Volume 692 Week 49 - Thursday 1 August 2013Text is incorporated into the Bound VolumeVolume 692 Week 49 - Thursday 1 August 2013[Sitting date: 01 August 2013. Volume:692;Page:12237. Text is incorporated into the Bound Volume.]Thursday 1 August 2013Mr Speaker took the Chair at 2 p.m.Prayers.Business StatementHon CHRISTOPHER FINLAYSON (Attorney-General)on behalf of theLeader of the House: When the House resumes on Tuesday 6 August the Government will look to progress the Government Communications Security Bureau and Related Legislation Amendment Bill and the Appropriation (2013/14 Estimates) Bill.Questions to MinistersGCSB Review of Compliance—Investigation into Leak and Authorisation for Release of Data1.GRANT ROBERTSON (Deputy Leader—Labour)to thePrime Minister: On whose authority did his Chief of Staff request that the Parliamentary Service provide access to information relating to Ministers and their offices and “any other relevant material requested” and did this take place after the Henry inquiry was told that Parliamentary Service would not release the information requested?Mr SPEAKER: Before I call the Minister my office has been advised that this answer may be longer than normal.Hon STEVEN JOYCE (Minister for Economic Development)on behalf of thePrime Minister: First can I congratulate Mr Robertson on his dancing last evening—Mr SPEAKER: Order! Would the Minister please just address the question.Hon STEVEN JOYCE: The Prime Minister’s chief of staff was acting with the Prime Minister’s authority when he asked Parliamentary Service to supply information relating to Ministers and their staff to the Henry inquiry. The member will be aware that the publicly released terms of reference for the inquiry clearly stated that stage one would include reviewing communications and copying equipment and records log books and any other material considered relevant to the persons and/or their officers who had or were likely to have had access to the compliance review report. At no point was it expected or desired that a journalist’s records would also be included in the inquiry. It is wrong that they were and the Prime Minister is extremely disappointed that the journalist’s records were sent to the inquiry. Let us be clear about what happened here: Parliamentary Service sent records that were not asked for to the inquiry and that is a serious mistake. The Prime Minister’s chief of staff asked Parliamentary Service to release information relating to Ministers and staff only not a journalist. He did so because he was giving consent to release the information for Government Ministers as flagged in the terms of reference. The Prime Minister also made it clear himself that he expected Ministers to comply. He notes that these issues are now before the Privileges Committee.Grant Robertson: I raise a point of order Mr Speaker. That was a very long answer from Minister Joyce acting for the Prime Minister but it did not respond to the second leg of the primary question.Mr SPEAKER: I think that on this occasion that is a reasonable point that is being made. Can the Minister on behalf of the Prime Minister respond to the second part of the question: did this take place after the Henry inquiry was told by Parliamentary Service not to release the information requested.Hon STEVEN JOYCE: My advice is that Mr Eagleson emailed Mr Thorn on 9 May—and of course that email was tabled in the House yesterday—to confirm that the Prime Minister wished him to make available the inquiry records in relation to Ministers and their staff. That is the instruction he is referring to in the primary answer.Grant Robertson: I raise a point of order Mr Speaker. I am sorry; that still does not answer the second leg of the question. The second leg of the question asked whether that took place after the Henry inquiry was told that Parliamentary Service would not release the information. All that Mr Joyce did then in his further answer was tell us something we already knew about an email from 9 May.Mr SPEAKER: It would be helpful if the Minister on behalf of the Prime Minister could address that particular fact. It is a primary question that was on notice.Hon STEVEN JOYCE: I understand Mr Speaker. My understanding is that this email occurred at the point where it was felt that Mr Eagleson would need to clarify that the Prime Minister and Mr Eagleson as his chief of staff had given permission for Ministers to be accessed and that was first. So I think we can assume that might have occurred after originally being told that they needed that clarification so it would be available.Grant Robertson: So to completely clarify the Henry inquiry was told by Parliamentary Service that it would not release the electronic information and it did release that information only after Wayne Eagleson sent an email on behalf of the Prime Minister?Hon STEVEN JOYCE: I am not sure I can be as emphatic as the member would like me to be. [Interruption ]Mr SPEAKER: Order!Hon STEVEN JOYCE: But I think that certainly we can take from the email that the chief of staff felt that he needed to clarify for Parliamentary Service that there was indeed a request to make available on behalf of Ministers.Grant Robertson: Did the Henry inquiry request and receive swipe card data for Andrea Vance on her movements in and out of this building after Wayne Eagleson’s email on the Prime Minister’s behalf requesting any other material be provided by Parliamentary Service to the Henry inquiry?Hon STEVEN JOYCE: I do not have that chronology to hand but what is clear—Grant Robertson: Oh yes very convenient.Hon STEVEN JOYCE: No what is very convenient is your question Mr Robertson. What is clear is that Mr Eagleson in no way asked for that information so whether it was supplied before or after is entirely incidental to Mr Eagleson’s email.Grant Robertson: When the Prime Minister said in answers to my written questions that his office became aware of the existence of emails between Andrea Vance and Peter Dunne discussing the Kitteridge report “as a result of a conversation with the Parliamentary Service” why was his office communicating directly with Parliamentary Service about records retrieved for the Henry inquiry?Hon STEVEN JOYCE: I think it is fairly straightforward. Mr Eagleson had told Parliamentary Service that it was entitled to provide the information with regard to Ministers. As we all know there was some concern expressed I think from Mr Dunne or from his office about that information being supplied and so therefore there was further conversation again I suspect wanting to know whether that information could be supplied and subsequently there was obviously a conversation with Mr Dunne. But this is all in relation to the Minister’s information and it was at the point where the Minister’s information was not able to be supplied that the clarification was sought.Grant Robertson: Is he aware of section 6(2) of the Parliamentary Service Act 2000 which states: “The Parliamentary Service is not an instrument of the executivegovernment.”; if so why did his chief of staff on his direction instruct Parliamentary Service to provide “any other relevant material requested by the Henry inquiry” to the inquiry?Hon STEVEN JOYCE: Because it was in relation to Ministers who had had a ministerial warrant that the Prime Minister had provided to them. The Prime Minister had made it clear to all his Ministers that he expected them to comply with the inquiry and supply and authorise to supply the relevant information. Mr Eagleson was following up that instruction with Parliamentary Service.Hon David Parker: It doesn’t wash.Hon STEVEN JOYCE: It does wash and you should pay attention.Grant Robertson: Why does he think it is appropriate for his chief of staff to put pressure on Parliamentary Service to release electronic records that it had originally declined to release to the Henry inquiry?Hon STEVEN JOYCE: Two points in response to that. Firstly it was actually in regard to Ministers who held a ministerial warrant and they hold that because they enjoy the confidence of the Prime Minister and he had made it clear that information needed to be provided to the inquiry. The second point is the contradiction—just a short time ago in this House the Opposition was baying for those emails between Mr Dunne and Ms Vance to be released. Suddenly it is holier than thou about the privacy of that information. You cannot have it both ways Mr Robertson.Grant Robertson: Is it correct that Peter Dunne received the Kitteridge report as the leader of a support party—as an MP in this House—not as a Minister as the Minister has just stated?Hon STEVEN JOYCE: I am not aware exactly on what basis he received that report but what I can tell you in relation to the emails and the information is that it was in relation to this matter as there was a ministerial warrant.Grant Robertson: Given that this is his inquiry and it was on his instruction that his chief of staff ask Parliamentary Service to access the electronic and phone records—and that when his chief of staff speaks to someone they are speaking to him—why will he not just take some responsibility for a fundamental breach of the rights of MPs and journalists in this building?Hon STEVEN JOYCE: The Prime Minister was making inquiries about his Ministers in the ministerial inquiry. It was not about their capacity as MPs it was not about journalists and with the greatest respect the irony of the situation is that the Opposition has been baying for this information and is not happy for it to now be released.Chris Hipkins: I raise a point of order Mr Speaker. On several occasions now the Minister has gone well beyond what had been pretty serious questions to him and has started to attack the Opposition. This is—Hon Annette King: Every answer.Chris Hipkins: In every answer that he has delivered he has attacked the Opposition. Previously in this House we actually had a standard that suggested that Ministers did not do that.Hon STEVEN JOYCE: In relation to that last question it contained any number of suppositions and made a political accusation and I think I was entitled to make a political response. [Interruption ]Mr SPEAKER: Order! I do not need any further assistance. On this occasion I think that the answer to the question was adequate and certainly not out of order in any way.Grant Robertson: I seek leave of the House to table an email from Wayne Eagleson on 9 May this year at 4.39 p.m. to Geoff Thorn in which he confirms that the PrimeMinister would like the Parliamentary Service to make available inquiry team records and other relevant material requested.Mr SPEAKER: Leave is sought to table that email. Is there any objection to that course of action? There is none. [Interruption ] I apologise. There was objection. It will not be tabled.Grant Robertson: John Banks objected.Mr SPEAKER: Order! That is every member’s right in this House.Economy—Business Confidence and Manufacturing Sector Performance2.MAGGIE BARRY (National—North Shore)to theMinister of Finance: What reports has he received on business and economic conditions in New Zealand?Hon STEVEN JOYCE (Associate Minister of Finance)on behalf of theMinister of Finance: There have been a number of reports in recent weeks that show business conditions are improving and confidence amongst New Zealand companies is increasing. For example just yesterday the ANZ issued its ANZ Business Outlook survey for July. It confirmed that overall business confidence increased three further points in the month with a net 53 percent of respondents expecting better times ahead. This is the highest level of business confidence since April 1999 or more than 14 years. Perhaps not coincidentally that was when National was last in Government. ANZ noted: “The latest lift in confidence is symptomatic of a broader expansion of the economy than we have seen previously.” It included a demonstration of confidence in the manufacturing sector which increased five points to a net plus 44 percent.Maggie Barry: What contribution do the medium-high tech and high-tech manufacturing sectors make to New Zealand’s economy?Hon STEVEN JOYCE: I am pleased to advise that the Minister for Economic Development released theHigh and Medium-High Technology Manufacturing Sectors Report today which outlines the substantial and growing contribution these two sectors make to the New Zealand economy. The medium-high tech sector exported goods worth NZ$2.8 billion in 2012. Exports by the high-tech sector grew from $139 million in 1991 to $1.4 billion last year. This sector has got a faster growth trajectory than the New Zealand wine industry. Within the Government’s Business Growth Agenda there are 58 specific initiatives to assist the high-tech manufacturing sector grow even larger so that it can continue to assist in providing higher incomes and more jobs for Kiwi families.Maggie Barry: What is the current state of the manufacturing sector particularly compared with 2008?Hon STEVEN JOYCE: Since the beginning of 2009 the manufacturing sector has grown by 9.2 percent. That is a significant turn-round from 2008 when manufacturing shrank by 12 percent in just 1 year. Since 2009 non-food manufacturing export volumes have grown by 14.6 percent. In 2008 by way of contrast they fell nearly 6 percent. Finally in June this year the BNZ - Business New Zealand Performance of Manufacturing Index was in solid expansionary mode at 54.7. This is the highest June result since 2004. It compares with 35.8 in 2008. So although individual firms are undoubtedly facing challenges the sector as a whole has made a lot of progress since the crisis of 2008.Maggie Barry: Has he received any reports of complaints about new investment in New Zealand manufacturing which is creating new jobs and helping families to get ahead?Hon STEVEN JOYCE: Well yes I have. I have seen a rather extraordinary press release criticising companies like Heinz McCain Foods and Call Active for shifting hundreds of jobs to New Zealand from Australia. Nothing seems to ever please the authors of this release. Having spent months complaining erroneously about a crisis inNew Zealand manufacturing they then criticise companies that want to move here and invest in manufacturing jobs. It seems their dislike of foreigners even extends to turning up their noses to companies that want to create jobs for Kiwi families. This mindless opposition to manufacturing moving here from Australia illustrates that this side of the House favours jobs and growth while the Labour Party and their mates in the Greens oppose every initiative to create jobs.GCSB Review of Compliance—Investigation into Leak and Authorisation for Release of Data3.Dr RUSSEL NORMAN (Co-Leader—Green)to thePrime Minister: How many emails did Wayne Eagleson and the Henry inquiry send to Parliamentary Service regarding the Henry inquiry and on what dates were those emails sent?Hon STEVEN JOYCE (Minister for Economic Development)on behalf of thePrime Minister: I can advise the House that Mr Eagleson sent two emails to Parliamentary Service regarding the inquiry one on 9 May and the other on 23 May. I am advised that the Henry inquiry sent a total of 39 emails to Parliamentary Service between the dates of 29 April and 6 June. I am happy to table a document now for the member that shows the breakdown of those dates and those emails.Mr SPEAKER: Leave is so sought to table that document. Is there any objection? There is none. It will be tabled.Document by leave laid on the Table of the House.Dr Russel Norman: Will the Prime Minister table the emails themselves?Hon STEVEN JOYCE: One of the emails from Mr Eagleson was tabled yesterday. I am happy to table the second one today. In relation to the emails of Parliamentary Service obviously it is a very high number. I would suggest the member put that request down in writing.Dr Russel Norman: How many of those emails were in relation to Andrea Vance’s records and were those emails in relation to Andrea Vance’s records from Wayne Eagleson and/or the Henry inquiry?Hon STEVEN JOYCE: Firstly in relation to Mr Eagleson’s emails the first one the House has seen. The second one is a very very short email which simply says “Thanks for that.” or something along those lines and is not in relation to Ms Vance. In relation to Parliamentary Service I have not seen all those emails on behalf of the Prime Minister but I have been provided with two. One again I think the House has already seen and the second makes it particularly clear that it did not want the call logs for two “numbers of interest” which were Andrea Vance’s numbers. It was particularly quite clear that it was not seeking those numbers.Dr Russel Norman: Is the Prime Minister concerned to find out that the Henry inquiry received Andrea Vance’s swipe card records on the authorisation of the general manager of Parliamentary Service?Hon STEVEN JOYCE: As you know the Prime Minister was very concerned about that and he made it very clear at the time that became public that he was concerned that that information had been provided.Dr Russel Norman: I seek leave to table an unpublished answer to a written question that establishes that it was the—Mr SPEAKER: Order! Can the member just clarify again what he is seeking to table?Dr Russel Norman: It is the answer to written question 08498—Mr SPEAKER: No no. Order!Dr Russel Norman: —which is not published. It is not available to the members of the House.Mr SPEAKER: Yes there is a 3-day stand-down before that information becomes available—Dr Russel Norman: Yes and I am—Mr SPEAKER: The easiest way for me to sort this out is that I will put the leave and it will be over to the House as to whether it is then tabled. Leave is sought to table an answer to a written question that is in the 3-day stand-down period so it would normally not be available. It is over to the House. Is there any objection to that course of action? There appears to be none. It can be so tabled.Document by leave laid on the Table of the House.Dr Russel Norman: Does the Minister consider that it is plausible that the Henry inquiry received Ms Vance’s swipe card records after the OK given by the general manager of Parliamentary Service—the highest officer within Parliamentary Service—while Ms Vance’s phone logs were released to the Henry inquiry by a low level contractor?Hon STEVEN JOYCE: It is apparent that the second part of Ms Vance’s phone logs was released by somebody who was not authorised to do so. In fact as we know the inquiry made it clear the moment it received that information that that was not something that it had sought. We also know that it had not been opened at any stage by the inquiry.Dr Russel Norman: Given that we now know that the release of the movement records was escalated all the way to the general manager of the Parliamentary Service does he consider that it is much more likely that the Henry inquiry was actually given the phone records—the phone records of a journalist—due to the pressure that was being applied by the Prime Minister’s office on Parliamentary Service?Hon STEVEN JOYCE: No absolutely not. I reject that assertion absolutely and entirely. The Prime Minister is on record all the way through making it absolutely clear that he did not consider it appropriate for either the swipe card access or the phone logs of the journalist to be provided. Note that that is now a matter for the Privileges Committee and I think it is appropriate that the Privileges Committee investigate that and have the opportunity to make the decisions that it sees fit.Dr Russel Norman: Given that the journalist’s movement records were released because it was considered a security breach issue does the Prime Minister now take responsibility for the fact that his inquiry—acting under his mandate—has asked for and received Fairfax journalist Andrea Vance’s building access records on the basis that investigative journalism is now a security breach?Hon STEVEN JOYCE: I completely reject that assertion by the member as well. The Prime Minister has made it clear in regard to the building access records that at the moment he was made aware of that he thought it was absolutely inappropriate. He also made it clear all the way through that the information being sought was in relation to the Ministers and not in relation to the journalist.Grant Robertson: Is it correct that Andrea Vance’s building access records were released by Parliamentary Service after Wayne Eagleson sent an email to it saying that it should release any other material requested by the inquiry?Hon STEVEN JOYCE: As I said in answer to a previous question—and I do not have the exact chronology—again it is not relevant because the chief of staff made it very clear that the information he sought was in relation to the Ministers and their staff not in relation to the journalist.Sexual Violence Crisis and Prevention Services—Funding and Review4.MELISSA LEE (National)to theMinister for Social Development: What announcements has she made to support sexual violence crisis services?Hon PAULA BENNETT (Minister for Social Development):Yesterday we announced funding of $1.37 million over 3 years to support the Auckland Sexual Abuse Help Foundation. The funding will contribute towards sexual violence crisis services it provides in Auckland and northern districts: a 24/7 telephone support service a call-out team of specialist trauma counsellors an acute crisis counselling service and court preparation and support services.Melissa Lee: What difference will this make for the Auckland Sexual Abuse Help Foundation?Hon PAULA BENNETT: As part of this funding there is an increase of $190000 per year and that is a significant rise in funds for them. The 3-year contract as well will provide certainty which the organisation asked for and we were pleased to be able to deliver. This funding is from multiple Government organisations and part of a joint agency approach to sexual violence. On that note I certainly want to acknowledge my ministerial colleagues and particularly ACC the Ministry of Justice and of course my own Ministry for Social Development which came to the party and were able to make this happen.Melissa Lee: What other announcements has she made to support the sexual violence services sector?Hon PAULA BENNETT: What is real is that we have got a much bigger problem than one organisation in Auckland can deal with no matter how significant it is and that we need to work on more sustainable funding solutions for the sector. I recognise that it has struggled at times to actually get the funding so that it can provide the services to those victims who are in real need. I will add that this is the first time there has been a lead Minister who has actually stepped up for this sector and tried to actually make a difference. I have commissioned an in-depth review which will look at the efficiency of funding provisions—[Interruption ]Mr SPEAKER: Order! I am now having trouble hearing the completion of the answer by the Minister.Hon PAULA BENNETT: It is kind of easy for Labour to sort of sit there and—Mr SPEAKER: Order! Just—Hon PAULA BENNETT: —bark but it did not make a difference when it needed to most. So there is a lot of work to be done in that area. We will be looking at the efficiency of funding provisions what drives that demand for services service duplication and gaps in the sector. These recommendations will actually mean that it is sustainable not ad hoc like it has been in the past and will make a difference to those victims who need it most.Sue Moroney: I wish to table the petition in my name that was put before the Social Services Committee and that called on the funding to be—Mr SPEAKER: Order! [Interruption ] Order! The member is now seeking to table something that is freely available to all members and has been presented to a select committee. Question No. 5 Phil Twyford. [Interruption ] Order! [Interruption ] Order! If members want to stay for the completion of question time I would appreciate some cooperation with interjections.Housing Minister—State Housing Affordable Housing and Mortgages5.PHIL TWYFORD (Labour—Te Atatū)to theMinister of Housing: Does he stand by all his statements?Hon Dr NICK SMITH (Minister of Housing):No. I made a statement earlier in the year that I thought Labour was genuine about its concerns about housing affordability. I was clearly mistaken having seen Labour’s policy and its opposition to freeing up new land in Auckland.Phil Twyford: How many of the 3703 empty State houses—up 40 percent since January last year—are in the wrong place or are the wrong size and how many are down to his incompetence in getting the 1290 Kiwi families in urgent need into homes?Hon Dr NICK SMITH: One thousand of the increased number of what the member calls vacant State houses are due to earthquake risk. Let me explain. Five hundred of those are earthquake-prone homes like those in this city of Wellington. I am proud that this Government has said that it is unacceptable to have State housing tenants in buildings that are earthquake-prone multi-storey buildings in this city where having had shakes today I think we would be putting people at risk. A further 500 homes are those that are being repaired in Christchurch and that is absolutely essential if we are at a rate of one new home per day urgently replacing those. I would also point out that what the member calls vacant homes are hundreds of homes that have been let but the tenants have not yet moved in. That is a misrepresentation.Hon Members: Oh!Hon Dr NICK SMITH: Well do the members opposite not—Mr SPEAKER: Order! That is quite a sufficient answer to that question.Phil Twyford: Why is he content to let Housing New Zealand staff take the blame for example when it said