Volume 666 Week 53 - Wednesday 8 September 2010 
Volume 666 Week 53 - Wednesday 8 September 2010 
[Volume:666;Page:13753] 
Wednesday 8 September 2010 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Ministerial Statements 
South Canterbury Finance—Receivership and Retail Deposit Guarantee Scheme 
Hon BILL ENGLISH (Minister of Finance) 
: 
 I wish to make a ministerial statement under Standing Order 347 in relation to the receivership of South Canterbury Finance and the coverage of depositors by the Crown Retail Deposit Guarantee Scheme. I seek leave for my statement and for the response of the leader of the Labour Party and the co-leaders of the Green Party to be 10-minute speeches with the other parties to have speeches of up to 5 minutes and for my reply to be a 5-minute speech. 
Mr SPEAKER 
: Is there any objection to that course of action being followed? There is none. 
Hon BILL ENGLISH 
: The deposit guarantee scheme was announced by the previous Government which set the terms of the guarantee in late 2008 and was supported by the incoming National Government. At that time the turmoil in world financial markets caused many OECD countries to take unprecedented steps to protect their financial systems including nationalising banks and providing sweeping sovereign guarantees for most financial system deposits. Administration of the scheme was delegated to the Secretary to the Treasury in accordance with policy guidance set by the Minister of Finance. South Canterbury Finance was admitted to the scheme on 19 November 2008. The essential test for admission was whether it appeared necessary or expedient in the public interest. Under the deed of guarantee participants could take on increased deposits in lending but were required to pay fees in respect of any growth. Allowing participants to continue lending was a major aim of the guarantee scheme. 
At the time South Canterbury Finance appeared sound. In June 2008 Standard and Poor’s had affirmed a stable BBB- credit rating and commented that “asset quality is sound underpinned by a modest risk appetite proactive risk management and sound underwriting standards.” However this was not necessarily the case. In the 4½ years to December 2008 South Canterbury Finance’s assets had almost doubled from $1.1 billion to $2.16 billion. As 2009 evolved it became clear that much of this additional lending was not high quality. The balance sheet expanded slightly under the guarantee peaking at $2.35 billion in June 2009. It is clear however that the great majority of problem lending occurred prior to entering the guarantee. 
In mid-2009 Treasury appointed KordaMentha as advisers to report on the company’s financial position. The June 2009 Crown accounts included a provision of $831 million for the deposit guarantee scheme. The majority of this provision related to South Canterbury Finance. Assessing the potential risk was complicated by related party lending generally poor credit and accounting processes and more recently the departure of most of the senior management. Despite this deteriorating position South Canterbury Finance remained in compliance with the deed of guarantee and as such there was no ability or cause for the Crown to withdraw the guarantee. If for whatever reason South Canterbury Finance’s deposit guarantee had been withdrawn existing depositors would still have been covered for the full term and the Crown’s exposure would have remained. 
In September 2009 the Government moved with unanimous support in the House to extend the retail deposit guarantee until the end of 2011 though on significantly more restrictive terms than previously. On 1 April 2010 South Canterbury Finance was approved for entry to the extended scheme when it started in October 2010. Its admission into the extended guarantee did not materially change the Government’s risk in the event of default. In the event because South Canterbury Finance entered receivership before October the extended guarantee scheme never applied. Payments to depositors will be made under the terms of the original scheme. 
During the period of the guarantee Treasury and its advisers were in close contact with the firm. Once it became apparent that the firm was in difficulty there were proposals either to acquire parts of the firm or to recapitalise. I instructed Treasury officials to work cooperatively with the firm on these options. However they all effectively amounted to a bail-out by the Crown with extra costs and risks to taxpayers. At no stage would Treasury have recommended accepting any of these proposals. 
At the request of its directors South Canterbury Finance was placed in receivership on 31 August. The ultimate cause was insolvency not lack of liquidity. The Government then moved promptly to ensure that the depositors would be repaid swiftly. As well as repaying $1.6 billion of remaining depositors the Government extended a loan facility of $175 million to the receivers to ensure prompt repayment of prior charge holders and extended the guarantee to a small number of previously ineligible depositors. These decisions were taken for commercial reasons. They avoided the need to pay ongoing interest that otherwise would have accrued over many months or years as investors submitted claims and also the risk that receivership might be controlled by prior charge holders to the potential disadvantage of the Crown. Treasury estimates that the net saving to the Crown is about $100 million as a result. 
The Government’s recent moves ensure that the receivership will be conducted in an orderly fashion that minimises disruption to businesses either financed or owned by South Canterbury Finance. The receivers this week called for expressions of interest from possible buyers of South Canterbury Finance’s assets. 
While the Crown has had to make good its guarantee to depositors it will recover some of the proceeds out of receivership. Once the receivership is finished this will largely complete the cycle that began in October 2008. When the fees collected from the wholesale and retail guarantee schemes are included the net cost to taxpayers is likely to be between $300 million and $400 million. Although this cost to taxpayers is considerable this expenditure did help prevent the potential collapse of the financial system. In the light of ongoing bank bail-outs around the world this net cost is the insurance premium that our economy has paid to avoid potentially catastrophic losses to taxpayers over the last 18 months. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 The Labour Opposition rises to address the important issue of the receivership of South Canterbury Finance and the additional liability that the public of New Zealand now has to the tune initially of $1.75 billion. Last Tuesday 31 August South Canterbury Finance was placed in receivership triggering the provisions of the Crown Retail Deposit Guarantee Scheme under which South Canterbury Finance’s deposit holders are to be paid $1.6 billion. In addition $175 million is being loaned to the receiver which will allow the Government to repay all of South Canterbury Finance’s prior ranking debts and become the first-ranking creditor. Once South Canterbury Finance’s assets are sold off the Government says it expects to make a net loss of about $600 million which the Minister of Finance argued in the House just previously could be reduced to $300 million to $400 million net of the interest received under the scheme. 
This is the largest bail-out in New Zealand corporate history. The events leading up to the receivership raise some serious questions. The public who are now footing the bill are entitled to know what went wrong when and why it went wrong and who was involved. Kiwis deserve to have clarity and transparency about how the Government and its regulators handled the bail-out and about whether the cost to the taxpayer was in fact minimised. We are asking these questions so that we can learn the lessons of South Canterbury Finance and ensure that something like this does not happen again. 
A wide range of detailed questions need to be addressed. Firstly should South Canterbury Finance have been included in the extended guarantee scheme? Did South Canterbury Finance breach its deed of guarantee? On what date did KordaMentha start to advise the Government on South Canterbury Finance? There have been reports that this happened in mid-2009. It was clear that South Canterbury Finance had substantial difficulties and that some at that point thought it was destined to fail. So what advice did the Government then get from KordaMentha? Did KordaMentha reach the same conclusions as Ernst and Young who said there were fundamental uncertainties about South Canterbury Finance’s financial position? 
Was South Canterbury Finance in breach of the Reserve Bank’s prudential requirements for inclusion in the guarantee scheme when it was accepted for the extended scheme on April Fool’s Day? Given the state of its balance sheet it must have been. Its half-yearly report released in April 2010 showed there had been a huge loss. Why did the Government then act as it did? Had Treasury seen South Canterbury Finance’s latest audit accounts when it announced that the finance company would be included in the extended guarantee? Was South Canterbury Finance in breach of the deed of guarantee when it was included in the extended scheme? South Canterbury Finance’s business practices suggest that it may not have been meeting the standards of prudence required by the deed. What for example was the level of related party transactions at that time and how did that relate to the criteria set out in the deed? 
Could the Government have tightened the terms of the deed of guarantee under the extended scheme? Could the taxpayers’ liability therefore have been limited in that way? The public of New Zealand will want to know whether the Government did indeed minimise the cost to the taxpayer. How many deposits did South Canterbury Finance attract after its inclusion in the extended guarantee scheme? South Canterbury Finance released— 
Rt Hon John Key 
: These are all very good questions. Shame you didn’t ask them when you did it. 
Hon DAVID CUNLIFFE 
: I raise a point of order Mr Speaker. The Opposition has done the Prime Minister and the Minister of Finance the courtesy on this serious matter of listening to their remarks without interruption and we ask that that courtesy be reciprocated. 
Mr SPEAKER 
: That is not an unreasonable request as the Opposition did accord the Minister of Finance the courtesy of listening to him in silence. I ask the House to try to avoid interjections please. 
Hon DAVID CUNLIFFE 
: How many deposits did South Canterbury Finance attract after its inclusion in the extended guarantee scheme? It released a prospectus in early April that sought to raise $1.2 billion in registered debentures. The Government’s decision to extend the guarantee gave investors the confidence to make new deposits with South Canterbury Finance even though the company was already in a bad state. 
There have been reports in the media about a potential commercial deal that would have greatly reduced the Crown’s and taxpayer’s liability. Apparently negotiations ended only at 4.30 a.m. on the night before the receivership was announced. What deals were on the table? Was someone interested in buying a share of equity in South Canterbury Finance possibly preventing the need for a bail-out? We have heard that reputable parties were willing to invest hundreds of millions of dollars of their own equity. This would have greatly reduced the taxpayer’s liability. Having made the decision to include South Canterbury Finance in the extended guarantee why did the Government not give Sandy Maier the chief executive every chance to recapitalise the company and why did those negotiations fail at the last moment? What was the sequencing of Cabinet’s consideration of the recapitalisation proposal relative to the timing of those negotiations? What other options did the Government consider before South Canterbury Finance was put into receivership? It seems that the Government’s moves were pre-planned given the speed of their implementation. Did the Government really give recapitalisation every chance to succeed? 
The Government has said that the minimum cost to the taxpayer could be around $600 million assuming that the Government can realise the full value of all of South Canterbury Finance’s assets. The Opposition asks whether that cost could in the end be more than that. It is clear that assets held in receivership typically erode in value. Faced with the choice between ceasing business as usual as a going concern or being sold to circling speculators at fire-sale prices what scenarios has the Government planned for the value loss of the assets currently held by the receiver and how will that loss be minimised? 
The Opposition and the public will be interested in the process that the Government went through when it put the House under urgency without a select committee process to extend the guarantee scheme. Labour voted for that and it was passed in September of last year. However at the time we made the point that the legislation should have gone to a select committee even if it was only for a compressed period of time. I believe that history has shown that to be a good and proper instinct. 
Did putting Allan Hubbard into statutory management exacerbate South Canterbury Finance’s troubles? It is clear that there are matters currently under investigation by the Serious Fraud Office that this House cannot have visibility into. But none the less on 20 June Minister Power announced that on the advice of the Securities Commission he was placing the Hubbards Aorangi Securities and seven charitable trusts under statutory management. Some matters were referred to the Serious Fraud Office. Although South Canterbury Finance was not part of the order it must have been affected by the loss of confidence in its principal Allan Hubbard. Because of the statutory management and the ongoing Serious Fraud Office investigations the public has little information about what led to the Government’s decision. No doubt more will be known when these matters are concluded. But after the announcement my colleague the Hon Lianne Dalziel wrote to Minister Power expressing her concern that placing Allan Hubbard under statutory management at a time when South Canterbury Finance was trying to raise funds was difficult to understand. Did the Government factor in the situation facing South Canterbury Finance when making the statutory management order? Did the Government consider the effect of the decision on South Canterbury Finance and the effect on the retail deposit scheme? 
Taxpayers will wish to assess who were the eventual winners and losers in this debacle. The Government has loaned $1.75 billion to South Canterbury Finance’s receivers and depositors which is more than the annual Budget allocation for the New Zealand Police and even after the assets are sold the Government could be $600 million in the red. The companies who borrowed off South Canterbury Finance will now be struggling as receivers cut up their credit cards and shut off their credit lines. However some companies with senior registered debt stand to make a very handsome return from their investments in this process. The public will want to understand more about how those circumstances arose. 
Were there any conflicts of interest? Some serious questions need to be asked about the transparency and integrity of the Government’s processes. What assurances did the Government seek that all private parties were free of conflicts of interests? What conflicts of interest were declared to the Government? What steps if any were taken to mitigate any conflicts of interests? These are issues that we will examine in more detail as the facts emerge. 
To sum up the issues raised so far the Government stated that its objectives for South Canterbury Finance included minimising the cost to taxpayers yet it decided to include it within the extended guarantee scheme despite evidence that South Canterbury Finance might already have been in breach of the terms of that scheme. Having made that decision the Government moved the company into receivership without clearly allowing the recapitalisation process to finish or other options such as statutory management to be explored. Serious questions remain to be answered. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I stand to speak today on the bail-out of South Canterbury Finance. This Parliament has often had the debate about regulation versus non-regulation. That debate has raged back and forth in New Zealand politics and global politics for many years. The side that opposed regulation dominated New Zealand politics through the 1980s and 1990s. That side of policy making and those who supported a laissez-faire approach dominated policy making in terms of how we should regulate the finance sector. Today we are witnessing the end result of the victory of a laissez-faire approach to the regulation of the banking and finance sector. Today we should draw the conclusions that those who have advocated very strongly for nearly three decades that we should not regulate the private sector—those who have advocated against the regulation of buildings for example or against the regulation of the finance sector—were wrong. The New Zealand public are having to pick up the bill for the cost of the victory of the new right in the debate between those who wanted to regulate the finance sector and the building industry and those who did not. 
At the end of the day the reality was that the finance sector and the banking sector were too big to fail. All of us in this House decided that we needed to support a retail deposit scheme and a wholesale deposit scheme in order to protect the New Zealand economy because these institutions were too large to fail. Once the institutions were too large to fail there was little alternative but for the taxpayer to step in when they were in trouble. If the taxpayer has to fork out billions of dollars or the hundreds of millions of dollars to bail out finance companies surely the taxpayer has a right to ensure that those finance companies are run in a way that will not result in the taxpayer being exposed to a massive liability. Surely once and for all we should put to bed the idea that we can simply let the finance sector and the building industry and whoever else go ahead unregulated when the costs to the community and to the Government and taxpayers of New Zealand are measured in the order of billions of dollars. Let us remember that the leaky housing fiasco was a result of a laissez-faire approach to building regulation and it has cost the country somewhere in the order of $20 billion. The issue we have in front of us South Canterbury Finance will cost the country in the order of hundreds of millions of dollars. If the taxpayer and the people of New Zealand are to pick up the tab when these companies fail surely the taxpayer and the people of New Zealand have a right to regulate them in such a way that they will not expose us to these gigantic failures. For those who have been engaged in this debate back and forth in this House over many years I say that the verdict is in. The verdict is in front of us right now in this House with this bail-out of South Canterbury Finance. 
The next issue I shall raise is the overseas ownership of land and I would be very interested in the Minister of Finance’s view on this. South Canterbury Finance has Dairy Holdings which in turn is the owner of large tracts of South Island dairy country. I would be very interested in the Minister’s view about whether the Government can control whether that land falls into foreign ownership during the receivership process and whether the Government has a preference. I assume it does have a preference. If it has a preference what mechanisms are available to the Government to ensure that these large areas of farmland do not fall into foreign ownership? It is a critical issue that both the Prime Minister and the Minister of Finance have spoken about on numerous occasions. 
The third point I make is on what I would call the unsustainable development that South Canterbury Finance was involved in. One of the issues for New Zealand is that not only was it unsustainable financially but also it was unsustainable environmentally. The environmental impact of the great dairy revolution across the South Island of New Zealand particularly in Canterbury and Southland has been enormous. The giant dairy revolution has an enormous environmental impact. It is time we learnt the lessons about the sustainability of these kinds of developments not only in financial terms but also in environmental terms. I was recently in Dunsandel. The people of Dunsandel are surrounded by cows from Dairy Holdings and it has had a big impact on them. There are issues of environmental as well as financial sustainability. 
The fourth issue is farming for capital gains. South Canterbury Finance and a large part of the dairy boom have been farming for capital gains. There have been relatively small real returns. The main returns and the whole system were based on the idea of capital gains as the value of land went up and up and up. Farming for capital gain is totally unsustainable. If we think we can build a financial system in which the way everyone makes money is through increases to the value of rural land year on year on year we are not taking a sustainable approach to financial development. Those who thought we could continue on the dairy boom which was based on capital gains and the value of farmland held a completely mistaken belief. 
The fifth issue I wish to touch on is the issue of equity. New Zealand taxpayers will be handing over many hundreds of millions of dollars. There is some debate about the figure but I ask the Government to look at the issue of equity. We all understand the necessity of the Crown Retail Deposit Guarantee Scheme but while on the one hand we are handing over hundreds of millions of dollars on the other hand we are penny-pinching right across Government spending for very small gains. The abolition of night classes which saved the Government a handful of millions of dollars has to be seen in the context of a bail-out that has cost the Government and the people of New Zealand hundreds of millions of dollars. There is an issue of equity. When we are bailing out those investors as I think we all agree we have little choice but to do we also need to put into context the issue of equity and all the other cuts the Government is making. 
Another example involves people who are uninsured in Christchurch right now. The cost of paying out those people who were uninsured would be relatively small in comparison with the cost of these bail-outs of finance companies. Surely when we look at supporting those who are uninsured in Christchurch as an issue of equity we should look at the cost of this bail-out of South Canterbury Finance. 
The first of my last two points relates to the Minister of Finance’s very strong defence of the Government’s role in all of this. To some degree the Minister has attempted to answer Mr Cunliffe’s questions on the role of the Government. But if the Government has nothing to fear will it support an open inquiry into the question of how all this happened? I am sure that the members of the Finance and Expenditure Committee would be very interested in an open inquiry into the biggest bail-out in New Zealand’s history. If the Government genuinely has nothing to hide and if it feels that all sides of politics are implicated in this bail-out will it be open to a Finance and Expenditure Committee inquiry into the bail-out of South Canterbury Finance? That seems to me to be one of the critical issues. 
Finally I can only reiterate what Mr Cunliffe said in terms of the use of parliamentary urgency. Urgency should be used only when it is absolutely essential and the matters being considered are urgent. We put through the renewed Crown Retail Deposit Guarantee Scheme under urgency and we are now discovering that there are some very big issues associated with that legislation. It would have been much much better if we had gone through a proper select committee process. I encourage the Minister of Finance to look at that. 
I ask the Minister of Finance to address just two issues: whether he will support an inquiry into the bail-out and what he will do about overseas ownership of the land that was in effect owned by South Canterbury Finance. 
Hon RODNEY HIDE (Leader—ACT) 
: 
 I rise on behalf of the ACT Party to speak in response to the ministerial statement made by the Minister of Finance the Hon Bill English. The demise of South Canterbury Finance and its subsequent slide into receivership last week came as a great shock to many people throughout the country. South Canterbury Finance was regarded by many as the bedrock of the South Island business community. The significance of the company to New Zealand’s business sector is indicated by the fact that South Canterbury Finance had close to $2 billion in loans out in the rural economy backing farms contractors and small businesses in provincial centres. It is also now clear that South Canterbury Finance had extended its portfolio beyond its traditional base. Accordingly the collapse of South Canterbury Finance has the potential to be felt throughout the New Zealand economy. That is why it is essential the receivership is conducted in an orderly manner. 
The Government’s moves will ensure that it has complete control of South Canterbury Finance’s lending and funding. It is important that we are able to unravel its investments in an orderly value-maximising way so as to reduce the cost to taxpayers. It has also ensured that South Canterbury investors will not have to go through the same ordeal as that experienced by investors in Hanover Finance Strategic Finance and St Laurence. Around 35000 South Canterbury Finance depositors will receive around $1.63 billion of which the Government expects to recover almost $1 billion. The fact is that many good parts of South Canterbury Finance are still trading. It is my understanding that the Government will be working closely with these businesses in an effort to ensure that they can continue to operate as normally as possible. 
The Crown Retail Deposit Guarantee Scheme arose from a unique global financial crisis. The threat was sudden and calamitous shifts of funds by depositors. The scheme was designed at speed by the previous Labour Government to avoid a spiralling series of financial crises with the contagion spreading internationally. That greatly limited the options that the Government then faced. It was always obvious that the scheme created adverse incentives and there was serious risk of the situation being gamed by some participants and by depositors in protected institutions. Those were the risks that the previous Government had to face. On aggregate that Government has been successful in limiting the damage. 
But like many policies it was easier to get into than to get out of. Some financial institutions were already weak when they entered the scheme as a consequence of a period of very low interest rates and in hindsight an excessive appetite for risk. This was a global phenomenon. These financial institutions were further weakened by the global recession the financial crisis and the rush of depositors and investors into low-risk investments. The problem of exiting from the scheme was well understood. It was discussed and it was debated. In September last year the House unanimously moved to extend the retail deposit scheme until the end of 2011. The House unanimously made the trade-off to accept the risk of adverse incentives and potential gaming of the deposit guarantee for a further period in exchange for ensuring broad confidence in our financial institutions. 
Now is not the time to second-guess those decisions made by the House but it is essential that we learn from the experience and are better prepared should we encounter similar situations in the future. Now is the time to review the situation and to learn from what has occurred. Thank you very much. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
:  
Kia ora tatau e te Whare. Kua tu ake hei waha korero mo te Pati Maori i tenei ahiahi. 
[ 
Greetings to us the House. I rise as spokesperson for the Maori Party this afternoon. 
] 
When talking about South Canterbury Finance the Maori Party has been trying to put the payout into some sort of context. As other speakers have alluded to just over a week ago around 30000 investors received a taxpayer handout to the effect of $1.6 billion to tide them over after the collapse of Mr and Mrs Allan Hubbard’s finance company South Canterbury Finance. 
Maori have been comparing this unexpected bonus for this one group of investors with the irony of the fiscal envelope offered 15 years ago as part of the grand plan to settle Treaty claims. The fiscal envelope limited the Crown to a total of $1 billion for the settlement of all claims over a period of 10 years. The $1 billion cap to settle all claims for the Maori population which at the last census totalled 643977 people compares miserably with the $1.6 billion payable by the Crown to settle a few unhappy investors. Maori ask why when “Ma” and “Pa” Hubbard go to the cupboard and find nothing there they will suddenly be bailed out by the Crown yet when Maori go to the larder it is so much harder and the best they will end up with is approximately 2 percent of the real value of their claims. 
Professor Margaret Mutu worked out a formula using the 1995 deal in which a Pakeha landowner Allan Titford received $3.25 million in compensation for the 94 acres of far north farmland that was taken off him and returned to Maori. Based on that formula she said that the settlement paid out to date would equal 0.06 percent of what the claims were actually worth. Ngai Tahu’s $170 million was 0.01 percent of the $1192 billion that they would have received under Professor Mutu’s formula and Tainui’s $170 million equated to 0.4 percent. 
We have no argument with the investors. On the contrary we think the South Canterbury Finance experience provides a benchmark from which to assess the financial compensation due to Maori from Treaty settlements. Let us put it all in context: just over $1 billion to Maori of whom there are just over 650000; $1.6 billion to 30000 investors; and $2 billion to Christchurch and the Canterbury area which they will definitely need. The figures here are seriously out of kilter. Tena tatou. 
Hon PETER DUNNE (Leader—United Future) 
: 
 Many questions can be asked about the circumstances that led to South Canterbury Finance going into voluntary receivership—the insolvency that the Minister of Finance referred to in his statement—and they will require answers over the next little while. But there comes a time in events like this where essentially a dose of pragmatism has to prevail. 
The parallel that I want to draw to the House’s attention because it was similar in magnitude was the decision that the previous Labour Government faced over the future of Air New Zealand. A number of questions could have been asked at that time about whether the bail-out was appropriate—[ 
Interruption 
]—and about the circumstances that gave rise to it but the fundamental point was—[ 
Interruption 
] I ask the member to be patient. The fundamental point was there was no credible alternative at that time to the action taken in the broader national interest. I think that is the parallel that needs to be applied in this particular case. The consequences of allowing South Canterbury Finance to fall over without the guarantee being exercised—without providing the assistance that is being made available—would have been far more catastrophic and significant than the cost of enabling the company to continue trading. 
So I think the decision is the correct one on those grounds alone. What comes out in the wash of time about the circumstances that gave rise to the commercial decisions that led to the company being placed in the position that it was are for the future to reveal and appropriate action should follow accordingly. But it was appropriate in this instance based on the parallel of previous circumstances for the Government to act in the way that it did and for it to act as prudently as it did. 
Hon BILL ENGLISH (Minister of Finance) 
: 
 I thank the various party leaders who have spoken on this matter. Taxpayers will of course want a lot of questions answered and I am sure that in due course they all will be one way or another. 
Firstly it is timely to remind ourselves that the original objective of the Crown Retail Deposit Guarantee Scheme was financial stability at a time when there was real concern right around the developed world about the meltdown of financial systems. Secondly compared with almost every other jurisdiction except for Canada and Australia our position coming through that threat to financial stability is remarkably good. In Australia and Canada as far as I am aware there have been a few payouts on the guarantees; in every other country billions of dollars have been paid out. I draw attention to Ireland which is an economy of somewhat similar size to ours. While we are debating a cost somewhere between $300 million and $600 million on this deposit guarantee Ireland is debating the recent injection of €26 billion into its main bank which it has now decided it will wind down. 
We should remind ourselves that the deposit guarantee covered depositors not the company. South Canterbury Finance has not been bailed out; the company has failed. Shareholders have lost all their money and preference shareholders have lost all their money. South Canterbury Finance is in receivership; it has not been bailed out. The depositors will be paid out in line with the intentions of this Parliament back in 2008. 
Another point to re-emphasise is simply that South Canterbury Finance depositors have been paid out under the original 2008 deposit guarantee not the extended deposit guarantee. The extended guarantee comes into place on 13 October. Under the original guarantee there were some 70 institutions; under the extended guarantee there are likely to be seven institutions. So the scope of the guarantee has narrowed quite significantly. 
Another point that was raised was the connection between decisions on statutory management of South Canterbury Finance. Those decisions were made by the Government quite separately from one another as they should be. Some have suggested that the Crown should have used its statutory powers to favour itself ahead of other investors. That of course would be unacceptable. It would be unacceptable for the Crown to make decisions using its statutory powers to minimise the deposit guarantee exposure at a cost to other investors who were involved under the Crown statutory management. In that respect the Crown has conducted itself with integrity as it should have done. 
This guarantee has fulfilled the original objectives set for it of financial stability. In working through the receivership the Government is fulfilling its objectives of ensuring firstly that depositors are paid out; secondly that they are paid out at minimal cost to the taxpayer; and thirdly that they are paid out with minimal disruption to the wider economy. 
Of course we hope that this will never happen again; we hope that a global financial crisis will never happen again. In many respects we should be grateful that by and large our financial system remained stable and that Parliament is pressing ahead on a pretty much bipartisan basis with reregulating our financial sector to ensure that the chances of this happening again are minimal. 
Motions 
Black Ferns—Women’s Rugby World Cup Victory 
Rt Hon JOHN KEY (Prime Minister) 
: 
 I seek leave to move a motion without notice relating to the Black Ferns’ world cup victory. 
Mr SPEAKER 
: Is there any objection to that course of action being followed? There is no objection. 
Rt Hon JOHN KEY 
: I move  
That this House congratulate the Black Ferns on their outstanding result in winning the 2010 Women’s Rugby World Cup.  
On Monday morning the Black Ferns won an unprecedented fourth consecutive Women’s Rugby World Cup title. In the final at Twickenham they beat England 13-10 despite being down to 13 players for a time. The final was a highly physical game. The Black Ferns showed the immense pride they feel in wearing the silver fern by responding to England’s challenge in emphatic fashion. Coach Brian Evans captain Melissa Ruscoe and the whole team can take great pride in their win. I am sure that all New Zealanders will join me saying how proud we are of them. 
It was a tremendous team effort but I make special note of Otago winger Carla Hohepa who scored New Zealand’s only try in the final. Carla finished as the tournament’s joint top scorer and was later named the International Rugby Board’s women’s personality of the year for 2010. 
Rugby is our national game and one of our most popular sports. It gives us an opportunity to celebrate passion skill dedication teamwork and success—all attributes demonstrated so well by the Black Ferns. They are great ambassadors for New Zealand. They have shown the world just how strong rugby is here and what New Zealanders can achieve when they set their minds to it. The Black Ferns are also great role models for us all. I am sure their achievements will inspire and motivate future generations of rugby players in New Zealand. 
The New Zealand Government and the people of New Zealand are extremely proud of the Black Ferns. We thank them for their outstanding performance at the Women’s Rugby World Cup and we look forward to following their continued success in the years ahead. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 On behalf of the Opposition may I join with the Government—[ 
Interruption 
]— 
Mr SPEAKER 
: The member has barely uttered a word. That level of interjection is totally unacceptable. 
