Volume 697 Week 69 - Thursday 10 April 2014Text is incorporated into the Bound VolumeVolume 697 Week 69 - Thursday 10 April 2014[Sitting date: 10 April 2014. Volume:697;Page:17169. Text is incorporated into the Bound Volume.]Thursday 10 April 2014Mr Speaker took the Chair at 2 p.m.Prayers.Business StatementHon GERRY BROWNLEE (Leader of the House):When the House resumes on Tuesday 15 April the Government will look to progress a number of bills on the Order Paper including the Vulnerable Children Bill the Victims of Crime Reform Bill and the Victims’ Orders Against Violent Offenders Bill. On Wednesday 16 April effective on the morning of Thursday 17 April and with the agreement of the Business Committee the House will sit in extended hours to progress further Treaty of Waitangi settlement legislation.GRANT ROBERTSON (Labour—Wellington Central):I thank the Leader of the House for that update. I just wonder whether he could confirm that when we reach the next members’ day the Government will ensure speedy progress to allow Sue Moroney’s Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill to have the airing in the House it deserves.Hon GERRY BROWNLEE (Leader of the House):That is a rather confusing request to come from the shadow Leader of the House. I note that yesterday the Opposition in fact stalled the day by asking questions to members and further put in a letter to the Speaker seeking an additional hour-long special debate. Then after years of saying this is the fastest-legislating Government in the West it said we need to actually stop going quickly or go even more quickly. So what is the position of the Opposition? Does it want good legislation or not?Questions to MinistersOil and Gas Exploration—2014 Block Offer and Conservation Land1.Dr RUSSEL NORMAN (Co-Leader—Green)to the Minister of Energy and Resources: Does he think conservation land designated as ecological areas should be opened up for petroleum exploration as part of Block Offer 2014?Hon SIMON BRIDGES (Minister of Energy and Resources):Yes and as the member knows any operator wanting to undertake exploration activity within these areas would need to first meet all the regulatory requirements including obtaining an access agreement from the Department of Conservation and resource consent under the Resource Management Act from the relevant local authority. Let us remember that the block offer is a call for exploration bids and that exploration itself is just the first step in a long process that may or may not lead to production.Dr Russel Norman: Is he aware that the Conservation Act which applies to all Ministers says that every designated ecological area “shall so be managed as to protect the value for which it is held.”?Hon SIMON BRIDGES: Yes.Dr Russel Norman: Is he aware that the Orikaka Ecological Area was created to protect important great spotted kiwi habitat and how is allowing bulldozers to rip open this area to pave the way for gigantic drilling rigs protecting the value of this special place?Hon SIMON BRIDGES: I am glad that the member can name an ecological area because on radio this morning he could not.Mr SPEAKER: Order! Answer the question. [Interruption] Order! I invite the Minister to answer the question.Hon SIMON BRIDGES: But we take these issues very seriously. That is why I said in my primary answer that there is a layered process which this is merely the beginning of. The sort of issues that Mr Norman is raising will be processed and considered by the Department of Conservation and also through the Resource Management Act process.Dr Russel Norman: Is he aware that the Kaniere Ecological Area was created to protect dense rimu hill forest and habitat for long-finned eels and short-jawed kōkopu and how is allowing bulldozers to rip open this area to pave the way for gigantic drilling rigs protecting the value of this special designated place?Hon SIMON BRIDGES: I am not aware of that. It could be one of the ecological areas that the Labour Party consented when it was in Government and when Mr Norman’s party was propping it up.Dr Russel Norman: Is he aware that the Te Wharau Ecological Area was created to protect a relatively isolated pākihi and mānuka shrub land ecosystem and a fernbird population and how is allowing bulldozers to rip open this area to pave the way for gigantic drilling rigs protecting the special value of this special designated place?Hon SIMON BRIDGES: I will just speak to the member. It strikes me that this is scaremongering by the member simply because that is a party that says no to all development no ifs no buts. Actually this is a party on this side of the House and on its better days—Kevin Hague: I raise a point of order Mr Speaker. The Minister is making no attempt to address the question.Mr SPEAKER: I agree. The member will repeat the question for the benefit of the Minister.Dr Russel Norman: Is he aware that the Te Wharau Ecological Area was created to protect a relatively isolated pākihi and mānuka shrub land ecosystem and a fernbird population and how is allowing bulldozers to rip open this area to pave the way for gigantic drilling rigs protecting the special value of this special designated place?Hon SIMON BRIDGES: I am not aware of any of the emotive claptrap that the member is talking about.Dr Russel Norman: Is he aware that the Mount Hārata Ecological Area was created to protect unmodified red beech - dominant forests and wildlife habitats that are particularly important to birds and how is allowing bulldozers to rip open this area to pave the way for gigantic drilling rigs protecting the value of this special designated and legislatively protected place?Hon SIMON BRIDGES: I refer the member essentially to my earlier response to the last supplementary question. But I think it is worth understanding here that ecological areas in this block offer are entirely on the West Coast. The West Coast has had mining and conservation coexisting for the most part harmoniously for well over 100 years. There has been consenting in ecological areas under both the National Government and the last Labour Government which the Green Party propped up and did nothing to stop.Dr Russel Norman: Will he respect the wishes of New Zealanders who love our precious places and wildlife not to mention the Conservation Act by refusing to grant petroleum exploration permits over any designated ecological areas?Hon SIMON BRIDGES: Absolutely. That is why under this Government a third of New Zealand is conservation estate and 13 percent is schedule 4. We have a very clear policy that we are not touching any of that. In relation to the other parts of the conservation estate that are not in schedule 4 as I made clear in my answer to the primary question we have absolutely got robust processes through the Department of Conservation and through the Resource Management Act processes post the very start of it—which is exploration indeed that we have consulted on.Economy—IMF Reports and Impact of Economic Inequality2.Hon DAVID PARKER (Deputy Leader—Labour)to the Minister of Finance: Does he believe that the Government’s policies have reduced income inequality; if so does he agree with the IMF that rising inequality slows economic growth?Hon BILL ENGLISH (Minister of Finance):The evidence shows that inequality in New Zealand has been flat or slightly declining since the mid-2000s. We also believe that a number of the measures the Government took through the recession certainly prevented inequality from worsening at a time when the Government was very short of revenue. But I welcome the member’s interest in the IMF’s view because among its recent comments on New Zealand the IMF emphasised the importance of ongoing fiscal discipline to a sustainable economic recovery. Nowhere in the statement does the IMF refer to inequality and that is for a very good reason in respect of New Zealand—that inequality in New Zealand has not increased over the last 10 years.Hon David Parker: Well then do I take it that the Budget that is upcoming will reverse the 40 percent of the 2010 income tax cuts that went to the top 10 percent of income earners?Hon BILL ENGLISH: No. If the member bothered doing his homework he would have seen that at the time of the 2010 tax package we published detailed distributional impact measures which showed—Dr David Clark: Must be rubbish.Hon BILL ENGLISH: No. Those measures showed that the combination of income tax cuts and an increase in GST and effectively a billion-dollar increase in property taxes meant that that tax package was distributionally neutral.Hon David Parker: Is he so out of touch that he thinks that inequality is not getting worse when 74 percent of New Zealanders believe that the gap between rich and poor has increased under his Government or does he side with the 3 percent who think that the gap has narrowed?Hon BILL ENGLISH: That member may be a stranger to the facts but I am not. The measuring system of the previous Government which I understand was a Labour Government was such that regular reporting on inequality was carried out by highly qualified professionals. That is the information on which we relied for the statement that inequality in New Zealand has not got worse in the last few years.Grant Robertson: Everyone else is wrong.Hon BILL ENGLISH: I accept that some people believe that. The fact is it is not correct.Hon David Parker: I seek leave to table the results of the Herald-DigiPoll which showed that 74 percent of New Zealand—Mr SPEAKER: Order! The point has been made. The Herald-DigiPoll is available to all members.Hon David Parker: How can he justify being out of touch with the 74 percent of New Zealanders who say that inequality has increased when homeownership has declined to its lowest rate in 50 years under his watch?Hon BILL ENGLISH: I am not sure the member is correct about the homeownership figures but in any case we look for—Hon Dr Nick Smith: They got worse under Labour.Hon BILL ENGLISH: Well under Labour house prices doubled which probably did not help. But despite the severe damage Labour caused to the housing market we would like to see the Opposition parties support Government efforts to increase the supply of housing by helping us persuade councils to allow more new houses to be built more quickly.Louise Upston: What recent reports has he received from the IMF on the New Zealand economy?Hon BILL ENGLISH: The most recent report from the IMF did not refer to inequality as a constraint on growth for the very good reason that inequality in New Zealand has not worsened. It did note that New Zealand has broad-based economic growth and increasing business and consumer confidence. It said that the Government’s fiscal management and monetary policy has helped to deliver improved resilience against future shocks to the economy. It considers that the steps taken by the Government to alleviate housing supply bottlenecks will ease pressures in the housing market and in the long run I believe those steps will help to ease inequality in New Zealand because one of the biggest drivers of inequality is the high cost of housing.Hon David Parker: Does he deny that the current annual student turnover rate at decile 1 primary schools which is a shocking 52.8 percent per annum is a further symptom of rising inequality and is this further evidence supporting the findings of the OECD that inequality is having a major and negative impact on educational outcomes in New Zealand?Hon BILL ENGLISH: No I do not agree with all of that. The interesting thing about the OECD work is that it shows that economic inequality in New Zealand has among the lowest levels of impact because of our education system. Part of the reason for having public education—in fact the main reason—is to overcome the inequalities of birth and inequalities of opportunity. That is why this Government is so strongly focused on helping our system be more effective in overcoming economic inequality. Another reason there is high transience in those schools is that the State housing system does not meet the needs of those with serious housing need. That is why the Government is changing that policy next week.Hon David Parker: Why can the Minister not see that rising inequality under National goes against the egalitarian values that New Zealanders hold dear is making educational outcomes worse and is holding back economic growth?Hon BILL ENGLISH: There is a very simple reason we do not believe those things despite the fact that the member does and that is that the measures of inequality in New Zealand and the facts demonstrate that it has not got worse. That is not a political assertion or an ideological conviction; it is the facts as laid out in the annual report from the Ministry of Social Development which was set in place by the previous Government. On “Planet Labour” I know facts have very little impact but on Planet Earth and in New Zealand the facts matter.Louise Upston: What comments has the International Monetary Fund made previously about the New Zealand economy?Hon BILL ENGLISH: In the light of recent discussion about the history of the New Zealand economy I looked for the IMF reports from 1975. That seems to have been the focus of economic debate in the House but actually I could not find any. Instead I went to the 2008 IMF report where the IMF talked about a number of issues facing New Zealand including what it described in careful bureaucratic language as “rapidly appreciating house prices”. It noted that in response to rising inflation the official cash rate reached 8.25 percent and homeowners faced floating mortgage rates of 11 percent. The current account deficit was 8 percent. All of those numbers are about double what they are now and they are measures of the wreckage that the previous Labour Government did to the New Zealand economy.State-owned Assets Sales—Progress Ownership of Genesis Energy Shares and Purpose3.Hon TAU HENARE (National)to the Minister of Finance: What progress is the Government making with its share offer programme to free up capital to invest in new public assets without having to borrow more from overseas lenders?Hon BILL ENGLISH (Minister of Finance):The Government is making very good progress. Last month the Government confirmed that Genesis Energy shares had been priced at $1.55 in the share offer book build which was the first stage of the offer. The general offer opened on 29 March and closes tomorrow. The total proceeds from the share offer will be up to $726 million with $620 million already committed through the book build so we will hand $726 million of share certificates to investors and they will hand us $726 million in cash. That means that the Government will raise $4.7 billion on behalf of taxpayers from the four share offers. That means we will be able to use that money to build hospitals build schools maintain KiwiRail and roll out ultra-fast broadband without having to go and borrow from the Opposition’s obvious friends the overseas bankers.Hon Tau Henare: What percentage of Genesis Energy shares is expected to be held by New Zealanders after the share offer is completed?Hon BILL ENGLISH: Right at the start of the programme the Government set a target of 85 percent New Zealand ownership. I know that many people were sceptical at that time that 85 percent New Zealand ownership could be achieved. In the case of Genesis Energy it is expected that around 88 percent of Genesis Energy will be owned by New Zealanders at the completion of the share offer so Kiwi investors have been at the front of the queue for shares. What that demonstrates is that New Zealanders are quite capable of making their own decisions without having to rely on the Government about investing their savings in large successful New Zealand companies. Quite why anyone would want to take that opportunity away from them is hard to understand.Hon Tau Henare: How many of the objectives that the Government set for the Genesis Energy share offer and the wider share offer programme have been met?Hon BILL ENGLISH: Despite the best efforts of the Opposition and the Māori Council we have achieved all of the objectives that we set. I am pleased to report that the four objectives were 51 percent Government ownership which has been achieved; New Zealanders at the front of the queue which has been achieved; companies that provide good opportunities for investors which has been achieved; and the freed-up capital being spent on new public assets which has certainly been achieved. The Government is satisfied that industry-specific regulation continues to protect New Zealand consumers who in the long run are the ultimate beneficiaries of this programme.Hon David Parker: And what about the money? Has his objective regarding how much he was going to raise been achieved; if not what is the difference? [Interruption]Mr SPEAKER: Order! I particularly want to hear the answer.Hon BILL ENGLISH: Yes. We set the—[Interruption] Well a far-sighted Government back in 2011 set a range of $5 billion to $7 billion in a programme that included Solid Energy. Solid Energy has dropped out and so with one less company we almost got to $5 billion—$4.7 billion. But I can assure the Opposition that that is enough money to buy some things and build some public assets in election year.Hon Tau Henare: What new public assets will the Government buy using proceeds from the share offer programme?Hon BILL ENGLISH: Well it is a very very long list but I will limit myself to just a few. The Government has so far allocated just $2 billion of the $4.7 billion. This includes $426 million for redeveloping the Christchurch hospitals one of the largest single public construction projects for a long time; $50 million to speed up the School Network Upgrade Project so our children can have access to the best technology; $94 million for the fourth year of KiwiRail’s Turnaround Plan; and a substantial contribution to building the new schools in Christchurch.Transport Infrastructure—Napier-Gisborne Freight4.DENIS O’ROURKE (NZ First)to the Minister of Transport: Does he agree with the conclusion in the 2012 New Zealand Transport Agency commissioned report by Opus International that coastal shipping followed by rail are the most cost effective modes of transporting freight over long distances in New Zealand?Hon GERRY BROWNLEE (Minister of Transport):The statement included in that question comes from a very simplistic reading of that report as it depends on which item is being freighted at any one time. What that report did was take one container and send it on five different modes around New Zealand and it concluded that that was an exhaustive way of working out what was the best way to transport any goods around this country. So I do not agree with the statement in its entirety.Denis O’Rourke: Why has he rejected the Hawke’s Bay Regional Council’s initiative to invest $5.5 million of ratepayers’ money over 5 years to re-establish a rail service on the mothballed Napier-Gisborne line if the Government makes a similar modest investment of $3 million to $4 million in repairs to the damaged track and other infrastructure so that a locally established company can lease the restored line and purchase the rolling stock from KiwiRail?Hon GERRY BROWNLEE: Because I have great respect for the ratepayers of that district. Secondly what I would tell the member is that if you look at the freight demand coming out of the area right now for 2 months of the year it puts an extra 17 trucks on the road per day and that is all that is in the increase. We have looked at that proposal. It comes from a group of people who are very keen on the idea but it simply does not stack up. If we supported it it would be a tragedy for the New Zealand taxpayer and it would be a bigger tragedy for the ratepayers of the Hawke’s Bay.Denis O’Rourke: Is the Minister aware that the council and the Napier Gisborne Rail Establishment Group consider that his ill-considered rejection of the initiative is based on a significant misunderstanding of their proposal; if so will he now reconsider it in the comprehensive manner that it actually deserves?Hon GERRY BROWNLEE: We have considered that proposal in a very comprehensive way. What I would say to the member is that if the Hawke’s Bay people are so keen on funding that rail line why do they need the relatively modest part from the Government as he suggests? If it is so good and it is going to work so well why do they not just come along and say: “Let us have the track so that we can make it all work.”