Volume 683 Week 21 - Tuesday 28 August 2012 
Text is incorporated into the Bound Volume 
Volume 683 Week 21 - Tuesday 28 August 2012 
[Sitting date: 28 August 2012. Volume:683;Page:4763. Text is incorporated into the Bound Volume.] 
Tuesday 28 August 2012 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Questions to Ministers 
Tax System—Policy Changes and Enforcement 
1. 
JONATHAN YOUNG (National—New Plymouth) 
 to the  
Minister of Finance 
: What is the Government doing to ensure that people are paying their fair share of tax? 
Hon STEVEN JOYCE (Acting Minister of Finance) 
: 
 The Government has made a number of policy changes that have been very effective in improving the fairness of the tax system and I will just briefly outline a few of them. We have changed the rules so that people can no longer use investment losses including those from rental properties to reduce their income and so become entitled to programmes like Working for Families or student allowances which were not intended for the wealthy. We have brought in stricter tax rules for foreign multinationals to reduce their ability to minimise tax payments in New Zealand. We have aligned the top personal and trust rates to improve the integrity and coherence of the tax system and to get rid of the incentive provided by the previous Government for people to hide their income in trusts. We have also tightened the rules for loss attributing qualifying companies and qualifying companies to ensure that property investors are taxed at the correct rate and this year’s Budget includes measures to close loopholes around holiday home ownership and livestock valuation. 
Jonathan Young 
: Is the Government being more vigorous in enforcing the tax rules? 
Hon STEVEN JOYCE 
: Yes it is. The Government has been significantly boosting the Inland Revenue Department’s capacity to investigate and prosecute tax fraud and tax avoidance. In Budget 2010 the Inland Revenue Department was provided with $119 million in additional funding over 4 years to increase its audit and compliance activity in areas like property transactions the hidden economy and debt collection. That was increased by a further $78 million in this year’s Budget. As my colleague the revenue Minister Peter Dunne said at the time of the Budget when people do not pay their fair share of tax everyone else suffers because there is less money for health education and other services. I would note that the Inland Revenue Department has been taking and winning a number of court cases relating to tax avoidance which is sending a strong message that the Government takes the issue of compliance very seriously. 
Jonathan Young 
: How successful has that extra funding for audit and compliance been? 
Hon STEVEN JOYCE 
: I am pleased to say it has been very successful. In the first year of increased audit and compliance the Inland Revenue Department has assessed additional tax of $86.9 million—a return of $6.62 for every dollar invested—in the hidden economy and in the property sector. An additional $115 million of tax debt was recovered which is a return of $9.50 for every dollar invested. It is estimated the extra compliance activities provided for in this year’s Budget will have a net positive impact on revenue of around $345 million over the 4 years to 2015-16. So it has been a very worthwhile investment. 
Andrew Williams 
: Mr Speaker. 
Mr SPEAKER 
: I call Andrew Little. [ 
Interruption 
] Oh Andrew Williams. I beg your pardon—I beg your pardon. 
Andrew Williams 
: Thank you Mr Speaker 
Mr SPEAKER 
: Andrew Williams my apologies. 
Andrew Williams 
: Thank you Mr Speaker. You are not the only Speaker who makes that mistake. Does he agree with the Minister of Revenue’s statement of 1 October 2010 that lowering the top tax rate to 33 percent was “a major tool in stopping tax avoidance …”; if so how does he reconcile this with the Inland Revenue Department’s announcement in recent days that only half of wealthy individuals are paying income tax? 
Hon STEVEN JOYCE 
: What the Inland Revenue Department actually said was that half of the small group of New Zealand’s wealthiest individuals are not paying the 33 percent rate of PAYE. However they could for example be receiving income through a trust—often people arrange their affairs through trusts—in which case they will be paying the trust rate of 33 percent which is of course the same rate. 
Hon David Cunliffe 
: Does he consider it fair that less than half of high-wealth individuals are currently paying income tax at the top tax rate? 
Hon STEVEN JOYCE 
: I think the answer to that question is the same as the answer to the previous question which is that the point that the Inland Revenue Department was making was that roughly half of these high net worth individuals were not paying PAYE but that does not necessarily mean they are not paying a 33 percent tax rate. For example they could be receiving income through a trust. I thought I had explained that previously but I am happy to do it again. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. The reason that I asked the supplementary question was that it went to the question of fairness rather than to the mechanism of the tax payments and the Minister did not address himself to the issue of fairness. 
Mr SPEAKER 
: The member is quite correct. He asked whether the Minister thinks it is fair. He sought the Minister’s opinion. The implication was that the Minister did think that was fair but if that is not correct the Minister should correct that. 
Hon STEVEN JOYCE 
: I was just making the point that because somebody does not receive a certain type of income it does not mean they are not paying the tax rate on another different type of income and if the tax rates are the same across the different types of income that is indeed fair. 
Hon David Cunliffe 
: I seek leave to table the Inland Revenue Department’s report  
Helping you get it right: Inland Revenue’s compliance focus 2012-13 
 which showed that in a survey of high-wealth individuals only 49.5 percent of them were in fact paying income tax on the top tax rate. The survey— 
Mr SPEAKER 
: The document is now understood. Leave is sought to table that document. Is there any objection? It is in the public domain. There is objection I take it? There is objection. 
Hon David Cunliffe 
: I seek leave to table a document prepared by the Council of Trade Unions that summarises Inland Revenue Department data and draws a similar conclusion that less than 50 percent of top income earners are in fact paying at the top tax rate and thereby looking— 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection—[ 
Interruption 
] I beg your pardon. There is objection. 
Jonathan Young 
: Has he seen any recent reports on how the Inland Revenue Department is enforcing the tax rules? 
Hon STEVEN JOYCE 
: Yes as a matter of fact I have. Just this weekend I saw an article in the news media written by Greg Harris a specialist tax partner in the Hamilton office of Deloitte commenting on the Inland Revenue Department’s latest annual compliance focus document which sets out its priorities for the next year. Mr Harris wrote: “An overarching theme in this year’s document is the importance of self-assessment—in particular taxpayers understanding their obligations and meeting them … IRD provides guidance on the appropriate actions to take when taxpayers get it wrong.” He goes on to say: “For taxpayers who don’t comply Inland Revenue has increasingly sophisticated methods of detection. It will not hesitate to use the full force of the law against those who do not comply.” 
Child Poverty—Role of Household Incomes 
2. 
DAVID SHEARER (Leader of the Opposition) 
 to the  
Prime Minister 
: Was he correct when he said the gap between the rich and poor “has been reducing”; if not why not? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes it was. I made that comment in August last year based on the household incomes in New Zealand report that showed that income inequality had slightly reduced between 2008-09 and 2009-10. This year’s report shows that between 2009-10 and 2010-11 it came back up again. According to the report this pattern reflects the impact and timing of the recession and the global financial crisis on various forms of income and on different groups of people. It also says that the increase over the last years does not necessarily indicate an upward trend; it could come down again next year. 
David Shearer 
: Did the household incomes in New Zealand report confirm that the gap is the widest it has ever been that inequality has risen significantly over the last year and that the number of children living in hardship has increased to 21 percent? 
Rt Hon JOHN KEY 
: There were a number of things noted in the report and they were quite wide ranging. What it does show and as the report says is that the global financial crisis is hardest felt— 
David Shearer 
: I raise a point of order Mr Speaker. That was a pretty straight question that asked whether that household incomes in New Zealand report actually did say those things. 
Mr SPEAKER 
: The member is correct. His question was pretty straight to those points. 
Rt Hon JOHN KEY 
: From memory yes but what the report shows is a number of things and the most important point it actually showed was that the global financial crisis as it is everywhere in the world is hardest felt by lower-income people and it also showed that there has been a bounce back in investment income. 
David Shearer 
: Does he agree with the figures produced by the Expert Advisory Group on Solutions to Child Poverty that showed that the number of children living in poverty declined from 2004 to 2007 as a result of Working for Families and that it began to rise again after he became the Prime Minister; if so does he still think that Working for Families is “communism by stealth”? 
Rt Hon JOHN KEY 
: Yes I do think it is communism by stealth— 
Hon Members 
: Oh! 
Rt Hon JOHN KEY 
: Well when it has an abatement rate that sees over 100 percent taken away from someone I call that communism by stealth. Secondly the member is being quite selective about that report because he happens to be quoting from 2004 to 2007. If he does not want to embarrass himself why does he not get up and talk about the period from 1999 to 2004? 
David Shearer 
: Given that he does consider— 
Mr SPEAKER 
: Order! I want to hear the question. 
David Shearer 
: —it to be communism by stealth is he planning to amend or change Working for Families? 
Rt Hon JOHN KEY 
: That is not necessary because this Government has done that. This Government has done that by lowering tax rates and therefore essentially increasing the amount that people get to spend. But if that member thinks someone going out there and getting to keep about 5c in the dollar is an incentive it is no wonder he does not want the unions in the lobbying bill. 
Mr SPEAKER 
: Order! I think that is sufficient. 
David Shearer 
: Given that two in five children in poverty are in households with working parents will he agree to lift the minimum wage? 
Rt Hon JOHN KEY 
: Every year this Government has been in office we have lifted the minimum wage so that is a 100 percent record. Yes it is highly likely that the minimum wage will go up again but of course that has to be balanced against people’s capacity to get jobs. If the member wants to continue to quote that report let me also quote this from the report: “Parents should be assisted to increase their hours of work by up to 30 hours per week where practical by the time their child starts school.” That is in line with the Welfare Working Group’s recommendation and it is a harder approach than the one taken by this Government. 
David Shearer 
: Will the Prime Minister agree to lift the minimum wage to $15 an hour rather than the paltry amount that he was talking about before—this year that is? 
Rt Hon JOHN KEY 
: Eventually but if the— 
Hon Members 
: Ha ha! 
Rt Hon JOHN KEY 
: Well the interesting thing about David Shearer is that he has just indicated why he is under so much pressure these days from not only David Cunliffe but also Phil Goff I might add. 
David Shearer 
: I raise a point of order Mr Speaker. That was a pretty straight question that asked whether he was going to lift the minimum wage to $15 an hour. 
Mr SPEAKER 
: The member is correct but of course the Prime Minister in his answer said eventually he would. Then there were a range of interjections from the Opposition that the Prime Minister then latched on to. That is my difficulty. When a Minister is responding to interjections it is a bit hard for me to intervene. The question was answered. I think the Prime Minister has had sufficient answer. 
Child Poverty—Role of Household Incomes and Expert Advisory Group Recommendations 
3. 
METIRIA TUREI (Co-Leader—Green) 
 to the  
Prime Minister 
: Does he stand by his statement that “the most comprehensive study of inequality in New Zealand is  
Household incomes in New Zealand: Trends in indicators of inequality and hardship 
”? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes. 
Metiria Turei 
: Does he agree with the 2012 update to this “most comprehensive study of inequality” that under his leadership as Prime Minister inequality in New Zealand has increased to the highest it has ever been in New Zealand’s history? 
Rt Hon JOHN KEY 
: That graph looks like the National Party’s poll ratings while in Government so I appreciate the member showing it to the House. 
Metiria Turei 
: I raise a point of order Mr Speaker—[ 
Interruption 
] 
Mr SPEAKER 
: Order! Come on. [ 
Interruption 
] Order! What is wrong with members? I am on my feet. On both sides of the House this will cease. I think I can anticipate the member’s point of order. Really the question deserved better than that. I think that was unfair and the Prime Minister can do better than that. [ 
Interruption 
] Order! I am on my feet. I mean the member asked a question. She held up a graph which on the face of it appeared to indicate whatever the graph was indicating at a fairly high level in recent years. Her question given the visual aid that the member had did not seem a totally unreasonable question at all. 
Rt Hon JOHN KEY 
: The reason the member got that answer is she has taken a very tiny piece of that graph—not the entire graph that is actually in the report and not many other graphs in the report that actually contradict that. That is the reason why the member got the answer. 
Metiria Turei 
: I raise a point of order Mr Speaker. My question asked whether he agreed with the report as to its conclusion on the state of inequality in New Zealand. I did not ask for his view about the graph; I asked about his view on the report about inequality and he has not even addressed— 
Mr SPEAKER 
: Order! I apologise to the member. I say to the House that it is not reasonable to be interjecting. A member is entitled to raise a point of order if they believe that a question has not been answered. However on this occasion—I think the Prime Minister’s first response was unfair and that was why I pulled the Prime Minister up—in his second response he pointed out in response to the substance of the member’s question that the graph the member was referring to covered only a limited period of the material presented in the report. I understood from the Prime Minister’s answer that if one took the entire period of the report different conclusions might be reached and I think that is not an unreasonable answer for the Prime Minister to come to. 
Metiria Turei 
: Does the Prime Minister agree with the “most comprehensive study of inequality in New Zealand” that under his leadership the percentage of children who are living in actual hardship in this country has grown from 15 percent to 21 percent—that is one in every five New Zealand children—while the rich under his watch keep getting richer? 
Rt Hon JOHN KEY 
: No I do not agree with the way that the member has phrased that. I draw the member’s attention to the report because what it actually shows is that income inequality on a number of measures in the report still remains lower today than it was over the mid-1990s and 2000s. The report also says that OECD figures show that we are not a deeply unequal country. On standard measures we are about the same as Australia and Canada and nowhere near as unequal as countries like Mexico and the United States. If the member wants to selectively pick one or two pieces out of the report she is free to do so but in my opinion she is misrepresenting it. 
Jacinda Ardern 
: Is inequality at the level it is now acceptable to his Government? 
Rt Hon JOHN KEY 
: We would prefer that we were a more equal society with less inequality but what the report actually goes on to quite clearly demonstrate is that the vast bulk of the changes that have taken place is due to the global financial crisis. Fortunately this Government has an economic plan that is seeing the economy grow and enabling people to get into work. This Government is focused on welfare reforms to get people into work. This Government has been quite prepared to put up over $350 million to insulate homes in New Zealand. This Government has supported under-6-year-olds to get free doctors’ visits. This Government has supported making sure we reduce rheumatic fever. This Government is increasing vaccination rates for young kids. This Government is making sure that more young children have early childhood education. This Government is making sure that national standards— 
Mr SPEAKER 
: Order! I call Metiria Turei. [ 
Interruption 
] Order! I apologise to Metiria Turei. Look I say again to both sides of the House that it is just discourteous to not allow a member at the back of the House to have their question heard. 
Metiria Turei 
: Does the Prime Minister agree with this comment from the report in section 4: “From the 2010 to the 2011 HES both the 80:20 ratio and the Gini rose significantly. This reflects the rise in incomes in the top third and the fall in incomes in the bottom two thirds of the income distribution …”—that is the gap between the rich and the poor is growing significantly because the rich are getting richer and everyone else is getting poorer? 
Rt Hon JOHN KEY 
: By definition they are not getting poorer. But what I can say is that the report quite clearly says that there have been the effects of the global financial crisis—some people have got less work less overtime; there are things bouncing around. The report also says the following: that research indicates that parents obtaining full-time paid employment is the most important event to lift children out of poverty. That is why this Government is focusing on areas like welfare reform—to make sure that those youngsters actually have a better opportunity. We know from some of the research that we see that 60 percent of all children living in poverty do so because they are in benefit-based households. 
Metiria Turei 
: Will the Prime Minister act on the call from the Expert Advisory Group on Solutions to Child Poverty which reported today for a universal payment to alleviate child poverty and therefore support the Green Party bill to replace the in-work tax credit with a child payment for all children who are in the worst poverty? 
Rt Hon JOHN KEY 
: No. And let us run through the logic of what that member has just said. She has got up in the House and she has told New Zealanders that we are an unequal society in New Zealand in her view because the rich are getting richer and now she is on her feet telling me to give the rich families even more for their kids. What a dopey idea that is! 
Mr SPEAKER 
: Supplementary question Metiria Turei. [ 
Interruption 
] Order! Can I say again to members that it is just not fair to a member at the back of the House to keep this noise level up. 
Metiria Turei 
: Does— 
Hon Simon Bridges 
: Been smoking too much of the dope again. 
Metiria Turei 
: I raise a point of order Mr Speaker. I take personal offence at the comment made by Simon and I ask that he be asked to withdraw and apologise. 
Mr SPEAKER 
: Order! [ 
Interruption 
] Order! I just do not understand why members are carrying on like this. A point of order was raised and the member took offence at a comment that was made. The member should have used the member’s full name in referring to the member whose comment she took offence at. Can I check with the member. I did not hear the comment. Whose comment was it that she took offence at? 
Metiria Turei 
: The Minister Simon—that guy over there. [ 
Interruption 
] 
Mr SPEAKER 
: Order! Look I think honestly if the Speaker is to take—[ 
Interruption 
] No I am on my feet now. Look if the Speaker is to take this seriously the member knows who the Minister is and that is not good enough. I think we should go on to the next question. 
Metiria Turei 
: I raise a point of order Mr Speaker. I want to just express my apology that in my frustration over this question I was not thinking straight. I do know the Minister’s name. My apologies for that. 
Mr SPEAKER 
: Supplementary question Metiria Turei. [ 
Interruption 
] Order! I want to hear just the supplementary question. 
Metiria Turei 
: Does the Prime Minister agree with the Expert Advisory Group on Solutions to Child Poverty that children should be guaranteed a warm dry home to live in through a warrant of fitness - type programme for rental housing like that proposed by the Green Party in our Energy Efficiency and Conservation (Warm Healthy Rentals) Amendment Bill; if so will he support our legislation in the House? 
Rt Hon JOHN KEY 
: To the latter point I have not seen the Greens’ legislation so I cannot comment on whether we would support it. Secondly in terms of the former point yes of course it makes sense for New Zealand homes to be warm. The health benefits of that are self-explanatory and the member knows that because the Greens worked with National for a $358 million programme for housing insulation. Whether more can be done to encourage private sector landlords to increase the quality of the accommodation they are providing is yet to be seen but that would be a very positive step if this Government could encourage them to do it. From our own perspective we are certainly getting our own house or as the case may be houses in order because the Government has agreed that we will be insulating every State home in New Zealand. 
Metiria Turei 
: Is the Prime Minister not ashamed that the only group whose incomes have risen under his leadership is the very wealthy leaving hundreds of thousands of New Zealand children living in poverty and hardship? Prime Minister who are you choosing with your policy? 
Rt Hon JOHN KEY 
: The member is quite incorrect. Median income in New Zealand has risen. Real after-tax incomes have risen across the board for New Zealanders. 
Metiria Turei 
: Not according to this it hasn’t! 
Rt Hon JOHN KEY 
: Well you can wave any bit of paper you want at me. Frankly if you want to selectively take bits out you are welcome to but if you want to be honest about characterising what the report actually says it says that on a number of measures it is better today than it was back in the 1990s and 2000s. So quite frankly yes median income has been rising and what we are choosing is hard-working New Zealanders who go out there day after day to try to support their families. That is why we have been reducing taxes and the like for them. 
Child Pornography—Increased Penalties and Legislative Reform 
4. 
ALFRED NGARO (National) 
 to the  
Minister of Justice 
: What steps is she taking to get tough on child pornography? 
Hon JUDITH COLLINS (Minister of Justice) 
: 
 We are delivering on our promise to increase maximum penalties for child pornography offences and futureproofing our laws against advances in technology to help prevent this despicable crime. We will increase the maximum prison sentence for possession importation or exporting of an objectionable publication from 5 years to 10 years and we will increase the maximum sentence for distributing or making an objectionable publication from 10 years to 14 years. To update the law to take account of new technology we are creating a new offence of indecent communication with a child. This includes texting online and verbal communication and intentionally viewing objectionable material on the internet will be an offence even if it is not downloaded on to a computer. 
Alfred Ngaro 
: Why are these changes necessary? 
Hon JUDITH COLLINS 
: Child pornography involves the sexual abuse and exploitation of children. By increasing the maximum penalties for offences we are showing how seriously we view this type of offence. The internet social networking and mobile technology have made children more vulnerable to people involved in the production distribution and possession of child pornography. Our laws to protect children from these predators have not kept up with technology and there is currently a gap in the law. 
Alfred Ngaro 
: What other steps is she taking to help protect children? 
Hon JUDITH COLLINS 
: We are also considering the Law Commission’s recommendations on minimising the harm of cyber-bullying of our children and young people. Their lives are increasingly enmeshed in social media and they are particularly at risk of cyber-bullying. In the coming weeks the Government will also make final decisions about public protection orders and legislation will be introduced to the House soon after. 
Child Poverty—Role of Household Incomes 
5. 
JACINDA ARDERN (Labour) 
 to the  
Minister for Social Development 
: Does she stand by her statement in relation to the report on household incomes released last week that “I tell you what New Zealanders say: ‘Thank goodness for a National Government that has managed its way through it and is now seeing real progress’ ”? 
Hon PAULA BENNETT (Minister for Social Development) 
: 
 Certainly and that is because under National’s responsible management in tough economic times benefit numbers for example have reduced by 27000 in the last 2 years since their peak in 2010. We have also seen some of the lowest interest rates which are making a difference for a lot of New Zealanders. And three-quarters of income earners now pay no more than 17.5 percent in tax. I do not think that any of those things would have happened under Labour. 
Jacinda Ardern 
: Does the increase in the number of children living in material hardship from 15 to 21 percent and in the number living in workless homes from 16 to 25 percent constitute real progress; if so how? 
Hon PAULA BENNETT 
: I think the point I was making last week and the point I make again today is that we have had some of the toughest economic global times and they have affected some of our lowest incomes and our children. We have to work our way out of that over a period of time but with targeting and concerted effort in that area. This Government is making that effort. I think New Zealand is better off because of a National Government and it would be worse off under a Labour one. 
Jacinda Ardern 
: Is the global financial crisis the sole cause of an increase in hardship decreases in real incomes job losses higher housing costs higher outgoing-to-income ratios and those on higher incomes doing better than they were 3 years ago; if so how? 
Hon PAULA BENNETT 
: I think there are a number of factors and we also can equate into that the Christchurch earthquakes which have taken up a lot of resource and caused a lot of hardship to a lot of New Zealanders. But equally what we saw for 9 long years was no real attention put on the one in five children who was not achieving at school. A lot of those who were teenagers then are parents now actually and do not have the education behind them to get the right jobs to move ahead. They were ignored under Labour for all of that time. We are picking up the slack now but there is a lot of work to be done. 
Le’aufa’amulia Asenati Lole-Taylor 
: What action if any is the Government considering to reduce the cost of living for households? 
Hon PAULA BENNETT 
: I am sure that the Minister of Finance could do a better job than I can at this. There has been a huge amount of effort put into those families who need it. We have seen lower tax rates. We have seen GST changes and them being compensated. We have seen lower interest rates for those families which is actually making a genuine difference in their household income each week. I think that is making a fundamental difference. 
Jacinda Ardern 
: Does she agree with the Prime Minister that Working for Families was communism by stealth when according to the household incomes report it was one of the only things to cushion families from the sharpest edges of the recession? 
Hon PAULA BENNETT 
: I always agree with the Prime Minister. 
Jacinda Ardern 
: Will she adopt a target to reduce child poverty rates by 30 percent and to halve severe and persistent child poverty within 10 years? 
Hon PAULA BENNETT 
: The Government is looking at the draft report that has been put out by the experts group today. It will have a full report out in December. I have also asked it whether it will work with us alongside the white paper which is due out in the middle of October. We have already been working alongside that group. So I am not prepared to make a call at this stage on what we will and will not be accepting. 
Welfare Reforms—Pre-employment Drug Testing for Job Seekers 
6. 
MIKE SABIN (National—Northland) 
 to the  
Minister for Social Development 
: What recent announcements has she made to require those on benefits with work-test obligations to be ready and work available? 
Hon PAULA BENNETT (Minister for Social Development) 
: 
 Today we have announced that—[ 
Interruption 
] 
Mr SPEAKER 
: Order! That is not reasonable. There is no way I could hear the Minister’s answer with that noise. 
Hon PAULA BENNETT 
: Today we announced that from July 2013 beneficiaries with full or part-time work obligations will be sanctioned if they refuse job opportunities that require a drug test or if they fail a drug test. Labour members can cry out but for 9 long years they let beneficiaries sit on welfare with no tests whatsoever and it is acceptable to them for those people to sit there and have recreational drug-use and not actually have any obligations under that. 
Mike Sabin 
: What evidence is there to point to the fact that drug use is a barrier for those on benefits seeking work? 
Hon PAULA BENNETT 
: There is no doubt that we have a problem with recreational drug-use in New Zealand. Ministry of Health research shows that around 20 percent of beneficiaries use drugs at least once a week and that those receiving an unemployment benefit were around three times more likely to be regular cannabis users than those not on welfare yet over 40 percent of the jobs we are asking beneficiaries to apply for require a drug test. At the end of the day I believe that the majority of the New Zealand public shares the very reasonable expectation that people do not let their illegal recreational drug-use get in the way of a job. 
Mike Sabin 
: How will this policy change support greater employment opportunities for those on benefit? 
Hon PAULA BENNETT 
: Requiring beneficiaries to be work-ready available and drug-free will certainly improve employment opportunities giving greater confidence to employers to take them on. Many employers have publicly stated that they have problems recruiting people off benefits and into work because of their recreational drug-use. This is particularly prevalent in industries like forestry and construction and unfortunately particularly in regions like the member’s own Northland and the East Coast and the central North Island. 
State-owned Energy Companies Sales—Water Rights and Timing 
7. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
 to the  
Minister for State Owned Enterprises 
: Has he seen the advice from Tower Investments Chief Executive Sam Stubbs that a delay in a float of Mighty River Power until early next year could increase demand for the shares; if so what harm would be done by delaying the sales while the Treaty partners negotiate a solution to recognise Maori rights and interests in water? 
Hon TONY RYALL (Minister for State Owned Enterprises) 
: 
 Yes I have seen those comments. There are three implications from delaying a sale I would respond to the member. The first is that we have only so many market windows to float these companies each year and it has been the Government’s preferred option to have the first float in the second window of 2012. Secondly we could very well end up having to borrow more. Thirdly the Crown will have to incur substantial expenditure a second time in the event that the sale is delayed and some of the complex work has to be repeated. 
Te Ururoa Flavell 
: What advice has he received regarding the Waitangi Tribunal’s view that if the Crown proceeds with its shares sale without first preserving its ability to recognise Maori rights the Crown will be in breach of the Treaty and how will this impact on the share sales process? 
Hon TONY RYALL 
: The Government has received the 300-page report from the tribunal we are receiving a large amount of advice on the tribunal’s views and those views are going to be considered by the Government. 
Te Ururoa Flavell 
: What advice has he received about the concept of “shares plus”—the additional rights sought in electricity-generating companies? 
Hon TONY RYALL 
: The Waitangi Tribunal has set out its views on the possibility of a “shares plus” arrangement. The Government is getting advice from both its legal and its commercial advisers on that proposal. But as I said we are taking an open mind as we consider the report of the Waitangi Tribunal. 
Maternity Services—Midwifery First Year of Practice Programme 
8. 
BARBARA STEWART (NZ First) 
 to the  
Minister of Health 
: What reports if any has he received regarding the enrolment into the Midwifery First Year of Practice Programme? 
Hon TONY RYALL (Minister of Health) 
: 
 I have received a number of reports all of which showed that virtually all midwifery graduates enter the Midwifery First Year of Practice programme. Those who do not are either on maternity leave themselves or travelling overseas after their studies. The member will be interested to know that for the first time last year the Government fully funded the Midwifery First Year of Practice programme for every graduate. 
Barbara Stewart 
: Does he believe that the voluntary Midwifery First Year of Practice programme with only 32 hours of supervision over 1 year is sufficient for all midwives to feel confident during all births and to recognise all birthing complications in a time frame that will prevent serious birthing incidents? 
Hon TONY RYALL 
: The Midwifery First Year of Practice programme should be viewed in the context of the changes that have been made in midwifery in the last few years. The member will be aware that some of those changes include that their time of training under supervision while studying has gone from 1500 hours over the course of the programme to 2400 hours over the course of the programme. In their third year trainee midwives have to spend 1280 hours of clinical training under the supervision of an independent mentor. 
Barbara Stewart 
: Does he have any plans to ensure that a midwife’s first year out of graduation is completed in a level two or three hospital environment to ensure “significant post-graduate monitoring supervision and education updates before going into private practice.” as recommended by the Health Committee recommendation nine following petition 2008/23 of Jennifer Maree Hooper? 
Hon TONY RYALL 
: Quite a lot of work is going into providing confidence to New Zealanders around maternity services. Indeed we have released the maternity quality and safety programme which is a very important part of that. What I would say specifically to the member with her question is that she should not have a view that midwifery graduates do not get some hospital-based experience during their undergraduate years. The Government is determined to work positively with the profession to provide that confidence that mothers fathers and their families would want. 
Education National Standards—Student Achievement Terminology 
9. 
CATHERINE DELAHUNTY (Green) 
 to the  
Minister of Education 
: Does she stand by her statement made in a speech to the New Zealand Educational Institute principals’ conference that “This idea that students have to be labelled as failures is offensive to me”; if so why? 
Hon HEKIA PARATA (Minister of Education) 
: 
Tena koe Mr Speaker. Yes I do stand by my statement which in full actually reads: “this idea that students have to be labelled as failures is offensive to me … because no professional would be using that language if what they were aiming to do was raise achievement.” So yes because those who advance their opposition to national standards by exploiting the trust of learners and their families asserting that national standards require them to do so are failing those very learners their families and indeed their profession. 
Catherine Delahunty 
: Why then is she setting up a system that labels children as “below standard” and therefore a failure? 
Hon HEKIA PARATA 
: National standards do not label children as failures. National standards help identify those kids who are falling behind so they can be provided with the support they need to improve. National standards help parents to know how well their child is doing. The only labelling that would be going on would be if someone was actively choosing to use national standards in that way rather than to inform their practice to improve achievement for those learners. 
Catherine Delahunty 
: I raise a point of order Mr Speaker. My question asked why she was setting up a system that labels children as “below standard” and I did not hear an answer to that term. 
Mr SPEAKER 
: I think the member is being a little pedantic. The Minister explained why “below standard” or “failure”—why she disagreed with the statement that national standards led to that automatically. I think that was not unreasonable. 
Catherine Delahunty 
: What is she doing to help children who are labelled as “below standard” a term often used in reports or as a failure by her national standards reporting system? 
Hon HEKIA PARATA 
: About 3 weeks ago I released a 5-year plan called the Public Achievement Information plan which sets out over the next 5 years the outcomes that need to be achieved at learner parent teacher principal board chair and agency levels on what we need to be doing. That is an explicated 5-year plan in detail by participants. Everybody can see it and can participate in this combined commitment to raise learner achievement for five out of five students. 
Catherine Delahunty 
: I raise a point of order Mr Speaker. My question related to the concept of labelling and I did not hear anything. I asked the Minister what she is doing to help children who are being labelled as below standard. I did not hear a reply to that. 
