and that was what contributed largely to the hole that we inherited as a Government.If we can do all that Mr Little says we can do right now why is it that voices out there in the business community are saying that this piece of legislation will become a breakthrough for ACC in this country? Let me just read out a quote from the chief executive of Business New Zealand Phil O’Reilly who said: “While BusinessNZ welcomes the $500 million proposed cuts in premiums to be announced in the Budget 2015 which is positive for businesses employees and motor vehicle owners the more important issue is the proposed new ACC Financial Responsibility and Transparency Amendment Bill. This will ensure levies reflect sound insurance principles”—there it is: not welfare but sound insurance principles—“ and is a major breakthrough …”.So if we could always do what Mr Little said we can do why is it that people who look from outside in the business world into what happens here in the House of Parliament and look at legislation call it a major breakthrough that ACC levies will now reflect sound insurance principles? So although yes we know that the ACC fund can be at times affected by what is happening out there in the equity world we also know that there needs to be strong principles in order to bring stability to that fund.He went on to say: “BusinessNZ hopes the bill will receive cross-party support as it proceeds through Parliament to ensure the public has faith in the principles of the ACC scheme.” I believe everyone in this House believes that ACC is a good thing. In order to ensure that it is stable and continues to offer New Zealanders what it intends to offer in the future it is important to have stability around that fund. We know what would have happened immediately if Labour had been in power. Yes it would have taken $350 million out of the levies. We know that that sort of short-term pay-as-you-go attitude is going to contribute to instability. It is important for us to have a long-term view so that we can take an actuarial approach to ACC.We know and some members on the opposite side know that when ACC came to the Transport and Industrial Relations Committee at the beginning of this year to do its annual review as ACC discussed its equity position it said that it worsened from negative $108 million on 30 June 2014 to negative $600 million by 31 December 2014. And in January this year for reasons beyond ACC’s control the asset base diminished by $4 billion and then bounced back by $2 billion in February. Short-term volatility exists around the assets of ACC. We are very thankful for the fine managers of that fund because they work hard for the benefit and interests of all New Zealanders. But we understand that even beyond a global financial crisis there are factors that affect this fund and therefore we need to take a prudent careful and yes a transparent but stable approach to how we manage and set those levies. It is very important.Due to short-term volatility in both the asset value and the outstanding claims for liability the Government’s approach is that a longer view is essential when it comes to levy-setting. This is what this bill is about. It is good to hear people like Phil O’Reilly who understands that and calls this bill a major breakthrough.If I could also read out what Kim Campbell chief executive officer of the Employers and Manufacturers Association said: “the $500 million reduction over two years comes at the right time following ACC’s sound financial performance and the solid footing which has the scheme now fully funded.” He says further: “We also like the fact there will be a more transparent levy-setting framework in the future and the Minister’s assurance around more stable levies in the future.” Let me just read his shout-out to the Minister: “We’re also pleased to see that as a new Minister to the ACC portfolio the Hon Nikki Kaye has quickly come to terms with the issues and made such a positive step in the proposed Accident Compensation Financial Responsibility and Transparency Amendment Bill.” That is worth saying as well. I think we are pleased to see the way that the Minister is very ably handling a very complex portfolio. I think it is good for all New Zealanders.I believe there are many components around that that makes ACC stable and strong. When the cost of claims increases by 57 percent in 4 years you wonder how much sicker we were how many more injuries we have had over that period of time and how many more accidents have occurred in our country. I think at that point in time Labour lost ACC’s proper focus on getting claimants back to independence—the independence that they deserve. There seemed to be such a huge flow of increased claims. I believe that over that period of time ACC suffered a $7.2 billion loss in 2 years and levy-setting was divorced from the reality of ACC’s burgeoning costs at that point. ACC’s long-term liabilities over that period of time increased by $15 billion.Yes it was hard work and yes it was at times controversial but getting this scheme back into the strength that it presently has is very very important for what it offers New Zealanders. It is a 24-hour no-fault scheme that is the envy of many countries in the world. It is really important for us to have cross-party work on this because it is such an important scheme for New Zealanders.By way of background in 1999 ACC moved to a system of fully funding the lifetime costs of an injury claim. Before this levies covered only the current costs of a claim—that is the Government looked at the current costs to ACC and set the levy to meet those costs as they currently occurred. What this scheme now offers is the ability to fund a person for the entirety of their claim. There are residual levies that are paid because of those claims that happened prior to 1999. But as those claims are finally paid out there is obviously not a need for those residual levies. What this bill does is enable the timing for the cessation of that to be determined closer to the mark when we come to that point.I have got to say one more thing before I finish my speech. Next month New Zealanders are going to see a significant reduction in the registration costs of their vehicles. I had a look at mine today. I have to say I have the oldest car in my street but it is a good old car—a 2006 Holden Calais. My registration cost is going to reduce by 50 percent. Is it not fantastic that this Government has got ACC under control fully funded strong and stable and that people right across our country are going to receive the benefit of that in their back pocket?I am very happy to commend this bill to the House.SUE MORONEY (Labour):This is a do-nothing bill from a do-nothing Government. It is what we have come to expect from this Government. When it comes to accident compensation there are so many things the Government should be doing that this bill does not do. Andrew Little is absolutely right. There is nothing in this bill that the Government cannot do already or that the Accident Compensation Corporation cannot do already and in fact does not do already. Instead we have got this do-nothing bill from this do-nothing Government.Why does this bill not do something to address the $350 million that that Government is overcharging every worker and every business in New Zealand every single year because of its determination to ignore the recommendations from ACC using exactly the criteria this legislation now codifies? The truth is that ACC already has to have levy stability as one of its criteria. It already has to take account of full funding. It already has to do forecasting to make sure that the levies it recommends to the Government every year do all of those things that the Government is now pretending it is bringing forward for the first time in this bill. Nothing here is new.Mr Young when he spoke talked about the corporation coming before the Transport and Industrial Relations Committee this year. He is absolutely right. When its representatives came before our select committee I asked them whether they already met every single one of the criteria that are outlined in this bill and they said yes. They told the select committee that they had already factored every single one of those things into account in formatting their recommendation which they have given to that Government and which that Government has routinely ignored. The Government has kept the levies artificially high but for what reason?Hon Nikki Kaye: That’s not true.SUE MORONEY: Well Judith Collins told us the reason Minister. Judith Collins said: “We have to get to surplus.” That is the reason that the Government has kept the levies artificially high—we have to get to surplus. Every single New Zealander is scratching their head and saying: “Sorry? We thought the point of ACC levies is to pay for the costs of injuries and accidents not to help that Government to fail again in getting to surplus this year.” which is in fact what has happened.That Minister should be extremely disappointed and angry in fact that her Government has put her in the position where she has had to overcharge every worker and every business in New Zealand their ACC levies in order to try to make Bill English’s surplus look a bit better—the surplus that never was. Even though the Government has trumped up and overinflated the ACC levies for at least 2 years now Bill English still could not get the books to balance. He still could not get the books to balance even though the Government had cards up its sleeve. The cards up the sleeve in that poker game were actually ACC levies being overcharged to every worker and every business in New Zealand to the tune of $350 million every year.Does this bill do anything about that? Does this bill do anything about that sleight of hand with those cards up the sleeve in that poker game? The answer Minister is no. It does nothing to address that issue. In fact all it does is codify the current situation. It does not require the Government to listen to ACC’s recommendations. It can continue to ignore the recommendations from ACC. It can continue to overcharge businesses and workers. It can continue to use this bill for the wrong reasons.For that very reason the Labour Party will be bringing forward a Supplementary Order Paper at the correct time in the passage of this bill to ensure that we do something about the sleight of hand that this Government has put in place. We will be bringing forward a Supplementary Order Paper that absolutely clarifies without anyone being in doubt that the Government cannot use ACC levies for any other purpose but paying for injuries and accidents in New Zealand and injury prevention. That is not what this Government has been using it for. It said that the ACC legislation allows it to use ACC levies for anything it damn well pleases. It said that that is in the public interest. Well we will bring a Supplementary Order Paper forward that ensures that levies can be used only in the public interest with regard to accidents and injuries and not for propping up Bill English’s failed attempt to get to surplus. That by the Government’s own admission is what it had been using it for and it is not what our precious ACC system was set up to do.Another thing this bill could do but does not is restore to injury prevention programmes the funding cuts that that Government has governed over since National came into office. The truth is that the best thing we can do with ACC is actually make sure that no one ever needs to use it because we are managing injury so well. That is my dream. It is my dream that we actually get to a situation where we are working so well with health and safety in our workplaces and we have got this so well under control that actually not many people have accidents and injuries that mean they have to rely on ACC for the rest of their lives. I can tell this House that that is not a very pleasant experience at all. But what did that Government do? It cut ACC funding for injury prevention programmes. How short term is that? It does not want to prevent injuries. It does not want to prevent injuries; it just wants to keep them happening and it has no plans to do anything about that.Chris Bishop: That’s wrong.SUE MORONEY: Well Christopher Bishop does not think that ACC should have anything to do with preventing injuries. He thinks that what his Government has done in cutting the funding for injury prevention programmes is the right thing to do. I can see that Minister Kaye is briefing the next speaker Alastair Scott. The Minister is briefing the next speaker to say: “Actually we’ve started restoring the funding cuts.” The injury prevention programmes are still not up to the level they were in 2008 when Labour left Government. They are still not funded to the level they were in 2008 and that is a disgrace. That is what this bill could be doing—restoring the funding cuts for injury prevention programmes—but it is not doing that. In fact it is not doing anything that cannot already be done.I want to spend a few minutes speaking about the name of the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill. In the midst of “flying sheepgate” which we have got happening on that side of the House there are distractions those members are trying to bring about to distract us from “flying sheepgate” like there suddenly being another ghost ship full of refugees on its way to New Zealand waters. The New Zealand flag referendum obviously is not distracting people enough from the issues that matter. This Government is claiming that it is bringing forward a transparency bill with regard to accident compensation. Well I challenge that Government. I will challenge that Government when we bring forward a Supplementary Order Paper that actually does require transparency from that Government to support it.The Minister has finally admitted after two oral questions fudging the issue and two written questions fudging the issue that she did not even seek any Crown Law advice on whether or not the Government had the legal right to overcharge ACC levies to prop up Bill English’s failed surplus. Why would that be? The only reason that a Minister would claim she has the legal right to raise ACC levies to pay for the Government’s failed surplus bid but not even ask Crown Law whether she is right or wrong is if she knows in her heart that what the Government has done is fundamentally wrong and probably without any legal foundation. If the Minister believed it was with legal foundation she would have sought advice from Crown Law and acted on that. But the Minister did not even seek Crown Law advice on an issue that is deeply dodgy and that is the overcharging of ACC levies to every worker and every business in New Zealand.All of those businesses know that if they had had that $350 million or their proportion of it in their businesses that would have grown the economy. They would have used it to create jobs and do research and development. That would have been a better way to grow the economy and get the books truly into surplus.ALASTAIR SCOTT (National—Wairarapa):The last speaker Sue Moroney was obviously a little confused a little bit concerned. She thought that the levies relating to ACC were related to the Budget surplus or deficit or the books. This is exactly why the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill is being put in place—to remove confusion to increase the transparency to increase the governance and to strengthen the framework under which ACC levies are calculated. It is necessary because as an employer myself I get bills from ACC. They are often not explained. It is difficult to work out where they come from and why the increase or the decrease has come about. This bill will increase the transparency and understanding for employers. The bill will improve the governance around the levy structure and this is so that we can continue to have fully funded accounts. Most of the accounts are almost fully funded and that is a good thing because it reduces the volatility in the levy setting when it is year to year. Some of the confusion comes about from a year-to-year levy setting or finalising as we heard in the select committee just recently. There was a strong debate on how the levies were calculated and whether they should be higher or lower. As I say that is a very good reason to bring this legislation through.The Government does not always go with the ACC recommendations. ACC recommended much bigger increases in fact in 2010-11 and again in 2011-12. Had we accepted those increases they would have cost levy payers $630 million more. We chose not to accept those recommendations. Again the reason for this legislation is to make it clear what the parameters are what the levy-setting characteristics or prerequisites have to be before levies can be changed. That again is important for the employer because employers are budgeting for their businesses. They need to know their costs. They need to look ahead and understand what the cost of ACC what the cost of having staff will be and ACC particularly in businesses where there is a higher risk of injury is significant.I am pleased just to clarify that injury prevention investment by ACC has increased by $10 million. That is for some of the stuff that the ACC is doing in injury prevention. There is also legislation that is not so much a parallel piece of legislation but rather health and safety law reform going through the House as we speak. If we can get that right and we encourage people to take greater responsibility for their own health and safety—again we will have fewer injuries fewer long-term injuries and fewer deaths in the workplace. We know that New Zealand does not have a great record when it comes to health and safety. That piece of legislation will aid encourage and support businesses and individuals to protect themselves and their families in the workplace. Again that can only be good for putting more pressure on a lowering of ACC levies simply because there will be fewer injuries in the workplace.There is another piece of this legislation that relates to the residual levies. It is a bit of a tidy-up I guess because at the moment those levies must continue to be collected until 2019. This piece of legislation allows those levies to be cancelled or rescinded or discontinued at an earlier date. When that liability diminishes so the liability to ACC diminishes and that can be terminated prior to the current cut-off date of 2019. That is a good thing.I just want to make a couple of points around the volatility of these funds and why it is important to consider and understand these fully funded assets. The current asset base of the ACC is over $30 billion. That is bigger than the Government’s superannuation fund—or as it is affectionately known the Cullen fund which is around $26 billion - odd. So we are talking big numbers here. That has risen from 2009 when it was $10 billion. That fully funding programme—and we are just about there—has created this nest egg if you like. But the swings and roundabouts of interest rates—with we know and as the Minister for ACC mentioned herself a $3 billion swing on a 1-month interest rate variation—are huge. So you can see the need to think well ahead of just this year to set your levies. You cannot say that we are down 10 percent so we need to increase the levies to recover the $3 billion loss that is just as a result of the interest rate fluctuation. That would be ludicrous. That would be unaccepted by the general public and the ACC levy payers. This governance and this governance framework will ensure that consideration is given to the long-term view the long-term understanding of the marketplace the interest rates and the term structure of interest rates as well as things that are going on in the public arena.I have mentioned health and safety law reform. That is just one thing. We are going to have safer cars for example. Again all these things in the long term will reduce accidents. We continue to invest in speed reduction in drug and drinking and driving programmes. All these things continue to educate the public and continue to reduce the burden that is the responsibility of ACC. That long-term approach is what is required. Currently as we have already heard from the other side there is this debate this argument and misunderstanding of how levies