recently that staff need more coaching on how to manage the vacancies process and when will he take responsibility for the shambles created by him trying to turn Housing New Zealand into a real estate firm?Hon Dr NICK SMITH: The actual number of vacant properties that are ready to let—that is they do not need repairs and there is not a commitment for a person to move into the property—is about 400 which is about the same number as when the previous Government was in office. That is 0.5 percent of the 70000 State houses. I was in Australia just last week and there are equivalent vacancy rates in New South Wales Queensland and Victoria. The performance of Housing New Zealand in terms of the management of its stock is focused on getting as many families as possible safely into those homes we own.Phil Twyford: Why did he say that the Government would be sticking to its guns on the housing accord legislation when just this morning Auckland Council said it cannot see anything in the bill that will ensure that affordable housing is built?Hon Dr NICK SMITH: The legislation that we have before Parliament specifically makes reference to the housing accord. If the member reads the housing accord it very specifically makes mention of affordable houses. If we want to give the accord legal weight and we want more affordable houses in Auckland the member opposite would vote for the legislation that enables us to achieve that goal with Mayor Len Brown.Phil Twyford: Does he agree with Westpac economists who said today that the Reserve Bank plan to restrict low-equity mortgages will “hobble first home buyers while helping property investors ensuring [that] house prices keep marching higher” and why will he not support Labour’s policy of a temporary exemption for first-home buyers which is the kind of thing the Prime Minister was advocating only a few weeks ago?Hon Dr NICK SMITH: The Reserve Bank has not yet made its decisions about its loan-to-value ratio approach but I would note that the first suggestion that we should be using tools other than just putting up interest rates for financial stability was actually made by members opposite. When the Reserve Bank Governor has confirmed what he will be doing what I can assure the member opposite is that this Government will beabsolutely committed to standing behind first-home buyers. I would point out also that the best thing for improving homeownership is low interest rates and we have got the lowest interest rates in 50 years.Phil Twyford: When will he and his Government abandon their tired old 1980s supply side fixation on the housing crisis promoted by Don Brash and the other hand-picked Chicago school dinosaurs on the Productivity Commission and when will he realise that the solution lies in the kind of balanced supply and demand approach advocated by Labour?Hon Dr NICK SMITH: I am surprised that the member opposite refers to Murray Sherwin and Professor Sally Davenport as dinosaurs in regard to their recommendation that to improve housing affordability—Hon Member: They certainly are.Hon Dr NICK SMITH: Well they appointed them.Grant Robertson: Of course they’re dinosaurs.Hon Dr NICK SMITH: Murray Sherwin was appointed by the members opposite to senior roles in government. The fundamental point is is housing supply at the core of the challenge we face about houses? Yes it is and we are going to build a lot more houses.Rt Hon Winston Peters: Is the Minister aware that in the USA the EU the UK Japan and China interest rates are now at 1 percent or lower and that New Zealand’s interest rates are five to six times that so when in the last 50 years was New Zealand ever in that situation of having interest rates five to six times higher than the rates of those five capital centres of the world and why does he keep repeating the misnomer that we have the lowest interest rates in 50 years?Hon Dr NICK SMITH: I have checked the records and the last time interest rates were as low as they are now for New Zealand home buyers was in 1964 before I was born. For dinosaurs like Mr Peters—Mr SPEAKER: Order! The member will withdraw that comment.Hon Dr NICK SMITH: I withdraw that comment but I would note that the reason New Zealand’s interest rates are not as low as they are in the US and some other countries is that our economy is actually in far better shape.Rt Hon Winston Peters: Does the Minister not understand that interest rates are all relative and is it not a fact that our interest rates are five to six times higher than in the following markets: USA EU UK Japan and China? That being the case—even “Big Ears” can understand that—why does he keep on repeating that we have the lowest interest rates in 50 years?Hon Dr NICK SMITH: The reason I keep repeating that New Zealand has got the lowest first-home mortgage interest rates in 50 years is that they are the lowest—they are! I would much rather have a growing strong economy with joblessness coming down with strong economic growth than I would have compared with the countries that the member mentions. Finally in respect of interest rates I think they are the single-biggest factor that affect the costs for New Zealand families and we should be proud they are so low. When the member was a Minister last—Mr SPEAKER: Order! I have a point of order.Rt Hon Winston Peters: I raise a point of order Mr Speaker. You will recall that I asked the Minister as to whether he understood the fact that interest rates are always relative.Mr SPEAKER: Order! No.Rt Hon Winston Peters: Well I have not finished my point of order.Mr SPEAKER: I will give the member a bit more time.Rt Hon Winston Peters: Well Mr Speaker that is the question I asked and I am still waiting for the answer.Mr SPEAKER: No the member will resume his seat. The member asked two questions. That was the first part of his question and the second part of his question was why the Minister continued to repeat that New Zealand has had the lowest interest rates for some period of time. The Minister chose to devote his answer to the second question that was raised in the supplementary question.Electricity Market—Commentary and Alternative Approaches6.JONATHAN YOUNG (National—New Plymouth)to theMinister of Energy and Resources: Has he received any reports on alternative approaches to the electricity market?Hon SIMON BRIDGES (Minister of Energy and Resources):Yes I have. I have seen criticisms of proposals to move New Zealand to a single-buyer model for electricity: “It is like rebooting your computer and starting out with all the same problems again. Why do it? It does not do anything in terms of competition. I do not see any advantage in a single-buyer system. Why do it?”. These comments were made by Professor Frank Wolack in Wellington this week the same professor on whom the Opposition relied so heavily—in fact championed—in its so-called policy to tackle power prices. I would recommend the Opposition finds a new expert—one who actually agrees with them.Jonathan Young: What other comments did Professor Wolak make in his address on the electricity market this week?Mr SPEAKER: Order! The Hon Simon Bridges in as far as he has ministerial responsibility.Hon SIMON BRIDGES: Well I am glad the member asks. Professor Wolak told the audience that he had never said—Grant Robertson: I raise a point of order Mr Speaker. The Minister does not have responsibility for Professor Wolak and he began to tell us what Professor Wolak had said. He has no responsibility for—Mr SPEAKER: Order! When I accepted the question I decided the question is in order but the Minister in answering the question can answer in as far as he has ministerial responsibility. [Interruption ] I will accept a point of order from the Hon Simon Bridges.Hon SIMON BRIDGES: Speaking to the point of order I have responsibility for the policy in the electricity markets and that is what I am addressing.Mr SPEAKER: That is right and if the Minister when he gets a chance to answer the question can address it within his ministerial responsibility that is perfectly OK. Is there a further point of order?Chris Hipkins: I raise a point of order Mr Speaker. The issue is just the wider issue not with regard to the specific question of whether a Minister can now be questioned simply on what someone else has said whether they have ministerial responsibility for that or not. That is actually something that we would probably quite welcome on this side of the House: that we can now question Ministers on anything that anybody has said.Mr SPEAKER: I think the interjection that is coming confirms my thoughts too. It is quite common that Ministers are asked to make comment on a statement particularly when it is in reference to a report of which the Minister received which was a report by this particular gentleman. Can the Minister please address the question. Does he wish it to be asked again?Hon SIMON BRIDGES: If it could be asked again—thank you.Jonathan Young: What other comments did Professor Wolak make in his address on the electricity market this week?Hon SIMON BRIDGES: There were a number of comments that I would agree with made by the professor. He told the audience that he never said New Zealand generators were making excessive profits and that such a claim is extremely difficult to make. The Opposition might want to amend its dubious claims in newsletters pamphlets and the like that generators are making super-profits. The professor also reinforced this Government’s message that politicians should not be involved in setting prices in the electricity market citing international examples where prices have been kept low by politicians and the result has been power shortages. I am proud to be part of a Government where security of supply has simply ceased to be an issue that dominates the headlines unlike the 9 years of the Labour Government.Moana Mackey: Does he also agree with Professor Wolak’s comments that under the New Zealand market excessive prices are extracted by generators especially residential customers when water is short that generators can and do exercise unilateral market power without colluding that this is similar to what happens in other hydro-dependent markets and that it is hard to get competition to constrain these excessive prices when the generators are vertically integrated with the retailers as they are in New Zealand; if so what is he planning to do about it?Hon SIMON BRIDGES: Well I suggest that anyone watching should listen to the podcast he made where he made precisely the opposite points that the member makes. He resiled from comments about excessive profits and what he made very clear was actually rather than—Grant Robertson: Stop making it up.Hon SIMON BRIDGES: I am not making this up Mr Robertson. This is exactly what he said: what was necessary rather than some radical policy—[Interruption ]Mr SPEAKER: Order! [Interruption ] Order! The Minister was asked a question. He has a right and a duty to answer it and I want to hear the answer.Hon SIMON BRIDGES: What the professor made absolutely clear was that rather than a policy prescription pretty much like what Labour is proposing incremental reform and pro-competitive policy just like this Government is implementing is what is required.Jonathan Young: What is the Government’s approach to the electricity market and is it working?Hon Trevor Mallard: I raise a point of order Mr Speaker.Mr SPEAKER: It had better be a point of order.Hon Trevor Mallard: I just want to make sure that despite that seeming like an Opposition question it does not come off our numbers.Mr SPEAKER: The member is very lucky to be allowed to be here at question time with a point of order like that. Will the Minister please answer the question.Hon SIMON BRIDGES: Well it is hard to be heard over the braying seals opposite—Mr SPEAKER: Order! Just answer the question please.Hon SIMON BRIDGES: It makes it very difficult. [Interruption ]Mr SPEAKER: Order! I am not going to put up with this level of noise for much longer. A member may well be asked to leave the Chamber if this sort of interjection and barrage continues. Would the Minister now simply answer the question.Hon SIMON BRIDGES: Precisely as Professor Wolak advocated this week this Government is not following some wacky radical plan. We are implementing over time pro-competitive policy in the electricity market so that today New Zealand has the highest consumer switching rates in the world delivering real benefits—more than790000 switches. There have been four new retailers in the market in the last couple of years bringing the total of independent retailers to 14 with 22 in total. We are seeing also major retailers altering their marketing and pricing strategies in order to compete. This Government is doing what works and is continuing it.Moana Mackey: Does he believe that privately owned generators using older hydro assets should be able to keep the extra returns they make from the public water resource as the cost of new generation increases and drives up the long-run marginal costs?Hon SIMON BRIDGES: No because as Professor Wolak I believe also said about the issue of water the Opposition policy in so many words is economically illiterate. The fact of the matter is actually using water has an economic opportunity cost which makes it very important that we put prices on these things and there are huge capital costs involved in building hydro power—something that the Opposition and David Parker accepted in Government and somehow now do not.Mr SPEAKER: Order! That answer is quite long enough.Intelligence Agencies—Impact of Legislative Reform on Telecommunications Industry7.CLARE CURRAN (Labour—Dunedin South)to theMinister for Communications and Information Technology: Does she agree with the Prime Minister that opponents of the proposed GCSB and telecommunications interception capability and security bills are “politically aligned” and “misinformed”; if so are Microsoft and Google “politically aligned” and “misinformed” when they say the Telecommunications (Interception Capability and Security) Bill would slow innovation and economic growth and keep new innovative services out of New Zealand?Hon AMY ADAMS (Minister for Communications and Information Technology):I agree with what the Prime Minister actually said which was that a lot of people who would go along to the protests on the weekend about the Government Communications Security Bureau and Related Legislation Amendment Bill would be politically aligned or with the greatest of respect misinformed. With regard to comments made by Microsoft and Google in relation to an entirely separate piece of legislation no I do not agree with their views.Clare Curran: I seek leave to table—[Interruption ]Mr SPEAKER: Order! This is a seeking of leave.Clare Curran: I seek leave to table a list of submitters on the GCSB bill which links to the Telecommunications (Interception—Mr SPEAKER: That list of submitters will be available—Clare Curran: No no. The list draws the link between the GCSB bill and the Telecommunications (Interception Capability and Security) Bill.Mr SPEAKER: It is easy to resolve. I will put the leave that that document be tabled. Is there any objection? There is.Clare Curran: I seek leave to table a list of submitters to the Telecommunications (Interception Capability and Security) Bill which draws the link with the GCSB bill.Mr SPEAKER: Leave is so sought. Is there any objection? There is.Clare Curran: I seek leave to table a list prepared by Parliamentary Library of the number of media articles that have drawn that link between the two bills.Mr SPEAKER: I think that is getting very marginal but because it is Thursday I will put the leave. There is objection.Clare Curran: Is she aware that innovative New Zealand information and communications technology companies such as Catalyst and others preparing to invest in cloud capability say that the Telecommunications (Interception Capability andSecurity) Bill and the GCSB bill are creating investment uncertainty and mistrust in New Zealand - based cloud services for overseas customers?Hon AMY ADAMS: No I am not. But what I would say to that member is that she needs to be aware that the obligations on service providers exist under the 2004 legislation which the Labour Government passed and those obligations continue under the proposed Telecommunications (Interception Capability and Security) Bill which is now before this House. I would point out to that member that if there is an innovation impact on New Zealand from these bills which I do not accept the same would apply in Australia in the UK and in the US. We are hardly out of step with the rest of the world in this regard.Clare Curran: Did she consult with major service and technology providers such as Google Facebook and Microsoft before she brought this current version of the Telecommunications (Interception Capability and Security) Bill to the House; if not why not?Hon AMY ADAMS: Personally no I did not.Clare Curran: Does she agree that it is unacceptable that there has been no advice provided by the GCSB to the select committee hearing the Telecommunications (Interception Capability and Security) Bill and that the committee has blocked the GCSB from being asked to appear and if that is acceptable to her why is she condoning a process where legislators are expected to make decisions blindfolded?Hon AMY ADAMS: Firstly the proceedings of the select committee are matters for that committee. But no I am quite happy with that process because the Telecommunications (Interception Capability and Security) Bill—Hon Phil Goff: The Minister instructed the committee. That’s what happened.Hon AMY ADAMS: Well that might be how it worked under you Mr Goff not under us. The Telecommunications (Interception Capability and Security) Bill—[Interruption ]Mr SPEAKER: Order! Would the Minister please complete the answer.Hon AMY ADAMS: The Telecommunications (Interception Capability and Security) Bill relates to the obligations that telecommunications companies have so it is appropriate that they were the focus of the bill and the hearings. The legislation does not in any way change the right of any agency to access any communication. That will always be dealt with under separate legislative provision and will require a warrant or other lawful authorisation. Nothing in the Telecommunications (Interception Capability and Security) Bill changes that despite the scaremongering from “Chicken Little”.Clare Curran: I raise a point of order Mr Speaker. My question was quite specific. It said: “Does she agree that it is unacceptable”—Mr SPEAKER: I heard the question.Clare Curran: I have not heard an answer.Mr SPEAKER: No the question was far longer than that and it had numerous legs to it and the Minister has addressed that question.Clare Curran: I raise a point of order Mr Speaker. I put it to you that the Minister has not answered the question—Mr SPEAKER: Order! I have just ruled for the benefit of the member that I consider the Minister has addressed the question. To further raise it is trifling with the Chair and that is a serious matter. Has the member got a further supplementary question?Clare Curran: Has she sought or received advice on the impact of the Telecommunications (Interception Capability and Security) Bill on the cost of doing business in New Zealand and its impact on the information and communications technology industry; if not why not?Hon AMY ADAMS: Yes.SuperGold Card—Expansion of Programme8.Dr PAUL HUTCHISON (National—Hunua)to theMinister for Senior Citizens: What recent announcements has she made regarding the SuperGold card programme?Hon JO GOODHEW (Minister for Senior Citizens):[Interruption ] The members opposite should await their applause. I am delighted to have recently announced that the SuperGold programme has surpassed 10000 business outlets. In the last 18 months the number of participating businesses has nearly quadrupled. The continued growth and success of this programme means that older people can now get real value from their SuperGold cards. The real growth as shown on that graph has been under this Government.Dr Paul Hutchison: What types of new businesses have been added to the programme recently?Hon Members: The Green Parrot.Hon JO GOODHEW: I am happy to inform the House that the Green Parrot is not one of the new businesses. During May and June this year a SuperGold business recruitment campaign targeting the health and well-being sectors was undertaken. The campaign attracted over 1200 new businesses to the programme including dental services pharmacies physiotherapists optometrists chiropractors and nutritionists as well as home heating and insulation providers. Around 45 percent of these new businesses are located outside of the main centres.Public Transport Auckland—City Rail Link Funding9.IAIN LEES-GALLOWAY (Labour—Palmerston North)to theMinister of Transport: Can he guarantee that 50 percent of the funding for the Auckland City Rail Link will come from central government?Hon GERRY BROWNLEE (Minister of Transport):It is not appropriate to talk about the rail loop as a separate project but rather as a package of projects that the Government has announced it will have an involvement in with Auckland Transport. Those discussions are continuing at the present time. They are designed to work out the sort of cost-sharing arrangements that might be put in place and when they have concluded they will be reported publicly and the member will be able to make his own assessment.Iain Lees-Galloway: Was Mayor Len Brown misinformed or simply misled when he said on 27 June: “The Prime Minister has said 50-50 he has said the government will put up half”?Hon GERRY BROWNLEE: I can only repeat my previous answer which was that we have a suite of projects planned for Auckland. Discussions are ongoing with Auckland Transport about how they may be funded.Iain Lees-Galloway: Well then who should Aucklanders believe: the Prime Minister who told Len Brown that it would be a 50:50 split or the Minister who today is dancing on the head of a pin?Hon Clayton Cosgrove: I raise a point of order Mr Speaker. I think that my colleague is misleading the House.Mr SPEAKER: The member will be lucky to see the balance of question time.Hon GERRY BROWNLEE: This is one occasion where I do agree with the Hon Clayton Cosgrove. If I could dance on the head of a pin he and I could be in the circus with him as Parliament’s greatest comb-over.Mr SPEAKER: The Minister now has not addressed the question that was asked.Iain Lees-Galloway: I raise a point of order Mr Speaker.Hon GERRY BROWNLEE: I have not I cannot and I will not dance on the head of a pin.Mr SPEAKER: No no. It is Thursday afternoon but the question asked who Aucklanders are to believe etc.Hon GERRY BROWNLEE: No that was only part of the question.Mr SPEAKER: No the point to which the Minister is referring is actually a point of order. [Interruption ] OK I accept the point the Minister is now making.Iain Lees-Galloway: Well then Minister who are Aucklanders to believe: the Prime Minister who promised 50 percent funding to Len Brown or this Minister who cannot give a straight answer to save himself?Hon GERRY BROWNLEE: The last part of that question is completely out of order. I reject it and I will not answer the question any further.Mr SPEAKER: In actual fact I apologise to the Minister because I should have ruled that question out of order.Iain Lees-Galloway: Who are Aucklanders to believe: the Prime Minister who said that the Auckland rail link would be 50 funded by central government or this Minister?Hon GERRY BROWNLEE: Any comments that the Prime Minister has made about funding relate to the package of projects we are negotiating our way through with Auckland Transport. When those discussions are completed there will be a very fair and equitable arrangement between central government and Auckland Transport. Mr Brown as Mayor of Auckland is doing a very good job of understanding that it is internodal transport that is important for Auckland not just the fixation that Labour has with the rail loop.Iain Lees-Galloway: Why does the National Party find it so difficult to simply take the stance that the Labour Party has and make a commitment to Auckland to 50 percent fund the Auckland rail link?Hon GERRY BROWNLEE: Largely because the Labour Party has said no more roads of national significance no tunnel across the harbour no extension of the Auckland-Manukau Eastern Transport Initiative and the East-West Link no work on State Highway 16 no work on the intersections up by Albany but a rail loop at 50 percent of cost. That is not an answer for Auckland’s transport needs.Pest Control—Aerial Use of 1080 Poison10.RICHARD PROSSER (NZ First)to theMinister of Conservation: Does he stand by all his statements?Hon Dr NICK SMITH (Minister of Conservation):Yes.Richard Prosser: Does he stand by his statement on 18 July this year that “I am totally satisfied that 1080 is the most effective tool that we have to be able to ensure survival of many of New Zealand’s iconic native species” given that 1080 is known to kill all oxygen-breathing organisms including native birds?Hon Dr NICK SMITH: Yes I do. There was a very substantive inquiry by the Environmental Protection Authority into 1080. It concluded that it was safe and the most effective tool. I would also draw to the member’s attention the report by the Parliamentary Commissioner for the Environment that drew the same conclusion. Those members who advocate a ban on aerial 1080 are indirectly writing a death sentence for many of New Zealand’s birds like kiwi and they would also put key export industries at risk given the importance of 1080 for controlling TB amongst New Zealand’s animal herds.Richard Prosser: What reports