Volume 705 Week 16 - Thursday 21 May 2015(continued on Friday 22 May 2015)Text is incorporated into the Bound VolumeVolume 705 Week 16 - Thursday 21 May 2015(continued on Friday 22 May 2015)[Sitting date: 21 May 2015. Volume:705;Page:3615. Text is incorporated into the Bound Volume.]Thursday 21 May 2015(continued on Friday 22 May 2015)Social Housing Reform (Flexible Purchasing and Remedial Matters) BillIn CommitteeDebate resumed.Part 1Amendments to Housing Restructuring and Tenancy Matters Act 1992(continued)The CHAIRPERSON (Lindsay Tisch): Members when the Committee was suspended last night the Committee was debating Part 1. Chris Hipkins had the call and he has 3 minutes 40 seconds remaining should he wish.CHRIS HIPKINS (Labour—Rimutaka):I do indeed wish to continue Mr Chairperson; I am just getting warmed up. As I was saying last night before I was so rudely interrupted by the suspension this Government claims that this year’s Budget is sticking with a plan that is working. The real question that New Zealanders will be asking is: working for whom? Whom is that plan working for? Working for the property developers is what this Government is really interested in not working for the first-home buyers who are struggling to get on the property ladder not working for the people who live in State housing who are being ignored shafted and are having their homes sold from under them by this National Government.Why is the Government pushing this measure through under Budget urgency? It is pushing it through because it does not want it to have the scrutiny that it really deserves. It does not want all of the social housing providers who do not want this to be able to come to a select committee and explain how this will not actually work—how this will actually result in a massive transfer of wealth from the Government sector to the private sector and it is the housing tenants who are going to pay the cost in the long term. The Government does not want this all to come unravelled through a proper public inquiry—through a select committee inquiry—so it is pushing it through under urgency.When Government members first mooted the idea that the private sector should have more involvement in State housing they tried to say: “Actually it’ll be the social sector. It’ll be organisations like the Salvation Army and these sorts of unspecified others who will be involved.”They cannot name one organisation that is actively involved in the social sector at the moment that actually wants this to happen. This is an open invitation to all the Government members over there: name one—name one. Not one—they cannot name one social sector agency that actually wants this to happen and that wants to be involved in these provisions. Simon Bridges points to himself. He is now a social sector agency in his own right. “Captain Slick” over there has now decided that he is going to become a social sector agency in his own right.This is simply unnecessary. This bill should not be being pushed through under urgency. It deserves proper scrutiny. At the last election the National Party promised New Zealanders that there would be no more asset sales. I did not see the footnote in small print that said: “Except for all the State houses that we’re going to hock off in a fire sale up and down the country.” Billions of dollars’ worth of State housing assets is now on the auctioneer’s block under a National Government that promised New Zealanders it was going to stop asset sales after the election. That was another broken promise in a long litany of broken promises made by this National Government and that is absolutely abundantly clear in this Budget. Of course we know it is not going to get back into surplus this year and probably not next year either. It is not going to deliver on its promises.It has got no plan to deal with the housing crisis that we have in New Zealand. In a very short space of time $1 million is going to be the average amount needed to purchase a house in Auckland and other New Zealanders are suffering because of that. They have higher interest rates around the rest of the country because the Government is not dealing with the housing crisis in Auckland. Even the plan to free up land in Auckland was of course a plan that the Labour Government was actioning back in 2008 which the then incoming National Government cancelled—so it is 7 years behind the eight ball. Even then the Governmentisnot going to guaranteethat houses built on that land are going to be affordable houses. It was offered the opportunity multiple times yesterday to give New Zealanders an assurance that those houses would be affordable and it did not take it because it knowsit cannot because freeing up all that land is not going to benefit first-home buyers; it is going to benefit property developers.Hon ANNETTE KING (Deputy Leader—Labour): When we get down to the hard end of a debate that is when we actually get the opportunity to question the Minister and the Minister can take that chance to answer the questions that we have been posing in the first reading and the second reading. We have one of the up-and-coming Ministers—well he was an up-and-coming Minister—in the chair this morning Simon Bridges and I am sure that he is going to take this debate very seriously. Last night we were told how proud and excited members opposite are about this legislation. They were so proud and excited that they took 1-minute speeches. I think the record was 27 seconds. That is how proud they were. In fact I think the speech from the member Jono Naylor might have been 27 seconds.But anyway we are now in urgency debating a bill that is not going to go to the select committee. It is not going to the select committee—for no reason that we know about. There is nothing urgent about this legislation other than that Mr Doocey from down in the South Island said that if we pass it today we will get 3000 homes tomorrow. Well of course we all know that that is rubbish. So now is the time for the Minister in the chair to answer the questions that the public would ask if they had the opportunity to appear before the select committee. I would like the Minister to tell me whether he has read the regulatory impact statement of this bill. If he has read the regulatory impact statement then why are there no reviews or evaluation reports to inform on this bill and on whether the policy given effect by this bill will work? That is what the regulatory impact statement says—that there are no reviews or evaluation reports on this policy. So the Government does not even know whether this policy is going to work because it did not bother to get an evaluation or a review on the policy.The Government has not allowed the public to review or evaluate the policy because it is passing it under urgency. Why was there no evaluation? Why not do what Sir Peter Gluckman the Prime Minister’s Chief Science Advisor constantly tells the Government to do? What does he say? He says that the Government should base its policies on evidence—good evidence—and that good policy comes from good evidence.Hon Member: Any evidence.Hon ANNETTE KING: Any evidence would have been a help—that is true. So why was there no evaluation or review done on this policy before this bill was brought into the House? Minister we would like an answer on that.Secondly Minister why did Treasury not provide independent opinion on the impact of this bill? Why did Treasury not provide that independent opinion? From my experience as a Minister Treasury usually comments on absolutely everything whether you want it to or not. I can only assume that the Government did not want Treasury to comment on this bill because the regulatory impact statement says that no there was no independent opinion from Treasury. Why not Minister? Why not do the work to find out whether this policy is going to work for the very people who are affected by it?I think that the members opposite were absolutely stunned. The “C Team” that rolled up here last night was absolutely stunned that there was no evaluation done. Do you know what? They had not read the regulatory impact statement. Not one of them had picked it up off the Table—[Interruption] Had you? Not one of you had read it. So like lambs to the slaughter they come in here and vote for something when they do not even know how it works. There has been no evaluation done on this policy. Well that is very very poor policy making indeed.For my last question I want to know Minister why the Minister concerned wants more powers to make delegated legislation under ministerial direction. My understanding is that there is already power for the Minister but she is seeking greater powers for greater flexibility to be able to sell off State houses and all she needs to do is gazette this ministerial direction and present a copy to the House after some sort of consultation. When I look at the consultation that took place on this bill it took place with people in the community sector who did not know what the agenda was and it took place back in March when Bill English was saying “The Salvation Army are really keen on this policy. They’re going to move on this policy.” But the truth is that they were sold a pup and they are not interested in it.GRANT ROBERTSON (Labour—Wellington Central): To pick up where my colleague Annette King left off not only were those providers sold a pup but also the whole of New Zealand was. This policy is about nothing more than finishing off the job of privatising and destroying social housing in New Zealand. That is the job that the National Party decided to kick off in the 1990s. Last night Kevin Hague said that he could picture the clothes and the colours of the 1990s—the pastels and the big hair of the 1990s. Kevin might even have had hair in the 1990s who knows? Actually no he did not—he did not have hair in the 1990s either.It was in the 1990s that the National Party began its ideological crusade against social housing and that is what this bill carries on. Part 1 of this bill is all about finishing the job that National started in the 1990s. There were 13000 State houses sold off in the 1990s. Every member of this House who is an electorate MP will say if they are honest that one of the biggest issues that comes through the door of their electorate office is people who cannot find housing. In my office we used to call it the “Friday 4.30 p.m.” problem where people would come in on a Friday afternoon with nowhere to live and nowhere to sleep on the weekend. They do not go to the National Party offices because they do not get any response. They come to our offices and we work hard with the social housing providers to find them somewhere to live. This bill is a charter for the Government to abrogate its responsibility for social housing.What is more fundamental in our society than the need for shelter—the basic right of people for shelter? In our society if people cannot find shelter themselves—if people cannot afford to house themselves—it falls to the Government to ask how it will make sure that shelter is provided. The National Government’s response to that is this bill. It throws away the Government’s accountability it throws away its responsibility and it pushes that on to the social housing sector. As Annette King said the social housing sector has looked at this policy and has said no. It has said: “We cannot do this. If you want us to be the people who take on the role that the National Government does not want any more then give us some money to do that. Give us some money to be able to provide that housing.” But that is not National’s agenda here. National’s agenda here is to push the problem on to other people to cut the funding as it goes along and then to blame those people for the situation that they find themselves in.The extraordinary thing about this legislation in Part 1 is the power that the Minister gains from it to enter into “flexible purchasing arrangements”. What a form of doublespeak. What a form of doublespeak from the National Party. The flexible purchasing arrangements are to allow the Minister to hock this stuff off to property developers—to the people who funded the National Party’s election campaign last year. [Interruption] That is right. This is about making sure that there is a sweetheart deal possible between the Minister and property developers. Hock it off at a cheap price—make it try to work. But the fundamentals of this policy are deeply deeply flawed.You know we have housing Ministers—and goodness there are tonnes of them in the National Partynow—who cannot actually come up with a decent policy. There are tonnes of them. We have housing Ministers telling us that the problem with the social housing stock is that it is poorly configured and in the wrong place and that the solution to this is to sell the poorly configured housing in the wrong place to somebody else—and somehow that will solve the problem. Somehow the problem is solved by shifting it on to somebody else. How typical it is of the National Government to solve a problem by shifting it on to someone else and blaming them for not sorting it out. That is what Part 1 of this bill is fundamentally about. It is about a National Government with no real plan for how to make the lives of people in social housing better and it would rather flick the problem off.So the questions for the Minister in the chair Simon Bridges are important. Why are these flexible purchasing arrangements being put in place now when there are no social housing providers who want to buy into this scheme?Hon Annette King: It’s only for the developers.GRANT ROBERTSON: So it can only be for the developers. The question that Simon Bridges needs to get up off his chuff and answer right now is: why is National pushing this policy through Parliament today when there are no social housing providers who want to take this up? It is an ideological experiment. This bill—Part 1—should have been scrutinised by a select committee. It should have gone to a select committee so that social housing providers and members of the public could have at least tried to turn this pig’s ear into something useful but that opportunity was not granted to New Zealanders.I want to make another point about what Part 1 does. What Part 1 does is finally kill off Housing New Zealand’s role as a social housing provider. After more than 7 years National has come in and said: “Housing New Zealand you are a landlord. That’s it. Plain and simple.” In fact this bill goes even further. This bill takes it from landlord to letting agency. That is what this bill does. Once upon a time Housing New Zealand played a role in understanding the needs of its tenants. How many electorate MPs in this House and list MPs as well have Housing New Zealand tenants coming into their offices because Housing New Zealand is no longer there to help support them in their lives?I have got a question for the Minister. In this environment where all these problems are being shoved away down the road here on The Terrace in my electorate are the Gordon Wilson Flats. They have been empty for 2½ years. What is happening for social housing in a community like Wellington City? Wellington Central is a wealthy electorate on average but when you look at the lives of the people who got thrown out of the Gordon Wilson Flats their lives are not getting better. They need support from a housing provider that looks at their broader social needs. Housing New Zealand used to make policy about housing—about the fact that we might actually need a plan for housing in New Zealand and that we might actually need to think about the future needs of those who live in our social housing. But Part 1 of this bill says that that is not the Government’s responsibility any more. So not only is it outsourcing the provision of social housing but it is also outsourcing the policy for social housing. It is saying that Housing New Zealand has got no role.Maybe they will not be saying this actually because they appear to be mute today. But perhaps at some point a National Party member might get up and say “No he’s got it all wrong. It is MSD who is doing housing policy now.” Well good luck finding someone in the Ministry of Social Development whom you can talk to about social housing policy. Good luck finding that distributed among the thousands of other tasks that people in the ministry have got. If we are serious about the importance of providing shelter to our most vulnerable citizens then we would have an agency whose job it is to focus on that. Instead what this bill will do is take that away completely from Housing New Zealand and turn it as my colleague Phil Twyford said last night into the public equivalent of Barfoot and Thompson—a real estate agent a letting firm. That is not good enough. That is not what a responsible Government does.What a responsible Government does is take seriously its responsibilities to the most vulnerable New Zealanders. Just because the Government and Bill English like some kind of Southland version of Rip Van Winkle have woken up to the problem of inequality and poverty overnight after 7 years does not mean that the National Party has got a plan to lift people out of poverty. It does not mean that the National Party has got a plan to ensure that we reduce inequality—for it to suddenly decide after 7 years of slumber to do something in this area. Actually this bill is much more instructive about where the National Party is at when it comes to the most vulnerable New Zealanders than a small amount of money going into some families’ bank accounts.This bill shows that the ideological agenda of the National Party is not over—it is not over. In fact this finishes off one part of it and says that social housing is somebody else’s problem. Well on this side of the Chamber we think that the shelter of our most vulnerable citizens is a core responsibility of the State. As well as its own provision of social housing it is a core responsibility of the State to work with the other people who are providing social housing not to shove the problem on to them with inadequate funding. This bill thoroughly undermines what we have come to believe is important about social housing. Nothing has stuck in my craw more in 7 years than being lectured by National Party members about State housing and the legacy of Michael Joseph Savage and Peter Fraser. This bill is a slap in the face for the legacy of social housing.Hon SIMON BRIDGES (Minister of Energy and Resources): If you listened to the Labour Party members you would think this bill was some kind of wildebeest Gene Simmons - like monstrosity coming to get you with tongue flapping in the wind. Well actually Andrew Little might like that and we have heard a lot of rhetoric from Grant Robertson on this bill—rather better actually I might say than his leader yesterday but be that as it may. So what is this monstrosity we have heard about? What is it doing? Where is the secret agenda? Where is the ideology? Well it is just this. We see this in the preface: more flexible and innovative social housing—more flexible and innovative social housing. So for all the talk and all the frankly scaremongering we have got from the deputy leader of the Labour Party that is what this is. I for one think that is a great thing. I was with Paula Bennett and Todd Muller in Tauranga just last week looking at the kind of thing this bill will enable more of. It is really really exciting.Hon Ruth Dyson: Yeah? Tell us.Hon SIMON BRIDGES: I will tell the member Ruth Dyson. She wants to know. Two old rundown State houses in a suburb in my electorate are going to become five new brick I think warmer drier houses that will be fit for purpose for people and that people will really want to live in. In that area it will not givejust those people living in those houses a lift but it will give the entire area a lift and that has got to be good for the people in those houses and the people in that suburb and actually in the wider community. Another one we went to on the same day was eight flats—just to give a bit of detail—a little bit behind Tauranga Hospital. Eight flats—they are all right. There was nothing particularly wrong with them. They have become with the help of the Tauranga Housing Community Trust 16 brick and tile homes that the people in those homes are really proud to live in. They are warmer they are drier they are newer—they are just better. And there are more of them.Here is what this bill does. It allows for more of that—for the flexibility and for the innovative approaches to that that ensure that we will see more of that in the Taurangas in the Invercargills and throughout New Zealand. And here is the thing: this is winding the Opposition up. This is winding the Opposition up. Why is that? Because it knows that what I am saying is true. It knows that for 9 years under Labour under Ruth Dyson and under Annette King—I cannot blame Phil Twyford; he was not in Parliament—those houses got older. They got more decrepit. They had problems. And actually we are going to see the solutions here. Annette King asked: “Well who else is going to do this?” and “Who actually wants this?”. Well we have seen on TV already that Accessible Properties says it wants to see it and the old IHC—a really big entity in this space—wants to see this.Grant Robertson says: “Oh this is all ideology. That’s all this is; it is all ideology.” Well if it is it is simply that actually we think there is room for more flexible approaches to this. We think there is room for more innovation. We do not think Wellington has all the answers unlike Grant Robertson representing Wellington Central bureaucrats. We think there is room for warmer drier more fit-for-purpose homes—actually more homes in many cases going from three or four-bedroom homes with one person living in them to what oftentimes they actually want: more homes that sometimes are smaller and sometimes are bigger and that meet the needs on the ground.We know on this side of the House that Wellington does not always have the best answers and that actually in the Taurangas and the Invercargills where we are trialling this sort of approach already it can be done better. There are people on the ground who actually know—it is radical; I know that it is radical—what is best for people there who are on the spot and who know and care about those communities rather than as Annette King used to do it just someone in Wellington sitting at a desktop thinking about this and saying: “Hmm maybe this’ll be nice. No that looks fine.” This approach will see more innovative flexible approaches on the ground throughout the provinces of New Zealand. It is a really good set of solutions for New Zealanders.JAN LOGIE (Green): I rise to take a brief call in the Committee stage of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. I would just like to acknowledge that it is Pink Shirt Day today and I am hoping that this House will take a break from bullying. It would be a really nice thing to have a day without any personal abuse within this House.I want now to speak specifically to the Minister in the chair the Hon Simon Bridges and to ask him some questions because we have just heard from the Minister about flexibility and innovation. That was pretty much the entire content of his speech—that I heard. It seemed to echo the speeches that we heard in the first and second readings last night in the 20-second speeches from members of the Government. I would say that was probably the average length of the speeches in which they said that this legislation provides flexibility and innovation. Where is the detail people? This is a bill going through under urgency with no public scrutiny and with no Treasury input on the financial consequences of this bill. We are being told that it provides flexibility and innovation. Where? In what situations? Why? What is the problem that this legislation is trying to solve? We are not even being told that amount of detail.The documents that I am looking at in front of me are saying that it will give the agency a new ability to negotiate prices with providers in order to cover diverse situations including but not limited to tenants’ needs resulting in higher or lower tenancy management costs. Tell us what that means in practice because we also heard from the Minister last night in one tiny snippet of detail that this is about say if the tenants have disability needs; that this will enable contracts that are able to help housing providers deal with their wider needs—this wraparound service that we hear so much about. Well that is something I would like to support but my understanding is that there is the ability to do that through other contracting provisions. Why are the needs around disability needs being provided through housing? Please explain it to us. If you have got a good reason for it then we may support it but explain it. At least give the public credit by explaining what this is even about and the reason for it.I would also like to say that the Minister said last night in another tiny snippet of detail that may help us to understand this legislation that it also provides Housing New Zealand with more flexibility in contracting and the ability to fund Housing New Zealand. I do not have the housing portfolio for the Greens but I have got a little bit of an understanding of housing and of some of the ways that the system works—possibly more than your average New Zealander. I still do not understand that. I am not sure why we need Housing New Zealand to be able to get more flexible arrangements for the funding of its services. Could you explain that to us?Minister could you also please explain to us why we are separating out and preventing Housing New Zealand from providing policy advice to the Minister. Why are we stopping the ministry which has the experience and the relationship with the people in the community from feeding any learning it has back to the Minister in order to inform policy making? Why? I would like some reasons. I would like the public to be able to at least make an informed decision about their view of this bill more than just the rhetoric of telling us that it is about flexibility and innovation. They are words and without any substance they have very little meaning.CLAYTON MITCHELL (NZ First): I stand on behalf of New Zealand First to take a short call on this new piece of legislation called the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill which to me is quite ironic really particularly when we talk about the flexibility that I think this bill is actually trying to address and that is the flexibility of the socially impoverished people of this country being flexibly rammed around corporations in new innovative ways which are the words that I keep hearing from Simon Bridges about flexibility and innovation.That is what we think of this Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill which has been pushed down at such great speed that we do not actually have time to consult with the public to find out what the real serious concerns are. We are not hearing anybody out there screaming from the rooftops saying this is a great idea. New Zealand has had over 100 years—100 years—of standing up for those people in need with social housing. I do not think there is anybody in this room who does not know somebody who has been brought up in a State home. In fact the Prime Minister himself got brought up in a State home. Many of us have had those same privileges—I will call it a privilege—but what is happening here is that this service is being packaged up sold off and given to the friends of the National Party so that they can make some profit out of this situation.National is saying that this is good. For whom? It is good for the corporations and the big companies that are actually putting this deal together but it is not good for the people who seriously genuinely need State homes and support from the Government. This is certainly not something that should be packaged up and given out to people who are designed to make money whichever way they can. This is where the Government has got a legal and moral obligation to stand up for those people and their rights to ensure that they get sufficient housing support.This bill is being pushed through very very quickly. Mr Bridges spoke about warmer drier and more fit for purpose homes. But if the commercial sector is going to be doing this they are going to be creating more expensive homes. If you were truly interested in looking after people to get them into their first homes then you would put something in this legislation to make sure that those homes stayed available and affordable for the people who need them the most.This legislation is not going to be good for New Zealanders. We do not see the benefits at all. Part 1 is all about taking away those rights of New Zealanders to have a comfortable position in their local areas. We definitely do not support it. Thank you.PHIL TWYFORD (Labour—Te Atatū): If there was ever any doubt about the Hon Simon Bridges the contribution that he has just made in the House puts to rest any doubt that he has well and truly drunk the Kool-Aid. He got up and made actually not a very good defence of the Government’s policy on social housing. He showed a lack of understanding of the detail and really just kind of parroted the most superficial lines that he gets from Paula Bennett about what is really going on with this social housing policy. Here is the big lie. Here is the big lie about National’s social housing policy. National wants the country to believe that it is all about making homes warm and dry that it is about innovation and that it is about giving power to the community. We heard Simon Bridges say that local communities can always do it better than someone in Wellington making all the decisions. So this legislation is dressed up in the language of empowerment of community and of modernising the housing stock. It is none of those things.Let us talk about what is really going on here. In November last year Bill English was basically caught candidly telling the truth to the New Zealand Herald when he said that the purpose of this policy is simply to get rid of State houses off the Government’s books. He thinks it is a lazy use of capital for the Government even to own housing. He wants someone else to own the houses. He does not care who. He said that on the record. He said: “We can sell them to anyone. It could be the Salvation Army it could be property developers.” He does not care whom the Government sells the houses to. He simply wants to get the Government out of the business of owning houses. The model that the National Party wants to move to is one where anybody can own the houses and the State will simply pay a direct subsidy into the pockets of the landlords. It is the accommodation supplement on steroids. It is exactly what happened in Britain under Margaret Thatcher and in countless other countries around the Western World.Bill English likes to get up in this House and say: “We’re old-fashioned in New Zealand. It’s time we caught up with the rest of the world.” Well I will tell you Mr Chairman what has happened in much of the Western World in the last 20 years. The State under right-wing Governments has retreated from the provision of social housing for the most vulnerable citizens in society and has handed that job over to the market. It is rolling back the lessons that were learnt all around the world during the 20th century—that the market alone will never deliver a sufficient quantity of decent housing for society’s most vulnerable citizens. That is what this Government is doing and it has said it. Nick Smith has said it and his officials have said it. The point of this “ideological burp”—as Annette King has described this policy—is to try to create an artificial market in social housing. As Grant Robertson said this is Bill English going back to the 1990s when National introduced market rents and flogged off 13000 State houses which ended up in the hands of property developers and private landlords. This is simply a continuation of that neo-liberal quest of Bill English to get the Government out of the business of providing social housing.Rather than listening to the mealy-mouthed platitudes of Paula Bennett we can actually look at the National Government’s behaviour to judge whether it is in fact seriously interested in providing more decent housing for New Zealand’s most vulnerable people. Let us look at what it has actually done rather than listen to its rhetoric. Since National has been in Government it has stripped Housing New Zealand of its core functions. It is now as we have been saying simply a State-owned version of Barfoot and Thompson. It is no more than a letting agency and this bill takes away one of the last vestigial functions of Housing New Zealand—that is its ability to do research to evaluate its programmes and to advise the Government of the day on social housing.National has sold down housing all over the country. In fact mostly what it is doing is shifting State houses out of regional New Zealand and into the north. It is taking State houses away from Dunedin away from Gisborne and away from Palmerston North and it is stripping out a valuable social and economic asset from regional New Zealand. It is not building any new State houses. More than anything that gives the lie to the rhetoric of Paula Bennett and Bill English. In the middle of a housing crisis—in the middle of a housing shortage—when people are living in cars and garages it is not doing the obvious thing which is increase the supply of housing and build more houses. In the middle of a housing crisis the National Government is using Housing New Zealand as a cash cow. It has taken half a billion dollars in dividends out of our country’s main social housing agency and that money has gone straight back into the consolidated account.When Bill English was asked “What are you going to do with the proceeds from the sale of State houses? Are you going to build more houses with them?” he said: “No why would we do that? We don’t want more State houses. What’s the point?”.Hon David Parker: He used to say that. He said that until 2008.PHIL TWYFORD: Yes. Yes he did and then he changed his tune.The Government has also tightened the eligibility criteria. It is so tight that even the poorest people in this country cannot even get on the priority waiting list for Housing New Zealand. Every MP on this side of the House who represents a community knows that there is massive unmet social need that there is hardship and that there is poverty in our communities. People cannot even get in the door because they have to ring an 0800 number. And worse than that they have no prospect of getting on the Housing New Zealand waiting list because this Government has tightened the eligibility criteria in a cynical cynical move simply to cut the waiting lists. The effect of that policy is that there are 3000 vacant State houses sitting around this country while people are languishing in expensive cold damp substandard rentals.There are thousands of vacant State houses and that completely gives the lie to Paula Bennett’s claim that this Government is about housing more people and looking after the tenants. It is a manufactured crisis where the Government is leaving dozens and dozens of empty State houses sitting boarded up and attractinggraffiti in regional centres all around New Zealand and that is the excuse that it uses for then selling off those houses. We know that Housing New Zealand has been offloading these State houses all around New Zealand—in every regional centre town and city around this country—at significantly below their Government value. It is flicking them off with no regard for the taxpayer’s value and is selling them straight into the hands of property developers and private landlords. That is what this Government is all about.It has subjected hundreds of tenants including families with young children the elderly and the disabled to needless anxiety and stress notwithstanding the fact that Nick Smith stood in this House 4 years ago and promised that he would not do that. The Government broke that promise. It is throwing people out on the street because they have committed the crime of earning enough to pay a market rent while living in State housing. These are the policies on social housing that the National Government is implementing. They are destroying the dream in this country that people should be able to have a decent roof over their heads no matter how much they earn. Paula Bennett and John Key stand in this House and I do not know how they can do it—how they can stand up with a straight face—to dismantle and dismember the very system of social support that gave them a decent start in their lives. It was OK for the taxpayer to give John Key and his mother a decent house in Christchurch in the 1960s which gave him a start in life but now apparently according to the National Party State house tenants are the undeserving poor. Government members demonise them; they parody State house tenants. Nick Smith gets up and says that there are Mercedes Benzes parked out the front of State houses. That is the political cover that the National Party uses to destroy the system of State housing in this country.This bill gives flexible purchasing arrangements. What a euphemism. It gives the Minister wide discretionary powers to do sweetheart deals with property developers so that the Government can flick off billions of dollars of State houses. It does not care whom it sells them to; it wants to get rid of them by hook or by crook. The current arrangements that the Government has where it can pay an income-related rent subsidy—the difference between a market rent and a social rent—that is what gets paid to Housing New Zealand. The Government has not been able to sell off these houses to the Methodist Mission the Salvation Army or anybody else. This bill is its “get out of jail free” card. It enables the Government to flick off those houses and do sweetheart deals with property developers.TRACEY MARTIN (Deputy Leader—NZ First): I take a short call on behalf of New Zealand First to strongly oppose the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. I have to congratulate Bill English. It has taken him 20 years to get to a place through incremental changes with dots on a page that the National Party has been trying to get to since the 1990s and that is to completely dismantle Housing New Zealand Corporation.What will be left once the advice issues get handed over to the Ministry of Business Innovation and Employment? And what does the ministry know about actual social housing? Is this another situation where “Mr Fix-it” is going to take over and stuff it up? Is that what this is about? Is this really a partnership between Paula Bennett and Stephen Joyce that the country should be worried about going on into the future through the next election perhaps?What are we doing through this bill in taking away the advisory capacity from Housing New Zealand Corporation and placing it with the Ministry of Business Innovation and Employment—business innovation and employment? How interesting because suddenly the rhetoric is again around human beings being productive units. In this one with the housing of those human beings that is now all about being a business. This is a continuation to give National its credit of the spin about “New Zealand Inc.” as opposed to thinking about it as “Family New Zealand”. That is where New Zealand First is coming from. This is about “Family New Zealand”.We find it interesting because whenever New Zealand First says that with immigration we should possibly be encouraging people to spread out throughout the country the answer from the Government benches is “You can’t tell people where to live.” but that is exactly what the Government intends to do with regard to social housing. That is exactly what it intends to do. So apparently you cannot ask a new settler to spread out around the country and enjoy some of the benefits of regional New Zealand but if you are a poor New Zealander you can. If you are a poor New Zealander the Government can actually decide where you will live because it is not going to provide you with any housing in an area where it has decided it is not going to do any regeneration around employment. The Government has decided that it is going to suck everybody into the main centres because—business as usual—it is “New Zealand Inc.” as opposed to “Family New Zealand”.So that is one reason why New Zealand First will strongly oppose this bill. The other reason is that it is just an out and out sell-off. You have got to hand it to the people whom that Government pays to market the words inside their press releases—I hope that the taxpayers are not paying all the media bill for the National Party over there but you have got to hand it to whomever it is paying. They know how to spin the English language—that is for sure. They know how to take what is a bitter pill and gloss it up in some sugar coating and then feed it to the New Zealand public with words like “flexible” with other words like “choice” for example. Apparently if you are rich in New Zealand you can have choice in New Zealand but if you are poor in New Zealand the Government will use that word to beat you up. That is the reality of what is happening here today and it is happening with every single piece of legislation that this Government is forcing through at this time under urgency.The other thing that we find very interesting is the situation where what we are really talking about is that social contract that New Zealanders believed in—or the majority of New Zealanders believed in—from the 1960s. Instead of actually saying that we are going to send this off to private business now—and it will be private business; the NGOs do not have the capacity—the Government will create what will appear to look like an NGO but at the end of the day it will be private business that will buy these houses. It will be private business that will on-sell these houses.It is interesting that this is being pushed through under urgency. I wonder whether it will be pushed through this quickly prior to 2017 because there just might be the off chance of a change of Government in 2017 and there just might be the off chance that there will be new legislation not allowing non-resident or non - New Zealand citizens to buy housing properties. But that legislation under current free-trade agreements cannot be put through retrospectively so it cannot affect anybody who has already bought huge numbers of rental properties in New Zealand. So this piece of legislation moving very quickly creates another organisation into which these houses will all be placed and then they can be on-sold to non - New Zealand residents. We find it highly suspicious. We will be opposing the bill.Dr DAVID CLARK (Labour—Dunedin North): I rise to take a call on this bill. I want to challenge members opposite who have read their economic textbooks—and I believe there are many. I can see faces across the Chamber that I have heard preaching on the benefits of sound economics. Indeed I guess I am talking particularly to those—Hon David Parker: Thatcherism 101.Dr DAVID CLARK:—yes interested in Thatcherism 101—who sleep with Hayek under their pillow those who have to run a spray mister at night in their room lest they spontaneously combust—the really dry ones; the really really dry ones. Even they will have heard of market failure. Market failure is something they might not want to acknowledge. They might not want to acknowledge it but it is something they in their heart of hearts know exists. They know that we have State housing provided in this country so that even those who struggle every day have a backstop have security and have a safe place to raise their children and that is for the benefit of future generations beyond just today. Those who are walking the tightrope of poverty know that they have underneath them a safety net provided by a sound State housing system.As we have heard from many members contributing today that safety net has been taken away by this Government. It is no longer interested in addressing that market failure. It wants to pretend that it does not exist. Well in my experience it does still exist. I can think of very recent examples a couple of which I would like to outline today. These examples are poignant to this bill because these are people who would like to ensure that they stay in State housing because of their experience of going into the private housing market.The first story I want to tell is of a family that I visited during my home visits. They live in a house that meets their needs roughly. It is a house with the right number of bedrooms. It is within a reasonable proximity of other family members and therefore they can share the care of children and grandchildren. But when I went to visit this family the house was rundown. It was cold. It is a private rental. They want to be on the State housing list. They used to be on the State housing list but they got bumped off. They got told they could have a private rental.I went into that house and I was horrified. It is a house I had visited many times as a student. It was pretty rundown then but now it has holes in the wall it has no insulation and it has young children living in it. They have runny noses. They have tears in their eyes. I do not want to be too emotive about this but these are children who are going to develop preventable diseases through their childhoods and we as taxpayers will end up bearing the cost of that for their whole lives—and they and their wider family will end up bearing the cost of that for their whole lives.I sought to intervene on behalf of this family—in fact they asked me to intervene. They asked me to represent their cause because their landlord would not listen. They want simply some insulation for which there are subsidy schemes. They want the holes in the wall repaired. But what happened when I did seek to intervene when my office sought to go alongside them to meet their landlord was that their landlord said no. He said they may not bring a representative with them to that discussion; if they did they risked being turfed out.That is the kind of bullying that can exist in the private market where the need is so great—is so great—where there is so much unmet need for social housing that private landlords can exploit the system. A good State housing social housing provider ensures that those private landlords are kept honest and that they do have to meet basic needs because they otherwise cannot compete in the market. But that situation currently does not exist at least not in Dunedin where I live.I have heard just yesterday of another case where there is a Dunedin family living in a State house that has just had its fire escape removed. And they have been told it is not coming back. It is the second case I have heard of in the last fortnight where a fire escape has been removed from the second story of a building that children sleep in and is not coming back. That is emblematic to me of what is going on in the social housing sector.The Government is physically—actually physically—dismantling the State houses that provide care and security for the most vulnerable citizens in our society. And here we have in this bill an attempt to flog these State houses off. These examples point in that direction and of course the State housing sales in Dunedin will continue. We have seen many come on to the market. Many are currently vacant in Dunedin despite the need despite the families who come through my door every week and despite the families who come through my colleague Clare Curran’s door every week in Dunedin. Those houses are kept vacant because of the criteria the Government applies. It says the need is not great enough.How great does the need have to be? How great does the need have to be? Surely when there are children in private rental accommodations getting preventable diseases the need is great enough to want to provide State housing. Yet Minister Smith has previously released papers saying that the Government expects that there will no longer be the need for the 1500 State houses in Dunedin. It is expecting the need to go down to 1000 State houses and it is selling them off now.This is a Government determined to get out of the social housing sector determined to wash its hands of the social problems it is creating by not meeting that market failure. This will have very long-term consequences for New Zealand. That is why we on this side of the House will continue to vigorously oppose this bill at every stage. We note that the public have not been invited to make submissions on this bill and I think that that is shameful and very telling of the Government’s agenda here.I doubt that we will hear much from the members on the other side during the debate. I would like to be proven wrong. I would like them to stand up and tell me that in their heart of hearts they do not think this market failure is going to hurt future families. I would love for them to get up and speak to it but actually I suspect they want to see this bill through the House as fast as it will go because they do not care about these people.This is a Government that does not care about these people. It is shameful. They may go to sleep with spray misters in their rooms—they are expensive spray misters that not everyone can afford I am sure—and they may to sleep with Hayek under their pillows but they should not sleep easily at night while knowing that they are doing away with these protections for our most vulnerable. These protections ensure that private providers are kept honest and must meet a certain minimum standard. This dismantling of our State housing sector cannot be allowed to continue. We will vigorously oppose this bill at every stage of its passage through this House.Hon PHIL GOFF (Labour—Mt Roskill): Perhaps I should not be naive after the length of time I have had in this House but I really hoped on behalf of my constituents and the people in my city that we would have seen a Budget that confronted some of the pressing social problems that we are dealing with at the moment. I really hoped that today under urgency we would be working across the House together on legislation that would make a difference. Well that was naive was it not? It was naive because what we have seen in this debate and from this Minister in his contribution today is nothing more than double-speak and spin. Talk about more flexible and innovative social housing—how does this bill create that Minister? This is not about more innovative approaches. This is code for privatisation and opting out of the social responsibility that any Government has to make sure that people have stable decent homes where they can raise their kids in security and in warm and healthy housing.Eighty years ago this year men and women sat in this House and debated legislation that did just that. We set up State housing because that was the guarantee that the lowest-income people in the country the most vulnerable people in the country could still aspire to provide their kids with a decent home and a decent start in life. The Prime Minister should know that. That is how he got his start. I am proud that it was a Labour Government that gave his family help when they needed it.But what have we got now? We have a Government that is ideologically driven which now just wants to privatise State housing and opt out. I talked about double-speak and Orwellian language. Take this statement that the Minister put out in relation to this legislation: this package was about supporting moves to housing independence. Independence is a wonderful thing is it not? What was she really saying? She was talking about 3000 eviction notices that will be given this year to those people who might have just got their chin above the rising level of the cost of living in housing and now they are out on the street and they are trying to find alternatives for their family.Talking about as the Minister did more flexible and innovative social housing is simply to disguise a Government that has given up that is opting out of its social responsibility and that now wants to give these houses not to an organisation like the Salvation Army as it had promised before but to property investors and developers that do not have the well-being of the poor the vulnerable and the low-income people of this country at heart.I want to ask the Minister this question: what is there in this legislation that requires urgency today? What is it? What aspect requires us to rush through this Committee today without the scrutiny of a select committee the provisions in this bill? I have read it backwards and forwards Minister and there is nothing there that requires urgency. Do you know why we are doing this under urgency? It is because this Government does not want to subject its superficial legislation to the scrutiny of the public through a select committee. That is why we have got it here today.What evaluation has been done? The Government is about to pass over the fundamental responsibility of providing social housing from an organisation that has had decades of experience and the flexibility of providing housing where and when it is needed. It is going to pass it over to the private sector. So I asked the Minister for Social Housing the Hon Paula Bennett this question under an Official Information Act request: what analysis has been done of the benefits or disadvantages of social housing being provided by NGOs—because I thought it was NGOs not the private sector when I wrote the request—rather than through Housing New Zealand? Listen to this reply: “Your request for analysis on the benefits or disadvantages of social housing being provided by NGOs rather than through Housing New Zealand is refused under section 18(e) of the Official Information Act as this information does not exist.” Do you know what this answer says? It says that we have got a bill before the Committee that will privatise State housing and no analysis has been done by the Government of the implications and the consequences of what it is rushing through this Committee without the benefit of scrutiny by a select committee.If you have any doubts about that just have a look at the departmental statement that accompanies this legislation because it confirms that there is no evaluation and that not even Treasury has commented on this proposal. This proposal is not a serious governmental proposal; it is an ideological proposal by a Government that pretends it is at the centre and throws a few coins to the poor when it suits it politically to do so but at the same time it is undermining the ability of our community and our Government to provide people with a fundamental housing need.I want to know from the Minister what this will do to increase the supply of social housing. When I looked at the figures Minister I saw that this Government has not increased Housing New Zealand homes; it has cut them by 1600—1600 homes—in the last 3 years. It slashed it. Now it wants to give away another couple of thousand houses to the private sector without knowing what is going to happen.And what is happening to our people on the ground who could be helped by this legislation? Our people on the ground are paying rents that have risen by $1300 on average in the last year—$25 a week. It is an interesting figure that $25 a week is it not? If you are a beneficiary it is gone already. It is gone on rent increases. But actually it is not $25 a week. Read the fine print—if you are in a State house a quarter of that goes anyway. So $6.25 goes on increased rent for your State house. It is not $25 a week for them; it is about $18 or $19. If you are in the private sector your accommodation supplement is cut. So it is a case of giving on the one hand and taking on the other.But going back to this legislation nothing in this bill helps those people whose rents are going up at six times the rate of overall inflation each year. There is a crisis of affordability for people to be able to get into homes and this bill does nothing at all about that. Actually think about the people at the bottom of the heap. Who are they competing with now? They are competing with 40 percent of the population who today have no chance of homeownership. Do you know what has happened to house prices in Auckland? They have gone up by 15 percent $100000 in the last year alone—$100000. What pressure does that put on rent? What pressure does that put on ordinary hard-working New Zealanders who actually want to buy their own home but cannot and are now forced into the rental market and can out-compete the people at the bottom who previously at least could have looked to Housing New Zealand to provide them with housing security?There is a crisis in housing affordability in this country. Once upon a time we could guarantee that an activist State would do something about that. Is this bill going to increase social housing by one house? The answer is no. The answer is no; it is likely to further reduce it. The Government is opting out of its responsibility at the very time it should be stepping up to its responsibility. If we want kids to get a good education if we want healthy kids that starts in the home and it starts with having a secure stable home and a warm and healthy home. Traditionally a Government would say that Housing New Zealand had that responsibility. Housing New Zealand through one piece of legislation after the other has had its role and its responsibility cut back. With this bill it is not even going to be able to provide housing advice. Why would it waste it’s time for a Government that has never listened to the advice? I know the Housing New Zealand people who provide the homes. I know the people in Work and Income who now allocate them. If the Minister went out from his ivory tower and listened to those people he would understand that there is a crisis and he would equally understand that there is nothing in this legislation that will go one iota towards resolving that crisis.This Budget was a failure and this bill is a failure in terms of actually making a difference for a better New Zealand.Dr MEGAN WOODS (Labour—Wigram): I am very happy to take a call in this Committee stage as we talk about Part 1 of the legislation which of course is the enabling legislation for the great State house sell-off that we are seeing here today wrapped up in ideological rhetoric of “flexibility”. What we have had is the Minister—because none of the members opposite are willing to stand up and defend what is a terrible policy and a terrible piece of legislation—trying to justify how this really is doing right by the tenants. But if we look at what Part 1 actually does we heard the Minister wax lyrical but I would ask the Minister to take another call and point us to the provisions in the legislation we are here in this Chamber debating that do what the Minister claims. Point me to the clause that does what the Minister claims this legislation is going to do. He cannot because this legislation does none of that. The Government can purport that this bill is all about flexibility but this is about selling off State houses.We have not heard about how one more piece of social housing is going to be provided. My colleague Phil Goff just finished off his speech by asking that question. I too would like to put that question to members opposite. Tell me how this bill provides for more social housing in New Zealand. Tell me how more houses are going to be provided for the people who are currently struggling to find accommodation in this country. Tell me how one more person is going to get off the Housing New Zealand waiting list but more important tell me how one more person is going to get on to the Housing New Zealand waiting list. In the last quarter 4000 of the 6000 people who applied to go on the waiting list—not to get a house but to go on the waiting list—for a Housing New Zealand house did not make it and this legislation will do nothing to help those people.My colleague said that he imagined that members opposite were having to sleep with their spray-misters and their copy of Hayek. Well they are also cuddling up to their fluffy toy version of the Big Society. This is what they are trying to do in this legislation. But like experiments in other places in the world it is not working. We had the social service agencies lining up and saying that this is not going to work. They said they cannot see how the Government’s plan to sell off State houses will in any way benefit tenants. They are saying that they do not have the capacity and they do not have the infrastructure to manage a sizable housing stock such as the Government is imagining.So what are we left with? Who is the Government going to sell to? Surprise surprise it is going to be developers. It is what it always intended anyway wrapped up in the guise of non-governmental organisations who have told the Government they do not want a bar of it. That is why we are debating this legislation under urgency—so those non-governmental organisations do not get a chance to come to the select committee and tell the Government they do not want its offer. What they do not want is their private property developer mates coming to the select committee and saying that they are lining up to buy these houses. Are they lining up to buy these houses because they want to provide wraparound services that provide well for some of the most vulnerable in our country? No they are lining up to buy these houses because they see a chance to make a profit because that is what the private sector does. The reason why these houses need to stay in public ownership is that we have decided in this country that the Government should intervene and that the Government has a responsibility to ensure that we do have housing as a crucial and critical part of our welfare safety net and that when people need it it is there and we do not have families who simply cannot find a place to live.Many of us have spoken about the challenges that people in our electorates are facing and what we are seeing on the ground at the coalface every day and every week. I can only guess that members opposite do this as well. The job of a constituency MP is increasingly being taken up with housing issues. Increasingly housing is forming a major part of our workload. It is people who simply cannot find somewhere to live who cannot get on to the waiting list and who cannot deal with Housing New Zealand when they are there. I would like to use a couple of examples from my electorate. One is a woman in her 60s who cannot afford to be in the private rental market in Christchurch—CLAYTON MITCHELL (NZ First): I rise to take a second call on this terrible piece of legislation. The more I read it—and let us be honest there is not a lot to read to be fair—it makes me feel a little bit sick. I look across the Chamber and I see every single backbencher in the National Party with their head down listening to their iPod not looking like they are interested.This piece of legislation is seriously going to affect New Zealand for a very very long time. I have to say that we have got a proud history of looking after those people who need support the most. What is going on here is shameful and it is going to bite us. Dare I say there is an old saying—actually it is not that old: “We have changed.” The old New Zealand would not do what we have done and what we are going to do right now. To let democracy be pulled out from underneath us to get this piece of legislation rammed through under urgency does not make any sense to me whatsoever. There are a few bills coming up over the next couple of days and this is one of the bills that we need to be standing up about proud to fight against—absolutely.In 1969 my parents bought their first home when interest rates were 22 percent. How could you imagine that you could actually pay for a house at 22 percent? Now interest rates are only 5 percent and we cannot get there. The difference is that back in 1969 the house that they bought was only $14000 and their annual income with my father working was only $12000. I have to say that this has changed in every way. Back then it was affordable for people to be able to get into a home. If you did not have a job that was paying well enough you could get State assistance and actually have a home where you could be brought up you could work and you could have a lifestyle.This privatisation—the corporatisation of the State housing industry is a fugazi. It does not even exist. What we are trying to do is give wealth and control to corporations. We are not actually looking after our people in this country which this country has an obligation to do. This is a sell-off. It is going going gone. We are getting rid of our State-owned assets and we getting rid of our State-owned housing. Goodness me we are probably going to privatise our army—that is the next thing. I am sure we have got some insight into some of the fictional stories that are coming out that say that one day this is going to be the direction of the world. It is going to be globalised and corporatised.This is a step in the wrong direction. This is knee-jerk legislation which we are very very concerned about. One of those concerns is that when you are getting advice as a Minister you want to take good advice from people who know the situation at the grassroots. The people who know what is going on in this country with regard to State housing are the people who are organising that State housing—the corporations that are there to look after people the most. Now all of sudden this legislation says that the Minister no longer has to listen to what they have got to say.Under this legislation the Minister can now take advice from the Ministry of Business Innovation and Employment. That ministry does not look after State housing. We are concerned that the second dot point of the explanatory note of this piece of legislation the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill is going to undermine the information that is required to make sound decisions for this Government. We oppose this bill strongly. Thank you.CARMEL SEPULONI (Labour—Kelston): This bill gives the Minister the flexibility to flog off billions of dollars’ worth of State housing to the National Party’s friends and developers but what this bill does not do is to take seriously the housing issues that we are faced with in this country. This bill completely ignores and sweeps under the carpet the fact that as a country we are facing a housing crisis.The Government is underplaying the housing crisis and acting like the flogging off of State houses is somehow going to address the issues that we have with housing in this country. It has stated recently that it is managing the Housing New Zealand waiting lists but when I put through an Official Information Act request on the numbers of people who actually applied for Housing New Zealand houses—not the ones who actually got on the waiting list—we saw that of the 1853 applicants who were placed on the social housing list there were 4000 other people who did not even make it on to that waiting list.The Government is ignoring the fact that there is a demand for affordable housing and that there is a need for increased social housing not the flogging off of Housing New Zealand houses to the private sector. There is a need for increased housing. When the Government is asked time and time again whether it is going to expand the amount of social housing that we have it goes silent because it is doing nothing to respond to the issue. What we see from members on that side of the House is that any way they can they will privatise. Any way they can they will find a way to flog off State housing.I want to talk about one example actually in my own electorate. The project that I am going to talk about is the Waterview Connection project where houses were purchased for the purpose of that project. Housing New Zealand houses were purchased for the purpose of that project but when that project was undertaken it was found that a number of the houses were no longer required. You would think that if the Government took seriously the demand for housing that we are facing in New Zealand—in Auckland—it would think: “OK New Zealand Transport Agency let’s put those houses back to Housing New Zealand so we can somehow try to meet the demand for social housing that is out there in Auckland.But what did the Government do? It did not divest it back to the State. Instead it took that opportunity—any way it can it will take the opportunity—to sell those houses that were purchased for the Waterview Connection project to private developers to private owners. The Government could have gone back to the State. It could have met the need that is there for social housing but instead it sold them off privately for a profit of course a monetary profit. But who is not profiting here? The people who are not profiting here are the 4000 people who cannot even get on to the waiting list for social housing. The people who are not profiting here are the people who are on the waiting list but will be on the waiting list for a long time because of the fact that demand is increasing but the stock of social housing is not increasing.I think that members on that side of the Chamber should be ashamed of themselves—ashamed of themselves because they think that if they pretend we do not have a housing crisis if they pretend that people are not in need of housing then the problem no longer exists. But the fact is that New Zealanders know there is a problem. New Zealanders know that housing is unaffordable. New Zealanders know that they cannot access warm healthy homes. The Government is trying to say it is going to do something about it but it has done nothing about it.We are facing the biggest housing crisis as a country that we have ever faced and here we have a Government that ignores it and thinks that the answer the panacea is selling off our Housing New Zealand houses our State houses to their private developer mates. If New Zealanders are not already aware of the fact that that is this Government’s agenda I have no doubt that within the next few weeks or the next few months that agenda will become very very clear to all New Zealanders out there who are looking at this problem.I just want to say that what we have here is a number of New Zealanders out there looking for houses and the Government is doing nothing to respond to the need that is there. We have the National Government determined to sell off billions of dollars of State houses by hook or by crook. Bill English says he does not care whom they get sold to; he just wants them off the Government’s books. The Government initially said they would go to NGOs. NGOs do not even want a bar of this initiative because of the fact that they know it is not going to work.IAIN LEES-GALLOWAY (Labour—Palmerston North): I have a couple of questions for the Minister in the chair Simon Bridges if he could lift his head out of his magazine for just a second and listen to the debate that is going on in the Chamber that he is supposed to be responsible for. I have a couple of questions for him. My first question is this: how is the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill going to make one iota of difference to the housing crisis that we face in my electorate of Palmerston North? And if the Minister does not think there is a housing crisis in Palmerston North then he should get there and come and talk to the people and talk to some of the agencies that deal with people who are in need of social and emergency accommodation in Palmerston North.If you drive around my city right now—this has been the case for quite some time and it is getting worse—there are huge tracts of empty land where there used to be State houses. On Botanical Road that land has been empty for 7 years with absolutely no plan for what to do with it. On Rugby Street that land has been empty for 3 years. On Selby Place that land has just been emptied now. And finally we hear there is a plan. Can anybody guess what the plan is for that land? Sell if off flog it off. And this land is not even going to the NGOs or the private developers or the foreign banks that the National Party wants to bring in to social housing. Oh no this is not for social housing; this is just outright privatisation—selling it off and that means less social housing for the people who live in my community.How do National members justify that? Well I will tell you how they justify that. They say there are only 20 people on the housing waiting list. Well we have just heard from Megan Woods and Carmel Sepuloni how they do that: 6000 people apply for a State house in New Zealand and 4000 of them are denied even the opportunity to get on the waiting list. And where do those people go when they are denied access to the waiting list? Well they end up at the doorstep of the Salvation Army which has had its funding cut and has had to reduce the amount of emergency accommodation that it can provide. They end up at the doorstep of Women’s Refuge which is now having to screen women with families who come and ask for its assistance. Women regardless of whether they have suffered abuse are being told by the Ministry of Social Development to go to Women’s Refuge to seek housing because Work and Income cannot satisfy their urgent and desperate need for emergency accommodation.So Women’s Refuge—which is already cash-strapped has already had to close down one facility in Palmerston North and is having more of its funding cut in this very Budget—is having to waste time determining whether or not women with families who come to it actually fit the criteria for its service because this Government is abrogating its responsibility to provide emergency accommodation to people who desperately need it.That is what is happening in my electorate and if any National MP honestly believes that the situation is rosy then get yourself down to your local Salvation Army get yourself down to your local Women’s Refuge and go and talk to any of the other agencies. In my electorate it would be Methodist Social Services or Shepherd’s Rest which have also had their funding cut. Go and ask them what the real story is.I say to Government members that your numbers do not tell the truth. Your numbers have been deliberately constructed by you to try to fool the people into thinking there is no housing crisis. The people are not fooled. The people are not fooled. We know full well there is a massive shortage of emergency accommodation. People are living in their cars people are sleeping under bridges people are having to couch surf from one friend to another just to try to find a place to put a roof over their head.Families are accommodating other families with massive overcrowding in those houses because this Government does not want to participate in a fundamental role of the State and that is to make sure that every citizen that it represents actually has somewhere to call home and a roof to put over their head and the safety and security that comes with it.I urge members on that side of the Chamber who cannot be bothered to get out of their seats and participate in this debate to go to the Salvation Army and to go to Women’s Refuge and find out the truth.JAMI-LEE ROSS (Junior Whip—National): I move That the question be now put.CLARE CURRAN (Labour—Dunedin South): To follow on from my colleague Iain Lees-Galloway’s speech to this Committee earlier this year I had a woman in my office who was desperate. She had been living in women’s refuges for 4 months with her two grandchildren in one room—in one room. She could not get on the Housing New Zealand list. Both the Ministry of Social Development and Housing New Zealand did not want to know. It took the intervention of an MP to battle with them for weeks to get her on the list. Both of those children were living with her because they had severe behavioural issues. They should not have been in one room and here we had two Government agencies that were impervious to their plight. Now finally she is in a State house but it took the intervention of an MP. Does it take the intervention of a member of Parliament’s office for every single one of those people who cannot get on the list?I challenge those MPs on the Government side of the House to say that they do not have those people coming into their electorate offices that they do not see the plight of people who are at their wits’ end and who are desperate. I challenge those people that Government to take off the cloak of conservative compassion. Take off that cloak of conservative compassion which is a sham and show us your real faces the real face of ideological privatisers who are dismantling our social safety net by privatising State housing and cementing an underclass in this country. Cementing an underclass—that is going to be the legacy of John Key. That is going to be the legacy of the National Government—an underclass a true underclass in this country.And why do we have this bill coming in under urgency? Because the Government knows that it will come under scrutiny. People will come out of the woodwork and say exactly what they think. As for the social service agencies that have operated in this country respectfully for over a century—the Methodist Mission the Salvation Army Presbyterian Support—what do those people have to say about what this Government is planning? They think it will not benefit those who are most vulnerable. Whom will it benefit? It will benefit the privatisers. That is why the Government should take off the cloak of conservative compassion.Paula Bennett and Bill English came to Dunedin in January. They came to spruik their social housing rort. They told us all that it was going to be nirvana that it was going to be innovative and flexible as Simon Bridges has told us. They told us that there are going to be warm dry homes. They told us that the trend was for one and two-bedroom homes that nobody wanted the three or four-bedroom homes. Well in Dunedin that is so not the case. Those people who cannot get on the list are the people who need the three or four-bedroom homes—the people who are desperate who are living in terrible circumstances in the private sector who are living under circumstances with slum landlords who are taking advantage of them. They are living in houses that are cold and damp and sending their children to hospital every year. This is the cementing of an underclass it is the cementing of poverty and it is the cementing of children who are living in circumstances they should not be living in. This is a great tragedy and every MP on the other side of the Chamber will have seen these people in their electorate offices and they should be ashamed.I would like to challenge the Minister sitting in the chair Simon Bridges to get up on his feet and tell us what regional New Zealand will get out of this bill. Get up on your feet and tell us what regional New Zealand will get out of this bill. Will there be a single new piece of social housing? How will those houses be made more warm and dry? What accommodation will those people be living in? What are their options? If they cannot get into social housing what are their options? Get up on your feet and tell us.JAMI-LEE ROSS (Junior Whip—National): I move That the question be now put.LOUISA WALL (Labour—Manurewa): Thank you very much for the opportunity to contribute to this debate. Actually I want to start by quoting from the Prime Minister’s press release titled “Supporting children in hardship focus of Budget”. What I want to highlight is that currently we have 4808 families on a Housing New Zealand waiting list. These are families who have been through the Ministry of Social Development process. They have been identified as those most in need. In fact priority A is defined as people who are at risk and includes families with a severe and persistent housing need that must be addressed immediately. We are actually talking about 10000 children who currently do not have a home. I think the question everybody should be asking is: how does this piece of legislation contribute to housing those children? The Minister for Social Housing is here. I would love to hear from her about how this piece of legislation will help the 10000 New Zealand children who currently do not have a home and who have been through the Ministry of Social Development process and have been deemed to be in severe and persistent need of housing. How does this piece of legislation prioritised by this Government meet the needs of those children?When I look at where this piece of legislation came from it came from a Government-commissioned report called Home and Housed: A Vision for Social Housing in New Zealand. It was commissioned in 2010. The central proposition of this commissioned research was No. 1 that private sector organisations could provide social housing to those most in needmore creatively than the Government. The second proposition was that there needed to be a plan to move people from renting to owning their own home. Again I ask the question: how does this piece of legislation contribute to those I guess two crucial outcomes from that commissioned report?What we know from the social housing provider - sector is that actually social housing providers do not want the transfer of houses because for them the transfer of Housing New Zealand houses is a transfer of responsibility. I want to quote Major Campbell Roberts who said that he does not believe “the lives of tenants would be sufficiently improved by such a transfer.” And why is that? It is because to take responsibility for a home means to make sure that that home is warm and dry and is going to contribute to the health and well-being of the family that is living in it. The reality of a lot of the houses is that they are not fit for purpose and actually this Government which is supposed to provide for those most in need should ensure that the houses that are being provided for those most in need are fit for purpose. So the private sector organisations that this Government wanted to transfer that responsibility to actually at the end of the day said no thank you.We think it is a core Government responsibility to provide housing for those most in need and to ensure that the 10000 New Zealand children who are waiting with their families on priority A and B housing lists which the Ministry of Social Development has determined for itself get the home that they need. Why is it important for our children to have a home? Well actually it is relevant to their education. If children do not have a home how are they supposed to have continuous education? How are they supposed to go to an early childhood education provider which we all know is the basis for getting a good education in our country? How are they then supposed to go to a primary school and reap the benefits of our public education system? How are they then supposed to belong to a family where mum and dad have security of tenure in the home that they want to build for their children so that they can go and get further education themselves or possibly go to work? How is that supposed to happen when we have a Government at the moment that wants to abdicate responsibility for providing houses and homes for those most in need?I am an MP in South Auckland and actually across the South Auckland area of the 2537 families waiting on the Housing New Zealand and Ministry of Social Development waiting list we have 1070 families and over 2500 South Auckland children who do not have a home. Forty percent of the people on this waiting list are Māori. So how is this piece of legislation ensuring that our Māori children have a home and are able to get quality early childhood education and are able to go to school? Pacific children and families account for 19 percent of the families and children on the Housing New Zealand and Ministry of Social Development waiting list. How is this bill going to contribute to meeting the Better Public Services target? We know we have got big issues with Māori and Pacific children. This Government wants to focus on participation.JULIE ANNE GENTER (Green): Thank you for the opportunity to contribute to this debate on behalf of the Green Party. I have to say that this legislation is quite indicative of the National Party and this Government’s approach. I think we all want better outcomes for everyone in New Zealand but the approach that is often adopted by this National Government is not supported by evidence it is not going to solve the problem and it is actually going to make it worse. Everyone in New Zealand needs a place to live and call home. It is a fundamental human right. The way we build a prosperous and happy society is not with the approach the Government tends to take which is maximising profit for rentiers and vested interested groups and selling off the assets of this State; it is by looking after our people. Surely having a place to live is one of the core components of looking after our people and particularly our children.Social housing could be improved in New Zealand; there is no question about that. There are things we could do better. There may be houses in the wrong place and there may be opportunities for Housing New Zealand to deliver to more people but this legislation is not going to do that. If Housing New Zealand is not able to manage our existing stock well why do we think that social housing providers would be able to do a better job and why do we think the market would be able to do a better job? Certainly all the evidence from overseas shows that in the countries that do get the best outcomes in terms of education childhood development reducing inequality and health outcomes all of that flows through to a strong economy. Of course the purpose of the economy is to look after people not just to have a strong economy for the sake of it. In all of the countries that do that they have a strong role for social support. The State is in the best position to provide social support particularly when it comes to houses for those who are the most vulnerable.The housing crisis in Auckland in particular is about both supply and demand. I just want to refer to the Productivity Commission’s paper on housing affordability from several years ago because if you look at its analysis of the social housing situation it suggests there are areas that need reform. Most importantly it points out that starting reforms at State housing without addressing demand pressures and without building sufficient options for people to move on to is generating a major risk for those who are reviewed out of State housing. I would say that it is pretty clear that the Government has taken pretty much no action to address the demand problems particularly in Auckland. It has not done anything to address the supply issues. It likes to characterise its Resource Management Act reform or “deform” as being all about achieving affordable housing but there is no actual evidence that what it is proposing in the Resource Management Act reforms or the Special Housing Areas legislation is actually going to increase the supply where it needs to increase or reduce house prices.All the Green Party is really asking for is that we take an evidence-based approach and that we look after our people first. There are many steps that could be taken to improve housing affordability in New Zealand. On the demand side there could be a comprehensive capital gains tax excluding the family home and the tax treatment of investment properties could be improved. The Government made a tiny move in that direction. It is too little too late. Of course the Green Party has been calling for the same tax treatment of income from labour for quite a long time and it is nice to see that there has been a slight move in that direction. In addition to tax treatments it makes sense to have restrictions on foreign capital coming in only because we know that foreign capital coming in is having an impact on house prices and land values as it is in many other jurisdictions. There are some pretty obvious ways that we can deal with that like by limiting ownership of land to residents and citizens in New Zealand.On the supply side the State is in the best position to address the supply issue of houses and not just houses but homes and neighbourhoods. The places in Auckland where land values are highest and the places where people want to be is where we need to be providing dwellings for people—where they are close to jobs where they are close to education and not out in the middle of nowhere where they are going to have an incredibly long commute and will have to own multiple cars. There is no point in increasing housing affordability—JOANNE HAYES (Third Whip—National): I move That the question be now put.The CHAIRPERSON (Hon Chester Borrows): Members the question is that the question be now put.SUE MORONEY (Labour): I raise a point of order Mr Chairperson. This is a substantial piece of legislation. There are several members on this side who have not been able to participate in this debate to date and I request that you reconsider your ruling.RON MARK (NZ First): This debate is quite a serious one for New Zealand First. A number of our members have left their offices and come down here to take the opportunity to take a call on this and they have not been afforded that opportunity.The CHAIRPERSON (Hon Chester Borrows): Thank you. I am ready to rule on this matter. The question will be put. There have been 21 calls taken by the Opposition. This is the third closure motion and I am going to put the question.PITA PARAONE (NZ First): I raise a point of order Mr Chairperson. I accept your ruling and the reference to the number of calls. I seek your reassessment of your decision with regard to the fact that this is an important piece of legislation and it has circumvented the normal select committee process. In view of that I just wonder whether or not you may reconsider.The CHAIRPERSON (Hon Chester Borrows): I am aware of the process and I am prepared to put the motion as it has been—Ron Mark: I raise a point of order Mr Chairperson.The CHAIRPERSON (Hon Chester Borrows): No I am not going to take a further point of order from the member. I have taken several points of order—sit down while I am on my feet please. I have made my ruling and my ruling is that the question will be put.RON MARK (NZ First): I raise a point of order Mr Chairperson. This is a new point of order.The CHAIRPERSON (Hon Chester Borrows): I will hear the point of order. I suggest that the member be very careful about how he puts it.RON MARK: Could you advise how many calls New Zealand First has had.The CHAIRPERSON (Hon Chester Borrows): Sorry I did not hear. Could you restate the point of order.RON MARK: I know you stated that the Opposition has had 21 calls. Could you tell me please how many calls New Zealand First has had.The CHAIRPERSON (Hon Chester Borrows): Three.RON MARK: Thank you.ADRIAN RURAWHE (Labour—Te Tai Hauāuru): I raise a point of order Mr Chairperson. Can I seek your guidance please. I stood to take a call at every single opportunity. The main reason was that there is a mistake in this bill that I wanted to highlight. Thank you.The CHAIRPERSON (Hon Chester Borrows): The fact is that it is the Chair’s prerogative as to when he will put the question. I have accepted a closure motion and I am going to put that question. [Interruption] Sit down please. Continual points of order around this particular position are becoming quite frustrating. Members will have to accept that there have been a large number of calls on this particular part and we have only—[Interruption] Do not interrupt me while I am on my feet. I am the Chair of this session and you are not. There is another part to be debated. There will be full calls given in those debates. I have outlined the number of calls that parties have had.CHRIS HIPKINS (Senior Whip—Labour): I raise a point of order Mr Chairperson. I will not make a long point of order but I will make three brief points. The first is that this bill is going through all stages under urgency and it has not been to a select committee. The second point is that there are members who have been seeking the call since the beginning of the debate who have not been given a call and other members have been given multiple calls. I think that does create an unfairness in this process. The third point is that there has been a long tradition in the House that where the Government does not engage in the debate that is not used as a reason for closing down the debate prematurely.The CHAIRPERSON (Hon Chester Borrows): In ruling on the point of order I am going to continue to put the question. The fact is that the Opposition and all parties have the ability to marshal who is going to speak. They all have the ability to make calls. Not every member who seeks a call in every debate does get a call; that is the history of it. Some of us go back quite a long way and remember how these things work and have worked in the past. The most frustrating thing about being the Chair in a debate such as this is that you think of your best lines while you are sitting here and you do not get the opportunity to use them. Having said that I believe that on analysis people will find that there has been a significant numbers of calls. Many members have had the opportunity to make their points. The points being made are now becoming repetitive so I am going to put the question. [Interruption] I am not taking any more points of order. [Interruption] Please be seated. I am not taking any more points of order on this matter. The question is that the question be now put.A party vote was called for on the question That the question be now put.