Mr SPEAKER 
: Order! Members should not be interjecting—both sides of the House. The Minister in my view answered the question. What she interpreted the member’s question as meaning is that if someone is being labelled as not meeting the standards it means according to the Minister’s answer that they need help and the Minister explained what the Government is doing to help those children. The member asked what she is doing about it and I think the Minister gave a reasonably comprehensive answer. 
Catherine Delahunty 
: What effect does it have on children’s confidence as learners to be labelled from age 6 as below standard? 
Hon HEKIA PARATA 
: Once and for all the system that is being implemented does not label students. People using the system may unprofessionally choose to do that but the system itself does not label learners as failures. No labelling is required under national standards at all—none whatsoever. 
Catherine Delahunty 
: I raise a point of order Mr Speaker. I asked about the effect on children’s confidence of being labelled. I did not ask whether the Minister thinks— 
Mr SPEAKER 
: Order! There is obviously a lot of disagreement around the House on this but that is no excuse for interjecting during a point of order. The Minister simply disagreed with the proposition that the system labels students and pointed out that in her view it is not the fault of the system—this is her view; I am just repeating what she said—if other people refer to students as failing to meet the standards. I think to refute the assertion in the member’s question is a perfectly reasonable thing for a Minister to do. 
Hon Nanaia Mahuta 
: Is she concerned that the labelling of some students as failures and some schools as bad schools will result from the publication of national standards data; if so what steps will she take to avoid such a damaging perception? 
Hon HEKIA PARATA 
: The steps that are being taken to help in every one of our schools how they raise learner achievement are set out in the 5-year Public Achievement Information plan. They are set out in the investment we are making in the progression and consistency tool which will help teachers to not only capture the absolute information about a learner in respect of their cohort but also capture progression over time all of which is related to overall teacher judgment. The OECD has commented in its New Zealand report on how well New Zealand’s assessment and evaluation procedure works and this will further embed that. 
Hon Nanaia Mahuta 
: Is she offended that children with moderate special education needs could be labelled as falling below national standards without consideration of their complex learning needs; if so what action will she take to rectify this? 
Hon HEKIA PARATA 
: By providing $304 million of professional learning and development over the next 4 years. There is no need for any child to be labelled in that way at all. 
Catherine Delahunty 
: I seek leave to table the report  
The Use of Evidence to Improve Education and Serve the Public Good 
 by the Ministry of Education from April 2012 which shows that parents of children who are labelled as below standard by national standards could react negatively. 
Mr SPEAKER 
: Order! Leave is sought to table that document. Is there any objection? There is objection. 
Chris Hipkins 
: How can the Minister claim that no children are being labelled as failures when the Prime Minister has been saying that one in five children is failing to meet standards? 
Hon HEKIA PARATA 
: I did not engage the conversation as to whether it was occurring or not. What I said was that the system itself does not require that to occur. 
Hon Trevor Mallard 
: The Prime Minister labelled them as failures. The Prime Minister labelled them as failures. 
Hon HEKIA PARATA 
: Ah ah—no no. Your proposition is that nobody is labelling. You are the ones making that argument— 
Mr SPEAKER 
: Order! I am not sure the Speaker is making any proposition on this at all. When the member is saying “Your proposition” she is referring to the Speaker. [ 
Interruption 
] Order! It has happened a couple of times today in questions and answers where members asking questions inserted “you are doing this” and Ministers answering them referred to “your” and “you”. Members should remember they are referring to the Speaker under those circumstances. 
State-owned Assets Sales—Water Rights 
10. 
Hon CLAYTON COSGROVE (Labour) 
 to the  
Minister for State Owned Enterprises 
: Does he stand by his answer to Oral Question No 10 on 1 August 2012 regarding asset sales and water rights that “it is not to say that it is not expected”? 
Hon TONY RYALL (Minister for State Owned Enterprises) 
: 
 Within context yes. Putting my answer to the member’s question in full context I said: “Certainly it is not part of the plan but it is not to say that it is not expected. I think what is more important for New Zealanders is to find out whether the Labour Party supports the Maori Council claim on the water or not.” 
Mr SPEAKER 
: Order! That was not actually necessary to answer that question. 
Hon Clayton Cosgrove 
: Given that the Prime Minister has stated that “The Government recognises that Maori have always had rights and interests in water.” why were these rights and interests not negotiated before the sale proceeds were booked by his Government last year before the legislation was rushed through the House in June and well in advance of the proposed float of Mighty River Power planned by his Government for the third quarter of this year? 
Hon TONY RYALL 
: Because it is the Government’s view that the sale of a minority stake in the State-owned enterprises does not interfere with the rights and interests of Maori. This should be seen within the wider plan that the Government has to help control debt in the New Zealand economy. 
Hon Clayton Cosgrove 
: Does he stand by his statement of 5 March 2012 that the deal negotiated with the Maori Party over section 9 “ensures we can proceed with the mixed ownership programme without prejudicing the rights of Maori or the Crown’s ability to settle future Treaty claims.”; if so in light of the Waitangi Tribunal’s finding will he now admit that one he was wrong and two the section 9 deal with the Maori Party is now worthless? 
Hon TONY RYALL 
: I would have to check the quote that the member has provided in respect of that question; I do not have it with me. But what I would say is that after the many weeks of consultation we had with Maori as a result of the section 9 issue it was transferred into the new section of the Public Finance Act. But as I said earlier in question time today the Government is considering with an open mind the almost 300 pages of Waitangi Tribunal recommendations that came out last week. 
Hon Clayton Cosgrove 
: Does he agree with the investment expert Brian Gaynor who said in regard to the Government’s mixed-ownership model that if it tried to float off a company with a huge amount of uncertainties the uptake by investors will be very poor particularly by experienced investors; if he does not why does he not? 
Hon TONY RYALL 
: Quite clearly these companies are going to be owned 85 percent to 90 percent by New Zealanders once floated—if that is the Government’s decision. Of course New Zealanders fully understand how the Treaty negotiation process works and the interests and rights of Maori in respect of that. 
Hon Clayton Cosgrove 
: Given that last week his colleague Bill English on his behalf stated that “We have been working with Maori over water rights and interests for 3 years.” does he as Minister take any responsibility for the last-minute decision-making and uncertainty around the asset sales programme given that it was all planned for according to him and his Government; if not why not? 
Hon TONY RYALL 
: There has not been last-minute decision-making by the Government. We have a path that we have been following and we have identified that there will be a number of challenges along the way. We are currently considering the almost 300 pages from the Waitangi Tribunal and the Prime Minister indicated yesterday a likely time line for that consideration 
Public Services—Kiwis Count Update 
11. 
JACQUI DEAN (National—Waitaki) 
 to the  
Minister of State Services 
: What reports has he received on New Zealanders’ satisfaction with public services? 
Hon Dr JONATHAN COLEMAN (Minister of State Services) 
: 
 Later today I will be releasing the State Services Commission’s Kiwis Count update which measures New Zealanders’ satisfaction with 42 frequently used public services across 10 service groups. I am delighted to advise the House that New Zealanders’ satisfaction with their public services has improved across the board. Each and every service group measured in 2009 and 2012 saw a satisfaction increase. The results indicate that New Zealanders are more satisfied with the Government’s provision of health education justice environment and recreation services to name just a few. 
Jacqui Dean 
: What does the survey indicate about the public’s experience of front-line services? 
Hon Dr JONATHAN COLEMAN 
: Public satisfaction—[ 
Interruption 
] 
Mr SPEAKER 
: Order! I apologise to the Minister. On both questions so far he has not even opened his mouth before there was unnecessary interjection. It is not reasonable. 
Hon Dr JONATHAN COLEMAN 
: Public satisfaction with front-line services is improving—for example the survey shows that the public is more satisfied with the provision of superannuation the quality of hospital emergency services receiving outpatient care and the quality of services at the border. New Zealanders reported high levels of satisfaction even in their interactions with the Inland Revenue Department. 
Jacqui Dean 
: What else does this survey indicate about what Kiwis value in their public services? 
Hon Dr JONATHAN COLEMAN 
: The survey specifically indicates that the public places a high premium on value for taxpayer spend. The improvements in this area demonstrate that the Government is delivering on its election commitment to provide better public services. This means a happy public a happy Government and an unhappy Opposition. 
Schools—Proposed Closure of Nelson and Christchurch Residential Schools 
12. 
CHRIS HIPKINS (Labour—Rimutaka) 
 to the  
Minister of Education 
: Why is she proposing to close Salisbury Residential School in Nelson and McKenzie Residential School in Christchurch? 
Hon HEKIA PARATA (Minister of Education) 
: 
 My focus is on developing the new intensive wraparound service contributing to Success for All—Every School Every Child which is this Government’s vision for a fully inclusive education system. As a result of consultation and in light of all the considerations the best option is to retain a mix of both residential places and extended use of the wraparound service. I have written to McKenzie Residential School in Christchurch and Salisbury School in Nelson advising them of my preliminary decision to close them and giving them 28 days to make submissions. If I do decide after this further consultation to close the schools the statutory process to close them will then begin. The two residential schools proposed to be retained will be located in Christchurch and Auckland and they will be national schools. 
Chris Hipkins 
: What evidence base is she relying on when she says that the wraparound service she is proposing will work better for these vulnerable students than the current model of care and support that they receive? 
Hon HEKIA PARATA 
: It is not as the member has framed it an either/or; it is a both/and. We are proposing to provide both residential placements and an intensive wraparound system. The Ministry of Education developed this in 2010. The service was extended during the temporary closure of Halswell Residential College following the Christchurch earthquakes. It provides support for learners with the same needs as those enrolled in residential special schools. Professor David Mitchell provided the report  
Joined-Up: A Comprehensive Ecological Model for Working with Children with Complex Needs and their Families/Whanau 
 which showed that an intensive package of support for students with complex needs in their local schools and home communities resulted in better outcomes for students. 
Tracey Martin 
: Can the Minister confirm that the suggested reduction in the State’s financial investment in these specific students’ educational needs from $84200 per year to approximately $29000 per year for the wraparound service or to the level of approximately $7700 per year for average mainstream students has not been based on advice from Treasury? 
Hon HEKIA PARATA 
: No. I can confirm it is not based on that and yes I can confirm that it does not include Treasury’s advice. 
Chris Hipkins 
: Will the wraparound service for students with special needs in local schools provide any form of assistance and support to students in their homes outside of school hours; if so what will the nature of that support be? 
Hon HEKIA PARATA 
: The intensive wraparound service is personalised to each learner. Whatever is required to assist them will be defined in association with a psychologist the learner and the family or any other specialist who might need to be involved in order to have a personalised plan for each learner. 
Chris Hipkins 
: I raise a point of order Mr Speaker. My question was actually relatively specific. It was about the level of support that they will be provided in their home environment and the Minister has not addressed that part of the question—well she has not addressed the substance of the question. 
Mr SPEAKER 
: Indeed the member did ask exactly that question. I am assuming from the Minister’s answer that the support was individualised and would meet students’ individual needs—that if they needed support beyond school that would be provided. But if I am wrong there the Minister had better correct that impression. 
Chris Hipkins 
: I raise a point of order Mr Speaker. That is a very helpful interpretation from you but that is not actually the answer that the Minister gave to a very specific question. 
Mr SPEAKER 
: She has indicated what she meant. 
Chris Hipkins 
: I raise a point of order Mr Speaker. You have indicated that where the Opposition asks very specific questions you will require Ministers to give specific answers or answers that address that question. It is not unreasonable for us to expect the Minister will deliver that. 
Mr SPEAKER 
: To save time I am sure the Minister is happy to clarify the matter. 
Hon HEKIA PARATA 
: I will repeat my answer. The answer is that the intensive wraparound service is personalised to the particular learner in their home environment—yes. 
Chris Hipkins 
: Which parts of the feedback from parents teachers and students on residential special schools convinced her that it would be a good idea to close two of them: was it the 93 percent of respondents who asked that their schools remain open or the universally positive feedback from former students about their experience at the schools? 
Hon HEKIA PARATA 
: I did read through over 300 submissions that were received from parents from families and from the schools themselves 224 of which were submitted through SurveyMonkey. I read through those and I was persuaded that residential placements should be retained as part of the continuum of provisions for special education needs and that all of the money committed to special education would allow us to add a further 110 learners to get a service that they do not currently get. 
Hon Maryan Street 
: Has she considered the risks attaching to moving students from the all-girls facility at Salisbury School in Nelson to a coed facility in Christchurch; if so what assurances has she been given that these most vulnerable girls will be safe? 
Hon HEKIA PARATA 
: Yes consideration has been given to that in terms of this preliminary decision. Halswell Residential College already does have separate villas and electronic monitoring and those provisions that are well-regarded in all the submissions that members have been talking about about the quality of provision will be maintained in both residential schools. 
Questions to Members 
Climate Change Response (Emissions Trading and Other Matters) Amendment Bill—Closing Date for Submissions 
1. 
MOANA MACKEY (Labour) 
 to the  
Chairperson of the Finance and Expenditure Committee 
: On what date will submissions on the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill close? 
TODD McCLAY (Chairperson of the Finance and Expenditure Committee) 
: 
 I thank the member for her interest in this bill. Subject to confirmation of the committee submissions on the bill will close on 10 September 2012. 
Moana Mackey 
: Did he consult with the committee before setting the closing date; if not why not? 
TODD McCLAY 
: Traditionally committee chairs have made a call for public submissions where there is a delay between the referral of legislation and the committee meeting or where a committee has a more focused time period for consideration of the bill. This is done under Standing Order 192. It was my view that given the report-back date that was set by Parliament the public should be given every opportunity to comment on this bill in the time available and therefore submissions were called for. 
Urgent Debates Declined 
Accident Compensation Corporation—Reports into Release of Personal Information and Governance 
KiwiRail—Performance 
Child Poverty—Expert Advisory Group Report 
Mr SPEAKER 
: I have received a letter from Andrew Little seeking to debate under Standing Order 386 the report commissioned by the Privacy Commissioner and the ACC’s board  
Independent Review of ACC’s Privacy and Security of Information 
 and the report by the Controller and Auditor-General  
Inquiry into aspects of ACC’s Board-level governance 
 their findings and the Government’s response to them. The release of the report is a particular case of recent occurrence involving ministerial responsibility. The big hurdle to get over in applications for urgent debates is whether the matter has reached the stage where the business of the House ought to be set aside. Although the release of a report may warrant an urgent debate this must be exceptional especially where working through a report’s recommendations may take some time. An urgent debate on the release by ACC of private details of ACC clients was held on 20 March this year. The member in his application has not authenticated any response yet from the Government to those reports. In these circumstances I am not persuaded that the setting aside of the business of the House for an urgent debate can be justified today. 
ANDREW LITTLE (Labour) 
: 
 I raise a point of order Mr Speaker. Just two points on your ruling. The debate on 20 June related to the rapid departure of a number of members of the board of ACC. That raised an obvious question about the governance that was left to look after that corporation given its importance. But also particularly the report from the Privacy Commissioner and Malcolm Crompton who was the external independent adviser to that review has laid out a timetable for implementation of the recommendations that spans 2 years. With all due respect I submit that it would be unreasonable for us to have to wait that length of time before we can debate what are very very important recommendations at a very important time over very serious events for a very important public body. 
Mr SPEAKER 
: I think the member has highlighted why perhaps the matter does not meet the bar for an urgent debate today. The member has acknowledged that in the case referred to earlier a significant proportion of the board of ACC resigned. If that had happened in response to this report then I think the matter would have met the requirement for an urgent debate. But as the member himself has pointed out the time frame for responding to or implementing the proposals is up to 2 years. There will be many opportunities over that time to hold the Government to account on how it is responding if that is in fact the time frame. That is why the application was therefore declined. 
I have also received a letter from Brendan Horan seeking to debate the state of New Zealand’s rail network following issues revealed in the  
Infrastructure and Engineering Business Plan 2012-2015  
report by KiwiRail. The release of the report is a particular case of recent occurrence involving ministerial responsibility. However as I have already indicated the release of a report on its own is not necessarily sufficient to justify the setting aside of the business of the House for an urgent debate. In recent times there have been a number of questions about the performance of KiwiRail and the House has other specific procedures for examining the performance and current operations of State enterprises. Again I am not convinced that the setting aside of the business of the House for an urgent debate today is warranted. This application is therefore also declined. 
I have received a third application from Jacinda Ardern seeking to debate the Children’s Commissioner’s expert advisory group’s issues and options paper. The release of the report is a particular case of recent occurrence involving ministerial responsibility. However it is an issues and options report and working through it may well take some time. The urgent debate procedure is a means of holding the Government accountable for its actions. The time for such a debate may be when the Government response is known. The application is therefore also declined. 
Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill 
Third Reading 
Hon AMY ADAMS (Minister for the Environment) 
: 
 I move  
That the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill be now read a third time 
. This is a bill that is long overdue. It will plug a regulatory gap so that for the first time New Zealand will have a comprehensive environmental management regime in place to protect our oceans. If New Zealanders are to have jobs a strong economy and a high standard of living we cannot afford to ignore the vast untapped economic potential that lies beneath our seas. However this Government is committed to ensuring that this is done in a way that is environmentally responsible and this bill gives us the opportunity to look at planned developments to decide whether the environmental effects are acceptable and how they should be dealt with. That there is currently no such process on our statute book is unacceptable and is to be corrected here today. The Environmental Protection Authority will be the decision maker under the framework running the nationally notified marine consent process for discretionary activities which provides the opportunity for public and iwi to submit on any proposed activity of this type and to be heard at a public hearing. 
 New Zealand has international rights but also obligations around the way we use the exclusive economic zone and continental shelf and the marine environment that surrounds us. Those rights specifically refer to and protect our sovereign right to explore and exploit our offshore and undersea resources and call on us to ensure that development is undertaken in a way that balances economic return with environmental safeguards. This bill recognises and has been demonstrated to be consistent with those international rights and obligations and the decision-making framework requires the consenting authority to undertake just such an exercise. 
Through the Committee of the whole House we made some significant changes to this bill which have improved stakeholder certainty around the purpose strengthened penalties for non-compliance and ensured workable transitional arrangements for industry. I would like to take this opportunity to thank the members of this House who have approached the bill with an open mind and after due consideration of the changes we have proposed are now prepared to support this much-needed legislation recognising quite rightly that the bottom line is that New Zealand is in a better position with this legislation than without it. It is disappointing to me that some parties are still taking the view that they would prefer to have no framework at all in place which after all is the option before this House today. For my part I am proud that we have produced a strong and effective piece of environmental legislation that will provide certainty for industry and investors in development activity in our oceans while protecting this special and vulnerable marine environment. 
I want to turn now to some of the key changes that have been made to the bill starting with the purpose clause. There is a natural comparison to be drawn between the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill process and that under the Resource Management Act. Both are consenting regimes addressing the blending of economic and environmental objectives and both leave broad discretion to the consenting authority as to the way in which that overall broad judgment should be exercised. In addition in respect of offshore activities it is not hard to envisage applications that cross or could have impact on both sides of the 12 nautical mile limit and therefore fall for consideration under both the Resource Management Act and the exclusive economic zone frameworks. With this in mind and the issues of clarity raised by stakeholders around the original drafting of the purpose clause we saw merit in aligning the purpose of the exclusive economic zone bill more closely with that of the Resource Management Act by incorporating explicit reference to “sustainable management”. 
In making this change I reflected in particular on the use of the word “balance”. Although balance is an easily understood expression conversationally as a legislative provision of such import however I saw it as less than ideal. The use of “sustainable management” relating to the use and development of our resources in conjunction with the detailed information principles within the bill is designed to provide for fundamentally the same process but directed through better-understood legal mechanisms. Certainty of how the purpose will be interpreted was a key issue for industry and NGOs alike which were concerned that the balancing purpose considered at the select committee could result in extensive litigation to clarify its interpretation. The concept of sustainable management on the other hand is well defined in domestic legislation through more than 20 years of resource management case law. 
The Government has also been listening to stakeholders who were concerned that the enforcement tools in the bill lacked the teeth to incentivise compliance. This along with greater clarity in the purpose statement was one of the key issues that Opposition members and stakeholders raised with me in respect of the bill. It is our intention to send a very clear message to businesses operating in our exclusive economic zone: although we welcome investment in New Zealand we absolutely expect you to follow the rules and if you do not you can expect to face serious consequences. For this reason Supplementary Order Paper 100 which I introduced at the Committee stage increased the maximum criminal penalty for corporate entities under the bill from $600000 in the bill as introduced to $10 million in addition to the daily rate for ongoing non-compliance. 
The final change of substance we have made through the Committee of the whole House is to the transitional provisions. The Government has clarified that planned petroleum activities permitted under a petroleum permit will be able to commence for a period of 12 months following the commencement of the legislation. This is simply a pragmatic change required for these activities to adapt to the new regime. Unlike other activities planned petroleum activities have to commit to a drilling rig a huge expense up to a year in advance of exploration. The bill as introduced allowed for a 6-month transition within which the consent was to be applied for and made clear that the activity could proceed and continue during the processing time. Given that planned petroleum activities occur only during the summer season the net effect in terms of operations is unchanged. However it means there will not be the potentially farcical situation of a consent being processed and by the time it is determined one way or the other the activity in question would have ceased in any event. To manage environmental concerns in the short term operators remain obliged to prepare and lodge an impact assessment with the Environmental Protection Authority prior to commencing their activity. 
In conclusion I am very pleased that through helpful feedback from stakeholders and parliamentary colleagues I believe we have crafted and refined this bill into a high-quality and workable piece of legislation. I want to take a moment to particularly acknowledge and thank the team of officials from the Ministry for the Environment and others seconded into the work programme. They have worked tirelessly on this legislation with an unwavering commitment to improving the management of our exclusive economic zone and continental shelf for the past 2 years and I am deeply grateful to them for their efforts. Can I also thank members of the Local Government and Environment Committee chaired exceedingly well by the MP for Christchurch Central Nicky Wagner for its detailed and helpful consideration of the bill and for refinements it made to it. Finally can I acknowledge and thank my predecessor the Hon Dr Nick Smith for his commitment to the shaping of this legislation and for taking charge of seeing it into this House. 
This bill will help us unlock the enormous economic potential that lies in our oceans in an environmentally responsible way that supports our clean green reputation. With the passing of this legislation New Zealand will finally have a comprehensive environmental management regime in place for our exclusive economic zone and continental shelf. It gives me great pleasure to commend this bill to the House. 
MOANA MACKEY (Labour) 
: 
 The only thing that the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill will unlock is hordes of lawyers making a lot of money as court cases are fought out in domestic courts and in international tribunals. That is what this piece of legislation unlocks. It is a shame because Labour the Greens and New Zealand First made an approach to the Minister for the Environment to try to find a compromise on what is undoubtedly a very very important piece of legislation. It did not need to be a political football but unfortunately after what we thought was a very good meeting with the Minister she was not willing to address the concerns that Labour members had about this piece of legislation apart from increasing the penalties—and we did welcome that change and we voted for it at the Committee stage. But apart from that the significant concerns that we had going into the Local Government and Environment Committee were not addressed they were not addressed in the Committee of the whole House and we will be voting against this bill at the third reading. 
Primary to our concerns is whether or not this piece of legislation is in line with our international obligations under the United Nations Convention on the Law of the Sea. The Minister keeps saying: “Yes it is. Yes it is. Yes it is.” Well she can say it until she is blue in the face but it is not going to make a blind bit of difference until it is tested in a court. What Labour has been saying and what it has been so disappointed about is that there was a very simple solution to this. If we actually believe that this piece of legislation should be consistent with our international conventions and presumably we all do and if we all agree that it is good to have no question about that and to put it outside of any question that it is—and I would think that that would be what we would want—then why would we not use the language that is in the convention to show that this piece of legislation is consistent? That language is around preserving and protecting the marine environment. The National members will get up over and over again and say that it is consistent it is consistent it is consistent. But no National member has said why they did not just put it completely out of doubt by using the language in the United Nations Convention on the Law of the Sea around preserving and protecting the marine environment. Then we would not have to even have that debate. 
This is a contentious piece of legislation. This legislation is going to be the legislation that regulates a very contentious activity and that is deep-sea oil and gas drilling. There is a high level of public interest in this piece of legislation. There is a high level of concern about that activity. Minister Heatley does not seem to think so. That does not surprise me. He is very out of touch in this portfolio area. 
Hon Annette King 
: Most portfolios. 
MOANA MACKEY 
: In most portfolio areas as the honourable member Annette King says. There is a high level of interest in this because people are concerned and it appears that the Gulf of Mexico disaster completely passed the National Party members by. They did not think at all that that changed the public’s perception of this particular activity. They did not think at all that that and the  
Rena 
 disaster changed the way New Zealanders think about the protection of our marine environment. It is unbelievable that they would not want to do as much as they possibly can to allay the concerns of the public— 
Hon Phil Heatley 
: I just smiled. 
MOANA MACKEY 
: Apart from just smiling Mr Heatley; it takes a little bit more than that if we get a massive oil spill. It takes a little bit more than that. Even your laughter will not stop that. As magical as it is your laughter cannot stop an oil spill in the deep sea. I am pleased that the Minister seems to think that this issue is a joke. It is actually not. 
What we want to see is robust legislation in our exclusive economic zone. We have the Resource Management Act within our territorial waters. So what we have now with this piece of legislation are two completely different regimes operating side by side regulating exactly the same activity. This line in the sea is jurisdictional only. It is only because beyond 12 miles it is not our sovereign territory and within 12 miles it is our territorial waters. It is nothing to do with the environment nothing to do with resource allocation nothing to do with science and nothing to do with anything to do with the marine environment other than being jurisdictional. So why would you have two such different regimes—very different regimes—operating side by side regulating exactly the same activity? It does not make any sense at all unless you deliberately want the two regimes to be different so that the one in the exclusive economic zone can be more permissive than the Resource Management Act is. One energy company that came to the select committee actually quite openly told us that that is why it liked it because it was going to be far more permissive than the Resource Management Act and it was going to allow activity to go ahead that perhaps would not have had we had a regime in place that was as robust and as stringent as the Resource Management Act. We had the Taranaki Regional Council which is used to dealing with the Resource Management Act in terms of oil and gas exploration tell us that it would like to have seen more consistency with the Resource Management Act because it is used to using it it knows where the goalposts are and it knows what the thresholds are. We do not know all these new legal terms that the Government has fabricated for the legislation and we have no idea what ultimately they are going to mean in practice. 
Instead of using and calling on 20 years of Resource Management Act case law and using legal terms that are well defined where people know where the goalposts are we have invented new terms like “favour caution”. No one knows what “favour caution” means. We all know what being cautious means but this is a piece of legislation and ultimately there is going to be a legal definition and a legal test of what “favour caution” means. It should not be a court that just decides this out of the blue and then we go backwards and forwards when we already have case law under the Resource Management Act where people know where the goalposts are. Why are we going through that entire process again unless you do not want those tests which are well understood to be applied in the exclusive economic zone? That is the reason for it. The National Government will not say that. The only plan it has for the economy apart from selling our assets is to ramp up oil and gas exploration in deep-sea water in New Zealand. 
Hon Dr Nick Smith 
: That’s not true and the member knows it. 
MOANA MACKEY 
: It is true. So because it has got no other plan it is desperate to get this stuff flying ahead and it wants to put as few barriers as possible in front of the companies that are going to go ahead and do this. But it is not good enough. This is a real missed opportunity—a real missed opportunity—because it is in no one’s best interests for this piece of legislation to become a political football. It is in no one’s best interests to have the National Government passing this piece of legislation and the Labour Party saying that when it comes to Government it is going to change it and swing in the other direction instead of asking as to what we can lock down now and how we can find a compromise that everyone can live with where we feel confident that the protections for the environment are there. 
The United Nations Convention on the Law of the Sea is very very clear. We have a right to exploit the mineral resources in our exclusive economic zone but that comes with an obligation to preserve and protect the marine environment. There is no qualification on that. As the Parliamentary Commissioner for the Environment said in her submission to the committee the exploration of those mineral resources is optional but the duty to protect is not. We could have been absolutely clear absolutely categorical in this piece of legislation that that was what this Parliament intended—that we have a right but that comes with an obligation an absolute bottom line. And we have not done that in this piece of legislation. 
We are also very concerned about the restrictions on the public—for example not being able to appeal to the Environment Court being able to go only to the High Court and then only on points of law. When you come to issues as complex as these where communities—and they are up against some very tight time frames potentially in this legislation—do not have the resources that the industry has to pull together evidence and to gather their arguments they do not have the money to do that they do not necessarily have access to the expertise to do that and as I said they could be doing it up against potentially very tight time frames you need to have an ability for them to appeal not just on points of law but on points of substance. That is a very important part of the process and it sends a very clear message in the Resource Management Act that it is good to try to resolve as many of these things as possible before you get into that formal process. It provides an incentive for people to actually engage with key stakeholders when they know that if they have not got their facts straight if they have not given some parties enough time to respond to that that they could be taken to the Environment Court. 
The Environment Court has a wealth of knowledge in this area—a wealth of expertise. Instead we are sending it to the High Court and only on points of law which is obviously deliberately meant to shut down a community’s ability to respond to what they see happening in their exclusive economic zone and their marine environment that they believe to be detrimental. We believe that that is an important part of natural justice and it should not have been removed in this legislation. We note that the Government has already notified its intention to do a similar thing in the Resource Management Act on mining projects. Again we say that sometimes these things can be a very false economy. When you start to take away a community’s ability to actually have access to natural justice on issues that could detrimentally affect their environment then that is a retrograde step and we would not support that. 
As I said at the beginning it is a shame that we are here on the third reading of this bill when we could have done so much more. I do want to thank the officials who worked on the bill. They worked incredibly hard. It is a contentious piece of legislation; it was very technical. They were wonderful officials to work with and we do thank them for everything they did and for all the hoops that we made them jump through. But at the end of the day this bill falls far short and it did not have to be that way. Our marine environment is far too precious to be gambled away on a piece of legislation that simply does not provide the level of environmental protection that our communities would expect this Parliament to be passing. When you see what happened with the  
Rena 
 disaster with that amount of oil washing up on the beaches of the Bay of Plenty that should have been a warning note to the Government that it needed to do better in this space. 
Hon Dr NICK SMITH (National—Nelson) 
: 
 This legislation the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill puts in place a proper regulatory regime for the 600 million hectares of ocean for which New Zealand has responsibility. It is good law it is long overdue and it fills a significant gap in New Zealand’s environmental laws. I want to commend the Minister for the Environment Amy Adams for the work that she has done on it particularly over the last 3 months in refining this bill with her Supplementary Order Paper 100. 
I do want to say how disappointed I am that the Labour Opposition members have chosen to oppose this bill. It is a party that is opposing for opposition’s sake and I want to expose some of their arguments. The member who has just spoken Moana Mackey made a great deal out of the United Nations Convention on the Law of the Sea. I have a very simple question for that party and members who are opposing this bill. How do we meet our obligations under that convention with no environmental law at all in the exclusive economic zone? 
Hon Phil Heatley 
: They did it for 9 years. 
