Volume 711 Week 40 - Tuesday 8 March 2016Text is incorporated into the Bound VolumeVolume 711 Week 40 - Tuesday 8 March 2016[Sitting date: 08 March 2016. Volume:711;Page:9419. Text is incorporated into the Bound Volume.]Tuesday 8 March 2016Mr Speaker took the Chair at 2 p.m.Prayers.VisitorsGermany—Germany-New Zealand Parliamentary Friendship GroupMr SPEAKER: Honourable members I am sure that members would wish to welcome members of the Germany-New Zealand Parliamentary Friendship Group led by Chairperson Mr Volkmar Klein who are present in the gallery.Questions to MinistersGovernment Financial Position—Current Account Deficit1.BRETT HUDSON (National) to the Minister of Finance: What reports has he received about progress in improving New Zealand’s external financial position—particularly in bringing down the longstanding current account deficit?Hon BILL ENGLISH (Minister of Finance): The latest data from Statistics New Zealand shows that the current account deficit is 3.3 percent of GDP. This is quite a bit better than was expected in past Budgets. Treasury’s forecast for the current account deficit for the same period in last year’s Budget was 5 percent and back in Budget 2012 it forecast that the current account deficit today would be 7 percent—and it is 3.3 percent. And 3.3 percent is significantly better than when we did have a 7 and 8 percent current account deficit back in 2006 2007 and 2008.Brett Hudson: What reports has he received on improvements in another measure of New Zealand’s external financial position—New Zealand’s net international investment position?Hon BILL ENGLISH: The net international investment position measures New Zealand’s total level of indebtedness to the rest of the world—that is it includes households the private sector and the public sector. The latest figures show that it is now 62 percent of GDP down from 82 percent of GDP back in 2008. Of course 62 percent is still too high; we want to see this falling further. The Government can influence it directly through its own fiscal control and indirectly through sound economic settings and encourage investment employment and exports. [Interruption]Mr SPEAKER: Order! The level of interjection—and it is from both sides of the House—is simply too loud and disruptive. [Interruption] Mr Peters when I am on my feet I expect even very senior members to also respect that.Brett Hudson: How is growth in the export sector supporting lower current account deficits?Hon BILL ENGLISH: The outlook for exports is mixed. Obviously dairy prices are lower and many farmers will be disappointed with today’s forecast payout announcement but other sectors including other sectors of the primary sector are doing pretty well. We are seeing good growth in horticulture and other agricultural sectors and that is alongside growth in tourism manufacturing and education. Despite the fall in dairy prices total exports increased by over $1 billion last year. This of course will help our external balances.Brett Hudson: What role do free-trade agreements like the Trans-Pacific Partnership play in boosting exports and supporting the New Zealand economy?Hon BILL ENGLISH: If you want to improve New Zealand’s current account deficit and net international investment position it makes sense to have a stronger export sector and a key to a stronger export sector is free-trade agreements. The Trans-Pacific Partnership agreement gives us better access to 800 million customers in 11 countries that account for 36 percent of the global economy. We believe the benefits that have been calculated are conservative compared with other free-trade agreements where for instance the benefits of the New Zealand - China free-trade agreement signed by the previous Labour Government turned out to be significantly greater than what was calculated at the time.KiwiRail—Northland Network2.Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he stand by all his statements?Rt Hon JOHN KEY (Prime Minister): Yes.Rt Hon Winston Peters: Does he stand by his statement to the House last week that “the rail line north of Whangarei is not closing.”?Rt Hon JOHN KEY: Yes.Rt Hon Winston Peters: If that is the case Prime Minister then why did Peter Reidy the chief executive of KiwiRail state to the Transport and Industrial Relations Committee on 2 February this year that “Well at this stage there is no rail north of Whangarei”?Rt Hon JOHN KEY: Because as we traversed last week the issue is not about the rail line closing; it is about whether an operator is operating on the line.Rt Hon Winston Peters: How can he stand by that statement when the New Zealand Transport Agency’s regional director for Auckland and Northland Ernst Zöllner talks of roading projects only in the far north without any funding and no funding for rail in the north north of Kauri?Rt Hon JOHN KEY: The issue is whether there are customers who want to use the rail and actually pay the commercial rates for that. Last week actually funnily enough I went to a function where one of the companies that is quite heavily involved in the far north said to me that it had considered the option of rail but it was inefficient for its business and it was sticking with trucks.Rt Hon Winston Peters: How can he and his Minister of Transport consistently tell this House one thing in respect of for example the Portland line and the line north of Kauri when the chief executive of KiwiRail and the New Zealand Transport Agency regional manager for Auckland and Northland have both confirmed to use their own words in the parliamentary record—Mr SPEAKER: Order! Bring the question to a conclusion.Rt Hon Winston Peters: —for the select committee that “there is no rail north of Kauri”?Rt Hon JOHN KEY: Because we are correct in the same way that that member tells his caucus he loves them and knows who they are but could probably not answer what their names are. [Interruption]Mr SPEAKER: Order! [Interruption] Order! I can only think that some members to my right hand are having trouble hearing me today. If it continues I will not hesitate to be asking Ministers to leave.Rt Hon Winston Peters: I raise a point of order Mr Speaker. My point of order is about the good order of Parliament. Surely the advice to the Prime Minister should be for him to apologise and withdraw those unseemly comments—or just fly a white flag when you are losing.Mr SPEAKER: On this occasion the answer was not helpful to the order of the House but I hardly think it was of a context or tone that requires anything to be withdrawn. I think the member often gives as good as he gets.Ministers—Confidence3.ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he have confidence in all his Ministers?Rt Hon JOHN KEY (Prime Minister): Yes.Andrew Little: How can he have confidence in the Minister of Finance who had final authority over the unaffordable fit-out of the Ministry of Health and failed even to check the ministry’s balance sheet?Rt Hon JOHN KEY: I have tremendous confidence in the Minister of Finance. I mean this is a Minister of Finance who has seen strong economic growth seen the books return to surplus and seen New Zealand growing and performing strongly on the world stage.Andrew Little: How can he have confidence in the Minister of Health when he covered up a “serious failure of financial management within the ministry” including keeping the Auditor-General in the dark doing his best not to leave any paper trail and hiding the cost from the public eye behind now a commercial lease?Rt Hon JOHN KEY: I just utterly refute the assertions made by the member.Andrew Little: What reports if any has he received from the State Services Commission on the cover-up in the Ministry of Health after Treasury called the commission in to investigate?Rt Hon JOHN KEY: I utterly refute the assertion the member is making.Andrew Little: How can he have confidence in the Minister for Economic Development who has made such a hash of the Ministry of Business Innovation and Employment amalgamation that his own staff have been underpaid for years?Mr SPEAKER: Order! The question has been asked and will now be answered.Rt Hon JOHN KEY: As I noted to the House last week not only do I have tremendous confidence in the Minister for Economic Development I am very proud of the achievements that he has achieved. Just last week we saw the export numbers for New Zealand be positive by $1.9 billion despite the downturn in dairy. We are seeing growth for New Zealand right across the regions. I accept it has been a bit hard for some Government departments to actually follow the rules set by Labour in the Holidays Act but then actually members of the Labour caucus find it hard to follow the rules—Mr SPEAKER: Order! I do not think where the answer is heading is going to help.Andrew Little: Just what kind of shambolic Government is he running when public servants are not paid what they are owed and the Ministry of Health managed to hoodwink the entire Cabinet into believing it had $24 million that did not exist?Rt Hon JOHN KEY: Well 1 minute ago he was trying to say it was the Minister’s fault and now he is trying to say it is the Ministry of Health’s fault. My understanding is that the issue has been dealt with. There have been some personnel changes.Andrew Little: With underfunding of health already running at $1.7 billion just how is he going to pay for the latest bout of ministerial incompetence that is now costing taxpayers at least a million dollars a year extra in rack-rent for the Ministry of Health?Rt Hon JOHN KEY: Firstly the member is utterly wrong again about health: its funding is up over $4 billion in the time we have been in Government. But I would point out that the amount that is being paid in relation to the release at least for the fit-out of the Ministry of Health actually comes out of its departmental expenses and has been reduced from $230 million when we first became the Government to $190 million. Personnel numbers have reduced from 1500 people to 1100 people so as we can see we are running the department at an annual expenditure of $40 million less.Landcorp—Land Use Programme4.METIRIA TUREI (Co-Leader—Green) to the Minister for State Owned Enterprises: Does he support Landcorp’s recent decision to significantly reduce its dairy footprint?Hon TODD McCLAY (Minister for State Owned Enterprises): Yes I welcome the business decision by Landcorp to revise its land use programme at the Wairākei estate. I would note that Landcorp’s current dairy footprint would not be reduced but that there would be a focus on alternative uses for the remaining former forestry land it leases there. In the Government’s regular meetings with Landcorp we have asked the company to lift its financial performance and to ensure that it is profitable and productive. However specific investment decisions are for the Landcorp board to make.Metiria Turei: Did the Minister then make a mistake in his answer to questions last year when he told my colleague Catherine Delahunty that he stood by Landcorp’s initial plans for large-scale dairy conversions given his Government’s plan to see the dairy industry double by 2025?Hon TODD McCLAY: From memory that was not exactly my answer but I certainly stand behind Landcorp and the Landcorp board as far as its business decisions are concerned. It was correct that about a year ago the Government asked it to look at all of its business models including the appropriateness of investment when it came to Wairākei. I would note that it is absolutely its decision to make. I welcome this decision just as other decisions when it comes to dealing with the financial performance of Landcorp.Metiria Turei: Does the Minister think his Government’s strategy to intensify dairying in New Zealand is coming undone when the Government’s own dairy farmer Landcorp is significantly reducing its dairy footprint for economic and environmental reasons?Hon TODD McCLAY: No.As opposed to the view of the Greens it is not the Government’s intention to nationalise farming in New Zealand. It is the private sector that makes these decisions every day. It makes them based upon indications that come both from pricing overseas markets and from the very successful job the Government is doing in signing up and negotiating free-trade agreements. What I would say to that member however is that Landcorp is not significantly reducing its dairy footprint; it has merely made a business decision that there are other uses at this time for the land it has yet to convert at Wairākei.Metiria Turei: Does the Minister disagree with Landcorp Chief Executive Officer Steve Carden who says he is concerned about leaving legacy environmental issues in sensitive water catchments and will the Minister now lobby the Minister for Primary Industries to place a wider national moratorium on dairy conversions in sensitive water catchments as Landcorp Chief Executive Officer Steve Carden is concerned?Hon TODD McCLAY: I have not seen those comments from the chief executive officer but in my ongoing discussions with the chair and the board I have indicated to them that it is the Government’s desire that they meet the rules and requirements that regional councils set when it comes to land use and particularly the protection of water. This Government has a better record than any other Government when it comes to these issues and I do not need to lobby my colleague the Minister for Primary Industries. He is up and down the country on a daily basis talking about the importance of farming and the importance of the economy.Metiria Turei: Does the Minister then disagree with Steve Carden when he said “The days of New Zealand continuing to expand its dairy footprint are largely coming to a close.” and how will this change the Government’s plans to double dairy production by 2025?Hon TODD McCLAY: No the Government—the Crown as the owner of Landcorp—has a direct relationship with the governance there; and of course that is the board. Every year we set out our obligations our expectations to it. As far as the chief executive officer is concerned when he speaks it is the same as any other farmer in New Zealand I suppose about their view of farming in New Zealand. Fundamentally my view of where Landcorp sits today is that we want it to be low risk we want it to return to profit and we want greater dividends returned to the Crown so that we can build schools and provide hospitals and good law and order.David Seymour: How does the Government ensure that its ownership of farms does not reduce its incentive to be a strong environmental regulator?Hon TODD McCLAY: That is a very good question. As Minister for State Owned Enterprises my role is to ensure that the board is focused on the outcomes that the Government wants from it and I mentioned them earlier: to be low risk to manage its debt well and to return increasing dividends and profits to the Crown so that we can invest them in other areas on behalf of New Zealanders. But what I would say is that we expect Landcorp—as with all farmers—to take its environmental obligations seriously. I actually see that it does that.Metiria Turei: Is the Minister confident that Landcorp’s change of direction away from intensive dairying will be enough to prevent it going the same way as Solid Energy?Hon TODD McCLAY: Well I think the member is oversimplifying what it is that Landcorp has announced. It has announced that it has found in one particular area of the country other land uses on top of the significant land use changes around dairy that it has made. Ultimately it is a decision for it—a business decision—as to how it uses the land that it has under its control and I support that.Metiria Turei: Does he understand Landcorp’s decision as a win for our rivers and lakes and a win for our economy and why is it that he thinks that Landcorp is willing to protect New Zealand’s rivers and lakes from dairy cow pollution but the Government is not?Hon TODD McCLAY: No there is just no evidence in that claim on the part of the Greens and what I would suggest to the member is that her coming across as a supporter of farming is almost the same as her supporting you know a very reasonable debate in this Parliament. The thing about Landcorp is that in our view they are farmers. It is not for the Government to interfere in their everyday business decisions when it comes to farming. But I repeat my earlier answer: this current Government has a very strong record when it comes to environmental standards around water and the balance that we have with the farming industry.Health Services—First Specialist Assessments5.BARBARA KURIGER (National—Taranaki - King Country) to the Minister of Health: Can he confirm preliminary data from the National Patient Flow Project which shows that 90 percent of patients referred by their GP to a hospital specialist between 1 July and 30 September 2015 were accepted for a First Specialist Assessment?Hon Dr JONATHAN COLEMAN (Minister of Health): Yes. Although this is preliminary data it indicates that of 145922 referrals to hospital specialists during that period 90 percent or 130000 received a specialist appointment. This is the first time that any Government has provided transparent data on the outcome of GP referrals to hospital specialists.Barbara Kuriger: What reports has he had on the number of surgical and medical first specialist assessments carried out in the last 7 years?Hon Dr JONATHAN COLEMAN: I am advised that there were 542000 first specialist assessments performed across the country. That is 110000 or 26 percent more than the annual number performed in our first year in Government. The only answer to increasing demand is to do more and this Government is.Barbara Kuriger: What percentage of referrals are sent back to their GP?Hon Dr JONATHAN COLEMAN: On the preliminary data 4 percent were sent back to their GP but as the data firms up that is expected to rise to 10 percent to 15 percent. No Government in New Zealand’s history has ever been able to give every patient every appointment they want but the focus of this Government is to continually increase access to services and we are.Health Ministry—Financial Management6.Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Health: When was he informed that the Ministry of Health request for a capital injection to fund the fit out of its new headquarters was not supported by Treasury and “exposed a serious failure of financial management within the Ministry”?Hon Dr JONATHAN COLEMAN (Minister of Health): I was informed by the Director-General of Health in mid-February 2015. The director-general advised me that he was calling in PricewaterhouseCoopers to both give advice on resolving the funding issue and provide independent advice on improving the ministry’s financial management. I told Mr Chuah very clearly that what had happened was unacceptable that it would not happen again and that the matter had to be resolved and subsequently it has been.Hon Annette King: In light of the exposure of serious financial management problems within the Ministry of Health under the current director-general when he was acting in the role in 2013 did the Minister raise any concerns with the State Services Commission before agreeing to the permanent appointment of the director-general in 2015; if not why not?Hon Dr JONATHAN COLEMAN: I think it is very unfair to go after a defenceless public servant but what I will say is the State Services Commissioner was very happy—Hon Annette King: I raise a point of order Mr Speaker. [Interruption]Mr SPEAKER: Order! [Interruption] Order! Could the Minister please resume his seat.Hon Annette King: You accepted the question—Mr SPEAKER: Order! I now want to hear the answer.Hon Annette King: Well he was not answering it.Mr SPEAKER: Can we now give the Minister an opportunity to answer the question.Hon Dr JONATHAN COLEMAN: I have answered it.Mr SPEAKER: Well then I did not hear the answer so I invite the member to ask the question again.Hon Annette King: Thank you Mr Speaker. In light of the exposure of serious financial mismanagement in the Ministry of Health under the current director-general when he was acting in the role from 2013 did the Minister raise any concerns with the State Services Commission before agreeing to the permanent appointment of the director-general in 2015; if not why not?Hon Dr JONATHAN COLEMAN: I think it is pretty bad form for the member to attack a public servant when he cannot defend himself personally but Mr Chuah was appointed because he was the very best person for the job. [Interruption]Mr SPEAKER: Order! I will allow the member an additional supplementary question because I do not think it has been answered.Hon Annette King: No.Thank you Mr Speaker. Why did he not make the PricewaterhouseCoopers report into the serious financial management public after it was presented in June last year rather than wait for it to be discovered through an Official Information Act request? Could the Minister please answer that question?Hon Dr JONATHAN COLEMAN: Well I know the member is trying to make out there is some sort of cover-up but that is complete nonsense.Hon Annette King: Why did he only receive verbal briefings on the issue of serious financial mismanagement from the Director-General of Health after he was informed there was a problem?Hon Dr JONATHAN COLEMAN: I am quite satisfied with the way that this whole issue has been resolved.Hon Annette King: I seek leave to table a letter from the Ministry of Health to our research unit saying the Minister only received verbal briefings from the director-general on this matter.Mr SPEAKER: Leave is sought to table that particular document. Is there any objection? There is none. It can be tabled.Document by leave laid on the Table of the House.Hon Annette King: What—[Interruption]Mr SPEAKER: Order! Supplementary question the Hon Annette King.Hon Annette King: What—[Interruption]Mr SPEAKER: Order! If the Hon Paula Bennett would prefer to leave question time she is welcome; otherwise please cooperate.Hon Annette King: What was the cost of the PricewaterhouseCoopers report—an inquiry that the Secretary to the Treasury requested and not the Director-General of Health even though he claimed on Radio New Zealand this morning he had asked for it?Hon Dr JONATHAN COLEMAN: I am happy to go and find the answer to that question for you but I have not got it on me now.Hon Annette King: Supplementary question—this is one I asked—well you gave me an extra did you not Mr Speaker?Mr SPEAKER: I gave you one more yes.Hon Annette King: Where will the Ministry of Health to quote him “be finding that $18 million” needed to pay for the refurbishment”? Will it be coming from funding better used for health services?Hon Dr JONATHAN COLEMAN: That is an excellent question. It is coming from the departmental expenditure. Under the Labour Government that was $230 million. We have reduced that to $190 million. There were 1500 people in the ministry when Annette King was running it; there are now 1100 but we are producing better results for New Zealanders. So very good question thank you.Russia—Trade Sanctions7.Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he stand by all his statements?Rt Hon JOHN KEY (Prime Minister): I feel like I have been here before but yes.Rt Hon Winston Peters: Does he still stand by his statement of August last year that “New Zealand should show solidarity with the other countries that have applied sanctions on Russia because of the actions that it has undertaken.”?Rt Hon JOHN KEY: Yes.Rt Hon Winston Peters: Then how was it that his former Minister of Trade Groser—now an ambassador—said about resuming trade with Russia that it was “a step in the right direction”; if not why is he willing to allow more dairy farmers to go bust while he remains tied down by an informal off-the-cuff golf course agreement with President Obama?Rt Hon JOHN KEY: In the latter assertion the member is quite wrong. But if the member cares about dairy farmers here is a clue: vote for the Trans-Pacific Partnership (TPP). The single-biggest gainers out of the Trans-Pacific Partnership are dairy farmers. Rather than some mythical Russian who might want to buy something I can show him 800 million consumers who definitely want to buy something.Rt Hon Winston Peters: Seeing as he has put that into contention—with regard to for example Canada Japan the United States and the EU and our farmers face $38 billion of preference selling—why has he denied farmers a chance to trade with the world’s second-biggest dairy importer Russia considering there has been another drop in Fonterra’s milk price disastrously from $4.15 to $3.90 announced this morning?Rt Hon JOHN KEY: Well a few things. This will come as new news to the member but Europe is not part of the TPP. The second point that might be interesting to the member is that one of the reasons that dairy prices have been falling is that the supply that used to go from Europe to Russia is not going to Russia not just because of the sanctions but actually because they—Rt Hon Winston Peters: That is the point.Rt Hon JOHN KEY: Well OK—maybe you should wander off and study a bit more economics and work out that they have got no money to buy anything through the front door or the back door. That is the reason prices are going down. Russia is in serious financial difficulty because of oil prices.Rt Hon Winston Peters: Why can he not understand that some of us are not interested in the fraudulent economics of Merrill Lynch but in taking advantage of trading with Russia—the world’s second-biggest importer of dairy products—when the European Union with whom he wants to negotiate now has taken full advantage of our informal sanctions by increasing its milk product exports in our markets?Rt Hon JOHN KEY: The member is quite incorrect. Secondly as I said to him if he wants to support those dairy farmers whom he now says he believes in it is pretty simple. Do two things: No. 1 vote for the Trans-Pacific Partnership (TPP)—pretty straightforward; No. 2 the member earlier in the year got up and said: “I will be approaching the Government to help it support and change the Resource Management Act.” Well I am still waiting. If the member wants to come to talk to me he should feel free to pop up to the 9th floor of the Beehive.Rt Hon Winston Peters: I seek leave to table a communication between the National Party and New Zealand First about the Resource Management Act offer that New Zealand First made but it is a blank paper because it never made an offer.Mr SPEAKER: Order! That is very difficult for me to put to the House.Women Minister—Cabinet8.JAN LOGIE (Green) to the Prime Minister: Will he return the Minister for Women to Cabinet to mark International Women’s Day?Rt Hon JOHN KEY (Prime Minister): It is not my intention to do a Cabinet reshuffle today but I would like to note that I think that the current Minister for Women Louise Upston is doing a great job.Jan Logie: If the Ministry for Women is the “Government’s principal advisor on achieving better outcomes for women” as stated on its website why is its Minister not in Cabinet?Rt Hon JOHN KEY: Because it depends. From time to time the Minister has been inside Cabinet; that was the case—Eugenie Sage: Not under National or your Minister.Rt Hon JOHN KEY: Yes it was. Pansy Wong was the Minister of Women’s Affairs inside Cabinet; so was Hekia Parata at one point. In other instances they have not been. But whether a Minister is inside Cabinet or outside Cabinet is irrelevant when it comes to the portfolio. If there is an issue in the portfolio I take those issues seriously. And by the way it is actually the responsibility of every Minister to advocate for women’s issues. I expect them to do that in the same way that I expect every Minister to advocate for Māori issues or other issues of significance—it happens right across Cabinet.Jan Logie: Is the Prime Minister OK that since he removed the Minister of Women’s Affairs from Cabinet there has been an increase in the gender pay gap increased reporting on domestic and sexual violence an increase in the number of children in poverty and the number of women in senior executive roles is down?Rt Hon JOHN KEY: I would reject the proposition from the member. Amongst other things more women are working gaining tertiary qualifications and studying or working in high-growth sectors than ever before. A report from Statistics New Zealand released in September 2015 shows that women are now almost as likely as men to work in managerial roles. The report shows progress in areas where women have historically been under-represented. We have extended paid parental leave and there are a number of other issues that we have worked on.Dairy Industry—Milk Price9.GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he agree with the Prime Minister that “when the primary sector sneezes the New Zealand economy catches a cold”?Hon BILL ENGLISH (Minister of Finance): Yes I do agree with the Prime Minister and I remember almost all of his quotes back to 2009. We are committed to doing what—I would particularly agree with the rest of that statement—we can to assist the dairy sector by for example working to remove barriers to free trade supporting primary sector research and development reducing unnecessary red tape developing critical infrastructure and supporting rural communities. Of course since 2009 the Government has delivered on all of those commitments.Grant Robertson: Is it correct that when John Key advised New Zealanders in November 2014 “not to worry about the declining price of milk” and that the price slide would “bottom out soon” the price for whole-milk powder was $567 higher than it is today and when will his Government start to be straight-up with regional New Zealand?Hon BILL ENGLISH: There has been a lot of commentary about what might or might not happen with the dairy price. It can be tracked fortnightly; the member may not be aware of this. Regional New Zealand has screens and computers and newspapers and if he went there he would see that. They can track the Global Dairy Trade every fortnight. I think it is Wednesday morning it comes out. I do not think the patronising attitude he has towards regional New Zealand is shared by this Government.Grant Robertson: What responsibility will he take for encouraging farmers to take on more debt as part of his Government’s plan around doubling dairy sector production while ignoring the warning signs that his Government got more than 2 years ago that there is a 5-year global milk glut?Hon BILL ENGLISH: None. Dairy farmers are owners of significant assets complex businesses and they are absolutely capable of making their own commercial decisions. There is a small group that now will probably come under pressure because they have got high cost structures and excessive debt. I do not think any of them would regard the responsibility for that being any other than their own.Grant Robertson: Is he satisfied with Fonterra’s approach to its value-add strategy and is it meeting his expectations of the role that it can play in diversifying the New Zealand economy?Hon BILL ENGLISH: Fonterra’s fundamental obligation is to meet the expectations of its owners which is not the New Zealand Government but the New Zealand farmers who have invested billions of dollars in that company. They regularly discuss Fonterra’s strategy. Of course the current price of dairy products is going to ensure there is more diversification because the capital that was going to flow into that industry is now going to flow somewhere else.Jacinda Ardern: Does he believe the new terms of payment for contractors and small businesses adopted by Fonterra including a shift to paying invoices after an additional 61 days is acceptable?Hon BILL ENGLISH: Well it would be unacceptable if it was outside the current legislative requirements. In the end these are freely transacting people