are calculated. That is not good. That is not a good thing and that is why this legislation is here to support the transparency and the strengthening framework of the legislation so that people can plan ahead so that there can be discussion and transparency. That is why I am pleased to support this piece of legislation.We have already heard of the $500 million planned reduction in ACC levies over the next few years and that will continue. We have talked about the reduction in the motor vehicle levy and that is a good thing. We will continue to see improvements in reductions in levies as those assets are managed in a more financially responsible manner. We will have increased transparency so there is less confusion about how the money is raised where the money is spent and where the money is invested and there will not be the confusion that was exhibited from one speaker at least on the other side. I commend this bill to the House.DENISE ROCHE (Green):I rise to take a call on the first reading of the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill. We support this bill because while it does not come anywhere near close to the Green Party vision for a fairer more transparent and people-focused ACC it does take a few tiny steps in that direction. I will start by looking at the things that we like—the positive aspects. We like that the bill improves the framework for determining ACC’s levied accounts. The changes provide improvements on the current models ensuring that the levy-setting process is more transparent and reducing the shock caused by sharp fluctuations in levies. We support the provision to adjust the dates to avoid the over-collection of the residual claim levy by removing the fixed state that is in the current legislation.We also support the policy objective of the bill to improve the governance process by setting levies through the requirement on the Government to set a funding policy in line with the statutory principles. As well as supporting improving the transparency of the levy-setting process we also support the objective of the bill to ensure that the public is better informed. Better reporting makes for a better-informed public and policy makers have more information as well.Although we do acknowledge that the bill has some positive changes we regard the funding model of this scheme as fundamentally unfair and flawed. Furthermore we think that this bill is a lost opportunity. We could have been a lot more ambitious.So what would the Greens do? What would our solutions be? As my colleague Kevin Hague has outlined numerous times our vision for ACC is where it continues to be a world-class service and honours the social contract it was founded on. We want an end to the shift towards a profit-driven insurance model a shift that this Government brought in through the abolition of the pay-as-you-go system and when it shifted to this one.In 1974 New Zealand broke new ground with the introduction of the no-fault Accident Compensation Act. It created a social contract embodied in the five Woodhouse commission principles that the scheme was founded on and I remind the House that those five principles were community responsibility comprehensive entitlements complete rehabilitation real compensation and administrative efficiency.In the 41 years since that original legislation was passed we have seen successive Governments tinker with our law. Since its inception in 1974 there have been five substantive legislative changes to the Accident Compensation Act and as a result many of the original principles have been undermined and people’s rights have been eroded.We have seen under this Government a transition away to a profit-driven insurance model away from an ACC that served the public good. There have been countless incidences where the access to ACC has been restricted and these have been well-exposed in the papers over the last few years. In 2012 in what could serve as a warning to the Minister of Health about the social bonds policy that he is introducing my colleague Kevin Hague exposed how ACC managers’ pay was linked to the number of long-term claimants they were able to remove from the corporation’s books.We hear more and more stories from people who should receive compassionate and equitable service from ACC but are wrongly denied compensation. That includes last year when claimants were denied access to the scheme because they refused to sign privacy waiver forms that were eventually found to be illegal by the courts.When the focus is on the bottom line the social-good aspect of ACC is completely ignored and lost for ever. We believe that we could have an ACC scheme that is fair comprehensive efficient transparent and more people-focused. If given the chance we would guarantee that all people who have genuine work-related gradual-process injuries diseases or infections including occupational overuse injuries and chemical poisoning—people like the sawmill workers from Whakatāne who were poisoned over three decades ago and are still having to fight for compensation—could obtain ACC cover. We would ensure access to specialist assessors to ensure that people can receive full entitlements. We would revoke co-payment requirements. We would establish an independent ACC ombudsman to improve accountability against abuses. We would also support specific risk-based levies to encourage injury prevention where appropriate. That would have a huge impact on health and safety in agriculture construction and forestry.We would fund ACC through an equitable mix of levies on employers employees motor vehicle usage and general taxation. We would ensure the maintenance of a rigorous ethical ACC investment policy that would prevent ACC from investing in enterprises that provide products or services that significantly increase rates of injury illness or otherwise significant adverse social or environmental aspects. I think ethical investment is something that we should be looking at a lot more closely.We would also support and strengthen ACC’s focus on injury prevention including integration with broader preventative health programmes and interventions in communities in workplaces in schools and in homes. We would fix ACC by reverting to a pay-as-you-go model. It was a working model that produced a different culture in ACC—one focused on rehabilitation and care. ACC is not an insurance scheme.There are many reasons for going back to a pay-as-you-go system—sound economic reasons outlined specifically by an expert from the University of Auckland business school Michael Littlewood. He suggested and has assured us that the pay-as-you-go model has less volatility on investment returns and has less uncertainty than the current actuarial calculations. He also says that the flawed nature of applying actuarial assumptions is intended for a private market rather than a Government one and a pay-as-you-go system is cheaper to administer—and I guess this Government is all for wanting to reduce the expense of bureaucracy. There is also the increased transparency of a pay-as-you-go system due to the ease of understanding it. Mr Littlewood concludes his research by saying: “A PAYG approach to levy-setting should be simpler more transparent and less risky financially. It would also lower the investment risk for New Zealand.”We support this bill because it is a small improvement to the inadequate status quo but New Zealanders deserve an ACC that tries to maximise the well-being of our people and its clients not one that relentlessly pursues the financial bottom-line.FLETCHER TABUTEAU (NZ First):I do actually stand in support of this piece of legislation. It is the first reading and it is definitely a piece of legislation that needs to go through this stage and into the select committee process because as noted in the stated objectives within the legislation itself we do need a higher level of transparency and accountability. There does seem to be an element of debate—and I would actually agree with my previous colleague’s position—about a level of redundancy in regard to the legislation itself in its entirety. As section 6 of the Accident Compensation Act does point out decisions around these areas can be made already the scheme has to be fully funded and it does give account to the fluctuations already in terms of the levy itself. So I do worry that the bill as insinuated earlier actually kind of gives another level for the Minister to come in with this legislation where it is not necessary and it just adds to the complexity and takes away from that transparency and accountability that we were talking about.However the stated intent of this bill is “to improve the framework for determining how ACC’s levied Accounts are funded so it is clearer more transparent has a longer-term focus and supports more stable levies:” and very important “to ensure that the residual levy is not over-collected.” I stand here on behalf of New Zealand First and say that those goals and those stated aims are to be highly commended. If that is what we are seeking to do with this piece of legislation then New Zealand First could not be more supportive.ACC itself just recently re-evaluated the liability of the three accounts that it manages and so we know that the specified amounts defined by the Acts are actually no longer relevant. New Zealand First believes that the objectives are on track like I have just said. This legislation in its stated aim is doing the right thing. We would insist though that the residual levies on the earners account the motor vehicle account and the work account should be collected only until the costs of shifting to the lifetime cost model are absolutely required and obviously no longer. In undertaking this legislative change ACC and the Minister will be required to be more transparent and consultative in the way the current levy regime is set. New Zealand First suggests that the more the public and those who are involved or affected by ACC can be involved the more seamlessly this process will work.But there are several issues to consider and it has been spoken about tonight already about putting ACC as a whole in context—a recent history if you will. The other is to ensure that going forward this Government actually chooses what we would consider to be the right option and not any option to facilitate these changes. The Government has a very poor record when it comes to ACC. It has abused the ACC system ignoring good advice and subsequently has overtaxed New Zealanders by stealth.The average New Zealander especially small business has borne the brunt of this deliberate inaction. Mr Foss for example has a small-business development group whose purpose is to advise the Government on small-business issues but he has not had the ACC conversation with it. The reality is that the burden that business has had to bear because of this Government’s inaction has been huge. Further he admitted to this House that he has not advocated a reduction in levies with this Government’s Cabinet. Broadly speaking everyone in this House knows—and ACC has stated unequivocally for some time now—that the levies paid by businesses especially the self-employed need to be reduced.It has taken far too long. There is no doubt that reducing red tape and improving cash flows are critical issues for small business. The Government has sat on this opportunity to help small businesses for far too long. That refusal to budge has been costing businesses and individuals thousands a year. The frustration out there is palpable. New Zealand First insists that these changes not only in terms of the general levy but the residual levy are well past due and our New Zealanders have been paying into ACC at too high a level for far too long.Additionally this Government is well aware that over-collection especially in the work account is creating distributional consequences that create constraints on the equity and the incentives for some of our businesses. The Government knows that there is no justification for creating this distortion given that the repayments are actually now well ahead of schedule. The Minister for ACC needs to be reminded that the residual portion of the work account is spread across businesses based on risk relativities that are actually now 10 years old in their calculations.The identified problem is a large one. Given a legislative stop date of 2019 by current rates of collection the Government will have over-collected $852 million from the work account $155 million from the earners account and $468 million from the motor vehicle account. I do not think that anyone in this House would agree that this should be allowed to happen and I acknowledge that that is why we are here today.Let us be very clear: there has been next to no time for this consultative process especially around the residual levy collection. It has been put to this House that the residual levies be discontinued by Order in Council but New Zealand First wants to point out the reality of the Government going down this path—that is if we actually acknowledge that some of the debate tonight has been fair and relevant because it is still in debate whether in fact this legislation is needed in the first place. But that is what consultation is about and I acknowledge that from here we go to a consultative phase.New Zealand First disagrees in principle with these council structures and legislation. I have stood up many times and spoken out against this method of consultation and interference with the process with Government entities State-owned enterprises and the like. It gives too much power to the Minister and his or her chosen few. Give the Minister the power to make this decision and unsurprisingly it has been stated in the consultation that there are concerns around additional risks on transparency and certainty.Putting these calculations and dates into legislation now would actually achieve the goal as set out by this Government which New Zealand First does applaud. Continuing to collect the residual levies given in the legislation cannot be justified because it would be a disincentive to businesses that are working to lower their operational risks. But because the residual levy component is so high as a proportion of the total levy collected any discounts that businesses are entitled to are actually barely noticed when they do their job right. At the moment because the residual levy is such a high proportion of the total levy counted it takes away the incentive to make those changes. The incentives are not there yet. So in bringing the residual collection date forward we actually support and reward businesses for undertaking their business in a safe and professional manner. Making this change in legislation would mean it would be debated in the House and would be offered to a select committee round and therefore the implications would be made clear through the debate and submission process.Business needs certainty to operate. We need to be certain about what it is that this Government is hoping to achieve and New Zealand First puts it to the Minister and to this Government that the best way to do that is actually by legislating the date now. Do not give the power to the Minister to act ad hoc. It is even noted that in doing so the time line may in fact be pushed out. We support this bill through to the select committee. Let us have the debate. Let us see whether this legislation is actually needed and New Zealand First reserves the right to consider the opinion of businesses and New Zealanders from that point. Thank you.ANDREW BAYLY (National—Hunua):It is great to be able to talk on this Accident Compensation (Financial Responsibility and Transparency) Amendment Bill. It is interesting listening to the debate. It is full of misunderstandings and misinformation in my view. I just want to acknowledge at least that New Zealand First is supporting the proposed bill. Also I want to acknowledge the Greens for being positive although there are times when I could not quite understand what the previous Greens speaker was saying particularly when she made the point that she could not understand that ACC was not in fact an insurance scheme. To date I think the most disappointing of all the contributions has been from Labour. It showed a significant lack of understanding and I am hoping that we are going to get some further input over time.This bill must be seen in the context of the outstanding financial result that has been achieved over the last 6½ years. I think credit is due not only to the board but also to the management team. The board of course is led by Paula Rebstock and the chief executive Scott Pickering. They have done an outstanding job of turning this organisation round. Do you know when this Government came to power 6½ years ago the state of ACC’s accounts was appalling. In the year to June 2008 the corporation reported a deficit of $2.4 billion and it had assets worth a mere $9.6 billion. With good financial management ACC reported a surplus of $2.1 billion in the year to June 2014—as opposed to a deficit. That represents a $4.5 billion turn-round in income for the corporation. Not only that its assets have grown to $27 billion—$27 billion. That is basically a $17 billion increase over the past 6½ years.As a result of this performance the Government has already announced decreases in levies totalling $1.5 billion made up of some changes to levies effective on 1 April 2014. First of all the work account levies have been reduced from $1.15 to 95c for every $100 of liable earnings and in respect of the earners account a further reduction has been made from $1.48 down to $1.26 for the same $100 of liable earnings. In addition to that $1.5 billion we have announced more recently a further $500 million of savings with $375 million commencing in the year 2016-17 and a further $120 million in the year thereafter. These are great outcomes and this is about sharing some of the benefits with all New Zealand businesses and with hard-working New Zealanders also. These savings are large they are significant and they are welcome.What I find most exciting listening to what ACC is about is that during 2013-14 it had four key focuses. First of all it wanted to reduce road injury and it was putting in place a whole range of prevention programmes. It was about reducing public injury and again it was introducing a whole raft of prevention programmes around that. It had a specific thing around preventing falls. Fourthly and this is probably the most important to many of us ACC was about preventing workplace injury and working alongside WorkSafe New Zealand. To do that it has introduced a whole raft of new investment approaches for injury prevention.Sue Moroney: Cutting funding for programmes you mean.ANDREW BAYLY: This is about ACC designing and implementing more successful programmes. Unlike what is being said by the Opposition member from Labour who is quite incorrect the level of investment in this area has increased from $22 million in 2013 to $34 million last year. But that does not even take into account the other investment that has been made alongside organisations such as WorkSafe. Not only is it about the money which—The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to leave the Chair for the dinner break.Sitting suspended from 6 p.m. to 7.30 p.m.ANDREW BAYLY: As I was saying just before the dinner break ACC has been investing $34 million in injury prevention schemes which is a great thing. That taken with the other entities involved in that area including WorkSafe is contributing to a large focus on reducing injuries in New Zealand. That is why I believe the Opposition is wrong in making the assertions that it has been making with regard to this issue.It is also interesting to note that in 2013-14 new claims increased by just under 5 percent taking the total to about 1.8 million new claims assessed that year. Despite the pressure of these additional claims 93 percent of all these claims resulted in people going back to work within 9 months. I think that is an admirable achievement by a well-run ACC. Also at the end of June 2014 the difference in terms of the assets of the commission had narrowed to just over $100 million. Again we were talking about that before. That substantial improvement was due in large part to a $2.1 billion surplus and also to improved investment