Volume 655 Week 18 - Thursday 23 July 2009 
Volume 655 Week 18 - Thursday 23 July 2009 
[Volume:655;Page:5087] 
Thursday 23 July 2009 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Business Statement 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 When the House resumes on Tuesday 28 July it is the Government’s intention to take the first readings of the Taxation (Consequential Rate Alignment and Remedial Matters) Bill the Cluster Munitions (Prohibition) Bill and the Inquiries Bill and to make progress on the Road User Charges Amendment Bill and any remaining parts of the Building Amendment Bill (No 2) left over from this week. Wednesday 29 July is a members’ day and the third reading of the Port Nicholson Block (Taranaki Whanui ki Te Upoko o Te Ika) Claims Settlement Bill will be taken on Thursday 30 July. 
Hon DARREN HUGHES (Senior Whip—Labour) 
: 
 Firstly I thank the Leader of the House for facilitating the maiden statement of David Shearer the new member for Mt Albert at 5.45 p.m. on Wednesday 5 August. I ask the Leader of the House whether there might be an opportunity to debate the Antarctica (Environmental Protection: Liability Annex) Amendment Bill for which I understand there is broad support in the House. 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 I agree that there is reasonably broad support for the Antarctica (Environmental Protection: Liability Annex) Amendment Bill which stands in the name of the Hon Murray McCully. The shadow Leader of the House will also be aware that an event is coming up in the middle of next month that may require all sides of the House to cooperate to enable members to go to celebrations marking the anniversary of the coronation of King Tuheitia. That bill seems to me to be one that might progress on that day in order to facilitate the requirements of all parties in the House. 
Points of Order 
Maori Language—Pronunciation 
TE URUROA FLAVELL (Whip—Maori Party) 
: 
 I raise a point of order Mr Speaker. Tena koe Mr Speaker. Kia ora tatou. In light of the discussion about next week and in respect of issues around order in the House I remind members that the Maori Party has in the past made a commitment to Maori language and in particular correct pronunciation. I remind members that next week is Maori Language Week. As we lead into that week I ask that members give some serious consideration to the delivery of Maori language. The Maori Party has pronunciation sheets to help out all members as we move towards celebrating Te Wiki o Te Reo Maori. Kia ora tatou. 
Crimes (Abolition of Defence of Provocation) Bill—Leave to Introduce 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I seek leave to introduce the Crimes (Abolition of Defence of Provocation) Amendment Bill in my name. 
Mr SPEAKER 
: Leave is sought for that course of action. Is there any objection? There is objection. 
Questions to Ministers 
Social Development and Employment Minister—Confidence 
1. Hon ANNETTE KING (Deputy Leader—Labour) 
 to the  
Prime Minister 
: Does he have confidence in the Minister for Social Development and Employment? 
Hon BILL ENGLISH (Deputy Prime Minister) 
 on behalf of the  
Prime Minister 
: Yes the Prime Minister does and he has a lot more confidence in the Minister than a certain Charles Chauvel had in a former Minister when as president— 
Mr SPEAKER 
: The question did not ask “if so why” it simply asked whether the Prime Minister had confidence in the Minister. 
Hon BILL ENGLISH 
: I raise a point of order Mr Speaker. That question was open-ended. I am allowed to give reasons comparisons analogies and anecdotes that back up my answer. Surely you are not going to rule that out. 
Mr SPEAKER 
: The Speaker is the sole judge of those matters and where the Speaker perceives that it will lead to disorder the Speaker may ask the member to desist. 
Hon Annette King 
: Did the Minister for Social Development and Employment advise the Prime Minister that her decision to cut the Enterprising Communities scheme would lead to 3000 job losses; if so how can he have confidence in a Minister who is creating more job losses than job opportunities? 
Hon BILL ENGLISH 
: The Prime Minister has a great deal more confidence in the Minister than a certain Charles Chauvel had in a former Minister when as president of the Labour Youth Council in 1988 he told the then employment Minister Phil Goff to “take action or resign”. Charles Chauvel is probably feeling the same way today. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. The supplementary question asked by the deputy leader of the Labour Party might have been a little political but it was also very specific. It referred to an enterprise training scheme and the effect on jobs of that action. That issue was not addressed. 
Mr SPEAKER 
: It would have been helpful had the Hon Bill English actually referred to the supplementary question in some way in his answer and I invite him to do so now. 
Hon BILL ENGLISH 
: Yes. 
Hon Annette King 
: How can the Prime Minister have confidence in a Minister who claimed that the Restart package was a great success and the answer to New Zealand’s skyrocketing unemployment when since its introduction around 100 people a week have signed up for it whereas 1300 people a week are signing up for the dole; and is that really what he thinks is the answer to unemployment? 
Hon BILL ENGLISH 
: Yes the Prime Minister does have confidence in the Minister for Social Development and Employment. The Restart package is innovative it is successful and it is targeted at people who need assistance. The record of the Minister is really quite startling: we have been in recession for seven quarters now and we have an unemployment rate that is amongst the lowest rates in the OECD. Despite the fact that Australia has not had a recession our unemployment rate is lower than Australia’s. 
Chris Tremain 
: Has the Prime Minister seen any alternative proposals for reducing unemployment? 
Hon BILL ENGLISH 
: The Prime Minister has not seen any alternative proposals for reducing unemployment. He has seen Opposition proposals for the expansion of welfare. That of course will do nothing for jobs. Mr Goff’s views on expanding welfare are impractical unfair and unaffordable but that is not surprising. He thinks he can keep making policy in the way that Labour did when it was in Government. 
Hon Annette King 
: Did the Prime Minister agree with the decision of the Minister for Social Development and Employment to abandon National’s social development election promises aimed at helping sole parents into training and back into work in order to give them and their families a chance at a better life; if so why? 
Hon BILL ENGLISH 
: The Minister for Social Development and Employment has not abandoned those policy objectives— 
Hon Annette King 
: Oh yes she has. 
Hon BILL ENGLISH 
: Well she has not abandoned those policy objectives and the Prime Minister fully supports the Minister in making decisions that set priorities and fund effective programmes. That sometimes means we do not fund programmes that do not work well. 
Hon Annette King 
: Does the Prime Minister stand by his pre-election commitment to help New Zealand’s most vulnerable people especially those who live on Struggle Street; if so when the Minister for Social Development and Employment says that tough decisions need to be made why is it that the first people to suffer are those who are on Struggle Street? 
Hon BILL ENGLISH 
: Of course that is not correct. Because of confidence in the Government’s economic policies our rate of unemployment is amongst the lowest rates in the developed world despite the fact that we have had a long recession. That means we are doing a good job of keeping people off Struggle Street. 
Chris Tremain 
: Has the Prime Minister seen any reports of an employment Minister dealing with rising unemployment during a recession? 
Hon BILL ENGLISH 
: Yes he has seen a report that states: “It takes more than hot air more than rhetoric and more than using the backs of unemployed people to make political points. … I despair at the gamesmanship of politicians trying to get votes from the problem of unemployment”. That was said by Annette King in this House. 
Carmel Sepuloni 
: How can the Prime Minister have confidence in the Minister for Social Development and Employment when it is clear that New Zealanders are losing confidence in her—New Zealanders like Trudy who said in response to the Minister’s performance in question time yesterday: “I feel Paula Bennett’s answer showed her running for cover and I was very disappointed in the answer she gave. It seems to me that she was painting a very rosy financial picture for beneficiaries. I defy her to show me any cases of beneficiaries who receive anywhere near that amount of”— 
Mr SPEAKER 
: The member will resume her seat. Questions are not meant to be speeches. I invite the member to reflect on that. I think we have heard enough of the question. I invite the Hon Bill English to answer it. 
Hon BILL ENGLISH 
: It is great to get a question from someone who was not a Minister 20 years ago and who did not say things like “I despair at the gamesmanship of politicians trying to get votes from the problem of unemployment.” Paula Bennett is doing a great job as the Minister for Social Development and Employment. What is it about female Ministers that irritates Labour so much? 
Moana Mackey 
: How can the Prime Minister have confidence in a Minister who is responsible for cutting the training incentive allowance; and does he agree with Christine of Gisborne a solo mother of four who now cannot do the nursing qualification that would enable her to move off the domestic purposes benefit and into paid work when she says: “The Government has been sitting there”—[ 
Interruption 
] 
Mr SPEAKER 
: I apologise for interrupting the member. Members may not like questions but provided they are within the Standing Orders—and I saw nothing wrong with that question so far—members are entitled to ask them. Because of the noise coming from the Government benches I invite Moana Mackey to start her supplementary question again. 
Moana Mackey 
: How can the Prime Minister have confidence in a Minister responsible for cutting the training incentive allowance; and does he agree with Christine of Gisborne a solo mother of four who now cannot do the nursing qualification that would enable her to move off the domestic purposes benefit and into paid work when she says: “The Government has been sitting there telling us to upskill get into jobs not run up debt to ride out the recession and then they go and take away the assistance that some people need to enable this to happen.”? 
Hon BILL ENGLISH 
: What we have learnt from the activities of the Labour Party over the last month is that we have to be pretty careful about believing whether Christine of Gisborne even exists and also whether she is on the domestic purposes benefit whether she owns three investment houses and whether all the information she has given to the Labour Party about her situation has been truthfully represented here. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. I am not sure whether you heard the end of the Minister’s answer but he challenged whether a member had truthfully represented something to the House. I think that is outside the Standing Orders. He can give an answer that defends the Government’s record without having to resort to that. 
Hon Rodney Hide 
: Of course the answer is within the Standing Orders. The Minister was not saying the member was lying or not telling the truth; he was querying whether all the facts had been presented—whether the matter had been truthfully represented. That is what that means and we have had plenty of instances where the examples used by the Labour Party— 
Mr SPEAKER 
: Order! 
Hon Rodney Hide 
: No no—I want to make the point— 
Mr SPEAKER 
: No no. I do not want to see points of order being used to criticise another party. The member has made his point perfectly well and I feel that on this occasion the interpretation I took was the one that the Hon Rodney Hide has just outlined. That is why I did not object to the answer. I accept that there was a robust exchange but where questions quote someone partially identified like that one did one can expect that answers will be pretty varied. If members want to use that practice in asking questions they will get answers that may not be what they want to hear. 
Hon Trevor Mallard 
: Why did Cabinet decide to cut the Enterprising Communities scheme given the fact as the Prime Minister has confirmed today that there will be 3000 job losses? 
Hon BILL ENGLISH 
: In the course of the Budget Cabinet looked at a whole range of schemes including many misguided and ineffective schemes put in place by the previous Government. Given the fiscal constraints we have made decisions about priorities and we stand by those decisions. 
Tax System and Benefit System—Alternative Approaches 
2.  
DAVID BENNETT (National—Hamilton East) 
 to the  
Minister of Finance 
: Has he received any reports on alternative approaches to the tax and benefit system? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes I have received reports of a policy from Phil Goff and Annette King to pay the unemployment benefit to people who have been made redundant but whose partners are still earning a good income. 
Hon Annette King 
: Was it last century? 
Hon BILL ENGLISH 
: No this was yesterday. Their justification is that these people— 
Hon Annette King 
: I hope the Minister’s quoting correctly. 
Hon BILL ENGLISH 
: —hang on; no listen the member might learn—have paid income tax while they have been working so they should get something back for it. The policy of Phil Goff and Annette King represents a fundamental change in Labour’s thinking about welfare. Assistance will now be targeted to those who have paid the most tax rather than to those who have the most need. 
David Bennett 
: Do the reports the Minister has received imply that the welfare system should be considered more like an insurance scheme? 
Hon BILL ENGLISH 
: The policy proposals of Phil Goff and Annette King essentially turn the welfare system into a form of insurance against redundancy to replace lost income and to help people who have made poor investments. I am surprised that the rest of the Labour caucus has gone along with this policy which turns the welfare system on its head. 
Mr SPEAKER 
: I ask Ministers to be careful in answering questions; they are not responsible for the Labour Party’s policies. They can certainly refer to them if they have reports on them but they are meant to answer about their own policies. Certainly some comparison could be drawn but an entire answer should not be focused on attacking the Opposition’s policies. I ask Ministers to respect that convention. 
Hon David Cunliffe 
: Is it now Government policy to bring back asset testing of beneficiaries and superannuitants—something the previous National Government including Bill English introduced and which caused hardships to thousands of older New Zealanders? 
Hon BILL ENGLISH 
: The answer to that is no. The National-led Government is however firmly committed to the welfare system as a safety net for those most in need and we will continue to keep that policy in place. We understand that Labour wants to move unemployment to an insurance system where those who are paid the most get the most benefit from going on the unemployment benefit. 
David Bennett 
: Do the reports he has received indicate that a good policy process has been followed? 
Hon BILL ENGLISH 
: The reports of the policy proposal I have seen from the Labour Party demonstrate that the policy was— 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. Mr English has amused himself by talking about matters long past and in previous Governments and that has been accepted by you Mr Speaker. He is now straying to venture his own personal opinions about whatever he considers to be the internal processes of the Labour Party. That is quite clearly out of order and I ask you to help him curtail himself. 
Hon Gerry Brownlee 
: Quite apart from the fact that the issues raised by David Cunliffe are in fact debating points I think that it would be fair to say that the honourable Bill English in referring to so many of the current Labour members who were Ministers or at least active in that party in the 1980s serves simply to demonstrate just how fresh the face of Labour is today. 
Mr SPEAKER 
: I blame myself for allowing that because points of order should not be used to make disparaging comments about other parties or members of this House. The Standing Orders are very simple on this matter. Ministers are not responsible for any other party’s policy. They can certainly comment on reports or can report the information they have from reports on other parties’ policies. That is perfectly proper. But they should not comment on other parties’ policies be hypothetical about them or offer their own analysis on them because that is not within the Standing Orders. The Minister may tell the House what is contained in reports about which he was asked. 
Hon BILL ENGLISH 
: I have seen reports on the front page of the newspaper of a man who was in a vulnerable situation and who was used for political purposes by the Labour Party which has now left him high and dry. Apparently he is to blame for the fact that he is not eligible rather than Phil Goff and Annette King who dragged this person and his misfortune into the centre of political debate and did so misrepresenting his situation. 
Hon David Cunliffe 
: Will the Government’s new asset-testing policy include shares in companies like Tranz Rail whether the holding is 30000 50000 or 100000 shares? 
Hon BILL ENGLISH 
: It is those kinds of questions and implications that mean that no one takes that spokesperson seriously. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. The Hon David Cunliffe put a question to the Minister of Finance. It was a factual question and he got a completely dismissive response. 
Mr SPEAKER 
: I hear the point the member is making. The slight dilemma I have on this matter is that the supplementary question was so far wide of the primary question. The primary question was actually about reports on alternative approaches to the tax and benefits system. I believe that the supplementary question asked about shareholdings in State-owned enterprises. That is why I had some difficulty in pulling the Minister up on it. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. [ 
Interruption 
] 
Mr SPEAKER 
: I have called the point of order and there will be silence. I will not have that kind of barracking or a Government member will be taking an early shower. 
Hon David Cunliffe 
: There are two points to be made in relation to that matter. The first case is that the primary question was extremely broad. It referred to any reports on alternative approaches to the tax and benefits system. The second point is that in my first supplementary question I asked whether it was Government policy to bring back asset testing. My second supplementary question directly followed from the first in asking for a specific aspect of that policy. 
Mr SPEAKER 
: I appreciate the attempt by the member to link asset testing for welfare benefits to shareholding in State-owned companies. I believe that that is a pretty long bow to draw which is why I wondered whether I should allow the supplementary question. I allowed it because I do not want to interfere too much. When the Minister did not answer the question precisely I felt that I could not intervene there either because the supplementary question was so far wide of the primary question. 
David Bennett 
: What advice does the Minister have for people who are experiencing financial difficulty because of redundancy? 
Hon BILL ENGLISH 
: I strongly advise people in that situation to make an appointment with their local Work and Income office to have a full assessment made of their circumstances and eligibility for assistance. Work and Income can provide a wide range of assistance for people who have been made redundant. However I strongly advise them not to make an appointment with the Labour Party because they will never quite know when they will be dragged into political debate and have their personal circumstances misrepresented for political purposes. 
Hon Annette King 
: “Mr Angry”! 
Mr SPEAKER 
: We always get into trouble when on the front benches members start interjecting on questions that have already been covered when I have called another member. I ask members to show some simple courtesy to their colleagues. 
Overseas Investment Rules Review—Ownership of Key Assets 
3.  
Hon DAVID PARKER (Labour) 
 to the  
Minister of Finance 
: Will he guarantee that any changes flowing out of the review of overseas investment rules ensure that key strategic assets can remain in New Zealand ownership? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes. The new rules will ensure that key strategic assets can remain in New Zealand ownership. The overseas investment changes the Government is proposing strike the right balance making overseas investment simpler and therefore more attractive while still protecting New Zealand’s most sensitive land and assets. The Government will address any public concerns in this area by requiring overseas investors to meet additional requirements to those for domestic investors. In addition we will consider a new national-interest test similar to that used in other countries as a final reserve power. 
Hon David Parker 
: Can the Minister guarantee that his changes will not allow Auckland Airport and other strategic assets to be taken out of New Zealand control? 
Hon BILL ENGLISH 
: I can guarantee in the same way as occurred under the previous Labour Government that anyone proposing to invest in Auckland Airport will have to go through the overseas investment screening regime. That regime will include passing a good-investor test and a national-interest test. 
Hon David Parker 
: Does the Minister support the commitment given by John Key that a National Government would not allow overseas buyers to invest in strategic New Zealand assets if that investment tipped foreign ownership over 50 percent? 
Hon BILL ENGLISH 
: As I have said today the Government is looking at using a national-interest test instead of a strategic-asset test because we believe it is too confusing and difficult to define exactly what a list of strategic assets might be. Our own stocktake has indicated that there are already existing protections such as the ownership restrictions on Telecom or New Zealand supervision of Australian banks. Most other assets that really matter such as the Cook Strait cable are in public ownership and will remain in public ownership. 
Peseta Sam Lotu-Iiga 
: Why has the Government reviewed overseas investment rules? 