if any has he received concerning a number of kiwi hand-raised by—Mr SPEAKER: Order! To be fair to the member his microphone came on very late in the question. Would he start that question again.Richard Prosser: Thank you Mr Speaker. What reports if any has he received concerning a number of kiwi hand-raised by the Department of Conservation and fitted with tracking equipment being killed by the 1080 that was dropped by the Animal Health Board in the Whirinaki State Forest in the winter of 2012?Hon Dr NICK SMITH: I do not have information on that specific incident but what I can say to the member is that if you look at the programmes where aerial 1080 is used and you look at the bird survey figures 12 months later 2 years later and 3 years later the evidence is overwhelming that for birds like kiwi like kākā like kōkako and like so many of our robins and other birds all of those populations increased because 1080 kills pests like possums and rats which are such a huge risk to New Zealand’s native birds.Richard Prosser: What precautions is he taking to ensure that no native species—kea in particular—are killed in a planned aerial 1080 drop to be carried out this year by the Department of Conservation over almost 114000 hectares of conservation land in the western Kahurangi including parts of the Kahurangi National Park?Hon Dr NICK SMITH: That is one part of an area of about 1 million hectares that will be treated with 1080. The criticism by the Parliamentary Commissioner for the Environment is in fact that we should actually be doing more. I tend to agree with that view simply because whether it be the Kahurangi National Park or whether it be so many of our other parks the evidence is overwhelming that 1080 is the most effective tool for controlling the pests that kill our native birds.Richard Prosser: I raise a point of order Mr Speaker. My question was specifically about what precautions he is taking—Mr SPEAKER: Order! I think on this occasion that particular part has not been adequately addressed but—Hon Dr NICK SMITH: Oh point of order Mr Speaker—Mr SPEAKER: No. I am inviting the member to repeat the question.Hon Dr NICK SMITH: I raise a point of order Mr Speaker. At the beginning of my answer I said that I did not have information about the specific drop in Kahurangi National Park which is what the member is now raising a concern about. I am more than happy to provide that detailed information but it is a legitimate answer for a Minister on a very specific question when there has been such a general opening question to say that no I do not have information on that.Richard Prosser: In fact the lack of reference to specific information was to the previous question.Mr SPEAKER: I think the easiest way forward is for the member to re-ask the question and for the Minister to answer it as he sees fit.Richard Prosser: What precautions is he taking to ensure that no native species—kea in particular—are killed in a planned aerial 1080 drop to be carried out this year by the Department of Conservation over almost 114000 hectares of conservation land in the western Kahurangi including parts of the Kahurangi National Park?Hon Dr NICK SMITH: Every year the Department of Conservation does dozens and dozens of these operations and I do not have the specific information on that drop. What I would say is that the overwhelming evidence and the post-drop surveys show that the number of birds recovers very substantially after 1080 drops because we push back on the pests that are killing so many of our native birds.Border Control—Joint Border Management System11.MARK MITCHELL (National—Rodney)to theMinister of Customs: What is the Government doing to improve IT processes for importers and exporters?Hon MAURICE WILLIAMSON (Minister of Customs):More good news. Today the Minister for Primary Industries Nathan Guy and I announced the launch of the Government’s $89 million Joint Border Management System. Importers and exporters can now submit shipment details electronically to a single point of contact through the Joint Border Management System trade single window rather than dealing separately with multiple Government agencies.Mark Mitchell: What are the benefits of the joint border management system?Hon MAURICE WILLIAMSON: Over the next 10 years the Joint Border Management System will generate benefits of $450 million. Savings will be made through the reduction of data duplication faster processing times connecting directly to the system and eliminating third-party transmission charges. The new system will also provide advanced risk management tools to support the Customs Service and the Ministry for Primary Industries to protect New Zealand. In short it will greatly benefit border stakeholders and the wider economy.Child Poverty—Measurement and Impact of Welfare Reforms12.HOLLY WALKER (Green)to theMinister for Social Development: When she said “Child poverty remains a serious issue and … all standard measures show rates have been flat since 2009” was she publicly accepting that there are indeed standard measures of child poverty?Hon PAULA BENNETT (Minister for Social Development):I have always said there are many standard measures. What there is not is an official measure for New Zealand.Holly Walker: If child poverty is a serious issue will she now adopt those standard measures she referred to as the official measures of child poverty and set binding targets to reduce them?Hon PAULA BENNETT: I think the point that the member makes that I am going to pick up is that there are many standard measures and that this country would spend at least 12 months debating which one to use. I do not think the country needs that debate; what it needs is action on child abuse and neglect.Holly Walker: How many families with children have been financially sanctioned since October 2010 under her welfare reform package and what is the human impact on the children whose parents have had their benefits cut?Hon PAULA BENNETT: I do not have that information in front of me. It was not in the main question. What I would say though is that it is also the length of sanction that is important. For the vast majority of them it is literally days and in most cases they actually do not get money coming out of their account—or in this case not going in—because they re-comply before that actually happens.Holly Walker: I seek leave to table this graph prepared by Parliamentary Library showing the dramatic increase in the number of families with children financially sanctioned since October 2010 to more than 8000.Mr SPEAKER: Leave is sought to table that particular graph prepared by the library. Is there any objection? There appears to be none. It can be tabled.Document by leave laid on the Table of the House.Holly Walker: In light of her previous answer that she would prefer to focus on abuse and neglect has she read the Child Poverty Action Group report showing a strong correlation between poverty and child abuse and how does she expect to meet the Government’s target for reducing assaults on children without also setting targets to reduce child poverty since the two are clearly linked?Hon PAULA BENNETT: I have read part of the Child Poverty Action Group report. To be fair I did not get it in advance like the member did or the media did so I have received it only this morning. But what I can say is that actually we never debated whether or not poverty was a factor but it is one of many. If you look at the reasons for child abuse and neglect—if one looks at sexual abuse actually it is not because they are poor it is because someone is pretty sick and has hurt a child and that does not depend on their income. So I would say that poverty unemployment harsh parenting styles poor educational attainment mental health fractured families drug and alcohol abuse and a history of having being abused as a child are all associated with child physical and emotion abuse and neglect and simply looking at poverty would be negligent to those children who need us most.Holly Walker: I seek leave to table the Child Poverty Action Group report Child Abuse: An analysis of Child Youth and Family data released yesterday.Mr SPEAKER: No. I presume it is a report that is freely available to all members.Questions to MembersEmployment Relations Amendment Bill—Submissions Received1.DARIEN FENTON (Labour)to theChairperson of the Transport and Industrial Relations Committee: How many submissions have been received on the Employment Relations Amendment Bill?DAVID BENNETT (Chairperson of the Transport and Industrial Relations Committee):As a large number of submissions have been received they are still being processed and final numbers are yet to be determined. However we understand that there may be many thousands of submissions.Darien Fenton: How many submissions have been processed and counted?DAVID BENNETT: With the large number the initial assessments are difficult but I am aware that approximately 12000 documents have been received. It is yet to be determined whether all of these are submissions.Government Communications Security Bureau and Related Legislation Amendment BillSecond ReadingHon CHRISTOPHER FINLAYSON (Attorney-General)on behalf of theMinister responsible for the GCSB: I moveThat the Government Communications Security Bureau and Related Legislation Amendment Bill be now read a second time . There has been a great deal of scrutiny and debate over this Government Communications Security Bureau and Related Legislation Amendment Bill. There has been a lot of uninformed commentary. There have been a number of examples of the great and the good the well meaning but impressionable being misled by ill-founded fearmongering. So at the outset let me make it quite clear: this legislation is not a revolution in the way New Zealand conducts its intelligence operations and national security. It is not a case of expanding the borders of some intelligence empire. This is about fixing legislation that at its best is not fit for purpose and at worst is broken.Under this bill New Zealanders can be confident that our intelligence agencies are acting in accordance with the rule of law. The bill sets out definitively what it is the Government Communications Security Bureau (GCSB) can and cannot do under the law. There are no grey areas. There are no loopholes. This is very important because of the status of national security in a democratic society. National security is vital for maintaining the freedoms and the way of life that we hold dear. It is vital for keeping us safe and free from harm. But national security tools if turned inwards and not subject to strict controls can erode that way of life and threaten the freedom of individuals.National security legislation must not have loopholes that can be exploited by those who would threaten our security who would threaten loss of life through terrorism or criminal activity. But equally national security legislation must not have grey areas of uncertainty or doubtful interpretation that allow the State gradually to extend its activities and creep into ordinary people’s private lives like some kind of growing shadow.The bill strikes the right balance. It makes amendments to three Acts with the three main objectives being to clarify what the GCSB can and cannot do to update the legal framework in response to the changing security environment and to strengthen the oversight of our intelligence agencies. Labour’s 2003 Government Communications Security Bureau Act sought to codify and make transparent existing practices of the then Government Communications Security Bureau. It failed. The Kitteridge report found that the 2003 legislation is not and probably never was fit for purpose. The bureau currently has three core functions: cyber-security and information assurance foreign intelligence and cooperation and assistance to other entities. Those three functions are retained under this legislation. For an organisation possessing the powers the GCSB does an unclear legal framework is simply unacceptable so the relationship between these three functions has been set out in much more explicit terms than in the existing legislation. Between 2003 and 2011 there were 88 instances of surveillance that highlighted difficulties of interpretation. There is a grey area in the current law and it arises because of a lack of clarity over the legitimate activities of the GCSB in those three different functions. That grey area disappears under this legislation.On the matter of assistance and cooperation Labour’s 2003 Act said that the GCSB could assist other public agencies in New Zealand in the performance of their functions and also to prevent and detect serious crime. It authorised explicitly to obtain foreign intelligence the surveillance of foreign organisations and individuals—organisations and individuals who in some cases may make contact with New Zealand citizens and residents. But the law also said in apparent contradiction that the GCSB must not intercept the communications of New Zealand citizens or permanent residents. In hindsight this was a recipe for confusion. Parliament had intended something straightforward that the GCSB should target foreign nationals only when gathering intelligence under its second function and in addition the GCSB should also be available to assist agencies such as the police and the SIS in their legitimate warranted domestic activities. But the wording was contradictory and unclear. The GCSB acted according to its internal advice to fill this grey area. That advice was in keeping with the intention of those who passed the Government Communications Security Bureau Act in 2003 but it may or may not have been justified by the words of the statute itself.Ambiguous law which leads to secluded decision-making on a case by case basis is unsatisfactory so we are taking these steps to overhaul the legislation and make it fit for its original purpose. The responsible thing for this Parliament to do is to clarify the Act to specify which agencies the GCSB may assist and to what extent; to remove ambiguity; and to increase oversight from outside the agency. The question of oversight is a very important one generally not only in relation to the GCSB. Former GCSB head Sir Bruce Ferguson recently implied that he wished there had been greater oversight of orders he issued as head of the Defence Force classifying some journalists as subversives. This week he acknowledged that he had never thought of journalists as the enemy and expressed his disappointment that no one had since overturned the orders he could not remember making. It is a reminder that memory can fail us. Some commentators including Sir Bruce have opined that the questions around the GCSB represent something new about the way intelligence operates in this country. That issimply untrue. The problems of drafting and legislative interpretation date back to the passage of Helen Clark’s 2003 legislation.This bill is not revolutionary. It is not an aggressive expansion of State powers. Its purpose is to provide concrete rules that leave less room for uncertainty. This is evident from the treatment of metadata in the bill. There has been much talk of metadata recently. It has become something of a buzzword.Rt Hon Winston Peters: This is quite sad. This is quite sad.Hon CHRISTOPHER FINLAYSON: But there is no magic in metadata I say to Mr Peters. In this bill metadata is treated as any other communication. This bill authorises the interception of certain communications. Communication does not differentiate between data and metadata for the reason pointed out by a number of submitters: we do not have a clear definition of metadata. The type and number of ways in which data can be described and indexed—that is the categories of metadata—are growing all the time. If we included a definition then we would risk leaving loopholes as new technologies emerge or new business systems are developed. We do not want loopholes that expose New Zealanders to unnecessary risks because our legislation cannot keep up with technology. Nor do we want amorphous gaps in the legislation that could allow agencies to exceed the powers intended for them by incrementally extending definitions by analogy.This bill takes into account national security and privacy. The issue is not national security or privacy; it is both. National security is about protecting our citizens and the rights and the freedoms we value. The legislation is sensitive to those rights and freedoms. In conclusion the bill has been subject to extensive discussion and debate which on occasion have obscured this very important issue. The bill before us today incorporates 19 recommendations endorsed by the Intelligence and Security Committee—and it is important to say that they reflect public submissions—and there will be further changes which have been flagged publicly in a Supplementary Order Paper. As I say this bill does not represent an extension of powers but a clarification. I commend the bill to the House.DAVID SHEARER (Leader of the Opposition):Labour opposes the Government Communications Security Bureau and Related Legislation Amendment Bill. We oppose it not because we do not accept that there are serious problems with our intelligence agencies and not because we do not think that changes in law are not necessary but because the Prime Minister who is responsible for our intelligence agencies has simply not made the case for why we need to ram through this legislation so quickly without taking a proper look at the critical issues right across our intelligence agencies—not just with the Government Communications Security Bureau (GCSB) but right across the intelligence network. I asked John Key whether he had any evidence that New Zealand would be more at risk if this legislation was not passed through and he simply could not make that case. He also could not explain why if changes are so urgent he did not act a year ago when he found out the problems and put urgent legislation through then.This bill has been rushed and it has been poorly informed. The Prime Minister denied my request for the Intelligence and Security Committee to hear the SIS the Defence Force and the Police and how they were going to fit with the GCSB and why they needed the GCSB’s support as they had described. He turned that down and he did so because he did not want to take a closer look at what the problems really were. He wants this off the political agenda and that is the scenario we are looking at. He knows that people do not believe his explanations. New Zealanders do not believe his explanations. They are losing trust in his oversight and they do not believe that he is passing the law for the right reasons. He just wants the spying scandal to go away but it simply will not go away.The tragedy of this is that it is a missed opportunity for New Zealand. It is an opportunity we could have had to pass legislation that would restore Kiwis’ confidence in our intelligence agencies so that people know we are operating in their best interests and that we have got the balance right between security on the one hand and their privacy on the other. That is why Labour has argued that we need a full and independent inquiry across our intelligence community before we put legislation in front of this House.New Zealanders’ confidence has been shattered by the recent events in our intelligence agency. It has been a complete train wreck. We have seen a litany of failures—the GCSB illegally spying on Dotcom. And remember we would not be here putting this legislation through if it had not been for Dotcom and the fact that Bill English was trying to hide the illegal spying by the GCSB on Dotcom from the courts. That is a fact. We then found out there was illegal spying on many other New Zealanders. We then found out that John Key has shoulder-tapped a mate of his to become the head of the GCSB. We have heard now in this past week that a New Zealand journalist was spied on and tracked in Afghanistan and our agencies were complicit in that. Now we have got officials tapping into journalists’ phone records right here in our Parliament. The GCSB of course was involved in that too. The Henry report actually states that it had a “Substantial” role particularly in the gathering of records.But of course John Key says it is nothing to do with him—nothing to see here nothing to be worried about! It is the Parliamentary Service’s problem. It is David Henry’s problem. It is somebody in the GCSB’s problem. It is the legal adviser’s problem. It is somebody who had a brain fade’s problem in the GCSB. Through all of these scandals John Key has been trying to pass the blame on to somebody else. When he does get caught out we have to drag the truth out of him. Well I say to Mr Key that it is time to stop making excuses. A serious mistake has been made. Stop blaming others and start taking some responsibility for the actions of the agencies that you lead.Today was astonishing. Mr Key took the opportunity on breakfast radio to announce that there is the existence of al-Qaeda threats. This was I believe reprehensible. We have seen the pattern before—weapons of mass destruction. We have seen the Boston bombings brought into the debate around the GCSB bill. But in this case there is no context there is no detail and there is no ability for him to give context or detail. He is using his privileged position as the head of our spy agencies to give himself political gain. That is reprehensible. He is scaremongering and it is designed to shift attention away from the facts of the case and the train wreck that is this bill and what is around it.But here is the second thing that I find so astonishing about the Prime Minister coming out and saying something like this: it is incredibly stupid—it is incredibly stupid. Why do you not send a postcard to people who are threatening us saying: “We’re spying on you.”