doing business. Any party to the transaction is able to choose whether the terms are suitable for them or not. But Fonterra I am assured is operating within New Zealand legislation.National Certificate of Educational Achievement—2015 Results and Literacy10.PAUL FOSTER-BELL (National) to the Minister of Education: What reports has she received on NCEA level 2 results for 2015?Hon HEKIA PARATA (Minister of Education): Tēnā koe Mr Speaker. Provisional National Certificate of Educational Achievement (NCEA) data shows that student achievement is continuing to rise. The provisional role-based data shows level 1 level 2 and level 3 NCEA achievement rates of schools rose by between 0.4 and 1.8 percentage points last year to 73.2 percent 75.8 percent and 62 percent respectively. Over the same period the proportion of year 13 students gaining university entrance—Hon Trevor Mallard: They can’t read and write. Why can’t they read and write?Hon HEKIA PARATA: It is so good is it not that the Opposition is celebrating the rise in achievement of New Zealand students because so many more kids are doing so.Paul Foster-Bell: What action has led to these positive results for young New Zealanders?Hon HEKIA PARATA: Since we took office at the end of 2008 level 2 achievement rates in school have risen by 15 percent. This rise reflects our Government’s focus on ensuring that all students get the opportunity to succeed. We are driving achievement through our unrelenting focus on lifting achievement for all students working with schools and parents raising the quality of teaching and learning and identifying and targeting those students at risk. We are doing this both by expecting more from the system and by additional targeted investment in those students most at risk of not achieving.Chris Hipkins: Why should parents and employers have confidence that improved rates of qualification attainment are actually a sign of improving educational achievement when a recent Tertiary Education Commission study found that up to half the students meeting NCEA literacy and numeracy requirements are not functionally literate or numerate?Hon HEKIA PARATA: Because although that report was published recently in December the study was undertaken in 2012. In 2012 the literacy and numeracy credits were both strengthened and raised in numbers. Moreover this Government introduced national standards recognising that literacy and numeracy are an important part of learning and that we needed to start earlier in the system than at NCEA. So at all levels we have been strengthening literacy and numeracy.Chris Hipkins: Was Avondale College principal Brent Lewis wrong this week when he stated that students can meet NCEA literacy requirements from only doing physical education or other subjects in which teachers had little experience assessing literacy and numeracy and that tightening minimum requirements would make it much harder to achieve the Government’s goal of 85 percent of 18-year-olds achieving NCEA level 2?Grant Robertson: What would he know?Hon HEKIA PARATA: Exactly. Because the New Zealand Qualifications Authority carries out a moderation of 100000 standards every year and I give a lot of respect to the work that it does. Moreover as it happens you are required to be literate in a range of subjects and not simply English. So you may understand that in other countries you can be literate in French and in Japanese; it does not happen just in English. It is important that kids learn literacy around all subjects and the national qualifications framework makes that possible. The assessment is done by moderators approved and accredited by the New Zealand Qualifications Authority and the Auditor-General in 2014 backed those processes.Police—Resourcing11.STUART NASH (Labour—Napier) to the Minister of Police: Does she have confidence in the Commissioner of Police?Hon JUDITH COLLINS (Minister of Police): Yes.Stuart Nash: Did she agree with the commissioner when he told the Law and Order Committee that the police are sufficiently resourced to solve crime or does she believe the 86 percent of hard-working policemen and women who say front-line police officers are under-resourced?Hon JUDITH COLLINS: I believe that the commissioner is correct. And I would also say of those wonderful police officers that they have been doing such a great job that crime is now at the lowest rate it has been since 1978.Stuart Nash: What message did she deliver to the commissioner when she became aware that the burglary resolution rate had dropped below 10 percent nationwide and is as low as 7.2 percent in Auckland?Hon JUDITH COLLINS: A very firm message.Stuart Nash: I raise a point of order Mr Speaker. I did actually ask what message not the firmness—Mr SPEAKER: And the answer was given: “A very firm message.”Stuart Nash: When she said to the New Zealand Herald this week that there is a shared responsibility for everyone to secure their property is she really saying that it is Kiwis’ fault that they are getting burgled?Hon JUDITH COLLINS: No.Hon Damien O’Connor: How does the Minister expect police to maintain their legal obligations under the Policing Act to maintain public safety to prevent crime to enforce the law and to meet response times of 30 minutes as stated in the New Zealand Police statement of intent when it disestablished a police station Karamea—a station over 1 hour from Westport?Hon JUDITH COLLINS: The member will be aware that there is a review going on on resourcing the West Coast and I can tell that member that I have had many submissions from people on the West Coast but particularly a submission from the new MP Maureen Pugh who has been very articulate and firm in her views.Trans-Pacific Partnership—Consultation12.JAMI-LEE ROSS (National—Botany) to the Minister of Trade: What opportunities do businesses and the wider public have to seek information on the Trans-Pacific Partnership?Hon TODD McCLAY (Minister of Trade): Yesterday in Auckland I attended the first roadshow on the Trans-Pacific Partnership (TPP) which was held to an audience of around 300 people. This is the first of 16 roadshows and hui being held throughout New Zealand in the coming months. The roadshows and hui are designed to continue open debate inform discussion and assist businesses to identify and plan for new export opportunities when TPP comes into force. I encourage everyone who has an interest in TPP to attend a roadshow or hui in their region. In addition I am looking forward to visiting regions over the next few months to speak at around 50 TPP-related events.Jami-Lee Ross: How wide has the consultation on TPP been so far and how will the Government continue this consultation on the agreement?Hon TODD McCLAY: It will be no surprise to anyone in this House that TPP has been the most widely consulted free-trade agreement the New Zealand Government has undertaken. The conversation on TPP will continue throughout 2016. For all of this year TPP will receive extensive parliamentary and public scrutiny and the legislation will be considered by a select committee allowing a significant amount of time for the public to have their say on TPP. Only when these steps have been completed and other countries have completed their own domestic approval processes will TPP be able to enter into force.Dr Kennedy Graham: Can the Minister assure the House that he has given the same opportunity for information and consultation to the wider public as he has to business?Hon TODD McCLAY: As Minister absolutely I have. The meetings that have been arranged the roadshow and the hui are public meetings that are open to members of the public to attend. They do need to register; they can still do so. Indeed they are open to members of the Green Party including MPs. If they need the list I can provide that to them.Jami-Lee Ross: How will TPP benefit New Zealanders?Hon TODD McCLAY: TPP is New Zealand’s largest free-trade agreement. TPP economies are worth $28 trillion and open our exporters up to more than 800 million consumers. TPP has the potential to seriously enhance both national and regional economies and is estimated to add at least $2.7 billion to New Zealand’s GDP every year from 2030. Annual costs are estimated to be about $80 million by comparison. TPP supports our exporters to grow and create new jobs and diversify their businesses in their dealings overseas.Urgent DebatesHealth Ministry—Financial Management of Building ProjectMr SPEAKER: I have received a letter from Andrew Little seeking to debate under Standing Order 389 the news of a serious failure of financial management at the Ministry of Health in relation to a building project. The news of the ministry’s inability to fund the building project from within the cash reserves as projected is a particular case of recent occurrence. The upcoming annual review debate offers an opportunity to debate the performance of Government departments. This issue could be debated at that time. I do note however that the Health Committee has already presented its report on the annual review of the Ministry of Health. The issue was not raised in the report and presumably the committee was not aware of it.The matter raised is a very serious one and the sum of money involved is significant. Treasury has expressed concern at the governance and financial management of the ministry and has stated that it does not have “confidence that the failures that occurred around the [project] will not reoccur.” Having carefully considered this application I believe it requires the urgent attention of the House. I therefore call on Andrew Little to move that the House take note of a matter of urgent public importance.ANDREW LITTLE (Leader of the Opposition): I move That the House take note of a matter of urgent public importance. The Ministry of Health is one of the biggest-spending ministries and departments in the Government so what happens with the Ministry of Health matters. That is why good oversight matters. That is why you need a Minister of Health who is focused on the job and a Minister of Finance who is not asleep at the wheel. Unfortunately we cannot say of the present Minister of Health nor of the present Minister of Finance that they are across their portfolios and that the Minister of Finance is not asleep at the wheel. This has been an absolute and utter failure of oversight by those charged with the responsibility of that oversight.A $24 million project—a $24 million refit project. That is a big project in Government yet the Ministry of Health—its officials—no doubt aided and abetted by the Minister because the Minister would know that this was going on was somehow able to persuade Cabinet that it had the funds to do this project when the funds did not exist. How does that happen—how does that happen? Now we see the real consequence of this: $18 million of the cost of this project has to be financed out of a now much-hyped rental that the ministry has to pay for its premises. It is $18 million more over 15 years. That means that its rental for its head office is now going to cost more than $1 million a year extra over the next 15 years.We know who will pay the price of that—we know who will pay the price of that. It will not be just every taxpayer; it will be the patients who yet again and for the next 15 years will go without the hospital surgery that they need and the pharmaceutical treatment that they need. That is what happens when Ministers and this Government are so arrogant and so contemptuous of their responsibilities as Ministers that they just do not care. They just let it go. They let officials from the ministry tell them: “Don’t worry we’ve got $24 million.”Did the Minister of Finance tell his officials the Secretary to the Treasury: “Could you please just go and check the balance sheet? Just check that the reserves are there please? Can you just check that they’ve got $24 million?”. No one did it. The Secretary to the Treasury aided and abetted by the Minister of course kicks for touch. He said: “No one came to us. No one told us. We’re only the Treasury. How would we know about the money that the Ministry of Health says that it’s got or that it needs?”. He does not know the Minister of Finance does not know the Minister of Health does not care and no one knows what is going on. But it does not end there. Having got the entire Cabinet to approve the whole project without the money being there they then delegated the responsibility of tying up the loose ends and making sure that it was all kosher to the Minister of Finance and the Minister of Health.This is what the Secretary to the Treasury said and how he recorded it: “In approving the business case Cabinet delegated responsibility to the Minister of Finance and the responsible agency Minister to approve final investment decisions.” It is very clear. In spite of the Prime Minister saying “There is no issue here. There’s nothing on the record. There is no evidence. There is nothing wrong.” here is the documented evidence. Here is the documented evidence of ministerial incompetence and failure. They cannot do their jobs. The one person whom we need to know is doing their job is the Minister of Finance—overseeing the spending of billions of dollars the raising of billions of dollars of taxes—and he does not care that a department one of the biggest in the country waltzes on up and says “Leave the project to us. We’ve got $24 million.” and he does not even care whether they have got it or not. That is our Minister of Finance. That is the New Zealand Minister of Finance today. He does not pay attention does not give attention to detail and lets this fiasco carry on.It gets worse—it gets worse. The Secretary to the Treasury goes on to say—and I make no judgment of it at all about whether this is a self-serving document; it may or it may not be; I make no judgment—“The approval by Cabinet was on the basis that no additional Crown funding was required and that the $24 million capital investment would be funded from cash reserves.” He goes on to say: “The Treasury was not consulted.” How does it happen—how does it happen—that a $24 million project can be given sign-off by Cabinet and Treasury does not know about it? Treasury does not know about it. Is that even possible? Is that even credible? Is it even believable?Hon Members: No.ANDREW LITTLE: No it is not—no it is not and the Government is desperately playing a dance to try to bury this and make it go away. That has been the role of the Minister of Health at least anyway.So when the fiasco became apparent what did the Government do? Anybody else—any self-respecting Minister concerned about his responsibilities and accountabilities to the taxpayer—would have thought: “Gee I’d better have a look at this. Better call in a specialist; better call in the Office of the Auditor-General because that is the specialist agency that deals with mismanagement in the public sector and with failures of management responsibility. Better go to the Auditor-General.” But what does he do? “Better not have anybody who can call us to account. We’ll call in the private sector.” because according to the National Party the private sector can do no wrong. That is why you sell Landcorp—or talk about it—at the behest of your junior party partner. So the Government calls in PricewaterhouseCoopers which does this skimpy little document that confirms what we all know just by looking at the details. It said there was serious financial mismanagement. Oh yeah? Cabinet approves $24 million that Treasury does not know about and the Ministers do not care about—we know that that is serious financial mismanagement.The question is: how on earth did that happen—how on earth did that happen? It is a disgrace. It is an absolute disgrace because what the Secretary to the Treasury then goes on to say in his most instructive memo—his aide-mémoire as he describes it—is: “The whole issue has come to light in the 2015 Budget process because