Hon Dr NICK SMITH 
: For 9 years Labour did not have any regime of independent environmental assessments at all. It did 16 deep wells without it. Did a single Labour member say: “Hey! Whoa! Stop! We’re not meeting our international obligations under the law of the sea.”? There was not so much as a peep from the Labour Party and for that matter from the Greens. 
Then we come to the issue of why we are not making it more consistent with the Resource Management Act. Let me make this point very simply because I do not believe Labour seriously believes this was simply an exercise in extending the Resource Management Act’s jurisdiction out to the exclusive economic zone. The Resource Management Act sets up a very complex system of national policy statements regional policy statements and district plans. All of these documents can take in total up to 9 years to complete the regulatory process for managing the environment. We are expecting at most six consents per year under this regime as compared with 40000 a year under the Resource Management Act. Does Labour seriously argue that we should have the complete fabric of the Resource Management Act’s national regional and district planning documents out in the exclusive economic zone? I do not seriously believe it does. I believe it is simply clinging at straws to try to find some excuse to oppose this important environmental statute. 
The member who has just spoken has claimed that National has not taken any account of the worst environmental tragedy to occur in the last couple of decades in the Gulf of Mexico. In fact this Government immediately commissioned an independent review of both our Maritime Transport Act and our Resource Management Act and our proposed exclusive economic zone legislation to ensure that we did learn the lessons from the Gulf of Mexico and those recommendations are contained in this very bill that Parliament now debates. 
The final point that was made by Moana Mackey was that we should have appeals to the Environment Court on any decisions that are made by the Environmental Protection Authority in respect of consents or declines that might be made under this exclusive economic zone legislation. Well I put this to the House: that is really a cop-out for saying that Labour does not want to see any resource used in the exclusive economic zone. I give a simple example: the previous Government legislated very clearly that the issue of climate change should not be taken into account in resource consents. That is right now being appealed by Greenpeace off to the Environment Court. Anybody who read the  
Hansard 
 would know that was deliberately the intent of the previous Labour Government. If we are to allow appeals on points of substance before the Environment Court on the consents under this legislation it will mean that it will take up to 2 years to get a consent—at least an extra 18 months on process. Let us be honest. That will drive away any investment at all in the exclusive economic zone and I do say that this country has a larger area of continental shelf than any per capita. We on this side of the House say that there are opportunities for us to be able to responsibly use those resources. If Labour is serious about going down that path it should be honest and upfront and say that it in effect refuses to have any use of the economic resources in that space. I would draw your attention to each of the big pieces of environmental law that have been passed over the last couple of decades whether it is the ozone protection law whether it is the Resource Management Act whether it is the hazardous substances Act or this which is of similar moment. Every one of those bills was passed with both National and Labour support. 
It really is a cop-out for the Labour Party to be opposing this bill dancing on the head of a pin over a few minor issues. Let us just follow what Labour has been saying in the course of this debate. In the first reading members said that they would prefer that the bill made reference to the principle of sustainable management which is in the Resource Management Act. 
Hon Amy Adams 
: Done. 
Hon Dr NICK SMITH 
: And that is done. They said at the time that they would prefer that we had higher fines. 
Hon Amy Adams 
: That’s right. Done. 
Hon Dr NICK SMITH 
: The fines have been increased and put up to $10 million. That is done. The only argument they have left is truly pathetic. They are saying that this bill requires decision makers to show caution when there is a lack of information and they are saying they are opposing this bill because they would prefer that it used the precautionary principle. Well can I put the record straight: in both the Committee stage and the contribution we had from Moana Mackey she said the language that is used in this bill has not ever been used before. Hello hello. Have a look at the Fisheries Act—passed and supported by the Labour Party. It used exactly the same language as the exclusive economic zone legislation in respect of caution and my simple question to members opposite is why that language would be acceptable in the fisheries environment of which actually this bill includes a huge amount but not appropriate in this bill. Again I think it reinforces that Labour is just absolutely desperate to oppose or find any excuse and I think that speaks volumes about its broader problems in that it knows what it is against but not what it is for. 
I want to conclude by just marking how significant this legislation is for New Zealand. We have the fourth-largest exclusive economic zone and extended continental shelf of any country on this planet. I would say that if our country New Zealand cannot responsibly manage the ocean environment who can? I say that it is absolutely consistent with New Zealand’s “clean green” brand to show that we are able to responsibly manage that area. I think we need to be upfront about the fact that with the increased pressure for resources there is a higher level of interest in the minerals and other resources that exist within this huge ocean space. Equally so with new technologies it is becoming more accessible and we are more able to use those resources and the position this Government has taken that we should pick up those economic opportunities but it should be done in an environmentally responsible way with independent environmental assessments is the right way forward. 
This bill puts a huge responsibility on the Environmental Protection Authority which this Government created in 2009. We started with responsibilities for nationally significant projects and with responsibility for hazardous organisms and for new organisms with the emissions trading legislation falling under its jurisdiction from December last year and now with this new responsibility in the area of the exclusive economic zone in my view it completes the creation of that important new authority. The passage of this bill will raise new challenges for Government around marine reserves around marine mammals and around other things that we need to do in the ocean space to ensure that New Zealand is going best practice. But the passage of this bill is the most important step that New Zealand has taken in more than a decade to put our environmental laws into a state of which we can say that we are responsibly managing this country’s huge natural resources. 
CHARLES CHAUVEL (Labour) 
: 
 I want to deal with a number of the points that were made by the previous speaker Dr Nick Smith because he suggested that the Labour Opposition was opposing this bill on a basis other than principle. Nothing could be further from the truth as that member knows because it has been Labour’s position from the start that this bill is inadequate. 
Hon Dr Nick Smith 
: Pure politics. 
CHARLES CHAUVEL 
: No Dr Smith it is not pure politics. Dr Smith you are the master of that art in this House. People on this side of the House take principled positions and I want to say exactly what those positions are. Let us start with first principles the principles around our international obligations. No amount of assertion on the part of National that this legislation is compliant with those obligations will make it so in the face of the submissions that were received from experts who were very clear that that was not the case. The United Nations Convention on the Law of the Sea is absolutely clear in article 192. Article 192 states: “States have the obligation to protect and preserve the marine environment.” Article 193 goes on to allow for the exploitation by States of their natural resources but it is “pursuant to their environmental policies and in accordance with their duty to protect and preserve the marine environment.” 
Dr Smith knows because he introduced this legislation—and I thought it was interesting that he failed to acknowledge this in his contribution just now—that when the bill was introduced it had a purpose section that actually pitted the environment and the economy against each other. I said in my contribution during I think the Committee stage that the current Minister for the Environment Amy Adams deserves some credit for modifying the purpose clause. The worst of the pitting of the two considerations against one another has been removed but it still falls short of properly protecting New Zealand’s environment just like other important environmental legislation that we have seen introduced by this Government. It is just like the Environmental Protection Authority Act which was referred to by the previous speaker—an environmental protection Act that does not even include in its purpose statement a duty to protect the environment. That is the sort of commitment to the environment that we have seen from this Government and it is reinforced in this legislation. 
The legislation is inconsistent with our obligations under the United Nations Convention on the Law of the Sea where the right to exploit resources is accompanied by a very clear duty to protect and preserve that precious marine environment. The international obligation section as amended if it passes in its current form will mean that decision makers have no obligation whatsoever to have regard to our international obligations. The chair of the Local Government and Environment Committee who I apprehend might speak soon conceded as much in the Committee stage. She said that that was a deliberate choice urged on her by the officials. So what do our international obligations mean to National? Why are we legislating in derogation of them? Why are we seeing in the House legislation that actually ignores those obligations and moreover within the four corners of the legislation calls for them to be ignored? This is not good practice and it is certainly not consistent with what we have told the world we will do. 
The second objection that Labour raises to this legislation and has maintained throughout is that the regime it will create will be much weaker than the regime that is created by the Resource Management Act and that applies on land in New Zealand. Dr Smith said that only six applications per year are anticipated to be dealt with by the Environmental Protection Authority under this legislation whereas there are thousands and thousands of applications under the Resource Management Act. So why would you apply the same tests? Well there are a number of reasons. First of all everybody knows what the tests are under the Resource Management Act. The law is settled. It is clear and well understood so no confusion will arise. No litigation risk or cost will arise from putting the same regime in place onshore and offshore. 
 But perhaps more important as we saw with the  
Rena 
 disaster there is a very very important issue here. Maybe there will be only six applications that might be dealt with every year but the consequences of failure—the consequences of weak conditions being set as part of the consenting process—are catastrophic when they occur in the marine environment and they cannot be allowed to occur in that environment willy-nilly. That is why tough protection is needed within the exclusive economic zone and on the continental shelf. 
As I said the tests under the Resource Management Act are well understood. Local and regional authorities already have experience managing those activities. The Environmental Protection Authority would be able to pick up that experience understand it and apply it very easily if the same sort of legal tests were proposed in this legislation but instead we have a completely new regime. Some industry submitters made this point in the Local Government and Environment Committee. I read their submissions with interest. They basically said it would make sense to have a closer alignment between the two on the basis that it would give business certainty—the sort of thing that National talks about but does not practise terribly often. 
Businesses understand how the Resource Management Act operates. The completely new set of legal tests that will be put in place under this legislation will simply mean arguments in court between lawyers for many years to come while the law has to be settled as to what it actually means. The bill adds new terms such as “favour caution” which are not widely understood or defined. In addition there is a definition of “adaptive management” that is completely different from that which appears in the Resource Management Act case law. So these are examples of the problems that I am pointing to with this different regime that is being set in place. 
The third objection that the Labour Party has raised consistently in respect of this legislation is that the process for issuing marine consents should be much more transparent than it is proposed to be. We are concerned that there are significantly more restrictions and barriers for submitters than there are for applicants and we are very disappointed that the bill blocks appeals to the Environment Court the very body that has expertise in dealing with these sorts of specialist objections and issues. It makes no sense to bar the jurisdiction of that court and that is a step that we should be very very concerned about. 
The fourth objection again advanced consistently by Labour throughout this process has been the Government’s complete failure to consult with or involve iwi through the process that has been invoked in getting this bill into the House. Their input into the processes that are set out in the bill will be optional only and at the discretion of the Environmental Protection Authority. We supported a submission made that the bill should be amended to include reference to Moriori and tikane Moriori in the bill. We put up an amendment to do that and National voted it down. We objected to the Treaty clause in clause 14. The bill does not impose a general obligation on the Crown to give effect to the principles of the Treaty. Again we put forward an amendment to fix that but National voted it down showing its real lack of commitment to any of the Treaty principles that ought to appear in the legislation. 
We are also concerned that the provisions covering penalties and cost recovery for a breach of the legislation are inadequate. Yes we supported the increase in a penalty for non-natural persons to $10 million but the other penalty levels are too low. Again the consequences of a disaster occurring in our marine environment are catastrophic and we ought to show that we take this seriously by having a stiff penalties regime in the bill. 
Finally in answer to Dr Smith’s charge that this is the first piece of important environmental legislation that has not been treated in a bipartisan way the process for dealing with this bill has been shambolic. The select committee was rushed and did not adequately consider the issues. There was a raft of amendments required that were put forward by the Minister which were also shambolic and rushed right at the end of the process. Those changes are significant and have not been subject to proper scrutiny and consideration because they were put forward after the select committee process ended. This is not the way to legislate on such an important matter and these are the principled reasons why the Labour Party will not support this shambles of a bill. 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Speaker. Nga mihi nui ki a koutou. Kia ora. I rise to take a call on the third and final reading of the Exclusive Economic Zone and Continental Shelf (Economic Effects) Bill. The Green Party for a long period—in fact for the entire time of our history in Parliament—has called for overarching oceans legislation to deal with the issues that this House is dealing with now but also for overarching legislation that looks at spatial planning and looks at marine protection. We believe that what we need is a holistic package on how we relate to our oceans. We agree with the member Dr Nick Smith that Labour in its 9 years should have acted. It had the opportunity but did not. But we disagree with his misrepresentation that the Greens were silent over that period. In fact in the entire time we have been in Parliament we have been calling for this. 
Our oceans face a number of challenges—from the recent news of the Arctic melting at a record level this summer through to acidification overfishing and pollution. It is important that we get this right. This is a historic opportunity for our Parliament to make sure we do pass enduring robust legislation for iwi community and recreational users—everyone who has an interest in our oceans which is all New Zealanders. We are intrinsically connected to our oceans. We love our oceans. We want to do it right and unfortunately this Parliament is missing an opportunity to pass enduring robust legislation. Instead what we are doing is passing a permissive weak bill which quite simply is not going to be protecting and preserving our exclusive economic zone; it is simply going to facilitate risky extractive activities. It is going to make deep-sea drilling “eezy”. 
We have got the fifth-largest exclusive economic zone in the world. It is internationally significant. It contains some amazing ecosystems. But it is also something that we know very little about. The National Institute of Water and Atmospheric Research has only scratched the surface if you will of what is in our oceans and what is down in the benthic environment and we really do risk trashing not only that valuable “clean green” brand but also some special unique ecosystems in this rush for minerals and extractions. 
What we are going to see as an outcome from this bill is quite simply a feeding frenzy of lawyers as they try to interpret what “favour caution” means when we have had the opportunity to use the internationally and nationally recognised precautionary principle instead. We are going to see the lawyers in their feeding frenzy try to debate the adaptive management provisions. We do not think the bill has been drafted to an adequate standard and it is simply going to be benefiting the lawyers. 
We saw a raft of amendments that were not in the spirit of working with the Opposition parties and not in a manner that was going to see Opposition support and a realistic and honest conversation with the Opposition. We saw the amendments tabled at the Environmental Defence Society conference which is a shame because all the Opposition parties went to the Minister for the Environment quite constructively trying to improve the bill. Sadly we saw these amendments slammed down on the Table if you will. We would have preferred the bill to go back to the Local Government and Environment Committee because what we saw was just spin— 
Hon Amy Adams 
: You came I listened and I changed the bill. Rubbish! 
GARETH HUGHES 
: —quite simply spin coming from the Minister who is talking about rubbish over there in the corner. We saw spin. There were a few improvements but there were the other measures that did not make it because of the Olympics being on. Those were things like the “Anadarko clause”—the transitional provisions that are sops to the oil industry. We should have seen another select committee appraisal of these significant very thick amendments so that we could have got it right. We missed an opportunity. 
We have got a number of objections to the bill. We do not believe that the bill is going to be meeting our international obligations. We think the purpose clause is still too weak. We have gone only halfway to improving it. The bill entirely fails to account for climate change. It ignores the precautionary approach. It fails our Treaty of Waitangi obligations. Quite simply it fails the principles of natural justice when it comes to appeals in the High Court. And it fails to look at the other side of the coin which is spatial planning and marine protection. 
Before I go into the substantive part of my contribution I would like to thank the submitters thank the officials thank the Minister and thank Nicky Wagner the chair of the Local Government and Environment Committee. We saw a number of very high-quality submissions made to the select committee. Some of those people are in the Chamber today and I would like to thank all those people. 
Firstly what we need is overarching holistic oceans legislation that looks at spatial planning and marine protection. What this bill is going to do is move the spectre of deep-sea drilling closer. The Government has got no plan when it comes to the economy apart from “drill it mine it frack it cut it sell it”. It is the lazy approach to economic development. It takes no vision no planning and no sense of where future trends are going. It simply hopes that we are going to find some of the last century’s energy sources in the ground without looking to the future. It is a lazy path to economic development which puts our environment at risk yet we are going to see hardly any taxes hardly any royalties and hardly any jobs for New Zealanders and the profits are going to flow offshore. 
 This bill is regulating how we deal with consents be they for phosphate in the Chatham Rise the gas hydrates the methane deposits which this Government is deciding to subsidise—and it was revealed last week that the Government is subsidising research into extracting the gas hydrates stored at the bottom of the ocean—or risky deep-sea drilling. So when we look at the international obligations numerous submitters such as the Parliamentary Commissioner for the Environment told the committee that in their opinion the bill failed to meet our international obligations. The bill as it came out of the committee was strengthened but the Minister’s amendments further weakened our consistency with our international obligations under the United Nations Convention on the Law of the Sea to protect and to preserve our marine environment. 
The Minister said she had a legal opinion on the previous drafting that shows that some people think this bill will be consistent. What we need to have is a new legal opinion based on the new wording. If the Minister thought it was going to be consistent with our obligations why on earth can we not say that it is going to be consistent? The fact that the Minister had to remove from the text of this bill that it be consistent with the convention shows that this Government is worried that it will be interpreted consistently and all we are going to see as Moana Mackey pointed out is lawyers interpreting this. It is the lawyers who are benefiting from this not the environment. 
We saw the Minister strengthen the purpose clause but only halfway. She has moved away from that flawed ideology of balance where you can degrade the environment a little bit if you are going to get a little bit of gain or you can degrade it a lot if you are going to get a lot of economic gain. We have gone away from that flawed failed ideology and instead we have seen the sustainable management principle but we have gone only halfway. We are trying to make it closer to the Resource Management Act but we are failing to have the requirement for decision makers to recognise and provide for it. We have gone only halfway because we do not have all the other provisions that would be made in a similar environment under the Resource Management Act. 
For the Green Party our economy relies on a healthy environment. We need to have environmental bottom lines and those are quite frankly missing—absent from this bill. I think the most damaging part of this bill is the failure to account for climate change. In fact it is more explicit than that. The Environmental Protection Authority is unable to consider the effects of greenhouse gases and climate change when considering applications. This is 2010. The Arctic is melting at a record rate. We know that it is happening. We know that humans are causing it. 
Hon Members 
: 2012. 
GARETH HUGHES 
: Well if the Government side wants to quibble about the date but will not have a proper debate around the big issue facing our planet it shows this Government’s priorities. It does not care about the future of the planet. It does not care about the environment. All it cares about is facilitating risky deep-sea drilling for its lazy economic plan. 
It is egregious that we are seeing the environment removed from the bill. It continues the bad trend of the Labour Government in 2004 when that Government removed it from the Resource Management Act treating it as if the planet does not matter. We see the member Annette King’s common-sense provision around the Moriori ignored by this Government. We see the Treaty of Waitangi provisions weakened. When it comes to the Environment Court we think it would have been more appropriate and fair to have appeals to the Environment Court. Instead what the Government has done is allow appeals only to the High Court on points of law. We have got a specialist court the Environment Court. We have got a body of case law developed. The Government quite simply wants to expedite these risky plans in our environment and remove the ability for Kiwis to have recourse to natural justice. 
We did see improvement on the penalties—probably the only suggestion from the Green Party that we have actually seen picked up by the Government—and we acknowledge that. But what we also need to see is the Minister of Energy and Resources actually making sure that these companies have got to have full insurance liability because at the moment that is not there. The transitional provisions the so-called “Anadarko clause” are simply a sop to the industry to make it as easy as possible for it to exploit our environment where we get so little environmental gain. There is no marine protection and no spatial planning provisions. This is not oceans legislation; this is an “eezy” deep-sea drilling bill. 
What we need to see is future Governments strengthening this law as we have missed a massive opportunity in this House. It is disappointing that the Minister for the Environment would not engage constructively with the Opposition so we could have seen a robust bill that had the support of this whole House. I do not think we were that far away but it is a shame that we will not see that today. I have outlined a number of reasons why the Green Party will not be supporting this bill. We support the intent of an exclusive economic zone bill. That is why we voted for its first reading. We will not be voting for an “eezy” drilling bill. 
NICKY WAGNER (National—Christchurch Central) 
: 
 I am very pleased to support this Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill at its third reading. It is very interesting listening to Gareth Hughes talking about the bill. It sounds like it is a totally different piece of legislation because this is a really important bill and it has been a long time coming. We have probably been talking about it for nearly two decades. 
As we know our exclusive economic zone is enormous. It is 20 times larger than the land mass of New Zealand and it is one of the largest and most diverse exclusive economic zones in the world. We have control over it. It is ours because of the United Nations Convention on the Law of the Sea. That convention gives us both rights and responsibilities: the right to access resources in that area and there are significant resources there that can be important to our economic future but also the responsibility to look after our marine environment. 
The purpose of this bill is to promote the sustainable management of natural resources in this area—the sustainable management. That is what Kiwis embrace. Kiwis love the ocean and I do agree with Gareth Hughes—that is absolutely true. Mostly we interact with our coastal oceans but our deep-sea ocean for a country that is a small speck is incredibly important and we embrace the fact that it must be managed sustainably. This bill will give us the framework to do just that. The bill provides a framework for environmental management to ensure that any activities in this area—and we do not expect a large number of activities; maybe up to a dozen consents a year—must use best practice. They must avoid or remedy or mitigate any possible environmental damage. 
We believe that this legislation does indeed meet our international obligations under the United Nations Convention on the Law of the Sea as believe our advisers and the Ministry of Foreign Affairs and Trade which has been involved in negotiations around the United Nations Convention on the Law of the Sea. Certainly it meets those obligations much more than when Labour was in Government for 9 years and did nothing to legislate in the marine environment although during that time it drilled 16 deep-sea wells. We are far better off with this legislation to protect our environment than we were under Labour which did nothing. 
The activities that will be covered under this legislation include petroleum exploration and production including structures; seabed mining; marine scientific research; submarine telecommunication cables; and any other activities that may arise in the future. That is an important catch-all because technology is changing significantly and we must err on the side of precaution when dealing with these new technologies for any work that is done in this area. 
The legislation aligns with the Resource Management Act—and that was an important discussion because the first 12 miles of our ocean are covered by the Resource Management Act. There is a transition between those 12 miles and the exclusive economic zone and continental shelf. This legislation uses the same type of characterisation and categorisation: permitted discretionary and prohibited activities. But the default in this case is for a discretionary activity. Unless that activity is categorised or deemed as permitted or it has a consent it must go through that process. 
Parliament has been working on this bill for months—actually we have been talking about it for years—and there have been many changes and much debate. There has been much debate in the Local Government and Environment Committee and with the Minister for the Environment. It was very pleasing when Dr Jan Wright the Parliamentary Commissioner for the Environment put out a press release saying that she felt “This is important legislation and the Government is to be congratulated on bringing it into existence and doing so by way of a wider conversation.” She also said in that press release that she is satisfied that the legislation will provide significant protection for New Zealand’s exclusive economic zone. 
I would like to thank everybody who worked on this bill. I would like to thank the two Ministers who were involved: the previous Minister for the Environment the Hon Dr Nick Smith who formulated this legislation over a long time and our present Minister the Hon Amy Adams who has brought this bill through the House. I would also like to thank all the advisers and the drafters and the Clerk of the House and her team and finally all the members of the select committee for robust debate. We worked hard on this bill and I think we improved it so I am delighted to see it passing today. I believe that it will protect the marine environment of the exclusive economic zone and the continental shelf and that it is something that New Zealanders are very keen to support. 
I am really disappointed that some parties will be voting against this bill because voting against it means that the exclusive economic zone and the continental shelf will have no protection and nothing to look after that very special and diverse marine environment. New Zealand is in a far better position with this legislation than it has ever been in the past or would ever be in the future without it. Thank you. 
Mr DEPUTY SPEAKER 
: Andrew Williams. 
ANDREW WILLIAMS (NZ First) 
: 
 Well done. I take a call on behalf of New Zealand First on the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill. As we have said in this House New Zealand First will be supporting this bill and supporting the Government with this legislation. I do not intend to take a long call on this as it has been stated on three or four occasions now in this House but we feel this legislation is long overdue in terms of our 200-mile limit. We have the fifth-largest economic zone in the world—ocean zone—and therefore without this legislation it certainly does not have the necessary sanctions on it and necessary legislation on it to ensure that the activities out in that zone are being monitored by this sovereign nation. 
I want to congratulate the Minister for the Environment Amy Adams and the officials for this extensive legislation which came before the Local Government and Environment Committee nearly half a year ago. It has been an extensive piece of work. It is a very hefty document. We had a huge amount of input from the officials and from the Parliamentary Counsel Office from the Ministry for the Environment from the Environmental Protection Authority and many many very very good submissions on the bill from a huge number of organisations and much of that was taken up. It was interesting that a huge number of the recommendations and the submissions came through and if they were not taken up in their entirety there were certainly very good sections taken out of the submissions and from the advice from officials that was taken up in the bill. As a result of that and also as a result of discussions with the Minister I think the result is pretty good. It is not 100 percent but like anything it is pretty well as good as we can get in the circumstances and it will certainly go a long way to providing what is required for such an important resource that this country has. 
As part of the whole economic development drive that we are all striving to get for this country to create more employment more jobs more opportunities—and particularly more opportunities for the next generation coming through—this serves a purpose in terms of laying a framework that will help the development of the 200-mile exclusive economic zone. It will ensure that there is future prosperity for this country in many respects because of the large numbers of resources and opportunities that are in our marine environment going out to the continental shelf. When you think that the New Zealand land mass represents something like only 5 percent of the total area of this economic zone we have vast amounts of resources under our oceans out there that we probably even today do not know all about and there will need to be some form of exploration and research and scientific investigation to see what is available there. 
Can I just in closing thank the members of the select committee. I think all the committee members had a huge amount of input on this. It was a very collegial way that we worked through it even though there was some disagreement for a period of time on the purpose of the bill. We are very pleased that the purpose of the bill was changed somewhat in terms of the wording to get a slightly better balance with the environment being of a higher importance than perhaps was the initial intention of the legislation. In that respect New Zealand First put in a minority report in the first instance with our concerns about the purpose of the bill. We said that we thought that the environment could suffer if it was seen only as a balance between the environment and economic development and if the environment itself was not still uppermost in our minds because at the end of the day New Zealand is very fortunate being in the South Pacific where we are. We have this pristine large part of the South Pacific on our doorstep. It is so important for our tourism and it is so important for our pure image around the world and so whatever economic development goes on whatever exploration and whatever taking of resources goes on within that economic zone we must always be mindful—and every New Zealander and everyone in this country must be mindful—that we are guardians of such an important marine environment which is so important for our tourism so important for our image so important for the place where our people and our nation live so important to Maori and so important to so many parts of our community. 
If we get this right and if it works out as we expect it will from this bill we would expect that there are great opportunities in the future. New Zealand will be much better for it and as a result all our people in this country will be better for it. So New Zealand First is very happy to support this bill and we commend it to the House. 
NIKKI KAYE (National—Auckland Central) 
: 
 I am very pleased to be speaking at the third reading of the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill. I am very pleased because I think that this bill is an example whereby not only have members of the Local Government and Environment Committee worked very hard but also we have seen changes both throughout the select committee process and that have come from the Minister for the Environment that I think are going to ensure that we get good environmental protection in the exclusive economic zone. We are also able to look at those economic opportunities and lift the standard of living for New Zealanders. 
I want to just cover off a couple of things from an overall perspective as to how this fits into National’s environmental reform package. If we look at what we have done in terms of the Resource Management Act reform we have passed over 150 amendments of the Resource Management Act in our first phase. That is the biggest reform since 1991. The purpose of those amendments was to reduce delays uncertainties and costs improve plan development and resource consent processes and strengthen compliance by providing a wider range of enforcement provisions and we have actually seen some real progress there. In my electorate Auckland Central I have had many constituents who have actually physically come to me and said: “Look we think you have got the balance right. We think we are getting quicker decisions and we think we’re getting them at a reduced cost.” If we look at the issues around for instance fresh water we have invested significantly in cleaning up some of our most polluted rivers. Also in the area of oceans reform we have progressed nine marine reserves—well we have announced nine marine reserves. That will increase the area of marine reserves in New Zealand by 36 percent. 
But the area that I think everyone is aware of and has been aware of for a long period of time where there has been a gap has been further reform in terms of our oceans. That is what this bill is about. This bill is about ensuring that we address that regulatory gap that currently exists in terms of managing our environmental effects from offshore activities. I think the point has been made by a number of speakers that currently there is a gap and I believe that from 1998 there were 46 wells that have been drilled without having an effective management regime. So what this bill does is provide a strong framework focused on four things to assess and manage adverse environmental effects in our oceans and also to provide greater certainty to investors and existing interests. If you listened to the Hon Nick Smith’s speech I think he talked very eloquently about the issue of rights of appeal and what that would actually do in terms of the process—the added time and delays in terms of process. The bill also does meet New Zealand’s international obligations. There has been a huge debate in terms of that at the select committee and throughout the speeches in the House as well. We are confident—and we have had a range of advice on that—that it does meet New Zealand’s obligations. 
But I think what has also been important is that there was some criticism after the select committee process and we have seen the Minister move via Supplementary Order Paper 100 to significantly improve the legislation. I want to touch on those issues. I do acknowledge that there have been a number of organisations including the Parliamentary Commissioner for the Environment that have commented on these areas. I just want to touch on those key areas now. There was a concern by some members around the purpose definition. We have moved and changed the purpose definition to focus on sustainable management. That brings it in line with the Resource Management Act. There was significant concern from some members in terms of penalties and we have also moved to increase the maximum penalty from $600000 to $10 million. I think that sends a very strong message regarding how New Zealand values our oceans. We have clarified the transition period. We have also provided a statutory time frame of about 6 months for marine consent processes. So from my perspective—and we saw as well the Parliamentary Commissioner for the Environment coming out very clearly to say that she supports this bill and that she wants it passed—we have made significant improvements not just through the select committee process but also post the select committee process. 
I feel that we are in a position with this legislation—and I acknowledge the support of some parties in this House; I believe New Zealand First and the Maori Party—to say that not only is the definition focused on sustainable management which is more in line with the Resource Management Act and not only have we sent some very clear messages around penalties but also we have clarified things like transitional provisions. When you actually look at some of those enforcement provisions particularly around the powers of enforcement officers I think we have got that balance right. That is why it has been personally a little bit disappointing that Labour and the Greens could not support this bill because we know that currently there is no environmental protection regime. 
Also the final couple of points that I would make are that we do have a strong obligation in this country to have sound environmental policies and with the largest exclusive economic zone in the world this legislation is incredibly important for our country. From my perspective I think that too often sometimes our environmental debates are at the extremes. You know you have those people who are absolutely focused on the economy; you have other people who may be very emotional from the environmental perspective. If we look to the future I do believe in the Bluegreens principles in terms of having a very scientific and evidence-based approach but also having an approach that is about good risk management. I think the Supplementary Order Paper that was tabled by the Minister has significantly improved this legislation as has the select committee process. I am very pleased to be supporting this legislation to the House. This is part of what needs to be significant reform in terms of our oceans. I am very pleased to support this bill to the House. 
Hon RUTH DYSON (Labour—Port Hills) 
: 
 It is with some disappointment actually that I join my colleagues in the Labour and Green parties to oppose the progress of this legislation the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill because it is certainly an area where strong legislative protection was needed and this bill tragically fails despite huge efforts from various parties around the House and from those with expertise in this area from outside our Parliament who have really really tried hard. 