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Motion agreed to.Ron Mark: I raise a point of order Mr Chairperson.The CHAIRPERSON (Hon Chester Borrows): We are taking a vote. Please be seated.Ron Mark: I understand that but it is about the vote.The CHAIRPERSON (Hon Chester Borrows): I will accept your point of order.RON MARK (NZ First): Mr Chairperson through you I would like to ask that someone please check that Māori Party vote. I cannot believe that that is the vote that they are taking on this piece of legislation.The CHAIRPERSON (Hon Chester Borrows): The vote is being cast. That was not a point of order.A party vote was called for on the question That the Part 1 be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Part 1 agreed to.The CHAIRPERSON (Hon Chester Borrows): The member Ron Mark will leave the Chamber. He has been here a long time. He knows that votes are called in silence. He was reminded of that and he decided to interject on three occasions casting aspersions on people who voted in a particular way. He will leave the Chamber.CHRIS HIPKINS (Senior Whip—Labour): I raise a point of order Mr Chairperson. I understand the decision you have just made. I waited until the vote was completed before intervening. I do understand the point you have made and it is out of order for a member to interject when a vote is being taken. That is absolutely correct. I do ask that you consider when determining how long the member will be out of the Chamber the fact that this is a bill going through all stages under urgency and this is in fact the only opportunity to participate in the debate.The CHAIRPERSON (Hon Chester Borrows): I will put my mind to that. The member is still within the Chamber. I must admit I was tempted to quote him from 2 days ago.Ron Markwithdrew from the Chamber.Part 2 Remedial and other mattersSUE MORONEY (Labour): I raise a point of order Mr Chairperson. I am seeking your guidance on an issue that I think we will come up again during the course of this debate. The point of order is this: I understand that during your decision on the last part you said that Opposition parties had had 21 calls on that part. That differs from the record that we have been taking of the calls. I wonder what the process is for addressing discrepancies in the record-taking.The CHAIRPERSON (Hon Chester Borrows): The process is outlined in Speakers’ rulings 64/4-6. Speakers’ ruling 64/4 states: “The [chairperson] is the sole judge as to whether or not he ought to sanction the putting of the closure motion”. In respect of the official record of who has spoken when and of how many calls have been taken this is retained by the Clerk and is available for inspection. If the member wishes to she can align them with her own records.Hon DAVID PARKER (Labour): Part 2 of this bill at clause 21 continues with this ridiculous notion that Housing New Zealand should not proffer advice to the Government. Clause 21 continues that. We live in a country that is wealthy. We are told every day by the National Party that we are living in a wealthy country and yet increasingly people cannot get houses to live in. We have got more people living in parks. The number of homeless is increasing. We are seeing that in the newspapers and in magazines like North and South. We have got people living in cars. We have got people living in garages. And we have got members of Parliament like Paula Bennett referring people in housing need to the camping ground to live in caravans and huts.We have got house prices that are the highest they have been for ever in New Zealand and some of the least-affordable housing in the world. We have the lowest rate of homeownership in New Zealand since the 1950s and yet the Government says it does not want decent advice about housing. In the social housing sector things have got so bad because of the ridiculous mismanagement by this Government. It does not let Housing New Zealand answer questions about need. It has stopped that already. It has got so bad in Labour Party constituency offices in part because National Party members sometimes quite frequently will not even address the causes of concern of their constituents which means that those people are coming to Labour Party offices in addition to our own constituency voters. It has got so bad that our staff are pulling their hair out.Not only that people out there are so frustrated that they cannot get a roof over their heads for themselves and their people that they are abusing our staff and threatening them. That is never excusable but the level of frustration in society has become so high that we have had cases in South Auckland where people are pulling knives on our staff. They are so frustrated that they cannot get an answer as to where they can get emergency housing and yet we have got less advice coming from the ministries because they do not want to know.I drove to Invercargill a couple of weeks ago. I went down through Ōwaka and came through the southern parts of Invercargill as I came in. The private rental stock the basic level of which will always be held up by the Government rental stock is in an abysmal state. These are cold parts of New Zealand. There are rotten houses with holes in the walls. I was shocked at the number of houses that I went past in these cold areas that just had a sheet draped over the window of a single-glazed house with rotten frames where the glass drops in the frame and where there are holes in the sides of the walls. People have got no alternative and the Government has not got any minimum standard for housing. All of those houses are legally let in this wealthy country where poor people suffer because of the inadequacy of the Government’s housing policy.Paula Bennett rates herself as the next leader of the National Party. This—Hon Paula Bennett: Rubbish!Hon DAVID PARKER: Look—it is promoted on the websites of the National Party. Judith Collins has already thrown herself under a bus and it is a competition between Steven Joyce and Paula Bennett. New Zealanders Ms Bennett hate hypocrisy. They hate hypocrisy and they do not like to see people who get ahead in New Zealand having had access to a State house now ditching the system. This will be the Minister’s bête noire. This will be carried with her until the end of her political career.Bill English when last in Government tried to get rid of income-related rents. He could not. That National Government sold 13000 houses but it lost the income-related rents and it has not even been brave enough to go directly after that this time because it knows that people think that poor people should not have to pay more than they can afford particularly people with mental illness or disability.SUE MORONEY (Labour): I am shocked as I speak to Part 2 of this bill because what happens in Part 2 is that it actually guts the Housing New Zealand Corporation and it washes the Government’s hands of any responsibility for providing decent housing for New Zealanders. It is an absolute disgrace because in Subpart 2 of Part 2 the Housing Corporation Act changes so that the Housing New Zealand Corporation is not even responsible for giving policy advice to the Minister any longer. How disgraceful is that?The Minister does not want to hear the policy advice from the Housing New Zealand because if the Minister did hear what was actually going on out there the Government would know that it is going to have blood on its hands. It is going to have blood on its hands from this disgraceful attempt to absolve itself from any responsibility for providing decent housing for New Zealanders.I come from the Waikato and in the Waikato region here is what is happening in housing. Housing New Zealand is not going to give advice to the Minister to tell her this any longer so listen up Minister because this is what is happening. Aucklanders are marching down over the Bombay Hills in their droves to buy affordable housing in Hamilton because they cannot do that in their own city where they live and work in Auckland. This is because the Government has failed to fix the housing crisis. It has buried its head in the sand and pretended that it is not happening. Well it has been happening and now that housing crisis is marching south into the Waikato.In Hamilton house prices are going through the roof and rents are going up on literally a daily basis as Aucklanders—and there is no problem with the Aucklanders because it is not their fault; it is the fault of the Government for doing nothing—are having to move down to Hamilton to buy their first affordable homes and they still work in Auckland. They have to travel backwards and forwards between those cities on a daily basis and that is creating a housing crisis in Hamilton. So what is that going to mean? Well what it means—and we will not hear from the Government Waikato MPs on this issue; you will not hear them getting up and speaking on this—is that there are people living in cars there are people living in garages and there are two to three families living in one home just to make ends meet.Just the other day in Hamilton I was at a network meeting where the issue of housing came up. One of the community workers asked the Housing New Zealand person who was in that meeting whether houses are going to be sold in Hamilton. I felt really sorry for this man but what he said was: “Oh no no. No houses will be sold in Hamilton. It’s great news. They are going to be sold in Waharoa and in Ngāruawāhia.”—Waharoa and Ngāruawāhia.If anyone knows the Waikato what two poorer communities could you find in the Waikato than Waharoa and Ngāruawāhia? That is where the Government is going to be flogging off these State houses. It says that there is no need there. There is no waiting list apparently in Waharoa and Ngāruawāhia. Well when I heard that I went straight back to the 1990s because in the 1990s when a National Government flogged off 13000 State houses I was one of the people who stood and formed a human ring round houses in Waharoa to stop those houses from being picked up in the middle of the night by that National Government and being shipped up to Auckland so that it could charge a higher market rent for them up in Auckland and leave the people in Waharoa without the housing that they desperately needed.The CHAIRPERSON (Hon Chester Borrows): Come back to Part 2.SUE MORONEY: Mr Chair why this is about Part 2 is—The CHAIRPERSON (Hon Chester Borrows): You are giving a Part 1 speech. Come back to Part 2.SUE MORONEY: —that the Minister is no longer going to hear from Housing New Zealand about these—The CHAIRPERSON (Hon Chester Borrows): Order! The member will resume her seat and I am sorry to interrupt her. She should have taken the indication I gave her without me having to stand on my feet. This is a Part 2 debate. She should have another look at it and not just continue with a Part 1 speech.Chris Hipkins: I raise a point of order Mr Chairperson. Again I will just make a couple of very brief points the first of which is that traditionally—certainly in the time that I have been in the House—when a bill goes through all stages under urgency and particularly when a debate has been curtailed on one part there is some scope given to members speaking on a subsequent part if they have not had the opportunity to make all of their points on the first part to address the wider part of the debate. That has always been the—The CHAIRPERSON (Hon Chester Borrows): Thank you for making that point of order. You may resume your seat. There is also a convention which the member will know very well that if she wants to do a little bit of straying she makes at least some reference to whatever is in Part 2. She has been here a long time for as long as I have. She knows the rules. Let us hear it.SUE MORONEY: In clause 21 where this bill will take away the ability for Housing New Zealand to give policy advice to the Minister the Minister is not going to hear this information from anyone else. Housing New Zealand is not going to tell the Minister because in this part of the bill it has been reduced to being just a badly run State-owned property developer. It is a property developer; that is what it has been reduced to because clause 21 in Part 2 says that it is no longer required to give any research or policy advice to the Minister.KRIS FAAFOI (Labour—Mana): It is a privilege to take a call on Part 2 of this bill. Ever since this Government took office it has been shaving away the functions of Housing New Zealand and clauses 20 and 21 of this bill continue that trend. Clauses 20 and 21 remove some of the objectives and the functions of the corporation that we colloquially know as Housing New Zealand. This continues as I said the trend that this Government has had for some time with Housing New Zealand. If we go back to the very start of the first shavings of the functions that are featured in clauses 20 and 21 I think that may have been the 0800 number that Housing New Zealand used to operate but then when there were waiting times of 2 to 3 hours or even 4 hours for some of the customers waiting for an answer to some of their basic questions there was a certain level of frustration. So that was the first change and the first shaving away of a function becausethere were fewer front-line staff.Speaking as a local MP in the electorate of Mana I say that the next shaving of function was the removal of a front desk in the city. So we went from a city with a considerable number of State housing tenants a high demand and a high capacity through that office to a situation where there was no front desk for the people of Porirua to go to and do their business. This was just not on in a city the size of Porirua and with the number of State house tenants. Clauses 20 and 21 of this bill just continue that trend of neglect for Housing New Zealand. The fact that this Government is taking away those objectives and those functions from Housing New Zealand in a way says that this Government does not want the story to be told of what is going to be the outcome of this piece of legislation.I said at the beginning of my speech that it is a privilege to speak to Part 2. Sometimes people say that just to fill in a bit of time but it is a privilege because no one else in New Zealand apart from members of this Parliament gets to scrutinise this piece of legislation. It is being rushed through under urgency and some pretty basic questions about the functions and objectives should be asked of this Government by people from outside this House. I am thinking about the people who live on Warspite Avenue on Commerce Crescent on Arahura Crescent on Driver Crescent in my electorate who want to know what is changing in this piece of legislation and what will change in their lives.These functions of Housing New Zealand are changing in clause 20 and 21 so who will be their landlord? It is a pretty basic question from someone sitting out in the community: who will be their landlord now? In the past it has been Housing New Zealand and now it is a mixture of the Ministry of Social Development and Housing New Zealand but with the functions changing in Part 2 who is going to be their landlord? What kind of rent are they now going to pay? What kind of tenancy are they going to have now? What happens to their children? What happens to their schooling? Are they safe in their community? These are all the kinds of questions that needed to be asked in a select committee process but this Government will not do that and has not even bothered to answer any of these questions in this Committee stage.These are major changes in clauses 20 and 21 and as I say they continue the trend of this Government having to wash its hands of any responsibility of social housing in New Zealand. I grew up in a State house as well but I do not want to be a political hypocrite—I do not want to be a political hypocrite. I want to come to this House and make sure we care for and build on some of the things that I had that were the very building bricks of the success that I have had today to make sure that the generations that follow can have what we have had. But no this Government wants to take that away. Clauses 20 and 21 are just another chapter in this long history of this Government basically wanting to get rid of Housing New Zealand and to have nothing at all to do with making sure there are affordable homes for the most vulnerable Kiwis in this country. Because if the market will not supply it who should? The answer from that side of the Chamber is “not us”. But on this side of the Chamber we know there is a responsibility and that is why we will build on social housing when we are in Government next.CLAYTON MITCHELL (NZ First): I rise to take a call on Part 2 of this piece of legislation. To try to keep it as relatively narrow as possible is probably not going to be the easiest because let us be honest the devil is normally in the detail but there are a few details lacking here—there are only a few paragraphs. Basically the essence of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill—I have to read that every time because it is so long-winded—in Part 2 is really about two things that I can see and that is taking away the GST in the first part. Whether that GST to be removed from the housing is really to do with making it more affordable—I do not think so. There is nothing in this legislation that suggests in any way that if you take GST off the costs of housing they are going to be transposed and put into the beneficial places for those people who are actually going to be paying those rents. If you really were interested in looking after the people paying those rents then take GST off residential rates and take GST off food. Those are the sorts of things that will go far further than taking GST off the accommodation costs for those people in those houses.This package that this Government is putting together and putting out there for the property developers will be its sum game. I cannot believe that the National Government members sit there silently. Not one person is standing up to speak on this legislation. In particular I invite the Māori Party to say what this legislation is going to do for the Māori people of this country. This is eating at the core of their issues. The biggest issues that we have in social housing deprivation throughout this country are now going to be handed over to those large corporations those property developers and we are not hearing anything that says in any way that the Māori Party is going to oppose this bill. In fact at the last count it is supporting it which absolutely beggars belief. I cannot understand that.Subpart 2 of Part 2 “Remedial and other matters” in the explanatory note to the bill is “Housing Corporation Act 1974”. Let me read it out to you because it is quite short but to be honest those people back home wherever you are watching—I am sure there are a good dozen of you out there—might want to know this: “Clause 20 repeals section 3B(b). The effect of the repeal is that [Housing New Zealand Corporation] no longer has an objective to provide advice and information on housing to the Minister of Housing. Clause 21 amends section 18(2) by making clear that [Housing New Zealand Corporation’s] research and monitoring function described in section 18(2)(j) does not include research and monitoring for the purpose of advising the Minister of Housing on those matters.”From now on the Minister for Building and Housing is going to be getting his advice from the people who are trying to get industry and employment for those people. This absolutely contradicts what this whole State housing is about. It is about looking after the people who need to be looked after the most. This is taking away their ability.I would certainly love to hear how the Minister thinks this is going to benefit New Zealanders but also the minority groups of New Zealanders and specifically the Māori people in this country who need a voice and we are not hearing one. We need to get some idea of how this is actually going to be of benefit to them and the rest of the people who are living in poverty in this country. We in New Zealand First like the other comrades on this side absolutely strongly and vehemently oppose the bill and we would just love to hear some words coming back from the National benches on how those members can justify supporting this absolutely abhorrent piece of legislation. Thank you.CHRIS HIPKINS (Labour—Rimutaka): It is a telling indictment on the current National Government that the only time its members are willing to get up on their pins and talk in this debate is when they are trying to shut it down. They are not willing to stand up and actually defend the clauses of this bill. I want to turn to some of the clauses that have not yet been mentioned in this debate and they are the clauses around KiwiSaver—clauses 22 and 23—that make changes to the KiwiSaver provisions in the legislation that allow someone to withdraw their contributions to KiwiSaver to purchase a first home. What this bill does is that it means that somebody who has been in another superannuation or retirement savings scheme and transferred to KiwiSaver will still be able to access those provisions where previously they might not have been able to. So potentially it is quite a sensible provision in terms of ensuring that people can use their retirement savings to buy their first home.But let us just think about that for a moment. That is how far we have come—when the main solution for people who cannot afford to buy their first home is that they can pull out all of their retirement savings to buy a house. That is what it has come down to. They have to make a choice between whether they are saving for their retirement or are able to buy a first home. That is the actual reality that many New Zealanders are facing. We are not talking necessarily about young people—well they are young relatively speaking but we are talking about people potentially in their 30s who might be looking at buying a first home. If they do that and they put all of their savings and all of their money into buying their first home and they then spend the next 10 to 15 years getting their head above water in terms of paying that off how long are they going to have to save for their retirement? As Michael Cullen said when he was the Minister of Finance you cannot eat your house. People are going to need to have savings in their retirement if they are going to live comfortably. I support this particular provision in the bill. I do not necessarily support the other provisions and I am going to talk about the other provisions in this part in a moment. I support this provision but I think we do need to take a step back and ask how on earth we have got to this point where it is a choice between owning a home or saving for retirement because we need New Zealanders to be doing both. We need to make sure that New Zealanders are supported to do both so that they can own a home and they can be sure that they are going to have a comfortable and secure retirement. Unfortunately the reality is that many are having to choose between that. There are other factors at play here when they are making those choices. Many of the people in their late 20s and early 30s who will be in this position—maybe even in their mid-30s—will also have student loans that they are repaying.What we are doing more and more and more is loading cost on to a generation of New Zealanders who are not going to be guaranteed the same comfort in retirement that they are seeing for the generations who have gone before them. That is going to create intergenerational pressure. I say to all of those who are nearing the age of 65 that when that pressure really starts to come home when the retirement boom starts to happen and the next generation of New Zealanders are faced with the choice of increasing taxes to pay for that—which they will pay—or making other changes there will be a conflict. The future generations of New Zealanders will remember that they had to make a choice between saving for their own retirement and buying a home. I think that is going to be very unfortunate. I think we should be factoring that in now and we should be planning ahead for that so that that conflict does not happen because that could be immensely damaging to intergenerational attitudes and I do not think that that is going to be healthy. So I think although that provision is one that I support I think we do need to look at that wider issue of housing affordability and those wider issues around that massive burden that is being placed on an emerging generation of New Zealanders and the pressure that that is going to lead to in the future.Clauses 19 20 and 21 which have been more widely debated in this bill make changes to the remit of the Housing New Zealand Corporation established under the Housing Corporation Act 1974. Previously Housing New Zealand was the main adviser to the Government on social housing policy. That is now being transferred to another agency as part of a wider move which has seen the policy function moving to the Ministry of Business Innovation and Employment—or whatever; I cannot remember the exact order of the words in its name—and the needs-assessments being transferred to Work and Income. So the mentality behind this is that Housing New Zealand is simply the owner of the houses. That is all its remit is; that is all it does. I want to say as strongly as I can to the Government that although I understand the distinction that it is trying to make with these changes it is not working on the ground. There are major challenges that that change is creating.TRACEY MARTIN (Deputy Leader—NZ First): Kia ora Mr Chairperson. Thank you very much. I seek just a short call in Part 2 of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. I am pleased to see the Minister in the chair there the Hon Paula Bennett—hopefully the Minister can expand on and give some explanation around what is happening there particularly in Subpart 2 and the changes to the Housing Corporation Act 1974. I refer specifically to clause 21(1): “In section 18(2)(j) after ‘related to housing’ insert ‘(but not for the purpose of advising the Minister of Housing on those matters)’.”From a New Zealand First perspective we are not 100 percent convinced by the reasoning given for the shifting of this advice to another organisation. My first question would be what Housing New Zealand did to the Minister that she no longer wants to put into legislation that it should be the one advising her or this Government about housing. The Housing New Zealand Corporation has an extensive institutional knowledge around the history of social housing in this country about the needs of social housing in this country. Why would the Minister and this Government put into the legislation that this organisation is not to advise the Minister of Housing? It does not mean that she cannot seek advice from other people. There is nothing needed there. You do not need to put into legislation that the Minister must seek advice only from Housing New Zealand. It bemuses us as to why an organisation that is entrenched in New Zealand history and that has seen and has institutional knowledge about what used to be what is currently there and about the pressures out there—even though we would have to say that the measuring of the pressures out there is completely abysmal.What is happening in our area is that there are institutions organisations and NGOs saying do not bother telling the Housing New Zealand Corporation that you need a house because actually there is no way on this planet that you are going to get one under this Government. So the need is not being clearly reflected. Perhaps that may be a reason why the Minister has decided that that advice needs to come from somewhere else. But it is a little bit like other pieces of legislation we have seen in this House—it is the removal of the requirement to seek advice from; it is the removal of the role of somebody who actually has institutional knowledge to advise. We see Subpart 2 as being a really interesting place to go to. I certainly would welcome the opportunity for the Minister to rise and actually address that.With regard to Subpart 3 and the amendments to the KiwiSaver Act 2006 we are seeing some other changes around the KiwiSaver Act and none of them are actually to the benefit of the purpose that KiwiSaver was set up to start with. The purpose of KiwiSaver was to incentivise and encourage New Zealanders to save towards their own retirement. I was the generation—I am slightly older than the Minister—Hon Phil Goff: No!TRACEY MARTIN: I am slightly older—slightly older than the Minister. She may look younger—a lot younger than me—but I am slightly older. We are of the generation that was told in the 1990s that there would be no retirement for us—that there would be none and we were on our own. Have at it. But KiwiSaver came along as one of those backstops to start to encourage generations such as my own and then future generations to make sure we were able to somehow support ourselves.This clause gives the capacity to completely remove from KiwiSaver for a period of time any of your savings to put into housing which is robbing Peter to pay Paul. From our perspective Subpart 3 is not an answer to the housing crisis or the inability of young New Zealanders to actually afford to purchase housing. It is not a true answer. So we would again seek some clarity from the Minister as to why this Government believes that actually allowing people to dip into a “Peter bucket” to pay into a “Paul bucket” is logical at this time when we know as Mr Hipkins said we are going to have to make some adjustments—and New Zealand First has its own theories about the adjustments that need to be made—as our population ages and goes forward and more and more stress is placed upon that part of our taxation system.Finally in Subpart 1 “Goods and Services Tax Act 1985” I think that personally I cannot find anything controversial in that particular area there. I guess what we are saying is that when the Government actually seeks a service from somebody else it does not have to pay the tax. At the end of the day it is taxpayers’ money. I can appreciate that taxpayers do not want to be paying again. I guess it is taking it from one bucket and sticking it into another and that creates an administrative cycle.So on behalf of New Zealand First just in closing we would certainly seek some clarity around Subpart 2 from the Minister if she is able to talk to us about why you would remove it.Hon PHIL GOFF (Labour—Mt Roskill): Can I welcome the Minister for Social Housing to the chair. She is the Minister in charge of this bill so we expect her to actually address questions that are asked genuinely to her rather than being mute and dumb in the chair. I have some questions that I need to ask about Part 2 of this bill. I am looking particularly at clause 20 which provides that Housing New Zealand does not have the purpose of providing policy advice and clause 21 which says that Housing New Zealand research and monitoring does not include research and monitoring to advise on the policy issues.I would have thought that the Minister would find it really useful to have an independent source of policy research and advice rather than listening solely to right-wing ideologues and property speculators and drawing on their advice and encouragement in order to set policy. For example Minister if you had listened to the advice of Housing New Zealand rather than not listening to it and now taking away its ability to give that advice you would realise that your statement yesterday that you are providing $500000 for emergency housing is practically meaningless. I have got a picture here of a house on the edge of my electorate of Mt Roskill. It is just in Mount Albert. It is a two-bedroom home unit. Do you know what that was selling for last week? It was selling for $797000—a two-bedroom unit. There it is—a very modest little home unit. Apparently the Minister does not understand that house prices for incredibly modest homes are now so high that people cannot aspire to homeownership and people who are renting are being asked to pay higher and higher rents that are unaffordable because the person who invests in that as a property investor wants to get a return on their capital.We know Minister Bennett that 40 percent of all homes purchased in Auckland are purchased by property speculators. I would have thought that you would know that and had you listened to the advice of Housing New Zealand you would have been better informed about it. So you would not then in your press statement say: “Look I am dealing with the big problem of homelessness—I am going to give emergency housing half a million dollars.” You know what that will do Minister? It will purchase half of that two-bedroom home unit. How is that going to address the problems of the shortage of accommodation and homelessness?If you had listened to Housing New Zealand you would also have gotten some information from it so that when you talked about supporting moves to housing independence in your press statement—I do not know who drafted that; great spin—you would have known what those words actually meant. They meant that you were not moving 3000 people to housing independence; you were evicting 3000 people. Housing New Zealand in its research and advice would have told you that a lot of those people are people who are going to find it really hard to cope in the private housing sector. I was talking to a woman; she is on a reasonable income now but she is crippled. The ministry spent I think $27000 on the State house to adjust it for a person who needed wheelchair access and was not able to have mobility. Because of her income she will now be put out in the private housing sector. The question I would like to ask the Minister if she is listening to the advice of Housing New Zealand is: what private landlord is going to spend $27000 modifying a house to deal with the purposes of somebody who has not got mobility?Then the Minister talks about increasing affordable housing supply. I know for a fact that Housing New Zealand would be able to tell the Minister that that simply is not happening; that instead of increasing affordable housing supply its housing stock has been run down by 1600 in the last 3 years. So here we are: we have got the worst housing crisis that Auckland has ever seen and what is the Minister doing about it? She is depleting the stock of Housing New Zealand rental housing. A good policy-advice agency would have told her that but clearly she is not getting that advice and now deliberately she is saying—DARROCH BALL (NZ First): Looking through the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill in particular Part 2 clauses 20 and 21 the theme that stands out—the intent of this—is that it is passing the buck. It is an absolute dereliction of duty by this Government to pass the buck the responsibility of maintaining that safety net that I have mentioned previously in this House and that the Government has a responsibility for maintaining and ensuring that it has integrity and that it catches those who fall. State housing is an integral part of that safety net. But what is happening now is like I said that dereliction of duty—passing it on to NGOs to community organisations that are underfunded under-resourced and understaffed and they have to take the brunt of the effects and consequences of legislation like this.There is a question that I need to ask—and everybody should be asking and the Government and the Minister for Social Housing in particular should answer—how did it get to this stage in the first place? They can stand up and give the situation and the reasons why it needs to happen now but how did it get to that situation in the first place? Like Kris Faafoi has already mentioned this has been happening slice by slice over the past 7 years to get to this stage where there is some feasible reasoning in dreamland—with all of the positive outcomes where the Government believes that it is all candyfloss and lollipops that it can put this responsibility on to someone else and try to make it believable. But the question is: what are the real consequences for the people on the ground and the NGOs that have to take up all of these responsibilities?I have got an example in Palmerston North in my electorate where I am based where we have got a trust the Shepherd’s Rest Trust which houses over 60 of the most needy people. The trust had Ministry of Social Development funding which was taken away. It had to get funding from the Lotteries Commission and it was not renewed this year. And there is a potential now that there will be over 20 people without beds unless a private organisation or NGO steps in and takes over from that trust. But what are the consequences? You have got the real responsibility of the Government which needs to look after those needy people being put on to the NGOs which have not got the funding have not got the resources and are balancing on a knife edge about the funding and keeping those people with beds.The fact is that this legislation will make it even worse in the regions. What the concern is for New Zealand First is that this is going down the pathway a step closer to the voucher system in the social system which Mr English was talking about. That spells doom for the regions because what that means is that if it is not financially viable in the regions for branches to be open to look after the people then they will close. And it is happening already. The Salvation Army has closed seven branches in the regions and is bringing itself back to the main centres—and we are talking about the two-tier system again. In closing I would like the Minister and the Government—any Government member when they want to stand up—to answer a simple question: what is the priority? Is it profit or is it people? Because all the way through this legislation and especially through Part 2 it all looks like it is about the bank balances it is about the surpluses it is about the profit and it is not about the people.ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Part 2 Subpart 1—Goods and Services Tax Act 1985 clause 18 Section 5 amended (Meaning of term supply) new subsection (6F) reads: “For the purposes of this Act the amount payable by the Crown or the agency under the Housing Restructuring and Tenancy Matters Act 1992 under a reimbursement agreement or a tailored agreement under that Act for the provision of accommodation in social housing is treated as consideration for the supply of accommodation in a dwelling by way of hire.” My issue with this particular amendment isthat first of all it refers to something in Part 1 of the Act. I rose to take a point of order on that. It is actually incorrect. In New Zealand Statutes 1992 Volume 2 No. 76 Part 1—which also is part of this in Part 2 of the bill. I am doing this because it is every member of Parliament’s obligation to make sure that even in legislation that you do not agree with it is correct because I do not want to see this—The CHAIRPERSON (Lindsay Tisch): Just one moment. Did you want a point of order did you? Did you actually ask for a point of order?ADRIAN RURAWHE: In the first part of the debate I did yes.The CHAIRPERSON (Lindsay Tisch): Oh OK sorry. This is not a point of order. OK.ADRIAN RURAWHE: In clause 4 of Part 1 of the bill section 2 is amended. It refers to: “reimbursement agreement means an agreement referred to in section 85(1)”. In this statute book there is no section 85(1). It carries on to say “section 98(1)”—there is no subsection (1) of section 98. There is a difference between alphabetic and numeric—there is a section 85(a) but no section 85(1).The CHAIRPERSON (Lindsay Tisch): Come back to Part 2.ADRIAN RURAWHE: I will come back to Part 2. Again new section 5(6F) in clause 18 refers to those very matters—“a reimbursement agreement or a tailored agreement”. Those clauses in Part 1 give effect to this clause and this clause now is redundant. In effect what has been passed in Part 1 is also redundant. We will be seeing this come back maybe as part of a Statutes Amendment Bill to correct it. This is wrong and it is incumbent upon me to tell this Committee so. That is what we get when we rush legislation through this House. This is what we get when the members opposite sit in absolute silence and do not participate in the debate about this part here Part 2. We need to hear from both the Minister and members opposite—the Government—about how they are going to correct this. This legislation is about to be passed in the next maybe 2½ hours. So somehow between now and then we have to make sure that we do not add additional cost to the taxpayer and that we correct this to make it as good as it can be because to do nothing would mean cost to this nation and I do not think that is good enough. I do not think it is good enough.I will refer to another part of Part 2 in particular Subpart 2—Housing Corporation Act 1974 which amends section 3B. That is about the Minister receiving advice from the Housing New Zealand Corporation. I am certain that if this had gone through a robust considered process then we would not be in here talking about—Meka Whaitiri: Errors.ADRIAN RURAWHE:—errors within this bill.PITA PARAONE (NZ First): Tēnā koe Mr Chair. Tēnā nō tātou. I stand to talk to Part 2 of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. Can I say from the outset and we all know this—those of us in this Committee—that the obligation of any Government is to protect the most vulnerable of our fellow citizens. I do not believe that this bill this Part 2 actually holds true in this case. Having said that and I say it with a certain weight on my heart when I consider the former leaders of that once-respected party—and I refer to Holland Holyoake Marshall and Muldoon—I am sure that all of them would be turning in their graves to see this bill come before this Committee promoted by a National-led Government.This part of the bill particularly clause 20 highlights and verifies what most of us on this side of the Committee believe: that this is the dismantling of our Public Service and in this particular case Housing New Zealand Corporation. This bill is not the beginning; it has already started.Chris Bishop: Do some research.PITA PARAONE: The member may say that it refers only to research but what I am saying is that this is the seed for further things to come.Reference was made by an earlier speaker that much of the work being done by constituent MPs is in addressing the accommodation and housing needs of the people in those electorates. Can I say that it is not only constituent MPs who have to deal with that but it is also list members like myself. This should not come as any surprise because the constituent member in the particular electorate that I am responsible for happens to be a member of the National-led Government. So one needs to ask: who is going to undertake that research; who is going to do the monitoring; and what skills and experience will they have in order to ensure that the Minister does in fact receive the quality advice that he or she certainly deserves and certainly will need to ensure that this Government and we in this House fulfil our obligation to meet the housing needs of our fellow citizens?I have heard reference to this bill as being one of flexibility and innovation. I do not think that there is anything new or innovative about removing the responsibilities for research and monitoring to another agency. I think the danger that we will see in all of this is that the long-term experience that the present agency has will be lost. I know that the Māori Party members have been very supportive of this bill. It behoves me to say that by giving their support to this bill they are doing the people whom they represent a disservice particularly in the regions that I come from. I do not believe that regions such as Whangarei will certainly be better serviced by this proposal and in particular by clause 20 of this bill. So I would ask that both the Māori Party and the National-led Government reconsider this. The fact that they are pushing this bill through by way of urgency suggests to me that they have already made up their minds and that they are not going to listen to any considered arguments.Dr MEGAN WOODS (Labour—Wigram): I would like to address in this speech largely clauses 19 through to 21 but I would like to speak briefly to the other clauses in Part 2 of this legislation. I would like to reiterate the need for the Minister for Social Housing to answer the serious questions that my colleague Adrian Rurawhe addressed in his speech before. I think there are some very serious questions around the robustness of this legislation that need to be addressed by the Minister in the chair. We are passing this legislation under urgency. It is the function and indeed the responsibility of all members of this Committee to examine this legislation—to read it and to question it—and even as my colleague Adrian Rurawhe said if we do not agree with it we must all work hard to ensure that it is good and robust legislation. That is our function as legislators and frankly Government members on the benches opposite me are being absolutely negligent in their part in ensuring that this legislation is the best it can be under an urgency stage. They need to get on their pins take a call examine the legislation and do the job that they were elected and paid to do.I have some questions that I would like to hear the Minister answer too. We still throughout all these parts of this legislation do not have any clarity around who is going to be taking over the function of providing monitoring and research around housing in New Zealand. These are of course the amendments to the Housing Corporation Act that are addressed under clauses 20 and 21 in this legislation. So I would like to hear the Minister take a call and give us some kind of indication. It is the kind of question that would have been asked at a select committee. It is the kind of question that we would have sought advice on from officials around what the options were. I would like to hear the Minister put those options to it because I have real concerns that we have all this talk from Government members around the flexibility around housing that is enshrined in this bill. A lot of it does come back to the advice that is offered under clauses 20 and 21 in Part 2 of this legislation.We have heard throughout other stages of this bill Government members talking about the need to make sure that we have housing that is fit for purpose and in the right location. In March this year I asked one of the Ministers with responsibility for housing the Hon Bill English some very specific questions about Housing New Zealand houses in my electorate by suburb. I asked about individual suburbs and I am questioning the advice and where this is going to come from under clauses 20 and 21 in Part 2 of this legislation. When I asked about housing in Riccarton when I asked about housing in Addington and when I asked about housing in Hoon Hay I was told that Housing New Zealand does not collect information by suburb. This Government is saying that it is making decisions about where housing needs to be based on information that it does not collect. I was told by the Hon Bill English that that information was collected by only local authority territorial units. Well this bill covers hundreds of thousands of people.We are being told that this is the big society where communities are taking ownership so I would like to hear from the Minister. I would like her to take a call and tell me who will be taking over this function. Who will be providing this granulated localised and community-driven information that will be required to deliver the outcomes that this bill purports to do? It is not being done at the moment so where will that function lie? Frankly I find it absurd that the Government is making decisions about localisation of housing when it does not even have the data when it has not been collecting it and when it has been collecting it only at a territorial local authority level. It simply does not stack up. So that is a question under this part that I would like the Minister to address.I would also like to know about the kinds of research and monitoring that are going to be undertaken under these clauses in the bill. What are the things that are going to be examined? I want to know not only who is going to do the research and monitoring but what kind of research and monitoring it will be. Is it going to be about the livability of homes? Are we going to be collecting that not only at a local level but at a meta level? Will those questions being asked be the ones that are fit for purpose to actually genuinely—The CHAIRPERSON (Lindsay Tisch): I call Phil Goff. [Interruption] I am sorry; Phil Twyford. I got the “Phil” part right. Phil Twyford. [Interruption] My apologies.PHIL TWYFORD (Labour—Te Atatū): It is the revenge of the Phils. Thank you Mr Chairman. I was a bit worried actually because one thing I have learnt is that if you give Phil Goff half a sniff he will grab the opportunity with both hands.Speaking to Part 2 of the bill I want to make a point that relates to the argument that many of us have been making this morning about this bill and that is the fact that National has been pushing this bill through the House under the cloak of Budget urgency with no apparent justification for why this bill needs to be passed today. I have not heard anything from any Minister in the chair or any of the Government members in this debate about why this bill has to be pushed through under urgency. But the pitfalls of that approach are actually contained within the clauses in Part 2.Clause 18 which basically ensures that these new flexible purchasing agreements are exempt from GST is a tidy-up. It is a tidy-up of previous legislative mistakes. Clause 23 amends the KiwiSaver Act so that membership in complying superannuation funds counts for the 3-year eligibility period for a first home withdrawal if a person transfers to KiwiSaver. This clause is cleaning up the mess left by the KiwiSaver HomeStart package and by the legislation that enables KiwiSaver withdrawals. So two clauses in Part 2 are evidence of this Government’s previous botch-ups in passing laws in this House but it does not seem to have learnt from its mistakes and it is pushing through this bill under urgency without any chance for scrutiny at the select committee without any expert opinion without the officials being able to take their time and look at the legislation and without the public being able to come along and make submissions. You have to wonder whether clauses within this bill will end up back in the House in some kind of mopping up operation in the future wasting taxpayers’ money to clean up the mistakes that this Government has made.Clauses 20 and 21 are really symptomatic of this Government’s systematic gutting of Housing New Zealand the latest and perhaps the last indignity before the organisation is sliced and diced and handed out to anybody who will take it. With the removal of any kind of policy and research function this bill basically takes away Housing New Zealand’s mandate to do evaluations of its programmes. So it has now basically been reduced to a Government-owned version of Barfoot and Thompson instead of being a full-service social housing organisation devoted to meeting the needs of some of the most vulnerable New Zealanders. It is simply a letting agency. Its ability to manage the waiting lists its ability to handle and assess eligibility has been hived off to the Ministry of Social Development. Its portfolio has been carved up and flogged off to anybody who will take it under other provisions in this bill. But these two clauses—20 and 21—basically take away Housing New Zealand’s ability to do research and most important to give advice on social housing to the Government of the day.But this Government does not want advice on social housing. It does not want to hear from people. We know that there is no evidence base for the Government’s policy of flogging off State houses and devolving the job of providing social housing and State housing to the most vulnerable New Zealanders. There is no evidence for the assertion that the Government cannot do that job properly and that non-governmental organisations charities Uncle Tom Cobbleigh and all who might come along and register as a community housing provider private landlords property developers and anyone who meets the perfunctory requirements of being a social housing provider can line up and get these houses at knock-down prices. There is no evidence base for it.JOANNE HAYES (Third Whip—National): I move That the question be now put.Hon RUTH DYSON (Labour—Port Hills): Normally I would say I was pleased to be taking a call on a bill that talked about more flexibility in social housing but unfortunately the title bears little relevance to anything in the bill particularly in Part 2. Before I speak to the specifics—and I want to speak particularly about clauses 20 and 21 in Part 2 I just want to talk about why members of Parliament come to Parliament and why we seek to spend our Fridays and our Saturdays for that matter debating in this House. It is because every single member of Parliament regardless of their party I think comes to Parliament because they think they can make a positive difference. They think they can make a positive contribution to a better New Zealand. So regardless of what their party is that I think is the driver behind the intentions of all members of Parliament.One of the things that we have been particularly proud of in New Zealand is our commitment to social housing. That is because as egalitarian New Zealanders we think that it is just right—it is fair—that people should have a warm dry affordable home and be able to stay there and be part of their community. That has been an integral part of the fabric of our society for nearly a century since this Parliament first debated the introduction of social housing. It is something I am particularly proud of especially when you go to other countries and see people living in appalling conditions. Of course we have State houses that are very run down in New Zealand. We have whole areas where we would like to see a lot of improvement done but would it not be great if this Parliament could regain the sense of unity that we had 80 years ago when we introduced social housing and asked how we could do it better for the future?But the National Party instead is saying: “We do not think it is the Government’s responsibility to operate State housing any more. We think we should sell it off.”Well I do not agree with that. I do not agree that it is a valid role of housing providers to provide social housing with the Government completely out of the picture. Social housing providers have always worked in partnership with central government and long may that partnership continue whether it is the Salvation Army or Comcare Trust or the Methodist Mission or Presbyterian Support—any number of organisations that have done their bit alongside the Government to provide warm dry affordable houses so that every member of our society can be safe and be part of a contributing community. That is not the aim of this bill at all.Clauses 20 and 21 specifically outline the further withdrawal of Housing New Zealand from a very critical part of providing social housing and that is in policy advice and in research and monitoring. How do we know what works and what does not if Housing New Zealand—the very agency that was responsible for providing social housing—is no longer providing policy advice to the Government about social housing or doing any monitoring or research? How can we say our aim is to do things better in future if we are not getting any policy advice about how things are working at the moment?I want to challenge the backbench of the National Party to explain why they are putting their personal names alongside a bill that privatises social housing—Chris Bishop: Oh it does not.Hon RUTH DYSON: —and that says that Housing New Zealand will no longer be responsible for policy advice or for research and monitoring. Mr Bishop I recommend some reading for you—the bill would be a good starting place. The bill would be a really good starting place because I am fed up with listening to interjections that are not truthful. They are not truthful and your colleagues listen to them and think that when your untruths are repeated they must be true. Well actually repeating something that is not true does not make it true. That is exactly what happens in respect of Part 2 of the bill which we are debating now. I challenge Mr Bishop to stand on his hind legs and say that he has read the bill—that would be a challenge—and then to explain what it does. How can this bill possibly be accused of providing more social housing more flexibility warm and dry homes or be accused of as Simon Bridges the Minister who was previously sitting in the chair said making time stand still? He said that under Labour—IAIN LEES-GALLOWAY (Labour—Palmerston North): I am very pleased to be able to speak to Part 2 of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. The title of Part 2 is “Remedial and other matters” which may suggest to people who are reading this bill at home that there are just a few little rats and mice bits and pieces in Part 2. But actually clauses 20 and 21 in particular have some very important changes to the way housing policy is developed in New Zealand and to the way the Government takes advice on housing policy. Clause 20 actually says that Housing New Zealand no longer has the purpose of providing policy advice. You know this is Housing New Zealand—the clue is in the name about who is best positioned to provide housing advice to the Government. It might be at a guess the organisation called Housing New Zealand but apparently that is not good enough for this Government. So I would like to knowwhere the documentation is since we are passing this bill under urgency and since there has been no select committee process. Where is the evidence where is the consultation process that the Government went through that led it to the conclusion that Housing New Zealand is not the best Government agency to provide adviceon housing? Minister please—or maybe Chris Bishop; he has got a lot to say. Maybe he could actually get up and tell us where the idea came from that Housing New Zealand is not the Government agency to provide housing advice. I want to know.If this bill went through the normal processes where the public actually got to come and have their say where this was properly consulted on and considered and we got to see the evidence we might not agree with the position that the Government got to but we would have an idea of how it got there. It is absolutely the most important thing that the Government members get up and explain to us where this idea comes from because at the moment on this side of the House in the absence of that explanation it looks like a pretty hare-brained scheme to us—that Housing New Zealand is not the organisation that will provide housing. Maybe the Government has lost confidence in Housing New Zealand. I do not know—maybe that is the reason why.I have absolute confidence in my local branch of Housing New Zealand. The people who work there are amazing. They would not say this they would never say this but my observation is thatthey suffer under absolutely appalling policy settings from this Government and they have to do things that they just do not believe in. They are committed public servants. They implement Government policy but they do it in a way that is as constructive as possible and they know what the needs of their community are. They know the housing needs of their community and maybe that is the exact reason why this Government does not want to get advice from them—because the advice that they would give this Government is not what it wants to hear. I think that is the reason and in the absence of any better explanation from the Government I think we have to all assume that is the reason.I hope the next call from the National Party is not a closure motion. I hope that it is actually an explanation of clause 20—why it is necessary and what led the Government to that decision. Clause 21 provides that research and monitoring by Housing New Zealand does not include research and monitoring to advise on policy issues. I am actually at a bit of a loss to know what research and monitoring function is actually going to remain required of Housing New Zealand because it is no longer giving policy advice it is no longer managing the waiting lists and it is no longer interacting with the tenants. What research and monitoring does Housing New Zealand actually have to do if it no longer has a policy function either? What will be done with that research and monitoring? Again is this the kind of information that the Government does not want to listen to because it knows its policies are wrong and it knows that if there is any consideration or sunlight applied to its policy at all it will be found out for being full of holes? Is that why this Government wants to remove the monitoring function from Housing New Zealand?JOANNE HAYES (Third Whip—National): I move That the question be now put.Hon Annette King: She has taken a call I’m sorry.The CHAIRPERSON (Lindsay Tisch): No there are no restrictions.Hon ANNETTE KING (Deputy Leader—Labour): Thank you very much Mr Chairman—The CHAIRPERSON (Lindsay Tisch): Order! I just want to clarify something. There is no restriction on the number of closures that a member can take.Hon ANNETTE KING: Thank you Mr Chairman. There used to be did there not? So there must have been a change in the Standing Orders to allow a person to take more than one closure motion. But thank you Mr Chairman for telling us what we ought to know.I want to address this part of the bill—Part 2 “Remedial and other matters”. I too want to go to the area around the functions of the Housing New Zealand Corporation and the role that it is going to play. You see it is under “Remedial and other matters” which I found very interesting because anyone who knows the meaning of “remedial” knows that it means “supplying a remedy”. I cannot see what remedy is being supplied under this part of the bill. It is meant to correct or improve deficient skills so I can only assume that the Minister for Social Housing thinks that there are deficient skills in Housing New Zealand and I want to dispute that.I want to start from the position that one of the features of a National Government—and it goes back many years; some of us experienced it when we came into Government—is this drive to stop policy making by Government departments and others to drive out the policy-making part and contract it out to somebody else. That was the history in the health portfolio. The policy function of the Ministry of Health was driven out and put into other agencies. I am asking the Minister why she would not want to have policy advice from Housing New Zealand—the very agency that has for so long been working with tenants that has been working in the community and that has very very competent staff who are able to provide the sort of advice a good Minister would want. Why would the Minister remove this role from Housing New Zealand? Who will replace it in this role? Where will the advice the on-the-ground advice that a Minister would want come from Minister? Would you be able to answer that shortly? Where will this policy advice come from?One of the problems for a Government is when it thinks it has got all the answers itself—when it does not think it needs good strong policy advice from its own agencies. It seems to me that the Minister has decided that she does not like the advice she has got from the Housing New Zealand Corporation. I know that it has raised a few issues actually with the Minister in relation to some policy and I think that this is a way of getting rid of that sort of advice. The Government does not want anybody that might contradict the direction and the path it is taking in housing. So Minister please tell us who will replace Housing New Zealand in providing advice on policy? When we look at this particular piece of legislation we see in the regulatory impact statement that no evaluation was done on it and that Treasury did not even do an evaluation on this policy that is before the Committee today. So who is going to do the evaluation and provide the advice on future housing policy? I think that is a very serious question that needs to be answered.Then we find out that the intent of this particular part of the bill is that “the Corporation will no longer be expected to undertake research and evaluation activities for the purpose of advising the Minister of Housing”. So who is going to undertake the research and evaluation? It is not Treasury. It is not Housing New Zealand. Who is it that is going to undertake this very serious function that must be undertaken when formulating very good policy? This is a huge gap in this Government’s approach to policy making. Get rid of the agency that would help with it get rid of any advice that it is going to give and any evaluation—this seems to me to be a very short-sighted approach Minister when it comes to Housing New Zealand.I agree with my colleague who just resumed his seat Iain Lees-Galloway that Housing New Zealand for decades has provided incredibly good advice. It has some excellent people working in it. You know if you go to your own Housing New Zealand offices when the doors are open and you can get in—because of course the doors are closed now and you have got to ring up to get inside the door—and if you have a close relationship with your local branch of Housing New Zealand you will find people very knowledgable about what is going on in your area. They can provide the quality advice to a Minister on the ground. They are good people. But unfortunately I think this Minister is going down the same track that she went down when she was Minister for Social Development because if you go to Work and Income offices now you will find a very demoralised bunch of people—people who used to care a lot.Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman): Following on from my colleague the Hon Annette King there is the question of who will provide advice if this bill is passed and we remove the ability of Housing New Zealand to do so. The question of why that advice should be provided is also one that I will come back to. In my view the “whos”—that is if we prevent Housing New Zealand providing that advice; that vacuum—will be filled by three parties: firstly the real estate agents because the Government likes them; secondly the banks; or thirdly the investors in the whole housing market. The reality is that the Minister will require advice. Capable as she is I do not think she has the ability to go around and find out what is happening in each and every different market for housing up and down this country. So where will the advice to the Minister come from? Real estate agents—well I guess they could provide advice; they are on the ground. The banks—they provide the money. And the investors obviously have an interest in this area.Well we must ask the question why they will provide the advice because when Housing New Zealand provides advice it is for one purpose—and it has been set up—and that is to help New Zealanders into housing and into homes. It is not just social housing; actually every bit of housing be it in the public or private sector has a social component to it. If we think we can have an economy without people having homes we have got our head in the sand and we live in a false world. We need a strong social structure across our society strength confidence and security to give us a good economy. The Government on the other hand is removing the ability of its own agency set up right back in the 1930s to provide houses and homes for New Zealanders and to provide security for our good people so they can get on and live their lives and contribute to our country and our economy. If you remove that ability for that agency to provide the advice you then leave it open to the real estate agents the banks and the investors. Their reasons for providing advice are not the same reasons as those of Housing New Zealand and are not the same reasons as those of a Labour Government but perhaps the National Government has a totally different objective.In spite of its words around social housing responsibility in my view the Government has got to the reality and honesty of saying “We’ll just leave it to the markets. We don’t need any advice because the markets will provide the advice to the Minister and indicate what he or she should do.” That is the philosophy of the current National Government. The market delivers nirvana! The market delivers to each and every New Zealander—it thinks—and we will get our advice from the real estate agents we will get our advice from the banks and the investors and we will ensure that every New Zealander has a fair go. Listen to the ad played in Singapore Minister. Listen to the ad that says: “Invest in New Zealand because New Zealanders will pay more than 50 percent of their incomes to pay the return on your investment.” That is the advice that the Minister is going to open her mind and ears to because the Minister and the Government are going to remove the ability of the one agency set up in the 1930s to provide homes and securities for New Zealanders and remove the ability of that agency to provide the advice.This is a huge backward step in Part 2. This is an outrage for a country that has depended upon the advice the independent advice and the sound objectives of Housing New Zealand since the 1930s. Subpart 2 of Part 2 of this bill will remove that and replace it with market advice—with the self-serving advice of real estate agents the self-serving advice of banks that want to pour more money in so they can get more money back and the self-serving advice of the investors who think it is better that more and more New Zealanders pay rent into the private sector than have the security of a home be it in the private sector or be it under Housing New Zealand. This is a disgrace.Hon PAULA BENNETT (Minister for Social Housing): I just thought it was important to tie up a couple of things as we have heard quite a few speakers. They are repeating themselves and so obviously there are a couple of issues here. So let us be clear on something: housing policy changes—Hon Annette King: Your side doesn’t even speak.Hon PAULA BENNETT: Well here it is. Here are the answers that you wanted. Housing policy changes were actually reported back from the Social Services Committee on 12 May 2011. They have been to select committee and they have just been repackaged into this bill. Ministry of Business Innovation and Employment staff to be quite clear have been undertaking policy advice in lieu of Housing New Zealand since June 2011. Since June 2011—[Interruption] It is coming. This is an opportunity for us to tidy up what is in the bill which says that Housing New Zealand does it. So we have changed it—Hon Annette King: So under urgency we need to tidy this up?Hon PAULA BENNETT: No actually it is mainly the first part but I am not going to talk about Part 1; we are talking about Part 2. To be quite clear: the questions that have been asked have been around that. It made sense to tidy up that Housing New Zealand no longer provides the policy advice which it has not been providing now for 4 years. Actually that whole advice part of it—what needs to be done—is more than just Housing New Zealand. This is about providing advice to the community housing sector and about making sure that we are seeing the needs of the whole community and not just of one player. It may be a big player and a significant one—one that I of course meet with incredibly often and take its advice—but that advice goes through the Ministry of Business Innovation and Employment which means that we are looking at the sector as a whole.The other part of it which I thought I should just quickly clear up is that there were questions earlier about subsections and the existing sections. It is obvious for those who have been around longer which is why I do not think we have had more on it. It is a drafting convention that when subsections are added the existing sections become subsections. So if you have got section 98 when you put in a section 98(2) then section 98 becomes section 98(1). That is why you cannot find section 98(1). It is because as a convention it will become that once we have made the changes. Thank you.CHRIS HIPKINS (Labour—Rimutaka): I am very happy to take a call on this second part of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill and respond to the Minister for Social Housing’s comments where she said that Housing New Zealand has not been providing advice to the Government—Hon Annette King: For 4 years.CHRIS HIPKINS: —for 4 years—since 2011. Does it not show? Does it not show? I think that is one of the major issues here. It is that the Government is divorcing the practical realities of the decisions it is making from the advice it is getting on those decisions and it is not working. I will speak about the experience I have encountered in my own electorate.Previously Housing New Zealand had if you like three broad functions: the provision of the housing advice on the housing and identifying the people who were going into the housing. Identifying the people who were going into the housing was transferred to Work and Income and as a result we now have a mismatch between the housing available and the people who qualify to get it because Housing New Zealand no longer has—Brett Hudson: With National it’s about the people in need not about who owns the house.CHRIS HIPKINS: I am looking forward to Brett Hudson’s contribution because like most of the people over there he has had a National Party lobotomy and does not seem to have his own opinion any more and therefore has only the option of being rude to other people because he is not willing to stand up and share with the House his own opinion. As I was saying the Government has divorced from Housing New Zealand decisions regarding who gets the houses so Housing New Zealand no longer has the complete picture of the people who are likely to be in need. That has an impact then on its ability to deliver policy advice to the Government. One of the issues there is that the complete picture of who the people in need are is now actually quite difficult to ascertain. Housing New Zealand has cut off the lower two tranches of the waiting list so that we now no longer have any record of the people who are at that lower level. That is a policy issue that Housing New Zealand could be supplying advice to the Government on and it is now no longer able to do so.Here is the real reality of what these changes have actually meant. I think we can look at the policy and we can look at all of the theory behind it. Let us deal with the practical realities of what it has meant. What it has meant is that on a Friday afternoon I have got people sitting in my office saying: “I am living in a car. There are three-bedroom houses empty in this area but because I qualify for a four-bedroom house Housing New Zealand will not place my family.” That is a practical reality. That is an actual case that I have been dealing with for some months where Housing New Zealand will not give that family a home because they qualify for a four-bedroom home. There are no four-bedroom houses available there are empty three-bedroom houses available but it will not place them in a three-bedroom house. That is the practical reality of the policies we are dealing with. And Housing New Zealand of course can no longer provide the Government practical advice on that because the policy function it previously had is being removed from it.There is good reason why the delivery agencies the agencies responsible for delivering on the policy should be able to provide policy advice to Ministers on the implications of the decisions Ministers make. The implications of the decisions Ministers have made in social housing policy are that they have actually made it more difficult for people to get into Housing New Zealand homes more difficult to target assistance to those who most need it. I have got no problem with our looking at the ways we can better support those who are the most vulnerable and most need it. The practical realities are that that is not happening and that there are very needy families out there who are living in cars. The family I mentioned before have got a number of kids. That is why they qualify for the four-bedroom home. The kids are staying with someone else; the parents are living in the car. That is just not acceptable. Then of course Housing New Zealand will offer them a place that is in another city. It will say: “Oh we’ve found a four-bedroom place for you but you’re going to have to move 100 kilometres away.” They have to uproot their kids from their schools and all those sorts of things. It is just not right. This family would be willing to accept a 3-bedroom house but Housing New Zealand will not give it to them. I think that is wrong. That is the practical reality of the policy we are passing.It is important that when Ministers make decisions about these issues they are connected to the practical realities that those decisions result in and that is not going to happen with this bill. The reforms simply are not working. If they were designed to ensure that the needs assessment process was more efficient and that the advice coming to Ministers was better that is not happening. The needs assessment is not more efficient. What it is resulting in is further delays for the most needy people who really should be getting placed in housing. They get shoved from one agency to another and then back again. The policy advice process that should support the needs assessment process is not there and is not robust enough because the agency now providing the policy advice the Ministry of Business Innovation and Employment is completely removed from the actual provision of housing and the practical implications of that. It says everything about this Government—that it has handed over the responsibilities for advice on housing to the agency that is responsible for property speculation.ANDREW BAYLY (National—Hunua): I move That the question be now put.Hon DAVID CUNLIFFE (Labour—New Lynn): This Budget has been labelled by the Government as the “compassionate conservative Budget”. These clauses clauses 20 and 21 of this bill the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill show that it is a “Cabinet club conservative Budget” because it is taking a Public Service housing provider ripping the guts out of it and in Part 2 of this bill removing from it even the ability to advise the Minister for Social Housing on policy issues. Here is how. Clause 20 says that Housing New Zealand Corporation will give no policy advice. Clause 21 says that when it does research that research will not be on policy issues. In other words no non-commercial function will be performed by Housing New Zealand Corporation. Housing New Zealand Corporation is going from being a provider of houses to vulnerable families who need help to essentially a commercial landlord.Let us look at what would be some of the advantages of an agency like Housing New Zealand continuing to be empowered to give policy advice. First as my colleague Annette King has mentioned is that it has history. It has managed the portfolio for decades. It knows literally where the renovations and the skeletons are buried and it knows what needs doing. There is nobody better placed than the organisation to advise on its portfolio and the needs therein. Secondly up until recent times the corporation had the most contact with its clients. If you had a problem of maintenance or a problem of prioritisation you would go and see the corporation. Because it had the stock and the client contact it was best placed to put the two together come up with a reasonable set of priorities and get the families who most needed the help into the properties that were most suitable for them. The Government has made that more difficult because instead of going to Housing New Zealand Corporation the poor families now have to go to the Ministry of Social Development or Work and Income. They are already overloaded. They are slapping and packing people through those waiting lists every 5 minutes and those are the performance indicators that the poor old Work and Income staff are under. They have to move them through. They do not have the expertise or the time to deal with these critical issues of where a family are going to live.The next thing of course is that Housing New Zealand Corporation has got a local footprint. It has got houses in each area of the country. It knows its stock and it knows the communities the houses are in. Why would you not want the corporation advising on policy issues? Of course if you are not going to have that what happens? Well the first thing is that you do not have contestable policy advice. The Government makes itself more vulnerable to input from the vested commercial interests the banks that are making a crazy killing off house mortgages the property investors and the organisations that represent them. Even the social service providers like the Salvation Army have said: “No thanks we don’t want to play this game because you’re giving us the liability without the assets. We can’t cover it.” The Government cannot get decent advice from them.Let us sum up. By taking away the policy functions from the corporation Minister you have made clients more vulnerable. You are not getting the advice you need to get from the people best placed to give it who have the history in the organisation who are close to the clients who have the deep knowledge of the housing stock that is being managed and who do not have vested interests that are in conflict with the public good. There is no basis in logic for the clauses we are debating in Part 2. Why are they there? And more important why are we here in urgency trying to pass this through all stages without even giving the public the opportunity to make a submission?Hon Annette King: They’ve been waiting for 4 years she said.Hon DAVID CUNLIFFE: It has been 4 years in the waiting. Why is this happening under urgency? The reason is because the Government knows that reasonable New Zealanders do not like this stuff. They do not like this stuff so the sooner this is wrapped packed under the carpet and out of the public gaze the happier the Government spin doctors will be. The Government does not want to hear from New Zealanders. It does not want New Zealanders having a say because it knows that the average decent Kiwi thinks it is a no-brainer that of course Housing New Zealand Corporation should be able to advise on housing issues. Why on earth would it not? Why are these clauses in the bill? Firstly Minister if you are really honest in your heart of hearts it is because you do not want to hear the advice. It is not good advice because the news is all bad. The waiting list is getting longer and longer. The needs are getting greater and greater. Just like Chris Hipkins Annette King Ruth Dyson and Damien O’Connor I have my office overflowing with hard-up Kiwi families who need help.SCOTT SIMPSON (National—Coromandel): I move That the question be now put.Dr DAVID CLARK (Labour—Dunedin North): I raise a point of order Mr Chairperson. I have not had an opportunity in this stage of the debate to make a contribution and there are some specific clauses that I wish to speak to. What remedy is available to me?The CHAIRPERSON (Hon Chester Borrows): The member may be seated. We had a substantial discussion at the time of the closure motion last time. I am not going to be going through that every time. The member will know that the next clauses we will be debating are very wide ranging and will cover this part and others. I am fully expecting and looking forward to members using the whole gambit of their colourful vocabularies in a seemly matter to have a lively discussion and debate on those clauses. The motion will be put and we will continue with the vote.A party vote was called for on the question That the question be now put.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Motion agreed to.A party vote was called for on the question That Part 2 be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Part 2 agreed to.Clauses 1 and 2Dr DAVID CLARK (Labour—Dunedin North): Thank you for your advice earlier Mr Chair. I do appreciate it and I appreciate the opportunity to make a wide-ranging contribution to this debate. I do feel strongly about this but I will certainly be speaking though to one clause in the bill and that is clause 2 the commencement of the Act and of Subpart 3. I wish for the House to consider that we change the commencement date to 1 April 2018. I think that way we could be certain that a Government that cares about State housing and a Government that cares about our most vulnerable will be in Government and we can have that debate again. We can ensure that this bill is never implemented. That will be what I will move and that is for the reasons that I am now about to give.What has happened here with this bill is that we are rushing it through the House without the opportunity for public input. It is a bill deliberately designed to reduce State housing in this country. It is designed to take the Government out of the provisions for social housing. As we have heard from many members in this House the problem with that is that the private market is not delivering the affordable and adequate social housing that is desperately needed in our society.I will give another example that has not been brought up. This is an example of a woman whom I met just last weekend on one of my home visits in the suburb of Wakari. I went to visit this woman and she said she was quite happy for me to tell her story because she feels strongly about this.Kris Faafoi: Where?Hon Ruth Dyson: What suburb?Dr DAVID CLARK: Wakari in Dunedin. She said to me that she is fearful that she will not be allowed to stay in her State house any longer. It is a three-bedroom State house. She is now living on her own but she uses the other two bedrooms frequently to take care of her grandchildren when her son is called to work at short notice. She has grandchildren whom she cares for in that house. She has lived in it for a good chunk of her life because for one reason or another she has never had the opportunity or the prospect of affording to buy her own home. She would love to but she has never been in a position to afford her own home. So the State has said: “Look we will look out for you. You are a good contributor to our society.” She has always worked up until recently. She is now unable to find work as she rapidly approaches retirement. She has been made redundant several times. There is simply just not enough work in Dunedin for this woman who would like to work like she has her whole life in order to keep affording a standard of living that we could call living with dignity.She tells me that now she has to save to buy a cup of coffee. She has got a good friend who rings her up every week and says: “Let’s go out for coffee.” She is embarrassed by the fact that she cannot go out every week with that friend because she cannot afford the cup of coffee. When she has paid her insurance which she does refuse to give up—and she says that that is discretionary—she has only $20 left over every week with which to feed herself. She has an elderly dog that she refuses to give away and that she has cared for for many years. She said: “That dog eats pretty close to $20 worth of dog food a week.” She has got nothing—absolutely nothing—to live off each week. When she goes to get a haircut her kids donate her money to get it. That is not the kind of living in dignity that we would want for our citizens. That is not the New Zealand I signed up to where someone who has worked for their whole working life bar the last few years because they cannot get work is forced to worry about whether they are going to have a stable place to live and whether they can care for their grandchildren adequately. Even now she is living in a house that is fairly cold I would have to say from having visited her. She is a good woman.We need to make sure that in our society there is adequate protection and that people who are in need are looked out for and looked after so that they can continue to make a constructive contribution to our society through the caring for grandchildren through the voluntary community work that that woman does and through other means.The point that I want to come back to is that the case for this particular intervention has not been made because there is a market failure. I mentioned this in my earlier contribution the market failure that sees many families who want to get into affordable houses being unable to get into them and families who want to provide warm dry homes for their kids to live in being forced into the private market because of unmet need in the State sector. Those people are in a position where they cannot—they cannot—get what they need out of the private sector. If we had an adequate State housing sector that would force private sector providers to meet that need at the level that the State housing sector meets it and it would address that market failure and the unintended consequences we see in the existing market.One thing that I have noticed in all of the legislation that has gone through the House is that there has been a lack—KRIS FAAFOI (Labour—Mana): Thank you very much for the chance to speak on the title and commencement clauses of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. This is one of those points in the Committee stage when we get to proffer some alternative titles for the piece of legislation. I have got a pretty simply one—just one: it is that we change the title to “Social Housing Reform (State House Sell-off) Bill” because in all reality that is what this is about. There has been a programme over time since this Government took office to slowly move back from taking any responsibility for social housing in New Zealand. I would challenge any member on the other side of the Chamber to take a 5-minute call—none of these 30-second calls that they have been taking—to try to say why this is not a State house sell-off bill because that is exactly what this is.Part 2 of this bill looks at some of the policy advice that Housing New Zealand will no longer be offering to the Government. It has offered over time lots of advice to the Government. Just some of the advice that Housing New Zealand has offered to the Government is about one cul-de-sac in Porirua. It is not about whether the Government should upgrade those houses or look at making sure that we do more for those communities. It is about Quotable Value. It is about getting those houses ready for sale. There is no plan or advice from Housing New Zealand to replace those houses.If anyone in this House wants to come to Calliope Crescent in Cannons Creek they will see that there is a big swathe of land there that has been empty for about 5 years. When those houses were taken away the Government promised that it would replace them and that that community would flourish again. But nothing has happened. Kids now use the land for games of touch because there is a park there now. This Government should have stuck to its word and should have replaced the homes that it bowled over. It should have put houses there for that community to flourish. But no there is nothing.There is only one side of this equation that the Government is interested in and that is getting rid of State homes. It is not interested in replacing them at all and that is the cold hard reality of this Government.Andrew Bayly: We’ve still got 65000 of them.KRIS FAAFOI: I can hear some interjections. Those interjections are longer—longer—than the speeches that members on that side have given. So I challenge the member who is interjecting to get to his feet. If you are so proud of this piece of legislation get up and take a call—get up and take a call. I will make another invitation. Come to my area and spend just half a day looking around and see how proud you are of the last 7 years of wrecking the Housing New Zealand sector in this country.As I said in my speech on Part 1 I came to this Parliament in order to protect and build on some of the opportunities that I was given as a child to make sure that I got to the privileged position I am in today. But on the other side of the Chamber they want to keep the privileged position that they have got today for them and their privileged friends. They do not care about the most vulnerable people in our country who are struggling to make ends meet. They have the most simple of rights in this country and that is to have a good safe warm home—a roof over their heads. That is too much for this Government to ask. The Government is glossing it up in the language of flexibility and it is taking a fair bit of flexibility with the truth. That is the reality of what this Government is doing. For 7 years it has been slowly winding back its responsibilities for social housing. So I do think that this bill should have its title changed to the “Social Housing Reform (State House Sell-off) Bill” because that is all it enables this Government to do.At the very beginning of this plan this Government said that the likes of the Salvation Army would be interested in purchasing these homes in working in our communities and in making the lives of these people better. Uh-uh it is not interested. The Salvation Army does not want a bar of it. I have spoken to a local iwi that also has experience in this area. Iwi members say it does not make sense for them to do it. So if the market does not work for them and if the market is not working for these vulnerable people then on whom does the responsibility fall to make sure that people get a decent home in New Zealand? It should fall on the Government. This piece of legislation sees this Government washing its hands of this responsibility. Come to Cannons Creek come to Ascot Park and come to Titahi Bay where there are vacant Housing New Zealand homes and people desperate to get into them. Government members will not because they do not care.CHRIS HIPKINS (Labour—Rimutaka): I am very happy to take a call on the preliminary clauses of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill and a very inappropriately named bill it is. What they should really call it is the “Social Housing Reform (Wholesale Privatisation) Bill” because that is exactly what this bill is really about. It is about the Government abrogating its responsibilities when it comes to the provision of affordable quality rental housing to those New Zealanders who are not in a position to buy their own home. It has been a long-held tradition in New Zealand that the State will ensure that its citizens are adequately housed. From the time of the first Labour Government that built so many of the State houses that the National Government is now content to hock off we have had a tradition in New Zealand that the State will be an active player in the housing area so that families have a warm dry home and a roof over their heads. This Government is walking away from that principle.I think of the areas like Pōmare Trentham and Naenae where under this National Government we have seen houses boarded up and abandoned only to then be demolished and that land handed over to private developers. It is not just in my area that that is happening it is happening up and down the country. I have made it very clear from the beginning of that process that the provision of the ultimate number of social houses—that is affordable rental houses for people on low incomes—is not decreased. I think it is good that there should be some redevelopment—that there should be some rebuilding. Some of those houses are past their use-by date and need to be replaced. I would not accommodate people in some of those houses. I do not think they are fit for families and demolishing them and replacing them is good. But it should not be at the expense of the overall number of affordable houses. Reconfiguring those neighbourhoods is the legitimate thing to do but what is the practical reality we are seeing? In Pōmare there is a good redevelopment happening but most of those houses are privately owned. Where did those families go which the National Government booted out?There were some social issues in Pōmare caused by a very small number of people I have to say. There are a large number of people there who were good law-abiding citizens just trying to make their way in the world who got treated very harshly by Housing New Zealand and by the other Government agencies involved in that. But the problems in Pōmare have not gone away just because the houses have been demolished. They have been relocated elsewhere. We are seeing problems emerging in other parts of the electorate in other parts of the Hutt Valley where some of the people who were causing the problems in the first place have simply relocated to. The problems did not go away. The Government’s busting up of the Pōmare community in the way that it did did not deal with the issue and it did not deal with the problem. Wholesale privatisation of that social housing market is not going to make any of the problems go away; in fact it is going to make some of those problems worse.The bill could easily be called the “Social Housing Reform (Increasing Intergenerational Inequality) Bill” because the Government seems to have given up on the notion that future generations of New Zealanders should have the same access to affordable housing to buy or to rent that previous generations had. The Government is giving up on that notion altogether. First-home buyers are being shut out. The only solution to giving first-home buyers a bit of additional assistance is to allow them to cash up their retirement savings—more of their retirement savings—to buy their first home. It could be called the “Practical Reality Bypassing Bill” because the Government is now going to be ignoring advice from Housing New Zealand. It is interesting—we could call it the “Abrogation of Responsibility Bill” because despite the fact that we have now got three Ministers in the Government responsible for social housing none of them seem to be willing to participate actively in the debate.I do have a technical question regarding clause 2 which covers the superannuation provisions coming into effect on or basically being backdated from 1 April 2015. The question I have got is does that mean that people who transferred from a non - KiwiSaver scheme into a KiwiSaver scheme prior to 1 April 2015 will not be eligible or does it mean that basically providing they had done it by that point they would be covered by this provision in the bill? I think it would somewhat thwart the intention given that most people in KiwiSaver would have joined up before 1 April 2015. It somewhat thwarts the intention of what they are trying to achieve—and I am sure the Minister in the chair will be able to answer. It is a pretty simple straightforward question I would hope. It seems to me that the idea behind the backdating is that providing someone had done it by that point they should be eligible. I certainly look forward to having that clarification.PHIL TWYFORD (Labour—Te Atatū): This bill I think instead of being called the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill should actually be called the “Flog Off State Housing to the National Party’s Property Developer Mates Bill”. That would be a far more accurate representation of what this bill is about. It is on the surface some little sort of vanilla kind of enabling legislation allowing more flexible purchasing contracts. But actually what this bill is designed to do is to give the Minister extraordinary discretionary powers to do sweetheart deals with property developers. Instead of simply as the current law allows being allowed to extend income-related rent subsidies to the people who buy these State houses from the Government this bill gives the Minister wide-ranging powers to do any kind of deal—to crank up the subsidies crank them down or to do away with the subsidies and just agree on direct payments. It gives amazing freedom and discretion to the Minister to do those sweetheart deals.The reason that the National Government is giving itself these powers is that it cannot give these houses away at the moment. It spent months saying that the Salvation Army was going to take them and that ended in tears when the Salvation Army said: “Sorry not us.” Paula Bennett Nick Smith and Bill English have been travelling up and down the country basically trying to hock off these houses to anyone who will take them and they are not getting any takers. This bill is about giving the Minister the freedom to do sweetheart deals or anything it takes to basically offload billions of dollars’ worth of publicly owned State houses.It could be called the “Cabinet Club Housing Policy Bill” because what is really going on here at the heart of this policy—when you strip away Paula Bennett’s mealy-mouthed platitudes about social housing—is a massive transfer of wealth from the public to private landlords and property developers. The Government is looking at divesting and flicking off billions of dollars’ worth of State houses that have been paid for by generations of taxpayers and State house tenants—flicking them off at knock-down prices to anybody who will take them. Those houses will then go on to the open market and people will make a killing on those houses. I guarantee that they will end up eventually just simply being rented back to the same people who need a decent roof over their heads but this time they will be paying higher rents and the taxpayers will make up the difference with a hefty subsidy directly into the pockets of landlords. That is the model that Bill English is pursuing. It is a huge transfer of wealth from the public to private landlords and property developers—that is fundamentally what is going on here.We saw recently in the New Zealand Herald reports of how the National Party funded its election campaign last year. The big cheques were made out by property developers. This policy is the big payback—it is the big pay-off. That is what the Cabinet club is all about. It is about giving big business—in this case property developers and big landlords—the opportunity to put their hands in the public pocket and benefit from billions of dollars’ worth of State housing that generations of New Zealanders have paid for. State housing is not intended to line the pockets of private landlords as this National Government wants to do but to put a decent roof over the heads of the most vulnerable New Zealanders. Nothing rankles more with New Zealanders than that basic idea that the reason we have a Government is to make sure that things work for everybody—that every kid in this country gets a decent start in life.Chris Bishop: Well we’re raising benefit levels.PHIL TWYFORD: That is why Chris Bishop we invented State housing in the first place. And I know that your party has never had any truck with State housing. You do not like it you do not believe in it and you do not want to have anything to do with the people who live in State housing because it makes you profoundly uncomfortable. The social and economic system that you stand for does not care what happens to the bottom 20 percent. You do not give a damn about it and you are quite happy—Tim Macindoe: I raise a point of order Mr Chairperson.The CHAIRPERSON (Hon Chester Borrows): There is a point of order. [Interruption] Sit down when I am on my feet.Tim Macindoe: This member is repeatedly bring you into the debate—[Interruption]The CHAIRPERSON (Hon Chester Borrows): There is a point of order. There is a point of order and it will be heard in silence. And you can sit there and point and say that he knows he should be sitting down and so did you but you did not and he did not and you know—what do you think this does for the reputation of this House? For goodness’ sake! Now I have a point of order from the Government chief whip.Tim Macindoe: This member is repeatedly bringing you into this debate in manners that are completely inappropriate.The CHAIRPERSON (Hon Chester Borrows): Carry on.PHIL TWYFORD: As I was saying there is one thing that rankles more than anything else with New Zealanders and that is when the Government dismantles the very systems of social support that are designed to guarantee that every child growing up in this country gets a decent start in life.Hon ANNETTE KING (Deputy Leader—Labour): We are at this stage of the debate looking at the title of this bill. We have had a number of suggestions as to how we could better title this bill. I thought that I would remind the House that it is not that long ago that I think it was the Law Commission or it might have been the Legislation Advisory Committee that told this House that bills must have titles that reflect the intention of that bill. It is very important that we have proper titles on bills so that when the public picks a bill up and they read it or they see the heading they know what that bill reflects. I have thought for a long time that that was very good advice to give to any Government when it is bringing in a piece of legislation. It must be a title that reflects the intention of the bill.I have to say that the title of this bill does not by any measure reflect the intention of the bill because it is called the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. You have got to go to the first word—that is “Reform”. “Reform”—what does “Reform” mean? It implies improvement—it implies improvement. We are being told that these reforms are improvements but no evidence has been given in this debate for improvement. No research no evaluation and no reports have been given by anybody that this is an improvement to social housing in New Zealand. I would have liked just one bit of evidence that this measure has been looked at properly but instead we are going to push it through under urgency—even though part of it has been done for 4 years—and no evaluation and no input from the public has been held.So how do we know that this reform is going to be an improvement? The word “Reform” should be removed from the title of the bill because that is what it implies—improvement. Then the next words are “Flexible Purchasing”. Well everybody knows what that means so why not just say what it is? It is the sell-off of State houses to other organisations but not to community groups. That was the intention when the Government had its regulatory impact statement done with a little bit of consultation with the community sector and had it published back in March. That was the intention but what happened in the meantime? Campbell Roberts who I think is one of the most respected people in the Salvation Army came out and said: “No we can’t participate in this great social housing reform involving a flexible purchasing arrangement. We can’t participate because we cannot afford to buy the houses because we would be in debt for 10 years and we would have to change what our philosophy and our approach is in terms of the provision of services by the Salvation Army.” Those services are there to help to protect and lift up the most vulnerable in our community.The Salvation Army told us that if its money and its attention had to go into buying houses under this community housing project it could not stick to its core values philosophy and principles in terms of providing those services. So the Salvation Army pulled out but the problem was that you had the Minister of Finance and the Prime Minister going around New Zealand telling New Zealanders: “This is a great policy because the Salvation Army will take the houses. It will be part of the flexible purchasing arrangement.” That fell flat on its face.We do not now know who the flexible purchasers in the community sector are going to be because we do not know of any and neither does the Government. But what we do know is that there are flexible purchasers out there who are very very interested in buying up State houses cheaply. I have to say that my colleague Phil Twyford is correct—they are property developers. I understand that many National members are new constituency members so maybe they have not had so much contact with their constituents at this stage or maybe they do not have many State houses in their electorates but if they go out and look they will see that State houses are already being sold off to property developers at knock-down prices. There are plenty of examples. Go out and look. State houses sold to property developers at knock-down prices—how does that improve—Hon DAVID CUNLIFFE (Labour—New Lynn): It is a great opportunity in this stage of the debate to draw together the themes of what is in and what is not in this bill. We have got the date of commencement and we have got the title which is an opportunity for us to pull these themes together. My colleague Chris Hipkins mentioned the proposal for a commencement date that postdates the next election. If the Government had a shred of honour given that it is removing from the New Zealand people the opportunity to make submissions on this bill and have it go through a select committee and given that it is simply ramming it through under Budget urgency and if it had the courage of its convictions then it would commence the bill after the next election so that New Zealanders can vote on it and cast their votes on whether they think Housing New Zealand should be a provider of social housing to New Zealanders who need it or whether it should be just another commercial landlord.This is a bill that could have so many names. It is part of the panic button for this the Government’s seventh fiscal deficit Budget. So perhaps it could be the “Housing (Broken Promises) Bill”. Perhaps it could be the “Housing (Give With One Hand and Take Away With The Other) Bill”. Perhaps it could be the “Housing (No Surplus Again This Year) Bill”. Those themes are all common parlance common knowledge amongst New Zealanders who are sighing with sighs of resignation because they have given up on this Government. They have given up on the Government having a new idea or a vision or a strategy for growing jobs and growing incomes for making life fairer or easier for those New Zealanders who just do not have enough to get by.My colleagues God bless them do the hard work that members opposite seem to find it too hard to find time to do. My colleagues are working with families week in week out who are living in cars who are living overcrowded with three or four families in one modest three-bedroom Housing New Zealand home who are living in garages and with children not able to go to school properly or being shunted from school to school. If you do not have a decent roof over your head the cost of that is measured in broken lives and underachievement and our country being the poorer for it.So the Government is essentially stealing from the future to do a cheap and nasty job of today. Sadly this bill is part of that cheap and nasty New Zealand. It is cheapening it. It is cheapening it by taking what was part of the envy of the world our comprehensive welfare State and carving it up and throwing it over to private property developers. Members opposite might smirk. Who knows—maybe some of them might be getting a cut or maybe the party is getting a cut from some of those wealthy wealthy property interests that lobby the Government up-hill and down-dale. Maybe that is the source of the smirking that is going on by members opposite. But I tell you what: there is no smirking going on in west Auckland where people are crowded into unacceptable damp overcrowded houses and the waiting list is getting longer and longer.What New Zealanders are saying to us now is that it is just too hard. The only people getting a Housing New Zealand home are people who are mental health consumers long-term invalids or some very few who have been in extreme poverty for years and years and years. You know how often is it now that you are in a major city and you walk down the street and there is someone sleeping rough on the sidewalk? I remember that when I came into this House around 20 years ago you would not see that. You would not see much of it under a Labour-led Government either. We used to look at places like America where people sleep rough often and we used to look down our noses and say that it would never happen in New Zealand. Well it is happening now.Gutting Housing New Zealand from being a social housing provider to becoming a commercial landlord—members opposite can smirk all they like but the New Zealand public will have their say at the next election because they damn well know what it means. It means more for the people who have already got a lot and more hardship for the people who are already doing it tough. And they have had a gutsful of it—a bloody gutsful. So members opposite can smirk all they like. Carve up Housing New Zealand throw away the welfare State give up on the ideal that Jack is as good as his master and the New Zealand public—[Interruption] Yes I know and throw John Campbell off prime time while you are at it. Make sure that every major news outlet is staffed by Government-friendly journalists. All that will prolong your miserable life in Government by not much because New Zealanders do not like to be told what to do. They will have their revenge at the ballot box.Hon PHIL GOFF (Labour—Mt Roskill): This bill cannot possibly go through under the title that is set out in clause 1 of the bill. The title that it is given is the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. We have all gone to school. We know what the word “reform” means. It means to make better to improve to make more effective to make more capable of delivering the results that ordinary working families need. There is not a member in this Committee not even a member on that side of the Chamber who believes for a moment that this bill carries out that purpose. It is a total misrepresentation. God knows that this House does need a social housing reform bill.I just want to take 1 minute of your time to read out this commentary which I picked from one of my local papers. It is actually from the electorate of the member for Hunua. This commentator talks about “desperate families two sometimes three families sharing a small house usually in South Auckland with the kids suffering from inadequate food poor clothing and often-poor health a direct result of over-crowding and rents consuming half of an average wage.” Do you know who that commentator was? Do you know who it was? It was Don Brash. That is what Don Brash the one-time leader of the National Party and the one-time leader of the ACT Party is saying in a publication in Andrew Bayly’s electorate. That is from just 2 weeks ago. I happen to agree with Don Brash in his description of the housing crisis that faces New Zealanders at the moment—a housing crisis that for the first time does not affect just the people at the bottom of the heap. This is a housing crisis that affects a lot of ordinary working New Zealanders who desperately hoped in this Budget and in legislation under this sort of title that they might have been given a break to get a decent roof over their heads and to bring their kids up with a chance in life.What we have seen is rents going up six times the rate of inflation in the last year in the city of Auckland—six times the rate of inflation. Rents have gone up on average by $1300 a year in Auckland in the last year—by $25 a week. It would take up the whole of the extra benefit given to vulnerable families who are on a benefit and it is affecting other New Zealanders as well. The price of a house in Auckland went up by $103000 last year—in 1 year by $103000. That is a 15 percent rise and that is putting pressure on those who are renting. People cannot afford to buy their own home and those who would normally have been able to afford to buy their own home are now competing with the most vulnerable for the rental housing that is available. A social housing reform bill would have addressed the problems of a housing shortage and housing affordability in Auckland which is now reaching crisis proportions. The National Party may have its head down but even its former leader Don Brash spoke the truth about the nature of that crisis.So what have we got from this bill that will help? Is this bill and this title about the Government stepping up to meet its responsibility? No it is about the Government opting out of its responsibility by facilitating the selling off of social housing to the private sector. It has cut social housing—1600 fewer State houses in its last term in Government—and now it is selling off a couple of thousand not to the Salvation Army which Bill English used to talk about the lovely Salvation Army that would look after people but to private developers and to private landlords. That does not solve the housing crisis. This is not a social housing reform bill; it is a bill to privatise social housing to gut Housing New Zealand and its ability to do the job that our forebears 80 years ago this year in this House set up which was to provide State housing so that every child in New Zealand had the chance for a decent life because they had a stable secure affordable home—warm and healthy—to enable them to have good health good education and a better life. That is what reform is about. This bill does the opposite.STUART SMITH (National—Kaikōura): I move That the question be now put.The CHAIRPERSON (Hon Chester Borrows): No. The time has come to suspend the Committee for the lunch break. The Committee will resume at 2 p.m.Sitting suspended from 1 p.m. to 2 p.m.Hon DAVID PARKER (Labour): I would like to speak to the title of this bill which is named the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. Before I come to why I think it is misnamed I want to just recap the main features of the existing housing crisis in New Zealand. First of all we have got the lowest rate of homeownership in the private ownership marketin over 50 years. Secondly we have got the highest prices for houses ever in New Zealand. Thirdly those prices are amongst the highest in relation to income as they are in any part of the world. Fourthly the Government has already sold off thousands of rental houses. Fifthly we have got poor-quality rental stock around the country—in Auckland but also in the provinces—because we have got no minimum standard of housing and yet this bill does away with the advice function of the ministry.I want to address where this leads. In particular in one little subsection of housing when you have such high housing need and no place for people to stay you not only get an increase in homeless people you get people staying in substandard accommodation. We are now actually seeing middle-class people—who used to be insulated from this sort of thing; I know of people in this situation now and I did not of know people in this situation a few years ago—who if they suffer a family breakup for example have to move with their child into another house and share a bedroom. These are middle-class people. These are not the lowest-income people. The person I am referring to whom I will not name is in full-time work but he is in that situation with one of his children.Even further down the tree the people who are less well-off get forced into even less desirable situations—namely caravan parks. I want to just reflect on where this is heading in New Zealand because we now have more people than ever living in caravans and caravan parks. I came across this article in respect of where it has got to in the United States because this is the path that we are on currently with all of those factors I have talked about. It is in the Guardian Weekly of 15 May—just this month. It says that “America’s poverty trap is offering up sharp profit margins for private landlords”. I hope people in here are shocked by this. This article refers to the number of people who are living in caravan parks in the United States—and its problems have been growing for longer than ours in this regard. How many people do you think are living in caravan parks in America? Have a guess.Dr Megan Woods: A million.Hon DAVID PARKER: A million?Dr Megan Woods: A million.Hon DAVID PARKER: A million is an enormous number of people. You would think that is right would you not? Did you know that the answer is 20 million people—6 percent of the American population now live in caravan parks. And it has become a big industry for the big end of town because they do not even own their caravan in their caravan park—6 percent of all Americans now live in caravan parks.I would hope that the housing officials who are sitting there looking at this would be ashamed of their bosses who are forcing through the House legislation to say that the officials cannot give advice about that being where this trend ends in New Zealand. That is why this bill should be named something different from it being about remedying social housing problems. It actually makes them worse and it should be about the trend towards caravans because that is what is happening in New Zealand.Paula Bennett who should hang her head in shame in this Chamber refers people to the local caravan park in west Auckland. In west Auckland and South Auckland the camping grounds are bulging at the seams because New Zealanders—some of them in work—have to live in camping grounds. Under this Government we are going down the same path that America has where it has now got 20 million people living in caravan parks in one of the wealthiest countries in the world. We are one of the wealthiest countries in the world too and we have got increasing numbers of people living in cars sharing houses living in camping grounds or being completely homeless.This bill will make it worse because it allows the Government to abrogate its responsibility—to escape income-based tenancies and State houses because it can sell them all off and move them to some other function that is not properly funded. And who will make more money? Again it is the big end of town. Who makes money out of all these trailer parks and the misery in America? The owners of the trailer parks. How many people are affected in America? Six percent of its population. This legislation should be called the “Housing (Promotion of Caravan Parks as a Band-aid) Bill”.DENIS O’ROURKE (NZ First): This bill needs a very serious title I think because it is a pretty serious issue that it covers. I think we should take it seriously and I believe that the title needs to be actually a lot longer even though it is quite a long title already. In particular it must be descriptive of the content of what is in the bill.So I would like to propose a more accurate title. It will be a bit longer but I think it will be worth the extra words. It would be the “Measures to Make the National-led Government’s Appalling Record on Housing Reform Since 2008 Even Worse Bill” because I think that is actually fundamentally what this bill does.The title could be longer of course because there are other things in it that show how bad this legislation is. For example it could refer to measures to reduce housing stock in New Zealand because that is one of the most obvious effects of this particular piece of legislation and the principal Act that it amends. Secondly it could refer to encouraging higher rents and house prices because that is also what it does and that is of course for the benefit of selected private housing providers and nobody else in the community. Rentals are far far too high already and the rate of increase is far too great. Thirdly it could refer to a failure by this Government to improve rental house quality over the 7 years it has so far been in power. The quality of rental homes has not improved. Little or nothing is being done about that and this bill fails to address it. So the title could also be as another alternative for example the “Measures to Reduce Rental Housing Stock Increase Rents and Ensure No Improvement in Private Rental Home Quality Bill” because that would also be a very descriptive title for this legislation.Another alternative might be the “Housing (Weasel Words) Bill” because I do not think I have ever heard so many weasel words in a piece of legislation itself and in the descriptions around it. I want to refer to just three of them.First of all is the term “housing independence”. What does that really mean? “Housing independence” really means being abandoned to the rigours of a dysfunctional rental market. That is actually what we are talking about when the Government refers to housing independence.Another word that is often used in relation to this bill is “flexibility”. I think that really means that Ministers through the excessive powers given to them in this bill to give directions will be empowered to do dodgy deals behind closed doors with a variety of housing providers.The CHAIRPERSON (Hon Trevor Mallard): Order! I am sorry—[Interruption] It is my responsibility to look at the member.Jacinda Ardern: I was blocking the view.DENIS O’ROURKE: OK. The third term is “tailored contract”. I think that what that means is that some will get privileges and provisions that others will not get. There will be no transparency and there will not be a level playing field so I do not think that is a particularly good term to use either and yet it is one that is bandied about the Chamber without any real attempt to define what it is.Finally another possible title for this bill could be the “Suppression of Housing Demand Bill” because that is the whole thrust of both the principal Act and this amendment to it. The suppression of housing demand really means pushing people out of State houses who should not be pushed or bullied out of State housing. In fact many such people should actually be encouraged into State housing as a good secure housing solution for them. It will make it too hard in the future for people to get a State house. That has been a problem for a long time. This legislation will make it worse.I have suggested at least three ways in which the title to this bill could be improved and I would be happy to support a change to any one of them.Hon RUTH DYSON (Labour—Port Hills): Can I first of all commend you Mr Chairman for your choice of giving the call to me against my colleague who has been competing for it longer than I have actually and may not be too popular with you later on. It is good to be able to have an opportunity to speak to the title and commencement of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill.I listened with interest to Denis O’Rourke from New Zealand First who just made a very substantive contribution. It is in keeping with the style of the debate on the title and the commencement of bills that we talk about alternative names that they could be called. He quite correctly pointed out that the purpose of this legislation is to continue what the National Government has been doing by stealth which is the selling-off—hocking-off—of State houses to the private sector. It is not so that we can have better provision of affordable houses not so that we can have more affordable houses but just solely so that the Government can get out of that provision of social housing and you know presumably spend less on supporting vulnerable families.I commend Denis O’Rourke’s recommendations in terms of the way that the name of this bill could be changed. But actually if you look at the name of the bill Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill—who on earth would know what that means anyway? Flexible purchasing to the National backbenchers who are going to put their names on the public record alongside this bill selling off State housing—I am sure they have not read it. It is quite obvious that the National Government got to its caucus before the Budget and they were briefed and were told that this was all about flexible purchasing and remedial matters. They would not have asked. None of them would have had the courage to ask the Minister what it actually meant and what they were going to be voting on and putting their names beside.So even though I agree with Mr O’Rourke and other colleagues who have spoken about changing the name the title is actually so meaningless that I do not know whether it would even matter. But if we want to say what this bill actually does then we should be much more honest.The spin around the media that has been associated with this legislation is quite extraordinary. The term “moving to housing independence” which presumably in this conservative model that John Key is now promoting—this conservative-compassionate model that he is now promoting—presumably that means something.Phil Twyford: Being thrown out on the street is what it means.Hon RUTH DYSON: Actually Mr Twyford is right. What it does mean for many people in State houses is quite literally that they lose their home. It is not just a house that they happen to go to after work after school every day. It is their home. It might not be as flash as the Parnell mansion but actually people have a very strong attachment to their home and people in State houses have every right to maintain that attachment unless we are offering them a better opportunity. Moving to housing independence by telling people that they no longer have the tenancy rights of a State house and they have to go into the private market is not offering them a better choice but that is all that Paula Bennett and Bill English are offering them.Prior to the lunch adjournment I listened to some of my colleagues speaking and I was actually pretty dismayed at the sniggers and sneers that came from members of the National Party backbench. When David Clark was talking about a friend of his who was no longer able to afford to have her hair cut on a regular basis and her children were paying for that—the rent had gone up to such a point that she did not have any spare money at all—they were sniggering about that. David Clark also said: “That is not the New Zealand that I signed up to” and I want to totally endorse those comments.When we are talking about what values we have as a society what is important to us what makes us proud to be New Zealanders then it has always been for me that we do have an egalitarian society. We do have people who are respected regardless of their level of wealth or income people who are considered as part of the community and people who have a stable home to call their own—whether they rent it or own it. They are still contributing members of our community. This bill is another step away from that vision away from that respect of individuals away from the ability of New Zealanders to be able to afford to live in a home because the Government thinks that subsidising their rent is a priority.JONO NAYLOR (National): I move That the question be now put.The CHAIRPERSON (Hon Trevor Mallard): No this bill has not been to a select committee and it is a very serious bill. Therefore I think all latitude will be taken at this stage of it.ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Speaking to the title of this bill—in the title of the bill it has the words “flexible purchasing”. I just want to say that when you have a purchaser you also have a seller and the seller in this instance is the Government—the State. So I think that instead of having the word “purchasing” in it the name of this bill ought to be “Social Housing Reform (Transfer of State Assets) Bill” or the “Sale of State Assets Bill”. By the Government not using the word “sale” and using the word “purchasing” instead it gives a different slant to that of the public’s perception I believe.Over the last few years we have had a number of debates about the sale of State assets. Changing the terminology now in this instance to have a bill that talks about flexible purchasing does not address the issue that this is a mechanism a provision for the Government to be able to sell State assets. The general public ought to have the opportunity to have their input and they have not had the input in this instance. So I stand here to suggest that the name of this bill should be changed and that the Act of Parliament if this bill is passed should actually be the “Social Housing Reform (The Transfer of State Assets) Act”.I could equally say that it is the transfer of social housing responsibility as well because the transfer of these houses to non-Government organisations to property developers also hands over the responsibility of social housing to those agencies. That is not right. It is not right because the intent of what social housing is meant to be all about is helping those families who are most in need.One of the things that I am really concerned about is the length of time. Once these transactions are made how long does the responsibility of social housing afforded to the non-Government organisations last for? Is it 1 year 2 years? After 2 years can they stop their responsibility of providing those houses as social housing and then sell them on the open market at prices that no doubt those people who occupy those homes will not be able to afford? That is a big concern for me because then at that point those houses stop being social housing. In this bill we do not know when that will be because it is entirely at the Minister’s discretion as to how and when that would happen if at all. We just do not know.These are the kinds of things that could be fleshed out in an open process like the select committee process where people have the opportunity to come and have their say on this particular issue. The title bears little resemblance in my opinion to what the final outcome and effect of this bill would be on social housing. So my suggestion is that the Minister should reassess this particular issue and I agree with the sentiments of other contributors to the Committee on this particular matter that the title of the bill does not give a fair reflection of the content of the bill itself.There is one other issue and it is around Māori housing. I have read this bill very carefully and there is nothing in here that suggests to me that there is any way that the Government is upholding its Treaty obligations in providing and addressing the—CHRIS BISHOP (National): I move That the question be now put.The CHAIRPERSON (Hon Trevor Mallard): No I made it clear last time. I am not ready yet to accept the closure motion.Dr MEGAN WOODS (Labour—Wigram): It is good to be able to take a final Committee stage call one of many on this bit on the title and commencement clauses. As you yourself alluded to Mr Chairman this is a piece of legislation that is going through under urgency. It is the job of this Committee to ask questions and it is the job of the Government and the Minister in the chair to answer those questions when those questions are put in this Chamber. That is what we are elected to do and it is what we are paid to do. I would actually like to hear from some Government members and have them get on their legs and actually examine the legislation that is under question.In regard to the title clause of this piece of legislation I have some questions for the Minister in the chair the Hon Jo Goodhew. The legislation is entitled the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. Well I would like the Minister to direct me to the parts of this legislation that are going to act in a remedial way for the current housing situation that we face. I have read this legislation. My colleague the Hon Ruth Dyson suggested some reading for members opposite. She suggested they start with the bill because it clearly was not on their reading list of things that they had examined before they came to the Committee for this debate. But I have read this legislation and I cannot see anything that is going to be remediated in terms of the housing situation. My other colleague the Hon Annette King in her earlier contribution on the title clause drew the Committee’s attention to the advice of the Law Commission and that we actually should title bills in plain English ways in that the titles reflect what it is that a bill is doing.I cannot find anything in here that is going to address the very real concern that the Hon David Parker talked about in terms of the trend we are seeing towards camping grounds in New Zealand with the ultimate outcome being like the United States where 6 percent of people are living in camping grounds. In terms of this I would like to know what is in here for Christchurch a city that is facing a very particular set of housing circumstances. What are the remedial measures in this piece of legislation? We actually have a situation in Christchurch where some of the homelessness is caused by the fact that a number of our camping grounds where people were previously being directed have now been converted to workers’ accommodation. Rather than being places where people who are under housing pressures can go they are where our housing rebuild workers are going and that is putting further pressure on housing.I would like to know what clauses in this bill are going to be remedial for the constituents whom I am seeing in my office. I want to know what clauses in this bill are going to be remedial matters in terms of social housing for my constituent who was threatened with eviction from her Housing New Zealand house in Hoon Hay because in the 2 years following the February 2011 earthquakes she had her daughter and her 3-month-old granddaughter living in a caravan on the property of her Housing New Zealand house. Housing New Zealand tried to evict her because it said it was not right for her to have a caravan on that property. It was prepared to see this whole extended family who were under extreme housing pressure be in a situation where housing was something that was simply beyond their reach.I want to know what clauses in this bill the title of which purports to propose remedial matters are going to do for that family. I want to know what remedial matters are in this piece of legislation for a constituent of mine who is currently in emergency temporary accommodation. Because she is classed as being in emergency temporary accommodation the district health board will not proceed with her hip replacement surgery because it does not consider that she has a safe place to go back to once that surgery is completed. I have not seen anything in this legislation that will do anything to remediate those situations.We have had other Ministers who have sat in that chair through earlier stages of this bill who have waxed lyrical about how this is going to be the panacea for housing. But we are still struggling. I would like the Minister to get up on her legs to address these questions and tell the Committee. This is the Committee stage of this bill where it is the job of Parliament to ask questions of the legislation. We would like some answers to those questions. How is it that this Government thinks it can bring a piece of legislation called the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill to the House when there are no remedial matters in the bill? Many of my colleagues have suggested alternative titles for the legislation. Another one of my colleagues the Hon Ruth Dyson has herself also drawn the attention—SARAH DOWIE (National—Invercargill): I move That the question be now put.JACINDA ARDERN (Labour): I want to speak directly to the title of the bill rather than the commencement clause. For those who are listeningin the gallery when we come to this stage of a debate it is always the point at which we have the ability to rename the bill if we feel that its title is not befitting of its content or of what it intends ultimately to achieve.An area that I think probably warrants a bit more discussion—and the title that I think is more appropriate for this bill is because of this—is that of Housing New Zealand being guttedfurther which is a consequence of this bill. So I would propose that the bill be retitled “The Death Nail to Housing New Zealand” because as Phil Twyford has pointed out although Housing New Zealand lost the substantive parts of its rolesome time ago this bill actually removes any role that involves Housing New Zealand giving policy advice direction research or information to the Minister. In fact in Subpart 2 clause 20 it repeals section 3B(b). The effect of the repeal is that Housing New Zealand no longer has an objective of providing to the Minister of Social Housing advice and information on housing. Housing New Zealand no longer has any role in saying to the Government that we have a housing shortfall—a social housing shortfall a homelessness issue a gap in the market. That is no longer its job. I would have to say that any officials within Housing New Zealand who are worth their salt would probably not want to claim that they have got that job right now given the response from the Government—because it has been particularly inadequate.In areas like Auckland we have seen house prices go up by $100000in the past year. There have been 40000 people who have moved into Auckland in the past year alone. We are simply not keeping up with demand and that is having a flow-down effect on our social housing market. People are unable to access homes. When you have groups like the Salvation Army coming to tell you that they have had new mothers leave hospital with a newborn child and sleep in the car because they cannot access housing you know that you have an absolutely critical situation. We have a Government department that no longer has the job of telling the Government that there is a problem or that there are solutions to fix it. This bill is not just about the sell-down of Housing New Zealand; it is also about the fact that Housing New Zealand itself has been gutted. It is essentially the Government version of Quinovic. That is what Housing New Zealand is. It is now simply a property manager and we on this side of the Committee feel extreme frustration about that.As I have also said I do see this as a bill that will exacerbate the problem in the social housing area. In my mind I think that to capture this it would probably be more appropriate to call it something like the “Continuation of Homelessness Bill”. Any bill about social housing should include some kind of provision to grow social housing stock. Labour has always said that it has no problem with the NGO sector being involved in social housing but it is incumbent on the State that it does not abdicate its responsibility for the provision of housing—Chris Bishop: We are growing it.JACINDA ARDERN: —and that is what this Government has done. The member on that side of the Chamber is trying to claim that they are growing State housing. Let me just tell you in the 1990s National sold 13000 State houses so it had quite a bit of ground to make up there.But equally Mr Bishop in my area of central Auckland with regard to the Auckland Unitary Plan in the submission from Housing New Zealand it engaged Beca Group to do an enormous amount of work where it was submitted to the council that every single Housing New Zealand house in the Auckland area should have any covenants that lay on themremoved. Where the house was a historic home it asked for it to be removed as a character home. Where there were any blocks on whether or not it could build upwards Beca Group asked for those to be removed. Why? Why would it have done that? Because it makes it much more profitable to sell the blocks to a housing developer when there are no restriction on the way it is able to develop the land. The intent is to sell—absolutely—and that is not just my speculating Mr Bishop; that is what is happening. In that area Housing New Zealand is selling stock as fast as it can. The one that we have at least been able to stop is Spring Street. To prove the lunacy of what is going on in the social housing area: Spring Street is one of the few areas where we still have pensioner housing. Housing New Zealand proposed selling the housing to a private developer so that it could lease back the units. That is absolutely farcical and yet that is what this bill is going to deliver us—more sales to private developers for no gain.JONO NAYLOR (National): I move That the question be now put.DAVID SHEARER (Labour—Mt Albert): I too am concerned that the bill here the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill is inappropriately named. It really should be called the “Social Housing Rip-off Bill” because that is effectively what it is. It does not in any way reflect what this Government intends to do with the social housing sector which is to gut it. This has been on the agenda of National Governments for generations and it does not stop here. We know what is going to happen. We saw what happened when the Salvation Army just the other day pulled out of the Government’s plan to push social housing towards it. The Salvation Army did the sums and it recognised that it was unable to run a social housing sector. This Government wants to push it on the Salvation Army in the way it has been done in Australia except that what the Government has not calculated is that the Australian model in comparison is much much bigger. The social housing providers in Australia are looking after tens or even hundreds of thousands of people whereas here it is much more embryonic. It cannot scale up to that sort of impact.We are sitting here under urgency pushing through a bill on social housing that will radically reform and change social housing in New Zealand. We are doing it under urgency because the Government does not want those social agencies to come before a select committee and actually talk about what the real issues are and what is actually going to happen should this bill go through. So this is the best way of making sure that the public are kept in the dark and that everybody else out there is kept in the dark about what the Government’s real agenda is which is to make sure that social housing is radically transformed from what we see today. What we are going to be seeing instead is that those social providers will not be able to cope with what the Government is wanting them to do. We will see a siloing effect within those community providers as well where we will not have the overview that we have today. But more important we will see many of these houses begin to drift into the private sector to benefit private landlords. If there is one amazing trend of the last few years under this Government both with the housing crisis in Auckland and what is going to happen here it is the enrichment of private landlords. The few landlords are getting richer and the rest cannot afford to get into a house. That is what is happening and will happen with this process here in this bill.This bill is wrongly named. It cannot be called the “Remedial Housing”—or whatever the hell it is supposed to be. It is the “Social Housing Rip-off Bill” because that is effectively what it is. It is putting private landlords and private homeowners before the rest of New Zealand. We have seen that all around. I have certainly seen it in my electorate. I have seen it all around the electorates where there are high proportions of social housing. We are seeing families and communities being disrupted because people are moving around after being turfed out of their house. Kids going to school are changing schools over and over. Many many schools have 25 percent or 30 percent churn. Kids cannot learn. It is disrupting communities. It is hindering kids and their education and most important it is ripping New Zealanders off. It is making sure that instead of helping New Zealanders who need it it is actually private landlords who are going to be enriched. Certainly the latest round of changes that have occurred to try to curb the housing crisis in Auckland are benefiting the private landlords.First home owners are not getting a look in. People who need social housing are not getting a look in. This bill is dismembering the social housing sector and ensuring that those people who really need help are pushed to one side and the few the rich few who put the money into the coffers of that party over there are the people who are being enriched and being favoured above the others. That is totally unfair and that is why the Labour Party is absolutely in opposition to this bill.Hon ANNETTE KING (Deputy Leader—Labour): The reason why I want to take a call in this debate—and we are on the title—is that this is the only chance this House has to examine this bill to scrutinise this bill. It is the only chance New Zealand has to have this bill scrutinised by eyes other than the Government’s which is why we are taking this debate so seriously. We are looking at each part of the bill and doing our job on behalf of the taxpayers of New Zealand because this Government would not let this bill which has nothing urgent in it at all go to a select committee. So I think we need to go step by step taking whatever time it takes to make sure that at the end of this process the people of New Zealand know that we did a good day’s work—maybe 2 days’ work or it could be 3 days’ work—examining this legislation because the lazy Government opposite would not send it to a select committee. The best speech those members have made all day is: “I move that the question be now put.” That is the speech from Government on this very important bill that we have before us.Well I have some got information to bring to this Chamber. We are talking about social housing which is what the title of this bill is and it is about the flexibility that is going to come from this social housing reform. We have been told that we need this bill—and the title of this bill—because it is going to make changes in the way that community housing is provided. So I thought: “What do the community housing people themselves think about this bill?”. Well they have just put out a press statement about this bill.Chris Bishop: Oh yes.Hon ANNETTE KING: They have said this. The community housing organisations say: “the government’s budget initiatives on housing are too timid—and won’t deliver the results needed.” These are the very groups that the Government—it says—wants to hand over community housing to. They said: “We hear loud and clear that the government intends to transfer some Housing New Zealand properties for use as ongoing social housing run by community housing providers.” They then said: “What the sector is trying to communicate equally clearly is that the better future is one where those properties can be regenerated made fit for purpose and deliver a whole range of better community outcomes not just put a new landlord in place.” Say yes now Mr Bishop. They said we should “not just put a new landlord in place”.They asked what about the regions? “What are you doing for the regions?” they said. They said that there was an urgent need to look at the accommodation supplement “which currently costs the Government $1.1 billion [and] is in dire need of review and adjustment.” and they go on. So I suggest members that you turn on your iPads and have a look to see what the latest reports are from the very groups that are supposed to be the beneficiaries of this social housing reform.As I said before the word “reform” indicates that it is supposed to be something that is an improvement but what we are hearing from the community housing sector is that it does not see it as an improvement. So this bill is not properly named and I am sure that those who have been in this House for a while will know how important it is to correctly name a bill. We have been warned many times that we ought to name bills correctly.Let us listen to the only submission that we have received on this bill and that has come in right now from the umbrella group Community Housing Aotearoa. That is the only submission we have got because it was not allowed to make one so it has put out a press statement. I have read out to the members opposite what that group thinks about this bill. Well if that group counts for anything the National Government would be pulling this bill and saying: “Let’s send it to a select committee and hear submissions from New Zealanders.”—maybe even a tenant or two. Heaven help us that they should be allowed a voice when it comes to community housing! You see the Minister for Social Housing blew it yesterday when she told us what tenants are thought of and called by the National Government. Do you know what they are called? They are not called tenants or people; they are called cohorts. She said: “We are talking about cohorts.” and she was not calling them tenants or people. That really is an indication of how out of touch the Government opposite is when it comes to social housing.CHRIS BISHOP (National): I move That the question be now put.The CHAIRPERSON (Hon Trevor Mallard): I think we are in the position now where the Committee can make a decision as to whether it wants to move to a vote.A party vote was called for on the question That the question be now put.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Motion agreed to.The CHAIRPERSON (Hon Trevor Mallard): I understand that a member was ejected from the Chamber earlier for commenting during a vote. I did not identify the member who just commented through this vote and who was not meant to be commenting but if I had he would have been joining the other member.A party vote was called for on the question That clause 1 be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Clause 1 agreed to.A party vote was called for on the question That clause 2 be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Clause 2 agreed to.Hon JO GOODHEW (Minister for the Community and Voluntary Sector) on behalf of theMinister for Social Housing:I move That the Committee divide the bill into theHousing Restructuring and Tenancy Matters (Social Housing Reform) BilltheTaxation (Social Housing Reform) Bill the Housing Corporation (Social Housing Reform) Amendment Bill and the KiwiSaver (HomeStart) Amendment Billpursuant to Supplementary Order Paper 78.A party vote was called for on the question That the motion be agreed to.Ayes 76New Zealand National 59; Green Party 13; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 44New Zealand Labour 32; New Zealand First 12.Motion agreed to.House resumed.Bill reported without amendment.The CHAIRPERSON (Hon Trevor Mallard): I move That the report be adopted.A party vote was called for on the question That the report be adopted.