? It is incredibly dumb. This is notBoys’ Own . This is serious. I have spent 7 years in the Middle East alongside people who have let off bombs and my family was in a hotel where a bomb went off and killed 40 people. So does that make us feel safer—that somehow he could announce to everybody that these people are going to be spied on? Well I think it is extraordinary. Apart from anything else we actually have agencies our intelligence agencies working on it. Those intelligence agencies are actually doing a pretty good job. They do not need to have their activities dragged into the public arena for a man’s political gain in order to help them with their jobs. In fact they have definitely just had their jobs hampered as a result of that.New Zealanders want to be able to trust our intelligence agencies again and to know that they are doing good work and they are properly policed but that will not happen when all the power continues to rest in one person unlike in any of the other countriesthat we are close to. The Prime Minister appoints our top spy and he heads up the committee that provides the oversight so he is in charge of operations and he is also in charge of oversight. He chairs that committee. On top of that he has the casting vote. He appoints the Inspector-General of Intelligence and Security and the Commissioner of Security Warrants.Let us just go back again to where we started with this. It was about Dotcom. The only reason we got to hear about that was because Mr Dotcom revealed it in court. Otherwise we would not have heard anything—we would not have heard anything. We are setting up a system designed for cover-ups. We are setting up a system that simply will not work. The real shame about this is that we could have a much better system. In fact I would go as far as this. I went and saw Mr Key. I said: “We’re prepared to work with you.” He said: “Doesn’t matter. We’ve got Mr Dunne. We’re chucking a bit of stuff at Dunne he’ll get across the line and we won’t need you both.” That is the extent of the negotiations with this side—no phone calls no approaches no nothing. I will say right now that Labour will work with the Government on an independent inquiry with terms of reference that can be agreed right across Parliament and that we will work with you to get good law that will provide the confidence that New Zealanders need in order for our intelligence agencies to function in the proper way.Hon TONY RYALL (Minister of Health):It is a shame that the Opposition leader did not apologise for the piece of legislation that his Government previously passed—it actually produced the bill here today; this bill fixes the 2003 legislation passed by Labour. This bill the Government Communications Security Bureau and Related Legislation Amendment Bill is about the security and the public safety of New Zealand. It tightens up the law it strengthens oversight and it limits whom the Government Communications Security Bureau (GCSB) can work with—it tightens up the law it strengthens oversight and it limits whom the GCSB can work with. It fixes the problems of the 2003 legislation.The security of the nation is important as is our public security. That is the reason why this important piece of legislation is before the House now. As result of the select committee process—which was not rushed and was not meaningless; it was focused and it dealt with the issues at hand—a number of changes have been made to this bill which strengthens oversight limits whom the GCSB can work with and tightens up the law.The bill provides for an independent review of the operations and the performance of the GCSB and the SIS in their legislation and thereafter every 5 to 7 years. The Inspector-General of Intelligence and Security who under the Labour legislation operated in singular status will now be supported by a two-person advisory panel making oversight of the intelligence agencies considerably stronger. No other agency can be added to the list—which consists of the New Zealand Police the SIS and the New Zealand Defence Force—to whom the GCSB can provide assistance unless Parliament agrees to change the legislation. This is a significant strengthening of Labour’s legislation which in effect would have allowed the GCSB to work with any agency throughout New Zealand.The GCSB will be required to report annually on the total number of instances in which it has provided assistance to the New Zealand Police the SIS and the New Zealand Defence Force. That is added oversight; more information. The intelligence agency will also be required to report annually on the number of warrants and authorisations issued. The Intelligence and Security Committee will for the first time hold public hearings annually to discuss the financial reviews of the performance of the GCSB and the SIS. In addition a set of guiding principles is being added to the Act.I think that list makes it very clear that this bill has come out of the Intelligence and Security Committee incredibly strengthened from the provisions that currently exist inthe law. We have toughened up this law we have improved and strengthened the oversight and we have severely limited the agencies with which the GCSB can cooperate unless Parliament agrees.The GCSB has three main functions. I think it is important for New Zealanders to know that their public safety and security are protected and contributed to by these three provisions. The first is information assurance and cyber-security. The GCSB has a lot of very smart people and smart technology. This smart technology people and experience can be used to help New Zealand corporates protect themselves from international cyber-attacks. Many of our leading exporters have intellectual property and have important information stored in their computer systems and international interests want that information. We need to use the skills that the GCSB has to protect not only those organisations vital to New Zealand’s infrastructure but also the Government organisations vital to our Public Service infrastructure in New Zealand.We know that these cyber-attacks are increasing around the world and already a number of incidents this year have been logged with the National Cyber Security Centre—a larger number of attacks than last year. All around the world nations are grappling with this challenge and that is why the GCSB’s specialist skills are so important. This legislation sets the rules around the use of those powers and those skills in order to help protect both the Government and the key private sector information technology infrastructure here in New Zealand. There are very strict rules around what information can be used and provided for but that is about helping protect information technology systems. That is its first use.The second use of the GCSB comes to foreign intelligence. This is the largest part of the GCSB’s intelligence. It is what ordinary people would describe as spying. This involves the capabilities intentions and activities of foreign persons and organisations. It has nothing to do with New Zealanders; it is all about foreign people and their activities. As the Prime Minister has said today the contacts that people have with al-Qaeda - related terrorists are such that we do need to have this skill and the ability of the GCSB to—Grant Robertson: What rubbish. What absolute nonsense.Hon TONY RYALL: “What absolute nonsense.” says Grant Robertson. What would he know? What would he know? This is important. The legislation makes it clear that the GCSB cannot spy on New Zealanders when it has these functions.The third more controversial power that this legislation puts with the GCSB is its ability to assist other agencies. This is where the whole Kim Dotcom situation has come from. When the legislation was passed in 2003 everybody involved in that legislation from the Prime Minister down thought that the legislation gave the ability to the GCSB to work with other agencies such as the New Zealand Police under their warrant capacities; to actually use the GCSB technology to assist the police. So the police had to go through their processes to get a warrant but they could use the GCSB technology in order to exercise that warrant.But the courts found that the 2003 legislation was not up to scratch and said that the GCSB could not share its capacities or make its systems available to outside agencies. The Kitteridge review as the Attorney-General has said found 88 cases of assistance over 10 years. That assistance has stopped pending this legislation and because the GCSB has specialist and unique capabilities we need to be able to provide that for other agencies. In the 2003 legislation it was the intention of the Prime Minister at the time Helen Clark that the GCSB could make that expertise available to any range of agencies—Grant Robertson: No that is rubbish.Hon TONY RYALL: That is what the law says.Grant Robertson: That is absolute nonsense.Hon TONY RYALL: That is what the law said—to any agencies—and our Government has made it clear in this legislation that we are limiting it to three: the New Zealand Police the SIS and the New Zealand Defence Force. What it means is that the police can go and get a warrant and that warrant can be supported by the skills and capacities that the GCSB has. The GCSB cannot keep the information because the information is collected under the police warrant. So it can do nothing with that information. It can use it for example to assist the New Zealand Defence Force but only under the rules and requirements—and similarly with the SIS. There has to be a warrant signed by the Prime Minister and the Commissioner of Security Warrants before the GCSB can make its systems available. The information cannot be used by the GCSB.I think there is going to be a lot of scaremongering from parties opposite on this legislation because it is all about politics. Actually this is important legislation and it has come out of the select committee strengthened because we are toughening the oversight provisions we are tightening up on the looseness of the previous legislation and we are restricting whom the GCSB can provide its support to. These are important agencies. Their work does not have the level of scrutiny of other public agencies but this bill will allow the select committee to have an annual review. It will allow there to be financial review it will allow there to be public awareness—with public attending much of that review—and we will also be having a review in the law on a regular basis every 5 to 7 years to review how the GCSB is doing.This is important legislation. It does make a difference to the security and the public safety of New Zealand. I think it would be good if we can get back to the time when the major parties in New Zealand recognised their responsibility for the security and the public safety of New Zealanders because indeed that is what this legislation does.GRANT ROBERTSON (Deputy Leader—Labour):This legislation the Government Communications Security Bureau and Related Legislation Amendment Bill degrades our democratic process. The way in which this Government—John Key Tony Ryall and the rest of this Government—has gone about passing this legislation through the House degrades our democratic process. It is a political response from this Government to a serious problem and issue. It is all about the politics on that side of the House. John Key does not want the New Zealand public talking about the Government Communications Security Bureau (GCSB) because his management of the GCSB has been incompetent. It has degraded to New Zealanders an agency that they should have confidence in.The trust and confidence of New Zealanders in our intelligence agencies is broken and the person responsible for that is John Key. He has brought this legislation to the House to put a band-aid over the problems he has created in the hope that they will go away. Well they will not go away because New Zealanders are rightly concerned that this legislation gets out of balance the balance between security and privacy. New Zealanders rightly jealously guard their privacy. But at the same time most New Zealanders understand that we have a need for security and intelligence agencies. Labour has always supported security and intelligence agencies doing the work that we need them to do. For the agencies to operate in a way that New Zealanders can have confidence in New Zealanders must trust those agencies and that trust has been broken by this Government.We need strong security and intelligence agencies operating under good oversight that New Zealanders can have confidence in. This bill will not deliver that. Before I go any further I want to say something in this House. This is an important piece of legislation. It has created enormous controversy around New Zealand but the PrimeMinister of New Zealand cannot even be bothered to show up today to give a first reading speech about a bill that is so important and so significant to—Hon Member: Point of order—The ASSISTANT SPEAKER (H V Ross Robertson): Order! I can anticipate the point of order. It is not proper for members to refer to the absence of any member because all members at some stage need to be away from the House for public business or otherwise.Hon Trevor Mallard: I raise a point of order Mr Speaker. I think if you look at the Standing Orders and the Speaker’s ruling on this matter they refer to “current absences”. Saying someone did not make a speech did not lead the speech on a bill that he is responsible for may indirectly say that—[Interruption ]The ASSISTANT SPEAKER (H V Ross Robertson): Order! Order!Hon Trevor Mallard: Mr Assistant Speaker are you going to deal with that?The ASSISTANT SPEAKER (H V Ross Robertson): I am listening closely to the member.Hon Trevor Mallard: Well it is a relatively simple matter. My colleague was not referring to the absence of a member because he was referring to something that was in the past.The ASSISTANT SPEAKER (H V Ross Robertson): Order! Can I just say to members that it is not in order to refer to someone as being absent from the House but to say that someone will not take a speech or do something like that is in order.GRANT ROBERTSON: New Zealanders should have heard a speech today from John Key. John Key is the promoter of this legislation. John Key is the person who wants to extend the powers of the GCSB at the very time all around the world people are expressing concern about their privacy and expressing concern about what will happen to their communications. Tony Ryall tells this House that this is a serious matter. John Key throws al-Qaeda around today but he will not give a speech in this House to promote his bill and that is shameful.Today John Key decided to throw out one of his weapons of mass distraction. He decided to throw out another one and this time it was about the threat of al-Qaeda in New Zealand. The one thing I want to say about that—and David Shearer has already dealt with this very well—is that there are already agencies in New Zealand to deal with those sorts of threats. There are already laws in New Zealand to deal with those sorts of threats. The GCSB can already deal with those threats. John Key is simply throwing out that as a weapon of mass distraction because he knows that this legislation is wrongly created and has been shoved through under the wrong process.The other thing that I want to talk about with regard to the way this bill has gone through is the fact that it is likely that today this bill will pass by one vote in this House. I think everybody in this House including the Prime Minister would agree that legislation of this type should have a large majority of the House—broad support within the House—to pass. But this Prime Minister John Key has not tried to get that. He has struck a political deal with Peter Dunne. To hear Peter Dunne say: “Well willing buyer willing seller.”—is that what our law has come to under this Government? I am half expecting to see the Order Paper on TradeMe with a “Buy Now” sticker beside it because that is how Peter Dunne and John Key are treating our legislation—willing buyer willing seller.Well I say to Mr Dunne that he has expressed a lot of concern in recent days about the private communications of people inside this Parliament. If he really believes that and if he really believes that New Zealanders’ privacy—their emails and their phone calls—deserve some kind of protection then he will vote against this bill today. If he had a shred of dignity left in this House he would vote against this bill today. I call onPeter Dunne to come to this House and vote against this bill today because he has the opportunity to do that and that would mean that we can go back to have the proper review that we need of all of our intelligence agencies so that we can come up with the legislation that is appropriate for the times for our security and intelligence agencies that gives the kind of oversight that New Zealanders would expect and that ensures that the trust and confidence in our agencies is rebuilt.That is why the Labour Party has said from day one that we want a review of all of our intelligence agencies. The Prime Minister actually had a review of the SIS under way and he pulled the plug on it and has never explained to this House why he did that. We need to see all of those intelligence agencies together. We need to see what will work for New Zealand’s security and what will help protect New Zealanders’ privacy in the future. We will get that only with a proper independent review and inquiry.We do need better oversight of our intelligence agencies. David Shearer has already run through the list of roles that the Prime Minister plays in overseeing our democratic agencies. He is our watchdog. He is the person who on behalf of New Zealanders should be making sure that those intelligence agencies work properly. He is not up to the job. He has proven that he is not up to the job. He appoints his mate as the director. We have to drag that information out of him. He stuffs up the Dotcom raid and then he works with Bill English to cover that up. He is not capable of being our democratic watchdog over these agencies. We need to ensure that we have a broad parliamentary oversight. We need to relook at the Intelligence and Security Committee to ensure that it actually provides that proper oversight. There have been some useful changes made in the area of oversight through this process but they are not enough to rebuild the trust and confidence that has been broken in this process.I want to refer briefly to a couple of the submitters because I think it is important to do that. It is very unusual for the Privacy Commissioner Marie Shroff to come to a select committee and to say that she wants a bill to stop. But what she said was that the effects of this legislation on individuals are potentially very significant. That is what she said. And she said in particular that it is not clear the type and level of oversight that is appropriate. She recommended that the bill not proceed.Then the Human Rights Commission used its statutory power to report directly to the Prime Minister—only the fourth or fifth time that it has ever done that in its 20-odd years of operation under the Act that it has at the moment. It said: “Stop. Do the review. Make sure that there are adequate safeguards and oversight in place.” because it was not confident they were there. The Prime Minister’s response to that—John Key’s response to that—is to threaten the funding of the Human Rights Commission. That is John Key’s response to that. The moment an independent agency stands up to John Key and says: “We want to see better oversight here. We want to see some safeguards for people’s human rights.” the Prime Minister threatens it and that is typical of bullying behaviour.The Law Society came to the Intelligence and Security Committee and it said that in the absence of compelling grounds for urgency this legislation degrades the democratic process. We have had New Zealanders from all walks of life say that they do not want this legislation to pass but the Prime Minister is determined to ram through this legislation for political reasons. He is determined to ram through this legislation against the wishes of the majority of New Zealanders.This piece of legislation is wrong. The Labour Party is clear: if we have an independent review if we are able to actually get all the facts on the table we then can put legislation in front of New Zealanders that they can then accept and we can rebuild the trust and confidence in our security intelligence agencies. The sad reality is thatunder this Government and under John Key the trust of New Zealanders in our security agencies has been broken. That is shameful. This bill must not pass.Dr RUSSEL NORMAN (Co-Leader—Green):I rise on behalf of the Green Party to talk about the Government Communications Security Bureau and Related Legislation Amendment Bill. This is a really terrible bill that has come before this House. There are millions of people who have come before us to fight for basic democratic rights and freedoms. One of those fundamental rights is the right to be free from constant State surveillance.One of the defining features of a free and open society is that we have managed to push the State back into its box so that the State is not able on a regular basis and without the approval of the judiciary to engage in surveillance of our private communications. It means that we can have a private conversation without the Government listening in. It means that we can send an email without the Government intercepting it. There are some exceptions that we have allowed that enable the State to interfere with those private communications and to intercept them but those are only for reasons of security. They are only when a judge comes in and says: “That’s OK—you can intercept that.” But there needs to be a very high standard.Those basic rights and freedoms have been fought for over and again over the centuries and they are being fought for once again right now in this House. We have a one-vote majority in this House that intends to degrade some of those basic rights and freedoms—in particular the right to live free from mass surveillance by the State because that is what this bill enables.Regardless of what the Prime Minister might assert over and over all the experts who have looked at this bill have come to very similar conclusions. Let me quote from one of the submitters the Law Society which I do not believe had any vested interest in coming to a decision that is highly critical of this bill. This is what the society said: “The Bill changes the Government Communications Security Bureau (GCSB) from being a foreign intelligence agency to a mixed foreign and domestic intelligence agency. The Bill empowers the GCSB to spy on New Zealand citizens and residents and to provide intelligence product to other government agencies in respect of those persons in a way not previously contemplated and that is inconsistent with the rights to freedom of expression and freedom from unreasonable search and seizure under the New Zealand Bill of Rights Act 1990 (NZBORA) and with privacy interests recognised by New Zealand law.” The Law Society made up of some of our leading legal professionals looked at this piece of law and came to the conclusion that it was inconsistent with the rights of freedom of expression and freedom from unreasonable search and seizure.The Government has provided no justification for the dramatic expansion of the powers of the State that are in this bill as the Law Society has described. Where is the giant brand-new security threat that has suddenly emerged that means that we suddenly need to give the State massive new State power to intrude into our daily lives? Where is it? Have we had a new 9/11 that none of us here just happened to notice? Where is this new justification for some dramatic expansion of the powers of the State?Denis O’Rourke: Dotcom.Dr RUSSEL NORMAN: In fact of course the rationale for what has happened here is the whole Dotcom affair as Mr O’Rourke has said. What the Government has done is use the Kim Dotcom affair as an excuse to dramatically increase the powers of the Government Communications Security Bureau. Today this has even reached a new and disgraceful level of scaremongering by the Prime Minister. On breakfast radio he kind of casually dropped into the discourse that al-Qaeda—al-Qaeda—was present in New Zealand and that was why we needed this new bill.I would ask people to think about this claim by the Prime Minister. Think about it like this. Either what the Prime Minister is claiming is true and there is a serious threat to New Zealand from al-Qaeda—let us say that is true. If that is the case then by the Prime Minister releasing this information and telling these dangerous people that we are spying on them and John Key has his eye on them he has jeopardised national security. He has released sensitive national security information that was previously kept secret in order to hide from these people that the State was spying on them and watching them that the State was protecting ordinary citizens from these dangerous terrorists—that is what John Key tells us; that they are dangerous. Instead for purely partisan political purposes to get this bill through the House the Prime Minister has now released this sensitive national security information and jeopardised national security—that is if it is true.What if what the Prime Minister said is false? I think that is another option that we should consider. If it is false and there is not a genuine threat to national security from this person or persons identified by the Prime Minister then the Prime Minister is scaremongering. He is using something he knows to be false in order to scare people into voting for or supporting this bill. Whichever way you look at it either the Prime Minister is jeopardising national security for partisan political politics or the Prime Minister is scaremongering for partisan political politics. Which is it? Which is it Prime Minister? What is the reason that you have done what you have done today releasing this piece of information?This bill does not happen in isolation and it is not just about Kim Dotcom. This bill is part of a broader international discourse about the surveillance State. What we have discovered is that the truth is much worse than any conspiracy theorist imagined about what the surveillance State is up to internationally—in particular the American surveillance State and the National Security Agency. What we discovered was that the National Security Agency is using its surveillance technology which includes the Waihopai base—the documents released by theGuardian newspaper in the UK today show that the National Security Agency is using the Waihopai base—as part of its international surveillance programme. It goes by the name of XKeyScore or some such programme. It goes alongside PRISM.What this means is that we in New Zealand and the GCSB are part of this international surveillance programme that is gathering all of the electronic data of all New Zealanders and everybody else who it can reach—which is pretty much everybody who has access to these machines these computers and these phones—collecting it all in one place and then making it available to the US Government and possibly to the New Zealand Government as well. We just do not know.So that is the international context in which this Parliament by a single vote is proposing today to expand dramatically the powers of the GCSB. It could not get much worse than that. We could not really be doing a worse thing in terms of the people who have come before us who have fought long and hard to protect basic democracy and basic freedoms when this Parliament by one vote will vote to enable the GCSB to engage in mass surveillance of New Zealanders.There is one element of the bill that the Prime Minister and others have used a lot and which I want to touch on just briefly in my last minutes—cyber-security. There is no question that there is a need for a cyber-security agency in New Zealand. However there is no need for that agency to be contained within the foreign intelligence agency that is the GCSB. It is of course about to become a domestic and foreign intelligence agency. Cyber-security should be held within the police. The police are already engaged in cyber-security. There is no need for this part of the bill to apply to the GCSB; it can be held elsewhere. If that were the case—that New Zealanders are getting their internetprotected by the police—there would be no concern that all their information is being shared with the “Five Eyes” and the Americans. This bill is a fundamental threat to our democracy and to our freedom. It is absolutely unnecessary and the Green Party will vote against it.The ASSISTANT SPEAKER (H V Ross Robertson): Just to inform the House before I call the next speaker this is a split National call—firstly Dr Jonathan Coleman and then the honourable member Tim Groser.Hon Dr JONATHAN COLEMAN (Minister of Defence):That was a somewhat revelatory call by the leader of the Green Party. I honestly believe that he does agree with everything he said but that is the sad point. You would expect that from the Greens. That is incredibly misguided. The basic fact of it is that there is not going to be mass surveillance of New Zealanders under this bill the Government Communications Security Bureau and Related Legislation Amendment Bill. The intentions and consequences of