CHRIS HIPKINS 
: On behalf of the Opposition may I join with the Government in extending our congratulations to the Black Ferns on their fourth consecutive victory at the International Rugby Board’s Women’s Rugby World Cup. The Black Ferns had some emphatic victories during this year’s competition setting a clear path to the finals with huge wins over South Africa Australia and Wales in the pool matches and a convincing victory over France in the semi-finals. But last Sunday the Black Ferns once again did all New Zealanders proud with their 13-10 victory over England in the grand final. 
All Kiwis love to see our teams win on an international stage. As expected news of the Black Ferns’ victory quickly hit the headlines in New Zealand and we all rejoiced in it. I do lament however the tendency of our broadcast media to give greater prominence to men’s sport in their schedules than that of their women counterparts. Surely a world champion rugby team is worthy of the same attention regardless of whether men or women took to the field. 
Achieving in sport strengthens our national pride and last Sunday the Black Ferns showed once again that the New Zealand rugby community is the best in the world. But we should never forget the path that led that team there. Once upon a time each of the members of that team would have been perfecting their skills on community sports fields either as children or as young adults. They may well have been coached by mums and dads in local communities or teachers from their local schools. Their success reminds us all that we need to recognise that sporting success often begins at the grassroots level and we should acknowledge that grassroots sports and high performance sports complement each other. 
Once again on behalf of the Opposition I say how proud we are of the Black Ferns and congratulate them wholeheartedly on their win. 
CATHERINE DELAHUNTY (Green) 
: 
 Tena koutou katoa. The Green Party is delighted to join our parliamentary colleagues in congratulating the Black Ferns on their extraordinary fourth successive Women’s Rugby World Cup win. We congratulate all the New Zealand players; the captain Melissa Ruscoe; the coach Brian Evans; and the team staff. Winning the world cup is a fantastic achievement and winning it four times in a row is simply outstanding. We congratulate also Carla Hohepa who was standout player of the tournament and on Monday was named the International Rugby Board’s women’s personality of the year. 
Of course this is not the first time Parliament has moved to congratulate a Kiwi sports team for its awesome achievement on the world stage this year. I am especially delighted today that we are congratulating a women’s team. I hope that the extraordinary success of the Black Ferns will help to promote and encourage women’s rugby and women’s sport in general in Aotearoa New Zealand. 
One thing that makes the Black Ferns’ win so impressive is the limited resources with which they have been able to achieve it. These world champions also hold down full-time jobs and balance their high performance sporting lives with other professional commitments. Their opportunities to practise their skill through club rugby and provincial competition are limited and they must fund-raise intensively. Not long ago I recall buying a raffle ticket to support our world champion Black Ferns. As we look towards 2016 when both women’s and men’s Rugby Sevens will become an Olympic sport I hope that increased gender equality in the sport greater opportunities for competition and more exciting success stories like this one will help to secure ongoing support recognition and funding for women’s rugby here in Aotearoa. 
This team is well named. The mamaku or black tree fern is the tallest and fastest growing fern in Aotearoa and it unfurls to produce a stunning umbrella canopy of fronds. I again congratulate the Black Ferns and everyone who supports them on their stunning achievements. I tell them to enjoy their well-deserved celebration. No reira kia ora wahine toa. Kia kaha. Kia ora koutou katoa. 
Hon RODNEY HIDE (Leader—ACT) 
: 
 The ACT Party rises with the rest of New Zealand to congratulate the Black Ferns. Like the rest of New Zealand and this Parliament the ACT Party supports all sportspeople men and women— 
Hon Darren Hughes 
: Oh! 
Hon RODNEY HIDE 
: I know that it is confusing for Darren Hughes but we support all sportspeople men and women particularly our world champions who show what New Zealanders are capable of. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 As the outstanding playmaker and try scorer when I play rugby it gives me great pleasure to stand on behalf of the Maori Party to support all the discussion today in respect of the Black Ferns’ win. I congratulate as others have done Carla Hohepa from Te Awamutu for becoming the International Rugby Board’s woman personality of the year for 2010. It is pretty awesome to wake up to victories like this one and that of the basketball team although that success was short-lived; they help to offset the catastrophes that we have had in the last couple of days. 
I endorse the remarks about the team’s amazing achievement of victories over Australia Wales South Africa and France and—as the Prime Minister noted—beating England 13-10 in the final. It puts this Black Fern team among the very best having recorded world cup wins in 1998 2002 and 2006. That history is quite important. It means that we need to take a little more note of Dr Farah Palmer the captain of the Black Ferns in her time who has asked the Rugby Union not to drop the ball. She believes that women’s rugby got a slap in the face this year when its national championship was dumped. Women’s rugby along with New Zealand Maori rugby has been a big casualty of the cost-cutting measures of the New Zealand Rugby Union. That is against the fact that—and I know having refereed a couple of games—Maori and Pasifika players have a huge influence amongst these particular teams. 
Earlier this week there was an article with the headline: “Black Ferns conquer odds to win World Cup”. It is bizarre that women’s rugby most definitely is the poor relation as mentioned by other members when it comes to national support. While the English have poured millions of pounds into supporting their side it seems that the New Zealand Rugby Union is a little bit reluctant to put the same investment into the Black Ferns. In fact it is an indictment on our national game that women’s rugby did not have a national provincial championship this year. It is limited to club level budgets have been slashed and even the franchise-based secondary school competition is gone. That is hardly the best platform we could expect to prepare the team for the women’s rugby sevens event at the 2016 Olympics. 
Against that background we acknowledge the remarkable achievement of the Black Ferns on the international field. Despite everything—the lack of funding the sin-binning and the withdrawal of support—they brought the cup home. Ka nui te mihi ki a ratou. The Maori Party is delighted to celebrate their fantastic success. 
Hon PETER DUNNE (Leader—United Future) 
: 
 I join with others in congratulating the Black Ferns on their unparalleled fourth Women’s Rugby World Cup victory. It is an achievement that is enviable and speaks volumes for their commitment their skill their dedication their preparation and their tenacity in overcoming what seems to be the bane of New Zealand teams male and female competing in international rugby competitions—the ubiquitous yellow card of the referee. 
I join with others in commending the Black Ferns on their achievement and lamenting the lack of support and coverage that their achievements and ongoing competitions receive. Now that we have a four-time world champion team within our midst I hope we can start to see some of the credibility they have achieved on the international stage reflected in the way they are treated and respected at home. 
They are all wonderful people in terms of the occupations and careers they hold and their dedication to their sport. They are exemplary role models. This country can be extremely proud of their achievements. 
Motion agreed to. 
Questions to Ministers 
Earthquake Canterbury—Government Assistance 
1. 
CRAIG FOSS (National—Tukituki) 
 to the  
Minister of Finance 
: How is the Government helping households and businesses affected by the Canterbury earthquake? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The Government is prioritising help for households and businesses affected by the Canterbury earthquake. The Government yesterday announced a wage subsidy to support employees of small businesses seriously disrupted by the earthquake. The aim of the initiative is to keep people in jobs and to support small businesses that are unable to operate or pay their staff. We have put aside $15 million for the wage subsidy because those businesses have been hard hit and they need some help through the worst of it. 
Craig Foss 
: How will the subsidy work? 
Hon BILL ENGLISH 
: The subsidy will be paid to businesses with fewer than 20 employees where earthquake damage means they cannot operate or pay wages. It will be paid for up to 4 weeks initially and businesses can reapply if after 4 weeks they are still unable to operate. The Prime Minister has indicated that businesses with just over 20 workers may also be accommodated on a case by case basis depending on their circumstances. Eligible employers will receive a wage subsidy of $350 per week gross paid in advance as a lump sum and backdated to the date of the earthquake and of course employers will be free to top up the subsidy. 
Craig Foss 
: When will the subsidy become available? 
Hon BILL ENGLISH 
: Affected businesses can apply to Work and Income for the subsidy from tomorrow and they will be paid within 24 hours—that is the next day. The Government has deliberately fast tracked this response because we are aware that small-business people who for instance turned up to work on Monday and had nothing to sell could find themselves very rapidly under financial pressure and unable to pay their staff who in many cases are personally vulnerable at this time as well. 
Craig Foss 
: What assistance is available to homeowners with damaged land or buildings? 
Hon BILL ENGLISH 
: Any business or homeowner with insurance cover is eligible for assistance from the Earthquake Commission. In the first instance they can claim up to $100000 plus GST at 15 percent for damage to buildings and $20000 plus GST for damage to contents. After that their own insurance kicks in. If land requires remediation or cannot be built on the Earthquake Commission will pay out that cost. The exact amount of required remediation and payment will be determined by an Earthquake Commission engineer. As at midday today the Earthquake Commission had received about 30000 claims. In total it is expecting to receive about 100000 claims with a cost somewhere between $1 billion and $2 billion. 
Craig Foss 
: What challenges does the Earthquake Commission face in assessing claims? 
Hon BILL ENGLISH 
: There are huge challenges in assessing the large number of claims. Along with private insurers the Earthquake Commission faces the massive task of compiling and processing up to 100000 claims. It has staff on the ground now and it hopes to have the first of 10 field offices opened by Friday. Each of the 10 offices will have around 40 staff. We have been assured that they are working as fast as they can to assess and process claims but this still could take some time. Of course once claims are processed it may be some time before building services are able to be procured. But the Earthquake Commission is working with the councils private insurers and the Government; in fact they have been having a meeting since 2 o’clock to find out how this process can be expedited. In the meantime the Earthquake Commission advises that the best way for homeowners to lodge their claim is through the Earthquake Commission website. 
Hon Annette King 
: Is it the Government’s approach to err on the side of generosity when assessing the eligibility of Cantabrians for Government support? 
Hon BILL ENGLISH 
: In respect of welfare assistance and the wage subsidy I think that has been the case. In respect of insurance cover we want to be sure that all the available insurance cover is fully understood. It seems likely that much if not most of the potential liability is covered by the private insurers which have reassured us that they have the capacity to pick up costs and by the Earthquake Commission which equally has the capacity to pick up the likely costs. 
Tax System Changes and GST Increase—Effect on New Zealanders 
2. 
Hon ANNETTE KING (Deputy Leader—Labour) 
 to the  
Prime Minister 
: Does he stand by his statements that after the Government’s tax changes including the increase to GST “the vast bulk of New Zealanders will be better off” and “If the Government cannot achieve that we would not increase GST”? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes. 
Hon Annette King 
: How can he stand by the statement that the vast bulk of New Zealanders will be better off when economists from the Institute of Economic Research estimate that rising food prices the GST increase and other cost increases that he has introduced will leave around half of all householders worse off by the end of the year? 
Rt Hon JOHN KEY 
: Because the advice I have had from Treasury is that a family will be better off by about $25 a week post the personal income tax - GST switch and that an individual will be about $15 a week better off. 
Hon Annette King 
: Is he aware that power companies are increasing their charges on 1 October with Contact Energy being the latest company to inform customers of a 6 percent increase in power prices leading to an increase of about $6 a week on average for families; if so how will New Zealanders be better off as he promised? 
Rt Hon JOHN KEY 
: I am aware that power prices have risen under the National Government by about 3 percent since we came into office. I am aware that power prices will increase by half what they would have increased under Labour in relation to the emissions trading scheme. I am aware that power prices went up by 72 percent when that lot were in office and I think that New Zealanders broadly speaking can take comfort that we are doing what we can to control power prices and make sure that this economy operates efficiently. 
Hon Annette King 
: Is he aware that public transport costs are increasing on 1 October with the GO Wellington bus company increasing its fares for some passengers by $5 a week—that is the extra amount it will cost them to get to work each day—if so how will New Zealanders be better off as he promised when $11 of their so-called tax cuts have been eaten up in just the two price increases that I have mentioned today? 
Rt Hon JOHN KEY 
: Well if the GO Wellington bus company is raising its prices by $5 a week as of 1 October because of the GST increase then it is ripping people off because quite frankly GST going up by 2.5 percent is unlikely to equate to an extra $5. I can say that inflation under the National Government has run at about 1.8 percent and I can contrast that with inflation under the previous Labour Government which was at 5 percent. It is worth remembering that any cost increases that occur because of increased GST will be more than compensated for by personal income tax cuts. 
Hon Annette King 
: Would the Government consider holding GST at 12.5 percent to help the about 100000 households in Canterbury who will have to rebuild their homes in light of the fact that about $7000 will be added to the cost of the average new house because of the GST increase on 1 October? 
Rt Hon JOHN KEY 
: No. That is because the first $100000 of payments for buildings made under an Earthquake Commission claim will be funded at a figure plus GST of 15 percent and contents will be funded at $20000 plus GST. 
Hon Annette King 
: What action will the Government take to avoid a repeat of the so-called Edgecumbe factor which following the earthquake there saw the cost of building materials and supplies increase dramatically and which if it happened in Christchurch and is combined with the GST increase would see the cost of rebuilding people’s homes increase markedly? 
Rt Hon JOHN KEY 
: That is one of the issues that the Government is focused on. The Minister responsible for rebuilding and recovery in Canterbury Gerry Brownlee is having discussions with building companies about that. Building companies that undertake work in the rapid-rebuild phase which we want to occur will have to sign conditions to ensure that their work is done at a fair and reasonable rate. I expect all builders who are operating in Christchurch and helping people to recover from the earthquake to do so in a reasonable and fair way. We expect them to make money and a profit but we certainly do not expect them to rip people off. 
Marine and Coastal Area (Takutai Moana) Bill—Access Under Customary Title 
3. 
DAVID GARRETT (ACT) 
 to the  
Attorney-General 
: Where in the Marine and Coastal Area (Takutai Moana) Bill is it guaranteed that access to beaches held under customary title will be free? 
Hon CHRISTOPHER FINLAYSON (Attorney-General) 
: 
 The whole scheme of the bill prohibits charging for public access. I invite the member to look at clause 27 which guarantees public access to the common marine and coastal area; clause 60 which specifies that customary marine title exists in a particular part of that area; clause 63 which sets out the scope of rights that may be exercised by customary marine title-holders; and clause 64 which specifies that those rights do not include charging for public access. The only restrictions on public access in the areas are the reasonable ones that already exist—for example picnicking at ports fly-fishing off naval bases or playing beach cricket on burial grounds. 
Metiria Turei 
: Can the Minister guarantee public access to the foreshore areas currently held in the 12500 private titles? 
Hon CHRISTOPHER FINLAYSON 
: The position with the 12500 titles remains what it was when the 2004 Act was passed. The titles are private titles and we are dealing with other areas of the coastal marine area. 
Metiria Turei 
: How does the Minister justify legislating for public access to foreshore held in Maori customary titles but not for that held in those 12500 private titles—why the discrimination? 
Hon CHRISTOPHER FINLAYSON 
: There is no discrimination. It recognises—and this was the case in the 2004 Act as well—that there are private titles for various reasons in the coastal and marine area. Those titles include land held as Maori customary land and freehold titles held by both Maori and Pakeha. 
David Garrett 
: If Maori owners under customary title do start charging for access or restricting access to the foreshore and seabed what penalty is there in the new law to stop them from doing so? 
Hon CHRISTOPHER FINLAYSON 
: I have already said that it is not possible to do so. Any attempts to deal with that situation will be made by the Minister of Conservation who will have adequate powers to deal with those sorts of problems. 
Te Ururoa Flavell 
: Has he seen the comment from Ngati Porou leader Dr Apirana Mahuika: “My advice to the Maori Party is to persist with the repeal because all iwi want a repeal of the act so that their mana can be assured by the Crown and that their mana be inalienable unbroken and sustainable.”; and how well does the Marine and Coastal Area (Takutai Moana) Bill respond to this advice? 
Hon CHRISTOPHER FINLAYSON 
: No but like so much of what Dr Mahuika says it seems to be very sound advice. The mana of iwi and hapu is explicitly recognised in the bill. It provides for a recognition of tupuna or ancestral connection to the coastal area. It contains an acknowledgment of the mana-based relationship of iwi and hapu to the marine and coastal area in their rohe. 
David Garrett 
: Does the Attorney-General agree with Maori Party MP Te Ururoa Flavell that “another go” may be required; if not can he categorically rule out extending the time available for claims from 6 years while he is the Attorney-General? 
Hon CHRISTOPHER FINLAYSON 
: The limitation period is 6 years. That is what the Government thinks represents a fair balance of all rights. As to whether I agree with Mr Flavell he is an excellent MP. It is great to work with him so that we can get rid of this disgraceful 2004 Act. 
Hon David Parker 
: Does the Attorney-General agree with the Prime Minister that the proposed legalisation should settle the legal framework for foreshore and seabed claims? 
Hon CHRISTOPHER FINLAYSON 
: Well of course I do. He is the Prime Minster and he is always right. 
Hon David Parker 
: Given his belief that the legislation should settle foreshore and seabed issues is he concerned that the Maori Party acting leader publicly stated yesterday “We will certainly be looking at it again” and there would be “another time for our people to come back and have another go in the future.”? 
Hon CHRISTOPHER FINLAYSON 
: I know this is probably an alien concept to the Labour Party but that is democracy. 
Hon David Parker 
: I raise a point of order Mr Speaker. In response to my prior question he agreed that this should be the legal framework for settling claims and my question was quite simple: was he concerned by the Maori Party saying that it would have another go. That answer did not address that question. 
Mr SPEAKER 
: The Minister in answering the question said that that is democracy and I imagine he was indicating that it is impossible to bind what future Parliaments might consider doing. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. If that is what the Attorney-General had said and all he said then I think the people on this side would not be happy but I think there would not have been a breach of the Standing Orders. I invite you to maybe afterwards look at what he did say in particular about a party on this side of the House and whether that was conducive to good order. 
Mr SPEAKER 
: The member’s point of order is fairly made that if Ministers are going to give an answer that is perhaps on the margins of being acceptable then they should not preface it with a criticism of the questioner’s party. It is probably a bit late for me to go back on this one now but I warn the Minister that if he is going to give an answer that is marginally acceptable then he should not preface it with that kind of comment. The Hon Trevor Mallard’s point of order is perfectly well made. 
Hon David Parker 
: Does he agree with the Prime Minister’s statement earlier in the year: “In the end if we can’t reach an agreement then the status quo will remain”; if so does the Government intend to seek an acknowledgment from the Maori Party that it will accept that the legislation settles the issues and if it will not give that assurance then will the status quo remain? 
Hon CHRISTOPHER FINLAYSON 
: Again as to the first part of the question of course I agree because the Prime Minister said it. 
Te Ururoa Flavell 
: Does he agree with Hokianga elder Rudy Taylor in his comments regarding the Marine and Coastal Area (Takutai Moana) Bill that Maori have always shared the coastline with their Pakeha neighbours and it is absurd to suggest that that will change; if so what does he think will be the key impact of the racially divisive campaign promulgated by the Coastal Coalition? 
Hon CHRISTOPHER FINLAYSON 
: I strongly agree that a culture of welcoming people of sharing and of hospitality pervades Maori culture. That has always been my experience whether visiting iwi to discuss the Government’s proposals this year or going out on the road to discuss settlement of historical Treaty grievances—and I understand why those members get excited about that proposition because they never did it. 
South Canterbury Finance Receivership—Cost to Taxpayers 
4. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister of Finance 
: Did the Government minimise the cost to the taxpayer of the bail-out of South Canterbury Finance; if so how? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 First of all I make it clear that the taxpayer has not bailed out South Canterbury Finance. The taxpayer is paying out depositors according to a guarantee offered to those depositors in October 2008. This payout was well signalled through provisions to the public accounts and we have taken at least one step to minimise cost to the taxpayer—that is to make quick payments to all depositors which is estimated to save about $100 million. Of course the more important step is still ahead of us—that is a receiver recovering the maximum value possible from the remaining assets of South Canterbury Finance. 
Hon David Cunliffe 
: What advice did the Minister receive from KordaMentha relating to South Canterbury Finance’s financial condition prior to approving the extension of the Crown Retail Deposit Guarantee Scheme? 
Hon BILL ENGLISH 
: I would need to look at what advice was received; I would not want to misrepresent it or partially represent it to the member. I make a couple of points. One is that Treasury was delegated the responsibility of administering the scheme. That was part of the original set-up agreed between the parties in Parliament and the Minister of Finance at the time. We have stuck pretty much to that process where Treasury has made the operational decisions about the guarantee. My view is that regardless of whatever advice or decisions the Government made South Canterbury Finance’s problems were so significant by mid-2009 that despite ongoing efforts to give it the best possible chance to survive and incur no cost to the taxpayer those efforts failed. 
Hon David Cunliffe 
: Was he concerned about the level of related party transactions and the earlier growth in South Canterbury Finance’s loan book; if so what measures were put in place at what time to deal with those issues? 
Hon BILL ENGLISH 
: The great thing about hindsight is it is never too late to use it. Concerns grew through 2009 that South Canterbury Finance was not as strong and robust as had been represented. The Crown at least came to the conclusion that there was a problem; in the 2009 accounts we put aside a provision of $830 million in the event that the deposit guarantee was triggered. That $830 million was based largely on an assessment of the risks to the Crown should South Canterbury Finance fail. A product of both KordaMentha advice and Treasury’s own views at least by the middle of 2009 was that there was a risk that it would fail. 
Peseta Sam Lotu-Iiga 
: How large has the failure of deposit-taking institutions been and what are the prospects for improvement? 
Hon BILL ENGLISH 
: Unfortunately South Canterbury Finance’s failure is just one of a number. I refer members to an analysis published on interest.co.nz which lists 61 finance industry failures with total deposits of $8.5 billion that have been either in receivership or in moratorium since May 2006. Of those institutions 47 failed before the guarantee scheme was introduced in 2008. There were 73 institutions covered by the guarantee and as I think I indicated to Parliament earlier the extended guarantee from 13 October will now cover around seven or eight institutions and obviously a much smaller potential liability. 
Dr Russel Norman 
: How will he ensure that farmland held or controlled by South Canterbury Finance does not fall into overseas ownership? 
Hon BILL ENGLISH 
: In the first place if there was any transaction involving potential overseas ownership of those farms it would be dealt with by the existing Overseas Investment Act which the member’s party had a hand in writing when it was redone in 2005. Secondly because of the way the receivership has been structured the Crown is able to exert significant influence over any initial decisions abut how that land might be sold. I might say that the Government is in no hurry. 
Hon David Cunliffe 
: On what date did Cabinet agree to the bail-out package he implemented on 31 August 2010? 
Hon BILL ENGLISH 
: Again I would prefer to check the record. From what I can recollect—after what seems to have been a very long week or 10 days—Cabinet’s decision on the package was made right at the last minute through either a Cabinet meeting or a group of Ministers with delegated power. As the member will be aware because it has been publicly stated the company itself was negotiating right up until the last minute and certainly it was our desire that it was able to be recapitalised by the private sector thereby enabling the company to continue and thereby preventing the Crown having to meet any obligation to depositors. 
Hon David Cunliffe 
: Having extended South Canterbury Finance’s guarantee in order to seek a potential recapitalisation solution why did the Government not agree to a potential recapitalisation deal that could have released South Canterbury Finance from its guarantees at potentially much lower cost to taxpayers than is now expected? 
Hon BILL ENGLISH 
: I think if such a deal from a credible source had been put before the Government we certainly would have considered it. That did not happen. There is much speculation about what different people have said or might have offered but at no stage was there a deal before the Government that had the support of Treasury that met those criteria. 
Earthquake Canterbury—Community Involvement in Rebuilding Decisions 
5. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Prime Minister 
: How will the Government ensure community involvement in decisions around the rebuilding of Christchurch? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 The Government has been closely involved with local authorities in Christchurch right from the beginning of this tragedy. We intend to continue to work closely with local government and the community to ensure that Christchurch and the surrounding areas are rebuilt reflecting the wishes and concerns of Cantabrians. I think it is important to point out that this will be a locally led process. We will not be imposing a central government - driven vision on Christchurch. 
Dr Russel Norman 
: Will the Government consider supporting a panel of representatives that would encompass the community local government business planning architecture and heritage sectors to plan a way forward for the rebuilding of Christchurch? 
Rt Hon JOHN KEY 
: I think it is too early to make those comments. At the moment we are dealing with the immediate after-effects of the earthquake. I can say that the Government is considering the option of putting in an earthquake commissioner who would be responsible for the rebuild and recovery phase. It may be an option that we want to consider. All I can say having been there on Saturday last night and today is that there is an enormous amount of goodwill from all participants to try and take this process forward constructively and in the best long-terms interests of Christchurch. If the member wants to suggest some people they may or may not form part of the mix. 
Dr Russel Norman 
: Can the Prime Minister give us some sense of what the powers of the commissioner would be that the Government is proposing? 
Rt Hon JOHN KEY 
: It would be too early for us to comment on that. Our primary focus at the moment as I said outside of providing emergency services for people in terms of welfare relief and trauma counselling as well as getting immediate infrastructure services reconnected is to start looking at how we can expedite the rebuilding of people’s homes in Christchurch. That is our primary focus at this stage. There is a meeting taking place this afternoon with relevant players that may shed some light on whether any changes need to be made to the law to help that process take place or whether it can happen with the existing legislative framework. 
Dr Russel Norman 
: Can his Government allay the concerns expressed on  
Close Up 
 by Peter Beaven a Canterbury architect who was concerned that some buildings could be needlessly torn down destroying Christchurch’s heritage and changing some of the unique character of Christchurch? 
Rt Hon JOHN KEY 
: The advice I have is that the decision to demolish buildings is a local decision based solely on public safety. That is the primary reason a building would be destroyed. We cannot override that. This morning I visited amongst other sites St John’s Church at Hororata. Clearly in the case of buildings like that one with a strong historical significance for the people of Canterbury it would be wonderful to save them if it was possible. But the first and primary concern has to be for the public safety of those who might go into those buildings. 
Early Childhood Education Centres—Effect of Funding Reductions 
6. 
Hon TREVOR MALLARD (Labour—Hutt South) 
 on behalf of  
SUE MORONEY (Labour) 
 to the  
Minister of Education 
: Does she stand by her statement in relation to her funding reductions for some early childhood education centres “I think it is unlikely that most centres will pass on those costs because they are able to change their staffing they are able to change their services—they are able to do a number of things in order to make those changes.”? 
Hon ANNE TOLLEY (Minister of Education) 
: 
 Yes. 
Hon Trevor Mallard 
: Did she receive advice that if she funded only up to 80 percent of teachers being registered fees would rise by $40 to $80 a week and over 80000 children would be affected? 
Hon ANNE TOLLEY 
: That was some advice that was given of one scenario that could happen in early childhood education. 
Hon Trevor Mallard 
: Was the option not to fund above 80 percent part of the only scenario related to that option? 
Hon ANNE TOLLEY 
: I do not have that briefing document in front of me so I cannot comment on the details of the advice. The member has received all the briefing documents that I released. I received a lot of advice but the core advice was that the cost of early childhood education had almost trebled in the past 5 years whereas participation had grown by less than 1 percent. So we were addressing a blowout in expenses that was unsustainable. 
Hon Trevor Mallard 
: Will early childhood education that retain 100 percent trained staff be able to charge a fee to cover the additional costs of having trained staff for the 20 free hours component for 3 and 4-year-olds? 
Hon ANNE TOLLEY 
: We have not changed the restrictions on the 20 free hours. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. Although the response said “We have not changed …” I am not sure that anyone in the House knows whether the answer to the question was yes or no. I will point out that the Minister— 
Mr SPEAKER 
: No no the member was fine until that point; he did not need to point out anything further. I accept the point being made. The question was a fair one. It did not contain any political accusations or anything like that. It was a straight question about the outcomes of a policy decision. I am not sure that anyone listening to the answer as the member suggests would be aware of what it meant. I invite the member to repeat his question. 
Hon Trevor Mallard 
: Will early childhood education providers that retain 100 percent trained staff be allowed to charge a fee to cover their additional costs of having trained staff for the 20 free hours component for 3 and 4-year-olds? 
Hon ANNE TOLLEY 
: This Government has maintained the previous Government’s fee controls which prevent compulsory top-up charges. 
Louise Upston 
: How will the reprioritisation of early childhood education funding help to raise the participation of children who are currently missing out? 