?Denis O’Rourke: Does the Minister accept that this region cannot depend solely on a narrow winding State highway when the log harvest alone heading for the Port of Napier is expected to go from 90000 tonnes per annum at present to around 900000 tonnes within a few years adding at least 180 more logging truck movements 6 days a week on a road that is already congested with heavy vehicles; if not why not?Hon GERRY BROWNLEE: It will not matter how emphatic the member is in asking a question loaded with bogus facts. The reality is that no logs have travelled on that line at any point. Secondly the so-called wall of wood has been promised for decades. Thirdly until it does materialise until it is there why on earth would you expect the Government to put the head of the ratepayers in that district in the noose for some people who in the end will not accept that their figures are not good enough to make it work?Denis O’Rourke: Does the Minister confirm that the creation recently of nine new passing areas on State Highway 2 between Napier and Gisborne at a cost of $4 million made possible by a special Crown contribution and the National Land Transport Programme allocation of $9 million to $10 million over a 3-year period to improve the condition of that highway for a large increase in truck movements means that the Government will continue to favour expensive but relatively minor road improvements over a rail restoration proposal with a much better cost-benefit ratio in both the short and long terms?Hon GERRY BROWNLEE: If this member keeps on putting these figures in front of us David Cunliffe is going to reconsider his coalition options. There is no way that anything he has said makes any sense. Yes we put more money into making that road safer because surprisingly 97 percent of all the freight coming out of that area has always gone on the road.Denis O’Rourke: Are there any plans to extend electrification of the rail network and in doing so retain the valuable human resource of the expert and skilled team that is undertaking the Auckland rail network electrification; if not why not?Hon GERRY BROWNLEE: Certainly not on the Gisborne to Napier line.Denis O’Rourke: I raise a point of order Mr Speaker. [Interruption]Mr SPEAKER: This is a point of order and I want to hear it in silence.Denis O’Rourke: The question had nothing to do with the Napier-Gisborne line and was a general question—Mr SPEAKER: Order! I am going to on this occasion ask the member to repeat the question.Denis O’Rourke: The question was this: are there any plans to extend electrification of the rail network and in doing so retain the valuable human resource of the expert and skilled team that is undertaking the Auckland rail network electrification; if not why not?Hon GERRY BROWNLEE: Not at this point.District Health Boards—Resourcing and Service Delivery5.Hon ANNETTE KING (Labour—Rongotai)to the Minister of Health: What recent reports has he seen on the funding of hospitals in New Zealand ?Hon TONY RYALL (Minister of Health):I have seen reports that show that despite tight financial times this Government has increased funding for health by an average of $500 million a year and that health will again be the top priority for more investment in the upcoming Budget. I have also seen a report that showed that despite nearly doubling the health budget more people thought the health system had got worse. The report noted: “It is inconceivable that a Government could spend so much money and make the system worse.” Of course this report was from the Dominion Post in 2007 and referred to the previous Labour Government.Hon Dr Nick Smith: Who was the Minister?Hon Annette King: Not me. [Interruption]Mr SPEAKER: Order! If some members want to get away early to clean up for the reception tonight they may well get the chance.Hon Annette King: Oh no Mr Speaker I am enjoying it. Will he dismiss the concerns of the representative of senior doctors in our hospitals who said last week that staff shortages and underfunding are putting hospitals under intense pressure and we now have a health system that is prone to “erratic decision-making heavy-handed management and gaga behaviour”; if so why?Hon TONY RYALL: Of course I would completely reject that assessment from the union. That union increasingly looks like a branch of the Labour Party and that statement certainly confirms it.Hon Annette King: With district health boards like Waikato having 61 nursing vacancies and 18 senior doctor vacancies and the Southern District Health Board having 58 nursing vacancies and 12 senior doctor vacancies leading to staffing shortages and pressure on existing staff should staff publicly state their concern and distress over unsafe working conditions and stressful staff levels or are they just being union activists?Hon TONY RYALL: I think it is perfectly legitimate for staff to use the appropriate processes if they have any concern in respect of patient safety. What I would have to say is that if it is correct that there are 61 nurse vacancies in the Waikato it would be nice if the member also said that there are actually 2000 nurses employed by the Waikato District Health Board and that 61 certainly sounds more like 3 percent which is nowhere near the big shock horror story that that member would like to portray.Hon Annette King: Is he aware that there has been in increase of 18 percent in older New Zealanders turning up to emergency departments over the last 4 years and that this is now leading to huge staff pressure staff burnout low staff morale and concern at patient safety; if so is this just union members talking?Hon TONY RYALL: Quite the opposite. I think the health service is providing better care for older people when they present to the emergency department. It is faster and better than it has ever been and quite different from when that member was a Minister in a Government where old people languished on trolleys in corridors under bright fluorescent lights for days on end.Hon Annette King: Is he aware that some district health boards are now implementing service reductions driven by budgetary constraints—particularly in home care—so they can meet the pressure in hospitals for example in the Capital and Coast District Health Board where Official Information Act information shows that on average there has been a 37 percent reduction of service to people requiring home care over the last 3 years?Hon TONY RYALL: More money than ever is being invested in home-care services right across New Zealand. The Government has more money put in there. I think last year’s Budget put more money into home-care services as well. There has been a very significant investment.Hon Annette King: I raise a point of order Mr Speaker. I am sure you heard my question—Mr SPEAKER: I did hear your question.Hon Annette King: —and it was not about—Mr SPEAKER: Order! I heard the question. I now have to decide. The question effectively was: “Is he aware of increasing pressure on home care because of financial pressure?”. The Minister answered that by saying there was more money being debated. The question has been addressed. If the member has a further supplementary we will listen to it.Hon Annette King: No but I’d like one.Mr SPEAKER: I am sure the member would.Methamphetamine Action Plan—Initiatives and Funding6.MIKE SABIN (National—Northland)to the Minister of Police: What steps is the Government taking to reduce the supply of methamphetamine and its precursors into New Zealand?Hon ANNE TOLLEY (Minister of Police):This week the Minister of Customs and I announced $1.1 million will be used to place a police attaché officer in Guangdong Province in southern China for a 2-year trial to work strengthening our relationship with Chinese enforcement agencies. This police officer will help to identify organised criminals attempting to smuggle methamphetamine and its precursors into New Zealand. This funding will also be used for Customs Service and police staff to take part in targeted operations in China. Southern China is used by criminals to source precursors and smuggle them into New Zealand and this programme is expected to result in a significant disruption to this trade. New Zealand and Chinese agencies are already producing excellent results and this initiative will support them to be even more effective in keeping these drugs and precursors out of the country.Mike Sabin: How are the illegal profits from those in the methamphetamine drug trade being used to fund this initiative?Hon ANNE TOLLEY: The funding for this initiative is from money recovered under the Criminal Proceeds (Recovery) Act and is a key part of the Government’s Methamphetamine Action Plan. When this plan was established in 2009 the Government committed to using the money recovered from criminals to target the drug trade and help those affected by it to get treatment. In other words the criminals are paying us to catch them and treat their victims. It is a nice irony. Since the Criminal Proceeds (Recovery) Act came into force $39.4 million has been forfeited to the Crown over half of which has come from methamphetamine-associated offences. Alongside this programme initiatives funded from the proceeds of crime include an increase in residential alcohol and drug treatment enhanced front-line screening at the border and the training of drug dogs to detect large amounts of cash.Question No. 5 to MinisterHon ANNETTE KING (Labour—Rongotai):I seek leave to table an Official Information Act request from Southern District Health Board showing there are 58 nurse vacancies and 12 senior doctor vacancies.Mr SPEAKER: Leave is sought to table that particular Official Information Act request. Is there any objection? There is none. It can be tabled.Document by leave laid on the Table of the House.Hon ANNETTE KING (Labour—Rongotai):I seek leave to table an Official Information Act request from Waikato District Health Board showing it has 61 nursing vacancies and 18 senior doctor vacancies.Mr SPEAKER: Leave is sought to table that particular Official Information Act request. Is there any objection? There is none. It can be tabled.Document by leave laid on the Table of the House.Student Achievement—New Teaching and Leadership Roles7.CHRIS HIPKINS (Labour—Rimutaka)to the Minister of Education: Is she satisfied that no student will be worse off as a result of the establishment of the new category of Expert Teacher; if so why?Hon HEKIA PARATA (Minister of Education):Yes; because supporting a culture of collaboration within and across schools will help raise achievement for all kids because expert teachers sharing what they know and how they work will mean that best practice can become common practice and because this Government is investing $359 million to create better career pathways and lift student achievement. But there is a lot more work to do with the sector working group.Chris Hipkins: What evidence did she rely on when determining that no student’s educational progress would be impacted by the removal of their regular classroom teacher for up to half the time?Hon HEKIA PARATA: A range of evidence most of it set out in the Best Evidence Synthesis but also McKinsey and Company Helen Timperley Michael Fullan and Viviane Robinson all of whom have talked about the need for a collaborative culture to be established. Most recently last year the OECD came and studied the professional learning communities and acknowledged that New Zealand was leading the community in this regard.Chris Hipkins: Why should students and their parents have confidence that the creation of expert teachers will result in a higher quality of education for them given that if they are fortunate enough to have a teacher who is deemed to be an expert they will be rewarded by having that teacher taken away for up to half the time?Hon HEKIA PARATA: That is not so. We already have the situation in New Zealand where expert classroom teachers share their expertise across the system between classrooms and across schools. Also in the package if I could refer the member to the actual detail in the Cabinet paper it makes clear that it also funds inquiry time it funds relief time and it funds collaborative practice all of which are characteristics of top-performing education systems—most particularly Singapore and Hong Kong which that member wrung his hands over last year when we were discussing Programme for International Student Assessment results. These two systems were second and third for all three areas so it made sense to go and have a look at what they are doing and they are doing a number of these things.Chris Hipkins: Who will the expert teachers be accountable to—the principal of the school they are employed at or the executive principal overseeing the group of schools they will be working in 2 days per week?Hon HEKIA PARATA: Subject again to the caveat that I have made several times that we are still working through the details on this with the working group the employment relationship will remain. It will be undisturbed between that teacher and their employing board. Accountabilities as they are now are different for different purposes. So for an achievement challenge that that school in which that expert teacher is employed has participated in agreeing to then it will be accountability for the achievement of that particular challenge.Mr SPEAKER: Supplementary question Chris Hipkins. [Interruption] Order! There were quite a number of complaints about the level of noise in the House yesterday through question time. I expect my office will be getting similar complaints today. I ask members to please cooperate and have a reasonable level of interjection.Chris Hipkins: Why is the Government’s goal not ensuring that all New Zealand students are taught by expert teachers given that it is limiting the number of the new rolls to around a thousand across the country or around 2 percent of the teaching workforce? Why do the 98 percent of other kids not get to have an expert teacher as well?Hon HEKIA PARATA: This is exactly what this initiative is aimed at: growing excellence across the system not uniformity as that member is probably interested in. In fact one of the pieces of research that I refer to is McKinsey and Company of 2009 which said that when a student is taught by an excellent teacher for 3 consecutive years it can make 53 percent difference. Professor Hanuschek from Stanford has also said that expert teaching over 4 consecutive years can eliminate all aspects of socio-economic difference. So what we are trying to do here—Chris Hipkins: So take the expert teachers away.Hon HEKIA PARATA: I know it is complicated; I do understand that. What we are trying to do here is build excellence across the system.Tim Macindoe: What reports has the Minister had on benefits of a collaborative education system beyond what she has already told us?Hon HEKIA PARATA: I have had many reports on this topic but I would like to quote one that caught my eye from last year: “The real challenge that we should be addressing is how we allow every New Zealand school to be a great school and how we support every teacher in every classroom to be an absolutely outstanding teacher. All of the research from New Zealand and internationally shows us that quality teaching is the biggest in-school influencer of student achievement. We could talk for hours about the out-of-school influences and there are many and I acknowledge all of those. But within the school quality teaching is the critical factor.” Who said this? It sounded so much like me that I thought it was me but it was Chris Hipkins on 29 May in his speech in Committee on the Education Amendment Bill.Chris Hipkins: I raise a point of order Mr Speaker.Mr SPEAKER: A point of order and I certainly hope it is a genuine point of order.Chris Hipkins: It is Mr Speaker. It was an excellent speech. I seek leave to table it.Mr SPEAKER: Order! That is not a practical point of order at all.Warm Up New Zealand Programmes—Progress8.JONATHAN YOUNG (National—New Plymouth)to the Minister of Energy and Resources: What update can he give on the Government’s Warm Up New Zealand home insulation programmes?Hon SIMON BRIDGES (Minister of Energy and Resources):I am delighted to announce that 250000 homes have been insulated since 2009 under the two Government programmes Warm Up New Zealand: Heat Smart and Warm Up New Zealand: Healthy Homes. Under the Warm Up New Zealand: Heat Smart programme 238000 homes have been insulated; it had an original target of 188500 homes. Already 12000 homes have been insulated under the Warm Up New Zealand: Healthy Homes project which started late last year. I want to thank third-party funders insulation service providers and local authorities which have worked together with the Energy Efficiency and Conservation Authority to help make these programmes such a stunning success.Jonathan Young: What reports has the Minister seen on the success of the Warm Up New Zealand: Heat Smart programme?Hon SIMON BRIDGES: I saw a report late last year from the co-leader of the Green Party that said: “Heat Smart is a Green success story.” I would like to thank my friends in the Green Party for supporting the Warm Up New Zealand: Heat Smart programme developed in 2009 which is helping keep homes warmer and drier. It is telling that the Green Party’s biggest success ever has come with the National Government despite propping—Mr SPEAKER: Order! That is unnecessary to the answer.Jonathan Young: What reports has the Minister seen on reducing electricity bills?Hon SIMON BRIDGES: I have seen one report promising to bring power prices down. I have seen another very close in time promising to just limit the growth in power price rises which is of course exactly what this Government has done. Both were from David Cunliffe so with his flip-flopping it may be a blessing—Mr SPEAKER: Order! That is enough for that answer.Phil Twyford: What percentage of the homes insulated under the Warm Up New Zealand: Heat Smart and Warm Up New Zealand: Healthy Homes programmes are private rental properties given that the Bryan Perry report shows that 50 percent of children growing up below the poverty line are living in cold and damp private rentals?Hon SIMON BRIDGES: I am happy to give the member a percentage in writing. I can tell him that more than 32000 rental properties have already been insulated and under this new scheme—and I have been and visited a home in Māngere that was a rental that is being insulated as well—that is continuing.Te Ururoa Flavell: Tēnā koe Mr Speaker. Kia ora tātou. What progress has been made on achieving the milestones negotiated with the Māori Party in its relationship accord to target 20000 low-income homes for home insulation and ensure that every State house built before 1978 that can be practically insulated will be insulated?Hon SIMON BRIDGES: Can I firstly thank the Māori Party for its input in the development of the Warm Up New Zealand: Healthy Homes programme. I am pleased to say that we have met both those milestones negotiated with the Māori Party and in fact under the two Warm Up New Zealand programmes we have insulated 110000 low-income homes.Rt Hon Winston Peters: I seek leave to table the Māori Party’s Warm Up New Zealand policy that relates to Ngati Porou and Ngāpuhi the two warmest areas where Māoris live.Mr SPEAKER: Order! We are not going to get into the process of tabling other political parties’ manifestos.Regional Economies—Taranaki9.ANDREW LITTLE (Labour)to the Minister for Economic Development: Does he stand by his statement “Taranaki is one of the leading regions if not the leading region in the country.”?Hon STEVEN JOYCE (Minister for Economic Development):Yes and for a number of reasons. If I could beg the House’s indulgence I will go through a few quickly. It is an important question. Firstly Taranaki is a strongly performing region economically. The GDP per capita in Taranaki is the highest in the country. Secondly its average household income is the fourth or fifth highest in the country. Thirdly its unemployment rate has been below the national average for many years now including through the global financial crisis. Fourthly its population has been growing strongly despite unsubstantiated rumours that there was a widespread exodus from the regions. Fifthly there is a very good set of local MPs who talk their region up—National MPs—instead of talking it down. Sixthly it is a beautiful part of the country one of the most beautiful parts of the country—but I might be biased because I was born there.Andrew Little: How does he reconcile that glowing summary and the statement I quoted earlier with the news yesterday that yet another 25 highly skilled workers will now lose their jobs this time from the heavy engineering firm Fitzroy Engineering which follows 15 job losses earlier this year at Tenix engineering—another heavy engineering firm—125 jobs lost from Fitzroy Yachts and other engineering firms struggling to keep their workforces occupied?Hon STEVEN JOYCE: I think we have just had a demonstration of the point that you can talk a region down or talk a region up. The reality with employment in this country is we have roughly 250000 jobs created each year and 250000 jobs lost. The member raises an interesting question about engineering jobs in Taranaki. I can tell him in response about a particular experience that I had recently when I was visiting a boatbuilder in Wanganui who wanted to hire some of the 120 workers who had lost their jobs in Taranaki. He could not hire any of them because they had all been snapped up by other Taranaki businesses.Andrew Little: Can the Minister confirm that GDP per capita for Taranaki has now declined for its third successive year and is nearly $4000 less than its peak in the last year of the most recent Labour Government?Hon STEVEN JOYCE: I cannot confirm that for the member but I can confirm that in terms of GDP—Grant Robertson: I raise a point of order Mr Speaker. We are encouraged to ask direct questions. That was a very direct question and remarkably the Minister could not confirm it. There is nothing more to say in his answer.Mr SPEAKER: On this occasion I entirely agree with Grant Robertson.Hon STEVEN JOYCE: Speaking to the point of order—Mr SPEAKER: The question has been answered. If this is a point of order that the Minister is raising I will hear it.Hon STEVEN JOYCE: It is the first opportunity to address the point of order. The point of order is that I was going on to give some GDP information that may—Mr SPEAKER: Order! I appreciate what the Minister is raising. The question was could he confirm that GDP per capita had declined for the last 3 years and the Minister got up and said no he could not confirm that. That is the end of the matter.Hon Gerry Brownlee: I raise a point of order Mr Speaker. Have you effectively just ruled that members of this House can expect a yes or no answer? That is the effect of what you have ruled.Mr SPEAKER: No. What I have said is that the Minister was asked a relatively direct question and the Minister said he could not confirm that. That is a sufficient answer for today. I am happy that that question has been addressed and now we are moving on.Hon Gerry Brownlee: I raise a point of order Mr Speaker.Mr SPEAKER: This is a point of order but I want to issue the same warning to the Hon Gerry Brownlee that if you are now attempting to relitigate a decision I have just made that will lead to disorder and I will treat it