Hon BILL ENGLISH 
: We have reviewed overseas investment rules because in this recession and coming out of it New Zealand will need to attract overseas investment. New Zealanders do not save enough to be able to source all investment in New Zealand. Without new investment there will be no new jobs. We are reviewing rules that have become unnecessarily complex so that the processes are quicker and more decisive but the protections New Zealanders are looking for remain in place. 
Peseta Sam Lotu-Iiga 
: What progress can the Minister report on the Government’s review of overseas investment rules? 
Hon BILL ENGLISH 
: First we have picked up some policy work that began under the previous Government to delegate more minor decisions to the Overseas Investment Office. Second—again in line with previous proposed policy changes from the Labour Government—certain types of transactions will be exempt from requiring consent under the Overseas Investment Act. Finally officials are now completing work on how the Overseas Investment Act itself can be improved. We believe it can be improved because over the last 10 years 98 percent of overseas investment applications have been approved and only 2 percent have been turned down. We want to make sure that the rules target genuinely sensitive assets and do not put a whole lot of investors through an unnecessary process. 
Hon David Parker 
: Under the New Zealand - interest test that the Minister referred to in a prior answer will he decline the sale of infrastructure assets where monopoly profits arise as the Commerce Commission recently found exist in the electricity sector; how can he deny that those billions of dollars of monopoly profits which are bad enough in themselves will otherwise be lost to the New Zealand economy with New Zealanders becoming poorer? 
Hon BILL ENGLISH 
: Monopoly profits are no more acceptable if the monopoly is owned by the Government than if it is owned by anybody else. The first solution is to make the electricity market more competitive and my colleague the Minister of Energy and Resources has lodged a major review of the electricity market. He is interested in protecting consumers from unnecessary price increases. 
Dr Russel Norman 
: Why did the Minister state in a release dated 17 March 2009 that “A Technical Reference Group will be established to advise officials on the practicality of any amendments to the Act” when the previous Minister for Land Information Richard Worth had already chosen this group who were all corporate lawyers and had sent thank you letters to the members of this group a week earlier? 
Hon BILL ENGLISH 
: I cannot give the member a detailed explanation of the sequence. However that group provided valuable advice on the actual process that applications go through. The advice may lead to the Government putting up policy proposals to simplify the process while maintaining the protections that New Zealanders want to see. 
Hon David Parker 
: Does the Minister agree that it is a privilege not a right for an overseas person to buy New Zealand land; if so why is he diluting the current controls on the sale of rural land given the different attitudes of some overseas owners to allowing access across their land to rivers lakes and mountains? 
Hon BILL ENGLISH 
: I believe it is a privilege for anyone to own land. If people own land they should take the role of stewardship seriously so they can hand that land on to others in better condition than in which they received it. In respect of public access the Government’s proposals will explicitly require a higher standard from overseas investors than from domestic investors. However if we are worried about public access then there are the tools of domestic policies such as district plans whereby people can and should influence the availability of public access. It is not an issue only when an overseas investor owns the land. 
Dr Russel Norman 
: What was the reasoning behind there being no public announcement regarding New Zealand’s overseas investment rules being rewritten by five corporate lawyers whose firms work for overseas investors? Why did Richard Worth’s office instead advise placing the names of this group on the Treasury website in “a non-highlighted manner”? 
Hon BILL ENGLISH 
: The rules are being reviewed by the duly elected Government of New Zealand not some group of advisers. The group has given some advice to the Government and we have taken some parts of that advice and rejected other parts. The proposals are out in the public arena today. 
Dr Russel Norman 
: I seek leave to table a few documents in relation to this matter. The first is the press release from Mr English of 17 March in which he says that a technical reference group will established. 
Mr SPEAKER 
: Leave is sought to table a press release from the Hon Bill English. Is there any objection? There is objection. 
Dr Russel Norman 
: I seek leave to table a letter from Dr Richard Worth former Minister for Land Information to Don Holborow from Simpson Grierson thanking him 5 days prior to the press release from Mr English for agreeing to join the panel. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Dr Russel Norman 
: I seek leave to table a letter from Dr Richard Worth to Garth Sinclair from the corporate lawyers Russell McVeagh thanking Mr Sinclair for agreeing to join the reference group. The letter is dated 5 days prior to Mr English’s press release. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Dr Russel Norman 
: I seek leave to table a letter from Dr Richard Worth former Minister for Land Information to Tim Williams from Chapman Tripp corporate law firm thanking him for agreeing to join the reference group. The letter is dated 5 days prior to the Minister’s press release. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Dr Russel Norman 
: I seek leave to table a letter from Richard Worth to Andrew Petersen of the corporate law firm Bell Gully thanking him for agreeing to join the technical reference group on overseas investment dated 12 March which is 5 days prior to the press release. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Dr Russel Norman 
: I seek leave to table the fifth letter which is to Andrew Monteith of Minter Ellison Rudd Watts corporate law firm from Richard Worth thanking him for agreeing to join the panel. It also is dated 5 days prior to the Minister’s press release announcing that a panel was going to be set up. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Dr Russel Norman 
: Finally I seek leave to table an internal email from Richard Worth’s office in which his office says that there is to be no announcement of the technical reference group and that the material is to be placed in a non-highlighted manner on the website. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Accident Compensation Corporation—Front-line Services 
4.  
MICHAEL WOODHOUSE (National) 
 to the  
Minister for ACC 
: What steps has ACC taken to implement the Government’s policy of shifting resources to front-line services? 
Hon Dr NICK SMITH (Minister for ACC) 
: 
 The Accident Compensation Corporation (ACC) is implementing the new Government’s policy of moving resources to the front line. This has involved reducing the corporate office by 70 and putting an additional 100 front-line staff to work in assisting claimants to get back to work with quicker and more effective rehabilitation. 
Michael Woodhouse 
: By how much have staff numbers at ACC’s corporate office grown in recent years and how does this compare with changes in front-line staff numbers? 
Hon Dr NICK SMITH 
: Corporate office staff numbers grew from 377 in 2003 to 490 in 2008 a 30 percent increase. This change was 27 percent faster than growth in front-line ACC staff. This balance was wrong and needs correcting. That is why the new Government is making changes. 
Michael Woodhouse 
: How will accident compensation claimants benefit from this shift in resourcing to the front line—particularly the increase in service delivery staff? 
Hon Dr NICK SMITH 
: The Government is requiring of ACC a strong focus on rehabilitation because of the consistent deterioration in this area over the last 5 years. This has been having a very detrimental effect on accident compensation finances as well as adversely impacting on people’s lives. The additional 100 front-line staff are to be focused on improving the timeliness of the service that ACC provides for claimants particularly those on income compensation so that they can return to work as quickly as possible. 
Grant Robertson 
: Can the Minister confirm that his triumphal announcement today was first made on 27 May and that there has actually been a net loss of 70 jobs as a result of the restructuring of ACC? 
Hon Dr NICK SMITH 
: Yes in May we did announce a reduction in staff at head office of 70. Labour wants to talk about only one side of the equation. On this side of the House we are interested in providing real services for the public. That is what we think public services are about and that is why putting 100 additional front-line staff in ACC so that it can more quickly rehabilitate people is exactly what the people of New Zealand voted for and want. 
Grant Robertson 
: Is the Minister comfortable that 70 hard-working New Zealanders have lost their jobs in an agency he is responsible for? 
Hon Dr NICK SMITH 
: Of course there would not have been a need for the staff losses at corporate office if not for the policy of the previous Government to have a bloated Wellington Public Service. If members opposite want to shed crocodile tears about it they should talk to the former Ministers who allowed a 30 percent increase in the size of ACC’s corporate office at a time when that was unaffordable. 
SAS—Deployment in Afghanistan 
5.  
KEITH LOCKE (Green) 
 to the  
Prime Minister 
: Will he make public any decision for or against the deployment of the New Zealand Special Air Service to Afghanistan as soon as a decision is reached; if not why not? 
Hon BILL ENGLISH (Deputy Prime Minister) 
on behalf of the  
Prime Minister 
: If such a decision was made the Government would follow the precedent set by the announcements of previous deployments of the SAS. 
Keith Locke 
: I raise a point of order Mr Speaker. I do not think the question was really addressed. I was not asking for specific details of any possible SAS deployment which often is kept secret; I was asking whether a Cabinet decision for or against would be made public—as is normal in respect of most decisions—so that we can discuss it. 
Mr SPEAKER 
: The Minister in answering the question spoke of following the standard procedure in that situation. The member does have a further supplementary question with which to dig deeper into that but I believe that the Minister answered the question; maybe he did not answer it quite in the way that the member wanted but he does have a further supplementary question with which to dig further into that answer. 
Keith Locke 
: Will the Prime Minister consider giving more civil aid to Afghanistan instead of sending special forces to be engaged in United States - led operations which seem only to drive more Afghans into the arms of the extremist Taliban? 
Hon BILL ENGLISH 
: The Government as the Prime Minister has said is doing a review of its involvement in Afghanistan. The Government may be interested in propositions about civil aid but it will also review its military involvement in Afghanistan. 
Dr Kennedy Graham 
: Is there any statutory authority that requires the Government to keep confidential from the New Zealand public the details of overseas deployments of the SAS; if so what is it? 
Hon BILL ENGLISH 
: As far as I am aware there is no statutorily defined process. We understand the public interest in such a decision. If a decision is made to deploy the SAS the Government will be as open as it can be while maintaining the safety and security of any deployment. 
Keith Locke 
: Does the Prime Minister agree that it would not reflect well on New Zealand if our SAS was involved in American-led combat operations which often cause significant civilian casualties? 
Hon BILL ENGLISH 
: Those are matters that the Government will take into account in its review of its involvement in Afghanistan. 
Keith Locke 
: To what extent will the Prime Minister take into account the growing unpopularity of the war when polls in Australia Britain and Canada show that a majority of the voters in those countries want their troops withdrawn from Afghanistan? 
Hon BILL ENGLISH 
: I think the member can be assured that the Government is aware of the full military and political complexity of involvement in Afghanistan and will take those factors into account. 
Keith Locke 
: I seek leave to table a description of a Populus ITV News poll from Great Britain dated 14 July 2009 showing that 59 percent of British people want their soldiers to be brought home. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is none. 
Document by leave laid on the Table of the House. 
Keith Locke 
: I seek leave to table an Angus Reid Strategies national public opinion poll from Canada showing that 51 percent of Canadians want Canadian troops withdrawn from Afghanistan. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is none. 
Document by leave laid on the Table of the House. 
Keith Locke 
: I seek leave to table an EKOS poll dated 16 July 2009 showing that 54 percent of Canadians oppose their troops being in Afghanistan. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is none. 
Document by leave laid on the Table of the House. 
Keith Locke 
: I seek leave to table an Essential Research poll from Australia showing that 50 percent of Australians want Australian troops withdrawn from Afghanistan. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is none. 
Document by leave laid on the Table of the House. 
Adult and Community Education—Programme Closures 
6.  
Hon MARYAN STREET (Labour) 
 to the  
Minister of Education 
: What reports has she received of schools closing down their adult and community education programmes? 
Hon ANNE TOLLEY (Minister of Education) 
: 
 The decision whether to provide adult and community education is one for individual schools to make. The Tertiary Education Commission is currently running an application process for Government funding for schools for 2010. I have encouraged schools that wish to offer adult and community education to engage with this process. 
Hon Maryan Street 
: Is she aware that Newlands College has been running a community education programme since 1976—that is for 33 years—and that it now has to close that programme because of her funding cuts? 
Hon ANNE TOLLEY 
: I repeat that that decision is entirely one for the school to make. It could continue to run courses both Government-funded and on a user-pays basis but that decision is entirely the school’s decision to make. 
Colin King 
: What reports has she received on the Government’s commitment to adult and community education? 
Hon ANNE TOLLEY 
: The Government is committed to adult and community education and that is why we are investing $124 million in it over the next 4 years. But I have received reports of Labour Party members spreading misinformation about the Government’s plan. Lynne Pillay for instance said that we would not be funding sign language classes. Well she is wrong. Maryan Street said that we are cutting $152 million. Well she is wrong. With that level of distance from the facts both those members seem to be a perfect fit for the Labour Party leadership. 
Hon Maryan Street 
: Is it of any concern to the Minister that the introduction of a user-pays system as she suggested in her answer to the primary question to allow the continuation of the Newlands College community education programme would see fees double or probably treble according to the principal of the college and that such cost increases would put skills acquisition out of the reach of many of the people in the community that Newlands College serves? 
Hon ANNE TOLLEY 
: I repeat to that member that the decision is entirely the school’s to make. I encourage and will continue to encourage schools to engage with the Tertiary Education Commission. It has sought expressions of interest by the end of this month and I encourage schools to be talking with the Tertiary Education Commission. 
Hon Maryan Street 
: What has she to say to the 3200 people who enrolled in the Newlands College community education programme in the last financial year and who will now not be able to advance their skills through that vehicle next year or to the 81 tutors who ran the 321 classes and who will now be without a job? 
Hon ANNE TOLLEY 
: I would say to those members of the community that they should be talking with their school about the provision of some of those courses that they may well be prepared to pay for on a user-pays basis. 
Health Camps—Funding 
7.  
TODD McCLAY (National—Rotorua) 
 to the  
Minister for Social Development and Employment 
: Has the Government announced any new funding to ensure the welfare of our most vulnerable children and families? 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 Yes I am pleased to announce that this Government has secured the future of children’s health camps. [ 
Interruption 
] This Government will be investing an extra $1.5 million into health camps each year. I heard Opposition members just then call out: “About time.” This is an issue that the Labour Government ignored for 9 long years driving those health camps to the brink of closure but within 9 months the National Government has sorted it out. 
Todd McClay 
: Can the Minister give further detail on the Princess of Wales Children’s Health Camp in Rotorua? 
Hon PAULA BENNETT 
: I certainly can. In Rotorua the Princess of Wales Children’s Health Camp takes kids from all over the central North Island from the Coromandel to Taranaki. That camp will undergo a badly needed $2 million upgrade securing a safe healthy environment for the children and at the same time saving about 40 jobs. When I became Minister this was one of the first camps that I visited. It is down to that member’s determination and doggedness quite frankly in making sure we got there saw them and fixed the problem. 
Dr Rajen Prasad 
: What evidence does the Minister have to suggest that social service agencies are cynically making applications and second-guessing Government priorities and adapting to suit securing funding in the process as she mentioned in her speech yesterday and how does this reflect her understanding of the work that the many voluntary social service agencies do with our most vulnerable children? 
Hon PAULA BENNETT 
: Those social service agencies do amazing work with our most vulnerable children with little resourcing—there is no doubt about that. We have seen evidence for the last 10 years that they have tried to second-guess the Labour Government because they knew they were being used as a ping-pong ball. They had to try and guess where the funding was going so they could follow it. We are being up front about what they do well. We will back them and we are being open about it. 
Dr Rajen Prasad 
: I seek leave to table the Minister’s speech yesterday to the national hui for child advocates. 
Mr SPEAKER 
: Leave is sought to table a speech made yesterday by a Minister. Is there any objection to that course of action? There is no objection. 
Document by leave laid on the Table of the House. 
Hon Nathan Guy 
: Can the Minister explain if there have been any particular issues around the Otaki Children’s Health Camp? 
Hon PAULA BENNETT 
: Otaki has a large camp with some historically significant buildings in need of repairs that the previous Government would not pay for. A former staff member at the camp wrote me a letter of thanks because she is so pleased that the camp will remain open. I would like to thank the Hon Nathan Guy for all the hard work I know he and his local community have done to secure the future of that health camp. I know they had an uphill battle for many years but we are pleased to be able to step in and help that happen. It is a great news story. 
Justice Minister—Chief Justice’s Speech 
8.  
Hon LIANNE DALZIEL (Labour—Christchurch East) 
 to the  
Minister of Justice 
: Had he read the Chief Justice’s speech “Blameless Babes” in its entirety when he stated to TVNZ news on Thursday 16 July “… the Government of New Zealand is elected to make policy—that’s what elections are for; judges are appointed and their job is to apply the law”? 
Hon SIMON POWER (Minister of Justice) 
: 
 Yes. 
Hon Lianne Dalziel 
: Does the Minister agree that addressing the drivers of crime is a long-term strategy requiring community education and requires political parties and the media to collaborate with each other to achieve that end as they have done in Finland; if so why did he respond to the single issue that undermines the Chief Justice’s call for community education and informed debate? 
Hon SIMON POWER 
: The member will know that I take the drivers of crime extremely seriously. I am not sure that the Finnish model is necessarily the most appropriate in New Zealand’s context but we are continuing to look at the issue. I say that those issues of policy are matters for the Government. 
Hon Lianne Dalziel 
: Is the Minister aware that reoffending rates are higher for those sentenced to imprisonment than those sentenced to community-based sanctions and that longer prison sentences increase the rate of reoffending; if so how will this information be allowed to inform public debate on effective interventions if the Chief Justice is silenced by him? 
Hon SIMON POWER 
: In response to the second part of the member’s question I think my comments were probably not as strong those of the previous Prime Minister Helen Clark who told the judiciary to “stick to the bench” because if they chose to go to the political arena they would get a political response. With regard to the first part of the question relating to the make-up of the prison population and the way those sentencing structures work I acknowledge that there are some divided views on the prison population and its make-up. For example in 2004 Phil Goff publicly celebrated the increased prison muster as an indication he was tough on crime yet 2 years later Damien O’Connor told Parliament that almost 30 percent of inmates in jail were no risk to society. 
Hon Lianne Dalziel 
: I raise a point of order Mr Speaker. My question asked “Is the Minister aware that reoffending rates are higher for those sentenced to imprisonment than those sentenced to community-based sanctions”. He did not answer the question. 
Mr SPEAKER 
: I listened to the member’s question very carefully and the Minister needed to answer only one part. He answered the second part of the question very clearly. I was concerned that he went on a bit long in his subsequent comments. 
Chester Borrows 
: Does the Minister stand by his statement that “… the Government of New Zealand is elected to make policy—that’s what elections are for;” and does he agree that policy issues that arise in the justice portfolio often require timely responses? 