Hon ANNE TOLLEY 
: Reprioritising the top two funding bands has allowed us to invest an additional $91.8 million over 4 years in a package to boost participation amongst groups that are currently missing out. Recently I announced that Waitakere and Northland children will be the first to benefit from the package. In some parts of those regions up to 25 percent of children are not getting any early childhood education at all and we are committed to addressing that. 
Hon Trevor Mallard 
: In light of her response to my last supplementary question why did she tell the New Zealand Free Kindergarten Associations conference that in order to make up the difference for the 3 and 4-year-olds and the cost of maintaining the trained staff who are not covered they should “go for it” and increase their fees? 
Hon ANNE TOLLEY 
: I did not. I received an email after the spokesperson for Labour had put out her statement. The email asked: “Was Sue at the same meeting I was? The Minister did not say kindergartens should ‘go for it’ and increase fees. What I heard her say was she hoped that the last thing kindergartens and centres would do was increase fees to parents.” 
Earthquake Canterbury—Civil Defence and Emergency Management Operations 
7. 
JACQUI DEAN (National—Waitaki) 
 to the  
Minister of Civil Defence 
: What is the update on civil defence and emergency management operations in Canterbury? 
Hon JOHN CARTER (Minister of Civil Defence) 
: 
 The 7.1 earthquake in Canterbury on Saturday morning was one of the most significant natural disaster events in New Zealand’s history. It is incredible that in the initial quake there was no loss of life. I have travelled to Canterbury three times since Saturday and the uncertainty for people in the area is exacerbated by ongoing aftershocks some of them quite severe with the potential to further damage buildings. The House may be interested to know that there have been 284 aftershocks six of them over 5.3 on the Richter scale. The Government is working with the local government authorities that are involved to ensure Canterbury is restored to business as usual as quickly as possible. Many Government agencies are involved and 69 percent of the downtown businesses in Christchurch have now been cleared. Both central and local government are operating in accordance with plans under the Civil Defence Emergency Management Act. That Act was developed to deal with exactly this kind of situation and is working as it should. New Zealand is vulnerable to natural disasters and I believe we have in place one of the best processes in the world to manage them. We are now on day 5 of this significant event. The situation changes sometimes hourly. There are states of emergency in place and that will continue while it is necessary to ensure the safety and security of the people of Canterbury. Part of the problem we are finding is that a house that may have been declared safe yesterday is found as a consequence of an aftershock not to be today. The recovery phase has begun but due to extensive damage through the three regions affected by this earthquake and its aftershocks—that is Selwyn Waimakariri and Christchurch—recovery will take time. Everyone on the ground in Canterbury is working as fast as they can to restore the essential services and no one is being ignored or forgotten. This is a huge exercise. 
Jacqui Dean 
: How are the civil defence and emergency management operations in Canterbury coping? 
Hon JOHN CARTER 
: I am very proud to say that the response in Canterbury has been fantastic. Ministry of Civil Defence and Emergency Management personnel are working around the clock to respond to the many demands that the 7.1 earthquake and ongoing aftershocks are presenting. The offers of help have been incredible and the civil defence and emergency management sector is coordinating both the offers of help and the requests for help. This is a huge job. The three mayors of the region—Ron Keating Kelvin Coe and Bob Parker—have shown true leadership. It is important for all stakeholders to know that the Ministry of Civil Defence and Emergency Management is the lead agency in this response and recovery. All statements and activities should be coordinated with the ministry. A Canterbury civil defence and emergency management group is coordinating external support with the assistance of the National Crisis Management Centre in Wellington. Today a number of building inspectors are being sourced from elsewhere to supplement the existing capacities in Christchurch and additional sewerage repair teams are being mobilised from outside the Canterbury region. Importantly the people of Canterbury are responding really positively despite the stress of repeated aftershocks. Volunteers have been out doing all sorts of things to help the people affected by this disaster and students have mobilised themselves. I must say that the people of Canterbury make us proud to be New Zealanders. 
Jacqui Dean 
: What issues do we need to address as we go forward? 
Hon JOHN CARTER 
: There are many quite honestly. This recovery will take months rather than weeks. But I think we need to focus on two things in the early stages. Firstly use of our welfare areas has already been made by a number of people but it is very likely that this demand will grow. There are people who have been taken in by friends and family around the region but of course their stay as the weeks go by will tend to cause them difficulties and problems. It means that our welfare centres are likely to come under more and more demand and more and more pressure. Indeed we may well have to establish more centres than we have. Secondly we all need to understand that this disaster has caused huge pressure on everybody in Christchurch. The trauma that people are under and the personal effect it has had on people is just hard to believe unless one has been there or has experienced it. The problem is that the aftershocks are likely to continue extensively and maybe for longer than 2 months. Following the Haiti earthquake there was a magnitude 6 aftershock a week later; following the Mexico earthquake there was a magnitude 6 aftershock 2 months later. It is likely that the aftershocks will continue for some time. Each aftershock causes more stress and alarm. There are people who are not sleeping and children who are not sleeping. We need to be aware that we will have to deal with major issues about people’s lives as we go forward. 
Education National Standards—Support of Trustees 
8. 
Hon TREVOR MALLARD (Labour—Hutt South) 
 to the  
Minister of Education 
: How many letters and emails has she received from school board of trustee representatives since she told the House on 24 August 2010 that members of the New Zealand School Trustees Association are “extremely supportive of National Standards” that expressed support for the current national standards and how many have expressed concern about the national standards? 
Hon ANNE TOLLEY (Minister of Education) 
: 
 I am advised that correspondence is logged by the name of the signatory and it is not always recorded that correspondence is from a board member. However five letters and emails have been received and logged as being correspondence from a board of trustees member. All were supportive of national standards and contained the following positive statements: “As an experienced trustee who is not afraid to challenge the current norms when we’re discussing student achievement I along with my fellow trustees are very much in favour of the new standards. Despite what you may hear”— 
Mr SPEAKER 
: If the Minister had listened to the question she would know that it was very simple in terms of what it asked. I think the Minister answered it quite a while back. 
Hon Trevor Mallard 
: Has she read the letter she received by email yesterday from a board of trustees chair outlining “his very serious concerns” about national standards and describing the situation that schools are currently in as “trying to fly an aeroplane that is still being built” which was written by David Bishop chairperson of Spotswood Primary School board of trustees of whom I had never heard before he sent me the email yesterday? 
Hon ANNE TOLLEY 
: No but I did go back and look at the emails that the member talked about on 24 August. Of the 51 emails only 20 were received this year. The rest of them were received last year and some of them were received during the consultation period. When I looked at the 20 emails received this year from board of trustees members who that member said were anti national standards I found that in fact they were asking questions about national standards and were not expressing any discontent with the standards themselves. 
Allan Peachey 
: What reports has the Minister seen that show that boards of trustees are getting on with the job of implementing national standards? 
Hon ANNE TOLLEY 
: The Education Review Office recently found that 80 percent of schools are either well prepared to work with the standards or have preparation under way. 
Hon Trevor Mallard 
: Yes 20 percent were ready. 
Hon ANNE TOLLEY 
: Regardless of what that member and that party think the facts are that the majority of schools are getting on with the job of implementing national standards telling parents and whanau how their children are achieving and giving our children the skills that they need to succeed. 
Hon Trevor Mallard 
: How does she reconcile her statement that the applause while she was on the stage at the New Zealand School Trustees Association conference was a sign of support for her standards with the association president’s statement that the applause was in recognition of the president’s 21 years of service as a school trustee? 
Hon ANNE TOLLEY 
: Easily because I did not say that. 
Hon Trevor Mallard 
: I do not know what to do because she said that in the House Mr Speaker. 
Mr SPEAKER 
: No no. The Minister absolutely answered the question. Does the member have a supplementary question? 
Hon Trevor Mallard 
: Yes but I will be back with another pointless letter I am sure. 
Mr SPEAKER 
: The member will just ask his supplementary question. 
Hon Trevor Mallard 
: Does she maintain that the New Zealand School Trustees Association is “extremely supportive of national standards” following its president’s comments that she “ ‘never said’ the boards were supportive of the policy”? 
Hon ANNE TOLLEY 
: I said to the member who asked the question that I was at the New Zealand School Trustees Association conference and I know that the comments made to me about the national standards were many and supportive. However Lorraine Kerr the president says “If we truly subscribe to the notion that our schools exist for our students and that students are at the centre of all quality teaching and learning then a degree of discomfort is an acceptable price to pay for a very real opportunity to improve the lot of every student. We are saying let’s just get on with it.” 
Hon Trevor Mallard 
: If the Minister is so certain of her national standards will she agree to Gary Hawke and John Hattie who are working for the Prime Minister and her appearing before the Education and Science Committee in order to outline progress that they are making in their committee? 
Hon ANNE TOLLEY 
: Actually that is an advisory group that provides free and frank advice to me as the Minister. I just remind the member that he said himself in— 
Mr SPEAKER 
: The Minister may wish to tell the House what she would like to tell the House but the question was a very specific one. The question did not contain any criticism of the Government’s policy; it simply asked whether the Minister would consider allowing two people—from memory Gary Hawke and Professor Hattie—to appear in front of the Education and Science Committee. That is not an unreasonable question. 
Hon ANNE TOLLEY 
: Actually it is not my business to dictate what happens in the select committee. The committee is perfectly free to invite whomever it would like to appear in front of it. 
Earthquake Canterbury—Damage to Transport Infrastructure 
9. 
DAVID BENNETT (National—Hamilton East) 
 to the  
Minister of Transport 
: What updates has the Minister received on damage caused by the Canterbury earthquake to the region’s transport infrastructure? 
Hon STEVEN JOYCE (Minister of Transport) 
: 
 I am receiving updates two to three times per day currently. The latest situation is that Christchurch airport is open and both terminals are operational. Rail services were again disrupted by the large aftershock this morning but are now back running. There continues to be significant rail damage near Kaiapoi and services are operating with speed restrictions in other areas. The Port of Lyttelton has suffered damage but is operational. The State highway network is predominantly open except for State Highway 74 at Heathcote Valley off-ramp a slip on State Highway 77 between Glentunnel and Glenroy two sections of State Highway 74 on Anzac Drive and the State Highway 1 Chaney’s Road on-ramp. The Lyttelton tunnel was reopened at 11.30 this morning following a brief closure to inspect cracks that appeared after this morning’s aftershock. A section of State Highway 77 between Methven and Windwhistle has one lane open. Christchurch arterial roads outside the central business district are open. The main damage appears to be suburban streets and extensive repairs will be necessary in conjunction with repairs to services like water and waste water. 
I take the opportunity to thank all the people who have worked tirelessly to ensure that emergency services people and supplies can move around the region and around Christchurch City. 
David Bennett 
: What funding has the Government made available to repair road and rail links? 
Hon STEVEN JOYCE 
: The damage to the State highway network so far has been remarkably light with an initial estimated repair bill of around $6 million to $10 million. Rail too has suffered relatively light damage so far with a repair bill estimated at $2 million. Local roads however have been extensively damaged and a cost estimate is not yet available. The New Zealand Transport Agency is able to provide initial funding assistance for the reinstatement of local roads in the case of natural disasters and initially has $94 million available for the current financial year. The agency is working closely with local councils to estimate the size of the damage and what contribution will be needed. Aftershocks are continuing to cause ongoing damage so all cost estimates are very preliminary at this point. 
Question No. 8 to Minister 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Speaker. I should have done this at the end of my question No. 8. I seek leave to table the letter from two individuals whom I had not heard of before—David Bishop and Allan Day—to the Minister of Education that she received by email yesterday. 
Mr SPEAKER 
: Leave is sought to table that document. 
Hon Member 
: Have you got permission? 
Mr SPEAKER 
: I guess the onus is on the member seeking to table the document. Is there any objection to that document being tabled? There is objection. 
Overseas Investment—New Zealanders’ Concerns 
10. 
Hon DAVID PARKER (Labour) 
 to the  
Prime Minister 
: Does he believe that New Zealanders who have concerns about overseas ownership of New Zealand land are racist? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 No. 
Hon David Parker 
: Does the Prime Minister believe it was wise for the Minister for Land Information Maurice Williamson to say that opponents of land sales to foreigners are racist? 
Rt Hon JOHN KEY 
: I believe that the Minister was using humour. That humour may well have backfired and I think that is the way it should be considered. 
Hon David Parker 
: Are the Japanese the Americans the Canadians the Chinese and the Australians who all have restrictions on the sale of their land to foreigners racist? 
Rt Hon JOHN KEY 
: I do not have responsibility for those countries. 
Hon David Parker 
: How can the Prime Minister have confidence in the Minister for Land Information’s ability to make a wise decision on the Crafar farm purchases by overseas interests when the Minister thinks that opposition to overseas land sales is in large part racist? 
Rt Hon JOHN KEY 
: I am confident that the Minister in due course will be presented with a recommendation from the Overseas Investment Office one way or the other. No one knows what will be in that recommendation. He is an intelligent Minister and I believe that he will follow that recommendation through and consider all the merits of the case. 
Earthquake Canterbury—Housing New Zealand Corporation’s Response 
11. 
HEKIA PARATA (National) 
 to the  
Minister of Housing 
: What actions has Housing New Zealand taken to assist its tenants following the Christchurch earthquake? 
Hon PHIL HEATLEY (Minister of Housing) 
: 
 Following Saturday’s earthquake staff immediately swung into action to assist affected tenants. As of today the Housing New Zealand Corporation has either visited or spoken to almost all of its 6000 tenants in Christchurch. To date 11 extra staff have been brought in from outside Christchurch with an additional 20 arriving tomorrow to assist with operations. Since this morning’s aftershock the Housing New Zealand Corporation has received an additional 880 work requests mainly related to damaged chimneys jamming doors and windows roofs and hot-water cylinders. On-site inspections of State houses are being prioritised by areas that have been most affected and have sustained the most damage as well as tenants contacting Housing New Zealand Corporation to report damage to their homes. Of the houses that have received an initial assessment over 200 properties have been identified as requiring very high-priority work and given that the Housing New Zealand Corporation has prioritised the most-affected areas it is anticipated that properties likely to have sustained the most significant damage have already been identified. Where tenants need short-term housing while urgent repairs are undertaken on their houses the Housing New Zealand Corporation is working closely with a number of agencies to locate emergency accommodation and it is also coordinating on behalf of the Government people seeking and offering long-term accommodation. I take this opportunity to thank the Housing New Zealand Corporation staff some of whom have sustained damage to their homes yet have still worked tirelessly since Saturday to assist those in need. 
Hekia Parata 
: What progress has Housing New Zealand made with assessing the damage to its stock? 
Hon PHIL HEATLEY 
: The State housing stock in Christchurch is valued at almost $1.1 billion. Of almost 6000 properties that the Housing New Zealand Corporation has in Christchurch most have already had an initial assessment either from on-site visits or by reports by phone. Thirty additional property inspectors will arrive in Christchurch tomorrow and each day 350 to 400 homes will receive comprehensive on-site inspections until all homes have been physically assessed. Urgent health and safety repairs are being undertaken immediately with less-urgent repairs being addressed through a planned programme of work that will be developed over the next couple of weeks. 
Drink-driving Blood-alcohol Limit—Reduction 
12. 
Hon DARREN HUGHES (Labour) 
 to the  
Minister of Transport 
: When he said that not enough New Zealand research has been done to justify a reduction in the blood-alcohol level for drivers had he read the report entitled the  
Review of effectiveness of laws limiting blood alcohol concentration levels to reduce alcohol-related road injuries and deaths 
 which draws on New Zealand data? 
Hon STEVEN JOYCE (Minister of Transport) 
: 
 No but I have read the New Zealand research cited in that British report—research that contributed to Safer Journeys. I note that the British report has the same difficulty with the New Zealand data that we have in that one has to estimate the impacts from very limited data collection from only fatally injured drivers in this country. As I have stated in the House many times before there is no data showing the actual impact on the New Zealand road toll from drivers having a blood-alcohol level between 0.5 milligrams and 0.8 milligrams who are not already deceased. 
Hon Darren Hughes 
: Is he aware that the report acknowledges that there are various reports of various qualities but states: “Overall there is sufficiently strong evidence to indicate that lowering the legal BAC”—blood-alcohol content—“for drivers does help reduce road traffic injuries and deaths” regardless of what jurisdiction was being referred to? 
Hon STEVEN JOYCE 
: Yes. The report also states that “a large number of factors” can affect the results including related policies enforcement and publication. It also notes the importance in some cases of a higher minimum legal driving age points-based licensing and random checks. The House will note that it is planned to raise the minimum legal driving age in this country and random checks are already in place. 
Hon Darren Hughes 
: Does the observation in the 184-page report that one of the factors of a lower blood-alcohol content limit being successful is public awareness and support reflect this Government’s policy; if so what does he make of the 64 percent support rate for lowering the blood-alcohol limit for driving as my member’s bill would do which is reflected in New Zealand opinion polls by New Zealand drivers? 
Hon STEVEN JOYCE 
: As the Government said when it made the decision regarding the package of measures to be taken in relation to drink-driving we are seeking two things in particular. One is clear evidence of the impact of drivers driving with a blood-alcohol level between 0.05 milligrams and 0.08 milligrams; we cannot currently collect that information in this country and we are going to change the law to enable us to do that. The second thing we were seeking was very broad public support for the change. Although there appears to have been an increase in public support up to this point there is still the need to collect this data to ensure enduring public support for any change. 
Hon Darren Hughes 
: Does the finding in the report—that currently the actual and perceived risk of being detected and sanctioned for drink-driving in the context of the limit of 0.08 milligrams blood alcohol is low and therefore does not act as a sufficiently strong deterrent—reflect Government thinking? 
Hon STEVEN JOYCE 
: I think that assessment in the report refers to the British environment in which it was written not necessarily to the New Zealand environment so I am not convinced that it is directly applicable to the New Zealand environment. Nevertheless the report points out the importance of enforcement and education regardless of the level at which the blood-alcohol limit is set. That also bears out research in Australia which says that when a limit has changed the enforcement and the educational effects of the change could be at least as important as the change itself. 
Hon Darren Hughes 
: What factors has he identified about New Zealand drivers that lead him to disagree with this 184-page report which has a finding that a blood-alcohol content of between 0.05 and 0.08 milligrams makes a driver six times more likely to die in a road crash? 
Hon STEVEN JOYCE 
: There is significant research around that has different views in terms of that difference. It does not change the reality that in this country we do not have the actual data on the impact caused by drivers driving with a blood-alcohol level of between 0.05 and 0.08 milligrams. The last time this matter was before the Government of the day which was in about 2001 the Government had the opportunity to legislate to enable that data to be collected. It never took that step. This Government is taking that step and from it we will be able to make an informed decision based on actual harm. 
General Debate 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I move That the House take note of miscellaneous business. The South Canterbury Finance collapse under the Crown Retail Deposit Guarantee Scheme is the largest corporate bail-out in New Zealand history. It raises serious questions that the Government must answer today. The public is entitled to know what went wrong why and through whom. New Zealanders are footing the bill and they deserve clarity and transparency about how the Government and its regulators handled this important matter. 
Why did the Government roll over South Canterbury Finance in the guarantee scheme when it must have known before that time that South Canterbury Finance was in significant distress? Having decided to roll it over why did the Government not tighten the terms of the conditions to prevent the scheme from mushrooming and the public’s liability being extended further? Why did the Minister of Commerce at a similar time then agree to place the Hubbards and Aorangi Securities into statutory management notwithstanding the negative impact that that must ultimately have on South Canterbury Finance? Why when distress deepened did the Government choose receivership rather than statutory management or recapitalisation of South Canterbury Finance to allow it to trade its way through its difficulties without a fire sale or value destruction under receivership? Why were senior debt holders like Torchlight Fund thus handed a gold-plated deal—discounted debt purchased paid back at full sticker price plus fees plus interest—something Fran O’Sullivan has called “usurious”? Why were some New Zealanders and some foreigners given a gold-plated payback and other New Zealanders equity holders were wiped out? Why was no moral hazard prevented in this case? 
Let us examine some of the initial responses of the Minister of Finance to the questions New Zealanders are asking. He said it would be unacceptable for the Crown to favour some investors and not others but as we have just noted that is exactly what the Crown did by default thanks to its perhaps slavish adherence to the ideology of the market that receivership was the only way out. It favoured senior debt holders and wiped out equity. That is exactly what has happened. Some people have made a handsome profit at the expense of taxpayers and some others have been bankrupted. That may be why Fran O’Sullivan said in today’s  
New Zealand Herald  
that the Government has effectively been “gamed”: gamed in the name of blind ideology. Or was it to avoid an untidy result in an election year? 
Mr English is guilty of manipulating the numbers around the financial liability to the taxpayer. In earlier statements the Government said $600 million. But it has chosen for the purposes of debate again today to reduce it to $300 million deducting from it the interest paid across the whole scheme—mainly from other people like the banks—which is completely irrelevant to this deal because it had nothing to do with South Canterbury Finance at all. That is what Fran O’Sullivan has called “specious” and what others would call “slippery”. 
The third issue that has been raised by Mr English today is that this all occurred under the original 2008 scheme. That is a complete red herring because we all know South Canterbury Finance would have failed before 1 April 2010 had the decision not been taken and announced by the Government to extend it under the scheme. The fact that South Canterbury Finance was covered for the future meant that it continued to take deposits and apparently to proceed with the recapitalisation plan. Well that brings us to the next crucial issue: why was the recapitalisation process kneecapped at the last moment? The chief executive has said publicly that they were negotiating until 4 o’clock in the morning. What was on the table? New Zealanders deserve to know because they are paying the bill. What was the term of that deal? Is it true that hundreds of millions of dollars of external equity were available that would have reduced the taxpayers’ liability—that South Canterbury Finance could have traded on under either statutory management or a new deal without the value loss of receivership? 
Finally were there any conflicts of interest involved in this process by Ministers officials or other players in this saga? Were they declared? On what dates? Under what terms? There is much much more to come. 
Hon JOHN CARTER (Minister of Civil Defence) 
: 
 I want to talk about the greatest natural disaster that this House and this country have experienced in over 80 years and that is the Canterbury earthquake. I start by saying thank you to all the people who have been involved—the three mayors the civil defence people the police and all the people who have been involved in the recovery work down in Canterbury. I also acknowledge the civil defence staff at the national headquarters in our bunker in Wellington—John Hamilton and the team—and all the work they have done. It has been an outstanding job. I am pleased to say that it shows that we have a first-class structure in this country. It does and can respond when it is needed and it has in this instance. Our biggest thanks need to go to all the people right across the region who have stepped up helped and given assistance to anybody and everybody who has needed it. I must say that that has been one of the features of the whole event. People in Canterbury have stepped up and worked to make sure that everybody else is safe and secure. All the other New Zealanders who have offered help have also been extraordinary. It makes one proud to be a New Zealander. 
I also compliment and thank all our colleagues across this Parliament. There have been numerous offers of help from right across every sector and I thank them all for the offers of support and help. I particularly commend the Canterbury members of Parliament. All of them have been out with the people in Canterbury helping and giving assistance guidance and support. That has been a great feature. To that end I am having a conference call at 4.30 this afternoon and I have invited all of the Canterbury members of Parliament to be on it so that I can give them a full brief and answer any questions in case there are issues they need to know about to pass on to their constituents. That is the sort of thing this country would expect. We have a common interest in this issue and in getting it resolved. 
I said earlier in answer to a question that there are two issues that we need to be concerned about. The first is the welfare of the people. Although we have welfare centres occupied by a number of people nevertheless we can expect that that number will swell over the next few weeks and possibly months as we grapple with the enormity of this issue before us. Unless people have actually been down there on the ground they do not comprehend how massive this event has been. Quite honestly it is staggering when one gets to see it. There is some good news. We are starting to get some reports that the effect on housing may not be quite as severe as we first thought but it is a bit early for us to say that. 
The second ongoing problem—one I spoke of earlier as well—is that a house school or building that was OK yesterday is not OK today because of aftershocks. So if we think we have this event summed up and understand the impact of it quite honestly we have not. Most important people need to understand that it may be some time before we understand the issues that we are addressing. The Government has stepped forward and done all it can on behalf of this Parliament and on behalf of the rest of New Zealand to provide all the support that one would have expected. There are whole numbers of funds and welfare offers for people to accept. I am spending all the time that would be expected down in Christchurch itself as well as working back here in Wellington. 
Finally I conclude my thanks by thanking the Prime Minister for the leadership he has shown in this event. On behalf of Parliament and on behalf of the people of this country I say that we are lucky to have John Key leading us at this time and in this place. It was needed and his presence down in Canterbury has given the people down there huge confidence. We place on record our thanks to him on behalf of the nation for the work he is doing in this regard. We have huge challenges ahead of us but by working together we will get through and resolve them. Thank you very much. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 Saturday 4 September was a day all the kura around Otautahi were looking forward to in order to support their rangatahi in the Ranga Ihi kapa haka competitions which were to be held at the Aurora Centre at Burnside High School. Instead Burnside High School became transformed into a welfare centre along with centres at Brooklyn Community Centre Addington Raceway and Linwood College. 
Saturday 4 September was a day that will be forever etched in our collective history. I am talking of a city dismantled swept under the tide of mass destruction that damaged some 100000 of the 160000 homes in the course of the 7.1 magnitude shake. I want to mihi to my colleague Amy Adams for the loss she has had to bear during that time. 
The cordoned off areas of the central business district have all the appearance of a war zone: soldiers manning cordons falling debris and a bustling metropolitan area reduced to rubble. I have been out on the streets and I have to say it is heartbreaking. Some homes are still without power and water; mounds of sand and mud cover the front lawns and pathways of properties. I listened to the frustration of a business owner after a person buying his business revised the offer to $100000 less than the agreed price. 
I wept at the devastation in Kaiapoi: the roading disrupted the water tanker in place at the school and other areas and so many chimneys strewn all over the town. One entire street of homes—no more than 5 years old—now faces demolition taking in its midst the hopes and pride of families who had worked so hard for their own home. I sat with a taua who was gripped by fear as she contemplated starting over again. I have seen the terror in the eyes of our babies as they suffered the staggering amount of 300 aftershocks since early Saturday morning. I have spent time with people in Hornby as they emptied out their freezers and cupboards to feed their taua and poua. 
I am told that the Facebook page that Ngai Tahu set up has entries from New Zealanders as far as away as London asking what they can do. There is compassion from those who have endured floods Cyclone Bola the Napier earthquake and other natural disasters. I am so grateful for all the kindness that has been expressed by the Government and the people of New Zealand to support the people of Otautahi as they struggle through such devastation coping with the constant aftershocks the fear and the exhaustion. 
This disaster will not be fixed in a week. Some business owners have lost their entire livelihood; some families have seen their homes reduced to a pile of bricks. Everyone is on edge unnerved and waiting for the next tremors to shatter their temporary peace. There will be many who relive the trauma of their walls literally tumbling down. We think particularly of those with mental illnesses and some of the more vulnerable members of our community. We think of our elderly our children and families who have lost the only home they knew and who are mourning for the memories that cannot be rebuilt. We think too of the local heroes who left their own damaged properties to set up welfare centres to assess the safety of buildings to drain sewerage pumps to guard the inner city to restore power and water to residents and to bring news to the nation. 
The Mayor of Christchurch demonstrated his leadership when it was needed most; but so too an incredible infrastructure of support has emerged during this crisis. The people of Ngai Tuahuriri opened up Tuahiwi Marae to provide a place of comfort to welcome those who are feeling unsafe. Te Runanga o Ngai Tahu has set up vital links for the community to access. All of our local MPs have increased staff and have been out on the roads. 
I have to mihi also to Aaron who on Saturday was out digging holes to help his constituents and who held a meeting on Sunday morning—he managed to get 200 people along to a meeting on a Sunday morning to tell them what was happening and to get from them what their needs were. We are all out there. We are all doing everything that we can to make sure that our people are receiving the information they need and that their needs are passed on to those in authority. 
There is the staff of the city councils civil defence hospital and health centres the Fire Service search and rescue the Maori Women’s Welfare League the Salvation Army Ministers of the Crown the media and the hundreds of volunteers who have kept the city afloat. We thank them all for the incredible commitment at a time of such need. 
I went into the Linwood centre last night. I was followed in by people with boxes of toys and boxes of clothes; people were just coming in off the street to see what they could do to help—they were amazing. We know that even though eventually the state of emergency will be scaled down the state of health for all our whanau throughout Otautahi will take a long time to be restored. That will be when the generosity and strength of the nation will be tested even more. 