the ministry does not have sufficient cash reserves.” But he goes on to say this: “Nor did the ministry have sufficient forecast cash reserves when the property consolidation”—which is the project they are talking about—“was approved by ministers in 2014.” So at the very time that the highly skilled National Cabinet—the masters of the universe the great managers of the economy the people who know everything about managing assets and capital and money—was approving this the Ministry of Health did not even have the money. It did not even have the money.Grant Robertson: What kind of incompetence is that?ANDREW LITTLE: What sheer and utter incompetence is this—what sheer and utter incompetence? It is nothing less than a total disgrace.Hon Annette King: He laughs.ANDREW LITTLE: And those members laugh about it because that is the National Party of the 21st century.Hon Annette King: Arrogant.ANDREW LITTLE: Arrogant contemptuous do not care about their responsibilities to the electorate do not care about their accountabilities to the taxpayer. Those members just do not care—they just do not care. The Secretary to the Treasury very helpfully went on to say that the ministry’s next bid demanded the equivalent of 90 percent of the department’s projected depreciation funding over the next 2 years which of course was completely impossible because as it turns out you know the ministry has got other assets that it has to depreciate including an ICT system which depreciates more rapidly.So it could not do it and do you know what the Ministry of Health then tried to do? It then tried to sort of inveigle its way in to the district health boards and say: “Forget about the district health boards for a moment. We might have an extra $200 million for their capital funding but give it to us in Wellington because we’ve made such a huge mistake that we should be rewarded for it at the expense of the district health boards around the rest of the country.”You know who the people are whom I most pity in all of this? It is the people of Dunedin—the people of Dunedin who have been waiting for an upgrade to their hospital for years. I visited that hospital last year. It is literally falling down around your ears—or my ears and they are pretty big admittedly. The hospital is falling down around their ears. It leaks. People are jammed into it. People have to have surgery in cramped and barely spacious surgical theatres. They are waiting for their hospital upgrade but they will not get it now. It will be pushed out because of the Minister of Health’s incompetence and the Minister of Finance’s failure. Will they ever front up to Dunedin do you think? Will they ever go to Dunedin and explain to the people of Dunedin: “Sorry. We’d like to give you a new hospital. We can’t because we failed to do our basic job of overseeing the officials whom we are responsible for. We are too busy scoring political points playing political games to care about what’s actually happening in health to care about what’s happening with our hospitals. We’d rather just ignore the officials ignore our job to check when officials tell us money is there that it is there. We would rather forget all that stuff because we are too busy playing political games and scoring political points.”That is what this Government has come down to and now we have reached the apotheosis—now we have reached the apotheosis—of a Government that for so long for 8 years has never taken responsibility for its own failures. It has never taken responsibility for its own incompetence. It blames everybody else. It is everybody else’s fault. I notice that when the story broke it was not the Minister who fronted up in the Westminster tradition of ministerial responsibility. The Ministers shoved out the Director-General of Health—the newish director-general and former acting director-general. They pushed him out there because he is the sacrificial lamb.Well it is not just his fault. He may have some responsibility—he may have some responsibility—but it is the Ministers ultimately who are to blame. I want to turn Bob Semple’s dictum on its head: they are not just responsible they are to blame. It was their job to make sure that their officials did their job. It was their job to ask the simple questions. “So when you say you’ve got $24 million of reserves”—because I say it does raise an obvious question when a Government department says it has got $24 million in reserves. If I were a Minister I would be asking: “Really? How much underspending have you had to do in the health sector—which is so desperately needy of cash—and for how long that leaves you with $24 million reserves?”. That is an obvious question and had the question been asked had the Ministers been doing their jobs had they asked the question—it is pretty obvious—then they would have had to be told: “Oh whoops. We do not have that money.” Then the project would not have been approved and we would not be in this situation.None of us in the Opposition likes to be in the position of pointing out to Ministers how incompetent they are. That is not good government. It is not good government when we are in that position. But it behoves us on this side of the House—it is our moral responsibility when we see such a fiasco such a farrago in Public Service management—to call this to account. We have to tell every New Zealander: “If you are wondering what has happened to your health dollar if you are wondering why you cannot get your melanoma drug treatment if you are wondering why you cannot get your surgical treatment your elective surgery look no further than the Minister of Health and the Minister of Finance who now have squandered $24 million—or at least $18 million over the next 15 years—which has to be tacked on to the Ministry of Health budget at the expense of New Zealand’s long-suffering patients.”And do you know who is going to suffer most? It is not just the people in Dunedin; it will be the elderly because we know that when it comes to health decisions and health rationing that it is always the elderly who suffer. They are the ones who miss out on the hip surgery and the knee surgery and those things that make life just a little more comfortable after a lifetime of paying their taxes. They are the people who will pay the cost of this when Ministers fail to do their job.It cannot go unnoticed and it will not go unnoticed and this House must notice that on this occasion two of the most senior Ministers presided over by a Prime Minister who has been in the job for 8 years and the New Zealand Government represented by Cabinet—the National Cabinet—have totally failed New Zealanders. They have totally failed taxpayers in New Zealand. This is not the quality of government we should expect. After 8 years you know the training wheels are long gone. The training wheels are off this lot. They know how to run a Government—or they should do. They know how to ask the questions—or they should have done. But they have got to the point now where 8 years on they have such contempt such arrogance that they no longer care anymore. They no longer care about doing a good job. They no longer care about doing their job as highly paid Ministers responsible for the public purse responsible to the people of New Zealand. It is absolutely appalling.It is absolutely appalling and now a project has been entered into it is beyond the point of no return and taxpayers will pick up the cost. Taxpayers will pick up the cost. The Secretary to the Treasury goes on to say that his recommendation was that no extra money be made available to the Ministry of Health to punish it for its failure. Well it is not just the ministry and its management that should be punished; it is the Ministers as well. They too have failed. They have failed New Zealand. They have failed every taxpayer in this country.Hon Dr JONATHAN COLEMAN (Minister of Health): Every time I hear Mr Little speak I am thoroughly reminded of why he could not win the New Plymouth electorate two elections in a row. I tell you there is one thing that unites the Labour caucus: it is the overriding feeling of boredom they get whenever they see their leader get up to speak. He was talking about arrogant and contemptuous—[Interruption] He was talking about arrogant and contemptuous—[Interruption]Mr DEPUTY SPEAKER: Order! Calm down.Hon Dr JONATHAN COLEMAN: He was talking about arrogant and contemptuous. What none of the Labour caucus could see was that right throughout that speech Phil Goff and David Cunliffe were talking between themselves in the back row because they have given up so much hope in Andrew Little they could not even be bothered listening to their leader speak.Hon Annette King: Behind you.Hon Dr JONATHAN COLEMAN: I have got a number of messages for Annette King actually but I tell you that if she is going to let that doofus take over her seat at the general election she is going to end up—Hon Annette King: I raise a point of order Mr Speaker. You heard what the member just said—a disgraceful comment about the Leader of the Opposition. If he cannot argue the issues he should not get to his feet at all.Mr DEPUTY SPEAKER: The point is taken. The Minister will restrict himself to parliamentary language and terms of address.Hon Dr JONATHAN COLEMAN: Well that was a very easy wind-up. You can see that Mrs King gets very het up very quickly. Look there are quite a few things that we just need to clarify about this whole situation and I can tell you that you can tell when Labour members are on the ropes because they will not listen.The first thing I would like to say is that if this is the biggest issue that Labour members have got to campaign on today I tell you they are in real trouble. It is very interesting that they do not want to be in here and talk about the funding of melanoma drugs because actually they have put themselves in a terrible position over that. They are compromised with their contacts with drug companies over that. It is very interesting that they do not want to talk about the economy because as they know they are losing on the economy so they try health. That is the strategy over there. But look you will really like this bit. You will really like this bit so just listen up. The Ministry of Health—[Interruption] Listen you will like this—[Interruption]Mr DEPUTY SPEAKER: Order! Just to quote former Speaker Hunt interjections are to be rare and reasonable and hopefully witty. Just repeating the same line over and over and over again is not within the Standing Orders—[Interruption] No do not crank up the volume as my cousin would encourage you to do. Just see whether you can limit yourself to what is rare reasonable and hopefully witty.Hon Dr JONATHAN COLEMAN: Come on Mr Deputy Speaker. It is not all about you you know.Mr DEPUTY SPEAKER: You cannot make comments like that. You will withdraw and apologise.Hon Dr JONATHAN COLEMAN: Now Labour—Mr DEPUTY SPEAKER: You will withdraw and apologise.Hon Dr JONATHAN COLEMAN: I withdraw and apologise. Listen up—you will like this bit OK? Just listen to this: the Ministry of Health made a mistake. I will say it again: the Ministry of Health made a mistake right? So its financial governance in this matter—and it has admitted it—was not up to standard OK? It said that it could fund this move out of cash reserves and when it came down to it actually it was $18 million short. That was completely unacceptable and Chai Chuah has taken responsibility for that on behalf of the ministry. I have made it very clear to him that that cannot happen again.But you want to look at the wider context here. What this move is about is five large Government departments—the Ministry of Health the Ministry of Education the Ministry of Social Development Crown Law and the Ministry of Business Innovation and Employment—moving into new premises. That is going to constrict the footprint by 30 percent over the next 20 years. It is going to cut costs by 20 percent and it is going to save $338 million so it was a very good decision to make—absolutely a great example of Better Public Services. There was a mistake in the financing of it but I can tell you that the wider story is very very good news.I can tell you that there are a few things that Mr Little said there that were completely incorrect and I am not surprised about that because the fact is that this is being funded out of departmental expenditure. So it is the back-office expenditure of the Ministry of Health and the very good news—[Interruption] Once again you can tell these guys do not want to hear because they know they are being delivered knock-out punches on this stuff. When they were in Government they were spending $230 million just on running the ministry not on delivering clinical services. Today that ministry costs $190 million to run. There used to be 1500 people there; there are now 1100 people. And guess what? They are producing better results all the time. So we are not in a situation like when Mrs King was the Minister of Health when she put in an extra $2 billion and produced—Hon Annette King: Oh dear oh dear oh dear.Hon Dr JONATHAN COLEMAN: —and I have got a folder for you here; the “King file”—2000 fewer operations. It was absolutely incredible. We were talking about first specialist assessments today. You know when Annette King was the Minister—when she started—they were doing 38000 specialist appointments in the Auckland District Health Board each year. When she had finished they were doing 7000 fewer. So how can you spend 6 years as the Minister of Health and deliver 7000 fewer appointments? But it was worse than that in other places—well actually not quite as bad; that was the worst. In Canterbury she ended up delivering 1800 fewer appointmentsover 6 years. And here in Wellington where she is an MP by the end of 6 years she was delivering almost 5000 fewer appointments.Hon Annette King: It’s only 11 years since I was the Minister—11 long years.Hon Dr JONATHAN COLEMAN: Yes and I think what it shows is the dearth of talent on the Labour benches. What are those members going to do when Mrs King leaves? They are absolutely stuffed. They could not have the MP for Wigram there; she is not up to it. Kelvin Davis—a pretty good footballer but not much good for anything else. Iain Lees-Galloway—they are never going to have a King’s College old boy on the front bench; universally despised outside Parliament and inside Parliament outside the caucus and inside the caucus. So the cupboard is pretty bare over there. There might be a bit of hope for that guy from Dunedin North but remember he is the guy who wants to ban Google.Mr DEPUTY SPEAKER: Order! I am sorry to interrupt the Minister but he needs to remember—sit down while I am on my feet. Thank you Minister. He needs to remember that this is not a general debate. It is a specific debate—an urgent debate—and he needs to address it. If he has not got anything more to say about it he does not need to fill his whole 15 minutes.Hon Dr JONATHAN COLEMAN: Oh yes I have. I have got plenty to say because actually I am responding to the character assassination of the Minister of Finance and the scurrilous attacks on me by just pointing out a few things about those members’ pedigree. Andrew Little—[Interruption] Listen to this. Andrew Little was talking about Dunedin. He was talking about Dunedin and he was saying that the sick and the elderly would suffer there. He was saying that people would not get their operations there. Well that is absolutely untrue because actually the point is that this $24 million is money well spent. It is going to save money in the long term. It does not come out of the operational budget right? So it does not take one dollar away from patient services.Hon Trevor Mallard: Rubbish. The member doesn’t know how to run a budget.Hon Dr JONATHAN COLEMAN: So actually anyone who is saying that—like Trevor Mallard the time-expired member for Lower Hutt—is wrong. They are wrong. And I can