quite severely. Is it a fresh point of order?Hon Gerry Brownlee: Yes it is. Having established that yes or no answers cannot be required from the House—Hon Annette King: This has got nothing to do with that.Hon Gerry Brownlee: Hang on—all things lead on. Do we now accept that erroneous material presented in the House has to be confirmed or denied by Ministers?Mr SPEAKER: No. My job here is to listen very carefully to the question and to listen very carefully to the answer. The circumstances are inevitably quite different with most questions. I listened very carefully to the question I listened very carefully to the answer and I have ruled that that question has now been addressed. The member can disagree with that. He has every right to. But once I have made a decision it is made.Andrew Little: What commitments is the Minister prepared to make to ensure that the highly skilled engineering workers of Taranaki can be retained in the region and will he commit to a long-overdue upgrade of State Highway 3 north or join with Port Taranaki to upgrade its infrastructure and readiness for offshore oil emergencies or do anything to show that the Government takes regional development in this region and others seriously?Hon STEVEN JOYCE: Absolutely. I will commit on behalf of this Government that this Government will continue to encourage investment in the oil and gas industry in that region which it is encouraging today. Actually all of the oil and gas industry and the other industries around New Zealand that I meet say “Thank goodness for this Government because we know that if we had the other option of Labour and the Greens there would be no growth and there would be no new investment.”Andrew Little: Given the contribution of the Taranaki region to the New Zealand economy through royalties and heightened tax receipts does he not accept that it should get more back from central government than just the expansion of a 100-metre bridge—the only thing to show after 6 years of being represented by a National MP?Hon STEVEN JOYCE: The member is wrong in his assertion. There has actually been an excellent summary published by Treasury in the last year that shows that Taranaki has received more back than it has put in in terms of Government expenditure as most smaller regions do because of the economies of scale of larger regions. Taranaki does benefit. Taranaki knows it benefits. That is why it keeps electing National electorate MPs in the three seats in the region.Senior Citizens—Prevention of Elder Abuse and Neglect10.JACQUI DEAN (National—Waitaki)to the Minister for Senior Citizens: What recent announcement has she made about elder abuse and neglect prevention?Hon JO GOODHEW (Minister for Senior Citizens):Earlier this week I announced that I have committed $170000 to establishing two new services. These services will build on the Government’s commitment to raising awareness of and addressing all forms of elder abuse and neglect. The Government currently supports a total of 24 elder abuse and neglect prevention services around the country costing $1.6 million a year. Elder abuse and neglect happen in many ways and are often well hidden in families and communities. Sometimes there are no obvious signs of abuse particularly when it is financial abuse.Jacqui Dean: Where will the new services be located and why were these communities selected?Hon JO GOODHEW: The Ministry of Social Development has worked closely with Age Concern to map elder abuse across the country and identify areas with unmet need for elder abuse and neglect prevention services. Wairoa and Kawerau were identified as areas of high need that currently have no funded services and Rotorua was not far behind. One service will be in Wairoa and the second will be in Rotorua and will also service Kawerau. The Ministry of Social Development will be contacting potential providers shortly.Health Associate Minister—Potential Conflict of Interest11.DENISE ROCHE (Green)to the Associate Minister of Health: Does he stand by his statement that “he has absolutely nothing to hide” in regard to any potential conflicts of interest in regard to his duties as the Associate Minister of Health?Hon PETER DUNNE (Associate Minister of Health):Yes I do.Denise Roche: Does he consider that there is the potential for a conflict of interest when the Minister who oversees funding for gambling harm minimisation is also chair of an organisation that seeks pokie funding; if not why not?Hon PETER DUNNE: No I do not; the reason is simple. The organisation that I chair I established in 1993. One of its local activities is to organise an annual Christmas parade which 25000 people enjoy. It seeks funding from local trusts to organise the floats for that parade. I have never taken any part in those funding decisions.Denise Roche: Does he consider that he has met the requirements of the parliamentary pecuniary interests register for the last—Mr SPEAKER: Order! The Minister has no responsibility as a Minister for the register of pecuniary interests; it is a responsibility that all members of Parliament have because they are members of Parliament. There is certainly no ministerial responsibility. I invite the member to rephrase her supplementary question.Denise Roche: Thank you Mr Speaker. I will do. Does he consider that he is meeting the high standards required of Ministers in the Key Government with his duties as Associate Minister of Health given his failure to declare his interest in the Northern Wellington Festival Trust until 2013?Hon PETER DUNNE: I have declared my interests in that committee and in a number of other activities. Maybe I should have done so earlier but that was an oversight. It is certainly in last year’s declaration this year’s and future declarations to come. As I said in my response to the member’s primary question I am confident I have absolutely nothing to hide in this respect.Denise Roche: Does he declare that it is acceptable that he is the Minister dealing with gambling harm and he did not declare interest in an organisation that receives pokie funds until 2013?Hon PETER DUNNE: I have already answered that question. We can go round and round in circles here. I have nothing to hide. I have never attempted to do so. I welcome any scrutiny on the matter.Te Ururoa Flavell: Will the Minister consider reopening the tender from the Problem Gambling Foundation?Hon PETER DUNNE: That tender process was from memory commenced in 2012. It was carried out independently of Ministers by officials. I was not made aware of the outcome of the process until it had been completed. That was on 19 March this year. As a consequence given the robust way in which it was carried out I have absolutely no intention of interfering in that decision.Denise Roche: When did he inform the Prime Minister that he chaired a trust that sought and received pokie funds? Was it before or after the Prime Minister gave him the role of Associate Minister of Health?Hon PETER DUNNE: I cannot recall exactly but it has been a subject we have discussed many times in quite a jocular way principally because photographs have appeared in newspapers of me dressed as Santa’s elf in the Christmas parade.Denise Roche: I seek leave to table parliamentary research showing that the Minister did not declare his interest in the Northern Wellington Festival Trust until 2013.Mr SPEAKER: Order! I just need the source of the document.Denise Roche: Parliamentary research from the Parliamentary Library. It is all in one document.Mr SPEAKER: On the basis that it may not be available to members I will put the leave and the House can decide. Leave is sought to table that—Hon Trevor Mallard: I raise a point of order Mr Speaker.Mr SPEAKER: Is the member wanting to speak before I put the leave?Hon Trevor Mallard: Yes. Just as a warning I think there are some pretty strict rules that came in with the last Standing Orders change as to the ways that members are allowed to draw attention to breaches in pecuniary interests and I think doing it this way is not one of them. I just want to warn the member that she might in fact get herself into some trouble if it was allowed to be raised in this manner.Denise Roche: I withdraw that but I do have another supplementary question.Mr SPEAKER: Supplementary question Denise Roche.Denise Roche: Does he regard that he is fit to be the Associate Minister implementing solutions to problem gambling given his links to the pokie industry; if so why?Hon PETER DUNNE: I have no links to the pokie industry. If the member assumes that the fact that an organisation that I chair seeks funding for a Christmas parade is some dastardly crime then she is from a vastly different world than I come from. I have nothing to hide and will continue in that role.Justice Minister—Visit to China12.GRANT ROBERTSON (Labour—Wellington Central)to the Minister of Justice: Does she know the name and employing department of the Chinese official that she had dinner with in Beijing on 20 October 2013 on her ministerial visit to China; if so is the reason that she has refused to tell the House that information because she believes it is not in the public interest to do so?Hon JUDITH COLLINS (Minister of Justice):I have no ministerial responsibility for that matter.Grant Robertson: I raise a point of order Mr Speaker. This question was submitted in the normal way through the Clerk’s Office and to you. It was accepted therefore the Minister must answer the question. She has ministerial responsibility.Mr SPEAKER: Yes. I want to draw to the Minister’s attention the Standing Orders and Speakers’ rulings that say she has a duty to answer a question. That answer is far from helpful to the House. She can answer it in anyway she likes but to simply say she has no responsibility when the question has been authenticated and processed to be placed on the Order Paper is I think most unsatisfactory. I will invite the member to repeat the question.Hon Gerry Brownlee: I raise a point of order Mr Speaker. What then does that do for the interpretation of Speaker’s ruling 153/1 which basically says that “The primary condition for asking a question of a Minister is that the Minister has ministerial responsibility for the subject matter of the question. If there is no ministerial responsibility there can be no question. An opinion that is sought from a Minister must relate to a matter for which the Minister has responsibility.” Speaker’s ruling 153/3 on the same page goes on to say: “The Speaker has no way of knowing which Minister is responsible in the role of Speaker.” What I am concerned about here is that the only person who can fully know where ministerial responsibility stops and starts is the Minister themselves. If they say in fact they have no ministerial responsibility for that in the past there has been a decision made that the public would make a judgment about that not the Opposition.Mr SPEAKER: The difficulty I have with that argument from the member is that there has been a series of questions now for some weeks and the Minister has on many occasions addressed the questions to my satisfaction. So I do not think at this stage she can now claim she has not got ministerial responsibility. I do not accept that. I can equally refer the Hon Gerry Brownlee to rulings particularly to Speaker’s ruling 173/1. It is a relatively lengthy ruling but I will read it for the benefit of the Minister: “A Minister must give an answer ‘if it can be given consistently with the public interest’. The Minister is instructed under [Standing Order 383(1)] to consider the public interest in framing a reply. In considering consistency with the public interest the Minister may address such principles as privacy commercial sensitivity or national security. But ultimately the judgment of whether a particular reply is consistent with the public interest is for the Minister to make. It is not a matter for the Speaker to judge. Nor is it a matter for the member asking the question to suggest that because the member considers the matter to be a matter of public interest the question should be answered in a particular way.” I am going to ask the member to repeat the question.Grant Robertson: Does she know the name and employing department of the Chinese official whom she had dinner with in Beijing on 20 October 2013 on her ministerial visit to China; if so is the reason that she has refused to tell the House that information because she believes it is not in the public interest to do so?Hon JUDITH COLLINS: It was a private dinner. I have no ministerial responsibility to explain it.Grant Robertson: I raise a point of order Mr Speaker. In your ruling on the Minister’s first attempt to answer this you made mention of the fact that we have had a number of questions about this. You also granted an urgent debate in fact around these matters because as was put in the question this was a ministerial visit paid for by the taxpayer. For the Minister to now decide that she does not feel like answering the questions is not acceptable. It is a breach of the Standing Orders.Mr SPEAKER: No I cannot assist the member to that extent. It is certainly not helpful for the Minister to take this attitude but I want to refer to two further Speakers’ rulings in this regard. Speaker’s ruling 173/3 says: “It is not obligatory on a Minister to answer a question. It is certainly customary but there is no sufficient reason for saying it is binding.” Furthermore Speakers’ ruling 173/4 says: “The Speaker cannot force a Minister to give an answer to a question and has no responsibility for the quality …”. I think it is a very unsatisfactory answer that has been given by the Minister. I am not responsible for that. This House and the public will judge that for themselves. But I invite the member to now continue with his supplementary questions and I give him one additional supplementary question as well.Grant Robertson: Did she discuss with the directors of Oravida what the role of the Chinese border official was before she left New Zealand?Hon JUDITH COLLINS: It was a private dinner. I have no ministerial responsibility for it.Hon Trevor Mallard: I raise a point of order Mr Speaker. Sorry I thought my colleague was going to take a point of order. It was a very direct question and it asked about an action to do with a particular individual and it had to do with before she left New Zealand. It was nothing to do with something that actually occurred at the dinner; it was a question about whether she received any advice on this matter from the directors of the company before she left New Zealand and it has been established previously in the House that she had discussions about this dinner before she left the country.Hon Gerry Brownlee: Speaking to the point of order Speaker’s ruling 151(2) is also quite instructive here inasmuch as it says: “The Minister primarily concerned is presumed to be the person to decide whether it is a question related to that portfolio or whether it is misdirected.”Hon David Parker: Speaking to the point of order—Mr SPEAKER: No I do not need assistance on that point. I think today we have moved well past that with my saying that this question has been raised in various forms now for some considerable amount of time. At this stage of the proceedings for the Minister of Justice to now claim there is no ministerial responsibility is in my mind as I have said to this House a very unsatisfactory answer. I invite the member Grant Robertson to ask his supplementary question.Grant Robertson: Did the New Zealand ambassador tell her that he did not think it was appropriate—Hon Annette King: No no the other one.Grant Robertson: Oh sorry do you want the previous question?Mr SPEAKER: I am inviting the member to repeat his other question.Grant Robertson: Sorry Mr Speaker I did not hear you say that. Did she discuss with the directors of Oravida what the role of the Chinese border official was before she left New Zealand?Hon JUDITH COLLINS: I took part in a private dinner. I do not have ministerial responsibility for that.Hon David Parker: I raise a point of order Mr Speaker. The Minister has previously admitted in this House that she should have made reference to this in her report to Cabinet after she made her visit to China. What is the remedy for the Opposition in respect of serious allegations where the Minister will just not answer any questions?Mr SPEAKER: The remedy available is for the member Grant Robertson to continue his line of questioning. I cannot force the Minister to answer the question. I am not responsible for the answer but as I said earlier people will judge the answers for themselves.Grant Robertson: Did she tell the New Zealand news media that she should have put this dinner in her formal trip report to Cabinet thereby making it a matter of ministerial responsibility?Hon JUDITH COLLINS: Actually I should not have because the Cabinet Manual makes it very clear that only matters of importance should in fact be put in. In fact when I had a look at the manual I noticed that actually having dinner is not something that anyone would consider a matter of national importance unlike that member might think it is.Grant Robertson: I raise a point of order Mr Speaker. My question was a specific one. I asked whether she told the New Zealand news media—Mr SPEAKER: Order! On this occasion I am ruling that the Minister has actually addressed that question. [Interruption] Order! I invite the member at this stage to continue his supplementary questions.Grant Robertson: Did the New Zealand ambassador tell her that he did not think it was appropriate for him to attend this dinner?Hon JUDITH COLLINS: I have no recollection of the ambassador saying that to me.Grant Robertson: Did Stone Shi ask her not to name the official who was at the dinner?Hon JUDITH COLLINS: This was a private dinner and I have no ministerial responsibility for it.Grant Robertson: Why was she prepared to say that the official at the dinner was from a border control agency but she is not prepared to say which border control agency?Hon JUDITH COLLINS: I advised the media because that was the advice I received from the Prime Minister’s office.Grant Robertson: Was the Prime Minister wrong to give her that advice?Hon JUDITH COLLINS: One day that member might realise that Prime Ministers are always right.Grant Robertson: Was the senior Chinese border official at the dinner someone who could influence whether or not Oravida’s products could enter into China?Hon JUDITH COLLINS: It was a private dinner. I have got no ministerial responsibility for it.Grant Robertson: Supplementary question?Mr SPEAKER: I think in actual fact the member may well have found that his number of supplementary questions has expired.Grant Robertson: Given the ridiculous answers I have been getting I seek leave to be allowed to ask one more question.Mr SPEAKER: No I do not think seeking leave would be a good idea for the member. Because there was some confusion earlier I will allow one more question.Grant Robertson: Can she confirm that she believes she has no obligation to the New Zealand taxpayer to tell them the name of a senior Chinese official that she met with along with her husband’s fellow company directors at a dinner arranged before she left New Zealand despite taxpayers shelling out $30000 for her to go on that trip?Hon JUDITH COLLINS: I have no obligation to discuss a private dinner not paid for by the taxpayer and at absolutely no expense to the taxpayer.Veterans’ Support BillSecond ReadingHon NATHAN GUY (Acting Minister for Veterans’ Affairs): I move That the Veterans’ Support Bill be now read a second time. On behalf of the Minister of Veterans’ Affairs Michael Woodhouse I would firstly like to thank the Social Services Committee for its hard work in examining the bill. It has carefully reviewed the bill to ensure that it is a fitting replacement and provides adequate support for not only our current veterans but also our future veterans. Service in defence of our nation and for freedom and democracy around the world is a sacrifice that needs appropriate recognition in legislation. I would also like to thank veterans for their feedback on the bill.The bill received a number of submissions which were carefully considered by the committee. Although submitters focused on various issues responses indicated an underlying support for the new legislation. [Interruption]The ASSISTANT SPEAKER (H V Ross Robertson): Order! Would members leaving the Chamber please show some respect to the member trying to address the House.Hon NATHAN GUY: It was also important to get feedback from the veterans affected by this legislation and the submissions received showed for the main part that we have drafted legislation that meets veterans’ needs.The bill replaces the War Pensions Act 1954 and originates from the 2010 report of the Law Commission that followed an extensive review of the war pensions scheme. The 1954 Act was found by the Law Commission to be outdated unwieldy and no longer fitting the needs of the veterans it was intended to support. The Law Commission made a large number of recommendations the vast majority of which were accepted by this Government. The bill continues and enhances the previous entitlements under the old Act and it retains the key principles of benevolence. Service eligibility criteria will remain the same and all deployments currently covered will be covered under the new legislation.The bill contains two schemes and it introduces several new entitlements. Scheme one will cover veterans who served from the Second World War through to and including the Viet Nam War. Their entitlements will continue to be based on those available under the 1954 Act. Scheme two will cover those who served in a recognised war or in emergencies since 1 April 1974. The entitlements will be closely aligned with those available under ACC but with an additional top-up that recognises the special nature of military service. The bill will also include a more