Hon SIMON POWER 
: Yes. For example I have seen a series of reports that show the Law Commission first recommended the repeal of the partial defence of provocation in 2001. The matter went to Cabinet in 2003. The Labour Government asked the Law Commission to look at it again. When the commission produced its most recent report in September 2007 I am advised the Government of the day did not respond at all and did not even produce a Cabinet paper as required by the Cabinet rules. In contrast I have announced today that I am seeking Cabinet support to remove the partial defence of provocation from the statute book. 
David Garrett 
: Does it concern the Minister that the judge in charge of all our judges thinks “Penal policy is largely irrelevant to reduction of crime” as the Chief Justice said in her recent speech; if not why not? 
Hon SIMON POWER 
: I was concerned and made a careful statement about my concerns about the way those opinions were expressed. There is an appropriate context for judges to express their views to members of the executive and I have to say that by and large most heads of bench do that. 
Hon Lianne Dalziel 
: Is the Minister aware that the Law Commission report on the defence of provocation contained a number of options to deal with the situation once the defence had been removed from the law and that they entailed consideration of diminished responsibility degrees of murder and also the question of sentencing guidelines—which was in fact the option chosen by the previous Labour Government with its proposed Sentencing Council and which the National Government has decided not to proceed with—and in light of that why on earth did the Government refuse to allow my member’s bill to be introduced? 
Hon SIMON POWER 
: Firstly in answer to the second part that member’s Government had 9 years to deal with this issue. Secondly this Government as the member will be aware is considering a range of reforms in the criminal justice area which is part of a comprehensive package. It is the Government’s view that those matters should be dealt with in a packaged form. 
David Garrett 
: How can the people of New Zealand have any confidence in a Chief Justice who thinks that “Penal policy is largely irrelevant to reduction of crime” and therefore must logically conclude that it does not matter that William Bell a person with 102 convictions including for armed robbery was out of jail on parole and was therefore able to kill three people at the— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. There has been a recent Privileges Committee report on this matter and my understanding is that the way you were going to rule is that matters regarding confidence in the judiciary were to be brought up in a very specific way and not casually like this. 
Charles Chauvel 
: There is another objection to the supplementary question and that is that it offends against Standing Order 113 in that it was an offensive reference to a member of the judiciary. 
Mr SPEAKER 
: I am not sure whether it was an offensive reference but it was sailing very close to the wind. The Hon Trevor Mallard’s point is correct. I was not going to pull the member up because I believed that the Minister would probably be very careful in answering it but the point the Hon Trevor Mallard has raised is one that is absolutely correct as was the point raised by Charles Chauvel. Members need to be very careful about the separation between Parliament and the judiciary. I will allow the Minister to answer but he knows how careful he needs to be in this area. 
Hon SIMON POWER 
: I have confidence in the judiciary. 
Hon Lianne Dalziel 
: I seek leave to table the 2009 annual Shirley Smith Address “Blameless Babes” and commend it to the House to be read. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Benefits—Strategies for Families 
9.  
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
 to the  
Minister of Finance 
: In light of his statement during the Budget speech that “Protecting the most vulnerable is a priority” what strategies are in place to address situations for families on benefits who continue to experience very high poverty rates? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 In the Budget the Government made a decision to absorb much of the shock of the recession for those most vulnerable to the sharper edges of the recession by borrowing an extra $30 billion over the next 4 years to maintain entitlements to income support increase front-line public services in health education and justice and invest billions in infrastructure projects that will support employment. In the longer term the only way to combat the poverty the member refers to is a healthy growing economy that lifts incomes creates jobs and gives those outside the workforce an opportunity to get back into it. Budget 2009 was the first step in that direction but we have also supplemented those measures with a range of more targeted policies such as the Community Response Fund and the insulation fund. 
Hone Harawira 
: Does the Minister see a correlation between poverty and offending and what advice has he received from the Minister of Justice to address issues relating to poverty? 
Hon BILL ENGLISH 
: The member will be familiar with the actions that the Minister of Justice has taken to bring together a range of people with an interest in justice to address the drivers of crime. The Maori Party played a constructive role in that process. We look forward to working more with the Maori Party on the kinds of issues the member has raised. 
Hon Ruth Dyson 
: What consideration did the Minister give to the most vulnerable in our society those yet to be born when he supported the decision to reverse the mandatory fortification of vitamin B in our bread which could have saved between 20 to 30 babies each year every year who will now be aborted because of his decision? 
Hon BILL ENGLISH 
: Apart from taking deep personal offence at the implication of that question—I gave it full consideration. 
Hone Harawira 
: What resources will be targeted to address the relationship between poverty and criminal offending? 
Hon BILL ENGLISH 
: There are any number of opinions about the relationship between poverty and criminal offending and I think most members of Parliament would be of the view that the kind of solutions that fix both are the solutions we are after. 
Hekia Parata 
: Tena tatou. What other assistance is available for families in real hardship? 
Hon BILL ENGLISH 
: In addition to the extra $1 billion that the Government will be spending on the main benefits this year we have put aside extra money to help families in trouble whether or not they are on benefits. There is $79 million more for special needs grants and $153 million more for temporary additional support special needs grant limits have been doubled and we have raised the other emergency grant limit from $200 to $500. This is extensive support and if Labour members think there should have been more they should have provided it when they were in Government just like after 9 years they should have put folic acid in bread if they thought it really mattered. 
Kopu Bridge Replacement—Creation of Jobs 
10.  
DARIEN FENTON (Labour) 
 to the  
Minister of Transport 
: How many jobs will be created by the replacement of the Kopu Bridge which was brought forward as part of the Government’s $500 million jobs and growth plan? 
Mr SPEAKER 
: Was that question as on the Order Paper? 
DARIEN FENTON 
: Yes. 
Mr SPEAKER 
: I do not believe it was but if I am wrong I apologise to the member. I ask her to read the question on the Order Paper please. 
DARIEN FENTON 
: It is exactly as I read it. I will read it again. To the Minister of Transport how many jobs will be created by the replacement of the Kopu Bridge which was brought forward as part of the Government’s jobs and growth plan? 
Hon NATHAN GUY (Associate Minister of Transport) 
 on behalf of the  
Minister of Transport 
: The Minister is advised that when construction is in full swing up to 50 people will be working full-time on the site. Construction is expected to take 3 years. There will be an additional 100 people involved in the downstream jobs supplying material and providing support services. This project will greatly improve freight and passenger access into the Coromandel region boosting economic development and tourism and saving significant time for people who sit in traffic congestion. 
Sandra Goudie 
: How long have the people of the Coromandel had to wait for this new bridge? 
Hon NATHAN GUY 
: For far too long. The replacement of this 82-year-old bridge which has been talked about for a long time and strongly advocated for by the local MP Sandra Goudie is occurring now only because the Government has brought it forward by providing extra money in the National Land Transport Fund via the February stimulus roading package of $142 million. The previous Labour administration signed off on a 9 percent decrease that would have seen projects like this one not get off the ground or even be cancelled. 
Darien Fenton 
: How many of those jobs will be going to local contractors and firms and what percentage of the total expenditure will stay in the local communities? 
Hon NATHAN GUY 
: The member will be pleased to know that very soon there will be an announcement of the successful tenderer. I am led to believe by New Zealand Transport Agency officials that the successful tenderer will be a New Zealand - based company. The member needs to know that a significant number of jobs will be created as a result of this project. I have already alluded to that in my primary answer. 
Darien Fenton 
: Is the Minister aware that only 3000 tonnes of the 11000 tonnes of steel required for the bridge will be sourced locally and that the rest will come from overseas; and how does that support or create jobs for locals and New Zealanders? 
Hon NATHAN GUY 
: The member should be aware that a good chunk of the steel that will be used in the bridge construction project will be sourced from New Zealand. However small portions of specific types of steel that are not manufactured in New Zealand will need to come from overseas. 
Housing New Zealand Corporation—Spending Priorities 
11.  
TIM MACINDOE (National—Hamilton West) 
 to the  
Minister of Housing 
: What are the spending priorities for Housing New Zealand under the new Government? 
Hon PHIL HEATLEY (Minister of Housing) 
: 
 The three main priorities are insulating State houses upgrading State houses that are in serious disrepair and adding new houses in high-need areas. The funding of $25000 sculptures in corporation developments as encouraged by the previous Government is not a priority for us. 
Tim Macindoe 
: How have the Housing New Zealand Corporation’s priorities changed? 
Hon PHIL HEATLEY 
: I will give members an example. An albatross sculpture was commissioned for Northcote under the previous Government. A contract was entered into and a significant down payment was made. I found out about this sculpture when it was half finished. Modest sponsorship of local communities is fine but officials are crystal-clear that house upgrades for needy families not expensive sculptures are the Government’s priorities from now on. 
Moana Mackey 
: What priority does the Minister give to the persistent problem of housing affordability given that he has just admitted that it is not a priority for the Housing New Zealand Corporation? What new initiatives were funded in Budget 20009 or does he still believe that tax cuts for the wealthiest New Zealanders are the answer to helping low-income families into homes? 
Hon PHIL HEATLEY 
: I remind the House that we have increased the Housing Innovation Fund which is predominantly used for first-home buyer and home renter projects from $12 million to $20 million. That is just one example. 
Tim Macindoe 
: Why does the Housing New Zealand Corporation have to change its focus? 
Hon PHIL HEATLEY 
: I agree with the Northcote tenants who in this week’s  
Campbell Live 
 story said: “$25000 would go a long way if it was spent on improving security and the homes.” I tell colleagues that $25000 would in fact insulate seven State homes. Our stimulus package of $125 million into housing upgrades and new builds—lifting needy families out of squalor keeping 1341 people employed in the month of May and helping New Zealand through a tough recession—is a priority for us. A $25000 albatross sculpture was a priority for the Labour Government. 
Biosecurity New Zealand—Staff Cuts 
12.  
Hon JIM ANDERTON (Leader—Progressive) 
 to the  
Minister for Biosecurity 
: Has he received any reports on cuts to staff positions at MAF Biosecurity New Zealand; if so how will these actions improve New Zealand’s biosecurity? 
Hon DAVID CARTER (Minister for Biosecurity) 
: 
 Yes I have received reports and those reports made it clear that unless action was taken by Biosecurity New Zealand it would be facing accumulated deficits of $10 million in its cost-recovery operations. This was due to a major fall in trade associated with the recession. The steps being taken will maintain existing levels of biosecurity and will ensure that Biosecurity New Zealand does not have to divert funding from vital front-line operations to cover this deficit. 
Hon Jim Anderton 
: Can the Minister give a guarantee that no new biosecurity incursion will result from cutting 60 front-line border biosecurity jobs; if he cannot give such a guarantee what will the cost to New Zealand be of a single biosecurity incursion as a result of front-line border control staff being cut? 
Hon DAVID CARTER 
: I can give an assurance that I am comfortable that any reductions in staff numbers associated with the decline of trade occurring at the borders will not endanger our borders and result in incursions. I point out to the previous Minister that I as Minister for Biosecurity have a substantially better record in regard to incursions than that Minister ever had. 
Dr Cam Calder 
: What other reports has the Minister seen on the border operation review? 
Hon DAVID CARTER 
: I have seen claims from Mr Anderton and from Labour’s fresh face Mr O’Connor that the review is a result of funding— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. Can you anticipate what I will say? 
Mr SPEAKER 
: I think I can anticipate it. I should alert the Minister—[ 
Interruption 
] I am on my feet and a point of order has been raised. Ministers must not use that kind of language when referring to other members of this House. 
Hon Damien O’Connor 
: I raise a point of order Mr Speaker. I have taken absolutely no offence at that. 
Hon DAVID CARTER 
: I have seen claims from both Mr Anderton and Mr O’Connor that the review is a result of the funding in this year’s Budget. That is totally untrue and I can best direct the House to advice given by a former Minister for Biosecurity when asked about a similar issue: “… the member clearly has no understanding of the difference between one-off incursion expenditure … and the baseline expenditure … Someone on the front bench who has been in a Cabinet of any description … should take the member aside … and teach him a lesson on Government accounting.” That very sound advice came from one Jim Anderton himself. 
Hon Jim Anderton 
: Has the Minister seen the comment of National’s biosecurity spokesperson when in Opposition that the biggest threat to our economy is a biosecurity incursion and Federated Farmers’ comment that “being disease-free is New Zealand’s real trump card when it comes to market access.”; what will he tell them when there is a biosecurity incursion as a result of a cut in front-line border staffing? 
Hon DAVID CARTER 
: There has been absolutely no cut to baseline biosecurity funding. In fact it has been increased. The $1.9 million reduction to which the member is referring has come about because Biosecurity New Zealand has successfully eradicated incursions like that of the saltmarsh mosquito which occurred under the previous Minister’s watch. 
Hon Damien O’Connor 
: Does the Minister consider that the number of biosecurity incursions that have occurred in the last few years to be too many; if so how does he think his cut of 60 skilled and competent staff will reduce incursions in the future? 
Hon DAVID CARTER 
: I totally agree that the number of incursions that have occurred in the last few years is totally unacceptable. I certainly hope we do not see that pattern continuing under this Government. I point out to that member that the cost of this particular activity is recovered at the border. That member knows full well—because he was told at the select committee—that trade volumes are down 13 percent and the number of imported cars is down by 70000. Those costs have to be addressed. The member might advocate that they be passed on to current importers; I think that would be totally unfair. 
Hon Jim Anderton 
: I seek leave to table—[ 
Interruption 
] 
Mr SPEAKER 
: A point of order has been called and a member loudly interjects. I ask members to pay a little more attention to what is going on. 
Hon Jim Anderton 
: I seek leave to table an inch-thick 98-page dossier of comments demanding that New Zealand’s front-line border biosecurity protections be strengthened not cut—all from the National Party’s biosecurity spokesperson in Opposition Shane Ardern. 
Mr SPEAKER 
: Leave is sought to table that collation of documents. Is there any objection? There is no objection. 
Documents by leave laid on the Table of the House. 
Disputes Tribunals Amendment Bill 
Third Reading 
Hon SIMON POWER (Minister of Justice) 
: 
 I move  
That the Disputes Tribunals Amendment Bill be now read a third time 
. I intend to take only a short call on this largely non-controversial legislation. This measure was part of a small business relief package announced by the Prime Minister on 4 February this year to promptly respond to the global financial crisis. Expanding the jurisdiction of the tribunal also fulfils National’s election promise to “increase the jurisdiction of the disputes tribunal to reduce pressure on District Courts”. The bill increases the maximum claim levels of the disputes tribunal from $7500 to $15000 or by consent of both parties from $12000 to $20000. I acknowledge the cooperation of all parties and officials in ensuring that this legislation could be introduced examined by the Justice and Electoral Committee and debated by the House expeditiously to enable it to come into force just 6 months after the Prime Minister’s announcement. It also reflects the respect accorded to the valuable dispute resolution services provided by the disputes tribunal. 
The disputes tribunal already resolves more than 20000 disputes each year. The increased maximum claim levels will assist up to a further 3600 claims to be resolved each year. This increase will enable individuals households and in particular small businesses to resolve their claims more quickly. This will be of assistance particularly in the current economic climate. Submissions to the Justice and Electoral Committee raised a number of other possible changes including an even greater increase in the monetary limits. Although there may be merit in some of those ideas the Government considers that it is best to wait and monitor the impact of the present amendments before deciding whether further change to the tribunal is warranted. 
During the course of the debate I noted that Charles Chauvel made the comment that maybe dealing with limits in both the agreed and non-agreed context between parties may be something more appropriately dealt with by way of Order in Council as opposed to statutory and legislative change. I have thought a lot about the contributions that member made during the course of the Committee and second reading stages. I still think that when we are dealing with the jurisdiction of a legal tribunal it is for Parliament to set those particular limits through this Chamber in a way that can ensure a consistency of debate but also make sure that when it comes to issues such as this we are mindful of the impacts the legislation will have on the costs and the requirements for legal advice should these issues become more complex. 
This is a significant increase in the maximum limits for claims before the disputes tribunal. This bill will have an important impact on access to justice for New Zealand. Again I thank all of those who have been involved in this small but important bill. I commend the bill to the House. 
CHARLES CHAUVEL (Labour) 
: 
 I listened with my customary level of interest to the contribution that has just been made by the Minister of Justice on the third reading of the Disputes Tribunals Amendment Bill. I will say first that the question of whether it is necessary for Parliament itself to deal with maximum monetary levels of jurisdiction for an entity like the disputes tribunal is twofold. First is all the time taken up by Parliament during the first second and third readings a Committee stage and a select committee process justified given the nature of the exercise here as against the alternative? The alternative would be to give the executive power to deal with the matter by Order in Council. That would automatically involve the Regulations Review Committee in the scrutiny of the matter. If anybody had a concern about the way in which the executive was seeking to either increase or decrease the claim limits of the tribunal then that concern could be raised in that forum or when the matter was reported back to the House in the event that a complaint had gone to the committee. So it is absolutely possible and feasible to have a good level of parliamentary scrutiny under our existing procedures while not spending a whole lot of the House’s time dealing with a matter such as the regular need to increase the jurisdiction of the tribunals themselves. 
On the question of the levels that have been agreed upon I asked the Minister during the Committee stage to take a call and explain why the particular figures had been settled on. I remind the House that the increases that have been agreed to are from a $7500 as-of-right level to $15000 and from $12000 by the agreement of the parties to $20000. The explanatory note of the bill notes that three options were canvassed when it came to considering what the increases should be. One option was no increase whatsoever; another was an increase to a maximum of $25000 which was nearly settled on given that the preferred option arrived at was $20000; and the third option increased the maximum claim level to $50000. 
The explanations as to why the particular level was reached and why for example the $50000 level was rejected seem fairly scant. It would have been helpful I think to have had an explanation from the Minister as to why presumably on advice the particular levels were agreed upon. But unfortunately the House does not know that reason because the call the Minister was invited to take was not taken. I think that really proves the point I have just made. What is the point of putting the House through the agony of three readings and a Committee stage on the pretext that some greater scrutiny in involved in this jurisdiction-setting exercise when the Minister will not even advise us when he has the opportunity during the Committee stage on a point like why the limits were reached? He might as well do it by regulation have the Regulations Review Committee look at it and then have the House scrutinise it by default if necessary. 