returns. Although this is all good what most people do not appreciate is that the decreasing investment returns and the changes in discount rates have a significant impact on the returns that ACC reports.The volatility is due to two things. Firstly ACC is required to assess on a mark-to-market basis the market investments held under its investment account which means that every year it has to go through and look at the current valuation. Secondly when it comes to assessing liabilities it adopts Treasury’s view on an appropriate discount rate. Here we have an independent body Treasury determining what an appropriate discount rate is—in terms of assessing its future liabilities. As noted by the chair of ACC at a recent Transport and Industrial Relations Committee hearing changes in the discount rate can be substantial. She noted that it had a $4 billion impact in that year. The essence of what we are trying to do with this bill is to provide a framework for determining how ACC’s levied accounts are funded while having regard to this issue of volatility.I hear Opposition members claiming that ACC accounts are over-funded and therefore the corporation should be paying out more in terms of reduced levies. In my view Opposition members are wrong as they misunderstand the real situation. Just to be clear in the annual report in June 2014 the work account was funded at 138 percent the earners account was funded at 131 percent and actually the motor vehicles account was slightly underfunded at 99 percent.Sue Moroney: Ah! So how come the levies got cut there?ANDREW BAYLY: What the good member across the way does not appreciate is that the valuation of the liabilities that I spoke of before takes into account only 75 percent of the assessed fee. That is an approved rate but it does not take in the full liability. What the chair of ACC said to us is that the commission’s No. 1 concern is to make sure that we have got levy stability and to ensure the long-term viability of the scheme. That is what this bill is about. It will improve the framework for determining how ACC levies accounts it will make sure that the way that is being determined is clearer and more transparent and also it will make sure that the residual levy is not over-collected. We have spoken about this before where we have got this residual amount that needs to be dealt with—$3.4 billion—and this bill is going to address that in a comprehensive way.I think what is being proposed particularly in new section 166A which is inserted by clause 5 of the bill is firstly to deal with the cost of claims and to make sure that they are fully funded by offsetting adequate asset returns around those; secondly to make sure that the levies also meet the lifetime costs of claims; and thirdly if an account is in deficit to set out a framework to make sure that we can get to a point where there is an appropriate return. I believe this is a great bill and I strongly commend it to the House.JAN LOGIE (Green):Indeed that is a hard act to follow but I will do my best. I rise to take a call in this first reading of the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill. The Green Party is supporting this bill. It is a short and straightforward bill. Its objectives are to improve the framework for determining how the ACC’s levied accounts are funded so that it is clearer more transparent has a longer-term focus and supports more stable levies which all sounds great.The current legislation requires that the residual claims levy which is the additional levy that is charged towards the full funding of the ACC be collected until 2019. However it appears quite likely that some if not all of the ACC accounts will be fully funded before then. The provision contained in this bill to adjust that date seems quite sensible in that it will ensure that there will not be an over-collection of that residual claims levy resulting in the fixed date in the current legislation.We are of course willing to support these measures because they do make tiny improvements to what we believe sadly is a corrupted system but they are improvements nevertheless. We are deeply disappointed however if not at all surprised that the Government is only tinkering with a system that is so regularly and systematically failing to deliver on its original intent for New Zealanders. This bill tutus with the completely unnecessary and corrupting fully funded ACC system which has seen a multibillion-dollar surplus while everyday New Zealanders are denied compensation denied access to the support they need and as a result in some cases lose almost everything they have and almost everything that they have managed to acquire over a lifetime of working because of that lack of compensation available to them and their inability to keep up with their costs.The Green Party believes a private insurance model is inappropriate for the ACC. We are certainly not alone in this. The fact that the ACC worked very well on a pay-as-you-go basis for over 20 years would I believe tend to support our view of that as a workable system. We do not support the false crisis that was created by this Government as a way of saying that it needed to have all the money there on the books to be able to pay out for any imagined potential liability. We absolutely believe that the ACC needs to cover its costs and have enough in reserves to be able to cope with any unexpected spikes. That has done us well for decades. We did not need this fully funded system. This fully funded system which allowed the Government to increase levies which it is now reducing partially and to reduce services—prevention compensation and rehabilitation—makes future privatisation and competition more viable. We think that is a dangerous thing.The Green Party in Government would listen to the experiences of New Zealanders who have been denied appropriate care because of these changes. We would reassert and restore the social contract envisioned in the five Woodhouse principles that the ACC was founded upon: community responsibility comprehensive entitlements complete rehabilitation real compensation and administrative efficiency. This Government has privileged administrative efficiency almost to the point of exclusion of all other principles. The stories of people with injuries tell us of the harm of that approach. But we will support this bill.PHIL TWYFORD (Labour—Te Atatū):Can I just start off my 5-minute contribution by remembering Sir Owen Woodhouse the architect of accident compensation—a great New Zealander who died this time last year at the age of 97. Sir Owen was the driving force really the intellectual architect behind what I believe is one of those institutions in New Zealand that we should be immensely proud of. I believe that it is one of those things like high quality universal public education and like our public health system that allows everybody to get a decent start in life. It is there to pick you up after an accident after an injury and to ensure that you can get on with your life and get back on your feet and it spares people the huge expense and the lottery of private litigation that is the alternative in so many other countries around the world. For those reasons I think ACC is incredibly important. It is a bedrock part of Labour’s belief in the fair society and in the basic equality that we accord to all individuals living in this society.That is why the debates over ACC get so heated in this House. On this side of the House we stand for that equality we stand for active Government and we stand for all those things that Kiwis can do together to make this society work better. On that side of the House they have over the years systematically undermined and privatised ACC. They do not believe in it because they are fundamentally uncomfortable with social provision. The hallmark of this National Government’s management of ACC is two things: the rorting of the ACC levies in order to prop up the surplus that never ever arrives and secondly it instituted from the day it was elected a culture of disentitlement. Any electorate MPs in this House will know that one person after another has come to electorate offices—that is if they are the kind of MPs who actually have an open door to people in the community who have problems—saying that they have had the door slammed in their face by ACC. The reason is that under this Government everything is a degenerative disorder—including ethics. That is the culture of disentitlement that this Government has introduced into ACC.I want to make two points in my contribution. The first is that this is basically an example and an exercise in political butt-covering. It is a public relations exercise and as with so much of what this Government does the purpose of this bill is simply to convey the impression of the things that it talks about in the title of the bill—about financial responsibility about transparency—but nothing could be further from the truth when it comes to this Government’s management of accident compensation. The second point I want to make is that this bill as Andrew Little said will not stop National’s interference with and manipulation and rorting of ACC and the ACC levy-setting process. So as I said this bill is basically about giving the appearance of propriety and of creating an impression of stability.As previous speakers—my colleagues Sue Moroney and Andrew Little—have pointed out all of the things that this bill talks about can be achieved under the legislation. It is all there. They do not need this bill. The members opposite have not once yet cited something that this bill enables them to do that the legislation otherwise would not do. The Government already has to take account of levy stability as a key criterion—full funding. It has got to forecast levies to ensure that levies meet all the requirements under the Act. The second thing I wanted to say is really to quote Alice in Wonderland Lewis Carroll’s book in which Alice says: “I give myself very good advice but I very seldom follow it.” This bit of legislation is a classic example of that. The bill talks about transparency and yet the deceit of this Government in Nick Smith’s manufactured crisis in 2009 is a classic example—in fact it is a classic example of almost everything that Nick Smith does—and in the cynicism of the way Bill English has rorted the levies to prop up his Government accounts for the last 7 years. National members do not need to give themselves this advice. They just need to change their ways.SARAH DOWIE (National—Invercargill):Thank you very much for the opportunity to speak on this first reading of the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill. It is always an honour to follow such an eloquent speech by my colleague Mr Andrew Bayly who has this wonderful knack of being able to expel financial sums and figures and use them in his speech.Hon Member: What about Phil?SARAH DOWIE: Well it still is very nice to follow Mr Twyford and I will probably come to that later but it is also very apt and fitting that I should take this call at this time and I will come back to the reason shortly. This scheme has now turned 40 years old and is a critical and integral part of our society in respect of our social sphere and economic sphere—a no-fault 24/7 coverage scheme for residents and visitors covering injuries whether they be at home with a motor vehicle or at work. I do not consider myself clumsy and I do not consider myself uncoordinated but I am while I take this call injured—injured just on Sunday in fact. I was at a child’s birthday party with my daughter where I lifted her off an extremely heavy solid rimu stool. As I brought her forward to meet me the stool decided to topple over and land on my toe—the very toe that is responsible for my bipedalism—and it was crushed and it was broken. We all know how fortunate it is to be rushed off to the emergency department and seen by some fantastic front-line staff. I give my thanks to the nurses and the X-ray people. I am not sure what the technical term is for X-ray—Clare Curran: Technicians.SARAH DOWIE: X-ray technician—oh that is handy. They were very compassionate and I am very thankful for their expertise. Hopefully I will be covered by ACC in respect of my treatment because I want to get healthy. There is nothing more exhilarating than running down the corridors of Parliament while the bells are ringing to get here to address you Mr Assistant Speaker. So that is my personal story about the ACC compensation scheme.But as we know this bill is about levied accounts. It is about the levied accounts of workers earnings and motor vehicles. If we look at some of the background as we heard in prior speeches in 1999 ACC moved into the premise of fully funding the lifetime costs of an injury claim. Before this only current costs were covered by levies. The legislation as it stands states that ACC must continue to collect residual levies until 2019. That is some 4 years out. What this bill will provide is an updated framework. It will improve it. It will make it more transparent implementing a more comprehensive set of principles for the funding of accounts through levies.No. 1 levies for each account must meet the lifetime costs of claims in relation to injuries that have occurred in that year. No. 2 what the bill will do if an account is in deficit—for example it cannot meet those costs—or alternatively has a surplus is that both must be corrected by the setting of levies at an appropriate rate for subsequent years. Finally large changes—the real peaks and troughs that we have seen in the past—must be avoided and this will provide greater flexibility and stability in levy setting. This bill will provide better guidance in how to manage this while balancing the needs of injury costs with levy collection.It is interesting to note following on from Mr Twyford’s contribution that the 2014 performance improvement framework review of ACC also identified such weaknesses noting that there is no overarching legislative framework that establishes the objectives to be met or principles to guide the annual levy-setting process. This is an issue that the Minister the Hon Nikki Kaye seeks to address in the bill through those three premises. So not only does this bill increase transparency but it makes sense fiscally. We want to make sure the scheme is well funded and can withstand the volatilities of the market place. But we have a duty to ensure that levies are kept as low as possible. So the bill also introduces stronger reporting requirements regarding account solvency and ACC funding and it takes care of the over-collection of levies.This is a Government that is committed to making sure that ACC remains sustainable and effective. In 2008 as we have heard previously this Government inherited a $4.8 billion deficit in ACC accounts. The Government and ACC have worked very hard to dig us out of this hole but not just that—ACC has worked extremely hard on the way it treats the injured and has focused on its clients’ needs. I am fortunate to sit on the Transport and Industrial Relations Committee. We heard from ACC about some of the measures it has put in place to raise the bar in respect of customer services in-house. I commend those officials and case managers for making it a priority to increase their compassion towards the injured in terms of updating some of their systems and making sure that reviews and other administrative processes are carried out in a timely function. That adds to the trust of those clients who deal with ACC.As of March 2015 ACC’s investment portfolio had reached $31.5 billion. Although ACC’s financial performance is still subject to short-term volatilities the performance of ACC as a scheme has definitely improved. This Government’s excellent management has led us out of that $4.8 billion hole that Labour left us in and since 2012 we have made levy reductions. New Zealanders have saved about $1.5 billion benefiting businesses workers and motor vehicle owners. That has saved our families’ money which goes directly back into their savings and obviously they are best to know how to put that money to good use. I also note Business New Zealand’s approval of this bill and the introduction of it. As an electorate MP who has her doors open to her constituents I also note the public’s approval of this bill of our management of the ACC levy and of the reductions that can go back into their back pockets.We are now looking as part of Budget 2015 at an average ACC motor vehicle levy falling from approximately $330 to $195 per year from 1 July and we are looking at an average cut of $75 for vehicles and over 2 years a 20c reduction in the average work account levy and 6c in the earners account levy. So this bill is about fiscal responsibility and transparency. This is a clear results-driven bill and hence I commend this billIAIN LEES-GALLOWAY (Labour—Palmerston North):This bill is an admission by the National Government that it cannot be trusted. All the instruments that this bill introduces are actually available to the Government right now. It could use any of the measures it is legislating for in this bill right now as a Government. What it is doing by bringing this bill in is requiring itself to meet the provisions in this legislation.So Government members know they cannot be trusted to plan ahead to set levies appropriately and to not overcharge people on their ACC levies. They know they cannot be trusted just to do that as a Government as a matter of course so now they are having to legislate to do it. It is no wonder that the public apparently are overjoyed at this. I do not know where the National Party gets its information about the public being overjoyed. I think that the public probably have absolutely no idea that this legislation is going through but certainly Phil O’Reilly has said he is pleased and I bet Phil O’Reilly is pleased because he is probably sick of the organisations the businesses that he represents being overcharged on ACC levies by this Government. So it is an admission by the Government that it cannot be trusted on ACC levies.I have heard a lot about how we need to have a levy-setting process that takes into account the volatility of the market place the volatility that can impact ACC’s investments. That is not an argument to be taken lightly. It is an argument that is valid and worth considering. If our ACC accounts particularly the work account and the earners account were only 100 percent funded then there might be some validity in the argument that the Government is making because we could see those accounts drop below 100 percent and we could see them rise up above 100 percent.The volatility that can occur would certainly be something that we would need to worry about if the accounts were only 100 percent funded. But they are not. These two accounts are more like 140 percent funded. Therefore the volatility that may cause them to go up or down is going to cause them to go down to maybe 120 percent funded or up over 150 percent funded. We are not talking about whether or not we have enough money in the bank to meet the full lifetime costs of the claims we are talking about how overfunded those accounts actually are.I reject the argument from the National Party that this legislation is required or even that that volatility and the long-term viability of the accounts have not been taken into account by ACC. In fact members opposite have told the House that we on the Transport and Industrial Relations Committee have heard from ACC that when it makes its recommendations about where the levies should be set it takes into account the long-term costs and the volatility that can occur over time. That is happening right now.What I find most bizarre is that the Government has been trumpeting the fact that the account that is having its levies reduced the most is the motor vehicle account. That is actually the one account where we do need to increase the reserves because the motor vehicle account is barely fully funded. In fact the volatility that members opposite have talked about has impacted the motor vehicle account and pulled it back down below 100 percent funding at times. In fact it has very rarely been at 100 percent funding. There is more work that needs to be done on the motor vehicle account but bizarrely that is the account where the