tell you that if Labour members did a bit more work—if they got around the sector if they did some reading if they produced some discussion documents—they might know some facts about the health sector because in actual fact we are delivering more and better services all the time. I know that Labour members read a few press releases. They would have been bitterly disappointed to see that over our time in Government we have produced an extra 110000 appointments per year. So it has gone from 430000 appointments per year to 540000 appointments a year.This was going to be Labour’s big knockout punch because those members were sure that when it came to GP referrals to specialists they were going to be able to say that it was absolutely terrible and that no one was getting their referrals. But do you know what the data shows? It shows that 90 percent of patients referred from a GP to a hospital specialist—in the 3 month period; of the first data released last year—got an appointment with a specialist. I know that that is very very disappointing to Government critics to the haters and wreckers of the health system and to Mrs King and the Labour Party but that is the fact. What is happening under this Government is that we are making more and more front-line services available to the public all the time.The other thing that I need to absolutely raise here is that Labour members keep on stating—and for the record it is completely untrue; it is incorrect—that $1.7 billion has been cut from the health budget. That is untrue and it is a lie. I do not know why they keep on saying it. It is completely untrue. In actual fact the health budget goes up every year. It went up by $400 million last year. It has gone up by $4 billion over our time in Government.So what was happening with Labour? It was increasing the spend like crazy. It was going up by 7 to 8 percent per year and I can tell you if we had continued on that spending track the Government would now be running the books at a massive deficit. So the question that Labour needs to actually answer is how it can promise to put more and more money into health and keep the books in balance. I can tell you Grant Robertson cannot do it. He absolutely cannot because it is impossible.The fact is that when Labour was in charge of the health system it put more and more money in and it delivered less and less. That is all those of you at home need to remember. When Labour is managing health it spends more and it produces less and I can remember that at North Shore Hospital. I would go there and there would be people waiting under the harsh fluorescent lights. There would be queues of ambulances in the car park and people were saying: “We’ve got to get National in because quite frankly we’ve had Annette King we’ve had Pete Hodgson we’ve had the disaster of David Cunliffe and we cannot bear to have the health system run by these people any longer.”The other thing I would like to say is that the health targets have been a massive success and I know Labour would concede that they have because when Labour was running the health system about 65 percent of our kids got immunised at the age of 8 months. Now it is 95 percent. It is absolutely incredible. Over Labour’s time in Government there were fewer elective surgeries delivered. We promised an uplift of 4000 per year and we have delivered an extra 50000 surgeries per annum since we came into Government an extra 110000 specialist appointments and 5500 more doctors and nurses in the system.Hon Annette King: One of his big porkies.Hon Dr JONATHAN COLEMAN: You know when Annette King was the Minister of Health she was sending 800 people per year to Australia for basic cancer care—800 people. Do you know how many go now? Zero. So there is no question that people are getting better health-care under this Government. Annette King speaks about cover-ups. Well I will tell you what a cover-up is. It is sitting in the room when the decision is made to spend $800000 of taxpayer money on your election pledge card it is kicking 30000 people off wait-lists and it is sending people off to Australia for cancer care. So I think Mrs King has thoroughly proved the case for her incompetence. It is sad actually that she is blocking up the Rongotai electorate. I think she would be far better going off to local government but actually on reflection there is no one competent in the Labour Party—Mr DEPUTY SPEAKER: Come back to the question.Hon Dr JONATHAN COLEMAN: —to take over the portfolio so they are probably better to leave her there for the moment. But when you come back to it we have put more front-line services there for New Zealanders. If these guys ever get into Government they will spend more and more they will produce less and less and do you know what? They will continue to go around the country misleading the public.Hon Annette King: You should be ashamed of this—Hon Dr JONATHAN COLEMAN: You know what Annette King said on the Trans-Pacific Partnership (TPP)? She said that people would die. She said that the TPP would kill people. She said that it would cost hundreds of millions of dollars and she has been proven wrong and now she is—Hon Annette King: I raise a point of order Mr Speaker. I require him to withdraw that. I have never said that TPP would kill people. That is a total lie.Mr DEPUTY SPEAKER: It is a matter for debate.Hon Annette King: Well it’s a lie.Mr DEPUTY SPEAKER: It is matter for debate.Hon Dr JONATHAN COLEMAN: Anyway while Annette King was saying that the TPP would kill people secretly she wants to vote for it and that is the big problem they have got. Apart from the hard-line left-wing Marxist Grant Robertson there are a whole lot of people who want to vote for it—just like David Shearer wants to vote for the flag. You know there is so much to debate in this Parliament that I am amazed that Labour is wasting Parliament’s time with an urgent debate—Mr DEPUTY SPEAKER: I will remind the Minister—Hon Dr JONATHAN COLEMAN: —on a minor financial blip.Mr DEPUTY SPEAKER: Order! I remind the Minister again that this is not a general debate; it is an urgent debate on the question that was raised. The member should confine himself to that.Hon Dr JONATHAN COLEMAN: Yes. Well going back to that question I can tell you that this move by the Ministry of Health into new premises is an excellent move. It will reduce costs by 20 percent it will reduce the footprint by 30 percent and it will save $338 million over 20 years. But I can tell you that Labour would not have a clue about how to do anything more efficiently and how to produce better services. And I can tell you that the constant commitment of this Government is to more front-line health services for New Zealanders. So that is more operations it is more cancer care it is more doctors and nurses and it is more immunisations. The bottom line is that only National can manage the books and produce better health services for New Zealanders and the public knows that.METIRIA TUREI (Co-Leader—Green): So the Ministry of Health makes a major financial mistake—losing $18 million—and the Minister knows about it and he hides it from the New Zealand public. He has just spent 15 minutes shouting about the Trans-Pacific Partnership (TPP) agreement and about Annette King and about anything else he can make up in his own mind and he has not explained to New Zealanders why he hid from the New Zealand public the fact that the ministry lost $18 million. He knew about it. The Minister knew that the ministry had made such a major financial mistake. He knew about it. He did nothing about it.Hon Annette King: He covered it up.METIRIA TUREI: I agree with Annette King. The Minister covered it up. He had an opportunity last year as I understand to tell the New Zealand public that the ministry had made this mistake. Perhaps he could have called for an inquiry or initiated an inquiry into that mistake—Grant Robertson: Or the Auditor-General.METIRIA TUREI: —or yes asked the Auditor-General to look at the financial mistake that was made. It is $18 million that was lost after all. He could have told the New Zealand public that a mistake had been made and he was handling it and making sure it would be managed properly. None of that happened. Not a single part of good governance of effective ministerial management happened when the Ministry of Health lost $18 million. And the Minister today had a 15-minute opportunity to tell the New Zealand public what had happened how he found out what he then did about it to try to fix it and what he expects to happen from this point on. Did the Minister talk about any of those things?Hon Annette King: No.METIRIA TUREI: No he did not. Did he provide the New Zealand public with any confidence that this is a Minister who has a handle a grip on his ministry? No he did not because he does not know what is happening in his own ministry. That causes very serious concerns for the Green Party and for Labour which raised this urgent debate and it should do for the New Zealand public as well. It certainly did for Treasury when Treasury discovered that this mistake had been made. The Ministry of Health got a letter from the head of Treasury saying that the fact that the ministry had lost this money brought into question the governance and financial management practices of the Ministry of Health.I will just note that the Ministry of Health is one of the core services that New Zealanders need to be confident is operating well and is operating effectively and efficiently with the budget that it has. We know that the budget is being squeezed in health. We know that more and more New Zealanders particularly older New Zealanders are needing more and better quality health-care. We know that there are thousands of New Zealand children who suffer from avoidable illnesses and also need high-quality health-care from the Ministry of Health. So for the Ministry of Health to be told by Treasury that Treasury has serious concerns about its financial management should cause uproar amongst New Zealand families because we cannot afford to have a ministry that is not managing its scarce resources properly. We must have a Ministry of Health that does have a handle on its accounts and does know whether it has $24 million or just $6 million in its reserves. How could we have any confidence in a ministry and a director-general that do not know what their financial picture is? And of course the Minister did not bother to ask the right questions and when he did find out that there was a problem he did not tell the New Zealand public. It had to be exposed rather than them taking control of the situation.We know that Pharmac needs more money to provide medicines—important critical medicines that will save the lives of thousands of New Zealanders. Our hospitals doctors nurses and district health boards are all crying out for more money so that they can take care of their communities. I live in Dunedin. We need a new hospital—desperately urgently. We know that the services there are being squeezed. The people in Dunedin feel this every day that they turn up to accident and emergency to have a health issue dealt with. All of those people in Dunedin and communities just like them around the country deserve better from the Ministry of Health and from the Minister. We know that mental health care is being cut in Canterbury—in Canterbury the area where there is the greatest need at the moment for genuine mental health care and services to help people ride through what is continuing to be a traumatic experience post-quakes. The money is not there for that.We have seen money disappear out of the Ministry of Health and money being cut from essential services in Christchurch and Canterbury. We have thousands of people every year who are living with serious pain because the surgery that they desperately need is being put off. Why? It is not that we do not have the expertise. We have the skills. We have the doctors and the nurses who can do that work who can provide that surgery. We do not have the financial resources to make sure that surgery is available to all of those people who need it. There are many many New Zealanders who are suffering simply because there is not enough money in the system to go around. On top of all of that the real and desperate needs of New Zealanders every day in this country—we have a Minister who seems to think that a hands-off approach to his ministry is good enough; a Minister who will sign off on an $18 million handout to his ministry to cover the mistake that it has made and to cover the mismanagement of the finances and not tell the New Zealand public about it.This is a debacle that happens when you have a Minister who is asleep at the wheel: financial mismanagement operational ineptness and a complete mishandling of taxpayers’ money for such a critical and essential service. The health Minister is responsible for this stuff-up and everyone in the House and taxpayers and New Zealanders around the country will not have to look much further than the monument that is in Molesworth Street now to see the consequences of that muck-up. New Zealanders deserved better from their Minister. I accept that when you are a Minister of a major agency like the Ministry of Health there will be mistakes made. Yeah of course there will be mistakes made but we look to our Ministers to show that they are capable of dealing with those mistakes when they are made—Ministers who are honest with the New Zealand public who will tell us what is going on and who will demonstrate to us that he or she is taking the situation in hand and has some control over it. It is a great disappointment that Minister Coleman the Minister of Health failed so miserably to do that today. Thank you.FLETCHER TABUTEAU (NZ First): This debate is a question that is about honesty and integrity. I sat there listening with earnest interest to what the Minister had to contribute to this debate. I wanted to understand how he was going to explain the situation to the House. I was busy listening but the Minister literally had no reply to the issue that we are talking about in this urgent debate as of this moment. There was literally nothing. It was an abuse of a member who has not had control of those ministerial reins for over 11 years and yet he felt it was topical to talk about that now to drag it up and somehow cast aspersions on someone who had nothing to do with this farce. The reply did attempt to finally get around to spinning numbers but that is what it came down to in the end: it was an attempt to spin statistics.We saw that a lot in the House this afternoon during question time actually. Whenever we asked a Minister an earnest question about what they were doing—with education the police the prisons—we were spun numbers. To ask this Government to now talk to this House to talk to the people of New Zealand with honesty and integrity seems to be too much to ask. It is truly upsetting to see. There have been calls for the Minister to resign and I am sure the caucus will agree with me when I say we fully endorse those calls.But actually it should not be a question about whether that Minister is going to resign. The question now should be whether the Prime Minister will get some guts stand up and actually hold that Minister to account for the failings that he has allowed to be perpetrated under his watch and actually more than his watch—under his discretion and his direction. It has been a travesty and there has been no attempt to reply and to show accountability for their actions. At least I will concede the Minister got it right when in previous statements he described the situation as a severe bungle but that is all he seems to be willing to admit. This is a $24 million refit. It is a debacle coupled with the payroll issue from another Minister whom we have often heard about in this House.What we were concerned to hear about today and what has come to light is how Cabinet decided