Hon DAVID PARKER (Labour) 
: 
 Before I speak about the South Canterbury Finance situation I add my thoughts to those of others about the people in Christchurch. I certainly agree with the comments of previous speakers on that issue. 
I want to address the issue of South Canterbury Finance and a couple of the things that need to be looked at further. First of all we need to think about why there was a need for a Crown guarantee. We needed a Crown guarantee in respect of deposits to financial intermediaries like banks and finance companies because without the wheels of finance turning the economy quickly grinds to a halt. The potential damage to the operation of the wider economy from the wheels of credit completely seizing up were perceived to be such a risk not just in New Zealand but in many countries around the Western World that Governments saw a need to intervene and to give some confidence to those who were investing in those institutions so that the institutions themselves could keep lending. The Government of the day—and I was part of it and am happy to take responsibility for this—thought the same as Governments overseas: that it was a necessary step to take. We did not want to do it. We saw that distortions would be caused and we saw that moral hazard was being created but none the less we thought that it was a necessary step to take. I agree with the Deputy Prime Minister Bill English when he says that overall it was necessary and even with the benefit of hindsight it had to be done. 
People could ask why we did not stop at banks but why should we have stopped at banks? Why should we have preferred the interests of banks over those of finance companies? No financial institution can sustain a run on the fund whether it is a bank or a finance company so I do not think a valid criticism is made there. But we should think about what we were trying to do. We were not trying to guarantee what was already lost. The terms relating to the grant of those guarantees meant that we would not prop up things that were already broke. 
I think one of the questions that needs to be answered here arises out of what the Deputy Prime Minister said today. He said that as 2009 evolved it became clear that the lending of South Canterbury Finance prior to the date of the guarantee was not of high quality. The firm had doubled the size of its book the Minister said to about $2 billion by the time of the guarantee and he essentially says a lot of that lending was shonky. Well there are some questions that need to be answered about that. Who knew that and when did they know and who should have known? We need to look at what the directors knew. What did the trustee company know? There is a statutory trustee for a finance company and in this case I think it was Trustees Executors and Agency Co. of New Zealand (Ltd). What did that company know? What should it have known had it been acting prudently? What did the auditors know? These organisations have auditors—what did they know? What responsibility did some of the valuers have? Were there cosy relationships with some of the valuers acting here? A lot of questions need to be answered. I think one of the reasons why I am perturbed is that some of these questions have not been answered already. 
There is a question for me as to whether the guarantee was enforceable in the first place. If the guarantee was obtained by misrepresentation on the part of the finance company maybe Fran O’Sullivan is right and things should have been reopened. Maybe there should have been a look at whether the depositors—who had effectively if what Bill English said is correct already lost their money by the time that the guarantee came in—should have been forced to share in the pain. And maybe the firm should have been put into statutory management in order to try to find a fair outcome that saw depositors recapitalising in part the institution. Maybe there should also have been a look at whether some of the preferential transactions that had been entered into since the date of the Crown guarantee were appropriate. 
I think there are some very real questions to be answered and I would hope that in the fullness of time the Government sees fit to agree that there should be a full and independent inquiry here. I think there is a need to look at what has gone wrong and what blame should be apportioned. I certainly think the auditors the trustees and the directors will all be ducking for cover. If I were in their situation I would probably be ducking for cover too. But someone needs to look at whether responsibility should be allocated to them rather than all the costs of meeting the guarantee to deposit holders falling on the taxpayer. Maybe the taxpayer should be seeking some recompense from other parties that have some legal responsibility for some of the things that have gone wrong here. We will not know whether that should be the case unless there is a proper inquiry into what has gone down. 
In terms of Mr Hubbard’s role I am not ready to absolve him from all responsibility. But I would say he did put a lot of his own assets into the company to try to prop it up in a way that he probably was not legally obliged to do. 
AMY ADAMS (National—Selwyn) 
: 
 There is a feeling at the moment in Canterbury that anyone who is not living through what has been going on is not able to grasp what it is like for us in Canterbury. I think too that there is a sense that the earthquake in Canterbury is something that happened for about a minute and half early on Saturday morning. The reality is that it is very much still happening. Today we heard the Minister of Civil Defence speak of the nearly 300 aftershocks we have had. That sounds simple enough when we say it but I can tell this House that it means that everyone in Canterbury every man woman and child is feeling frazzled frayed and terrified. They are short of sleep. They are wandering around wondering whether the next shock is the big one. A truck will roll by and people do not know whether they should dive under a desk or grab their kids and head to a shelter. It is like living in a permanent state of fear. 
That fear over the last 5 days has done more to damage the psyche of Canterbury than probably the short shock on Saturday morning. Until we can feel that we are actually through this and we know what the damage is it will be really hard for the people of Canterbury to start to rebuild and move forward. Every day—in fact every hour—we are getting updates saying things like: “Following the last aftershock this is now closed. Lyttelton Tunnel has developed cracks and is not available. The airport is down again. The airport is back up again. This building has been evacuated. Cracks have now opened up in these roads.” This is not something that has finished. Every single day the situation is changing. I spoke to a chap this morning whose house was “green-stickered”—a phrase we have all become very familiar with—on Monday only for it to be condemned earlier this morning. Every time Canterbury shakes the picture changes for us. 
This morning I was with the Prime Minister right on the fault line at the epicentre near my house and we spoke to a team of visiting seismologists—I think that is the term. They told us—and I not sure it is something I wanted to hear—that following the earthquake in Haiti which was the same size as the Canterbury quake the major aftershock was about 8 days after the quake. We are only at about day 5. In Mexico which had a similar-sized quake the main aftershock was 2 months after the main quake. So for us in Canterbury it will be a long time before we know that we are even through the worst of the aftershocks. Many of us are living in houses right now as I am that we do not know when we go to bed at night whether they will be standing in the morning when we get up. I am not allowed in parts of my house and that is fine. At least it is still standing. We can rebuild that and everyone is fine but there is a fear that is difficult to explain. Those moments on Saturday morning are being relived by us every time we go to bed. We are reliving the physical violence of houses being thrown around. 
It is hard to believe that houses can withstand the sorts of forces that were being imposed on them. I had absolute certainty that my house would collapse around me and I can tell members that at that moment there was only one thing on my mind—and it was not Parliament and it was not the debates we have here and the contention. It was the family and where they were and whether I could get to them. My daughter was in the next room. We were screaming for her. She could not hear us and we could not get to her but when we did get to her we found that the fish tank which had flown across the room and smashed on her bed had missed her head by inches. That is the sort of story we are hearing all the time. It is incredibly hard it is incredibly challenging and it will take Canterbury a huge amount of time to recover. 
The physical impact is the least of it. I think that is the thing we are all starting to understand. The emotional trauma is massive and it is getting worse and the financial trauma is only adding to it. Everyday I hear of people who do not know whether they will have a job to go back to. The owners of factories are saying they are not sure they can reopen. The owners of businesses whose buildings have been shut down until they can be inspected are saying they will not survive if they cannot trade for the next few weeks. It may seem like a few broken buildings on the TV but it is so much more than that to a huge number of people. When we think about the fact that 100000 homes will need to be repaired we look at our houses and wonder how long we will be living in damaged houses and how long it will be before they are fixed. It really is a sobering thought. I know we are all incredibly lucky that nobody was killed and we are incredibly grateful for that. The euphoria at being alive got us through the weekend but now the reality of what it will take to turn this round is really hitting home. I thought it was important to speak to this House and try to give a bit of that sense of what the situation is like in the streets of Canterbury right now. I want to touch on the resilience of our communities. They have been fantastic and they make me proud to be a Cantabrian. 
Hon PETER DUNNE (Leader—United Future) 
: 
 That was an amazing speech. I would like to acknowledge as I am sure all members in the House would the bravery of Amy Adams the member who has just spoken. We know the ordeal that she and others around her have gone through in recent days. That cry from the heart for understanding for some space and I guess for recognition of the huge stress that the member and the people of Canterbury are under is I think one of the most powerful contributions I have been privileged to hear in this House in a very long time. I acknowledge the member for that. I congratulate her and assure her that every single member of this Chamber will be behind her her family and the people of Canterbury during this ordeal. 
I will use my time this afternoon to talk about some of the tax measures that have been put in place in the wake of the earthquake in Christchurch. As the member alluded to it may be difficult at this time but the threads of life have to be picked up. One of the immediate concerns people will have is all those day-to-day things like their tax bills and their Working for Families tax credits and whether they will be paid as usual. They may well be part of the more substantial income coming into the house in these trying times. I assure Cantabrians that all payments they are expecting from the Inland Revenue Department such as their Working for Families tax credits will be made as usual. 
We have as I said in the House yesterday established a special Inland Revenue Department disaster response line. The number is 0800 473566. It is for individuals and businesses to make contact with the department if they think they face difficulties that require attention. I know that in the vast scheme of things sorting out tax matters will not be a huge priority for Canterbury people and businesses at this stage. That is perfectly understandable; there are far more pressing things for them to get on with worrying about. But we are saying from the Inland Revenue Department’s perspective that we will be prepared to work alongside individuals and businesses in this very stressful time to make sure that they are not doubly disadvantaged by some of these systemic interventions. We will be providing full information to people on the remission of late payment and late filing penalties and interest payments that are due. We are also working on a number of technical tax issues that arise from property that has been damaged or destroyed and the tax consequences that inevitably arise from any associated insurance claims. 
It has been gratifying to know that many people have contributed to the relief funds that have been established. I am pleased to announce this afternoon that cash donations of more than $5 made by individuals towards earthquake relief will be eligible for tax credits and they will be tax deductible if they are made by companies. 
I simply say to people in Christchurch that they should not be concerned about these matters at the moment. They have more pressing things on their minds. But from a tax point of view we are prepared to work alongside them both to make sure that they get in a timely way the entitlements they are due and also to ensure that the adverse impacts upon them at this particular time are minimised. I do not want to say too much more about the Christchurch situation because in the wake of the comments of the member who preceded me any comments from me about it would be superfluous. She did it so much more powerfully. 
I will talk about one other issue in the time that remains to me and that is the issue of child support. Last week I released a discussion document  
Supporting children 
 about changes to our child support law. It is worth putting on record that 140000 families and some 210000 children in New Zealand are affected by the child support system. Although in an ideal world those arrangements would be made voluntarily between parents at the time of relationship breakups the reality is that in a number of cases that does not happen. Sadly what was designed to be a back-up backstop solution has become the default. We need to change that and make a number of other changes that recognise the reality of circumstances today and ensure that the focus—which everyone proclaims but sadly often ignores in the emotion of the circumstance—on the welfare of the children is given pre-eminence. I invite people who want to make a submission to go online to www.supportingchildren.ird.govt.nz and make their comments accordingly. 
Hon SHANE JONES (Labour) 
: 
 Tena koe Mr Assistant Speaker. Along with the Hon Peter Dunne I acknowledge the contribution made by Amy Adams. As our leader articulated yesterday everyone in the House is conscious of the stress and concern that families in Canterbury feel especially where the elderly or children are concerned. 
I want to follow on from my senior colleagues in relation to South Canterbury Finance. Today we have seen yet another example of corporate failure turning to the taxpayer to be bailed out and this measure is from a party that has for a long time accused members on this side of the House of being too socialist. 
Let it not go unnoticed that there was an opportunity for the Minister of Finance the Reserve Bank and indeed the Prime Minister during his secret meeting with “Mother Hubbard” to have alerted the regulators and alerted themselves that to continue the opportunity in an indiscriminate fashion for South Canterbury Finance to continue lending in dangerous speculative ways and to free depositors—fresh ones—from the obligation of due diligence meant that this was a train wreck waiting to happen. 
Every time members on this side of the House are warned that there is no money I will take great relish in reminding Government members about the chance they squandered. They had an opportunity to pursue other options to shore up the position or to minimise the exposure of the taxpayer to this huge catastrophic bail-out but that opportunity was not taken. Fortunately the people who put their money in South Canterbury Finance can sleep a little easier tonight because no doubt they are living close to where there has been a natural earthquake. 
The deposit guarantee scheme started in response to the global financial crisis. It started as a consequence of Ireland Australia and a variety of other international jurisdictions deciding to shore up their banks in a fairly unfettered fashion. Then our Reserve Bank along with the Government of the day adopted a similar course of action. But members opposite enabled fringe operators such as South Canterbury Finance to hop on board. When South Canterbury Finance hopped on board inadequate conditions were placed upon that organisation. I suspect that the auditors the valuers the managers and the relevant regulators were asleep or were told to look the other way. 
The reality is that there were always other options rather than the New Zealand taxpayer being expected to continually bail out these companies where we find egregious examples of wrongdoing. I am told that the former chief executive officer of that organisation—and I do not refer to the redoubtable Sandy Maier but to his predecessor—is in distant climes. The name Mexico comes to mind although I have just come back from the Pacific and I could recommend that he be sent to clean the sewerage in Tarawa in Kiribati. 
The key point is that the organisations that offer mezzanine finance perform a valuable function in the economy but not when we the taxpayers are expected to bail them out in the face of existing irregularities and no doubt mounting evidence that people were either delinquent or chose to take a political route. The political route—and I am sure that the facts will eventually bear this out—was that the current Government did not want to see a commercial option pursued. It did not want to deal with people who were having to deal with the consequences of their own poor judgment. This is a case where political triumphalism has overridden corporate discipline. 
This is a massive bail-out. It is very important—and we are insistent—that the real masters and not just the receivers act with haste to minimise our losses. 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 The address from the previous speaker the Hon Shane Jones does not need answering because quite frankly it bordered on the ridiculous. Instead I will talk about the earthquake in the Canterbury region the effects it is having on people and the Government’s response to date from a welfare perspective. I acknowledge as other members of Parliament have done those people who are affected who are in distress and who are trying to live their lives as best they can. The earth is still moving they are still frightened and they are still very much in an unknown place. Not knowing what is coming next is I think one of the worst places to be. 
I have spent the last 24 hours in the Canterbury area and I have seen people who are living with the effects of the earthquake. I am so incredibly proud of the workers within Work and Income and the response they have given. On Saturday afternoon they were working at the welfare centres and they were ready to step up and give that level of support to people. Some people whom I met today left their own children behind at home—children who were distressed and upset—but they recognised they wanted to go into work and help other people. That is a true measure of the job they do. They have been working shift work in welfare centres in some cases from 6 o’clock in the morning until 11 o’clock at night. They have extended their hours. Some Work and Income offices have closed so that workers could go into other offices to try to meet the most urgent needs of people who are dealing with this emergency. 
Yesterday as the House has already identified at question time we announced the earthquake support subsidy. As of 11 o’clock this morning 65 employers with 20 staff or fewer have already stepped up to say that they want to take advantage of a payment to their employees of $350 per week. That money goes into the employers’ bank accounts. Employers can then pay their employees and top up that amount if they can—and we certainly hope they can—to give them a living wage while those employers have to close their businesses. We have also given some flexibility around that payment recognising that some employees are part-time and that in some cases as in a business with 10 employees there will be two employees still working on the phones but the other eight will effectively be out of a job in the short term while the business is closed and has only that administration going on. So those eight employees can get this assistance as well. 
Today we have announced a $2.5 million appropriation for counselling which will mean working closely with Victim Support the Salvation Army and Relationship Services to get qualified staff from other areas to supplement the people who are working there already and doing such a fine job. Some of those staff will be based within the welfare centres; others will be visiting homes. 
From day two Work and Income staff recognised that many elderly people were at home alone and that we did not know what they were doing and whether they were OK. We know who is living alone in Canterbury because of superannuation payment data. Our staff have made to date over 20000 outbound phone calls. Staff have now made contact with 12000 people but we are not quite sure where 6000 others are or how they are so staff have been visiting homes working in conjunction with the Salvation Army to check that those people are OK. 
I have heard stories of elderly people who will not get out of bed and have not done so for the last 3 or 4 days because they are frightened. They are not sure of their agility to move quickly if they need to when aftershocks happen because they are so frightened. Reaching out to a neighbour now is vitally important but it is equally important that we put that sort of support in around them. The 0800 779997 hotline has had well over 6000 phone calls coming into it. The queries have asked whether a street is closed when schools might open and how people can get financial help. But a record number of people have called the hotline to ask about how they can help and what they can do to make a difference and to support our community. People want to get in there and make a difference. We have had offers of payments to people and referrals to other agencies. It has been quite outstanding. Builders have asked how they can get in touch with people so they can help. 
Today I visited the student work gangs and I suppose members can see a little bit of a smile on my face because it was one of those lighter moments. The fire truck operated by engineering students turned up with 80 pizzas on it. The students started handing them out— 
Hon Trevor Mallard 
: Oh Gerry was there. 
Hon PAULA BENNETT 
: Ha ha! It was very commendable and something to look at. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I rise on behalf of the Green Party to send our love and our thoughts to the people of Canterbury and the people of Otautahi. The Green Party has just recently managed to reopen our office down there which was originally inside the zone. We were down there yesterday and the building is still in one piece so we were able to start work again which was great. The Green Party of course will be playing our role. My colleague Kennedy Graham who is down there currently has been playing his role along with our staff in trying to help the people of Canterbury during this time. I totally agree with Amy Adams; I think she hit the nail on the head when she told us that it was not just about the earthquake—the one earthquake—it was about the ongoing tremors that have continued since that time. Certainly the people I talked to last night found those ongoing tremors extremely unnerving. The experience overseas is that those tremors will continue for some months. 
None the less it became very clear in talking to people in Canterbury that people are also looking ahead. People’s minds are very much on the rebuilding phase. Their minds are on both getting through the current crisis and looking forward to getting on with the building. A number of issues have come up that we as a Parliament need to start thinking about and the Government needs to start thinking about. One of those issues is how we are going to deal with the suburbs hard hit by the earthquake because they were built on wet sand. Some of the eastern suburbs have been particularly hard hit. The mayor Bob Parker quite rightly has raised some difficult questions that we need to address about whether we rebuild in those areas that performed particularly poorly during the earthquake or we make the decision that because those areas are clearly earthquake-prone we need to look at them differently—for example paying out the people who currently have land there. It is a bit unclear at this stage whether we should have a green zone in those areas but we do need to put on the table the question of what we do about them. The people of Christchurch are already having that discussion. 
The other discussion that is going on in Christchurch at the moment that I think is quite interesting is the discussion in relation to sustainability and rebuilding. There was a letter in this morning’s  
Press 
 for example from Ray Genet who said that rebuilding Christchurch must not involve cutting corners and that new buildings should be warm light and energy-efficient. I think that as we enter the discussion about the rebuilding those questions are going to come to the fore. The modernisation of buildings when we are rebuilding needs to be something that we put in the centre of the discussion. I also think the protection of heritage is a real concern for many people in Christchurch. Christchurch has previously lost quite a lot of its heritage buildings. Many people are concerned about the potential loss of further heritage buildings. There is a desperate need to protect whatever heritage can be protected in order to protect the unique character of Christchurch so that we do not get tilt-slab buildings going up all over the show but protect as much of the heritage as we possibly can. 
The next step is about pulling together a plan for how Christchurch will be rebuilt—the missing pieces of Christchurch. The community needs to be involved in the discussion. I think many people in Christchurch although they are concerned about the current situation are looking forward and want to participate in the planning and decision-making process about how Christchurch will be rebuilt particularly the major buildings. There is clearly a key role there for the community and the councils but also for those who have expertise—whether in architecture planning heritage or sustainable building. They will play a key role in that process. 
The other issue that repeatedly came up in my discussions with people in Christchurch was the role of regulation. People were very grateful when comparing their experiences with those of Haiti and other countries that have had similar earthquakes for the role of regulations—particularly those established after the Napier earthquake but also those established since then—in making sure our buildings perform well under earthquake conditions. That is one of the issues I think we can learn from this experience. 
Although it is important that we address the issues of the day it is also critical that we look forward to how we are going to rebuild Christchurch. 
JO GOODHEW (National—Rangitata) 
: 
 I first want to pay tribute to Amy Adams the MP for Selwyn who did a really difficult thing this afternoon. She brought a very human face to this House and a human face to the Canterbury earthquake and to the life that people in Canterbury are living now. I also pay tribute to all of the other MPs from all sides of the House who are spending a lot of time both trying to recover their own lives but also helping their constituents. I know that in some cases National MPs’ offices have been badly damaged and I understand that this has happened to a number of Labour members as well. I know they are working in difficult circumstances and that in doing so they are entirely in the same place as so many of their constituents. 
My electorate of Rangitata was a little removed from the earthquake but nevertheless we are still feeling it. We are still being woken each night as the tremors the aftershocks continue to come through. When my husband and I woke on the night of the earthquake my first instinct was just as Amy’s. It was to run to get my daughter from her bedroom—she was home on mid-semester break—only to pause shakily in the hallway when I remembered that she was not there; she was in Christchurch. I thought that we were at the epicentre of the earthquake; it was so harsh. It was only a quarter of an hour later that I discovered my daughter was very close to the epicentre and then my worry truly began. 
In my short speech this afternoon I will talk a little bit about what is happening in my electorate and a little bit about what I hope will be happening in the weeks and months ahead. There have already been 180 claims to the Earthquake Commission from mid-Canterbury and 215 claims from South Canterbury. They are largely though not all of a minor nature. Some of the buildings in mid-Canterbury have been damaged and will need major renovations. I suspect some buildings will have to be pulled down so we have not escaped completely. Very few of our residents have been evacuated from their homes but I can tell members that I have yet to find anyone in mid-Canterbury and South Canterbury who does not have relatives or close friends living the nightmare—certainly not the dream—further north in Canterbury. 
To add insult to injury we then had power outages on Sunday night and gale-force winds that damaged buildings and plantations etc. so it has been a rocky time all around. Some of my constituents’ businesses have been affected. The St Ita’s Guesthouse in Rakaia is a very old building and I was told that the very shape of the building has changed. The same applies to the South Rakaia Hotel. One of the iconic structures in Methven the Canterbury Draught hotel—the Brown Pub as it is known to the locals—has also been damaged and part of the business is unable to be used. 
This Government—in fact not just the Government—and civil defence emergency services and all of the MPs in this House have gathered together and rallied around to find ways to help people. One of the businesses in Methven was damaged but very quickly the local builders got together and planned a way to get the business back into operation. But it does not change the fact that this business will be out of action for 3 weeks. At least one of its full-time employees is relying on their income from the business so the very quick response from the Government has certainly been welcomed. Although people feel very fortunate the Government has to pick up on the need for assistance. People are repeatedly saying that their neighbours are so much worse off but nevertheless some of them do need assistance to buy groceries to pay rent etc. 
Although the Hon Peter Dunne said that tax matters may not be at the top of one’s mind right now it is entirely necessary as has been the case for the Government to step in to look at all of the pressures on individuals on families and on businesses and to look for ways to allay those pressures in order to help people through this very very difficult time which has been so very well described by our colleague Amy Adams. It is this very comprehensive package that is making the difference. Regrettably concerted effort will be needed for months and months to come as people recover from this very severe earthquake. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I would like to join colleagues in the House in acknowledging the very hard work that is being done by all MPs based in Canterbury. I have spent some time talking to colleagues. I especially want to place on record my appreciation for the contribution given today by Amy Adams. I think she expressed to the House the intense feeling that all of us are getting from relatives who live in the area and from most people in the House with family members who are currently unable to live in their houses in Christchurch. I know the intense pressure that people are under and that it means a lot to them to know that we are uniting in a way that we do not very often do in order to be supportive of them. 
I like my colleagues will make some comments on the South Canterbury Finance situation. I think that members who have been following the views of Labour members on this will know that they have not always been consistent with one another and Mr Power and I have exchanged some views that have been closer to each other’s on occasions in this one. I would like to do the unusual thing now of acknowledging the work that has been done by Bernard Hickey by Cactus Kate and by Fran O’Sullivan in their analysis of this particular issue. They are people with whom I do not always agree but their ability as bloggers and as journalists to get in underneath and behind some of the fronts that are being put up I think is valuable. 
I thank them for drawing my attention to the John Campbell interview which was very informative where Mr Sandy Maier effectively admitted that the company had violated a lot of prudent lending criteria. In doing that he made it clear that the company was in breach of the Crown deeds of guarantee which I have copies of here and will seek to table in the House at the end of my time because there is an obligation to conduct affairs in a proper businesslike efficient and prudent manner. Sandy has made it clear that that did not occur. Analysis has shown that it was in breach of its trust deed and that audited accounts were not available at the time when it was appropriate for them to be available. In fact there had to be a waiver from the stock exchange in order for the late accounts to be filed and it is now obvious they were being held back in order to get a better rating from the rating company. After the rating came in the new accounts were audited and were made available. So the company was in breach both of the trust deed and the stock exchange regulations as well as the Crown deed of guarantee. 
I think what we will get to at some stage is finding out effectively who knew what when. In this case there are four deeds of guarantee and notwithstanding the comments from the Prime Minister all of these were entered into in the time when he was Prime Minister—every single one of them. There was no deed of guarantee for South Canterbury Finance under the Labour Government; it came into the scheme at the time Mr English was the Minister of Finance. Most importantly the deed of guarantee that was entered into in April this year at a time when South Canterbury Finance was very very clearly in breach of its requirements leaves open the question as to why Mr English allowed it to be part of the continuation. Why did he allow it to continue to take deposits with a very clear Government subsidy? With those amounts people probably could have got 4 percent if they were lucky. They were getting 8.5 percent with a Government guarantee as a result of Mr English’s decision to let them stay in and at the same time there was a lot of lending going on to shonky people not in South Canterbury but in Auckland. 
I seek leave to table the set of four Crown deeds of guarantee dated November 2008 December 2009 April 2010 and June 2010 between Her Majesty the Queen in Right of New Zealand and South Canterbury Finance. 
The ASSISTANT SPEAKER (Eric Roy) 
: Leave is sought for that purpose. Is there anyone opposed to that course of action? Leave is not granted. 
JACQUI DEAN (National—Waitaki) 
: 
 The Government’s reaction to the terrible earthquake in Canterbury was swift and entirely appropriate and it showed the depth of concern and care that every member of the Government benches—and indeed those across the House—has for the events that have unfolded in Canterbury. I do not need to rehearse to the House the impact it has had on all of those people in Canterbury. The MP for Selwyn Amy Adams has done that and I do not think any other contribution can express to the House what it is like for those people living in Christchurch. 
Today there was another aftershock. It was one of some 260 aftershocks and I understand they are to be expected for another couple of weeks. The shock this morning was over 5.1 on the Richter scale. Taken in isolation that event would be enough to cause damage and terror amongst people but this is day 5 of this event. As Amy Adams expressed the ongoing sense of fear anxiety and terror particularly amongst children and older folk is of great concern to this Government. 
The Prime Minister went down to Canterbury just as fast as he was able. It was noted and appreciated by the people of Canterbury as was the response by Mayor Bob Parker. There has been extensive news coverage about the earthquake in Canterbury. Most of that coverage seems to have included footage of Mayor Bob Parker with his sleeves rolled up getting stuck in and doing what he can to help. I pay tribute to other members of Parliament from across the House who have also rolled up their sleeves and got stuck in to help the people of Canterbury and Christchurch because that help will need to continue. 
With today’s announcement that the state of emergency—[ 
Interruption 
] I am sorry that the member across the House Darren Hughes is choosing to make light of this debate. Those of us on the Government benches take this issue very seriously and it is regrettable that the Labour Party does not seem to share our sense of ongoing responsibilities in our reaction to this earthquake. I think it is regrettable but it is notable that people will not see that response on the Government’s side. 
It was announced today that the state of emergency in Christchurch will be extended for another 7 days. That is a very telling decision that speaks to the sheer breadth and depth of damage that has happened in Christchurch and to the degree of fear for the safety of civilians that exists in the city. 
Our civil defence emergency management system has worked exactly as it should have. All the people on the ground in Canterbury are doing an amazing job. Many people in civil defence the police and the military as well as volunteers and the council have literally dropped everything left the crises they have in their own homes and put their concerns aside and they are continuing to do that to help out. 
The response from my own electorate of Waitaki is that yes we felt the earthquake and yes it woke up a number of people and a number of people were fearful. The damage in my own electorate has been minimal but I extend my concern and condolences to the Acland family of Mount Peel Station whose lovely old stone church the Church of the Holy Innocents sustained considerable damage. The sense of loss they feel at many many generations of family history being destroyed must be terrible. I extend my condolences to them and to other families who have lost mementoes of past family experiences. 