modernised approach to rehabilitation. Submissions confirmed general support for these proposals. In addition submitters recommended changes to some key areas. It is pleasing to see that where appropriate the committee has recommended that changes be made to the bill to reflect these.One of the key changes made by the committee is to the threshold for the veterans pension. Submissions questioned whether 55 percent was the appropriate level of whole-person impairment to use as a threshold for the veterans pension and other entitlements noting that it did not appear to be the equivalent of the threshold currently used in the 1954 Act. The information that was provided to the committee established that 52 percent whole-person impairment was in fact the most equivalent threshold and in order to not disadvantage veterans the threshold will be moved from 55 percent to 52 percent. To further ensure that no veterans are disadvantaged by this provision the bill has been amended to provide that a veteran or other claimant who currently meets the threshold for entitlement under the 1954 Act will continue to do so if they claim under this bill.I note that a minority on the committee suggested that the disablement threshold for veterans pension eligibility should change from 54 percent on the new scale all the way to zero. In 2012 the Government announced a new $60 million package over 5 years to improve the support and recognition given to veterans who have served New Zealand and it agreed to adopt in full or in part 132 of the Law Commission’s 170 uncosted recommendations. The decision was made by Cabinet at the time not to discard the impairment threshold for veterans pension but to retain the status quo.The war disablement pension and veterans pension represent forms of compensation from the Government for those who have suffered injury or impairment as a result of their military service and for their families. Removing a level of disablement as a requirement in order to receive a veterans pension and access its associated benefits would be a significant departure from the current rationale which has existed since the veterans pension was first introduced. It would cost more than $40 million over the first 4 years alone with most of this cost coming directly from the lump-sum payment that is triggered by the death of a veteran. This bill is about supporting our veterans. Removing the disablement threshold would have a significant cost but would do little to increase the support offered to veterans during their lifetime. As it fundamentally changes the rationale behind the veterans pension and does not represent well-targeted spending we do not support this move.Another area of change is to the decision-making provisions and the points of reference for deciding claims. Underlying the rewrite of the 1954 Act was a desire not only to modernise the legislation but to make it more accessible for both veterans and administrators to understand and use. The evidential provisions underlying eligibility for entitlements in the bill are fundamental and they received scrutiny in many of the public submissions. There was very broad support for the use of the Australian statements of principle as the main reference point for deciding claims. The statements of principle are comprehensive soundly based in medical terms and introduce a much-needed element of certainty to the process.The bill also needed to modernise the legal and evidential tests for establishing entitlement and these were the subject of many submissions. It became clear that more work was needed to reduce legal jargon and ensure that the provisions are clearer easier to understand and fully aligned with the benevolence principle in decision making. The committee made several changes to the bill as a result of these submissions. As a result I am confident that the decision-making and legal provisions of the bill will serve the decision-making process well in the future. In summary the Government is committed to improving veterans’ support and this is reflected in this very important bill as reported back by the committee. I commend this bill to the House.Hon PHIL GOFF (Labour—Mt Roskill):Just before I start on this Veterans’ Support Bill I acknowledge the work of a senior researcher for Labour Bridget Service who helped on this bill and who is leaving after many years of hard work on behalf of our MPs here. Thank you Bridget for the work that you have done on our behalf.I want to come now to the bill and say that I respond with amazement to Nathan Guy’s statement that it was important to get feedback from the veterans and to meet the veterans’ needs. We sat through those submissions and we heard—unlike the Acting Minister—what the veterans said and what the Royal New Zealand Returned and Services Association said about the inadequacy of some parts of this bill.I reject the Minister’s statement that there are no grounds for removing the requirement that before a person is eligible for a veterans pension they have to be significantly disabled. What the RSA told the Social Services Committee and what the veterans have told the select committee and what New Zealanders would support is this: if you are a New Zealander eligible for New Zealand superannuation and you have served your country in an overseas deployment gazetted by the Minister and recognised by the Chief of Defence Force as having put yourself in harm’s way then surely that is the appropriate threshold for a person to be eligible for a veterans pension. That was recommended by the Law Commission. That was asked for by the New Zealand RSA. That is what the families of the veterans who sacrificed so much thought was appropriate and the National Government ignored those views those requests and those pleadings.I have here a letter from the RSA. It is signed by the national president Lieutenant General Don McIver a man who is much respected in this House. He said that it was very disappointing that the Social Services Committee decided not to progress the removal of the requirement of serious impairment before you are eligible for a veterans pension. He said it is particularly disappointing to those veterans who have served their country with loyalty and with honour but it is also disappointing to the RSA membership as a whole.He raises the question in this letter—and it has gone to various members of this House—that during the Law Commission’s processes and the Law Commission review that led to this legislation the commission strongly recommended that the threshold of serious impairment be removed. He said: “Neither we nor the commission were able to find out why it should be necessary to be significantly disabled to qualify for the veterans pension.” He says that the 52 percent significant disability figure is entirely arbitrary. He asked officials time and again at the select committee what the grounds were for saying that before a person can get a veterans pension they must have 52 percent of total disability. No answer was given except that that was historically the case. There was no rationale; it was entirely arbitrary.The other thing the RSA points out is something that I concur with strongly. It points out that although the Government gave no explanation for its decision it declined the submission saying: “Not progressed at this point of time.” Not progressed at this point of time. We are talking about 16700 elderly veterans many of whom left their families and served this country for years overseas putting themselves at harm’s risk and who are dying in their droves at the moment because they are in their 80s and 90s. “Not progressed at this point of time.” is a cynical answer from a Government that knows time is not on the side of our veterans.We are not asking for a lot. Nobody gets the veterans pension first of all until they have reached the age of superannuation. That is 65 at the present time. You do not get the veterans pension on top of superannuation; you get it instead of superannuation. So the costs are actually quite small. The relatively small benefits are a gesture of gratitude by us to those who put their lives in the firing line on behalf of their country. It is about getting a community services card. It is about if you are in hospital for more than 13 weeks being able to retain your pension rather than losing it and it is about a lump sum payment on death. Yes the Minister is right. That lump sum payment will usually go to the widow. But surely the widow is entitled to something in recognition of what she gave up while her husband or partner was serving this country for long years during the Second World War.This year 2014 is a special year. It is a special year because we commemorate the centenary of 100000 New Zealanders going to serve in the First World War of whom one in five died and six out of 10 were either killed or injured. Twenty years later our parents’ generation went to serve in the Second World War and another 12000 lost their lives. The people came back after years of serving their country and many of them were scarred inside and often scarred physically as well. Why is it so much to ask this Government that instead of just rhetoric about our gratitude to the veterans we actually give them something tangible? There are 16700 of them at the moment and do you know what it is going to cost? I asked Veterans Affairs so I have the official figures. In the first year it will cost $11.1 million. That is 2014-15. By 2017-18 in 3 years’ time that will be down to $8 million—just $8 million—because of the level of the passing on of the World War II and the Korean War veterans.What I am saying—and I have been totally upfront in the select committee as members will attest and to the Minister—is that there is a gap in this bill. There is a gap that the Law Commission which did all of the hard yards on this bill recommended should be closed. There is a gap in this bill which the RSA with its wisdom and its right to represent the interests of veterans said “Please fix this.” The Government has not because it says that it will cost too much. On one hand there will be $60 million spent over 5 years. On the other hand just $11 million dropping to $8 million a year is required to fill that gap to enable the people who have returned as veterans to have the pride of saying: “I am not just a superannuitant; I am a war veteran.” That is what they want it for. They are not actually even particularly interested in these small financial benefits. They want to have the pride of saying: “I have served my country.” What better way of saying that than to say: “I am in receipt of a veterans pension. This is how my country has recognised what I have done on behalf of my nation.” That is what we are asking for.In the Committee of the whole House I will be moving an amendment through a Supplementary Order Paper to pick up the Law Commission’s recommendation to pick up what those veterans have asked us so sincerely for and to pick up what the RSA says is a major gap in this legislation.I have one other comment and it is to the Minister of Defence. We know that morale and attrition rates have reached a record low in the case of morale and a record high in the case of attrition. We know that when the Auditor-General reported on this she said that is because this Government is perceived by the men and women of the New Zealand Defence Force to have broken the social contract between Government and the services. They have no union and they cannot negotiate their conditions.I want to say to the Minister of Defence—and I say it sincerely—that the best way we can tell our current serving members of the New Zealand Defence Force that we honour their commitment and service is to pass something that recognises that we see our commitment extending into their retirement years. The best way we can deal with the problems of recruitment and retention is to send that message to our serving soldiers today. It will not cost us much for another 30 years. Most of those who have served in Timor-Leste the Solomons Afghanistan and Bosnia will not be retiring for 30 years.But this year—the centenary of our joining the First World War—is surely the appropriate time to say to our veterans that we honour them not simply with our rhetoric but that we honour them with a practical measure that they have asked for and we can easily deliver and that is affordable and justified. I commend my Supplementary Order Paper to the House in the Committee of the whole House.MELISSA LEE (National):Ahn yung ha se yo. It is a great pleasure to rise to support the second reading of the Veterans’ Support Bill. Before I get on with my contribution I would just like to make a comment. It is lovely to see the passion in Mr Goff’s speech. We have seen that in the Social Services Committee and in the House. I just wish he had been as passionate when he was responsible for the Treasury benches when Labour was in the position of Government—in the 9 years that it was in Government. Now that he is in Opposition he basically says passionately: “Why does this National Government not do something about it?”. He had the opportunity; he was actually the Minister of Defence. He could have really done something about it but he did not. Now that he is in Opposition he can throw stones.The men and women who serve in our defence forces now and in the past for freedom and democracy need to be recognised for the sacrifices that they have made. I am a recipient of those sacrifices. Having met lots of Korean veterans who have come back from the war—there were people who were injured and there were people who died during the Korean War—and being born in Korea I grew up with the knowledge that we must be grateful for the ultimate sacrifices of the veterans who actually paid with their lives in a war that divided my birth country. We owe a great debt to our veterans and this National-led Government is committed to honouring their service and better meeting the needs of older veterans who need help to maintain their homes and of veterans of modern-day deployments.This bill has many of the same provisions as the current Act. The criteria for service eligibility will stay the same as will health care treatment. Accepted conditions will continue to be funded. No veteran will have their entitlements reduced; in fact thousands will benefit from increased care and support. That has to be better. It has been quite a process to rewrite a 60-year-old Act an Act that was designed to deal with the physical risk associated with deployment but did not actually cover the psychological and environmental risks that veterans have faced. The Law Commission’s findings after reviewing the Act stated that the Act was outdated and unwieldy and no longer fitted the needs of the veterans it served. This Veterans’ Support Bill actually fixes that.There are two schemes. Scheme One comes into force on 1 July this year and runs until 1 July 2015 to cover all veterans as a transitional measure. After that Scheme One will apply to veterans with service from World War II to the Viet Nam War. The entitlements will be based on what is already available with some improvements such as when a veteran is under the age of retirement and unable work they will receive a higher rate of income compensation than is now available. The rate paid will be based on 80 percent of the average wage an increase of about $200 gross for most of the recipients. Scheme Two covers veterans with service since 1974 when ACC was introduced and comes into force on July 1 next year. In 2015 there will also be changes to the eligibility criteria for accessing support services such as home help and lawnmowing.This is a bill that the select committee considered very carefully. I do understand the passion behind Mr Goff’s speech and most of us in some way understand where that passion comes from because we do all support the veterans who have paid greatly through their service in service of their country and people. We appreciate their participation in battles overseas with the New Zealand flag on their chests serving our nation proudly. This is a great improvement on the 1954 Act which is totally outdated. It is a great improvement and I believe it is something that the veterans have been waiting for. Thank you.IAIN LEES-GALLOWAY (Labour—Palmerston North):Labour does support the Veterans’ Support Bill as our veterans’ affairs spokesperson Phil Goff has already outlined. We do have some changes that we would like to make to the legislation as well and I will come back to both our support for the legislation and also the changes we would like to make. But I want to say at the outset that Melissa Lee really needs to just think about history. She is someone whom I think does understand the importance of history and certainly the importance of her nation’s history. She has spoken about the association between New Zealand and Korea since the Korean conflict and the role that New Zealand soldiers played in that conflict. So she has an understanding of history and she understands the significance of knowing your history and getting things right. But Melissa Lee got up and asked the question: why did Labour not do anything about a replacement for the 1954 War Pensions Act? She is suggesting that Labour did nothing.Well that could not be further from the truth. What Labour did is it worked with the RSA to identify what the issues were. There was an agreement between Rick Barker—it was in fact Rick Barker who was the Minister for Veterans’ Affairs not Phil Goff as Melissa Lee suggested. It was Rick Barker who worked with the then president of the New Zealand Returned Services Association and he initiated the Law Commission report into the 1954 Act. The ball started rolling back in 2006. It was Labour that got the work started on this. In fact it was not too long after the change of Government when the Law Commission came back with its recommendations. It was June 2010 when the Law Commission came back with its comprehensive report and its recommendations for how the new legislation should be constructed—June 2010.We now find ourselves here nearly 4 years later because National sat on its hands for years after that Law Commission report came back. Melissa Lee do not get up in this Chamber and say that Labour did nothing. Labour started the work and then it was National that delayed the progress on this legislation. So do not attempt to say that Labour in Opposition has not done enough for veterans. There is only one party that has dragged its feet. There is only one party that it has dragged its feet on this legislation and it is National—it is National.Mike Sabin: Helen Clark has always been a great supporter of the armed services of course!IAIN LEES-GALLOWAY: Yes actually the Labour Government put far more money into the armed services. I am glad that Mike Sabin raised that because the Labour Government had to rescue the defence forces from years of under-investment by that National Government. The vehicles that our troops had to drive around in in Bosnia the armoured personnel carriers that our troops went to Bosnia in could not keep up with the freight transport vehicles of our allies. That was the state of our armed forces after 9 years of a National Government. So again Mike Sabin get your history right. Do not tell us that Labour is not interested in the defence forces. Do not tell us that Labour is not interested in veterans. Labour has consistently been the Government that has put more money into the defence forces and has put more money into veterans’ support. The 9 long years of National in the 1990s saw our defence forces eroded to almost nothing—eroded to almost nothing under the National Government.So what happened? When that Law Commission report came back to Parliament National sat on it—National sat on it. But what is worse than that is that what National then did was it picked and chose what aspects of the Law Commission report it would implement. Yes this legislation is good. This legislation is a great improvement on what we had in the 1954 Act. It is a huge improvement on what we had in the 1954 Act. But there are things missing and that is because this National Government is not interested in doing the full deal for veterans. It is over an amount of money that is so insignificant—$11 million reducing over time. Often when you bring in a new initiative it costs a certain amount in year 1 and then the costs increase in the out-years. In this case it is $11 million decreasing over the following few years to $8 million. Well if $11 million is money that this Government cannot find in order to make sure that veterans get a fair deal then the Government’s books must be a very very sorry state of affairs indeed. If $11 million is going to be the difference between—I do not know—reaching surplus or not then this Government has clearly failed on a number of fronts.I think what National should do is support Phil Goff’s Supplementary Order Paper. It makes sense. It is what the Law Commission recommended and it is what the RSA wants. In the grand scheme of things it is not a huge amount of money to recognise the service of our veterans—not just our veterans from prior conflicts such as Viet Nam and Korea and those who are still left from World War II but also to recognise those who have served us in recent years in places like East Timor Afghanistan and the Solomon Islands. That is what this Government should be doing. But it refuses. I really cannot tell why. The Government will make the claim that it costs too much but it patently does not. It clearly does not cost too much. I want to hear from the Government members their explanation for why it is that they did not support this recommendation at the select committee. Why is it exactly? It cannot be the cost—it cannot be the cost. An amount of $11 million cannot be money the Government cannot find. The Government found a billion dollars to give tax cuts to the top 10 percent. It found $800 million to bail out South Canterbury Finance. It found $30 million to bail out Rio Tinto. It found $27 million to give to private schools. The money is out there. The Government is perfectly capable of spending money on the people whom it chooses. Why cannot it spend this tiny amount of money on veterans? Why? I want to hear from the members opposite as to why that is. Why is it that the Government cannot spend that money?As I said though that is a change to the legislation that we do want to see but overall this is an improvement on what we had before because the 1954 legislation was becoming outdated and it was becoming outmoded. That is why Labour initiated the review of the legislation. The 1954 Act actually had not changed in any significant way in the—I am trying to count—many many decades since it was first enacted. As is often the case it was legislation that was responsive to the needs at the time and it was responsive primarily to the needs of World War II veterans. Of course it came in about two decades before ACC was established. ACC has changed the playing field for what veterans are entitled to and what they can receive through the normal social security framework that we have in New Zealand. So we needed a new system that not only recognised the change but recognised that we have some veterans who receive an entitlement based on the service that they gave before ACC came in and other veterans on the service that they undertook after ACC came in. So the bill acknowledges those differences and sets up two separate schemes for those different groups of veterans and that is a significant improvement.Overall what this legislation does is it implements a number of the Law Commission recommendations. We think it should implement more of them and we have a Supplementary Order Paper to that effect but in general we do support this legislation.JAN LOGIE (Green):Tēnā koe Mr Assistant Speaker. I am pleased to rise and take a call on and offer the Green Party’s support for the second reading of the Veterans’ Support Bill. I am not however as pleased as I would have liked to be as not all the issues that we had hoped to see resolved within the Social Services Committee have been resolved. But clearly the 40000 veterans with qualifying service and their families have been waiting 7 years since this issue was first referred to the Law Commission and you know it seems about time. The 1954 Act clearly needs updating. So for those reasons we are absolutely supporting this bill today. It is time for some resolution. It is time for families to be able to move forward.The Law Commission made 170 recommendations for updating the Act. The Government has accepted 132 of those recommendations and during the select committee process we heard very well-informed submissions from many presenters on issues of a technical as well as a more fundamental nature. The basic shift of this bill is that it will make changes to the administration and decision-making processes provide a greater focus on rehabilitation and enable the provision of services to better meet the needs of elderly veterans as well as those of modern-day and future deployments.Changes have been made through the select committee and I would like to acknowledge the committee and the presenters for the process that has brought this bill back to the House even with our reservations. I do believe that we all want a system that appropriately acknowledges those whom this country has sent to war. I share I guess the slight bemusement from Labour colleagues about not understanding really why the threshold was not taken out of this bill and I have not heard from the Government a reason that makes sense to me on that.I am a pacifist and the Green Party is founded on a principle of non-violence. After watching the incredibly moving film last night Field Punishment No. 1 I cannot help but reflect on the pointlessness and brutality of many if not all wars and reflect on how much better it would be if no person ever picked up arms. The film which I really think everyone should watch showed how during the First World War conscientious objectors from New Zealand were sent to the Western Front and tortured for refusing to become soldiers. It also highlighted the brutality of war and reminded me that soldiers are real people members of our communities and our families as well as being members of our armed forces.The images we saw last night reminded me of the stories we heard from submitters who have been in our armed forces and told us of lives irrevocably changed by war and in the case of the children how the parents’ experience was at times passed on to the children. When the parents did not get the rehabilitation or psychological assistance they needed the damage that was caused to those parents through that experience of war was at times passed on to their children as their homes became war zones as they lived out that post-traumatic stress in the home.We also heard of years of battles to get help and of struggles for recognition—battles and struggles with the same State that sent these people into places that caused them harm. You do not have to believe in war to want the best support for people who have been through such horror which is why the main point of contention I have with this bill as it is being reported back is that it does not go far enough.The bill does not pick up the Law Commission recommendation and the recommendation of many submitters including the Royal New Zealand Returned and Services’ Association that all veterans with qualifying service should be eligible for the veterans pension. It seems to me that that policy would have had several advantages. It would have simplified our system and removed some of what we believe is unnecessary conflict that exists within the system as it is at the moment. Although that might sound like that is triggering dollar signs for people as has already been noted by the Hon Phil Goff the cost of that in the first year would be $11 million and the cost is projected to decrease to $8 million in the year after. That does not seem like an insurmountable unbearable cost for this country to bear. If the fear is possible costs as a result of more conflicts in the future well we would hope that this would be another thing to consider before entering into a conflict. If we cannot afford to recognise people for the cost of going into those wars then we really do need to second-guess our decisions to go.The primary advantage as we see it would be that it would acknowledge the debt of the State to our veterans. Most people serving in the armed services are not there to go to war; they are there for many other reasons. If the State does send them to war I believe a debt is owed regardless of the degree of injury.The second point that we are unresolved over is the portability point. Again this elicited a large number of submissions asking this House to uncouple the portability arrangements for the veterans pension from superannuation rules. It was submitted that the veterans pension is earned in recognition of a duty to the Crown by way of military service putting veterans in harm’s way and not by living in New Zealand for a specific period of time. Again the Royal New Zealand Returned and Services’ Association expressed concerns that there were many New Zealand military veterans—particularly Pacific Islanders—who were otherwise entitled at age 65 but who did not qualify due to residency requirements.The counter view to this was that the majority of veterans living overseas reside in countries with which New Zealand has a social security arrangement and therefore they are able to access the pension. Of course of those in places without an agreement the majority at the moment live in the Cook Islands. New Zealand has just announced a change to this arrangement so that veterans wishing to retire in the Cook Islands Niue and Tokelau will be covered.The Law Commission also noted in its review that the major concern regarding portability was for those under superannuation age. This bill resolves that issue by instating a veterans’ weekly income compensation that does not have a residence criteria. With that all said we still retain concerns about any future conflicts and entitlement for people who wish to retire in other Pacific Islands—for example Tonga or Samoa. We believe the principle—and possibly more importantly the symbolism—of entitlement holds a meaning beyond the financial benefits of the pension.We would have preferred to uncouple the pension from superannuation to ensure all qualifying veterans were entitled regardless of where they live. These two points are really our only sticking points with this bill. Again we want to acknowledge the need to update the War Pensions Act and improve the processes for veterans.War and armed conflict are a horror and a failure of humanity that we should do everything in our power to avoid. When the State fails to avoid war the State has a particular responsibility for those who pay the price of that failure with their health and their freedom. With respect to the human frailty of those who end up fighting the wars created by political leaders—and in the knowledge that this bill will not in any way make going to war more attractive—we wholeheartedly support this bill as the least our country can do to acknowledge the cost of being asked to kill another and putting your life and body on the line. We commend it to the House.ALFRED NGARO (National):I would like to add my words to that and concur with my parliamentary colleague in regard to the fact that war and conflict are unnecessary evils. But there are times when people lose sight of the humanity and therefore we are faced with the reality that in order to keep peace and harmony in existence there are drastic measures that have to be taken. So we end up in this place. I think it is not the place really or appropriate for us in this place and in this time to argue about who did what and who did not do what. In order to honour the memory and to honour the aspect of the support that we need and want to give to our veterans it is important to be able to progress this through to a place in which they receive the support that they so desperately need.Can I also acknowledge Major Rebecca Thornley who is in the gallery and who led the work with the rest of the Defence Force and Veteran Affairs. It was work that I know must have been very difficult not only to hear the stories but also the role that they had to play knowing the legacy that has gone before them and what they needed to do in order to ensure that the future of other veterans will be served by this. So can I acknowledge you and honour you for the work that you have done. It is not an easy place to be.This bill the Veterans’ Support Bill has come about through the Law Commission. In 2007 that review was initiated. This bill replaces an Act that is nearly 60 years old. As was just said out of the 170 recommendations 132 were implemented. Therefore it is important to note that in the implementation of that review there were some things obviously that were not able to get through. But we can have some confidence—hence the reason why we have support across the House—that we have worked diligently and effectively to ensure that we have heard the submissions and worked with officials to ensure that we have a bill that will definitely meet the core issues of importance for our veterans in particular.The Veterans’ Support Bill is now all-encompassing. That ensures that it actually meets the needs of veterans and provides for treatment and rehabilitation for accepted conditions. One of the challenges is that in the previous Act the War Pensions Act 1954—and I think this is an important part—I know for many of us it was often silent on the provision of rehabilitation and the compensation was often focused on physical disability without acknowledging the emotional or mental effects and the need for rehabilitation in those areas as well. So I believe that this has been important as it has actually answered some of the concerns that were put forward in the submissions as well.Just a couple of other important points. I think there was concern raised about the importance of support for surviving spouses of veterans. As part of this package we have also increased the war disablement pension and the surviving spouse pension by 5 percent last year on top of inflation. We think that is important as well.More than 20000 modern defence force personnel are now veterans and there is a need to have a legislative framework that supports all our veterans. It is never going to be the perfect bill but it is the right bill. It strikes the right balance to make sure that it actually meets the needs of our war veterans. Along with others I do support this bill. It is the centennial next year 2015 to commemorate 100 years of the New Zealand Defence Force. Along with Poto Williams I have also been working with the Cook Islands community to ensure that we remember all of those right throughout our communities who have served and sacrificed themselves for New Zealand. We have put this bill forward with the recommendation that it will truly support and meet their needs as well. I commend this bill to the House.ANDREW WILLIAMS (NZ First):I rise on behalf of New Zealand First to speak on the Veterans’ Support Bill. Around this Chamber on the various crests and plaques are the names of many of the great battles and campaigns that New Zealand has participated in. When you look around this Chamber and you see names such as Monte Cassino Korea Passchendaele Viet Nam Malaysia and all the others around these walls it is a solemn reminder to us all as members of Parliament of the huge commitment that our men and women have made in the service of this country in so many campaigns abroad. That service was usually undertaken to uphold democracy and to ensure that others living in other parts of the world can hopefully enjoy the same quality of life that we enjoy here in New Zealand.The men and women who have gone abroad have put their lives at risk. They have done that voluntarily. They have not had to go abroad; they did not have to join the services in many instances apart from of course earlier in World War I or World War II when they were called up. But many in recent campaigns have done this as volunteers in the services including in the instance of the Viet Nam War where my brother was killed. All those who went to Viet Nam volunteered to go as Regular Force soldiers. They did not have to go but they volunteered to be part of it. Many of those servicemen and servicewomen from the likes of the Korean campaign Viet Nam and indeed some from World War II as well—who are now getting very elderly—deserve the absolute respect that this House should give and that the Parliament of this country should give. They should be given all that is due to them.In 2007 the Law Commission put forward 170 recommendations to this House. One hundred and thirty-two have been picked up by the Government to go forward; the remainder have not. In particular the area the Government has not picked up is where the Law Commission recommended that if you have served abroad on behalf of this country you should be entitled at age 65 when you are eligible to receive superannuation to receive a war veterans pension. That would then recognise that any person retiring who has served this country abroad has put themselves on the line and that they have come back. It would recognise the fact that they are not just a superannuitant but they are a superannuitant who has served this country.The small amount of additional money to provide those superannuitants with a war pension to provide them with an automatic community services card to ensure that they retain their pension after being in hospital for more than 13 weeks and to give their spouse or family a lump sum on death is such a small amount as recognition of and compensation for having served their country. I am absolutely appalled having lost somebody in Viet Nam having lost uncles in World War II and having lost relatives in World War I as well that this Government cannot see fit to find $11.1 million—$11.1 million—in 2014-15 to ensure that those veterans are properly recognised in this manner.We have put forward a minority report as has the Labour Party—and the Labour Party one is supported by the Green Party—and in it we have stated “New Zealand First is firmly of the view that the Veterans’ Support Bill is long overdue. The Law Commission first reported in 2010 and four years later this legislation is finally reaching its conclusion. Progress should have been made with much greater urgency. A great many veterans are affected by this review. They are not getting any younger.”—they are not getting any younger. “They deserve far greater respect for the service they have given to their country. Expediency in completing this exercise would be in order.”The report further states: “The National Government has rejected the Law Commission’s recommendation that all veterans who have served on an overseas operational deployment for the New Zealand Defence Force should be eligible for a veterans’ pension if they meet the criteria for New Zealand Superannuation. New Zealand First supports the recommendations of the New Zealand Law Commission to lower the entitlement threshold to zero percent which is strongly supported by the Royal New Zealand Returned and Services Association and some other submitters. New Zealand First does not agree with the Government’s position. We strongly believe that all military veterans who meet the eligibility criteria should be entitled to receive a veterans’ pension in recognition that they have served their country. There should be a clear distinction which acknowledges the important difference”—and this is a critical point—“compared to receiving standard New Zealand Superannuation. The additional benefits of a veterans’ pension are relatively minor but the sentiment and recognition is vitally important to all those affected by this.” It is not just the money but the recognition and the sentiment that go with it to recognise that these people have served their country.It is also very disturbing that many veterans continue to struggle to receive their various allowances and disability allowances as a result of medical records that are missing or are in error. And it is greatly disturbing that we had a situation this week where the Rev. Wally Te Ua was in the High Court here in Wellington having to take Veterans Affairs New Zealand and the Government to court to prove that he has cancer as a result of his deployment to Viet Nam and being affected by Agent Orange while in the jungles of Viet Nam. It is incredible that a man like that an Anglican vicar—an Anglican vicar—has to take Veterans Affairs to court to try to prove that his cancer was a result of Agent Orange.Back in 2008 I was at Tribute 08 the apology to the Viet Nam veterans here in Wellington which was held in this Chamber and in the Legislative Council Chamber. The Rt Hon Helen Clark made the apology on behalf of the Government to the Viet Nam veterans. At the Basin Reserve Lieutenant General Jerry Mateparae the then Chief of Defence Force also apologised to them and he also said that veterans will not be disadvantaged because there were errors with medical records and because medical records were missing. He said in his speech that the New Zealand Defence Force had let them down. He said that it had let them down and they would not suffer as a result of the medical records being missing or in error. That was Tribute 08 and yet 6 years later many many many veterans—thousands of veterans—are still struggling to get what they are due from Veterans Affairs New Zealand.New Zealand First can assure the veterans—and some will be listening to this out there today—that New Zealand First will rectify this. We will rectify this. We will ensure that they get what they are due and that they are honoured in the right way by this country. Those men and women who have put their bodies on the line put their lives on the line for this country will be recognised in the true manner.It is just very sad that so many National Party members of Parliament have not had the same close experience with many of these veterans and with the military. I think it comes from the top down. It would be nice to think that the Prime Minister and some of those members could have some heart in this and say: “We will honour them we will do our best by them and we will stop this once and for all.” New Zealand First will support the Veterans’ Support Bill but we will be speaking strongly in favour of sorting out some of the aspects of it that need rectifying.LOUISA WALL (Labour—Manurewa):Kia ora. Thank you very much for the opportunity to contribute to the second reading debate on the Veterans’ Support Bill which Labour supports. I want to acknowledge my colleagues who sit on the Social Services Committee for the manner in which we normally conduct the discussions and dialogue. It is fair to say that there have been intense discussion and dialogue specifically about whether or not veterans should qualify for a veterans pension by virtue of having a disability. I thought I would provide a little bit of history not only on how we have come to where we are now but also on the whole philosophy about why veterans have to have a disability to receive support.What I wanted to do was pick up on my colleague Andrew Williams’ mention of veterans who have specifically served our nation in Viet Nam because it was in fact a 2003 Health Committee inquiry into agent orange that started this process. One of the findings of that particular Health Committee report was that we needed to review the 1954 War Pensions Act. What the Government then did at that stage was enter into a memorandum of understanding with the Royal New Zealand Returned Services Association and the