that Treasury did not need to be a part of this process. For some reason it was good enough for the Minister of Health and the Minister of Finance to sidestep procedure and undertake this process themselves. What we have discovered is that we have got this $18 million commitment over 15 years—so we are talking about more than $1 million a year in financial commitments—to offset this mistake this failing of this Minister. What was upsetting tonight was that the Minister denied that this will affect New Zealanders and their health care.I put it to the Minister that it does not matter how we label the title of the budget and it does not matter what budget he says the money is coming from: New Zealanders and their health care will be undermined by the lack of funds now available to the health care budget. That is the bottom line when it comes to money and what the reality is in this situation right now. I mention that they delegated responsibility to the Minister of Finance and the Minister of Health. Treasury clearly highlighted—it said that it was Cabinet that had sidestepped correct procedure.But I am sure Steven Joyce is not surprised at all by this stuff and the stuff-ups that have been occurring. He has seen it happen under his “super” leadership. His rule has almost continuously seen these kinds of mistakes and stuff-ups. I personally am not surprised to see that transfer into Cabinet procedure; and now we see this come to fruit which is completely unacceptable. These Ministers have made mistakes. I note here that the Treasury secretary Mr Makhlouf said: “the new bid for funding brings into question the governance and financial management practices of the ministry”. He went on to say that Treasury had no confidence that the failures would not happen again—absolutely no confidence that this would not happen again. We say to Treasury that there is probably a reason why it has no confidence that this will not happen again; I simply look to those people sitting on the other side of this House. [Interruption] No I will not say that. Neither should it be a surprise to the New Zealand public that these mistakes—more than mistakes; I describe it politely as a mistake. There seems to have been deliberate action here on the part of Cabinet and on behalf of the Ministers to essentially—I put it to the House—cover up this issue.What then upsets the New Zealand First caucus—we ask the Government what it was thinking—was that they did not go to the Auditor-General to look at the accounts. They did not call up the one body that could publicly hold them to account for this financial stuff-up. No they called up a private consulting firm to audit the books—a private consulting firm. This is unacceptable and an insult to this Parliament and an insult to the people of New Zealand. But let us take note of some of the feedback that PricewaterhouseCoopers actually gave in its report. I will just briefly say that the report can be summed up by saying that there were failures of governance failures of capital planning failures of documentation and reporting. The findings by the private consultants were damning even of themselves but the fact that the Auditor-General was not called on is completely unacceptable.The people of Dunedin have been literally crying out for years for this upgrade to their physical asset—to this health facility. This Minister of Finance and this Minister of Health have failed them. They now must suffer the indignity of those conditions for years to come because of this mistake and with no one owning up to it. It is unacceptable. The arrogance the temerity—just today we were told of the police not doing their job by the Minister herself and yet she refused to admit that the Police for example are being underfunded. It just seems to be a practice of passing the buck and it seems to be everyone else’s fault.We in the Opposition are not surprised to discover that the Ministers have failed to do this very simple job. Not only have they failed to do the job but they have deliberately gone out of their way to ensure that they were not held accountable for it. For that the accountability needs to be much more severe and greater than it ever would have been in the first instance. I finish by saying that people looking for health care and people who need the support of this Government have been let down. People will miss out on their health care services. It is unacceptable and this Government and those Ministers need to own up to their mistakes. Thank you.Hon Peseta SAM LOTU-IIGA (Associate Minister of Health): I rise to stand in this urgent debate and to just outline some of the facts around what has happened in the last 2 years around these new premises. The Minister stated quite clearly and I support the Minister in this that there were savings around some of these projects in the Ministry of Health in the Ministry of Education and the Ministry of Social Development for the premises of over $338 million—$338 million worth of savings. These are savings that go back into front-line services. So we get those savings by having those projects.However we also understand—and members opposite should understand—that a mistake was made. At an operational level a mistake was made around the financial management of this project. But we know that an independent review was ordered. PricewaterhouseCoopers came in did a review found some of these mistakes and changes were then made within the system—within the Ministry of Health—in order to alleviate this problem. So what changes were made? Changes were made to the financial processes that were undertaken to manage this project. What other changes were made? Changes were made to personnel to manage this particular project. What other changes were made? Changes were made in order that financial transparency around these types of projects would be completed in future. So we have got that undertaking. The Minister was quite clear in his representations to the officials that this was unacceptable—it was unacceptable.But what we also know is that there is no additional capital funding going to this project. We also know—Hon Annette King: It’s not capital any more—that’s right.Hon Peseta SAM LOTU-IIGA: And Mrs King should know—I do not know whether she does—but we also know that it does not impact on front-line services because these are departmental expenses. They are departmental expenses made by the ministry. A mistake was made and therefore there was some level of accountability in the ministry—unacceptable unacceptable.However we have heard members opposite wax lyrical about how according to Metiria Turei there is no mental health funding in Canterbury. Well that is not true—that is simply untrue. In fact there is more mental health spending in Canterbury today than there ever has been so that is untrue. We have heard Mr Tabuteau say that this is a travesty; that there is a lack of funding. What he did not say was that there has been $4 billion extra spending in the health portfolio since this Government took power—$4 billion worth of extra spending in health services in front-line services since National took power.What does that mean? I know that Mrs King is smiling because she knows the good news that National has brought to the health portfolio. She knows that there are 1700 more doctors. She knows that there are over 3500 more front-line nurses dealing with the issues and the problems—the health services dealing with the issues and the problems—that New Zealanders deal with every day. She also knows that there are 1000 fewer bureaucrats in the health portfolio than there were under the King-Clark-Cullen Government—1100 fewer backroom operators than there were under that Labour Government. So these are the facts—these are the facts. We also know that the number of employees decreased from 1500 to 1100.What we will stand on in the health portfolio is we will stand on our record. Yes mistakes are made but then they are alleviated. Problems are sorted out within ministries within departments. What we will say with the extra spending—and we heard recently that the rheumatic fever rates across this country have been halved. I know Mrs King is also proud of that fact—we know that Mrs King is proud of the fact. We also know there are no more people flying to Australia for their cancer treatment because they are being treated right here because this Government has made a commitment to those patients to fund their cancer treatment right here in Aotearoa New Zealand.We also heard from Mr Little and he said that things are out of control—that the finances are out of control. Well I say to Mr Little that we inherited a budget that would have blown out the debt in this country to over $100 billion. Treasury forecasts were quite clear that it would have been $100 billion worth of debt by 2021—by 2021 it would have been well over $100 billion—and the debt to GDP ratio would have been well over 60 percent. Mrs King also knows that we have got that ratio down to 30 percent—we have got that down to 30 percent and she knows that. We also know that this Government has run the first surplus for—Grant Robertson: His surplus!Hon Peseta SAM LOTU-IIGA: Yes it has run its first surplus due to the damage that Mrs King did—11 years ago she was the Minister of Health—and the damage that she and her mates did. And Grant was up on the 9th floor—Grant Robertson was up on the 9th floor. He was up there scheming and running debts—[Interruption] Yes running up programmes that were profligate and well outside the ambit that New Zealanders expect.Mr DEPUTY SPEAKER: Back to the debate.Hon Peseta SAM LOTU-IIGA: I just want to summarise by saying that this is an issue and it was unacceptable. It was a problem and the Minister has got on top of it. There are changes that have been made but New Zealanders will continue to get the high-quality health services that they have been getting under this Government. I am confident about that and I know that members opposite are too.Hon ANNETTE KING (Deputy Leader—Labour): What a disappointment. We have an urgent debate on a serious issue in this Parliament and we have a Minister of Health who would not front up to the issue who did not apologise for what has been called a serious financial mismanagement by his ministry. He used abuse he accused people he smeared people and he insulted them. I have to say that it was one of the most pathetic performances that I have seen from a Minister in a long time. Maybe the chair of the Health Committee might like to teach the Minister something about contrition because that is what was needed today—it was contrition.Grant Robertson: Absolute idiot.Hon ANNETTE KING: Well maybe even absolution but he is not going to get it until he faces up to the problems that were of his making at the end of the day. All the Minister could say was: “They made a mistake.” Well that is not how this story unfolds. I just say to the Associate Minister of Health who has just sat down that he made a better speech than his Minister. He would probably make a better Minister but he was not informed on this issue because it was not PricewaterhouseCoopers that found out about the mistakes; it was Treasury that found the mistakes and it was Treasury that said that there must be an independent inquiry into what went wrong in the ministry. I have to say that when I heard the Director-General of Health on the radio this morning saying that he had asked for an inquiry he was not telling the truth. I have the documents here to show that it was Treasury; it was the Secretary to the Treasury who went to the Ministry of Health and the director-general and said: “There must be an independent inquiry.”I want to ask this: why did they not go to the Auditor-General? The Auditor-General is the person who carries out the investigations into our Government agencies. Each year they provide the Health Committee with a report into the financial management. Why did they not go to the Auditor-General? I know the answer. Because from the very beginning this has been a terrible cover-up—a cover-up of what they called a mistake.Let us look at the facts. The sum of $24 million is what it was going to cost to do a fit-out within the Ministry of Health. In 2014 the then acting director-general who is now the director-general came to the Ministers and said: “The $24 million”—this is 2014—“for the fit-out we can do from our own reserves from the cash reserves we have and our forecast cash reserves. We don’t need any money.” So the Ministers said: “Go ahead.” And then we come to 2015. In February 2015 the director-general told the new Minister of Health: “Oops. We made a mistake. We actually haven’t got the reserves. We’re going to need to put in a bid for $18 million of money to cover it.”The Minister said today that he has known since February. Treasury in its papers released said it was not told until March. What sort of Government management is this? The Government agency that has oversight over money was not told until March that there was no money in the cash reserves to pay for this fit-out. So I do not know what was going on in their minds.But what happened next is interesting. Treasury then sent a very strongly worded memo to the Minister of Finance the Minister of Health and the Associate Minister of Finance and said that it was very worried. Treasury said that it would never have supported this bid had it known that the ministry did not have the cash reserves to pay for it. What Treasury said is that it would not have been supported by Treasury and have exposed—this is the words they used—a “serious failure of financial management within the ministry that is being investigated and needs to be addressed.”