this bill are that it is going to correct Labour’s flawed 2003 legislation. So we are actually clarifying what is going to happen.In regard to spying on New Zealanders the fact of it is that anything that the New Zealand Defence Force the Police or the SIS commissions the Government Communications Security Bureau (GCSB) to do on their behalf will be done on a totally legal basis. This is actually going to narrow the scope of the GCSB’s activities with regard to New Zealanders.I can understand how the Greens would be so off the mark with this because frankly they are on a different planet. Russel Norman is an apologist for Ed Snowden. He was quite up front about that. So I can understand that. What I cannot understand is that the Labour Party which knows better has decided to play petty party politics with this whole process. Phil Goff was a Minister of Defence. He knows the threats that are out there. He knows why this legislation is needed. He was a Minister of Foreign Affairs and Trade and yet he is not taking a firm grip of his leader and telling his leader that this is legislation that is needed.We need to correct the flaws in our legislation of 2003. There is no question of that. I know that members over there have decided very cynically to exploit the degree of lack of knowledge out there in the public and they are fermenting it. They are saying that this will lead to mass surveillance when they know that actually it will not lead to anything of the sort. It is a major disappointment because on security matters we should have a bipartisan approach in this Parliament. It was incredible to hear David Shearer speaking. He is saying that he wants an investigation into the intelligence services in New Zealand and then in the same breath he is criticising Prime Minister John Key for detailing those threats. Well I can tell you that if New Zealanders had a full understanding of the threats that are out there they would know that this is legislation we absolutely need.So this is not a power that is going to be used to spy willy-nilly on any old person out there who might criticise the Government or an agency. This is a power that is needed for the very security of our country. If you look at those 88 New Zealanders whom the GCSB has spied on over the last 10 years they were people involved in organised crime involved in people-smuggling with links to overseas terrorist groups people involved potentially in research to do with weapons of mass destruction. These are not the sorts of people who were marching against the bill around the country on Saturday; these are people who are major security threats to our country and the bill is absolutely vital.If the Green Party thinks that there is not a growing security threat well they need only look through the history of the world since the year 2000 because I can tell you that in every major global terrorist incident New Zealanders have been caught up. NewZealanders were caught up in 9/11 in the Bali bombings and in the London tube bombings and it is naive if anyone thinks that there are not people in this country holding New Zealand passports both here and travelling overseas who potentially do not present a threat to our national security.So this is very important legislation but the key thing is that it does not allow for mass surveillance. Everything that the Police the SIS and the Defence Force do in terms of using the GCSB has to be done with legal authority. So it is a very strong protection for the rights of New Zealanders. I think it is time that the Labour Party took its misguided Green Party colleagues by the scruff of the neck and said: “Look this issue is serious. You’ve got to actually work with the Government to come to a sound understanding of this.”The last thing I would say is that for Russel Norman to say there are hundreds of thousands of people in the free world fighting against this sort of legislation is completely wrong. And for Dame Anne Salmond to say: “If you vote for this don’t come to Anzac Day.” is completely misguided. This bill is totally in line with the wishes of those who have died for New Zealand in previous conflicts namely for the security and the well-being of the people of New Zealand. Thank you.Hon TIM GROSER (Minister of Trade):I listened very carefully to the deputy leader of the Labour Party and the co-leader of the Green Party and I have to say that I am not surprised that they continue to grossly misrepresent the purposes of this bill the Government Communications Security Bureau and Related Legislation Amendment Bill its specific safeguards and the context within which this bill was drawn up. It is irresponsibility of a significant degree. We all know about Opposition politics OK? There has got to be some slack given to Opposition politics where things that were done when the party was in Government are airbrushed out of reality—fine. But there are some limits that have to be observed. We could debate probably inconclusively where they should stop before you start to undercut the fundamental concept where Government proposes and Opposition opposes but we cannot debate where it starts. Where it starts is national security.I am not going to address the Green Party’s issues; I think Mr Coleman very adequately summed up in his previous comments exactly where the real heart of the Green Party stands. But we expect a higher standard of care from the Labour Party because when it was in Government it did not give us any signal that it thought it was living in political “La-La Land” where there are only naughty teletubbies who just need better information to make more informed decisions. It understood about national security when it was in Government. Labour understands the types of crimes that the Government Communications Security Bureau (GCSB) has been involved in—unfortunately without adequate safeguards which this bill is about to correct—around terrorism around people-smuggling and around fundamental threats to New Zealand’s national security and on this issue the Labour Party should have shown a far higher level of responsibility and accepted that this was absolutely necessary to clarify the purposes of this bill.We are just as I said airbrushing out of reality the fundamental problem with the legislation that Labour introduced in 2003 and to get up and start to make speeches about the expansion of spying powers is fundamentally irresponsible. The core operational section of the 2003 Government Communications Security Bureau Act says in section 8(1)(e) that the GCSB may assist “any public authority or other entity in New Zealand or abroad …(ii) on any matter that is relevant—(A) to the functions of the public authority or other entity;”. You could drive a civil liberties bus through that section. There were so few protections of a legal and political nature around the original 2003 Labour legislation.This bill—I am not going to go on; this is very straightforward—puts roadblocks in the way. This is no longer a highway down which any Government agency can apply on any matters that are relevant without proper safeguards and without proper legal procedures and channelled through only three institutions of the State. The real reality is that this is a matter of national security. We are tidying up through putting in place proper legal and constitutional safeguards that will actually narrow the scope—narrow not expand the scope—of the GCSB. The fact that the Labour Party—I have no confidence whatsoever that if we talk for the next 10 years the Green Party would ever get this point—is stirring up legitimate concerns of New Zealanders in a way that is totally at variance with the fact is simply outrageous.Rt Hon WINSTON PETERS (Leader—NZ First):The sincerity of that last speech is evidenced by the fact that the man who gave it Tim Groser is just back from the latest round of the Trans-Pacific Partnership negotiations but he will not tell one New Zealander what we are negotiating about. It is an utter secret.The fact is that it is very instructive that the Attorney-General led off the debate for the Government substituting bombast for substance and I say this because it is very apposite for our future. That Minister who made that speech was put up for a certain reason which as time unfolds he and we and everybody in the country will understand—but that is for another day.The other thing is that the Prime Minister was so alarmed in his press statement at al-Qaeda being in New Zealand that he decided not to speak on this Government Communications Security Bureau and Related Legislation Amendment Bill which is in his name. He was so alarmed by this information that he decided not to make a speech today and to put the usual yes-men up to give his address.We rise on behalf of New Zealand First to speak on the Government Communications Security Bureau and Related Legislation Amendment Bill. We recognise that the defence and security of our country is of the utmost priority and we said so from day one. It is one of the fundamental pieces of the social contract between the State and its citizens that the people’s safety and defence from internal and external threats must be maintained. And that fundamental principle we believe should be shared across all political parties whether it be in relation to foreign affairs the police force or our citizens’ right to protest.We would like it to be on the parliamentary record that New Zealand First was prepared to seriously deal with this legislation provided a number of safeguards were included. Sadly this Government has not taken that approach nor has it generally sought to work across the parliamentary divide. [Interruption ] The member from Hamilton can make those sorts of frowning statements over there but I will say something to him that he should not overlook: this is almost a sideshow to what has happened in New Zealand.What has happened in New Zealand is that the Prime Minister is on record saying statements that are demonstrably not true. For decades the New Zealand people and our intelligence agencies have remained under the radar screen. They have been getting on with the job protecting New Zealand’s interests and remaining unseen by the general public.Hon John Banks: Give us an example.Rt Hon WINSTON PETERS: I say to Mr Banks when he shouts “Give us an example.” that Mr Dunne said that too and he was gone in a matter of days. We do not make idle threats here. I want to come back to say this. We had a status quo of our agencies under the radar screen. The status quo was maintained under numerous Governments both Labour and National. There was no great controversy until along came John Key.In the past month we have seen our security agencies go from being an insular beltway issue to being one of great controversy on which nearly every New Zealander now has a view. New Zealanders are now well acquainted with the background because of all this news and speculation about spies lies and alibis. It is big news and the architect around the Government Communications Security Bureau (GCSB) controversy is the Prime Minister who is the Minister in charge. With the Prime Minister coming primarily from a background of money speculation we assumed that he might at least pay some attention to the detail but he has not.Remember that this issue exploded with the illegal actions of the GCSB over the Kim Dotcom affair. There is no time to go into the facts about that save to say this: the Prime Minister’s denials of prior information about Kim Dotcom the Hollywood connection the Washington power elite and because he just made a statement the role of the Attorney-General—Hon Christopher Finlayson: Ha ha!Rt Hon WINSTON PETERS: It is all laugh now but you will not be laughing later—that I do know. I want to tell that man there that forensic research is critical in our game and there is the research that implicates him—deeply implicates him. [Interruption ] It is no use saying it now. Wait until the reply at the end. I know that he led off but if he wants to put it on the line today I tell him to get up and say in the reply today that in no way is he in any way involved in the Kim Dotcom affair. Say it on the line in this House on the record so that if it is disproved he has to go. That is my challenge.Hon Anne Tolley: What? You’re mad.Rt Hon WINSTON PETERS: Oh yes you are right.If you are looking in the mirror and you say: “What a nut.” you are quite right because he is nuts to put his whole career on the line in the way that he has implied by his constant denials. The nature of the GCSB engagements if you look at all those allegations and at the Prime Minister’s denials are all bound to fail.Hon Christopher Finlayson: Complete fantasist.Rt Hon WINSTON PETERS: Attorney-General—Hon Christopher Finlayson: Complete fantasist.Rt Hon WINSTON PETERS: No no it is not a fantasy. It is not a fantasy to know what the Attorney-General’s record on this is. Nobody has inquired as to what he has done.Hon Anne Tolley: What?Rt Hon WINSTON PETERS: Do not look at your colleague. Do not look at the Minister of Police for some sort of haven for some sort of refuge because I have so often in my career seen denial after denial only to see tears and desolation when it is over.Hon John Banks: Oh yeah we know about denials Winnie.Rt Hon WINSTON PETERS: And John Banks knows all about this. John Banks knows all about this. For goodness’ sake he was hugged by a bear of a man and he could not remember him. He got into a helicopter and he could not remember that even though he has got a helicopter licence and takes great pride in that. He went off to this great mansion and could not remember that. There was a huge Guy Fawkes display paid for by this great big bear of a man and he could not remember that and then he got 42 separate donations and he forgot not one or five—that is possible—or 10 or 20. He forgot all 42. Unbelievable—unbelievable.Hon John Banks: Have you paid the money back yet Winston?Rt Hon WINSTON PETERS: Unbelievable Mr Banks and that is why sadly the great career that most of his colleagues used to sponsor and help him through has now come to disaster. He is on his own.The Prime Minister’s stance is to deny culpability and to argue despite the Eagleson missives that he as Prime Minister is not responsible. How dramatically things have changed. This is what somebody said way back in 2007. He said: “Ladies and gentlemen I believe you get the democracy you are prepared to stand up for. Here in New Zealand we often take our democratic freedoms for granted. We think they always will be there. We have a Bill of Rights which is supposed to protect our right to freedom of expression. What on Earth could go wrong?”. And this member of Parliament went on to say this: “I have a different view. I believe what Thomas Jefferson said—that the price of freedom is eternal vigilance. We cannot and we must not take democratic freedoms for granted. Because in reality it is not a Bill of Rights that protects our rights. It is not up to a solicitor in the Crown Law Office or an official in the Ministry of Justice. In the end it is not up to the government at all. The protection of rights lies with us the citizens of New Zealand. There are times when we have to stand up for our rights and the rights of our neighbours and friends and indeed the rights of people we totally disagree with or else these rights will begin to erode away.”Hon Annette King: Who said that?Rt Hon WINSTON PETERS: Who said that? Why John Key said that. Well of course detail is important. It was not Thomas Jefferson who made that statement but John Philpot Curran when he said: “The condition upon which God hath given liberty to man is eternal vigilance;”. Facts are important.What Prime Minister and Attorney-General has happened? Seeing as the Attorney-General has given all his political background and his majesty in the law which he frequently and in grave vanity extols around the circuit I ask what Attorney-General has happened? [Interruption ] Ha ha! Well they have been selling off their ideals quicker than they have been selling off their assets. As for Peter Dunne well he said this: “… I think we start down a very slippery slope. And I for one having had a long interest in protecting personal privacy am not prepared to take that step.” That is what he said on 11 June.Who is overseeing the activities of the intelligence and security agencies and are they independent with teeth? First question—answer: no. What civil liberties are herein being eroded? Answer: too many. Three: with respect to metadata and new cyberspace technology are there nevertheless in this bill fundamental principles that will see this law endure? No there are none.In conclusion New Zealand First believes in the security of this country its defence and its well-being and what we are opposed to is dangerous law changes and the sycophantic defence of them by people who should know better like the Attorney-General—the sycophantic defence of the indefensible by the Attorney-General. This man appoints judges. This man has got enormous sway and out there in the great land of the law he has shamed himself. This is bad legislation and in its present form it should not pass.Hon JOHN BANKS (Leader—ACT):We have just heard from the right honourable member who is the principal shepherd of the politics that has been practised so well by the Labour Party all week and has got it nowhere—dog whistle.Rt Hon Winston Peters: I raise a point of order Mr Speaker. I forgot to table the issue of the first emergency here—Mr Thorn has just resigned.The ASSISTANT SPEAKER (Lindsay Tisch): Are you seeking leave to—Rt Hon Winston Peters: Table information about that.The ASSISTANT SPEAKER (Lindsay Tisch): Well that is—Hon JOHN BANKS: Point of order. This is not the appropriate time to do—The ASSISTANT SPEAKER (Lindsay Tisch): I ask the member to sit. We have a point of order. Look that information is publicly available—Rt Hon Winston Peters: No.The ASSISTANT SPEAKER (Lindsay Tisch): It is publicly available. It is on the website and that—[Interruption ] Order! [Interruption ] Order! Please. I am calling the Hon John Banks.Hon JOHN BANKS: About time too. That was a rambling—a rambling—from the leader of New Zealand First. I can tell Parliament and the people of New Zealand today that the Prime Minister tried on numerous occasions to set up meaningful discussion with the right honourable leader of the New Zealand First—“Winston First”—Party to discuss these matters and the phone was always off the hook.Rt Hon Winston Peters: I raise a point of order Mr Speaker.Hon JOHN BANKS: The phone was off the hook.The ASSISTANT SPEAKER (Lindsay Tisch): There is a point of order. When I am on my feet members will sit.Rt Hon Winston Peters: I take offence at that gross misrepresentation about the New Zealand First Party and its name. The fact is that just because Santa Claus ran into heavy weather it is no time—The ASSISTANT SPEAKER (Lindsay Tisch): No.Rt Hon Winston Peters: —to call Rudolph.The ASSISTANT SPEAKER (Lindsay Tisch): No look the point that you make—[Interruption ] Order! I am on my feet. The point that you made was a valid one. Members refer to members and their parties by their correct name. But it does not help then to go on and throw something back.Hon JOHN BANKS: The Prime Minister tried on numerous occasions through his office to set up a meeting with the leader of New Zealand First and the phone was always off the hook. The question I ask my colleagues on this side of the House is whether the politics of the dog whistle being perpetrated this week by David Shearer will work. Will they work for him? No they will not work for him. He was also invited by the Prime Minister in my presence in the Intelligence and Security Committee to have a chat with the Prime Minister about these things but of course he did not say that today. He offered the Prime Minister not one constructive piece of advice to make right this Government Communications Security Bureau Act which the Labour Party put in place in 2003. We are here because of shonky legislation perpetrated on the people of New Zealand by the Labour Government in 2003. It could have had much more thoughtful legislation then that would have worked in the best interests of security and intelligence for this country but no it put together and shonked together a piece of bad legislation that we on this side of the House have had to fix up—have had to fix up.But the Labour members did not want to come across. They bleat today that this side of the House has just one number—one individual—to pass this legislation. We have been waiting for them for years. If it was not for the leadership of the Prime Minister to put this legislation right we would still be dealing with the Labour Government’s shonky 2003 legislation that did not work in the best interests of New Zealand including Dotcom. It did not work in the best interests of Dotcom. It did not work in the best interests of the 88 warrants that the Government Communications Security Bureau (GCSB) were exercising. It did not work in the best interests of an open democratic society with a search and surveillance overview of the country to keep us safe. It did not work because the legislation was blurred and bleary and like the learned member my aged friend over there the Rt Hon Winston Peters it was out of date. It was out of date. I say to the leader of New Zealand First that the legislation we are fixing today was likethat member well and truly out of date. Its use-by date was expired before it was even put in place in this Parliament in 2003.The ACT Party and the people of Epsom back those who work to defend our country. The ACT Party and the people of Epsom back the men and women of the New Zealand Defence Force and our small but vital intelligence and security communication agencies. We do not put the boot into them. We do not blame them. We support them and we help them and this afternoon we are supplying them with a legislative framework to make all of their work most worthwhile inside the legality of search and surveillance needed by this country for the democratic purposes of keeping these shores safe from people who would otherwise want to harm us.The ACT Party and the people of Epsom back the men and women of the New Zealand Police who keep us safe in our homes and our property and protect us. The ACT Party and the people of Epsom believe it is the primary duty of Government to keep New Zealand safe from both foreign and domestic threats to our lives and property. That is why any abridgment of our fundamental rights must be expressly authorised by clear law and only to the extent necessary to achieve the first duty of the Government—as Mr Attorney-General said so well the protection of the rights and values of the people of this country.All regimes that authorise the Government to engage in covert activities have three features. These are the three features that are spelt out in this new legislation. First they must have clear legal authority; second there must be strong executive branch oversight; and third there must be parliamentary oversight like the Intelligence and Security Committee on which I serve—and on which the leader of the Labour Party serves and on which the leader of the Green Party serves and to which they made no substantive contribution to changes in the shonky legislation that we have tried to fix here today. They made no contribution on that parliamentary select committee whatsoever except criticism. What we tried to do is put right the legislation that they got wrong in the first place. Being fair to the Green Party the Green Party in 2003 did not support this legislation.Labour failed to get the law right in the first place. The Kitteridge report found that the 2003 legislation was probably never fit for purpose—that is what Miss Kitteridge said. That is what Justice Neazor said. It is not fit for purpose it needs to be reformed and that is what we are doing today. On the other side of the House they are whingeing and bleating because the people of New Zealand have not given them the numbers to be on this side of the House. They are still fighting the 2011 election. Further the GCSB could intercept the communications of New Zealanders on behalf of public entities so long as those entities had legal authority to do this yet Labour’s legislation said in contradiction to these express provisions that the GCSB cannot intercept the communication of New Zealanders.What a total mess this legislation became. What a total mess the execution of this legislation became. Labour cannot tell the country that it did not know the GCSB was doing this work on behalf of other public entities. Although it is fair enough for Labour to ask for an inquiry Labour should have recognised the immediate need to fix up this legislation which was probably never fit for purpose in the first place. Notwithstanding its plea for an inquiry which was the only proposition it put to the Intelligence and Security Committee it did not want to help this Parliament fix up that shonky piece of 2003 rushed-through legislation.ACT agrees with the Cabinet secretary who is a fine public servant that the 2003 Act needs an immediate fix. That is what the fine public servant Rebecca Kitteridge said. It needs an immediate fix. The Prime Minister said to the leader of the Labour Party in my presence and the Prime Minister said to the Green Party and the PrimeMinister said to the apparatchiks in New Zealand First: “Come and have a cup of tea and we will try to meet at the crossroads—we will try to meet at the crossroads.” The Prime Minister is good at having cups of tea Winnie. He would willingly have had you in his office and given you