Ex-Vietnam Services Association. Then in 2007 we instigated the Law Commission review. So the momentum for the review of the 1954 Act and for the piece of legislation that is here before us is now over 10 years old.In terms of why you have to be disabled to receive any form of State assistance actually goes back to a quote from Queen Elizabeth I: “such as have adventured their lives and lost their limbs or disabled their bodies in defence of Her Majesty and the State should be relieved and rewarded that they may reap the fruit of their good deserving”. I repeat that—the fruit of their good deserving. What happened after that speech was the formation of a charity called the Chatham Chest which occurred in 1590. So the reality of the philosophy around why our veterans have to be disabled to receive a veterans pension actually goes back to that undertaking—yes which is interesting—by Queen Elizabeth I. So we have seen that philosophy just be transferred historically.What happened from that was that in 1713 essentially that is when the pension for veterans was created. The same was replicated in the USA which became a pension plan for disabled veterans and that occurred in 1792. So essentially all New Zealand has done to get to this point in time is to continue to perpetuate a charitable response to veterans who have fought for our country and have become scarred by that experience or disabled by that experience. I think the question we have to ask today is whether or not that philosophy should drive the provision of a veterans pension now and into the future.I do want to look at the numbers. The Hon Phil Goff mentioned that currently we have 16700 veterans who would qualify. We have a lot of veterans within the 80 to 100-year age range. These are our veterans who served in World War II. But the interesting statistic I want to share with the House from the regulatory impact statement which is dated 27 September 2008 is that in 5 years 28 percent of those veterans actually will not be alive any more. So that means of those 16700 in 2019 we are actually talking about only 12000 veterans. So it is incumbent on the House I think to challenge itself to be critical about the provision of services and of support to our veterans to understand the history of that provision and as I said before to question whether or not that is acceptable and relevant as we move into the future. Because certainly both the Law Commission and the Royal New Zealand Returned and Services’ Association were very clear in their submissions that they could not see any rationale as to why all qualifying veterans—and these are veterans who have gone over and risked their lives and their limbs to serve our country and to protect all of us—should not qualify for a veterans pension.I actually think there is a compelling argument for this House to work together which is what we have tried to do in the select committee. To be forced as an Opposition—and I know I stand here as a member of the Labour Party with our New Zealand First colleagues and with our Green colleagues as servants on the Social Services Committee trying very hard to get a consensus around this point. So we are not playing politics actually. What we are playing is a very straight bat founded on a Law Commission process—recommendation 95—and founded on a fantastic submission by the Royal New Zealand Returned and Services’ Association.My colleague the Hon Phil Goff as our veterans affairs spokesperson will be proposing within the Committee stage a Supplementary Order Paper so that we can get consensus and all of us as a Parliament can recognise that our veterans are worthy of recognition. For a lot of them—and I am speaking on behalf of veterans from my Manurewa RSA and I have spoken to Graham Dolan who is the president—they are proud to have represented our country. It is a sense of pride for them to have a veterans pension. Yes there are going to be benefits and additional support that they will get. But I think they are not a charity any more. Our veterans do not need to be treated as a charity any more. I guess my plea to the House and to the Opposition is to please have a look at it. If we are to debate the Committee stage next week we still have time to reach consensus.As I said before if we actually put veterans at the centre of this bill—because in fact the Veterans’ Affairs Act is all about meeting the needs of veterans. Mike Sabin might think that is strange but actually saying that someone has to have a disability to get support and then haggling over the level of that support seems really disingenuous when we say that we honour what they do. All of us on Anzac Day will be at the services in our electorates honouring the people who have risked their lives for us. I think it is really disingenuous of us not to be really critical about why we will not open our minds to a change in philosophy that is actually about recognising the contribution that our veterans have made to our society the contribution that our veterans continue to make to our society the sense of pride that we have in their achievements and the sense of contribution that we have within a global context for participating in these wars to bring peace to the world. So as a member of the select committee it has been my pleasure and my privilege to be involved in the passage of the bill through the House. I look forward to further discussions and I commend the bill to the House. Thank you.MIKE SABIN (National—Northland):I am very pleased to take a call on this bill the Veterans’ Support Bill. There has been consensus across the Social Services Committee on much of it. On some of it we have parted our ways and views. One of them is what the previous speaker Louisa Wall has just alluded to. As an ex - naval officer myself I can assure this House that no serviceman goes away to fight for their country thinking “I wonder what I’ll get in the way of a veterans pension when I come back.” or anything of that order.What this bill is about in terms of the veterans pension is bringing parity from what there was in 1954 because let us not forget that a lot of those people have since passed on. To all of a sudden say that now there is only a few of them left actually that disability—and successive Governments have made decisions on this—that would have given them the prerequisite opportunity to have that veterans pension should somehow now mean nothing is wrong. It is wrong because of those who have been there before. I can assure the House that there is not a single serviceman who serves their country because of what they may get out of it—some minor financial compensation—at some other stage in their life.Having said that of course it is important that every veteran is supported wholeheartedly in a holistic way. Actually that is why this House is largely in agreement on everything else on this. What this bill does is ensure that no one is worse off that everyone is supported in a more tangible and realistic and modern way. But never forget that servicemen do not do what they do for this.Can I just also acknowledge the contribution of Major Rebecca Thornley. She got promoted during this exercise and I am sure she is going to shout at some stage shortly. I also acknowledge Ross Miller for his contribution and my father Lew Sabin and my uncle Lew Gibb who are also former servicemen. I am very proud to support this bill.Bill read a second time.Credit Contracts and Financial Services Law Reform BillSecond ReadingHon CRAIG FOSS (Minister of Consumer Affairs):I move That the Credit Contracts and Financial Services Law Reform Bill be now read a second time. I would like to compliment the Commerce Committee for its consideration of this technically challenging piece of legislation. The committee has considered approximately 70 submissions covering a wide range of views and tested the underlying policy intent of the bill. The policy intent remains sound. The Commerce Committee’s report reflects the large amount of work that has gone into getting the bill to this point. The bill comprehensively amends the consumer credit legislation which is an important part of the Business Growth Agenda promoting confidence in our financial markets. The bill reflects a sensible approach to compliance costs through amendments recommended by the Commerce Committee including changes to the standing disclosure requirements and repossession provisions. It is not the intent of this legislation to reduce access to credit by imposing heavy compliance costs that will ultimately be passed on to consumers.Many changes have been made to improve our consumer protections under this bill. At the select committee many submitters raised concerns about the protections available particularly to vulnerable consumers. The bill as introduced already elevated consumer protection to the primary purpose of the Act and introduced the new concept of responsible lending. It introduced sensible reforms including that initial disclosure must be provided before the contract is entered into. Standing disclosure must be available on request and free of charge. Overpayments must be refunded to the borrower. Hardship applications can be made by borrowers who are already in default. The Commerce Committee has helpfully refined many of these changes and it is pleasing to see the proposals in the bill confirmed and strengthened. The amendments made by this bill ensure that the interests of consumers are protected lenders compete effectively and consumers can participate confidently in the market.The current law the Credit Contracts and Consumer Finance Act is a principle-based approach to consumer credit legislation. The lender responsibility principles will help consumers and lenders to identify the practices you would expect from a responsible lender. The responsible lending code is intended to provide guidance and elaboration on the principles. Submissions to the committee asked that the status of the code should be clearer. Submitters were also impatient for the code to come into force as soon as possible. I share that impatience. We are keen to progress this legislation and the code. As a result the committee has recommended that the bill specifies the code is non-binding but also allows for work to begin on the code before the Act comes into force. This will ensure that the principles and the code come into force at the same time: no later than 12 months after the Act has passed or hopefully sooner.The fees provisions particularly the provisions relating to unreasonable credit and default fees have been a controversial area of the bill. Submissions to the Commerce Committee stated that the provisions needed work. The committee has recommended that the bill make it clear that fees are constrained by a reasonableness test and that the test is anchored in the principle that fees are a means for creditors to recover costs. This is consistent with the policy intention of the legislation as it currently stands. The committee has recommended two further amendments to the fees provisions: firstly making it clear that prepayment fees should be limited to losses from changes in interest rates for fixed rate contracts and secondly that third-party fees will also be subject to the unreasonable fees test. They are in addition to the increased limitation period for unreasonable fees that was included in the bill as introduced.A significant improvement to the consumer credit landscape is the incorporation of the Credit (Repossession) Act provisions into this bill. The 2012 Law Commission report on credit repossession recommended measures to provide a balance between consumer protection and access to credit. The primary recommendation was to incorporate repossession law into the Credit Contracts and Consumer Finance Act. Repossession is part of the life cycle of a loan and the idea is that the law should deal with the consumer credit as a whole. The bill adopts virtually all of the Law Commission recommendations and makes it clearer and easier for lenders and borrowers alike to know where they stand in a repossession process. Goods available to be repossessed must be specifically identified by the lender and some items including beds bedding medical equipment and heaters will be prohibited from the repossession altogether. Borrowers who have received a repossession warning notice will also have the right to voluntarily return the specified goods rather than being forced to participate in an often stressful repossession process. Previously the Credit (Repossession) Act was self-regulated.One of the most significant amendments in relation to credit repossession is the introduction of the Commerce Commission as the regulator. Enforcement was a key area identified in submissions to the committee where consumers and their advocates called for action. The committee has taken a positive step in boosting enforcement powers and penalties for breach. The committee has recommended the alignment of penalties with the Fair Trading Act increasing these from $30000 to $200000 for an individual and from $30000 to $600000 for a company increasing the amount of statutory damages available from $3000 to $6000 and introducing an infringement regime that will allow the Commerce Commission to issue infringement notices in respect of minor misconduct or straightforward issue of fact. In addition where a lender breaches the lender responsibility principles more than once the court will be able to order certain persons not to act as creditors. This will provide a mechanism for recidivist and irresponsible lenders to be banned from the market.I know that the select committee gave full consideration to the issue around interest rate caps. I note that in its report it states that although restricting interest rates may offer consumers protection from one form of high-cost credit it considered that it may also have unintended consequences. Those include restricting access to credit for consumers and also having the interest rate that is at the upper limit coming to be viewed as a target or reasonable. The committee considered that the provisions included in the bill especially as they relate to disclosure unreasonable fees and responsible lending would reduce the risk of lenders offering unaffordable credit. I do agree with the committee on those findings.Also of note in the bill is the increased access for consumers to the oppression and hardship remedies. Access to justice is paramount when it comes to consumer protection. Submitters noted that many consumers do not know where to go when they are in trouble. The bill will allow applications for hardship relief to be made once the debtor is already in default and elaborates on the grounds for a court to reopen a credit contract on the grounds of oppression. The committee has recommended that specific references in the financial dispute resolution schemes are included within the Act increasing their presence.To conclude I commend the committee for its consideration and examination of this bill. I believe this bill will be welcomed by lenders borrowers consumer groups budget advisers regulators and the like. We want the consumer credit market to work as effectively as possible. Reshaping the consumer lending environment is an important part of the Government’s Business Growth Agenda. These changes will boost confidence in the role that consumer credit plays in our financial markets while providing increased protection for New Zealand’s most vulnerable consumers. I commend this bill to the House.CAROL BEAUMONT (Labour):I am rising to support the Credit Contracts and Financial Services Law Reform Bill at its second reading. This is a substantial bill and it covers across the consumer credit area. Certainly as the Minister of Consumer Affairs has said there are many very positive provisions in this bill. For many of us and I am sure for those listening the impact on fringe lending or predatory lending as part of consumer credit is the area we are particularly interested in. I just want to look at what that problem is because actually it is a weeping sore. Just in the last month or so there have been reports in the media from budget services all around New Zealand of examples of 100 percent interest rates of 50 percent interest rates and of 50 percent interest rates for a loan of 7 days. These are just a few examples that I have recently looked at. This is a real problem. People know—I am sure that virtually every MP in this House knows—about the shonky business model of the so-called truck shops that rattle around in low-income parts of our communities. So we know that there is a problem and it is an ongoing one.But it has got worse. In tough economic times the problem has got a lot worse. These lenders—these predatory lenders—have preyed on vulnerable consumers. They have preyed on families who are struggling to make ends meet. There has been an increasing problem of the type of predatory lender that has been in the market. So over recent years we have seen an explosion in for example the number of pay-day lenders—short-term smaller loans supposedly from one pay period to another but often longer than that—loans by texting and things like that. So there has been an increasing problem from new players. Budget services say that the level of indebtedness that they see in our communities has increased. The overwhelming majority of people who go into budget services are tied up in high-interest consumer debt and many of the budget services have seen a change in the ratio—that is the proportion of people whom they see who are in the paid workforce has increased as well.Families are damaged by these lenders. Families are damaged as they try to repay excessive interest rates and many of them actually repay those loans with those excessive interest rates. That is just taking money that they can ill afford to lose out of their children’s pockets or mouths—taking it away from feeding and clothing their children. So it is being irresponsible not to have acted sooner when we know this problem when we can see these problems and I know that the level of concern in the community is very very high.This particular bill has been a long time coming. There was already a review of consumer credit laws under way when National came into Government. It started in 2007 with the Financial Summit held in South Auckland and that was held in response to concerns about the adequacy of the current legislation the Credit Contracts and Consumer Finance Act—particularly in response to its adequacy in dealing with predatory loan sharks which were starting to be seen as an increasing problem. The deprioritisation of the work of reviewing that legislation is shameful. The delays despite the rhetoric from across the House of getting tough on loan sharks has just been truly shameful. I ask how many thousands of families have been caused immeasurable grief and hardship as a consequence of the exploitation and predatory behaviour that has been increasingly evident right across New Zealand but it is especially evident in low-income areas. Loan sharks truck shops and pay-day lenders have flourished in an environment of low and static wages ever-rising prices and high unemployment. This is not the rock star economy that the Prime Minister brags about.I want to talk about interest rate caps. The Minister has referred to them in his speech. How many members of this House think that interest rates of 80 percent 100 percent 200 percent or 700 percent are acceptable? How many of you think that that is acceptable? How many of the people listening to this debate think that those sorts of rates are a fair go? If we went and surveyed New Zealanders how many of those people do you think would think that it is OK? Well I do not think too many would. So why are such rates legal and why are we not addressing those rates in this bill?Although Labour welcomes many parts of the Credit Contracts and Financial Services Law Reform Bill as it is a positive step to further protect consumers we are outraged that National has once again rejected interest rate caps. New Zealand is now one of the last remaining countries that have not capped rates in an effort to curb unscrupulous rates of interest. Many of those paying such interest rates can ill afford to lose that money from their impossibly tight family budgets. As I said many of those people repay those rates but at what cost? It is at the cost of food at the cost of clothing and at the cost of other essentials for their family and many get caught in a cycle of debt and despair that has a huge cost for that whole family. Many are vulnerable families living in our poorest communities.On 1 July last year Australian legislation came into force capping interest rates at 48 percent right across Australia. A bill was introduced into the US Senate in April 2013 proposing an interest rate cap of 36 percent right across the United States. More than 80 percent of the individual states in the United States already had interest rate restrictions. Britain was one of the last European jurisdictions to decide to implement loan shark interest rate caps. It had explored every avenue in an attempt to avoid caps but just before Christmas Prime Minister Cameron and the Chancellor of the Exchequer George Osborne did a U-turn and announced interest rate caps after previously denouncing them. They announced that every avenue had been explored and that there was simply no alternative to interest rate restrictions. In addition to the above interest rate restrictions now apply in Japan Singapore most countries in Africa and Europe Canada Mexico and almost all of South America. This list is by no means exhaustive.The same old tired arguments—and the Minister of Consumer Affairs had them just before—were trotted out during consideration of this bill: unintended consequences the caps become a target access to credit from loan sharks may be reduced or driven underground. What was not adequately answered for Labour