On the question of the limits in part because there was not any response to my question I had another look at the question of how overseas jurisdictions deal with this matter. The US along with the rest of the English-speaking world has had small claims courts since the time of the Great Depression. That is when these types of claims courts came into vogue. They were informal and speedy they did not require people to have legal representation and they were able to deal with claims on the substantial merits of the cases. The largest jurisdictional limit appears to be in Hawaii where there is a counterclaim limit of US$25000. The smallest seems to be in Kentucky where the small claims division of the Divisional Court can deal with matters only up to the value of US$1500. That gives the House an idea of the sort of range that exists in the US. As I have said in previous speeches on this matter in Australia the range is somewhat closer to that of New Zealand currently although it is interesting to look at the jurisdiction that has most recently increased the monetary limit in this matter which is Western Australia. Until 1 January this year the minor cases jurisdiction limit in the Magistrate’s Court was A$7500. It has been increased to A$10000. So by and large we are quite a way ahead of the Australians. We are about on a par with some of the more generous Canadian jurisdictions in this area. 
As I have said in the United States the range is vast. It is between US$1500 and US$25000. So it would have been nice to know how the levels agreed on in the legislation $15000 and $20000 respectively were arrived at. It would have been nice to know whether some thought had been given to for example not having a maximum level of jurisdiction if the parties to the dispute agreed. After all we have heard many speeches from the other side of the House about what a great move this legislation is in terms of increasing access to justice getting rid of red tape and letting small business have access to a debt-proving mechanism so they can get their disputes heard. If that is the motivation why not say to the parties of a dispute that if they agree there need not be a limit they can do away with the lawyers they can do away with the rules of procedure and the rules of evidence and a referee can help them deal with the dispute no matter what the upper limit is provided that there is informed consent about it? But of course because of the Minister’s failure to take a call during the Committee stage we do not know the answer to that question either. 
Having said all that I say that the Opposition has decided it will support the increase to the jurisdictional limits to $15000 and $20000 with consent. It is appropriate to always keep these jurisdictional limits up to date. The history of the disputes tribunals is a very good one. Since they were first established by the third Labour Government and then re-founded in their current form by the fourth Labour Government they have provided an excellent opportunity for the rendering of substantial justice to people and small businesses that need them. Members on this side of the House very much support their continued efficient functioning. We very much hope that the new limits will contribute to that functioning and we are delighted to signal that we will be voting in support of the third reading. 
Hon NATHAN GUY (Associate Minister of Justice) 
: 
 It is a great privilege to take a call in the third reading of this very important bill the Disputes Tribunals Amendment Bill. The bill went to the Justice and Electoral Committee which was very ably chaired by Chester Borrows the MP for Whanganui. He did a fantastic job getting it through the select committee process. 
I will make a few introductory remarks on this important third reading. Most important is that the Government is very busy. It is getting on with a very heavy justice workload and is progressing a lot of bills through Parliament in the name of the Hon Simon Power. This is an important bill. It is very important for a whole lot of New Zealanders because it allows for pretty speedy cost-effective access to justice. That is the most significant point about what this bill does. 
The Disputes Tribunals Act has not been changed since 1998 when the maximum claim levels were last adjusted. Nothing happened in regard to this legislation under the previous administration so it is great that we are cracking on and making justice simpler and easier for a whole lot of New Zealanders. 
Currently about 20000 disputes are resolved each year. Because of the new bill and the way we are progressing it through the House and with the select committee work that has gone on around 3600 people will be able to have access to justice quicker on top of those 20000 disputes that are resolved each year. That is a significant point. 
This is a very small but very important bill. I spoke in the second reading debate of the bill. It has a great deal of support around the House which is fantastic. I think some of the challenges that were raised by submitters and the discussion through the select committee process were about the claim limits and whether they should be higher between the agreed and non-agreed parties. That is a challenge for this Government. We must allow this legislation to bed in and to give it time so that we can understand how it is working and how the jurisdiction limits are working. The Hon Simon Power raised the issue of whether in future the limits could be looked at through the Order in Council. That is something to watch. 
In essence this bill will make it easier for New Zealanders to access justice. That is important for New Zealanders. I am delighted to support the third reading of the Disputes Tribunals Amendment Bill. 
CARMEL SEPULONI (Labour) 
: 
 I rise to take a call on the third reading of the Disputes Tribunals Amendment Bill. The disputes tribunal has been very successful in gaining the confidence of New Zealanders since 1988 when it was set up as Mr Chauvel said earlier under the third Labour Government. The disputes tribunal has been successful because it has demonstrated its ability to resolve civil disputes; therefore it does make sense to enable the disputes tribunal to resolve cases of a higher value. 
Before I go into detail about what these changes will entail I think it is worthwhile providing a little background to the disputes tribunal. Disputes tribunals are established by the decision of the responsible Minister as divisions of particular District Courts. The jurisdiction of a disputes tribunal is exercised by referees who are appointed under warrants by the Governor-General for terms of 3 years and they may be reappointed. In performing their statutory duties referees have the same status as a justice of the peace acting in a criminal jurisdiction. In general tribunal decisions are enforced as court decisions. 
We on this side of the Chamber recognise that there has been a gap between cases that can be heard in the disputes tribunals and those that are viable to be taken to the District Court. In the past a number of cases have been deemed as not worth taking to the District Court due to the increased costs associated with District Court proceedings or people feeling that they should not pursue their claim at all. The alternative for many claimants was to reduce their claims so as to be able to have their case heard at the disputes tribunal. Hopefully the amendments to this bill will result in better access to justice particularly for individuals but also for small businesses. 
At present the disputes tribunal generally has jurisdiction only if the maximum amount of the claim does not exceed $7500. The amendment increases that amount to $15000. The exception to the general rule in the Disputes Tribunals Act 1988 is where parties agree otherwise in relation to the extension of the tribunals’ jurisdiction. At present where both parties consent the jurisdiction of the tribunals may be extended to deal with claims up to a maximum of $12000. The amendment increases that amount to $20000. By amending the Act we are providing more effective access to justice and this can only be good. Hopefully this will close the gap between those cases that can be heard in the disputes tribunals and those that are viable to be taken to the District Court. The changes should result in fewer instances where claimants are faced with the choice of reducing their claim facing the increased costs or not pursuing their claim at all. 
There were a number of issues raised by submitters during the select committee process that I thought I would touch on. One issue was they felt that perhaps there was scope for increasing the maximum claim levels further. Although most submitters supported the proposed increases in the maximum claim levels and considered that access to the disputes tribunals would not be improved and that the costs of resolving civil disputes would be reduced as a result some submitters argued that the purpose of the disputes tribunals would be achieved better if the maximum claim levels were increased further. There is probably scope for looking at that again further down the track. 
As the purpose of the disputes tribunal is to provide cheap simple fast and less formal access to justice it limits the protections that would ordinarily be available to parties appearing before the courts in various ways. The point was raised that although referees have regard to the law when making their decisions they are not bound to give effect to strict legal rights. Instead decisions can be based on the substantial merits and justice of the case. I stand to say that Labour will be supporting the amendment to this Act. Thank you. 
CHESTER BORROWS (National—Whanganui) 
: 
 I rise as chair of the Justice and Electoral Committee. I thank the members of that committee and acknowledge the efforts they have put in to progressing the Disputes Tribunals Amendment Bill through the select committee process. 
Chris Hipkins 
: And the acting members. 
CHESTER BORROWS 
: And various acting members who were all welcome and who ate their fair share of the chocolate biscuits. Having said that I can say that a number of submissions were made before the committee but not a heck of a lot; most of them were around the issue of the threshold in terms of making suggestions that it be raised so that people could come before the disputes tribunal to settle disputes with a higher monetary value than the bill currently before us has. 
The decision was made that the threshold should stay at about where it is on the basis that once we start raising that threshold and taking it as far as some submitters wanted—at around the $50000 mark—there would be a need to have greater legal expertise because the weight of the ramifications of the decision of the arbiter would be too heavy for those who did not have access to legal counsel bearing in mind that those appearing before a disputes tribunal are not legally qualified. 
There was also some concern about certainty and consistency around the country. Whereas the majority of those arbiters in the disputes tribunal process have legal qualifications there are some who do not and there is seen to be a variation in the integrity of some decisions from tribunal location to tribunal location. Then of course the way to appeal that is through the District Court which in itself becomes expensive. 
It is important to note that access to the disputes tribunals is easy. Paying a sum of about $40 obtaining specific statement of claim forms from the court house filling them in in handwriting and giving them into the court can see people before the disputes tribunal in a couple of months. The arguments are made as I said earlier without legal representation. The adjudicators can apply fairness as well as the black letter of the law to a situation; they are not bound specifically by the law. So it is seen as a ready remedy that is available quickly to the public. 
The point has been made by previous speakers about the mechanism involved in being able to raise the threshold in the future. It has been suggested that this should be able to be done by regulation or could be done through the legislative process by having some sort of inflation-tied figure. That is a matter for another day; suffice it to say that it should be that flexibility could be accorded to the disputes tribunal process because the thresholds appear to be changed only about every 10 years and it seems that getting to the end of those 10-year time frames the sum is not appropriate because it is too small bearing in mind the cost of legal representation to proceed through the District Court. 
So I too commend this bill to the House. I am pleased that it has received wide-ranging support from across the House. I look forward to its speedy progress into use within our disputes tribunal system around the country. Once again I thank members of the committee and those submitters who took the time to make submissions before it. Thank you. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I take a call on the Disputes Tribunals Amendment Bill. As mentioned by previous speakers this bill will amend the Disputes Tribunals Act 1988. It increases the maximum claim level of the tribunal from its current level of $7500 or $12000 with the consent of all parties to $15000 or $20000 respectively. The need for this bill rests with inflation and the relative value of the current maximum claim levels of the disputes tribunal which has decreased. That is combined with the increased cost of taking cases to the District Court which has created a gap between cases heard by disputes tribunals and those taken to the District Court. The increase of the maximum claim levels is intended to enable more New Zealanders to resolve their civil disputes in a simple cheap fast and less formal forum. Increasing the jurisdiction of the disputes tribunal to the $15000 to $20000 level may enable this but only time will tell. 
What is concerning is the number of low-income earners with claims of over $15000 who will be forced to use the ordinary courts because they will not be able to get agreement from the other side that $20000 ought to be the limit. My colleague Charles Chauvel outlined that in his first reading speech. We must offer protection to low-income earners and this should be a Government priority especially in a recession. We have seen more than 310000 people join the dole queue which is an extremely worrying trend. It undermines the Government’s claims to be blunting the sharp edges of this recession. 
As at February 2008 there were 471000 businesses in New Zealand and it is estimated that around 97 percent of them are small businesses—businesses employing fewer than 20 employees. So this bill is relevant to them. Before being elected to Parliament as the member for Dunedin South I was one of the many New Zealanders who owned and was director of a small business. Passing legislation is important to support those businesses because they are so vulnerable in the recession. On becoming an MP I resigned my interest in my business but I still hold the passionate belief that it is small businesses that keep New Zealand humming along. We note and acknowledge that the proposed changes in this bill could reduce costs for many cases—perhaps thousands of cases a year—which will now be able to be held in the disputes tribunal and we agree that it is important to lighten the load on small and medium sized businesses so they can get on with the business of producing goods and services. We agree with the Arbitrators and Mediators Institute of New Zealand in its statement of February this year that taking the pressure off the District Court and making justice much more accessible not just to businesses but to all New Zealanders is important. So Labour supports this bill. 
We have a proud tradition of setting up small claims tribunals as members have previously heard my colleague Charles Chauvel outline and we agree with the Arbitrators and Mediators Institute of New Zealand which says that we must ensure high-quality dispute resolution is readily available through alternative means to the courts system. The disputes tribunal will continue to operate on its current basis balancing the required protections for parties against the need to provide simple cheap and fast access to justice. Most submitters supported the proposed increases of the maximum claims levels and said that access to the disputes tribunal would be improved and the cost of resolving civil disputes would be reduced as a result. However some advocated greater increases. I share the select committee view that changing these protections would harm the disputes tribunals’ ability to deliver a cheap simple and fast service. Increasing the jurisdiction to higher levels would increase the workload of the disputes tribunals immensely. 
It reminds me of a current proposal that this Government has for dealing with copyright disputes. How can a tribunal’s power be increased such as it has been in the case of the Copyright Tribunal without it being properly resourced for the increase? I look forward to hearing more from this Government on its plan to properly resource the Copyright Tribunal to cope with what is most likely to be hundreds and possibly—or more likely probably—thousands of claims within months of it enacting its rewrite of section 92A of the Copyright Act. As with the Copyright Tribunal it is important the disputes tribunal is fully resourced as many of New Zealand’s most vulnerable people turn to that remedy. 
On the face of it this legislation addresses an important issue by updating the jurisdiction of the tribunal which should happen. As my colleague Charles Chauvel said in his first reading speech we should always keep the monetary levels of our courts and tribunals under review as circumstances change but important issues about consumer protection and access to justice remain unaddressed by this legislation and they must be faced at some point in this Parliament. 
SIMON BRIDGES (National—Tauranga) 
: 
 The Disputes Tribunals Amendment Bill is very brief—some two or three pages. Its operative clauses are really only three or four clauses. It is a bill of very limited compass. It achieves in its mechanics only one thing: it broadens the jurisdiction of the disputes tribunal to claims of $15000 without consent and to claims of $20000 with consent. Nevertheless despite the bill’s brevity and its limited compass it achieves a very real advancement—that is increased access to justice. 
The bill’s passage through the Justice and Electoral Committee was interesting; it was an interesting process as we have heard. The committee was ably chaired by Chester Borrows with constructive comment from the membership of all parties. Lynne Pillay and Jacinda Ardern—who I believe is in Hungary at the moment—were present on the committee and even Chris Hipkins came in from time to time with Diet Coke in one hand and a BlackBerry I think in the other. 
Chris Hipkins 
: Coke Zero. 
SIMON BRIDGES 
: It was Coke Zero. But in all seriousness positive contributions were made by all sides. A characteristic of the select committee I would say was that of broad consensus both in terms of the parties’ views and generally of the submissions we had before us. 
If there was one issue that was subject to some consideration and discussion it was the issue of the jurisdiction limit. A number of submitters argued for a higher set of limits than we have gone for; some even said the limit should be $50000 or more. That view was given due honest serious consideration but I think it was quite clear in the final analysis of committee members that we had things at this stage and at this time about right. That is not to say of course that we might not look at this matter in the future once this amendment legislation has bedded in and its effects have been seen. We might change to the kind of proposal that Charles Chauvel noted and that the Minister of Justice the Hon Simon Power spoke on. 
The reason I say that it was quite clear to us that we had things about right is that to have gone higher with the maximum claim level would have changed the nature of the disputes tribunal. If we had gone much higher it would have become a disputes tribunal in name only thus losing its cheapness its simplicity its speed and the less formal aspect it has as a forum. The disputes tribunal would have become really a court by another name with all the formalities—some would say the pedantries—with all the procedural fairness and as some would say with all the unnecessary niceties that courts have when the value goes up. 
As I say if I do say so myself I think we did get things about right. We have a disputes tribunal at the moment that is working well; the quality is of a good standard. There was not the need to do those kinds of things that would have gone with raising the limits substantially such as greater appeal rights and the expense that goes with that or the need for legally qualified referees. We heard from the Law Society that we would need to go to such referees compulsorily if we increased the limit much more. There was also the right to lawyers the compulsory bringing in of lawyers—getting “lawyered up”—by the people who came to the disputes tribunal and the need for published decisions and all that went with that. We did not see all that as desirable necessarily for something that we wanted to be cheap simple fast and less formal when we had a quality tribunal as things stood. 
 In finishing I say that the explanatory note of the bill puts things very well when it discusses why we have not increased the quantum of the jurisdictional limit to $50000 for example. That is because “Justice officials consider that legal representation legal decisions increased appeal rights and increased requirements on the qualifications of Referees would all be required. Changes to these areas would compromise the very nature of the Disputes Tribunal. The Tribunal would not be able to provide its cheap simple and fast service.” Currently I think we have a tribunal that has the balance right by lifting those limits to $15000 and $20000. This will again “achieve the objectives of improving access to the Disputes Tribunal and allowing an increased number of New Zealanders to reduce their costs in resolving small civil claims by hearing the claim in the Disputes Tribunal rather than the District Court.” We did not want to turn this tribunal into a court by another name. We did however want to see greater access to justice and I think that is what this bill achieves. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I will probably take only a very brief call on the Disputes Tribunals Amendment Bill. 
Hon Simon Power 
: Excellent idea! 
CHRIS HIPKINS 
: I will try. It is something I have never managed in the past but I will give it a go. I want to make sure that the Minister in charge of the bill Simon Power gets a little bit of a break because I notice that once again we are having another day in the House when it is bill after bill for which he has to rise to his feet. He is the very hard-working MP from Rangitikei. 
I had the opportunity to sit on the Justice and Electoral Committee for much of its consideration of this bill in place of David Parker who was tied up with the emissions trading scheme review. It was a really interesting debate and I compliment the chair of the select committee Chester Borrows on his excellent chairmanship. It is always a pleasure when I have the opportunity to sit on that committee. I also acknowledge the work and dedication of my colleagues Lynne Pillay and Jacinda Ardern who are the other Labour members on the committee and the contribution they made to the deliberations. 
I learnt a lot about disputes tribunals by sitting on the committee and hearing the submissions on the bill. The bill increases the maximum claims levels for disputes tribunals from $7500 or $12000 with the consent of the parties to $15000 or $20000 with the consent of the parties. Probably the most common theme through the submissions was where the numbers came from and how they were determined. A lot of submitters wanted to see those numbers go higher. It would be fair to say that there was not really a compelling argument for where the numbers came from. I think it was fairly arbitrary on the part of the Government when it came up with those numbers. As I said a lot of people wanted to see those numbers go a little higher. 
One of the things it is important to bear in mind when it comes to the dollar amount of a maximum claim is that monetary amount and complexity are not proxies for one another. There could be a claim with a fairly small amount of money involved that could actually be quite complex. And vice versa; there could be a claim with quite a large amount of money involved that could be relatively straightforward and simple. It is important that we do not see monetary value as a proxy for complexity. 