In the time I have remaining I ask members to spare a thought for the young people because a lot of them come from my electorate. They go to Christchurch to study or to earn a living. They might as I did many years ago work in the centre of Christchurch. I worked in a takeaway bar and a sandwich bar. I literally lived from one pay to the next—maybe not even that. I applaud the Government for bringing in initiatives that will support businesses and their employees. Thank you. 
The debate having concluded the motion lapsed. 
Manukau City Council (Regulation of Prostitution in Specified Places) Bill 
First Reading 
Hon GEORGE HAWKINS (Labour—Manurewa) 
: 
 I move  
That the Manukau City Council (Regulation of Prostitution in Specified Places) Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be considered by the Local Government and Environment Committee. Before I delve into this bill I want to pass on to the people of Canterbury the sympathy that I think everyone here has for what happened to those people. When one has been the Minister of Civil Defence one knows the problems going on and I say to John Carter that many people appreciate the work he is doing. 
This bill is on behalf of the Manukau City Council. It will allow the council to make by-laws designating any place a specified place; it requires a by-law to be made and reviewed in a manner similar to that of a by-law made under the Local Government Act 2002; it prohibits the conduct of the business of prostitution or the supply or receipt of any commercial sexual service in a specified place; and it provides the police with powers to arrest a person committing an offence under this legislation. 
This whole question goes way back to the Prostitution Reform Act 2003 which was passed by one solitary vote. Since then Manukau City Council has been back to this House trying to get legislation to help it overcome a difficulty it has. In my electorate of Manurewa and in Ross Robertson’s electorate of Manukau East we have been plagued by street prostitution for a number of years. Of course it has a huge impact on the community. When shopkeepers have to clean up used condoms vomit and urine in their shopfronts people get very upset. When kids on their way to school see that they are annoyed. The Prostitution Reform Act 2003 did not solve the problem. In most areas people work in brothels but we have a certain class of people who I think make life bad for others. This bill is supported by the two chief mayoral contestants for the super-city. They are Len Brown and of course John Banks. Here they are soliciting themselves on the front cover of  
Metro 
 magazine. They are soliciting for votes which is far different from anything else. 
Paul Quinn 
: I raise a point of order Mr Speaker. It is well known in this House that using visual aids is acceptable only by the member speaking and no one else. Former Assistant Speaker Ross Robertson was joining in by holding up that display which I think Mr Assistant Speaker saw. 
H V Ross Robertson 
: I know that the member is a new member— 
The ASSISTANT SPEAKER (Eric Roy) 
: That is not helpful. 
H V Ross Robertson 
: —but the reality is—and I am trying to inform the member—that during the course of a speech a member is entitled to use a display. That was what was happening and it was only for a very short time. 
The ASSISTANT SPEAKER (Eric Roy) 
: The point has been made. We know the rules. 
Hon GEORGE HAWKINS 
: I thank the member opposite for his real concern. Soliciting is something that I think he does around election time but he will not do it very successfully next time; in fact he might be further down National’s list. 
When Manukau City Council developed its first bill it thought some real progress would be made and to be sure the first reading attracted about 100 votes in this House. Then it went off to the select committee. It came back from the select committee and the committee was divided on the matter but in the end it decided not to proceed with the bill so the council had the added problem of trying to find a way around the issue. It has used all the options we would expect a council to use. It has used better street lighting closed-circuit television Maori wardens and ambassadors and of course the police have been directed to look at the problem. But prostitution is just one of many social problems that are impacting on South Auckland. I have another bill on the Order Paper the Sale of Liquor (Objections to Applications) Amendment Bill which is waiting for its second reading and deals with another aspect of the social deprivation that is happening. There is also the issue of pokie machines but the issue that really annoys most people is the street prostitution that goes on. Yes we have a lot of people who are very upset that there is a mix of alcohol abuse and street prostitution going on at the same time. 
Last time I said it was a plea from Manukau City Council for help. This bill is also a plea for help from Manukau City Council. This bill may have the unusual feature of lasting longer than the council. Manukau City Council will not exist on 1 November and hopefully this bill will be picked up by the new super-city. That remains to be seen. Some people such as Councillor Dick Quax have been pushing to have this matter dealt with for a long time but there are some councillors who identify the problem and make a lot of noise about it but nothing happens. I am referring to Colleen Brown who has written an article in a newspaper about a young girl—let us call her “Holly”—who stands in the half-light of a liquor store. She goes on to describe “Holly” as a 14-year-old on the streets. I challenge every member of this House to get up and say whether a 14-year-old on the streets is acceptable. The trouble with the article of course is that it is made up by Colleen Brown who does not do anything other than make up stories. 
H V Ross Robertson 
: She wrings her hands. 
Hon GEORGE HAWKINS 
: Yes she wrings her hands and this is a problem that needs far more support than that. It needs the support of this Parliament so that Manukau can get something done. 
When people talk about liquor being an associate of prostitution people really know what is meant. We have people marching around South Auckland protesting about liquor but the chair of the Wiri Licensing Trust goes on those marches. She is selling booze and protesting about the sale. So in South Auckland there is real conflict and people are getting confused messages. I say that this issue needs a forceful answer. It needs people to stand up and be accountable. It does not need people who make up stories or people who try to sell booze but say they are against it and against prostitution. We need people of much sterner stuff. 
It is unfortunate that this bill has come into the House at this late stage but it takes a lot of time and a lot of work by a council to bring a local bill before the House. I thank the officers of the Manukau City Council for their efforts. I thank the people of Manukau City who have contacted me about this bill. 
H V Ross Robertson 
: I raise a point of order Mr Speaker. I am really sorry to interrupt my colleague but the reality is that a member in this House is using the Chamber as an office. The member knows who I am talking about. He was using a telephone which is against the Speakers’ rulings. I know that is true because I made the ruling myself. The member knows who it is. 
Mr SPEAKER 
: I thank the member for that. Members know that they cannot make calls in here. They must go out to the lobbies to do that. 
Hon GEORGE HAWKINS 
: What happens is that people look to this Parliament to see whether it will make a difference and whether it will give power to a local authority to do something about a problem. Of course that is what is really important: saying to councils that we will support them in their battle against street prostitution. We are not asking to turn the clock back to the days prior to 2003 when the prostitution reform legislation was before the House but we are saying that it is time for change and people have had enough. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 Thank you for the opportunity to speak on the Manukau City Council (Regulation of Prostitution in Specified Places) Bill. I congratulate the Hon George Hawkins on sponsoring the bill on behalf of the Manukau City Council. I believe the council requested he do so and as a good local member and an aspirant member of the new local council he has done so. We wish him well in the forthcoming elections. The aim of this bill is to stop prostitution in specified places throughout Manukau City. I note that the 2008 review of the Prostitution Reform Act 2003 concluded that most territorial authorities had no problems with the sex industry in their districts and had received few complaints about it. 
However that is not so in Manukau City and in Christchurch and we have heard some fairly explicit descriptions of what goes on in Manukau City and around that area. There is no doubt that it is pretty awful. The council tried to have a bill introduced in 2005 to bring attention to the problem and to impose a complete ban on street prostitution in Manukau but it was defeated. Following efforts by councillors to make suggestions this bill is the result. I think the Hon George Hawkins agrees that it is far from perfect but indeed I support this bill. I think the situation is very serious and it is worthy of referral to the Local Government and Environment Committee for detailed discussion to see whether something useful can come from it. 
A variety of difficulties with this bill have been pointed out. The first one is that once we ban street prostitution from one area like Hunters Corner the prostitutes will go elsewhere and we could keep passing by-laws until the area is more or less covered. Another thing is that the police are concerned that prostitutes will become wary of the extra policing lighting and all the rest and the police may have to bring in undercover agents. Through this bill the police have the power to arrest on suspicion and to impose fines up to a value of $2000. But clearly this could be a merry-go-round. I note that the Prostitutes Collective is against this bill because its view is it is very important that if prostitutes are to carry out their profession in the streets they should not have to move to less safe places that are dimly lit where all sorts of problems can occur. 
It is worthwhile pointing out the aims of the original Prostitution Reform Act of 2003. They were to decriminalise prostitution although not endorsing or normally sanctioning prostitution or its use; to create a framework to safeguard the human rights of sex workers and to protect them from exploitation; to promote the welfare and occupational health and safety of sex workers; to contribute to public health; and to prohibit the use in prostitution of persons under the age of 18. I think most of those aims were very very important and the review suggested that most of those aims were being fulfilled. There is no doubt that safe sex and diminishing the problems of infectious disease and sexually transmitted disease was one issue that was very important to improve in New Zealand at that time. In this issue of prostitution in Manukau City there is what has been described as a variety of unsavoury debris—needles used condoms vomit and urine—found close to schools and places of work which has to be cleared up day after day. 
There are also under-age sex workers. I was very concerned when I heard the Hon Maurice Williamson point out that when he went around these areas with some of the councillors and expressed his concern about young women who were clearly under age being with the older prostitutes one of them came up to him and said: “Look you’ve got to realise that these young women are here they are under our protection they are being fed and they are given money. If they were at home they would be beaten up they would be raped by their parents and their life would be made even worse.” I think this describes the huge difficulty of this whole problem. Certainly during the debate on the 2003 bill under-age sex—prostitutes going from legalised situations to illegal ones—was one of the big difficulties predicted at that time. Here in Manukau City we have the problem of it happening overtly night after night. 
This bill will give only a limited amount of assistance to what is occurring very explicitly. It does not solve the wider problem of illegal prostitution and particularly under-age prostitution. They need to be addressed in a systematic and very careful manner as outlined in the review of the 2003 Act. Nevertheless this bill has arisen because of a repeated problem in a specific part of New Zealand. I agree it is worthy of being supported to the select committee and I congratulate once again the Hon George Hawkins on his sponsorship of this bill. Thank you. 
Mr DEPUTY SPEAKER 
: The remaining calls will be of 5 minutes’ duration. There will be a bell at 4 minutes. 
SU’A WILLIAM SIO (Labour—Mangere) 
: 
 It is my pleasure to rise to support the Manukau City Council (Regulation of Prostitution in Specified Places) Bill in respect of street prostitution. I think it is important for members of this House to note that this bill is not about eliminating prostitution. There is no effort whatsoever being made to repeal the Prostitution Reform Act. This bill is about addressing a problem that the people of the Manukau City Council acknowledge has existed for some time in their midst. It is a problem that has caused quite a lot of pain within some sectors of that community. No doubt my colleague to my right Ross Robertson and my colleague to my left George Hawkins who represent those communities will have more to say on this issue. 
I think it is important to say that we are not about trying to eliminate prostitution and I do not think that will ever be possible. For as long as there is violence in the home women are beaten up and women and children are sexually abused there will be people who feel inclined that this is perhaps a way for them to earn a living and a way for them to pay back the people whom they might be angry with. As long as there are men out there with money who are willing to buy this kind of service then we will always have that sad situation in our community. 
I say also that this bill is not driven by any moral outrage despite the fact that in the early days of the Prostitution Reform Act the Manukau community felt as though it had every right to say no to what was being proposed then. It is important that members note that this bill focuses specifically on street prostitution. 
I understand that the members of the Manukau City Council are united in sending a very strong signal to this House that it is a problem and that they simply want this bill to be referred to a select committee so that we can listen to the evidence that is available from the public particularly the public of Manukau and so that we can also get some advice in terms of how we deal with this particular problem. The problem is that the Prostitution Reform Act does not protect the women who are offering their services on the streets. Despite the work of the council in advocating for social services and protection from other agencies and its work in ensuring that these areas are lit have closed-circuit television and are monitored by security the fact remains that it is not only unsafe for those practising their services on the street but also unsafe for members of the local community when they have to deal with the nuisance factor that arises from street prostitution. 
I will not say anything further except to say that this bill is a major improvement on the previous bill that was forwarded by the Manukau City Council in 2005. It is the view of the council which I support that the Prostitution Reform Act has failed to protect street workers or to move them to safer settings indoors. As I said this bill will not provide the sole answer. It is a tool as we explore how to try to deal with the unsafe situation of young people mainly who feel that they have to offer their services on the street. We need to provide a balance so that their rights as prostitutes are protected and the rights of the community are maintained. 
KANWALJIT SINGH BAKSHI (National) 
: 
 It is my pleasure to stand and speak on the Manukau City Council (Regulation of Prostitution in Specified Places) Bill which was introduced by the Hon George Hawkins. The bill aims to address behaviour associated with street prostitution in certain areas of Manukau City. Prostitution is one of the oldest professions in the world and I respect those who are in that profession. They take on that profession because of their circumstances not by choice. We say slavery has vanished from modern civilisation but that is not true. Still it exists. It applies only to women and it is known as prostitution. 
My out-of-Parliament office is in Papatoetoe at Hunters Corner and several people have come to my office to complain about street prostitution. Street prostitution at Hunters Corner is a major issue for the residents and business owners in Papatoetoe. Businesses complain that they have found used condoms in their car parks and doorways and that human waste has been left against the walls of their businesses. Schoolchildren from Papatoetoe Central School Papatoetoe High School and Papatoetoe Intermediate School walk past those areas on their way to and from school. 
Papatoetoe is a community of good people and it is a pleasant place to live yet it is dramatically dragged down by a very small minority. During the day Hunters Corner looks like a corner on any shopping strip: a steady stream of traffic passes a pick ‘n’ mix of offices takeaways and grocery shops. But as night falls Hunters Corner is hunted by the predators of sex. 
The proposed law will make Papatoetoe and Manukau a safer area to live and work in. We need to protect our community and our youngsters. When the Prostitution Reform Act 2003 was enacted I doubted that anyone would have thought that street prostitution at Hunters Corner would increase so drastically. Even though this bill does not address all the issues I support the bill at its first reading. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Kia ora Mr Deputy Speaker. Kia ora tatou katoa. I take just a brief call on the Manukau City Council (Regulation of Prostitution in Specified Places) Bill to state where the Maori Party sits. We are aligned as a party in respect of our stand on this issue. 
We recognise that Maori might take up some roles here and there—just like any other New Zealander—in the wider sex industry. Some will be street-based workers; the research tells us that Maori are more likely to be represented here than in managed or private businesses. Maori may be managers or owners and Maori may access commercial sexual services. But a wider group of whanau is also affected either by their family member’s involvement in the sex industry or simply as members of communities in which the business of prostitution or commercial services plays out. 
Prominent in our thinking around any legislation to do with the sex industry is the matter of health and public safety not just of the workers but of the greater community as a whole. The literature tells us that people enter the industry primarily for economic reasons. Most sex workers are female and female workers most often cited the need to pay for household expenses as well as to support their families. Ironically it is the working conditions—the flexible working hours and the ability to earn money readily at rates often exceeding the minimum hourly wage—that attract many of the participants. 
Some research provided to the Prostitution Law Review Committee also provided some interesting ideas around how to encourage workers to exit the industry. Transgender sex workers spoke of the lack of acceptance in society and the feeling of belonging that they got from working with people who were more similar to them. Young sex workers also spoke of the feeling of acceptance and the family-like atmosphere they got from working on the streets. So some bigger issues around the existence of the sex industry need to be tackled before one simply imposes a ban that prohibits the business as with this particular bill. 
All of that background being in place when the Ministry of Justice reported back on 1 May 2009 about the impact of the prostitution law reform it concluded: “localised approaches are likely to be more effective than legislation” for dealing with the issue. It recommended that the council the police residents business owners and sex workers work together to address the community tensions and antisocial behaviour set out by other colleagues in the House this afternoon. 
It is very hard to understand why Mr Hawkins would ignore that advice and put a bill forward anyway. Even more worrying is the extent of the new authorities that Mr Hawkins is seeking to invest in the police to deal with prostitution by granting officers powers of arrest that would enable them to stop and search vehicles and demand that passengers state their private details merely on suspicion of committing an offence under this Act. We do not find favour with that. If the passengers—frightened embarrassed or fearful of being outed—happen to object they will be stung anyway with a $1000 fine. 
So many other things could have been done to improve the health and safety of people in Manukau City. For example appropriately targeted and well-designed programmes can offer support education and advocacy to young Maori and others involved in prostitution. The programmes provided by Te Aronga Hou Inaianei for example provide services to those soliciting on the streets of Counties-Manukau. The outreach service the toro atu is a mobile service offering information and support. The awhinatia service links takatapui and youth with appropriate support services. The knowledge and training service matauranga provides well-being education awareness programmes personal development and vocational rehabilitation. 
We do not support this bill going forward. We believe that it sets an undesirable precedent in creating a local exception to the Prostitution Reform Act. Finally we believe that those involved in the sex industry are regulated far more effectively by family and peers than by legislation and the police. 
KEVIN HAGUE (Green) 
: 
 Our caucus sometimes has debates over bills that we do not support or that we support only in part as to whether there is some value in allowing them to go to select committee in the hope that a better bill may emerge. Today I stand to say that the Green Party does not support the Manukau City Council (Regulation of Prostitution in Specified Places) Bill. However some of our members believe that there would be value in discussing the issues further in a select committee and they will vote for the bill’s first reading on that basis. Those members believe that local communities should make local decisions if this is possible without undermining the law. 
The majority of us however will oppose the bill at its first reading. Our reasons for opposing the bill are exactly the same as the reasons that the Green Party vigorously opposed the equivalent bill the last time that George Hawkins introduced it in 2005 and are the same reasons that the Green Party strongly supported Tim Barnett’s original Prostitution Reform Act. The bill enables the council to re-criminalise soliciting in particular areas of its choosing. This effectively recreates exactly the imposition on the rights of sex workers that existed under the old law except that the penalties will be 10 times higher. It is constitutionally objectionable furthermore for local authorities effectively to create criminal law. 
The point of the Prostitution Reform Act was to focus the law on those behaviours that can be associated with soliciting that present actual problems such as people being harassed or intimidated offensive signage or behaviour or used condoms left in public places. There are solutions and remedies for all of those behaviours. Rather than the moral objections that some people have about prostitution this principle is being reversed by the bill that stands before us today. 
I am not belittling the concerns or the anxiety of the Manukau City Council local residents or shopkeepers; rather I am restating the point of view that I expressed back in 2003 as the executive director of the New Zealand Aids Foundation alongside my colleagues from the New Zealand Family Planning Association the National Council of Women the Maori Women’s Welfare League the Public Health Association the New Zealand Federation of Business and Professional Women the YWCA and many other organisations. Those concerns were that marginalised desperate and vulnerable members of our society who end up street-based soliciting in places such as Hunters Corner are easier to reach out to with services and with information if they are not doubly victimised and hiding from criminal sanctions such as those again proposed in this bill. 
Street-based soliciting at Hunters Corner is hardly a new phenomenon. It was extensively discussed in the debate and in the submissions made on Tim’s original bill. The arguments being made tonight in favour of this bill were considered and rejected at that time and then considered and rejected again in 2005 by the Local Government and Environment Committee and by Parliament. Then in 2008 the Prostitution Law Review Committee visited the areas that the council was concerned about discussed the issues broadly and heard from the police that they were more concerned about family violence and abuse of alcohol in these areas. The review committee again rejected the arguments advanced by the council endorsing the recommendation made by the select committee. 
In 2009 the crime prevention unit of the Ministry of Justice undertook another comprehensive review of the specific issues addressed by the bill published under the title  
Review of street-based prostitution in Manukau City 
. Again the review concluded—as have all reviews—that localised measures for working with sex workers and non-governmental organisations were a more productive way to address any actual problems being experienced and that legislative approaches were unlikely to be effective and were quite likely to create fresh problems. 
In summary this bill intends to unwind the intent of the original Act. It is constitutionally repugnant has been considered frequently and in great depth and is both extremely unlikely to achieve its intent and likely to further marginalise some of the most vulnerable members in our entire society. It is a waste of this House’s time. I do not support it going any further. 
H V ROSS ROBERTSON (Labour—Manukau East) 
: 
 Tena koe. Street prostitution can be dangerous. Often in this House we pass legislation with good intentions sometimes not knowing its effects on or ramifications for the people whom we seek to serve. Since the legalisation of prostitution the residents of Hunters Corner in Papatoetoe have never been the same. That also goes for the residents of Otahuhu which also has a street problem. I can tell this House that some traumatic incidents have occurred over the years since the legalisation of prostitution—and out of the public eye. As the local member for both areas I am continually reminded by concerned citizens about the state of Hunters Corner when daylight resumes each day with faeces condoms vomit and drug paraphernalia left in shop doorways and residents woken by actions that concern all and sundry. This evening I stand with and for the people of my electorate and I will vote to support the Manukau City Council (Regulation of Prostitution in Specified Places) Bill going to a select committee at its first reading. 
The bill is not opposed to prostitution—only to where it is carried out. Street prostitution can be dangerous. It can be a dangerous environment in which to work. Such workers are less accessible to health workers who provide a community education programme with a focus on sexual and reproductive health and on HIV/AIDS. The New Zealand Prostitutes Collective also provides community drop-in centres and outreach services throughout New Zealand where prostitutes can access a range of occupational health and safety support services including sexual health advice the use of health clinics and needle exchange programmes. Peer education and support are also provided on a range of issues concerning the health safety and welfare of sex workers. Street prostitution can be dangerous. 
I emphasise again as both of my colleagues have done this evening that this bill is not about eliminating prostitution or revising the Prostitution Reform Act which was passed in 2003. No it is about where prostitution is carried out. As the explanatory note of the bill states “The purpose of the bill is to authorise the Manukau City Council to make bylaws prohibiting the business of prostitution or commercial sexual services in specified public places in Manukau City. The business of prostitution in private premises carried on in accordance with the provisions of the Prostitution Reform Act 2003 will not be affected.” That is where my two colleagues and I from the city of Manukau come from. We recognise that there is a problem. I have campaigned continuously for Hunters Corner in Papatoetoe to be cleaned up. In fact in 2008 I raised the issue with the Mayor of Manukau Len Brown and also with the Counties-Manukau Police District commander Superintendent Mike Bush. They advised that neither of them had the power to do anything about it because no crimes were being committed. 
This proposed legislation allows local businesses and residents to object to prostitution taking place on our streets where it causes nuisance or serious offence to members of the public. It will have no impact whatsoever on brothels or smaller owner-operated brothels. The bill allows for an assessment of the impact of street prostitution in specific public places in Manukau City. I stand here tonight along with my colleagues to support Manukau City Council’s legislation in order that we can do something to protect our street workers. Tihei mauri ora! Tena koutou tena koutou tena koutou katoa. 
Dr CAM CALDER (National) 
: 
 I rise to speak in support of this local bill the Manukau City Council (Regulation of Prostitution in Specified Places) Bill which has been submitted by my colleague the Hon George Hawkins on behalf of the Manukau City Council. I am proud to be the National MP based in Manurewa which is a vibrant and diverse community full of hard-working families ambitious for themselves and for their children. 
Street prostitution as my colleague Mr Ross Robertson observed is a dangerous occupation for its practitioners. It impacts negatively on our community and it has proved to be an intractable problem in our community for a number of years. This bill will authorise the Manukau City Council to make bylaws that will designate specific public places within the boundaries of Manukau City where no person is permitted to conduct the business of prostitution or to supply or receive any commercial sexual services. 
The Government the Manukau City Council and local business associations have effected huge improvements in our local Manurewa town centre over the last couple of years. The activities of prostitutes plying their trade in public spaces such as Manurewa town centre and also the Hunters Corner area of Papatoetoe significantly detract from the civic amenity and impact negatively on community pride. Householders and businesses often have to deal with the unsavoury aftermath. Syringes that litter the ground and other debris are not the welcome mat to Manurewa that this community wants. 
I stand for a safer community. I stand for a Manurewa where our young people are encouraged to unlock the treasure trove of potential that lies within them all a Manurewa where our young people are drenched with exhilaration at the opportunities available to them. I commend this bill to the House and I support its referral to a select committee. 
Hon GEORGE HAWKINS (Labour—Manurewa) 
: 
 First of all I thank the pretender to the throne of Manurewa Cam Calder for getting up—that person from the North Shore is concerned about street prostitution as well. I thank all the people in the House who have spoken today from whatever point of view because I believe that addressing that issue is very important. I thank even those people who spoke against the Manukau City Council (Regulation of Prostitution in Specified Places) Bill. When we have legislation that deals with local problems then I think a bit of passion comes out. 
I have had people over the course of time tell me that instead of picking on the prostitutes we should pick on the men who use them and arrest those men. That is not a bad idea. 
Hon Tau Henare 
: You had 9 years. 
Hon GEORGE HAWKINS 
: Yes I have had 9 years but that member has been here for a long while and what has he done? What has he done? Nothing—not a thing. However I say the real tragedy about all of this is that under-age young girls are involved in prostitution. Of course they cannot work in brothels until they are 18 so they are exposed to street prostitution. When the original reform bill came through Parliament no one thought of that. Now we are trying to use band-aids to cover up problems that we did not foresee. I think that is a pity. We have had people murdered on the streets. Prostitutes have been murdered which shows what a dangerous life it is to be on the streets. 
When we analyse what is happening we hear a council Manukau City Council asking for help. The community that Manukau City Council represents is asking for help. Perhaps the real answer is to go back and redo the Prostitution Reform Act but I do not see many people who want to do that. Perhaps that is what the answer really is—to go back to the legislation. But people will not like to do that because last time the legislation passed by one vote and it was a real test for people. To try in an election year to amend or change the Prostitution Reform Act is the real measure. 
People who have electorates and party offices know what the problems are. People come to see us. People from the churches come to see us. People from the schools come to see us because they do not like kids to walk on their way to school through vomit left by undesirables who mix alcohol and prostitution. It is unseemly and of course it just does not make a town come right. I know that that is what my colleague Ross Robertson really wants to see happen in Hunters Corner where there is a big problem. Ross Robertson is a person who keeps on going and going—a wee bit like the battery. He never runs out; he keeps on going. That is really important because if one does not keep on going—[ 
Interruption 
] 
Ideally we should go back to the Prostitution Reform Act and change it. 
Simon Bridges 
: That was your party. 
Hon GEORGE HAWKINS 
: Yes and we made a mistake. I imagine that the present Government will not change that Act but I thank its members for their support tonight. This bill provides a mechanism whereby once again a problem can be highlighted and a select committee can look at it. When the bill goes to the Local Government and Environment Committee the committee can do some real good work. The police have not been actively involved with this bill. They said they did not have the staff but now that they have the staff they are still not interested. Addressing the issue is too hard for them and it appears to be too hard for some of the political parties represented in this House. 
Mr DEPUTY SPEAKER 
: Members the question is that that the motion be agreed to. 
Hon GEORGE HAWKINS (Labour—Manurewa) 
: 
 I raise a point of order Mr Speaker. I request that a personal vote be taken. 
Mr DEPUTY SPEAKER 
: The member is seeking a personal vote. A personal vote will be held. 
A personal vote was called for on the question  
That the Manukau City Council (Regulation of Prostitution in Specified Places) Bill be now read a first time. 
Ayes 82 
Adams (P) 
English (P) 
Kaye (P) 
Roy H 
Ardern S (P) 
Finlayson (P) 
Key (P) 
Ryall (P) 
Auchinvole 
Foss (P) 
King C (P) 
Shanks (P) 
Bakshi 
Garrett 
Lee 
Sio 
Bennett P (P) 
Gilmore (P) 
Lotu-Iiga (P) 
Smith L (P) 
Blue (P) 
Goff (P) 
Macindoe 
Smith N (P) 
Borrows 
Goodhew 
Mahuta (P) 
te Heuheu (P) 
Boscawen 
Goudie (P) 
Mapp (P) 
Tisch (P) 
Bridges 
Graham 
McClay 
Tolley 
Brownlee (P) 
Groser (P) 
McCully (P) 
Tremain 
Calder 
Guy (P) 
Nash (P) 
Twyford (P) 
Carter D (P) 
Hawkins 
O’Connor (P) 
Upston (P) 
Carter J (P) 
Hayes 
Parata (P) 
Wagner (P) 
Choudhary (P) 
Heatley (P) 
Parker (P) 
Wilkinson (P) 
Clendon 
Henare 
Peachey (P) 
Williamson (P) 
Coleman (P) 
Hide 
Power 
Wong 
Collins (P) 
Hodgson (P) 
Prasad 
Woodhouse 
Cosgrove (P) 
Huo (P) 
Quinn 
Young (P) 
Davis (P) 
Hutchison (P) 
Ririnui (P) 
Dean (P) 
Jones (P) 
Robertson R 
Teller: 
Douglas 
Joyce (P) 
Roy E 
Bennett D 
Noes 36 
Ardern J (P) 
Dyson (P) 
King A (P) 
Sharples (P) 
Barker (P) 
Fenton (P) 
Laban (P) 
Shearer (P) 
Beaumont (P) 
Flavell 
Lees-Galloway 
Street 
Burns (P) 
Hague 
Locke 
Turei 
Chadwick 
Harawira (P) 
Mackey (P) 
Turia (P) 
Chauvel (P) 
Hipkins 
Mallard (P) 
Cunliffe (P) 
Horomia (P) 
Moroney (P) 
Curran (P) 
Hughes G (P) 
Pillay (P) 
Dalziel (P) 
Katene 
Robertson G (P) 
Teller: 
Delahunty (P) 
Kedgley 
Sepuloni (P) 
Hughes D 
Bill read a first time. 