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Report adopted.Third ReadingsHon JO GOODHEW (Minister for the Community and Voluntary Sector) on behalf of theMinister for Social Housing: I move That the Housing Restructuring and Tenancy Matters (Social Housing Reform) Amendment Bill the Taxation (Social Housing Reform) Bill the Housing Corporation (Social Housing Reform) Amendment Bill and the KiwiSaver (HomeStart) Amendment Bill be now read a third time. I want to use this opportunity to reiterate how these four bills improve the lives of vulnerable New Zealanders by providing them with social housing that meets their needs. The Housing Restructuring and Tenancy Matters (Social Housing Reform) Amendment Bill is all about increasing the supply and quality of social housing and growing the community housing sector. There are currently 30 registered community housing providers which have 213 houses where tenants are receiving the income-related rent subsidy. They deliver niche services that meet the diverse needs of social housing tenants and we want them to grow. This legislation will help them do that.This bill gives the Ministry of Social Development flexibility in the way that it enters into agreements with social housing providers. It creates a ministerial direction power to allow the Minister for Social Housing in consultation with other housing Ministers to authorise the Ministry of Social Development to enter into tailored agreements to purchase social housing. These new tailored agreements will enable the Ministry of Social Development to look at contracts with tenants in mind and to look for ways to get better housing services and better provision of social housing. The current income-related rent subsidy will remain but the new tailored agreements will now provide greater flexibility. We have been talking to the community housing sector and it has told us loud and clear that the income-related rent subsidy alone is not sufficient to encourage community housing providers to supply properties in all circumstances. Community housing providers want to be able to enter into different types of agreements including into long-term fixed-price contracts with the Government. Long-term contracts will give them a guaranteed income they can use to borrow against to build or buy houses.The practice for far too many decades was that a tenant would be put in a State house left there and forgotten. We recognise that some social housing tenants need extra help. We want to make sure that tenants’ needs are met and as they change over time we want to provide the right housing and the right services to respond to those needs. I firmly believe that local providers understand their people’s needs best and I think that these tailored agreements will give them a greater role in determining what is best for tenants. To be clear nothing in this bill will change tenants’ eligibility for the income-related rent subsidy or how much they will have to pay in rent.It is crucial that we pass this legislation today so that we can work more effectively with the sector towards an additional 3000 places in the next 3 years and support an Auckland initiative that will see another 300 social housing places delivered by community housing providers. This will help vulnerable New Zealanders into quality accommodation. In the future as we work with the sector we will establish different types of agreements worth exploring which will be beneficial to both tenants and providers. These changes are going to make the Ministry of Social Development a smarter and more sophisticated purchaser of social housing. It will also enable the ministry to more effectively manage the social housing spend and purchase quality social housing for vulnerable people.The three other bills—the Housing Corporation (Social Housing Reform) Amendment Bill the KiwiSaver (HomeStart) Amendment Bill and the Taxation (Social Housing Reform) Bill—all make minor but important changes. The first ensures that payments for residential social housing provision under these agreements are GST-exempt consistent with the current treatment for residential rental payments. The second clarifies that Housing New Zealand is no longer required to provide policy advice to Ministers. That has been the role of the Ministry of Business Innovation and Employment for some time. The final one ensures that any prior period of membership in a complying superannuation fund should count towards the 3-year eligibility period when the member transfers to KiwiSaver. This means that more KiwiSaver members have access to their savings to assist with the purchase of a first home. I commend these bills to the House.PHIL TWYFORD (Labour—Te Atatū): I will give this to the Government: this Budget is an example of clever politics. There has been a lot of giving with one hand and taking away with the other. But for all those New Zealanders who are looking for more than sleight of hand who want a plan for New Zealand—some kind of idea about how we can create a better future for our children—this Budget has been a big disappointment. It has offered nothing for the regions nothing to diversify our economy and grow our prosperity and nothing to fix the housing crisis. It is a Budget of squandered opportunities and that theme applies pretty much to the Government’s entire housing policy.Let me say for the record that pushing through this legislation under Budget urgency is a cynical abuse of this Parliament and its processes. There is no reason that we have heard last night or today from the Ministers in the chair from Jo Goodhew who just spoke or any of the Government members as to why this legislation has to be rammed through the House under urgency. There is nothing in the bill or in anything that any Government members have said that explains why this legislation should be denied the proper scrutiny of a select committee process and the chance for members of the public to come along and make submissions.This legislation and the Government’s social housing policy show how absolutely bankrupt of ideas the National Government is when it comes to fixing the housing crisis. It will not build the vast numbers of affordable houses that are desperately needed to relieve the housing shortage in Auckland. Instead we get these silly little special housing areas which are basically lines on a map creating little zones for fast-tracked consenting and what have they achieved? In 1½ years they have seen the building of 170 houses in Auckland when the city needs 13000 every year just to stand still. Every day the shortage of houses in Auckland is getting bigger. It is currently 20000 and it is getting bigger all the time.The Government refuses to crack down on speculators—speculators both local and foreign who are driving house prices higher and higher and beyond the reach of ordinary people. Instead what do we get? We get some half-hearted rushed panicked measure to tighten up the taxation rules. The result of that is that Treasury’s own analysis indicates that that policy will not catch more than 1000 speculators a year.Social housing and the intent of this legislation should be designed to help the most vulnerable people in our society: the people who under their own steam in the current economy will never be able to own a home of their own. That is the point of social housing in modern New Zealand. It is there to be part of the modern safety net.The intent of this bill is to make it easier for the Minister—in fact it gives the Minister extraordinary wide-ranging powers—to do sweetheart deals with the property developers that this Government is pinning all its hopes on to buy the houses that no one else wants. The Government has tried for the last 6 months to convince New Zealand that the thousands and billions of dollars’ worth of State houses it wants to sell were going to go to charities and to NGOs in the community sector. That was a front. It was a fig leaf designed to give a veneer of respectability to a policy that is deeply unpopular with New Zealanders—that is the hocking off of billions of dollars of publicly owned State houses to the National Party’s property developer mates.This Government refuses to change the planning rules to allow us to build more and better houses and it has been talking about it since 2006 blaming the Resource Management Act. Bill English still gets up in this House and blames the Resource Management Act but National has done nothing. In 7 years in Government it has not yet brought a proposal to this House to reform the Resource Management Act to make housing more affordable. It has no credibility in that area. It is not doing the very thing that is the most logical simple obvious thing to do in the middle of a housing crisis when there is a shortage of houses. The obvious thing to do is to build more houses—to build houses for young Kiwi families good decent hard-working New Zealanders who only want to own a home of their own. They need a Government that will stand up on their side and build more houses. National refuses to do that.The people in New Zealand who are most vulnerable who are struggling on household incomes that barely allow them to survive who struggle to get a decent roof over their heads they need more and better State housing. What is this Government’s answer? To sell off the houses that it already owns as if by changing the ownership it is going to make the slightest difference to the shortage of housing. It is as Annette King memorably described it an ideological burp a bit of ideological reflux from the 1990s by Bill English who back then introduced market rents for State housing and sold off 13000 houses that ended up in the hands of private landlords and property speculators. This is simply a continuation of that policy. The difference is that this National Government has tried to dress it up by saying the Salvation Army was going to buy the houses in order to try to reassure New Zealanders about this deeply unpopular policy.This legislation gives the Minister the flexibility and the wide-ranging powers to do sweetheart deals with property developers to get rid of the houses. Bill English who is the architect of this policy simply wants to get State houses off the Government books. He does not care whom they go to. He will give them away. This is a fire sale of State houses on a massive scale. Billions of dollars of public assets that were paid for by State house tenants and taxpayers over generations are being flicked off by this National Government because Bill English has an ideological agenda. He does not want the State owning these houses. He does not want the State to have an active role in the delivery of decent housing for the most vulnerable New Zealanders. He would much rather replace that system with a taxpayer subsidy that goes direct into the pockets of landlords. That is what Bill English wants to do. At least he is being candid about it. Forget the mealy-mouthed platitudes that we hear from the mouth of Paula Bennett.Let us look at how the Government has tried to justify this con job it calls social housing reform. The first thing it says is that one-third of the houses are in the wrong place and are the wrong size. Well in spite of the fact that that was flatly contradicted by Housing New Zealand in its recent annual report it begs the question of how selling the houses to someone else will magically ensure that those houses are the right size and in the right place. It is a fallacy.Paula Bennett repeatedly makes the claim that community organisations can do a better job than Housing New Zealand. As Phil Goff pointed out the Government has no evidential basis for making that claim. We asked Paula Bennett under the Official Information Act to provide the evidence to provide the data. She said that no such document exists.Simon Bridges got up from the chair during the Committee stage of this debate and said: “We want to build more warm dry homes and build lovely modern homes for people. That’s why we’re passing this bill.” Well to be honest that is brainless. There is no need to sell billions of dollars of State houses to your property developer mates. Just insulate the houses. Just redevelop them. Build more houses. That is what New Zealanders want.This is an ideological agenda by the National Party. It is withdrawing the Government from the provision of decent housing for New Zealanders. It wants a market-based approach. It simply wants the houses off the Government’s books and Labour will not support that.We are not against building up a stronger community housing sector. In fact as members will know I have given some very good speeches in the House and elsewhere making the case for that. But we will not stand by and allow the community housing sector and many fine organisations to have their good reputations cynically used and manipulated by this Government in order to lend a veneer of respectability to its policy. The answer to the housing crisis is simple. We have a shortage of houses; just build more houses.MATT DOOCEY (National—Waimakariri): I am rising to support the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill in its third reading. Can I start off by acknowledging Housing New Zealand in the Canterbury region since the devastating earthquakes. It is well on track to repairing 5000 Housing New Zealand houses and rebuilding 700 Housing New Zealand houses. In my electorate alone in Waimakariri it is on track to rebuilding and repairing every house. In fact we will end up with more Housing New Zealand houses than before the earthquakes. Can I acknowledge and congratulate the very creative community organisations in my electorate that are out buying affordable housing for their customers.Could I say to those New Zealanders those 3000 extra New Zealanders who under this legislation will get housing support that the Labour Party said no the New Zealand First Party said no and the Green Party said no and tell them that this National Government said yes. And can I tell all those extra tenants who will get extra help under this legislation by wraparound services that the Labour Party said no the New Zealand First Party said no the Green Party said no and this National Government said yes. We are the workers’ party. We are working hard for the working people of New Zealand. I commend this legislation to the House.Hon ANNETTE KING (Deputy Leader—Labour): National members are very proud of this social housing reform legislation. We have heard this repeatedly in their 1 minute and 27 second speeches we heard it again in the second reading in their 1 minute and 40 second speeches we heard it again with their “I move that the question be now put.” speeches during the Committee stage and now we have had another 1 minute speech in support of this legislation from the backbench of the National Party.Unfortunately for this House it started off with the Minister for Social Housing who has bailed out of the debate before it has finished. She started off this debate by saying that the Government had started a vicious programme of reforms. I said yes she is right on one thing; she has started a vicious programme of reforms. We now know what they are. There has been a series of major changes to housing policy under this Government. Every one of them takes State house tenants backwards. Every one of them leaves State house tenants unsure as to whether tomorrow they will still have a roof over their head.I said at the beginning of this debate that I believe this was a series of ideological burps by this Government—in other words a lot of hot air and gas wrapped up in its biased and unbalanced philosophy that the National Party holds dear. I believe we have gone from Nick Smith who has been a great exponent of this sort of philosophy to Paula Bennett and Paula Bennett in her wake has left a trail of destruction in Government departments. Go out and see what you find in the Work and Income offices around New Zealand now. See what the morale is like after 3 years of her stewardship. She has now moved on to Housing New Zealand. What we find out in this legislation hidden in this legislation in the remedial matters part of it is that she is removing any advice from Housing New Zealand on policy. Did the members opposite know that? Were they aware that she was removing any advice that would come from Housing New Zealand?Brett Hudson: Since 2011 Mrs King.Hon ANNETTE KING: The member at the back the list member from the back Brett Hudson who has not bothered to contribute to the debate except from his seat sitting down ought to go and have a real look at this legislation instead of being just a parrot for the notes they are given.In fact we have got a whole backbench of parrots who have not taken the time to read what this legislation does. They did not take the time to ask questions of their Minister. They just said: “We are so proud Minister of your bill.” I actually think they are not earning their salaries today because they are not working and questioning and debating this legislation which they ought to be doing.You know we the people of New Zealand were given a solemn promise by the Prime Minister of this country that there would be no more asset sales and what we know from this legislation and from the other actions that this Government has taken is that the biggest asset sale you could have is taking place now. There would not be a member opposite or on this side of the House who would not think that a house is the biggest asset any of us could ever have. Our house whether we own it or whether we rent it and live in it and cherish it is the best and biggest asset we have. And to say that selling off thousands of State houses is not an asset sale is to be very economical with the truth.That is what this Government has been with this legislation. You see it has been set up. It was set up over 3 years ago when National became the Government and the first wave of changes came to State houses. It followed a pattern and I set that pattern out in the first reading of this legislation. I think it is worth repeating because every constituency member on this side of the House knows the pattern.First of all the people are taken out of the State houses. Is that not what happened out in your electorate our chief whip? Is that not what happened in other parts whether it is in Te Atatū or whether it is in Rongotai? People are removed from the houses. That is the first thing that happens. There are all sorts of reasons why they need to be removed. Secondly the Government then says: “No one wants to live in these houses. Look they’re empty. Nobody wants these houses.” And all the while the waiting list for State houses was growing and growing and growing. These houses were empty the Government said that nobody wanted to live in them and the waiting lists in those areas were growing.So then the next excuse is: “Well these houses must be in the wrong place and the wrong size so if they are in the wrong place and are the wrong size we should sell them to the community sector. It will be able to put people in the houses that are in the wrong place and are the wrong size.” You see it is nonsensical. It does not make sense. Then the Government just flogs them off to whomever whoever will buy them because they are going to be used for community housing. If they cannot be used for community housing by the Government agency why does the Government think a community organisation is going to turn them into the right house in the right place and of the right size?You then get to the next part of this process. When you leave houses empty—just go around and look at empty State houses—what you will find is that suddenly the windows start to be broken. Then you have vandalism and graffiti written on the walls and written on the houses. You see the boards go up as Housing New Zealand tries to cover up the broken windows. Then you get the complaints about what it is doing to the neighbourhood and questions as to why these houses are looking so unsightly in a neighbourhood. Then it gets to the final stage of all. The Government says: “Well we’ve got to sell them off. We’ve got to get rid of them.”That has been the process that we have watched take place since this National Party became the Government—cynical manipulative movement in State houses to get rid of houses whether they are all the best houses or not. We would not have objected if they were being replaced by other houses. That is not the history of the National Party. It sold off 13000 houses when it was last in Government and it is now on the big State house sell-off again.So then we thought that if this party cannot look carefully at the legislation and the backbenchers are too lazy to get out of their seats—other than to make 27-second speeches—that we ought to look closely at it. Many of us go straight to the regulatory impact statement. You see it is provided for a reason. It is provided to tell us the members of Parliament in this House what other eyes have seen when they have looked at the legislation. It is always worthwhile I say to new backbenchers. Go and read any regulatory impact statement.We have seen some very good regulatory impact statements over the years. I can think of the one that was put out on the legislation for the care of adults who are disabled—remember that one? When we got that regulatory impact statement Tony Ryall had it all redacted. On the day we were debating the bill you could not even read what they were saying. Well we have got a regulatory impact statement on this bill and what we found out was there has been no review no evaluation and no reports on this legislation.The first issue: what does it say? Has there been any? The big answer is one big fat no. There have been no reviews or evaluation of this policy. The second one which I think is important is that Treasury did not provide any independent opinion on the quality of this legislation. Those are two fundamental things that happened. Is it evaluated? Have they got advice? Is there a report? What has Treasury said about it? On both those counts the National Party did not get advice. It knows best! It knows exactly what people need in New Zealand; it is what the National Party wants! It is not what people necessarily want; it is what the National Party wants!I say to the members opposite after you have passed this bill—because you have not taken the time to read these statements now and have not taken the time to question whether there is anything in these bills that ought to have closer scrutiny—I suggest you come to the Table pick up the documents and at least learn a lesson from this bill. Learn a lesson that you do not just become the rubber stamp for your Ministers. You are not going to go far in a political career when you just become a rubber stamp for a Minister.And I say to the C-team—except Mr Bishop—that you have become rubber stamps for the Minister who has hoodwinked you into thinking that a bill that does not have to be passed with urgency parts of which they have been undertaking for the last 4 years you are going to need to pass and you just need to rubber-stamp it. Well I say to the members opposite that you are not doing the job that you are elected to do if you are not scrutinising the legislation that is put before this House.I say to the members opposite: shame on them. This legislation should have gone to a select committee. It should have had submissions. It should have had input from the people of New Zealand so they could have a say. State houses are their assets not the Government’s.Dr PARMJEET PARMAR (National): Thank you for the opportunity to speak on the third reading of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. The current law assumes that all social housing tenants’ needs are the same. There is no provision for a tailored response. As we have heard since this morning there are waiting lists and there are some houses sitting there vacant. This bill is designed to fix that situation—exactly to fix that situation. There is a mismatch between the needs of the families and the kinds of houses that are available. Urgency is required because there are people on waiting lists and we do care for those people who are on waiting lists. That is why we need this urgency.The aim of social housing reform is to house more families. We do care about the size of the house that we provide to these people. We do care about the location they will be put into. We cannot put a five-member family in a one-bedroom house. On the other hand another family with just two members may not want a five-bedroom house. Location does matter because people want to be close to their family members their relatives or the communities they want to be in. We need to address these needs. This Government is working hard to get the best outcomes for people in social housing and for that we need flexibility. We need this bill. I support the bill. Thank you.JAN LOGIE (Green): I rise to take a call on this the third reading of the legislation arising from the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. When my colleague Kevin Hague spoke in the first reading of this bill he said this bill was an emblem of the Government’s wider housing agenda and evoked the Government’s own consultation process for the flag referendum distraction. Members will know that New Zealanders in that campaign are being asked “What do you stand for?” and then pose for photos holding a sign saying what they stand for. Well with this bill one can all too easilyimagine I think the Prime Minister holding his sign no doubt with a relaxed smile on his face. The sign might read: “I stand for abdication of Government responsibility.” Or it might say: “I stand for not giving a damn.” Or it might say “I stand for the ideology of pink and grey of the 1980s and 1990s.” even though that failed miserably the first time around. Or it might even say: “I stand for contempt for the normal democratic process that should surround a bill like this.”There is a housing crisis in this country. People from Invercargill to Kaitāia are sleeping in cars in overcrowded housing and on other people’s couches because they cannot get into State houses and cannot afford private rentals. All but the most privileged young people are now facing a lifetime of renting and of never being able to buy their own home—something that was once considered a birthright for those in this country. This represents growing intergenerational inequality and the abandoned generation.It also represents a demise of community. One of the National members said last night that this National Government represents big community. Well I can tell that member and members on that side of the House that in my community a low-income community there is amazing heart and amazing kindness but it is hard for that to bed in in communities because sadly all too often people are having to move because they are in rental accommodation and they cannot afford the costs. So my community is constantly in flux because of the policies of this Government which undermine our entire social fabric. This Government’s approach undermines community.I was at the Child Poverty Action Group post-Budget breakfast this morning and was really moved by a presentation from a young emergency department doctor talking about the personal shock he had experienced when seeing the emergency department in Wellington turn into what seemed like a paediatric clinic during the cold snap just last month in April. While he was studying he had learnt in his studies about the social determinants of health. He knew that poverty and poor housing are causing illness. There are about 40000 preventable hospital admissions a year in this country. He had learnt through his study that more than one child a week dies from poverty-related illnesses in this country many connected to the quality and over-crowding of our housing. He knew all of this theoretically but he told us that none of that learning prepared him for the reality of facing that onslaught of children coming in in the middle of the night in waves of sickness with bronchial diseases and even pneumonia. He said that this Budget and this legislation will do nothing to stem the flow of children into the emergency departments of this country and it will do nothing to stop the deaths.It grieves me that when this Government had the opportunity to present us with legislation that could have turned that round what we have instead is legislation that is making it easier for the Government to transfer State housing stock into the hands of private developers and possibly some community organisations. Last night when Government members bothered to take their maybe maximum 2-minute calls on this bill they mentioned a commitment to home insulation from this Government. I would like to remind this House that that was a Green Party initiative—an initiative that this Government stopped before the job was done. Again how familiar is that?Chris Bishop: That’s not true. That’s a bit harsh. That’s unfair.JAN LOGIE: The member says that is not true. I would like to ask the member whether every house in this country is insulated. Would every house in this country pass a warrant of fitness? Are our houses still killing our children? The reality is that they are still killing our children. You have not finished the job.This legislation is passing under urgency without the possibility for the public to contribute to it except through one media release from the community housing providers which are telling us they believe it is timid and will not solve the problems that we are seeing in the communities. This legislation is passing without analysis from Treasury and without any substantive input and analysis of the implications particularly the fiscal implications. It is passing without I would say even one coherent substantive speech from the Government members to provide detail on this legislation so that those of us on this side of the House and the public of New Zealand can properly engage with what the Government is doing.It seems to me that at the heart of this legislation it is helping the Government to transfer State housing stock to property developers. Although the Green Party absolutely supports the role of community housing providers we believe it needs to be in addition to a strong State housing sector. We absolutely oppose the transferring of State housing resources—our collective public resources—into the hands of the private sector to make a profit off the vulnerability of New Zealanders.This Government is failing in housing at every turn. The public expects that New Zealanders will not be sleeping on the streets or in cars or garages but this Government has done nothing to address homelessness or provide emergency housing. The public expects that it should be possible for someone to rent a house and feel secure but this Government has presided over skyrocketing rents and making rental tenure less secure. Landlords seem to be in some kind of race to the bottom these days and in fact the worst standards have become entrenched. Right now landlords—including tragically Housing New Zealand—that lose their cases in the Tenancy Tribunal are now using 90-day notices to evict tenants.The public expects that everyone will have a home that is at least healthy dry and warm. Yet despite the Green Party policy for home insulation many New Zealanders are still living in houses that are broken in disrepair and are making them ill. The public expects that that traditional dream of homeownership should still be available to all yet the Government seems relaxed about the situation in Auckland where the median house price is now around $800000 while the median household income for people under 35 is $50000. Younger people in Auckland are being permanently excluded from homeownership with devastating economic consequences for them personally and for our wider economy into the future.Finally I do want to remind National that it was actually the first party to build State houses in this country.Chris Bishop: That’s right.JAN LOGIE: Yes. In 1905 Richard Seddon passed the Workers’ Dwelling Act to build the first State houses for inner-city workers to rent. He thought New Zealanders could enjoy higher standards of living if the State took over from “greedy city landlords”. I still believe that is true.DENIS O’ROURKE (NZ First): There are three questions that I believe the people of New Zealand should be asking this Government about this legislation. First how will this legislation create more homes for people? Second how will this legislation reduce the cost of housing stop the massive increase in rents and stop the ludicrous rises in house prices in Auckland without causing the bubble to burst? Third how will the privatisation of State housing improve the quality and security of housing for the most vulnerable people in our communities? I want to try to give some answers to these questions.To the first question about meeting the demand for rental homes this legislation is not actually designed to increase rental housing stock. It is in fact designed firstly to minimise the role of the State by emasculating Housing New Zealand; effectively requiring it to sell houses and to build only in some areas in the nature of a residential property developer rather than a social housing provider. What is needed of course is an agency with a comprehensive role in order to provide a housing service for the lowest-income people in the country to insulate them from the worst effects of the worst landlords. Also the legislation eliminates Housing New Zealand’s research and advice functions to the Government which seems very stupid to me because all of its expertise will be lost in the process.The second part of the answer is that the legislation means that the Government is actually abdicating its responsibility for social housing by contracting that function to others—to organisations that are not always capable of carrying out that function and to people without responsibility for the welfare of the tenants. The Minister said in her speech that flexibility will allow for tailored agreements to give certainty to providers so that they are able to borrow and build more homes. But the truth is that Housing New Zealand could actually do that faster. It could build more homes and it could build them better if it were properly resourced by the Government to do so. Why go to housing providers outside Government that do not have the capacity to do the job? It just does not make sense.The third part of the answer is that the Government by providing far too little money to Housing New Zealand for new rental housing shows that it is not really interested in solving the problem at all. If that were not bad enough the principal Act amended by this legislation means that people are being pushed out of State houses—actually bullied out of them—through this policy of reviewable tenancies. This is based on a bureaucratic assessment of the ability of tenants to move into private accommodation for no apparent reason and without regard to their health or well-being their community connections or their need for secure accommodation.The legislation is also designed to avoid accountability. The Government wants to be able to point the finger at somebody else when it is shown that not enough rental houses are being provided. This Government’s way of dealing with the social housing crisis is to transfer it to others—avoiding the heat by leaving the kitchen. The answer to the first question about increasing rental housing stock is that the legislation will not cause one new rental home to be built and Housing New Zealand will not be resourced to do it either. It will be another tool to speed the sell-off of rental homes and it will be used to justify less and less investment in new State rentals. It will make the crisis worse not better. Ultimately that means more housing deprivation and it will make State houses even harder to get than they are now.I want to move on to the second question about affordability. The average rental is now $379 per week. Under National that is an increase of $65 per week since 2008—a 20.9 percent increase. That is an increase above the Consumers Price Index of 11.7 percent. What does this mean? It actually means that in the main centres rents have become unaffordable for people despite the rent subsidies offered by the Government. Even that is not the full story because those figures that I gave are for all of New Zealand. The crisis is much greater in Auckland and Christchurch. In Auckland people typically spend half or more of their income on rent and that is unacceptable. In Christchurch where I live I hear stories all the time. People tell me that they are spending $1000 a week for an ordinary three-bedroom home because they cannot find anything of reasonable quality for anything less.Those are facts. They are not just my opinions; they are what people are telling me. It is the truth and this Government is not addressing it in those main cities. People are still forced to live in cars—forced to live in cars—in caravans in tents under bridges and in hovels not fit for human habitation. That is the record of this Government and it is not addressed at all by this legislation. So the answer to the question is this: this legislation is simply not capable of curbing even the rate of increase of rents let alone reducing them at the present time. In fact the legislation is more likely to cause increases in rents because the interest of private providers is in returns not in the welfare of tenants.Moving on to the third question on rental housing quality: social housing will now be at a very great arm’s length from the Government agencies that actually understand housing. Oversight will be seriously compromised as a result. More power is given to Ministers to give directions on the terms and conditions of contracts but they are clearly going to take a very political very dogmatic ideology-driven approach to it. This means under this Government that the approach will be aimed at saving money with much less focus on looking at the best interests of the most vulnerable people in our communities. Non-government providers will impose their own policies and practices. What that means actually is that there will be no satisfactory minimum housing standards for rental properties in New Zealand and we know where that will lead. It will lead in entirely the wrong direction. It will mean poor-quality housing. Most of all this legislation will result in a very uncertain outcome for low-income people who are dependent on the State for housing and above all who need security—not uncertainty—in their tenancies.Lastly the whole thrust of this Government’s housing programme as expressed in this amendment legislation and in the principal Act is that it wishes to suppress demand rather than meet demand. The results of that will be very expensive in social terms. It will result in reduced health and well-being and increases in poverty putting more families at risk and compromising social cohesion. This legislation is a retrograde step. It emasculates Housing New Zealand. It seeks to reduce Government accountability. It does not increase housing supply. It does not control rocketing rents. It does not improve housing rental quality. It simply does not address the New Zealand housing crisis at all. What a shame. This Government should be hanging its head in shame not telling us that it is proud of this useless legislation because that is what it is.I see somebody over there on the Government side laughing at this but the truth is that if he was one of the people affected the smile would be on the other side of his face. This is poor legislation. It should not be passed.JONO NAYLOR (National): Well it has been an interesting few hours since yesterday hearing the members opposite just being fixated with one part of this legislation and going on and on and on. I want to draw members back to the legislation itself and to the explanatory note which states: “Among other things ministerial directions could allow the agency to purchase social housing places into the future … to pay more or less than the income-related rent subsidy and generally to enable arrangements that respond effectively to social housing need.” Over the last few months I have spoken to a number of agencies and they have expressed to me a desire to get further involved in social housing. They want to play a bigger part in social housing because the clients that they are working with are interfacing with Housing New Zealand and other social agencies as well but the current legislation that we have is not flexible enough for them to play the kind of role that they would like to play. So I am really looking forward in a little while’s time when we vote on this bill to be able to go back to them and say: “Boy have I got a deal for you. Boy we are going to move forward. You are now going to be able to do what you want to do.” I am going to say to them that they will be able to engage with Housing New Zealand and they are going to be able to engage with the Government to be able to provide an even better service for their clients. That is why I will be supporting this bill.The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call—Jenny Salesa 5 minutes.JENNY SALESA (Labour—Manukau East): Thank you for this opportunity to speak on the social housing reform legislation. Today is a sad day to be debating this legislation in this House. Michael Joseph Savage a former Labour Prime Minister in the 1930s left the legacy of building State houses to house vulnerable families. He stated that the Government has a collective responsibility to care for each other—all of us here in the House of Representatives have a collective responsibility to care for each other and for our constituents—although the social housing reform legislation is the total opposite of a caring piece of legislation.I have heard a few members particularly from the other side of the House stating that this legislation is about serving families—that it is about serving families better. How in the world is it possible that we would serve families better by selling the houses that they live in from under them and by evicting them from the houses that they live in right now?We have a housing crisis in Auckland already. Almost every day I see this with my own eyes. Families who come into my office are families who come in minivans and that is the home that they live in. There are families who live in garages. There are two and sometimes three families sharing a house because that is the only way that they can make ends meet. There are families who cannot afford to put a roof over their own heads by themselves.I would like to state that unfortunately there is not much in Budget 2015 including this social housing reform legislation to relieve the 7 long—very long—hard and painful years that have been suffered by the people in my electorate of Manukau East in South Auckland. These are people in Ōtara Ōtāhuhu and Papatoetoe alongside thousands of other ordinary Kiwis across New Zealand.Housing and decent jobs are major issues for my constituents in Manukau East. Housing and employment are the basic building blocks for a decent life. Having the ability to work being able to afford a roof over your family’s head and being able to afford to buy food for your children and your family—nothing fancy; just the basic necessities of life. These basic necessities continue to be increasingly difficult for working families to maintain. This in spite of many years of tantalising promises that we are on the cusp of something special and that we should just wait a little while longer and there will be more jobs there will be increased incomes and there was also the promise of affordable housing by this Budget. Somehow affordable housing we will hope to see in the very unknown future—who knows?There is undeniably a major housing crisis in Aotearoa New Zealand. This Government has failed to confront the housing crisis head on. It has been content with tiptoeing around the edges. In last year’s Budget National promised that housing would be made more affordable but it is plain for all to see that housing is not more affordable today; housing is in actual fact much more expensive each and every day. Housing in Auckland—$809000 for an average house. That is most definitely not affordable.The very first piece of legislation this Government is ramming through the House is to hold a fire sale of State houses for its developer mates. This social housing reform legislation is not compassionate conservatism as we heard yesterday; it is Cabinet club conservatism—flicking off the State houses to developer mates at knock-down prices.Brett Hudson: Tired old lines—didn’t work last year.JENNY SALESA: It is not lies. In this Government’s special housing areas in Auckland which are touted to actually relieve the situation in Auckland 170 houses have been built in a year and a half—170 houses. Under National the shortfall has not been addressed. This Government has failed to ensure that housing is affordable as it promised. This Government has failed to provide housing which is a basic human right for people. I and the Labour Party strongly oppose this bill.The ASSISTANT SPEAKER (Lindsay Tisch): I call Meka Whaitiri—5 minutes.MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): Tēnā koe Mr Assistant Speaker. Tēnā tātou katoa. State housing has a proud history in New Zealand. It is how we make sure that every child gets at least a decent roof over their head. No matter how hard mum and dad are struggling financially it is how we make sure every child gets a decent start in life.It is my privilege to stand and take a call on the third reading of this important legislation. I came to this House at 9 a.m. and sat in the Committee for 4½ hours to try to get a call on this particular legislation so I am pleased to finally get 5 minutes to talk and share my experience of the impact that it is going to have on the people and constituents whom I represent in this House—Ikaroa-Rāwhiti. There have been some communities that have been identified in terms of how this legislation will not address their needs. Can I make it really clear for the House that there are real social and emergency housing needs throughout Ikaroa-Rāwhiti. There are real housing needs. A couple of suburbs were mentioned by colleagues on this side of the House—Flaxmere—but one suburb that I particularly want to mention is Maraenui. Since coming into this House I have the privilege of visiting Maraenui often when I am back in the Hawke’s Bay—Napier. I can say without a word of a lie that 80 to 90 percent of the cases that I deal with on a daily basis when I am in the electorate are to do with housing issues. That is why I am saying that legislation like this is not going to address the real social and emergency housing needs of the constituents I represent.One of the issues raised in the passing of this legislation under urgency is why we are doing this urgently because that was not answered by the Minister for Social Housing when she was in the chair. What is the urgency that is prevalent in this bill that requires us to have that time and why were the people who are going to be affected by the legislation not given the opportunity to present? They are not here. Their voices cannot be heard but this side of the House is bringing the very real issues that we confront as electoral MPs to the House. This legislation falls short in terms of supplying or being able to give the number of social housing homes that are going to replace those that have been sold off.As I mentioned Maraenui is a place of many many social and State houses that have recently been sold or are currently vacant. We have just under a hundred on the waiting list in Hawke’s Bay yet we have these homes that are either vacant or have been turned down. So much has the Government dropped the ball in Maraenui that recently I met with the Maraenui revitalisation committee and who is heading that committee? The Napier City Council. Napier City Council along with all the Government agencies property developers and Te Puni Kōkiri have got round the table. When my colleague Stuart Nash and I visited them 2 weeks ago we asked the question: “Why are you doing what you’re doing? There must be a Government plan to deal with housing issues in Maraenui.” Do you know what they told us both? There is no plan. They—the people around the table—said to both of us that there was no housing plan for Maraenui. There is clearly a gap in that part of my electorate. There is no housing plan so the people of Napier have taken the ball to address the real issues.But for the time I have got left on my feet in bringing forward those issues of the people of Maraenui I also want to mention what this legislation is actually doing. As a former public servant I understand what important and really robust policy looks like and I also know what robust and good policy does not look like. In this particular legislation it talks about removing from Housing New Zealand Corporation the deliverer of housing in this country the role of giving advice to the Minister. I read that and I fear for all the public servants that we are talking about here in Housing New Zealand. That means who is next on the block. Which other departments and officials that work tirelessly on behalf of our community are also going to get the chop? This is one of the failings of this legislation. It is not just about not delivering; it is also downplaying the Public Service which has a proud record in this country and therefore I cannot support this legislation. Kia ora tātou.STUART SMITH (National—Kaikōura): Legislation arising from the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill is important legislation. I think the main plank of this legislation is that it moves the focus from one social housing provider in Housing New Zealand to the people who require social housing. That flexibility is essential because other providers in conjunction with Housing New Zealand will actually be able to meet people’s needs in the way that they are needed—in the right places with the right houses of the right size. It is a great pleasure to be a part of a Government that actually hits to the heart of the matter rather than sticking to tired old ideology. So it is with great pleasure that I commend the legislation to the House. Thank you.ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Tēnā koe e te Māngai o te W’are otirā tēnā tātau katoa.[Thank you Mr Assistant Speaker of the House and indeed to us all.]It gives me great pleasure—in a way—to have the opportunity to speak to this. I think it is really important that I again acknowledge all of those families who are sitting in their State homes today wondering about the future of their occupancy of the houses that they live in—their homes. I also want to acknowledge those families who have applied for a State house and have been declined. They have been declined because the rules around who qualifies for a State house and who does not have changed. That has not lowered the number of people wanting social housing; it means that the Government has just written them off. So I want to acknowledge those families as well because this legislation does nothing for them—nothing at all. This legislation has got nothing to do with what the Government benches say that it has although we have not heard a lot from them especially today. We have heard as my colleague said interjections that have lasted longer than their speeches and in a democratic society that is actually not good enough. It is not good enough for the speeches from the Government benches that we have heard today—very few of them—that when they are given the opportunity to actually speak to those issues you get a 1-minute speech in response. As my colleague the Hon Annette King pointed out the Government benches are actually not doing their job properly.I go to the bills that have come out of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. Let us talk about the flexible purchasing or as I mentioned during the Committee stage the flexible sales because that is what it really is. These bills provide the mechanism for the Government to sell State assets. That is what they do. No one can deny that. In fact if that was not right why have we not heard from the Government benches about that particular issue? The sale of these State assets also transfers the responsibility to provide social housing. That is actually not good enough. It is an obligation on the Government to provide those houses. If it is not then the Government should say so. The Government should tell the country—come clean. Tell the community that the Government does not want to be in that business any more—that it does not want to provide social housing for New Zealand. That is what this legislation is effectively saying. It wants to transfer the responsibility to community organisations and others: property developers—we do not know because new section 137A of the Housing Restructuring and Tenancy Matters Act inserted by this legislation gives the power to the Minister for Social Housing to make those decisions. The Minister can make the decisions around transferring those assets to from my reading anyone the Minister chooses. And without any rules around that we do not know how long those houses have to stay as social housing. Is it 1 year 2 years 10 years? Maybe after 2 years they can be transferred or sold on the open market no doubt for a large profit and then no longer will those homes be affordable no longer will those homes be social houses.The big question in debating this particular legislation is whether there will be one single social house more in New Zealand when this legislation takes effect and the answer is no—not one single one; nothing. How then can members opposite claim that this legislation will provide more social housing? It does not. It does not. I think I am bound to say that the public should have had the opportunity to have input into this legislation. New Zealanders ordinary Kiwis out there have been denied the opportunity that our democratic system offers. They have not had the opportunity to give evidence. We have heard in the contribution from the Hon Annette King that one organisation was able to get out a press release in time to give its thoughts on it. Imagine what other organisations might have been able to contribute. There is nothing in this legislation as I started to allude to in one of my earlier contributions around the Government’s Treaty of Waitangi obligations. It talks a lot about providing Māori housing and yet in this legislation there is no mention under the enabling clause of the Minister giving any recognition whatsoever to the Government’s Treaty partners—none whatsoever—so that may or may not happen but there is no obligation on the Government to do that. I call on the members opposite who have one more call. Maybe they can answer some of those concerns that more than just I have.As I mentioned earlier those families who are sitting at home wondering about the future of the occupancy of their homes will be very concerned that they have not had the opportunity too to make a contribution and give evidence on this legislation. Actually we have not heard any compelling evidence or any compelling contribution from the members opposite about exactly why this legislation is so important that it has to go through under urgency. I have not seen or heard any contribution from them addressing that issue. There is no urgency in this. It is a matter of the Government deciding that it wants to get this legislation through under the urgency of the Budget so that the general public will miss the fact—or may miss the fact—that this is about the flexible sale of State assets. It is not flexible about the purchasing because when you have purchasing you also have someone who is selling and that is the Government on behalf of all New Zealanders selling its stake in social housing in New Zealand and transferring the responsibility that it has to organisations and others to carry out that function. That is just not good enough.Ā nō reira ka tuku atu i taku kōrero ki aku iwi katoa. Kia kaha ki te āta titiro i ēnei pire. Kaua e pōturi ki te tuku atu i ō koutou kōrero ki a rātau mā te Kāwanatanga. Nō reira Mr Assistant Speaker tēnā koe.[Therefore my advice to all my Māori people: be robust and scrutinise these bills very carefully. Do not be slow in submitting your findings to that lot the Government. So thank you Mr Assistant Speaker.]TODD MULLER (National—Bay of Plenty): It gives me great privilege to be able to stand here as the final speaker in support of the legislation divided from the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. It is time for the members to park their histrionics and park their ideological dead ends and actually come across and listen to what this legislation delivers. There will still be 60000 properties in the ownership of Housing New Zealand in 2017. There will be 3000 more social housing places by 2017—3000 more. It is time for you to come across. You have still got an opportunity to represent the people whom you purport to support like the iwi in Tauranga who want to participate as a community housing provider and like the accessible housing companies that are wanting to participate in Tauranga. These are people whom you purport to support. If you had integrity you would see that this bill is designed to deliver more for the people whom you purport to represent. But this party does—we represent them. I commend this legislation to the House.A party vote was called for on the question that the Housing Restructuring and Tenancy Matters (Social Housing Reform) Amendment Bill the Taxation (Social Housing Reform) Bill the Housing Corporation (Social Housing Reform) Amendment Bill and the KiwiSaver (HomeStart) Amendment Bill be now read a third time.RON MARK (NZ First): I raise a point of order Mr Speaker. I want to refer you to a couple of Speakers’ rulings. This is Speaker’s ruling 205/2 which reads: “It is central to the democratic idea that the purpose of elected public office is to serve the public not to enrich the office-holder or his or her personal connections. It is important for members to ensure that they do not use their position to influence the legislative process for their own advantage or that of someone with whom they are connected.” I have spent a little bit of time going through the pecuniary interests register and I have just had the Parliamentary Library return a document stating a number of members’ own property development companies in Auckland.The ASSISTANT SPEAKER (Lindsay Tisch): One moment. Look we are in the middle of a vote here. I thought your point of order related to a vote. [Interruption] No the member will sit down. Of course you should have brought the point of order before we went to cast the vote. I have called for the votes and the Clerk is now assessing those votes. We will have the result of those votes and then the member may continue with his point of order.A party vote was called for on the question That theHousing Restructuring and Tenancy Matters (Social Housing Reform) Amendment Bill the Taxation (Social Housing Reform) Bill the Housing Corporation (Social Housing Reform) Amendment Bill and the KiwiSaver (HomeStart) Amendment Bill be now read a third time.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 56New Zealand Labour 32; Green Party 12; New Zealand First 12.Bills read a third time.Points of OrderMembers of Parliament—Conflicts of InterestRON MARK (NZ First): I raise a point of order Mr Speaker. To continue my point—my point is this: we have done a search using the Parliamentary Library research services and it is now clear to us that a number of Government members who have just voted have strong interests in property development companies in Auckland. A—Hon Member: Oh shut upRON MARK: Shh! In silence. A number—The ASSISTANT SPEAKER (Lindsay Tisch): Points of order in silence please.RON MARK: It is clear from the register that some 24 National Party members have 48 properties. But it is also very clear and concerning—and this is why I tried to give an opportunity for the Government to consider before it cast those votes—that a number of National Party members who just voted have strong interests in property development companies that could stand to gain from this legislation being moved—The ASSISTANT SPEAKER (Lindsay Tisch): No no. [Interruption] Order! [Interruption] The member—[Interruption] Order! We are dealing with a point of order and there will be silence. If the member had concerns about this—we have had a 4-hour debate. We started this debate at 9 o’clock this morning. So we have had over 4 hours now of this debate. If the member had concerns he should have brought them up at that stage. We cannot interfere with the vote. The vote has been taken I have announced the result and the Clerk has read the third reading. That is the end of the matter. If the member has concerns then the course of action for him to take is to actually go through the Speaker and lodge a complaint. If you feel that there are some grievances here then this could be a case for the Privileges Committee and you would be able to lodge those grievances through that avenue but not interfere with the process of this House because your concerns are not a process matter that this House can concern itself with. We move on.Absence of Members—Effect on VotingRON MARK (NZ First): I raise a point of order Mr Speaker. I have also received reports of a number of Government MPs having been seen outside of the House so on that basis I am going to ask to move that a personal vote be called in accordance with Standing Order 144.The ASSISTANT SPEAKER (Lindsay Tisch): No I have concluded the vote; it is all finished. If the member had concerns as I mentioned earlier he should have brought it up earlier. Once we have taken the vote once I have announced the result and the Clerk has read the third reading it is finished. That is the end of the matter. That is how we have always operated. There is no recourse. We are now moving on. Your point of order is out of order.Ron Mark: I raise a point of order Mr Speaker.The ASSISTANT SPEAKER (Lindsay Tisch): If you are relitigating what I have said Mr Mark that would be a very serious matter as far as the House is concerned.RON MARK (NZ First): I understand and appreciate that but I did raise a point of order prior to the third reading for your announcement and I did attempt to get that through to you and you overruled and moved forward. My—The ASSISTANT SPEAKER (Lindsay Tisch): Once we have started the vote when you raised a point of order I thought it was in regard to the process that we were going through at that stage. Your point of order was about what you considered to be some affairs of certain members of Parliament which is a very serious matter—a very serious matter. It is an allegation that this House would take very very seriously and that is why I have considered that this is a matter that you need to go and lodge through the Privileges Committee if you feel aggrieved by it. As far as the vote on this bill is concerned we have finished that and I will not entertain any further discussion on it. The matter is finished. So we now move to the next bill on the Order Paper.Telecommunications (Development Levy) Amendment BillFirst ReadingHon AMY ADAMS (Minister for Communications): I move That the Telecommunications (Development Levy) Amendment Bill be now read a first time. There are few countries in the world where connectivity is more important than it is for New Zealand. We are a nation of 4.5 million people and a country situated at the last bus stop on the planet spread across three islands with plenty of mountains lakes and rivers in between. The tyranny of distance from the rest of the world and our unique geography make rolling out high-speed connectivity all the more difficult and all the more important. Broadband is critical to our future because it creates opportunities of untapped potential. It connects New Zealanders with one another and with new markets across the world. It allows our best and our brightest to export new ideas services and products. It is a vital part of the Government’s plan in developing a productive competitive economy and creating more jobs for Kiwis and their families.Over the past 6 years the Government has been rolling out its Ultra-fast Broadband Initiative and Rural Broadband Initiative programmes to lift the connectivity of 97.8 percent of New Zealanders. The first stage of that roll-out is going well. We are ahead of schedule and we are within budget. The Ultra-fast Broadband Initiative build is 46 percent complete and we have completed more than 75 percent of the Rural Broadband Initiative stage one programme. Almost 325000 households are now covered by the Rural Broadband Initiative with 80 percent uptake of the main fixed line component of the programme. We have upgraded almost 80 percent of towers and installed 113 new ones. In the March quarter alone there were nearly 1.8 million unique Vodafone mobile customers using these towers. In addition we have completed the auction and allocation of the 700 megahertz spectrum which will enable the widespread roll-out of 4G cellular networks across more than 90 percent of New Zealand.But although all of that is an outstanding achievement this Government is not resting on its laurels; we are already looking ahead to the next stage. Last August we announced that if re-elected the National Government would look to use the telecommunications development levy to extend the rural broadband programme by $100 million and establish a fund of $50 million to provide mobile coverage to the most remote parts of New Zealand. In March I confirmed that this extension was going ahead. With the success of the first stages of the Ultra-fast Broadband Initiative and Rural Broadband Initiative behind us this Government is looking further forward. We want to push on and extend coverage even further. We want more homes connected to better broadband. We want more businesses participating in the digital economy. We want more remote communities being able to tap into the internet’s potential.The Telecommunications (Development Levy) Amendment Bill is a vital part of this plan. The bill itself is incredibly straightforward but let me set out a little bit about the levy. The telecommunications development levy is an industry levy that is collected from telecommunications companies to fund open access infrastructure in areas where it would otherwise be unlikely to be commercially viable for them to build that infrastructure. The levy payers can then use the funded infrastructure to provide services for their customers. So the key factor worth noting is that the levy is used to fund infrastructure that all of the telecommunications companies can then use—so they are essentially funding their own communal infrastructure which they then use to sell products over. The levy to provide Rural Broadband Initiative facilities is paid back to providers through contestable processes. It funds non-economic aspects of infrastructure so that the industry giants cannot just cherry-pick the profitable areas such as high-density urban areas and leave rural New Zealand in the dark ages.The levy was first introduced in the Telecommunications Amendment Act 2011 and has been applied since the 2010-11 financial year. It replaced the existing telecommunications service obligations liability allocation process which had been in place much longer. This bill does not change any operational aspects of the levy nor does it determine the parameters for how the second phase of the Rural Broadband Initiative will be rolled out. It simply resets the levy amounts for the 2016-17 to 2018-19 years to keep the levy amount at its current level. The telecommunications development levy is currently set at $50 million a year. This is about 1 percent of industry telecommunication services’ revenue. The levy amount is not going up. It is staying exactly the same so the industry will not need to put its prices up or explain to its customers why the bill is changing.It is worth noting that the levy we are proposing to extend is substantially less than the levies that were funded under the previous telecommunications service obligation arrangement which was an average of about $65 million a year. The levy makes up a very small portion of an average monthly bill and as this is an extension of an existing levy it will not increase costs to consumers in any way. Because the levy has been in place for a number of years now we do not expect consumer bills to change. The telecommunications companies already incorporate the levy at this level into their pricing and so there is no reason to change. Let me put this in context in terms of the impact to the average New Zealander. For a consumer on a $19 basic prepaid mobile phone package their contribution to the telecommunications development levy is around 22c a month. This is the equivalent of the cost of a single text message. For a comprehensive broadband package it is around 80c a month. The consumer impact is so low that even if the bill did not pass it is completely implausible to think that consumer prices would be dropped by the few cents a month that are involved.Although the impact of the levy on consumers is tiny the impact is hugely significant for reaching rural communities. It is available to fund charges relating to the telecommunications service obligation—that is the obligation that Spark gave to provide a telephone connection to every household options for free-calling and the 111 service. It funds improvement to the rural telecommunications infrastructure including as we are discussing today the Rural Broadband Initiative. It funds upgrades to the 111 emergency calling system and it is already being used to fund the relay service for the deaf and the hearing impaired. These are essential services that New Zealanders need and use.The $150 million extra that this bill will provide will mean that we can set aside $100 million for the extension of the second phase of the Rural Broadband Initiative to the regions meaning that almost every New Zealander will get access to better broadband and another $50 million to establish a contestable Mobile Black Spot Fund to enhance network coverage in black spot areas as increasingly mobile coverage is expected to be almost universally available.The changes in this bill should come as no surprise. We initially proposed these changes in our election manifesto last year and announced in March that our intention was to follow through. We have been very upfront and transparent about our ambitions to extend rural connectivity and how we are going to go about funding it. Passing this bill in all stages is part of Budget legislation it provides certainty and stability to the telecommunications industry but even more important it allows the Government to get on with the job of rolling out the extension of the Rural Broadband Initiative and better mobile coverage to areas that desperately need it as the legislative mandate must be in place before contracts can be negotiated and this Government wants to get better broadband to New Zealanders as fast as we can.The Ultra-fast Broadband Initiative and Rural Broadband Initiative programmes that this Government initiated are key components to ensuring critical communication services are available to New Zealanders. Now more than ever it is important that businesses and communities right across New Zealand and into our rural and remote areas have access to the information and communications technology capabilities that they require to operate effectively in a competitive global economy. This bill enables us to put the funding mandate in place so we can get on with providing that connectivity. We will continue to look for opportunities to enable New Zealanders to realise the benefits of our investment in connectivity and to ensure that New Zealand is digitally competitive on the world stage. It is with great pleasure that I commend the bill to the House.CLARE CURRAN (Labour—Dunedin South): Let us just be clear: a levy is a tax. You cannot dress it up. Levies are not intrinsically bad but this Government said there would be no new taxes. That is my first point. If you are going to introduce a new $150 million broadband tax on an industry under urgency with no consultation and no evidence that your proposal is sound then it will immediately flow on to consumers. This bill imposes an immediate tax on consumers for their internet for their landline phone for their mobile phone.Prices are going to go up and it is Amy Adams who is to blame. What this Minister is doing is one of the biggest scams this Government has tried on. It warrants examination by the Auditor-General it warrants an inquiry and I am surprised that Treasury has not commented on this legislation. But on closer examination of the departmental disclosure statement at 2.3.1 the regulatory impact statement was identified as not meeting the threshold for receiving an independent opinion on its quality from the team based in Treasury. So Treasury never even got the legislation in front of it to comment on. There is an unpleasant smell about this legislation that smacks of a Government covering up massive wasteful spending with very little to show for it. The bill needs a select committee. The whole scheme needs to be scrutinised. It was a Government election promise and it did not need urgency. There has been no consultation on the levy being increased or on the passing of it under urgency.Again I refer you to the departmental disclosure statement where it was asked whether or not there had been any external consultation on the policy to be given effect by this bill or on a draft of this bill and the answer was no. There is huge disappointment and anger about this bill being passed under urgency and with no consultation. The regulatory impact statement is misleading. All it does is reflect the Government’s decision back to itself. There is no free and frank advice.Labour absolutely recognises the educational social and economic benefits to New Zealand of better rural broadband. It was our policy that all New Zealanders deserve connectivity opportunities. Labour took comprehensive policy into the election last year in respect of extending rural and urban connectivity and addressing the digital divides that exist. No other party did the work that we did.Amy Adams’ contribution was to announce spending $150 million of the industry’s money which she knows will be passed on as a tax to consumers. Either she is too lazy or not bright enough—or she is trying to cover up the failure of the Rural Broadband Initiative—to know that you should not spend money unless you have done your homework first. Why should we care about this? Well maybe we should not care if this was a sound policy. But it is not. This legislation fast tracks Government spending and it is more money after bad. It is Government waste. It is economic mismanagement. Who is going to pay? The consumers are going to pay. To all consumers listening to this this afternoon who have got internet and phone connections your prices are going to go up.Rural New Zealand will continue to receive crap broadband. It is a flop it is a failure it is a disaster and it is a scandal. There is no proof that the Rural Broadband Initiative as it is now has worked. There are three parts to this scheme. There is the building of new towers which the Government insists is on track and I am hearing that there are issues with the capital that Vodafone requires to complete the job. The Government however insists that it is on track. However as I understand it all the easy ones have been built and the harder ones are still to be built.The second part of this scheme was a Chorus upgrade of broadband to 85000 lines which go to households and businesses. That has never been evaluated. But the biggest scam of all in the Rural Broadband Initiative is the fixed wireless component of it. That is the biggest scam. Vodafone’s role was the provision of fixed wireless broadband capable of peak speeds of at least five megabits. So how has that worked out? Well there are no figures. There has been no evaluation. We do not even know for sure how many people have actually been connected through this part of the scheme.Mysteriously into my in-box yesterday afternoon came the response from a written question from the Minister. It was the first time there has ever been any indication of numbers of people who have been connected through the fixed wireless scheme. Guess how many it was? It was 8500 people. Guess how much money was committed to that part of the scheme? It was $60 million. If you divide 8500 connections by $60 million guess how much that is? It is $7000 per connection. If that does not sound like a scam and a big scandal that warrants the Auditor-General getting involved in evaluating it I do not know what is. There are no reports. We were told by the Ministry of Business Innovation and Employment yesterday morning at a select committee that it had done no evaluation of the Rural Broadband Initiative and now the Minister is about to commit another $150 million to it.There is no business case. There is no real data. There has been no consultation. But there already is data—and it has not worked and if you do not believe me maybe you might believe the research that—Mr DEPUTY SPEAKER: It is not me you are trying to convince; it is the House.CLARE CURRAN: Thank you Mr Deputy Speaker; my apologies. If the other side of the House does not believe me there is unpublished research that I have come across from Colmar Brunton which was done for Chorus just before the election and which shows that of 600 rural businesses and 300 rural households 68 percent are frustrated and angry with their internet connections and feel restricted and left behind. That is a pretty high figure. I am pretty sure that the Minister and her Government knew that this was an issue in rural New Zealand and miraculously 3 weeks before the election we got a new policy whereby $150 million was committed to rural broadband out of the blue with no consultation—and no consultation since—and no business case to support it.How do we know there is no evidence? Because the regulatory impact statement says so—it actually says so on its first page. The Ministry for Business Innovation and Employment has failed. It has failed big time to provide an analysis for the Minister. It is just doing the Minister’s bidding. So how do we know there has been no consultation? Because everyone in the industry says so and because the departmental report says so. How do we know it is going to be a tax on the industry? Because when any levy is imposed on an industry it is passed on.There is another issue a final issue. Rural New Zealand is standing still on broadband and it is about to get more of the same. The digital divide between rural New Zealand and urban New Zealand is being entrenched under this Government. The 5 megabits that is being provided in rural New Zealand under the existing scheme is going to be provided under the new scheme. This is treating rural New Zealand like second-class citizens or poor cousins. It is treating them with disdain. Even the US has announced a few months ago a new standard of broadband of 25 megabits per second. If we stick with 5 megabits per second then rural New Zealand is never going to go ahead. There is going to be no economic development and it is an absolute travesty and a demonstration of regional neglect and treating rural New Zealand as if it really does not matter.MELISSA LEE (National): I am just a tad surprised by the member Clare Curran who has just sat down. I was slightly confused as to whether she was in fact for rural broadband or against rural broadband—I guess that is just like the Labour Party. This is actually Budget-related legislation that has been brought to the House and yesterday when the Budget speech was read I think the Labour Opposition was absolutely gobsmacked that we for the first time in more than 40 years are delivering for the poorest people in this country and increasing benefits. There has been nothing from previous Labour Governments.We live in a world where it no longer takes ages to deliver mail. It used to be that people used to write a longhand letter put a stamp on it and put it in the post. It might have taken weeks before it was actually delivered. With the advancement of modern-day technology it is almost instant. Somebody could write an email from Korea or America and it will be here within a couple of seconds. Technology advancement has made our lives easier in some instances and sometimes in rural areas it has not actually caught up. This is what we are trying to do—to provide faster internet technology for the rural areas.I know that some other countries that Ms Clare Curran talked about have different speeds they are going for and some have managed to achieve some elements of their target. Korea has been a major leader in technology and even in Korean rural sectors where there is difficult terrain and small groupings of houses the target is only 2 megabits per second. In New Zealand this National Government is targeting 5 megabits per second. Tech advancements are fabulous but sometimes I lament the bygone days when we had to send letters. There are times when I wish I could disappear from the reach of the telephone calls I get.But I digress. The Telecommunications (Development Levy) Amendment Bill is a great bill. It provides further stability and certainty to the telecommunications industry and consumers. This bill will benefit businesses families and New Zealand as a whole. I commend this bill.Hon DAVID CUNLIFFE (Labour—New Lynn): I rise to take a call on the Telecommunications (Development Levy) Amendment Bill which is being rushed through the House during Budget urgency setting aside the normal processes of Parliament—to have a select committee hearing and a report back from stakeholders.Why is this happening? I can only imagine the picture in the Cabinet room when this legislation was mooted and there was Nathan Guy bright as a button poking his eager little eyes up above the Cabinet table and realising that this sounded like free broadband for farmers. How wonderful! The Minister for agriculture could announce—Hon Nathan Guy: No; primary industries.Hon DAVID CUNLIFFE: Primary industries. He wants a bigger title. It happens in the third term of a Government. The Minister for Primary Industries—not primary schools but primary industries—wanted to be able to say in a press release “Free broadband for farmers.” National is the farmer’s friend. But nobody told him—David Bennett: Who’s your friend? You’ve got no friends.Hon DAVID CUNLIFFE: Oh there is another farmer. He is still alive David Bennett. I have not heard from him for months and months but he is still alive. He moves—proof of life! But nobody told Nathan Guy PhD that if they impose a levy on telecommunications companies which is a new tax it will simply be passed on to consumers and in the end the farmers will pay. I can see the look on his face now. The camera can zoom in on the crease in his brow as he realises that it ain’t as good as it sounded.What is the ostensible purpose of this bill? It is supposedly to fix things call black spots. That is when you are driving through the country and your mobile phone drops out.David Bennett: The Labour Party.Hon DAVID CUNLIFFE: Well we are law-abiding citizens. We do not often use mobile phones when we are driving and if we do—which is a rare exception—we always have them on hands-free.But there is a thing about Northland. Occasionally members of Parliament were in Northland for the by-election. There was a traffic jam as ministerial LTDs BMWs were backed up trying to get into Northland on their shabby rural roads and it suddenly dawned on Ministers that you cannot actually use a mobile phone through most of Northland because there is almost no coverage at all even on the main road. So you can imagine their haste as they scampered back to Wellington and realised that Simon Bridges was a bridge too far and that the good people of Northland would not be fooled by umpty-dumpty years of neglect followed by 10 bridges in 10 days but they could tell the difference between that and a regional development strategy and there was a black spot all over Northland. So this bill got rushed through.This is yet another example of the National Party hitting the policy panic button. [Interruption] “Who cares?” says the member at the back. I cannot remember his name but he sometimes speaks in the House. He says “Who cares?”