Government is cutting levies the most. You might wonder why that is. I think there is a pretty straightforward reason—it is just pure politics. There is nothing fiscally responsible about this at all. It is pure politics.The fact is that most people pay their motor vehicle account through their vehicle registration. So they actually have to go along to New Zealand Post and make a payment. They notice that money coming out of their bank account whereas the earners account levy in particular comes out of your account before you even see the money. It comes out of your pay before you even see the money so people do not notice that as readily as they do the motor vehicle account.So this is just pure politics. The Government has cut the levy that people will notice the most even though it is the levy that actually least requires cutting out of all of them. Others probably could be cut a lot more. The work account and the earners account certainly could be cut more. This Government is overcharging workers and employers by $350 million a year yet that is not where it makes the cuts. It makes the cuts where they will have the most political impact not where they actually make the most sensible and responsible impact.We have heard a lot about the supposed $4.8 billion hole that existed in ACC some 6 years ago. Well the fact is that ACC’s reserves are invested and just like every other major investor ACC suffered in the global financial crisis. Yes its accounts fell and the amount that it had in reserves was much less than it required for full funding but actually at that point ACC had never met full funding because the process of achieving full funding was something that was being undertaken by successive Governments and had been under way for about 9 years at that point. It was something that was started in 1999 and was carried on—David Bennett: Your policy was to remove it.IAIN LEES-GALLOWAY: Oh David Bennett says that our policy was to remove it but here are the facts David Bennett. The process towards full funding carried on right through the entire period that the last Labour Government was in Government. That was what occurred.David Bennett: Tell the truth.The ASSISTANT SPEAKER (Hon Trevor Mallard): Order!IAIN LEES-GALLOWAY: David Bennett can say whatever he likes. He just needs to look at the facts—David Bennett: Tell the truth.The ASSISTANT SPEAKER (Hon Trevor Mallard): Order!IAIN LEES-GALLOWAY: —and see that what happened was—[Interruption]David Bennett: Tell the truth.The ASSISTANT SPEAKER (Hon Trevor Mallard): I regret that I have to interrupt the member Iain Lees-Galloway. I did warn Mr Bennett twice—I called him to order twice. He will desist.IAIN LEES-GALLOWAY: The member is encouraging me to tell the truth. I am talking about the facts. I am talking about straight facts. Those might be a foreign concept to the member David Bennett over there but I am talking about the straight facts.In 2009 the Government seized on this supposed hole in the ACC accounts to do what—to push ACC levies up. There was one purpose for that and it was to make the private insurance companies that the Government wanted to use to privatise the work account and other accounts able to compete with ACC because those private insurers simply would not have been able to compete with ACC when its levies were set at a reasonable level.The result of shoving up those levies was twofold. One was that we have reached full funding much faster than was originally envisaged by overcharging New Zealanders. The whole idea of the progress towards full funding was that it would be done in a measured fashion that would not overcharge New Zealanders. We have reached full funding and I note that the removal of the residual levies is one aspect of this legislation because full funding has been reached far earlier than was ever originally envisaged.The other thing of course is that the Government soon realised that this additional income that was coming in was very helpful for it in its attempts to reach a surplus so it maintained its levies at an artificially high level in an effort to reach surplus which it still has not done. It is overcharging New Zealanders by $350 million which is far more than the surplus that is budgeted for in this year’s Budget. So in the absence of that overcharging of levies for ACC there would be no budgeted surplus as unlikely as it is that the Government will hit its budgeted surplus just like it failed to meet it this year.There needs to be some honesty from the Government about the way it has treated ACC and what is behind this legislation. The truth is there is nothing in this bill that the Government cannot do right now. What it is doing with this bill is demonstrating to business that even if it cannot be trusted as a Government to operate ACC appropriately and to set levies appropriately it is going to put it into legislation. But actually really it is smoke and mirrors because even with this legislation in place it will still be able to overcharge on ACC levies.We will support this legislation because it does not appear to do any harm but also because we think that further down the track it is a vehicle through which we can propose amendments that might actually make some real difference. We are looking forward to the select committee process and we are looking forward to the progress of this bill but in its current state it ain’t going to do much.Dr PARMJEET PARMAR (National):Thank you for the opportunity to speak in the first reading of the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill. The aim of this bill is to amend the Accident Compensation Act—the ACC Act—to reform the mechanism of setting levies and to ensure that residual levies are not over-collected. ACC is there to support injured people to get back into work and to get back into their routine lives as soon as possible. ACC also has a role in stopping injuries happening in the first place. ACC is accountable to all New Zealanders. Everyone contributes to ACC and everyone wants value. Until 1999 ACC used to operate on a pay-as-you-go basis which was to collect levies to cover the cost of claims coming in in that particular year but then it changed to a fully funded operating model which means that levies are collected to cover the cost of full lifetime claims coming from injuries happening in that particular year. Sometimes people have to rely on ACC for a very long time in their life. It could be 10 15 20 30 years or even more so significant reserves of funding are required to cover those claims. The money collected is invested and the interest is also used to pay for the cost of claims. This fully funded model of operating is seen as fairer for levy payers because future levy payers do not have to pay for injuries that happened in the past.This bill inserts certain principles for setting ACC levies for the work earners and motor vehicle accounts—the levied accounts. The work account is the one that covers claims for all work-related injuries. As a result of the legislative change in the Accident Compensation Act in 2010 the work account was merged with the residual claims account. The earners account is for levies paid by people who are in the paid workforce. The non-earners account is funded by the Government using money collected from general taxation. The motor vehicle account is funded by a levy that is included in petrol prices and motor vehicle licensing fees. This bill makes provision for setting levies so that levies derived from each account are able to meet the lifetime cost of claims in relation to injuries that occur in that particular year. If an account is accumulating a surplus or if an account is in deficit then in order to meet the cost of claims that surplus or deficit needs to be corrected by setting levies appropriately in subsequent years. At the same time we want to make sure that changes to levies are not drastic. We want to avoid big changes to levies.The ACC scheme is critical to us because it provides 24/7 coverage for motor vehicle work-related and non - work related injuries. Since the National Government got in in 2008 the ACC scheme has been doing much better than before but there is more that needs to be done. Also at the same time we want to make sure that the levies are as low as possible. It is important to have consistency and stability for levy payers because that helps to build public confidence in the ACC scheme. Through the Working Safer package of workplace health and safety reforms our Government is committed to reducing workplace injuries by 25 percent especially serious and fatal injuries by 2020.We also have an interim target of reducing claims by 10 percent for people staying away from work for more than a week.As I mentioned the ACC scheme has been doing much better under this National Government since 2008. That is specifically because from 2004 until 2008 there was a period of significant deterioration of the scheme especially in its financial performance and outcomes. That translated into outstanding claims liabilities. This was because there was no transparency and also levy rates did not increase to keep pace with claims expenses. This led to the situation in 2008 when the National Government got in. What we got was a big hole in the ACC account—a big hole of $4.8 billion. There are various reasons for that big hole in the ACC account but I believe that the main reason was the poor management of the previous Labour Government. [Interruption] Yes it was the poor management of the previous Labour Government. So that is why in 2008 what we inherited was this big hole in the ACC account of $4.8 billion and also a scheme that was heading in the wrong direction because there was this significant funding shortfall and rising claims costs. So this Government and ACC have been working hard for the last 6-plus years to improve the scheme’s finances and also to deliver better outcomes for people who need the ACC scheme.Our focus is to keep improving our ACC scheme so people can get into work as soon as possible and people can get back into their routine life as soon possible and to return claims rates and costs to sustainable levels. The work earners and motor vehicles accounts—the levied accounts—are now at or approaching full funding. Also this National Government has put back $1.5 billion back into New Zealanders’ pockets since 2012. This is through levy reductions as we have heard from my colleagues from this side. This Government is working hard to achieve that appropriate balance between keeping that financial performance of the scheme and also delivering better outcomes for New Zealanders. We want to do more for injured people so that they get appropriate help but at the same time we want the scheme to be transparent. We want to make sure that there is visibility for levy payers. We all have high expectations from the ACC scheme: we want the ACC scheme to provide meaningful injury prevention we want the ACC scheme to provide better and faster dispute resolution we want the ACC scheme to provide consistent service and we want to make sure that complex issues are also resolved as soon as possible. At the same time we want the ACC scheme to be financially responsible. We want the ACC scheme to provide levy reductions that are sustainable and also we want the scheme to be transparent.Continued improvement is important to maintain levy stability and avoid unpredictability. Although the scheme’s overall performance including financial performance is going really well under this National Government there could be some short-term unpredictability for example for reasons like sudden population growth. There is no overarching legislative framework that establishes the objectives to be met or the principles to guide the process of levy setting. That is why this bill is required because it will give us that sound and responsible approach to setting levies. The application of the principles in the bill will see that levies are stable and that they are reflecting underlying costs in the absence of economic shocks or large swings in ACC claims performance. Most important transparency is needed—that is for the Government and also for people who are paying levies and it will also help us calculate downstream consequences of funding decisions.This is about improving accountability of the scheme. As I said the ACC scheme is accountable to all New Zealanders so we want to make this scheme more accountable. This bill will help us achieve a more sustainable and transparent ACC scheme. This is very important for New Zealanders so I support the bill and I commend the bill to the House. Thank you.Bill read a first time.Bill referred to the Transport and Industrial Relations Committee.Hon Peseta SAM LOTU-IIGA (Minister of Corrections) on behalf of the Minister for ACC:I move That the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill be reported to the House by 3 November 2015.Motion agreed to.Electronic Monitoring of Offenders Legislation BillFirst ReadingHon Peseta SAM LOTU-IIGA (Minister of Corrections):I move That the Electronic Monitoring of Offenders Legislation Bill be now read a first time. I nominate the Law and Order Committee to consider this bill. This bill is really about improving the safety of victims and the public. It will do so by removing some of the legislative barriers in the Sentencing Act to electronic monitoring. It will make electronic monitoring available to the courts when imposing either of the following sentences as described in the bill before you: first a prison sentence of up to 2 years with release on conditions specified by the court; second a sentence of intensive supervision. Monitoring technology has continued to improve and give the Department of Corrections and the police opportunities to protect the public from certain offenders in the community. This bill recognises the importance of this objective.The purpose of electronic monitoring is to detect and potentially deter non-compliance of offenders with conditions that relate to their movement. The Department of Corrections uses radio frequency as well as GPS technologies to do this. Where the condition is to remain at a specific address radio frequency equipment has proven to create an electronic boundary and it sends an alert if the device attached to the offender crosses that boundary. Many of these devices can now plot the offender’s location by GPS and when he or she is allowed to leave the property or does so contrary to that condition the condition instead prohibits entry to certain areas related to the offender’s risk of reoffending. I believe and certainly I think it is a widely held view that GPS monitoring is fitter for purpose.The offender will wear a device around their ankle that will send an alert if the offender enters a prohibited area. Authorities also receive an alert in the event that the offender tampers with or tries to break the device or removes it from the monitoring equipment. There is quite a strong public interest in electronic monitoring as the most timely and reliable means of detecting these offences. Breaching these types of conditions can also sometimes be a precursor to more serious offending. Electronic monitoring gives us the opportunity to intervene swiftly ideally in time to prevent harm to the public should the device be tampered with. It also increases the likelihood of detection and that should deter the offender from committing further offences.Obviously the benefits of electronic monitoring to public safety need to be weighed up with the fact that sometimes it is an onerous intervention and in many respects it constitutes a search that interferes with the privacy of individuals. So you have got to balance those rights to make it necessary for the offender to wear a device. GPS monitoring devices also need to be regularly charged by the offender at regular time intervals which some would argue actually impinges on their liberties and their freedoms. Some would argue that; I know that you do not Mr Assistant Speaker.I want to turn to some of the legislative barriers removed by the bill. The courts currently impose electronic monitoring on bail for example to verify compliance of the requirement to be at a certain bail address. They can also impose some of these monitoring devices namely for community detention and home detention and they prove quite effective in those examples. These sentences require the offender to remain at the address which makes electronic monitoring necessary in those particular circumstances but the courts are currently prevented from using these devices for the two populations that are clearly laid out in this bill. I expect members across this House—certainly I have had discussions with some members in terms of the bill’s genesis—to actually take up this bill and vote for it.So let us look at the two categories in turn. First we will look at the offenders sentenced to imprisonment for up to 2 years. These offenders are entitled to be released after serving the first half of their sentence. Their release is often subject to the conditions of release imposed at sentencing. But what we know about these types of offenders is that they have a higher rate of reoffending. On their release they do sometimes recommit crimes and recidivism is certainly one of the Government targets that I am focused on as Minister of Corrections. There is a subset of offenders that could be managed better if they were subject to electronic monitoring.One example of this is those who breach protection orders. Certainly I have heard the debates in this House around the breach of protection orders and I am sure members right across this Chamber will see this as an advance in the protection of those particularly women and vulnerable people who are subject to protection orders. Also there are stalking offenders. These types of devices will limit the ability of stalkers who are released on conditions to go anywhere near the victims of their previous crimes.Second we have got offenders who are subject to intensive supervision. This is another highly problematic population in my view because they have some of the highest reconviction rates of our prison population. It is really in keeping with the rehabilitative purpose of intensive supervision to prevent certain offenders from entering certain areas out in the public domain. For example it may be disruptive to the progress of an offender to visit areas where they have had opportunities say to sexually reoffend or areas where there are members of their previous gangs where they have gang affiliations and they are prevented from going into those types of areas. Electronic monitoring would of course under the new rules provide a pretty stern deterrent for them to enter those areas should this bill pass.One important detail in the bill is the requirement for the courts before they impose a sentence to take the advice of the Department of Corrections into account. It is certainly not mandatory to take that advice on board but certainly it will have an impact on the courts’ ability to hand down sentences that are appropriate for electronic monitoring. I think this is another progression in this legislation.Before I conclude I just want to touch on the section 7 New Zealand Bill of Rights Act report from the Attorney-General. I want to offer just a brief explanation for its apparent inconsistency with this Act. We know from previous Government bills that have dealt with electronic monitoring that this was an issue. Certainly the Attorney-General’s report focuses on the electronic monitoring component of it. It is not concerned with the policy of the bill which relates to the monitoring of offenders and the administration of those sentences. I would like to recommend to the select committee that it focuses on Part 2 of the bill and not on Part 1 in terms of the New Zealand Bill of Rights Act report from the Attorney-General.In conclusion I want to say that the courts have a legitimate interest in requiring the electronic monitoring of offenders when imposing conditions of release from imprisonment for up to 2 years. I have laid out the reasons why. There are specific examples clear examples where this bill will have a beneficial impact particularly on victims. Electronic monitoring can help considerably to protect the community from the risks