some tea to meet at the crossroads so we could fix up a piece of legislation that you Mr Peters voted for in the first place.The ACT Party is pleased to support the beefing up of the office of the Inspector-General of Intelligence and Security. The ACT Party suggested that there be better links between the Inspector-General and the Intelligence and Security Committee. There are matters not fixed by this bill that require more work. One such issue is the definition of private communications. There is a lot of work to be done. Is it not a pity that this Parliament could not agree on this piece of substantive legislation to fix up the shonky piece of work that was a once-over-lightly done in 2003 by a previous Government led by Helen Clark? The bill is crystal clear on what the GCSB can do and the bill is crystal clear on what the GCSB cannot do.The final point I make of course is that there is a risk to freedom from the covert capabilities of any Government. That is stating the obvious. This bill seeks to manage the risk by improving oversight. That is why I support it.Hon PHIL GOFF (Labour—Mt Roskill):There is a deep irony today in the fact that this Government will seek to pass this legislation the Government Communications Security Bureau and Related Legislation Amendment Bill on the votes of two discredited and temporary MPs. One John Banks has just resumed his seat after speaking to this House. That man is the man who went to meet Kim Dotcom. He forgot about Kim Dotcom. He is a man who is easily overlooked!Hon Trevor Mallard: And the giraffe.Hon PHIL GOFF: He forgot about the giraffe he forgot about the hippopotamus he forgot about the biggest mansion in New Zealand and he forgot about the helicopter ride that took him there. But most important he forgot about the fact that he went to Kim Dotcom and asked for $50000 in two cheques of $25000 each and then declared the donation anonymous. That was not true. That was a lie. Everybody in this House knows that was a lie. And that man comes into this House to support a piece of legislation that fails to get a consensus of support in this House and fails to get a consensus of support across New Zealand.The other vote that the National Government relies on is Peter Dunne’s. Two weeks ago I heard Peter Dunne say on radio without qualification that he would not support a piece of legislation that gives the Government Communications Security Bureau (GCSB) the right to spy on New Zealanders. Without qualification he said that he would not support that legislation. A week ago he said that there was a willing buyer and a willing seller. I wonder what the price was. What embassy was it? It is yet another political appointment that Peter Dunne will go on because he has sold his soul. He did exactly what he promised 2 weeks ago he would not do. That man was sacked as a Minister because he broke the oath of office as a Minister that he would not disclose the Cabinet papers of his own Government.That is whom the Government relies on to get this legislation through. It does not rely on the support of ordinary New Zealanders. We had a poll did we not on TV3. It found that 40 percent of New Zealanders did not have trust and confidence in the GCSB. That is unprecedented. Forty percent of New Zealanders have lost faith in the organisation to which this Government is now extending the powers to be able to spy on ordinary New Zealanders.We heard a lot of cant about the failure to get a consensus and why Labour was not supporting the bill. It was not through a lack of goodwill. This Labour Party accepts that we need to have intelligence agencies and accepts that there are threats in the world—cyber-security threats threats to our economy and threats potentially from terrorists. What it does not accept is that this piece of legislation is being passed in a way and with content that protects the other rights of New Zealanders the rights to freedoms and privacy. I challenge the National Government and the next speaker who gets on his or her feet to say why it is that the key agencies of government that are our watchdogs to protect those rights and freedoms have all come out against this legislation.The Privacy Commissioner—a former Secretary of the Cabinet a woman whom you can absolutely rely on—said that this legislation must not go through it needs an independent inquiry before we give these extra rights to that agency. We had the Human Rights Commission—not full of trendy lefties appointed by the former Labour Government but full of people appointed politically by that National Government—which said that this legislation should not pass. The commission said that it lacks adequate oversight it makes inadequate provision for ensuring appropriate transparency and accountability of those who administer the legislation and it does not provide for a legal regime containing sufficient safeguards against abuse of power and to facilitate a proportionate approach. That is from an agency—the Human Rights Commission—appointed by that Government.There is no consensus in New Zealand for this legislation. There is no consensus in this Parliament for it. This Government is relying on two discredited MPs to pass legislation that we should be extraordinarily cautious about. We are giving powers to an agency that is not subject to the normal scrutiny by the media or by Parliament because it acts in secret. We have the core submitters on this legislation saying that it has been rushed that it was introduced under urgency and that they had not time to prepare submissions on it.This is legislation that should have taken time. This is legislation that should have followed a full and independent inquiry into not just the GCSB but in fact all of our security agencies. That is how you do it. That is how the Australians do it. They do it regularly. You have a full public independent inquiry and you base your legislation on what that inquiry shows. This Government has rushed the legislation through. This Government has rushed it through to cover its tracks and its own failures incompetencies and inadequacies.What New Zealander believes that John Key has done his job in placing the GCSB under his proper scrutiny? I know that Helen Clark did. She was there until 1 in the morning doing her job. This man has not done his job. This man claimed not to have ever heard of Kim Dotcom despite the fact he has the biggest house in his own electorate. This man claimed that he had never been briefed by the GCSB on Dotcom. That was not true and it was proven untrue. This man said that he did not know about the illegality of the GCSB’s spying until 7 months later. He did. It is inconceivable that he did not know about it. This man John Key said that he did not know that his deputy leader and Acting Prime Minister at the time Bill English had suppressed the ability of the court to know about what the GCSB had done. That had never been done before in the history of this Parliament and under our constitution and he claims that Bill English never briefed him.This man says that he has nothing to do with spying on journalists. That is not what Andrea Vance thinks. She said that that lacks credibility: “… [the Speaker and] John Key claim a cock-up … over conspiracy. Forgive me if those assurances ring hollow.” This is from a member of our parliamentary press gallery. This person John Key is simply covering up. This person cannot be relied on to exercise the proper scrutiny over our spy agencies. That is even more reason why we need legislation that will work even when we do not have a Prime Minister who can be bothered doing his job of oversight.This legislation before us does not do the job. It is inadequate. It does not provide us with confidence in what will happen. You know we even had a former head of the Department of the Prime Minister and Cabinet David McDowell see the legislation with its proposed changes and say this will not do. This is a man with inside information who said that this legislation does not provide the protections or the assurances that we properly have scrutiny over an agency that we are giving extraordinary powers to. He is not a trendy leftie. He is not a wild radical. He is a lifetime professional—retired now—civil servant just as Marie Shroff is. The two people who have better inside information than anybody else make a lie of the claims that are made by the Government about the protections provided for in this bill.This bill does not have the confidence of New Zealanders. This bill will scrape through on the votes of discredited members of Parliament. I want to say disgraced members of Parliament—both of them are disgraced members of Parliament.I want to say this last thing. You know if the Prime Minister were interested in independent scrutiny of the GCSB he would have followed a proper appointment process in appointing the man who is the director of it. He failed to tell the country that this man was a personal friend. He followed a process that the State Services Commissioner did not approve of. This is a man who takes short cuts. This is a man who looks after his own. This is a man who would misuse power and he is saying: “Believe me this is for your own good.” We live in an age—and I will finish on this point—where we have seen the abuse of power by security agencies the National Security Agency and the Government Communications Headquarters—The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member his time has expired.TE URUROA FLAVELL (Co-Leader—Māori Party):Tēnā koe Mr Speaker. Kia ora tātou katoa. I will start by saying that the Māori Party will not be supporting this legislation the Government Communications Security Bureau and Related Legislation Amendment Bill.In the first 6 months as an MP in March of 2006 I supported the call for a broader debate on intelligence and security matters. From relatively fresh eyes as they were at the time I shared the word on the street that the new anti-terrorism legislation was being pushed through Parliament in way too much of a rush. I could see protesters or activists designated as terrorists even myself at the time.I was told a story from the very early days of the Māori Party in late 2004 when a Sunday newspaper had revealed that the Security Intelligence Service had launched a major covert operation investigating the Māori Party our members our leaders and our associates. Operation Leaf the story revealed had been a major SIS campaign targeting various Māori organisations over several years. The article disclosed that a former SIS agent allegedly said he had quit the operation because of his disgust at the system that was spying on decent law-abiding New Zealanders. Understandably we were very very angry about that and yet the reaction from the Prime Minister at the time Helen Clark was that these allegations were simply “a work of fiction and laughable”.I will take the time to go back just a little bit in time to a part of the history around surveillance and human rights in Aotearoa. There are other episodes of course: the case of the Algerian refugee Ahmed Zaoui a political prisoner imprisoned for nearly half of it in solitary confinement in maximum security without charge or trial and earlier still in 1996 when the SIS was caught trespassing in Aziz Choudry’s house. These all form the history of the bill we are debating today. Fundamentally that is one of the greatest issues we have with the whole debate around the Government Communications Security Bureau (GCSB) and the current legislation. For the very nature of the work in question is such that we will never know whether Operation Leaf was indeed fictional or fact.The bill is being put forward to make amendments to the objective function powers and limitation provisions supposedly to improve clarity about the legal parameters for GCSB’s activities and to accommodate changes in the prevailing security environment. Well the New Zealand Law Society as many have quoted already was pretty up front about what “clarity” actually means. In its submission it said: “The bill empowers the GCSB to spy on New Zealand citizens and residents and to provide intelligence product to other government agencies in respect of those persons in a way not previously contemplated and that is inconsistent with the rights to freedom of expression and freedom from unreasonable search and seizure”. That is pretty hefty stuff from people who have high reputations and it certainly alerts us to common concerns around the new powers to conduct surveillance.The underlying question must be: what does it mean for our people? We have to recognise the impact of context. The author of the bookThe Hollow Men  Nicky Hager has noted that since the passing of Labour’s Terrorism Suppression Act 2002 “people taking part in ordinary protests have found that they are being subjected to much heavier policing.” According to Mr Hager police have routinely removed computers and exercised far tougher measures against people exercising a legitimate right to protest. Then you fast forward to 15 October 2007 and the raft of search and surveillance methods used in the police terror raids in Operation Eight and the subsequent human rights breaches.Let us make no mistake. Law enforcement needs must be adequately met but at the same time in a way that is consistent with human rights values. I will tell you this: the Māori Party will never stop stating the obvious that we want the system to be held accountable for decisions taken against so many innocent children who were taken from their homes in their nightwear and searched in the street causing significant trauma in the process. We must have answers for the way in which the State embarked on virtual PlayStation assault against the innocent people of the sheltered valley of Ruātoki.That shameful period was followed by an equally disturbing raft of legislation including the Video Camera Surveillance (Temporary Measures) Act forced through in 24 hours and the Search and Surveillance Act 2012 also known as the “Guilty of Suspicion Act” or the “Creepy Peeping Act”. Here we are again—here we are again. Whether the Government is red or blue is irrelevant; the secret surveillance of citizens appears to come with the territory of being the ruling power.I come back to the questions of why exactly this new legislation is required and what it will do. Earlier this year the Māori Party wrote to the Prime Minister requesting a copy of the names of the 85 citizens who were the subject of potentially illegal surveillance by the GCSB which were revealed in the Kitteridge report. We suggested that to restore public confidence the public disclosure of the names was required. The response we received from Mr Ian Fletcher Director of the GCSB left us in no uncertain terms that names would not be released and that releasing those names might “prejudice the maintenance of law”.That is the catch-22 situation in which this bill is trapped. In order to restore public faith and confidence we need to know more about the need for the proposed legislation. Yet the activities of the Government Communications Security Bureau by form and function are not readily available for discussion. No explanation or justification for the conferral of the new powers is given. The explanatory note states that the Act as it stands “was conceived at a time when the nature extent and potential impact of the cyber threat was dramatically different from the threat posed now”. Again that explanation is meaningful only if one knows the nature and the type of threat that is now faced. That is the point made also by the Human Rights Commission. A letter received today from the Chief Human Rights Commissioner David Rutherfordrecommended that New Zealanders have access to more knowledge about the potential nature of the threats that surveillance might be used to monitor.The Māori Party believes a little knowledge is essential to ensure that whānau are safe from being unlawfully scrutinised by the State and safe also from the potential threats that have supposedly pre-empted the need for this bill. That is the question John Adams representing the Adams and Huatau Marae outlined in his submission when he said: “robust checks and balances must be in place to ensure citizens seeking natural justice and due process are not labelled and treated as enemies of the state.” He continued: “History is littered with conscientious objectors to whacky government policy and those seeking natural justice and confidence in public process being targeted for surveillance and/or marginalisation.” Cherie Hereora echoed the same sorts of concerns defending the right of New Zealanders to privacy and to “the freedom to go about their daily lives without being watched by a government agency as if they are criminals”.Finally I want to leave the last word in this debate to the public health physician and senior lecturer at Te Kupenga Hauora Māori Dr Rhys Jones. Dr Jones of Ngāti Kahungunu expressed great concern about the objective in proposed new section 7 in clause 6 of the bill around the economic well-being of New Zealand. His statement is powerful and warrants the attention of this House so I quote directly from his submission. He says: “If critics of government policies were deemed to be a threat to the economic security the GCSB would have the power to spy on those individuals or organisations. This has serious implications for freedom of political discourse. Government surveillance or the provision for Government surveillance has a chilling effect on political expression and a detrimental effect on social relationships between citizens. It must be kept to an absolute minimum if we are to remain a free and democratic society. No justification has been provided for these powers and therefore they should not be granted.”The Government does not need any more power to put New Zealanders under surveillance. Freedom of association and freedom of speech are fundamental to any democratic society.The ASSISTANT SPEAKER (Lindsay Tisch): I understand the next call is a split call. I will ring the bell at 4 minutes.Hon DAVID PARKER (Labour):I was astounded to hear the Attorney-General in his opening address in this debate say that under this legislation there are no grey areas—no grey areas. It is just impossible to conclude that there are no grey areas left in this Government Communications Security Bureau and Related Legislation Amendment Bill when you have the Privacy Commissioner the Human Rights Commission and the Law Society all saying the opposite. I cannot see how the Attorney-General can get to that position in the face of that clear advice. There is no doubt that this legislation widens the existing powers of the Government Communications Security Bureau (GCSB). There is no doubt that we need to have appropriate legislation for the Government Communications Security Bureau (GCSB). There is no doubt that the existing legislation for the GCSB is imperfect and needs to be improved. But there is no doubt that this is not the right way to go about it. Effectively what the Government is saying is “Trust us. We know what we’re doing.” It is essentially what it is saying. It is saying “Ignore the concerns of the Privacy Commissioner the Human Rights Commission the Law Society and the Opposition parties and just trust us.”I want to set out reasons why I do not think New Zealanders trust the Government on this because there is now a litany of what I think are inappropriate actions by this Government which undermine public confidence and civil liberties. The Hon Phil Goffwent through the appointment of Ian Fletcher where the Prime Minister had to have the truth dragged from him initially denying that he knew him when it was proven that he did.Hon Anne Tolley: He did not.Hon DAVID PARKER: He did—he did. He said he was sort of a person he might have met once or twice. It turned out that he went to school with him he had breakfast with him he asked him to apply for the job he rejected the short list and then he appointed him.Andrew Little: He played rugby with him.Hon DAVID PARKER: Then—and played rugby with him—he claimed not to have been briefed about Kim Dotcom and it was proven that he was and then he claimed and still claims that Mr English did not tell him when he was out of the country and Mr English was Acting Prime Minister that he authorised the suppression of evidence relating to Kim Dotcom. It does not add up.Then we have had the prior exercises of improper use by this Government of the power of the State against the media. We had the teapot tapes a stunt that was designed to shoehorn John Banks into the Epsom electorate in order to get a majority at the last election. The stunt went wrong. This very public event with cameras there for a stunt went wrong when the improper or embarrassing comments by the Prime Minister and John Banks were recorded by a journalist. There were two defences to what happened. First—that it was always clearly a public event and no one was going to convict a journalist for recording that event when they set up that public stunt. Secondly even if it had not been public if it had been private—and I do not think it was private but even if it had been—if it was inadvertent recording it was legal. The Prime Minister during the election used the power of the State through the police against the media and in the end did not pursue it because he knew that it would be embarrassing to the Government. There would be no conviction entered against the journalist but none the less when the Government dropped the matter it said: “We deem him to be guilty.”—without trial!Then we had the other instance of the Serious Fraud Office raiding theNational Business Review and using production or examination orders against it to try to get information about South Canterbury Finance following the inept inquiry by the Government agencies. That again was an improper breach of media freedoms by the Serious Fraud Office. We in the Opposition said “Let’s fix it through the search and surveillance legislation” but the Government refused to do that. Even now to this day the Serious Fraud Office has the right to use production orders and examination orders against the media.Then we have had the Parliamentary Service. Then we have had the Skycity debacle where there were improper processes and to this day the Government suppresses the advice given by Treasury to the Ministry of Economic Development by the ministry to the Department of the Prime Minister and Cabinet and by the Department of the Prime Minister and Cabinet and the Ministry of Economic Development to their Minister the Prime Minister—still suppressed. And then we have had the ousting of the jurisdiction of the court in respect of the disability legislation so that New Zealanders cannot go to court. Then we have had the use of urgency to curtail people’s rights of protest at sea with no select committee report no New Zealand Bill of Rights Act vetting. We are 5 years after the abolition of the Canterbury Regional Council and we still have got no local democracy in Canterbury. And the Government says: “Trust us. We know what we’re doing.” That is why amongst other reasons the Opposition does not trust this Government and does not think that this legislation should proceed.STEFFAN BROWNING (Green):I stand to talk to the Government Communications Security Bureau and Related Legislation Amendment Bill. The GreenParty clearly is not supporting this bill just as it has not supported the Waihopai spy base from before it was even built.The Waihopai spy base is the classic symbol of the activities of the Government Communications Security Bureau (GCSB). The Waihopai spy base where I was very recently at another protest to help raise attention to its relevance to this bill has been spying on New Zealanders for a long long time. John Key is now intending to use that base. Along with his personal friend whom he hired through a very shonky process—his personal friend Ian Fletcher—to head the GCSB they through this legislation will now carry on and spy if this gets to be passed legally on New Zealanders rather than the illegal spying that it has done in the past. I for one do not trust that to be the end of that either in terms of illegal spying.The Government Communications Security Bureau and Related Legislation Amendment Bill suggests that there will be certain provisions and warrants around whom can be spied on and when and certain processes. So we assume that the 85 people identified through the Kitteridge report—unfortunately the people or the targets themselves were not identified but the fact is that there were 85 through to 88 different ones illegally spied on who no doubt will be legally spied on. It is very very interesting that those people who were spied on did not end up in a court did not end up in the justice system because of something that they were doing apparently illegally but the powers that be—John Key and others involved in this—were doing it illegally. So here we are with a bill that has no justification at all.I suggest that that 85 is the tip of the iceberg because as we have learnt and we have learnt it through repeated activities of whistleblowers such as Edward Snowden being the latest—and thank goodness Edward Snowden has had the bravery to come out and to blow the whistle on the US National Security Agency.Simon O’Connor: That’s why he’s hiding is it? So brave he’s hiding.STEFFAN BROWNING: He needs to hide because the USA in its approach to foreign policy is not very kind even to its own people because the USA is also spying on its own civilians and that is what Edward Snowden has revealed. Of course as soon as he came out he said that Five Eyes which Waihopai is part of—Echelon which