In terms of raising the limit further there was a lot of talk about the simplicity of the tribunal process at the moment. If we raised the limit further we would need greater legal expertise at tribunals. At the moment one does not have to have a huge amount of legal expertise in order to preside over disputes tribunals and one does not need a lawyer in order to make a claim with disputes tribunals. The larger the stakes involved the more that that situation would be questioned. 
There is also a very limited right of appeal from the disputes tribunals. If we make the monetary value much higher then some questions would start to arise. There was a view from some submitters that the District Court would find a way. I am seeing nods from members on the other side; I think they can probably recall the submission. I cannot remember who argued that point but the submitter argued that if we increased the monetary value of a maximum claim significantly and an injustice was done then the District Court would find a way of dealing with that. That was an argument that was put forward. 
Although referees have regard to the law when making their decisions they are not bound to give effect to strict legal rights. Instead decisions can be based on the substantial merits and justice of the case. The grounds for appeal are limited. Parties in hearings are not entitled to legal representation referees are not required to be legally qualified and proceedings are held in private. Decisions of the disputes tribunal are not published. In fact those are some of the reasons that were put forward for maintaining the limits at a relatively low level—the new limits of $15000 and $20000. Some of those things would be compromised if the limits were to be raised further as many of the submitters asked for. 
A lot of discussion at the committee was about whether the decisions of the disputes tribunals should be published. Many submitters argued that some case law and precedents in the case of the disputes tribunals may well be quite useful. I think the general view of the committee was that publishing them could be problematic and it was a view that I had some sympathy with. If we start publishing the decisions of disputes tribunals then the whole process may become much more complex and much more legal in nature and therefore the whole principle behind a relatively simple easy-to-access and fast form of justice may be compromised. 
Although Labour members have some reservations about this provision it is a very arbitrary increase but without necessarily an evidential base to justify it. The Minister I suspect probably stuck his finger in the air and thought that the numbers sounded about right and so picked those numbers. That is the kind of approach he would generally take to these sorts of matters. We do have some reservations about where the numbers might have come from but generally speaking we need to keep these things up to date. Of course the value of the numbers over time and of the maximum amount in real terms has diminished. This bill brings it forward a little. We are generally in support of that situation but we obviously have some other questions. I am sure they will be addressed at some future point. Thank you very much. 
PAUL QUINN (National) 
: 
 It gives me great pleasure to rise to make some concluding remarks on behalf of myself and other members on this side of the House on the Disputes Tribunals Amendment Bill. This outstanding bill is another milestone achievement of this National Government. I make one point: during question time this afternoon I thought we might have to take urgency to get this bill through because the brutish glare that I saw the Hon Trevor Mallard give his colleague the Hon David Cunliffe was unbelievable. I thought “Gosh we are going to have to go to the tribunal and bring in Parekura Horomia as the referee!”. 
Hon Member 
: And the language! 
PAUL QUINN 
: And the language. That would be the first opportunity for the Hon Parekura Horomia to be the referee amongst his colleagues. 
With those concluding remarks I commend the bill to the House. 
Bill read a third time. 
Securities (Disclosure) Amendment Bill 
Financial Advisers Amendment Bill 
Third Readings 
Hon SIMON POWER (Minister of Commerce) 
: 
 I move  
That the Securities (Disclosure) Amendment Bill and the Financial Advisers Amendment Bill be now read a third time 
. Both bills are part of the Government’s response to the interim report of the Capital Markets Development Taskforce and are designed to facilitate capital raising without prejudicing investor protection. 
The Securities (Disclosure) Amendment Bill provides for a simplified disclosure prospectus that may be used by listed issuers who are subject to continuous disclosure requirements. The offer may be for securities as long as the security being offered ranks equally or preferentially to the issuer’s existing listed securities. The detail and content of the simplified disclosure prospectus will be set out in regulations to be made under the existing regulation-making powers in the Securities Act 1978. Officials have been working on those in anticipation of these bills passing. 
Under the regulations a simplified disclosure prospectus will be able to be used only for securities that rank as I said equally or preferentially to the issuer’s listing securities. The Securities Commission will monitor and enforce compliance with the simplified disclosure prospectus regime once it is implemented. The commission will have the ability to prohibit an issuer from using this regime. The commission will also have the ability to extend the date of allotment under the simplified disclosure prospectus through a delayed allotment order. These orders could for example be made to give potential investors more time to consider new information prior to accepting the offer. 
The bill also makes changes relating to categories of persons who are exempt from the disclosure requirements for offers of securities under the Securities Act. These will assist both listed and unlisted companies and will particularly benefit private companies that tend to approach investors for capital directly often in cases where the investor is well known to the issuer. 
The proposed changes will firstly allow the offer of securities to be made at the same time to different categories of persons exempt from disclosure requirements without requiring the issuer to prepare a prospectus. Secondly they will allow incremental investments to be made by those who have invested half a million dollars in the issuer in the past 18 months without requiring the issuer to provide full disclosure requirements. 
Thirdly the changes will clarify that assets held on trust are counted for the purpose of applying the eligible person criteria meaning that they are eligible for disclosure exemptions. Fourthly they will allow certification that a person is wealthy and therefore is eligible for disclosure exemptions every 12 rather than 6 months. Lastly they will require a person who is experienced in investing money to acknowledge that as an experienced investor he or she will not receive disclosures typically required in relation to a public offering. 
These amendments do not introduce new classes of exempt investor; they simply make the existing classes more workable. I do not expect that any investors will be disadvantaged by the amendments and these changes will make it considerably simpler for businesses to raise capital by removing ambiguities or anomalies in the current law. There will of course always be debate over whether we have the exemptions in the Securities Act exactly right. There was a lot of discussion at the select committee and during the Committee stage and at the instigation of the Hon Lianne Dalziel and Charles Chauvel about the wealthy investor exemption in particular. The debate is about the validity of the assumption that if an investor is wealthy he or she will be able to make an informed investment decision without the aid of a disclosure regime because he or she will be able to afford financial advice. 
The wealthy investor exemption is relatively new. It was enacted in 2004 as part of the Business Law Reform Bill. The scope of all exemptions from the need to disclose will be a key issue in the current review of the Securities Act a matter that I know has been raised by the other side of the House. I am looking forward to working through these issues as part of that process. 
The Financial Advisers Amendment Bill makes minor amendments to the Financial Advisers Act to remedy errors that have come to light since the Act was passed last year to ensure the legislation works as intended. 
Charles Chauvel 
: Careless chairing of the select committee! 
Hon SIMON POWER 
: It has been a long day. 
To sum up the Securities (Disclosure) Amendment Bill’s primary aim is to enable firms to continue to have cost-effective access to capital whilst ensuring investors receive full accurate and timely disclosure of information. Both these aims are particularly important in these times and will continue to be a focus of this Government as we consider further regulatory challenges. 
I put on record my appreciation of the input from the Capital Market Development Taskforce and its ongoing input to the draft regulations that will be promulgated following the passage of this legislation. In addition I would like to thank officials for the work that has gone into drafting this important legislation. I also thank members of the Commerce Committee and the committee’s chair for their valued contribution to the development of this legislation. I commend these bills to the House. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I want to go back over a matter that I raised in the Committee stage of the Securities Disclosure and Financial Advisers Amendment Bill because it is important that people think very carefully about what we are doing in the legislation in this particular area. As I said in the Committee stage the Securities Act 1978 is investor protection legislation; that is what it was designed to do. The reason we need investor protection legislation to be at the fore is so that confidence in our capital markets can be maintained. If we do not have confidence in our capital markets then there is a flow-on consequence to those capital markets and we simply cannot develop the depth and the breadth that we need in those markets. The previous Labour Government established the Capital Market Development Taskforce because we believed that it was very important that we had people who work within different parts of the economy actually focusing their minds on the barriers to growing the depth in our capital markets while also ensuring that investor protection is maintained. 
The Opposition has taken the position that we support this legislation not because it comes as a recommendation from the Capital Market Development Taskforce although I acknowledge the work it is doing but because we have assessed whether there is any degree of risk associated with the passage of the legislation. We do not believe there is any risk around the recommendations that are made. I know that Government members have stood up and said this is fine legislation that will make a huge difference to the raising of capital in New Zealand and have said the removal of compliance costs will ensure that people are able to raise capital in a much more cost-effective manner. I think that simply overstates the degree of change that will result from these particular amendments which is why we are supporting them. 
The rest of the world is reregulating; we are deregulating an aspect of the Securities Act. It is really important that we think about the recession that everyone has talked about in the debate on this legislation what lies behind the recession and how deregulating actually responds to what was started by an international crisis in the global markets. That global financial crisis was sparked off by either the lack of or the abuse of regulatory regimes. That is why every other country in the world is looking very carefully at its regulatory regime. Other countries are not talking about compliance costs at the moment; they are talking about investor protection because they know that without confidence they simply will not be able to restimulate those aspects of the world economy that have been damaged by their actions. So it is very very important that we do take this legislation seriously instead of just simply passing it off as a measure to reduce compliance costs for those who seek to fund-raise in a recession. The Opposition has gone through the legislation with a fine-tooth comb and that is why we are satisfied with the changes that are being made. 
However there is one area of change in the Securities (Disclosure) Amendment Bill—and the Minister has referred to it—that relates to the wealthy investor category. We do not mind the changes that are being proposed; we think they are pretty sensible. That is why we are happy to support the passage of this legislation and why we have done so right from the outset. What concerns us is that the wealthy investor category was subject to a specific question in the  
Review of Financial Products and Providers: Review of Securities Offerings 
 discussion paper which was distributed in September 2006 and which is still very much at the base of the Securities Act review that the Minister referred to in his contribution to this debate. The issue around wealthy investors that was raised in the paper was: “Should the exemption for wealthy investors be retained? If no why? If yes how does this meet the objectives of the Securities Act?”. 
I just make the point—and I have made it more than once during the course of this debate—that in the case of people who are deemed to be wealthy essentially their wealth is somehow seen as a proxy for their experience in investing. The previous section of the Act deals with utterly appropriate mechanisms for exemptions for sophisticated investors. Those investors are professional they are habitual and they are experienced. For them to choose to obtain their information in another way either through continuous disclosure on the stock exchange or through information that they are referred to in a shorter document rather than a full prospectus is fine. They know exactly what to look for; they know exactly what the risks are; they have been doing this for some time. They know exactly how to look after their own interests and indeed often the interests of others on whose behalf they may be investing. But possessing wealth is not a proxy for that degree of sophistication and I had hoped that out of this whole review process the wealthy investor category would go. 
I just want to quote from the discussion paper: “We seek feedback on whether this exemption should be retained. The policy behind this exemption is the least principled of all the exemptions.” I think that is simply obvious—that the exemption assumes that if an investor is wealthy then he or she will be able to make an informed investment decision without the aid of the disclosure regime because he or she will have the ability to seek professional financial advice. We had the Banking Ombudsman at the Commerce Committee today and I have to say there were some very wealthy people—before they invested in ING—who are no longer wealthy people. Wealth is not a proxy for experience. My only question about this change is why make it now? Why use the vehicle of this legislation to change the wealthy investor category when we are likely to get rid of it altogether? That is really the only point I have made. It is not a huge change that is being made to the category so I do not mind it. I would just prefer that we got on with the debate about whether to retain the category at all. 
With those words I reiterate the comments made by the Minister and I thank fellow members of the committee for their diligence on this legislation. There was certainly considerable debate on the issues as we dealt with them in a relatively truncated way in order to meet the report-back date that the Minister set. I especially put on record our grateful thanks to the officials who provided us with excellent support. I commend the legislation to the House. 
KATRINA SHANKS (National) 
: 
 It is my pleasure to speak today in support of the third readings of the Securities (Disclosure) Amendment Bill and the Financial Advisers Amendment Bill. I also acknowledge the officials who came before us and supported us throughout the legislation. They were always forthcoming with their advice and were very timely in providing additional information. 
There was robust debate around a couple of the issues in this legislation and one of them was the wealthy investor category which we kept on coming back to. It was something we thought about a lot before we made the decision that we would have that clause in the legislation. This legislation came about in response to the current international financial crisis. It is about how we can raise capital and how we can get businesses to raise capital more easily when times are tough which they are and it is hard to raise capital. It is all about how we can make it easier for these businesses how we can encourage investors to invest in New Zealand businesses and how we can get that match together so our companies can grow. 
When one goes around the sector and talks to people about obtaining capital one will hear them talk about the walls in their sector. When they talk about the walls they are talking about the regulation within their sector and how high the walls are in New Zealand when one goes to raise capital to do something. The walls are so great for companies especially for those companies that are in growth mode and may not have a lot of skills in raising securities or have not done so before as a way of getting capital into their organisation. The walls are very high for them to get over and they struggle to deal with the regulation. They get a bit frightened because there is a lot of regulation around them. So it is about looking at the walls around businesses and how we can reduce compliance and reduce regulation but still ensure there is enough regulation there to protect both investors and companies at the same time. That is what this legislation is about. 
It is about ensuring that we have growth in our companies in New Zealand. In November last year the Capital Market Development Taskforce released an interim report in response to the financial crisis. I acknowledge the work of the previous Minister the Hon Lianne Dalziel in relation to this task force and setting it up. The report made a number of recommendations on how securities law could be improved to increase the availability of capital and reduce the compliance costs of raising the capital. This legislation addresses a number of the items addressed by the task force and the recommendations it brought forward requiring legislative change—which is why we have got this legislation—and which are considered to be most likely to make immediate differences for firms seeking to raise capital. That is really important. 
It is important that we move very very quickly in these times to ensure that we keep that flow of money going around and around. So we have picked up the things that we think will bring the most change the quickest—in effect the biggest bang for our buck. The legislation principally provides for simplified disclosure prospectuses. That was the biggest thing we looked at in this legislation. When a company goes to do an issue it does a prospectus and if it does an additional issue it has only to do a simplified disclosure prospectus. Continuous disclosure is still in there so the protection is still there for companies which is really important. That was the biggest item we looked at in this legislation. 
The issue of wealthy investors was one we looked at in terms of how much information those investors need and how well they need to be informed to make these decisions. There was great debate on the point that just because someone has half a million dollars it does not necessarily mean one has the skills to make good investment choices. We looked at that point and took it into consideration and we thought that at this stage the wealthy investors or in effect sophisticated investors do have the skills to make that decision. It is my pleasure to support this legislation today. 
CHARLES CHAUVEL (Labour) 
: 
 I rise to speak in support of the third readings of the Financial Advisers Amendment Bill and the Securities (Disclosure) Amendment Bill. I will speak first on the Financial Advisers Amendment Bill. 
In Lianne Dalziel’s third reading speech she spoke about the importance of confidence in these times and nobody could dispute that that is the case. Confidence is an elusive phenomenon and it is important that this Parliament does nothing to undermine it and everything to bolster it. Certainly the previous Government tried to do that when it regulated this sector of the market that had previously been unregulated passing a suite of related measures near the end of its last term. Those measures included the Reserve Bank of New Zealand Amendment Act 2008 which for the first time brought non-bank deposit takers into the supervisory orbit of the Reserve Bank. Previously they had simply been administered by their trustee and no one else. There was also the Financial Advisers Act which put ethical requirements on the industry for the first time. It was an industry that many New Zealanders had not received great service from. The issue of undisclosed or hidden commissions for example had recurred in this industry many many times. We legislated to ensure that a proper set of ethical standards would apply to those engaged in the giving of financial advice. The final part of the suite of measures to do away with New Zealand’s Wild West image in the finance sector was the Financial Service Providers (Registration and Dispute Resolution) Act. 
 Of all those measures the last piece of legislation—for members who are not familiar with it—put in a requirement that all financial providers as defined should be registered and that they should be part of an industry complaints scheme so that if people had concerns about their conduct then there would be an industry body supported by the relevant subset of the industry to whom those investors could appeal. Again it was an attempt to try to put some confidence into the market because that confidence had not been there previously thanks to the completely deregulated nature of financial services in that part of the market in New Zealand. 
In relation to the financial advisers legislation members who were on the Finance and Expenditure Committee in the previous Parliament—and each of these three bills went through that committee at that time—will remember that there was a substantial rewrite of the legislation in the committee itself thanks to feedback from the industry. Effectively an exposure draft of the legislation had been released. The bill when it was read a first time reflected that exposure draft but then we received a lot of feedback from the industry and from consumers about the provisions of the legislation. As a result of that feedback substantial changes to the legislation were made in committee. I think that as a result of those changes—even though I say so myself having chaired the committee—the bill ended up being much better. But it is not surprising given the extent of those changes and the speed with which they were dealt with—because we wanted to get them through the parliamentary process prior to the expiry of the previous Parliament—that there were one or two mistakes. Those typographical errors will be corrected by this legislation. As I said in my first reading speech no one should be concerned about the changes being made. They are sensible logical ones and they will ensure that the bill is better as a result of our efforts today. Labour supports the Financial Advisers Amendment Bill. 
In respect of the second measure with which we are concerned today the Securities (Disclosure) Amendment Bill much has been said by both Lianne Dalziel and Katrina Shanks who both had the benefit of hearing all the submissions at the Commerce Committee. I will content myself with just a couple of remarks. As we heard this bill was another confidence-building measure. Lianne Dalziel as the previous Minister of Commerce set up the Capital Market Development Taskforce in July 2008 under very different economic circumstances—it was a time of much greater plenty and prosperity—to those in which we find ourselves today. The aim of the exercise was to look at how we could broaden and deepen New Zealand capital markets given the circumstances halfway through last year. We recognised that there was a problem with businesses in New Zealand being able to access the sort of capital they needed in order to grow. We wanted to make sure that as part of their contribution to a more prosperous stable and fair New Zealand they had the ability to do that. So the idea was to get a group of experts together to listen to their recommendations as to how to better facilitate access to capital for business and then to get on and implement those recommendations. 
Well as history shows the recession hit and the current Government decided that it would ask for an interim report from the task force. It received that report shortly after the election last year. This legislation implements some but not all of the recommendations of that report. One sensible measure that the legislation will implement was referred to by Katrina Shanks—the waiving of the requirement for a full prospectus in certain circumstances. That makes a lot of sense. Actually securities law in New Zealand still requires prospectuses in far too many situations—for example in respect of issuing employee share schemes. In many cases it is just a completely unnecessary exercise and I hope the law will come to deal with further unnecessary examples of circumstances when prospectuses should not be issued. As has been observed there is a degree of irony in deregulating in these circumstances rather than reregulating given the causes of the current financial crisis. But here we are; we are doing that. We are doing that on the basis of the recommendations of the Capital Market Development Taskforce. The recommendations seem to make quite a lot of sense and for that reason Labour is supporting the legislation. 