of reoffending where there are specific geographical areas that offenders certainly should not be moving into. I expect that the bill will improve the safety of victims and the general public and that is why I commend it to the House.Hon PHIL GOFF (Labour—Mt Roskill):The Labour Party has a long track record in supporting legislation that will enhance the safety of the public and in particular legislation that will protect the interests of victims and prevent them from being revictimised. So our decision in respect of this legislation is initially to support it to the select committee. That is the normal step that we would take. The select committee deliberations give us the opportunity to listen to the pros and cons of the legislation whether it goes far enough or whether it goes too far. But in terms of the objectives of the Electronic Monitoring of Offenders Legislation Bill I have no problem with them if the legislation actually meets what the objectives set out.The objectives are first of all to improve the integrity of the sentence. When a person is convicted and sentenced for a particular crime we want to make sure that the sentence is carried out as it should be and that the offender complies with the terms of that sentence. That becomes an issue when the offender is out in the community rather than locked up in prison. Secondly if the bill is successful in safely managing offenders in the community then everybody benefits. The offender benefits if they are discouraged from reoffending in a way that would see them simply being given a harsher sentence and leaves them with the prospect of spending more of their life locked up. Of course the community and potential victims also benefit. Those are the thresholds that we are looking at. It is also important that the legislation works in a cost-effective way and in a reasonable manner. I think the Minister of Corrections himself talked about the balancing of the rights of the offender—and offenders do not lose all of their rights—and the rights of the community to be safe. We want to make sure that this legislation finds that appropriate balance.Back in 2002 when we passed the Sentencing Act there were provisions in that Act as it exists today that prevent the imposition of electronic monitoring in particular circumstances. Electronic monitoring cannot be used in respect of a sentence of supervision; a sentence of intensive supervision; a situation where somebody is released from prison where the sentence has been 2 years or less; and where somebody is released from a sentence of home detention. People might ask why the legislation would stop the use of electronic monitoring. The reason that the Department of Corrections and the Ministry of Justice gave me at the time—and they are still giving it to the Minister—is that there is a danger when you bring in a new form of sentencing that a phenomenon called net-widening occurs. If the sentence is there it will be used sometimes whether it is cost-effective or not cost-effective justifiable or not justifiable. At the time the strongest recommendations were that electronic monitoring ought not to be used in these four areas.The Department of Corrections I presume in conjunction with the Ministry of Justice has looked at this again and it has reiterated that in terms of two out of four of those categories the use of electronic monitoring is still not the right way to go. It says in relation to a sentence of supervision that this does not justify the expense of electronic monitoring and it is not justified by the risk that the offenders create for society. Supervision is actually low in the hierarchy of sentencing and therefore why would you waste $3500 on electronically monitoring somebody who has been sentenced to a relatively light sentence and is not likely to reoffend? It has also ruled out for similar reasons the use of electronic monitoring in relation to release from home detention. It says that a person who has complied with all their conditions through home detention constitutes a low level of risk and it argued it could not justify the imposition of electronic monitoring either in terms of its cost or in terms of the further infringement on the liberties of a person who has been released from the sentence of home detention. I accept those arguments in those two cases.In the other two cases the department says there is an argument for the use of electronic monitoring. I think it is worth remembering that the electronic monitoring that is available today is quite different in nature from that which was available 14 years ago. In those days it was all radio technology with the bracelet. Now you have a phenomenon called global positioning system which can tell you exactly where the offender who is out in the community has gone and can alert you when the offender goes to an area that is prohibited under the terms of their sentence. I think that that makes sense. The first category is imprisonment for 2 years or less and sadly when we look at every sentence the sentence where there is the highest rate of reconviction is where an offender has been sentenced to a short sentence. It makes you wonder whether the short sentence is actually particularly effective in meeting the requirements that we expect from it. But there is a high rate of reoffending and there is an argument on that basis for allowing electronic monitoring of certain categories of people who have been sentenced to 2 years or less. I want to make it clear to the House that the electronic monitoring does not automatically apply to everybody in that category. It is still applied only at the discretion of the sentencing court. So we are relying on the discretion of the court not to over-utilise this but to apply it only in those areas where the court has reason to believe that this will protect the public and is required for public safety and the safety of victims.The other area that this will apply to is where somebody is under a sentence of intensive supervision. This is a little more challenging. Intensive supervision means that the person has not offended to the degree that the court felt it worthwhile sentencing them to home detention but nevertheless the seriousness of the offending was such that ordinary supervision was not sufficient and intensive supervision was needed. In this respect I think there are some clear categories where electronic monitoring would be worthwhile. It is of real concern to members on this side of the House that domestic violence is increasing: convictions for domestic violence and I believe the occurrence of domestic violence are increasing. Protection orders are really only a piece of paper; they do not protect the victim in practical terms. So what electronic monitoring might do to an offender who has already offended against the victim is to alert authorities in real time if that offender goes near the home of the victim. That seems to me to be something that is worth doing and I would support that.There are other instances where there are no-go areas imposed as a condition of the sentence. If a person was convicted for a crime because they had an addiction either to alcohol or to gambling and you say we do not want that offender to go near the casino then having electronic monitoring in real time or even having a record of it after the event does enable you to discourage the offender from going back to the cause of his or her offending. I have looked at the international evidence for this and the international evidence says that GPS does act as a genuine deterrent in those cases. Therefore we would go along with that. The areas that will be targeted for electronic monitoring are the family violence cases that I have talked about gang-related offenders and high-risk sex offenders. I think that if we are targeting those specific groups then there is a justification for what this bill does.I want to touch briefly on the vet for consistency with the New Zealand Bill of Rights Act. This bill has received a negative vet. That means that it is inconsistent with the New Zealand Bill of Rights Act. According to the Attorney-General Mr Finlayson it provides unjustifiable limitations on freedom of movement search and seizure and double jeopardy. But I think we need to dig a little deeper than that first analysis. Of course there will be limitations on freedom of movement if the individual exercising that freedom is going to breach their protection order. I do not think that freedom of movement for a person who has been convicted and is still under sentence can be determined to be full freedom of movement. I think that is a matter of common sense. Unreasonable search and seizure which is how they define monitoring—well if the monitoring actually does mitigate against real risk to the victim and real risk that the offender will reoffend that might also be justifiable. The last point is in terms of double jeopardy. It would be double jeopardy if this was being done for the purposes of punishment but I believe that this is being done for the purposes of prevention. On those bases Labour Opposition members will support the first reading of this bill. We will look at it closely at the select committee and if it stands up to the analysis and the evidence presented to us we will continue to support it after that point.KANWALJIT SINGH BAKSHI (National):It is my pleasure to stand in support of the first reading of the Electronic Monitoring of Offenders Legislation Bill. I agree with the Hon Phil Goff in his concluding remarks that the New Zealand Bill of Rights Act is not that important for offenders because the rights of victims are also to be protected. So it is very important that we have to consider what victims have gone through. Victims should not be allowed to go through the trauma again and I hope that the select committee will be looking into these things and reporting back to the House when required. I would like to thank the Minister of Corrections the Hon Peseta Sam Lotu-Iiga for nominating the Law and Order Committee to consider this bill.I would like to begin by outlining the benefits of electronic monitoring and how it can help in improving safety especially for the victims. It is very important that we use the tools that are available nowadays. If that makes it easy for monitoring or looking after the victims they should be used.I remember the first time that I went out for a ride-along with the police. We visited a few houses to check whether the offenders were at home following their bail conditions and their curfew orders. It was a real hassle. That night it was raining. The policemen went to the house in a heavy downpour to check out whether the offender was there. Plus it was also a hassle for the offender. Knocking on their door at midnight was a real challenge and I think that that was an undue hassle for the offender. The police were doing their duty and there was no other way. But now as this new system is available we should make sure that the offenders have this equipment on their bodies so that they can be monitored. One monitoring person can look after many offenders to check whether they are following their bail conditions or not. The electronic monitoring will help to track the whereabouts of the offender. This means that an electronic boundary will be created. If an offender tries to cross the boundary an alert will be sent out through the device attached to the offender which will help in detecting his or her location.We want to improve public safety and this device will help. It will play a crucial role in helping this Government in reaching its goal of reducing reoffending. The Government has a target of reducing reoffending by 25 percent by 2017 and these are the tools we need to provide to the Department of Corrections and the police so that they can reduce reoffending. Electronic monitoring gives the opportunity to intervene in matters swiftly ideally in time to prevent harm to the public or to those who are prime targets of the offenders. The increased likelihood of detection may also deter the offender from committing further offences. Through electronic monitoring the authorities will also receive an alert if an offender tampers with or tries to remove the monitoring equipment giving the authorities a chance to act in a timely manner. This is a very important tool that will help authorities to monitor the offenders.National is working hard to ensure the safety of the New Zealand public and we want to remove any barriers when it comes to monitoring offenders. Under the current legislation electronic monitoring cannot be imposed as a condition of a sentence of supervision a sentence of intensive supervision release from a prison sentence of 2 years or less or release from a sentence of home detention. Electronic monitoring is unavailable for offenders sentenced to imprisonment for or up to 2 years or for offenders sentenced to intensive supervision. The offenders sentenced to imprisonment for up to 2 years have higher rates of reoffending on their release than offenders serving any other sentence. Also offenders sentenced to intensive supervision have higher reconviction rates. Electronic monitoring will thus help in providing the whereabouts and condition of such offenders and will stop the offenders visiting areas where they can easily have an opportunity to reoffend.National is working on preventing people from committing crime and on creating a safer New Zealand society. The main objective of this bill is to use technologies that allow the Department of Corrections to restrict the movement of offenders and prevent them from committing further offences. GPS monitoring will help in improving agencies’ ability to safely manage offenders and also help support our law enforcement agencies. The department can then prevent serious reoffending through timely intervention and through prosecution before reoffending escalates. We have now got tools that help us to monitor offenders electronically. Without electronic monitoring the department’s ability to perform its statutory duties is compromised. National is focused on providing support and rehabilitation services to the offenders who go back to their communities so that they stay away from crime-related activities by providing them with opportunities through which they can take better control of their lives.Last week we visited a prison in Rimutaka and we saw how corrections is trying to help the offenders to go back into society where they can have safe lives and they can go back to their families and spend time with them. They are being trained so that they can have jobs over there. This electronic monitoring is another tool where they can send them out of the gate to work in society and ensure that they have got jobs when they are released from the prison. This tool is very important.The Electronic Monitoring of Offenders Legislation Bill sets out that the offenders must comply with written instructions from a probation officer that are reasonably necessary for the effective administration of electronic monitoring and that the offender may be required to have equipment attached to his or her body. Electronic monitoring will make offenders avoid areas where they are not supposed to be and thus help in improving public safety.This National-led Government is committed to delivering better public services and we are working hard to further bring down the crime rate. There are a lot of prisoners who will be released to the communities and although we have been able to reduce the number of prisoners returning to prison we want to ensure that they do not create still more victims and are instead focused on reshaping their lives through the skills training and education they got during their imprisonment.Section 93(2)(b) of the Sentencing Act 2002 explicitly prevents the courts from imposing electronic monitoring as one of the conditions of release. Removing legislative barriers could help in improving the ability of the department to keep the public safe as offenders serving short sentences will be demotivated to reoffend.Coming back to the technologies safety can definitely be enhanced through the latest technology. Electronic monitoring is delivering one of the most reliable electronic monitoring systems monitoring around 1960 offenders and defendants: 1299 via GPS and 661 via radio frequency. This is more than 50 percent of those who need to be transitioned to the new system. Reoffending is reducing under this National-led Government and it is my privilege to commend this bill to the House.The ASSISTANT SPEAKER (Hon Trevor Mallard): Before I call the next member I am going to remind the member who just spoke and other members of Speaker’s ruling 47/1. I think the member has now been here for nearly 4 years and I think the exemption that is allowed to new members or Ministers introducing technical bills no longer applies to him. He actually spoke for about 3 minutes without reading his speech and then appeared to revert to that. I just want to reinforce the rulings that have been given by other people in this Chair and to remind people to have a look at Speaker’s ruling 47/1.PEENI HENARE (Labour—Tāmaki Makaurau):Tēnā koe Mr Assistant Speaker. Can I take the opportunity to pick up on the words of my esteemed colleague the Hon Phil Goff in his mention of serious sexual assaults. I want to acknowledge our colleague Kelvin Davis in whose absence I stand and speak this evening. I want to acknowledge his efforts in this field and his hīkoi to the Far North.I rise to take a call on the first reading of the Electronic Monitoring of Offenders Legislation Bill and can I take the time to point out that Labour supports this bill. We support it going to the select committee where I hope for—and I will certainly be encouraging—robust debate on this bill to ensure that all people researchers advocates perpetrators and victims of crime find a voice on such an important topic to all New Zealanders. We hope that this bill after going through a robust democratic process will enable electronic monitoring conditions to be imposed on those who have served a sentence of imprisonment of 2 years or less and are being released into intensive supervision.It is the duty of a responsible Government to ensure the safety of all New Zealanders. It is with that in mind that I want to commend the Minister of Corrections the Hon Peseta Sam Lotu-Iiga. I want to commend the Minister and this bill. Can I pick up the point again of safety for all: safety for all New Zealanders must be paramount. Therefore a bill like this must consider the victim at the forefront of all discussions must consider the victim at the forefront of any rhetoric around such a bill. But it must also consider the perpetrator and I will pick up on that point again shortly.Naturally we all in this House want a system that is not only fair but also punishes crimes accordingly. New Zealanders can also expect to be safe as they go about their daily business. I asked myself when considering this bill what a safe system looks like. With the ever-growing and evolving technology in this world one’s mind only boggles when we consider the future. This is not the first time I have spoken on a particular bill in this House in my short time here just around the advances of technology and the impact that it has on crime and on victims moving forward. Therefore I ask what a safe system looks like. It is important that this country and all the authorities are well-equipped with the right technology. At this point can I highlight just how fast technology in this field changes.If you will indulge me Mr Assistant Speaker I have a short news article here. It is from Los Angeles and is only as old as last year 2014. It talks about this particular system being implemented over there. The report concedes widespread failures in the electronic monitoring of felons in which probation deputies were deluged with meaningless alerts while offenders were untracked for days and weeks at a time. This is now a big concern to me. Although we support this bill we want a robust system that will make sure that felons and perpetrators do not fall through the cracks of surveillance and in the meantime go unaccounted for. We can only imagine what they may get up to. I will talk about a body of research that was done that proves that this particular