is what the Waihopai system is involved in—is spying on as many people as it possibly can and we have always said that. What he has done is come out and show that that is in fact the truth. What has come through the wires and things today is showing that there is a dot right on Waihopai as part of that system that is involved through the UK in this instance but is still part of that Echelon system. What he also did was show that every email is open for the fullest surveillance and how if I were to email somebody on either side of the House or a friend or family or whatever that email can be accessed.What we need to remember is that thousands of people in New Zealand were prepared to go to the streets over this issue. But it was not just those people you say might be traditional protesters or whatever who are prepared to get out there. There were others out there whom we do not normally see. They are very very concerned about their civil rights. We suggest that a full robust and independent inquiry is needed ahead of this bill. We will not be supporting this bill. Thank you.Hon ANNE TOLLEY (Minister of Police):I have to start today by saying that I am absolutely appalled at the determination by the Opposition to play politics with this nation’s security. It is based on untruths it is based on scaremongering and it has been based on what you could describe only as a political tin hat mentality.This bill the Government Communications Security Bureau and Related Legislation Amendment Bill clarifies that police can lawfully request the assistance of the Government Communications Security Bureau (GCSB) to intercept private communications in New Zealand but this assistance is limited to instances where NewZealand Police has the lawful authority to intercept but does not have the technical capability to undertake that interception. This is supported by the Policing Act which gives police the ability to seek assistance from any person or organisation that may be able to give effect to a lawful interception authority.As Minister of Police I am well aware of the threats to our Kiwi way of life from international organised crime. In fact we would not be exaggerating to say that organised crime has never been more pervasive more powerful and more complex. A UN report published in April this year estimated the cost of transnational organised crime in East Asia and the Pacific to be in the region of US$90 billion—US$90 billion—with counterfeit goods illegal wood products heroin and methamphetamine the top money spinners.The drug runners of course do not need to sell their evil wares face to face any more. They do not have to dodge the police on the streets; they simply advertise them on the internet. People troll the internet for the drug of their choice they order it and they can expect to have it delivered to their door. This activity is growing and developing rapidly and although our established monitoring systems continue to provide good insight into the established and traditional drug markets—in theDominion Post today there was report of another successful raid based on very good information—the speed and the complexity of these new developing markets are making the monitoring increasingly difficult. Monitoring will continue to decrease in effectiveness as we all struggle to understand and stay ahead of this very lucrative industry.The challenges for our law and border enforcement agencies are huge yet lawful interception is used to solve serious crimes such as murder kidnapping aggravated robbery child exploitation and drug distribution. Interception of private communications in real time is currently used to investigate disrupt and prosecute serious criminal activity including organised crime and to inform the response to emergencies like armed defenders situations or kidnappings. As such the GCSB’s assistance in a select number of investigations can be absolutely critical for police to effectively respond to and solve serious crime. Interception allows the detection disruption and proof of organised criminal activity such as the illegal importation of drugs into New Zealand.In 2005 New Zealand Police was advised by an overseas police force about an organised crime group smuggling drugs into New Zealand so it launched an investigation. It found a group of about 12 people working together over a number of months opening bank accounts and storage units around New Zealand—quite legitimate activities—while also placing international orders for shipments of paint and cement and establishing relationships with local drug dealers. Police were granted interception warrants. The information that they got from those led to two suspicious containers being seized. One the shipment of paint was found to contain 95 kilograms of methamphetamine and the shipment of cement contained 150 grams of pseudoephedrine which is a precursor for methamphetamine. The interception allowed the suspicious shipments to be identified in time and allowed those receiving the containers and distributing the drugs locally to be identified and arrested. In fact it provided such strong evidence of the organised criminal activity that all the accused were found guilty and a number of them even pleaded guilty before the trial.The internet provides a virtual marketplace for illicit goods such as drugs and guns. It enables global virtual networking and social interaction between criminals between international gangs and between that ever-increasing group of sophisticated criminal entrepreneurs who are pretty savvy operators—ready willing and able to exploit theonline environment. They are becoming increasingly active selling fake investments via the internet to unsuspecting New Zealanders. Mass-marketing fraudulent schemes on the internet is very easy; they are invisible and they never have to set foot in the country. They steal personal information and personal identification in order to commit fraud or internet crime.What of the child pornography and exploitation rings—that global network of perversion? International organised crime makes a huge amount of money from this obscene business. New Zealanders want the GCSB to be watching the activities of these international gangs of thugs who make money from the misery exploitation and torture of innocent children.The Australian Government has just published a report by its Australian Crime Commission on organised crime and it shows that in the past 2 years globalised organised crime is pushing hard into Australia and New Zealand stretching the abilities of law agencies to keep pace with syndicates now threatening national security. The report states: “Organised crime … is inextricably linked to international organised crime. Serious and organised criminals operating in Australia necessarily have international links to facilitate their activities—particularly the movement of illicit goods into Australia—and overseas-based organised criminals actively target Australia. This means that strong and trusted partnerships with overseas law enforcement agencies are now more fundamental to combating organised crime than they have ever been.” Why does the Opposition think that New Zealand is in any different place from Australia under threat from international organised crime?Finally I want to remind this House that despite the Opposition’s outrageous scaremongering interception of private communications is an important tool to combat serious crime. In addition it can identify and rule out innocent people. There was another case where a child—Andrew Little: What a disgraceful Minister. What a dreadful Government. You don’t care about human rights and civil rights.Hon ANNE TOLLEY: Just listen Mr Little and you might learn something. A child was murdered in 2005. The police investigations had narrowed down the number of suspects but were not able to further establish whether a neighbour or a member of the child’s own family had been responsible. Police were granted an interception warrant. Interception enabled the police to rule out the involvement of the child’s family. The investigation was then focused on the neighbour who was later brought to trial and found guilty of the crime. Without the use of interception the investigation would have been greatly prolonged and much more painful for the child’s family.I have sat through all the speeches in this House today and I do not understand why the Opposition is quite prepared to sit on its hands and demand a lengthy inquiry another talkfest that the Labour Party is so well known for. Those members love to talk about this stuff but when it comes to actually doing something they were bereft in the 9 years that they were in power while New Zealanders are at risk from the menace of organised crime from the drug runners from the scammers from the child exploiters and from the “hactivists”.This is a very sensible bill. It strengthens and it clarifies the activity of this essential service to protect our New Zealand citizens our New Zealand companies and most important of all our New Zealand way of life.A party vote was called for on the questionThat the Government Communications Security Bureau and Related Legislation Amendment Bill be now read a second time.Ayes61New Zealand National 59; ACT New Zealand 1; Independent: Dunne.Noes59New Zealand Labour 34; Green Party 14; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.Bill read a second time.Tabling of DocumentsGCSB Review of Compliance—Investigation into Leak and Authorisation for Release of DataLOUISE UPSTON (Senior Whip—National):I seek leave to table an email referred to by the Hon Steven Joyce answering on behalf of the Prime Minister in question time earlier today.Mr DEPUTY SPEAKER: Leave is sought for that purpose. Is there anyone opposed to that course of action? There appears to be none. Leave is granted.Document by leave laid on the Table of the House.Imprest Supply (Second for 2013/14) BillFirst ReadingHon Dr JONATHAN COLEMAN (Associate Minister of Finance)on behalf of theMinister of Finance: I moveThat the Imprest Supply (Second for 2013/14) Bill be now read a first time .A party vote was called for on the questionThat the Imprest Supply (Second for 2013/14) Bill be now read a first time.Ayes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; Independent: Dunne.Noes56New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1.Bill read a first time.Appropriation (2013/14 Estimates) BillThird ReadingImprest Supply DebateHon Dr JONATHAN COLEMAN (Associate Minister of Finance)on behalf of theMinister of Finance: I moveThat the Appropriation (2013/14 Estimates) Bill be now read a third time and the Imprest Supply (Second for 2013/14) Bill be now read a second time . These bills authorise the appropriations and provide the financial flexibility needed to implement the Government’s Budget and economic strategy for the 2013-14 year.In considering this Budget it is worth reflecting on the environment in which recent Budgets have been prepared. When the financial crisis started in 2008 it was not appreciated that what was unfolding would become the worst financial crisis since the Great Depression and would impact economies around the world as severely and for as long as it actually did. By 2009 it was clear that many countries around the world werein trouble and that the recession New Zealand was already experiencing would likely be serious. Credible forecasters were predicting that unemployment could rise to over 10 percent and the Crown’s finances had deteriorated alarmingly. The previous Government had increased its spending by 50 percent over the previous 5 years. Much of this new spending was always questionable even when times were good. In the environment that had developed it was worse than questionable; it was simply unaffordable. Adding to this we were faced with the Christchurch earthquakes and the enormous costs of responding to these and then rebuilding the city. If no changes were made Treasury projected perpetual deficits and rising debt.This was unacceptable. This is not an academic or accounting debate. You do not need an economics textbook to know how that type of scenario ends. All you need to do is turn on the television or pick up a newspaper and read about events that are still unfolding in Europe to see the eventual severe economic and social consequences of ongoing deficits and unmanageable debt. Plainly action had to be taken. This was not a situation that could be solved by wishful thinking waving a magic wand or printing money. In the real world there were no simple panacea solutions that could simply and painlessly fix the problem. We faced up to the hard choices and made the decisions that had to be made. This Budget is a continuation of this measured and balanced strategy that we have adopted.A key issue that we had to address was the outlook for the Crown’s finances. We recognised that we initially needed to accept the large deficit and an increase in debt. This was needed to support living standards and to protect the vulnerable in the face of the global recession and to rebuild Christchurch after the earthquakes. We also recognised that alongside this we had to take resolute action to put the Crown’s finances on a more sustainable footing and to support the economy returning to economic growth. We did so.This Budget continues the Government’s economic and fiscal strategy. We have set ourselves a target of returning the Crown to surplus by 2014-15 and of returning net core Crown debt to 20 percent of GDP by 2020. I am pleased to advise the House that with this Budget we remain firmly on track to achieve these targets. Through tight spending discipline and setting key targets for public services we are returning the Budget to surplus while also improving services and providing new money for key priority areas such as health services early childhood education tertiary education and aged care. Through resourcing major initiatives such as welfare reform we are helping to assist those who can be reasonably expected to move off the benefit and into work while also reducing the long-term cost to the Crown.The other key part of our strategy is to support economic growth. We have made changes to the tax system to lower and more closely align personal and company tax rates and to shift the tax burden away from work and effort towards consumption. We have invested to support growth. The 2013 Budget continues this by allocating money to measures to support growth and innovation reducing ACC levies and improving the provision of new housing. Through the Future Investment Fund the Budget makes significant investments in New Zealand’s key infrastructure. Ten priority targets have been set for the Public Service where there are opportunities to make a substantial difference. Investment is being carefully targeted to support these. Christchurch remains a key focus. This Budget provides an extra $2.1 billion for the Christchurch rebuild taking the Crown’s total contribution to $15.2 billion. I am pleased to be able to state that the strategy is working. New Zealand has recorded GDP growth of 2.5 percent for the year to March. There are now 50000 more jobs than 2 years ago and the unemployment rate has fallen to a 3-year low of 6.2 percent.I spoke before about balance. Even though we are on track to achieve that this Budget is not just about balancing the books. It is balanced in a wider sense in that it focuses on improved public services on meeting social needs in areas such as health and education and on supporting a return to sustained growth. We have set out a clear strategy for New Zealand’s recovery and prosperity. With this Budget we are sticking to it. This is not an unaffordable reckless-spending Budget nor is it an austerity Budget. In fact it provides for $5.1 billion of new operating spending in the current year and over the next 4 years as well as allocates $1.5 billion of capital investment into hospitals schools and priority health investments. This is a balanced and considered approach to achieving long-term growth and prosperity for New Zealand. I commend these bills to the House.Hon DAVID PARKER (Labour):The last speaker Jonathan Coleman said that Government expenditure rose alarmingly under Labour. Then he proceeded to abuse statistics really. He quoted nominal growth figures not real figures so he failed to take inflation into account; and he included under the Labour Government’s increases in spending the Working for Families tax credits which we remain proud of but in the way the National Government reports them they show up as spending rather than tax reductions.It is notable that that happens differently in other countries and it is one of the things that needs to be fixed in the way in which New Zealand’s accounts are presented. Indeed you would think from listening to that speech that the current Government inherited very poor Government books and has had to pursue austerity and cut major programmes to get back to surplus.Hon David Cunliffe: How many surpluses in a row?Hon DAVID PARKER: Well David Cunliffe asks me how many surpluses in a row the prior Labour Government ran. It was nine. It was nine out of nine.Hon David Cunliffe: How many has National run?Hon DAVID PARKER: National has run none. The largest of Labour’s surpluses was approximately 6 percent of GDP and we had a number of them that were very large all of which were opposed by National. The sum total of those surpluses allowed Labour to reduce Government debt in a time of plenty and they were good times under Labour. We reduced gross Government debt from 38 percent to 18 percent of GDP and we got net debt down to zero—zero. We got net debt down to zero. Since then this Government has run deficit after deficit after deficit. We agree with the Government that it is important to get back to surplus because the last Government that ran deficit after deficit after deficit and never got back to surplus and left the country really in the doo-doo was a National Government under Mr Muldoon. In this country we still have that memory and it is fair to say that since then Governments from both sides of the House be they National or Labour have been fiscally responsible. We have not had a fiscally irresponsible Government since Muldoon and that is why in the Labour Party we actually agree that it is appropriate to get back to surplus next year—and we would have too. So much of that crowing relates to a rewriting of history that does not withstand scrutiny.Indeed if you think about it since this Government came to office it has also had tax cuts—unfairly in that 40 percent of its income tax cuts went to the top 10 percent. But if it was in such terrible trouble how come it managed to get back to surplus having cut taxes as well? The reality is that the accounts it inherited and the economy it inherited from Labour—the accounts certainly—were amongst the strongest in the world. Unemployment was low—it was one of the lowest in the developed world—and this Government inherited the benefit of that.The problem with this Budget is that it does not work for the everyday New Zealanders who rely upon a Government to set fair settings which give them opportunities which give them prosperity and which push against inequality. This Budget does none of those things. The Minister even had the audacity to say that this Budget set up a future for a decrease in ACC levies. What this Budget and the Government’s Budget for next year do is bank excessive ACC levies which means that they technically get an operating balance before gains and losses surplus which includes the benefit of those excessive ACC levies and then they drop them. The Government could actually drop them this year because it is collecting more than it needs to pay the bills but as a consequence of its failure to do that for political reasons New Zealanders pay higher ACC levels higher petrol prices—Hon Clayton Cosgrove: Bribe them in election year.Hon DAVID PARKER: —and it will use them as an election bribe next year.The Government came to office on the promise that you were going to say goodbye to higher taxes not your loved ones. Since then more than 200000 have gone to Australia permanently lots of people are still leaving permanently for Australia and 40 percent of them are aged between 18 and 30. Why is that? Why is it that so many young people are leaving? The reality is that too many of our young people end up in low-paid service jobs. All of this work is dignified—every job has dignity—but the reality is that too many of our young people are overqualified and end up pulling coffees and cleaning the elderly if we are truthful about it.You know they are stuck in service jobs because the productivity of our economy is not improving in large part because this Government refuses to pull the levers that it has available to it to improve the shape of our economy. It continues to undermine wages. Its latest labour reforms are so nonsensical. It says that people lose the right to strike—or lock out in the case of an employer—once there is an irreconcilable breakdown effectively. So an employer—or a union for that matter but it will always be the employer—can go to the court and say: “Look this negotiation’s broken down.” and from that point forward the right to strike or lock out is lost. What that must necessarily do is that for those who do not want to lose their right to strike they have got to exercise their right to strike earlier.So this legislation which is said to be designed to improve industrial relations will increase strike action because it is not about that. It is actually about further driving down wages and working conditions for the everyday New Zealanders despite the fact that we know that over the last 20 years the share of national income that has gone to wages and salaries and the share that has gone to profits has changed with more going to profits and less going to wages and salaries. Despite that National wants to make inequality even worse than it already is in New Zealand.The OECD in its recent report complained to the New Zealand Government that we have got one of the highest rates of increase in income inequality in the OECD. It said that amongst other things we need to fix that by fixing the tax system which is more beneficial to the wealthy than it is in virtually any other OECD country in respect of a substantial part of income for the wealthy which is income earned through capital gains. It says that capital income in New Zealand is under-taxed. It is real income. It is real income except to the extent that it is inflation. Most of it is real income. You have got to be careful you do not tax the inflationary component but you should be taxing that income because otherwise it is not fair.The wealthiest people in society pay lower rates of tax and the gap between rich and poor grows ever higher. Not only would a capital gains tax help fix that according to the OECD—and the Labour Party agrees—it would improve the economy because money would be invested in the economy on the basis of profitability of enterpriserather than on the basis of chasing a tax bias. And that tax bias is one of the things that is driving up Auckland house prices for ever higher beyond the reach of first-home purchasers. Homeownership rates in Auckland are under 60 percent for the first time ever. Those homeownership rates are declining because people are competing for the purchase of those houses as rental houses. Some of those people are from overseas; some of them are from New Zealand. Both of them have an advantage in terms of the tax settings which make that sort of investment tax-preferred compared with investments in other parts of the economy like in factories and things that pay real wages.These are the reasons why we have this two-speed economy in New Zealand why this Government prefers the interests of a wealthy elite against the interests of everyday New Zealanders why we have got this rising gap between those who have and those who have not and why we have got some regions thriving whilst other regions are doing very poorly. It is true that the Christchurch economy is starting to boom on the back of billions of dollars of reinsurance money being re-spent in the rebuild of that economy and yet we have got other parts of the economy that are fading away. In the next census—Carol Beaumont: The Government’s done nothing about it.Hon DAVID PARKER: That is right. The Government does not take an interest and it does nothing about it and the census results which are going to come out soon are going to show how dire that is becoming in some of the provincial parts of New Zealand.We have got house price inflation in Auckland that is running in double digits despite the fact that underlying inflation is low. We have got power prices continuing to go up at five times the rate of inflation. We have got profiteering on the back of the public water resource which is now being privatised through the asset sales programme of the Government concentrating the value of the profits that are being extracted from the public resource into the pockets of the very small proportion of New Zealanders who own shares in those companies.This Government came into office pretending it was going to govern for everyone when in actual fact we know that those who benefit from it disproportionately—hugely disproportionately—are those who have already got the most. It is not right. We are seeing the same thing in education. We see the Government propping up Wanganui Collegiate School despite the recommendation of the ministry saying that no additional school was necessary there at a cost of millions of dollars every year. That is effectively at the cost of poorer children or middle-class