Finally I wish to echo the point made by my friend Lianne Dalziel which was touched upon by the previous speaker as well. It is quite wrong to equate the wealth of investors on the one hand with their sophistication on the other. It is not necessarily so that just because people have a lot of money in the bank they will be sophisticated investors. Some people for example may inherit money from an estate and find themselves in certain circumstances in possession of quite a lot of money but none the less they may not necessarily be terribly clued up as to how to deal with that money. It is a little bit like the situation in respect of the Disputes Tribunals Amendment Bill debated earlier whereby Chris Hipkins made the point that it is not right for example to equate the complexity of a matter before a court with its monetary value. Matters relating to quite large sums of money can be relatively simple in respect of a dispute. Just because a lot of money is involved does not mean that it will necessarily be complex and just because the investor is wealthy does not mean that the investor will be sophisticated as sadly the history of our finance company collapses in this country despite the suite of protective measures to which I have referred demonstrates. 
But having said that I tell the House that the Labour Opposition supports both measures. Although they are relatively modest bills particularly the latter one we hope they will go some way towards continuing to maintain confidence. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 We acknowledge the work the previous Government did in this particular area. One of the areas this Government is focused on is a serious and strong priority to get our economy moving again particularly sectors of our economy that generate growth and jobs. With a decade of deficits ahead of us it will take a lot more than shifting around what we already have to get things going. It will take an increase which is growth and the development of business and industry in New Zealand for it to become more competitive and successful on the international stage. 
Because of this situation we need a regulatory regime that will enhance our opportunities. One particular area that New Zealand businesses are finding difficult is the raising of capital to fund such growth and development especially as we are in a credit crisis. As the previous speaker Charles Chauvel commented and as Lianne Dalziel also mentioned confidence is a very important ingredient for growth and for the opening up of our financial markets here in New Zealand. Many people have been hurt and have lost many thousands of dollars. Confidence is not built upon just the wide smile and smart suit of an issuer of a security or stock; it is built upon the substance of the issuer’s offering which is reflected accurately currently and in plain English for prospective investors. 
The Securities (Disclosure) Amendment Bill and Financial Advisers Amendment Bill are proposed within the context of the present global financial crisis and seek to reduce its impact on New Zealand businesses. I fully endorse and support the recommendations made within the legislation and the changes to the Securities Act that have been recommended through it. Many thousands of New Zealanders have lost a lot of money in the last year or so and are shying away from investment. A regulatory regime that not only makes it easier for companies to raise money but also at the same time continues to make information accurately and currently available to prospective investors is very important in order for their confidence to continue and for many people to again be seen to invest in or release their capital into New Zealand. 
This amendment legislation seeks to create a better environment for those investors and businesses to raise finance which is essential for businesses to operate. It also ensures that timely disclosure of relevant financial information is provided by the issuer of a security to a prospective investor. There is always tension between businesses needing to be able to easily raise capital and the timely and appropriate process involved in raising that capital that protects the interests of the prospective investor. It would be fair to say that New Zealanders who have suffered losses through finance companies and through loss of property value are often lost in the technical terms and the minefield of the financial sector. With this legislation we want to achieve a balancing act giving investors the opportunity to have the information they need without additional cost arising from considerable amounts of information being duplicated. 
As the Minister of Commerce the Hon Simon Power stated during the second reading of this legislation “This bill addresses a number of the recommendations made by the Capital Market Development Taskforce in its interim report of November last year. The bill amends the Securities Act 1978 to provide for a simplified disclosure prospectus that may be used by listed issuers who are already subject to continuous disclosure requirements and would otherwise be required to produce a separate disclosure document for each offering. Listed issuers would therefore be required to produce only one disclosure document for a securities offering instead of producing both a full prospectus and an investment statement. The intention of the simplified disclosure prospectus is not to reduce the amount of information provided to investors but to reduce duplication between forms of disclosure.” 
The changes to the legislation have been described by the Commerce Committee as being minor and of a technical nature. These amendments essentially sort out and tidy up some of the issues that need attention in the general oversight of financial institutions in New Zealand. All of this work goes towards increasing confidence in investors which in turn will release capital increasingly to businesses that need it in order to go to the next level of growth that they need to go to and that we need them to go to in order to bring our country through the recession. 
The legislation looks at the simplified disclosure prospectus that is to be used by listed issuers who are already subject to what we call the continuous disclosure requirements. The committee had the benefit of assessing one such simplified disclosure prospectus that came to 22 pages in length compared with prospectuses in excess of 100 pages that are regularly produced for large companies raising capital. We see that there is obviously efficiency and a greater ease in producing information necessary for the raising of capital by these companies. The reduction of unnecessary duplication is one way in which we are reducing the red tape and cost of raising capital. 
Overall submissions on this legislation were in favour of the simplified disclosure regime. Some submitters stated that they did not think the Government has gone far enough with regard to the legislation. The legislation was swiftly prepared in response to address the current credit crisis. The amendments are part of the Government’s response to this crisis and will help ease the credit crunch currently being experienced by New Zealand businesses. The amendments cover both stock market listed and unlisted businesses meaning that the benefits reach everyone. The reduction in compliance costs will help New Zealand businesses to focus on business rather than on excessive reporting. Investors at all levels will be given easy-to-understand information allowing them to make better-informed and timely decisions about their investments. 
This legislation is more evidence of the Government’s commitment to helping New Zealand through the recession. The amendments made by the Commerce Committee will help the legislation to achieve its objective of facilitating access to capital for New Zealand businesses. It is my pleasure to support the third readings of the bills in the House. Thank you Mr Deputy Speaker. 
MELISSA LEE (National) 
: 
 I rise to speak in support of the third reading of the Securities (Disclosure) Amendment Bill and the Financial Advisers Amendment Bill. As members have already heard from previous speakers these bills will remove unnecessary impediments imposed on raising capital in New Zealand. Raising capital for business in these tough economic times has become more difficult and this legislation goes some way to assisting that situation. It does not mean we are just making things easier for businesses by removing regulatory compliance and putting investors in harm’s way as some people might like to think. We accept that there are inherent risks in investment and for some sophisticated investors the removal of some compliance issues does not pose greater risk but certainly assists a company in its endeavour to raise capital. 
On the point of investors the current economic climate has no doubt made crystal clear to companies the importance of looking after the interests of investors if they are to succeed as ongoing concerns and successful businesses. The Securities (Disclosure) Amendment Bill amends the Securities Act 1978 to provide an opportunity for an issuer of security to produce a simplified disclosure prospectus as members have heard from my colleague Jonathan Young. The number of pages will be less than a full disclosure. The issuers are already subject to the continuous disclosure requirements which I think are very helpful. The reason for the simplified disclosure prospectus is not to reduce the amount of information available to investors but to reduce duplication or multiplication between forms of disclosure. As a person who does not really have finance and security sector experience unlike some of my colleagues I like the fact that any relevant or new information is made through continuous disclosure and is freely available to me as an investor if I choose to look it up. As Mr Young said some of the disclosures can be up to 300 pages long. I doubt that most people would look at them but the information is there if people need it. 
As the chair of the Commerce Committee the Hon Lianne Dalziel mentioned one of the main issues the committee discussed was that of wealthy investors. I like to call them sophisticated investors because they are not just wealthy but may have experience in investing in numerous securities before. Those investors who have previously made investments of more than $500000 or more are presumed to be able to afford to take the risk and if they are in fact investing in the same entity then they do not necessarily require the full disclosure statement in the form of a full prospectus. Rather they may need only a simplified disclosure. That is easier for the company as it does not have that regulatory wall to get over. 
This legislation is in response to the report by the Capital Market Development Taskforce which was released in November of last year. The report focused primarily on increasing the availability of capital for New Zealand companies and reducing the cost of raising capital. I was present today at the select committee when the Banking Ombudsman Liz Brown spoke to us about the ING New Zealand - ANZ investment debacle which Lianne Dalziel started to discuss. No one disputed the sentiment of the chair of the select committee when she talked about people who invested a lot of money and lost a lot of money. We all feel for them. Certain things obviously went wrong and some rules and regulations are required to make sure that that does not happen in the future. Having said that New Zealand companies must be given the market conditions to raise capital and grow in this tough economic climate. As we have heard in previous debates this is the worst economic situation New Zealand has faced since the 1930s. We must support our businesses to be able to raise capital so they can get on with the job and provide jobs and opportunities for more people. 
It was a Labour member the Hon David Parker who said in the second reading debate I believe that this bill tries to grease the wheels of commerce. He also said that it tries to put in place improved rules so that it is possible for institutions and companies that need to raise capital to be able to do so while at the same time giving investors greater confidence to place their money in those investments. Although I do not often agree with the Labour members I have to agree with him. There are risks involved in investing; that is a given. Apart from the simplified disclosures there are also some aspects of the legislation that are brilliant. 
In regards to the Financial Advisers Amendment Bill the Commerce Committee made a recommendation that we need to ensure that we remedy the oversight in the Financial Service Providers (Registration and Dispute Resolution) Act as well. We had some really interesting discussions. We are trying to close some loopholes and provide better security and better confidence for the people in New Zealand who want to invest. In the section that amends the Financial Service Providers (Registration and Dispute Resolution) Act some financial advisers are now exempt from registration. We have heard many members speak in the House about this bill. It is about providing confidence to the market to raise capital. The increased risk in this time of recession means that this is a good bill and is supported by all parties. I do not have any more to say; I commend this legislation to the House. 
RAYMOND HUO (Labour) 
: 
 I rise to take a call in the third reading debate of the Securities (Disclosure) Amendment Bill and the Financial Advisers Amendment Bill. I do have mixed feelings especially after listening to what the Banking Ombudsman said at the Commerce Committee hearing this morning. The whole issue is about how to strike a balance between investors’ confidence and assisting businesses to access capital. 
On the bills’ third reading debate it is appropriate for me to take this opportunity to thank our officials and parliamentary counsel for the great work they have done in putting together valuable views that originated from submissions on this legislation and for assisting the Commerce Committee in reporting those valuable recommendations to this House. My learned colleague the Hon Lianne Dalziel has no doubt done a great job in her capacity as the chair of the Commerce Committee. I will certainly miss the days when we deliberated on those submissions on the legislation. 
The bills are intended to make raising capital more efficient through reducing costs to issuers while ensuring that the level of information provided to potential investors is not reduced. In other words the bills are designed to remove impediments to raising capital without undermining investor protection. During the current economic downturn it is even more important to make sure that investors’ protection is stringent. Labour supports those proposals that are the outcome of recommendations made by the Capital Market Development Taskforce in November 2008. The Labour-led Government launched the task force to identify ways to improve access to capital. When launching the task force in July 2008 the Hon Lianne Dalziel said that improving the investment environment was a key part of the Labour-led Government’s economic transformation strategy. She said “to deliver wealth and jobs New Zealand firms need ready access to affordable capital. The task force will identify ways to make this happen”. 
I take this opportunity to thank the Capital Market Development Taskforce. Originally the task force had a year to produce its specific outputs but in response to the global financial situation it produced an interim report in November 2008. It outlined a package of proposals designed to boost access to capital for New Zealand businesses and reduce the cost of raising capital. The chair of the task force Rob Cameron noted in the interim report that in response to the current financial crisis access would be a key issue in the survival of many businesses. 
In summary the Securities (Disclosure) Amendment Bill addresses firstly the Securities Act 1978 in order to provide for a simplified disclosure prospectus that may be used by listed issuers who are subject to continuous disclosure requirements and secondly it addresses the Act in relation to the categories of people who are exempt from the disclosure requirements for offers of securities under the Act. 
The Financial Advisers Amendment Bill on the other hand amends the Financial Advisers Act 2008 which was passed by the House of Representatives on 23 November 2008 through the correction of a minor error in the assent version of the Act and a number of other minor tidying-up amendments. The Commerce Committee of which I am a proud member received 18 submissions from a variety of sectors. Generally those submissions on the bill welcomed the introduction of the simplified disclosure regime and supported the bill’s proposed amendments to the Securities Act that related to categories of people who are exempt from the disclosure requirements for offers of securities under the Act. 
Regarding the simplified disclosure prospectus there is currently duplication of the information released by listed issuers under the continuous disclosure obligations and the documents required at the time that make a securities offer. All public offerings regardless of whether the issuer is listed on a registered securities exchange such as the New Zealand Exchange must comply with the disclosure and other requirements of the Securities Act 1978. In the case of any offering by an issuer who is already listed on a registered exchange two disclosure regimes apply. Those two are the continuous disclosure requirements for listed companies and the disclosure requirements for a public offering. The proposal in this bill is for listed issuers to produce one disclosure document for a securities offering instead of producing both a full prospectus and an investment statement. 
The intention of the simplified disclosure prospectus as I mentioned in my previous speeches is not to reduce the amount of information provided to investors but simply to reduce duplication between forms of disclosure. In that respect as many submitters rightly stated the regime should and would promote effective disclosure to investors in a streamlined form. However Labour members of the Commerce Committee have concerns about the wealthy investor category as the Hon Lianne Dalziel said earlier. Although we do not oppose the specific amendment we are concerned that changes are being made to the wealthy investor exemption when that exemption may be repealed as part of the review of the Securities Act. I note that in the relevant review of financial products and providers the discussion document described it as the least principled of all the exemptions. 
To conclude I have mixed feelings about the third reading of this legislation especially after listening to what the Banking Ombudsman said at the Commerce Committee hearing this morning. It is very important for us to strike a balance between investors’ confidence and how New Zealand businesses can access capital. It is great to be able to support the legislation and I congratulate the Minister again on adopting this great initiative. Thank you Mr Deputy Speaker. 
JOHN BOSCAWEN (ACT) 
: 
 It is a pleasure for me to speak in support of the Financial Advisers Amendment Bill and the Securities (Disclosure) Amendment Bill. Previous speakers have acknowledged the work of the officials and the advisers on this legislation. I would like to acknowledge my own colleagues. I was not able to be personally involved in a great deal of the deliberation on this legislation and I would like to thank my colleagues on the Commerce Committee for working in my absence. I cannot claim to have played a major part in the development of this legislation. 
Raising capital for firms is fundamental to the New Zealand economy. It was interesting to hear my colleague Melissa Lee talking about the role that the Hon Lianne Dalziel played when she launched the New Zealand Capital Market Development Taskforce and said: “To deliver wealth in jobs New Zealanders need access to capital.” What this legislation seeks to do is put in place a series of regulations that make it easier for companies to raise capital. In particular it provides for a simplified disclosure prospectus that may be used by listed issuers. They are companies that are listed on the stock exchange and are subject to the continuous disclosure requirements. It enables them to raise money from potential investors without having to go to the trouble and expense of a full-blown prospectus. I think it was my colleague Melissa Lee who referred to the fact that a full-blown prospectus might number over 100 pages whereas a simplified disclosure prospectus might come to only 20 pages. 
Anything that will help to raise capital and give access to capital to companies has to be good for the New Zealand economy. But it needs to be done with certain protections. I thought it was very interesting to hear the Hon Lianne Dalziel focus on the wealthy investor exemption this afternoon. This is the exemption that allows so-called wealthy investors to accept a lesser level of disclosure on the grounds of their wealth. Lianne made the point that simply because someone is wealthy does not mean that he or she is necessarily a sophisticated investor. I think she makes a very good point. She was the first of the speakers this afternoon to refer to the fact that the Banking Ombudsman appeared before the Commerce Committee this morning and subsequent speakers have also referred to this. 
Of course the Banking Ombudsman came in to give us evidence in respect of the so-called ANZ-ING affair. This was where ING launched a number of funds but two in particular its diversified yield fund and its regular income fund were marketed to investors on the grounds that they were low to moderate risk. Some 13000-plus investors who invested in those two funds have lost considerable sums of money. ING to its credit offered the opportunity for people to sell their interest in those funds but only at a considerable loss. So I pass on my grateful thanks to ING for at least putting up a proposal because for a number of people who lost money in finance companies there was no such proposal. But there are a number of deficiencies not least of which in my view is that ING is probably offering approximately half of what it should be. During the course of the morning I had the opportunity to meet many members of the ING-ANZ Frozen Funds Action Group and I acknowledged the role that its founder Gerard Prinsen from Wellington has played. Over the course of the morning I learnt about an investor who was very successful. He had a business and when it came time to retire he had a sum of about $2.5 million. That is a very substantial sum. That investor was encouraged by ANZ to invest $1.8 million—three-quarters of the total—of his $2.5 million in the regular investment fund or the RIF fund. There is no doubt that he was persuaded to do so by his ANZ investor. So if ever we wanted evidence of what the Hon Lianne Dalziel was saying we could not get a better illustration in my view. He was a very successful investor who reached retirement age sold his business had $2.5 million to invest and was persuaded to put three-quarters of that—$1.8 million—into one of those funds. 
One of the reasons I was keen to hear evidence from the Banking Ombudsman this morning was that there are some 13000-plus people who invested in this fund and most of them have accepted an offer from ING to buy their units. Most of them—some 95 percent we are told—have accepted an offer to buy their units but they are doing so at a considerable loss. Those funds the diversified yield fund and the regular income fund were frozen in March of last year when their reputed value was respectively 70c and 80c. People were told that their money was being frozen that they should not worry about it that their assets in the fund would be looked after and that they should leave it to those in charge of the fund. Then some 12 months later those people were apologised to and told that their funds were now only worth 20c. The initial offer was 20c and was subsequently increased to 60c and 62c. That is still well short of the 80c that the funds were frozen at in March 2008 and obviously well short of $1 which was the face value of those units. By accepting that offer to sell back their units at either 60c or 62c some 95 percent of the 13000-odd investors in that fund have surrendered all of their rights. They surrendered their rights to benefit from any future legal action or from any action brought by the Commerce Commission under the Fair Trading Act. 