I am disappointed that the Minister for the Environment failed to take the opportunity of being a new Minister in this portfolio. She is not a brand new Minister—she has been a Minister for a little while—but in this environmental portfolio she was very new and in fact inherited this legislation. She therefore had a huge opportunity to say: “Well I’m new in this job.” She could take a step back have a look see what the submissions on this bill have said see what the other parties are saying see what the experts from around New Zealand and internationally are saying see what our international commitments are and how this legislation fits and then say: “Well we haven’t quite got it right and there are a few amendments that could be made.” 
That would actually have resulted in the whole of Parliament supporting this legislation which I think not only would have been a good thing for the process and the outcome of the legislation itself but would have sent a very strong message from the New Zealand Parliament about the way we consider our exclusive economic zone and continental shelf should be treated. But no the Minister unfortunately—and I do not understand why she did this because it does not seem to me to be her normal approach—just really refused to engage in constructive engagement on the flaws in this debate and instead bowled ahead with it. So on that basis and as I say with some disappointment I will be voting against this legislation along with my Labour colleagues and I know the Green Party as well. 
We opposed this legislation at the first reading and that was quite a big debate we had. Some of us held out great hope that there would be enough changes made at the Local Government and Environment Committee and through the Committee of the whole House on this legislation that we would be in a position to support it. But actually in the end those who said it was so fundamentally flawed when it was first brought before the House have been proven to be right. It is a missed opportunity and with something as important as this it is really a puzzle. I know it is a puzzle to the submitters on this legislation. It is a puzzle as to why Ministers do not take the opportunity not just to get legislation right but also to make themselves look better than they actually may appear. If they have not taken that opportunity I frankly do not understand it. 
We agree that a strong legislative framework is needed to regulate and manage the activities that are undertaken in the exclusive economic zone and in the continental shelf. This bill does not provide adequate protection for the environment. We heard during the first stages of this bill this tedious mantra from the Government—which I hope has been changed now with the Minister’s Supplementary Order Paper—about having to balance protection of the environment with economic development. Well sometimes you have got to do a little more than that. Sometimes you have to have a principled approach. You have to say that some things are so important that despite being able to make money despite being able to benefit economically—usually for a small number of people—and even despite quite a big opportunity for economic development the destruction of our conservation or our environment is so important that we will forgo that opportunity. There is no such thing as balance if you are talking about destruction. 
I was delighted to see that tired oft-repeated mantra being put to bed by the Minister’s Supplementary Order Paper 100. She has taken a slightly more tentative step forward than she may have but at least a step forward in saying there may be some environmental bottom lines that we think are beyond the balancing approach. I want to commend her for that. But when this bill was first introduced that was all we heard—that we could not have environmental protection as the fundamental frame for this bill. In fact it did not have environmental protection—really obvious—as an outcome that was desired let alone required as part of the legislation. So if you are talking about fundamental flaws that had to be one. If the bill’s aim is to have environmental protection for the exclusive economic zone and continental shelf but that is not the purpose and the outcome required of the legislation one would assume a slightly fundamental flaw. 
What is the reason that we were so supportive of this regulatory framework? Well it is really obvious: there is an increasing interest in oil and gas exploration in New Zealand and the most important thing therefore is to have a really robust framework one that has been well considered one that has the different perspectives put into it and one that says that our environmental protection is fundamental and we do not want to put it at risk. There are some types of exploration that we would warmly welcome. There are many parts of New Zealand we would warmly welcome it in. But without that framework of protection one that the industry is really clear about and one that the enforcers of the legislation are really clear about then we are doomed to disaster. We have already had enough near risks and near misses in New Zealand. We have seen some devastating outcomes from incidents overseas where they have not had that strong framework—and not just a framework but an understanding of the framework and enforcement of the framework. So that is a very good reason why we needed this legislative framework because we know that there is an increasing interest in both oil exploration and gas exploration in New Zealand. 
It is not just the industry and the enforcers who need that framework. In my view every single member of the public of New Zealand our citizens needs to have the confidence that if applications are put in for this sort of exploration we have the robust framework for consideration of those applications and then if something goes wrong we have clear liabilities and we have clear responses to deal with any incidents that happen. 
 It seemed to me that this Government quite sadly demonstrated once again that it knows the price of everything but the value of nothing. That is really quite in opposition to the way that most New Zealanders feel about the parts of our country that are most special to us the parts of our land and of our sea that are most special to us—let alone the potential damage that can be done to one of our major industries and that is the fishing industry. It did not seem to have any weight to bear on the consideration when this bill was first drafted. 
As I mentioned earlier we had hoped that the Minister would be open to working constructively with us on this legislation and making amendments that would provide the robust framework that I mentioned we need so desperately and I am really disappointed that she is not. I hope that as she gains confidence in her environmental portfolio she will have the ability to stretch across the political divide and work with members of other parties because actually all of us have constructive ideas. We do not always agree with each other—that is fairly obvious otherwise we would all be in one great middle-of-the-road political party—but we do have constructive ideas to offer and when that is done with an agreed outcome I think that it would be better for this Parliament if the Minister would engage with us in the future. 
We lodged six Supplementary Order Papers and I want to commend my colleagues who did that. Every single one of those six Supplementary Order Papers was voted down by the Government. We put the preservation of the environment as the principal obligation in this legislation. How could you vote against that? We made sure that there would be no doubt that the legislation would comply with our international obligations. We ensured that the cautious approach that is advocated in this bill would be replaced with the widely recognised precautionary approach. There does not seem to be anything in those Supplementary Order Papers that a thinking person could vote against and yet every single member of the Government voted against our six Supplementary Order Papers. Had those Supplementary Order Papers and the other amendments the Minister has proposed all been included we may have been able to rethink our position and support the bill. That would have been my preference. So again I say it is with great disappointment that the Minister and this bill have fallen well short of the mark and I will be voting against it. 
MAGGIE BARRY (National—North Shore) 
: 
 I rise with great joy to speak to the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill in its third reading. Unlike the rambling excuse for a speech by the previous speaker Ruth Dyson which was sad bewildered like Eeyore—you know truly the previous speaker typifies the tired old failed Labour policies of old. There was that element of condescension that do-nothing attitude the sanctimoniousness the silly braying when Labour members cannot think of anything clever or of substance to say. This is something that we have got used to but I would have to say that so principled is the last speaker as part of the failed Labour regime for 9 years—plus plus plus—that Labour members do nothing; they do nothing when the environment is at risk. They do nothing but sit on their principles keep themselves warm with their disappointed condescension and think they have the moral high ground. They are in fact doomed to the Opposition benches for a long while to come because New Zealanders are not as silly as they are. 
This bill is as others have said before me an essential piece of legislation. It corrects the omissions the void left by Labour. There were something like 16 I think it was licences granted with no regulation around them. We feel that this is a very important piece of legislation and it needs to come into effect without any further delay. I completely disagree with our political opponents politicking around this. As far as our international obligations are concerned we have honoured them and many people agree with us. The United Nations Convention on the Law of the Sea is certainly something we have taken into great account in putting together this piece of legislation and right through the select committee process. The Ministry of Foreign Affairs and Trade agrees with us our advisers agree with us and the Parliamentary Commissioner for the Environment also agrees that this is something that is favourable and protects our environment adequately. Who are the odd ones out? Labour indeed and the Greens of course as well—the unholy coalition that may well doom us to terrible economic woe if they ever do get the Treasury benches but it is unlikely because as I have said I feel that New Zealanders are an intelligent lot who are not likely to make those sorts of mistakes again. 
I am on the Local Government and Environment Committee which has heard all the submissions. I personally would like to thank the people who came to us and made submissions. I think many of them clarified some of the murkier areas around this vital piece of legislation. Their contribution was well-thought-through and very acceptable to us. I think the challenging robust debates that occurred within the select committee itself were useful and I commend the Minister for the Environment for listening carefully to the people on the opposing sides for consulting with them individually for listening to their concerns and for coming up with a Supplementary Order Paper that has strengthened this legislation. So unlike the naysayers on the other side I am very much of the view that the robust process has resulted in an excellent piece of legislation. 
As the Minister outlined earlier the purpose has been clarified. It is aligning the purpose of the exclusive economic zone with the Resource Management Act a little more than it was and that is an acknowledgment of some of those concerns. The penalties have been strengthened as well going up from $600000 to $10 million—so you follow the rules or you reap some very serious consequences indeed. There is also certainty provided for investors and workable constraints for the industry. Sustainable management and balance were very important considerations in weighing up what would make this a good piece of legislation. Minister Adams a lawyer herself did not want to see extensive litigation around this and I think that she and the select committee have actually arrived at a piece of legislation that will serve New Zealand well. 
Also the transition process has been very well-thought-through. For me it is a vital thing representing as I do the North Shore which is bounded on three sides by water. We feel very strongly that the Hauraki marine gulf needs to be protected. All of our coastal waters need to be protected but we also need to be able to unlock the enormous potential of our oil and mineral reserves if they are there and if we need them. The importance of course is in protecting the environment and that is what we will do because we are committed to it. We are not just going to sit on our principles and let the whole thing slide as Labour did for so many years. We are absolutely of the view that this is a good piece of legislation and must be passed. 
I conclude with a reminder of why it should be supported. This is a bill that provides a strong and effective framework to ensure that there are processes in place that will enable us to assess and very important manage adverse environmental effects in our oceans. It will also provide much greater certainty to the investors and to existing interests. It will meet our obligations as I have said under the United Nations Convention on the Law of the Sea and it will do things in the most efficient and effective way possible and I hope without further delay. If our political opponents Labour and the Greens really did want to protect our environment they would support this bill. I support it unreservedly. I feel it is fit for purpose and I commend it to the House. 
Mr DEPUTY SPEAKER 
: Just before I call the member this is a split call is it? 
Rino Tirikatene 
: Yes it is 
Mr DEPUTY SPEAKER 
: Thank you. 
RINO TIRIKATENE (Labour—Te Tai Tonga) 
: 
 Kia ora. I am pleased to make a short contribution at this third reading of the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill. This is critically important legislation. I do commend the Minister for the Environment Amy Adams for the improvements that have been made to the bill through the Committee stage and also the work that was carried out in the select committee. But alas this has not progressed the legislation to the point where we can support it. There are still too many loopholes and too many uncertain areas in the bill. So alas we will be opposing this bill. 
I just wanted to pick up on some key areas where there are very clear deficiencies in the bill. Firstly around the whole consultation issue—and I am focusing on the Maori issues—there was no consultation with iwi in the preparation of this bill. There were many many submissions from iwi and other interested Maori organisations opposing various aspects of the bill such as the purpose clause and throughout the various processes and procedures that were flowing through the consent processes under the bill. Disappointingly none of those submissions were actually picked up or incorporated into the bill. I speak to points like the Supplementary Order Paper from Ms Sage that included cultural impact assessments which was one thing that Ngai Tahu pushed for in their submissions. 
Likewise and most important was the beefing up of clause 14 the Treaty clause. We have very clear Treaty obligation clauses between the Crown and iwi Maori in the Conservation Act and the Resource Management Act but unfortunately equivalent provisions are not contained in this bill. That is very disappointing. Even more disappointing is that the obligations that do include iwi or Maori interests are just mere procedural matters which are options that can be picked up by the Environmental Protection Authority through its advisory committees but are not mandatory. Likewise there is no inclusion of a right to consult with iwi around any of the application processes. So that is disappointing and that is a huge deficiency in this bill. 
Just the other day I had a briefing from a mining company. To put this into context there was a company that was wanting to mine phosphate on the Chatham Rise. I am not going to talk about the merits of their particular activities but this particular company had a prospecting licence and it wanted to mine phosphate on the seabed floor of the Chatham Rise. I think it is important that we look at these applications on a case by case basis because the members on the other side talk about how there will be such great economic development from extracting minerals or oil and gas and the like. But when we actually spoke to the company and asked: “What would be the employment opportunities created from your mining activity?” it said that there would be very few. Why was that? Because it would be bringing in these big super 200 metre - type ships from the Netherlands with all their expertise to come down and blow the sea floor so that all the phosphate could be sucked up and taken up as raw material. It would be extracting raw material and there was no commitment to actually further value-add or to any other activities there. We oppose this bill. [ 
Bell rung 
] Is that the end of my time? Oh sorry Mr Deputy Speaker. That is a classic example of the spin that there will be jobs created from this mining boom. This company itself said that there would be no jobs created from its activities as all the expertise would be brought from offshore. That actually needs to be taken into account by the Environmental Protection Authority for all applicants that are going to be mining our pristine marine environment—the sea floor and the continental shelf. 
There are big deficiencies in this bill. We are very disappointed that all the Supplementary Order Papers that we put up particularly amendments to strengthen the Treaty clauses were voted down. So alas we will be opposing this bill. Thank you. 
EUGENIE SAGE (Green) 
: 
Tena koe Mr Speaker. The Green Party supported the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill at its first reading because we recognised the need for an effective environmental management regime for the oceans but we voted against it at its second reading and will be voting against it today because this bill is not adequate to do that job. Before explaining why I would like to thank all of the submitters. There were a number of very detailed and constructive submissions that made very good suggestions as to how to amend the bill. Unfortunately a lot of those suggestions did not get taken up. We would also like to thank the officials from the Ministry for the Environment and the officials of the Local Government and Environment Committee. 
Our reliance on dirty fossil fuels is the major contributor to human-induced climate change and we must accelerate our move away from our dependence on fossil fuels. Yet this bill does nothing to address climate change and in fact provides a key platform for this Government’s “fossil fool” agenda to open up the exclusive economic zone to oil exploration. As Greenpeace said recently: “New Zealand is missing the opportunity to share in the economic and jobs bonanza created by clean energy due to the Government passing laws to promote its fossil fuel agenda at the expense of clean energy”. This is one of those laws. The Government blocked the Green Party Supplementary Order Paper that would have allowed the Minister in making regulations and the Environmental Protection Authority when deciding on marine consent applications to take into account how an activity contributed to climate change. It is entirely appropriate for a national-level body such as the Environmental Protection Authority to consider how the quest for extreme oil such as deep-water oil contributes to and exacerbates climate change. 
We oppose this bill because it takes insufficient account of our responsibility under the United Nations Convention on the Law of the Sea to preserve and protect the marine environment. That is because the suite of matters in clauses 33 and 59 do not give priority to the preservation and protection of the marine environment as the convention requires. Certainly decision makers under both of those clauses are required to take into account the importance of protecting biological diversity and the integrity of marine ecosystems but the Minister and the Environmental Protection Authority must give exactly the same weight to these as they give to the economic benefits of activities that are applying for consent. It is that fact that there is no priority given to environmental matters that means that the bill fails to implement the United Nations Convention on the Law of the Sea. It would have been very easy to amend the bill so that it was much more consistent with those international responsibilities. 
We oppose it because of the very generous provision in the Minister’s Supplementary Order Paper 100 the “Anadarko amendment” that potentially allows a company that is planning exploration activities in the exclusive economic zone to do this without getting a marine consent. 
Jacqui Dean 
: They do it now. 
EUGENIE SAGE 
: Yes they do do it at the moment. This bill is designed to set in place a consenting regime but the new transitional provisions which extend the transitional period from 1 May 2013 as it was in the original bill to 1 May 2014 give companies like the Texan giant Anadarko and the Austrian oil giant OMV if they have an allocation permit the right to actually go ahead with their oil exploration without getting a marine consent under this legislation. What is the point of the legislation if we have got such generous transitional provisions? 
It is also inadequate because although the original purpose clause of balancing has been improved by the Minister—and we commend that—to one of sustainable management under the purpose clause clause 6 on its own unlike the Resource Management Act and section 104 decision makers do not have to make their decision subject to the purpose of sustainable management. So it is completely different from the Resource Management Act. 
The bill has got very limited provisions around implementing the Crown’s Treaty responsibilities as Rino Tirikatene noted and there is no general obligation to implement and give effect to the Treaty. There were a number of constructive suggestions made by Te Runanga o Ngai Tahu and others to provide for a cultural impact assessment. Those suggestions were not taken on board by the Government because it blocked the Green Supplementary Order Papers. 
One of the other reasons is the way in which the Environment Court is sidelined. It has made a very valuable contribution to the development of case law and policy under the Resource Management Act and there is no opportunity for that here. 
JACQUI DEAN (National—Waitaki) 
: 
 I want to start my contribution to the third reading of the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill by just reminding the House of the press release put out by the Parliamentary Commissioner for the Environment a couple of weeks ago where Dr Wright says that she is satisfied that the legislation will provide significant protection to New Zealand’s exclusive economic zone. She said: “I’m largely satisfied that this legislation now provides environmental protection to our oceans. … I would welcome this much needed legislation passing into law—it’s been a long time coming.” 
Maggie Barry 
: Table it. 
JACQUI DEAN 
: I seek leave to table this press release by the Parliamentary Commissioner for the Environment where she congratulates the Government on listening—[ 
Interruption 
] 
Mr DEPUTY SPEAKER 
: Order! 
JACQUI DEAN 
: —and congratulates the Government on its good legislation. 
Mr DEPUTY SPEAKER 
: I do not need assistance from the members who were calling out. We do not table press releases. 
JACQUI DEAN 
: Thank you Mr Speaker but I have it in my hand and I have it available for any members of the House opposite who would care to have a look at the parliamentary commissioner’s view which is a view that I value. In fact I have a colleague who would like to have it now. She is going to read it quietly to herself and pass it amongst her colleagues. 
Jan Wright is absolutely right. The Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill is a good bill. It fills a regulatory gap that currently exists in managing the environmental effects of such activities as offshore mining petroleum exploration cable laying and also things like scientific research in the area 12 to 200 miles offshore. Finally we have a Government that is willing to address the regulatory gap the legislative gap that was left behind after the 9 years that the Labour-Green Government failed to even consider it—along with a lot of other things it failed to consider like water. This Government is not afraid to deal with the hard issues. Today we have brought to the House a bill that not only is widely supported in the community but has been given approval by the Parliamentary Commissioner for the Environment whose opinion I do value. 
This bill is not about pitting the economy against the environment; it is about responsible management of our oceans. In clause 11 the bill gives effect to our obligations under the United Nations Convention on the Law of the Sea to manage and protect the natural resources we have in the exclusive economic zone. It is worth noting also that the United Nations Convention on the Law of the Sea provides coastal States like New Zealand with exclusive rights over all resources in the exclusive economic zone while preserving pre-existing navigational rights—and that means peaceful passage—and other rights in these areas. So the United Nations Convention on the Law of the Sea is quite a wide agreement that we are giving effect to in this bill. 
The United Nations Convention on the Law of the Sea sets rules for activities like the conduct of scientific research and it also gives effect to duties regarding the management and conservation of fisheries and the protection of the marine environment. The Environmental Protection Authority will be the decision maker for all consents and all consent applications will be decided by that body within a statutory time frame of 6 months for the marine consent process. It was interesting that the previous but one speaker Rino Tirikatene from the Labour benches thinks it is good to look at these applications on a case by case basis. Well yes it is. The good news for that member is that the Environmental Protection Authority is the body that will be considering those applications. 
Although the bill sets up the general framework for the regulatory system specific controls and standards will be set out in subsequent regulation. There will be a transitional period enabling planned activities to proceed in the 2013-14 season. Regional councils will still be responsible under the Resource Management Act for regional coastal plans and consenting activities for up to 12 nautical miles offshore. 
The Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill does not intend—never did intend—to be the Resource Management Act of the seas. The Resource Management Act was designed for predominantly land-based activities. Although this bill has adopted a similar purpose clause to that of the Resource Management Act—thanks to a good Minister who was prepared to listen to submissions—there are several reasons for a slightly different legislative approach. First of all the definition of “environment” is narrower in the bill than it is in the Resource Management Act. The Resource Management Act refers to physical resources like buildings and roads and also refers to people communities and things like amenity values and social conditions. The Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill definition of “environment” refers only to the marine natural environment including its ecosystems. There is a fundamental difference on that which seems to have escaped the Labour members. 
Secondly there are our international obligations particularly those under the United Nations Convention on the Law of the Sea. The United Nations Convention on the Law of the Sea grants New Zealand limited sovereign rights and sets limits on what the Crown can regulate. For example the Crown has very limited abilities to interfere in marine scientific research carried out by foreign-flag ships. Clearly the Resource Management Act has not got sovereignty over this part of it so the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill has to provide for these activities to be permitted in accordance with the United Nations Convention on the Law of the Sea. Because the rules are set out in the United Nations Convention on the Law of the Sea the use of the Resource Management Act framework is clearly inappropriate in these activities. 
The exclusive economic zone area of ocean is 20 times New Zealand’s land area and offers us significant economic opportunities but we must also ensure that we have robust laws in place to protect the environment. The Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill does just that and I commend it to the House. Thank you. 
A party vote was called for on the question  
That the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill be now read a third time. 
Ayes 72 
New Zealand National 59; New Zealand First 8; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 49 
New Zealand Labour 34; Green Party 14; Mana 1. 
Bill read a third time. 
National War Memorial Park (Pukeahu) Empowering Bill 
First Reading 
Hon CHRISTOPHER FINLAYSON (Minister for Arts Culture and Heritage) 
: 
 I move  
That the National War Memorial Park (Pukeahu) Empowering Bill be now read a first time. 
 I intend that it be referred to the Transport and Industrial Relations Committee. At the appropriate time I am going to move that the National War Memorial Park (Pukeahu) Empowering Bill be reported to the House by 18 September and that the committee have authority to meet at any time while the House is sitting except during oral questions during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 188 and 191(1)(b) and (c). 
On 7 August the Prime Minister announced the Government’s intention to create a National War Memorial Park in front of the National War Memorial. New legislation is required to give effect to Cabinet’s decisions and to enable this work to be completed in time for the centenary commemorations of the Gallipoli landings on Anzac Day 2015. 
Before I outline the provisions of the bill it is very important to remember why the memorial was erected and to acknowledge how the current precinct falls short of the original vision. In the First World War over 100000 New Zealanders served overseas. This would be an astonishing commitment today from a population of 4.5 million let alone from the 1914 population of just over 1 million people. A total of 18500 servicemen and servicewomen lost their lives and we can only imagine now the depth of grief across every community in this country let alone the challenges facing the families of the nearly 50000 wounded who returned. 
So in 1919 the Government of William Ferguson Massey decided that a National War Memorial should be erected so that future generations would remember this enormous sacrifice. It was decided that the memorial should be erected on a site with a commanding position so that it could be seen from many points in the city and from the harbour. The Pukeahu site on Buckle Street met those criteria. The term “Puke-ahu” is the ancient Maori name for that particular ridge. In fact over a decade passed before the memorial was finally opened in 1932. Fifty thousand people were there to hear the national Carillon bells ring for the first time. 
A grand boulevard from the memorial to the sea had been included in the plans but this never eventuated. In my opinion that was a good thing too because I always thought it looked as though it had been designed by Albert Speer. The planned Hall of Memories was thwarted by the onset of the Depression and the Second World War and it was not completed until 1964. The Tomb of the Unknown Warrior was added in 2004. These developments all complement the 1919 vision but the setting clearly does not. In particular State Highway 1 is incompatible with the memorial’s status as a place of quiet contemplation and reflection where families dignitaries and visitors can honour the service of our forebears. Quite apart from the constant noise of traffic there simply is not enough space immediately in front of the memorial for the ever-increasing number of New Zealanders who come together to remember the fallen on Anzac Day and other important occasions in the life of our country. With the centenary of the First World War approaching it is time to address these issues. 
The project made possible by this legislation will divert the traffic underground and unite the different sections of the memorial precinct for the first time. The Anzac Day commemorations in 2015 will take place in a new open space flanked on either side by landscaped areas with trees seating cycleways and walking paths. The new park is also going to provide an appropriate setting for an Australian memorial which is planned to complement the existing New Zealand memorial in Canberra. Other memorials will be added over time and there will be an interpretation centre which will provide information to those who come here to reflect on the sacrifices of those who served their country. Under the existing statutory processes it would not be possible to guarantee the completion of the project within the required time frame. 
What I want to do is just briefly outline the very extensive consultation that has taken place with the community and with affected parties about the memorial park over a number of years because it shows why we are able to fast track this matter. Since 2008 I have consulted over the years with the Port Nicholson Block Settlement Trust Mount Cook residents the local Mt Cook Primary School the National War Memorial Advisory Council Massey University the Wellington City Council the Royal New Zealand Returned and Services’ Association and the regional council. I have to say that the response was positive—indeed universally positive. What consultation with the community made clear when I became the Minister was that the original plan for the park which involved the option of moving State Highway 1—that section of Buckle Street—back away from the memorial and closer to the children’s playground was not acceptable. I have always been very concerned about the welfare of the children at Mt Cook School. With the passage of this bill stage one of the development can commence. This will see State Highway 1 temporarily diverted northwards. The undergrounding work will begin in early 2013 and landscaping in late 2014. 
I want to acknowledge the assistance of the Prime Minister and the Minister of Transport in achieving this outcome. Once again they have gone in to bat for Wellington. Two years ago they intervened to save the  
Hobbit  
movies in this country and they have once again brought their considerable vision to this project to ensure there are no corners cut and no halfway measures as we develop a memorial park that the soldiers deserve. This would not have happened without Gerry Brownlee’s support and I salute him. He is a wonderful colleague. Secondly I acknowledge Sandy McCallum the Principal of Mt Cook School who has been a tireless advocate for the children under her care and has helped us to this best result. Finally I acknowledge the Deputy Mayor of Wellington Ian McKinnon. He and I have worked closely on this project for years to get the best outcome for the city. 
The bill will empower the creation of a National War Memorial Park providing the certainty necessary for its completion by Anzac Day 2015 while ensuring the integration of the park and roading networks within the wider city of Wellington. The bill will grant the statutory authorisations and property rights necessary to complete the roading and landscaping in time for that important centennial event. These authorisations are necessary to complete the park on time and to avoid remedy or mitigate any actual or potential adverse effects on the environment. It requires the Transport Agency and the Ministry for Culture and Heritage to comply with existing social and environmental responsibilities and expectations. 
Subpart 6 of Part 2 gives the Governor-General authority by Order in Council on the recommendation of the relevant Minister to grant additional authorisations and rights or to amend authorisations and rights granted by the bill if reasonably necessary or desirable for the purposes of the Act. The enactments that may be the subject of an Order in Council are listed under clause 24(2) of the bill and clauses 26 and 27 provide for a National War Memorial Park Review Panel to provide advice in relation to Orders in Council that may be required. Subpart 7 requires the Minister to arrange for a community forum of at least 20 people to provide advice in relation to the development of the park and the bill stipulates relevant stakeholders to be represented at that forum. The provisions relating to Orders in Council and the removal of appeal and objection rights will expire at the close of play on 31 July 2015. 
In conclusion this legislation has been drafted for a very specific purpose and will deliver a result that I believe that all New Zealanders will be proud of. I believe that we are all agreed that the National War Memorial should be one of the most solemn and sacred places in this country. In 1919 the National War Memorial was approved without a single voice of dissent in this House. It was a matter that was above politics. I hope there will be similar broad support for this bill in 2012. 
Hon ANNETTE KING (Labour—Rongotai) 
: 
 I am pleased to speak on the National War Memorial Park (Pukeahu) Empowering Bill and I begin by saying that my colleague Grant Robertson the Wellington Central member of Parliament is sorry that he could not be here to speak in the first reading but unfortunately family issues take priority today. But as another Wellington member of Parliament and a person involved in the original idea in the last Labour Government I am very pleased to be able to speak on this bill. We will support this bill and we will work with the Government to ensure its passage. We do have some amendments that we would like considered at the Transport and Industrial Relations Committee. I will talk more about them in a moment. 
The National War Memorial Park will be situated adjacent to the site of the existing National War Memorial the Carillon and the Hall of Memories as has been defined in the National War Memorial Act 1992. The establishment of a National War Memorial Park is the policy of the previous Labour Government. I have to say that it was a very strong vision of the former Prime Minister Helen Clark. In 2004 Helen Clark after several years of negotiating and planning led the return of the Unknown Warrior to New Zealand and the formal burial of the remains at the memorial. It was her passion that New Zealand would have a resting place to represent the thousands of New Zealand soldiers seamen and aviators killed in action who have never returned to New Zealand and whose bodies are left many of them in unmarked graves on foreign shores. 
Like many of us she was driven by a deep understanding of the strength of feeling New Zealand has towards the sacrifice that young men and women made to ensure our freedom democracy and human rights and also by personal family experiences—from uncles great-uncles fathers and so on who had fought in the First World War and Second World War. 
I have to say that my regard for our old servicemen came from a very early age with the emphasis that my parents put on honouring those who had served in those wars. In June 2007 I represented the New Zealand Government at the 90th commemoration of the Battle of Messines in Belgium where 128 officers and soldiers are buried at the Messines Ridge cemetery thousands of kilometres from home. They died defending people they did not know. It was the battle where Lance Corporal Samuel Frickleton a South Island coal miner won his Victoria Cross. I was moved by the gratitude still felt by the people in that tiny village of Messines—a village twinned with Featherston in New Zealand. In the museum that you will find in that village I found the names of two young men killed in action from my home town of Murchison. When you consider what a tiny town that is and that two men had lost their lives in that battle that certainly moved me. 
On 24 April 2007 Helen Clark and I announced plans for a New Zealand memorial park at the National War Memorial precinct and $10.9 million of funding was allocated at that point. Wellington City Council also committed funding. We worked closely with the former mayor Kerry Prendergast on this matter. It was the accumulation of several years of work. From the time of the return of the Unknown Warrior work was started on the idea of a National War Memorial Park. It started by ensuring that we were able to acquire the land. Because the land actually was zoned semi-industrial we needed to be able to acquire that land for the park to proceed. We worked with the Wellington City Council on that proposal. 
I was disappointed when I heard on the radio at the time this bill was announced criticism from the Green Party about the delay by Labour for this park. In fact it was quite wrong. A lot of work had been done from the time that the Unknown Warrior was brought home to the time we went out of Government. You had to finish the inner-city bypass to ensure that you were able to preserve that land for a park. We also worked with the Wellington City Council because at that time it wanted the continuation of a tree-lined avenue up Taranaki Street that could then link in with the park. This is the sort of work that was going on when we were in Government. 
The key political point if there is one to be made is that it could have been done without legislation if the National Government had not mucked around with the proposal for the last 4 years. Chris Finlayson who has just introduced the bill made it very clear to the Wellington City Council just after the 2008 election that he was not going to continue with Helen Clark’s vision. I am pleased that he now talks of caring for the children and so on but he did not wish to continue with her vision. It always seemed to me to be rather petty because this was a vision as he said that we should embrace for all New Zealanders. 
So putting aside the petty politics that have been played with the memorial park we do want to see a National War Memorial Park that the nation will be proud of at the 100th anniversary of Gallipoli in 1915. It is a park opening that I would be very honoured to attend and hopefully will be attending as the sixth Labour Government. 
The passing of this empowering legislation should not be done lightly. This is empowering legislation and we always need to be careful when we give such power to this Parliament but there is strong support from the local community from the Wellington City Council and from our veteran organisations. So with the strong support and with the desire to have it finished by 2015 and the need to make sure that it will be finished we will support this empowering legislation. 