Bill referred to the Local Government and Environment Committee. 
Sittings of the House 
TE URUROA FLAVELL (Whip—Maori Party) 
: 
 I seek leave for the House to rise for dinner a little bit early to allow my colleague to have a good run at her speech bearing in mind that there are only about 3 minutes until the dinner break. I seek the leave of the House for that to happen. 
Mr DEPUTY SPEAKER 
: Leave is sought for that purpose. Is there any objection? There is no objection. 
Sitting suspended from 5.57 p.m. to 7.30 p.m. 
Goods and Services Tax (Exemption of Healthy Food) Amendment Bill 
First Reading 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 I move  
That the Goods and Services Tax (Exemption of Healthy Food) Amendment Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be considered by the Health Committee. Timing is everything. Just over a year ago I stood to introduce my very first member’s bill—Te Ra o Matariki Bill/Matariki Day Bill. That bill was an opportunity to welcome a new dawn to celebrate our distinctly New Zealand culture and within that to acknowledge the importance of planning and preparing for our future the future that cared for all peoples of this land Aotearoa. Then just 4 days ago a violent earthquake shook my electorate to its very feet striking fear in the hearts of the people of Otautahi and leaving far too many families nervous about their financial outlook in the wake of damage done to business and home. Today this bill is a genuine attempt to make a difference for low-income families to make a difference for the health and well-being of New Zealanders and in doing so to create a new environment of care for the future of our nation. 
I want to extend my heartfelt appreciation to Dr Gay Keating the national executive officer of the Public Health Association; the Maori Women’s Welfare League; the Country Women’s Institutes; the Alliance; the Socialist Unity Party; and the Residents Action Movement. It was the Residents Action Movement that gathered up the support and signatures of some 25000 people and then embarked on a high-profile procession to Parliament in October 2008 rallying support along the way to take GST off food on the grounds that GST hits low-income people disproportionately. I acknowledge the influence of all of these people and organisations in putting together this bill. 
I want to lead off with the words of encouragement from Dr Gay Keating: “These benefits include helping New Zealanders improve their diet particularly families on lower incomes which are likely to be harder hit by any increase in GST. Supporting Ms Katene’s bill would be a great move towards increased fairness. It would also be a great start towards lowering the high rate of avoidable disease hospital admissions and premature deaths that plague lower income families.” 
I find it hard to believe that any politician could fail to be moved by such advice. It is in that spirit that I seek the opportunity across the House to at least enable this bill to benefit from the scrutiny of the select committee process. The Goods and Services Tax (Exemption of Healthy Food) Amendment Bill has emerged out of a growing body of Government and independent research that confirms the persistence of a high level of poverty and associated health and well-being effects in New Zealand particularly in our children. International research including the recent OECD report  
Doing Better for Children 
 has also confirmed the high rates of child poverty poor living conditions and poor health status for children in low-income families in New Zealand. 
Professor Tony Blakely from Otago University’s public health department has made a substantial contribution to this debate through his study surveying the health and nutritional habits of some 1100 shoppers. The study concluded that a 12.5 percent drop in price increased people’s consumption of healthy food by a massive 11 percent. The cold hard facts of life are that food prices have risen more than 20 percent in the last 3 years while real incomes have risen only very slightly and within this the increases for the staples of a nutritious diet such as fruit vegetables and milk have been particularly high. 
As New Zealanders have heard about my bill and written to me with their support I have heard some shocking stories about the mark-up on food prices by retailers. Some retailers have been charging 500 percent more GST to customers than they are paying in GST to the growers. If that is not outright robbery I would like to know what is. I emphasise that although all consumers will benefit from the removal of goods and services tax from healthy food those on lower incomes spend a greater proportion of their income on food and will receive a significant benefit as a result. My bill seeks to address rising food prices and the impact those have on the ability of those in low-income households to purchase healthy food by exempting this food from goods and services tax. 
I have been amused at some of the cynics who have complained that it would be difficult to define what is healthy and what is not. It reminds me of the words of a song: “You say tomahto I say tomayto.” It is all technical detail that could easily be dealt with by administrators and fine-tuning the policy for enactment. In my bill I have been very specific about how “healthy food” will be interpreted. It is fruit and veges including fresh frozen canned and dried; breads and cereal including all bread grains rice and pasta; milk and milk products including cheese yoghurt and plain milk— 
Charles Chauvel 
: Roquefort! 
RAHUI KATENE 
: —but excluding ice cream—sorry Charles—cream products condensed milk and flavoured milk; lean meat poultry seafood eggs nuts seeds and legumes. 
Another issue that some critics have sought to expose has been about costings. Analysis of the Statistics New Zealand household economic survey 2008 estimates that the annual GST on all fruit and vegetables sold in New Zealand households was $167 million. In fact an analysis collated for a Sunday paper in January 2009 showed that in reality the Government earned just under $51 million in GST revenue on fruit and veges in the year to June so it is not likely that this bill would break the bank. Instead it could well create impressive savings in health and well-being. 
There have been some wild allegations that the GST on food is $1267 billion but that figure represents all food and non-alcoholic beverages whereas my bill restricts the meaning of “healthy food” to the definition of healthy food based on the Ministry of Health’s food and nutrition guidelines. 
Finally I want to focus on the long-term savings that taking tax off healthy food could establish for this nation. Organisations such as the Public Health Association of New Zealand and the National Heart Foundation have called for the goods and services tax to be removed from foods that constitute a healthy diet to make them more affordable. Alongside their support I was interested in the views put forward by Fight the Obesity Epidemic spokeswoman Dr Robyn Toomath. Her view was that removing tax on healthy foods and putting high taxes on unhealthy food was ideologically sound. It does not need to be as difficult as some people make out. What we already know is that many countries including Australia and Britain have already removed the GST equivalent on certain healthy foods. In fact with all the talk about how great it would be to have a single Australasian market it would be perfectly appropriate to work with the Australian Taxation Office which has produced a computerised model that makes GST food and beverage compliance extremely easy to manage. 
I want to acknowledge the enthusiastic support of the Labour Party and in particular of Mr Phil Goff who has embraced the opportunity to at least explore the proposal to take the tax off food in an effort to encourage people to eat more healthy food. A GST food exemption is an easy and effective way to foster support for eating nourishing food for protecting families from exorbitant costs and for paving the way for a healthy future for all peoples of Aotearoa. I urge the House to support the Goods and Services Tax (Exemption of Healthy Food) Amendment Bill. 
CRAIG FOSS (National—Tukituki) 
: 
 I would like to share with the House the fact that National will not be supporting the Goods and Services Tax (Exemption of Healthy Food) Amendment Bill— 
Hon Members 
: Oh! 
CRAIG FOSS 
: —members on the other side groan—but I fully acknowledge the sentiment the aspirations if you will and the motivation behind this bill from the member Rahui Katene. I fully acknowledge that and I will speak a little bit more on that in a moment. 
I point out that New Zealand’s GST system is world-renowned. It is the envy of many of the countries that we compare ourselves with or the countries that many people visit. The system has been relatively unchanged in the many years—perhaps 25-odd years—it has been in existence. I note that when the Labour Government in the 1980s brought in GST from zero to 10 percent there were no exemptions to speak of. Exemptions were considered I understand but the then Labour Government chose not to make them. When Labour increased GST from 10 percent to 12.5 percent again it did not exempt items such as healthy food which this bill specifies. I note that the most recent Labour Government from 1999 to 2008 considered exemptions along the way but the point is that it chose not to exempt healthy food—or any other items for that matter—from GST. I fully expect members on the other side will speak in support of the bill as the previous member just noted. That is their right of course but when they do speak their credibility is totally undermined because suddenly they will have become supportive of such an exemption. Of course that is the nature of politics but it is somewhat shallow. But I guess we will hear the speeches from members on the other side. 
There is no doubt that the intent of the bill is to encourage a healthier diet and healthier living which is absolutely fine. It also has to be noted that many families already buy healthy food and vegetables but when the cost of GST is taken off then someone somewhere has to bear the extra taxation cost— 
Hon Phil Goff 
: Maybe the wealthy. 
CRAIG FOSS 
: —maybe—whatever the amount may be. We can see how it can become complicated. I could make the same arguments for how healthy red wine is. Red wine is very good for one’s heart apparently. I could make a case for exempting red wine from GST on the basis that it is good for health care heart care etc. But I will not. 
I will make a couple of further points. Some communities particularly lower socio-economic communities are able to access fresh fruit and fresh vegetables right now. I raise the example of Te Aranga Marae in Flaxmere where there is a community garden. Most of the seeds and most of the plants are donated by the community so there is zero GST for the people who participate in the garden; there is a great community spirit. The garden is managed by my good friend Henare O’Keefe. But my point is that the ability to grow and to access fresh fruit and vegetables is right there in our communities right now regardless of the debates on raising GST or not. 
Hon Annette King 
: That’s because you live in Hawke’s Bay. Try Newtown in Wellington. 
CRAIG FOSS 
: The member opposite tries to identify that it relates just to Hawke’s Bay. Well then maybe we should have exemptions in other places down south perhaps rather than in Hawke’s Bay. We can start to see how complicated this could get. For example an apple on a tree would not attract GST but an apple that has been washed and bagged would. Again I fully acknowledge the sentiment of the mover of the bill and I value her contribution but I really question what I am sure we are about to hear from members on the other side when they speak beyond this particular bill and perhaps somewhat dilute the good intent behind it. 
I also note as the previous speaker noted that in other jurisdictions GST or VAT is not charged on certain items. That is quite correct. But again after much debate most of those jurisdictions look quite enviously at New Zealand’s GST system as it was introduced. It has essentially stood the test of time over 25 or 30 years across Governments and across Parliaments and it still remains virtually unchanged. Of course there will be some politicking from some members about the measure but to be true to the integrity of GST and to be true to the integrity of debate a consistency of position is probably quite admirable. Thank you. 
Hon PHIL GOFF (Leader of the Opposition) 
:  
The member who has just finished speaking Craig Foss did not have enough information to debate during the 10 minutes he had. 
Labour will be supporting the Goods and Services Tax (Exemption of Healthy Food) Amendment Bill to go to the Health Committee. We think we should hear the arguments in relation to whether exemptions should be made. This is a chance to hear from the experts. It is a chance to line up the officials and ask what the difficulties would be in exempting some categories of basic necessities from GST. Most important it is a chance to let the public have their say on this legislation. 
I want to know why National is frightened to send this bill to a select committee where the debate can be had. National should have the courage of its convictions. If it thinks that exemptions are so bad and that its arguments will stand up to that scrutiny then it should subject them to that scrutiny. I say to Mr Foss that he should not run away from the debate which is exactly what National is doing. 
Craig Foss 
: I raise a point of order Mr Speaker. The member speaking questioned the courage of members in the House and I believe that is beyond the Standing Orders. I ask him— 
The ASSISTANT SPEAKER (Eric Roy) 
: Oh— 
Craig Foss 
: I have not finished. 
The ASSISTANT SPEAKER (Eric Roy) 
: I do not need any assistance. I am listening carefully. When allegations are made against a party or against its style it is outside the margin of implying that individual members do not have courage. To say a member is running away from the debate—I do not think he has crossed that line. I am listening carefully and if he crosses it I will pull him up. 
Hon PHIL GOFF 
: Labour does not support the breadth of the exemptions that are proposed by the Maori Party and if the bill goes to the select committee we will be moving to limit those exemptions to a particular area—that is fresh fruit and vegetables. 
GST was brought in at a low rate and it was brought in to be comprehensive. That low rate was 10 percent. The rate that National is now introducing on 1 October of 15 percent—contrary to the sincere promise that it made at the elections; John Key broke his word—is 50 percent higher than the rate at which it was introduced and 50 percent higher than the rate at which our Aussie cousins pay GST across the Tasman. And Australia exempts food products. As a result of what this National Government is doing the GST rate as a proportion of GDP in New Zealand will become the fourth highest in the 30 countries of the OECD—the fourth highest. So the National Party cannot claim that GST is at a low rate. 
The thing about consumption tax is that it disproportionately hurts lower-income earners. It is a regressive tax. At the same time as the Government is hurting lower-income families it is giving tax cuts to the highest earners. One-third of the tax cuts—33 percent—is going to National’s wealthy mates the top 5 percent of income earners. Exempting fresh fruit and vegetables would be a way of giving some relief to those lower-income families. It is much fairer. 
More than that we know from the study done by the University of Auckland School of Medicine that when we take the tax off items like fresh fruit and vegetables people consume more of them. The medical experts are saying to us that if we want to improve nutrition then we should take the tax off fresh fruit and vegetables. The World Health Organization reports that we have the third-highest rate of obesity in the world—the third-highest rate of obesity in the world—but what is this Government doing about it? It is doing nothing. It could do something in a very positive sense. If we took this tax off to improve nutrition the cost of it would be small. It would cost $200 million to $250 million which is the same amount that National took in increased excise duties from those who smoke. If it is good enough to tax people more to stop them consuming then the Government should take the tax off something we would like them to consume more of. 
Hon ANNETTE KING (Deputy Leader—Labour) 
: 
 Labour members are very keen to speak on the Goods and Services Tax (Exemption of Healthy Food) Amendment Bill. I will continue on from the previous speaker Phil Goff who put forward a very strong case as to why we support this bill’s referral to a select committee. I ask why National will not support it to a select committee. I ask why National will not allow the people of New Zealand to make submissions on this bill. It is probably the first opportunity in 25 years for people to say whether they believe that changes ought to be made. Is that not democracy? Is that not open government which we heard so much about today from the Prime Minister? 
Unfortunately as soon as the suggestion was made that GST ought to be removed from healthy foods—in particular Labour suggested that GST be removed from fresh fruit and vegetables—John Key said that National would not support it. He did not wait to see whether the public wanted to have a say. He came straight out and said that National would not support it and that the Government has compensated for the GST increase through personal tax cuts. Well in the House today I pointed out to Mr Key two increases not even mentioning the price of food that have come in before 1 October. Firstly there has been an increase in power prices right around New Zealand. Yesterday a letter arrived notifying me of a 6 percent increase in power from Contact Energy. Secondly I pointed out the increase in the cost of bus fares in Wellington for people to get to work which is $5 extra a week. So $11 of the so-called tax cuts to compensate the increase in GST has been cancelled out and we have not even got to the extra GST on food. Labour asks why the Government will not support sending this legislation to the select committee. 
The problem we have with this bill is that the definition of “healthy food” is complicated. Rahui Katene mentioned eggs and we would have to ask whether the definition of “eggs” includes Scotch eggs. Scotch eggs are eggs with sausage meat around them that are put into fat and deep-fried and they come out as a very fatty food. So we get into definition issues when we have such a broad definition. Labour would define “healthy foods” as fresh fruit and vegetables. There is nothing complicated about that and we would move an amendment to propose that definition. 
We support the bill’s referral to a select committee because there is a real issue in New Zealand of obesity and the cost of affordable food. A very recent study in New Zealand showed that low-income New Zealand families would have to spend up to one-third of their income on food in order to eat healthily. A separate study revealed that 40 percent of New Zealanders go hungry skip meals or scrimp on ingredients because they are not food secure. The studies also said that people in low socio-economic groups are more likely to have diet-related diseases such as diabetes heart disease and some cancers. 
I hope Dr Hutchison will take a call because as a doctor he should understand that there is a need to do something in New Zealand to address the obesity epidemic and to show some leadership. But all we have had since National came into Government is the rolling back of measures that try to address the obesity problem in New Zealand. Initiatives relating to healthy eating and healthy action have been laughed at and scoffed at by National and such public health measures are being taken out of circulation. 
DAVID BENNETT (National—Hamilton East) 
: 
 We all know the simplicity of the New Zealand GST tax system; it is renowned around the world. But in respect of the Goods and Services Tax (Exemption of Healthy Food) Amendment Bill there is one point I think we need to make: do members really think that the price of fresh fruit vegetables and other healthy food will come down if we take off GST? No way. The market knows that it can get the same price for them. It will still charge that price and there will not be a 15 percent or 12.5 percent reduction. So the theory behind the Labour argument is completely wrong. There is no guarantee there will be that reduction. There is no guarantee because the market can get those prices now and it will continue to do so even if we took off GST. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 The Green Party will support the Goods and Services Tax (Exemption of Healthy Food) Amendment Bill’s referral to a select committee. We think that it is an important bill and we want to hear the arguments on it. We want to have the debate in select committee on this bill. We think the intent of the bill to encourage people especially poorer families to eat healthier food is an extremely important intent. Moreover we think that the aim to reduce the price of food particularly healthy food is certainly noble and would make it easier for poorer families to afford healthy food. We also know that if we can get people eating better healthier food there are cascading benefits to the health of the individuals and to the cost of the health system itself. New Zealand has an obesity epidemic. It is one of the greatest problems facing the New Zealand health system and New Zealand health in general. The obesity epidemic is a slow-moving health catastrophe and the cost and treatment of diabetes will swamp the health system if we do not do something about it. 
One of the key drivers of the high cost of fruit and vegetables is the supermarket duopoly in New Zealand. One of the ways to address the high cost is to tackle the exorbitant mark-ups that supermarkets put on fruit and vegetables. Earlier this year my colleague Sue Kedgley surveyed fruit and vegetable growers in New Zealand and the growers reported that supermarkets or rather the two supermarket chains that dominate 95 percent of the retail trade in New Zealand routinely put mark-ups of 100 percent to 200 percent—and sometimes as high as 500 percent—on fruit and vegetables. So a grower will sell a kilo of lemons for 70c and the supermarket will charge $3.99 for them which is a mark-up of more than 500 percent. These mark-ups are excessive and frankly obscene. They are putting fruit and vegetables out of the reach of ordinary New Zealanders whereas it is fresh fruit and vegetables that we absolutely need ordinary New Zealanders to consume more of. That is one of the key issues this bill is trying to address. The bill is trying to get people to purchase more fresh fruit and vegetables and obviously GST is one issue but there are some other issues as well. These mark-ups that supermarkets are putting on fruit and vegetables are influencing the eating habits of New Zealand and discouraging us from buying them by making them too expensive. So dealing with supermarkets is one effective way to counter that and I encourage members to support the development of a supermarket code of practice similar to the one in the United Kingdom. My colleague Sue Kedgley has a private member’s bill to do that. We are supporting this bill because it is one way to address the high price of fruit and vegetables. 
Beyond the issue of the supermarket duopoly which drives up prices there is the further question of whether a cut in GST would be passed on to consumers. There are absolutely no guarantees that a cut in GST on fruit and vegetables would be passed on to consumers. It is of course a function of the duopoly that supermarket chains have an enormous leeway for setting their prices for fruit and vegetables. So in the select committee process which I am disappointed National does not want to engage in we can have the discussion about what is the best way to ensure that any cuts in GST would be passed on to consumers. National members have quite reasonably raised the issue of their concern as to whether cutting GST would result in that saving being passed on but they do not want to take evidence and have the debate about it in select committee. 
Supermarkets also have a complex set of internal price trade-offs so they discount one line in order to get consumers in. The question is how much of the cut would be passed on. The other concern about this bill is the compliance costs particular for small business. We know that supermarkets will have a system to make it easy for them to sort out what is GST-free and what is not. But for smaller businesses this can be quite a significant issue. So we would hope that in select committee we would look at that. The other issue is the reduction in Government revenue. A cut in GST involves a cut in Government revenue so the question that would need to be debated is whether this is the most effective use of that forgone Government revenue. That is the debate we would all very much like to have in select committee around this excellent bill. We can have that debate in the select committee only if the majority of the House passes this bill tonight. 
We certainly support this bill. There are very strong arguments for encouraging New Zealanders particularly poorer New Zealanders to eat fruit vegetables and other healthy food. We will certainly be supporting this bill’s referral to a select committee tonight. 
Hon HEATHER ROY (ACT) 
: 
 I rise to speak in the first reading of the Goods and Services Tax (Exemption of Healthy Food) Amendment Bill. The ACT Party will not be supporting the bill for a number of reasons. However I commend the sponsor of the bill Rahui Katene for her intent and her motivation in trying to raise awareness of healthy eating in New Zealand. 
Unfortunately one word has been missing from this debate despite the fact that it has been raging backwards and forward across the House and that is “education”. If there is one thing— 
Hon Annette King 
: Read the research; it doesn’t work. 
Hon HEATHER ROY 
: Mrs King says it does not work. During her 9 years in Government she spent all her time saying that education is the best thing since sliced bread. 
This has been a very interesting and enlightening debate because Labour seems to have forgotten that it was in power for 9 years and had the ability to put this measure in place during those 9 long years that we were subject to its policies and Draconian outlook on life. Labour had the numbers. It would have had support from the Green Party and maybe the Maori Party. Labour could have done it but not for a minute did Labour think it was a good idea. It is interesting that all of the hard-hitters of Labour—the leader of the Labour Party the deputy leader of the Labour Party and other Labour caucus members here tonight who are not in Christchurch—are saying that this measure would be a good thing for the country yet in Labour’s 9 long years in power it did not take 2 minutes to even consider that this measure might be a good idea. 
There are several things wrong with this bill but I think that the sponsor of the bill should be congratulated on her motivation. 
Labour said that it does not support the breadth of the definition of healthy food in the bill; Labour wants “healthy food” to be just fruit and vegetables. 
Hon Annette King 
: ACT doesn’t support any of it. 
Hon HEATHER ROY 
: That is right; we do not support it because that is our principled position when it comes to these things. 
I ask whether this bill is about health and healthy eating or about taxation. That is the basic question. The assumption being made by those members who support the bill is that people’s behaviour will be altered by dropping GST. The Green Party stood up and told us that supermarkets are terrible because the prices are exorbitant—as if they are the only places we can buy fruit and vegetables. I ask whether anybody has given any thought to the fact that people can actually grow their own fruit and vegetables. Not very many people do grow their own but those who are serious about saving money go to nurseries or the supermarket and buy the seeds—[ 
Interruption 
]; thank you very much Mr Foss—which they have to pay GST on and I think that is a good thing. There is no proof that people’s behaviour will be altered in any way by reducing GST on healthy foods. 
I think there is also difficulty with the definition of healthy food. To be fair to Mrs King it was mentioned by her. Healthy food is a confusing area and it is much more complex than it may seem. For example fish and chips could be considered healthy because it contains fish and vegetables so it would make sense that GST was removed. But I do not think it should be removed. A Scotch egg was the example that Mrs King used and I agree with her. Part of the reason that Scotch eggs taste so good is that they have quite a high fat content. Eggs are relatively healthy and are accounted for in the bill. 
When we look at the Australian example we see that the issue is very confusing. We need to think carefully about taxation in respect of this bill because removing GST from certain products in the marketplace means that we would lose part of the success of the universality of GST. 
If GST was removed from healthy food of whatever description a precedent would be set and that precedent may affect other goods that people should be encouraged to utilise more. Toothbrushes in Northland might be a good example but I ask whether removing GST from such an item would affect people’s behaviour. Setting a precedent by removing GST from healthy food would raise further questions of whether other goods that are of benefit to society should be exempt. For those reasons and others that I have not had a chance to address the ACT Party will not be supporting this bill. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Assistant Speaker Roy. Kia ora tatou katoa. Unfortunately my colleague Rahui Katene had to get back to her home and her whanau tonight so I add to the comments that she made to the House in opening the debate on the Goods and Services Tax (Exemption of Healthy Food) Amendment Bill. 
I say from the very start that there is no politics in this particular bill. This bill was on the agenda at the last election in terms of our platform as a Maori Party. It was ahead of any discussion in respect of what the National Party might do with GST. At the heart of it it is motivated by the factors that my colleague Rahui set out at the very start. The first is a real desire to help those who are struggling in respect of paying the bills and looking after their whanau and families. On the back of that by taking off GST from healthy foods in particular—and that it is healthy foods is deliberate—we might not only enable tamariki and whanau to have good food but also in the end contribute to the longer discussion on the health of New Zealanders across the board. Sure in our view the bill is aimed towards Maori but that is in the belief that what is good for Maori is good for everyone. I congratulate Rahui on taking on this bill for us as a party. 
I cannot help but refer to the bailing out of South Canterbury Finance which we debated in the House today. The amount paid out to the investors of South Canterbury Finance—according to our figures at least—is equal to $405 for every man woman and child in Aotearoa. What we are talking about with this GST bill is equivalent to a mere $38 for every man woman and child in Aotearoa. It hardly bears comparison. 
Removing GST from healthy food is a key Maori Party platform as I said and there are many reasons for that. The health impact is immediate; frankly we are not by a long shot winning the battle of the bulge. New Zealand’s obesity ranking is third out of the 31 OECD countries. We trail behind only the United States and Mexico. At its most serious 8000 preventable deaths a year are related to poor nutrition and obesity and there will be a rising cost of $1.3 billion in the next few years for type 2 diabetes alone. 
One of the most ironic factors setting the scene for this bill is that it can cost a lot to be healthy. Members should just look at the supermarket trolleys these days. The fruit and veges are rapidly allocated to the too-costly basket while the unhealthy items such as noodles a bottle of Coke or a packet of biscuits are far cheaper to stock up on. 
I remind members of the reality of poverty and say to the House that it is easy enough to rattle out the statistics. Twenty-seven percent of Maori children live in poverty and 150000 children are categorised as being in severe or significant hardship. The estimated cost of child poverty is about $2.8 billion. The greater question is how any nation can afford not to eliminate poverty and not to do all it can to invest in the health and well-being of its people. 
We are really proud of this bill and its challenge to the Government to exempt healthy foods from the goods and services tax. We believe that a responsible Government would encourage the purchase of healthy food and would make it possible for all people to benefit from fresh fruit and veges; to enjoy the luxury of lean meat poultry and seafood; and to have a bottle of milk in the fridge. It does not have to be difficult. It is hard to understand why a Government that is so committed to trans-Tasman relations is so reluctant to learn from Australia’s experience and the computerised model the Australian Taxation Office has developed to make it easy to take the tax off. The Australian tax experience has streamlined the process to make it simple for small businesses. 
To sum up for the minimal cost of $38 per person we can save billions of dollars in the health spend. We can do it tomorrow without too much difficulty. In doing so we would be investing in the long-term health of the nation. I will end with a simple question that was posed by Gordon Campbell in his article “Everywhere else countries recognise the need to exempt food from GST”. He asked: “The question then is not why do it—but why not do something so easy so readily manageable by business so justifiable on grounds of social justice and so likely to deliver practical health benefits to the community?”. That is the question. 
If this bill does not make it through tonight we will be raising this matter again as an ongoing issue to support those who are struggling. 
STUART NASH (Labour) 
: 
 What a couple of interesting speeches we have just heard. I rise to support the Goods and Services Tax (Exemption of Healthy Food) Amendment Bill. I will talk on two points but before I do I will comment on Heather Roy’s speech. 
The ACT solution to the problem discussed in this bill is to give people seeds and let them grow their own vegetables. That is the solution from the party that talks about lowering taxes and empowering people. I invite ACT to take that solution to people who are living on the fourth floor of an apartment block and struggling to pay the bills. ACT should tell them to plant seeds grow their vegetables and do it all in the bathtub because they do not need a shower. Goodness me! 
The first of the two points I will make is that although I support this bill it was the Maori Party that supported legislation passed in this House to increase GST on all food including healthy food. No one can say there are no politics in this bill because that party supported the National Government’s Budget to increase GST on food and it cannot escape that fact. My second point is that obesity is a national epidemic which really does need to be addressed most urgently. The principle behind this bill is a step in the right direction. I find it a little backwards that a member of the Maori Party introduced this bill when she voted for a Budget that increased GST on healthy food not 6 months ago. If the Maori Party had the courage of its convictions it would have voted against National’s Budget which increased the rate of GST on all food from 12.5 percent to 15 percent. 