A small subset of those investors some 2800 who took direct advice from the ANZ Bank have the ability to lodge a direct complaint with the Banking Ombudsman under the Banking Ombudsman scheme. Sadly some 11000 people who took advice or bought their product through another channel do not have that same access. Those 2800 people who do through the Banking Ombudsman scheme are lucky. The Banking Ombudsman told us this morning that she had received some 520 complaints. Of those 2800 people about a fifth—20 percent—have lodged a complaint with her. Of the 129 complaints that she has decided on about 110 have been found in favour of the complainant either wholly or partially. So there is a very clear message from the Banking Ombudsman. If one lodges a complaint it is more than likely depending on the circumstances that it will be decided in favour of the complainant. 
It concerns me that only 520 of the 2800 people who invested on the basis of ANZ’s advice have so far lodged a complaint. Sadly under the terms of the settlement they reached with ING they have only 8 more days in which to do so. They have only until 31 July. I hope that out of the evidence presented by the Banking Ombudsman today and the media coverage of it more people who took the advice of ANZ—like the gentleman I referred to earlier who I am told this morning had invested $1.8 million of the $2.5 million he received from the sale of his business—actually lodge complaints. I found it interesting that so far that gentleman has not lodged a complaint. It might surprise members to hear that. He is being advised to lodge a complaint and he has until 31 July to lodge a complaint but after that date he will forfeit those rights. 
That is clear evidence of what Lianne Dalziel said to the House this afternoon: simply because someone is wealthy does not necessarily make that person a sophisticated investor. A level of wealth does not equal sophistication. People rely on advice. They rely on banks. In our society it is accepted that banks are the pinnacle of financial institutions. Beneath them come other institutions such as finance companies and the like. But people rely on banks and they should be able to act confidently on advice from banks. If we are to address the capital market needs of our economy we have to put in protections that give people the confidence to invest. It is absolutely critical for the life of our system. Thank you. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I rise to speak on the third reading of the Securities (Disclosure) Amendment Bill and Financial Advisers Amendment Bill. As outlined by the speakers before me this legislation amends both the Securities Act 1978 and the Financial Advisers Act 2008. It is intended to respond to the current international financial crisis by removing unnecessary impediments to capital raising while ensuring the timely disclosure of relevant information to prospective investors. It also makes a number of minor changes to tidy up the Financial Advisers Act. 
Before I go any further I will comment on something the National member Jonathan Young noted in his speech earlier. He said that business confidence is what matters right now. I could not agree more. But I also note that the legislation being put before us by this Government is really a small measure towards improving confidence. It is ultimately tinkering around the edges—as are most of the bills that have been put before us in the House this year—and does not deal with or address the real issues confronting us right now. 
This legislation is the first I have been able to participate in from start to finish as a new member of Parliament. As a member of the Commerce Committee I was able to see the process in how the legislation has been shaped. What has amazed me most has been all the hard work that has gone into the legislation that is before us now. I thank all the submitters to the bill all the officials who advised on the bill and all members of the Commerce Committee particularly its very capable chair the Hon Lianne Dalziel. As the Minister of Commerce at the time she announced the Capital Market Development Taskforce in November 2008. The task force has shaped the legislation before us. Labour at the time launched the task force to identify ways to improve access to capital. Originally the task force had a year to produce its report but in response to the global financial crisis it produced an interim report in November 2008. 
The report outlined a package of proposals designed to boost access to capital for businesses and reduce the cost of raising capital. Getting access to capital is important for businesses to grow and in a recession it has become even more important that we enable access to capital. This importance was noted by Rob Cameron the chairman of the task force who said: “In response to the current financial crisis access to capital would be a key issue in the survival of many businesses.” Enabling businesses to grow will keep people in jobs. 
I have already said today and I will say it again that there are around 471000 businesses in New Zealand and 97 percent of those businesses are small businesses employing fewer than 20 employees. As I also mentioned in the Chamber last night unemployment in Dunedin has doubled in the last 3 months and has risen 161 percent in the last year. As the member for Dunedin South it is important that I stand here and advocate for greater support from the Government for putting people into work. 
This legislation attempts to respond to the current international financial crisis by removing unnecessary impediments to raising capital while ensuring the timely disclosure of relevant information to prospective investors. It is worth noting that the recession has created a need for strong Governments to act. It is a pity we do not have one here. Under a Labour Government the deposit scheme was put in place to give New Zealand depositors confidence that their money would be secure in the event that an approved financial institution failed. The finance industry as we know is at present facing huge distortions in the cost of money and is paying interest rates for money that because of falling demand or tightened credit approvals it cannot or will not lend. This legislation attempts to enable some of this capital raising to occur by endeavouring to remove unnecessary impediments. I hope that the legislation does enable some capital raising. 
As we have learnt over 310000 New Zealanders are currently reliant on Government support and we do not want that number to continue to grow. But if the trajectory of recent weeks continues there is no doubt that predictions of the numbers of unemployed growing from currently 53000 to 90000 by 2010 will instead be realised by early next year. Securing funding today is arguably the most critical issue for businesses as they come to terms with the current global economic downturn. That was the theme echoed in the submissions received by the Commerce Committee. The intention to streamline equity funding for listed issuers through the simplified disclosure prospectus proposal instead of an investment statement is one measure put forward under this legislation. 
I will turn back to finance companies that were down and out until the previous Labour Government’s deposit guarantee revived confidence in the sector. Until that guarantee scheme we did not see a recovery to the debenture downturn being faced by most of the sector. It is important for many New Zealanders particularly in the retail finance sector that this legislation is properly considered as getting it right. 
As a relatively new member I have enjoyed participating in this debate. Labour supports this legislation but has a particular specific concern with one part of it which has been referred to by all of the speakers on this side of the House. As members have heard this concern is with the wealthy investor category. Labour members of the committee were particularly concerned about that category. We have heard from the committee chair from Charles Chauvel and from Raymond Huo about it. As we have also heard from other speakers being wealthy does not necessarily or automatically make one informed or sophisticated about investing. Although not opposing the specific amendment some of us are concerned that changes are being made to the wealthy investor exemption when that exemption may be repealed as part of the review of the Securities Act noting that the relevant review of the financial products and providers discussion document described it as “the least principled of all the exemptions”. It is important that this concern is taken note of. 
Going back to the priorities that this Government should be looking at it is important that we are protecting the most vulnerable and that everything that is being put before this House is about confidence and also about job creation. But what we have seen under this Government instead has been cuts to the funding of New Zealand Trade and Enterprise grant programmes slashed research and development tax credits the slashing of the Fast Forward Fund and putting community skills training programmes on the back-burner which are all about undermining confidence. No one is blaming National for the recession but people expect a coherent plan focused on compliance costs rather than on investor protection. Building confidence in general should be the focus of the Government right now. 
As a nation we do not save enough. Initiatives such as KiwiSaver were designed by the previous Labour Government to help address the imbalances in our economy. As I mentioned earlier in this debate the global pressures have had an impact on the recovery of household savings which should contribute to an improvement in New Zealand’s external balance over the next few years. But measures that focus on ensuring that our savings regime is protected such as KiwiSaver investing in infrastructure to create jobs and introducing measures to protect investors are some of the things that this Government should be focusing on. 
Finally amending the Securities Act 1978 and Financial Advisers Act 2008 is a significant undertaking. I make the point that what is ironic about this legislation is that similar recommendations were consulted on in the review of the financial products and providers and are included in the current review of the Securities Act. Labour supports this legislation. I have enjoyed working with the Commerce Committee on seeing it through the House. Again I thank the officials who supported us in the endeavour and the submitters who provided us with their analysis of the issues. 
AARON GILMORE (National) 
: 
 It is a pleasure to rise and speak on this legislation again. This is about the third time I have spoken on this legislation and I have been following the conversations today and earlier conversations. Again this is neat legislation that reduces compliance costs and helps to get New Zealand growing again. It helps us to raise capital a little bit smarter a little bit cheaper and a little bit faster and that has to be a good thing. As many speakers have said today the legislation is about widening and deepening our capital markets. 
I must go on and talk a little bit about some of the good work that has been done by the Commerce Committee which I do not have the pleasure of being a member of. I know that the chairman of that committee has done a reasonably good job. It is surprising to hear me thank that member but I think she did a good job on this legislation. The Capital Market Development Taskforce led by Rob Cameron did a very good job as well. He is my former employer so I would be remiss in not saying that Mr Cameron did a good job. 
Hon Lianne Dalziel 
: Did he set up the stock exchange as well? 
AARON GILMORE 
: Who knows? I think a good job was done all round on this legislation and I think no one will dispute that reducing the cost of raising capital is a good thing. 
I would like to spend a bit of time talking about practical examples that may arise around reducing some of the costs of raising capital. The initiatives in this legislation will do some really good things and have some unintended consequences that will be really good. I would like to touch on that. 
Typically when one raises capital it costs $10000 to $50000 to do a prospectus. I have gone through this process myself both in a personal capacity and in a professional capacity. That is $10000 to $50000 that one does not really want to spend on a lawyer or an accountant for the body one is working for. There are number of approved advisers helping people do prospectuses and investment statements. Imagine how much money may be saved as a result of that reduced compliance cost. I have a feeling that about 100 companies a year at an absolute minimum go through a process that this legislation might apply to. 
If we think about those 100-odd companies and about the $10000 to $50000 per company in costs that might be saved we can see an amount somewhere in the region of $1 million to $5 million per annum that some legal firm might not get. That money could be reinvested back into productive parts of the economy particularly in those areas where those firms that are going through either rapid growth or capital shortage may need it. 
It is incredibly difficult for those companies to raise money in any shape or form during the early stages when they need either working capital or financial capital to buy plant and equipment. I have worked alongside many friends who are entrepreneurs and I know it is very hard to raise capital. People try to find an angel investor a venture capital fund or some other organisation and the last thing those people want to do as entrepreneurs is spend money. Every dollar they spend on lawyers or accountants is a dollar they will not spend reinvesting in their business so that it will rapidly grow. We have had some fantastic examples of companies in New Zealand that had very small amounts of seed capital or initial capital but have gone on to do amazingly great things. 
I want to talk further about some examples of the $1 million to $5 million that will be saved from lawyers and accountants out there. I am sure they will not thank us for taking away some of their fees—there will be one or two fewer legal or accounting bashes because they have a bit less income. But that money will instead be available for investing in early-stage companies. 
I spoke briefly about a couple of those early-stage companies in earlier readings of this legislation. I want to touch on one of them and that is Trade Me. Trade Me went from one guy operating out of his Holden HQ in the back his garage to being a successful company that sold for about $700 million. Throughout that process there were about 16 or 17 shareholders if I recall correctly who brought in expertise and capital. Around only $1 million of total capital was actually invested in Trade Me for a resulting outcome of $700 million. 
If through this legislation we can free up somewhere between $1 million and $5 million by reducing compliance costs then that money could be invested in early-stage companies like Trade Me instead of being spent on our good friends the lawyers and accountants of New Zealand. One or two of those companies could go on to be a success and make $600 million or $700 million for their shareholders and that is what we as the Government are concerned about. We want to get New Zealand growing faster and we want to get productivity up. I think that is a wonderful thing. Seeing more of those things in Government is something that we are very keen on doing. The Government wants to raise productivity and get more bang for the buck in terms of those early-stage companies. 
I want to talk a bit about some of those wasted costs and about some of the highly successful New Zealand businesses that reprioritise some of those costs. Typically if one is a partner in a legal or accounting firm one would want to rake in somewhere between $1 million and $5 million per year in fees. In this legislation we are probably talking about putting one partner in a legal firm or a couple of partners in an accounting firm out of work. They will probably have to reprioritise themselves out of being a lawyer or accountant writing prospectuses and do something a lot more productive. Who knows; they might end up having an epiphany and doing some amazing things. 
In one story I read recently someone who was working in an accounting firm went on to set up a company called Working Style. It is a wonderful company. It is the sponsor of the All Black suits and it is a wonderful example of what might happen as it was founded by an accountant. Maybe an accountant will be freed up from doing these prospectuses and he or she might go on to found a company. Who knows? That gentlemen or lady with all that extra time—there are more and more ladies in the accounting profession now I have found—could go out and create a new company. That would make New Zealand grow a bit faster and be more productive. In this day and age when access to capital is very hard to get those people may find a new lease of life. 
Another interesting thing is not just the cost of raising capital or the saving of money with reduced prospectuses; it is much more than that. One of the biggest things is speed. There is no point getting capital to people if it is 3 weeks or even 3 days too late. Many companies fail not because they cannot make money in terms of profitability but because they cannot get any cash. At a time like this with the credit crunch we have globally the ability to access cash is critical. This legislation will allow companies to get cash faster. 
Dr Cam Calder 
: Extraordinarily good! 
AARON GILMORE 
: What extraordinarily good legislation! The unintended positive consequences of legislation like this are amazing. I do not think people have cottoned on to that. 
Yes this legislation will reduce compliance costs and reduce the need for companies to spend that $10000 or $50000. But equally it will mean that things will go faster. If venture capital investors want to have the ability to invest they can not only do it at a cheaper rate but they can do it faster. They do not have to sit and wait for their lawyers or accountants to come back with 50000 drafts of a 150-page prospectus or investment statement. They could probably get it done in an afternoon. 
Companies that want access to capital from investors will because of the exemptions in this legislation get access to their funds faster. That might mean we save one or two companies that might be close to the edge because they will be able to access funds faster instead of going through major capital raising and all the required paperwork. How great would that be! Those are amazing unintended positive consequences of this legislation. If we can save one or two companies from going bust that would be amazing. 
 I want to touch quickly on another provision in the legislation which has been talked about and that is the wealthy investor exemption. Well I have been a wealthy investor—one finds a small fortune by starting with a large fortune! If a wealthy investor starts with a small fortune and does not know what to do I can tell members that he or she will end up with no fortune very quickly. This legislation gives those wealthy investors the ability to front up and say that they are signing away their rights to have access to additional information. I want to leave it there. This is great legislation with amazing levels of unintended positive consequences and I commend it to the House. Thank you. 
The ASSISTANT SPEAKER (Eric Roy) 
: The question is that the motion be agreed to. Those of that opinion will say Aye. Those of the contrary opinion will say No. The Ayes have it. 
SUE KEDGLEY (Green) 
: 
 I raise a point of order Mr Speaker. I seek your guidance. The bills are being voted on jointly but the Green Party would like to have a different vote on each bill. Is there some way of being able to do that? 
The ASSISTANT SPEAKER (Eric Roy) 
: It would have been helpful if the member had alerted us to that and called for a party vote. 
SUE KEDGLEY 
: I did not realise the bills were going to be taken together. 
The ASSISTANT SPEAKER (Eric Roy) 
: In that case the member would be best to seek leave to have the vote put again. 
SUE KEDGLEY 
: I seek leave to vote on the Securities (Disclosure) Bill separately. 
CHRIS TREMAIN (Senior Whip—National) 
: 
 I raise a point of order Mr Speaker. I understand that the Green Party member wants to vote separately on the two bills. 
The ASSISTANT SPEAKER (Eric Roy) 
: Yes that is what the member has just sought leave for. 
CHRIS TREMAIN 
: No the member sought leave to repeat the vote on the Securities (Disclosure) Bill but the actual vote was on the two bills together. 
The ASSISTANT SPEAKER (Eric Roy) 
: I think that is helpful. I ask the member to include in the seeking of leave that the vote be put again and that the two bills be voted on separately. 
SUE KEDGLEY (Green) 
: 
 Thank you Mr Assistant Speaker. I could not have put it better. I seek leave to have the votes taken separately and voted on once again. 
The ASSISTANT SPEAKER (Eric Roy) 
: We are clear now as to why leave is sought. Is anyone opposed to that course of action? No one is opposed. Leave is granted. 
A party vote was called for on the question  
That the Securities (Disclosure) Amendment Bill be now read a third time. 
Ayes 112 
New Zealand National 58; New Zealand Labour 42; ACT New Zealand 5; Maori Party 5; Progressive 1; United Future 1. 
Noes 9 
Green Party 9. 
Bill read a third time. 
Financial Advisers Amendment Bill read a third time. 
Building Amendment Bill (No 2) 
Third Reading 
Hon NATHAN GUY (Minister of Internal Affairs) 
on behalf of the  
Minister for Building and Construction 
. I move  
That the Building Amendment Bill (No 2) be now read a third time 
. I am pleased to begin the bill’s final progress through the House this evening on behalf of the Minister. This bill refines and streamlines the building consent process and reduces compliance and transaction costs for a group of home builders developers and councils with flow-on effects for homeowners and that is vitally important. 
I make three introductory remarks about the specifics of this bill. First it introduces national multiple-use approvals that will fast track the building consent process for house designs that are used repeatedly by group home builders. Secondly it defines a new streamlined process for managing minor variations to building plans after a building consent has been issued. That will save time for building consent applicants and indeed for local authorities. Thirdly the bill makes voluntary the requirement to obtain a project information memorandum commonly called a PIM which reduces time and costs for building consent applicants. 
The bill provides for regulations to be made that will provide the operational detail needed to get the initiatives up and running. The Government is committed to rapidly progressing these regulations so that the initiatives can come into force as soon as possible and the sector can begin to benefit from that. 
This bill is the first step in the reform of the Building Act 2004. Led by the Minister the Hon Maurice Williamson this Government is undertaking a wider review of the Building Act with a view to reducing compliance requirements and costs but without compromising building quality. That is an important point. Broadly we would like to achieve several things as a result. The first is to further refine the building consent process by looking at what really needs to be consented based on risk if at all. The second achievement is to facilitate greater use of technology by councils and building consent applicants such as having an online national consenting system to reduce costs and get consistency across the country. The third one is to lift performance and skill levels across the sector through builder licensing. 
A couple of other points I wish to make is that the reforms that we are looking to make in the future will provide better information on the building code and more examples of how to achieve or meet performance standards. Also they will help consumers make informed decisions about building their homes and choosing the products they need. The final point is to consider how the liability and risk in the building sector is shared. That is an important point. 
 The bill before us tonight the Building Amendment Bill (No 2) makes a pragmatic start to the reform of regulation in the building and construction sector. I acknowledge the work of the Local Government and Environment Committee ably led by its chair Chris Auchinvole. I also acknowledge the select committee staff the Department of Building and Housing officials and the Parliamentary Counsel Office drafters who have worked on this important bill. I commend this bill to the House. 