. Who cares whether it is good policy? Who cares whether it is a good investment of taxpayers’ money because it was a bloody good press release? It sounded really good on the news and that is all that matters right? Postmodernism got the narrative right. Who gives a toss about the facts? That is the Government for you in its third term. Here is the issue. Have you heard of Google’s Project Loon? Have you heard about that? Do you know what Project Loon is? What is it? He is nodding.Brett Hudson: Balloons my friend.Hon DAVID CUNLIFFE: Very good you get a starter for 1.Project Loon is a new way of getting broadband to the rural regions by a mesh network of balloons that can broadcast and that way you do not need expensive lines in the ground or on power poles. It may or may not work at scale around the world but the point is this: before you go spending another $150 million of New Zealanders’ hard-earned cash you had better look at things like that.Brett Hudson: You’ll wait for years. Mr Cunliffe suggests you wait for years. Let rural New Zealand suffer for years he says.Hon DAVID CUNLIFFE: There are two ways I say to the noisy backbencher on the far side that that can happen. The first is a thing called a regulatory impact statement that tests a whole bunch of options. But the department here in its disclosure has said that it really did not have time for any options analysis because this was a panic-button measure as my colleague Clare Curran has pointed out. So there goes option one.Option two is to have a select committee process and hear from the industry: hear from Vodafone Chorus Spark 2degrees—hear from the experts—about how they think they can get the most broadband possible to the most people possible in rural New Zealand at the least possible cost. Oops—the Government did not do that either. That is why we are here on the dead of Friday passing this legislation through all stages under urgency which denies the sector and the public the opportunity to comment. Why on earth would you do that when you are spending $150 million? I will tell you what: the industry is hopping mad. The Government may be the farmers’ friend but it is certainly not the friend of the telecommunications companies right now because they know it is a muddle waiting to get worse—a muddle waiting to get worse let alone that it is a broken promise—David Bennett: Sounds like the Labour Party.Hon DAVID CUNLIFFE: —let alone that members like Mr Bennett could not give a toss about the facts—they are interested only in the media—and let alone the fact that this measure has not been justified in terms of evidence or a select committee process. This is bad lawmaking and it is a bad process.The broadband obligation that is contained in this bill will be passed on to consumers. There is no such thing as a free lunch. A telecommunications levy can be levied on the phone company but of course it will pass it through and it will be Mr Guy’s farmers whom he will have to face when their phone bills and their broadband bills go up because nobody has done the analysis to find the cheapest way to get them the bandwidth. But let us just assume that all of those problems were not there. Let us just assume that the Government had done its homework it had done options analysis it was having a select committee process it had consulted the industry the industry was onside and that consumers were going to get a good deal. Just assume for a moment that was all true.Ah—the other big problem every time the Government goes near broadband telecommunications is that nobody hooks up. The Government set an objective of 80 percent coverage for its ultra-fast broadband. Well nobody was ultra-fast to hook up to the thing. The last time I looked there was about 3 percent usage. Three percent of New Zealanders have actually ponied up the connection costs to hook themselves to the so-called ultra-fast broadband network and that was in the cities where it was easy. Spend another $150 million of taxpayers’ money with no select committee process no data analysis and no consultation with the sector and guess what is likely to happen—sweet nothing because people cannot see the reason to spend $2000 or $3000 of their hard-earned savings to hook up to a system that may or may not work. That is why there has been a knock-on effect through the sector from this Government’s incompetence.Here is the sad story although it is mainly about urban not rural areas but it is relevant. Chorus pressed the panic button. It rang up Steven Joyce and his sidekick Amy Adams and said: “Hell we’re going to go bankrupt because you put us over a barrel with the ultra-fast broadband roll-out costs. It looked OK but as nobody is actually joining up and no one is using it we are losing money. Please write us a big fat cheque.” or words to that effect. So what did the Government do? The so-called economic managers who are zero for seven on running a surplus said: “Sure.” They rang up Mark Ratcliffe and said: “Mark how big a cheque do you want?”. He said: “Oh well look it’ll look better if you just let us renegotiate our ultra-fast broadband contracts.” So they did. Chorus shares rose faster than just about any other share on the stock market last year because the deal that it got out of this brain-dead Government was just so sweet that they were rolling in shareholders’ funds and the Government got duped.Well here we are again. The Government has obviously learnt from its mistakes because it would never again spend taxpayers’ money without consulting the sector or having a rigorous select committee process. Oops—except here we are on a Friday passing this $150 million new tax through all stages without a select committee hearing. Can New Zealanders see the problem with this process? Well I will tell you what—the telecommunications company sector can see the problem and even Nathan Guy’s favourite farmers will when they pick up the bill. Mr Guy’s smiling face as he lifts himself up to the Cabinet table will not be smiling quite so much. Thank you.SIMON O’CONNOR (National—Tāmaki): I am not sure who that member was at the backbench of the Labour Party who was just speaking but there were two interesting themes. One was about Project Loon from Google and Labour would know all about that—hot air and balloons floating around in the stratosphere and it is like the balloon in Missouri that crashed to the ground recently. The Labour members were also I see talking about black spots and I think the Labour Party knows all about black spots because most of them would have loved to be in a black spot yesterday when they heard their leader’s speech falling on deaf ears and collapsing and crashing to the ground.This is a good bill. It seeks to increase an existing levy in order to roll out services that our people want. I was on a select committee yesterday where we were hearing evidence from people who were saying that they want more broadband be it in the rural or urban areas. They want it faster as well—that was one of the things they said. This is a Government responding to that. You are hearing very positive thoughts from this side but unfortunately all it is from the other side is ad hominem. With that I take my seat.GARETH HUGHES (Green): Kia ora Mr Deputy Speaker. Ngā mihi ki a koutou kia ora. I rise to support the Telecommunications (Development Levy) Amendment Bill. This is a pretty uncontroversial bill and it should be. It is simply keeping the telecommunications development levy where it is. You could argue it is marginally increasing it but look it is keeping it where it was—at $50 million. This increase is for $100 million to spend on Rural Broadband Initiative 2 and then $50 million on a contestable mobile black spot. It is fulfilling a governmental election policy. We are disappointed with the process. We think it could have gone through a select committee. There is no reason to pass this bill through all stages today on a Friday afternoon or early evening. The fact is that the Government has sat on its hands when it comes to this issue since that election promise. When it comes to actual industry involvement the Government’s own officials advise that no one in the industry was consulted and in fact the officials then go on to say that at least they will get a parliamentary process to give their input which we will not see given this bill is passing through all stages. It is unfortunate that we are seeing this pass in the way that it is. The second unfortunate aspect of this is that this is an area that the Government is currently consulting on—it is currently consulting on it. So at the same time it is passing legislation through all stages in a single day under urgency it is asking the public and the industry to consult on the process for spending. It seems a bit like the horse after the cart.I raise these issues because I think that a critical question this Parliament needs to ask itself is: given the questions around the original Rural Broadband Initiative what we do not want to see is simply a cut-and-paste job with this extra $150 million for Rural Broadband Initiative 2. That is why I support greater industry and public input and a better process. But I am supporting this bill because of the importance of the internet to our rural communities in terms of social cohesiveness in terms of health outcomes and in terms of regional economic development. We know that the internet plays a critical role for our communities and we have been hearing about those communities on the Commerce Committee—from Outram from Mosgiel and from a host of communities that have not been able to access ultra-fast internet to date—and how it is holding their communities back. I have a vision that kids in rural schools can access the world’s best educators via the internet. Our farmers who are using data to increase their productivity can do so more and sell their products around the world.When it comes to the internet it breaks down some of the strategic challenges our country faces. There is a limit to how much milk powder we can export around the world. In fact we are seeing it in our streams and rivers at the moment. There is no limit to the amount of intellectual property services new ideas and entrepreneurialism that we can be exporting across the internet cables. As the Government is now with this legislation set to spend more than $2 billion on internet access over the course of its term we have to ask ourselves whether we are simply just building an ultra-fast intranet. We also need to focus on those international conventions which is something the Green Party has pushed. So rural broadband is good for farmers it is good for kids and it is good for our rural communities. It lessens that digital divide which we know is based both on income but also on region.Disappointingly when you look at the original Rural Broadband Initiative though the Government cannot point to a comprehensive economic evaluation of its outputs. This is important because we know that a lot of our communities are not able to access ultra-fast internet particularly in rural regions. The Government is able to point on paper to the amount of potential connections but I think for many communities that sounds and rings hollow. They want to know how many people are actually connected. We can do this for the ultra-fast broadband project but not for the Rural Broadband Initiative. We should be measuring this stuff. We should be getting value for money for spending $300 million to date and the additional $150 billion the Government is now wanting to spend. It is important to invest this money. We saw from the report by Hayden Glass and others from the Sapere Research Group that providing greater internet access and use of the internet by our businesses could deliver $34 billion in economic benefits. We can see our regional economies thrive. I will not name the person but I know someone down south who literally is managing a network of global satellites for climate change research and managing assets worth hundreds of millions of dollars yet this person is able to live in picturesque central Otago. We know that there are a lot of people who would love to come to live in New Zealand and we need to attract the quality of those who want to live here by our quality of life. So let us build up our regional communities. Let us offer them good internet access.I would like to touch on some of the questions and concerns. We have heard some of them from the Labour Party members. I think there are three big concerns around the evaluation of the reporting around the role that Vodafone has played to date but also around an expectation gap. So let us look at the effectiveness of the original Rural Broadband Initiative. It was a $300 million investment. It is incredible that the Government cannot point to a comprehensive evaluation. I think when you are spending such significant sums of taxpayers’ money it is prudent and reasonable to be able to ask those questions. We are seeing a market failure in our regions. Obviously the big telecommunications companies are not rolling out ultra-fast broadband to the level they are in our cities and you can understand that. That is why everyone I believe in this House thinks it is eminently reasonable for public subsidies to rectify this market imbalance to provide internet access to our communities. So a subsidy is valid but look taxpayers want to know whether their money has been spent in a cost-effective manner. They want to see the benefit-cost ratios.The Government does not ask these questions basically because the asset infrastructure it is installing is open access and anyone can use it. But I think that rings hollow. I think that the Government—and I place the blame squarely at Steven Joyce’s feet—should have made this a requirement of the contract. Look if the Government is going to spend $300 million of the money of telecommunications companies’ customers ultimately it should be able to at least say how many people are connecting as they can for the ultra-fast broadband. Do not just take my word for it; we have seen Chris O’Connell of the Telecommunications Users Association of New Zealand write in August last year around some of the questionable Rural Broadband Initiative spends. He writes: “my recent travels have shown me that the RBI has yet to make a real impact and even when it is available it’s is decidedly average in its performance because it is basically delivering last decade’s broadband at best and often less than our innovative regional wireless ISP’s have been doing for years.” So we have got to question this. We have got to have that evaluation and I will be pushing through the Commerce Committee for us to actually show some leadership step up and do that evaluation.The second key concern is around Vodafone’s role in the original Rural Broadband Initiative. It received $60 million of telecommunications development levy funding for the wireless Rural Broadband Initiative stage. It has been estimated that only 8000 people have connected to Vodafone’s wireless system—8000 people from a $60 million investment. If you do the simple maths $60 million divided by the 8000 customers is $7500 per connection. Let us have that debate as to whether that is a worthwhile use of taxpayers’ money or not—but let us have the facts and have that debate. I am concerned to read in the officials’ advice to the Government in section 17 of the regulatory impact statement that they do anticipate that the majority of funding will go to the larger telecommunications development levy players. This is concerning because there are questions around Vodafone’s wireless versus the Chorus copper upgrades and cabinet upgrades. So let us have those questions.We have also heard thirdly that there is an expectation gap arising from our regional communities versus our urban communities over what they can expect. The Government has really got to step up here and show some leadership. It needs to improve its communication. It needs to actively communicate the time lines to these communities. To address some of these concerns around further telecommunications companies and customers subsidising particularly large players—and I am thinking of Vodafone here—I have got Supplementary Order Paper 83 in front of the House that will request the Minister to take regard in her decision making to ensure the use of the telecommunications development levy to promote competition to promote diversity in non-urban telecommunication markets and to look at the range of different technological solutions. We have heard of the Project Loon balloons and it is true that technology is changing fast so I think it is prudent and eminently reasonable that the Minister should have regard to new technology.Secondly the Government also as part of the 700 megahertz spectrum auction has achieved at discount for the successful auction winners around 75 mobile towers to eliminate some of the regional black spots. That is a good thing. That is why I have got another reasonable Supplementary Order Paper in front of the House to make sure that those existing telecommunications companies who have received a discount from the spectrum auction are not going to be able to access telecommunications development levy funds and essentially get a second bite of the cherry. These are two issues I think that Government members should be able to agree with and if they do they should support them and there is no reason not to. There is the Green Party position. We stand for good regional internet access. We have got some concerns around the process some suggestions and some solutions to make it better and that is why we are supporting the bill today. Kia ora.TRACEY MARTIN (NZ First): Kia ora Mr Speaker. New Zealand First will be supporting the bill. Again we agree with the Green Party. We believe that it is an uncontroversial bill. To date there is only one part of the Labour Party’s contribution that we would agree with and that is the fact that this is actually a broken promise. It is a broken promise to the telecommunications companies however and that is something that the telecommunications companies will need to work out with the Government and the Minister.With regard to where this bill came from let us talk about the fact that much has been made of the possibility that there has not been any consultation on this. The reality is that this is an amendment to an amendment. The Telecommunications (TSO Broadband and Other Matters) Amendment Bill—brought into this House in 2010 with the member responsible being the Hon Steven Joyce—actually set up this levy to start with. And in this case New Zealand First actually believes it is a levy under the dictionary meaning of the word “levy”—as opposed to the term “tax”. So therefore we believe this is a levy. However back in June 2011 when this bill was finally given Royal assent the agreement that was reached—and the table was put inside that amendment to the Telecommunications Act 2001—was that in 2016 the $50 million contribution which was spread over 22 telecommunications companies would then be dropped to $10 million only. And at that time way back in 2011 consultation was done.We understand that there were telecommunications companies that were not thrilled that they had become part of that process. We understand that Chorus took a case to the Commerce Commission and argued that it should not have to be part of this levy payment. We understand that other telecommunications companies took cases and sought that. Take Skycity for example—not Skycity I beg your pardon. The National Party and Skycity are normally so connected that sometimes I forget. They argued that Sky TV should actually be part of this levy payment because there is now so much content actually put out over those networks. Possibly—possibly—that is something that a review might pick up—that with the shift since 2011 around what is delivered in this digital environment there are maybe more people more corporations or more companies. Perhaps there are more companies that should be contributing into this levy pot.But the reality is that this levy needs to be extended for the continuation of the Rural Broadband Initiative. It needs to be extended and we are very pleased to see the establishment of a mobile black spot fund.We can only assume that as Mr Cunliffe said when driving through Northland on a bus or in any other mode of transportation you realise more often than not that you have just lost signal again. The reason why New Zealand First will be supporting the Green Party’s Supplementary Order Papers is that we want to make sure that that mobile black spot funding is tagged and that it can be used only for the delivery of that service to our consumers. We can only hope that if this fund is tagged and kept and spent exactly for that then people like Robyn Dixon will be able to stop going outside her house in the middle of the Dome Valley—again sitting in the super-city of Auckland—standing on one leg with her arm in the air on a hilltop to try to get a signal.I am just going to quote from an email sent to Prime Minister John Key by his neighbours in Ōmaha. Let us remember that Ōmaha sits in the super-city of Auckland. When we talk about the Rural Broadband Initiative Ōmaha is actually sitting in the super-city of Auckland. The email says: “Ōmaha is a part of a fast-growing area taking into account new subdivisions in Matakana Point Wells and further intensification of Ōmaha itself. We are close to Warkworth and know it of significant growth as a future satellite town for the Auckland Council. In simple terms we have very poor radio reception poor AM and virtually no FM capability at all. We cannot access free-to-air HD television signal. Terrestrial TV signals are too weak. We have extremely low internet speed a maximum of 5 MBs which slows by 90 percent on weekends and busy periods. Ōmaha and close are not included in the UFB rollout.” But Ōmaha is in the super-city of Auckland.We accept the fact that with this extension of what is an already consulted-on levy the industry may not be happy about the fact that it is going to continue; but it was consulted on. This extension is for up to 2020. It is not another $150 million in this coming financial year; it is $50 million in the pot and means extending that levy from 2016 all the way through to 2020. We can only hope that by using that money places like Ōmaha and Northland will be able to have these issues addressed. However we think that it is also a very fine suggestion by the member from the Green Party that the Commerce Committee pick up this topic of evaluation. I mean one cannot miss the point that the original amendment that this bill now extends was sponsored by Steven Joyce and the fact is that other contracts that Steven Joyce negotiated and other situations like this where there have been levies and so on with telecommunications companies have not gone that well. So it would not be untoward in our view if the Commerce Committee were to take this as an inquiry topic or as an evaluation topic and we will let it do the work. I understand that it is not necessarily doing a lot of legislation work at the moment so there is some space for it to do thisactually. It might even fit with some cabling inquiry work that it is doing right now.The only other thing I guess I would address in this first reading speech is the comment about New Zealanders’ wanting to know how many people are connected. I take on board $60 million divided by 8000 is $7500—Kris Faafoi: Ish.TRACEY MARTIN: —ish—but actually most of the New Zealanders I know do not care about that. What they want to do is connect. They want—Clare Curran: But they can’t.TRACEY MARTIN: Exactly. That is exactly what I am talking about Ms Curran. They want to connect. They want the Rural Broadband Initiative to actually work. They want to be able to get in there. They want to see their children able to do their homework at home. They want their schools to be connected. They want all that to happen. They want it to happen now because they are being held back. This will not put up the price. In our view this will not put up the current price for consumers. This has been in place since 2011. This is not an increase of a levy; this is an extension of a levy. Also the companies already knew it was coming. They were consulted in 2011. The Minister and the Government indicated this before the last election and they also indicated it again in March of this year.I can appreciate that those telecommunications companies may have projected their budgets and that they are going to have to do budget amendments. I can appreciate that their shareholders may actually have to take a cut. I can appreciate that. But I think it is a little bit of a stretch to suggest that the extension of the levy is going to mean that a huge amount of increased cost will now be placed on consumers when the levy has already been there. New Zealand First will support the bill because we want to see this finished but we will be supporting the Green members’ Supplementary Order Papers and we would certainly support the Commerce Committee working on an evaluation around what is going on now. Perhaps later we will talk about the dangers of changing course midstream to look at other technology because technology is always improving but you do not necessarily change to balloons just because balloons are there.Hon JUDITH COLLINS (National—Papakura): What a joy to be able to contribute on the Telecommunications (Development Levy) Amendment Bill. Having listened to all of the previous speakers I think we are in danger of peace breaking out. Fantastic! I never thought I would say that I agreed with almost everything that Tracey Martin from New Zealand First said. I never thought—ever ever ever—and not in my wildest nightmares believed that I would ever say that I agree with almost everything that Mr Gareth Hughes from the Green Party said. I have to say that that was spectacular except for the nonsense about the inquiry and attacking my dear colleague the Hon Steven Joyce. I do not think we want to do that.What I am really pleased about—Hon David Cunliffe: She’s having to cast a wide net for Cabinet votes now. She’s even asking the Greens for votes.Hon JUDITH COLLINS: Oh Mr Cunliffe is upset because I have not mentioned him. All right. I really liked the part where Mr Cunliffe said: “It looked OK but no one signed up.” He was talking about his own leadership of course.But apart from all that to hear that we have 73 percent of rural homes now with the Rural Broadband Initiative—that roll-out has happened—that is fantastic. But the Green Party is dead right. Not having broadband particularly in rural areas is not only really disadvantageous for homes and for people in businesses but also it is a danger now. In so many places along the roads in various parts there are black spots—it is now a danger. We have mobile phones not just because we like to but actually because it is a safety measure. I think we need to sort this out in the 21st century and I fully support this bill.The ASSISTANT SPEAKER (Lindsay Tisch): A 5-minute call—James Shaw.JAMES SHAW (Green): I rise to speak to the Telecommunications (Development Levy) Amendment Bill and to agree with virtually all of the previous speakers on this bill. What does the bill do? It increases the existing levy it extends the Rural Broadband Initiative and it creates a mobile black spots fund.The ultra-fast broadband roll-out around New Zealand has not been smooth over the last few years but it is critical. Although it has had its rough spots it is incredibly important that it continues and that it gets completed. That is because ultra-fast broadband is an absolutely critical piece of New Zealand’s economic infrastructure.I have just spent most of the last 10 weeks travelling around places like Northland Gisborne New Plymouth Whakatāne the Coromandel Whanganui and down to Invercargill—incredibly remote places around New Zealand. The divide between our rural and provincial towns and our main urban centres is enormous. If they do not have access to broadband it is going to get worse and worse and worse. As my colleague Gareth Hughes said that is because the internet provides us not just with economic infrastructure but with access to educational opportunities to health care opportunities and with the ability to connect with one another.In terms of the economy of course the digital economy is how we are going to get to a sustainable smart Green economy which the Green Party has been talking about for years and years and years and the idea of weightless exports where we can earn huge amounts of revenue without having to transport heavy goods or pollute or degrade the environment. Given the tyranny of distance that New Zealand has historically been subjected to this is an absolutely critical piece of infrastructure for us.I will also just say something about the mobile black spots. In addition to the safety component to it this is a really significant tourism issue. An increasing portion of our tourism dollars are coming from particularly China and East Asia and South Asia where the expectation is that you are connected all the time. It is actually not meeting our tourists’ expectations that they are travelling around parts of New Zealand and they cannot connect to the internet and to Facebook to be able to post their photos and so on. Of course that word of mouth gets back to their home countries and it weakens our reputation in the tourism sector. Most significantly as I was saying before this is about the rural economy and our ability to develop in areas where we currently have a massive divide. Not getting this piece of infrastructure in place will make it even worse.As my colleague Gareth Hughes said we do have some concerns about the bill. It does seem odd to us that the Government is currently consulting on how it will spend the money and is passing a bill under urgency for raising the money that it is currently trying to work out how to spend. That does seem like putting the cart before the horse but we can work with that because we do believe that this is so important to get through. Having said that it does seem odd that this bill is being passed under urgency. There does not seem to be any real need for it to get passed tonight. It could go through a proper process of evaluation through the select committee process and so on.We will be putting forward two Supplementary Order Papers later on during the debate which are about promoting competition promoting diversity in the system and exploring new technologies as well. The second Supplementary Order Paper is to prevent telecommunications companies from having two bites of the cherry. We do hope that they will get accepted and that they will improve the bill given that it is passing through under urgency so quickly after the Budget. Overall we do support this bill and I commend it to the House.KRIS FAAFOI (Labour—Mana): It is my pleasure to take a call on this Telecommunications (Development Levy) Amendment Bill. One hundred and fifty million dollars is a lot of money. It is a lot of money for this House to expend so if we are going to do that we want to make sure that it is going to be an effective use of money. When it comes to the Rural Broadband Initiative 2 and the $150 million of funding that this bill is basically going to create we want to make sure that the Rural Broadband Initiative 1 has been effective. For those at home who do not know what the Rural Broadband Initiative 1 is that is roughly about $300 million—$250 million of which has come from the telecommunications development levy—that has helped some of our remote areas in our rural sector become more connected. There are many many reasons why that is good for our country—and they have been said on both sides of the House—like obviously the primary sector the health and well-being of our remote areas and of course economic development.The reason why we have a problem with this piece of legislation is that we have not had enough of an assessment of the Rural Broadband Initiative 1—the first $300 million of this programme—to see whether or not it has been effective. At the Commerce Committee—a select committee that would have loved to have seen this bill by the way; I will come back to that later—we heard from a number of submitters just I think—Clare Curran: Yesterday.KRIS FAAFOI: —yesterday morning. Oh it seems so long ago! Yesterday morning we heard about the lack of assessment that has been done about the spending and the effectiveness of the Rural Broadband Initiative 1. We do have an issue with this piece of legislation: with it being a new tax of course but also because we have not seen enough evidence of the effectiveness of the Rural Broadband Initiative 1.I do want to point to a submission given to us yesterday by InternetNZ at the Commerce Committee if I may where it pointed out its concern around the lack of assessment of the Rural Broadband Initiative 1. This came about via three areas of Otago that have petitioned the Commerce Committee about the lack of effectiveness in their experience of the Rural Broadband Initiative. Basically they do not think that this initiative has served their communities well and that it has not made them as connected as was promised by the Government. InternetNZ said in its submission: “These petitioners are motivated not by a lack of clarity but by a lack of satisfaction and we see a different requirement. This could call for a verification of commitments made as part of the RBI delivery to ensure that whichever provider responsible is delivering the expectations that were set. Have the committed time frames for the Rural Broadband Initiatives been met? Is the minimum speed commitment of 5 megabits per second also being met?”.So there is concern out there in those rural communities. They were promised a service of 5 megabits per second but that has not been their experience. For us to sit here and say that that is the experience of $300 million of investment and we are about to say here is another $150 million for the second phase of the Rural Broadband Initiative then we on this side of the House think we need a better assessment of whether that $300 million that has been spent on the Rural Broadband Initiative 1 has been spent effectively.There are some good things in this bill I believe especially around the black spots. I think that is a good development in terms of State Highway 1—if someone can look at the Ngauranga Gorge that would be quite useful—and also for tourism as well. If we can get the Government to look at those black spot areas that will be useful.This piece of legislation does not meet the test for us to support it because as I said $150 million is the commitment here. That is $50 million for each year that we are continuing this levy—a levy that was not necessarily promised. We want to know if we are going to be spending $150 million more whether the first $300 million was spent effectively. Communities in small remote rural areas around this country do not think that is the case. InternetNZ—a bit of a watchdog for these kinds of issues—does not believe that is the case. Because of that we share those concerns and we are not going to support this piece of legislation.KANWALJIT SINGH BAKSHI (National): Thank you for the opportunity to contribute on this bill. I would like to share something with this House. Last month we visited Spark and it shared a very interesting fact with us about how the internet has changed the whole scenario in New Zealand. Spark mentioned that 15 years ago the total internet traffic from New Zealand was 40 gigabytes—the total traffic from New Zealand was only 40 gigabytes—and today the average household has got a connection of 40 gigabytes.Paul Foster-Bell: How much?KANWALJIT SINGH BAKSHI: Forty gigabytes on average.Kris Faafoi: Who told you that?KANWALJIT SINGH BAKSHI: Spark told us. You were there I think Kris.Kris Faafoi: No no no.KANWALJIT SINGH BAKSHI: Ah! You heard that.Kris Faafoi: I was at the Porirua McDonalds.KANWALJIT SINGH BAKSHI: OK. Ha ha! Technology is changing as we heard from a lot of members. This is a very good bill which will make the difference. I commend the Minister the Hon Amy Adams for her thoughtfulness and I commend this bill to the House.Dr DAVID CLARK (Labour—Dunedin North): It is not often that I rise as speaker No. 11 on a bill with some breaking news but today I have some breaking news. It is interesting that the member opposite who has just taken a seat Kanwaljit Singh Bakshi mentioned a visit to Spark because Spark has just put out a press release in the last hour explaining very clearly that this bill is going to cost customers across their whole user base. This is a new tax. Spark is saying that it is going to pass it on to its users and it is going to be transparent about that. It has just put out a press release—and the members opposite might like to think about the cannon fodder they are going to be when they get back to their electorate offices—saying that it is going to pass it on to every single user in New Zealand. This is a new tax. It is going to cost New Zealanders and that is another broken promise from this Government.I will read out what it says in the press release for the benefit of this House: “ ‘Now that the Government has confirmed the levy will continue rather than reduce as originally legislated for it has put upward pressure on future costs and we will have to pass that cost through to our broadband and on-account mobile customers. We are exploring options for adding this cost in a transparent way to our customers’ monthly statements so they understand the contribution they are making to the Government’s Telecommunications Development Levy fund’ says Mr Moutter.” That is a clear picture of a new cost to customers. That is what Amy Adams said would not happen in her speech in slot No. 1. By slot No. 11 the news is out: it is happening New Zealand.This Government has broken another promise. It is introducing a new tax. Government members should have known this—they should have known this. This is also new and has not been covered in the previous speeches. Perhaps they have not read the departmental disclosure statement. Perhaps it was too rushed for them to get to. But I believe that the Minister will have read this. If members in the House turn to page 8 of the departmental disclosure statement I will read it out to them. It is headed “Charges in the nature of a tax” in the departmental disclosure statement and asks: “4.2 Does this Bill create or amend a power to impose a fee levy or charge in the nature of a tax?”. The department says and I will hold the statement up for those at home—they probably cannot read it. It is highlighted but it is on the website if anyone wants to go and have a look. The answer the department has given is “Yes”.This is a new tax. It is in the nature of a new tax. We heard yesterday Paddy Gower on TV3 ask the Minister of Finance: “Is this another broken promise? Is this a new tax Mr English?”. He said: “Well um mm ah you can call it what you like.” and so on. He would not admit that this was another broken promise from this Government. Well now we know that it is going to be an additional cost to customers and different from what Amy Adams said in speech No. 1 in the first reading of this bill. Now in speech No. 11 we know that there is an additional cost to New Zealand broadband users.This is a Government that is determined to charge more people for the use of rural broadband. It has not even measured the effectiveness of this scheme. That is the great shame. My colleague Kris Faafoi drew attention to this and so did my colleague Clare Curran earlier on. We have heard from InternetNZ that it believes that it would be in the interests of the select committee to take leadership on this issue. We do not know whether the Rural Broadband Initiative has worked. We do not know whether it is a successful scheme because there is no data to measure it. The Government has not measured the success of the scheme but it is about to give another $150 million in the area. Current spending on the scheme amounts to about $7000—my colleague Clare Curran has calculated—for each and every household that has taken up this scheme. It is hardly value for money.This is a Government that is failing. It is scratching around. It does not have a long-term plan. It is trying to make it look like it is doing something but we learnt today that there is a new charge a new tax. The Government had been warned about it in the disclosure statement. The Government knew this was a new tax and it did nothing to stop it despite promising to the electorate before the election that it would introduce no new taxes. It reminds us of course of the GST increase. John Key said he would not increase GST and then fast forward in Government and it went up to 15 percent.It reminds us of the wage rise promise. By the end of next year employees should expect a wage increase of about $7000. Well in this Budget we heard the Minister of Finance kick that promise out 3 years. We were promised that exports as a percentage of GDP would rise to 40 percent under this Government and then we have heard since that Bill English says they would need to double the rate of improvement that they currently have in order to achieve the target. It is out of reach.The final biggest promise that the Government has broken the promise that was central to its election campaign was that it would get to a surplus. It is broken promise after broken promise after broken promise after broken promise after broken promise. That is five I have gone through—five broken promises in this Budget alone.This is a Government that is out of touch with New Zealand. It is now so arrogant that it thinks it can say to the electorate “We will not introduce new taxes.” and then put them in straight away in its first Budget after the election. This is a Government that is out of touch and out of ideas. We will hold it to account on this side of the House.There has been a review called for. The Ministry of Business Innovation and Employment says that there is no way it can measure whether this has been good value for money. The Government does not care what happens with New Zealanders’ money any more. It does not want the criticism. It does not want to know if it is not working. We are being told by the companies using the system that it is not working. We are being told by the department that it cannot measure it. It is not good enough. Taxpayers deserve better.Then of course the point has been made that this bill is being passed under urgency without the opportunity for example for those telecommunications companies to tell the Government that this tax is going to increase costs for customers that this tax is going hurt ordinary New Zealanders that it is a broken promise that the Government should not go through with it and that it should indeed review the system to make sure that the money is being well spent.I know why the Government is hiding this. I know why the Government is rushing this through under urgency. It is because the programme is failing. I know that from my own electorate. The people out at Karitane a rural area put up a petition to this House because they were so concerned about the internet speeds they were experiencing. People were telling me they could not run businesses from home—they simply could not run businesses from home as things were so bad.Then there were letters to the providers and there were letters to the Minister. Nothing happened but following a petition to the select committee and other petitions to the select committee lo and behold the problem was fixed. Well I urge all of those rural communities around New Zealand—if you are unhappy with a new tax and unhappy with the slow progress on rural broadband and unhappy with the broken promises of this Government please start a petition yourselves. Please ask for proper rural broadband in your areas.This is a Government that is failing to diversify the economy. It is failing to deliver on its export targets. If the Government does not actually review what it is doing and increase rural broadband and broaden the base of our economy so people can run other new industries then it will continue to fail and we will slip further and further behind. A Government that is prepared to manage decline is not a Government that we need. We need a Government with a plan. We need a Government that will keep its promise and actually stick to what it says it is going to do.This broken promise is not acceptable and New Zealanders will not roll over and take it without a fight. This tax is just another broken promise. The broken promises mount up. A Government with so many broken promises is losing the confidence of New Zealanders. So I ask New Zealanders to start their own petitions in those rural areas to petition any committee. Ask your local MP how you at home can start a petition that will be acceptable to Parliament and passed on to a select committee for consideration.This Government needs to hear it. It is so out of touch that it does not even know what is going on and it does not want to know what is going on. The Government will not launch an inquiry into what has happened. It is determined to spend more money without asking what is happening without consulting stakeholders and to ram legislation through this House. We have heard it today we have heard it now in the last hour that this levy which the department says is in the nature of a tax—another broken promise—is going to be passed on directly to customers who are users of broadband. Broadband is the very thing we need to be happening for our economy to broaden and get ahead.The Government has broken its promise to grow jobs it has broken its promise to lift wages it has broken its promise not to introduce new taxes and it has broken its promise to get to surplus. This is a Government that is out of ideas and a new tax seems to be what passes for a big idea under National. It will not do.BRETT HUDSON (National): It is an absolute joy to rise and speak in this first reading. It is incredible—twice incredible. Yesterday the Minister of Finance delivered an incredibly good Budget one that helps those in most in need by increasing real benefits for the first time in 43 years. Those members over there should hang their heads in shame at the two previous Labour administrations—absolutely shocking—and today it is incredibly bad that the same Labour members are opposed to our helping people in rural New Zealand by expanding the rural broadband coverage. Dr Clark just said that he thought that communities should encourage us to give faster broadband although he is going to vote down this measure that is going to expand the coverage.This is a great bill. I commend it to the House.A party vote was called for on the question That the Telecommunications (Development Levy) Amendment Bill be now read a first time.Ayes 89New Zealand National 59; Green Party 14; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 32New Zealand Labour 32.Bill read a first time.Second ReadingHon AMY ADAMS (Minister for Communications): I move That the Telecommunications (Development Levy) Amendment Bill be now read a second time. We heard a lot in the first reading in the various speeches. We heard from process issues to Labour wanting to declare this successful important programme a failure. Well we know that Labour never wanted it. We know that if Labour had been in Government it would not have done it. But I can stand here as a rural MP—one of the few rural MPs who have actually contributed on this—and say that I am incredibly proud that we have already brought better broadband to more than 325000 rural and provincial houses. I know that that matters in rural New Zealand and this bill is about taking that even further.We have heard claims that this is somehow a surprise move and we have slipped one past New Zealanders. We announced this in August which was pre-election. We announced it again in March which was several months ago.Hon David Cunliffe: Why is it going through all stages in urgency? What’s the hurry?Hon AMY ADAMS: The bill is the most simple bill imaginable with one operative clause doing exactly what we said it would do. To answer Mr Cunliffe’s very simple point the hurry is that New Zealanders want broadband they want it fast and we are going to do everything we can to get it to them.I also want to reiterate at the beginning of this contribution that the telecommunications development levy cost for consumers is a few cents a month—a very few cents a month—and it has been built into prices for some years. The costs to the telecommunications companies remain exactly the same under this bill. This extension comes into effect on 1 July 2016 but it has not taken some of the telecommunications companies long to jump at the chance to announce price rises and blame the Government.I have to say to claim that this extension warrants a price rise is disingenuous at best and a blatant money grab at worst. Furthermore the changes do not take effect for 14 months. Given that the telecommunications development levy represents a few cents a month I will be very interested to see whether prices do rise when and by how much. If they do it is a blatant grab for more profits that they want to blame someone else for.Let us be very clear about this. What Spark is saying is that it thinks that taxpayers should fund its business infrastructure. We do not. This is infrastructure that telecommunications companies use to provide their commercial services over and we think that they should pay for it. I am not going to charge every New Zealander to fund business assets for Spark Vodafone and others to use. They should pay for it—which is why we levy them—and then provide it on a common basis. It is a well-designed process it works well and New Zealand likes it.The first phase of the Rural Broadband Initiative programme is creating a huge opportunity for regional economic growth and that is something that this Government is delivering. Alongside investment from the partners the Government’s deployment of the Rural Broadband Initiative is delivering better connectivity to our rural and remote communities. The next phase will build on the success of that by providing infrastructure to rural homes to farms to schools to businesses and to health centres.Brett Hudson: We back these communities Minister—we back them.Hon AMY ADAMS: That is right. We back them we represent them and that is why this Government is getting this done and Labour would oppose it.We are seeing a significant number of rural communities able to access fast broadband through upgrading the copper line network. So far this has included upgrading copper landlines for more than 85000 rural households to speeds of up to 20 megabits a second. For the last quarter I am pleased to tell the House the rate of deployment for upgrading copper lines for fast broadband is equal to about 46 lines every day being upgraded. The upgrade of fixed line copper broadband in rural areas is progressing incredibly well and it is meaning that our businesses and export sector can grow innovate and sell to the world and we want to take that further because we back success in rural New Zealand. Better connectivity means access to cloud-based software and other benefits like high-definition video streaming giving our businesses a competitive advantage.The programmes and the regulatory environment are showing dividends in our international rankings. We are now No. 1 amongst all developed countries for annual growth of fibre connections with an annual growth of 272 percent and we are now ranked 15th out of 34 OECD countries. Do you know what it was in 2004 under Labour? It was 22nd. We have now gone from the bottom third of the OECD to the top half—it is making a difference.Deployment in the first phase of the Rural Broadband Initiative has also seen a significant expansion of cellular coverage in rural New Zealand with 113 new towers and 308 existing towers upgraded so far. We are establishing new towers at the rate of about one every 10 days which is very impressive. Cellular towers have facilitated greater network coverage for mobile users to make and receive mobile calls and data on their devices. But it is not just about households and businesses actually—38 out of 39 rural hospitals are now able to connect at a 100 megabits a second.Hon Member: How many?Hon AMY ADAMS: It is 38 out of 39 of our rural health-care centres. Also 972 rural schools are now able to connect with peak speeds of 100 megabits a second under the Rural Broadband Initiative and 51 of our most remote schools have received point-to-point wireless connections. Because infrastructure established through the Rural Broadband Initiative is open access it means that existing and emerging telecommunications companies throughout the industry and throughout the country can take advantage of this infrastructure to provide innovative services.As we know the bill enables funding to be made available for further improving rural connectivity by also establishing a mobile black spot fund as well as extending the Rural Broadband Initiative programme. The mobile black spot fund will address gaps in cellular coverage with a focus on transport corridors and tourist spots. This brings important gains for convenience and business productivity but also importantly for public safety through 111 calling accessibility from mobile phones in some locations away from landlines. This programme and the bill that funds it will bring fast reliable broadband to more New Zealanders to more Kiwi businesses and to more parts of regional New Zealand.The rural areas targeted for improvement will now be identified through a tender process and technology solutions that will best meet the needs of those communities will be selected. It is worth noting that the technology to be used in the second phase of the Rural Broadband Initiative may not be the same as for the first phase. I am certainly open to technology suppliers providing new and innovative options to consider and that is all part of the process we are now working through. A registration of interest has been released to obtain more information and I encourage all rural communities to get involved. I encourage councils to take part and to talk to their households and businesses.This Government’s vision is for a New Zealand where anyone anywhere can take advantage of digital opportunities and we are not going to let only the highly densely populated highly profitable parts of New Zealand benefit. That is why we levied the telecommunications companies to ensure that the infrastructure is strong right across rural New Zealand. This is a Government that works for all New Zealand and that is why we are supporting this bill.CLARE CURRAN (Labour—Dunedin South): Well Minister Amy Adams came into the House and she delivered her first speech on this bill. She said that this was not a tax she said that prices would not go up and she said that it was a mere extension to a levy. So what happened within 40 minutes? Prices were announced to be going up by one of the major telecommunications companies. It called it a tax and said that it was unfair and that there had been no consultation. And in the most important part of the release that it sent out it said: “We are exploring options for adding this cost in a transparent way to our customers’ monthly statements so they understand the contribution that they are making to the Government’s Telecommunications Development Levy fund.” Well if that is not a demonstration of a new tax being imposed then I do not know what is.All I can say is that this Government said it would introduce no new taxes but it has. This is the latest one and it is going to go on everybody’s phone and internet bills every month because this Minister has not done her work. She has not consulted properly with the industry. She has not done an evaluation of the original rural broadband scheme. There is no evidence that it has been successful despite what she gets up and says. InternetNZ which came before the select committee yesterday said that we could expect more petitions from communities around New Zealand that have very bad broadband speeds and are desperate to try to change that and that there was no evidence that had been provided. The Ministry of Business Innovation and Employment told us the same thing. It said that there was no analysis of the economic outputs or the benefits because it has not been done and all we are hearing is that it is money that is being spent on rural New Zealand but it could be going down a big black hole. Here we are committing another $150 million from an industry levy that is directly being passed on to consumers—[Interruption] Oh the Minister scoffed at me when I said that. But what happened? It is being directly passed on to consumers.Hon Bill English: Scoffs at you no matter what you say.CLARE CURRAN: Mr English an extra dollar a month on every consumer’s phone and internet bills is a direct result of a piece of legislation that is going through under urgency. That is a result. Whether it is a good result or a bad result is another matter. I call it a bad result but it is a result that is going to put an extra dollar—so you give $25 and you take away $1. The Government has introduced three new taxes during this Budget. I would say that the Government and Amy Adams have got egg on their face—egg on their face. I would also say to the National MPs who are in the House right now and who live in rural electorates that they would know that they are having—particularly Stuart Smith in Kaikōura and Barbara Kuriger who are two that I know of who are having steady streams of constituents coming in from rural New Zealand saying that the quality of their broadband is inadequate and please do something about it. I would imagine that there are many other rural MPs who are saying the same. Well I say to them that this legislation which commits $150 million of a levy on industry being directly passed on to consumers is not going to make it better because the first scheme has not been evaluated. There is no evidence that said it has worked.In fact the information that we are getting is saying that it absolutely has not. And let me give you some examples. There has been a road trip undertaken by a group that calls itself Hills Holes and Poles which is a project that is part funded by InternetNZ and has been touring the country over the last few months in rural and regional New Zealand looking at the quality of broadband experience that people are having. What it is finding is that for many rural Kiwis broadband remains frustratingly out of reach or unaffordable which is despite successive Government policies including the Rural Broadband Initiative. What they are finding is communities are instead doing it for themselves. They are not using the rural broadband scheme. They are coming up with community initiatives with local wireless providers with trusts and with providers to actually form their own community wireless schemes. They are doing in some of the communities really well.But this is not Amy Adam’s initiative; this is not what she gets up and trumpets in the House. There are dozens and dozens of them and more are happening but they are doing it themselves. What Labour would have done would be to support them to do it themselves better and faster. Instead we are having a Government imposed levy that will be passed on to consumers—Dr David Clark: A tax.CLARE CURRAN: —a tax which is not going to deliver and that is the great tragedy of this. Even the ministry involved acknowledges that the work has not been done and that there has been no evaluation. It cannot be evaluated. Therefore it cannot be decided whether or not it is a good idea to invest the extra $150 million. Actually the most innovative rural broadband is happening as I said in communities around New Zealand and there is one happening in mid-Canterbury which is ironically right next to the Minister’s electorate. Maybe she should go and visit that. One of the problems with the telecommunications development levy which is highlighted in the regulatory impact statement is the expectation by the major payers that the funds will in large part be recycled back through them.I note that the Green Party has introduced two Supplementary Order Papers that we the Labour Party will be pleased to support during the progress of this bill through the Committee stage. We will be keen to debate those Supplementary Order Papers and what the impacts are because one of the issues that lies behind the lack of evaluation and the lack of economic analysis in this legislation is knowing whether or not the recycling of funds back into the big players such as Vodafone and Chorus has actually in effect ended up being a subsidy to those players and has enabled them to entrench their status out in rural New Zealand. I am not making that assertion in the House tonight but I am asking the question and the problem is that we do not have the answers because we have not been able to have the analysis about this very matter and that is a great shame.Another example of what communities are doing for themselves is in Marlborough. The Marlborough District Council has just managed a survey and 700 people have responded to its online survey on connectivity which is a very high response for a community. As I understand it is four times the number of people who have engaged in the long-term district planning process which indicates that there is a high degree of interest out there in rural New Zealand. I challenge any of the National Party MPs who have got parts of their constituencies that are rural to tell the House that they do not have people coming into their offices on a constant basis or writing to them about the state of their rural broadband. Colmar Brunton has done a survey. They have come up with the figure of 68 percent of rural businesses and households in New Zealand that are angry and frustrated about the state of their broadband. After nearly 5 years of the first scheme you would think that things would be better than that and now the Government is introducing another $150 million for a failed scheme.MELISSA LEE (National): Very briefly I would like to make two points. One is that I would have thought that the Opposition understood competition. I thought competition was actually a good thing—that if you provided competition within telecommunications companies and had more than one company which would actually be a monopoly the companies would do everything that they could to appeal to customers. They would provide the best possible service so that they can actually get more customers. Oh but no those members are in the Labour Party. They had a competition and they ended up with Andrew Little. Ah that is the reason why they do not understand competition—OK I get it now.This is a great bill. I was actually despairing when I saw on my Facebook a post that a friend had made. She is visiting. She is the manager of New Zealand Tourism in Korea. She is here with a bunch of travel writers. They have been here for a week I think and they could not access the internet properly in our rural areas. These are people with millions of followers but because they have been travelling in our beautiful country—what good is beauty when there is no internet and these people are travel writers? They finally got to a place where they could actually tweet and this is the photo that I got.I will not lament the day that we have very fast internet. This is a great bill for the rural sector. This is a great bill for New Zealand where businesses will grow families will benefit and New Zealand will actually benefit as a whole. Thank you very much.Dr DAVID CLARK (Labour—Dunedin North): There has got to be some irony in the previous speaker Melissa Lee getting up and decrying the Government’s broadband system. It has spent nearly $300 million and the member opposite who is a Government member is saying that it is appalling and she is right—she is right. That is the kind of confession from a Government that is so out of touch it thinks it can tell New Zealanders it is spending $300 million of their money and deliver no result. That is what we have opposite. Honestly this is reaching a ridiculous standard. But Mr Speaker—I think with my voice cracking like that I am going to turn into “Mr Squeaker” myself—I do not want to speak about that; what I want to talk about is the contribution from the Hon Amy Adams the woman in charge of the Telecommunications (Development Levy) Amendment Bill.The Minister for Communications said in her speech introducing the bill and I will read it that “the industry will not need to put their prices up or explain to their customers why the bill is changing.” Those are words from the Minister’s mouth. Let me read them again: “the industry will not need to put their prices up or explain to their customers why the bill is changing.” Well we have learnt during the debate that the big provider Spark is going to put up its bills and it is going to do it in a transparent way so that people know how much extra the Government is charging for this broadband service. It is going to put up its levies. It is saying: “Now that the Government has confirmed the levy will continue rather than reduce as originally legislated for it has put upward pressure on future costs and we will have to pass that cost through to our broadband and on-account mobile customers. We are exploring options for adding this cost in a transparent way to our customers’ monthly statements so they understand the contribution they are making to the Government’s Telecommunications Development Levy fund”. That cost is going to borne by every business broadband and mobile customer. That will be across all of the firms and that is because this Government is so determined to ram this through that it has not consulted on the legislation. It is just going to impose a new tax on all New Zealanders who are interested in using these kinds of internet services.That is what this Government does because it is so out of touch. It is breaking its promises. It had those promises that of course we remember: that this Government would return to a surplus. That was its big promise—its central promise in the last election campaign. Well we found out yesterday. We were told to wait—we were told to wait for the surprise. Well the surprise was no surprise. For the seventh time in a row this Government has failed to deliver a surplus. It keeps promising it. It keeps promising it—always jam tomorrow. The wage rises—the Government has broken that promise. It said that it would deliver an average increase of $7000 by 2016; now it is saying that increase will not be delivered until 2019. It is leaving it to the next Government to deliver the wage increase. This is a Government that cannot keep its word any longer. It did it with the GST increase. If we think back John Key said there would be no increase in GST and then lo and behold once he was elected up it went to 15 percent. That was at the same time of course that the Government delivered those tax cuts to the wealthiest New Zealanders.Well middle New Zealand is struggling every day going out to work trying to pay the bills but getting behind because this Government does not have its concerns at heart; it has at heart only the interests of the 1 percent. They are the very very elite; those who have the capital from a previous generation. They are all it is interested in serving. It is not interested in the people who go out every day and work hard to try to get ahead to try to look out for their families. On this side of the House we are—on this side of the House we are—and we are upset that the Government has broken its promises because it was elected on those promises. It was elected on the promise of a surplus. It was elected on the promise of increasing wages. Now it is not delivering. It said it would introduce no new taxes—we have had three in this Budget. We have had three in this Budget.I will read again from the departmental disclosure statement that the Ministry of Business Innovation and Employment put out and that the Minister will have seen. It asks whether there are in this bill any charges in the nature of a tax. In section 4.2 it asks: “Does this Bill create or amend a power to impose a fee levy or charge in the nature of a tax?” and in big bold capitals it says next to that “Yes”. Yes this is in the nature of a tax. Now we hear that the telecommunications providers are going to pass it on to their consumers. That makes a lie of what the Minister said. The Minister said “the industry will not need to put their prices up or explain to their customers why the bill is changing.” This is a Government that is so out of touch it thinks it can introduce a new tax after saying it would not. It thinks that it can say that surplus is its central promise and then not deliver on it. It thinks it can say wages will go up for hard-working New Zealanders and then not deliver. And we learnt yesterday of course that Working for Families is going to go down for many families in middle New Zealand. They are going to be further further behind. Sure it is really good that beneficiaries are getting a little bit extra but it should not be the case that that little bit extra is taken out of the pockets of those who are just a couple of rungs further up the ladder. That is not fair. New Zealanders know that is not fair. They know that these promises are promises that have been broken. This is a Government that can no longer be trusted to keep its word. This is an appalling appalling state of affairs and New Zealanders will be rightly upset about it.We know of course that InternetNZ has called for a review. Its representatives came to the Commerce Committee yesterday and they said it would be really helpful if the Government or the select committee or anybody—actually—would take a lead on investigating what has happened with the Rural Broadband Initiative part 1. That is what they said. They said that some leadership would be great. Let us see whether it worked or not. Let us see when you spend $300 million as a Government whether there is any effect. The Government is not interested. It is not interested. It does not want to be held to account any more. It can spend hundreds of millions. It does not need to account to the taxpayers or the voters—that is how out of touch it is. That is how far removed from the truth it is. That Government over there will reap the public displeasure as the public see their bills go up for this Rural Broadband Initiative while many of them cannot access it.The other thing I want to say is that I recently read that Ashburton has one of the best rural broadband connections in the country. I have been to Ashburton. Its connection is not that good. If that is the best that this Government can deliver it is appalling. New Zealanders deserve better than that. Now the Government is throwing more money at it but it is not going to test whether it is actually getting to where it needs to get to. My colleague Clare Curran has calculated that for every connection that has been made so far it is around $7000 that the Government has forked out. Are New Zealanders feeling better off for that $7000? Well they are actually going to be charged extra on top of that—about another buck a month for every kind of connection whether they have got a business connection or a personal connection. That is what they are facing now because new taxes are being introduced by this Government. It is a Government that is out of ideas that is breaking its own promises and it does not have a plan.The Government has not articulated how it is going to increase exports. It has promised an increase to 40 percent of GDP. Well actually under its watch exports are going backwards. They used to be 30 percent. They are going backwards. Treasury predicts that they will go backwards further—that next year exports as a percentage of GDP will drop further. Exports are becoming a smaller portion of the economy under this Government. It is no wonder that fewer small businesses are starting under this Government. It is a Government without ideas. It is determined to carry on with the commodity price cycles. It thinks that is the only answer. Well it is not. We need vision. We need aspiration. We need a Government that will keep its word. We need a Government that will be keeping its word and will actually deliver on the promises it makes. This Government seems determined not to do that.This Government is so out of touch it thinks it does not even need to answer to New Zealanders. It thinks it can introduce a tax and then say it is not its problem. It thinks it can reduce Working for Families for hard-working Kiwi families and say it is not its problem. This is a Government that is out of touch and out of ideas.It has also brushed off we learnt a housing idea from the Labour Government but it has not done the research. We saw in the Budget documents that there is $52 million in a capital contingency fund. When I worked at Treasury the things that went in the contingency fund were things that had not been thought through yet that could not be quantified from a Government that had not done its work. The Government was responding to the polling at the last minute. It set up a contingency fund and said: “We will do something about housing. We’ve got to do something—the polls are telling us it’s a real issue.” Six years on having done nothing the Government has put a little bit of money to one side. It is going to be a long time before that solution gets implemented. This Government is out of ideas. It has got no long-term plan. It is a Government that is breaking promises left right and centre and it will be held to account.BRETT HUDSON (National): For the edification of the member David Clark who has just resumed his seat the telecommunications development levy exists today. It has existed since 2011. It is already built into the pricing packages that businesses and consumers pay today. The change here does not increase it. It is the same rate as it is today. It merely extends the number of years that it will apply for. So look Spark is entitled to send whatever message it wants but if it wants to send a message to its customers that a levy they are already paying for is going to be charged again then it risks its customers saying to themselves: “Different brand same old Telecom.” I will leave them to decide whether or not to do that.This is an extremely good measure that supports rural New Zealand and I commend it to the House.GARETH HUGHES (Green): Kia ora Mr Assistant Speaker. It is not often I find myself in the same voting position as the National Party but the Green Party and I will support good legislation when we see it. I am not going to stand here and make a political point at the risk of not actually providing internet access to New Zealand communities. I support the roll-out of the Rural Broadband Initiative. I want to see our farms our regional schools and our communities across provincial and regional New Zealand accessing the internet and I thought that the Labour Party did too. We have seen a passionate call around taxes. I know that Labour is rightfully trying to hold the Government to account for previous statements which is right but let us not buy into a frame where taxes are all bad. I support collective community capital investment to rectify market failure. I support that I think it is the right thing to do and that is why I am voting for this bill.It is right to criticise the Government for putting the cart before the horse. It is currently consulting on the roll-out of the Rural Broadband Initiative 2. It is currently consulting and here it is putting legislation in front of Parliament and passing it under all stages. I have suggested to the Minister for Communications that it is putting the cart before the horse and that the Government should have put it the right way round. It is obviously not doing that which is disappointing because the industry is not going to get a say and the public is not going to get a say. In fact the officials had advised: “Well at least the industry will get a say during the parliamentary process.” but when you are passing a law in 24 hours that is a big fat “No” to the industry.The Government also has not addressed the critical concerning question of the existing Rural Broadband Initiative which is whether this is just going to be another big subsidy for Vodafone or for someone else. The Labour Party is right to question this. When you divide the anticipated number of customers of the wireless system run by Vodafone—around 8000—by the $60 million it got it is an incredibly high $7500 per connection. Those figures might not be correct because the Government and the officials have not released the exact numbers. It seems they are worried about doing that. It seems they were short-sighted to not include it in the contract. But if they are not the accurate numbers—if it is not costing $7500 per connection—the Government should front up and give us the statistics.We do not want to see another massive subsidy paid for by Vodafone’s competitors to another one in a different scenario. That is why I have put forward a solution—Supplementary Order Paper 83—and I appreciate the Labour Party’s support and the support of New Zealand First for it. What I want to promote is the idea that the Minister must have regard to competition and diversity in the regional markets. I think these are good reasonable things that all parties should support. The Minister has intimated that this is her thinking and her direction. Well if that is the case the Government members should have no problem in supporting this Supplementary Order Paper.The officials also warn in section 17 of the regulatory impact statement that it is likely the large telecommunications companies which are currently contributing the most are the ones that will be most likely to benefit from this. There are fantastic regional solutions happening right now and the Government should not be ignoring them and just going to some of the big players.New Zealand is a challenging country in which to roll out considerable coverage of broadband. We have got topographical and other issues. Locals all across the country are already coming up with those solutions in their communities with their local councils and with local experts. Let us not sideline them. Let us in fact not compete them out of the market with a big-scale Rural Broadband Initiative - funded competitor. I hope that the Government can support the Supplementary Order Paper. I hope the Government can have a contestable fund that some of the smaller players—the real locals on the ground—can have and the first step to getting there is supporting the Supplementary Order Paper.I am voting for greater internet access. I am voting for coming together and acting in a communal fashion to invest in new capital infrastructure. I am supporting that and that is why I am voting for this legislation.TRACEY MARTIN (Deputy Leader—NZ First): Kia ora Mr Assistant Speaker. I am going to admit that I was not looking forward to coming down and speaking on this bill because it was not that controversial. It was not that controversial but I have got to say that it has taken an interesting turn. The comment I would give to Spark is: oh come on! Come on! I went back and looked and this levy was originally passed before the 2011 election so New Zealand First was not here but I think the voting was interesting. The voting was interesting when you actually go back to the votes that were taken. I am going to give the Labour Party points for consistency because it voted against the levy then. So well done because it voted against it then. The Green Party voted against it then but the Green Party has obviously shifted its position because it can see that there has been some movement. We have to get this rolled out—we have to get this rolled out. How much longer can rural New Zealand stop and wait for this Parliament to make up its mind? Something has got to be done to actually connect these people. They have been promised it long enough and we need to make it happen.But the most interesting thing about the vote on this legislation before the 2011 election was that it split the ACT Party. The ACT Party had three members vote for it and two members vote against it. I wonder whether Mr Seymour is going to split over this vote. Is this going to put Mr Seymour into some sort of a tizz? We never know.There is another comment that I think is most interesting and this is why I say to Spark “Come on!” and to the Labour Party “Come on!”