The Maori Party is in coalition with the National Party which has made the following changes. In February 2009 Anne Tolley removed the clause in the National Administration Guidelines that stated that where food and beverages are sold on school premises schools should make only healthy options available. That change provoked a  
New Zealand Medical Journal 
 headline that read “School is back in New Zealand—and so is the junk food.” In May 2009 Tony Ryall removed a district health board and Ministry of Health target to reduce obesity in New Zealand. The 2009 Budget cuts included a cut of $32 million over 4 years from Healthy Eating - Healthy Action. In addition $24 million was cut from the diabetes initiative “Get Checked” Diabetes Aotearoa. Those are only four initiatives that have been removed by the National Government which is supported by the Maori Party. I know we are not allowed to use the “h” word—and I will not—but it comes to mind. 
My second point is that obesity is a disease that is placing enormous strain on our health system. The cost to the nation in terms of loss of productivity sub-optimal productivity and health-related illness is staggering and is expected to grow. I will give members some facts. The direct cost of obesity to the health system is $500 million per annum—$500 million. The World Health Organization estimates that the cost of obesity is between 2 percent and 7 percent of a country’s health care costs. The OECD placed New Zealand as the third-fattest nation last year. In New Zealand 11 percent of deaths are attributable to obesity 26.5 percent of adults are obese 63.7 percent of Pasifika adults are obese 41.7 percent of Maori adults are obese and 20.9 percent of children are overweight. 
Labour has raised the idea of removing GST on fresh fruit and vegetables only in recognition that we simply cannot have fresh fruit and vegetables out of the reach of a significant proportion of New Zealanders and their families. A study undertaken by the Auckland School of Medicine on the purchase habits of over 1000 shoppers found that the price elasticity on healthy foods is about 0.85. That means that for every 1 percent drop in price there is a corresponding 1 percent increase in the purchase of healthy food. In that study two-thirds of the increase was attributed to fruit and vegetables. So there is merit in investigating this legislation which will encourage all New Zealanders to eat healthier food. 
In conclusion this bill is flawed. It was introduced by a member who voted for a Budget that increased GST on healthy food. However as I have mentioned the principle behind it is right because obesity is a national epidemic that is costing the country up to $1 billion a year. That is why we are supporting this bill being referred to a select committee. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 I too congratulate Rahui Katene on her good intentions in encouraging healthy eating through the Goods and Services Tax (Exemption of Health Food) Amendment Bill but this bill is riddled with flaws. That is no better illustrated than by Labour which when it was in Government did nothing for 9 long years. I ask members to listen to what Mr Phil Goff said to Radio New Zealand. The broadcaster reported that Labour’s leader had “told a meeting in Nelson that removing GST on fresh fruit and vegetables would be positive for health reasons and could also ease the pressure on family budgets”—but Mr Goff said—“it won’t adopt it as policy if it turns out it would create more red tape than it’s worth.” Only 2 minutes earlier who but the colleague of Phil Goff none other than Trevor Mallard had posted the following on his blog—and I invite members to spot the irony. He stated: “In two weeks the Maori Party will vote for a very silly bill to take GST off ‘Healthy Food’. Just imagine trying to define that. And how much of each we are allowed to eat each hour/ day/ week before GST kicks in. And the army of inspectors to check the food. And the increase in GST or other tax to cover the diff.” On the one hand we have Phil Goff saying one thing and on the other hand we have Trevor Mallard saying the other. 
Tonight we have heard Annette King say that Labour thinks the definition is complicated. Rahui Katene said we should not worry about that because all definitions could be dealt with by administrators. Clause 5 which inserts the definition of “healthy food” in section 2(1) of the Goods and Services Tax Act contains a flaw in each of its paragraphs. For instance paragraph (a) talks about canned foods. Can members remember all that sugar swilling around in some of those magnificent canned foods? Paragraph (b) mentions “all bread” and I ask how much nutrition is contained in pure white refined bread. In paragraph (c) cheese and plain milk are mentioned; to some people those foods will just clog up the arteries. Paragraph (d) mentions poultry and seafood but whether they are healthy foods all depends on the way they are cooked. This bill is riddled with flaws and no one other than Labour members illustrates that so clearly. 
A party vote was called for on the question  
That the Goods and Services Tax (Exemption of Healthy Food) Amendment Bill be now read a first time.  
Ayes 56 
New Zealand Labour 42; Green Party 9; Maori Party 4; Progressive 1. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Motion not agreed to. 
Military Manoeuvres Act Repeal Bill 
First Reading 
KANWALJIT SINGH BAKSHI (National) 
: 
 I move  
That the Military Manoeuvres Act Repeal Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be considered by the Foreign Affairs Defence and Trade Committee. It gives me pleasure as a first-term member of Parliament to introduce my first member’s bill which was selected from the ballot at the first attempt. I hope to retain my personal record of keeping my speeches short and sweet and hope that other contributors to this debate will follow in my footsteps by keeping their speeches short and sweet as well. 
The Military Manoeuvres Act of 1915 was enacted in the second year of the First World War and provides that the Governor-General may by proclamation declare that any land for a period specified be made available for military manoeuvres. After the manoeuvres are completed the officer commanding the forces engaged in them must as far as possible restore the land to its former condition. To the best of the knowledge of the New Zealand Defence Force the Act has not been used for the last 30 years largely as it was enacted specifically to deal with the extraordinary circumstances of mobilisation for the First World War. It is believed that no current proclamations remain in force and that there are no outstanding claims relating to past proclamations and military manoeuvres. So the Act sits on the statute book for no purpose and the bill we are debating today will repeal the Act. 
Some people might ask why we should bother to repeal this Act—it may be obsolete but surely there are hundreds of obsolete Acts just like it. This is precisely the point. The Military Manoeuvres Act is representative of a very vital problem—that redundant legislation on the statute book must go. The New Zealand Institute of Journalists Act 1895 and the District Railways Purchasing Act 1885 are totally obsolete. Other Acts such as the Tourist and Health Resorts Control Act 1908 the Rent Restriction Act 1924 and the Patriotic and Canteen Funds Act 1947 require revisiting and re-examination as to whether they should be retained. 
A member’s bill is one way to start the job but Parliament needs to look at a more comprehensive approach. In case anyone thinks this is nonsense the Law Commission has said that our statute law lacks coherence and is untidy and can be difficult to understand and use. My colleague the Hon Chris Finlayson has said that for the rule of law to be strong in New Zealand our statute law must be clear and accessible. I am sure the whole House will agree with this and support the efforts of the Parliamentary Counsel Office and the Law Commission to tidy up the statute book and make it easier to understand. 
The Legislation Bill is being considered by the Regulations Review Committee at the moment. It will modernise and improve the law relating to the publication availability reprinting revision and official version of legislation. My member’s bill the Military Manoeuvres Act Repeal Bill highlights an important problem and I hope it will help to make the House aware of it. I look forward to the support of the House in passing this bill. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 It is a pleasure to follow the member Kanwaljit Singh Bakshi who has just given one of his notoriously short and inconsequential speeches in the House. He barely made it to 4 minutes in speaking on his own bill. I say from the outset that Labour will support the Military Manoeuvres Act Repeal Bill because it repeals obsolete and outdated legislation. But to be absolutely honest we wonder why we are here tonight debating this bill when there are so many other issues that we could be dealing with. 
John Hayes 
: You had 9 years and you didn’t do it. 
IAIN LEES-GALLOWAY 
: Does the member know why we did not do it? It was because there was absolutely no point. There is no reason whatsoever to be here debating this bill. 
Hon Annette King 
: Even the Minister’s smiling. 
IAIN LEES-GALLOWAY 
: Even the Minister in the gallery—and I do not know whether he is looking down on the future Minister of Defence—is smiling about this bill tonight. 
The bill repeals the Military Manoeuvres Act under which land could be made available for military manoeuvres. The Act provided that after the manoeuvres the land would have to be returned to the owner of the land in as close to the original condition as possible. However to the best of our knowledge the Act has not been used for at least 30 years. In fact it may not have been used since World War I. So the Act is obsolete and it is great that we are getting rid of it but seriously is this why Kanwaljit Singh Bakshi came into Parliament? Is this what his supporters sent him to Wellington to do? Did the first Sikh member of Parliament came to Wellington to repeal the Military Manoeuvres Act? I do not think so. I do not think that this is what his supporters sent him to Wellington to do. 
It is possible that his supporters thought that maybe he would come to Wellington and deal with some crime issues. I know that his community is deeply concerned about crime and they probably thought that was an issue that Mr Bakshi could focus on. Or maybe he could turn his attention to assisting the members of the Indian community who will be so deeply affected by the 90-day no rights at work legislation. That could have been something that Mr Bakshi could turn his attention to. But no; instead he has decided that this bill is his piece of action. This is the bill that he will be remembered for. It is his signature piece of legislation. He will be remembered for two things: short speeches and the repeal of the Military Manoeuvres Act. 
One has to wonder what this bill was even doing in the ballot in the first place. We had such short speeches from National members on a far more important bill that came out of the ballot the Goods and Services Tax (Exemption of Healthy Food) Amendment Bill in the name of Rahui Katene. They could not even manage to put a decent speech together for that bill so why was this bill in the ballot? It was padding. There is no other reason whatsoever than padding to try to avoid any decent bills coming out of the ballot that would require the Government to debate some serious subjects. That was the reason for this bill. I have no doubt that that is the reason why Mr Bakshi was told to put the bill in the ballot. I have no idea what his motivation is whatsoever. 
We have to reflect on that in a week when an earthquake in Canterbury has caused damage that was totally unpredicted and on a scale that we never thought we would see in this country. Who has responded to that? The military are there doing a fine job. Just possibly the military could have done with this bill. They could have done with the need to occupy some private land in order to carry out their manoeuvres. It is unlikely but it is just possible that maybe Mr Bakshi has been a little quick out of the gate and this bill could have been useful to the military this week. 
I do not intend to waste Parliament’s time by taking a long call on this bill. This bill is an absolute waste of time. It is a silly bill that Mr Bakshi should not be proud of. I hope that it speeds through the House and that we see the back of it as quickly as possible. This is not a sensible use of Parliament’s time. 
JOHN HAYES (National—Wairarapa) 
: 
 I was really interested in that bitter twisted perverse and almost racist speech made by the member Iain Lees-Galloway on the Military Manoeuvres Act Repeal Bill. 
Hon Annette King 
: I raise a point of order Mr Speaker. That is unacceptable. The member cannot accuse anybody of racism. 
The ASSISTANT SPEAKER (Eric Roy) 
: The point of order is upheld. 
JOHN HAYES 
: I will withdraw “racist” and substitute “patronising”. I point the member to— 
Iain Lees-Galloway 
: I raise a point of order Mr Speaker. I take offence at the member’s comments and ask that you request him to withdraw and apologise. 
The ASSISTANT SPEAKER (Eric Roy) 
: The point of order is not upheld. 
JOHN HAYES 
: I point the Labour member for Palmerston North Iain Lees-Galloway in the direction of the Law Commission report published in October 2008. I have reason to believe that the boss of the Law Commission is a former Labour Prime Minister. Is that right? 
Iain Lees-Galloway 
: What’s your point? 
JOHN HAYES 
: My point is this and I quote from Sir Geoffrey Palmer: “A further problem with the current state of the New Zealand statute book is that a number of redundant Acts remain in force and needlessly clutter the law. Some old Acts still appear in the annual tables but are totally obsolete.” Mr Palmer points out: “For example the New Zealand Institute of Journalists Act 1895 and the District Railways Purchasing Act 1885 both remain in force and are both completely disused and unusable today.” We have been having earthquakes in Christchurch so let me tell members about another piece of useless law—the Hawke’s Bay Earthquake Act 1931. Let me quote Sir Geoffrey again: “This Act still exists but has not been reprinted since 1931—it was not even included in the supposedly comprehensive 1957 reprint.” Kamal Bakshi my very sensible colleague has read this and he understands that nothing is to be gained from cluttering the statute book with the presence of these obsolete Acts and provisions. As Sir Geoffrey an erstwhile Labour leader said: “They add clutter but no value to the statute book. Repealing them would be of great value. An accessible navigable and clear statute book should have as little “dead wood” as possible.” 
I suggest to the Labour Party that it could get rid of its Palmerston North dead wood because that man does not have a chance of being re-elected in the next election; Palmerston North will return to National. I commend my colleague Mr Kamal Bakshi for a very very sensible— 
Dr Rajen Prasad 
: I raise a point of order Mr Speaker. It is an important part of my culture that Indian names be pronounced properly. The member has made no effort and I ask him to do so. 
The ASSISTANT SPEAKER (Eric Roy) 
: I am not sure. There was so much noise that I am not able to determine or make judgment about the accuracy of the nomenclature that was used. 
Dr Rajen Prasad 
: It is certainly not Mr “Kamal”—or something like that—Bakshi. He has a wonderful name given to him by his parents. The member should at least try to pronounce it properly. 
JOHN HAYES 
: Yes and it is a Sikh name not an Indian name Mr Assistant Speaker. I simply suggest that people should stop being misled by obsolete law that masquerades as live law. With those words I support 100 percent my colleague and his bill. I look forward to it coming to our select committee. 
Dr RAJEN PRASAD (Labour) 
: 
 I am reminded of the saying: “Cometh the hour cometh the man.” Seriously I was going to take a very brief call but I might take my full time because the last speaker has introduced a serious element to this particular debate. I wonder where was the conviction of his party to really say that National wants to do something serious about obsolete legislation. National has set up Mr Bakshi to take his time on a member’s bill that does something absolutely inconsequential. If this issue was so important for National why did it not introduce an omnibus bill to take in all of those pieces of law that are now obsolete and take the Law Commission’s recommendations seriously? I tell Mr Hayes that his party has not done that and this bill is an abuse of Parliament. 
I do not think for a moment that Mr Bakshi thought about this area of work when preparing himself to come into Parliament. The member has been put up by National. I wanted to congratulate him on being successful in his first member’s bill but the junior Government whip knows that this bill is an abuse and is not serious. If it were serious National should use the right elements of Parliament introduce an omnibus bill and put all of those obsolete Acts into it and then let us fix it up. Labour would support that. This bill is an abuse. 
Mr Bakshi in everything he has said in this House has properly talked about the things that are passionate to him and passionate to his people. What have they been? They have been violence issues. His first member’s bill might have been in an area that he was passionate about and I would respect him as a fellow traveller. But this bill is not it. This bill is an abuse of the system and it is not the way to use a member’s bill. 
The Minister of Defence should be very worried if this really is the height of a member’s concerns about military matters. Mr Mapp and I know he is listening knows that— 
The ASSISTANT SPEAKER (Eric Roy) 
: The member was quite concerned about using appropriate titles. 
Dr RAJEN PRASAD 
: The honourable Wayne Mapp; my apologies. 
The ASSISTANT SPEAKER (Eric Roy) 
: Dr Mapp. 
Dr RAJEN PRASAD 
: The Hon Dr Wayne Mapp; my apologies to a fellow traveller. I know how it is important it is to call doctors by their title. 
This bill is an abuse. Labour will support the bill because it has a serious element to it but this is not the way to do it. Members opposite are defending the indefensible. The member’s time could have been used far more seriously. But I do still congratulate Mr Bakshi on bringing a bill forward and having it pulled out of the ballot. Thank you. 
KEITH LOCKE (Green) 
: 
 It is my great pleasure to announce that the Green Party will support the Military Manoeuvres Act Repeal Bill. I think the points made by the previous speaker Rajen Prasad were very apt— 
Hon Annette King 
: Doctor! 
KEITH LOCKE 
: Dr Prasad sorry. I think an omnibus bill would be the best way out. We have the statues amendment legislation where a whole lot of little non-controversial changes can be put into one bill. Certainly the Military Manoeuvres Act 1915 and other redundant Acts could be dealt with together. Perhaps Mr Bakshi’s bill will stimulate the Government into action and perhaps in a month or two we will see such an omnibus bill. 
I think this bill meets with support from a wide range of groups within the community. The ACT Party will be speaking next and no doubt as absolutist defenders of private property rights it will defend private property holders against the intrusions of people whether they be in suits or in kaki. I look forward to that speech. This bill will meet with the approval of pacifists who do not like any military manoeuvres at all. Also many older people in our society do not like loud noises so they will be supporting this bill. For young children it can be frightening to see people running around with big guns in camouflage paint. Gardeners do not want their cabbages trampled by the boots of troops going through their fields nor do they want their land affected by the toxic after-effects of explosions although it has to be said that sometimes bombs going off aerate the soil. But most farmers want to do that themselves. 
This bill has not been used for 30 years although I did get an email 8 years ago from a woman who lived on Kawau Island right by the beach. She was on her morning walk and was very surprised to see camouflaged troops emerging from the shrubbery and then hear loud explosions. She and her neighbours were very upset that they had not been informed that the military was performing there. Perhaps the military thought this Act was still operational. I think one of the most important parts of the passage of this bill is that it puts an end to all of that. It is interesting that the Act was enacted in 1915 at a time when the military was more powerful backed up by conservative politicians where not only were the military grabbing people’s land for manoeuvres but it was conscripting many young people forcefully and sending them off to be slaughtered in their tens of thousands in Europe. 
If we look at the bill in that context and look at it in the way the ACT Party will—defending private property rights—then whatever angle one comes from we must support Mr Bakshi in passing this bill tonight. Thank you. 
Hon HEATHER ROY (ACT) 
: 
 That speech will be very hard to follow I have to say. I should start by saying just to put Mr Locke out of his misery that the ACT Party will support the Military Manoeuvres Act Repeal Bill. I think that he spoke with such passion about blowing things up that he secretly has a desire to have the ability to do so. I can help him out with that—it is not too late to join the army. 
The Military Manoeuvres Act Repeal Bill is absolutely the right legislation to pass. It is being done not for the reasons that the Labour members suggested—that Mr Bakshi has nothing to talk about—but because it is very important that we have our statutes and law books in a very good tidy position. When laws have not been used and have not been reviewed it is a long time before reform happens. In fact if the previous Labour Government had been any sort of Government it would have tackled regulatory reform in the same way that this Government is now doing. An omnibus bill would be a very good thing but there is always a starting place and Mr Bakshi has started us off with this bill. This House and the people of New Zealand should be thanking him for that. 
This bill repeals the Military Manoeuvres Act 1915 which provides for the Governor-General by proclamation to declare that any land for the period specified is available for military manoeuvres. But given that this Act has not been used for well over 30 years now it is time that it is not only reviewed but repealed. I am pleased to see that Steve Chadwick is agreeing with this in great mirth even though I think she is still stuck on Mr Locke’s speech. 
The Act was put in place to deal with the mobilisation for the First World War. It is difficult in this day and age to see that that situation and the need for the Act to be there would arise again. In fact if we did come to those circumstances the Government would have the ability to quickly put in place legislation that would allow that to happen again but as I said it is unlikely for that to happen. The ACT Party will be supporting this bill. This is a very good move by Mr Bakshi to tidy up the statutes legislation and it should be encouraged. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Kia ora tatou. For starters I acknowledge Mr Bakshi for having the Military Manoeuvres Act Repeal Bill pulled out of the hat because I know what it is like trying to get a bill out of the hat especially a member’s bill. So I congratulate him. I support the general comments in respect of wiping the Military Manoeuvres Act off the statute book. It has not been used for 30 years. Obviously the Maori Party will support that move. 
I want to take the opportunity to give some other background to this bill and to acknowledge a kuia who has passed away today and to put that into some sort of perspective. There is a bit of history here but it goes back to the Military Manoeuvres Act of 1915 which says any land can be made available to the New Zealand defence forces for military manoeuvres. In talking about that law today for the information of those who do not know this I say a kuia by the name Te Manawanui Pauro of Kaiwhaiki in Whanganui is being mourned. I am told that 103 years was her age. She passed away today. I can imagine that in her lifetime she would have welcomed home—[ 
Interruption 
]—troops who went away overseas in World War I. So it adds another dimension to this debate to think that this amazing kuia of over a century in age in her lifetime would have seen and experienced the Military Manoeuvres Act in operation. 
As other speakers have said basically that law enabled the Governor-General to declare that any land could be made available for military manoeuvres such as military training or war games. It was a special circumstance I believe: a bill passed as a reaction to the advent of the First World War and the consequences of military mobilisation. The question is whether it is still necessary to conduct such military manoeuvres today. In light of the fact that the legislation has not been used for 30 years the answer is that it is probably not necessary. 
Any legislation that is used to justify the taking of Maori land will provoke extra scrutiny in particular from us. So in the course of researching this bill we approached the Ministry of Defence to understand whether the law had had any immediate impact on Maori land Maori landowners or even Maori personnel working in the forces. The Military Manoeuvres Act did not permit the taking of land for defence purposes but rather permitted the New Zealand Army to occupy land for military manoeuvres by proclamation—in other words for temporary activity. No interest in the land was ever required so that is pretty good. The land always remained owned by the legal owner and its use by the Defence Force ended with the end of the military manoeuvres authorised by the proclamation. 
That is not to say that Maori land was not acquired for defence purposes—it certainly was—but that was under the Public Works Act 1981 which was obviously a fair way on in time from the Military Manoeuvres Act. The Public Works Act was the focus of my member’s bill earlier in the year. The Waitangi Tribunal has found that the compulsory taking of land and resources without consent and sometimes without compensation by legislation unsanctioned by Maori communities has given rise to an enduring and powerful grievance. My bill proposed that land sold to the Crown should be offered back to the original owners and/or their descendants or that compensation should be offered. As we all know that fine bill was voted down so the vexed issue of the acquisition of Maori land and more important its return will remain to be dealt with on another day. Suffice it to say that the impact of the Public Works Act has been significant right across areas of current legislation and in this bill. For instance land was acquired in 1915 at Featherston for a camping ground under the provisions of the Public Works Act 1908. In fact the New Zealand Defence Force still holds lands at Trentham Military Camp under the public works and reservations legislation. 
We cannot address the issue of the public works legislation in this bill but we see no reason not to support the initiative put forward by Mr Bakshi to repeal the outdated Military Manoeuvres Act. As such as I said we will support this bill when the vote is taken on it. 
KANWALJIT SINGH BAKSHI (National) 
: 
 First of all I thank everyone who has contributed to the Military Manoeuvres Act Repeal Bill and supported it. I would like to clarify that Opposition members mentioned what I am passionate about. There is no doubt that law and order was the issue at the previous election and this Government has been very serious about it. In the past 21 months the Hon Simon Power and the Hon Judith Collins have introduced 18 bills that are related to law and order. I think that this Government is quite serious about this issue. Those members do not have to worry because we have great leadership that is looking after the country in the area of law and order. I thank everyone who has contributed to this bill. 
Bill read a first time.  
Bill referred to the Foreign Affairs Defence and Trade Committee. 
Crimes (Reasonable Parental Control and Correction) Amendment Bill 
First Reading 
DAVID GARRETT (ACT) 
: 
 I move  
That the Crimes (Reasonable Parental Control and Correction) Amendment Bill be now read a first time. 
 It is my pleasure to introduce this bill to the House today. There are so many problems with the current legislation that it is difficult to know where to start. The original bill was passed in the dying days of the last Government at a time when after 8 years of suspecting that it was out of touch the people established that was the case beyond all doubt. This law has turned good parents into criminals; it is as simple as that. Members of the previous Government decided that they were better parents than the people themselves. They forced upon the nation their other-worldly view that parents who smack their kids are no different from the parents who bash abuse and kill their kids. I must sadly add that those members were aided and abetted in that view by the National Opposition. 
I could not explain the bill’s purpose any better than the explanatory note does and to save time I will not read it all. The first paragraph reads: “The purpose of this Bill is to repeal section 59 of the Crimes Act 1961 and substitute a new section to provide that parents and those in the place of parents no longer commit a criminal offence if they use reasonable force to correct their children’s behaviour;”. It then talks about the definition of “reasonable force”. 
One of the many terrible ironies is that this bill is really no different from the very good amendment that the member Chester Borrows who is in the House proposed during the debate on the law now in force. The need for this amendment has only grown stronger. 
Hon Dr Wayne Mapp 
: The world’s moved on. 
DAVID GARRETT 
: I heard a silly comment from someone that the world has moved on. Indeed it has; experience has shown us that this bill not only does not achieve anything but it is counter-productive. 
The Prime Minister and his colleagues were no doubt hoping the recent Latta review of the anti-smacking law as it has become known would be the end of the matter. Perhaps it might have been had the report not been a complete and utter whitewash. To this end a series of case studies were completely distorted by the Latta review to back up the wishful claim that the bill is working well. I will provide just one example for now from the Latta review. A father who was discharged without conviction for shaking his daughter’s shoulders suddenly became in the Latta review a man who was convicted and then discharged for punching his daughter three times in the head and mouth. That is completely incorrect on both limbs. Discharged without conviction and convicted and discharged are two very different things; even more different is shaking by the shoulders compared with punching in the head and mouth. There are plenty of other examples that I am sure my colleague the Hon John Boscawen will touch on later. 
The bill was originally in John Boscawen’s name and he has worked tirelessly at public meetings all over the country to assure parents that at least some MPs in this House are not deaf to parents’ concerns. Once upon a time it seemed that the Prime Minister John Key was also listening but sadly no longer. When writing the notes for this speech it occurred to me that based on past quotes I could have asked the Prime Minister to write my entire speech for me. I will share some of those quotes with the House. Mr Key once described the anti-smacking law the law that is in place now as “a complete and utter dog’s breakfast badly drafted and extremely vague.” He also said—and here is the kicker: “The Borrows’ amendment was the right place to settle.” But Mr Borrows was browbeaten into voting against his own amendment. It is shameful absolutely shameful that the system does not allow Government members to vote for this bill—and there are many of them and we know it who would very happily vote for this bill tonight if they were not under the whip. Another Key quote said that linking a light smack with child abuse was “bloody insulting”. He is right; it is bloody insulting to compare a light smack on the leg with a bash. 
Hon Maryan Street 
: Watch your language. 
DAVID GARRETT 
: I am quoting the Prime Minister. Yet that was the argument put forward by many proponents of the current law. I will never forget my introduction to politics if you like at a meeting in Helensville—in fact Ms Fenton was there too—that was addressed by Sue Bradford the former Green member. After the meeting was over I took her to one side and had a quiet word. I asked her if she really believed that any swines who thought it was OK to hit their kids with a piece of wood or pipe would not do so as a result of that law change and she said no. I was astounded. Sue Bradford who was behind the legislation admitted that the legislation in place now does absolutely nothing to prevent child abuse. What it does do is criminalise good parents. 
Since the law has been passed more than 20 children have been murdered—20 children. This law did nothing for 6-month-old Cezar Taylor. It did nothing to stop the murders of Nia Glassie Cash McKinnon or any of the other children killed by those who were supposed to protect them. Notifications of possible child abuse received by Child Youth and Family numbered 125000 in the past 12 months; 125000 is 57 a day every day. The anti-smacking law has done absolutely nothing to change that. In fact the numbers have gone up. That is evidence alone surely that not only is the legislation ineffective but it has made things worse. 
Something that the somewhat hysterical debate at the time seemed to forget was that beating—bashing—one’s child was already against the law. What made anyone think that the anti-smacking legislation would cause such parents—and I use the word reluctantly—to think twice before inflicting such terrible harm? There are many people who disagree with the idea of a light smack. That is their prerogative; that is their right. When things go awry is when their views are forced on other equally good parents who choose to give their children a light smack for the purposes of correction. They do not give them a bash they do not use a weapon but they give them a light smack. They are a world apart as the Prime Minister admitted in his speeches when the law currently in force was before the House. 
New section 59(2) inserted by clause 5 clearly defines unreasonable force and thus removes the confusion many parents have about the current law. It also removes an enormous amount of power from the police—power that has often been improperly used. It is pretty straightforward. If the child suffers more than transitory or trifling injury then there has been unreasonable force. If the discipline—and it is not discipline—is as stated in subsection (2)(b) “inflicted by any weapon tool or other implement;” then it is unreasonable force. If it is as stated in subsection (2)(c) carried out “by any means that is cruel or degrading.” it is unreasonable force. That is what lawyers call codifying the law. Such a provision as Chester Borrows and John Key once recognised would help prevent the law from criminalising good parents. It also recognises that those few cases that escape conviction under the old law such as the use of a riding crop or a piece of wood were and are unacceptable. 