But there are some changes that we would like to see made at the select committee and I believe that the Minister of Transport at least is entertaining these amendments that we are putting up. We would like to see the role of the review panel that is established in the legislation widened to include oversight of the consents that are granted. Given the range of the consents and the overriding of the appeal rights we think that that would give the public confidence in the process if the review panel had this role. This is especially important in terms of environmental and heritage considerations. Secondly we would like to see the review panel report on its work on a regular basis—6 monthly—to a select committee such as say the Regulations Review Committee. Thirdly we would like to see prior consultation procedures with interested stakeholders before Orders in Council are proposed. The community forum that has been established in legislation could we believe fulfil this role. Fourthly we would also like to put into law a role for the community forum in being consulted on the final design of the park. Incidentally the local MP Grant Robertson does have some concerns with elements of the design of the park particularly around vehicle access but he has been working this through with members of the Government. 
We support the undergrounding of Buckle Street but we have to say that it is going to be rather a funny road. We have now just had announced by the New Zealand Transport Agency the flyover that is going to go round the Basin Reserve. This road is now going to look like a roller-coaster road where you go under you go up you go down you go up and you head to the tunnel at Mount Victoria. I do say to the Government that maybe Maurice Williamson can take this up as he is probably the only Minister here who has some knowledge of these things. When we underground the road at Buckle Street we might look at whether a flyover is actually appropriate unless we do really want a roller coaster. I have to say that it has been a roller-coaster ride for those of us in Wellington looking to see what the Government was finally going to do around the congestion in the city. We know now that it is going to be this roller-coaster ride up to the Mount Victoria tunnel. You will be able to get very fast to the Mount Victoria tunnel but then of course you will go through just a one-lane tunnel. Although you will get there quickly you will get through the tunnel more slowly. 
We do say to the Government that this in the wider sense is a great idea—the park. We will support it but look at what you are doing with the other roads round the Basin Reserve leading to Mount Victoria. We do not want it to look foolish when we finally open it in 2015. The Labour Party will be supporting this bill and we will be giving all assistance and advice we can to the Government to make sure it goes through in the timetable that has been set. 
Hon JOHN BANKS (Leader—ACT) 
: 
 I rise on behalf of the ACT Party to support the first reading of the National War Memorial Park (Pukeahu) Empowering Bill. Of course as previous speakers have said the bill seeks to give the Government the necessary statutory authority to complete the memorial park by April 2015. This is a timely bill in our history. It will be the 100-year anniversary of the Australian and New Zealand Army Corps landing at Anzac Cove on the Gallipoli peninsula in the Dardanelles on that fateful morning of 25 April 1915—lest we forget. The disastrous Gallipoli campaign gave birth to the Anzac spirit of comradeship and bravery beyond all odds. It contributed much to our sense of national identity. This empowering bill is as much about national identity as it is about an empowering bill that will enable us to put in place a long-living memorial to those brave souls who lost their lives in such great numbers on that first day and days thereafter 25 April 1915. 
Today Anzac Day commemorates all our brave fallen from the Western Front and other theatres of war—World War II to the conflicts in Korea Malaysia and Viet Nam to modern places of conflict in East Timor and currently much in our minds to the conflict in northern Afghanistan where the brave men and women of New Zealand stand in harm’s way. In Anzac Day we still celebrate the close bonds of friendship and family with our Australian cousins and our shared sacrifice at Gallipoli since then with our Australian cousins. Some have said that Anzac Day is as close as New Zealand has to a national day. I would agree with that. In part this results from our annual controversy around Waitangi Day. 
However I believe the better explanation is that Anzac Day does not celebrate war as the great adventure; rather it reminds us of the tragedy and utter waste of war the longing for family and the familiar. We remember the young New Zealanders buried in some corner of a foreign field. We look to our own families where most have experienced loss and disability from war and those who have had family members in the service of New Zealand. In short Anzac Day speaks directly to the shared experiences of most extended New Zealand families more than any other day in our national life. This is what this empowering bill is all about. 
 I am glad that this is a shared belief and commitment from all corners of the Parliament. As the number of active service personnel who experience conflict falls in real terms it is even more important that we remind ourselves annually of the horror and loss of war and reaffirm and confirm our commitment to the young men and women who stand ready to go into armed conflict on our behalf on any day. So this bill will enable the building of a memorial park. As a Wellingtonian born and bred that is a very fitting place of national commemoration and national mourning—the capital city of the country. 
All New Zealanders should be proud of this day and what this empowering bill follows and what this piece of legislation will deliver. It does so by granting the right to the New Zealand Transport Agency and the Chief Executive of the Ministry for Culture and Heritage to design construct maintain and operate the park during the construction and alteration of this significant piece of our roading network. It requires mitigation of an actual or potential adverse environmental effect. It provides a series of statutory powers that are incidental to this objective. The extensive schedules to the bill which run to a mind-numbing 92 pages essentially provide what would be in a resource consent issued by the Wellington Regional Council and the Wellington City Council. In essence the project is to cut and cover Buckle Street to develop a contiguous park directly linked to the Hall of Memories and the Tomb of the Unknown Warrior. I salute all of those who have been responsible for the design of this everlasting memorial and the complexities of what they have been given and what they have had to work with. This of course will provide appropriate space for ceremonies involving our service personnel and a place for memorials for those nations that are closest to us. 
I acknowledge the work of Ministers Finlayson and Brownlee for their persistence and tenacity and delivering this today at this time for this memorial. I also place on record the contribution of the Wellington City Council and in particular the outstanding individual Ian McKinnon the Deputy Mayor of the Wellington City Council. We hope that the memorial park will be a place where New Zealanders will visit to reflect and remember our fallen. This is a bipartisan memorial and I salute all of those former Prime Ministers arts and culture Ministers and members of Parliament from the Wellington district who have committed to this memorial and who will vote for this today through their affiliations in this Parliament. 
So it is with some caution that I want to make this observation to the House in passing. I accept fully the Government’s contention that this worthy project cannot be completed in 18 months. In most other developed countries it could easily be completed within 18 months within a standard consenting process. This speaks not to the complexity of this worthy project but rather to the unwieldy effect of the Resource Management Act 1991. I sat in this Parliament opposite on the front bench of this Parliament and then on the Government side of the Parliament in 1991 where at 11 o’clock at night in a third reading 7-minute dissertation by the Minister of the time the Resource Management Act was posted unanimously on to the statute book by this Parliament with little understanding of the consequences that would follow the implementation and interpretation of the Resource Management Act over 20 years. It has been in general terms a complete disaster for growth investment and jobs for this nation and that is why the ACT Party is at the forefront of two tranches of reform to the Resource Management Act which is well overdue. If there is one flagpole that should be attended to today and a flag raised it is the flag for democracy it is the flag for private property ownership and it is the flag for development growth and jobs that is well overdue here. 
We should not replicate the Resource Management Act high jinks that cost the constituent ratepayers of the Auckland City Council $10 million in cost overruns in building the refurbished redeveloped art gallery in Auckland City—that is $10 million of political high jinks around the Resource Management Act and the Environment Court by a litigious handful of people which cost us so much money. It is entirely appropriate that we continue to expand and perfect our freedoms so that those who were sent and did not return from places that are listed on the battlefield plaques around this Parliament are not disappointed in this new century around an Act of Parliament that stops sensible stuff like this happening. New Zealand after 100 years have passed remains committed to the memory of those brave souls who fought the battles recorded on the walls around this Chamber and soon to be recorded with a new memorial for the 100-year commemoration of that fateful day of 25 April 1915. 
Hon ANNETTE KING (Labour—Rongotai) 
: 
 I raise a point of order Mr Speaker. I wonder whether you could give the member who has just resumed his seat the Hon John Banks the opportunity to correct his  
Hansard 
 in that it was not Labour that passed the Resource Management Act— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! That is a debatable issue and the member is a very very experienced one. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 After the speech from that member which strayed so far from the substance of this bill can I say that it is rather amusing to hear Mr Banks from the ACT Party speaking so passionately about a memorial. It will be a memorial to that member and his party that will be constructed in the not too distant future. 
I do want to come back to a very important piece of legislation. The Labour Party will be supporting the National War Memorial Park (Pukeahu) Empowering Bill despite the truncated select committee process which requires the bill to be reported back by 18 September and despite the fact that this bill overrides aspects of the Resource Management Act. We are a constructive Opposition party and we do want to work with the Government where it is appropriate on a project that truly is of national significance. It is a pleasure to finally see a roading project that is of genuine national significance. 
It completes as other members have said a memorial project that was first envisioned really immediately after the First World War or the Great War as it was known at the time—a time when New Zealand was reeling from the deaths of over 18000 of our people who went to Europe and served on behalf of our nation and on behalf of the British Empire. Countless others were injured and countless families were impacted by that really astonishing conflict at a time when the Industrial Revolution had delivered the firepower to create untold damage to people to buildings and to the landscape but had not yet delivered the manoeuvrability for soldiers sailors and airmen and women to be able to manoeuvre around that firepower. 
The effects were devastating and it was out of that devastation that Prime Minister William Massey first explored the idea of a war memorial which of course was first constructed in 1932 with the Carillon followed a few decades later with the Hall of Memories then early this century with the Tomb of the Unknown Warrior and now this project to complete the memorial which is obviously not just to those people who served in the Great War the First World War but also ultimately to those who served in South Africa in the Second World War in Korea in Malaysia and in Viet Nam. Of course we will soon need to add to that list the veterans of our peacekeeping activities in East Timor and those in the Solomon Islands where we have been lucky enough not to lose anybody in combat and of course what is really front of mind for all New Zealanders at the moment those who have fallen in the conflict in Afghanistan. Of course we particularly remember the five who have fallen this month. 
They will be remembered in this National War Memorial Park. It will be a place where New Zealanders can pause reflect on that sacrifice made over the generations by New Zealanders reflect on what it means to build a peaceful world what it means to live in a peaceful nation and what it means to create tolerance and understanding and reflect on our work to find a future without conflict and without that level of sacrifice. It is for all those reasons that we do support this piece of legislation. 
It is disappointing though—and I am sure there will be a lot of people out there who will be disappointed—that it requires this empowering legislation that does override the Resource Management Act and that real traction on this project has taken such a tremendously long time. The idea of the memorial park was first articulated by the then Prime Minister Helen Clark at the time that the Tomb of the Unknown Warrior was first unveiled. Progress was made through to 2008. As recently—well as long ago in fact—as 2009 the Minister for Arts Culture and Heritage Chris Finlayson was saying in response to questions from his own backbenchers that the Government had the project in hand that it did not necessarily want to carry on with the vision that Helen Clark had articulated but that it was making good progress. Well it is lamentable that the progress was not as solid as was made out by the Minister at that time and we find ourselves now more than 3 years after that event debating a bill that gives the Government the ability to rush a project that did not need to be rushed. 
But as I have said we in the Labour Party wish to be constructive and we know that this is a project that New Zealanders want to see fulfilled and that we now need to put aside the unfortunate delay and get on with the project. However we also need to acknowledge that this legislation gives the Government significant power and we need to have the right checks and balances in place to ensure that that power is used appropriately and wisely. 
We are committed to the memorial park and we support this legislation but we do want to see some changes and we hope that these changes are given proper consideration despite the truncated select committee process. The role of the review panel that is established in the legislation needs to be widened in our opinion to include oversight of the consents that are granted. Given the range of consents and the overriding of appeal rights we think that it would be right and would give public confidence to the review process if the review panel had this role. It is especially important in terms of the environment and heritage considerations that will go along with this project. 
The review panel needs to be able to report on its work regularly. We think that a 6-monthly basis would be appropriate. We think that report should be made to a select committee and the most appropriate appears to be the Regulations Review Committee. We would also like to see prior consultation procedures with interested stakeholders before Orders in Council are proposed. The community forum that is established in this legislation could easily fulfil this role. Finally we would also like to see put into the legislation a role for the community forum in being consulted on the final design of the park. We think this is just simply about ensuring that what is created is something that the community can appreciate and that they will be able to buy into. 
As I said this is the completion of a vision that truly goes all the way back over nearly the full century that the completion of this memorial park will acknowledge on 25 April 2015. It is the completion of a vision that many Prime Ministers have articulated most recently of course Helen Clark who was so instrumental in ensuring that that Unknown Warrior was brought back to New Zealand and that we had that focal point of our memorials. This memorial park will be a proper completion of this project and something for all New Zealanders to celebrate—truly a project of national significance. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Just before I call the next member can I just advise members about the use of electronic devices. When not being used for notes to refresh memories when members are speaking in the debate they should be placed on the drop-down work surface so that they in no way obstruct or interfere with the Speaker’s view of the House or any of its members. 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Speaker. Nga mihi nui ki a koutou. Kia ora. I rise to take a call on the National War Memorial Park (Pukeahu) Empowering Bill. The Green Party supports the National War Memorial Park but we will not be supporting the National War Memorial Park (Pukeahu) Empowering Bill at its first reading. We support the memorial. We support a park. As a Wellingtonian I am excited by the idea that we will get a bit of green space a bit of quiet space in an otherwise pretty busy and hectic part of the town in Mount Cook. We think it is important that we do commemorate the people who have fallen and are immortalised around this Chamber. I was recently in London where I got to see the new New Zealand war memorial in downtown London. It is a great example I feel of how we can have modern war commemorations that do not use the traditional mould. I note that Australia has still got the traditional one in the park next to ours. They can be powerful emotional reflections of our national character and I think that it is a good example of that. 
The Green Party will not be supporting the bill because it is drafted in such a manner that overrides the Resource Management Act the Historic Places Act and the Public Works Act and takes from the Canterbury Earthquake Recovery Act the provisions whereby further rules can be amended by Orders in Council. I think it is important to reflect on why the Green Party is opposed to this bill. We are opposed to this because it is a damaging precedent in our democracy. I have gone through the history. I am aware of a number of bills and Acts that have been enacted by this Parliament over the years to enact transport projects like the Tauranga expressway and there are a few more like the Auckland Harbour Bridge but none of them used the powers—the immense and considerable powers—outlined in this bill to override legislation. In fact the only examples that the Parliamentary Library could find this afternoon were the Canterbury Earthquake Recovery Act and the Rugby World Cup 2011 (Empowering) Act which were passed in this current Government’s time on the Government benches. This is the only Government that is drafting laws that allow itself to override any laws—or in this case a constrained number of laws—that it wants to override. This is the only Government that is drafting laws that allow it to amend future laws through Orders in Council. We think it is a damaging dangerous precedent. Although we do not think it is likely to be abused under this law we do not think it is the path this Parliament or this country should be going down. We support the democratic rights of law the due process that our soldiers went overseas to serve and to protect. 
I have not heard from the Government or from the Labour Party benches the reason why we have to have legislation to override these three laws and to give themselves other powers through Order in Council. What is the reason? I think we all know but it is embarrassing because we do not want to mention it and that is that the Government has not given itself enough time to enact it to get the time to go through the normal processes because the Government scrapped it. The history is that in 2004 Helen Clark first announced the formation of this park which the Green Party supported. In 2007 Labour put $10 million towards it. In 2009 it was the Government in its line by line review that removed the funding. The only reason why we have to do this I think amazing and dangerous precedent step of passing laws to build a road and a park is that the Government has not given itself enough time to do it because the Government scrapped the money. The Government has raided the transport pantry and there is not enough money left for projects like this because the Government would rather spend it on seven uneconomical roads of national significance. This is the real issue we should be addressing. Although I would like to stress that the Green Party supports the war memorial and we support the park we do not support the process that is going through. We are seeing the same pattern emerge when it comes to the select committee consideration—a constrained time for New Zealanders for Wellingtonians to have a say. 
What we are concerned about of course is we are going to get a less than ideal process. The point of having an open and appropriate length of time for public consultation and processes through the Resource Management Act or the Historic Places Act is so we make the right decisions. What we are concerned about is we are not going to see the right decisions being made. We are not going to see maybe common-sense decisions to mitigate an unfortunate side effect or impact of this project because the Government wants to race it through because it has run out of time because the Government is a poor manager. That is the real reason why we have to go through this unprecedented step. 
The Green Party wants to see it done right. We want to see proper processes and that is why we will not be supporting this bill. We will go into the Transport and Industrial Relations Committee with a constructive manner. We would like to improve this bill but it has to be pointed out that look this road is only 5 years old and this Government at a time of austerity at a time of debt crisis has all this money to dig up a road that is only 5 years old and it has to do it through legislation because of its bad decision-making. It is a shocking state of affairs and that is why I am proud to be a member of the party that is voting against it today. 
DAVID BENNETT (National—Hamilton East) 
: 
 It gives me great pleasure to speak in regard to the National War Memorial Park (Pukeahu) Empowering Bill. First of all I would like to thank the Minister for Arts Culture and Heritage for his introduction to this bill. I would like to make special mention of the Labour Party and thank its members for the way they have spoken on this bill and for the work that they have done in the past and also for the agreement from them to help in the select committee stage as we go through this somewhat truncated process. I would like to draw special attention to the Transport and Industrial Relations Committee members from the Labour Party who are very helpful and can work well with all parties to achieve the right things for this country. I think it is important for us to note that this is a bipartisan approach. 
It is very disappointing however to hear from the Green Party which has now left the Chamber that it does not support this bill. 
Holly Walker 
: I raise a point of order Mr Speaker. I believe it is inappropriate for the member to refer to the absence of another member from the Chamber. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Actually the member is right. If he did do that then he should not. But I never heard him say that. The member is saying he did not do it? 
DAVID BENNETT 
: I said the Green Party not the member. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I think the member did breach the convention but just for Holly Walker it is a convention rather than a Standing Order I think. The problem is that when one draws attention to it all a member does is actually emphasise the fact of what has happened and that is generally not a good thing. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Can I just say that members should look at Speaker’s ruling 24/4. It is inappropriate to refer to the absence of members from the Chamber because each and every one of us at one stage or another needs to leave the Chamber. 
DAVID BENNETT 
: But I think it is sad that the Green Party will not support this bill. When it talks about the Resource Management Act and a road being 5 years old and that in times of austerity you do not want to take the road up and do anything that is just rubbish to be honest. This is something that many Parliaments have worked on over many years. It is something that is in the best interests of us as a country to think of the culture and heritage of our country. It is about paying tribute to those people who have made sacrifices for the freedoms we enjoy here in this room today. It is about having some pride in our history and doing the right thing. Maybe this will be a lesson for the Green Party should it ever be close to getting into Government that it may need to do the right thing when it is in Government and not what it thinks necessarily is in its best interests. 
Hon Christopher Finlayson 
: If David. 
DAVID BENNETT 
: That is a big if as the Minister says. It is very sad that in this House those members have not agreed to this bill today. But they did ask one question and that is why you want to do it. There is a reason and that is to get it finished by 2015 and that is what this bill is enabling the Government to do. It is to make sure that the effort that has gone in in past years is completed so that we have it ready in time for April 2015. That is a very important date on our political calendar and also on our country’s calendar. 
Hon Christopher Finlayson 
: Annette could be mayor when it’s opened. 
DAVID BENNETT 
: Yes we may have Annette as mayor when it opens we are hearing. This bill grants the necessary authorisations and property rights and works with the different departments to achieve this purpose. We look forward to Annette being there as the mayor. That should be an interesting process if that comes to fruition as well. 
This bill represents an important part of our culture and our history. The symbolism of memorial parks is very valid and important. Wellington is the capital of New Zealand. It is a place where you have large art and cultural meaning for this country. It is a place where Parliament is based. It is also fitting that we have a memorial of this stature and calibre to represent the immense sacrifices and the pride that we take in our country’s past and also in our ability to go forward together. I would like to recommend this bill to the House. I would like to thank the Minister and also the Labour Party for their support. We look forward to other parties in this House supporting it as it goes through. Thank you. 
ANDREW WILLIAMS (NZ First) 
: 
 I take a call on behalf of New Zealand First on the National War Memorial Park (Pukeahu) Empowering Bill. New Zealand First will be of course supporting this bill and supporting this initiative of the Government and the other agencies including Wellington City Council the New Zealand Transport Agency and the Ministry for Culture and Heritage. We believe this is a very worthy project as we approach the centenary of World War I and it is very fitting that such a project is undertaken as a significant milestone in the commemorations of some of our most notable parts of New Zealand history. 
For those of us who have been to the National War Memorial on a number of occasions we are always most impressed with the memorial itself the wonderful building that is there and what it offers in terms of that building structure. But it has always been my impression that it is a great shame that the road immediately in front of it is a busy road. In a sense you know it is a big drawback from the war memorial that is there and the National War Memorial building. It is not fitting that it is such a busy arterial route. When you compare it with the great capitals of the world and their national memorials and you think of the likes of Canberra and you think of the likes of Washington DC—my youngest daughter Bryony was in Washington DC this week and she commented on being able to walk around and see the marvellous monuments and the wonderful memorials in Washington DC—it is very notable that in many countries a huge amount of national pride is often in their national war memorials. We have also seen that in more recent years with the wonderful memorials that have been developed in London including the New Zealand memorial that is there now in Hyde Park. So I think it is very fitting that finally New Zealand should make its National War Memorial an even more fitting place something with a little bit more peace and tranquillity and something with a little bit more of the natural New Zealand quiet ambience rather than a busy road roaring straight past the memorial. 
I have looked at the concept drawings and the concept designs for this and it is a beautiful park that is envisaged there with the former road disappearing underneath and well out of sight and sound. As a result it will allow larger numbers of people to go and visit the war memorial and take in the whole ambience and feeling of the place. Also when there are parades—and I have been to a number of parades there—it will be a much nicer place for our veterans for our military for those involved with the parades and for the public who are attending to have a more fitting peaceful and more observant commemoration. 
I was talking with my colleague Richard Pryor here before. Both of us have attended—not Richard Pryor; Richard Prosser. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Prosser. Prosser. 
ANDREW WILLIAMS 
: Sorry. It is not a day for surnames is it Mr Assistant Speaker? I apologise to my colleague and I am sure he will call me names afterwards as well. 
But Richard Prosser and I were just noting that we have both attended Anzac Day ceremonies at the Anzac War Memorial in the centre of Sydney and how lovely that is with the ponds and the park that surrounds it and how it is such a wonderful fitting situation for their Anzac Day ceremonies. I can see this being the same situation for the capital city of our country. This park in the future will be a wonderful place for more and more people to go to. Being an Aucklander I say that we are very proud of our cenotaph up there in the middle of the Auckland Domain next to the Auckland War Memorial Museum and how wonderful it is to have that surrounded by such a large expanse of green space. Similarly it would be very appropriate for the capital city to have a similar park of a reasonable size around the National War Memorial so that again it can be commemorated in that way. 
We owe a great debt to our veterans and as the veterans’ affairs spokesman for New Zealand First I say that we are very conscious of honouring them and remembering them. Here in this Chamber when we look at the names around the walls here there are great names such as Passchendaele behind me Gallipoli over there Messines and Egypt. There are so many wonderful names and of course more recent ones such as Viet Nam Korea Malaya and others. While we honour our veterans and our great commitment to keeping world peace around the world it is very fitting that we also do this at our National War Memorial in this way. 
Much of the cost does involve the actual road and many people who perhaps are not so enthusiastic about this might look at the cost but much of that is taken up in the actual tunnelling of this road which is going to be of long-term benefit to Wellington and long-term benefit to traffic movements in that area. Effectively the park costs and the memorial costs are an insignificant amount in the greater scheme of things. 
We believe that this legislation is important. Time is of the essence. It will take a reasonable amount of time to get this project completed. We cannot wait until after the World War I commemorations to have it completed so it is important that it is done in a timely fashion. In matters of national importance such as this where we would hope there would be agreement across the House to get this done we would certainly look to have this bill expedited through this House as quickly as possible so that this project can really get some traction and really make some progress very very quickly. 
Just in closing New Zealand First supports this. We think it is very very timely. It is another way that we can honour those who have fallen in the name of our country and who have made the ultimate sacrifice for this country. They have made the ultimate sacrifice on behalf of our nation in order for us to be the good democracy that we are. In that respect this is a very very small price to pay to ensure that we continue to honour what is a great legacy that has been left by those who have fallen in the past and by those who have gone off to war on behalf of New Zealand. So New Zealand First is very happy to commend this bill to the House and we will be supporting it. 
JAMI-LEE ROSS (National—Botany) 
: 
 It is a genuine pleasure to speak in favour of this piece of legislation the National War Memorial Park (Pukeahu) Empowering Bill and it has been very good to see you know the working together of the parties with the exception of one on this bill and the genuine and the passionate and the well-intentioned speeches of all members so far on this piece of legislation. 
I was listening very carefully to the speech of the Minister for Arts Culture and Heritage. It was good to hear that when the war memorial was first established in this country it was a unanimous vote in this Parliament that saw it established. As we come close to the centenary of the Gallipoli landings and as we talk about a project that is designed to commemorate not only that landing and that war but also other conflicts that New Zealanders have served this country well in in overseas theatres remembering those people and commemorating the sacrifice that they have made for this country it is fitting that we should also have cross-party support in this Chamber. 
I would ask those who have indicated some opposition to this bill to really reconsider whether or not that is the right thing to be doing. Yes there are some questions about the process. Yes there are some people who may have some unease at the fact that legislation of this type is being proposed or is going through this Parliament in the fashion that it is but we have to remember the importance and the significance of this project. We have to remember that we want to see this project in place and completed by Anzac Day in 2015 and to fail to meet that deadline would be absolutely unacceptable. 
I listened carefully also to the speech from the Hon Annette King and I was pleased to hear of all the work that Labour did for the National War Memorial. The Minister for Arts Culture and Heritage Chris Finlayson also spoke at great length about the consultation and the efforts that he has put in as Minister on behalf of this Government to try to get the National War Memorial to the point where we can have the park to remember New Zealanders in 2015. 
Looking through the regulatory impact statement there are some interesting points that are worth noting and I would like to cover just a couple of those. I was quite interested to see that there was some recent consultation done with the community in 2011. It was around the Wellington Northern Corridor road of national significance. There were many hundreds of submissions to that process and 550 of those submissions indicated that they would like to see a realignment or a redesign of Buckle Street. So this legislation and the proposal we have in front of us would fulfil the wishes of those 550 submitters. 
It was also interesting to see in the regulatory impact statement that a lot of work has gone in with the Wellington City Council the New Zealand RSA and indeed Mt Cook School all of which have indicated their support for this option. There is support from a very wide range of people for this particular project and it is important that those people’s wishes as well as the wishes of all New Zealanders to have a grand memorial for the centenary of the Gallipoli landings is in place in time. 
In terms of the process yes there is some legislation that is being proposed here that would override some normal processes that we would go through but I think it is important to note in the House that there are also some important safeguards that are being put into this legislation. Firstly there is the disallowance procedure that is in the legislation. When such wide-ranging powers would be granted to the Governor-General to make Orders in Council it is appropriate that the disallowance procedure be put in place and this bill does that. 
This bill also establishes a community forum for ongoing consultation with locals in the area and interested stakeholders. There is also a review panel that is being established. Although it is not desirable in the normal course of business to be overriding other pieces of legislation in the fashion that this does for such a significant project it is absolutely appropriate and the timing issue is essential so that we meet the deadlines the strict deadlines we have for this project. The corresponding actions that have been taken in the legislation around review and around consultation are also appropriate and should be welcomed and they should mitigate many of the concerns that some people may have. 
This is a very very important piece of legislation to commemorate a very important date when many thousands of New Zealanders served their country in war and I commend the bill to the House. 
PHIL TWYFORD (Labour—Te Atatu) 
: 
 It is my pleasure to contribute to this debate on the National War Memorial Park (Pukeahu) Empowering Bill. This legislation would not have been necessary if National had not taken away the project funding that Labour had allocated in the closing period of the fifth Labour Government. The park would have been ready for the 2015 centenary of Gallipoli and we would not have had the need in this House to pass empowering legislation if that had been done. But I want to say that Labour supports this bill. We believe that New Zealanders will see the need for this legislation and that New Zealanders will appreciate the plan that is in place for this war memorial park. 
I want to say to the Green Party members here today “Enough with the sanctimony. Enough.” I feel absolute exasperation that the Greens would come here and lecture the House on this bill because it overrides the Resource Management Act because it overrides the Historic Places Act and because it overrides the Public Works Act. These bits of legislation are not some kind of religion. They are not our constitution. They are legislation that we have there to govern the process of resource management and land use. They are practical bits of information that are there for practical purposes. With this project we are not rebuilding the Clyde Dam and we are not desecrating some national landscape. What we are doing is converting a piece of urban cityscape into what will undoubtedly be a fantastic national memorial for the people of Wellington and the people of this country and I urge the Greens to reconsider their position on this. 
This as Iain Lees-Galloway said will be a park of national significance. I want to just talk in the minutes remaining about how this is an exercise in constructing and building a special place in Wellington for people to come—a place of contemplation a place of reflection. I think it will be a tremendous contribution to our national life as a country. Like other members will have done I have looked at the concept drawings for the memorial park and I think they are appropriate. They are grand and they will leave as a legacy for this country a really special place for people to come and reflect on our history and on the sacrifice that generations of New Zealanders—men and women who fought overseas and particularly those who gave their lives—have made. 
I just want to stress how valuable it is to create places like this. There are one or two others in New Zealand that I can think of. The Waitangi Treaty grounds are another place where the history is palpable when you are there. It is a place of reflection where you can contemplate this nation’s modern history. I think as Andrew Williams said that the cenotaph at the Auckland War Memorial Museum is another similar place. In another city that I am familiar with in Washington DC where I lived for several years the Lincoln Memorial was perhaps my favourite of all the Washington memorials—an amazing place where people would go day and night to remember the abolition of slavery the civil war and in fact the civil rights movement. That particular place in Washington DC is a remarkable place to go to visit to soak up the ambience and to reflect on the country’s history. 
I also want to just note that it is interesting I think that in order to create this park of national significance it is necessary to remove the traffic from this place. It would be unthinkable to build a war memorial park of the kind of scale and the ambition and the quality that we will want for this park without getting cars out of it by building a tunnel. Increasingly in our cities people are recognising that it is time to reclaim the streets of our cities from the car because when you—as we have done for so many years—build cities around the motorcar it creates uncivilised environments that are not fit for pedestrians are not fit for people to spend any time in and are certainly not fit for places of reflection or contemplation. I think that we are seeing more and more in our cities a pedestrianisation and a reclaiming of our streets from the cars. 
The last point that I wanted to make is about the number of provisions that Labour is requesting be inserted into the bill as a condition of our supporting the legislation. We ask the Transport and Industrial Relations Committee to consider these matters. First that the role of the review panel that is established under this legislation be widened to include oversight of the consents. Given the range of consents and the overriding of appeal rights under this bill we think it would give the public some confidence in the process if the review panel is given this widened role. That is especially important in terms of the environmental and heritage considerations. We also believe that the review panel should report on its work on a regular—perhaps 6-monthly—basis to a select committee such as the Regulations Review Committee. We would also like to see prior consultation procedures with interested stakeholders before Orders in Council are proposed. The community forum that this bill would establish could fulfil that role. Finally we would also like to put into the law a role for the community forum in being consulted on the design of the park. I know that Grant Robertson who is the local member of Parliament has some concerns about elements of the design of the park particularly around vehicle access. We think it would be useful to involve the local community and interested parties in the design of the park. 