children in other schools—Mr DEPUTY SPEAKER: Order!Hon David Parker: —who are suffering. Have I finished time-wise?Mr DEPUTY SPEAKER: You have. Your time has concluded Mr Parker.CATHERINE DELAHUNTY (Green):Tēnā koe Mr Deputy Speaker. Thank you very much. I also want to talk about the economy this afternoon. It is the economy that does not get mentioned here—the elephant that tramples around the room. The so-called real world is often referred to but the economy that is ignored in terms of many of the appropriations including Vote Energy is the economy that we all survive on: the water the climate the earth and the soil. Without those things being sustainable all of the endless rhetoric around balancing books and paying taxes is pretty meaningless.We see around the world increasing threats to our climate and yet this country has made no attempt in recent years to do anything about it—nothing. The Arctic is melting and we are down to a large lake that used to be pack ice. It is almost like the naked emperors are running the country and imagining that if we just talk about fiscal balance and if we just ignore the fact that most of our rivers are polluted that we havecontaminated a large part of the country and that the only plan is to dig it up and sell it on the commodities market—which is collapsing at the moment for gold and is very shaky for coal—somehow that is going to fix everything. In the end like anyone else who manages a house you do it with a budget and if that budget is not based on the foundations being strong it does not matter how well you play with the numbers—there is no house.The tragedy is that the natural world is such an extraordinary intricate sophisticated economy and our relationship is not sophisticated. Our relationship with the economy—and particularly this Government’s and particularly this Budget’s—is a very very crude relationship. In fact I do not think the Government mentions the environment at all in the latest Budget. I do not think it got even a one-liner. All it did was cut the Department of Conservation’s spending and then put $18 million from energy and resources aside for the management of Crown minerals in this country.It was a really interesting spend that one. About $4 million was spent on research so I had a look at what research the Government was doing because I thought well it would be interesting to see given its track record what it was researching. I found out that quite a lot of that $4 million is being spent on contracts to do things like identify indicators to permit the discovery of new gold deposits in areas of southern New Zealand. So in other words let us help the industry by doing the research and let us find the indicators. Let us do it for the industry—that is our job. The State’s job is to actually find minerals for members of the industry most of whom will then take the profits offshore. Identify sources of platinum—that was another research project. The Government in its desperation to attract overseas investment into platinum is doing its best to find it for investors. It is not actually its job to find all the minerals but that is what it is going to do.Another research project in this Vote Energy was to build a framework for utilising mineral resource development. Another one was to enable the management of offshore mining. Well enabling the management of that is going to be a challenge to anybody given the global record of the offshore drilling companies and the disasters—Thailand being a case in point. The latest exploration spill in Thailand is an utter disaster. So why this Government would be able to manage that given that it could not manage a small coastal disaster I have no idea. It claims that the project will identify gaps in our understanding of the environmental impact of offshore mineral and hydrocarbon extraction. This of course is not unrelated to the bills that were put through to stop protests at sea and it is not unrelated to the bill that has just been through its second reading in the House around spying on everybody. These are all connected in the great economic plan and the great economic plan—which is mine it kill it drill it—is unfortunately out of step with what is going on if we just raise our heads a little bit and have a look around the world.Kevin Rudd made an interesting comment recently when he came back into his role as Prime Minister. He said that he had always been concerned about Australia’s dependency on minerals and that the truth is in 2013—I am quoting Mr Rudd here—the China resources boom is over and because the China resources boom is coming off Australia’s core economic strategy for the future must be one that diversifies the economy. Kevin Rudd is possibly not my soul brother in his views on the mineral industry—I think that is quite possible—but even he can see that there is a need to create more jobs in manufacturing food production infrastructure construction and the service industries rather than having the eggs in one basket. In this country we are desperately trying to find the basket and invite other people in to take the eggs out and sell them for their own benefit. That is our strategy but if you look at what is happening globally no one else recommends this.Coal has got very shaky and we have seen the consequence of that for Solid Energy and also for the people of the West Coast who are experiencing a major cycle and a continuous cycle which will always happen with the commodities market. It is nothing that is new and it is nothing that can be relied upon. It is like an addiction whereby it is almost like we know it is going to fail we know it is going to hurt but it is the devil we know. We will do what we have always done and we will get what we have always got which is a boom and then a bust.That is what happening not only in coal on the West Coast but also in gold. OceanaGold has just announced that it is going to mothball and Newmont Mining Corporation the wonderful multinational in my district has just announced that it is going to cut a third of its staff worldwide. Why is this happening? This is happening because after the global financial crisis there was a peak in minerals in particular and of course as things change and allegedly re-stabilise—although I find that ironic given the runaway mess that the economies of the world are in—people are no longer buying up gold.It is no longer what it was. Very conservative organisations such as Ernst and Young are saying that there are enormous risks in investing in minerals so it might be good if the Government actually looked at its own natural allies like Ernst and Young and had a look at what is actually happening before it relies on an entire economic plan based on digging up minerals that are losing their value on a daily basis.It was interesting that the report that was done by Ernst and Young talked about the top 10 risks over the next 5 years. It studied this from 2008 to 2012 but looking forward it says those risks still exist. One of them is resource nationalism. That is people are not so keen in many parts of the world to hand over their resources. In terms of resource nationalism people are more keen to get benefit for themselves—funny that—but multinationals are seeing that as a problem. Not of course in Aotearoa where the door is constantly being opened where the law is constantly being rewritten where it is: “Welcome welcome take take take—we love you.” Whether it is Warner Bros or minerals does not really matter. We are almost like an abused child who cannot fight back. We just will say anything we will offer anything and we will change any law so long as someone still appears to love us.But according to these top 10 risks—there are a number of them but one of them is that the mining industry is at risk because it is losing the social licence to operate. What that means is that everywhere on the planet there are people—characterised as lunatics as we often are—who actually think that looking after the environment is fairly fundamental. That is one of the reasons that disinvestment is taking place in the mineral industry. Another one is price and currency volatility. That is manifest right now. You see it with OceanaGold. You see it with Newmont Mining Corporation. They just cannot rely any more on those inflated prices and they are cutting jobs and they are cutting people’s livelihoods. They are also unable to plan a future that they thought was secure. This is normal for them; they do not really care. It is like: “Well you know we got some gold out we didn’t pay much tax we didn’t pay many royalties and now we’re gone—it’s all good.”But for people in towns like Waihī who are looking at mining underneath their houses if the price collapses it may save them. If they are saved it will be not because of any vision in this Budget or any vision in this Parliament. I have never heard of a country that allows mining directly underneath people’s houses causing vibration dust and shaking and collapsing their property values and nobody cares what happens to those people. Minister Bridges was recently in Waihī with Scott Simpson Coromandel MP and I was told by the locals when I visited them the next day that they were appalled by the lack of concern the lack of interest in what is happening to them. Theyare on their own. Companies are allowed to mine underneath their homes because the multinationals will do whatever it takes to get the dollar while there is a dollar to be made. As soon as that collapses they are gone.So what is going to be the new plan? What are we going to do next? The Green Party has many ideas. There are many positive things we can do to build an economy based on the reality that is called the Earth. We forget that at our peril.DENIS O’ROURKE (NZ First):The Government’s Budget this year is accurately described as the boring Budget. No doubt the lolly bag will be opened next year before the next election. This Budget fails to address the major economic and social issues facing New Zealand. It is boring because it achieves very little. What the Budget exposed is that the Government does not actually have a coherent economic policy. There is no economic vision no economic plan for improving the lives of ordinary Kiwis. Instead all we get are deals—deals with specific interests or lobby groups: Skycity Warner Bros China Southern Airlines and so on.For example it has now been revealed that Treasury warned the Government back in November 2011 that the private benefits to Skycity would exceed the public benefits. But National is blatant in ignoring any advice or any information contrary to its agenda. Then there are the other deals like selling State assets so assets go from being public assets to being in the hands of a few. Everything is up for sale: our land and assets our laws and even our citizenship. Those deals have one characteristic: they favour the few—the wealthy few—at the expense of the New Zealand public as a whole. In fact the Skycity deal is likely to be the defining event of John Key’s Government. In all its sleaze corner cutting manipulation of process and trashing of the public interest it will stand as an ignominious and outrageous legacy of the John Key Government. It really is a shocker. In the Government’s contract with Skycity it has stitched up subsequent New Zealand Governments for another 27 years. It has also effectively killed the Aotea Centre as a convention centre at a cost of who knows how many millions to the ratepayers of Auckland. And this is from a Prime Minister who touts his financial savvy and prowess!Unemployment remains a huge problem for New Zealand. It is no excuse that other countries have worse. The Budget offered little comfort for unemployed people in New Zealand. At the end of March 2013 nearly 150000 New Zealanders were unemployed. That is an appalling amount of wasted human potential and productivity. With high levels of unemployment a rational Government would put the brakes on immigration and drastically reduce the number of immigrants. But this Government gave temporary work visas to 140000 people in the year to mid-2012. That is a staggering number of jobs. In the case of Chinese migrants parent category migrants outnumbered skilled migrants by a ratio of 2:1. In contrast New Zealand First’s policy is for a rigorous and strictly applied immigration policy. New Zealand First says immigration policy should be based on New Zealand’s interests and the main focus should be on meeting critical skills gaps. Unlike this Government we would put Kiwi workers at the front of the job queue.Housing is the single biggest problem facing New Zealand today. The Government’s Budget measures on housing policy are actually a mess and fail to deal with the housing crisis especially in Auckland and Christchurch where there are severe housing shortages and where first-home buyers especially have no hope of buying a home. In a homeowning democracy which New Zealand has always been this is a national disgrace. The Housing Accords and Special Housing Areas Bill would be all right as far as it goes with some modifications in establishing special housing areas but it does not go far enough. In Auckland there is a need for at least 12000 new houses per year and there is already a housing deficit there of well over 30000 houses. Under theGovernment’s plans there is a probability of no more than 10000 new houses per year if that. On that basis there will never be a catch-up. The worst is that young people seeking a first home will not be assisted by this Government under this Budget to get a home of their own.To make matters worse it is highly likely that the Reserve Bank will shortly limit the quantum of high loan-to-value ratio mortgages that the trading banks can make. This is a flawed policy too—a second-best strategy. Normally the Reserve Bank would raise interest rates but that cannot be done without raising an already overvalued New Zealand dollar. If the loan-to-value ratio mortgage limitation does happen many first-home buyers on low incomes can kiss goodbye homeownership in this country. The Reserve Bank does not care and this Government does not care either. The policy will do nothing to deter property investors and speculators who have been buying up Auckland property and who also have ample equity already. It does nothing about the migrant flows which have been concentrated in Auckland. It does nothing to tighten immigration policy in areas such as parental reunion which have added significantly to housing demand in Auckland. It is not the first-home buyers who have caused the housing bubble but they will be the sector most heavily penalised by limits on loan-to-value ratio lending. The Government’s policies overall are to blame for this situation. Over the last 4 years the Government has allowed a housing price bubble to emerge through its inept immigration and housing policies.Only a comprehensive housing strategy designed to address both demand and supply factors as advocated by New Zealand First will make housing affordable for first-home buyers. New Zealand First supports a broad-based housing policy that will make homeownership a reality again rather than just a dream for ordinary New Zealanders. New Zealand First’s policy to assist first-home seekers is to establish a new State agency to acquire land where demand clearly exceeds supply and to sell residential sections of modest size on long-term agreements for sale and purchase up to 25 years to first-home seekers with concessionary 2 percent interest rates for an initial period of 3 years. Purchasers would build their own houses using normal bank financing. The Government’s special housing areas are not enough. New Zealand can do better with New Zealand First’s policy on housing.Another New Zealand First policy that should be adopted is to put the brakes on foreign speculators pushing up Kiwi house prices. This was recently copied by Labour I am glad to see. The only difference is that we would not allow exemptions based on nationality. Labour says it will exempt Australians. New Zealand First would apply this policy across the board. There will not be any exemptions based on nationality race or any other form of discrimination. We will stop all non-residents from buying both existing houses and sections for houses. The justification is clear. We know that some foreign nationals can get very cheap loans not available to Kiwis and these people can therefore outbid Kiwis in the house property market especially in Auckland. To make matters worse this Government allows parent reunion category immigrants under tier 1 to have fast-track entry into New Zealand if they bring in at least $500000 with them. So National’s witless immigration policy also makes the Auckland housing problem worse. New Zealand must regulate the foreign ownership of residential property if it is to fully address the Auckland housing market problem.This year’s Budget was a wasted opportunity. It exposed just how incapable the Government is of getting to grips with the economic challenges facing New Zealand.PAUL GOLDSMITH (National):It is my pleasure to speak in this debate. It is fair to say that few Budgets in recent times have received such a warm reception as this the fifth Budget in Bill English’s time as Minister of Finance—a very positive reception. We have had some stories today about business confidence in New Zealand. Businessconfidence has been strongly rising since the middle of last year according to the ANZ’s monthly survey. It has hit the highest level since April 1999. Members of the House might wonder what is significant about 1999. It was actually in the previous National Government that we saw the same levels of business confidence. A net 53 percent of respondents expect the general business situation to improve over the year ahead up from 50 percent in June. That is a net 50 percent.Business assessments of their own outlook remain high. Construction firms are upbeat. Agriculture is still according to that survey not the highest but that survey did not capture Fonterra’s announcement that it has lifted its forecast milk price for the 2013-14 season up to $7.50. The combination of higher prices and increased production can be expected to boost the economy by a further $3 billion. So we have great cause for optimism. The ANZ survey showed profit expectations increased to a 14-year high driven by the service sector. Investment intentions remain at their second-highest level in 8 years. Employment intentions are very high. The ANZ’s Confidence Composite growth indicator combined with the Roy Morgan Research survey is pointing to a potential for 3.9 percent economic growth by the end of the year. These are very positive stories.Then if you turn to the country’s business leaders we saw the overwhelming majority of respondents in the 2013 “Mood of the Boardroom” survey indicating that New Zealand is going forward over the next decade. When rating the prospects for their own businesses and the domestic economy the majority of business leaders report they are more optimistic than they were a year ago and more confident that over the next 12 months we will see increasing staff and investment in capital and IT.I can quote from the Business New Zealand Chief Executive Officer Phil O’Reilly: “Bill English has really been an exceptional Minister of Finance … He has been sober boring and sensible but the macro settings have been just right. He deserves more credit for that.” So it has been a very positive reception. I will not mention the polls because that would be—[Interruption ] No no that would be gloating. But generally we have certainly had a warm reception for this Budget that we are debating in this House today. New Zealanders know. They feel it in their bones. They know that this country’s finances are well managed and this Budget confirms that New Zealand is on the right track. Growth is amongst the best in the OECD unemployment is falling real wages are rising inflation is subdued and interest rates are the lowest in decades.As for the Government books this time last year after that Budget nobody believed that the Government would be back in surplus by 2014: “Oh no no no. They’re not going to make it. There’s no chance of that.” And what do they say today? They know that it will be back in surplus and this country’s books are going to be back to where they should be. This country is confident that the Government knows what it is doing. It is disciplined in its spending. It is extracting better value from its core spending in the Public Service and it is providing that secure and stable environment in which businesses feel confident to invest to grow and to employ. That is what this country needs and that is what is going to provide the strength behind the incomes and put the food on the table of the New Zealanders who are trying to do their best.I am not saying that we do not have challenges in this country. Of course we have challenges. There is no need for us to be triumphalist about what is going on here. We are certainly making good progress in improving the welfare system that we have in this country. Paula Bennett deserves a great deal of praise for that getting some boundaries round a system that has been growing—no questions asked—for decades and showing that actually we believe that everybody can work should work and should contribute and it is actually best for them and their families if they do have that opportunity.The other area that we hear a lot of concern about quite rightly is housing particularly in Auckland given the rapid increase in house prices there. On the face of it that is no bad thing. If you have a house that is something to be enjoyed. But it is a concern for people wanting to get on the housing ladder and it is a concern for the potential stability of the New Zealand banking system where so much money is invested in housing. So rightly this Budget was very much focused on addressing Auckland’s affordability issues. We have seen over the last few days all manner of options thrown up as a potential solution. We hear constantly from the Labour Party about how a capital gains tax would somehow miraculously solve this problem notwithstanding the fact that capital gains taxes on housing in Australia in the UK and in the US have done nothing to avoid similar housing bubbles there. More recently we have had suggestions around overseas buyers.There is no question but that there is an issue with the demand for housing and we do need to deal with these concerns in a thoughtful and in a considered way but the other side refuse to hear any talk of an acceptance of the basic need to build more houses as quickly as possible as the best means of getting houses—Carol Beaumont: That’s not correct—100000 affordable houses.PAUL GOLDSMITH: Well yes it is very easy to talk about waving a wand and the Government somehow with its great track record on building houses coming up with 100000 houses for $300000 notwithstanding the fact that the price of an average plot of land in Auckland is much more than $300000. Despite promises that nobody believes have any grounding in reality when it comes to the crunch of whether you support the efforts that the Hon Dr Nick Smith has made in reaching out to the Auckland Council reaching out to Len Brown reaching out to people whom we do not necessarily agree with on all matters of all shapes and sizes coming up with these housing programmes and special housing areas and actually doing something and making a difference what happens? Do we get the support that we deserve? Do we get the support from Labour? No we do not. All we get are schemes dog whistles and all sorts of focus on the edges and on small elements of the broader issue and a refusal to accept the need to focus on increasing the supply. That is what this Budget was focused on. I commend the work of Nick Smith and his team for making progress on that.To get back to the broader issues let us not forget the four priorities. The essence of the support I think and the confidence that we see in the business community which ultimately leads on to investment growth and jobs is in the predictability and consistency of the Government’s messages over the last 5 years—the predictability about responsibly managing the Government’s books about building a more competitive and productive economy about rebuilding Christchurch and about delivering Better Public Services. For 5 years we have had that consistency from this Government. We have not been lurching to the left and lurching to the right changing our minds every 5 minutes and getting in all sorts of tangles. We have been demonstrating consistency over the key issues around the economy.Although people on the other side can fool themselves into thinking that everybody is concerned about their little side issues and their little politics when you look down at it most people are concerned about the strength of the economy and that they have got good money in their pockets and have got prospects of a good job and that their children have got prospects of getting a good job. That is what this Budget has been delivering. It has been showing that we are back on track for surplus. Looking around at the rest of the world where there is low growth and where Governments are struggling to deal with their debts and are not actually getting on top of the fundamental issues New Zealand by contrast has so much to be pleased about in the progress that we havemade over these past 5 years. I just hope that we will be given the opportunity for Bill English—Mr DEPUTY SPEAKER: Order! The member’s speech has concluded right on the time it is for the House to rise.Debate interrupted.The House adjourned at 6 p.m.