. Do not tell me that a company the size of Spark does not have the Minister’s telephone number on speed dial. Do not tell me that a company the size of Spark cannot reach out to this Government and tell it what it thinks; that it does not actually have dinners with this Government to tell it what it thinks. To say that there has been no consultation on what is just an extension of a bill from 2011 is pushing the bounds of believability—it really really is pushing the bounds of believability.Spark is being disingenuous. I have not seen Spark’s press release. I am going to take the member’s word for it that Spark has said that it is going to pass this on to the customer. But if that is what Spark has said then I want to suggest that Spark is pushing both sides of the same horse here. In 2013 members on this side of the House fought to stop an increase in copper pricing to subsidise rural broadband roll-out and to subsidise fibre. We fought against it. But Spark just—and this is when we are talking about; we are talking about 19 May 2015. Spark Chief Executive Simon Moutter said he was encouraged by the public’s response to its campaign to cut copper broadband costs. You cannot have it both ways. If we want to keep the copper price low—and we should keep the copper price low because it is not right that those customers who have remained on copper need to subsidise those customers who can afford and who get fibre. So if Spark wants us to argue on this side to keep copper pricing low you cannot come out in the next minute and decide you are going to up the prices when a levy you have already priced on that you already knew was coming and that already way back here—when is this article from? This is from 5 January 2015. Spark had a conversation with the Commerce Commission around its final decision on the liability allocation for telecommunications providers. Please do not argue that you did not know. I fully understand that you may have budgeted for more profit going forward when you believed that—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order!TRACEY MARTIN: Beg your pardon. I fully understand that that business may have budgeted for more profit going forward when it believed that the levy was going to drop to $10 million in 2016 as that was the promise made. Take your issue to the Government; do not take your issue to the people of New Zealand. Take your issue to the Government. If it misled you then take it to the Government but there is no need for Spark to raise its prices. And I agree with the Minister that if it does so when this bill goes through then it does so disingenuously. It cannot have it both ways.As for the digital literacy inquiry I am sorry but I find it interesting that Ms Curran who sat on the digital literacy inquiry and at the time pointed out that rural New Zealand was missing out that lower socio-economic areas of our urban cities were missing out on broadband and that there was a delayed roll-out because the big players were actually going where the money was and where the number of connections were—you cannot argue that there are not enough connections and so therefore they are not valuable if at the same time you want us to put that provision into those areas so that there is the capacity for those people to connect. That will be happening once we find a method by which they can actually afford to connect—that is the first thing. And also how can you therefore argue against a tender system that says that all areas now will be decided through a tender system rather than the telecommunications companies deciding that if there is a whole group of rich people sitting in that space who can pay the bill who will download a lot of internet then the companies will actually go and put the signal into there? I cannot understand the Labour Party and its position at this moment although its position is consistent.And although I certainly want to use any opportunity I can to have a go at the Government about breaking promises—and I will mention it again if the Government broken a promise to you the telecommunications companies take it up with the Government. But to suggest that this levy is new is just beyond belief. It has been here since 2011. This legislation is an extension of the levy. It is an extension. The reason why it is an extension—and unfortunately this might turn the Labour Party right off New Zealand First—is because of Northland. One of the reasons why—Sitting suspended from 6 p.m. to 7 p.m.TRACEY MARTIN: At the time I was interrupted I was launching into a bit of a tirade one might perhaps call it around Spark. I want to let the directors of Spark know that Mr Conor Roberts earns his money because within 1 minute of me sitting down Mr Roberts emailed me to make sure that I had a copy of the press release to make sure that I knew what it was that I could not believe Spark had said. However I still do not believe that you said it but thank you very much Mr Roberts. I really appreciate it.Can I just read this other little bit about what this levy pays for. We have gone on and on—it has been on and on—about rural broadband and the mobile black spots. They are incredibly important particularly the mobile black spots and particularly for Northland. I think I was referring to the fact that on 12 March 2015 in Kerikeri “the Prime Minister confirmed funding of $100 million to extend the Rural Broadband Initiative and $50 million to fix mobile phone black spots in remote places around the country.” One cannot say that the industry did not know it was coming I would have thought. This was back in March. So all the way along the industry has known that this is what is coming. So to say that it was not consulted to say that it did not have an opportunity is disingenuous.The last thing before I sit down because I know there are other members absolutely gagging to stand up and talk to this bill—and I will have more to say at the Committee stage and at the third reading—is that I just want to read this out from the Telcoreview.co.nz website to make sure that we all understand that this is not just about mobile black spots and it is not just about rural broadband. It says this “levy is used to pay for telecommunications infrastructure including the relay service for deaf and hearing impaired persons broadband for rural areas and improvements to the 111 emergency service.” These things are important to New Zealanders. They were concerned at the time when it was removed. It is interesting that it is now being suggested that the cost will be passed on and that it is onerous to the consumer. It was originally a cut in cost in 2011 from $65 million to $50 million.As I say New Zealand First does not just agree with the Government because we wish to agree with the Government; we are here to hold them to account. But the reality is that New Zealand First will not just stand and oppose legislation on a political basis. This is a levy that is being continued. It came in in 2011. The telecommunications companies need to take it up with the Government if they have a problem. There is no need for them to increase their pricing. So Mr Roberts I hope to see you next week in my office probably but at this stage please reverse your press release. Kia ora.KANWALJIT SINGH BAKSHI (National): It is my privilege to stand and contribute to the second reading of this bill. I agree with what Tracey Martin said. It is a very good bill from this Government.This Government is working to ensure that all New Zealanders are connected to the latest technology. I congratulate the Minister the Hon Amy Adams on bringing this bill to the House. I hope all New Zealanders will appreciate the work that this Government is doing. I commend this bill to the House.The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call. James Shaw—5 minutes.JAMES SHAW (Green): I am standing to speak on the second reading of the Telecommunications (Development Levy) Amendment Bill. I just want to address the concern that this bill is a new tax on New Zealanders or on users of broadband services. Frankly the Minister of Finance over the last 7 years has introduced so many new taxes and raised so many other taxes that I have kind of become a little bit blasé about it.This is an incredibly important piece of economic infrastructure particularly for rural New Zealanders. We have a huge economic divide between our regions and our main centres especially Auckland. It is absolutely vital for the regions that we get them connected to broadband and that it is a really high-quality service. Only then will they be able to access the social connections the educational opportunities the health care and in particular the economic infrastructure of being able to participate in the digital economy which is a growing and increasingly critical part of New Zealand’s economy overall. It has to get paid for somehow. It is a huge and expensive project and somebody has got to pay for it. This seems to us to be the best available method of paying for it.I do want to speak very briefly to the Supplementary Order Papers that my colleague Gareth Hughes introduced earlier—sorry I just wanted to say before that that we have not heard anything yet in the debate that would have us change our vote on this bill. We recognise that there are some concerns from the industry. We also understand Labour’s concerns in relation to this being a new tax and so on but at the moment our support for the bill still stands.We are introducing two Supplementary Order Papers. The first Supplementary Order Paper 83 if you do not mind my reading them out is to insert a new section 90(4) into the Telecommunications Act 2001 where the telecommunications development levy is used for purposes specified in clause 90(1)(b) and 90(1)(d) and particular regard will be taken to promote “… (a) competition in non-urban telecommunications markets; and (b) the diversity of non-urban communities intended to be served by the levy; and (c) the range of different technological options that may best serve particular non-urban communities; and (d) the rapid pace of technological development.”I would just like to speak to that because we did have some concerns that in the previous phase of the roll-out I guess the beneficiaries primarily were Vodafone and Chorus; that they in essence received a really significant subsidy paid for by other industry players. We want to make sure that there is maximum competition and a diversity of providers in the market place and that it does not benefit just a couple of large companies too much.The second Supplementary Order Paper 82 is to insert a new section 90(4) into the Telecommunications Act 2001. Where the telecommunications development levy is used to promote cellular mobile coverage in rural areas—for example through a mobile black spots fund—the levy will not be used to fund any of the existing contractual requirements between the Crown and mobile network operators.There is a risk that the Government’s telecommunications development levy - funded mobile black spots fund could be used to fund these from cheaper requirements. This would essentially short-change the taxpayer and the rest of the industry. Again we just want to make sure that companies that have got these contracts already do not get two bites of the cherry. Again it is about ensuring that there is a maximum number of players in this and that the benefit is sort of spread through the economy.We think that those amendments are quite sensible that they aid diversity and competition in the market place and we hope that we can get support for them. In the meantime I commend this bill to the House.The ASSISTANT SPEAKER (Lindsay Tisch): Kris Faafoi—5 minutes.KRIS FAAFOI (Labour—Mana): It is a pleasure to take a call on the second reading of this Telecommunications (Development Levy) Amendment Bill.There are a number of questions that we have of the Government which we will also ask in the Committee stage. The first one I will put to the Minister and that is why in her first reading speech did she say: “The industry will not need to put up their prices or explain to customers why their bill is changing.”? For then less than an hour later Spark put out a press release saying: “Now that the Government has confirmed the levy will continue rather than reduce as originally legislated for it has put upward pressure on future costs and we will have to pass that cost through to our broadband and on-account mobile customers.”So less than an hour after the Minister saying that this will have no effect on consumers and nothing will change Spark says that yes it will because it is going to make the consumers pay. Regardless of who was at fault—either the Minister’s wrong or Spark is playing silly buggers with this—someone is going to pay. It looks like it is going to be everyone who has a broadband account with Spark at this stage and potentially more because we have not heard from any other telecommunications companies at the moment. It further emphasises our point that this is a new tax.Further to that in the regulatory impact statement put out by the Ministry of Business Innovation and Employment on this bill point 50 talks about the level of consultation that the Government has had with the Telecommunications Forum. It says that “While formal consultation … has not been undertaken MBIE regularly engages with the telecommunications industry and as such the issues considered by this Regulatory Impact Statement have been widely canvassed … MBIE has monthly meetings with the New Zealand Telecommunications Forum (TCF) which represents levy payers and others in industry … ”. Point 51 says: “The intention to continue the levy at its current level was communicated openly during the election campaign …”.So from that regulatory impact statement you would think that the telecommunications companies know they are pretty OK with that. The Telecommunications Forum has been informed. It has got no problem with this bill and the implications of it but lo and behold not only has Spark put a press release out today the Telecommunications Forum has put a press release out this afternoon as this bill makes its way under urgency through this House. Geoff Thorn the chief executive of the Telecommunications Forum says: “This bill has been introduced under urgency and doing so avoids any public debate.” We agree with him on that. He also says: “This is a proposal which has not been the subject of any consultation …”—but the regulatory impact statement said there was consultation—“and which has avoided the usual scrutiny that would apply to Government spending.” which we do agree with.This bill is being pushed through under urgency and we would ask why. If as the Minister says this has been signposted and if as the Minister says there has been consultation with the Telecommunications Forum that does not necessarily look like it was the case.The press release from the Telecommunications Forum goes on to say: “The bill extends a tax which to date has not been explicitly recovered from consumers.” So the Telecommunications Forum itself says well in the past it had not got this money from consumers. So the assertion from the other side of the House is that this is not going to hit consumers. From this perspective Spark has said it is going to put up its prices. The Telecommunications Forum has said well it has not done this in the past. So someone is going to pay and it is not the Government. This Government said that there are no new taxes but when it continues this levy someone does have to pay and they are the broadband users of New Zealand.I would like to reiterate that we have no problem with rolling out broadband further into rural areas. It is a great idea but the $300 million that has been spent so far—we do not have any idea of how effective it was. And before we spend another $150 million—we do not think we should be rushing this through under urgency until we make sure we are going to get good value for money. That is why we are opposing this. This Government just wants to throw money around—another $150 million—without knowing how effective the first tranche of the Rural Broadband Initiative has been. We do not think that is on.Hon JUDITH COLLINS (National—Papakura): The money that has been spent has been so effective that 74 percent of rural households now have broadband. That is how effective it is and frankly it is only going to get better under this Government.I feel sorry for the Labour Party. It is the only party that is voting against rural broadband for New Zealanders who need that for their businesses for the schooling of their children and for them to be connected to the rest of the world like the rest of us are. It is disgraceful that a party that used to say it stood for telecommunications and broadband is now voting against the bill. It is the only party—disgraceful. I think about the fact that we are talking about it being an extension of a levy that has been in place now for some years not some new thing just dreamt up and the only person I see who has really come out against it is Mr Conor Roberts who has not been that long with Spark. I remember him from his days as an often-failed candidate for the Labour Party and also with Len Brown’s press office. So I think that Mr Conor Roberts is a very nice chap and I wish him well in his career but he needs to get his facts right.I commend this bill to the House.Hon DAVID PARKER (Labour): Well that does deserve a reply. That member Judith Collins used broadband repeatedly in respect of her dealings with Cameron Slater where she showed herself to be morally bankrupt—which is why she is now on the backbenches.Hon Judith Collins: I raise a point of order Mr Speaker. I take offence at that.The ASSISTANT SPEAKER (Lindsay Tisch): Yes the member has taken offence. I ask him just to withdraw that comment.Hon DAVID PARKER: Point of order Mr Assistant Speaker.The ASSISTANT SPEAKER (Lindsay Tisch): No I ask you to withdraw that comment.Hon DAVID PARKER: Point of order—The ASSISTANT SPEAKER (Lindsay Tisch): Order! The member has taken offence. Any member can take offence and if a member takes offence I ask the member to withdraw the comment.Hon DAVID PARKER: I withdraw the comment. I raise a point of order Mr Speaker. Could you please tell me which of my comments was unparliamentary?The ASSISTANT SPEAKER (Lindsay Tisch): The member took offence. It is not for me to judge. The member took offence at statements that were made and she brought it to my attention. On that basis I have asked you to withdraw the comment which you have done and now we will proceed.Hon DAVID PARKER: That member who just criticised a person outside of the House who was unable to defend themself was removed from her post as a Minister for disreputable conduct. There were about five or six instances—Hon Judith Collins: I raise a point of order Mr Speaker. I take offence at that. I was not removed for disreputable conduct. It is completely false.The ASSISTANT SPEAKER (Lindsay Tisch): That is a debating point—[Interruption] That is a debating point and we are going to proceed.Hon DAVID PARKER: —the first of which was the conflict of interest that she had in respect of Oravida which was a company that her husband got paid by and she took steps to advance their interests and then lied to the media and misrepresented the position to the Prime Minister. Having showed herself—The ASSISTANT SPEAKER (Lindsay Tisch): Order!Hon Judith Collins: I seek leave to make a personal explanation in accordance with the rules in relation to the accusations made by the Hon David Parker.The ASSISTANT SPEAKER (Lindsay Tisch): Leave is sought for that purpose. Is there any objection? There is no objection.Hon Judith Collins: Mr David Parker is quite incorrect. I was not removed for disreputable behaviour. In fact I was asked to resign on the basis that I was accused by way of an email to somebody else from someone else. It had nothing to do with me. There was an allegation for which I was utterly cleared by the Chisholm inquiry. In addition Mr Parker has long commented on a Mr Pleasance. That matter has been dealt with by the Privacy Commissioner. I have been cleared of that as well. I was cleared by the Cabinet Office of any conflict of interest and actually Mr Parker knows that well. He of course did resign as Attorney-General.The ASSISTANT SPEAKER (Lindsay Tisch): All right we are now on the Telecommunications (Development Levy) Amendment Bill and I ask all speakers from now on in to concentrate on the substance of that debate.Hon DAVID PARKER: What rubbish! That is not correct at all. History shows that that is not correct.This bill is said by the Government not to be in the nature of a tax. We heard that from the Minister at first reading and at second reading. Yet in the Ministry of Business Innovation and Employment’s own departmental disclosure statement it is asked a form question. It is asked: “Does this Bill create or amend a power to impose a fee levy or charge in the nature of a tax?”. In bold writing and capitals on page 8: “Yes”—yes. The Minister then said that this would not result in any increase in charges to consumers and yet already we have a press release from Spark saying that it will; the average person’s bill will go up by about $1 every month. That is $12 a year for an increase in a connection fee. To quote Spark: “ ‘The bill for this from the Government to Spark New Zealand averages out at almost $1 per month for each of our consumer and business broadband and mobile customers.’ ” So that is for people who are using bandwidth both in broadband at home and also through mobile devices.Everyone I think in this Parliament recognises that the roll-out of broadband is a good thing. No one disputes that. What we do dispute is the competence of this Government which just months ago was saying that it was going to cost only $10 million a year—in respect of this particular cross-subsidisation—to roll it out across rural areas whereas now it is saying that that cost is going to be $50 million per annum. This is in an environment that as the Government says has virtually zero inflation. So in an environment where inflation is running at zero how come the costs have ballooned so that the cross-subsidy that has to be paid through this mechanism has risen from $10 million per annum to $50 million per annum? The answer is that the Government is doing it incompetently. That is also apparent from the fact that the Rural Broadband Initiative is being ignored by some consumers who are going around the side of that not getting the cross-subsidy that is available through the Rural Broadband Initiative. Instead they are without subsidy going about their business and using wireless technology to get broadband.That is why we are opposing this bill. If the Government had come to New Zealanders at the start and said “Look this is the full cost of the roll-out of broadband. There will be some cross-subsidy between cities and rural areas to ensure that rural areas will get it.” I think all New Zealanders would have gone along with that. We certainly would have on this side of the House. But to then come along and pretend that a failed Rural Broadband Initiative which is now coming in over the original budgets obviously and is not doing what it was originally promised to do—to come to us and say “Oh look please there is nothing happening there that needs scrutiny.” well we just do not buy that.Here we are under urgency. We heard one of the prior speakers from the National Party throwing off at the release from the New Zealand Telecommunications Forum the TCF. That release complains that “ ‘This Bill has been introduced under urgency and doing so avoids any public debate.’ ” That is why this is being done under urgency. It is not because it is urgent. This measure does not take effect until next year so it does not need to be done under urgency. Now Government members slag that off. Do you know who the writer of that press release was? It was Mr Thorn the former chief executive of the Parliamentary Service. He knows how parliamentary processes are meant to work. That is why he is critical of this being done under urgency. He also notes that it “extends a tax which to date has not been explicitly recovered from consumers.” and that the industry cannot continue to absorb the tax.The Minister for Communications will soon be sitting in the chair during the Committee stage and I want the Minister to stand up and tell me that I am wrong when I read out the departmental disclosure statement at paragraph 4.2 which asks “Does this bill create or amend a power to impose a fee levy or charge in the nature of a tax?” and answers “Yes”. I would like her to tell me how I am misreading that because I cannot reconcile that with her statement that it is not in the nature of a tax. Look I do not know. This is the Minister for the Environment who seems to think that dirty water is clean water—[Interruption] She did when she was the Minister for the Environment—so maybe there is some consistency of principle between those two ridiculous statements.I also want to say that she is still contending that there is going to be no on-charge to consumers. I cannot work that one out either.Dr David Clark: Industry says there is.Hon DAVID PARKER: I know the industry says there is; I have read that out already as you did earlier Dr Clark. It is absolutely clear that this will result in an increase in charges.It is a tax. It is because the Government’s financial performance is so poor that it can no longer absorb the Rural Broadband Initiative through the Crown balance sheet. That is essentially what has happened. It was going to pay some of this out of Crown finances but its mismanagement of the economy is such that it can now no longer afford to do so and so it is going to charge what is effectively a tax on consumers. That is what is happening here. The Government has not consulted on it. It says it has. I have no doubt that it consults regularly with the community but again in its regulatory impact statement and its departmental disclosure statement it says it has not in respect of this. That is confirmed by the telecommunications industry in its releases today so again I expect the Minister to be saying how she can justify those comments when her departmental report says it is wrong and when we have had two releases—from both the industry body generally and from our largest telecommunications company Spark—to say that that is not the case.I just want to return to this issue of how incredible it is that the Government needs another $40 million per annum when inflation is running at virtually zero. How does that happen? The Crown says that the reason it is not hitting surplus is that we have got such low inflation that people’s wages are not going up as much as it thought they would and therefore it is not collecting as much tax. There is a little bit of truth in that. We all acknowledge that with low inflation wages and costs do not go up by as much. So how could you in a zero-inflation environment need to come along to this House and seek authority for $50 million per annum? I tell you what. It is because the Government is incompetent in respect of telecommunications companies. We saw it with the Chorus fiasco last year when it was going to override the regulator when it was trying to help out its mates at the big end of town. The telecommunications companies came out and spoke out against the Government at that stage. And what are they getting in response? Because they spoke out last time they are now getting whacked with a levy of $50 million—because the Government did not like them exposing the incompetence of the Government last year in the telecommunications space in respect of Chorus. That is why the Labour Party is opposing this legislation not because we oppose the roll-out of broadband in rural areas.JAMI-LEE ROSS (National—Botany): I commend the bill to the House.A party vote was called for on the question That the Telecommunications (Development Levy) Amendment Bill be now read a second time.Ayes 88New Zealand National 59; Green Party 13; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 32New Zealand Labour 32.Bill read a second time.In CommitteeThe CHAIRPERSON (Lindsay Tisch): This debate is by clauses and the question is that clause 1 stand part.Clause 1 TitleCHRIS HIPKINS (Labour—Rimutaka): I am very happy to take a brief call on this particular legislation. I want to say to the Government first of all that there are people in my own electorate—and despite being in an urban Wellington electorate I have quite a significant rural hinterland in that electorate—and in the rural part of my electorate who are very supportive of the idea of getting better rural broadband. But the issue here is that many of them according to the Government’s definition supposedly have already got rural broadband—and yet it does not blimmin well work.The number of complaints I have had in my office from people whom the Government claims get 5 megabits per second rural broadband but who claim that they do not has been increasing exponentially. So they are getting flyers in the mail saying “Connect to this broadband service it’s great—you’ve got rural broadband.” But of course what it does not say is that in order to get that particular speed they have to be the only person connected to it at that given time. The more people who connect to it the slower the speed gets to the point where somebody at home if they have cellular connections getting faster connections through using a cellphone—and in some of these cases they are in a cellphone dead zone so they are not even getting that—is getting very very slow broadband speeds like the type that we might have had once upon a time when we had the old dial-up over the old copper network. In fact they were faster than what they are getting now with supposedly broadband connections.I want to say on behalf of the people in the rural communities in my electorate and I am talking about Whitemans Valley Kaitoke Mangaroa and those areas that they—Clare Curran: The Minister is writing it down.CHRIS HIPKINS: I hope she is writing those areas down. They do want rural broadband. The Government claims they have got it but they do not. Their rural broadbandis actually slower than what they would have got under the old dial-up system and the more people who are connected to it the slower it becomes. These are small-business people who might be working from home. There are small farmers in that area and they are not getting what the Government promised them.They will come to me and ask why it is that the Government is now spending all this extra money to roll this out to its next phase when the first phase is not working and why is it that they as consumers are paying for a service that they are not able to get. These are people who are paying now. They are paying for broadbandnow as of today and they are not getting the broadbandthey are paying for. The cost of that broadband is potentially going to go up because this is an extra tax and taxes ultimately get passed on to the consumer to the end-user.So the Government is increasing taxes despite its very clear pre-election promise that there would be no new taxes under National. This debate is the first one on the first of three new taxes that it has introduced with this Budget. Ultimately the consumer will pay the cost of it. It is yet another broken promise.I want to say that I support full broadbandavailability to all New Zealanders and I would support reasonable measures to do that where there is evidence that they were working and that they were actually going to deliver it. But spending $450 million—that is what we are talking about despite the fact that the Ministry of Business Innovation and Employment has admitted that there is no business case or analysis of the Rural BroadbandInitiative’s effectiveness. It is staggering that the Government would spend this quantity of money without actually establishing whether it is any blimmin good. I can tell you now that the people who have been coming into my office to complain about the quality of their broadbandconnection are very firmly of the view that it is not any good and that they are not getting the speeds of rural broadband that the Government already claims they are getting.When the Government says—what were the numbers it gave—that something like 86 percent of rural households and businesses are getting speeds of up to 5 megabits per second it should put a very clear rider on it that it is only if they are the only person connected in that area. The clear reality of this situation is that in many of these rural areas particularly the rural areas closer to the city centres where there tends to be higher density population than in a rural area the broadband speeds are woefully slow—absolutely slow. We have got people getting in their cars with their laptops and driving over the hill literally into Upper Hutt because that is the only way they can get a decent broadband speed. It is good for the cafes in Upper Hutt if you are business person working in Whitemans Valley because you will end up going over to Upper Hutt and sitting in one of the cafes there so that you have got access to decent broadband because they are not getting it despite the Government’s claim that they actually are.I want to say over and over again that I support rural broadband but I want to make sure that if we are going to spend money on rural broadbandthen that is actually what is being delivered. It is not being delivered. The Government claims that Whitemans Valley has rural broadband. It does not. The Government has not delivered it and now it is saying that it wants to spend more money on a programme that clearly is not delivering what was promised.TRACEY MARTIN (Deputy Leader—NZ First): Kia ora Mr Chair. Just taking a quick call in the Committee stage of the bill I understand what Mr Hipkins is talking about—I absolutely do. I have a 20-year-old son his mate who ended up homeless a 17-year-old son and a 14-year-old daughter and they complain to me constantly about lag. I am assuming because I am not that up to speed with IT that lag is when everybody is on Dungeons and Dragons or whatever the heck it is that they are playing and there are too many people on the line as such and so it slows down the speed. I understand that.But what I do not actually understand is the argument that the continuation of the levy is not the answer. I am yet to hear—Clare Curran: I’m about to tell you all about that.TRACEY MARTIN: And I hope Ms Curran will stand and tell me what the alternative is. Who will build this infrastructure and how will it be paid for if not in this way? Dr Clark is nodding his head so I am hopeful that those members will stand and take a call—and Dr Woods apparently is also going to stand and give us an alternative way to make this work.Nothing is worse than spending $300 million and then changing direction and spending $150 million in another direction while some people still have nothing. Nothing is worse than that. I take up Gareth Hughes’ contribution around the Commerce Committee and while it is at it have a look at it do a review do an inquiry and let us see how it went. But do not let us not change horse mid-stream after $300 million has been spent. Let us not leave the Robin Dixons and the Ōmaha residents and ratepayers out there on their own yet again with a levy that has been in place since 2011. Let us get real.There is no cause for Spark to raise its charges. Let me just ask you: who actually pays this levy? Spark formerly known as Telecom pays $25 million per year of the $50 million levy because it is a percentage of what its take is of the market. I would say to its customers that if Spark decides to pass on the cost to them which they have already been passing on to them since 2011 then change your provider. Change your provider. That is why we have 22 providers: Vodafone contributes $10 million Chorus contributes $6 million Vodafone fixed contributes $4 million 2degreescontributes $1 million; Orcon TeamTalk Vector FX Networks CallPlus Services BayCity Communications World. Where is the press release from all those providers? Where is the press release from the 21 other providers apart from Spark? The reason why Spark has put out a press release is that it has the largest amount of your business New Zealand and it does not want to pay this levy. But this levy is required in order to deliver for the rest of New Zealand no matter whom you have your business with. So I suggest that to you if Spark is not happy about paying its fair share around infrastructure.New Zealand First agrees that there should be a review on the $300 million. There is nothing to be afraid of if it is doing well and we could learn some lessons about it. What we know from inside our schools is that telecommunications can be a black hole of money. Everybody comes up with another great idea. But what is a sustainable idea are we on the right track and what is the cost of switching horses mid-stream?So I hope Ms Curran will tell us how the Labour Party would fund this infrastructure throughout New Zealand. I hope that Dr Clark and Dr Woods will because right now as far as—Dr David Clark: I hope New Zealand First will change their vote if there’s a good idea.TRACEY MARTIN: If you give a good enough argument Dr Clark you never know your luck. Today is Friday; it could happen. But at the moment New Zealand First stands with the Green Party. This infrastructure is required. The rural areas require it and actually most of the super-city of Auckland requires it. That is the most bizarre thing. Many parts of the super-city of Auckland like Wellsford Te Hana Tapora Ōmaha—these places are in the super-city of Auckland created by this Government—still cannot get reasonable broadband. Sitting in Warkworth—what are we called? We are a satellite town of Auckland. We are going to go from 10000 dwellings to 30000 dwellings in 20 years but apparently we have got lag.So New Zealand First will continue to support the bill but I will be listening to the contribution from the Labour Party. I am looking for alternatives but at this stage we see it as appropriate that the infrastructure is built on a levy that has already been in existence since 2011. They have already passed on the cost. Do not up your prices any more Spark using this as an excuse. We will be watching. Kia ora.CLARE CURRAN (Labour—Dunedin South): There are so many things to say. I am going to start my contribution in the Committee stage addressing clause 1 by talking to the history of the telecommunications development levy and the legislation within which it sits. The Telecommunications Act was passed in this House in 2001 with a vote of 65 to 52. One of the most interesting things about that vote was that the ACT Party which then had five members in the House split their vote. Three members voted against and two members voted in favour. The two who voted in favour were the two who had been sitting through the select committee process for the whole time.That piece of legislation split Telecom in half. It was structural separation. The Labour Party did not oppose that. It did not oppose that at all. The person sitting on my left was the Minister for Communications who brought in the legislation for the operational separation of Telecom. We did not oppose that. What we opposed was the process and the setting up of a monopoly—a monopoly that is now called Chorus which was set up to be given handed over on a plate the contract for the ultra-fast broadband project. We opposed that implacably we opposed the way it was done and we opposed the concessions and handouts that it was given along the way to do that.Chorus has now become the monopoly provider of 60 percent of the roll-out of ultra-fast broadband at the same time as being the monopoly that has the copper network which sits alongside that and has continued to provide problems.In that legislation was the establishment of the telecommunications development levy. Labour did not oppose that part of the legislation. We never opposed that because we knew the benefits of providing a fund that was provided by the industry for the provision of services that could not be got through the market. My colleague over here talked about the market gap. There are many market gaps in this country with regard to the digital divide. There are market gaps within urban areas as well with people who cannot afford to access broadband cannot afford to access home phones anymore and use prepaid mobile phones. There are people who are disadvantaged particularly families with children which is the biggest problem.Nobody—nobody—could say that the Labour Party has not stood up for those people. Nobody could say that the Labour Party has not been the champion of closing the digital divide in this country and has not led the charge on that. It led the charge in that select committee which you referred to earlier around it and has pushed and pushed around those issues so nobody could say that.That telecommunications development levy—and by the way everybody should remember that this was Steven Joyce’s baby; the brainchild of Steven Joyce was to create this—has caused so many ongoing headaches for the Government. He created the legislation that set the terms for that levy to be reduced to $10 million next year. What the National Party—and the Minister in the chair sitting over there was a candidate in the election—introduced 3 weeks before the election out of the blue was to just willy-nilly extend that levy. It extended it created a new levy and came up with more money. This was because National members knew—their market research was telling them—that there was a big problem in rural New Zealand because there were too many people getting crap broadband. It was turning out to be a problem for National members in their polling and in their market research.So what happened? All of a sudden we get $150 million. There was no consultation no reports no analysis and interestingly since the election—and it is now more than 6 months since the election—we still have not seen any reports. There still has not been any analysis and the regulatory impact statement admits it. It is embarrassing for the Ministry of Business Innovation and Employment I have to say that it has put out a regulatory impact statement that acknowledges that it has not done the work. What we have got is a levy that was supposed to go to $10 million and now—oh—it is up to $150 million.I think that my colleague David Parker made it clear that if there had been a different process around this if there had been full consultation around how to spend that $150 million how to do that with the community not just with the providers who are paying the levy but full consultation about whether the Rural Broadband Initiative worked and which bits have worked which bits have not worked and then how could we do it better if they had done that in a way that had been contestable and fair we would not have opposed this—because we had never opposed it at the time when it was made before the election. What we said was that it needed to be contestable. It absolutely needed to be contestable and fair.What we are seeing in the regulatory impact statement is that there could be capture by the big providers again which is a rort an absolute rort. This is why we are opposing it. This is why we are retaining our consistency of opposing something that is wrong. It is putting good money after a bad outcome and we are terribly concerned about that.I want to turn to a curious thing. My colleague Chris Hipkins referred to the fixed wireless broadband and the terrible situation that is occurring out there. Well what we think we have discovered—and this is one of my questions or many questions that I have for the Minister tonight during this debate—is that there is some information around the number of customers. This goes to the 8500 customers on fixed wireless broadband which looks as if it has cost around $7000 per customer. Who are they and who are the providers behind them?Dr David Clark: How much?CLARE CURRAN: It is $7000 per customer. That is a rough estimate but it is just doing some basic maths.Dr David Clark: No evaluation.CLARE CURRAN: We have no other information to go on Dr Clark—no other information. There have not been any reports produced.Well let us have a wee look at who those customers might be and who is doing the connecting. Well the top provider—self-described top provider actually—for the Rural Broadband Initiative’s fixed wireless connections is a company called Farmside. It describes itself as that and I have even got a piece of paper here that I would be very happy to table if anyone wanted me to. It talks about how it provides fast broadband via satellite Rural Broadband Initiative’s fixed wireless and fixed line solutions as well as phone and mobile access. It says it has got more than 15000 rural customers.Well that is really interesting because what I have heard is that it is transferring many of those customers over to fixed wireless broadband which is fine in itself but it might be interesting for the House to know that the managing director of TeamTalk which is Farmside’s parent company is David Ware who is the—Hon Amy Adams: Brother-in-law yes.CLARE CURRAN: —husband of Belinda Milnes who happens to be the Minister’s sister. It is curious—Hon David Cunliffe: —and Jason Ede’s employer.CLARE CURRAN: Oh and Jason Ede’s employer. I forgot about that. The fact remains that it is a little bit curious that Farmside which describes itself as one of the top providers for fixed wireless broadband which has got very few customers—and I think everyone would acknowledge that given that it has had 5 years has spent $60 million and now it has got 8500 customers which equates to about $7000 each.Dr David Clark: Good transparency. It’s an evaluation.CLARE CURRAN: I think there is a really important issue here around transparency and around what actually is going on here with rural broadband. There are questions about how the money is being spent on the towers and there are questions around what actually is being delivered out there for rural New Zealand.So I say to the House tonight and I say to anyone from the other parties who wants to listen that there are some very very good reasons to say: “Hang on a minute. Let’s not commit another $150 million to a programme that is highly questionable and needs scrutiny. Let’s take a pause.” We are absolutely committed to rural broadband and delivering that infrastructure and delivering it in the best possible way.JAMES SHAW (Green): I have been listening to the debate on the Telecommunications (Development Levy) Amendment Bill and I am trying to sum up what the different objections and questions are that have been raised by various members previously—and there are nine that I can discern. I just wanted to flag these and to ask the Minister in the chair to provide some kind of response to these questions.The first question is of course about the concern that was raised earlier tonight when Spark released a press release saying that it was going to be passing along these costs to its customers. What is her response to Spark about that?The second question that I have got is around some of the questions that were raised to do with the quality of the connection. Is the work that has been done so far actually producing the kind of result that we would want it to? Are those connections actually working for people? Are they providing the kinds of benefits that we would expect?The third question is about the evaluation and the reporting of the existing Rural Broadband Initiative. Is it an effective way to spend the money? There have been questions raised about the sheer amount of money per connection. That has come up so we would want an answer to that.The fourth question that we have got which Gareth Hughes raised earlier is about the extent to which we are considering new technologies as part of this initiative. Is that being considered? And is the pace of change in these new technologies being considered? Is it possible that there will be a disruptive technology that will come along while we are still rolling out the existing solution that may actually render it redundant?The fifth question that we have got is about whether companies will have two bites of the cherry. As we understand it when the Government auctioned off the 700 megahertz spectrum it reached a contractual arrangement with Spark and with Vodafone to roll out cellphone towers which meant that they got a slightly reduced price on the spectrum. If that is correct will they be bidding for this new money essentially to be doing the same work? Will they get two bites of the cherry for the same piece of work?The sixth question is around process. Why is this being considered under urgency? I will leave it at that.The seventh question is related which is: why are we seeking funding for initiatives now before the policy details about how that money is going to be spenthave emerged and while the policy design is still being consulted on? Why do we have the cart before the horse in terms of seeking funding before we know the details of the policy?The eighth question is in relation to competition and our concern that was raised earlier about needing a more diverse and multiparty approach with different solutions for different rural communities.And the ninth question is: what is the Minister’s response to the two Supplementary Order Papers that are being put forward by Gareth Hughes and me?I do not know whether that is comprehensive. I have been trying to discern what the different objections and questions are that various members have raised. I may have missed some but if we could start with those nine I would be delighted. Thank you.Dr DAVID CLARK (Labour—Dunedin North): I rise to speak in the Committee stage of this bill the Telecommunications (Development Levy) Amendment Bill. I want to speak a little bit about the title of the bill because I think that there are some more fitting titles for this bill. I think it would be useful to consider them as sensible amendments to the bill to illustrate more clearly just what this bill is doing and to make it transparent to the public what will happen when this bill is passed—so that people are not surprised when their bills go up further down the track so that they are not surprised when a new tax is put on them so that they are not surprised when there is Government waste and so that they are not surprised when there is another broken promise from this Government.I want to address though a point that was first raised by Tracey Martin in her contribution earlier which was a good one I have to say. The issues are being debated here and although we may disagree on whether this bill should be supported or not at this stage part of the point of the Committee stage is of course to hammer out the ideas and to have a full debate and to ask whether this is a good idea or a bad idea. We are pretty firmly convinced that it is a bad idea but Ms Martin raised a very sensible question: how otherwise would this be funded? From this side of the House—from the Labour side—there are two things that we would say are obvious. The first is that it is not wise to fund something that is not working. And because there has been no evaluation of the existing programme it makes very little sense at all to continue to fund something that has not been proven to be effective or to be working.Let us put that to one side because we all want good rural broadband. I think that is the one point that everybody around the House is unanimous on. It is something that will take the country forward. The Government seems to have a somewhat limited vision of what might be possible but we would all agree that rural broadband needs to be better. I wonder whether the Government might consider investing its Future Investment Fund in such an activity. I mean what is that fund for if it is not for investing in future infrastructure? That the Government might choose to invest that money in it seems the most logical thing in the world.Let us put to one side the fact that it has promised to spend that money 10 or 15 times over. It talked about paying off debt at one stage; well it is $88 billion in debt. The $4.8 billion it got from flogging off the family silver will not cover that. But if we actually take the promises that it has owned up to and has put in ink in terms of the Future Investment Fund this would seem to be a sensible thing to fund that out of rather than by imposing a new tax on users. We have seen earlier this evening Spark come out and say that this is a tax that it will be transparently passing on to its customers. We have had the Telecommunications Carriers Forum come out and say that it has been bearing the cost in this industry and that it cannot continue to bear it any longer. It thought this tax was time limited but a new tax has been issued that takes it for ever into the future. This Government has promised not to introduce a new tax and now it is.So the first of the alternative titles that I suggest should be considered by the Government is—let us just call it what it is—the “Telecommunications (Development Tax) Amendment Bill”. This is a Government that is trying to introduce three new taxes despite having promised—crossed fingers behind its back—that it would introduce no new taxes if it was elected. In this Budget we have got three of them. This is a Government that is introducing a new tax and we have had the proof of that of course in the departmental disclosure statement which says quite clearly: “Does this bill create or amend a power to impose a fee levy or charge in the nature of a tax?”. And the department says in the biggest letters on the page “Yes”. This is in the nature of a tax. Bill English has tried to deny that but the public of New Zealand know a tax when they see one. It is an additional charge on top of what they are currently being charged—exactly what the industry now proposes to pass on transparently as an additional charge.So we have got that and it makes sense therefore to call this bill the “Telecommunications (Development Tax) Amendment) Bill”. That would be plainer. That would be clearer. More people know what a tax is than what a levy is. It is a nice clear way of saying what it is. This tax of course is going to be imposed on small businesses around the country.Hon DAVID CUNLIFFE (Labour—New Lynn): I have to say that I was enjoying the contribution of my colleague David Clark and I will pick up where he left off. Members opposite seem to be disputing the question of whether this is in fact a tax. In this Committee stage it is proper for us to address that question in the debate on clause 1 of the Telecommunications (Development Levy) Amendment Bill because that contains the title. The fact that this is a tax is I think quite plain. It is a cost that is imposed on members of the public through this instrument that applies through the companies concerned. We had a statement out today from Spark—the old Telecom New Zealand—which uses the language of a tax and which makes it clear that it is going to have to pass the cost on to its customers. What is more it is looking at doing so with an explicit splitting out in everybody’s phone bills so that they can see what this extra tax is. This is an extra tax and it will be shown on people’s phone bills. That is a statement from Spark. I think that colleagues and members of the public know that in the past I have had cause to take issue with some of the statements from the old Telecom New Zealand so I do not give it a soft run but I will take it at its word on this.If that was not good enough for people let us turn to the statement published today Friday 22 May on the Telecommunications Carriers Forum. This is the industry body. It is not one company pushing its own barrow; this is the forum of all the players. It talks about this being unnecessary to pass under urgency “in order to tax the industry”—this is quoting from it. This is the industry body. The industry body is calling it a tax: “The bill extends a tax which to date has not been explicitly recovered from consumers. However the industry cannot continue to absorb ongoing costs of this magnitude.”Members opposite have said “Look we don’t need a select committee process because there is nothing new in this.” Well what is new? I think Mr Moutter the chief executive officer of Spark makes the point very clearly: the original tax was a one-off to support the development of ultra-fast broadband through the Rural Broadband Initiative. It was time limited and the downsizing of those taxes was legislated for in the formal bill. So to change the law is in fact a change because under the continuous disclosure rules of the stock market the companies’ concerns have to build that into their forecasts and that has to be notified to the exchange and made public. If Parliament wants to override—people will see the irony of my having to set this out for members opposite—those private property rights that are enshrined in the securities legislation then we are using legislation to do it; therefore something is definitely changing. We are overriding legal rights.What then is the proper framework of objectives to consider the questions? I want to commend our Green colleagues for the list that they have come up with. I am going to refer to it again. Let me just set out for the public what Labour’s goals are here when we look at this type of policy issue. The first one reminds me of the old digital strategy with the “three Cs”. We want great connectivity for all New Zealanders. To be frank we want faster cheaper broadband wherever you are in New Zealand. We support the goal—I think every member of this House does—that broadband ought to be ubiquitous and available anywhere in New Zealand. The whole country benefits from the fact that everybody is on the network. You can ring peopleup; their phone numbers are in the phone book or they are on the net or what have you. Nobody is left out and the whole country benefits. That is the first goal: faster cheaper ubiquitous connection. But it leaves open the question: is this the right instrument? Is this helping? How would you know? There has been no evaluation done.The second one is user capability. We are opposed to digital divides. We abhor the digital divide which is an income-related divide where about a third of households—low-income households—do not have fast broadband access. And that impedes children’s learning and all sorts of things such as access to Government services. We want every New Zealander to have access to the net at speeds that they can use. We are also concerned about the rural-urban divide. We know that there has to be a technology mix starting off with fibre in the backhaul out to perhaps ADSL copper VDSL or whatever else is the current flavour of technology and then out to mobile and then out to satellite. Or perhaps Project Loon will bear fruit and we will have a mesh network of balloons—who knows. The technology frontier will shift. That is the point. Because the technology frontier is shifting because technology is changing it is prudent and proper and really important for the Government of the day to carry out a proper analysis of how the tax has been operating before imposing a new tax over the top of it. That brings us of course to the third “C”: content. We want a vibrant content environment. We want there to be competitive conditions online so that New Zealanders can access the content that they need and want on the cheapest possible terms.Those are the goals. What questions arise? I am just going to come back to Mr Shaw’s list. I think it is a really good one. Will these taxes be passed on to consumers? Well we have the industry body and one of the largest players saying that they will. That is at the very least a very important and open question. Secondly what about the quality of connections? There are two issues. There is a technical sufficiency argument and there is a benefit-flow argument—who gets what? They need to be answered. The third issue: has there been sufficient evaluation and reporting? Well there clearly has not been because there is not a proper regulatory impact statement and there has not been an options analysis done by officials. Fourthly what do we know about disruptive technologies? I mentioned Project Loon; there could be others. The point is: who would know? The Government has not done the work. Fifthly will companies have two bites at the cherry? Are they under existing obligations? I do not know we do not know and the public does not know but that is a very important question because we are opposed to companies double-dipping. If they are contractually bound because they have concessional terms under a previous spectrum licence auction then we should not be making New Zealanders pay twice by imposing a new tax on them especially not under urgency in the dead of night.Was the process proper? Well clearly it was not. There has not been an options analysis done and there has not been a regulatory impact statement done. Why should seeking funding from policy have been designed in this way? Was the cart before the horse? It looks like it was. To answer that question we turn to the OECD’s telecommunications policy unit and a very major report on telecommunications development obligations or levies which was published in 2012 and which was widely regarded at the time as “the gospel”. The report sets out the following points which it is a shame that the Government has not apparently addressed. First “define the specific features of the service under consideration”. Second “determine whether broadband is essential for full participation in society” and therefore in the public interests. Third “establish that market mechanisms are insufficient to ensure that service is available”. Fourth “assess the options of imposing a universal service obligation relative to other policy alternatives” Note: that has not happened in this case. Fifth “evaluate those alternatives in light of the broader policy objectives and other ongoing programmes.” That has not happened either. What are the criteria that an evaluation should take care of? Page 24 of the OECD study lists parsimony sufficiency neutrality focus adaptability predictability accountability and effectiveness. It is quite a long list. The OECD has done a lot of work.Well what are they saying? Turn to page 27. “At present revising universal service policies to include service from any location may not be feasible in all OECD countries.” It goes on to say that those with high population density like Korea will have no problem. Those with low population density like Sweden Australia or New Zealand may well have a problem and the issue of a universal service obligation is a very pertinent issue to be evaluated and raised. There is certainly in terms of the OECD’s work no case for an automatic roll-over. This is highly contentious stuff. What issues arise? Well what they name is cost relative to benefits. “In large countries with large unpopulated or sparsely populated areas”—like the South Island of New Zealand—“…the cost of providing access from any location would exceed the benefits.” How much is too much? How far away is too far away? We are never going to run a fat fibre pipe to Mount Cook. There are not enough people there. But we may want to use mobile broadband satellite or “Loon”—who knows. The point is the work has not been done and the public does not get access to that information.The OECD asks what the range of services to be provided is. What is the impact on competition of imposing a TDO? What is the impact on the quality of service? What about the affordability of the service if the tax is passed on to the consumer? What about technical issues like emergency services and social tariffs and so on and so forth?Hon AMY ADAMS (Minister for Communications): Given that the debate on clause 1 is quite a wide-ranging debate it is probably a useful chance to take my call on this matter. I was not otherwise intending to speak on the title but I do want to make a few comments. The first is that we have heard repeatedly from Labour in this debate—as if saying it often enough makes it true—that this is somehow a new tax. It has been in place in its current form and at its current level since 2011 and it was in place at a higher level under the telecommunications service obligation before that. Neither is it something that we have decided to do post-election without telling anyone. It was announced in August as part of our election manifesto which said that if elected this is what the National Government would do. So there is no question that this is in anyway inconsistent nor can anybody through any sort of twisting of the facts to suit the argument suggest that this is new. It is not new.The costs are in place. The costs of this are already in place. There is zero increase to the costs to the telecommunications companies. I have said that there is zero justification for any increase in their bills. I have never said that they will not be opportunistic and craven and try to justify some profit grab through it. I have said that there is no increase in costs to the telecommunications companies and therefore zero justification for them to increase their fees. If Spark wants to announce that it is going to put its prices up that is something it will have to explain to its consumers but let me tell you as others have said in this Committee it cannot sensibly justify raising prices because of this legislation. These levy extensions that we are talking about tonight do not take effect until 2016. So if they do put the cost up let us remember two things: when and by how muchwill they go up? At the very most we are talking about cents per bill per month. So if they put costs up from 1 July 2016 by more than 19 cents for a prepaid plan and maybe up to 80 cents for a consumer then they are not being honest with New Zealanders. Even then it is already in your bill so they would be double-charging you.Can I make the point that it is very easy to stand in this House and say how much you support rural broadband but not be prepared to do anything to make it happen. Here is the reality: we are building infrastructure in rural communities that telecommunications companies will use to sell their products. The telecommunications companies that are paying this charge use this for their business services. So who should pay for it—taxpaying mums and dads or the telecommunications companies? My view is that the telecommunications companies should pay. When Labour says to take it out of general taxation it is saying that we should pay for the infrastructure that Spark Vodafone Chorus MyRepublic CallPlus Services and all of the others use to carry on their business. That does not make sense. That would be irrational and unreasonable. It should fall on the industry. Those in the industry should not be allowed to sell the service just where they can make a lot of money. Instead we levy them to say that actually we have an expectation that they will provide services everywhere. That money then provides the communal infrastructure that those same companies provide their services over.The question that has come up also is: “Why is it urgent?”. This is a fair question. I accept that because yes the extension takes effect from July 2016. I will tell you why it is urgent. It is because anyone who understands how these processes work will know that I cannot go out and start negotiating for contracts for this to work until the money is legislated for. So the first step is that there has to be a legislative mandate to say that the money is available; then I can start the process. The longer that is pushed out the longer it will be until people get better broadband. To every member in this House who has talked meaningfully about “Oh we have got to get better broadband it is taking too long.” I say that that is where the urgency is. The urgency is that New Zealanders want this and they want this as soon as possible. This bill has been made the simplest bill possible. It does not talk about the levy’s operation how it is allocated how it is spent or how the Commerce Commission divides it. It simply provides the basis for the money so that we can get out and start getting these processes in place.Let me close by just saying this: broadband is critical to everyone in New Zealand—everyone. Somebody has to pay and I am absolutely comfortable that the right place for that payment to fall is a levy on the telecommunications companies that will use it and that will benefit. There is zero justification for anyone to increase prices as a result and if they do that is a conversation that they should be having with their consumers. If I was their consumer I would be looking to shop around.KRIS FAAFOI (Labour—Mana): I would like to thank the Minister for taking a call because now everything is as clear as mud. I am really happy because it is so clear that it actually goes against what the Telecommunications Carriers Forum has said in its press release tonight. The Minister has said that the telecommunications companies are the ones to blame here and that this is not a tax. But it is clear from the press release put out by the Telecommunications Carriers Forum I guess a couple of hours ago that this situation as I said before is as clear as mud.The Minister said that because of the level of levy—or tax I should say—the prices should have come down. Well—Hon Amy Adams: No I didn’t.KRIS FAAFOI: Yes you did. But the Telecommunications Carriers Forum disputes that and in its press release from this evening I guess it says that the bill that we are currently debating “extends a tax which to date has not been explicitly recovered from consumers. However the industry cannot continue to absorb ongoing costs of this magnitude.” So who is right? Is it the Telecommunications Carriers Forum which is saying that “We have absorbed this for some time and now we have to charge.” or is it the Minister who says: “Well it shouldn’t be double-charging.”? I guess that is why we have got a problem with this piece of legislation because as I said the situation is as clear as mud.This is a new tax. In fact the departmental report on this bill says it is a new tax. It has been quoted but just because the Minister said that this is not a new tax I will quote it again. Part 4 of the departmental report asks a very specific question at 4.2. That question is: “Does this Bill create or amend a power to impose a fee levy or charge in the nature of a tax?” and the answer is yes. The answer is yes. And then Spark—[Interruption] Here is a question for the Minister if she is disputing a lot of things that I have said today. Does she dispute something that she said today? In her first reading speech she said: “… the industry will not need to put its prices up or explain to its customers why their bill is changing.” Well that would be great because she is obviously trying to cushion the market and people at home will be worried if they are going to have to pay more in their bills. But the reality is that less than an hour later Spark said it was going to put its prices up by $1 a month. You can question whether that is the fault of the company—and that question has been asked by New Zealand First and also by the Minister—or whether it is the fault of the Government but the reality is that people are going to be paying more for their monthly bill. They are going to be paying more for their monthly bill—that is the cold hard reality of this.This is a new tax and this Government is trying to spin its behind off to say: “Oh well it’s not our problem. It’s not our fault.” Well you created this problem—you created this problem. We are not going to vote for this piece of legislation for a very good reason: $300 million has already been spent and as we on this side of the Chamber have said the assessment and the critique of the Rural Broadband Initiative phase one has been well less than ideal. So if we are going to go and spend another $150 million which is going to be put together by this tax in this bill I think the New Zealand public would like us to know whether the Rural Broadband Initiative phase one has been effective or not.The Government claims that 86 percent of rural users now have access to this. Well we do not necessarily think that that is the case. There has been no assessment of the Rural Broadband Initiative phase one. This issue was before the Commerce Committee yesterday morning. InternetNZ wants us to have an assessment of the $300 million—which is you know not pocket change—to find out whether it has been effective. I do not think it is a bad thing for members on this side of the Chamber to say: “Was that $300 million spent well so that we can commit another $150 million to the next phase of this programme?”. We cannot sit here and say: “Well yes go and do whatever you like.”We absolutely agree with the objectives of the Rural Broadband Initiative but $450 million is a hell of a lot of money and we want to know whether the first $300 million has been effective or not. We have big questions about that. We have had a number of communities come to our select committee and say: “Well our experience hasn’t been that flash.” So is this something that is happening up and down New Zealand? Is it something that we need to address and is it something systemic?Dr DAVID CLARK (Labour—Dunedin North): I want to talk again about the title of the bill because I had raised only one of my suggestions when the bell so rudely interrupted me earlier. The second suggested title that I have for the bill is “Telecommunications (Government Waste) Amendment Bill” because that would label clearly the problem that we have here where the Government is refusing—refusing—to evaluate this proposal before it takes any further steps.Before I elaborate on this I want to touch just quickly on a point raised by my colleague Mr Faafoi in his contribution. He talked about how things are now as clear as mud and whether this is a tax or a levy. The Minister says that it is a levy; the industry says that it is a tax. Mr Cunliffe has raised the point that the OECD would probably define it as a tax and we have numerous other references including from the Minister’s own department referring to it as “something in the nature of a tax”. The Minister now claims that she is the only one who is right on that point and that everybody else is wrong and perhaps it is as clear as mud in the same way that the Prime Minister’s promise not to raise GST was as clear as mud—and the promises made by the Government that it would raise wages by $7000 by 2026 were made in the same vein. All these promises were meant one way and now the Government is trying to say that they mean something else. It said that it would get to surplus. That was the central promise of this Government’s last election campaign. Well we know now that that has not been achieved.It is not clear whether this is a bill about a development levy. It is a development tax as I have suggested in my previous contribution but it might well be labelled “waste”. If something is not measured—and this is a simple precept—we do not know whether it is actually being spent well or not. We have suggested alternative ways that it could be funded and we have asked the Minister to explain—or others in this Committee have—why it will not be evaluated properly. Questions that hint at conflicts of interest have been raised. I am not aware myself of the detail of that but I think the Minister ought to be on her feet explaining why she is not going to evaluate it. Even if she is going to press ahead without public scrutiny of this bill I think it would be reasonable for her to explain to us why no evaluation is happening. This is why it could well be called the “Government Waste Bill” because the facts that we have insofar as we have them are that $60 million has been spent on this particular initiative so far to get only 8500 connections. That is the best estimate available. That is $7000 per connection and the quality out there is not great. We have heard that from several MPs who have had people coming into their offices to complain. I have certainly had them. I took the petition to the select committee which has seen a change in behaviour as a result and I know that my colleague Clare Curran has done the same and I encourage others to do so.This is a wasteful bill. If we are not going to evaluate whether the programme works—and all of the evidence points to it not working and not being an effective use of taxpayers’ money—then there is an arrogance in not evaluating it in not being able to explain and in not being able to actually front up and say “This is why we think it is worth investing again.” I do not think the public at home are going to say that $7000 per connection is good value for money. There are plenty of other ways that we could get broadband there more quickly. I think the overseas experience would be that it could get there more cheaply and be of a better quality. This is a Government that needs to do some explaining. So I am hoping that the Minister will soon get to her feet and explain to us why it is that what appears to be incredibly wasteful spending is not being evaluated. We all want better broadband—we all want better broadband. All of us would like to have happy people coming through our electorate offices saying: “Look I’ve just started a new business and I’ve got this great fast broadband and now I’m able to participate in the world.” The reality is that that is not the experience.This Government has been in Government for nearly 7 years now. We heard Melissa Lee earlier complaining about the poor quality of broadband. The irony of Government members also complaining about the poor quality of broadband despite their having been here for quite some time seems to be lost on them. So I suggest that in addition to the title “Telecommunications Tax Amendment Bill” being considered the alternative title “Telecommunications (Government Waste Amendment) Bill” also be considered. Thank you.The CHAIRPERSON (Hon Chester Borrows): I will give a call shortly but by way of being helpful and in no way being patronising I will note that the debate is becoming somewhat repetitious at the moment. The discussion around this clause 1 “Title” is the widest ranging part of this debate. After that we move on to clause 2 “Commencement” clause 3 “Principal Act” the amendments that are around clause 3A and then clause 4 “Schedule 3B amended”. These will be very narrow debates and very little leeway will be given in so far as members must address those parts. Members seeking clarification on this could look at Speaker’s ruling 114/7. I just draw to the attention of members that now they should be looking to draw on new novel and innovative avenues of inquiry or debate or discussion.TRACEY MARTIN (Deputy Leader—NZ First): I will definitely try to be original; thank you very much Mr Chairperson. First of all can I thank Dr Clark. I am actually enjoying myself. This is a debate but I find it very interesting that I am doing the Government’s work. Not a single member of the Government apart from the Minister has stood up to actually address the issues that the Labour Party has raised. So first of all—Hon Judith Collins: You’re doing a great job Tracey.TRACEY MARTIN: Thank you Ms Collins. First of all New Zealand First would agree absolutely with the comments around evaluation that Dr Clark raised. Absolutely we would agree. It has been raised also by the Green Party and previously in conversations we have said that the Commerce Committee would be a perfect organisation through which to do an evaluation. But that is no reason to stop this bill.We can accept that urgency may not be the best thing but even if we—[Interruption] I think I am in a parallel universe. I am standing here arguing against the Labour Party about a levy on a corporation. Can I just talk about a press release from Friday—Hon David Cunliffe: I raise a point of order Mr Chairperson. The member’s address raises an interesting point. If the New Zealand First Party were in the position where on the basis of its concerns about the lack of an evaluation it wished to change its vote is there any possibility of correcting the record on clause 1 which has already passed?The CHAIRPERSON (Hon Chester Borrows): No it is not an issue and it is not a point of order. Continue.TRACEY MARTIN: Speaking to the point of order New Zealand First is quite clear in its own mind how it votes and when it votes. It does not require the Labour Party—The CHAIRPERSON (Hon Chester Borrows): That is a matter for debate not a point of order. The member may continue with her call.TRACEY MARTIN: Thank you Mr Chair. And the evening goes on so there you go. Can I just draw the Committee’s attention to a press release on Friday 22 August 2014 headed “Spark annual profit almost doubles … grows mobile revenue”. It said: “Spark New Zealand … the rebranded Telecom almost doubled annual profit on the sale of its Australian AAPT unit and grew mobile revenue as it repositions itself away from relying on dwindling landline use.” It made that record profit with this levy in place—with this levy in place. And that net profit rose to $460 million or 25c per share—25c per share—but 22c only per month is what it needs to recover on mobile calls to actually pay this levy. Yet it made 25c per share in the 12 months ended 30 June from $238 a year earlier.I am arguing this against the Labour Party. I find that unfathomable. I would not have believed when I came down to the Chamber today that I would be standing here doing the Government’s job—doing the Government’s job on a Government bill. Why on earth am I doing your job for you? Get up and argue.I agree that there needs to be an evaluation. Surely because the National members are not rising to their feet National must agree also because the Green Party and New Zealand First appear to be doing their job for the consumers of New Zealand and those in rural New Zealand who want broadband. The other thing that Dr Clark said if I can just address it was that the alternative way to pay for this infrastructure which as the Minister quite rightly pointed out is used by every one of the 22 telecommunication companies—upon which a percentage of their profit is paid into to create this infrastructure. [Interruption] For goodness’ sake Mr Jami-Lee Ross please take a call and stand up for your own Government bill. This is just so unusual that I am having difficulty dealing with it. One of the things missed out that Dr David Clark said was that the Future Investment Fund could pay for this.Hon David Cunliffe: Would the member change her vote if the National Party—TRACEY MARTIN: No we will not change our vote Mr Cunliffe because you have not provided enough evidence to suggest that this is the way that we should go. The Future Investment Fund—New Zealand First quite clearly said that we believe that 49 percent of our State-owned assets should not be sold. How on earth now could we vote for the use of those profits when we said that they should be reinvested in income-earning assets that provide an essential service such as power which has been sold off? How on earth would New Zealand First then actually stand by and support some organisation that said we should take it out of the income of the Future Investment Fund?But here is the irony that blows my mind. Whether the consumer is currently paying 22c per month for a mobile call or 80c for any other service because the levy is currently in place or whether as the Labour Party suggests we actually take that money out of another taxpayer bucket they are the same people—they are the same people. The consumers of New Zealand who have got the mobile phone in their hand and I suggest if Spark puts up its prices they change their provider—JAMI-LEE ROSS (Junior Whip—National): I move That the question be now put.Dr MEGAN WOODS (Labour—Wigram): It is my great pleasure to take a call on the widest-ranging part of this debate as you identified Mr Chairman on this Telecommunications (Development Levy) Amendment Bill. This is a seemingly very short piece of legislation that we have before us of just four parts. But I as a number of my colleagues have done before me want to talk about the title of this bill in terms of the Telecommunications (Development Levy) Amendment Bill. One of the objections that has been raised from Labour members who have spoken previously is that this is an increase in tax from a Government that purported that there would be no new taxes. What do we have here? A new tax and an increased tax. It is dressed up. We are trying to call it a levy trying to soften the blow but let us call this what it is.We have had the industry come out today and one of the questions we have had is why there is the need to use this process of urgency to go through this. I think that that is a real question that does need to be addressed. Why is it that we are not having the chance for the industry and the concerned players—the people who need this broadband in their small businesses and the rural families and families in our regions that need this access to broadband—to be able to come and speak to the people making the decision and to have that chance to have submissions at the select committee stage? Urgency should be used for real reasons not just as a way to ram through some legislation that you think might be a little bit unpopular and where you do not want to give people a chance to front up and have some objection to it.But this legislation is absolutely on message for the Government. Its Budget was one that was long on broken promises. It was from a Government that is short on vision. It is a Government that all round tried to scurry around the fact and get as close to reaching the non-surplus as it could—the non-surplus of course otherwise known as a deficit. What we do have here is a piece of legislation and a title that is quite misleading for people.Of course it goes without saying that Labour supports more people getting connected to broadband. We know that this is absolutely imperative for the future of New Zealand. We know it is important for education. We know that it is important for our businesses. We know that it is important for our industries. We know that it is absolutely vital. We have consistently focused on getting rural and regional New Zealand a plan for community-based fibre schemes. This is something that has occupied our minds and our actions when we have been in Government. However the existing rural broadband scheme has been a flop. It is a rural broadband scam. It is not working. Not only is it a waste of Government money but it lacks accountability and transparency.Once again what we are seeing here is economic mismanagement from a panicking and desperate Government. We can hear the shrieks from the other side that are serving only to underscore this point from the reaction that comment got over there. It is another example of how it is that National is neglecting the regions and treating them like the poor country cousins. Rural customers are going to end up paying more for this far from less.Dr David Clark: It’s shocking in Waitaki.Dr MEGAN WOODS: It is shocking in Waitaki—that is what I am told by my colleague Dr David Clark. He wants to know why the member Jacqui Dean barracking from the other side does not stand up for those constituents in Waitaki who are experiencing shocking internet and broadband connections and why it is that instead of taking a call and explaining to her constituents why she will not back them and stand up for them she chooses just to interject in an incomprehensible way from the benches opposite. So get on your feet take a call and stand up for the people who elected you to represent them. It would be great to hear from you. We are all holding our breath and would like nothing better at this time on a Friday night.The Rural Broadband Initiative was supposed to deliver speeds of 5 megabits to 86 percent of rural households and businesses. At the time Steven Joyce said that this was meant to mean 252000 customers in rural New Zealand getting access to high-speed broadband comparable to urban levels of services and prices.RICHARD PROSSER (NZ First): I was not sure whether I was going to take a call on this when I came down here but listening to the debate I feel that I cannot not take one. I do want to talk about the title. I think the two words that really matter most are “telecommunications” and “development”. Frankly I do not care whether we call this thing a levy or a tax or a koha or a Danegeld or anything else; what matters is that it is money that gets paid.I agree absolutely with Minister Adams that it should be the telecommunications companies that pay it because it is actually the companies who since privatisation are responsible for the fact that we have not had development in telecommunications in the rural areas.I am going to put this from a slightly different perspective from some of my Labour colleagues because I actually live in the boondocks. I live in a cellphone blackspot—it is called rural New Zealand. There is no coverage. I have got maybe one little sweet spot up by my garage where I can get two bars if I hold the phone up there—sometimes on a good day if it is not raining. But in the house? No chance. This is 40 minutes north of downtown Christchurch so it is hardly the middle of nowhere.We moved up to Canterbury about 6 years from Central Otago. The previous 2 years we had been enjoying blisteringly fast broadband speeds of about 2 megabits and that was because they had upgraded the cabinet round the corner finally but prior to that we were on dial-up. If you wanted to look at a picture you just sort of set the thing going and then went to bed and in the morning your 14 kilobyte photo had come through—if you were lucky if the thing had not logged off through the night.Going back a little bit further in time when I was growing up I remember the telephone was a black Bakelite thing on the wall with a crank handle. To use it you would pick up the handle crank the handle and the nice lady on the other end would say “Number please?” and so you would say whom you wanted to talk to. Being a little boy at the time of course the nice lady in the phone exchange was in the post office and she could see the town. She knew everybody and she knew whom I was probably talking about. She would say “Do you want to talk to Paul?” and I would say yes and she would say “I’ve just seen him go out.” And that was the way that rural New Zealand was. Actually in broadband terms most of rural New Zealand is still like that. Most of rural New Zealand would just like to have broadband.So in 2009 we moved to Canterbury and Telecom said yes that was fine it could hook us up to broadband it had checked our lines and they were all fine. It sent us a nice free modem and that was all going to be good. And then Telecom came to hook it up and said actually no our line could not take it. We asked when that was going to happen and Telecom said it was looking at upgrading the exchange—maybe in about 2012. We asked what we were going to do until then. A couple of the Labour members mentioned companies like Farmside. In those days that was pretty much one of the only alternatives. It was doing mostly satellite internet in those days. So we looked into that and we looked into radio and ended up getting a radio link with a company out of Christchurch. We were on the outer edge of where it could reach. It was slightly cheaper and slightly faster than the terribly slow speeds that that satellite was offering.I think it is a bit rich that we have got members—and they are mostly Labour members—who are standing up here talking about rural this and rural that and provincial this and provincial the other thing. They talk about constituents coming to see them and they relate these second-hand stories about the services that are provided in the provinces kind of holding it out at arms’ length as if it is some sort of distasteful thing—“We’ve heard about the countryside. We see documentaries about it on television from time to time. Every now and then an angry person from rural New Zealand will phone us up and sometimes a scruffy one will come into our office and sing us a tale of woe about how terrible things are. Of course we sit there and smile sweetly and nod and take these concerns on board—at a distant academic level because actually we do not live that.”Well people like me do live it. I understand that maybe the upper levels of the National Party have lost touch with the heartland but there are plenty of members on the Government side who still live in the rural areas who still know. They themselves experience these things. And so I agree with my colleague Tracey Martin that it is a bit odd that here we are doing the Government’s work for it but in actual fact as far as this is concerned we agree with them entirely. I heard Ms Lee talking earlier about the plight of some travel writers I think they were who were having difficulty out in the cellphone blackspot that is called rural New Zealand trying to get a link to their Twitter. These things do not mean anything to urbanites who understand them at an academic level. Of course here we have got connectivity. We have got cellphones that have got lots of bars on them all the time. We can go up to our offices and we have got high-speed broadband. Members can go back to the hotel and they have got broadband. They can go back to their apartment and they have got broadband. They can go home to their urban electorate offices and they have got all of these things. And so they hear this sort of whining noise from people—“Oh the poor people of the country have not got fast broadband.”