This bill sets the stage for what we believe will be a fantastic memorial for those who have given their lives overseas for our country. It will create an outstanding public space in Wellington for all New Zealanders and particularly for the people of the Mount Cook community. This is going to be an extraordinary addition to their community. I want to finally pay tribute to the former Prime Minister Helen Clark whose vision it was after the opening of the Tomb of the Unknown Warrior to develop the national memorial in this way. Helen Clark had that vision she took the initial steps funding was put in place and the process was set in motion to build this memorial park. Labour is pleased that the Government has finally come to its senses and brought this bill to the House. Thank you. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
CHRIS AUCHINVOLE (National) 
: 
 I rise to speak in favour of the National War Memorial Park (Pukeahu) Empowering Bill— 
Hon Nathan Guy 
: A very good bill. 
CHRIS AUCHINVOLE 
 —sponsored by the Minister for Arts Culture and Heritage Chris Finlayson. It is indeed as the Hon Nathan Guy says a very good bill and it has received accolades from pretty much all sides of the House. There was— 
Charles Chauvel 
: That’s going a little far. 
Hon Nathan Guy 
: Charles Chauvel supports it. 
CHRIS AUCHINVOLE 
: Well no no I do not remember Mr Chauvel hearing all of the debate but he will— 
Chris Hipkins 
: Oh it was better without the microphone. 
CHRIS AUCHINVOLE 
: God gives some people a good voice. Mr Chauvel will remember the remarks made by the Hon Annette King which were praiseworthy indeed of the concept the design the proposal and the need in fact to have a place of reverence in our capital city because really we do not have one at the moment. 
This empowering bill grants the necessary statutory authorisations and property rights for the project to the New Zealand Transport Agency and the Ministry for Culture and Heritage to complete the roading and landscaping in time for the 2015 Anzac Day commemorations—100 years. The bill is vital to the creation of a National War Memorial Park for Wellington providing the certainty necessary for its completion by April 2015 while ensuring the integration of the park and roading networks within the wider Wellington City. 
If I may without any undue offence suggest that Mr Hughes from the Green Party was just a little mean-spirited I thought in concentrating on the sacrosanct nature— 
Hon Nathan Guy 
: They hate roads the Greens. 
CHRIS AUCHINVOLE 
: —well on the sacrosanct nature of process. I think this is an occasion when process can be fitted in to meet the requirement and I am sure that that will be the case. 
Scott Simpson 
: Sanctimonious. 
CHRIS AUCHINVOLE 
: It was a little sanctimonious I guess. New Zealanders attach a special importance to our military history as well as to our environmental processes and the reverence we continue to have for those who made the ultimate sacrifice in the defence of this nation and what it stands for. Indeed in October I hope to be in Passchendaele paying due reverence to great-uncles who went into that particular dreadful battle where New Zealand lost so many. It will be a moment of reflection. I think it will be great that we have the same opportunity for New Zealanders and for people from overseas to engage in reverence in New Zealand. It will be a fitting place for Kiwis and others to congregate on major occasions or to reflect at any time on these great sacrifices. 
The project will ensure that Anzac Day commemorations in 2015 will take place in a new open space flanked on either side by landscaped areas with trees seating cycleways and walking paths. 
Scott Simpson 
: Very appropriate. 
CHRIS AUCHINVOLE 
: It is indeed appropriate and befitting for such a historic moment in the history of both our nation and our allies across the Tasman Sea. Indeed the Australian Government has contributed A$5 million of its own for the development of an Australian memorial which will stand with pride opposite the National War Memorial as a symbol of the bond and the shared history between our two nations. 
Hon Nathan Guy 
: That’s right—the Anzac spirit. 
CHRIS AUCHINVOLE 
: That is the Anzac spirit. This memorial plan has been crafted with great care and respect. And it was again just a tad unfortunate when listening to the Hon Annette King whom I have great respect for as a long-serving politician to hear a little sting in the tail that perhaps we have been dilatory over the last 4 years in getting things done. May I suggest with great respect to Annette King who did leave Government with a plan that that plan was not simply dispensed with and ignored. It was considered. There is a lot of difference between being a little casual in getting on with things and working extremely hard to ensure the best results and that is what Mr Finlayson demanded from the team that has been working on this. 
The memorial plan has been crafted with great care and respect but a number of problems presently hinder the completion of this project by April 2015. These are practical physical problems such as the busy State Highway 1 which is currently in the way of the site and which is clearly incompatible with a memorial status as a place of quiet contemplation and reflection for families dignitaries and visitors. You cannot have it quiet except for the cars. It is quiet or it is not. Also under existing statutory processes it would be impossible to guarantee the necessary statutory authorisations rights and consents to see this project completed on time hence my mild criticism of the Greens. The whole purpose of this bill is to make sure that the project is done on time. As my colleagues on this side have articulated it is time to resolve these problems once and for all. 
Under this bill the Governor-General will be able to grant additional statutory authorisations by Order in Council and enable the relevant agencies to obtain additional property rights in the event that any unforeseen authorisation and rights are legally required in order to complete the project on time and to avoid remedy or mitigate any actual or potential adverse effects on the environment. We are not ignoring the environment. Indeed I think Annette King—whose speech I quite enjoyed and I am showing her that I listened—illustrated that you would have a tunnel underneath a flyover round the cricket grounds and then go straight into the tunnel like Hobbiton. 
The bill also sets the conditions that will apply to the statutory authorisations and provides a process for the independent certification of plans and documents required by conditions of the authorisations. This is to ensure that both the New Zealand Transport Agency and the Minister for Arts Culture and Heritage comply with the usual construction requirements and environmental standards that they would have had to meet if the authorisations had been granted under normal process. The provisions relating to Orders in Council and the removal of appeal and objection rights will expire at the close of 31 July 2015. 
To put it simply without this bill the development of this site and its monuments would not be possible on a timetable basis in the foreseeable future. This is a roll-your-sleeves-up grunty little bill that gets the job done. Underneath that or overarching that it will produce not only something that is practical and well done but something that is beautiful that we can all celebrate in and that we can all enjoy. Thank you. 
Mr DEPUTY SPEAKER 
: Charles Chauvel is this a split call? 
Charles Chauvel 
: It is Mr Deputy Speaker. Thank you. 
Mr DEPUTY SPEAKER 
: Thank you. Charles Chauvel. [ 
Interruption 
] 
CHARLES CHAUVEL (Labour) 
: 
 Well here we go: a spiteful comment from the Minister for Arts Culture and Heritage setting the tone for the debate as he has done in respect of this matter ever since it began. The reality of this entire issue is that had that member not held such a spiteful hatred for Helen Clark which he repeats ad nauseam at every opportunity this legislation the National War Memorial Park (Pukeahu) Empowering Bill would not be necessary. We would not be taking up Parliament’s time with it at the moment because the reality is that when Labour left office this park was ready to go. 
Hon Christopher Finlayson 
: No it wasn’t. 
CHARLES CHAUVEL 
: Everything was ready—everything was ready—and that member because of his petty spiteful nasty bitchy little hatred of Helen Clark could not stand the idea that this project would proceed as planned. So what did he do? Never mind our proud traditions of bipartisanship around commemorating our fallen and never mind the need to expedite the commemoration of Gallipoli; that member stopped the project in its tracks. 
That is why we are here tonight having to pass special legislation in its first reading—legislation that on its face is objectionable because it suspends the Resource Management Act and it suspends the planning process. It is now a matter where Grant Robertson and Annette King have had to go to Gerry Brownlee—not to that worthless Minister Chris Finlayson because that Minister would not have any power or authority to grant these guarantees—and Gerry Brownlee very properly in the spirit of bipartisanship has said: “Yes. This isn’t an ideal situation. We will grant you some concessions around process to make sure that our suspension of the ordinary rules”—our suspension of the ordinary rules forced on us by the spiteful Minister for Arts Culture and Heritage who just cannot stand the idea of Helen Clark having credit for anything—“actually proceeds.” 
 That is the position we are in tonight. The position that we on this side of the House are in is that we are having to support this legislation because we are patriots. We do want to see this park completed in good order and in time for the Gallipoli commemorations. We do not like the fact that it has to be forced through this House without Resource Management Act approvals without the ordinary processes that would normally apply to it and that would have applied had the Minister sponsoring this bill not allowed his spite to interfere with his judgment—his hatred of the idea of Helen Clark having a legacy—and introduced this legislation as he has done years late in order to expedite this project. That is the problem that we face tonight. 
Contrary to what the earlier speaker said we are hardly giving this legislation accolades. We are saying well we are where we are. The anniversary is important it is a couple of years away. This job should have been completed by now but because of the incompetence of the Minister we are where we are and we are having to contemplate special empowering legislation in the great Muldoonist traditions of the National Party in order to get this legislation through. That is the political reality. 
Let me talk about the concessions that our deputy leader and our former deputy leader have negotiated as I understand it with the Minister of Transport. First of all there is going to be a review panel. That will be established in the legislation and its role will be widened to include oversight of the consents that are granted. Given the range of the consents and the overriding of the appeal rights that would normally exist we think it will give some measure of public confidence to the process if the review panel has this role. The review panel will report on a regular basis to a select committee—perhaps the Regulations Review Committee or another committee—so that there is proper parliamentary oversight. And there will be prior consultation procedures with interested stakeholders before Orders in Council are proposed. We also would like to see a role in law for the community forum which is proposed so that it is required to be consulted on the final design of the park. 
This is not an ideal situation. We will be proud to see the memorial erected. It should have been in place by now and it would be had the events that I have described not transpired. But as I say we are where we are. With the guarantees as to process that Labour has negotiated we will be supporting this legislation to select committee and we hope that those guarantees will survive. 
HOLLY WALKER (Green) 
: 
 I am pleased to speak on behalf of the Green Party on this National War Memorial Park (Pukeahu) Empowering Bill. I want to start by reiterating the Green Party’s and indeed I am sure all members’ profound sorrow at the loss of five of our soldiers in Afghanistan in recent weeks. This tragic loss I think really throws the issue of how best to commemorate and how best to memorialise war and our soldiers lost in armed conflict into a sharp and very tragic relief at this particular time. 
In that context I first want to emphasise that the Green Party is fully in support of having a National War Memorial Park. I think that other members have commented on the renewed interest in recent years in the commemoration of our military history and in particular the increased interest from young people in Anzac Day celebrations. We support the creation of this park to allow greater space for that reflection and that commemoration to take place particularly to reflect on that tragic loss of life both historically and more recently; to consider and question the role of war and armed conflict; and to think about how best to promote peace. National war memorials like the park proposed in this bill can help us to do that and to do that thinking as a nation and that is very important. 
It is important to do this in time to mark the centenary of Gallipoli in 2015 which is clearly a very significant anniversary. It also has the benefit of creating some vital public space in our capital city and for our national enjoyment. However we cannot and do not support the extraordinary powers sought by the Government in this bill—the power to grant rights and consents by Order in Council without recourse to Parliament and the power to override the Resource Management Act the Historic Places Act and the Public Works Work—and the truncated select committee process that has been proposed for this bill. There is an absurdly short period of 3 weeks for the committee to report back to the House. 
I heard an earlier speaker—David Bennett I believe it was—refer to the sacrifice that has been made by our soldiers over history for the rights and freedoms that we enjoy here in this House today. I say to the House that one of those rights and freedoms is democracy and responsible Government. We do not honour those rights and freedoms that our soldiers fought for by brushing the law aside in order to build a war memorial which could have been done in a timely fashion had it not been prevaricated on and cancelled by the current Government. It could have been built on time with due process and probably less cost if the Government had not cancelled funding for the project in 2009. The reason we are here today looking at this extraordinary legislation in an extraordinarily short time frame is that prevarication. There would have been no need for this legislation as the previous speaker has pointed out and the bill could have proceeded with the cross-party support that it deserves. 
What this bill does is continue a pattern of behaviour from this Government in giving itself extraordinary powers to override the law when it is inconvenient. We have seen it with the dismissal of the Environment Canterbury councillors we have seen it with the creation of Orders in Council in relation to the Canterbury Earthquake Recovery Authority in Christchurch and we have seen it with the Auckland super-city. This bill is just another example of this Government pushing the law to one side when it is deemed politically convenient to do so. 
I want to address some of the comments made by Phil Twyford an earlier speaker because I was actually quite surprised to hear from him some pretty dismissive comments about due process. He said that the Resource Management Act is just a piece of paper. He said that it is not our constitution; it is just a piece of paper. He said that it is not like we are ramming through some outstanding landscape. That is what Phil Twyford said. I wonder whether Charles Chauvel heard that speech because I agree with Charles Chauvel in his previous contribution just now that elements of this bill are very objectionable from a process perspective. If the Labour Party really does think that we can put them to one side in such an easy manner then I find that quite concerning. 
The Green Party will look to engage constructively and to improve this bill in the select committee. I am pleased to hear from Labour members some of the likely concessions that they have negotiated. Those are the kinds of things that may make it more palatable. Our support at this stage is open. We are voting against this bill at its first reading at the moment only because we have such profound concerns with the process. Thank you. 
SIMON O’CONNOR (National—Tamaki) 
: 
 “At the going down of the sun and in the morning We will remember them.” I think that is the context in which we debate this National War Memorial Park (Pukeahu) Empowering Bill. Although I will turn some attention to the comments from the Opposition I think it is important to remind a previous speaker Mr Chauvel that—not that I am a military man myself—a frontal attack on to an entrenched position using words like “spiteful” and “hate” is actually fraught with danger and you will get shot to pieces if not by me necessarily. 
This is an incredibly important bill. Every bill that comes before this House is important and every bill by its nature is democratic as it is debated and discussed. As I begin I do want to take umbrage with the previous speaker Holly Walker and others from the Green Party in particular who have talked about this bill as being anti-democratic and not following process and so forth. I sort of think ipso facto the fact that we are standing here in this House progressing a piece of legislation through its stages debating and discussing is by its nature democratic. 
But you see the Greens betrayed themselves when they made an earlier comment that “We are willing to work with anyone.” Yes they are—so long as everyone agrees with them. I might need to remind the Greens that that is not democracy. Democracy is about difference and debate and coming to a consensus. It is if I may use the words of Phil Twyford sanctimonious to stand and lecture people that consensus means accepting only a particular viewpoint. I think it is also most unfortunate that people like me and others have had to react tonight to this debate in what has been a really important discussion on a war memorial to honour our war dead. 
I think it is important too to acknowledge what generally has been a very positive debate. I do want to acknowledge previous speakers including from the Greens who have uttered some very positive words but particularly speakers from Labour from New Zealand First—even if they might get their colleague’s name wrong occasionally and I myself will probably fall into that trap now. There were some really positive statements here. 
 It is important that we remember. Remembrance is an important element of our human nature an important part because to remember is an attempt to not repeat the mistakes. We stand in a House of memory here. Different speakers have talked about the plaques that are on the wall and have acknowledged too the tragedies of the five deaths in recent weeks. Memory of these events is important. So as we turn now to the National War Memorial the Carillon and the development of the park it is important that we can create a space that enables us as Kiwis as we approach 100 years since 1915 to remember. But remembering is not just an action of the past but an action now of the current. We have men and women serving overseas—fine men and women with families—who are there serving us and continuing to serve. So it is really important as we debate this bill and as we remember in 2015 when this national park is opened that we acknowledge not only those who have served us in the past but those who continue to serve us now. 
There has been some discussion that there is not enough due process. I think it is important quickly to turn to the first words of the Minister for Arts Culture and Heritage about the array of discussions that have been had— 
Hon Christopher Finlayson 
: Over 4 years. 
SIMON O’CONNOR 
: Over 4 years the Minister reminds me; over 4 years of discussions with parties across the country here in Wellington. It is vitally important to put that in context because this bill is not an affront to the Resource Management Act. This is not an affront to previous legislation. This is an opportunity to take those discussions to move the bill speedily through so that we can rightly—rightly—celebrate in 2015. 
I think it is important too to note that the role of the Governor-General—and I say this as someone who is quite interested in things constitutional—is actually incredibly important and an essential part of New Zealand’s constitutional and democratic structure. Orders in Council are not unusual and I think it is difficult to start scaremongering around that point. I just want to highlight that. 
But I want to return to the importance of the national memorial. In 2015 we will remember that 100 years ago Kiwis and Australians landed on the shores of Gallipoli and that they gave their lives. The very least we can do here tonight is to move this bill through simply gently and kindly— 
Scott Simpson 
: With dignity. 
SIMON O’CONNOR 
: —with dignity and in a way that was not accorded—[ 
Interruption 
]; as we are now hearing from the Opposition—to our men who landed on those shores. In 2015 we will remember them and tonight we begin that process. Again it is lamentable that in doing so we have I think brought some dishonour amongst them. But I hope that on finishing this speech tonight we return some honour to those men to those fallen and that all of us here in this House will unite to celebrate in 2015 the building of this national park. 
A party vote was called for on the question  
That the National War Memorial Park (Pukeahu) Empowering Bill be now read a first time. 
Ayes 105 
New Zealand National 59; New Zealand Labour 34; New Zealand First 8; Maori Party 2; ACT New Zealand 1; United Future 1. 
Noes 14 
Green Party 13; Mana 1. 
Bill read a first time. 
Bill referred to the Transport and Industrial Relations Committee. 
Hon CHRISTOPHER FINLAYSON (Minister for Arts Culture and Heritage) 
: 
 I move  
That the Transport and Industrial Relations Committee report the bill to the House on or before 18 September 2012 and that the committee have authority to meet at any time while the House is sitting (except during oral questions) during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 188 and 191(1)(b) and (c). 
Motion agreed to. 
Taxation (Annual Rates Returns Filing and Remedial Matters) Bill 
In Committee 
Part 1 Annual rates of income tax 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 I am very pleased to be able to take a call on Part 1 of the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill where we are being asked— 
Todd McClay 
: Not as pleased as the chairman. 
Dr DAVID CLARK 
: —to confirm the annual rates of income tax and I hope it also pleases the chairman that I take a call at this stage. The rates of income tax are very critical to outcomes in our society and I want to put firmly my view that this part of the bill is one of the ones that we struggle with the most. We will support the broader bill but I would like to have a quick look at the outcomes that can be attributed to the current rates of income tax and ask the Minister of Revenue why we should confirm these particular sets of tax rates now. 
Recent reports have indicated pretty clearly that we are doing poorly as a society. We are becoming more and more unequal. A good deal of this inequality in our society comes as a direct result of the so-called tax switch in 2010. And we know that in that tax switch 44 percent of the value of the tax cuts that National gave out went to the top 10 percent of earners and just 2 percent of the value of those tax cuts went to the bottom 20 percent of earners in New Zealand. That tax switch benefited greatly those at the top—some pocketing an extra $1000 a week—while those at the bottom very quickly had any tax cut gobbled up in GST. 
There have been reports in recent days and weeks that indicate that the effects of the current tax rates are disastrous—increasingly disastrous. In fact they were labelled quite accurately by the leader of the Labour Party as a bloody disgrace. Firstly I want to look at  
The Netherlands Study 
 commissioned by Every Child Counts which came out on the 22nd of this month. It indicated very clearly that we need to invest in policies that support children and parents and ensure that they have the right tools and support if we want to eradicate poverty in this country. And all the evidence shows according to the report that poor outcomes for kids in poverty cost taxpayers a good deal and that is estimated at between $6 billion and $8 billion a year. New Zealand spends around a third less each year than the Nordic countries on this. The Netherlands spends less than half but continues to achieve excellent outcomes. That is the first report. 
The next report that we have had recently was the  
Household incomes in New Zealand 
 report which indicated that inequalities in New Zealand are worse than ever. The median income across all households fell by 3 percent between 2009 and 2011. That follows 15 years of steady growth in those median incomes. We also know that without Working for Families a Labour policy things would be a lot worse in terms of that inequality in our country and the outcomes for our citizens in poverty would be a lot better if we had both Working for Families and a fairer set of tax policies. 
The fall of 3 percent in real terms in the income of those people on the median wage is one thing but we also know that the same thing led to an effect where the proportion of kids in poverty in New Zealand has gone from 15 percent to 21 percent between 2007 and 2011. This is through policies that can be tied back to a number of things including things like health care and other proactive measures but also very firmly tied back actually to particular tax choices that we make. 
We are being asked here I remind the Committee to affirm the annual rates of income tax in Part 1. We are being asked to say that the current set of policies the Government has in the tax area are fair and are leading to positive outcomes for our citizens. I wish to argue that they are not. 
The Children’s Commissioner’s report is the third of these reports that has come out recently that points to very unequal outcomes that I wish to draw attention to. It indicates a 25 percent incidence of child poverty—270000 children in poverty. The costs of a poor start as we have said amount to around $6 billion for those children living in poverty which we pick up as taxpayers every year. So I want to argue that this particular set of tax rates benefits the wealthiest in our society in the short term but is actually bad for all of us in the long term as it leads to disinvestment in social goods and also disinvestment in those things that are good for all of us in the economy including public services and the right incentives as I said to grow our economy. 
We have also learnt in recent days that 90 of the 100 wealthiest New Zealanders are not on the top tax rate—90 of the 100 wealthiest New Zealanders are not on the top tax rate—and that in fact a full 50 percent of those with wealth over $50 million are not on the top tax rate in New Zealand. They are able to structure their affairs in such a way that they do not pay their fair share of tax. Labour stands for fair taxes in a fair economy and we would impose a capital gains tax that would make sure that people did not avoid paying the tax that they are due to pay that they would carry their fair share in terms of taxation but also that a neutral signal is sent to the investors in respect of the productive sector. When people invest their money they make a choice about whether it is better for them to invest in productive assets which are good in fact for all of New Zealand in terms of exports or to choose as they currently often do to put money into the housing sector where the returns are artificially distorted by the absence of a capital gains tax. 
There are only three countries in the OECD that do not currently have a capital gains tax. This Government is choosing not to put one in. We are told—the rumour is—that that is because the current tax capabilities in the department are not up to scratch. The computer system could not handle a capital gains tax and that is one reason why the Government cannot go near it. Mr Key has pointed to that in a Valentine’s Day promise. He talked about $1 billion that needed to be spent to remedy this problem. That does not seem to have been spent. We have no timetable no understanding of when our tax system will be able to handle the changes that we need as a country. In fact we are left confirming current policies by and large because our tax computing system will not handle the big changes that New Zealand needs to grow its economy to be an effective country in terms of addressing the issues of poverty and also to make sure that businesses have the environment they need to grow exports. Instead what we are faced with is a growing balance of trade deficits and children increasingly living in poverty. The largest gap between rich and poor that New Zealand has ever had on record is what we are faced with this week. 
It is a bloody disgrace. David Shearer is right. We need to address these things. We need a fairer tax system where all New Zealanders know that if they put their shoulder to the wheel they can get ahead they can contribute they can put food on the table for their families that is nutritious and healthy and they can afford to buy the shoes they need for school the raincoats the textbooks and all the other things that are necessary for kids to succeed and not feel like society is against them. 
I put it to you that this current annual rates of income tax confirmation should be thoroughly questioned by all sides of the Committee because in so far as National has a plan to address these issues of poverty— 
Todd McClay 
: We have a plan. We have a plan. 
Dr DAVID CLARK 
: —and inequality it is not working. We have heard of 120-point plans. We do not actually see any plans with measurable targets. As Mr McClay points out they say that they have a plan but we do not see any with measurable targets and we certainly do not see any targets being achieved. The real economy is smaller now than it was when National came here. The only thing that keeps the economy growing is population growth. Real wages are lower than they were in 2008. The median wage we have learnt is down 3 percent and people are suffering. This Government is not delivering the brighter future that was promised. It is delivering a poor shadow of that and New Zealanders are tiring of it. They wish for stronger tax policy that would address these inequities and instead we are asked to confirm the status quo. I put it to you that that is not an adequate solution. Thank you. 
TODD McCLAY (National—Rotorua) 
: 
 I have just said to my colleague beside me the senior Government whip Michael Woodhouse to wake up. You are not allowed to sleep in this House. He said that it was not his fault—he had listened to the beginning the middle and the end of the speech from the last member David Clark. How is it that two MPs from Dunedin one from Dunedin North and another MP representing Dunedin South can have such a different grasp of reality when it comes to issues as important to New Zealanders as this? One is grounded in reality and one in the area of fanciful land and of course it is Mr Woodhouse who has his feet firmly on the ground. 
What we heard from the last speaker in this debate was wishful thinking. The one point that I take from what Mr Clark said was to impose more tax. He said: “Impose more tax.” He said that David Shearer is right; impose more tax. Well he is actually not right he is left but he is so much further left than what people in this country want at this time that it concerns me greatly for members opposite who believe that their leader is right. Impose more tax on New Zealanders. 
We heard about a capital gains tax—capital gains tax. We heard about it again recycled from the last election—a capital gains tax on all businesses and farms on all houses on beach houses on everything that New Zealanders own. Those members will stand up in this Chamber and say: “No no. That wasn’t what we meant before the last election. Indeed we had a good plan before the last election and New Zealanders just didn’t understand it.” We hear that from the Labour Opposition all the time. I would say that not only did New Zealanders understand but they rejected imposing more tax they rejected an unfair capital gains tax and they elected the policy that is before us delivered by the honourable Minister in the chair the Minister of Revenue. 
The Finance and Expenditure Committee had an opportunity to hear from all New Zealanders on this piece of legislation the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill and on Part 1 and we took extra time as we often do in the Finance and Expenditure Committee to listen to those submitters on their views. Although there were a range of views I believe that the bill that has been brought back to this Committee clearly follows the views of those whom we heard from from all around New Zealand. Those views were simple. They were that David Shearer is wrong—do not impose more unnecessary tax we do not want a capital gains tax; it will penalise us. We want a tax system that will benefit New Zealanders and give them an opportunity to invest in themselves and go forward. I commend this wonderful piece of legislation that the Minister of Revenue has brought to the House. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 It is a pleasure to take a call on this Taxation (Annual Rates Returns Filing and Remedial Matters) Bill—they always have such exciting titles. It is of course instructive to listen to the speech of the member who has just resumed his seat Todd McClay because he finished off by making a monumental blunder which was to say that because Labour might be considering some new forms of taxation to neutralise investment signals across the economy—a very good thing any economist would say—he is leaping to the conclusion that that would therefore mean a higher net tax burden. In fact that is not necessarily the case as it was not the case that the Government’s own tax switch was not tax neutral but $1 billion in the red over 4 years. That is leaving aside the fact that upper-income earners of course got a massive tax windfall and medium-wage earners just for example have gone backwards because their real wages even before tax are 3 percent lower today than they were when the current Government took office. 
Looking at the title of this bill and looking at Maggie Barry opposite and thinking about annuals and perennials I am reminded that although the rates revision is an annual gardening term the Minister in the chair is in fact a perennial Minister of Revenue. In fact so perennial is the Minister that he is now amending his own amendments to his own bills on previous amendments from previous Governments. A bit like the perennial spinach that keeps people fed with greens during the winter there is the perennial—I think you would say he is a spinach-type of Minister. There is no icing on that cake—well maybe there is actually. He is more a meat-and-potatoes man is he not? 
In all seriousness this seemingly innocuous bill does give the Labour Party some delicious opportunities to remind the good people of New Zealand for whom we are working so hard that we had some excellent policies for them that they narrowly—narrowly—failed to grasp at the last election some of which are still going to occupy an important place in their futures. For example there is KiwiSaver. This bill tinkers with KiwiSaver. National’s big bad savings secret was—wait for it—first off it reduced the member contribution rate from 4 percent to 2 percent. That was brave—that was brave. Now it is putting it up by precisely half the amount that it put it down last time—stirring stuff from the National Government! It half re-amended its own amendments. 
Todd McClay 
: It’s time for another shave. Ring the bell. 
Hon DAVID CUNLIFFE 
: Would the member for Rotorua like to consider that one in relative silence? That would be lovely. The really important thing about this is that Labour’s universal KiwiSaver plan achieved the objective of growing New Zealand’s savings rate by—wait for it—four times the rate of National’s tepid plan part of which we are rather sadly and forlornly debating tonight. That is four times more opportunity for New Zealand mums and dads to save for their future and to build up a nest egg. For somebody who starts out in work in their mid-20s and saves at the minimum wage that was going to be at least half a million dollars by the time they hit 65—a really important complement to their superannuation and a real opportunity to get a deposit on a house to have a nest egg and to buffer them from major ill fortune. But remember that Labour’s savings plan would have had a rate of savings increase four times faster than this tepid little amendment in this bill. 
Dr David Clark 
: Four times? 
Hon DAVID CUNLIFFE 
: Four times—Kiwis would be four times better off under Labour’s plan than under this so qualified little change which only half reverses the previous backsliding. 
Then of course we get on to the subject of GST. There are GST amendments in this bill. Well go ahead make our day. New Zealanders are not going to forget that GST has been raised by this Government on every single New Zealand family and on every single product: the school books the shoes the raincoats the milk the bread—you name it GST on these has all gone up to 15 percent. Kiwis cannot afford that—they cannot afford that. That was why Labour offered some relief in that area in the last— 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I cannot let the moment go without injecting a note of reality into this debate on the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill. The previous speaker David Cunliffe has waxed lyrical about KiwiSaver. 
Hon David Cunliffe 
: That wasn’t lyrical; that was prosaic. I waxed prosaic. 
Hon PETER DUNNE 
: Well he attempted to be lyrical. It certainly was very Harvardian prosaic shall we say. The point I want to make is simply this: the allegation put forward is that enrolments in the KiwiSaver scheme have somehow stalled since this Government came to office. I was there as the member acknowledges when the KiwiSaver scheme was devised and I should tell the Committee that in its original conception the plan was that we would hit—wait for it—700000 KiwiSavers by 2015. 
Todd McClay 
: How many are there? 
Hon PETER DUNNE 
: Seven hundred thousand by 2015. In February 2009 we topped a million. 
Chris Hipkins 
: That’s because it was a good idea. 
Hon PETER DUNNE 
: And the member opposite says it was a good idea. The members opposite are arguing if they would just bear with me for a moment that the steps this Government has taken have been to the detraction of KiwiSaver. As I say we have topped a million KiwiSavers in February 2009. A little over 2½ years later we are within days of hitting 2 million. The point I want to make to the Committee is that if this scheme has been so tarnished so tinkered with and so destroyed how come we have doubled its membership in 2½ years? I would have thought that had the claims the member was making had validity we would have seen a downward tail but in fact here we are going to be by the end of 2012 not at 700000 but probably three times that original prediction and twice what we were early in 2009. 