system deters further crime—but this is a concern to me when I think about the system that we are looking to implement or certainly to legislate through this House.The report goes on to say that they lost track of approximately 80 felons while they were on electronic monitoring in 2013 and 2014—80 felons. Although that may be only a drop in the bucket in California 80 felons are a heck of a lot of people here in New Zealand. This of course as I have already pointed out is a serious concern. However he also pointed out in this report the inadequate or non-existent training and policies. It is on this point I want to say to the Minister—and of course I will be encouraging debate on this as this bill progresses through the House—that technology is only one side of the equation. It is important that we have the manpower or the people power to ensure that the monitoring of felons or the monitoring of those who are under GPS monitoring is robust sound and timely. I say “timely” because there is quite a point that has been made this evening about how this GPS will allow pinpoint accuracy that is of benefit to those who are monitoring where the perpetrators or where those who are wearing the ankle bracelet might head to because they are zoned.According to this particular report they have had trouble with the zoning of these particular GPS systems because those who are let out under this type of surveillance or supervision model are still allowed to go out and about in their communities. We know that one of the purposes of this bill is to ensure that those people who are under such supervision or under such surveillance do not or are not tempted to recommit a crime by going back into the area. It reminds me of the old school adage that although we might pour all these fantastic things into a child we just cannot help what happens when they go home. I say that because it is all fair and well to say that we are going to GPS monitor these people and we are going to make sure that its pinpoint accuracy will allow victims to feel safer within their communities.Well as this particular report has highlighted there are flaws in this system. Why are there flaws? Because technology is constantly changing and these criminals are getting smarter. They are getting smarter. We know that there have been cases over the past decade since this type of monitoring has come into our country where some clever person has been able to tamper with their ankle bracelet and whether they escape the eyes of those supervising them for 1 hour or for 1 week that is simply not good enough. However it does go on in this particular report to talk about how although they acknowledge that the zoning of such GPS monitoring is a good thing it must also be unique to each offender. How you do that exactly I am not too sure but those are the challenges that we hope to flesh out as this debate and this bill progresses through the House. Therefore it is important that we get the system right to ensure that not only is the technology up to date—as I have already mentioned—but also that we have the people power to be able to resource it.In terms of the other intent of this bill I turn to the matter of rehabilitation. The Labour Party wants to see that proper measures that encourage rehabilitation and the reintegration of offenders back into our public life are a commitment made by this Government and to make sure—as I have already mentioned just like the child whom we pour all the stuff into at school who then goes home and we just do not have any control over what happens like outside the walls of a prison—that this Government makes a commitment to the proper reintegration of prisoners back into our communities.Jacqui Dean: We’ve already done that.PEENI HENARE: Although the member across might say they have already done that I invite her to come over to Ngā Whare Waatea Marae in my electorate where they are seriously underfunded in making sure that the prisoner reintegration models that are being proposed by this Government are carried through.There is indeed a body of research that supports that “sex offenders monitored by GPS”—it says here—“are found to commit fewer crimes”. If this is true—and the body of research certainly suggests that it is—then we on this side of the House will be supporting that. We think that is a great step forward and like I said if the research suggests it then that is fantastic. This report however does advise caution. It advises that there are limitations with the system and I hope that through the select committee we can address these issues. I do hope that this bill is part of a wider strategy from this Government in protecting all New Zealanders while also showing some commitment from this Government to the relevant programmes for the reintegration of prisoners. Tēnā koe.TODD BARCLAY (National—Clutha-Southland):It is a privilege to speak on the first reading of the Electronic Monitoring of Offenders Legislation Bill. I would just like to acknowledge the other speakers across the House who have spoken so far tonight and thank them and acknowledge their support of the bill through its first reading so far. It is an important piece of legislation as many people have already acknowledged as it is putting victims at the forefront of the criminal justice system and trying to make sure that these people get a fair go.I thought it was timely to acknowledge the Department of Corrections chief executive Ray Smith who was acknowledged in the Trans Tasman’s sixth annual departmental review for his personal performance and also for the performance of his department. Both he and his department have been ranked second. I think that acknowledgment is pretty timely really when we are listening to what some of the Opposition members have already acknowledged about making sure that we are integrating our services and making sure we have got the manpower to implement the technology that this bill puts in place. It is a credit to Ray Smith and his team for the resilience and hard work that they have put into improving the corrections system over the last couple of years under his leadership. I am very much looking forward to him presenting to the Law and Order Committee over the estimates so we can acknowledge him in person and thank him for the efforts of his team.As we have heard tonight from the Minister of Corrections this bill is aimed at removing the barriers to monitoring offenders and it is around trying to improve the safety of those who are victims of crime and who are the most disadvantaged and vulnerable in our society. Electronic monitoring can improve public safety by making authorities more aware of the offenders and how they have failed to comply with conditions of their release out in the general community. Without electronic monitoring the conditions can be difficult to enforce as we know.I come from a provincial electorate where we have a number of people who are out on probation. Simply trying to track somebody down from your branch and trying to discuss an electorate issue can be difficult let alone trying to track down someone who does not want to be found. So GPS and electronic monitoring will play an important role in the future strengthening of our justice system. We have already heard that the areas that will be most targeted by this new technology will be offenders in family violence sexual offending and seriously high offenders. When I was doing a bit of research for this we looked at the number of sentences in order by area and I am just going to talk about two particular areas that traverse parts of my electorate. For Otago we have currently got 1012 individuals out on sentences in the community who are doing part of their rehabilitation back in the community and 338 who are out on sentencing orders in the community.In Southland and in part of Jacqui Dean’s electorate Central Otago we have got 691 who are currently serving part of their sentences in the community and 229 who are operating under orders in their community. I think that is quite important. They are quite large numbers for quite small areas and I think most members of the general public would not quite appreciate how many of these people are out in their society.If you look at the percentage of those who are serving these community-based sentences a fair majority of them—well over 50 percent—are between the ages of 20 and 35 which indicates that if these offenders are not already on their second or third offence the chances statistically that they will reoffend by the time they have finished their sentence are quite high. So I think we have got to do everything in our ability to try to prevent them from reoffending. That is part of what this bill enables: it helps to prevent those who may have been put into prison for gambling alcohol or drug-related offences from falling back into the same traps that saw them put in prison in the first place. By being able to monitor and control their whereabouts when they are in the community we play an important role in their rehabilitation not only in support of the victims who are the most heavily affected by these individuals but also for themselves.If we look at the percentage of people currently serving community-based sentences in order of most serious offence 23.5 percent of them are serving sentences for violence-related offences 3.1 percent for sexual offences and about 10 percent for drug and antisocial offences. These are quite significant numbers when you look at the general make-up. These are pretty dangerous individuals who are in and around our communities right now as we speak. If you look at the general prison population of around 8500 prisoners as well most of these people—certainly not all of them—will be back in communities eventually whether it is in 6 to 12 months’ time or whether it is in 20 years’ time. They will be somebody’s neighbour living across the road from somebody or living across the road from a family and they will be integrated back into society eventually. So we have got an obligation as a Government to do everything that we can to ensure that their smooth integration back into society is as seamless as possible to prevent them from reoffending and getting back in the criminal justice system.As we have heard from a number of other members up until now these people have been in the communities and we have been able to track them through some form of radio tracking but it is quite difficult to actually tell exactly what they are doing where they are and whether they are in places that they should or should not be. Response times from police can sometimes put victims in danger as well. We have heard from the Minister that it is a synchronised response and the reason why it has taken a little bit longer to roll this legislation out across the most serious of offenders is that we wanted to make sure that from a correctional perspective and also a police perspective there is the capability and capacity to actually administer the roll-out of these services.The second point that I want to touch on is the fact that offenders serving short prison sentences are reconvicted at a higher rate than any other prisoner. I think that goes back to the point where the majority of these people who are serving community-based sentences are of the age of between 20 and about 35. Most of these people—all of those who are willing and able—are of working age and of working ability. So whether they are in the community or whether they are traversing back through the correctional facility if they do not have a qualification or a set of skills that they can apply to the workforce already then it is in everybody’s best interests that they do so.I want to talk a little bit about the Otago Corrections Facility which is just out of Milton in my electorate. I want to acknowledge the manager there Jack Harrison who manages just over 200 staff and ensures the security and the locking up of about 415 prisoners. Jack was kind enough to give me a tour around his facility a couple of months ago and took me through the various units that they have got there right from high security to medium security to drug and alcohol rehabilitation to low security and then into their community integration wing.The important part about this is that almost all of these prisoners whether they start off in drug and alcohol rehabilitation or in high security work their way through that system back to integration. Almost all of these people who have committed serious offences although they are an incredible danger to the community now will eventually be released back into society. The point that he made which has stuck with me—and this has actually been the most valuable electorate visit for me as a new MP—is that while they are in prison all of these people no matter what they have done or what their background is are still human beings and they have got rights albeit not as many rights as those who are on the other side of the bars.But when they do go back to society it is in our best interests to make sure that they are equipped with the skills and capabilities to function in everyday life. An example of the work that the Otago Corrections Facility is doing towards this is that it has got 16 current prisoners working in a carpentry training workshop which will enable them to get hands-on training in the theory and practice of construction. Part of that course is that they have to partially build a house. By the time they have completed that course and while they are working in prison they will have gained a National Certificate in Building Construction and Allied Trades Skills at level 2 and then a National Certificate in Carpentry at level 3 if they progress to the next level. This is a practical skill and most of these people have not even completed National Certificate of Educational Achievement level 1 or level 2 at high school let alone thought that they would gain a trade. While they are in a facility like this it is in our best interests to help them try to gain their skills so that they can be participating members of society.Just on that note that is why I would like to speak in support of this bill and I would like to acknowledge again the Opposition parties that have already committed to supporting it through its first reading. This is an important part of corrections. Thank you.DAVID CLENDON (Green):I am pleased to make some initial brief comments on this Electronic Monitoring of Offenders Legislation Bill. It could scarcely be described as a bold bill. It will not change the world but it makes some useful and positive incremental changes to the Parole Act and the Sentencing Act.This bill is largely a response I guess to improvements in technology that enable some variations in the sentencing and parole management of prisoners which do provide alternatives to prison. For that reason alone the Greens would support it and indeed I should stress that we are supporting this legislation. It will come as no surprise to anyone to know that we are no great fans of prisons as an alleged solution to offending and crime. The Minister of Finance the Hon Bill English has quite accurately described prisons as a moral and fiscal failure in the 21st century. I think that awareness should underpin a lot of our work as we progress with considering how best to deal with matters around crime and what is appropriate in terms of imprisonment or not.As we have heard this legislation would allow some alternative sentencing to the paroling of people sentenced to less than 2 years. It deals with sentences of intensive supervision and enables electronic monitoring in those situations.I should just make the point that the regulatory impact statement and other documents around the bill do highlight the fact that there are issues around the New Zealand Bill of Rights Act with regard to this legislation. That has been a conundrum and that has been the reality with many of these Acts that now allow for extended supervision orders and the like. These are not trivial matters and we will be paying some quite close attention to that in the course of the select committee conversations because the New Zealand Bill of Rights Act is something that we ought not to tamper with or compromise readily without some really serious thought and evaluation of the cost and benefits. So that is something we will engage with at the appropriate level as I say in the select committee process.I mentioned that the nature of technology has changed. Historically electronic monitoring has really been an electronic leash if you like—something that tied an individual to a particular address—and OK it had some value in that. It was again often a better alternative to imprisonment. But it was very limited technology. It had somewhat perverse characteristics given that it operates on a radius from a given point. Very few of us live in perfectly round properties so it made it possible for people to do some strange things like jump the fence and visit the neighbour but not actually be able to go to the full extent of the property that they were allegedly confined to. So it is imperfect technology but it has got better.This new technology the GPS technology is much more enabling. It does allow people a level of freedom of movement subject of course to their staying out of identified exclusion zones and that is very positive. It means that people can be subject to monitoring subject to limitations on their movements but it does allow them to perhaps go out to work to go out to be educated and to go out and be involved in positive social activities such as allowing them to do their shopping or to develop these life skills that unfortunately a lot of our long-term inmates particularly simply do not have or they lose in the period of their imprisonment. It is a positive aspect of the proposed bill in that sense—that it is more enabling. It enables people to be participants but fairly carefully monitored to endeavour to limit the likelihood of them offending.I think we have to understand that the monitoring is a very limited tool albeit better than the old technology. It is a tool for managing but it is not a cure. It is not a treatment. It will not in and of itself assure us that these people will stop offending in the long term. Of course if somebody is wearing some sort of an electronic tag that enables people to be monitored either in real time or for them to leave an electronic trail if you like of their whereabouts that is going to discourage people for the period they are wearing that bracelet or subject to that monitoring. In and of itself it will not change people’s behaviours. It will not change their attitudes. To me this electronic monitoring is a useful tool to keep people a little bit on the straight and narrow while we are investing heavily in actually changing their attitude changing their behaviours and changing them in a long-term sense.If anybody was unsure of the power value or potential of rehabilitation they would have done well to join the Law and Order Committee last week. Some members of that committee visited Rimutaka Prison. We had a very compelling hour or so getting a presentation from two young men two young inmates—and they were young men in their 20s perhaps early 30s—who had been on a violence management programme for about 12 months. It is a very intensive programme and one that they found very difficult. It has changed those young men for the better undeniably. Their stories were different. They had no connection prior to prison. But unfortunately there were some very obvious and common characteristics to their backgrounds: very early exposure to drug and alcohol abuse dysfunctional families the gang became the safe haven the refuge and their sense of identity was embedded in gangs and all the violent behaviours associated with that. These men were put into an intensive programme for 12 months and at the end of that year they have broken through some barriers. Their level of self-awareness is what came through to me. They now understand that their offending hurt other people as well as themselves that it was not a way to live their lives that it did not enable them to stand proudly as parents as fathers.So rehabilitation can work if we invest in it if we put the right programmes in place and if we sustain those programmes over time. It is no good