—exposed a serious financial mismanagement. Mr Speaker would you call that a mistake?Mr DEPUTY SPEAKER: Don’t bring me into it.Hon ANNETTE KING: Well I am sure if you could you would know that it was not a little mistake; it was a serious failure by a ministry. So what happened then? We have the Minister of Health who is now aware of the problem. There is then a report that is commissioned because Treasury said there must be an investigation. We have the ministry get PricewaterhouseCoopers to do it and then you hear from Treasury a little later on saying it is very worried about it. Treasury does not think the report when it sees it is going to actually fix the problem. It has grave doubts that it is going to fix the problem. Treasury says the report outlines that there were failures in governance capital planning documentation reporting and engagement particularly with key stakeholders like Treasury. So the Secretary to the Treasury said: “We’re very concerned about this PwC report in its final form because we don’t think it addresses the issue.”Well that report was put out in June last year. Was the select committee when we did our annual review told there had been a problem within the Ministry of Health with financial management? No we were not. We were not told and I believe that is a cover-up. We ought to have been told there had been an issue this is how the ministry had addressed it these were the recommendations and this is what it was doing. No we were not told. The Minister had that report from June from the beginning of June.Do you know how we know about it today and why we are having a debate? One line in a Treasury report seen by a Labour researcher said: “A report from Treasury on financial management in the Ministry of Health.” We put in an Official Information Act request. What came out was all this stuff. I have to say Treasury released it with alacrity—with alacrity. In fact people are really surprised that the information provided was even provided—budget-sensitive budget secrets advice to Ministers. It was provided because Treasury was so angry about what happened.So that report—the Minister knew about it Treasury knew about it the Ministry of Health knew about it and the Minister of Finance knew about it. The Minister of Health if he was a good Minister would have fronted up and said: “There’s been a problem. I have made sure they address this problem. I have had a report. I’m making sure all the recommendations are addressed. Here it is.” So through an Official Information Act request it was released a couple of days ago—actually at the end of last week. Why did the Minister not front up? I believe this is a cover-up. They did not believe we would ever find out about this mismanagement. PricewaterhouseCoopers—we did not know they had even had an inquiry. We did not even know there was a report. This House has been treated appallingly. The select committee has been treated appallingly.Ron Mark: It should have been in the annual report.Hon ANNETTE KING: It should have been in the annual report—you are quite right; it should have been the financial investigation into the financial statements from the ministry. They sat there and said nothing to us and treated us like fools. That was with the backing of the Minister of Health. A Minister who was really on top of his game—and I will not say the word—would have come forward and fronted up to the issue and he would have had our respect. He did not. I have said that the director-general ought to offer his resignation.I do believe the Auditor-General should now look at this whole issue. In fact I am going to send it to the Auditor-General. Treasury does not believe that what was said in the PricewaterhouseCoopers report will be implemented—that it is going to work. So let us have the Auditor-General have a look at this whole issue and report back to this Parliament because it will be transparent it will be open and the public will know. This is a black day for this Government and for this Minister of Health who spent most of his time talking about when I was Minister of Health 11 long years ago. I have to say that it was most disappointing. They have not fronted up to this debate in any serious way at all.Mr DEPUTY SPEAKER: A 5-minute call Marama Fox.MARAMA FOX (Co-Leader—Māori Party): I want to recognise the Speaker of the House who after receiving the letter from the Leader of the Opposition thought it important enough that we follow that letter and have an urgent debate. There is an issue here. The issue of overspending ensures we could say that we do not get to spend in the areas of most need. The rates for Māori in health in all of the outcomes are poorly represented. We could go on to ask: should the ministry have put money into bricks and mortar or put the money into the asthma rates for children for Māori? The chronic obstructive pulmonary disease rates for Māori women are the worst in the world. We can carry on having that debate for ever. There are a lot of things that the Ministry of Health could have spent that money on notwithstanding the ministry needs a building to go into. So that is beside the point. The point of this is that the ministry did not have the money that it said it had.We have heard from Annette King who explained the details of that. I thought it was serious enough and the Speaker of the House thought it was serious enough that we should address the issue. I waited to hear the explanation but I did not hear it. It was not forthcoming. And so I do go back to those statistics because for me they are quite concerning. We are overrepresented in too many areas as Māori in this country as Pasifika in this country and that needs to be addressed. Just this year I was approached by an asthma group—the Train the Trainer workers for Māori asthma providers in this country—that had had its contract ended for no apparent reason. No reason was given to it; it had met all of the outcomes that had been asked of it by the Ministry of Health.Māori have some of the highest rates of asthma in this country and in the world and yet the only Māori health provider that provided training for trainers for asthma prevention had its contract discontinued. Hauora groups across the country have expressed concern that funding for Māori health is continuing to dwindle. I have put those questions to the Minister of Health and to the Ministry of Health and have not yet been satisfied with the answers that have been provided. Māori adults are three times as likely as non-Māori adults to smoke.The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I am slightly reluctant to interrupt the member but I did listen carefully to the rulings that the Speaker previously in the Chair Chester Borrows gave as to the narrowness of this debate and the importance of relating matters to it. It is not a general health debate and it is not a health estimates debate; it is on a relatively narrow issue. The flow-on from that may be something that the member could discuss but she has got to at least occasionally get back to the issue.MARAMA FOX: Thank you Mr Assistant Speaker. I listened intently to a number of the issues that were raised in the House and I felt that they were quite wide and therefore gave me some leniency here but I take your direction. And the point comes back to the fact that $24 million has been overspent misspent and not calculated for correctly and has been presented some might say fraudulently to the Health Committee. And yet we continue to have these disparities. It is a borderline issue but I am waiting to hear the response.I am waiting to hear how that mistake happened and then did not get reported back. I am waiting to hear from our Minister how we can continue to address these issues of disparities and not have those mistakes happen again. I have not been satisfied that I have heard those things. I have heard from the Associate Minister of Health Peter Dunne that the spending on health has gone up that we cannot make those comparisons that this may not have made much difference and that we have fewer workers overall in the bureaucracy of the health sector. Yet we continue to have this mistake raised in front of us and we continue to have the disparity of health statistics for our people.I do push the boundary of this discussion to mention that because the reasons that have been given by the Minister and the Associate Minister for expanding health spending to address those issues are clearly not evident when you look at the statistics for Māori health and for Pasifika health in this country. And so I appreciate the leniency that the Assistant Speaker has given me today. I would be interested to hear that these issues are being addressed. I would be interested to see next year—again when it gets that far—that they come to the select committee and present their findings to show that processes have been put in place to eliminate this happening again. Thank you.GRANT ROBERTSON (Labour—Wellington Central): Let us be absolutely clear about what has happened here because Ministers who have stood up have tried to say: “Oh well this was a very good deal. We need to have people in these facilities. It’ll bring staff together. It’ll have efficiencies.” That is not the debate. The debate is that the Ministry of Health with the Minister of Health along with a Minister of Finance looking the other way has come forward only when it was forced to to acknowledge that it did not have the $24 million that was required for this. And then when it was found out about that it tried to cover it up. That is what we are talking about here today—a ministry that somehow or other got past Treasury $24 million of spending of money that it did not have. And Treasury has been very clear in the papers that have come out that had it been consulted when this idea first went up it would not have approved it.On this side of the House we find it extremely hard to believe that Treasury was not consulted about an expenditure project of this scale and we will be digging in further to that. But if we accept that then this is not just a little financial mistake as the Minister of Health would have you believe; this is serious financial mismanagement and it is a cover-up. And New Zealanders deserve far far better than that. My colleagues Andrew Little and Annette King have outlined the details of this case.What I want to say to this House and to the people of New Zealand is that it is quite clear in the third term of this Government that it has got arrogant; it has got out of touch. It somehow does not think that $24 million matters. It somehow wants to brush off $24 million wasted—$18 million now has to be found—but $24 million does not seem like a big sum of money. Spending $26 million on a flag referendum does not seem like a big sum of money to this Government. The $10 million owed to KiwiSaver policyholders because they have not had their contributions passed on is brushed off by this Government.This case here is typical of an out-of-touch Government in its third term. It does not care any more whether it wastes $24 million. Well on this side of the House we know what $24 million could do in the health system. We know that it could deal with the operations for people who come into our office every day in pain because they are not getting operations under this Government. We know that that money could go into helping ensure that young people are not growing up in cold damp homes which are giving them respiratory illnesses and skin diseases which are seeing children show up at hospitals in greater numbers than ever before. That is what $24 million could give the health system. But instead this Government wants to cover up the fact that it has wasted that $24 million—now $18 million—which will have to be found year in year out in budgets.This case is one where the Government needs to own up and take responsibility. Where was the apology from Jonathan Coleman today? Where was the apology from Jonathan Coleman about how he and his ministry tried to hide the fact they did not have the money for this project—$24 million? They tried to hide it. They came back to Treasury asking for $18 million and then someone in Treasury asked the right questions and then it came to light. But it came to light this week only because of the good work of Annette King and the research unit of the Labour Party. No one on that side of the House was putting their hand up to say: “We had serious financial mismanagement.” Those are the words of the Secretary to the Treasury—serious financial mismanagement.It was a year ago that this was discovered—a year ago. Not one peep from the Government in the last year. It hid it it covered it up it did not want New Zealanders to know and it has only emerged because the Labour Party has brought it to the attention of New Zealanders. Well I will tell you this: we will keep doing that in the health sector because this Government is mismanaging the finances of New Zealand. It has got its eye off the ball when it comes to Bill English and Treasury and we have got a Ministry of Health that wants to cover things up. New Zealanders deserve far far better than that.SIMON O’CONNOR (National—Tāmaki): I am always pleased to speak on issues like this particularly after the likes of Grant Robertson because I hope I inject a bit of rationality and calm into things. You can often note around topics like this—and it is something I have talked about in the House before—that it is about proportionality. When we respond to issues you can choose to yell scream be quite shrill about things—Tim Macindoe: Calm.SIMON O’CONNOR: Yes you can try to be much more calm about these things but if you measure a topic against a level of shrillness I think you begin to understand very quickly—sorry Mr Assistant Speaker; the House can begin to understand—the level of truth. And the long and the short is that we have heard a lot of shrill comments we have heard a lot of conspiracy we have heard a lot of personal attacks and I think again that masks basically a lack of substance.But I do echo at the start what the Minister of Health himself said at the beginning—I am not sure whether he was heard because there were so many interjections from the other side but what he said was that a mistake has happened OK? I am more than happy to say that other members on this side of the House are happy to say that the Director-General of Health Mr Chai Chuah has said that—a mistake has happened. Whether you then take a particular mistake to be a sign of a collapsing health system—I think that is out of proportion. I think if you start to use shrill language saying that this is a Government that is arrogant and out of touch—again shrill. Interestingly of course it has been the thematic approach of the Opposition for a while now.I think it is important to put this into some context. The first for me if there is a theme is that the exception proves the rule—the exception proves the rule. This is exceptional it is a mistake it is one that should not have happened one we did not want to happen and do not want to happen again but it actually shows and proves just how well the health sector overall is performing. Look mistakes do happen. The Opposition knows this—it elected Phil Goff and then got rid of him and then made the mistake of putting in Shearer and got rid of him and then followed through into Cunliffe and now I think they are probably still regretting mistakes there. The thing here is that ultimately mistakes do happen. You learn from those and you move on and that is exactly what has occurred here. Eighteen million dollars has not been apportioned correctly. It is a financial governance situation as much really as accounting and where things are placed and put.And really importantly—and I think it has been drawn to the attention of the House by other speakers—this is within the departmental spend not the operating spend so I think most Kiwis out there will understand that we have to have moneys to run the department and there are other New Zealanders out there who understand that we have moneys to run the actual health system the district health board itself. What we are talking about here is a Ministry of Health that thought: “Hey we will be able to fund the costs of refitting the building through savings in our departmental fund.” It thought it could save $24 million; it turned out it was not able to save as much as that. It forecasted incorrectly and instead it needed a further $18 million. A mistake has happened the Minister was rightly informed in time and was importantly informed as a Minister ought to be.But importantly as an operational matter the Director-General of Health as I understand things moved very quickly particularly to bring in the likes of PricewaterhouseCoopers PwC to look through not only how this particular situation happened but also to see what financial considerations can be put in place to make sure it does not happen again. I think that is fundamentally important.Context as well is fairly important. The whole idea of a refit for Government buildings is something that we have been looking at as a Government for quite some time. We are very aware that the likes of the Ministry of Education the Ministry of Business Innovation and Employment the Ministry of Health—obviously in this particular circumstance—and the Ministry of Social Development are relooking at where they operate from how much floor space they need and so on. As context to the fact that the Ministry of Health was trying to refit which has brought about this $18 million shortfall is that ultimately the Government was seeking to save around I think $338 million in expenses related to buildings to actually reduce the cost by about 30 percent. I think it is really important to put therefore the $18 million that we are debating here today in the context of that wider $338 million savings.Again it is all around proportionality and some of the shrill nature of the debate is that we do not want to in a sense lose the forest for the trees. This has been a project by the Ministry of Health and others to save a substantial amount of money and yes elements