This bill should satisfy those who genuinely feel that the old law did not go far enough as well as the 87 percent of New Zealanders who said last year in a properly constituted referendum—not some telephone poll or write-in survey—that the current law has gone much too far. It will not please those who feel that smacking should be banned altogether—but that is OK. It is not for us politicians to tell parents how to raise their children. It is not our job to judge parents for disciplining their children as they see fit as long as they stay within the confines of reasonable law. If we fail to pass this legislation that is exactly what we are doing; 122 of us here are saying to the parents of New Zealand that we know better than they do. That is the kind of arrogance that got Labour kicked out of Government probably for the next 20 years. Labour members said: “We know better than you.” to the 87 percent of New Zealanders who voted against the current law. I will finish with another quote from the Prime Minister— 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: I regret to advise the member that his time has expired. Before I take the next speaker the member needs to advise the House what select committee this bill will go to. 
DAVID GARRETT 
: At the appropriate time I will move that the bill be referred to the Social Services Committee. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: Thank you. It is normal custom in the House at the beginning of bill like this that the member advises the House which select committee the bill will be referred to. It will be referred to the Social Services Committee. 
CHESTER BORROWS (National—Whanganui) 
: 
 I rise to make a number of points clearly and succinctly in respect of the Crimes (Reasonable Parental Control and Correction) Amendment Bill. On the face of it a number of the comments that the previous speaker Mr Garrett made were valid and I agree with him that the Supplementary Order Paper that I put forward in 2007—which the member now puts forward as a bill—was valid for the time. 
David Garrett 
: What’s changed? 
CHESTER BORROWS 
: A number of things have changed and I will make those points very clearly. 
We have to look at where this bill came from. The bill came from a Supplementary Order Paper that was drafted by me in response to the Crimes (Abolition of Force as a Justification for Child Discipline) Amendment Bill which was a member’s bill in the name of Sue Bradford that sought to repeal section 59 of the Crimes Act. I spent a number of months on the Justice and Electoral Committee looking at that bill and hearing submissions from around the country. The reason why the Supplementary Order Paper—the bill as it is now; its provisions form this bill before the House—was valid at the time and is not valid now is that we did not have the numbers. When the Supplementary Order Paper—now this bill—came before the House the Labour Party and its support parties had the numbers to defeat it and it contained all the words that are in this bill before the House now. What changed? Well there needed to be a compromise position which was arrived at through negotiation between John Key and Helen Clark. If we had done nothing if we had done what that member Mr Garrett probably wishes we had done—stuck to our guns put forward our Supplementary Order Paper and been defeated—then the law would be in a much worse state than it currently is. It was the negotiation between those parties that actually brought about a compromise changed the wording of the bill and gained support from across the House apart from the ACT Party and one or two other members. 
I worked hard to get support for Supplementary Order Paper 86. I spoke to the Green Party I spoke to the Labour Party I spoke to the Maori Party I spoke to United Future and I spoke to New Zealand First. The vote was split in New Zealand First. We had the support of the ACT Party. We did not have the support of the Maori Party and it was clear we were going to lose. I believed then and I believe strongly now that it would have been wrong to say: “OK stuff you. Let’s argue about it at the next election.” That would have left New Zealand parents in a worse position than they are in now even with the compromise in place. 
I will move on and ask the member who has just resumed his seat David Garrett where he thinks this bill will go. If this bill is passed tonight it will be referred to a select committee and all of a sudden the debate will not be about the words “transitory” and “trifling”. The whole debate will be about when parents can hit their kids under what circumstances they can hit their kids how hard they can hit their kids or what marks they should be able to leave behind on their children. The debate will be about whether they are allowed to use implements on what occasions they are allowed to hit their kids and who can hit kids. Will it be confined to parents or will a person acting in place of a parent be able to hit those kids? I believe that the difference between back then and now is this: we put forward the Supplementary Order Paper in the course of business and if we had had the numbers then it would have passed and we would not have got into a debate about such things as whether a person can hit a child between their shoulders on the tops of their knees on the bottom of their legs or on the fleshy parts of the body and what sort of marks one can leave behind. That is a distasteful debate to have. 
If that member thinks that it is seemly to go around the country listening to hundreds of submitters talking about when it is appropriate to hit kids and what level of injury one can leave behind on the kids—a debate we would not have had around the country if the Supplementary Order Paper had passed—then we are on different planets quite frankly. I heard all those submitters. I heard a number of people argue that they have a God-given right to belt their kids and that they should be able to smack their kids. They said they should be able to use a rod to hit their children. 
It was interesting that the vast number of those submitters came from fundamentalist Christians who quoted scripture to me. I took great delight in quoting scripture back at them. Never once did those submitters quote the scripture that says: “Suffer little children to come unto me and forbid them not: for of such is the kingdom of God.” All they talked about was sparing the rod and spoiling the child. All they did was talk about their God-given right to discipline their children in the way they saw fit. Where the total evil in that position comes from is this: in almost every case where a child was beaten with an implement and where the case went forward to a prosecution—including our famous horse-whipping stock-whipping woman—the beating started in order to discipline the child and to control and to correct the child. I believe that if we were given the opportunity to mandate discipline control and correction in the same way then we would see an abuse of the legislation that allowed that to happen. 
We know that although parents protest that they use a range of discipline regimes such as time out the naughty step loss of privileges a growling apologies compromises and all that sort of stuff when parents start to smack smacking becomes the default position very quickly. It gains immediate compliance. Children stop doing what they are doing because smacking hurts. They do not learn not to do the behaviour; they learn not to get caught doing the behaviour. Through the work of the SKIP programme which has been incredibly successful we have seen that after only 2 years of implementation 34 percent of parents knew of its existence knew how to access it and said that they implemented the strategies for disciplining children in a non-violent way. 
The law has changed the future for many young children. As much as there are parents who still give their children a light smack—and I would not argue that they were child beaters—I make the point that the vast majority of parents want to live within the law so they do not use corporal punishment and they do look for other strategies. It is quite right for the member to point to the large number of respondents to polls and surveys but at the same time he has to understand that the practice of the law as it is now is different from the letter of the law in many aspects of our law. 
I will take an example which maybe is an extreme example far away from this piece of legislation. Under the Misuse of Drugs Act there is a presumption before the criminal court that anyone in possession of more than 28 grams of cannabis is in possession for the purpose of supply. The police never ever charge anyone for possession for the purpose of supply when all people have with them is 29 grams of cannabis or more. Why not? The police realise that actually practice has overtaken the presumption that is in the law. So I am saying to the House that the police use their discretion to look at who they have in front of them and apply the letter of the law accordingly. That is why we have not seen a huge flourish of parents appearing before the courts and being charged with assault on a child over an incident of light smacking. In fact in the last year in 2009 there were 33 complaints of smacking and there was one prosecution that was later withdrawn. To put that into perspective I note that over the same period there were 83000 complaints of domestic violence. 
I believe that the police are working in the public interest in the enforcement of the current legislation. I think it is written like a dog’s breakfast. I think it is ugly and on the face of it with all the legalese it is not easy to understand. I think my Supplementary Order Paper was a hell of a lot better than the dog’s breakfast we have. But at the time we did not have the numbers and in this House we need the numbers. If members do not have the numbers then members have to compromise. We compromised and like it or loathe it it works. 
Hon ANNETTE KING (Deputy Leader—Labour) 
: 
 What an excellent speech from Mr Borrows tonight. I think that Mr Borrows has probably summed up for the majority of this House what we think about this bill—the Crimes (Reasonable Parental Control and Correction) Amendment Bill. It is a member’s bill in the name of David Garrett ACT MP. It was John Boscawen’s bill and I know that he will be disappointed that he is not taking it through the House tonight but I think the baubles of office were probably more tempting than staying on the backbench to pursue this bill that was his passion. 
This bill repeals section 59 of the Crimes Act 1961 and substitutes a new section to provide that parents can use reasonable force to correct their children’s behaviour. Labour opposes this bill. Section 59 was previously amended in an attempt by this House to change the culture of violence towards children in New Zealand. It was agreed to by the majority of this House although Mr Garrett wanted to lay the blame on Labour and said that it would mean that we would be out of power for many years. It was agreed by the majority of members in this House in a sensible debate and compromise so that we could move on from this bill. 
No one is asking for this change. This is a political move by the ACT Party whose time has gone. As Chester Borrows said nobody wants to go back out and listen to submissions on how we should hit our children how hard and with what. We want to get on and ensure that we do the best we can for our children in New Zealand; that we do the best we can with programmes like Incredible Years SKIP and positive parenting programmes to help parents and give them the tools to deal with their children. This is a political bill. I say to ACT that its time has gone we have all moved on and I suggest that the House discharge this bill from the House as fast as possible. 
HEKIA PARATA (National) 
: 
 Tena koe Mr Assistant Speaker. Tena tatou te Whare. I rise to speak against the Crimes (Reasonable Parental Control and Correction) Amendment Bill. I agree with previous speakers that this issue has long been debated that we are seeing a cultural change and that that is what is necessary in this country. I can speak from personal experience as an elderly primigravida which is what I learnt I was when I had my first daughter at over the age of 35. 
Simon Bridges 
: Say it again. 
HEKIA PARATA 
: An elderly primigravida. I thought I had some kind of disease when I was approached and told that clinically that is what I was. 
In any event I grew up in a home where smacking did not occur. I grew up in a home where boundaries were set for us without violence being threatened. I did grow up in a home that was rather sexist in that different rules were applied to the boys than to the girls but we all learnt to behave very well and as colleagues in the House will observe I am a very well-behaved person. I owe that to very very good parenting. I had the opportunity to learn from my parents the kind of parent that I wanted to be. 
Very early in my marriage we explicitly discussed how we would bring up children and we explicitly agreed that we would never smack our children. What that forces one to do is to find other measures to bring about the kind of discipline and behaviour that one wants to have in the home and we have managed to get through 17 years of our daughters’ lives without smacking them. From observation and feedback I can say that our daughters are regular normal children who will take every licence and push every boundary that they possibly can. But they know and understand when we as parents tell them that enough is enough and it does not require us to lay a hand on them physically. It seems to me that if we remove that as an option then all of us are forced to find other options by which to get the outcome that we want. I am not suggesting that it is all rosy and sweet. Yes there is shouting doors get slammed and all those kinds of things happen. I know it is a shock and surprise but actually that can and does happen. 
My point is that the legislation is working; the Latta Broad and Hughes review has found that it is working. Practice within Child Youth and Family has been improved as a result of that review so that parents in the wider community who think they need any greater assistance are able to get it freely and quickly. To give some sort of balance to this discussion I say my understanding is that over 80000 domestic violence incidents were reported in 2009. Only 33 were raised in terms of the Crimes Act. Only one charge was laid under section 59 of that Act and that was subsequently withdrawn. If that is not an indication of a law that is working I do not know what is. We will not be supporting this bill and I personally applaud the fact that we will not. Kia ora. 
METIRIA TUREI (Co-Leader—Green) 
: 
 I acknowledge the contribution made by Chester Borrows much of which I agree with. He gave an excellent history of the Crimes (Reasonable Parental Control and Correction) Amendment Bill. Some of the most serious threats that our kids face are violence and abuse so we must maintain and strengthen the protections in law for children including those in the Crimes Act as Sue Bradford worked incredibly hard and successfully to do. 
I will look at the broader issues and look at the status of children in Aotearoa today. How are our kids actually doing? Compared internationally they are doing very poorly indeed. New Zealand ranks 29th out of 30 countries in the OECD for child health and safety—almost at the bottom. Out of 30 OECD countries New Zealand is ranked 21st for infant mortality and 29th for measles immunisation. Fifteen percent of all children in this country live in poor households. Thirty-one percent of children in this country live in overcrowded homes. In households that suffer from food scarcity body mass index—BMI—tends to be higher and children suffer from poor nutrition and long-term health impacts. 
Hundreds of children change schools every Monday because their families live in overcrowded and insecure housing. That change of schools is undermining their education and leading to future underachievement and low incomes. On other international scores New Zealand is fourth from the bottom of all OECD countries for injury deaths amongst 1 to 4-year-olds. New Zealand has 14 times the average OECD rate of rheumatic fever. It has rates of whooping cough and pneumonia that are five to 10 times greater than those of the UK and the US. Its rate of child maltreatment death is four to six times higher than the rates of OECD countries with the best results—four to six times higher. 
The truth is that our society treats kids really badly. Too many of our kids live in miserable housing and suffer significant illness and Third World diseases. Our kids suffer terribly from accidents and worse from deliberate maltreatment at the hands of adults. Knowing all this—and it is easy to find this out—the only solution that the ACT Party proposes is to remove some of the meagre legal protections that our children have against grown-ups who hit kids. That is the ACT solution to the poverty and inequality suffered by our children and their families—to make it legal for grown-ups to hit kids. That is ACT’s solution. That kind of political leadership which invests so much effort into legislation that will increase harm to children is perhaps an indicator of why our kids are doing so badly. So much more has to be done and we are wasting time on legislation like this. 
We know that if we reduce the gap between rich and poor and address inequality we can raise the living standards and well-being of all New Zealand children. Reducing the gap between rich and poor is good for everyone in our society not just the poorest. So let us spend our time dealing with that. How about we guarantee the essentials for every New Zealand child so that we can guarantee them the opportunities they need. How about we make sure that every child has a warm dry secure home. Let us build homes for the 300000 kids who need them. That would be good use of our time. Let us eliminate the discrimination in income support that the children of beneficiary families suffer. Let us give the poorest families the extra 60 bucks a week that working families get. Those extra 60 bucks a week for the poorest families would mean that they would not have to choose between paying the rent and paying the power bill. 
Let us stop wasting our time on bills like this that seek to injure children and instead build a society that treats our kids with the respect and the dignity they deserve. Kia ora. 
Hon DAVID PARKER (Labour) 
: 
 I will take only a brief call. I agree with Metiria Turei that New Zealand has problems with violence against children. We have cultural issues as well as a long history of violence against children and it will take a cultural shift in order to fix that problem over time. 
David Garrett 
: This hasn’t done it. 
Hon DAVID PARKER 
: Mr Garrett says that this has not done it. Well cultural shifts take time. We saw that in terms of how long it took to reduce smoking rates and to reduce drunken driving. Similarly I am sure that over time we will see a cultural shift away from inappropriate physical punishment of children. The legislation that this Crimes (Reasonable Parental Control and Correction) Amendment Bill effectively seeks to overturn was a step in the right direction. I agree with Chester Borrows that now is not the time to revisit that legislation; it does send a strong signal. There is nothing greatly wrong with the current situation. It is not being abused by the police. I see no reason to vote in favour of David Garrett’s bill. 
Hon JOHN BOSCAWEN (Deputy Leader—ACT) 
: 
 It is a pleasure to rise and speak on behalf of the ACT Party on the first reading of the Crimes (Reasonable Parental Control and Correction) Amendment Bill. I am pleased to speak on this bill because as Annette King alluded to and as members know I introduced this bill to the House. I thank my colleague David Garrett for taking on the bill on my behalf. 
Let us look at some of the comments that have been made this evening. Annette King said that no one is asking for the change. Well I wonder what planet she is on. Over 300000 people took the trouble to put their names to a petition asking for a referendum on this issue. Over 300000 people took the trouble to ask for a referendum and 1.4 million voted to change the law—1.4 million; 87.4 percent. Annette King has the gall to sit there and say that no one wants a change in the law and no one is asking for this. She should listen to the people of New Zealand. This is absolutely about reflecting the views of 1.4 million people; 87 percent of people. It is no wonder that politicians have a bad reputation amongst the people of New Zealand; it is no wonder. Even when 1.4 million people—87 percent—voted to change the law Labour members sit there and totally ignore these people and show their absolute contempt for them. 
However let me make one acknowledgment. I thank Annette King for the time that she took to discuss this bill. I asked to speak with Mr Goff and he gave me the courtesy of his time and Annette King joined the discussion. For that I am grateful; I appreciated the opportunity. I was unsuccessful in convincing Labour members to support the bill but I certainly appreciated the opportunity to speak. 
Let me turn now to some comments that Chester Borrows made. He said: “Look this law is based on my Supplementary Order Paper. If we had had the numbers we would have passed this law.” So Chester Borrows is saying that had the National Party had the numbers 4 years ago when this law was originally passed this is what would have happened. Chester says: “Well it’s a dog’s breakfast. It’s a dog’s breakfast; it’s a law that is not easy to understand.” What do I say to this Parliament? I say surely it is the job of this Parliament to pass laws that can be understood and that can be enforced. Surely we have no greater responsibility than to pass laws that can give people certainty. 
I would like to quote a couple of paragraphs from the explanatory note of the bill. In particular it states: “Section 59(4) also creates confusion with its reference to Police discretion. According to members of Parliament the intention of this subsection is to provide a safeguard against the consequences of banning reasonable physical correction so that parents will not be ‘subject automatically to investigation and police prosecution’ if they give their child a light ‘smack’ …”. The law is not certain. Although Mr Borrows referred to 33 people being charged I ask how many thousands of parents do not actually know what the law is. They do not actually have the confidence. I say to Mr Borrows and to National members that surely we owe the people of New Zealand a law that is simple and that can be understood. 
My bill was drawn out of the ballot just 3 days after the results of the referendum were announced. It was drawn out of the ballot at 12.00 on a Wednesday and by 4.30 that afternoon 4½ hours later National had called a press conference and said it would not be supporting my bill. National members said they would not give effect to those 1.4 million people the 87 percent of New Zealanders who voted in the referendum for a change in the law. Annette King says this is political. It is not political I say to Annette King; it is representing and standing up for the rights of those people. If the member wants to ignore them I say good luck to her but I am not prepared to and I am very proud that my ACT colleagues and I take the same view. Thank you. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 I need to say from the very outset that the Maori Party say ka kite ano haere ra kaua e hoki mai hasta luego and ciao to the Crimes (Reasonable Parental Control and Correction) Amendment Bill which is purported here by Mr Garrett. 
The Maori Party supported the original legislation for the abolition of the use of force as a justification for child discipline which amended section 59 of the Crimes Act. There were two reasons why we supported that legislation. Firstly we supported the concept of children being able to live in an environment free from violence. That was No. 1 and it was consistent with numerous traditional accounts of tikanga in terms of the care of children. Secondly we supported the original legislation because it was in the context that underpins the kohanga reo and kura kaupapa movements. Sure not every Maori child is involved in those movements but it was an approach taken that we hope will continue to spread throughout the whole community. 
Right from the start of the kohanga reo movement in 1982 it was stated that mokopuna were not to be smacked. The no-smacking kaupapa both established the preciousness of children and continued the manner in which our tupuna reared children. In strengthening parents kaiako extended whanau through involvement in kohanga and the aim was to show that smacking was more a manifestation of adult behaviour than that of children’s behaviour. Kohanga reo whanau and wider whanau benefited from taking the time to understand themselves in relation to raising tamariki and mokopuna. 
It is important to have aspirational kaupapa to guide and inform party policy and conduct. The Maori Party saw the aspirational intent of the bill as an important aspect of encouraging whanau to recreate and maintain violence-free homes. At the time we were very clear. What is wrong about holding out hope that we can reclaim our tikanga and find our own solutions to violence? We want to promote a more positively framed approach to addressing issues of violence instead of promoting the punitive approaches that we see in this bill. 
We want to inspire a change of direction. Instead of focusing on what was wrong within our whanau hapu and iwi we want to expend our energies on a positive future for Maori by focusing on our strengths and by mobilising our actions to change that which was ours to change. That is pretty much at the heart of the Whanau Ora approach which is about taking issues back to whanau for them to address amongst themselves. 
On reflection 3 years after the amendment to section 59 it is hardly as if the world has come to an end as other speakers have said. In operation the law does not criminalise parents as was always the threat. The general consensus is that the current law is working well. Parents facing charges of assault against their children are prevented from using a defence of reasonable force for the purpose of correction. I absolutely support that. 
I want to remind the House that—as if we need reminding—New Zealand ranks at the bottom of the list of OECD countries for children who die from accident and injury and Metiria Turei touched on some of those incidences. In fact we rank in the bottom four for children over 1 year old. There is no way that the Maori Party will compromise on our aspirations for a violence-free Aotearoa. So we reject this bill absolutely. 
Mr Garrett talked about the fact that the anti-smacking legislation has done nothing to stop the murders of young children. He said that that was the rationale for some reason for this bill coming to the House. So the inevitable question would be: has the “three strikes” legislation stopped any murders? I do not think so. Kia ora tatou. 
SU’A WILLIAM SIO (Labour—Mangere) 
: 
 Thank you Mr Assistant Speaker Barker for the opportunity to speak on the Crimes (Reasonable Parental Control and Correction) Amendment Bill. I believe that most of the significant arguments for why this bill should not proceed have already been articulated by my senior colleagues so I am happy just to share some experiences. The first experience is from this morning when the Social Services Committee visited a local organisation down the road from here. It was an organisation that deals with young men predominantly who have suffered in their lives from their homes. We sat there and listened to the presentation from those young men about how many of them were abused violently sexually by people who supposedly loved them. If members had heard the experiences of those young people then I believe that all of us would be united in saying to the ACT Party that what it is attempting to do tonight is not OK. 
I am reminded that when I was a young man my father said to me constantly: “E fafaga le fanau a manu i fua ma lau o laau ae fafaga le fanau a tagata i upu.” That means that the children of birds are fed with fruits and the leaves of trees but the children of men are fed with words. They are words of patience they are words of love and they are words of example. If we as parents have to resort to force whether it be reasonable or whatever the force is that this bill is attempting to define then we have failed in providing words of encouragement words of support words of love and words of faith to our young people. 
To further illustrate my point once upon a time I bought a mandarin tree and because I am quite busy I just dug a hole and put it next to my driveway. I did not take any notice of that mandarin tree and it grew crooked. My car ran into the leaves as it grew and finally one part of that mandarin tree was dead. I had to cut that particular part. But I was too late when I was trying to remove the dead part of that tree and it eventually affected the whole tree. The point I am making is that if we do not feed our children with words of support words of love words of encouragement and words of faith then it will be too late and irrespective of whether we cut their hand or whip it or use reasonable force as determined by that small party there I would say we have wasted our time. 
The community as a whole has moved on. I constantly hear on the rugby field any time somebody attempts to be violent whether with words or facial features that there is always somebody out on the field saying that it is not OK. I think we have created a culture where we respect our young people. We are respecting the fact that these young children will become future leaders of our society of our family of our community and indeed of this country. If we now resort to the old ways then I have to say there is no place for this bill no place for the kind of rhetoric that is coming from that particular party and I again repeat that it is not OK; it is not OK. Thank you for this opportunity. 
SIMON BRIDGES (National—Tauranga) 
: 
 I would have and I almost have some sympathy for David Garrett and his Crimes (Reasonable Parental Control and Correction) Amendment Bill except for this inconvenient truth—and no I am not talking about Al Gore’s climate change movie—that good parents in this country are not being criminalised for a light smack. In saying that or in trying to argue something along those lines David Garrett sounds a little bit like Chicken Licken who thought that the sky was going to fall in. We all know the story of Chicken Licken. An acorn fell on his head—not a lamington I say to Mr Boscawen—and ultimately after going off scaremongering to Goosey Loosey and Henny Penny and the like he was eaten by Foxy Loxy. So I am not sure if there is a moral in that for Mr Garrett but that is a bit what this is like. The truth of the matter is that good parents are not being criminalised for a light smack; the sky has not fallen. 
The Government is not at all complacent in this area. We took the referendum that this country had very seriously. There were reviews and reports by people such as Peter Hughes the chief executive of the Ministry of Social Development; Howard Broad the Commissioner of Police; and Nigel Latta who is very well known to New Zealanders. They looked through the policies and the procedures in this area and researched extensively. What they found in the end is exactly as I have said: good parents in this country are not being criminalised for a light smack. The law is working and they reinforced that view. We also have in this country a situation where the Government has invited police to report on a 6-monthly or an annual basis for the next 3 years on the operation of the law in this area. They will be doing that. But I come back to what they are finding and what the reports and reviews have found: good parents are not being criminalised. If we were to find that and if the sky was to fall—and I do not think that it will—this Government is open to looking at things. But we believe that the law is working as intended. We want to give parents the assurance that a National-led Government will continue to monitor the way the law is being implemented but I say to Mr Garrett that the truth is that good parents in this country are not being criminalised for a light smack. I think that will long continue. 
DAVID GARRETT (ACT) 
: 
 I have not been here long enough to play the silly game where I pretend that the vote will be anything other than what it is to be on the Crimes (Reasonable Parental Control and Correction) Amendment Bill. We all know what the vote will be so I will use my last 5 minutes to remind those who are listening to this debate of a few facts. 
The previous Labour Government cynically ignored the people who demanded a referendum on the question of smacking prior to the last election—more than 300000 of them. There was plenty of time to conduct that referendum at the same time as the election but Labour decided not to do so because it knew very well that although it would probably lose the election if it drew the attention of the public to its stand on this issue it would definitely lose it. So Labour cynically delayed the referendum. Labour cost the country $10 million to do a postal referendum 6 months later. But that delay did not work as 1.4 million people took the trouble to fill in their ballot papers go down to the post office or whatever it is called and post them. There were 1.4 million people who said a light smack should not be a criminal offence versus 100000 who supported the current law. I tell members to make no mistake about that. 
There is some truth in what we have heard from the other side of the House. Some good police discretion may well be operating but that is not the point. The law as it stands criminalises anyone who smacks a child for the purpose of correction. Labour cynically ignored 1.4 million people and this Government and those members over there are doing exactly the same as Labour did. I have not been here long enough to play the game so I am sorry if I am breaking some conventions. 
Throughout today member after member has called me or spoken to me to say I should make it stop. They have asked me to stop the emails that have been flooding into their offices today from thousands of thousands of people. I had nothing to do with that campaign. I did not know what members were talking about. There was nobody I could call to make it stop even if I had wanted to. 
Everyone forgot that section 59 of the Crimes Act had only ever been a defence. We have heard stupid speeches in this House since I have been here about defences and the defence of provocation was another one. There is a foolish idea that if we offer up a defence the legislation will work. The previous version of section 59 more often than not did not work. It was a defence. 
What will happen to this bill very shortly is a spit in the face of all the 1.4 million people in this country who took the trouble to vote by postal referendum to say they did not think it should be a criminal offence to smack a child for the purposes of correction. It is a case of 122 of us in this House saying we know better than all of them. That is just utter arrogance which I thought we had got rid of when we got rid of the sad lot of members opposite from Government. 
As I said in my first speech the current version of section 59 fails the second test of efficacy. Had the instances of child abuse plummeted since it was passed I think we would have quietly let the issue fade away but that has not happened. Since it was passed 20 children have been killed. Sue Bradford the author of the original bill said 18 months ago that she knew it would not stop one bad parent from bashing his or her child and she was right. That legislation has failed the test of democracy and the test of efficacy. It has not worked and it has not reduced child abuse at all. The nonsense frankly that came from Su’a William Sio and the way in which he said it was almost comical. In 18 months according to him we have become a wonderful loving non-violent society. I say if only that were so; it has not happened. We keep on bashing children because the people who bash and abuse children are not the good parents who wish to smack their children. 
I say to members that they should go ahead do what is going to happen and spit in the face of 1.4 million people but we in the ACT Party are putting it down in  
Hansard  
that we think parents know better than we do and decisions on parenting are better made by them than by us. 
A party vote was called for on the question  
That the Crimes (Reasonable Parental Control and Correction) Amendment Bill be now read a first time. 
Ayes 5 
ACT New Zealand 5. 
Noes 115 
New Zealand National 58; New Zealand Labour 42; Green Party 9; Maori Party 4; Progressive 1; United Future 1. 
Motion not agreed to. 
Reports 
Reserve Bank of New Zealand’s Financial Stability Report May 2010—Consideration of Report of Finance and Expenditure Committee 
Debate resumed from 4 August. 
The debate having concluded the motion lapsed. 
Sittings of the House 
JO GOODHEW (Junior Whip—National) 
: 
 Given that the House has made such excellent progress this evening I seek leave for the House to rise now for the end of the day. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: All members have heard the seeking of leave for the House to rise. Is there any objection? There being none the House stands adjourned. No reira tena koutou tena koutou. Po marie. 
The House adjourned at 9.44 p.m.