having a programme in the community for 12 months or 18 months and then can it through a lack of funding. We need to identify programmes that work for rehabilitation and reintegration invest in them and sustain them over time. It takes a long time for somebody who has 20 years 30 years or 40 years of offending. You do not turn those people around in 6 months a year or even 2 years. These technologies are useful in providing a means of transitioning out of the prisons which to my mind is often the worst solution into community-based treatment and programmes. Given that you cannot offer or expect a level of trustworthiness with some of these offenders who have proven themselves untrustworthy the electronic means the technologies do enable us to just keep them on the straight and narrow for a little while. But we must not confuse monitoring electronic technologies with long-term solutions. These are a means of enabling that transition to deal with the deep-seated causes of offending that have been embedded in their lives over time.We are happy to support this legislation albeit as I say with some ongoing concerns about the New Zealand Bill of Rights Act implications of it. We look to obviously minimise those and to see what best we can do with that. I think we must recognise that technologies are useful but of themselves are not a solution. We need to continue to invest in the long-term solutions and look for reintegration patterns.I am always reminded of Anne Opie’s book From Outlaw to Citizen where she makes the very clear and obvious statement which I think is perhaps not that obvious at times that as well as offenders needing to change and be willing to come back into society society needs to create a place for these people to come into. That is a shared responsibility for all of us. We will support this bill. We look forward to engaging with the submitters and with our colleagues on the committee. We hope to come out with something at the end that will be fit for purpose. Thank you.MAHESH BINDRA (NZ First):I take pride in rising on behalf of New Zealand First to speak on this Electronic Monitoring of Offenders Legislation Bill. Like most other things this bill is not perfect. However it is a step in the right direction we think and we will provisionally at this stage support this bill provided there is enough done to remove the anomalies and ambiguities within this piece of legislation.This bill removes barriers to the electronic monitoring of offenders who firstly are released from a sentence of imprisonment of 2 years or less and secondly are sentenced to intensive supervision. What that actually means to us is that the courts will now have the ability to impose these electronic monitoring conditions on bailees and those offenders who are released from a sentence of 2 years or less.We like the intent of the bill but we do have some reservations about the way the final product will be delivered and whether the intent will actually be translated into outcomes that make our communities safer. Although we will support this bill at this stage we would like to have the ambiguity around administration removed and our questions answered during the select committee process.We suspect that not enough has been said about the victims of crimes. One basic question that comes to my mind now is whether there is a possibility that electronic monitoring will be used to free up prison beds and whether there is too much of a dependence on the electronic anklet which is far from perfect. There have been instances where the offender has tested the monitoring agency by setting the alarm off and then measuring its response time. It has also happened that the offender within that response time period—which is calculated by the offender by repeatedly testing the response of the responding agency—has committed offences and then gone back to the premises where they were meant to be earlier. Time and again it has been proved that the monitoring system is actually not foolproof. We can have all the technology and still fail. As I say iPads and iPhones do not prevent crime; good policemen and prison officers do.When it comes to the safety of our communities we cannot afford loopholes and a trial and error approach. Just recently the offender who is alleged to have been involved in the mindless callous murder of Ms Blessie Gotingco was said to be on some kind of electronically monitored release conditions. Although I cannot comment further on this horrendous offence clearly in this instance the system failed. The system failed in protecting Blessie and her family. The system failed in keeping our communities safer. Our concern is how far this bill actually goes in filling the holes and strengthening the related legislation which is the Sentencing Act the Parole Act and the bail conditions legislation.We will support this bill to the select committee provided the anomalies within this piece of legislation are addressed. We will not give a blank cheque like the support parties have been giving to the ruling party.JACQUI DEAN (National—Waitaki):I am speaking to the first reading of the Electronic Monitoring of Offenders Legislation Bill. It seems that this bill will enjoy the support of the House through the first reading and into the select committee stage. Having sat on the Law and Order Committee in the last term and a half of Parliament I see this as another step in improving the criminal justice system. I share the concerns of the previous speaker Mahesh Bindra about this bill not being the answer to keeping communities safe and I know that David Clendon also raised the same issue. Although this is a step forward in terms of electronic monitoring—and I will talk about that in a little while—I do not think that it was ever intended to be the silver bullet if you like. But I do believe that this is another step in a suite of legislative changes that have been through this Parliament and previous Parliaments to make sure that prisoners are kept where they need to be and are kept under control while they complete their sentences and to focus on keeping our communities safe. The previous speaker did mention a victim of serious crime and the member is absolutely right: it is so hard to protect vulnerable people in our society.I will not stray too far from this bill but I will go back a little bit and talk about our work on the Bail Amendment Bill which sought to make it safer for society when people who are out on bail for crimes of which they have been accused go on to commit further crime. That is the nature of what we are dealing with is it not? It is about people who have committed crimes at the expense of innocent victims. I think that around this House and around New Zealand there is certainly widespread support for additional measures to keep everybody in our society safe. I think back to the discussions on electronic monitoring that we had in the Law and Order Committee in the last Parliament. We made amendments to that bill and it was at a time prior to GPS technology. It is a very new technology and it is revolutionising the way we monitor prisoners and people out under intensive supervision.The issues back then only just a few years ago were around electronic monitoring. The perimeter would be a round circle so you would have an offender on home detention with electronic monitoring wearing a bracelet or an anklet and of course there would be a field around them that was the perimeter of the electronic monitoring. In one or two cases they could not even go to the letterbox because it was in the corner of a square section. Now with GPS this is another step forward in terms of what we can do to monitor people after a prison sentence of 2 years or less. In this case the amendment is to the Sentencing Act and to the Parole Act in order to allow offenders to be released with conditions. We are talking about pretty serious offences—pretty serious repeat offending—that require people to be sentenced to incarceration for a period of 2 years or less.On the other hand as another member has mentioned—I think it was one of the National members—all prisoners bar a very few in the criminal justice system will be returned to society eventually. Long gone are the days when a term of imprisonment came to an end the door creaked open and a plastic bag filled with belongings was given back to the person and it was a case of “Good wishes go with them” only for them to go out into society and reoffend because they could not find their way or could not find their feet. I hope that those days are long gone in New Zealand. I know that successive Ministers of Justice Ministers for Courts Ministers of Corrections and Ministers of Police have given an awful lot of time and have brought through legislative changes and changes within our prison system to make sure that these days prisoners do not simply come to the end of their sentence and be released back into the community with high recidivism a high rate of reoffending. It is a serious issue that we have tackled quite consistently and with great success over the past 4 or 5 years. The rate of reoffending is dropping in New Zealand and that is something we should all be proud of.Our working prisons are of course transitioning from being places of incarceration and punishment to being places where there is an opportunity actually to provide education and improvements in health. Many prisoners who end up in prisons all around New Zealand have poor oral health poor mental health or low rates of literacy and numeracy. Those issues are being addressed in our prisons increasingly so year on year Budget on Budget. Further to that the extent of training now being provided in prisons is growing again year on year and Budget on Budget. We now have from recollection—I am no longer on this committee—four working prisons in New Zealand and the plan is to increase that number over the next few years so that all prisons in New Zealand are working prisons.Why? Well the benefits are pretty obvious are they not? I would say that the major benefit is that those prisoners as we know are going to be returned to society and will become our neighbours once again and we are giving them the best chance of not reoffending of finding their feet back in society where they may never have had a job or a permanent home or pride in themselves. A working prison can give those prisoners the opportunity to gain the skills that they need so that when they go back into society they can do so with the greatest chance of success. As I said this Electronic Monitoring of Offenders Legislation Bill catches up legislatively with the modern technologies of GPS tracking. What that will do is allow prisoners to be tracked in real-time. I am sure that when the committee meets to discuss this bill those aspects of the deterrent effect will be pointed out.Again I will be interested in this debate as it goes through the House in the months to come when it is returned for its second reading and the Committee stage. Several members have pointed out deficiencies in the bill. The New Zealand First member did. I think the Green member did. Well I am interested to see what those deficiencies are because from what I can see in this bill it is on the face of it a relatively simple straightforward bill that takes into account new technologies and their applications—where they were expressly forbidden to be used previously. Prisoners released on conditions after a prison sentence of 2 years or less and offenders serving sentences of intensive supervision were expressly forbidden to go out using GPS. This bill catches up with modern technology and modern practice and with modern treatment of policing.I am unclear from the speeches of the members opposite just what they were referring to when they were talking about deficiencies in this bill. I think it is a good bill. I think that it is another step on the way to addressing the issues of reoffending and the number of wasted opportunities and wasted lives that we have in the New Zealand corrections system. I too have visited a number of prisons in my time as chair of the Law and Order Committee. It was very heartening to see a young man who was very busy—I think he was a bricklayer in Auckland; I think it was Mt Eden Prison—doing a bricklaying apprenticeship which was going to be very useful. He wished to get away from his gang-affiliated friends and associates in the Auckland region. He wished to move down to Christchurch in the future and for a start to get a job constructing letterboxes out of masonry. This guy was looking forward to a future. It is very inspiring to talk to people like that and to see that although they are paying their debt to society they are also looking forward to a better life for themselves. This is a good bill and I commend it to the House.The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call. Catherine Delahunty—5 minutes.CATHERINE DELAHUNTY (Green):Tēnā koe Mr Assistant Speaker. Tēnā koutou e te Whare ko tēnei pō. I would like to take a short call on this and acknowledge the other speakers. I think there have been some really interesting contributions. The last speaker Jacqui Dean asked what flaws there could possibly be in the bill. I think one of the issues is the fact that this is relatively new technology and although we are supporting the bill to the select committee and looking forward to it being a constructive enabling tool for a better justice system there is evidence from other jurisdictions and from the use of technologies of these things not always being followed through and having problems with surveillance. So I think it is not good to become romantic about technology and think that simply because we put the system in place it will automatically work the way it is intended. So I think those are the kinds of issues that will probably come up during this debate.I have also been thinking a lot as our human rights spokesperson about the human rights aspects of the bill and that is the human rights of everybody including the human rights of victims who are often terrified by the return to the community of people who caused them serious harm. So if there is a flexible but firm boundary around that person which means they cannot return to stalk their victims then that is a very good thing. That is something we would support and we recognise that anything particularly for women in the community who are feeling unsafe that makes it safer in that way is a good thing. But the human rights issues as highlighted by section 7 of the New Zealand Bill of Rights Act report do have to be taken seriously and we will be as my colleague David Clendon said looking at those at the select committee. We can never lightly set aside any concerns around human rights.In fact at the World Congress on Probation that was held in Europe a number of issues were raised. I would just like to quote from some of its findings: “Over the years many understandable fears have been expressed by European probation services and civil libertarians more generally in relation to the surveillance implications of tagging and tracking technologies. European experience to date has shown that EM can indeed be a useful form of offender supervision within a framework in which other programmes may also be applied. The key question is; is this how it will remain in the future?”. So it said it is really important that there must be “a debate about best practice and … an understanding of what must be done to ensure that the worst does not come to the worst as it so easily could with this technology.” That was a quote from the findings of the World Congress on Probation last year because the issues of human rights and civil liberties are not simple and technology does not solve them automatically.Technology is not as my colleague and others have said the solution to reoffending recidivism or risk to the community or indeed risk to the person who has come out of prison. It is actually really important that we not only invest in rehabilitation within the prison system for everyone but also rehabilitate our society and its attitudes towards crime and people who have committed offences. I am thinking here of the late Celia Lashlie and her extraordinary work in this regard and I am also thinking of Kim Workman—people who have actually dedicated their lives to thinking about how we make things safer for all of us. It never really works when there are severe restrictions on human rights to the point at which the person becomes dedicated to overcoming the rules to find an opportunity to further offend. It is much more effective when there is buy-in. What is clear about electronic monitoring is that there does have to be a level of buy-in because people have to charge up the electronic monitors.So monitoring is important and technology should be of service to justice but we also need to keep thinking about the New Zealand Bill of Rights Act and what it is that we mean by “human rights”. We need to make sure that actually this is enabling and makes people feel they have a reason to stick within those boundaries rather than to try to circumvent them. We will be looking at this very carefully and making sure there are no unintended consequences because one of the things about the surveillance State that we are now developing in this country for many other people not just criminals—I myself have been a victim of the surveillance State and I know just how random inefficient badly managed and sometimes prejudicial the surveillance State is towards people who dissent. So we want to make sure that it is applied in the right place to the right people and in the right way so that it betters everybody. Thank you.The ASSISTANT SPEAKER (Lindsay Tisch): I call Poto Williams—5 minutes.POTO WILLIAMS (Labour—Christchurch East):It gives me pleasure to rise and take a short call on the Electronic Monitoring of Offenders Legislation Bill. During this first reading we have traversed quite a few of the issues that I hope the select committee and the submitters will pick up once the bill does get to the select committee. I think it is really important to just reaffirm a couple of those issues that we in the Labour Party want to ensure there is some resolution for. We do support this bill going to the select committee.It is really interesting because the reasons for this bill are to bring the electronic monitoring of offenders into the modern age to keep up to date with modern technology and to provide an opportunity for the discretion of judges when they are sentencing people whose offences carry a sentence of less than 2 years’ imprisonment to use this as an option. I think this is one of the things that the select committee really has a role in bringing some light to in respect of what those offences might be because it is not going to suit everything that may come out of that pot. There are some things where it might be useful and we have already been talking this evening about domestic violence family violence and sexual abuse cases and the possibility that community-based electronic monitoring might be useful in those cases.I just want to refer to some of my own experiences having worked in the refuge movement. We used to say in our particular refuge that we had six women and a piece of paper—that was our protection order—to protect victims. What I do not want to see occurring is a situation where there is a piece of plastic and an electronic ring to protect victims. What we have here is an opportunity to get this right. Electronic monitoring can be very useful as a community sentence. It can be very useful to ensure that we are not filling our prisons with offenders who do not need to be there and options can be useful in the community. But we have to make sure we get it right and we have to make sure that when we do not get it right our backup systems can actually assist us.In our current options around the use of protection orders I am not sure that we always do get it right. Our backup systems do not always protect the victims. They do not always support those people who should be protected under that piece of paper or the protection order. So what we should be ensuring when this bill goes to the select committee is that we are also talking about having adequate police resources to monitor whether those devices are actually working