MOANA MACKEY (Labour) 
: 
 I intend to take a short call on this legislation. Labour is happy to support the third reading of the Building Amendment Bill (No 2). This bill was drafted by the previous Government and was picked up by this Government. It is always good when we can get consensus between the two main parties on issues as important as these. In that respect we also wish the Government well with the work being done on further reforms in this area. 
Hon Lianne Dalziel 
: It is building consensus. 
MOANA MACKEY 
: That is a nice little late Thursday afternoon quip. I think we have all been here too long. 
This is never an easy area in which to change regulations or legislation simply because we never really know what the impact will be until it is enacted until the rubber hits the road and we see what the consequences of the changes will be. In this country we have seen the pendulum swing wildly in this area from complete deregulation—which caused a number of problems—to the changes that were implemented after that. The previous Government acknowledged that the changes went too far: that they put far too much compliance on the building sector. For that reason and because it recognised that the legislation had gone a bit too far it drafted this legislation and made the reforms. 
It is important to say that the legislation was written in response to the leaky homes crisis and a number of New Zealanders were calling out for far more regulation in this area. I certainly hope that this legislation proves to be a good balance between the need for quality homes to be built and the need not to put too much cost on to those who are building homes particularly with the housing affordability issues we have in this country. 
As the Minister has stated the bill aims to improve the efficiency and effectiveness of the building consent process whilst ensuring that quality homes and buildings are being constructed. It extends the functions and powers of the Department of Building and Housing. It will allow the department to issue national multiple-use approvals for dwellings and buildings that are replicated on a substantial scale. This is an important point and it will make a large difference. As we know 40 percent of all new homes built in New Zealand are built by volume builders. So if we manage to get this right and I hope that we have—and I join the Minister in congratulating the Local Government and Environment Committee on the work it has done—it will make a significant difference to the level of compliance in this area. If we get this right I think that we can achieve enormous efficiency. I was the former chair of the Local Government and Environment Committee. It is now under the careful stewardship of Chris Auchinvole who was one of my little grasshoppers on that committee in the last Parliament. I feel very proud of him and I am sure that he has taken every care to ensure that the legislation will stand the test of time. 
The legislation also reduces the statutory time frame for processing a building consent application from 20 working days to 10 working days where the application uses the national multiple-use approval. That will be an efficiency that the building sector will be very grateful for. The bill differentiates between major and minor variations to consented building work to support best practice in managing amendments to building consents. It makes it voluntary for an owner to obtain a project information memorandum from a building consent authority that is a territorial authority. 
I know that during the select committee process the Historic Places Trust in particular was a little bit concerned about the move to make project information memoranda voluntary. It is important to say that its use has not been adequate even though the idea was very good which is why it was supported in the first place. Project information memoranda were meant to be a one-stop shop for all the information relating to building work that required consent. It was envisaged that they would save time and money—that is why they were put in—but only a minority of them were applied for prior to the building consent which undermined the entire point of having them. It did impose a cost on the owner or the developer. The benefit of them was not being realised by the advance warning process so it seemed sensible to move along the path that the select committee recommended. Even though we acknowledged the concerns of the submitters who were opposed to this move on balance we have to acknowledge that it was the right thing for the committee to do. 
I will finish by saying that this is an important move in terms of addressing the issue of affordable housing but it will not be a silver bullet. Any reduction we can make to the cost of homes is important so that New Zealanders can afford to purchase their own homes. We hope there can be an accrual effect with a number of different changes adding up to a significant difference. However I believe that we need see more movement in the area of affordable housing. 
I think a lot of people expected that during the course of this recession housing would become more affordable and there would be a natural correction to the housing bubble that was created in the past few years. In fact that has not been the case. What we have seen across most of the country is that housing prices have not dropped significantly and certainly not as much as people thought they would. Interest rates have dropped but at the same time more people are unemployed. Fewer people are getting pay increases or even cost of living increases so that their pay is keeping pace with the cost of living. 
Darien Fenton 
: Pay cuts! 
MOANA MACKEY 
: People are getting pay cuts. So the ability of people to save for a deposit and to purchase their own home is dropping and it is doing so faster than the interest rate cuts which are not being passed on in full so that homeowners can see the benefits of those cuts in their bank balance. 
I implore the Government to please show some leadership on the issue of affordable housing. This bill is good. Every little bit is good. But what we have also seen and it was indicated in the Budget is a number of cuts across areas like Welcome Home Loans and the shared equity scheme. It was an underspend. They were cut simply because those mechanisms were not deemed to be necessarily appropriate for the time even though the number of applications for Welcome Home Loans has increased in recent months. In the area of affordable housing we need constantly to be looking at what the best mechanism is to assist people into their first homes. Labour and National had a similar policy at the election which looked at using Government-owned land to get people into their first homes. The only difference between our two policies was that in Labour’s policy the Government retained ownership of the land so that the house was affordable in perpetuity—it would always be affordable because when it was sold on only the cost of the house was sold—whereas National’s policy was to have the homeowner buy the land after 5 years. Apart from that the policies were very similar. National’s policy did not get funding in this year’s Budget and I was disappointed with that because I believe that it would have been an important tool particularly to help New Zealanders to get into their first homes. 
I reiterate that we will be supporting this bill. We think that the select committee did a really good job. We certainly hope that the legislation strikes the balance that this Parliament has been striving to strike for a long time but we do need to see more action from the Government on affordable housing. 
CHRIS AUCHINVOLE (National—West Coast - Tasman) 
: 
 I thank Moana Mackey. C’est toujours un plaisir à suivre Mademoiselle Mackey. 
Chris Tremain 
: You’ll find that was “Oh Grasshopper”. 
CHRIS AUCHINVOLE 
: Ha ha! I am not quite sure of the grasshopper. 
Hon Lianne Dalziel 
: You’ll have to get a Maori pronunciation sheet from the Maori Party though. 
CHRIS AUCHINVOLE 
: I shall do that. 
It was a pleasure to hear the Building Amendment Bill (No 2) being introduced by Minister Nathan Guy. Let us remember—and this side of the House has always acknowledged—the contribution to this bill made by the Hon Shane Jones in his drive to get it going. 
In many ways the speeches given on this bill have been quite cathartic in that they have reflected on the difficulties of the leaky home syndrome that occurred and frightened the industry. It certainly made councils risk-averse and introduced very severe inspection regimes and that sort of thing. It is good to hear members of the previous Government say that they maybe went a bit far with regulation. This bill addresses that situation. It is novel it is clever and National was very happy to proceed with it when National became the Government. As I mentioned yesterday there was even a suggestion that we should have called it the “Shane Jones Building Amendment Bill” but that would perhaps have been over-egging the cake. 
The purpose of the bill as the Hon Nathan Guy said when he introduced the third reading is to allow the Department of Building and Housing to issue national multiple-use approvals for dwellings and buildings that are to be replicated on a substantial scale. I reiterate that it was interesting and a surprise to learn during the submissions that that relates to 40-plus percent of residential housing in New Zealand—40-plus percent. Those dwellings are separately designed and attractively designed; we are not building little boxes. 
Moana Mackey 
: We’re not building shipping containers. 
CHRIS AUCHINVOLE 
: That is right—we have a separate purpose for those. It does mean though that this bill affects a large proportion of residential building. It reduces the statutory time frame for processing a building consent application from 20 working days to 10 working days where the application includes a national multiple-use approval. That makes a hang of a difference. Minor variations—whether someone wants a bath on one side of the bathroom or the other or whether someone wants a little window here or a little window there— can be consented building works so that minor changes can be made without going through a full process. This will reduce costs and save time. The bill makes it voluntary for an owner to obtain a project information memorandum—a PIM—from a building consent authority that is a territorial authority. 
That is the basic cut of this bill. The background is relatively well known. It is designed to reduce both direct and indirect costs to property owners and developers while ensuring that quality homes and buildings are constructed. Multiple-use consenting will drive improvements in housing costs and affordability by removing barriers to achieving potential economies of scale. These proposals follow consultation with the industry and with local government. It was a pleasure to see this bill go through the Local Government and Environment Committee because really it attracted no partisan approach at all. It has been well received by both sides of the House. Support for this bill has been very much bipartisan. It has been one of those occasional oases in the desert of political cant. 
It was a slight disappointment and a surprise to hear the only discordant speech on the bill thus far from the Hon Maryan Street yesterday. That surprised me a little because she is normally very temperate. None the less she railed against the discussion on the bill for not giving the bill sufficient credit for being a step towards reducing the cost of housing. I feel that that has to be responded to because she really was quite strong about it. The Committee stage is usually devoid of party political statements I would think because it deals with the clauses of the bill. But to reassure the Hon Maryan Street—and she made a valid point in saying that the bill is a step towards providing affordable housing—I checked the first and second reading speeches that I gave on this bill. I can reassure her that there were 10 separate mentions of cost reduction and housing affordability in the first reading speech and 17 separate mentions in the second reading speech. I think my colleagues would say we have always had that as a priority. 
Dr Cam Calder 
: Undoubtedly. 
CHRIS AUCHINVOLE 
: Indeed. In a recent speech by the Prime Minister given last Wednesday I think he emphasised the whole matter of businesses needing conditions that are favourable to them and said that investors will put their money where they can get a good return for good processes. That is why this Government is focused squarely on improving New Zealand’s economic performance. There are lots of ways of doing that. 
The Government is committed to increasing New Zealand’s productivity growth and to maintaining high levels of employment. This bill will help to do that. Increasing our productivity growth basically means getting better at producing goods and services and getting them up and running. The reality is that although this bill has often been described as a small bill or a short bill it is a very valid bill because it does everything that a bill is required to do. The most fundamental problem facing the New Zealand economy is poor productivity growth. Whichever way we look at this bill it is significantly designed to increase productivity. Our productivity is already low in comparison with that of other developed countries and in recent years it has been growing more slowly than that of other countries. This bill is a small step towards acceleration. It will be followed as indicated by the Minister who introduced the third reading by far more profound bills that revise the Building Act. 
As I said it has been a pleasure to be associated with the bill it has been a pleasure to be associated with its third reading and it has been a pleasure to support the bill from beginning to end. Thank you Mr Assistant Speaker Roy. 
DARIEN FENTON (Labour) 
: 
 I am pleased to take a short call on the Building Amendment Bill (No 2). I have to say I was getting a little bit concerned about the level of agreement in the House. This consensus is getting to be a bit of a habit on Thursday afternoons. I was with Chris Auchinvole all the way until he started to talk about productivity then we absolutely parted company. I am really looking forward to the debate on productivity led by the wonderful Dr Don Brash. I am looking forward to seeing what silver bullets he can come up with. I am looking forward to being able to challenge his answers because I suspect they will be the same as they were in the past. They will be the same old things we have heard in the past. 
However I do not want to finish on a discordant note on a Thursday night. On behalf of Labour I add my support for the bill. As many people have already observed Labour introduced this bill while in Government. The purpose was to help reduce unnecessary delays in the building consent process that cause frustration among builders and make it more expensive for the owners. The bill will reduce both the direct and indirect cost to owners and developers associated with the construction process while ensuring that quality homes and houses are constructed. 
This bill was part of a coordinated approach from the last Labour Government to assist in increasing the supply of good-quality affordable homes as part of a package of programmes introduced by Labour. As my colleague Moana Mackey observed the package was largely picked up by this Government. Again it is really interesting to see we have consensus on these things. It will be more interesting when we get past all the bills that Labour introduced in the last Parliament—bills that we are now passing. Every day we are voting on good Labour bills that National agrees with. I suspect that once we get to the Government bills we will have a lot of disagreement. 
I congratulate the Local Government and Environment Committee as others have on the work it did. It received 17 submissions on the bill including submissions from local government industry bodies private companies a Crown entity and a community advocate group. I am sure others have set out the main changes that the select committee recommends which I think are very sensible. I am really pleased that this important Labour bill has found favour with the National Government. I look forward to its measures making a difference to the affordable home market. 
SUE KEDGLEY (Green) 
: 
 The Green Party is very pleased to join in the consensus in this House on the Building Amendment Bill (No 2). A previous speaker talked about how wonderful it was to have consensus between the National and Labour parties. I remind members that there are other parties in this House as well. I believe that all parties including the Green Party ACT and the Maori Party are joining in the consensus the reason being that the bill is an eminently sensible amendment bill which was originated by the previous Government and is being carried through by this Government. 
The bill provides for multiple-use approvals for houses that are built on a large scale. We think here of Lockwood Homes Golden Homes etc. One small point I would like to mention which no one else has mentioned is that during the consideration of this bill in the Local Government and Environment Committee which was ably chaired by Mr Auchinvole we managed to make a small but I think important concession. We ensured that Lockwood Homes could also benefit from this bill. Previously there was a regulation that prevented Lockwood Homes from benefiting from this bill as it was not able to be considered to be a volume builder. I am very pleased about that change. Actually at the start we were told it was impossible for it to be considered to be a volume builder. The committee persisted and we included Lockwood Homes. That was a small thing that the committee was able to do. I am sure that Lockwood Homes which is an important and iconic New Zealand company will be very pleased that it is not excluded from the provisions of this bill. 
The bill does many good things. It will streamline as many others have said the building consent process. It will hopefully produce economies of scale. It will make homes more affordable and it will speed up the approval process and enable houses to be built more quickly. 
A previous speaker mentioned that we really will not know the consequences of this bill until it has been enacted and I would like to mention a couple of cautionary notes that we need to have in the back of our minds. Other speakers have pointed out that really this bill is a reaction to the previous building bill the Building Amendment Bill which of course was passed in response to the leaky building problem and arguably went too far and created too many hurdles in the Building Act. But there is a danger that the pendulum will swing too far and we will end up once again cutting corners. The Minister said when he introduced the Building Amendment Bill (No 2) that it will bring down the costs of building while not compromising building quality. Others have repeated that statement but nobody has explained to me how this bill will ensure that we will not compromise building quality. I have no idea how we will ensure that we will not compromise building quality or slip back to the days when poor regulation resulted in the leaky building crisis—and it is indeed a crisis and a growing one. So we need to have that at the back of our minds. 
The second issue I would like to touch on is that some submitters as is noted in the select committee’s report raised concerns that the national multiple-use approvals could lead to a proliferation of standardised housing that is not designed with reference to the specific environment. I share those concerns. I think there is such a possibility. We know that 40 percent of new homes will be built by volume builders and there is the risk that we will have standardised identikit houses—absolutely identical—one by one and side by side because it is cheaper to build them. Someone said we are not building little boxes with this bill but the possibility does exist that that would be the consequence and that we would end up with a lot of little boxes that are not built in harmony with their environment. 
One needs only to travel briefly to Europe to recognise the importance of building homes that are not ugly and are in harmony with their environment. One of the huge appeals of tourism in Europe is that there tend to be in many areas—not all by any means but many—buildings that are in harmony with the environment. We can think of areas where they are not in harmony with the environment. There are for example huge multi-storey buildings on the Spanish coast. They tend to be very ugly and tourists are often put off by them. So we do need to be mindful. We do not want to create a whole lot of ugly standardised buildings all looking the same as a consequence of this bill. We need to make sure that that does not happen. We will not know whether it will happen as someone said because we will not know the consequences until these regulations are put into effect. 
 However on the positive side the bill will help in some small way to enable affordable houses to be built. Everyone agrees that it is a huge huge problem in New Zealand that homes are not affordable we have a huge number of New Zealanders living in overcrowded homes and there are not nearly enough homes being built. This bill may take one small step towards making homes more affordable enabling them to be built more quickly and reducing compliance costs. For those reasons the Green Party is pleased to join in the consensus on this bill. We very much hope that our fears about identikit standardised ugly houses being built as a consequence of the bill will not be realised. Thank you. 
LOUISE UPSTON (National—Taupo) 
: 
 I am delighted to stand to take a call in support of the third reading of the Building Amendment Bill (No 2). I think that having unanimous support for a bill around the Chamber is a really nice way to finish a parliamentary week. It is important to acknowledge that members of the previous Government have recognised that perhaps some of the regulations around building had gone a bit too far. They have become a barrier in terms of affordable housing and have added layers of bureaucracy that are not ideal. The National Government has picked up this bill put some urgency around it and focused on some areas where we know that we can get some quick wins that will have an impact in terms of housing becoming more affordable. 
I will recap on the three main initiatives of the bill. The first is around the national multiple-use approvals. The building consent process for the 40 percent of houses that are currently built in New Zealand by group building companies will be far more streamlined. Their designs are replicated on a substantial scale so less work will be involved for 40 percent of the houses built in New Zealand. 
The second area is around the streamlined process for making minor variations to building plans after a building consent is issued. These are minor changes in building plans. They are not significant and the process of making them in the plans was too complex. 
The third main initiative which is the final part is to make voluntary the requirement to obtain a project information memorandum or PIM. Again this initiative reduces time and costs for building consent applications. 
It was very pleasing to see that as well as these changes receiving support from around the House there was strong support for them from the industry. Good targeted consultation was undertaken during this process and I am sure that has made the process and the submissions far more encouraging and supportive. The 17 submissions that came in were encouraging in terms of supporting both the changes that are specifically recommended in this bill and the wider reform of building legislation. A review was started in March of this year to further refine the building consent process to lift performance and skills through builder licensing and to increase the use of technology by councils. 
I was working for one of the councils when the Building Act amendments came in. It was an interesting process seeing how councils came to grips with a very difficult and complex process. They will be extremely relieved about the changes that will come in not only now with this bill but also with the wider building reforms. Those reforms will improve the use of technology for councils and will provide more information and education for consumers so that they can have better access to what is going on with their building consent. 
The review will also look at responsibility liability and risk. As we know from the leaky homes issue which was a major issue when the initial changes came in there was a concern that the solution to that problem went too far. We need to make sure that we continue to look at that issue in terms of managing the risk and deciding where the risk should sit. 
It is really encouraging to see that everyone in this House is supporting this particular bill in order to make sure that housing is more affordable for hard-working New Zealanders. I am sure that New Zealanders out there will see that it is great to have a Parliament that can work together and great that all members can agree on something that it is so important to this society. It is the dream of New Zealanders to own their home and we will give it to them. 
Debate interrupted. 
The House adjourned at 6 p.m.