was why this would be a problem here in New Zealand but not in the many many jurisdictions around the world that have introduced interest rate caps. If the Government’s concerns have any substance then New Zealand would not stand out as one of the last remaining countries not to have imposed interest rate caps. I personally challenge Minister Craig Foss to find a country that has recently repealed such provisions because they have proved unworkable. Canada has had them for 8 years. If they had all those consequences why has it not repealed that legislation?So we are not going to sit back and leave this unchallenged. We will be putting forward amendments to this bill to include interest rate caps and also to ensure that the oppression provisions can be used to look at interest rates. I am pleased to say that when we introduced those we had clear indications of support from the Greens New Zealand First Mana Brendan Horan and the Māori Party. Peter Dunne is the man we need to get across the line I say to everybody. To those listening Peter Dunne is the man we need to get across the line. He supported interest rate caps when he voted for my member’s bill in 2010. What stops him doing it now? He said at the time he was deeply disappointed. What stops him in my opinion is his need for the National Party’s support and it outweighs anything else for that man so I urge everybody to talk to Peter Dunne. Let him know what you think he should do.Going back to the rest of the bill the bill contains many positive provisions as I have already said. Many of them have been provisions that budget services put forward years ago and from citizens advice bureaux in the review Labour commenced 7 years ago. I want to acknowledge the work of those people. They deal with the consequences of this every single day.My member’s bill also provided for responsible lending provisions in 2010 and I am pleased to see that we have responsible lending provisions albeit 4 years later in this legislation. Another thing I am very pleased to see is responsible lending provisions being applied to guarantors. I think that is great. I think that is particularly good for all those elderly people who end up guaranteeing loans for their children and their grandchildren. Truck shops as I have mentioned will be covered by some of the provisions and I want to acknowledge my colleague Kris Faafoi. Kris and I also worked very hard on the select committee to try to ensure that truck shops were covered by those provisions. Thank you.JONATHAN YOUNG (National—New Plymouth):I am very pleased to stand and speak in the second reading of the Credit Contracts and Financial Services Law Reform Bill. I want to say thank you very much to the officials who worked alongside the Commerce Committee. This was a particularly interesting but also a very complex and large bill. In fact the commentary that the committee signed off as a record of our work was about 25 pages long—one of the largest commentaries I think in a bill this year. It showed the complexity and the scope of the work that we did.The availability of credit both for businesses and for consumers is fundamental to the sound operation of a modern economy. Many goods and services are purchased through consumer transactions that are partly or completely financed by credit. Without credit such purchases would not occur and consumers and businesses would be worse off. Accessible consumer credit can make a significant contribution to the welfare of consumers and to the prosperity of business.The credit industry can be categorised in a number of ways. The Reserve Bank household financial liabilities report from a year ago shows that there was approximately at that point in time $180 billion of housing loans $9 billion of bank consumer loans and $3.9 billion of non-bank consumer loans.Colmar Brunton produced a report in 2011 for the Ministry of Consumer Affairs entitled Using a third tier lender: experiences of New Zealand borrowers. This report defined the three segments in the consumer credit market—that is first-tier lenders second-tier lenders and third-tier lenders. First-tier lenders include registered banks. Second-tier lenders include building societies credit unions the Public Service Investment Society and other deposit-taking financial institutions. The third-tier lenders are providers of personal non-mortgage credit which are not banks credit unions building societies deposit-taking institutions or credit card providers. Third-tier lenders include finance companies pay-day lenders and moneylenders.Some third-tier lenders are quite large organisations with multiple outlets. However most are single-outlet small operations. Third-tier lenders have tended to focus their business in lower-income areas. A number of lenders operate solely via the telephone internet and/or brokers and third-tier lenders are seeing opportunities and increasing demands for more accessible loans that are not being met by the banks and other credit providers. Third-tier lenders operate in a market where it is easier to engage in practices that potentially take advantage of vulnerable consumers because many of the borrowers have lower levels of financial literacy and/or have low incomes and do not have access to affordable credit.One of the things that we found quite challenging in the committee was the marked differentiation between those different tiers. That was quite a challenge as we looked at wanting to certainly address the real problem that happens particularly in those low-income families and communities where financial literacy is low. I think we worked quite extensively in the committee to try to find those demarcations.One of the areas that we worked on was lender responsibility principles. The bill introduces the concept of responsible lending to New Zealand credit legislation requiring lenders to help borrowers to be reasonably aware. It does not take away the responsibility of the borrower to gain financial literacy but it puts the onus upon the people lending the money to do everything they can to help the borrower to become reasonably aware of the full implications of entering into a credit contract.We recommend requiring lenders to express in plain language the terms of agreements and subsequent variations to agreements to help borrowers and guarantors to reach informed decisions. This is a very important part of the bill. Its sounds simple but when we have a population—particularly in the northern part of the country—that is increasingly made up of immigrants who have come from overseas and whose English language may not be as strong as it is in the rest of country it is important that plain language is used and that borrowers become reasonably aware of those implications.There is much to cover on this but I have probably said enough at this point in time. I am very happy to commend this excellent bill to the House and thank all the Commerce Committee members for their hard work in getting it this far.Hon CLAYTON COSGROVE (Labour):I join with other colleagues in support of the Credit Contract and Financial Services Law Reform Bill. I am particularly pleased by a couple of aspects of it. I will not labour the point but before I get into the guts of the legislation I want to refer members to a particularly pertinent piece in the commentary which is on page 4: “We recommend amending new section 9B(3)(e) to expand on ‘problems’ defining them as situations where a credit contract has been breached or may be breached. We also recommend requiring lenders to treat borrowers ‘in an ethical manner’…”. It is that ethical behaviour that I want to touch on in a wider context in respect of this bill because I note that—Hon Peseta Sam Lotu-Iiga: What page?Hon CLAYTON COSGROVE: —many of the concepts in this bill will amend—for the member’s help it is page 4 second paragraph down beginning: “We recommend …”.Grant Robertson: No pictures sorry.Hon CLAYTON COSGROVE: There are no pictures and a few large words but we will get over it. In terms of corrupt practice I note that when the President of China was appointed to his post one of his pledges if you will to his people was to go after and deal with both unethical behaviour and corrupt practice. I have to say that when we talk about acting in an ethical manner—ethically and responsibly—an example of that could not be used when it comes to the Minister of Justice. I will not labour the point because I want to go on to some other aspects of this bill but I say that where you have a person who is as eminently qualified as a Minister of Justice you would expect that person to act in an ethical way with ethical behaviour and in an ethical manner. Ordinarily you would especially since the chairman of the Commerce Committee talked about those people who should be educated in respect of financial literacy so that they are qualified to make appropriate decisions when it comes to lending. In the same way you would expect a person like Judith Collins—a Minister of Justice a lawyer and a senior member of Parliament—to conduct herself in a way where she could not be accused of unethical behaviour she could not be accused of corrupt practice and her reputation as the leading justice official in this House apart from the Attorney-General could not be besmirched.However when we look at the track record in the proceedings of the House today—The ASSISTANT SPEAKER (Lindsay Tisch): Order!Hon CLAYTON COSGROVE: —that does not fit the definition even in this legislation. Oh they may not like it Mr Assistant Speaker—and it is germane to this legislation—but her conduct today does not fit in any way shape or form the words contained in this bill about acting in an ethical manner. It is not ethical in relation to this bill to attempt to enrich oneself or one’s husband by one’s actions as a member of this House and as a Minister. If it is ethical then that is corrupt practice. I call that behaviour and the Minister of Justice’s behaviour in this House today back-pedalling corrupt practice where she will not name officials—The ASSISTANT SPEAKER (Lindsay Tisch): Order! It is not proper to allege that a member of this House is corrupt. From now on the member will come back to the substance of the bill. We are on a second reading and I refer the member to page 110 of Speakers’ Rulings. We will not have any cause for a member to talk about another member as acting in a corrupt manner.Jonathan Young: Please do not corrupt Standing Orders.Hon CLAYTON COSGROVE: I appreciate your advice. I appreciate it as well.Jonathan Young: Oh how kind of you. Thanks very much.Hon CLAYTON COSGROVE: No no ethical behaviour and ethical standards are very important in this House. The bill talks about treating people with respect and there are a number of disclosure provisions within this legislation. I put it to you that in order to be ethical and not be accused of corrupt practice if you a lender a borrower or any other individual in the community you have to be transparent you have to be ethical you have to tell the truth and you should not change your story every 5 minutes as we have seen in the last few hours in this Chamber—for the record.Moving on one thing I am particularly pleased about in this bill for the benefit of the Minister of Pacific Island Affairs over there if we look at the commentary under “Content of continuing disclosure statement”—and we would love a bit of that when it comes to the Minister of Justice would we not a bit of continuing disclosure—it is the recommendation to insert new clause 13A “to provide for regulations to prescribe a minimum repayment warning on credit card statements.” This is something I am particularly interested in—and I have campaigned in my own way over the years in several committees about this—because as the commentary says this is where “The warning would detail to the debtor the consequences of paying only the minimum monthly payment on credit card debt such as higher interest costs over time.” The Aussies have had this for several years.When we talk about financial literacy it is incumbent on this Parliament to assist those who often cannot—sometimes will not but often as not cannot—assist themselves. I put it to the House that there is no better form of financial literacy than for a bank to do as they do with mortgages where they tell you on your statement what your repayments are what your interest bill is from month to month what your interest bill currently will be on maturity and the total amount of the debt on maturity. You can see it all mapped out and see how many years you have to pay it off.Yet banks in New Zealand for a time have resisted under really the only excuse which is cost. There is a cost to making these changes and I acknowledge that but it is not an earth-shattering one. Their parent companies in Australia were compelled some years ago to disclose to a person who holds a credit card that this is your minimum payment this is the average payment you are making monthly and that if you keep paying it off with this frequency it will take X number of years and you will have paid X amount of money you will have paid the bank a bucketload of interest and it might take you 10 years to pay it off. At that point everything is disclosed to the person who is incurring that debt.I would wager—I hope I am right—that many people once that explicit disclosure is made on the credit card statement will look at it and go: “Heck. I didn’t think if I kept paying at this sort of frequency that I would be paying that amount of interest and that it would take that amount of time and my total bill at the end of this would be a bucketload of cash.” Once that realisation is made I suspect those people will say: “Hey I’m going to remedy this. I’m not going to give the bank a bucketload of money in interest. I’m actually going to shape up in terms of my internal financial processes. I’m going to redo my household budget and I’m going to try to quit this debt or minimise it to a manageable level.”I am quite proud of that. I am pleased and I am grateful to all members of the committee. It was something that I think sprang out from left field for us all. We raised it with the officials. I commend our officials who went away and challenged the banks and the financial institutions and came back with a remedy. Yes it will put a bit of cost on the banks to make the electronic changes that they will have to make. It will not raise interest rates. I would say that I would be very surprised if it is passed on in any major shape or form to the punters to the customers but it will bring our banks in line with their Australian parents. More than many things that have been done around financial literacy to me this is one of the ultimate forms of it because it is completely transparent it hides nothing and it gives a warts and all view to the person who is incurring debt through a credit card.We certainly know that it is relatively easy for credit cards to be made available to people and we know that they are an easy form for all of us who like to make the odd purchase from time to time. They are an easy form that aids our purchasing power. For those who can afford it that is OK. For those who cannot afford it it is troublesome. I am one of those people who can afford to pay the credit card off on time every time. The banks do not particularly like me I suspect because they do not get any interest out of it. I am well remunerated like all members of this House.Hon Simon Bridges: Too well.Hon CLAYTON COSGROVE: But we all have constituents who have been caught in that credit trap—especially the “Minister for Victoria Forest Park” or the “Minister for Geography” over there Mr Bridges. He did not pass School Certificate geography I am told. Even he is well remunerated in this House. But there are many constituents who get caught in that trap. Hopefully this small measure within the totality of this bill will assist them. I wish Judith Collins all the best for question time next week.JULIE ANNE GENTER (Green):The Green Party is happy to vote in support of the Credit Contracts and Financial Services Law Reform Bill at its second reading. The Green Party has long called for better regulation of third-tier lenders—that is pay-day lenders moneylenders and those who are known as loan sharks. Third-tier lending at extortionate interest rates has been increasing in New Zealand and in other jurisdictions over the past decade. It is both a symptom and a cause of growing inequality. The gap between those who have and those who have not is growing in New Zealand and in other countries and wealth is being concentrated in the hands of fewer people.Post the global financial crisis although the people who arguably caused the global financial crisis—The ASSISTANT SPEAKER (Lindsay Tisch): Order! I am sorry to interrupt the member. There is this banter going across the House. I am trying to hear the member who is speaking.JULIE ANNE GENTER: Thank you Mr Assistant Speaker. Post the global financial crisis a number of people lost their jobs and they found it more difficult to put food on the table and to pay their ever-increasing power bills. Predatory lenders set up precisely in those areas of greatest social and economic deprivation and take advantage of limited financial literacy and a desperate need for cash to make ends meet.It is not enough to improve financial literacy and regulate loan sharks alone. Part of the solution is addressing the underlying causes of this growing inequality and that means taking a hard look at our tax system which currently favours the wealthy few. We need to look after our children 250000 of whom are living in poverty. There are many steps the Government can take to do this thing like raising the minimum wage paying a living wage themselves and working towards a living wage across the country and investing in smart affordable transport and kid-friendly streets. Our Schools at the Heart policy which is focused on our education hubs and on making sure that kids are looked after from the beginning is going to help deal with some of this growing inequality.But the immediate issue of regulating third-tier lenders is finally being addressed in this bill. Even though we do not agree with everything in the bill—there are a few areas where we certainly differed from the Government’s policy and that is expressed in the minority report—we are very happy to finally see the very good work that was done as an outcome of the review of the Credit Contracts and Consumer Finance Act. I have to acknowledge the excellent work of officials in this area and especially the work of my colleague Carol Beaumont on the Commerce Committee. She is really the expert in this area. I am certainly not. I had to look to her expertise. She advocated for really important changes in this bill and I was so happy that she was there to do that.We will see truck shops and other lenders covered by this legislation which is incredibly important. As Carol Beaumont said in her speech earlier this evening one of the biggest disappointments of this legislation is that it does not include any provision for setting a cap on interest rates. What is disappointing is that we did not get any compelling evidence or reasons why this was not being included in the bill. We certainly asked for it. We heard a huge number of submissions and it is fair to say that some submitters were not in favour of interest rate caps—most notably the Bankers’ Association. But there were quite a few submitters who were in favour and there certainly is a lot of evidence that other jurisdictions are using interest rate caps to protect consumers from spiralling out-of-control debt. As Carol Beaumont said New Zealand is one of the last remaining countries not to have a provision for interest rate caps.So although I am certain that the provisions in this bill will go some way to protecting those consumers who are most vulnerable I am concerned that we have not given ourselves even the opportunity to try interest rate caps. The reasons given for not including interest rate caps were simply that there might potentially be a lack of access to short-term credit and that the interest rate cap would become the target and everybody would automatically put up interest rates to whatever the cap was. I have to say these are not really overwhelmingly compelling reasons for not including some sort of provision. I am an empiricist. I very much believe that we cannot know everything before trying it—Simon O’Connor: Did you say an imperialist?JULIE ANNE GENTER: Empiricist.Simon O’Connor: Oh I thought you said imperialist.JULIE ANNE GENTER: No empiricist sorry. So basically I think that when it comes to policy it is very easy to make up reasons for not trying something but actually if most of our trading partners in other comparable jurisdictions are doing something then maybe we should give ourselves the opportunity to at least try it. Seeing as how it took so many years for this legislation to come before the House we are not going to easily have that ability to include a cap in the future. I mean it takes time. We consulted on it. It was certainly spoken about in the submissions process. This was the logical place to at least introduce the possibility of the Government imposing an interest rate cap or allowing the Reserve Bank to set one.Of course if all these hypothetical drawbacks of interest caps did occur and there were no other means of introducing them then we could always roll it back but we should at least try it because it is an important tool. Why would you restrict the number of tools in your tool kit to deal with predatory lenders? As we know it is a growing problem and one that is increasingly affecting the people in New Zealand who are the most vulnerable and the people whom we should be looking out for the most.The lack of access to short-term credit is perhaps something that the Government should be seeking to address so that those who have the least really