appropriately in the community. I remember sitting on a bus a couple of years ago glancing across the aisle seeing a young man wearing his ankle bracelet and wondering what the heck he was doing on a bus heading into the middle of town. I know that technology has changed and now we have a GPS system that is likely to go into place but even then—I do not know whether you Mr Assistant Speaker have had experience of this—there are some very clever people who can manipulate the system and the monitoring devices.I am really comfortable about our position in support of taking this bill to the select committee. I would really urge that we get a range of submitters who would think about the options where the monitoring may not be entirely foolproof that we have good systems in place to back up the system should it fail and that we ensure that those people who should be protected in our society are given the full weight of our consideration in this matter. With regard to that I do commend this bill to the select committee. Thank you.The ASSISTANT SPEAKER (Lindsay Tisch): I call Ian McKelvie.IAN McKELVIE (National—Rangitīkei):Thank you Mr Assistant Speaker. You got it right this time. It is a pleasure to get up to take a call on the Electronic Monitoring of Offenders Legislation Bill—[Interruption] That is not what I meant. The bill removes legislative barriers to the electronic monitoring of offenders released from sentences of imprisonment of 2 years or less and offenders sentenced to intensive supervision.I want to talk a bit about one or two of the comments that have been made around the House tonight because I think it is interesting that every party in the House supports this bill I think in one form or another. I think some of the points made particularly by Catherine Delahunty are quite interesting and some of the challenges that the select committee is going to have as it puts this bill through its paces so to speak will be interesting. I guess if you look at electronic monitoring it is something that is relatively new to the world and to New Zealand and it is something that we need to test in all sorts of communities. One of the challenges that the select committee will have is in understanding how this might work in remote parts of rural New Zealand where of course we do not have the same types of connectivity that they have in the cities. That will be one of the issues of course that affects it. The other one will be the remoteness of some of those locations and the places that some of these people choose to live.There are some significant advantages to this bill. I guess that if you look at it in the broadest possible manner it is supposed to—and will I am sure—assist the lot of victims in that it will keep a much better track of people who have committed crimes and it will hopefully ensure that the victims are protected from those people where necessary. I think it will also make a difference to the rehabilitation of those people who are the beneficiaries of this electronic monitoring because it is quite clear from the results of the last few years that everything we do in corrections to improve the reintroduction into our community of prisoners or people who have committed crimes makes a difference to how they I guess react and it also makes a difference to the success rate in reintroducing them.The Government has had some pretty significant success in this area in the last few years. I think it was David Clendon who talked about visiting Rimutaka Prison a couple of weeks ago and it was really a very interesting visit. I had the good fortune or otherwise to visit that prison a few years before with a previous select committee and it was really interesting to see the changes that have happened even in the 2 or 3 years since we had been there last. There are some pretty amazing things happening in our corrections sector. I think of the retraining and the work that is done around drug and alcohol counselling and the work that is done with violent offenders. David Clendon did mention the progress that was made at Rimutaka Prison and we did get to talk to a couple of people who had been through the programme. The result that the programme had got with those two people was pretty amazing. I hope they were not unusual and that that result is able to be achieved with more people than just them.There is obviously all the work around the Release to Work programme and that is where this electronic monitoring comes in to some extent because Release to Work enables these people to be released and the Department of Corrections to keep track of them and understand what is going on. It also protects those prisoners to some extent because it protects them from I guess making the same mistakes twice. Well hopefully it does anyway.The other thing that I found really interesting in the corrections sector is the way that parole hearings have changed and the way that staff pay so much attention to where prisoners who are being released on parole are going to be released to how they are going to be released where they are going to live where they are going to work and what they are going to do when they are not working. It is a very good process and I think we are making some really good progress in that area. Actually it has led to a significant change in the number of reoffenders we have. Since 2011 there are some 1850 fewer reoffenders than we had prior to that. There is the stabilising of the prison population—I think there is a population of about 8600 in prison right now which is a pretty good result. The figure in 2008 was estimated to be 10500 by this stage so clearly at that time there was a significant increase in the number of people going to prison and in the number of people committing crimes. We have of course had a significant drop in the number of crimes being committed too and I will get on to that in a few minutes.Chris Bishop: I can’t wait.IAN McKELVIE: It will be very good Mr Bishop—it will be very good. In fact as I said a minute ago we were up in the Hutt Valley just last week or the week before inspecting some of the work that has been done by the Department of Corrections.Chris Bishop: Great part of the country.IAN McKELVIE: There was not a lot of sun there. In the last few years the Government has passed a lot of law that I guess to some extent is playing around the edges a little bit but that is where we are at with a lot of this stuff. The more small adjustments we can make to legislation that impact positively on both victims and prisoners the better off we will be. In the last year or two I can think of the Parole Amendment Act and particularly the Bail Amendment Act that have had a significant impact particularly on victims.The Government has a Better Public Services programme in place and some very ambitious targets have been set to be achieved by June 2017 and this goes a long way towards achieving what we have been talking about in respect of the Electronic Monitoring of Offenders Legislation Bill. By 2017 we are hoping to have 600 fewer prisoners 4000 fewer community reconvictions and 18500 fewer victims of crime. If that can be achieved there is some significant progress being made. That is an overall reduction in reoffending of some 25 percent and of course this bill goes a little way to assist the Department of Corrections to lessen the amount of reoffending that goes on. I think that is really positive from our perspective very positive for the Government and it has got to be good for New Zealand.The effects of the bill are as I said earlier twofold really in that it gives more protection to victims and it enhances the opportunity for offenders to be successfully reintegrated into society and to successfully find work and a place they can live where they are not tempted to get back into their old ways. Peeni Henare in his talk on this bill talked of this issue and he also accused the Government of failing to spend enough on rehabilitation. Well I would take him up on that because I think that the Government is doing a great job in respect of the rehabilitation of prisoners. There are so many programmes in place; there are so many opportunities for us to get prisoners trained as Jacqui Dean said earlier while they are in prison and consequently when they are trained to work they can then find gainful employment when they leave a prison.In my electorate Rangitīkei I have obviously Manawatū Prison at Linton which has about 260-odd prisoners and very close to my boundary is the Whanganui Prison which has about 500 who all came from somewhere else of course. The thing about Whanganui Prison is that it has a number of programmes where it is training people in nursery and concrete work—all sorts of stuff like that—and it makes a big difference to these people. They can get out and get jobs either in timber mills or with roading contractors in the district. For them to get out and be able to do that—to get out and work—while they are in prison they are released to work and then these monitoring systems if necessary can be utilised at that point.So I think that this bill has got a lot to offer the people that it concerns. It will be very interesting to see it go through the select committee process because there are a number of issues even in a small bill like this that will arise during the course of the select committee process. A number of them have been raised around the House tonight so I think members have done a pretty good job of that.I want to comment on just one other thing and that is about the Ministers of Corrections. I think that our current Minister of Corrections is doing a great job but interestingly in the House I think that there are probably six Ministers of Corrections. You could have an old boys’ or old girls’ society of former Ministers of Corrections. I notice one over in the back row on the other side—he has probably forgotten he was the Minister of Corrections. But it is obviously a pretty important role. With those few words I have a great deal of pleasure in commending this bill to the House and I look forward to the process as it goes through.JACINDA ARDERN (Labour):I have to admit that I was not really feeling the passion from Mr McKelvie in that speech yet there was a real opportunity there I felt that perhaps was missed by the speaker when he took his chair. He did reach one of his goals which was giving a 10-minute speech. Beyond that I am not sure what was achieved necessarily with that contribution. You would have thought that the National Party would be briefed—Jacqui Dean: That’s just mean.JACINDA ARDERN: Oh he can take it in his stride. I imagine that there are these briefings that go on in the National caucus that go something like this: “Look team. We know from Crosby/Textor that there are two big issues that we need to hit when times are rough and the PM’s popularity is taking a hit.” Those issues are crime and immigration. They are the go-to issues. They are the go-to issues in Australia. In fact I was not surprised to read that just a year roughly before Tony Abbott took over the lead of Prime Minister in Australia Mark Textor was writing: “Australians have an uncertain outlook when it comes to the future. They believe the country is facing continuing challenges that directly impact their daily lives: jobs cost of living [and] boat people”. I mean are boat people affecting their daily lives? Lo and behold suddenly the Prime Minister’s popularity takes a dive. What do we see him doing? We see him declaring that boat people are on their way to New Zealand.Someone on a boat saying that they are heading to New Zealand is akin to someone saying they are heading to Paris. Just because they said it it does not mean they are going to get there. I have to remind this House that boat people have always been saying that they are heading to New Zealand. In fact under Labour I recall—[Interruption] It does not mean they are going to get here. [Interruption] It goes to the two key goals of the National Party—crime and boat people. That is how it is relevant. I recall a similar threat when Labour was in office. Our concern was that people in Indonesia wanted to head to New Zealand—The ASSISTANT SPEAKER (Lindsay Tisch): Order!JACINDA ARDERN: I will just finish this sentence. What did the Immigration Service do? It put out a pamphlet saying that if you try that you will perish. That was the advice then. Now suddenly apparently we need to set up detention centres because everything has changed.Coming back to the crime strategy the Electronic Monitoring of Offenders Legislation Bill which we have before us tonight does certainly have though some things that are worthy of consideration by this House—it does. I will concede that point. The special conditions imposed by the Parole Board—I have to say that that element the amendments to section 15 in clause 4 do appear to simply be clarifying a provision of the bill. But in respect of the electronic monitoring under the Parole Act 2002 the bill provides that the offender “must comply with written instructions from a probation officer that are reasonably necessary for the effective administration of the electronic monitoring”. Instructions might include for example requirements that the offender regularly charges the monitoring equipment.When you have a provision that has that much specificity to it you can assume that there has been some existing issue within current legislation that has required that that occur. That is a bit of an indication. I would be very keen to hear at the select committee examples of where this has been an issue. But how do we ensure for instance that an offender is complying with a regime where they are required to keep their electronic monitor charged? How do you define when the breakdown of equipment for instance or the loss of coverage of monitoring is equipment failure—because we know anecdotally that there have been issues with equipment failure—versus a failure on the part of the offender to recharge said equipment? That is the level of detail we are required to get into because if you are going to have further penalties attached to a provision like this we need to make sure that we are able to differentiate between those two issues.I am also—just a heads-up to the Minister—very keen for us to explore the effectiveness of the equipment in question. We know that some of the contracting for and provision of this equipment has changed. There have been whispers in the street for some time that there have been significant failings. This is a contract that has been delivered via 3M—that is my understanding. We need to ensure if we are extending provisions like this that we have reliability in the technology that we are using.One of the next significant provisions is the pre-sentence reporting for sentences of 20 months or intensive supervision. The bill and I see it states this in the Bills Digest consequently amends the Sentencing Act 2002 which currently specifically excludes electronic monitoring as a possible special condition for a sentence of intensive supervision. I have not gone back through Hansard and it may not have been raised specifically in the House but the Ministry of Justice should be aware of why Parliament specifically excluded electronic monitoring from intensive supervision. Parliament will do that only if there is good cause. It has given that issue consideration. It might simply be by omission but to specifically exclude it speaks to something else. I would be interested to hear more on that and we will be raising it at the select committee.I also want to raise as my colleague Poto Williams has raised that generally electronic monitoring cannot be seen as a substitute for other checks and balances. She rightly used the example of domestic violence and so on but equally at the moment we do have provision for probation officers and the police to have a role in one-to-one contact with offenders and that has other spin-offs to it. Simply relying on technology to play that role means that we will lose out on that ongoing relationship that we need an offender to play with their probation officer. So I would not want to see those checks reduced—that one-to-one engagement reduced—simply because we have extra conditions that are able to apply for electronic monitoring.The area I want to spend most of my remaining moments on is the provisions around offenders sentenced to imprisonment for short terms. At the moment there is a prohibition on the imposition by the court of an electronic monitoring condition in respect of sentences of less than 24 months but only in respect of a whereabouts condition and not a residential condition. I think it is right that we reconsider that provision because as has been raised in the House there are examples perhaps of issues of harassment of stalking and of domestic violence where it would be useful to have the ability to put these electronic monitoring conditions in place. My question is: why does the bill not specifically set out a set of relevant offences rather than specifying a time frame? Rather than saying “24 months or less” why are we not being sentence-specific? We do this in a lot of other areas—for instance extended supervision orders and so on. It is not unheard-of to say well if we are mostly concerned that this is a provision that affects domestic violence situations why not be specific about that? That might stop it from being overused potentially in the courts if that is indeed a concern. So I would like to explore that at select committee as well.We are also very mindful of the New Zealand Bill of Rights Act assessment by the Attorney-General. Under that New Zealand Bill of Rights Act report this bill fails but it fails on counts where we have failed before. Extended supervision orders already test the boundaries of the New Zealand Bill of Rights Act and because this bill relates again to the use of electronic monitoring for extended supervision orders it is natural that it fails too. But we in this House should never—never—be complacent about New Zealand Bill of Rights Act failures. It is our obligation to make sure that we truly believe that it is warranted and that is a test we need to maintain at select committee.My final point is that if some of these provisions are intended to assist for instance with domestic violence situations they still rely on an offender a perpetrator entering into the criminal justice system. Yet we know presently that changes in Crown Law’s Prosecution Guidelines mean that we are not seeing as many offenders being arrested. We are seeing potentially the poor use of police safety orders. In all of those cases the flow-on effect is that because funding follows a sentence or a court process or a referral through a court process we are not necessarily seeing some of those mechanisms being used. This is another mechanism that relies on an offender going through the criminal justice system so we need to be mindful that that means that we may not be picking up everyone who would potentially benefit from such monitoring in those cases.JONATHAN YOUNG (National—New Plymouth):As a member of the Law and Order Committee I am pleased to stand and speak on the Electronic Monitoring of Offenders Legislation Bill in its first reading. It is good to hear that other parties across this House are going to support this bill to select committee. I believe that is good judgment. I failed to hear passion in the voice of the previous speaker Jacinda Ardern as she agreed to that point but I am sure that as we go through the select committee process we are going to hear lots of very interesting submissions.Just last week a number of us from the Law and Order Committee were able to visit one of Her Majesty’s prisons.Chris Bishop: Where was that?JONATHAN YOUNG: We went to Rimutaka Prison here in the Wellington region. Many people were surprised that they let me out but they were certainly very keen to see me go. A lot of people out there just think that prisons are where criminals go and are locked away but you would be surprised at just how passionate the people who work in those corrections facilities are to rehabilitate the people who find their way into those places. It is quite surprising to feel and hear the passion and the genuine concern they have to see people rehabilitated.Debate interrupted.The House adjourned at 10 p.m.