—and talk in highfalutin conceptual ideas about having another review or perhaps forming a committee and looking at things again.People in the provinces have actually had a gutsful of that. It is the provinces that earn this country’s living. It is the provinces that create the wealth. It is the provinces who are always on the rough end of the stick.KANWALJIT SINGH BAKSHI (National): I move That the question be now put.A party vote was called for on the question That the question be now put.Ayes 75New Zealand National 59 New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 45New Zealand Labour 32; Green Party 13.Motion agreed to.The result corrected after originally being announced as Ayes 75 Noes 46.A party vote was called for on the question That clause 1 be agreed to.Ayes 88New Zealand National 59; Green Party 13; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 32New Zealand Labour 32.Clause 1 agreed to.The result corrected after originally being announced as Ayes 89 Noes 32.The CHAIRPERSON (Hon Chester Borrows): I will just remind members that votes are to be heard in silence. We have had previous precedent today when that was breached and there were ramifications. We will hear votes in silence.Clause 2 CommencementCHRIS HIPKINS (Labour—Rimutaka): I am very happy to take a call on clause 2 which is the commencement clause of the bill the Telecommunications (Development Levy) Amendment Bill. It is a nice simple straightforward clause which reads: “The Act comes into force on the day”—on the date after—“on the day after the date on which it receives the Royal assent.” That seems relatively straightforward. What does that actually mean?Hon Ruth Dyson: Can you say that again?CHRIS HIPKINS: I will read it out again because I botched it up completely the first time. “The Act comes into force on the day after the date on which it receives the Royal assent.” That might seem relatively straightforward. Typically the Royal assent would be given within a few days of the bill being passed through all of its stages by Parliament with the Governor-General signing it effectively on behalf of the Sovereign the Queen of New Zealand who is of course Queen Elizabeth. However there is no guarantee that the Royal assent will in fact be given. All New Zealanders work under the assumption that if a law is passed by Parliament it will automatically become the law of New Zealand. That is not correct. In fact we have the royal prerogative which does allow the Sovereign of the country not to provide Royal assent. That has not happened in New Zealand but it has happened in other jurisdictions that have a similar procedure. If I look at the Parliament of Belgium for example—Hon Member: Let’s!CHRIS HIPKINS: Oh we will look at the Parliament of Belgium where the issue of the Royal assent came up when a law was passed by Parliament—and I think from memory it was around gay marriage—that the King of Belgium objected to and therefore refused to provide the Royal assent. Therefore the will of the people through the democratically elected Parliament was thwarted—or perhaps it was not. What the Parliament of Belgium did—and this is quite a novel approach—was effectively to remove the king from office for a day. The law was signed—The CHAIRPERSON (Hon Chester Borrows): I would not want the member to feel that I was being pedantic in any way but it has been drawn to my attention that speculating as to what the Sovereign may do at any one time is not only a long way away from the ambit of this particular clause but also may draw disrespect towards the Sovereign. The member may wish to check Standing Order 118 in relation to that. I would ask him to stick fairly close to as he has conceded the very narrow nature of clause 2.CHRIS HIPKINS: Absolutely and I mean no disrespect to the Sovereign whatsoever and I wish to make that abundantly clear. However the Royal assent is granted by the Sovereign of New Zealand who is Queen Elizabeth II or by the Governor-General. The point that I am making is merely that there is no guarantee that the Royal assent would be given by the Sovereign and I am not speculating in any way as to whether the Sovereign may or may not give the Royal assent. I am simply pointing out that there is precedent of the Royal assent not being given in other jurisdictions that follow the same legal process as us. In the case of Belgium what that resulted in was the Parliament effectively taking the sovereignty for itself for a short period of time which allowed the Prime Minister to sign the law and then of course the Sovereign was reinstated. That was the precedent in Belgium.We are very fortunate that in New Zealand the Royal assent as far as I know has never been refused under the royal prerogative. And that of course is a very good thing. The principle that we have in New Zealand is that the Parliament the will of the people through the majority in the Parliament—even when the minority is right and the majority is wrong—will be given the Royal assent and that will become the law. So this bill will effectively come into force at some point within the next few days probably. I think early next week would be the next opportunity for the Governor-General to sign the law for it to come into force. Of course we are debating this bill on 21 May despite the fact that the rest of the country has moved on and it is now 22 May. The Hansard records of the House if this bill is passed—and by the looks of the votes it is going to be passed by a reasonably comfortable margin—will show that this was passed on 21 May. One would assume that the Royal assent might be given on 22 May.That will not be the case because in fact by the time the bill makes its way to the Governor-General for the Royal assent it will be at least 23 May. I would think that it is not going to go to the Governor-General today—“normal people time”—which is 22 May. It is 21 May according to the House. It will be 23 May tomorrow by the time the bill is prepared and ready but that of course is a weekend. So Monday 25 May would probably be the first opportunity for this law to actually come into force. This is quite correct. This is when the Royal assent will take place. The earliest opportunity for this bill to come into force would be Monday when you work through the logical sequence of the dates that we are talking about. The reality would be that if the Governor-General were unavailable to sign the legislationfor some reason it may not come into effect on Monday and it may be given the Royal assent further down the track. There are of course other provisions that mean that if the Governor-General is not available on Monday the legislation could be signed by someone else.TRACEY MARTIN (Deputy Leader—NZ First): I am ecstatic to rise to speak on clause 2 particularly the part of clause 2 that my learned colleague Chris Hipkins from the Labour Party has started us down. I think he has raised a very very good point about the fact that nobody can assume that any legislation will be passed. Obviously one of the reasons for the beginning date of this legislation is that one of the things the Governmentwants to do I am sure and one of the things that parties supporting this bill want to do is make sure that those telecommunications companies have the widest possible opportunity to amend their budgets to make sure that the levy that is in place—the levy they know has been in place since 2011—is going to continue until 2020. We want to give them a strong lead-in on that because nobody wants to actually negatively affect those telecommunications companies in the way they do their business.Also the Minister made the point that as soon as we know where the money is going to come from there are other conversations that can take place around the provision and who is going to do this that and the other. But actually I want to go back to the point that Mr Hipkins raised and that is around Royal assent. I think it is a very very valid point. For me personally it is one of the reasons why New Zealand should never become a republic. I think it is one of the strongest reasons why New Zealand should never become a republic.Let us imagine that this piece of legislation with the start date that is required is not in the best interests of the country. Let us just imagine that for a moment. With a start date such as this where it requires Royal assent to begin then the Governor-General can actually refuse to sign it. Until the Governor-General signs it on behalf of Queen Elizabeth—a very fine woman whom I personally admire—it does not become the law of the land. Therefore if this was not a billthat was in the best interests of the country—and New Zealand First is obviously supporting it; we believe it is—that one little clause around the start date around Royal assent would actually save the country. It is the last backstop to bad decisions by this House. I am not sure that that is where Mr Hipkins wanted to go with his contribution but from a New Zealand First perspective or from my perspective specifically this particular clause is incredibly important. That piece around Royal assent keeps us safe.One of the things we must never get rid of with regard to start dates and pieces of legislation is the Royal assent. That is our last protection for bad legislation. The Governor-General can decide to sign any legislation. People might decide to do away with the Governor-General but until he signs a bill it cannot be put in place. I agree with Mr Hipkins that that is a very very important clause. More members of the Government should stand and take calls on that particular clause because I believe that they obviously would support it. They would support the start date being on Monday possibly or Tuesday if the Governor-General has appointments.Kris Faafoi: We could still be sitting on Monday.TRACEY MARTIN: Oh well there you go. You see it may not get out of the House by then. But the moment it gets to the Governor-General he will make a decision as to whether it is in the best interests of this country. We all know what a fine man the Governor-General is. All of us trust the Governor-General and his judgment. Therefore that clause again is a very very important clause inside this piece of legislation. Kia ora.The CHAIRPERSON (Hon Chester Borrows): I will give a member the call. I would just like to make the point that we have well traversed the Royal assent even in various European countries by the Governor-General as well as the Queen and the King of Belgium. So I look forward to the next speaker cutting a fresh track on this very narrow clause.Hon DAVID CUNLIFFE (Labour—New Lynn): There is a strong precedent in this House not to bring the Chair into the debate. I am going to depart from that on this occasion only and very gently to note that you are a member in another capacity of the esteemed Regulations Review Committee on which in fact we serve together. The Chair will have almost I am sure uppermost in his mind at this time that the Regulations Review Committee has a tradition of objecting to legislation where the date of Royal assent or the date on which a bill comes into force is not specified in the primary legislation. That is seen as very very poor drafting practice.What normally happens as you know is that the Regulations Review Committee will write to the substantive subject select committee—in this case it would be the Commerce Committee—asking them to invite the Minister to reconsider whether in fact there should be a fixed date put into the equivalent clause the commencement clause.That is where we run into problems with this bill. I guess it is yet another little proof of why we should not be here on a Friday night trying to ram a bill like this through all stages because there is no substantive select committee that the Regulations Review Committee can write to to object about the fact that it does not have a proper commencement clause in it. This is an open-ended commencement clause. It is poor drafting practice. It would be pulled up by the Regulations Review Committee and the Commerce Committee would have to deal with it. The Commerce Committee would probably then write to the Minister. There would be an amendment made in the usual way and there would usually be either a fixed date for commencement or a deadline for commencement.That is particularly odious and improper when it comes to a tax bill. This is a tax bill. This raises taxes. Apart from the fact it is breaking an election promise it is a serious matter. There should be no taxation without representation. Representation includes the full select committee process. So here is a tax bill being rammed through Parliament without a select committee process and with an improper commencement clause.The Regulations Review Committee would take this very very seriously. It would write to the subject select committee the Commerce Committee and it would ask for an amendment or consideration of an amendment on that point. It is not too late for the Minister given that the Minister has seen fit not to send this to a substantive committee to respond to that point and to assure the Committee in some way as to the timing of the commencement. It may be that the Government may see fit even in the time that is still available to amend this commencement clause by way of Supplementary Order Paper to give at the very least a back-end assurance to the public that there will be some certainty about this.As my colleague Mr Hipkins Dr Hipkins has said there is a very important precedent which we are not allowed now to refer to from a small European country where Royal assent was withheld on a matter of almost equal import as this unjustified unwarranted and improperly drafted piece of tax law that we are ramming through the House in the dead of a Friday night.I invite you Mr Chairman to ask the Minister to take a call and for you to at least share with the Committee your experiences on the Regulations Review Committee where you know—The CHAIRPERSON (Hon Chester Borrows): Order! Please be seated. The member knows that it is wrong for him to draw the Chairman into the debate. I certainly will not be jumping when he yanks my chain.Hon DAVID CUNLIFFE: Thank you for the admonition Mr Chairman. It must be getting late but since you put it in those terms your chain shall be completely unyanked by the Labour Party. But it is not too late for the Government to yank this bill from the House because this bill is improperly drafted. This is an improper commencement clause for a tax bill.We should not be pushing tax bills through in the dead of night. We should not be doing it when the Government said that there were not going to be any more tax laws no new taxes—well here we have got one. It was brought in through urgency without a select committee process flying in the face of established constitutional convention. This is legislation for cowboys and the Labour Party wants none of it.BRETT HUDSON (National): I move That the question be now put.Dr MEGAN WOODS (Labour—Wigram): I am very happy to take a call on this commencement clause. Mr Chairman with the greatest respect I have listened to your calls to move on beyond the Royal assent but it has become somewhat of a debating point in this Committee tonight around the circumstances in which the Governor-General on behalf of the Sovereign can actually—could they or when could they—refuse the Royal assent. When such questions come up being the hard-working parliamentarian that I am I like to go to the source and consult McGee to see what the circumstances are under which this could occur. I think it is important that we clear up this debating point in this Committee tonight and actually see what the facts are around this. There is no longer explicit statutory recognition of a power to withhold the Royal assent as there was in a previous law. This was admitted in 1986 as being unnecessary. It was felt that to re-enact—The CHAIRPERSON (Hon Chester Borrows): Order! Just for clarification for the member speculation as to the inclination of the Sovereign or the Governor-General is not relevant to the detail of this clause. I previously warned all members that we have pretty much covered this ground. So I ask the member to explore new territory take us to new depths in this clause.Dr MEGAN WOODS: Just speaking to the point of order Mr Chair.The CHAIRPERSON (Hon Chester Borrows): Not challenging it in any way?Dr MEGAN WOODS: No I am seeking your clarification Mr Chair and asking for some guidance from you in that there has been a debating point established around whether or not—I am not questioning the reputation of the Sovereign—they could do that. I am just asking your guidance how it is that a member can address what has become a debating point in this debate.The CHAIRPERSON (Hon Chester Borrows): Well fortunately for me as Chair I am the sole judge of the scope of this debate and I have judged that we have traversed that. I believe that it has reached the full extent of the scope in relation to the Royal assent in this matter. We are looking for new territory. If the member has not got any new territory to explore there are plenty of other people seeking the call—Mr Faafoi for one.Dr MEGAN WOODS: Thank you Mr Chairman. I appreciate your guidance in this matter. It is always useful to have your wisdom shared with us. We always appreciate it greatly.In terms of the commencement date on which this bill receives the Royal assent and when it comes in to date my colleague Chris Hipkins has already talked about when that might be. I think there are some serious matters that remain unresolved around when it is and how it is that we treat taxation law in regard to the Royal assent because it goes back to some of the material that was covered. There is a clear intersection here between clauses 1 and 2 around what it is that this bill the Telecommunications (Development Levy) Amendment Bill is called. This is called a development levy bill but in reality this is a taxation bill and as my colleague the Hon David Cunliffe has pointed out in his previous contribution actually there are some very serious questions that we need to ask around taxation law and how that may be treated. Mr Cunliffe raised a very serious point about the Regulations Review Committee and howthis would be treated if it were going through a regular select committee process and how it is that this might have to be treated differently. I think it is important when we are using this mechanism of urgency that we are not circumventing what are some very important conventions in this House and that is that people in this country need to have the peace of mind that they do not have a Government or a Parliament indeed that will pass legislation that unfairly taxes that there are important checks on that and one of those is that—Clare Curran: Shouldn’t be doing it under urgency.Dr MEGAN WOODS: —we should not be doing it under urgency and if we are we should at least be putting some of the normal procedures around it. I know whether or not the Sovereign would give this piece of legislation Royal assent has been ruled out. Royal assent is not something we would ever consider talking about again but I am sure other members of our team here in Labour will have very serious questions that they will need to raise around this very important clause 2 of this legislation being the commencement clause. We should always ask the serious questions of any bill that we as legislators are asked to pass. We should never just think of ourselves as rubber-stampers. We should examine legislation clause by clause and we should always be asking questions especially when we are not going through the proper processes that we would expect of a select committee of this House. So there are important questions to be answered and I invite the Minister in the chair to take a call and to address some of these very very important questions that members have put to him because this is what we deserve as a Parliament.KRIS FAAFOI (Labour—Mana): Thank you very much Mr Chair for the opportunity to speak to clause 2. As your predecessor in the Chair has mentioned it is a very narrow clause. I do not intend to go into some of the issues in terms of the Royal assent but I do want to take this opportunity to talk about the commencement date. We do not know when this bill will come into force—it may be Monday it may be Tuesday—but when it does come into effect it will set in train a chain of events to allow the Government to negotiate with other telecommunications companies not only to allow the tax that is going to be collected under this piece of legislation to be collected but also because we know that this bill will become an Act to allow the second stage of the Rural Broadband Initiative to get under way.Although we on this side of the Chamber have noted some concerns about that I did want to use that in terms of the chain of events that starts when this bill becomes law to take issue with something that New Zealand First member Richard Prosser said earlier on. He suggested that members on this side of the Chamber—or from this party more or less—were using constituents who were coming to us into our electorate offices by dangling them out there to use as examples of people we do not really care about. I would say to Mr Prosser that that could not be further from the truth. There are a number of electorate MPs on this side of the Chamber who have had a number of constituents come to them and ask them why their rural broadband is so rubbish.One example of that is someone in my electorate. Like Chris Hipkins I have got a mixed electorate. I have got the rural areas of Pukerua Bay and some rural areas in Pāuatahanui and—Brett Hudson: Pukerua Bay is not rural.KRIS FAAFOI: Well there is a farm there. You want to come and have a look at it. It has got livestock and everything—come and have a look. One person who lives in those rural areas came to me and said: “Look my internet connection is not what I want it to be because of where I am located.” and he was in a rural area. So I looked at that case. I took it to Vodafone and said: “Look this chap lives here.” and I am just about to get to my point Mr Chair.The CHAIRPERSON (Hon Trevor Mallard): Well the member had better because if he does not his call will be terminated.KRIS FAAFOI: The outcome of that conversation was: “You’re going to have to wait for the second phase of the Rural Broadband Initiative.” because he was not going to be in phase one. It is absolutely crucial for him to now get his broadband up to the speed that he wants. Is the commencement date of this piece of legislation—I will give him that. We want Rural Broadband Initiative 2 to start rolling out and this piece of legislation will commence probably on Monday or it might be Tuesday if we are still here.There are a lot of people who I guess are waiting for this piece of legislation to go through but our point of issue with it commencing on that date is that we do not think we have had a justification or a good analysis of the first piece of legislation which saw Rural Broadband Initiative 1 come in. So before this piece of legislation comes into force or commences we do not want this piece of legislation to go through without the right scrutiny of the first tranche of Rural Broadband Initiative 1.Do not commence this bill to spend $150 million without looking at the first piece of legislation which came in to bring in Rural Broadband Initiative 1 which was worth $300 million. We are not sure whether it has been effective so we do not think this piece of legislation should go through which is why we are not supporting it. Why? This piece of legislation is to expend $150 million. We on this side of the Chamber think that that is a lot of money. The Government does not seem to care about the accountability of expending $150 million. We would like a closer look at how effective that first $300 million has been before we go anywhere near letting this piece of legislation go through.To Mr Prosser I would say please do not take the examples we have used in this debate as something you can simply throw away. They are people whom we have cared for. It is our duty as electorate MPs to make sure that the Rural Broadband Initiative is as best as it can be. When this legislation commences hopefully that person—JACQUI DEAN (National—Waitaki): I move That the question be now put.The CHAIRPERSON (Hon Trevor Mallard): I am not going to take it now but I am going to issue a warning and it—Dr Russel Norman: Oh come on Trevor.The CHAIRPERSON (Hon Trevor Mallard): Who was that? Can I remind the member of what happened to Mr Mark earlier in the day for interjecting in a similar circumstance.Hon Member: What happened?The CHAIRPERSON (Hon Trevor Mallard): Mr Mark had a short holiday from the Chamber. So I now give the Committee a general warning about interjecting when the Chairman—[Interruption] Yes Mr Williamson will be required to stay if that is the case. The point that I am going to make to Mr Faafoi is that this is a bill about collecting money and not spending it so any further arguments about when the money is spent will not be tolerated.KRIS FAAFOI (Labour—Mana): I am not quite sure of how much time I have got left to take. I might have another 5 minutes but I am not sure. I am sure the bell will tell me.We do not believe that this piece of legislation should continue and I take your point that this piece of legislation is about the collection of a levy or a tax as we have argued on this side of the Chamber. We do though think that it should have gone through the proper process before it did start collecting this tax.Jacqui Dean: I raise a point of order Mr Chairperson. I am just seeking your assistance. I did rise and request a closure motion which I do not know that you addressed but you then called upon a member to make a speech who had not actually asked for the call.The CHAIRPERSON (Hon Trevor Mallard): Well actually he had and he asked at the same time as the member asked for the closure. He called at that point and that is the right time to call. Actually by going to another member it is probably a pretty clear indication of my decision on the closure motion. If the member wants me to sort of underline it I had declined it.KRIS FAAFOI: Thank you very much Mr Chair for that clarification of your ruling. I do not want to unnecessarily take up the time of the Committee but there is—from what the Minister said in one of her Committee stage contributions—a fair bit of negotiation that has to happen from the commencement date up until about June 2016 when I understand that the Rural Broadband Initiative 2 comes into force. I think from a couple of the press releases we have seen that there is a fair bit of negotiation that needs to be done between the telecommunications companies and the Government before this piece of legislation can actually become effective and until those taxes can start being collected.We have heard a submission via a press release from the Telecommunications Carriers Forum. From the commencement of this piece of legislation until—The CHAIRPERSON (Hon Trevor Mallard): OK I have now decided that the member has struggled for long enough.A party vote was called for on the question That clause 2 be agreed to.Ayes 88New Zealand National 59; Green Party 13; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 32New Zealand Labour 32.Clause 2 agreed to.The result corrected after originally being announced as Ayes 89 Noes 32.Clause 3 Principal ActCLARE CURRAN (Labour—Dunedin South): Clause 3 entitled “Principal Act” amends the Telecommunications Act 2001 which is the principal Act. This amendment is an amendment to an amendment of the Telecommunications Act 2001 that was passed in 2011. The 2011 amendment was about changes to the telecommunications development levy where the imposition of a levy was made on telecommunications provided—[Interruption] I am very happy for you to take a call Mr Williamson. That would be quite useful. I am sure it would further the debate. The levy was imposed on telecommunications providers who received a minimum of $10 million gross revenue annually and that levy was established to contribute to the cost.The issues which I think have been canvassed well tonight were around non-urban telecommunications infrastructure—that is infrastructure in rural New Zealand. I do not think that anyone has argued about that or has a differing view about the purpose of the telecommunications development levy—namely that we need more infrastructure for rural broadband. We think that is a good thing but the matter at hand is about this amendment bill tonight which is going through all its stages under urgency. This clause “Principal Act” is about where it came from what it is actually intended to do and the way in which it is being done. That is the issue that the Labour Party has with this piece of legislation before the Committee.I am hoping that the other parties in the Chamber tonight have had enough of the debate canvassed for them to be clear about the strength of the views that have been espoused by the Labour Party about why it is so important that when an amendment is going through that actually imposes a new levy—a tax; the departmental report has been very clear that this is a tax—that it is a significant matter that should not be allowed just to pass without due process.There are so many other things sitting behind this around the Rural Broadband Initiative version 1 and whether or not it has actually been successful. And here we are voting on an amendment to provide more money for version 2. There is a lack of evidence a lack of process and a lack of accountability from the Government which has expended that money—that $300 million—in the past 5 years for a programme that it is now planning to re-fund.In the meantime there are many other ways that the lack of rural broadband is being dealt with throughout New Zealand which again members have talked about tonight. Communities are actually trying to do it for themselves and are doing it in conjunction with rural local providers and are doing it more successfully and are bypassing the scheme that has been funded by the Government because it is just not working. Here we are about to commit another $150 million in the same vein with no scrutiny no evidential base and with even the regulatory impact statement telling us that there is no achievement of the policy directives relating to it because they have not been evaluated. So it seems to me that it would be irresponsible and even negligent to actually approve this bill.Hon DAVID CUNLIFFE (Labour—New Lynn): The clause that we are currently debating is clause 3 which directs the Committee to the principal Act being the Telecommunications Act 2001. I think that it is important for the Committee to bear in mind the history of the development of that Act—in terms of the shaking of the Chairman’s head which means that one might want to stay somewhat closer to the detail of the Act. Therefore this is not the occasion on which to go into the Fletcher inquiry and the review that followed the legislative process which as I recall was a full process that included a very wide set of consultations with the community. It led later to amendments to the Act in around 2005-06 following a 6-month review called if I remember rightly the “Stocktake Review” at which every single company was brought in and the nature of the issues confronting the industry were surfaced and a set of quite far-reaching amendments were brought into play which broke up the incumbent telecommunications monopoly which unbundled the local loop which set in place I think a pretty proactive regulatory framework that brought completion to bear in the industry while at the same time protecting consumer rights and property rights.The CHAIRPERSON (Hon Trevor Mallard): I am going to interrupt the member now to remind him—[Interruption]—that the Committee has accepted the principle of the change. Who said that? The member will stand withdraw and apologise.Jacqui Dean: I withdraw and apologise. I raise a point of order Mr Chairperson. I am just seeking your clarification. For what am I withdrawing and apologising?The CHAIRPERSON (Hon Trevor Mallard): You are withdrawing and apologising for yelling out while I was on my feet. You were the member who pleaded guilty I think to making the noise. Is that right?Jacqui Dean: Is the Chair asking me a question?The CHAIRPERSON (Hon Trevor Mallard): I will apologise to the member if I have got it wrong but I thought the member was the member who yelled out and that she did indicate that she was. That is why the member withdrew and apologised.Jacqui Dean: Yes I did. It is just that I was pointing out to the member that it is the normal procedure of this Committee that when the Chair is on his feet members sit down and I was merely reminding the member of that fact. I was trying to be helpful. If I am guilty of anything I—The CHAIRPERSON (Hon Trevor Mallard): The member will now resume her seat—[Interruption]—and I will remind her that when anyone in the Chair is on their feet the member should sit down. It is the role of the Chair to enforce that rule and not the role of any other member. Although I might need some coaching the member is welcome to do that at some stage outside the Chamber.Mr Cunliffe going back to the point that I was making: this is a very narrow bill. It is the most substantive clause in the bill but it is a very narrow bill and it does not go back to either the origins of the Act or the 2005 reforms. I think one might be able to go to the amount we are talking about and that shape of it.Hon DAVID CUNLIFFE: Thank you for the clarification Mr Chairman. I guess the point that I was trying to come to albeit a little slowly is that the process that this amendment here is following is so different from the process that the principal Act went through on several occasions. Here we are going through a process of urgency without the benefit of a select committee—and I know that that is something that you Mr Chairman will be taking into account by allowing for a full debate of these albeit quite specific clauses.The reason that that is an issue is that a number of members have made the point that there has been no evaluation of the existing $300 million programme that is enshrined in legislation including its sunset clause. Mr Chairman you may not have been privy to the statement from the Telecommunications Carriers Forum that drew attention to the fact that this new tax is overriding provisions made in law for the sunsetting of the previous obligations. That is a serious matter; one which members—certainly of this party if not this side of the Chamber—would wish to see investigated thoroughly by a select committee which has the benefit of public submissions from the industry as well as consumer groups. I think I have made the point that I need to make.In summary this is amending a very substantive piece of legislation. It has fiscal consequences. I think it is now generally accepted by the House that this is a new tax—that this is a breach of an undertaking that the Government did give to the people of New Zealand that there would be no new taxes. I think that is now quite widely accepted around the House. It has certainly been stated on multiple occasions not only by individual companies but also by the industry group concerned the Telecommunications Carriers Forum. And as such we are in the situation where we are amending through urgency a very important piece of tax law.Earlier Mr Faafoi was going to draw the attention of the Houseto a matter that is close to Mr Bennett’s heart—that the generic tax policy process has been thwarted on this occasion. As members opposite well know when a piece of legislation goes through—either by amendment to a principal Act as in this case or when it is a new Act that has revenue consequences—there is an established convention during the generic tax policy process that the accounting profession and the legal profession are consulted to ensure that there are no unintended fish-hooks in the design of the legislation and there is a sharing process normally over a period of about 6 to 9 months where feedback is sought and consultation occurs. This way there are no surprises. The industry implementation issues are thrashed through. None of that—none of that—is occurring in this case. I am sure that Mr Bennett will want to rise to his feet and express his condemnation of the Minister for this outrageous breach of standard tax process; one that has kept the country safe over many years.Recalling very briefly the impact from the previous clause around the commencement issues there is no fixed date for commencement.DAVID BENNETT (National—Hamilton East): I move That the question be now put.The CHAIRPERSON (Hon Trevor Mallard): No this is the most substantive clause in this bill and it has not been to a select committee. We are quite a long way off.JAMES SHAW (Green): At this point I just want to speak to our Supplementary Order Papers.The CHAIRPERSON (Hon Trevor Mallard): We will wait until we get on to the Supplementary Order Papers. That is a separate debate because you are proposing separate clauses.A party vote was called for on the question That clause 3 stand part.Ayes 88New Zealand National 59; Green Party 13; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 32New Zealand Labour 32.Clause 3 agreed to.The result corrected after originally being announced as Ayes 89 Noes 32.New clause 3AThe CHAIRPERSON (Hon Trevor Mallard): We have two amendments on the Table: one from Gareth Hughes and one from James Shaw. Although not the same they are quite closely related and I propose to the Committee that we debate the two Supplementary Order Papers Nos. 82 and 83 together but vote on them separately. Is there any objection to that process?JAMES SHAW (Green): I just wanted to speak briefly to these Supplementary Order Papers. We did speak earlier on in the debate about the Supplementary Order Papers that we will be introducing. If you would just allow me to read from the Supplementary Order Papers the first one which is in the name of Gareth Hughes adds new clause 3A which is to amend section 90 of the Act “Crown use of telecommunications development levy”. After section 90(3) it would insert subsection (4): “The Minister must ensure that any use of the telecommunications development levy for purposes specified in subsection (1)(b) or (d) promotes—(a) competition in non-urban telecommunications markets; and (b) the diversity of non-urban communities intended to be served by the levy; and (c) the range of different technological options that may best serve particular non-urban communities; and (d) the rapid pace of technological development.” The second Supplementary Order Paper which is in my name would amend section 90 as well and inserts “(4) The Minister must ensure that any use of the telecommunications development levy for the purposes under subsection (1)(b) or (d) does not fund any person to meet their existing contractual requirements with the Crown.”I would just like to speak very briefly to these Supplementary Order Papers. Earlier on in the debate I tried to discern what the different objections were and the Labour Party has raised a number of extremely pertinent questions about the bill. One of those is to do with the evaluation of and reporting on the effectiveness of the existing Rural Broadband Initiative. That is essentially the intention of Gareth Hughes’ Supplementary Order Paper which is to ensure that new technologies that are emerging and the pace of that change are taken into account in order to ensure that there is competition and diversity of players in the market place. The Supplementary Order Paper will ensure that the needs of the local environment and the local communities and some of those variances between places are taken into account so that we do not have a one-size-fits-all approach.Earlier on in the debate Mr Cunliffe used the example of Mount Cook saying that we are not necessarily going to lay a massive ultra-fast broadband pipe to Mount Cook because there are not enough people there. But there are a range of technologies that we might consider. As an example people have used balloons or mobile telephony and so on. The intention behind this Supplementary Order Paper is essentially to ensure that these funds raised are used wisely and that they encourage a market-oriented approach as opposed to favouring just a few big companies.The intention of the second Supplementary Order Paper in my name where it says “The Minister must ensure that any use of the telecommunications development levy … does not fund any person to meet their existing contractual requirements with the Crown.” is to deal with a question raised about how Spark and Vodafone—particularly when they were awarded earlier contracts with the 700 megahertz spectrum—got a lower price because they made a commitment to install black spot towers in return for a better price. We wanted to ensure that the funds raised through this extension of the levy are not used to fund existing contractual requirements—essentially so that those companies would not have two bites of the same cherry. That is the intention of those Supplementary Order Papers and I shall rest here.CLARE CURRAN (Labour—Dunedin South): I would like to speak in support of the Green Party’s two Supplementary Order Papers. I suppose I would make the comment that this is the discussion that we would have been having in the select committee if we had been able to have a select committee hearing. In fact I would argue that the Committee of the whole House stage tonight has been like a select committee hearing although it has been fairly one-sided because the ability to have a proper debate with all of the parties has not actually occurred which is one of our main problems with this bill. We are also unable through this process to hear from submitters representing consumers from different communities throughout rural New Zealand. The only chance that we have had to do that is through a select committee process with some petitioners from specific rural communities just outside of Dunedin who had very strong views.With regard to the two Supplementary Order Papers before the Committee I would argue that they hit some of the nails on the head with regard to the concerns around the problems that lie with the existing Rural Broadband Initiative. The problem that I have and that the Labour Party has is that we are unable to judge the value of the existing Rural Broadband Initiative in these terms. It is only an amendment to the Telecommunications (Development Levy) Amendment Bill that goes forward for the next tranche of the Rural Broadband Initiative; therefore there is no ability for there to be an in-depth discussion about matters such as diversity for non-urban communities.I would contend that competition is one of the most important things here and I just draw your attention to page 7 of the regulatory impact statement to point No. 17 where it says that it is anticipated that much of the future telecommunications development levy funding earmarked for Rural Broadband Initiative extensions could be allocated to the larger telecommunications development levy players if they secure contracts to supply infrastructure for the Rural Broadband Initiative extensions. Well right there is a significant issue. The whole purpose of the Rural Broadband Initiative or one of the purposes was for it to be open access—for the infrastructure to be built but for there to be the ability for other players to come in and for there to be a competitive environment. We do not think that that has occurred; or if it has it has occurred only in a very limited way. But we are not absolutely sure because there has not been a proper evaluation done. Here we have a regulatory impact statement telling us that the next tranche may be dominated by big players. If that is the case then is that the best expenditure of the money?The competition aspect of Supplementary Order Paper 83 is quite critical in ensuring that the different technological options that may best serve particular non-urban communities are available. With regard to that I am not quite sure what that is referring to specifically but I am hoping that it is referring to the fact that 5 megabits which was offered in the initial Rural Broadband Initiative is patently insufficient particularly in the era of Netflix where rural New Zealand is basically unable to access the new technologies and the new content offers that are coming into our country. It is urban New Zealand that is going to be able to access and benefit from those and enjoy those things and rural New Zealand is just not going to have the capacity. These are really critical issues and they are critical issues that should have been teased out in a select committee with the full ability for submitters to come before us. That is not going to happen. Instead the shadowy entity that is the Rural Broadband Initiative is going to be allowed to continue on unchecked and with no accountability. We implacably oppose that.RON MARK (NZ First): I came down from my office especially to take a call particularly on these Supplementary Order Papers because of the fact that New Zealand First is hopeful. As a Wairarapa-based MP I am very hopeful that this legislation which New Zealand First is supporting led by our MP Tracey Martin will actually deal with those black spots. But we have had some concern over the years looking at the way in which the roll-out of the Rural Broadband Initiative has been delivered.As Mayor of Carterton and in my time there it was somewhat frustrating after all of the good news about the rural broadband roll-out and where it was going to find that in places where you would expect there to be good coverage astonishingly there was not. I point to a little place in the Wairarapa called Greytown. It is a little place where you drive up State Highway 2 through Featherston into Greytown and the first thing you note when you come into Greytown on the weekend is the number of Wellingtonians who are there. You hear consistently in the hotels the bars and the shops and at the festivals and the fairs about how frustrated people get by their inability to use their cellphones to ring back to David Seymour or to anyone else in Parliament or to anyone else in Wellington or to anyone else in doing business. I would just hope that—The CHAIRPERSON (Hon Trevor Mallard): Order! It is not at all hard to relate what the member is saying to the Supplementary Order Papers but the member does have to do it in order to remain relevant.RON MARK: Thank you for your guidance Mr Chairman. I take confidence in this particular Supplementary Order Paper put forward by Gareth Hughes. Where it says “(a) competition in non-urban telecommunications markets” that is us. Where it says “(b) the diversity of non-urban communities intended to be served by the levy;” we would hope given the number of small telecommunications companies in rural provincial New Zealand—small telecommunications companies that have a lot of experience in how to tackle the difficulties of getting good communications through rural New Zealand—that this Supplementary Order Paper would give them the opportunity to be involved and would allow them to compete so that they can apply their extensive experience.I can name probably half a dozen small telecommunications companies that are operating in the Wairarapa but they seem to be shut out. There seems to be something in the process that forever and for always puts the delivery of the service the provision of the service and the roll-out of the broadband in the hands of a very small bloc—namely Chorus. I would hope if nothing else even if the Government does not approve this—and I have got a strong sense that it is not going to vote for these Supplementary Order Papers—that it would still get the message because it is heartland rural New Zealand that is actually suffering right now.It is very frustrating for people there when they go to talk to WIZwireless—when they go to talk to some of the Māori telecommunications providers such as Tuarōpaki Communications Ltd up in the central plateau. Tuarōpaki Communications Ltd has invested very heavily in communications. In fact it is a strong shareholder in 2degrees but where did its roots start? Its roots started very small in a small telecommunications company. The question is: would Tuarōpaki Communications Ltd and its derivatives would the company that it is now a shareholder in—I think it is now working with Thinktank; it was with Timaru-based BayCity Communications—would these small telecommunications companies get an opportunity to have a shot without this clause?I would hope that we would support this clause. I would hope that this clause would allow greater competition opportunity for the small telecommunications companies which are experienced in rural New Zealand and in delivering services out to place like Akitio Flat Point and Tora. Those are the areas that are suffering dearly. The notion that we are suffering in Greytown is absolutely astonishing and I would argue that so far the dependence on the major telecommunications companies to deliver this service has done Greytown poorly—very poorly. That in itself is a very strong argument for the Government considering making sure that these other rural telecommunications companies which do have the experience which are out there which very often do the work for half the price and are a lot more productive because they are grateful for the business and which do this service very well because they want more business get a better shot. And we believe that this Supplementary Order Paper would give them that opportunity and that it would give them an absolute assurance that they would be invited and asked to give it a shot.I am grateful that our caucus is supporting this Supplementary Order Paper and I am grateful to Gareth Hughes for putting it forward because for far too long these small rural telecommunications companies have been ignored. For far too long the productivity they offer has been let slide by.TRACEY MARTIN (Deputy Leader—NZ First): Kia ora Mr Chair. Thank you very much. If I could just pick up where my colleague Ron Mark left off with regard to these Supplementary Order Papers—specifically the Supplementary Order Paper that Gareth Hughes has put forward which is around making sure that there is competition in the non-urban telecommunications market and diversity in non-urban communities. Specifically I would like to request that the Māori Party and the ACT Party cast their votes for these amendments—the ACT Party because it is a believer in competition and because that is what the party stands for: an open market. This is something that I cannot imagine the ACT Party would not support: making sure that all members of the telecommunications community have an opportunity to vie for these Government dollars so that they can compete in a real market. I would also seek and I am hoping that the Māori Party might also support these amendments because again this is about rural communities rural workforces and rural companies and small to medium sized enterprises. That is what these clauses are about.In the last few minutes I have received an email with regard to these Supplementary Order Papers from Taylor Communications which is the largest fixedwireless rural broadband provider in the Hawke’s Bay. It wishes to confirm that the charges of the telecommunications development levy will not result in extra costs being passed on to consumers. It says: “The telecommunications development levy (TDL) has been built in to our existing pricing and will continue to be done.” This is one of those companies. They pay the levy. They already pay the levy these small telecommunications companies. But unless this Supplementary Order Paper goes through there is no guarantee that they will be allowed to play with the big boys. The email continues: “It is well known that the previous $300 million has not been well spent but with the new funding that is planned for the next few years it will bring real results bringing real broadband to rural New Zealand if it is distributed by our regional players. The New Zealand Wireless Providers Association is a collective of rural broadband providers that are applying for TDL funding. With no Government funding in the past they have achieved over 50000 rural subscribers providing download speeds in excess of 5 megabytes per second.”This Supplementary Order Paper supports those providers. I implore the Māori Party and the ACT Party to assist today and to stand by their principles of real competition supporting Māori and supporting rural communities. Vote for this Supplementary Order Paper to place this in the legislation. I am sure that they have the opportunity and the time to walk over and let the whip of the Government members know that that is the way they will be voting—thereby meeting the obligations of their agreement. Therefore again I implore the Māori Party and the ACT Party to stand up for what they believe in and to vote for this Supplementary Order Paper.MELISSA LEE (National): I move That the question be now put.DAVID SEYMOUR (Leader—ACT): I take great pleasure in responding to the previous speech by Tracey Martin and in particular to subclause (4)(a) of new clause 3A of one of the two Supplementary Order Papers currently on the Table Supplementary Order Paper 83. The assertion is that people of a certain philosophical persuasion should be in favour of supporting that particular paragraph because competition in a particular location is always a good thing. There is some quite interesting economic theory behind this particular topic relating back to the Nobel Prize winner who sadly died only a couple of years ago Ronald Coase. Ronald Coase won his Nobel Prize primarily for his work on the nature of the firm. The story of Coase will take us directly to the matter at hand in subclause (4)(a). Is competition the only value that believers in free enterprise and economic efficiency should pursue? Or is economy of scale also a particularly important virtue that we should want?Coase’s story was that he started as a socialist. He might well have found his place on the far left of New Zealand First but unlike those members he was a thinking man a very inquisitive man who knew to ask the right questions. What he did was he travelled from his home in England to at that time the centre of industry in Chicago and he asked the people at General Motors: “Why is it that in a capitalist economy you practise an island of socialism a firm where you have a dictatorship over a group of resources? Why do you do that when competition works so well? Why do you believe in so much economy of scale? Why might you 80 years hence be opposed to (4)(a) being inserted in this bill?”. And the answer—Chris Bishop: He definitely asked that.DAVID SEYMOUR: He may well have asked that question had he been able to anticipate such a silly speech from Tracey Martin but despite being a great man and a Nobel Prize winner Ronald Coase was not able to anticipate Tracey Martin. Few of us would have been able to. The answer that Ronald Coase got from asking the right question which eventually earned him a Nobel Prize was that firms should expand. The nature of the firm is that firms should expand up until the point where the marginal transaction outside the firm has greater transaction costs than the marginal transaction within the firm.This is something that is very very difficult to determine by statute. It is something that must be discovered in the market place and that is why the ACT Party is a believer in free markets but opposed to subclause (4)(a) in this Supplementary Order Paper. Interestingly in the course of this inquiry—I hope they are learning something there—Ronald Coase discovered transaction costs. Transactions costs are one of the most important things to understand when it comes to being a true believer in free markets and economic efficiency. I do not think we will see that level of sophistication or understanding in some seats across the Chamber but since I was asked that is why I am opposed to this Supplementary Order Paper. I do not believe that it will increase economic efficiency or the welfare of New Zealanders in respect of telecommunications. Thank you.Dr PARMJEET PARMAR (National): I move That the question be now put.Motion agreed to.The question was put that the amendment set out on Supplementary Order Paper 82 in the name of James Shaw to insert new clause 3A be agreed to.A party vote was called for on the question That the amendment be agreed to.Ayes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the amendment set out on Supplementary Order Paper 83 in the name of Gareth Hughes to insert new clause 3A be agreed to.A party vote was called for on the question That the amendment be agreed to.Ayes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.Clause 4 Schedule 3B amendedJAMES SHAW (Green): Earlier in the debate I tried to summarise the various arguments that I had been hearing and some of the concerns and questions that had been raised about the bill. Some of them are pertinent to schedule 3B which discusses the amounts that are being raised saying in 2016-17 it will be $50 million the same in 2017-18 and again in 2018-19.I would just like to acknowledge the Minister Amy Adams for taking the call and responding to a number of the questions that I had itemised. I think that she gave responses to four of the nine questions but there are still five to be answered and in fact there have been a couple of other questions that have been raised since. The questions in relation to the amounts are really to do with the value for money of the previous programme and whether we should be seeking to raise this $50 million a year as specified in clause 4 here when we are unsure about the $300 million that has been spent on the programme so far.The questions that I put earlier—and I would appreciate hearing from the Minister or someone on the Government benches—were about whether there has been good use of the money. Firstly there have been a number of complaints about the quality of the connections that people have received as part of the existing programme and the sense that actually for all of that money the quality of the connections is not all that good. Secondly there is the issue of the evaluating and reporting on the effectiveness of the Rural Broadband Initiative. There is sort of a sense that actually some really good programme evaluation has not yet occurred and that that money may be kind of good money after bad. We have not yet heard I believe from the Minister or from the Government about those concerns. I would like to get a response from the Government on that in relation to these amounts here in this clause. Thank you.A party vote was called for on the question That clause 4 be agreed to.Ayes 63New Zealand National 59;Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Clause 4 agreed to.The result corrected after originally being announced as Ayes 63 Noes 58.Bill reported without amendment.Report adopted.Third ReadingHon AMY ADAMS (Minister for Communications): I move That the Telecommunications (Development Levy) Amendment Bill be now read a third time. As I have heard in this debate fast and reliable connectivity is critical to New Zealand’s economic growth. Like running water or electricity connectivity has become a fundamental must-have service for homes and businesses. The Telecommunications (Development Levy) Amendment Bill—we should have given it a catchier name—highlights the Government’s commitment to extending enhanced connectivity to regional New Zealand. It will help us to deliver faster more reliable connectivity to the regions.I would have thought that it would be hard to argue against better connectivity for our rural and remote communities but there have been a number of MPs across the other side of the House—Labour MPs—who I believe are putting politics ahead of people. I cannot wait to be out on the stump in 2017 reminding rural New Zealanders that Labour campaigned against their getting better broadband. Labour is the only party in the House opposing this bill and I find its position astonishing. It is showing tonight that it would rather side with the telecommunications company executives and their profits than support the extension of broadband to communities that need it. No wonder it cannot win in regional New Zealand. No wonder it is so out of touch. No wonder it is bottoming out in the polls. It cannot even bring itself to support better broadband for regional growth for rural and provincial New Zealanders who desperately need it. It annoys Labour so much to see a Government programme succeeding that it will cut off its nose to spite its face. And of course Labour members cannot filibuster if they are voting in favour which is what we know they are all aboutreally.There has been some confusion from the benches opposite so let me set some things out very clearly. Opposition members who are opposing the extension of the Rural Broadband Initiative are opposing the basic principle of ensuring that our most rural areas have the same opportunities that faster broadband offers our cities. We do not support that. Opposing this extension is refusing rural New Zealanders the same connectivity that other parts of New Zealand enjoy. Labour members will tell us—and they have been telling us throughout this debate—that uptake of the Rural Broadband Initiative is low. They are cherry-picking the numbers and they know it. We know that 8500 people have signed up under the fixed wireless broadband programme and that is only 20 percent of the Rural Broadband Initiative 1 spend.Furthermore Labour members are completely ignoring the fact that one of the core benefits of that part of the spend is enhancing cellphone connectivity. The cellphone connectivity benefits of those Rural Broadband Initiative towers mean that every quarter nearly 2 million New Zealanders benefit from it. The other 80 percent of the programme is fixed line copper broadband. As of 31 March more than 85000 households were able to connect and almost 68000 households have. That is an uptake rate of 80 percent. That does not even begin to cover the service provision to rural hospitals rural health centres and rural schools. This is the programme that Labour is trying to tell you is not working and is failing. If that is the definition of failure Labour has not got a clue.We have also heard that this is some sort of new tax. Well I can tell you that it is not a tax and it sure the heck is not new. Taxes for those who do not know have a broad-based application. Levies are targeted and are used for specific targeted purposes. The telecommunications development levy has been in force since 2011 and replaced the telecommunications service obligation which had been in force even longer and was higher. And of course we announced these changes in August. In this case it is a levy charged against some of the large telecommunications companies and it is used to fund open access infrastructure in areas where it would otherwise not be commercially viable for it to be built. Someone has to pay for it and I do not believe it is fair that taxpayers should foot the bill for the infrastructure that the telecommunications companies use to provide their commercial services. The levy is user-pays and that is exactly how it should be.The Government’s rural broadband programme reflects our commitment to rural communities. We are working with our private sector partners to provide services and coverage that would not otherwise be feasible. By 2016 90 percent of New Zealanders in areas not covered by ultra-fast broadband will have access to rural broadband under Rural Broadband Initiative 1. The $150 million raised by this levy extension will be put specifically towards extending the Rural Broadband Initiative so that almost all Kiwis can benefit from better connectivity under the National Government. That is $100 million for expanding fast reliable broadband to the regions and a further $50 million for expanding mobile network coverage in black spots.The Rural Broadband Initiative is making an immense difference to the way that rural firms do business to the way that our kids learn in rural and remote schools and to the way that health services are delivered to patients. There does however remain a high level of unmet demand in rural areas that are not scheduled to receive upgrades under the original Rural Broadband Initiative. This is due to increased numbers of customers high download demand constrained by existing cabinet technology and backhaul limitation. This bill is about letting us get on with making funding available for communities to improve their connectivity with a $100 million contestable fund for extending broadband in our regions. The criteria for the fund will focus on enhancing connectivity across all areas outside the ultra-fast broadband footprint and they are open-minded about the range of technologies that will be used. This bill means better connectivity for more people.Mobile phone coverage is an essential form of connectivity and can be even more important in rural and remote New Zealand where it has benefits for public safety as well as the potential to grow productivity in our regions. Currently the Spark Vodafone and 2degrees networks claim to provide collectively mobile access to approximately 97 percent of New Zealand premises. However those existing mobile networks achieve less than 50 percent geographic coverage of New Zealand. There remain many rural and remote areas of New Zealand such as sections of State highways and remote tourist areas that would benefit from extended coverage. The benefits of expanded mobile coverage include of course improved communications for businesses and residents who live and work in those areas; improved public safety particularly on our State highways; and making our tourism destinations more attractive particularly in some of those smaller communities. As a result this Government is establishing a $50 million contestable fund with the aim of providing mobile emergency calling and voice and contemporary data service coverage. The fund will enable companies and communities to nominate black spots in key tourist areas and work together to make a case for funding. Let me also confirm that none of the money from this contestable fund will enable any company to satisfy its existing obligations to provide coverage.Rural connectivity is absolutely critical and everyone in this House agrees on that except for Labour. Everyone in this House agrees on that except for Labour. Can I thank New Zealand First the Greens the Māori Party United Future and ACT for their constructive approach and for recognising that actually we do need to get on at pace with rolling out broadband to our rural communities. Someone has to pay and it is appropriate that it should fall on the telecommunications companies. I thank those parties for recognising that this levy has been in place for a long time. It is a matter of cents in each bill and if any telecommunications companies argue that they needs to put their prices up as a result then their consumers should look long and hard at those claims because I do not believe that they stack up. This is a Government that is fulfilling its promises to regional New Zealand. This is a Government that knows that connectivity is the core plank for regional economic growth and this is the Government that is delivering it. I am proud to commend it to the House.CLARE CURRAN (Labour—Dunedin South): Labour believes that there should be an inquiry into the Rural Broadband Initiative. If there is anything that has come out of the debate tonight then it is that this Government does not listen and that that Minister Amy Adams does not listen. This Minister pushes things through and ignores concerns. She has denied that this is a tax. It is obvious that this is clearly a tax on consumers and it is going to be imposed on consumers. She has refused to answer questions about the evidential basis for the rural broadband scheme and whether it has actually delivered. She has refused point-blank to provide any evidence to the House or in this debate and her ministry has not provided any information on this.The debate that the Opposition parties have had tonight begins the debate that should have been held in a select committee. This should have been a first reading speech. If this had been a first reading speech then the Labour Party would have supported the bill in its first reading. The Labour Party would have supported the bill in its first reading. This is a bill that is being taken through all its stages under urgency with no opportunity for submitters to come before a select committee or for members of a select committee to ask for evidence from all parts of the rural community. We have heard tonight from some of the industry players. We have heard from a major telecommunications company. We have heard from an industry association that represents the telecommunications industry and we have heard from the organisation that represents the smaller wireless internet service providers which are the ones that are coming up and the ones that are building strong community-based connectivitythroughout New Zealand that is not part of the Rural Broadband Initiative. Those are the organisations that should be being supported and nurtured but the Rural Broadband Initiative is not doing that.The Rural Broadband Initiative has had no scrutiny and the next part of the Rural Broadband Initiative will have no scrutiny either which is why Labour cannot support it. If there is to be an inquiry then we need to take a principled view on this and that is what Labour has done tonight. Labour members took a consistent principled view on these issues when they went into the election. We went into the election with policy that raised concerns about the Rural Broadband Initiative. We said that there had been ongoing concerns over a number of years that the Rural Broadband Initiative was not delivering broadband to the tens of thousands of rural New Zealanders. We said that the existing scheme was inadequate for the needs of many of our rural communities and that although it was providing internet access via cellphone towers—that is an improvement over dial-up and there is no doubt about that—it falls far short of the quality and speed provided to urban New Zealanders through ultra-fast broadband and existing connections. This is not the step change that the Government promised. The standard of rural broadband services has been woefully less than the step change that was promised. We have taken a principled position on this and we are holding to that position.This issue is not about telecommunications companiesactually. It is not even about the instrument of the telecommunications development levy as a levy—that is not what this debate is about. It is about what this Government is doing without scrutiny under the cover of urgency. It is pushing legislation through that will spend $150 million of new money which is going to be paid for by the industry but will be passed on to consumers—and I do not think that anyone can argue about that tonight—and the debate is about whether or not it is right to do so. We have missed a stage in the process and it is a critical stage. We are the legislators. We are the legislators who are making the decisions on these issues and we have got to be accountable for them. If you do not take a principled position and you allow a piece of legislation that commits $150 million to go through all its stages under urgency with no scrutiny then the Labour Party thinks that that is irresponsible. We cannot in good conscience vote for this bill because it has not gone through the right process. The Minister has not addressed the important questions that have been raised tonight. She has glossed over the issues. She has refused to answer questions about where the accountability for the Rural Broadband Initiative lies and where the economic analysis for the next tranche of this programmesits.There are real New Zealand businesses that are investing heavily without Government or industry-funded money through a levy. They are investing heavily in their local communities. They are based in places like Gore Ōwaka Timaru Ashburton Culverden Seddon Richmond Masterton Napier Palmerston Palmerston North Inglewood Hamilton Tauranga Waiheke and Whangarei. The organisation that contacted us via the email that my colleague from New Zealand First Tracey Martin read out earlier is an organisation that was formed only recently and that represents those wireless internet service providers that are the quintessential essence of what innovation in rural New Zealand looks like. But they are struggling because they are doing it themselves and this Government has allowed a programme to be developed around rural broadband that firstly has not delivered for consumers and secondly has provided the money mainly to big providers which have entrenched their status in rural New Zealand and have blocked many of those smaller companies from coming through.There are no guarantees by passing this legislation tonight that those smaller companies are going to get a look-in and are going to be able to thrive. That is the story. That is what we should be promoting here tonight: the progress of a piece of legislation that is going to nurture those sorts of businesses and allow communities to develop connection capability that actually suits their region and that is not part of a one-size-fits-all structure which is what this Minister is proposing and which the previous Rural Broadband Initiative has done and has not delivered on. Labour cannot support this bill tonight because we have taken a principled position. We are absolutely committed to rural connectivity. We are the party that took comprehensive policy into the last election. We are the party that works alongside rural New Zealand and rural communities. We are the party that knows how to do this well rather than the once-over-lightly from the Minister and what she is proposing to this House. We do not support this bill.MELISSA LEE (National): I could start off in many ways in this third reading of the Telecommunications (Development Levy) Amendment Bill but I will actually start by borrowing a line from a movie that I saw many many moons ago: you Miss Clare Curran had me at “inquiry”. I mean you had me gobsmacked with the word “inquiry”. This is how Labour does everything: “Let’s do an inquiry.” With the modern-day techno speeds that we actually get in this world she wants an inquiry that will take months and possibly years and millions of dollars potentially. She wants an inquiry. People in the rural sector are complaining to her as she commented and she wants an inquiry. This is so typical of Labour. This is how ineffective it is and this is how wrong it is about this issue. It is the only party in this Parliament that is opposing this bill. We live—Todd Barclay: Shame!MELISSA LEE: Yes that is right shame. Todd Barclay you know about the rural sector. You actually live there. You know how desperately we actually need this. We live in a world where things are instant and accessible. We can even access our telephones with a thumbprint nowadays. We cannot wait for an inquiry. This is the reason why we are here. This is a good bill and we need to pass it tonight. I commend the bill.Hon DAVID CUNLIFFE (Labour—New Lynn): It is so disappointing to see a Government so out of ideas so vacant so desperate to hit the panic button that it has New Zealand’s Parliament in urgency after Budget night for a bill that from its point of view is simply a bill to roll over an existing tax. The Government cannot have it both ways; either this bill is a “nothing”—in which case the Government should not be taking Parliament’s time abrogating the select committee process and ramming the bill through under urgency—or it is actually an issue and it is actually a problem and it needs to be thoroughly debated. The Government cannot have it both ways. The Minister “Out of Breath” Amy is back here saying the oldest trick in the book: that Labour opposes broadband. We do not oppose broadband. Our whole history has shown leadership in the telecommunications sector without which this Government would have very little to play with. It does not have to lecture us about our commitment to rural broadband. We are absolutely secure in our commitment to broadband roll-out. Straw man arguments never work. They never work because in fact we know why we are opposing this bill.I am going to take you through the objectives of good policy. I am going to take you through the issues that arise with this bill and finally why we cannot support it on grounds of process. The objectives are quite simple: better connections for faster cheaper broadband everywhere in New Zealand—ubiquitous coverage. We want to see users with strong capability and the confidence to use the gear wherever they are in New Zealand. We want to close digital divides. And thirdly we want vibrant content competition wherever people are in New Zealand. That means having enough bandwidth so that terrestrial aerial and online providers can compete to deliver the best deals to consumers. We are firmly on the side of getting broadband into the regions. The issue is not “whether” but “how”. That is where the Government’s arguments run into fundamental trouble.Earlier we quoted from an extensive OECD study that showed the really wide range of issues that arise with rural broadband roll-out. It is necessary to evaluate the $300 million worth of investment that has already been made. It is necessary for a range of reasons. The technology is shifting and the frontiers between backhaul fibre copper extension mobile satellite and innovative disruptive technologies like Project Loon from Google—all of those things—are changing and we need to assess the best way to deploy the public’s money. The second issue is that this is a tax. The industry has made it clear that this is a tax. The Telecommunications Carriers Forum has made it clear that this is a tax. It is a tax; therefore it is a broken promise. It is a tax; therefore it should not be done under urgency without a generic tax policy process or proper select committee consideration.The Government in its attempt at a defence said: “No no it is just the rolling over of an existing programme.” No it is not. It is not because the existing law legislates for the sunsetting of the current telecommunications development levy. It legislates the sunset. That is why the Government has managed to enrage pretty much the whole industry with this seemingly simple piece of law because companies have had to disclose their profitability based on some certainty of contracts under the existing law. They certainly did not expect the Government to undermine that by pushing legislation through under urgency. This is a change it overturns preceding law it overturns preceding