I listened to the previous speaker bar Mr Cunliffe Dr David Clark and Mr Cunliffe as well talk about the Labour Party’s taxation plans and I listened in vain. What I heard from both was a lament about current circumstances the fact that incomes have fallen with no reference to the global financial crisis the biggest crisis to hit the world since the Great Depression—no reference to that. And then I heard two suggestions made as to what we could do to rectify the situation. One was to bring in a capital gains tax. That was rejected by the electorate last year. It has been rejected by the electorate every time a political party has campaigned on it at every election over the last 30 to 40 years. It was also rejected substantially by the Tax Working Group in its work in 2009-10. But the Labour Party clings to it and when it realises it will not work it then falls back on the claim that the only reason we do not have it is because the Inland Revenue Department’s computer will not let us design one. The reality is that we are about to embark on the biggest re-design of our technology since the introduction of the first system in 1991 and we will be making announcements about that and the scope of it a little later in the year. 
So we are left with this: a lament from the Opposition about the annual tax rates and a failed plea that the overall solution lies in a capital gains tax. Then Dr Clark made the point that low-income people and middle-income people have been the big losers from the 2010 tax changes. In fact the bulk of the expenditure on those tax changes in 2010 were on changes to the bottom two steps. I do not think the Labour Party opposes the reduction in the bottom two steps of taxation which was where the bulk of the spending occurred. So what we come down to is this: the one thing that they have not said tonight is that their bold new plan is to put the top tax rate back up. What happened the last time they did that in 1999 was that we saw a massive explosion in the number of trusts—we saw a massive explosion post-1999 in the number of trusts—and tax avoidance and tax evasion and one of the reasons why we deliberately aligned the trust and the personal rates in 2010 was to stop— 
Hon Member 
: Who was the Minister of Revenue? 
Hon PETER DUNNE 
: Michael Cullen. The reason we deliberately aligned those rates was to stop that process—[ 
Bell rung 
] Mr Chair— 
Hon David Cunliffe 
: I raise a point of order Mr Chairperson. I seek to raise a point of order under Standing Order 107(2) “Misrepresentation”. The guidance in paragraph (2) is that “A member may not introduce any new matter or interrupt any member to explain a misquotation misunderstanding or misrepresentation.” and Standing Order 107(1) says that the member should rise when the member has resumed his seat. So now that the Minister has resumed his seat— 
The CHAIRPERSON (Eric Roy) 
: Sorry can you just tell me what the point of order is. 
Hon David Cunliffe 
: The misrepresentation is quite simple. The Minister has waxed on for 5 minutes suggesting that I had alleged that KiwiSaver was in decline— 
The CHAIRPERSON (Eric Roy) 
: Order! I am on my feet. The response the member should take is to take another call to correct it not to correct it by seeking to do it through a point of order which is not a way of introducing debating points. 
Hon PETER DUNNE 
: Mr Chairman. 
Hon David Cunliffe 
: Mr Chair. 
The CHAIRPERSON (Eric Roy) 
: I will hear the Minister who— 
Hon David Cunliffe 
: I’m seeking a call as per your instructions. 
The CHAIRPERSON (Eric Roy) 
: Yes and I am giving the call to the Minister. 
Hon David Cunliffe 
: He’s just had one. 
Hon PETER DUNNE 
: I sought the call again. 
The CHAIRPERSON (Eric Roy) 
: He sought the call and I had given him the call. You raised the point of order and I am now referring back to the call. 
Hon David Cunliffe 
: I raise a point of order Mr Chairperson. Without wishing to second-guess a call that has already been given you will remember that I was seeking a call previously when you gave the call to the Minister. I know that you are impartial and I wonder whether there is any room for you to reconsider your decision by giving the call back to the Opposition so that the— 
The CHAIRPERSON (Eric Roy) 
: OK. Order! I hear the member. Please sit. I hear the member. Firstly let me say that once a call is given it is given. That is the nature of this place and there is no rescinding of a call once it has been given. Also members might consider that it is part of the institution of this Committee that a Minister responding to speeches has unlimited calls and they generally get a call. I have given the call to the Minister. He shall now take the call. 
Hon PETER DUNNE 
: Thank you Mr Chairman and lest members be concerned I doubt that I will take the full 5 minutes because I was simply winding up on the point that the argument that the Opposition has put forward about the changes that it requires to be made to the tax system has been pretty inadequate. We have got an argument about raising the top tax rate when we know that what happened the last time that happened was an explosion in the number of trusts and an explosion in avoidance opportunities and the reason we have aligned the trust rate and the personal top tax rate was to curb that. The figures that the member—I am not sure whether it was Mr Cunliffe or Dr Clark; I cannot recall which one of them—quoted from the Council of Trade Unions’ release earlier in this week fall neatly in the middle of the period where that realignment was occurring. So the argument about how much people in the top income brackets in New Zealand were paying in tax needs to be taken into account from two perspectives. Firstly it falls within that period where we were shifting out of those massive evasion and avoidance opportunities created by trusts and secondly the figures also show an improvement from the previous time that survey was conducted. 
I am happy to support Part 1. I think it is an eminently sensible part of the bill. It confirms the annual tax rates. It confirms the direction in which we are moving. It confirms a reasonable and fair tax system for the vast majority of New Zealand taxpayers and it gives them the opportunity to get ahead in their own lives. 
The CHAIRPERSON (Eric Roy) 
: I am going to the Hon David Cunliffe. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 Thank you Mr Chairman as it gives me the opportunity to point out several inconsistencies in the contribution of the Minister in the chair the Minister of Revenue. Firstly at no stage has the Labour Party or this member said that KiwiSaver was in decline merely that the rate of growth of savings under Labour’s plan was four times that of the rate under National’s plan. The disturbing thing is that the Minister of Revenue cannot tell the difference between a plus sign and a minus sign in front of a financial aggregate. That is of deep concern. This bill in fact does explain something because as we noted earlier this bill is raising a contribution rate that the same Minister previously dropped. It may be that he was confused on one or both occasions and has not meant to do another U-turn in policy but it may be that it is deliberate and I ask the Minister to take a call and explain to the Committee whether he is confused or whether he actually meant to change his previous amendment again. 
But there is of course a bigger debate here and that is about how we grow New Zealand business. What we need for New Zealand businesses to grow—we get told as we go around the country—and what we hear from businesses is that they want the capital for growth. They want to be able to invest in good Kiwi jobs. 
David Bennett 
: They want a National Government. That’s what they want. 
Hon DAVID CUNLIFFE 
: And in dairy farms says the “member for dairy farm accumulation”. They want dairy farms they want businesses they want to be able to invest in them I say to—what should we say—the “member for tax efficiency in the rural sector”. That is a very good phrase. Members can figure that out amongst themselves. 
The issue here is that when all the incentives in the tax system are for people to get rich quick through property and not to build honest businesses this country suffers. We do not have as many higher-paying jobs. We do not have as many people in work. Unemployment in New Zealand has gone back up to nearly 7 percent years after the current Government told us it would be back down towards 5 percent. This is a scandal of epic proportions in New Zealand. New Zealanders are really suffering. The current Government does not have a plan. It has deserted the hopes and dreams of New Zealanders. If this is as good as it gets—changing the savings contribution rate from 2 percent to 3 percent after having cut it from 4 percent to 2 percent—then we really can conclude that this is a visionless vacuum of a Government. 
It makes no difference then whether this is an annual or a perennial bill—you know an annual bill from a perennial Minister which is where we started this little debate—because this Government is going to be time-limited not perennial and because New Zealanders are going to wake up and they are going to understand that if they want their kids to have a future in this country they are going to need a Government with some vision and some guts and some boldness that is actually going to have a plan to make some changes. 
Maggie Barry 
: They’ve got one. 
Hon DAVID CUNLIFFE 
: Oh they have got one says the “member for annuals”. They have got one she says. They have got such a great Government that those members did not ask the question of whether asset sales ought to have a Treaty examination before they started. So other than upper-income tax cuts which we are debating in this bill the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill they pinned their economic strategy on flogging off the family silver. But just like the renowned celebration in the brewery they could not even organise that properly. They could not organise a celebration in a brewery. They could not even flog off their own family silver—actually New Zealanders’ family silver. So inept are they that they did not ask themselves the question: “Oh I wonder whether there’s a Treaty problem. I wonder whether we should ask iwi. I wonder whether we should ask the Waitangi Tribunal.” Why does that matter in the context of this bill? They have just got themselves another $6 billion of fiscal hole because they could not even manage to do the wrong thing effectively. 
They are so hopeless that they are doing the wrong thing ineffectively which I suppose is a good thing but it only proves how hapless hopeless and ineffective they are. So I implore New Zealanders these clowns may think they are perennials but let us lop them off at the growth buds let us turn them into annuals and let us have an election this year. 
MICHAEL WOODHOUSE (National) 
: 
 It is my pleasure to take a call on this bill the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill. But before I do I must admonish my colleague the member for Rotorua gently for his faux pas in describing me as the member for Dunedin South. Of course I am the member in Dunedin South. In fact if you ask the constituents of Dunedin South they would probably say that I am the member for Dunedin South. The interesting thing is that if you ask the constituents in Dunedin North they would say that I am the member for Dunedin North as well. So I do understand the confusion. 
But in respect of the call from the member who is the Dunedin— 
Hon David Cunliffe 
: I raise a point of order Chairperson. It is clearly outside Speaker’s directions for a member to refer to himself even in the imagined third person as the member for Dunedin South when we all know that he has been the member rejected by— 
The CHAIRPERSON (Eric Roy) 
: Order! That is making a political point. The member actually made no such claim. 
MICHAEL WOODHOUSE 
: Thank you Mr Chairperson. That saves me speaking to the point of order. I will say of the member for Dunedin North that I think he is the revenue spokesman for Labour and I will give him this: he is definitely smarter than the previous spokesman on revenue that Labour had. Remember Stuart Nash? In fact I must say that I was very very worried that Mr Cunliffe was actually going into that territory that Mr Nash used to go to in wanting to tax farmers’ revenue. Remember that? Labour wanted to tax farmers’ revenue. 
The other credit that I will pay Dr Clark is that he is becoming very good—very good—at telling half a story extremely well. It is true according to recent reports that 50 percent of New Zealand’s top earners are not on the top tax rate. I want to elaborate on the comments of Mr Dunne the Minister of Revenue about why that is. I will remind members about the Tax Working Group report that was released in 2009. It said that up until the late 1980s and early 1990s we had one of the least distortionary tax systems in the world. By the time National came back to office in 2008 it was one of the most distortionary in the world with a punitive top tax rate but legitimate tax-planning opportunities for those high-income earners to move their income into trusts and into companies. Which was the Government that allowed those tax loopholes to occur? 
Todd McClay 
: Who? Who was it? 
MICHAEL WOODHOUSE 
: It was the previous Labour Government—actually asleep at the wheel in my view. But it is crocodile tears now to say that those top earners were given the opportunity to legitimately tax-plan and then criticise them for taking those opportunities. I am very proud of the fact that this Minister and this Government have actually reduced those opportunities closed those loopholes and reduced the tax rate away from a punitive 39c in the dollar and down to 33c in the dollar. 
But more than that in Dunedin North and at the University of Otago one of the biggest things that people said to me during the campaign last year in respect of student allowances was that the student allowance was available to the very poor and the very rich and the thick middle was not getting the opportunity to take student allowances and that was not fair. We agreed and we have changed that by changing the definition of income for the calculation of student allowances—something that Labour should have done at the very start when it put in place the interest-free student loan scheme and the student allowance system that it did. 
I want to remind this Committee when that side bleats about tax rates that we now have three-quarters of the taxpayers in this country paying no greater than 17c in the dollar marginal tax rate and their full tax paid is about 15c in the dollar. Nearly half of the families in New Zealand pay no net income tax after Working for Families accommodation supplements and other income transfers. We think that that is pretty fair. What we do not think is fair is to tax further the 17 percent or so of New Zealanders who are paying about 70-something percent of net income tax in this country. That is punitive. That is envious. That is jealousy. 
Dr David Clark 
: Why is poverty growing? 
MICHAEL WOODHOUSE 
: And here he is—he interjects. This is another good “half a story very well told” because median take-home income has grown every year under this Government. The net take-home pay gap with Australia has closed and the only reason that the Gini coefficients are starting to drift away in the same way as they closed last year is that very high-income earners took an extremely large whack and it is growing again. Maybe that top income bracket has grown slightly faster than the bottom two tiers and the solution to that is jobs and growth and job strategies—none of the things that we hear from Labour. 
In fact in respect of monetary policy Labour wants to loosen monetary policy to reduce exchange rates. Those strategies are really the fly on the elephant’s butt I have to say because it is simply not possible to move them in the way that Labour wants to. But there is no detail whatsoever. I am still completely in the dark about what monetary policy Labour would follow were it in power. It talks about a capital gains tax but who would be affected? It talks about putting the top tax rate back. We all understand what that means. No detail— 
ANDREW WILLIAMS (NZ First) 
: 
 Thank you Mr Chairperson. I will take a little call now if I may on behalf of New Zealand First. A small pun on words. 
Richard Prosser 
: Not a prior call. 
ANDREW WILLIAMS 
: No not a prior call; a little call. In the famous words of Benjamin Franklin “The only things certain in life are death and taxes.” Further to that Albert Einstein is attributed as saying “The hardest thing in the world to understand is income tax.” If that is coming from Albert Einstein we would all agree that certainly the subject of tax although it is a very dry topic and a very complicated topic is indeed a very necessary topic because apart from death it is the other main thing that we will all contribute to in our lives. Also there is an unknown quotation from another individual who said: “People who complain about taxes can be divided into two classes: men and women.” That pretty well sums it up as well. 
In terms of the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill in a sense this is moving the deckchairs around on the  
Titanic 
. It is somewhat extraordinary that many of the measures that are having to be brought in through this bill—and we do support it because anything is better than nothing—are very much a lot of tinkering around the edges in the opinion of New Zealand First. It certainly is not the overhaul of the tax system that we in New Zealand First have long sought for many many years. 
In respect of some of the measures in this bill it is only putting back what has been taken away. We concur with previous speakers: KiwiSaver contributions by employers were reduced from 4 percent to 2 percent just a year or so ago and to now come back in this bill and put them back up to 3 percent is basically an admission that reducing those employer contributions was an error in the first place. We are disappointed that this House is having to basically redress errors of that nature from the past. 
It also says in the bill that there will be taxes on bonus shares issued by companies. Again we do wonder whether that will apply to the bonus shares that will be issued for the State-owned assets that are proposed to be sold off by this Government. Will those bonus shares that are going to be offered to the supposed mum and dad investors—otherwise known as Mr Fay and Mrs Richwhite—end up with taxes being paid on them because of this bill? Who would know? 
Also in terms of this bill it does require taxpayers who choose to file a return to file ones for the previous 4 years. That does tighten things up a bit so that people cannot just cherry-pick with their tax returns and pick good years and not file in other years. If you are going to be an ongoing taxpayer and expect to get refunds or have to pay tax you have to be consistent year after year for the previous 4 years. That is a sensible solution. 
But there are many other areas of this bill that are pretty dry to people who might be listening out there around New Zealand. Basically there are things such as the clarification that the late payment fees charged by businesses and the credit card service fee for tax and social service payments will be subject to GST. It prevents liquidators and receivers from switching the basis on which they account for clients’ GST obligations. It confers charitable status on four overseas-focused charities. The bill also provides various remedial amendments to ensure that legislation operates correctly and is consistent with the original policy intent including the following. It amends the portfolio investment entity rules to ensure they are applied correctly it ensures that the rules introduced in 2011 for look-through companies are consistent with the policy intent and it clarifies the loss limitation rules for limited partnerships. It also clarifies the definition of “hire purchase agreement” repeals an exemption to foreign investment fund rules and provides an optional method of valuing certain shareholdings under the rules. Lastly it introduces new rules for the transfer of emissions units by public bodies in certain circumstances. 
Most of these are pretty dry and pretty boring to be read out but it does show that this bill has a great deal of content in it. It is a fairly hefty and weighty bill with an awful lot of information in relation to taxation much of which will go over the heads of most people. But in so doing much of this bill does tidy up some loose ends of the taxation system. It does bring things into line. It does provide some improvements in areas after recommendations from the Inland Revenue Department and Treasury. Therefore it can only be advantageous in terms of a better tax system. 
But at the end of the day it is still tinkering. It still does not get around the fact that for instance although we are trying to pull in the nickel-and-dimes here and although we are trying to tighten up small loose ends here this Government only 2 years ago gave very very large tax reductions to the wealthy of this country of several billion dollars per year. We now in hindsight must be wondering why on earth we did that. We end up having to tinker around the edges like in this bill while giving away billions of dollars to those who could certainly afford to not have those tax reductions. Let us hope that in the future there will be proper tax reform and there will be proper tax reviews so that we do not have to continue to just tinker and that there will be genuine tax reform. 
The CHAIRPERSON (Eric Roy) 
: Dr Megan Woods. [ 
Interruption 
] 
Dr MEGAN WOODS (Labour—Wigram) 
: 
 There is no need to be so rude to my colleague as to refer to him as that. It is with great delight that I take a call on this Taxation (Annual Rates Returns Filing and Remedial Matters) Bill of 2011. When we look at the purpose of this bill when you are coming down to the House to speak on a bill such as this you do not actually realise that you are walking down to speak on a piece of legislation where nowhere is it clearer that this is a Government without a plan. This is a piece of legislation that in the part of the bill that we are currently debating sets the rates of taxation. As the Minister in the chair the Minister of Revenue has said it sets the rates of taxation and puts out what the Government’s plan for managing the economy is. 
This is as previous speakers have said tinkering around the edges. It is tinkering around the edges while the economy tanks. We are spending $10000 a minute here for members opposite to explain their plan. It is not a 104-point plan it is not a 110-point plan and it is not even a 10-point plan. It is the no-plan plan. There is simply no plan here. It is tax policies that can be used to address the inequalities that we are facing in New Zealand. These are inequalities that have never been higher. All we hear from members opposite is a chorus of “It’s the global financial crisis.” Well here is a message for members opposite: it is a choice you make with your policies that you make the poorest people suffer the most in times of economic crisis. That is a choice that you make and your tax switch of 2010 only exacerbated this situation. 
David Bennett 
: Rubbish! 
Dr MEGAN WOODS 
: We are told by members opposite that this is rubbish. Well this is not rubbish. Here is a fact that members opposite might like to consider: the tax switch that members opposite put into place widened the gap between someone earning $30000 and someone earning $150000 by $135 a week. I am not talking about that being the difference; that is how much the gap widened. We are told by members opposite that actually we have seen a rise in incomes since National has been in power. No we have not. What we have actually seen is a fall in real incomes. We have seen a fall in real incomes for the first time since the 1990s—the last time that National was in power. What we are seeing is that the poorest people are suffering. 
The day after the 2010 Budget John Key proclaimed that the tax reforms that his Government was introducing had been designed to be broadly fiscally neutral. We now have a definition of what “broadly fiscally neutral” means to members opposite—to Todd McClay the member for Rotorua. Apparently a billion dollars is “broadly fiscally neutral” to members opposite because that is the size of the whole of the tax switch that they put into place. I would like that member to take a call and tell us what is fiscally neutral about a one billion dollar hole of inequity. That is something that he is not even over the detail of as most of the members opposite are not. What happened with the tax switch is actually we had a set of policies that crashed the revenue side of the Budget. We have a dwindling Government revenue base and this has forced more borrowing. We have members opposite who have the audacity to call themselves good economic managers—good economic managers who think that a billion dollars is broadly fiscally neutral. They have the audacity to paint Labour which consistently kept the books in order and ran large surpluses as spendthrifts. They simply have no plan and they simply have no way of looking at it. 
Labour put up excellent alternatives to this approach at the last election and we have not heard one compelling argument from members opposite about how that would not have modified the economy. We are told there was no detail around Labour’s capital gains tax policy. This is just ridiculous. There were pages and pages of modelling. We also had a savings plan that gave some surety to people and ensured that they were going to stay in that scheme. What we did not have is the up and down and changing that erodes people’s confidence in KiwiSaver that we are seeing with this piece of legislation. Is it 2 percent? Is it 3 percent? Is it 4 percent? That level of uncertainty is no way to encourage Kiwis into the scheme and to keep them there. My colleague David Cunliffe has addressed that. 
We have been told many things tonight in the course of this debate. One of these that we were told was from the member rejected by Dunedin South. He has stood up and told us that at the last election every time he went on campus in Dunedin North he was told by students that only the very rich and the very poor students could get student allowances. Well he is a member of a Government that has certainly set about fixing that. If you are a postgraduate student in this country now no student will get a student allowance. The Government has certainly introduced equity into this area. It is one of the few places where it has actually introduced equity because no one no matter what their level of income can get a student allowance under this Government to do the very research that will benefit this country and will actually do something to address the levels of inequality that we are seeing in this country which members opposite are claiming are not a problem. 
We have growing inequality in this country. We have a Government that has no plan to address it and a Government that refuses to believe that it has a choice in the context of a global economic climate. It has made choices that have meant the poorest New Zealanders have borne the brunt of this recession. Their incomes are lower their taxes are higher as a result of their tax switch and they are worse off. Government members can bury their heads in the sand or they can read the international reports. Reports are coming out daily that are showing that their Government has failed when it comes to addressing inequality in this country and has failed to put in place any plans that will address inequality into the future. This piece of legislation that we are looking at here today does nothing but show that this is a Government without a plan. It is a tax system that is wedded to benefiting the highest-earning New Zealanders the most and doing nothing to address inequality in New Zealand. 
Dr RAJEN PRASAD (Labour) 
: 
 It is a good place to take off from where my colleague Dr Megan Woods just left off. We are talking about Part 1 clause 3 of the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill and talking about confirming the basic tax rates. Of course there is a purpose as to why we collect tax. It is so that we can develop the country but also address those things that need addressing as a matter of urgency. 
It was no accident today that knowing that the Children’s Commissioner was going to put out a major report on a significant area about children and child poverty in the midst of that what did the Minister for Social Development do? She announced again probably for the third or fourth time that there has got to be drug testing of beneficiaries. If that was not a distraction then I do not know what is. That was the only purpose for that. It was already announced. It was an old policy. The point here is that we are talking about tax and we are talking about the need to take tax so that we can address those really important issues that our children are facing today. There can be no doubt that our children are suffering. I do want to confirm what my colleague Megan Woods said which was that the Government is going backwards. The Government is out of touch with the ordinary needs of Kiwis. Certainly the Government is out of touch with the needs of our children particularly children living in poverty. Of course if you did have a fairer tax system then that would not be the case. The needs of our children particularly the most vulnerable would be addressed and would be addressed quite systematically. 
Here in a major area is one of the implications of the kind of tax system the Government is confirming tonight and the tax rates the Government is confirming. It is not as if it is all going well because in order to fund the tax breaks and the tax cuts they did get we all know—the Government members can deny it as much as they like—that we are having to sell our assets in order to make up for this fiscal hole. But the real sad thing is what is happening to our children because of what the Government is doing. I expected Todd McClay to know a bit more about it. After all he is the son of a former Children’s Commissioner. He ought to know what our children are actually suffering. 
Todd McClay 
: If I start listening I will be the only one in New Zealand so I won’t. 
Dr RAJEN PRASAD 
: What the Expert Advisory Group on Solutions to Child Poverty did say—it actually is a very very good report Mr McClay. I commend the member to read it because this is the A team in New Zealand of experts in the particular area of child poverty. You could not get a more illustrious well-informed team: Professor Jonathan Boston Dr Tracey McIntosh— 
John Hayes 
: They’re all communists. 
Dr RAJEN PRASAD 
: Dr Airini Dr Fiona Cram Professor Mark Henaghan Professor—I beg your pardon what did the member say? 
Sue Moroney 
: He said “They’re all communists.” 
Dr RAJEN PRASAD 
: Well what would that member from Masterton know? That member does no justice to his own constituents because they would want to know that that member knows these New Zealand experts. Phil O’Reilly—maybe the member knows that person? Maybe the member does. Professor Richie Poulton Dr James—this is an impressive list and what they have come up with is the most comprehensive plan I have seen which ought to be funded by a proper tax system which is what this clause is about. They have put a lot of thought into this. I commend the member to read the summary because that is probably as much as the member may be able to digest at any one point. Hear what this group has done. It has put together a comprehensive plan as to how all of the things that need to be addressed—aiming for that one dot on the horizon called eliminating child poverty—are addressed in this report. I say to the members opposite that actually the tax system that this clause is about is a system by which the resources are brought together to address this. 
You see for children now is the most important time. In this House we talk about the needs of children as if the numbers—you know if we increase it by 5 percent or 6 percent that is enough. But for children born today their time here is the most serious time and they need these services now. So whether it is in housing whether it is in health and education whether it is Maori children in poverty Pasifika children in poverty community-based and place-based partnerships income and employment or implementing actions and measuring progress all of these matters are addressed in this particular report. It is the most comprehensive one. And I do commend particularly the Minister for Social Development to actually take it into account. I say to the Minister in the chair the Hon Peter Dunne that a taxation system ought to be good enough to support these kinds of activities. They have to be in multiple areas. 
So far what the Government has done—and the Minister in the chair said “Well most of the expenses in this area have increased.” Well it has not increased enough. I am sure that those who like me received a significant tax cut in the tax cuts the Government gave would happily give it away—happily give it away—if we could be guaranteed that the needs of our children in poverty our children who are suffering our children who will cost us multiple billions of dollars in a very short period of time would be addressed now. We as a society would be proud to eliminate child poverty. The reports are here. These programmes that the group has come up with these ideas that the Children’s Commissioner’s expert group is advising are really very very sound Minister and they are worth listening to. 
There is no point just addressing one thing. There is no point just doing drug testing in a particular area or doing a little bit of punitive social policy in a particular area. 
Todd McClay 
: Come on speak to the bill. 
Dr RAJEN PRASAD 
: Mr McClay it is about comprehensive programmes to address the needs of our children. Read the report from the expert panel. This is the problem with members opposite. They do not think. They do not read it. They pick on a small element of party policy their particular ideology which is quite caustic and they do not actually assist the children who ought to be supported through our taxation system. This is about— 
Louise Upston 
: Oh taxation! He mentioned it. Woo hoo! 
Dr RAJEN PRASAD 
: This is about the taxation system I say to Louise Upston. That is what I am talking about. We are confirming in Part 1 clause 3 the tax rates I say to Louise Upston. It is the tax rates that provide the State with the resources to address the fundamental problems in our society. Unless we do that we produce the problems of tomorrow. This is why this Government has no plan. This is why this Government is lost. This is why this Government is going backwards. 
Louise Upston 
: No we’ve got too much of a plan—you can’t keep up. 
Dr RAJEN PRASAD 
: A very small number of people might be feeling better. I am sure the member opposite is feeling better but really our society is not. People out there do not have jobs. They are leaving New Zealand in droves. They are going overseas. None of those figures none of those figures that that—the goals— 
Todd McClay 
: That that that! 
Dr RAJEN PRASAD 
: —that the other side set up the Prime Minister set up in the election campaign are being met. Mr McClay they are not being met. Fifty thousand people are leaving for Australia annually. It is a growth record the biggest record in 50 years. How can Mr McClay be proud of this? A 52 percent increase in unemployment and nearly 50000 more on benefits. How is that something to be proud of Mr McClay? How can that member say and how can that party say that the taxation system is fair? They are saying that the taxation system the rates we are confirming here today is what will make this society great. No. It will pick winners and losers. That side wants to pick winners out of a small group of people but this side is interested in all of our people. It is interested in a fair economy. It is interested in equality— 
John Hayes 
: Pity the community doesn’t agree with you. 
Dr RAJEN PRASAD 
: We have become a very unequal society I say to the member from the Wairarapa. We have become that and unless we have a taxation system that is good enough to meet those needs that our most vulnerable have then what kind of society are we creating? What are we bequeathing to our children? 
John Hayes 
: An excellent one. 
Dr RAJEN PRASAD 
: Well the member might be happy that 50000 people are leaving and that there are more children in poverty. The member might be happy with that. Well this side is not which is the fundamental difference between this side and that side. This is what we are here to fight for and to expose at every opportunity—the kinds of systems and policies that that member and his party come up with and what this bill is confirming today. Throughout the bill there are matters of that kind. We will talk as we go on and discuss other parts about the flip-flop in the policy of the other side but this has gone on for long enough. How long will that member sit up and put up with this society going backward? 
JOHN HAYES (National—Wairarapa) 
: 
 I move  
That the question be now put 
. 
SUE MORONEY (Labour) 
: 
 Thank you very much for the opportunity to speak on the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill. I am speaking on Part 1 which I think is the most disappointing part of this bill because it simply reinstates or puts in place the annual taxation regime that was brought in by this Government in 2010. I have called Part 1 disappointing but in fact it is actually damaging. It is actually damaging because as we have heard from many of my learned colleagues it is actually reinforcing and endorsing the tax switch from 2010—or as many of the people I come across these days call it the tax swindle of 2010—and that is in fact hurting our country. It is damaging to our country because this is the part of the bill that entrenches the growing inequality that is happening in New Zealand society. And it takes only three lines in this particular bill to do it. 
It might be interesting for members of the public who are listening to this debate to know that all of the issues that we are traversing here from the Labour side of the Chamber are because we are concerned about the direction of the country. We do not accept that it is OK for the economy to be tanking in the way it is. We do not accept that it is OK for people’s incomes to be dropping versus their cost of living. We do not accept that it is OK that the only brighter future New Zealanders are finding at the moment is to buy a ticket to go across the Tasman and relocate their families there. We do not believe that that is OK and is a good enough future for this country. 
It takes only three lines in this particular bill that does all this damage because effectively what this part does is say that we are going to just continue on with the regime that has got us in the place that we are in. That regime is one that this Government particularly put in place and specifically put in place and it is one that grows inequality. It did in 2010. It increased GST. GST of course impacts on every single person but it impacts mostly on low-income people because low-income people spend every cent they earn just to make ends meet and just to get by on a week-to-week basis so that means that every dollar they earn is subject to GST. However for people on very high incomes they are spending only a small proportion of their weekly income and therefore having to pay out the higher GST that that Government put in place. Let us not forget that the Government put that higher GST in place without telling the electorate it was going to do it if it was elected. It went to the election pretending that it would not raise GST. In fact John Key promised he would not raise GST and then after National won the Treasury benches what did it do in one of its very first Budgets? It raised GST. And it had told the New Zealand public that it would not do that. It promised in fact that it would not do it but there you go; that is what it did. The Government did that on the basis of a so-called fiscally neutral tax switch which brought in the income tax regime that we are reinforcing and endorsing in Part 1 of this bill here this evening. 