should not be forced to go out and get a pay-day loan or a short-term loan in order to put food on the table. That should not be a reason. You should not need access to credit to get your kids enough food to eat or to make sure that they have got warm clothes or that you are able to pay your power bill. There are other problems deeper problems that need to be addressed in this country and I think that allowing predatory lenders to go out and charge interest rates of well over 100 percent to people who have potentially—and I have to say that most people are not very good at understanding compounding interest. People who are struggling just to get enough to eat and to put food on the table might not be in the best position to understand the consequences of interest rates that are expressed simply in a daily rate and to understand what that is going to mean as it compounds.So simply put I think the Green Party is happy to see this legislation finally come to its second reading. It is mostly very very good and we are disappointed that the Government for quite ideological reasons seems to have neglected to include an important tool in the tool kit to address the problems we face.The other disappointing thing I think was the last-minute amendments around credit and default fees that were made entirely at the behest of the New Zealand Bankers’ Association—with some scaremongering claims that I am sure it made about the increased costs to it. Again I thought it was disappointing that the amendments came at the last minute. We were not presented with very compelling evidence for the wording changes. I think that although we have to admit that at least the Government did see this legislation come before the House—that is good—and there are some improvements ultimately there are still some ideological policy decisions being made by the National Government that are about “Let’s look after the bankers and let’s ideologically be opposed to caps on interest rates even though they might help those who are the most vulnerable in our society.” Thank you.Hon Peseta SAM LOTU-IIGA (Minister of Pacific Island Affairs):It is a pleasure to speak on this the second reading of the Credit Contracts and Financial Services Law Reform Bill. This bill will make a difference and it will make a real difference to people up and down this country who have fallen prey to predatory moneylenders. Many of my colleagues and members opposite have referred to this. Part of this bill is about protecting the most vulnerable in our communities in what is sometimes the most desperate of times. The bill is a result of many hours of consultation. I want to thank the officials as well. I also want to thank the Ministers both the present Minister of Consumer Affairs Craig Foss and past Ministers of Consumer Affairs—Simon Bridges who is in the House and Simon Power—and many others who have brought this bill to this stage. I also just want to say that the bill has taken some of the clauses from my own member’s bill which I launched 3 years ago—I am quite happy to tell my friends opposite—especially around credit repossession agents. It is a bill that is going to make a difference to our lives and the lives of many New Zealanders.We campaigned on this bill in 2011. It is now seeing some real results and I am glad that members opposite have chosen to support it. What they have not spoken about is the responsible lending guidelines that will be part of this bill.Carol Beaumont: I did actually mention that.Hon Peseta SAM LOTU-IIGA: No they have talked a lot about interest rate caps and I will come to that soon. The guidelines are about the duty on responsible lenders to their borrowers and customers. They cannot be indifferent to the needs of those borrowers. They cannot be indifferent to the circumstances of those borrowers. They cannot be indifferent to the borrowers who have situations where the transaction may lead to distress. This bill will fundamentally change the way that lending is done in this country and it will skew the power if you like back to protecting consumers particularly those vulnerable borrowers whom I referred to. I have seen them in my electorate office and I have had family members who sadly have been fleeced by these loan sharks. This bill is only part of the overall thrust of our Government to assist those borrowers. It is about education it is about having freephone lines so that they can access help and it is about the Commerce Commission playing its role in enforcing and prosecuting these lenders. That is what it will be about in the future. Responsible lending guidelines are going to be a critical part of this bill.I just want to touch on interest rate caps which members opposite have been referring to. As I asked in a member’s bill that advocated for interest rate caps—and they still do not get it across the aisle—what happens when you cap interest rates and fees get out of control? What happens when default fees get out of control? What they should be advocating—and I do not hear it—is a cost of finance cap not an interest rate cap. If you understand the fundamental difference between fees and interest rates then you would not be advocating the latter. What I am saying to members opposite is that interest rate caps do not work. In the jurisdictions that have implemented them you still have predatory lending. It is a blunt instrument that does not work.This bill has a lot of solutions. We are glad members opposite are supporting the measures within this bill because it is going to make a real difference to New Zealanders out there that finally a Government—not the Labour Government but the National Government—is putting in place these measures.ANDREW WILLIAMS (NZ First):I take a call on behalf of New Zealand First on the Credit Contracts and Financial Services Law Reform Bill. It is very appropriate to come after the Minister of Pacific Island Affairs Sam Lotu-Iiga with whom I had a discussion today on this very subject. I asked the Minister whether he would reconsider the aspect of capping the interest rates. He advised me that that was not going to be possible and he gave me various reasons. I am somewhat disappointed Minister because you come from the very area that is one of the most affected by loan sharks by high interest rates and by racketeers. The people whom you represent and are Minister of desperately need all the protection that they can get. They are the most vulnerable the Pasifika people. My colleague here Le’aufa’amulia Asenati Lole-Taylor can confirm that in the area of South Auckland in the Manukau area these people are very vulnerable. They need every assistance to ensure that they are not ripped off by some of these racketeers.So it is disappointing that the National Government just cannot see fit to go that extra step. It is bringing this bill through but it cannot go that extra step to put caps on interest rates. Caps have been introduced in the UK the USA Canada Japan Australia and much of Europe. This Government says it sees no justification for doing it here in New Zealand yet so many of our major trading partners so many of the countries that we have some of the closest contact with have done this. Therefore there can be no justification for this Government saying it does not think it is appropriate to do it when so many of these other countries based on a huge amount of case studies and past history in this area have seen fit to do so.It is also most concerning that this bill will go through but that the suggested amendments from Carol Beaumont in relation to those caps will be lost 61 votes to 60. They will be lost by one vote. They will be lost by the one vote of the Hon Peter Dunne. I use the word “honourable” very loosely because in this case if he was to do the honourable thing he would vote for the amendments as he voted back in 2010 for the Credit Reforms (Responsible Lending) Bill a member’s bill that was then in the name of Carol Beaumont. Back then United Future voted in favour of that bill and that bill said: “The amendments to the Credit Contracts and Consumer Finance Act 2003 will require lenders to seriously consider the actual means of a prospective borrower and their ability to service the debt and will allow for the prescription of maximum annual percentage rates of interest payable in respect of consumer credit contracts. Rules applying caps to annual interest rates now apply in many overseas countries including the United States Canada and Australia.” That was in that bill and the vote on that bill was lost by 59 votes to 63 but those who voted for it included United Future.So the Hon Peter Dunne was happy to vote for that and have caps 3 years ago but yet recently in the media he has said that he has never supported it and never did support it. He has done the usual flip-flop of a Minister. As the Rt Hon Winston Peters said in the case of Peter Dunne “he will double-cross that bridge when he comes to it.” In this case he has double-crossed the bridge when he has come to it because he is on record—and I have a letter here also confirming it—saying that he supported that bill and was sorry that it did not go through. He wrote a letter and I have got the letter here. He said: “I was very pleased to hear from you … thank you for taking the time to write to me and for your [kindness]. I was happy to support this bill and was very sorry that it did not proceed past first reading. I hope that further progress will be made on this issue in future.” Well this is the future Peter Dunne—this is the future. This is 2014. We now have a bill that would allow if the Government accepted the amendments caps to go on interest rates.At a time when people can be absolutely ripped off with interest rates rising to three digits—hundreds of percent—why should poor vulnerable people be paying interest rates of hundreds of percent in some cases when this Government has the ability to support putting caps on interest rates? It is just absolutely diabolical in this day and age that this Government cannot see sense in doing this when our trans-Tasman sister country Australia has done it and when so many of these financial people operate on both sides of the Tasman as well. Why should they have constraints in Australia but not have constraints here in New Zealand? It does not make sense. Why does this Government often say “Oh we are trying to harmonise with Australia as much as we can so that businesses both sides of the Tasman know what the rules are and so do the banks and everybody else—you know so we’re harmonised.” and yet here is an instance where the Government will not harmonise with what is happening in Australia? It is just absolutely nonsensical.In the case of the Hon Peter Dunne New Zealand First can say to him that once again he is selling out taking the baubles of office and giving the one vote that is required to stop those caps going in. If he followed what his party’s principles stand for—and also we have confirmation that people within United Future are saying that they would like to see these caps in place. They cannot understand why Peter Dunne himself is not supporting the capping of rates. Peter Dunne is obviously a one-man show voting for his own self-interest and not voting on the basis of what many of the people in his own party would say. He is basically voting to ensure that he keeps his ministerial portfolios his Crown limousine and all the baubles of office so he will give the one necessary vote to ensure that credit caps are not put on interest rates.In closing New Zealand First will just say once again that we are very disappointed. We will be supporting the bill overall because it does significantly help vulnerable people. It will enhance the whole situation in terms of those who are most affected and who require credit. But at the same time when the bill comes through the Committee stage we will be expressing grave concerns as to why the Government is once again letting down low and middle income earners in this country and is not seeing sense by doing that.KANWALJIT SINGH BAKSHI (National):It is my pleasure to take a call on the Credit Contracts and Financial Services Law Reform Bill. I would like to acknowledge the Hon Simon Bridges and the Hon Craig Foss for their contributions to this bill. I would also like to thank all the members of the Commerce Committee—in particular the Hon Peseta Sam Lotu-Iiga and Alfred Ngaro—for their contributions during the select committee process. It is a very important bill particularly for the people of South Auckland where I have got my office. It is my pleasure to commend this bill to the House.KRIS FAAFOI (Labour—Mana):Thank you very much for the chance to speak in this second reading of the Credit Contracts and Financial Services Law Reform Bill. Like the Minister of Pacific Island Affairs Sam Lotu-Iiga I also represent a community that is disproportionately affected by the kind of behaviour that is carried on by third-tier lenders—or as we like to colloquially call them loan sharks—and the likes of as I guess they would call themselves mobile traders whom we like to call truck shops.It would not seem fair to any fair-minded New Zealander that interest rates of the likes of 50 percent to 100 percent or even more are charged to vulnerable people in our community. I think if you asked any fair-minded New Zealander who wants a fair go for consumers especially those who are vulnerable and who cannot get credit from the likes of traditional banks they would say that getting charged the likes of 50 to 100 percent is just not fair. It lands a whole lot of families—and as I say there are a whole lot of families in my community who sign up to those kinds of deals—in massive trouble. It usually ends up with them going to the likes of the local citizens advice bureau or the Porirua Budget Service. I am going to see the Agape Budgeting Service tomorrow in Porirua. Those are the kinds of people who end up dealing with the hurt of the families because the likes of third-tier lenders or loan sharks are able to charge exorbitant interest rates.Although we are supporting this piece of legislation this is a massive opportunity gone for this Government to take some real action to introduce interest rate caps. I do want to acknowledge my colleague Carol Beaumont who has a number of Supplementary Order Papers on this bill. One of those specifically does do what the Government should have done in the introduction of this bill and that is to look at interest rate caps. I think it was Mr Lotu-Iiga who said that these interest rate caps do not work. So maybe Mr Lotu-Iiga would like to ask the likes of many countries in Europe Mexico Canada South Africa Japan Singapore—which has a Government that this Government always says is doing a good job financially—the US Australia and most recently the United Kingdom as to why they think it is appropriate to put in interest rate caps for third-tier lenders. I think those Governments probably recognise the fact that there is huge public interest in making sure that the most vulnerable in our communities are not stung more by the likes of interest rates of 50 percent to 100 percent.Essentially what we are saying here is that this side of the House is not OK with the most vulnerable people in our community going to third-tier lenders and paying interest rates of 50 percent to 100 percent or more. But that side of the House—the Government; National United Future—are quite OK with people who probably cannot afford to take out these loans having these huge exorbitant interest rates. That is exactly what this boils down to. We are not OK with it but that Government is OK with it.From now on all the hurt that the likes of budgeting services see around the country can be blamed on that Government because it is quite OK with letting things go on as they are now.Or one person in this House the Hon Peter Dunne could change his mind again. He could change his mind again. Andrew Little said that Mr Dunne supported a member’s bill back in 2010 in the name of Carol Beaumont that would have introduced interest rate caps. I want to quote from the same letter that Mr Little—Dr Cam Calder: Williams.KRIS FAAFOI: —Mr Williams thank you—quoted from. I want to declare somewhat of a conflict of interest. This letter is to Mr Andrew Shann who is a constituent of mine and who also works for me part-time and who has been campaigning against third-tier lenders since well into the past and also to make sure that interest rate caps come in.Hon Simon Bridges: Ah!KRIS FAAFOI: You can crow over there because you guys are OK with 50 percent or 100 percent interest rates. You are OK with it. I am not OK with it. You guys are the ones who are OK with it. I just want to say that Mr Dunne was not OK with it 4 years ago. He said: “I was very pleased to hear from you … thank you for taking the time to write to me” He said he supported the bill and was very sorry that it did not pass the first reading.So 4 years ago Mr Dunne was not OK with exorbitant interest rates but now that he has got the Crown car back and he is back in his ministerial office he is toeing the party line and he is all of a sudden not OK with caps on interest rates. I would suggest—if people are watching this debate and I am sure a lot of people around the country who are interested in making sure that—Dr Cam Calder: If they know you’re speaking they will be—they will be.KRIS FAAFOI: He is a retiring member. Those people who are interested in making sure we are looking after vulnerable people can put a lot of pressure on Mr Dunne to change his mind again. His is the one vote that could change this whole thing. Peter Dunne said in 2010 that he was OK with interest rate caps but now that he is back in the House with the Government he is not OK with it.So write letters to Peter.Dunne@parliament.govt.nz. Send him a letter—to the Hon Peter Dunne. It is freepost. If you are not OK with 50 to 100 percent or more interest rates write Peter Dunne a letter send him an email or bombard his office with phone calls. He is the one who can change this whole situation. The Government has not shown any leadership on this. It is dead against interest rate caps. It does not want to introduce them. But there is one person in this House who can change everything. I fear that he may not change his mind because what did he do with asset sales? He made sure he voted for that. That squeaked through with one vote. But I do not want to discourage people from trying to get Peter Dunne to change his mind on this.Can I just take a brief moment because this was the first substantive piece of legislation that I sat through on the Commerce Committee to thank other members of the Commerce Committee. It was a relatively good process. We had the odd stoush—nothing compared with what we have had recently.Carol Beaumont: Officials.KRIS FAAFOI: Can I thank the officials too because as the chair of the select committee Jonathan Young said the bill is very technical but I think the way the officials guided us through this process made it very plain sailing for someone who had to make sense of this as a new member to the select committee.I do represent a community where the effects of loan sharks and truck shops do have a disproportionate effect. Although I support this piece of legislation I do think as I have said before that we have missed an opportunity to make the lives of those people better. I have had people in my office who have been in tears because of the interest rates and the debt that they have got themselves into with loan sharks. I cannot do much more than offer the services of a budgetary advice service. That is heartbreaking because I think this Parliament should be able to do something to prevent people from getting into those situations. I think an interest rate cap certainly would have been one of those ways.There is also one person I do want to thank who is not in this House any more and that is Charles Chauvel. Before he left this House he also took a very strong leadership role in the Ōhariu electorate which Mr Dunne is the MP for in making sure that this issue was brought to the fore. It was actually 5 years ago when the effects of the global financial crisis started kicking in that this really started to hit home especially with our most vulnerable people in our communities.As Sam Lotu-Iiga said he put in a member’s bill 3 years ago—3 years ago. It was 3 years ago and we are sitting here today 6 months before an election and something is being done about it only now. My question is why it has taken so long for this Government to get off its chuff and make sure that something is done for these most vulnerable people. We have still got the Committee stage of this debate to go and I suggest that that question may be a very strong theme in that debate—as to why it took so long for this Government to do something. During that time a lot of families up and down this country and certainly in my electorate of Mana have been put through harm that I do not think they necessarily should have been put through. They are in debt. That affects their daily lives. It affects what they can do with their kids and their families. If this Government had acted a little bit sooner to put some protections in place for them their lives could have been markedly different.I just want to finish up with this thing. There is one vote in this House that can change it. We on this side of the House are not OK with interest rates of 50 to 100 percent or more. If this Government does not support the Supplementary Order Paper of Carol Beaumont that pretty much says that that Government is OK with it.Bill read a second time.Sittings of the HouseLOUISE UPSTON (Senior Whip—National):In light of the State reception that is to commence shortly I would seek leave for the House to rise early.Mr DEPUTY SPEAKER: Leave is sought for that purpose. Is there anyone opposed to that course of action? There appears not.The House adjourned at 5.34 p.m.