contracts and it is somewhat strange to see members opposite delving with some torture through the archaeology of Coase theorem to find some justification for standing on their liberal heads and saying that they are in favour of Parliament expropriating private property rights without so much as a by-your-leave or the “The Maestro” of the Northland by-election giving a decent explanation. Chris Bishop—back to strategy school.The other problem with this is—without evaluating the rural broadband programme that has currently been in place—that there could be very very few technology areas as dynamic as broadband roll-out over long distance. We have got 3G we have got 4G and we have got 5G coming which looks like it will deliver more broadband speed than you can get through a closed deployed copper wire. It is certainly going to be very disruptive for the industry. Any prudent Government would want to look very carefully at that technology frontier before putting a new obligation on the industry which is designed for the old world not the new—designed for the old world not the new.The bottom line is that we can have a whole lot of arguments about the technology about the construction of the tax about how good or bad the previous deployment has been but the fact that those issues are out there should be proof enough of the fact that we need a select committee process. The industry said that it wanted to have a say. It offered to co-design this legislation with the Government but it got a salute instead. The public wants to have its say. The public wants to say “No taxation without representation.” We do not think that ramming this stuff through under urgency is fair representation. Then of course we have got technical problems around the fact that the commencement date is not specified and that we are overriding with the stroke of a pen law that has been painstakingly developed through multiple public processes.In summary there are both very important substantive technology and policy problems and there are significant process issues as well. This is not simply an extension of an existing agreed industry position; this is a new tax. This is a broken promise. This is desperate government. This is desperate government because it does nothing to lift productivity it does nothing to create jobs and it does nothing to deliver a better future for New Zealanders. It is just a tax. Ask people in New Zealand’s regions whether they think National has a plan for them. Chris Bishop did you ask Northlanders? I think you did and I think you got the answer which was that Simon Bridges’ bridges convinced nobody. They convinced nobody that National had a plan for the region because 5 years of being ignored and then 5 weeks of random pork barrels—The ASSISTANT SPEAKER (Lindsay Tisch): Order!Hon DAVID CUNLIFFE: So here we are and you are rightly bringing me back to the point that this bill should be about regional New Zealand. Give regional New Zealand a say. Have a select committee process and call for submissions. Although we strongly support rural broadband we do not support abrogating the parliamentary process in this way. We cannot support this bill.EUGENIE SAGE (Green): I seek leave to correct the record of the House for the voting during the Committee stage. It should have been 13 votes for the Green Party and not 14.The ASSISTANT SPEAKER (Lindsay Tisch): This is for the Committee stage—Eugenie Sage: Since dinner—since the dinner adjournment.The ASSISTANT SPEAKER (Lindsay Tisch): For all Committee stages since dinner?Eugenie Sage: Yes.The ASSISTANT SPEAKER (Lindsay Tisch): And the first reading?Eugenie Sage: No just since the dinner adjournment.The ASSISTANT SPEAKER (Lindsay Tisch): I will just check with the Clerk. Leave is sought for the Green Party to change its vote from—Eugenie Sage: From 14 to 13.The ASSISTANT SPEAKER (Lindsay Tisch): —14 votes to 13 votes in every vote cast since dinner. Leave is sought for that purpose. Is there any objection? There is none. The record will be changed accordingly.BRETT HUDSON (National): The telecommunications development levy when we continue it with this bill will provide the funding to provide support to the rural communities of New Zealand because this Government works for all New Zealanders. I commend this bill to the House.JAMES SHAW (Green): What is in a name? That which we call a rose would by any other name smell as sweet. Is it a levy? Is it a tax? Actually who cares? Has Bill English broken his “no new taxes” promise? Well he put up GST he put up the petrol tax he has introduced an airport levy he is introducing a capital gains tax he has cut the paper boy rebate and he has put a tax on private jets—it does not actually matter whether he says he was not going to introduce any more taxes. He has extended and introduced new taxes left right and centre—in fact literally left right and centre if you think about the political spectrum. It just does not matter.The relevant question is: what do we do about paying for the continuation of the Rural Broadband Initiative and for these black spots? Earlier on in the debate I was trying to work out what the different objections were and what the questions were about. I just want to acknowledge again the Minister for having taken a call and responded to some of those questions. I just want to reflect back on some of those.The first question was in relation to the press release from Spark about passing on prices. The Minister said that it cannot be justified as that would be double-charging consumers because it is already contained in the price. The Telecommunications Carriers Forum has a different view. It said that actually the industry has been absorbing those costs rather than passing them on and so it would be new for the industry to pass them on. It is kind of unclear which of those views is correct. It becomes quite difficult and I can fully appreciate why the Labour Party would like to have a proper select committee process so that we can get to the bottom of that.The second question was about the quality of the connection and whether the money that has been spent so far—the $300 million that has been spent so far—was a good use of the money and whether it was producing the results. I am afraid that we did not get a good answer on that question; nor did we get a good answer—or in fact any answer—about the issue of evaluation and reporting on the effectiveness of the existing Rural Broadband Initiative. Tracey Martin raised the question of why it is up to the Greens and New Zealand First to do the Government’s job for it. There are a bunch of questions here and a Government bill about the quality of the spend. Where was the Government’s response? We are not getting a response to a number of these questions.There was a related question that was about new technologies. Mr Cunliffe spoke very eloquently about that and again I do not feel that that was addressed. We did have a question about whether companies would get two bites of the cherry. We received an unequivocal answer from the Minister on that that they would not and I am very pleased to hear it. That was the point of one of our Supplementary Order Papers and so we feel that that has been answered and I appreciate that from the Minister.We also asked why this legislation needs to be passed under urgency. Again the Minister responded directly to that saying that we cannot start negotiating and there is such urgency to roll out the whole programme that we cannot wait for the full legislative process to go through this. I empathise with the Government’s sense of urgency. As I said in my first or second reading speech having travelled around the country over the last 10 weeks in the rural areas in particular the digital divide is exacerbating an existing social educational and economic divide. We have real urgency to get this out there which is why the Green Party is inclined to support this bill even though we would normally not support bills being progressed under urgency because of the lack of scrutiny that goes with passing legislation under urgency.We asked a related question that was around why we are doing this now—seeking funding while the policy design is being consulted upon. Again I think that relates to the sense of urgency so we were satisfied with that answer from the Minister. The question about competition—and this was another Labour Party concern that I do not feel was sufficiently addressed—was whether small companies and a broader range of companies will be able to participate in the programme or whether it is just going to be the established players. So that one is still kind of up in the air. The ninth question was around what the Minister’s response was to the two Supplementary Order Papers put forward but I feel that that was answered as well.So some questions were answered; some were not. We are left actually with some discomfort about voting for this bill because there were a number of the key issues we feel the Government did not actually bother to try to answer.We also had the question of whether the legislation is constitutional so it has been quite a surreal night. Who would have thought that a telecommunications funding bill would have involved the regent of Belgium and other constitutional arrangements? And there was the question of the Royal assent which took up close to an hour and was sort of a fascinating piece that we got into on this bill. It has been quite a strange legislative process tonight. Strange enough as I have said because I felt like New Zealand First and the Green Party were kind of doing the Government’s work for it because we were not getting answers to those entirely valid questions that the Labour Party was raising.We will be voting for this bill but we are disappointed that some of those questions have not been answered including some of the really substantive questions about the quality of the spend of the money so far and the possibility that we would be throwing good money after bad here. I did want to gently remind the Labour Party which stood on principle tonight on the matter of urgency and said that it could not support such a weak legislative process that only a couple of months ago it supported the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill through the urgency process. This piece of legislation was passed not only without any of the normal legislative processes but it contained algebra that no one in the House could actually comprehend. At least we have some idea of what this bill will actually result in which is the raising of $50 million a year for the next 3 years. That is actually a pretty simple proposition. That is easy enough to argue about but the MPs’ remuneration bill contained a formula that literally no one knew what they were passing as they were passing it.It has been a fascinating evening. We will be supporting this piece of legislation because we do believe that the programme needs to continue with a great deal of urgency but we do have some discomfort and we will be looking to the Government to answer those questions that it did not bother to answer tonight. Thank you.TRACEY MARTIN (Deputy Leader—NZ First): Can I just allay the fears of the Green Party member James Shaw by saying that New Zealand First member Darroch Ball is a member of Mensa and that he actually understood the algebra in this bill—so New Zealand First was well-informed when it voted thank you very much.New Zealand First is supporting this bill because New Zealand First believes it should be supported. We would agree with Labour in some areas. We would agree with the Labour Party that it would be a good idea for the Commerce Commission to do an inquiry or a review of the $300 million spend. I disagree with Melissa Lee when she waved her hands wide and said that you have to stop everything in order to do a review. I remind Ms Lee of the digital literacy inquiry which actually looked at the work of Network for Learning. It was done by the Education and Science Committee under the chairmanship of Nikki Kaye and that inquiry changed the direction of Network for Learning while it was still going. While it was still being developed the inquiry identified that it was going in the wrong direction and it shifted direction so that it was a much better provider.We would also agree with the Labour Party on the need for local small to medium sized enterprises to be part of this roll-out and to be able to participate in the provision of the Rural Broadband Initiative. We are sitting here on 21 May and it interests me that on 19 May the Warkworth Area Business Association put out this email to all its members. The title of this email is “Ultra-fast broadband improvements”. Much has been made that the industry did not know that this funding was coming. Much has been made that the industry did not have an opportunity to be consulted. Again I say that lobbyists for industries always have the telephone numbers of Ministers. I find it hard to believe that the industry did not call the Minister’s office and have a conversation about this. The email goes on to say that on 12 March the Government announced that this funding was coming.I think it is pertinent to the bill that we are talking about—and to the conversation that has been had about whether there has been consultation about whether there has been a review about whether there is going to be participation by the public which is the other area that has been addressed—that this email says: “The ultra-fast broadband 2 funding is intended for rural towns.” It says: “In order to make an informed decision about how to allocate funding central government has invited local authorities including Auckland Council to submit a registration of interest. This is an opportunity to communicate to central government any issue with broadband and the level of demand for better services in rural Auckland. We would like your help to make sure that we get as much accurate information to Government as possible.” The questions they ask relate to a description of where you live i.e. the boundary of your community; what your current internet service is like; what problems you have with your broadband connection; the extent of the problems; and what demand for broadband services is like in your community. They ask members to please provide other information around business information and any other information that they want to provide to the register of interests for the funding for the broadband roll-out.That is the Warkworth Area Business Association. That is a local group taking control and talking and sending directly to Government information around how this—what we are talking about tonight; what will be funded—is delivered. We take the Minister’s word that the reason this needs to go through under urgency is that without the levy that has been there since 2011 and without it being secured in legislation until 2020 there is no way that the Minister can start the process of deciding how and where it will be spent. This is a process matter at the moment. We agree that sometimes process needs to be short-circuited. In this instance this is a continuation of a levy that has been in place for several years that was fully consulted on and that the telecommunications companies knew was coming and the levy is to continue to deliver what we know is needed.However we do support many of the areas that the Labour Party has mentioned; we just do not support their call to try to stop this bill tonight. We have a member on the Commerce Committee. We would support a call from that committee to do a review or an inquiry and to actually have a go at making sure that up to this point we have been in the right direction—how we could possibly while the Minister is consulting the communities have a look at this and make some bright decisions. Let us not change just for change’s sake but let us actually look at where we might be able to improve. Kia ora.KANWALJIT SINGH BAKSHI (National): We have made very good progress tonight on this bill. It provides excellent infrastructure for New Zealanders. I commend this bill to the House.The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call. Dr David Clark—5 minutes.Dr DAVID CLARK (Labour—Dunedin North): I rise to speak for the last time on the Telecommunications (Development Levy) Amendment Bill a bill of broken promises. Labour will be opposing this bill. As many of my colleagues have outlined there are many problems with it. We must say first and foremost it would have been much smarter for the Government to expose this to public scrutiny. The fact that this evening it has imposed on New Zealanders a tax that will be borne by businesses and households without allowing the public to have its say is shameful. There is no need for this rush absolutely no need whatsoever. This obviation of the normal processes is a travesty.Of course we heard the Minister for Communications Amy Adams in her opening speech say that “the industry will not need to put their prices up or explain to their customers why their bill is changing” and within the hour we had one of the major telecommunications companies saying that it would be putting up its prices as a consequence. And of course we know the reason why this is. It is because in that industry planning is years ahead. Telecommunications companies plan years ahead for infrastructure developments and so of course—of course—they have taken into account the fact that the levy was supposed to run out. Of course they have taken that into account in their planning and so they had built in what charges they thought necessary. And now they get slapped with another charge which was unexpected a tax on them that they can and must pass through to their customers. They are going to make their bills transparent so that we see when we use their services the extra dollar per month that that will be costing as a result of this change for each and every business or person connected to this service. That might not sound much to some people but to many business people struggling in the regions that extra dollar does matter—it does matter. It is a marginal cost but it is a cost. Every marginal cost matters. It does become prohibitive for some people. That cost is on top of many other costs that this Government has put on top of small business. It has put up red tape left right and centre. It seems to have no heart for small business. We have heard of plenty of additional taxes: the paper boy tax in the last set of Budgets. We have had the additional child support—The ASSISTANT SPEAKER (Lindsay Tisch): Order!Dr DAVID CLARK: —expectations and so on.But coming back to this bill here we have got in the departmental disclosure statement a clear yes as to whether this is in the nature of a tax. Yet we have the Deputy Prime Minister dancing on the head of a pin. It is a shame he cannot land an aircraft on the head of a pin like the last Labour Government did nine times in getting to surplus. We have him dancing on the head of a pin when his own department says that yes this is a tax. It is one of three new taxes after this Government said it would introduce no new ones before the last election. InternetNZ of course called for a review. It said: “Why do we not look at it and see if this rural broadband money is being spent effectively?”. There is $300 million being poured into this. It does not seem an unreasonable request but a Government that is out of touch might say “No we will not have a review. We do not care that only 8500 people have taken this up by our best estimate. We do not care that it has cost $7000 a head for this particular initiative to be taken up because we are the Government. We won the election and we do not care any more what the people think.”Well that is a Government out of touch I am afraid. It is a Government out of ideas. Introducing new taxes seems to see the big idea we are facing today. The reason of course we can see that this is being passed under urgency is because Government members are trying to hide their failure in rural New Zealand. They are embarrassed at least for their failures in rural New Zealand. Of course I have seen in my own electorate the need to get a petition. A group has gone to the extent of having a parliamentary petition to get rural broadband. I encourage others who are experiencing the same difficulties around New Zealand to do the same to approach their local MPs and to get a petition set up that will be heard by Parliament because this problem is costing hundreds of millions of dollars and the Government is wanting to be unaccountable for spending. This is a Government that does not care about taxpayer funds and that does not care about small business. It is a tragedy. It is a shame. I hope the next speaker because I know he is sympathetic to the issues of small business will take on some of these challenges as well. We have seen a Government that is prepared to break its promises on the surplus in the Budget the biggest promise of all. It was central to the election campaign promise and it has broken it.The ASSISTANT SPEAKER (Lindsay Tisch): I call David Seymour—5 minutes.DAVID SEYMOUR (Leader—ACT): Well I had enormous hopes for the previous member’s speech. I hoped to see a principled detailed economically literate public policy - based rebuttal of the bill. Sadly—sadly—my hopes were misplaced. But I thought that in the interests of informing the House I should show the member how somebody might have given such a rebuttal and might have critiqued the bill. The first question to ask about any public policy intervention or revenue-raising initiative is: where is the market failure? Why is the game theory outcome not Pareto optimal? You might look for an answer like that in the regulatory impact statement.It is a sad commentary on the standard of regulatory impact statements in New Zealand I am afraid to say that they are not very strong. It seems the problem definition is mostly about why the current policy is not as big as we would like it to be. It even quotes political party websites in the regulatory impact statement. That is not the kind of problem definition and identification of market failure that one would like to see in a regulatory impact statement.One might well argue that there is no public policy basis or intervention logic behind this bill. The Opposition could have done that but sadly it did not. It might have raised the question of technological change. If I could indulge the House with a small personal anecdote 15 years ago my flash uncle wired his entire house with ethernet and we thought that was pretty cool and he thought that was pretty cool. Then along came something called Wi-Fi and then we did not think he was so cool and neither did he. You might think that is a small personal anecdote but I recently heard that larger organisations are capable of such mistakes. Indeed the entire Tasman District Council recently—as recently as 15 years ago that is—made a regulation that every house in its region should be wired with ethernet. That lasted for about 3 years and it was swallowed by the same fate. Anybody who wants to fund a rural broadband initiative through any kind of revenue source should be very wary that technological change is happening a lot faster than Government programmes and legislation even legislation as fast as tonight.Hypothetically if you did agree that there was a case for the public funding of telecommunications infrastructure you might ask some questions like: to whom is the benefit and what is the most appropriate source of revenue to fund that benefit? It seems the principle is that it is current telecommunications users. Well what we find in the regulatory impact statement is that one of the best rationales you can find is that we need to do this for people who do not have access to telecommunications services. So we are charging the people who are using the services on behalf of people who are not using them. That sounds to me like a public-good argument or a redistribution argument and if you adopt the principle that you want to raise revenues in the ways that are least distortionate of behaviour then you should use low-rate broad-base taxes such as indirect taxes like GST.None the less that was not the quality of argument that we heard even from some of the most able members on the other side of the House. So I conclude with another thought which is that even the best public policy relies upon political support to be sustainable. What this bill is really about is ensuring that the body politic of New Zealand is able to keep supporting the public policies under which it lives. That is why there is a naked unashamed redistributionist element in this bill and perhaps in another time and another place and another electoral result I might speak out about it a little bit more strongly. But seeing as those who can actually are unable to apparently for cognitive reasons I will not either and will be supporting this bill. Thank you Mr Deputy Speaker.TIM MACINDOE (National—Hamilton West): I support this bill.KRIS FAAFOI (Labour—Mana): It is a sad indictment on the level of debate in this House from the National Party that that was one of the better contributions to this bill. I commend Mr Macindoe for getting up and at least telling the truth about their position on this bill. He did not say anything to support it because the grounds on which to support this piece of legislation are very thin.It was with ultra-fast speed that the Minister for Communications was forced to eat her words from her first reading speech. I will for the benefit of the House remind the National Party what Amy Adams said in her first reading speech: “The industry will not need to put their prices up or explain to their customers why their bill is changing.” Within the hour not even 60 minutes had passed from those words leaving the Minister for Communication’s mouth Spark New Zealand issued a press release making a liar of the communications Minister. That press release says that now the Government has confirmed the levy/tax will continue rather than reduce as originally legislated for it has put upward pressure on future costs and Spark will have to pass that cost through to its broadband and on-account mobile users. Not even an hour had passed.We had the Minister who said: “No New Zealanders don’t worry we’ve got this sorted. We’ll get this money from the telecommunications industry.” And then the telecommunications industry said: “Well actually Minister we’re going to get it from Kiwis.” According to this press release from Spark the average bill of Kiwis using broadband will go up by $1 a month. You can argue: “Hey that might not be a lot of money.” It certainly is not a lot of money for the people who support the National Party with all their big cheque books but it certainly is to people on this side of the House.There needs to be some scrutiny around this piece of legislation as to the effectiveness of the expenditure for the first tranche of the Rural Broadband Initiative. Maybe Mr Seymour might like to join the Labour Party and other parties on the Commerce Committee to get an inquiry on the effectiveness of the Rural Broadband Initiative. I think Mr Seymour actually raised a very good point: is what we are doing the most effective use of the money? Is it the right technology?We may not agree with everything that Mr Seymour may want to look at but he might want to join our initiative to get an inquiry into whether or not we are getting good value for money. I always thought that the ACT Party was the bastion of trying to make sure that every taxpayer dollar was spent well. But no no no not tonight—not tonight. Three hundred million dollars was spent on the first tranche of the Rural Broadband Initiative. We want to know whether that money has been spent effectively.From that side of the House we heard during the Committee stage at least very few speeches. They are lions in their seats but lambs on their feet. They would not get up and take a call to say: “Well this is good spending of $300 million.” At least David Seymour stood up and said: “Hey is this money being spent effectively? Are we doing the right thing?”. I look forward to Mr Seymour getting to the Commerce Committee—a very good select committee—and helping us get our inquiry over the line. I look forward to you coming to our meeting next Thursday.Four hundred and fifty million dollars is not chump change; it is a lot of money. And $300 million has already been spent on the first tranche. There is concern in rural communities as to whether that expenditure has been effective to deliver what has been promised by this Government and that is that 86 percent of rural people would get at least 5 megabits per second. There have been—and I believe that the number is three or four; I think it is three—rural communities come to our Commerce Committee and say: “Well Parliament that hasn’t been our experience. We have slower or ineffective broadband speeds in our area and we were promised this.”We thought it was a really good idea to see whether or not that first $300 million was spent effectively. I thought that the Government might think that too but no we have already heard from the chair of the Commerce Committee that she is not interested in having an inquiry. Maybe we need just that one more vote. Maybe on Thursday morning at 10 o’clock which is roughly when we have our meetings Mr Seymour you might want to turn up and help us out. I am sure that you and your members do not want to see $450 million go down the drain.We actually do want to make sure that the Rural Broadband Initiative is effective. We actually agree with the objectives of the Rural Broadband Initiative. Who would not? Isolated rural communities want to make sure that they are connected not just for economic benefit; there are educational benefits and health benefits from the Rural Broadband Initiative. If we are going to spend more money we want to make sure that that money has been spent effectively and that simply has not been the case.There has also been an argument from that side of the House—not a very strong one—that this will not affect the telecommunications industry. That is not necessarily the case because the telecommunications industry is not very impressed with this Government. The industry is saying that this piece of legislation has been rushed through urgency. Geoff Thorn—no stranger to us; he used to be the general manager of Parliamentary Service—who is now the chief executive of the Telecommunications Carriers Forum—[Interruption]Hon Member: Take a call Mr Bennett.KRIS FAAFOI: Yes take a call. Get up. You were here for the Committee stage but I did not hear one peep out of Mr Bennett—not one. All he can do is interject—all he can do is interject. Well just shush for a minute Mr Bennett and listen to what the telecommunications industry has got to say about your process—slamming this through at 11 o’clock at night.This bill has been introduced under urgency and doing so avoids any public debate. Well heaven forbid that we have public debate. Heaven forbid that we actually let the public have their say on this seeing as they are going to be the ones who are paying for it—a dollar every month. We cannot have the people coming in here. This is a proposal that has not been the subject of any consultation and that has avoided the usual scrutiny that would apply to Government spending. They go on.For the benefit of Mr Bennett this bill extends a tax. That word “tax” is mentioned four times in this press release I must add and that tax to date has not been explicitly recovered from consumers. However the industry cannot continue to absorb ongoing costs of this magnitude. Translation: the telecommunications industry has absorbed these costs and is saying it cannot do that any more. As we saw from Spark who is going to be paying now? Its customers—its customers. The Government is furiously trying to spin: well do not blame us; blame the telecommunications companies. Well who is passing this legislation through in the dead of night? It is this Government—it is this Government—and there is no scrutiny. No members of the public can come and ask any questions and this is the way the Government is doing it.The Rural Broadband Initiative is a great thing but if we are spending $450 million we want to make sure we do it properly. Do not just throw the money out there into the wind and hope that everything is all right. If we are going to spend $300 million we want to make sure it is being done properly and this piece of legislation allows us to collect $150 million more to roll out the second tranche. I think we should take a big deep breath and have an inquiry to look at whether the first tranche worked before you have $150 million more spent. It can be done otherwise we might be wasting taxpayers’ money. I know Mr Seymour hates that so I look forward to seeing him on Thursday morning at the Commerce Committee. It might be your turn to bring the baking.TODD BARCLAY (National—Clutha-Southland): I can do no better than to echo the sentiments of the senior whip.A party vote was called for on the question That the Telecommunications (Development Levy) Amendment Bill be now read a third time.Ayes 88New Zealand National 59; Green Party 13; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 32New Zealand Labour 32.Bill read a third time.KiwiSaver Budget Measures BillFirst ReadingHon TODD McCLAY (Minister of Revenue): I move That the KiwiSaver Budget Measures Bill be now read a first time. The bill proposes to remove the $1000 KiwiSaver kick-start contribution paid to all new enrolees in the KiwiSaver scheme. The KiwiSaver scheme has been a very successful scheme attracting new enrolees into the scheme. The scheme now boasts over 2.5 million members but this has come at a cost to the Government and to the taxpayer because for every one of those KiwiSaver accounts in addition to the funding of the member tax credit the Government has contributed $1000 as an inducement to enrol.KiwiSaver was launched over 7 years ago in different circumstances. The original objective was to assist individuals who are not in a position to enjoy standards of living in retirement similar to those they enjoyed pre-retirement. However the scheme subsidies had not been very well targeted at those individuals and many have reallocated other savings. Today in our post - financial crisis world Kiwis are paying down household debt and successfully saving with almost $30 billion in KiwiSaver. The incentive payment to join KiwiSaver is no longer necessary. Since KiwiSaver’s launch the Government has paid in over $6 billion to KiwiSaver members’ accounts much of that through the kick-start incentive. The scheme is an expensive way of promoting savings among the target group.A set of evaluation reports based on evidence progressively drawn together over the first 7 years of KiwiSaver’s life has just been published by the Inland Revenue Department. It indicates that although KiwiSaver has achieved a number of its goals it is continuing to have a relatively small effect in promoting additional savings and a considerable fraction of subsidies go to those outside the likely target group. A priority for the Government is cutting back on low-value spending and restoring its balance sheet. It is estimated that removing the kick-start will save the Government over $500 million over the next 4 years. That is money that could more usefully be used elsewhere. Other features such as the annual member tax credit and the minimum employer contribution rate of 3 percent will continue.The kick-start is currently paid following a 3-month wait period. The effect of this bill is to ensure that the 3-month wait period may start before 2 p.m. on 21 May 2015 but not after. In other words if a new enrolee has begun the 3-month wait period just prior to the announcement they will still be eligible for the incentive payment on or after 21 August 2015 as long as they meet all other relevant criteria. A person who becomes a KiwiSaver member after that date may not be eligible.The Government remains committed to KiwiSaver but needs to ensure that subsidies provide a prudent use of taxpayer funds. The proposed measures in this bill will help achieve that. I now commend this bill to the House.Dr DAVID CLARK (Labour—Dunedin North): National has hit the panic button in its seventh Budget. It has failed to reach surplus and it has failed to outline a plan. It is stealing from future generations through this measure by taking the $1000 kick-start programme out of action. This is a Government that is going to ensure Kiwis miss out that is going to ensure kids miss out.The Government has said that it will increase benefits in this Budget but it is giving with one hand and taking away with another. It is helping to lift the most vulnerable people—sure—and it should get some credit for that but it should not have to come at the cost of taking down those who are just a few rungs higher on the ladder.This is a Government that has broken promises before—we know that. We have heard about the GST promise that John Key made—that there would be no GST increases. Next thing it is up to 15 percent. We have heard about the 40 percent economic growth target. He said that we want to grow the economy so that exports are 40 percent of it. Well they are down to 30 percent now and they are going backwards. We have heard about the promise to increase wages by $7000 by the end of next year for ordinary workers. Well we know that that has just been kicked out in this Budget by 3 years to 2019. We also know—biggest of all—that this Government promised a surplus which it has failed again to deliver. The one that it is projecting for next year is wafer-thin. It is less than a rounding error.This is a Government that has produced no surpluses in 7 years after a Labour Government that produced nine surpluses in 9 years. This is a Government that is failing. This is a Government that has no vision and no plan for the future. The Government has broken its promises to grow jobs to lift wages and to not impose any new taxes. Cutting KiwiSaver will reduce savings at the very time when we need to increase them. We need long-term thinking not short-term thinking. I am sure that Mr Bishop will try to argue that cutting the contributions to those who are starting to save for the first time is somehow a long-term plan. But the people at home will not be convinced of that; I do not believe that they will. They would not have signed up to it in the first place if they thought it was a bad idea. We know that already 2.5 million Kiwis have signed up to Labour’s KiwiSaver programme.The Government cut the member contributions last time round. This Government halved the employer contributions in the last Budget in 2011 and we know that it has a plan to cut it back further. It is weighing up the options. How do we cut it further? In Australia they introduced a KiwiSaver-like scheme shortly after the Labour Government introduced one here in the 1970s and they have kept that scheme. Australia now has $1.3 trillion in retirement savings. This KiwiSaver scheme is growing. It is a proud scheme but it is only in its infancy and the Government wants to cut it again. The Government has cut the superannuation fund contributions and now it is cutting the KiwiSaver kick-start. It is a Government that is out of ideas it is scrimping and saving and it is costing middle-income Kiwis as it tries to prove that it can get to a surplus eventually and it is failing. It is failing to do even that—even to achieve its own biggest election promise.Half a million Kiwis—that is 500000 Kiwis—will be deprived of the $1000 KiwiSaver kick-start payment over the next 4 years. That is a shocking statistic. KiwiSaver is growing in popularity and the number of people opting out is reducing over time. Many members of the House I am sure will have studied the Inland Revenue Department’s evaluation of KiwiSaver its final summary report from 2007 to 2014. The department examined KiwiSaver and its estimate in the 2010 survey was that additionality—i.e. extra savings on top of what people would ordinarily have saved—was 36 percent. Then in 2013 the department said that had not significantly changed.Hon Todd McClay: Not true.Dr DAVID CLARK: It is a fact. The Minister shakes his head. It is his department. He shakes his head. He is out of touch.This is clear—and the scheme is working. I know plenty of people who have signed up for the scheme because of the $1000 kick-start. In fact if the Government really believed that it had no effect it would not make this legislation retrospective. There is silence on the other side of the House. The Government would not make this legislation retrospective if it did not believe it worked. The Government has no answer to that. It cannot have it both ways. If the Government really believed it did not work it would not make the legislation retrospective; it would allow people to sign up for it while the bill was being passed through the House. But Government members know in their heart of hearts that that is not true. That incentive is there and it does encourage people to save and it does encourage people to join the scheme.This cut is stealing from kids’ pockets. It is robbing the savings of future generations. It is a short-sighted attempt to somehow plug the $1 billion hole in the Budget that has emerged in the last year. This is a Government with $88 billion in debt—let us not forget. The Government pays about $10 million in interest a day—$10 million in interest a day. This is a Government that is failing to manage the economy. It has already halved the member tax credit in Budget 2011. It is cutting savings further. This is the kind of economic mismanagement that has seen the Government run up more debt than Muldoon did. Those Kiwis who will miss out will be at home watching this. They will hear that they have missed out and they will be sorry—certainly the ones who voted for this Government will be sorry. This is not something that was talked about. These kinds of cuts were not talked about in the last election—taking away half a million Kiwis’ access to the $1000 kick-start grant that comes with the KiwiSaver scheme.This is a country that has struggled with capital debt. We know that is a problem for this country—having enough savings as a pool for investors to call upon to grow new businesses and that pool of savings is essential if we wish to diversify the economy and if we do not wish to be for ever dependent on dairy prices and on commodity price cycles. The dairy industry does what it can and it contributes to our economy in good measure but we actually need a number of other industries. We need clean industries. We need growing industries. We need innovative industries. Those industries need to be able to access savings so that they can grow. We need an economy that is diversified and that is sustainable so that New Zealanders can enjoy in the future the prosperity that they enjoy now.Cutting savings is not a vision. Yet that is the vision that this Government has come up with. It has failed the test it has set itself to achieve surplus and now it is trying to plug the hole by cutting savings. That will not do. It is retrospective and it is unfair. Good on those Kiwis who have already accessed it but think about the ones who have not. I say to those people at home who are watching this late at night—as we pass this legislation under urgency because the Government knows that if it did not pass it retrospectively and quickly there would be outrage—if your colleagues join KiwiSaver on Wednesday and you at home send in the form today they can join the scheme and get a thousand bucks but you cannot. That is the change that this Government is bringing in. It has chopped the member tax credit and it is now chopping the $1000 kick-start payment.This is a Government that is out of ideas and that is trying to fill a hole. It will claim that it will not have an effect on enrolment rates. If it really believes that it would not make the changes retrospective. There is a Supplementary Order Paper that suggests that the date be pushed out and I challenge the Minister of Revenue if he really believes that it will not have an effect to adopt that Supplementary Order Paper and to let people have that $1000 if they want to sign up in the next wee while but I am pretty sure that he will not. He knows in his heart of hearts that that 36 percent figure from the Inland Revenue Department—that “additionality” the additional savings that this scheme has enabled—is a number that is real.I will read from the Inland Revenue Department report here where it says that using a flow measure of savings the estimated level of “additionality” rather than substituting from other forms of saving was 36 percent. The main reason that people join the scheme is that it is “an easy way to save”—well that is not rocket science. “The second reason was the contributions from the Crown and their employer.” These are incentives and if they believe in economics they will believe that incentives matter. “There is likely to be an interaction [effect] between these two reasons with the contributions also making it easy to save more.”Those are the key findings from a report that this Government is ignoring. Instead it is ensuring that half a million Kiwis will be deprived of the $1000 KiwiSaverkick-start payment over the next 4 years and this is a disgrace. Labour’s policy is to restart this programme. We would not do such a thing; we would not be so mean to the kids of the future. This retrospective legislation is robbing future savings in a short-sighted attempt to pay for the $1 billion Budget black hole that the Government has dug.DAVID BENNETT (National—Hamilton East): What a great week. This Budget has consigned the Labour Party to the irrelevancy that it deserves. This is a Budget for all New Zealanders which shows a Government that is committed to New Zealanders in the most difficult of times. It is the first time in 43 years that core benefit rates have been increased. The National Government has delivered for all New Zealanders at the most difficult of times and this KiwiSaver Budget Measures Bill is part of that.Look at the comparison with Australia’s Budget the week before. Their deficit is $41.1 billion; our deficit is $684 million. GDP growth in Australia is under 3 percent; in New Zealand it is over 3 percent. As for net migration for the first time New Zealanders are coming home and staying home. The unemployment rate is over 6 percent in Australia and under 6 percent here. New Zealand is doing well and it is doing well because we are making good decisions like this bill does which deliver for all New Zealanders in the right way. Thank you.Hon DAVID PARKER (Labour): We have got a Minister of Finance who cannot merely not balance a Budget—seven deficit Budgets in a row—but he cannot address the long-term challenges of the economy. The greatest failure of the Minister of Finance and his offsider Steven Joyce is that after 7 years in Government the fundamental indicators of this economy are still going backwards. We have had reports from the likes of Paul Glass at Devon Funds Management in the New Zealand Herald recently showing how real per capita GDP when you strip out Christchurch has been increasing at less than 1 percent per annum. So when you take out the effect of Christchurch and the effect of the huge rapid increase in population caused by immigration real growth is less than 1 percent per annum.The export target is trashed. The export targetwas to increase exports from 30 percent to 40 percent of GDP. This year exports have been 27.9 percent of GDP—Dr David Clark: How much?Hon DAVID PARKER: —27.9 percent—and next year they are predicted to be 26.4 percent of GDP and they do not get over 27 percent of GDP until the end of the forecast period. So much for the target of growing exports as a percentage of the economy!In respect of New Zealand’s net liabilities to the rest of the world as a percentage of the economy as a consequence they keep growing. New Zealand’s net international liabilities are currently about 69 percent of GDP. They grow every year from here on to 75 percent of GDP. When you have got long-term problems like that you do not reduce your savings because the savings are the key to investment.Let us look at a bit of history here. When KiwiSaver was first planned John Key said this—this is his release on 24 August 2006—and this is confirmation that National was right all along: “The scheme’s initial design lacked the incentives needed for people to change their savings behaviour.” Well we have heard from Dr Clark about how the scheme has increased savings but now we have got National reducing the incentives that John Key said then were inadequate.What has this Government done so far? First off on 9 December 2008 this Government decreased the minimum contribution rate for members from 4 percentto 2 percent. John Key had already criticised it for being too low at 2percent as it happens. Then on 1 April 2009 the National Government cut the member fee subsidy of $40 per annum. Then the third thing it did was to change the compulsory employer contribution and capped that at 2percentas well. So it cut the employer contribution. Next it took away the tax credit that applied to the employer contribution. That was cut No. 4. The fifth thing it did was to reduce the member tax credit. It halved it from $1042 to $520 per annum. Then the sixth thing it did was to change the taxation treatment of the employer contribution to the detriment of savers. The seventh thing it did having cut the contribution rate was to increase it from 2 percent to 3 percent so it reversed its reversal.Now we have got it doing away with the $1000 kick-start contribution. How does this work in practice? The Government says that this is going to save $500 million and it will. It is removing $500 million of incentives for the scheme. What is the effect of this? I will give you a real example of this. This is the example of my daughter. She is in a middle-class family she is not hard-up she is a 15-year-old and she has got a job working in a cafe as a waitress. She gets a $1000 kick-start payment because she signed up recently and she adds to her savings by about $2 or $3 a week and she follows that. If you are a young person and you are starting at $2 or $3 a week and after the first few months you have got less than 20bucks it seems like nothing—it seems like nothing. If you are a part-time worker as most young people are when they first enter the workforce and you are saying that you want to encourage them to get a savings habit for a lifetime and they are saving at $2 or $3 per week it really seems like nothing for the first few years. But because of the incentives in the scheme currently she sees a balance of $1002 and then $1004 and then $1006 and she feels really successful and that she is embarking on a savings pattern that will see her right for life. And it will.Everyone else who is in that situation will be so much better off when they get to the age of retirement if they have started to save. But now a lot of those kids instead of having $1000 which will grow by a small amount every month or every week that they get paid are going to have only that small amount. This is stealing from the next generation in order to get to a make-believe surplus. That is what this is—[Interruption] It is. This is in the face of dropping exports rising international debt and the failure of the Government to make its own targets.Hon Todd McClay: Why wasn’t the speech yesterday as good as this one?Hon DAVID PARKER: It was better than this. It was better than this.The record of the Government in every area of superannuation and the record of the Government in savings and superannuation is worse on every front. Do you know that it canned contributions to the New Zealand Superannuation Fund—the New Zealand Superannuation Fund which Bill English when it was set up said was a dog. Those are the exact words he used only to be embarrassed last year at the 10th anniversary when he turned up and celebrated it as being one of the best sovereign wealth funds in the country—in the world in the world. It is the only one in the country of any significance but it is one of the best ones in the world.Do you know what happened in the meantime? In the meantime the Government ceased contributions in 2010 at a time when the world’s interest rates were at the lowest that they had been in many generations. It said: “We are not going to incur that small amount of Crown debt at historically low interest rates to invest.” Well what has happened to the superannuation fund since? Well you know the Guardians of New Zealand Superannuation estimate it—this is not controversial—and show their rates of return every year and they show how much would be in the fund if the Government had made these contributions. The capital contribution is $16.3 billion worse—New Zealand is $16.3 billion worse off—than if it had contributed to the scheme as it was meant to do. On every front the Government gets it wrong.Then members on the Government side pretend that they are good managers of the economy. Why did they get cleaned out in Northland? Why did they get cleaned out in Northland? It is because the people know that that is just rubbish. That is rubbish. Exports as a percentage of GDP are down. They have got no long-term plan.A good Government builds a country. Everywhere you look National cannot build a country. It cannot build a country metaphorically; nor can it build a country physically. It does not know how to build houses and it does not know how to build an economy. National tears away at the foundations of future growth. National did eventually get to the point—and the Minister was good enough to say this in his introduction—of saying that KiwiSaver is a good scheme that it still believes in; just not enough to keep it working properly.This sort of short-termism is awful: no solutions despite the fact that National’s own Budget documents released just this week show exports dropping this year and next never getting much over 27 percent never hitting 28 percent of GDP to the end of the forecast period. Look at those members. They are quiet now. They know that they have not met their target of raising exports to 40 percent. It is a failing Government: no ideas on exports—no ideas on exports. Debt is rising. New Zealand has got high international liabilities and yet those keep rising too because we do not cover the costs of our imports and our interest bill and our outgoings for dividends through the value of our exports and our overseas earnings. As long as we have got a Government that will not invest in production that trend will continue.CHRIS BISHOP (National): Two people in the Labour Party have been very prominent in the debate so far on the Budget legislation—David Parker and David Cunliffe—and we wonder why that is. The Leader of the Opposition gave the worst Budget reply speech this House has seen for many a year and Cunliffe and Parker are doing the numbers and we know on this side of the House that the Labour Party is in disarray tonight because of the good Budget being promoted by this Government. I was meant to be at a Shihad concert tonight in Auckland. Sadly I am in the Chamber but I do have the call and it is good to see you again Mr Deputy Speaker.The Labour Party wants to say “gimme gimme” to the $1000 kick-start for KiwiSaver but actually on this side of the House we think it is a “nice to have”. When 2.5 million have signed up for KiwiSaver already in today’s economic climate it is a “nice to have” but it is not necessary. I will tell you what is necessary. What is necessary is to raise benefits for the first time in 43 years. Was it not interesting during the debate on the Budget when John Key announced that it was a National Government that was raising benefits for the poorest and the most hard up in our society? The silence and the looks on the faces of members on the Opposition benches were priceless because it is only the National Government that is delivering for those most in need in our society.Dr David Clark: I raise a point of order Mr Speaker. I am sorry to interrupt the member. I appreciate that it has been a somewhat wide-ranging debate so far but in my contribution when I talked about those benefits I linked them to the cuts in this bill. Is that what the member is doing or is he really off topic?CHRIS BISHOP: Speaking to the point of order I point out that it has been a very wide-ranging debate and Mr Parker’s speech was far more wide ranging than my speech.Mr DEPUTY SPEAKER: I do not need any more advice on this. It is robust it is late at night; some people will think we are clowns for still being here. In actual fact we are having a bit of fun. It has been wide ranging. The member himself uses wide-ranging interjections to the extent I was considering bringing my own earmuffs. I will monitor this very closely. Mr Bishop should continue but stick to the point.CHRIS BISHOP: At the risk of never being allowed to speak in the House ever again all I would like to say in closing is that I commend the KiwiSaver Budget Measures Bill to the House.JAMES SHAW (Green): Tēnā koe Mr Deputy Speaker. I rise on behalf of the Green Party to speak on the KiwiSaver Budget Measures Bill. We will be opposing this bill. This bill is one of five pieces of legislation introduced under urgency to give effect to particular elements of yesterday’s Budget—and what a Budget! What a Budget! Billed as a hardship Budget it included—let us be gracious here—a $25 a week benefit increase for families with children which we applaud; a Working for Families increase which we applaud; and an increase in childcare assistance. After 7 years in Government National has finally realised that it can no longer ignore increasing public alarm at the broadening and deepening of child poverty rates in New Zealand.When I was campaigning in Wellington Central in 2011 and going to the meet the candidates evenings I would talk about the 250000 children living in poverty. I kind of got that sort of blank look you get when you know that people do not really know what you are talking about. Three years later in 2014 when I was campaigning to the same people in the same halls around Wellington Central and I was talking about the 275000 children who were living in poverty I got absolute recognition and nodding heads. People really knew it was an issue and I will tell you why. It is because for the intervening 3 years that is what we campaigned on. That is what we talked about. We never shut up about it and a huge range of civil society organisations from Barnados Unicef Save the Children and others have made child poverty the political issue that it deserves to be.So we are going to claim some credit for the Budget—for actually making it a political issue for getting child poverty up on the agenda to the point that the Government has had to listen. It is great to see this Government adopt this as an issue even if it is a “weak tea just might work maybe” kind of approach. If you want the real thing then in 2017 I recommend you vote for the Green Party because we have been championing this cause for years and years and years. National has done what it has done not because it wanted to but because it had to because it became such an important issue.So I come to the bill at hand—what does the bill do? It removes the $1000 KiwiSaver kick-start contribution making it effective from the delivery of the Budget yesterday. The Government’s argument for this is to achieve fiscal savings and improve the value for money of the KiwiSaver scheme by lowering the headline cost. OK that is a fair enough objective but as has already been remarked on tonight this is a wildly successful scheme. About 15000 people a month sign up for KiwiSaver and they do so in large part because of the incentive scheme that is in place. That sign-up rate has slowed down not because the incentive is not working but because the rates of adoption are getting to saturation point. More than half of the eligible population is now a member of KiwiSaver but we also know that the group hardest to get to are the most disadvantaged right? These are people at the bottom end of the scale and these are the people who need the incentive more than anything. So although we understand that the Government wants to pay for the extensions to benefits that it described yesterday it is taking that money out of KiwiSaver and essentially moving it around in the same pot.Let us take a little bit of a closer look at some of the other things that happened in yesterday’s Budget. The jobseeker support and emergency benefit were down 5.7 percent. Supported living payment was down 1.2 percent. The sole parent support was down 1.5 percent. The accommodation assistance was down 0.8 percent. The hardship assistance was down 1 percent—and this one of the most successful schemes that we have to address poverty in this country is losing the main incentive to get people into the scheme. It is a “Peter and Paul Budget”. We are taking money from one and moving it around largely the same group of people.What we are proposing later on in this debate is putting in a Supplementary Order Paper the intention of which is to keep the $1000 kick-start payment for people who have a community services card. What we are suggesting is that we can meet the Government halfway. We are saying: “OK we understand that you want to eliminate what you see as a middle-class subsidy. You want to help to cut the costs of what is a pretty expensive scheme. We understand that. But if you really believe that yesterday was a hardship Budget that was designed to reach out to the most vulnerable people then support our Supplementary Order Paper to retain the $1000 kick-start for people who are on a community services card.”Why a community services card? Because that is the easiest simplest way to implement a proxy for people on low incomes. It does catch a wide array of income bands but we believe that it is the simplest best way to retain it for the people who need it the most who actually need that incentive the most. We also know that the overall cost of that to the Government will not be that great because it is adoption at the lowest end which is the hardest to get. We think that if you keep the incentive in place for the people who are at the low end you are going to continue to keep it for that vulnerable group. And because we know that without the element of compulsion rates of adoption will be reasonably low. The overall headline costs to the Government will not be nearly as great as they would be if you kept the overall scheme.Our preference of course is to retain the overall scheme. In fact Metiria Turei only a week ago launched a proposal for a kids KiwiSaver scheme which would also ensure that the most vulnerable children in society had a nest egg of up to $12000 by the time they got to the age of 18 which they could use for tertiary education or for a house deposit or similar purposes.Given that the Government has the numbers to pass this bill and to remove the $1000 kick-start contribution from KiwiSaver in its entirety what we are proposing to do is to limit the harm of that and to support the Government’s notion of yesterday’s hardship Budget by retaining the kick-start contribution for people who have a community services card. We believe that that will not be as expensive for the Government. We believe that that will be in line with the Government’s intentions yesterday of producing a Budget that is orientated at the poorest in society and it keeps in place the principles of what has been a wildly successful scheme. We do hope that the Government supports us on that. Thank you.FLETCHER TABUTEAU (NZ First): All this Budget did was remind me of the movie Groundhog Day. It was the same old promises and the same old apathetic thinking that we have come to expect from this Government. This is the same Budget we have seen for the last 7 years. I believe—I genuinely believe this—that the former National leaders who ran this country in their time are turning in their graves right now. Although those former leaders rose and fell on their principles and on what they believed in—what they believed in—this Prime Minister plays the politics of focus groups and plays superficial lip-service to what are critical issues in New Zealand. He is doing all he can to appease the masses. He compromises what wasonce a very long time ago actually a great party.Yet again we were promised a surplus. When the Rt Hon Winston Peters was speaking earlier yesterday I put it to some of the backbench National MPs that the finance Minister will never actually reach a surplus during his time serving in that role. I made the challenge and what was the answer? Well it was quite similar to now. I was expecting more of a response. Those National MPs went quiet. They went very silent. The derogatory shouting evaporated. It became a very quiet House to be in.This bill the KiwiSaver Budget Measures Bill is a simple onetechnically but the repercussions of it are quite significant and they will have huge consequences into the future. Without doubt this country will be undermined by yet another short-sighted decision supposedly to save on the bottom line in the moment. We are saving on the bottom line in the moment. What confused a few people who were listeningyesterday and I was one of them was that in Mr English’s speech—[Interruption] I will get to that Mr Seymour. In Mr English’s speech in the House he spoke of how providing an annual contribution of $521 per year and a kick-start of $1000 for new members would—and I quote for the members opposite—“provide a strong reason to join KiwiSaver.” “Yes fair enough” I said “I couldn’t agree more.” But then in his very next breath the Minister makes the statement: “Removing the kick-start payment … [will have] little or no effect on the number of people expected to join the scheme.” Which statement does the Minister stand by? Which one is true? They completely contradict one another. Let me tell you he should stand by the first statement because the second is patently wrong.As a lecturer in economics I would like to take the opportunity just to point out a few facts that Mr Seymour may have missed when he used the Coase theorem to debate in the House earlier tonight. Coase said himself that actually it was not really his theory at all. But more apt for this night’s discussion was that he said that his theory—like the ACT Party itself—actually bears no resemblance to reality and cannot be used in reality and that it is an economic theory that cannot be used in that way. What I would tell my students more specifically is that if we undertake an action we must consider its consequences. What consequences is this party hoping to achieve when it looks to remove the kick-start contribution from the KiwiSaver savings scheme of everyday New Zealanders? What is it that it is hoping to achieve? What it is doing is robbing from the next generation. Why are we robbing from the next generation? What is the justification? As far as I can see probably the only justifiable reason in their minds is to try to reach that mythical surplus which like Groundhog Day never changesyear after year. Promises are made and promises are broken.The Minister actually spoke so eloquently in his speech about spending wisely in order to generate significant long-term savings in the future and I will quote him: “Its social investment approach”—Dr Megan Woods: I raise a point of order Mr Speaker. I was reluctant to raise this point of order but I am having trouble hearing the speaker. We are not having contributions to the debate from members opposite but what we are having is a raucous racket that is only bringing this House into disrepute.Mr DEPUTY SPEAKER: The point is very well made. The members on my right should tone it down a bit. Carry on.FLETCHER TABUTEAU: I was quoting from the Minister: “Its social investment approach which is about targeted evidence-based investment to secure better long-term results for the most vulnerable New Zealanders. We’re willing to pay a bit more up front” he said “to get real sustainable change and in doing so we can generate significant long-term savings for the Crown.” It is pretty infallible logic but it is not being applied in this case. Why is that logic good in one circumstance but not good in this?For decades New Zealand First and those with common sense have been talking about the benefits to the individual and to the country of saving. Why? Because as was debated in the House just several weeks back we were told by this very Government how wonderful the Cullen fund was for example and how the asset of this Government was growing and circling that wonderful $30 billion mark. That kind of growth and those kinds of sums—well ahead of projections actually—are what a small country like this needs to help our people. This provides a financial stability and a confidence as we move forward with proportionately more New Zealanders moving into retirement. That large sum of money is working for the people of New Zealand. The KiwiSaver funds that are invested create so much wealth within New Zealand. The Minister is simply—as has been said so often tonight—robbing Peter to pay Paul. Well actually so he thinks. It is not as simple as that. Although a few balance sheets today may be changed around what he is doing is robbing from future generations to attain this mythical Budget surplus and he is removing a huge huge driver in the New Zealand economy.The point I make to this House today is that this is a disincentive. It is plain and simple. It was noted earlier that the Prime Minister himself at the inception of this wonderful scheme said there were not enough incentives in the programme and that New Zealanders needed more to get involved. New Zealand First argues that the Government is giving away too much. National will argue that it costs too much. The Government said that it has spent $2.5 billion on this scheme since its inception and that removing this initial lump-sum contribution will save approximately $120 million a year. That is over only the next 4 years actually. As the fund reaches a critical mass in terms of the people subscribing contributions will decline fairly rapidly over time. So these minuscule savings are in the now and actually do not go on for much longer. We are robbing billions of dollars in supplementary retirement income from our next generation. This small cut has a giant multiplier effect which has not been taken into account; and if it has it has been ignored. New Zealand First cannot support such short-sighted change that saves next to nothing today but costs so very much for our future generations tomorrow. It is an incalculable potential that the growing pool of wealth could have contributed to the New Zealand economy as investors sought to grow their returns. New Zealand First does not support this bill.JAMI-LEE ROSS (National—Botany): It is easy to see why the members on the other side of the House are so glum. They are so glum after yesterday’s Budget because there are tens of thousands of families across the country who are going to benefit from the package this Government has put together. The half a billion dollars of savings through this bill will enable us to deliver $790 million of funding to the children in this country who are most in need.I can tell those members that there are families and there are parents in this country who are saying: “I would rather have $25 a week in my pocket now than $1000 that can be used in 30 40 or 50 years’ time.” When we consider the Budget and we consider what New Zealanders need right now what they need right now is family support for those in hardship. It might cost half a billion dollars in savings to do this but ultimately there are 190000 children who will be better off through these changes and those members need to realise this. I commend this bill to the House.Mr DEPUTY SPEAKER: A 5-minute call—Jan Logie.JAN LOGIE (Green): I am a little bit at a loss as to whether it is even worth standing up to speak when all I can hear from that side of the House is a barrage of laughter and heckling and a round of applause for a speech that I think took less than a minute defending a policy that I think is actually indefensible. The last speaker Jami-Lee Ross stood up and tried to tell this House that the Government is being beneficent by taking half a billion dollars from some including very low-income people in this country who otherwise would have no savings whatsoever and are trying to survive and feed their kids while it gave tax cuts to the wealthiest people not that long ago and increased taxes by increasing GST on every New Zealander. This was not: “Take from here—this is the only place we can take it from to be able to give to this group.” There are other places. The Government could be more creative but it has not been. It has gone for the very easy option.I will say—and I have said it before—that when the economy is not working for everyone it is not working. We know this economy is not working when a quarter of a million children in this country are in poverty and when a measure which the Government is so proud of purporting to be $25 a week will not in fact be $25 a week in the hand for beneficiary families because they will be losing it through accommodation cuts and money being taken off in health costs and other abatements. So the Government is giving with one hand saying it is being so generous while it is taking with the other.I want to talk a little bit about inequality which is a real problem in this country. People in New Zealand are increasingly concerned about it. There are two types of inequality. It is a basic thing. There is inequality in relation to income and then there is inequality in relation to wealth. Income is pretty easy to understand. Wealth is something we do not talk about as much but in New Zealand the last survey that we—[Interruption]Mr DEPUTY SPEAKER: Order! If members want to maintain a discussion can they go to the lobbies.JAN LOGIE: Thank you Mr Deputy Speaker. I do not think they care. I do not think they care what other people think. I think they are just so pleased and proud of themselves for taking this money away from people that they do not need to listen.In 2003 and 2004 the top 10 percent of New Zealanders owned 51.8 percent of the net wealth of all households in New Zealand. Those people in that category averaged about $835000 worth of wealth each. The top 1 percent had 16.4 percent of the wealth in this country and averaged about $2.6 million each in their wealth and yet the bottom 20 percent of New Zealanders had zero or little wealth and some were in debt. This policy which provided $1000 in savings for people may have been the only wealth they had—the only chance they had to have some savings. That has been taken away by this Government. It will have a compounding effect on inequality in this country.The Government is saying: “We can’t. We’ve got no choices if we’re going to give $25 a week to people who have children who are dying through income-related poverty.” I would remind this House and members on that side that the wealth of the richest person in New Zealand is worth $7 billion while 20 percent of this country have zero or little wealth and many of them are in debt. This is at the heart of what this bill is about—the Government contribution to KiwiSaver enables some people to actually get some savings. We know that KiwiSaver can contribute to increasing inequality because people who are earning the most will get the most from their employer contributions and therefore they are able to go ahead and their wealth will breed more wealth and it grows. However for the people on the lowest incomes who are not able to afford those weekly contributions to KiwiSaver their wealth or lack of wealth will stay there. This bill does not help inequality in this country.Mr DEPUTY SPEAKER: A 5-minute call—David Seymour.DAVID SEYMOUR (Leader—ACT): I greatly enjoyed listening to the contribution of Fletcher Tabuteau. He told us that he was a lecturer in economics. Between you and me I think he has been telling a few bedtime stories. His declaration also reminded me of a quote by Margaret Thatcher: “If you have to tell them that you are a lady maybe you are not.” If you want to quote economists then maybe we should start with the wonderful Henry Hazlitt who said that the good economist looks at the long term and an average for all groups; the bad economist looks only at the short term for some. When we talk about this shift in resources within the Budget we are reminded of another thing that Fletcher Tabuteau said. He said it was a “Peter and Paul Budget” taking money from one person and giving it to another. Well I hate to tell you but that is what Budgets are about. If everyone was just going to keep the money that they already had we would not need to do any of this. We could just keep our own money and not have a Budget. But I know that members are very eager to get home so I will be as short as I can.The fact is that what this Budget has done is take money out of middle-class welfare—2.5 million New Zealanders; $2.5 billion—into savings and put it into another form of investment—that is investment in human capital the most important investment that any country can make in the long term.Clayton Mitchell: Are you getting a sore neck from all this bobbing around?DAVID SEYMOUR: Maybe just wait your turn. Oh wait you have had your turn and it was not very good was it? The fact of the matter is there is a real problem with this policy and I am sorry to disappoint members to my immediate left but this Government has shown tremendous courage in removing a middle-class welfare transfer. Would it not be nice—would it not be nice—if this Government could show the same courage when it comes to superannuation? Because the benefit that so many older generations got it is more than happy to take it away. It is more than happy to take it away from younger New Zealanders those who might have been enrolling for KiwiSaver in the future. It is more than happy to do that but it will not bite the bullet when it comes to the future liabilities for New Zealand superannuation which those same young people will now have to pay. This is the same $1000 that not so long ago National wanted young people to put into the same housing market that the Reserve Bank Governor is doing everything he can to deflate because he says that it is dangerous. So this cuts both ways. It is an admirable policy. It is an economically literate policy unlike what I hear from my right. It is a policy that I will be supporting. However would it not be nice if this Government had a little bit more of a long-term view and was a little bit more prepared to look into the future confront the challenges that this country faces and take on long-term superannuation reform? Thank you Mr Deputy Speaker.ANDREW BAYLY (National—Hunua): What a wonderful night to be here is it not? That was a fabulous speech. Unfortunately it was slightly confusing at points but it was a great start. And that lesson on economics I have just so much enjoyed that.All I want to say tonight is that I think that we should be celebrating that 2.5 million—2.5 million—people have joined KiwiSaver and got their $1000. They have got success but everyone still gets the $521 every year and through our generous home loan package they can still join up and enjoy and go forward and buy houses. I believe that this is a good thing and I commend this bill to the House.Hon RUTH DYSON (Labour—Port Hills): I am delighted at this peak listening time to have the opportunity to speak in opposition to the KiwiSaver Budget Measures Bill. This bill is clearly the result of the panic that Bill English went into when he got into his final preparation for the Budget and realised that there was going to be yet again for the seventh year in a row no surplus. He did everything he could to try to get some money together. Some of those measures were understandable; some of them I feel so strongly opposed to that I will be putting my vote against the bill—and this is included in the one that we are debating now.For many people they will never have the opportunity to have $1000 in their savings account and it is sickening actually to listen to members opposite who earn $150000 a year—and all that they have done for the last 3 days is stand up and say “I move that the question be now put.” For that they earn $150000 a year—and additional expenses on top of that of course. And yet when we leave tonight we will have people come in and clean our offices who earn less than $15 an hour and who are expected to keep their families on that sort of income. For those people who work as hard or harder than every member of Parliament and who have had the opportunity to have $1000 put into their savings accounts once they start contributing the little bit of money that they have—and some of them do not have it to spare; they have had to cut something in order to put money into their KiwiSaver accounts—to have that $1000 taken away from them and even more galling to have the members of the National Party laugh and say that that is a good thing is I think wrong. I do not agree with it as policy. I think it lacks vision it lacks compassion and it lacks any empathy at all in understanding how many members of our society have that inability to save for their future. When you are on $150000 a year you just take it for granted but if you are on $14 or $15 an hour you are not able to put that money aside for the future.It is a sort of vision that we should have for older New Zealanders. It is a sort of vision that we should have. We would like to see older New Zealanders being able to retire and have security in their income and more than just the basic superannuation. We have got a better superannuation scheme in New Zealand than in many other countries but a married couple still gets only 66 percent of the average wage as their total superannuation income. I would challenge members opposite to try to live on that without any other savings to fall back on. For day-to-day living it is OK except for when something goes wrong when your roof needs replacing when your washing machine breaks down or when you need to fix your car—big expenditure items. If there is no money in the bank those are the people who suffer. That is why I have always supported that kick-start payment being made to people who join KiwiSaver.KiwiSaver itself was a fantastic scheme and I want to pay credit to Dr Michael Cullen for his vision in saying that we need to change the savings culture in New Zealand and this was his way of doing that. Since it has been introduced we have seen the National-led Government make cuts to the integrity of the KiwiSaver schemeyear after year after year. At every opportunity Bill English and John Key have weakened what was a very strong scheme—weakened the integrity of the KiwiSaver scheme. The minimum member contribution was reduced. We have had the fee subsidy discontinued the compulsory employer contribution capped and the employer tax credit discontinued. It is not that we have suddenly decided to weaken the KiwiSaver scheme. This measure tonight in the KiwiSaver Budget Measures Bill is a desperate attempt to try to cobble together a little bit of extra money to make the surplus but it was—Mr DEPUTY SPEAKER: I am sorry to interrupt the member. The time has come for me to leave the Chair. I want to thank the House for the collegiality of the debate and for the spirit in which people have engaged tonight. I must admit that we have all learnt an awful lot specifically about the King of Belgium.Debate interrupted.Sitting suspended from12 midnight to 9 a.m. (Saturday)