That new income tax regime is the very mechanism combined with the GST that I have just described that has specifically driven the growth in inequality in New Zealand. It has specifically revved it up. When Government members talked about supercharging the economy actually they planned to supercharge the growing inequality gap. That is what they supercharged and they supercharged it by bringing in this particular set of income tax changes which we are now reinforcing and endorsing in Part 1 of this bill. What we know is that the top 10 percent of income earners in this country got vast amounts of income back. In fact I have stood in this House before and accused the Prime Minister of pocketing personally $1000 extra in tax cuts from that particular regime and he has never denied it. If it was not true I would expect the Prime Minister to actually be denying that in Parliament but he never has because the truth is that people on very high incomes did pocket in the order of an extra $1000 a week. That is not just what they are earning; that is the extra amount that they got at the same time as lower-income people actually got a tax cut that was way way smaller. It was certainly smaller than $1000 a week. Most of the people in the area that I come from in Hamilton record having got about $20 a week in tax cuts. By the time they had suffered that increase in GST that tax cut was wiped out. Also if they had young children it was more than wiped out by the increase in the early childhood education fees that happened in the same Budget in 2010. 
The costs on New Zealand families have increased under this Government but this income tax regime which we are reinforcing here in Part 1 is actually the very specific mechanism that has grown inequality in New Zealand and that is not good for anyone. What is particularly not good for those people who are suffering the inequality and suffering at the poverty end of the spectrum is that actually we all lose. We all lose from an unequal society because there is research for Africa literally—and I probably should not talk about that continent when I am referring to inequality and poverty. There is a lot of research that reinforces that unequal societies actually have the largest amount of social problems. We see that reflected in our own country do we not with growing inequality that is reinforced by this income tax regime which we are now establishing in this bill that we are talking about tonight. With that growing inequality come growing crime growing underachievement in education and all the associated problems that come in society. So we all pay when we get this wrong and Part 1 is reinforcing a tax regime that is growing inequality in our country. 
It shows that the Government does not have a plan to do anything different. It does not really understand the pressures on families at the moment and it does not think that there is anything necessary to change the current situation in this country. Government members find it perfectly acceptable that the economy is flatlining. They find it perfectly acceptable that thousands of New Zealanders are just leaving in their droves to go to Australia because that is the only way they can see a future for their families. They think that it is OK. Well on this side of the Chamber we do not think that it is OK. We think that the economy and the income tax regime do need a bit of a shake up and we particularly want to start thinking about other ways that we can get some income from tax reform. 
So it is Labour that is coming out with the fresh ideas that will give this economy a kick-start. It is Labour that has got the courage to actually address four big issues that are facing our economy. In fact if this Government had the courage to do the same thing— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! The member cannot imply that someone or a party does not have courage. I ask the member to withdraw that comment. 
SUE MORONEY 
: I withdraw that comment. What I was trying to describe was the difference between Labour and National with Labour having the courage actually having the courage to address these four big issues. 
And what are those four big issues? Well we actually need to deal with the capital gains tax issue in this country because we are one of only three countries in the OECD that do not face up to this issue. There is the unfairness that people with so much extra income can invest in houses—other than the one that their family lives in—as investment properties and when they sell those houses and earn a lot of capital gain from that there is not one cent of tax paid on that particular income. That is what we have. We have a capital gains tax problem in this country and that Government is not fronting up to that. 
We also need to increase our savings through universal KiwiSaver. It was Labour who actually had that vision. Talk about the brighter future; this is where it resides on this side. It was Labour that brought in KiwiSaver it is Labour that has the plan to move that through to being a universal savings scheme and it is also Labour that will establish research and development tax credits. 
A party vote was called for on the question  
That Part 1 be agreed to. 
Ayes 71 
New Zealand National 59; New Zealand First 8; Maori Party 2; ACT New Zealand 1; United Future 1. 
Noes 49 
New Zealand Labour 34; Green Party 14; Mana 1. 
Part 1 agreed to. 
Part 2 Amendments to Income Tax Act 2007 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 I am delighted to take a call on Part 2 of the income tax bill—sorry the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill to give the bill its proper name. I am delighted to take a call on Part 2 which addresses changes in the Income Tax Act 2007. There is a lot of meat in this part of the bill. Although as I have said in my earlier contribution the really big issues facing the economy are not addressed in this bill—I would not want my comment to be mistaken for saying that I thought they were—it does deal with a number of important issues. Some time was spent dealing with these in the select committee process. 
One of the issues was around taxation of bonus shares. We find—there were some interesting submissions from Contact Energy and others on this issue—a concern that a share issued by a company under a profit distribution plan is defined as a dividend. Those who put submissions in on this matter which appears in clause 7 and other clauses in this part of the bill raised the concern that this really might lead to a type of behaviour that was the opposite of saving to dissaving. Whereas the Government currently speaks a big game on saving in fact elsewhere in the assets sales legislation we find the Government is actually trying to pay people loyalty bonuses to hold shares—quite the opposite to what seems to be the intention in this part here. We will also note as we go on that in the KiwiSaver area the Government has been all over the show. It has flip-flopped backwards and forwards on KiwiSaver. All of that indicates that this Government really does not have a plan for savings. It has— 
John Hayes 
: Yes it does. 
Dr DAVID CLARK 
: It has a plan in so far as it has a plan one week and then it changes that plan back the other way the next week Mr Hayes. 
John Hayes 
: Flexible. 
Dr DAVID CLARK 
: It is a “flexible” plan Mr Hayes says. The National Party has flexible plans and I think the truth has come out there. The plans do change from week to week according to which way the wind is blowing— 
Dr Megan Woods 
: Just like kids moving out of poverty. 
Dr DAVID CLARK 
: —and probably very similar to the way in which as my colleague Dr Megan Woods points out kids move in and out of poverty. Look we do not accept that on this side. We do not think that these are trivial matters. As I raised in Part 1 we are very concerned about matters of poverty that are created through the current system of unfair tax distribution that we have in New Zealand. We stand for a fairer tax system that is actually pro - economic growth. The Labour Party is keen to see our economy grow as it did under the Labour Government’s last period of stewardship—25 percent in real terms. The economic cake grew by a full quarter in real terms under the last Labour Government. Under this Government real wages have dropped. So the issue of taxing bonus shares stands as an interesting little commentary in this part of the bill because it says that the Government is discouraging savings as it has done in other areas where it has been paying people in the assets sales area and has had quite different positions on KiwiSaver. 
Clause 17 in Part 2 of the bill refers to software development write-offs and the deduction of liabilities for unsuccessful software development. We in the Labour Party support this measure because it is a way of ensuring that people are not discouraged from investing in this area and from developing intellectual property. We wish to see this proceed because we need to be earning the really good margins that we get from our intellectual property. There are real big opportunities in New Zealand in the area of information technology. We can play to that weightless economy. We turn out we are told the fourth-best students in the world according to Programme for International Student Assessment rankings and long may that continue so long as the Minister of Education does not disassemble our very highly functional secondary sector. As long as we continue to turn out these graduates we have the opportunity to capitalise on that for the growth of our economy. This clause which deals with write-offs in the software development area is surely a good thing. 
On clause 96—I am skipping about. There are many more clauses and I am sure the Minister of Revenue will tell us of the many other useful small changes in this bill. We might classify them as tinkering but many of them are indeed worthy changes. Clause 96 talks about the changes to schedule 28 and notes that 2 percent is replaced with 3 percent. The Minister can correct me but I am assuming that this refers to the KiwiSaver changes that also appear in the later part of the bill. These changes to KiwiSaver rates are something again that we would support. It is excellent to see that the Government is adopting a change of direction in respect of KiwiSaver. This is one of those flip-flops that we would applaud. We only worry that it may be something that the Government may flip back on the other way. If I could just for a minute say why that is a very real risk. If we look at what National did in December 2008 we can see that it cut the minimum contribution rates for employees and employers to 2 percent. It was to have been progressively raised to 8 percent default rate of gross income by April 2011 for employees and 4 percent default rate for employers. National cut that and now in this legislation it is being brought back a little way and we will see no doubt further changes. We are not sure in which direction. Mr Hayes describes it as a “flexible” policy so we will look for more announcements next week perhaps from Mr Hayes perhaps from the Minister in the chair Peter Dunne or perhaps from the member up there at the back our good chair of the Finance and Expenditure Committee Todd McClay. 
National in 2008 discontinued the employer tax credit that effectively subsidised employers for their costs in providing KiwiSaver. It discontinued the fee subsidy of $40 per annum which was aimed at ensuring that accounts with low balances were not eroded through taxes themselves. And of course it repealed sections of the Employment Relations Act which also made it harder for saving. If we contrast that with Labour which has had a much more consistent view on KiwiSaver which indeed introduced KiwiSaver—the original KiwiSaver model was announced in Budget 2005—we saw incentives for members to save. There was a $1000 kickstart for each member joining a fee subsidy that the Government confirmed to $40 per member per annum and a housing deposit subsidy of up to $5000. Budget 2007 saw Labour build savings further investing an additional $3.2 billion in KiwiSaver over 4 years. 
Those changes show a consistent policy from Labour of encouraging savings. Indeed we have heard earlier contributors to the debate refer to the retirement savings system that was put in place by the Labour Government and later repealed by the Muldoon-led National Government. If that system had continued we would have had several hundred billion dollars worth of savings and had an undoubtedly much higher GDP as a country as we would have had savings looking for a home and that home would have been in good business ideas. We know that in Australia which introduced a similar system later they now have A$1 trillion worth of savings looking for a home. 
Sue Moroney 
: How much? 
Dr DAVID CLARK 
: A trillion dollars. New Zealand has a very low savings rate because it was introduced only latterly in a comprehensive way by Labour and then National has flip-flopped on that. So clause 96 which replaces 2 percent with 3 percent is a modest and tentative step by National which is probably not yet sure whether it really believes it is a good idea or not. It is running out of opportunities to make changes because it does not seem to have any ideas but it keeps trying this little tinkering thing here and this little tinkering thing there. 
We have spoken earlier about the difficulties with implementing real change because the Inland Revenue Department’s computer system is on its last legs. Mr Dunne indicated that there will be announcements later in the year. I hope we will get some very real progress soon. On Valentine’s Day this year the Prime Minister said that it was an appalling position that the Government was in—that is a full 6 months ago—where the Government could not introduce real change in the tax system. That has got to be a real real worry for New Zealand. Most Western economies have a tax system; in fact I believe that all Western economies have a tax system. It should not be too hard to rebuild our one in line with those that are in operation elsewhere in the Western World. If we do not do that if we do not get on to that urgently we will be stuck with a tax system that is falling over that cannot implement proper change and that cannot make sure that we have the tax policies that we need to grow our economy rather than leave it in the stagnant position that it is in currently where real wages have dropped under this Government rather than grown where unemployment has risen and where we have migration to Australia at record rates. 
Hon PETER DUNNE (Minister of Revenue) 
: 
 May I begin by responding to perhaps the last point that the member David Clark made relating to the Inland Revenue Department’s FIRST computer system. It is a 1991 system. Since it was introduced in 1991 we have bolted on to it under successive Governments in no particular order child support Working for Families KiwiSaver and one or two others as well that will come to my mind as I go through. So we have a very complicated system. But I want to assure the House in Committee that there is no danger of imminent collapse. The system continues to do today what it always has done. Its capacity to absorb new change is what is at issue. I think the Committee needs to be very clear that we are not talking about the imminent collapse of our technology. We are talking about the need to upgrade modernise and bring it forward to enable us to do the things we do now and will go on doing and also any new initiatives that come along. There will be as I said earlier announcements later this year about the plan and I am sure that the member will be supportive of it when we do announce the whole raft of plans that will need to be taken to upgrade this system. 
I want to pick up on a couple of other points that the member made because they are the critical parts of the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill although they are by no means the totality of Part 2 of it. The first one I want to talk about is the profit distribution plans—the bonus share issue. The member attempted to draw a little bit of an analogy between what he saw as restrictions in this area and opportunities created for KiwiSaver investment. In fact the changes that have been made regarding profit distribution plans are simply to prevent what was a potential element of double taxation had those schemes been applied as they were being developed. As the member may recall we consulted fairly broadly with those who were affected before developing the plans that came through in the legislation that the Finance and Expenditure Committee considered. So I do not accept the proposition that this is in some way a restriction on savings opportunities. It is actually preventing a potential element of double taxation and it is also ensuring that we have a common standard if you like for profit distribution plans with similar schemes within the tax system in terms of saving and investment and the tax treatment thereof. 
The member also spoke about the amendments relating to the writing off of unsuccessful software development. This is a very important issue actually because it is one that occurred in retrospect. There had been for some time an assumption that these deductions could be made. Then we discovered that that was not in fact the case. So what we are effectively doing in the amendment in the bill is making clear in statute what had been a common understanding until such time as there was doubt cast upon its validity. There will be a number of occasions when we make changes like this. They are broadly taxpayer-friendly and it is appropriate that we do so. 
I want to come back to the comments about KiwiSaver. I want to say to the member that he can argue as much as he likes about the relative incentives that this Government and the previous Government have offered to KiwiSaver savers but the reality is that KiwiSaver membership has more than doubled since this Government came to office. KiwiSaver membership is now three times what the previous Government estimated it would be by 2015. KiwiSaver membership is now not far short of 50 percent of New Zealanders and it will continue to grow. What the Government embarked upon in 2008 was a programme to ensure the financial viability of KiwiSaver in terms of the Government’s investment long term. What the changes being proposed from April 2013 in terms of the increase in the contribution rate recognise are two things: firstly a recommendation from the Savings Working Group; and secondly the fact that because of the nature of the changes made a little earlier we feel more comfortable about the long-term viability of KiwiSaver. Members need to be reminded—and I think it was a correct decision that the previous Government made—that KiwiSaver individual investments are not Government guaranteed because they are held in private funds. Therefore the Government’s responsibility here is to make sure the regulatory regime the administration of the KiwiSaver scheme is as sound as it can be to protect to the best extent possible the interest of the KiwiSaver members. I am very proud of the fact as I say that we are not too far away from having the 2-millionth KiwiSaver identified. I think that is a terrific achievement and I actually think both sides of the House can take some credit for that. 
I want to just draw attention to some of the provisions that are contained in the Supplementary Order Paper that I have moved because Supplementary Order Paper 98 applies to a number of the provisions of this particular part. These are a number of amendments that are related to the outcomes arising from the Canterbury earthquake. What we have embarked upon quite deliberately since February 2011 has been a series of remedial pieces of legislation as and when needed to give effect to situations that arise as a result of the earthquake and the rebuild. These changes in this particular Supplementary Order Paper are all taxpayer-friendly but they all deal with situations that we could not have anticipated pre-earthquake. 
I say to the Committee that although I am very pleased to be bringing this range of measures before the House in Committee today I do not expect that these will be the last. This is an ongoing work in progress if you like as the rebuild gets under way and issues become identified about the nature of some of the arrangements particularly those between insurers and builders issues relating to the nature of business activity and the disruptions that it has suffered pool depreciation rules treatment of damaged assets that are uneconomic to repair etc. etc. This is very much new territory. I want to commend the Inland Revenue Department officials who have worked on this because they have been diligent in identifying the problems that have arisen. We have consulted with the local community in Christchurch with the business community and with tax professionals to make sure that we are addressing the particular problems that are emerging and we will continue to do so as and when necessary until such time as Christchurch is back on its feet. They may not appear to be significant—and taken individually and collectively they are probably not—but they are beneficial to those people seeking to re-establish particularly business and other activities in Christchurch. 
They are the main aspects of Part 2 of the bill. It is essentially remedial it is all very positive and I think in general terms it will be regarded as taxpayer-friendly. 
RAYMOND HUO (Labour) 
: 
 The Minister of Revenue who has just resumed his seat talked about the reality. According to the Minister the reality was that the savings of the scheme have been more than doubled. By pure mathematics that more than doubling of the figure would have been doubled further if the National-ACT Government had not cut the contribution by half. 
To be fair to the Minister in the chair the Minister of Revenue there are good initiatives in this part Part 2 and in other parts and we will talk about the new initiatives when we move on. To be equally fair to the general public the New Zealand taxpayers and voters I think the Minister would appreciate the difference between the two words “botched” and “ditched”. What the National Government ditched was the compulsory superannuation scheme in December 1975 and what this current National-ACT Government has botched was the KiwiSaver and it is still botching the scheme. If only Muldoon and the National Government of the day had not terminated the scheme it would now be worth more than NZ$240 billion and would have transformed the New Zealand economy into a world-beater over the past 30 years. According to Brian Gaynor and other leading economists Muldoon’s dreadful political decision instead transformed New Zealand from a potential Switzerland of the southern hemisphere into a low-ranking OECD economy. It was the worst economic decision in the past 40 years. 
Hon Judith Collins 
: Tell me about the Crafar farms. What does your party think about the Crafar farms? Sell them to the Chinese—I just remembered that. 
RAYMOND HUO 
: Well the Chinese community would appreciate the dire consequences. The dire consequences and also the ripples of that decision are still being felt to this date. In fact if the scheme had not been ditched then New Zealand would be much better positioned economically would be able to own many more assets and would not incur that much Crown debt. 
Talking about the Crown debt I enjoyed the questions for oral answer—or Q and A—in this House between the Prime Minister the Rt Hon John Key and the Rt Hon Winston Peters in May. According to those Q and A at the end of 2008 Crown debt was at $6 billion it increased to $50 billion in 2011 under the National-ACT Government and it is expected to reach $75 billion by 2015. 
To go back to the superannuation scheme ditched by the National Government in December 1975 based on the $240 billion projection— 
Dr David Clark 
: $240 billion? 
RAYMOND HUO 
: —$240 billion—each worker would have had $111200 of superannuation assets compared with the current—how much—$6300 and A$86821 in Australia. The scheme would have represented 146 percent of GDP whereas Australian superannuation which is considered to be the benchmark for the world represents only 82 percent of its GDP. That is according to Brian Gaynor and that is a 2007 projection. As a result of the Australian scheme the average 30-year-old Australian is expected to retire with superannuation savings of about A$400000 now—that is according to Devon Funds Management in 2010. 
Australia started its superannuation scheme much later than the New Zealand scheme that was ditched by the National Government in 1975. The Australian scheme has since accumulated assets of over A$1.3 trillion—growing at over A$100 billion per annum. So based on this Australian banks were able to recapitalise during the depth of the global financial crisis. 
John Hayes 
: That was a good benefit for us too. 
RAYMOND HUO 
: Indeed Mr John Hayes. Australia now intends to lift the current contribution to compulsory superannuation from 9 percent of wages to 12 percent. It is also interesting to note that in Singapore the contribution is 20 percent of wages. When National came into power in 2008 as a couple of my learned colleagues mentioned in previous contributions the National-ACT Government cut KiwiSaver which is a similar scheme to the compulsory superannuation in 1975 from 4 percent of workers’ contributions to 2 percent. 
Hon Judith Collins 
: But that was 37 years ago—37 years ago. I thought that member wasn’t even born then. 
RAYMOND HUO 
: Well for the information of that Minister Judith Collins for the first time in 13 years—for the first time in 13 years—New Zealand’s credit rating was downgraded in September 2011. Worse still the lower credit rating is likely to increase the costs of borrowing for the New Zealand economy under that National Government and because of New Zealand’s poor savings record thanks to the National Government and thanks particularly to Prime Minister Robert Muldoon we cannot source these funds domestically but have to rely on offshore markets making our position even worse during the global financial crisis. 
The current National-ACT Government has obviously realised that it has done something wrong. So through this bill— 
Darien Fenton 
: Something? A whole lot of things. 
RAYMOND HUO 
: Well I tried to be polite. Through this bill it intends to raise workers’ contributions from 2 percent to 3 percent. National has been flip-flopping all over the place on KiwiSaver but in general it has not been consistent in its objection to superannuation schemes similar to the one that it ditched over 30 years ago and the one it is botching now. I am curious whether that attitude is driven by ideology or is purely for the sake of it. 
Muldoon’s decision over 30 years ago has had dire consequences. Like most Western countries our population is ageing. By 2050 the ratio of workers per retiree will have fallen from 5:1 currently to 2:1 and superannuation costs will have grown from 4 percent to over 9 percent of GDP. Thanks to Muldoon and his successors the gap between rich and poor has grown wider in New Zealand. While a small group of rich and privileged are becoming wealthier New Zealand as a whole has become poorer and is gradually becoming an economic backwater. 
JOHN HAYES (National—Wairarapa) 
: 
 I would like to bring us back to “Planet New Zealand” away from “Planet Labour”. Before I speak about Part 2 of the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill and the changes in Part 2 that we are debating at this point I think we have to look at the global reasons as to why we are making these changes and why we are introducing this bill. We are doing it because we want to make a more competitive and productive economy. With reference to the previous speaker Raymond Huo I have got to say to you that I did not ever feel that Mr Muldoon was about making a more productive economy or certainly a competitive one. It is only by lifting our economic performance that we can create jobs boost incomes improve living standards and provide world-class services for the people in my electorate the Wairarapa electorate. That is what we want to deliver to them. 
I would like to reinforce comments made by the Minister of Revenue. Before we made changes to KiwiSaver the scheme was costing the Government $1.2 billion a year and rising in subsidies and tax breaks. We had to borrow that money from overseas. As the Minister said that was not sustainable. So what we have done is we have kept the $1000 kick-start payment from the Government. That has not been changed in this bill. It is not changed in Part 2. We have reduced the Government’s borrowing and increased private sector contributions to KiwiSaver. Why are we doing that? To increase national savings. So for the year ended 30 June 2012 and beyond the tax credit was halved to 50c for every dollar contributed by members up to a maximum of $521 a year. That is what this bill provides for. 
From 1 April 2012 employer contributions are being taxed at a rate broadly equivalent to an employee’s marginal rate and then from 1 April 2013 this bill provides for the minimum employee contribution to increase to 3 percent. The compulsory employer contributions will increase to 3 percent as well. That is not a flip-flop. It is about saying that we managed to get the scheme under control. It is now sustainable. We have to give Kiwis confidence that future Governments can afford to maintain KiwiSaver. They will be future National Governments of course. The Government is going to spend as a result of these changes $2.6 billion less over 4 years on member tax credits. We will encourage private savings and the employer and Government contributions including the $1000 kick-start will continue as an attractive savings option. 
The changes in Part 2 are creating a simpler and fairer tax system that rewards hard work. That will be a foreign concept to many of the people across the Chamber despite the protestations of the ex - Families Commissioner who delivered nothing in his period of tenure— 
Hon Judith Collins 
: Absolutely nothing. Spent $9 million a year for nothing. 
JOHN HAYES 
: —and spent $9 million a year for no delivery no outcome whatsoever. What we will be doing through these changes is protecting the vulnerable—the very people he professes to be concerned about. 
We have delivered across-the-board tax cuts and we are delivering more money to working New Zealanders. Two-thirds of the cuts to income tax went into reducing the bottom two tax rates. So now we are in a situation where the changes in Part 2 of this bill will mean that three-quarters of earners are paying no more than 17.5 percent in personal income tax. We have cut the company tax in this bill to 28 percent ensuring our businesses remain competitive. When you are concerned about families—or you profess to be—you will find that a family with two children can earn up to $50000 for that family and pay no tax at all when you take Working for Families into account. [ 
Interruption 
] I would just like to repeat that because I was being rudely interrupted. I want to stress in response to the concerns—or the professed concerns—across the Chamber that a family with two children can earn $50000 a year and pay no tax at all. Zero tax. How much is nothing zip zero? That is the tax a family with two children will pay. So what is going on in this community and our families and certainly my constituents in the Wairarapa know this is that after-tax wages are increasing faster than prices under this Government. 
I have heard various speakers on the other side of the Chamber slandering Richwhite and Fay and I want to point out to them that they have not read the changes that we are proposing in this bill. What the bill does is take steps to tighten the private property tax rules by eliminating depreciation removing the loss attributing qualifying companies rules and improving Working for Families and integrity measures. The Inland Revenue Department’s funding for audit and compliance—and I congratulate the Minister of Revenue for his work in this area—has been increased and we expect that to generate substantial revenue in the 4 years to 2014-15. But of course under the people from the Opposition who are criticising this legislation their alternative would be to bring in a capital gains tax. They want to more than double the employer contribution to KiwiSaver costs and they want a big gap between the company rate and the top personal rate which encourages tax avoidance. We do not on this side of the Chamber stand for those changes. 
In Part 2 we will see that the application date for changes to profit distribution plans under which bonus shares issued by a company will be treated as a taxable dividend will be deferred from 1 July 2012 to 1 October 2012. If you were to read the bill and the parts of the bill that we are making changes to you would see that it is very straightforward. Other changes to GST provisions have also been made such as clarifying the definition of “land” and where new apportionment rules for zero-rating supplies can be used. The foreign investor tax credit scheme will be extended to investors in foreign investment portfolio investment entities with application from 2013 and 2014. And as several speakers have noted tonight Part 2 provides for the deductibility of unsuccessful software development costs. That will apply from the 2006-07 income year rather than from 2007-08. As the Minister said these are very taxpayer-friendly changes. 
The KiwiSaver membership start date will be clarified for persons who joined through their employer. The start date determines when a person is able to withdraw their savings after 5 years of membership if aged 65 years or older. I would think that that would apply to the former Families Commissioner. Further amendments allowing certain shareholder employees of close companies to receive the in-work tax credit will also apply from 2011 rather than 1 April 2012 to enable eligible individuals to claim a tax credit for the 2011-12 income year. Finally I should say that in Part 2 the bill is going to clarify the tax position of insurance companies where there is a transfer of business during the income year. 
I congratulate the Minister on bringing to the House this bill and a series of very coherent changes to the bill and a series of coherent tax policies that will ensure that all New Zealanders will be better off and that people will be better in work will get more money in their bank accounts and will be able to save more through the policies that are being introduced by the Minister. I commend this bill. 
Dr RAJEN PRASAD (Labour) 
: 
 What an interesting fully read speech from that member John Hayes who has been in this House long enough to have at least short-term memory recall not to have to read his speech. But there you go. I thought the last part congratulating the Minister was from the heart which was very good but most of it was read. 
We actually support Part 2 of this particular bill the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill. There is very little in there that we would have difficulty with because as the Minister in the chair the Minister of Revenue said this has gone through—as the officials have done—those things that would make the operation of the tax system better. As members on this side have said we support those changes that are being made in Part 2. Whether it is the higher purchase definition which has been parked or unsuccessful software development these are all good provisions. But I would have expected that member who just sat down to at least— 
Darien Fenton 
: Who is it? 
Dr RAJEN PRASAD 
: Mr Hayes I think his name is—Mr Hayes. I would have expected him to be at least fairer about a number of things. Mr Hayes it is your party that changed a very good KiwiSaver scheme. Now this is going back up again and perhaps the member might simply acknowledge that and say: “Ah we made a mistake. We’re going to move it up there. This is the best we can do.” When the Helen Clark Government passed that particular bill that member’s party did not support it—did not support it at all. It is very very interesting that the member now owns it calling it a great scheme etc. Well remember where it came from. Remember what the genesis of that was. 
I think Raymond Huo made a very good point reminding that member and those opposite—and I know the Hon Judith Collins is bored by this because it was not recent enough but sometimes the facts of history have to be repeated Mr Hayes so that others do not repeat the mistakes of the past. Some elements in Part 1 do do that but in this part no. 
But the member John Hayes did begin to talk about things he knows nothing about. That member knows nothing about the Families Commission and nothing about its achievements. In fact he actually tells things not the way they were but he makes them up—that member has made them up. For the benefit of that member—because the challenge was direct and named me and named my former position—what did the Families Commission achieve? The Minister in the chair is very familiar with this. All of the work in the family violence prevention area had the imprint of the Families Commission under my leadership Mr Hayes. Is there any piece of that that his Government would take away? There is not one. That member acknowledges that there is nothing that that member knows anything about. So Mr Hayes if you do not know about something do not say anything about it; rather read your speech. I would put up with that. 
Does that member know that most of the thinking around paid parental leave was done by that commission? That was probably the best piece of work on paid parental leave. The member looks surprised. The member did not know about that. The jaw dropped just then. I think the member knows nothing about it yet the member is very quick to criticise. 
Going back to family violence it was that member’s party when in Opposition that actually stood aside from the task force from the ministerial group that worked on family violence prevention. That party stepped aside from it. That member’s party had no interest in that. There is a whole bunch of areas around parenting but I say to the member that if the member is defending this part of the bill it needs no defence because this side agrees with most of it. 
We do have some criticism about how the changes around KiwiSaver have come about. In Part 5 it comes up again if the member has read the bill right through. But there are reasonable parts of the bill. This side of the Chamber will always be reasonable if things come up. Part 2 of this bill addresses many of those things in our taxation system that need to be tidied up. We are supporting it and we are supporting it very very clearly and unequivocally. 
But this side will not take an approach like Mr Hayes just took. He was accusing members on this side— 
Dr MEGAN WOODS (Labour—Wigram) 
: 
 I am very happy to take a call on Part 2 of the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill. I want to touch on a couple of areas specifically and talk about some of the reasons why Labour is supporting this part of the legislation. I want to first of all touch on Supplementary Order Paper 98 and the provisions that are there to support Canterbury businesses and to thank the Minister in the chair the Minister of Revenue and the select committee that looked at this legislation the Finance and Expenditure Committee for a very pragmatic and very common-sense—if I can use the term—set of measures that will be put in place to help Christchurch and Canterbury businesses get through. 
These are some very technical taxation issues that will make a real difference to the viability of so many businesses in Christchurch and they do deserve to be commended. These are things that we never thought we would have to deal with in our taxation system such as how it is that we treat depreciation on assets or even land that has been damaged and then paid out on and how it is in the taxation system we are going to deal with such massive amounts of insurance receipts and income and where that sits in terms of financial years. There are a lot of very technical issues that need to be dealt with for Christchurch businesses and we in Labour support those measures that are being put in place and can see the real difference that they will make to so many businesses in Christchurch. 
The other piece of the legislation in terms of the shopping list that Part 2 does that I want to touch on—and a couple of colleagues have already touched on this as well—are the provisions around unsuccessful software development. I think this is a provision that actually shows the potential of what the taxation system can do in terms of the kinds of levers it can offer beyond mere revenue generation and collecting of revenue in our economy. What we have here is a provision that is intended to provide for expenditure on software that needs further development to become depreciable property. That is if it is going to need further work on it it can be depreciated. 
What we are seeing here is the use of the taxation system to encourage businesses to take some risks to innovate within their business processes and to look at software development that might be used. What we are seeing here is that there is actually going to be a way in which the taxation system can offer those benefits for projects that do not actually make it—for unsuccessful software developments—because we do need to have the courage to innovate and we do need to have the levers and the mechanisms in place that do that. 
I guess one of the things that has been talked about and the Minister talked about it tonight is that this is one of the things that can make us a more competitive and productive economy. This is a very small start but I think it really draws into sharp relief for me and my colleagues on this side of the Chamber what a real opportunity we lost by getting rid of the research and development tax credit using the taxation system in a real and meaningful way to be able to innovate. 
Progress to be reported presently. 
House resumed. 
The Chairperson reported progress on the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill and no progress on the Trade (Safeguard Measures) Bill. 
Report adopted. 
The House adjourned at 9.55 p.m.