of financial governance have led us to this situation—not ideal—but the systems have been put in place I have been assured as have others to make sure this does not happen again.It has been raised that it is a cover-up and that the Health Committee should have been told. Well look select committees are actually the masters in many ways of their own destiny. There are nine members of the committee independently minded and I would say capable who are able to read and to seek information and to ask questions. It was not something that was raised—it was not raised and has not been discussed. Personally I see no great conspiracy in that. When I think about the hour that we had with the Ministry of Health—sure I know in my own self there was a whole pile of questions that I would have liked to ask. The great thing about our parliamentary system particularly around annual reviews and estimates later in the year is that select committees get their opportunity to raise questions and to interrogate for want of a better word the Minister—Hon Member: Scrutinise.SIMON O’CONNOR: Scrutinise—there is a much much better word; interrogate is a bit too strong—not only the work of departments but also their officials. I have every confidence after the debate today of what some of the first questions will be in upcoming annual reviews. Again I do not think there is any conspiracy here—in fact you could ask why it took the Opposition so long to find these bits of information. The select committee—Sue Moroney: Because it was a cover-up.SIMON O’CONNOR: Here we go once again a yell about a cover-up that actually was down on paper. In fact if it was covered up we would not be having this discussion—[Interruption] Exactly. It seems a very strange statement.We are sitting within a health system as I said at the start that is incredibly positive. I think the joy or the attempted joy of the Opposition to jump on to this is as I said at the start a case of the exception proving the rule. The Opposition is not able by and large to find negative elements in our health system so a financial reporting error has become a moment of delight. I think what we have heard from Minister Coleman certainly what we have heard too from Peseta Sam Lotu-Iiga one of the Associate Ministers is that this is well-structured and under control. I think that the public needs to have confidence that this has been discovered it has been appropriately reported—and I think the independent approach by bringing the likes of PricewaterhouseCoopers in is incredibly helpful itself.As I say too I know it is belabouring the point but I think it is fundamentally important in the context of others who keep saying “Hey we could have been funding more support for rheumatic fever” which in fact we have done remarkably well in already. Some people say we need more funding for cold houses. Yes there are always calls for more and of course this Government has done—I think it is hundreds of thousands; 300000 or more I think mainly State houses—an amazing job there. So there are two points: one the Government has been doing a tremendous amount of work in all the areas of health that have been put forward—great stories to tell there.But fundamentally there are always calls for more in the health system. Those of us who have worked in it understand that; those of us on the select committee understand that but importantly what we are talking about today is a departmental spend not the operational spend. Fundamentally not one dollar—not one cent—has been taken away from or is missing from the health budget which leads to the tens of thousands more surgeries under this Government to the really strong initiatives to reduce rheumatic fever to the moneys that have been put in to actually insulate homes around the country. Not one cent has been missing from that. We are talking in this context about a departmental budget a mistake that has been acknowledged and importantly a mistake that has been corrected—acknowledged corrected and processes put in place. There is not much more to be said in this proportionate speech.The debate having concluded the motion lapsed.Appropriation (2014/15 Confirmation and Validation) BillSecond ReadingHon Dr NICK SMITH (Minister for the Environment)on behalf of theMinister of Finance: I move That the Appropriation (2014/15 Confirmation and Validation) Bill be now read a second time.A party vote was called for on the question That the Appropriation (2014/15 Confirmation and Validation) Bill be now read a second time.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Bill read a second time.Employment Standards Legislation BillIn CommitteePart 1 Amendments to Parental Leave and Employment Protection Act 1987The CHAIRPERSON (Lindsay Tisch): We first turn to the Employment Standards Legislation Bill and the question is that Part 1 stand part. This is debate on clauses 3 to 81 and schedules 1 and 2.SUE MORONEY (Labour): Today is International Women’s Day and so it seems right and proper that we are here debating some positive moves on paid parental leave. We are doing that in Part 1 of this bill so I think that is very appropriate. Paid parental leave has been a bit like that in this House. It seems that every day that we are debating this in the House—whether the Government is for it or against it; it seems to flip-flop around a bit on it—seems to be on a day that is incredibly important to the issue that we are debating and today International Women’s Day is no different.For my initial contribution on this bill I would like to focus on replaced section 71DA. It is an amendment in clause 56 of this bill and it is something that I feel very proud to have had a part in bringing about because this amendment will make a big difference to many many families actually in New Zealand—the families whose baby has been born pre-term a prematurely born baby. What the Labour Party has been able to do is to drive a position where the whole Parliament is about to actually extend paid parental leave—give additional paid parental leave—to exactly those families.I particularly want to pay my respects to a woman by the name of Donnelle Belanger-Taylor because I actually think that if there is one person who is responsible for this—and I know the Government is going to try to lay claim to it and say that it is its idea and the ACT Party will say it was its idea but the parliamentary record will show that it was actually a Labour Party amendment that was the first idea around getting additional paid parental leave for families in this situation. So I talk about Donnelle Belanger-Taylor because she is a woman who came and gave a submission to a select committee which first put this issue on the table. I think this is a great story to be told because this is a story of how participating in democracy by making a submission to a select committee can make a big difference. And it can make a big difference to a whole range of families.So in this instance the simple submission that Donnelle Belanger-Taylor came along and gave to a select committee about the experience that she had as a mother of twins has ended up bringing about this change. She told her story. She talked about how traumatic it was and how difficult it was for her to be back in paid employment when her twins were 5 months old. The problem that it created for her was so big that she resigned from her job because she could not make it work. If she was not up feeding one twin or the other throughout the night—she was not getting much sleep then she was trying to go to work the next day dropping the twins off at early childhood education going back on two or three occasions throughout the day to feed them and then going home on public transport and doing it all over again 5 days a week. She simply found that she could not continue to do it and so she resigned from her job.She was back before the select committee when her twins were 5 years of age to tell us that she had still not made her way back into paid employment. She had lost her connection with her employment at that point in time because it was just too hard. This caused me to think about not only the plight of families where there is the joy of a multiple birth but the plight of families where there is a prematurely born baby or a baby born with disabilities. There is a need to have additional paid parental leave so that the bonding and attachment can be formed so that families under more pressure are able to actually sustain that and able to focus on developing that bonding and attachment with their babies. So that was the beginning of the story that brings about replaced section 71DA in Part 1.What happened next I think is pretty instructive about our parliamentary environment because I proposed an amendment along those lines to a bill I had before this Parliament in an effort to secure the Government’s support for that measure. Actually it was not much more than 12 months ago that I proposed that amendment—probably about 14 months ago. What did the Government do then? It voted against it—it voted against it just 14 months ago. And not only did it vote against this particular measure just 14 months ago but it also made sure that the amendment could not pass.What I did was I went to secure the vote of as many MPs as I could to get that amendment through for those families and I was one vote short. I knew that I could not look those families in the eye and say that I had done everything possible to get their needs addressed if I did not go and look at every MP and ask for their vote. That meant that I ended up in the office of David Seymour asking for his support. I want to say that in an MMP environment was this not a lesson? Actually David Seymour said “Yeah that’s an entirely reasonable thing to think about and to support.” and he said that he would support it. So suddenly that amendment had the numbers in the House 14 months ago to go through.So the truth is that if the National Government had not meddled and got in the way this provision could have been in 14 months ago and the prematurely born babies and their families for the last 14 months could have had exactly this provision in place. But the National Government played politics. It played politics instead and so here we are today with all those families in the interim period missing out on this provision.What is the provision? The provision is that if a baby is born before 37 weeks’ gestation—that is the medically accepted definition of full term; so a baby is full term if it is born at 37 weeks of gestation or beyond—they are technically pre-term. What this part of the bill does is it says that for every week that that baby is born prematurely the parents of that baby will be able to have an additional week of paid parental leave. And that is going to be a big relief for those families.Think about being in the situation of having sometimes surprisingly a baby born early. Sometimes people know their baby is coming early but often they do not and it just happens. Suddenly you have finished work when you did not expect to suddenly you have a baby earlier than you expected to and suddenly and quite frequently the prematurely born baby is in hospital for a prolonged period of time. Often the parent has to take time off work from that point onwards even though their baby may not come out of hospital for 3 or 4 weeks.What happens quite frequently is that under the provisions that we have currently in this country those families are forced to go back into paid employment before their baby is really at the age of 4 or 5 months with where the paid parental leave provisions are now. These are the babies that probably need a lot of support. They need that extra bonding time and certainly their families need additional time to prepare because in many instances they have not been prepared for this early birth and in many instances there are complications that come with the fact that this child has been born early.So it is great to see on International Women’s Day that this going to be addressed.In fact it will come into effect on 1 April. Should this bill pass through all its stages this week this provision will come in from 1 April this year.I am very proud of the role that Labour has played in making this happen because there is no doubt that this would not have happened if it was not for the Labour Party pushing this agenda of extending paid parental leave. In this instance it was joined by and informed by a fantastic young mum by the name of Donnelle Belanger-Taylor who came along to have her say in our parliamentary process and who has changed and improved the lives of thousands of New Zealand children as a result. It is a great celebration on International Women’s Day to think about how one woman made such a difference for children throughout this country and I really want to celebrate that.But the downside of this is that if it was not for the politics being played by National over paid parental leave and over families and the support they need for goodness’ sake then we would have had this measure a good 14 months ago. It is very sad for those families and there are many of them who have had prematurely born babies in the meantime.JACINDA ARDERN (Labour): It is a pleasure to follow on from Sue Moroney and her contribution on this bill because I think it is widely acknowledged that the huge amount of debate and discussion on paid parental leave that we are rightly having in this Parliament has in a large part been driven by Sue Moroney and the Labour Party which has supported her in that campaign. Even though we have been unable to reach consensus on elements of paid parental leave—most notably the Labour Party still believes obviously that 26 weeks is ideal. Actually to a certain extent I believe that National probably agrees that it is ideal—probably; maybe I am being a touch generous—but it has continued to argue that in its mind the cost-benefit analysis does not add up. Well that is where we have a definite difference in opinion.On this side of theHouse we believe that it is one of those investing-to-save things when it comes to investing in mums and babies and that we all benefit from that investment as a society. So as much as we are very pleased to see some of these amendments today I think it is still important to use the opportunity to say look we would have been happy if Part 1 had an extension of time and if we were at that ultimate ideal of 26 weeks because it is what the international evidence and advice suggests to us that we should be pursuing. As a party—Sue Moroney: And we have an amendment that does exactly that.JACINDA ARDERN: And of course because we fundamentally believe in that we will still be pushing amendments that make that point—you never know perhaps David Seymour might like to support that again—and perhaps also amendments on multiple births as well which is an issue that we still have concerns around.This is the point where I always pay tribute to my nana who had not just one multiple birth but two multiple births within a period of 4 years. I challenge anyone not to grimace at the idea of having four children of that age—two multiple births—and to keep your sanity at the same time. So there are obvious reasons why we continue to push. Although we have acknowledged again the need for support for those pre-term babies that is where we would like to see those extra provisions go in terms of 26 weeks as well.I want to come to some of the amendments. I am not a member of the Transport and Industrial Relations Committee but in reading some of the amendments that it has made you can tell that a lot of good work has been done by this select committee. There was a huge number of submissions—12260 submissions—on this bill. A number of those of course would have related to the zero-hour contract elements of the bill which we will come to but Part 1 does not cover that. Part 1 is focused on parental leave and payment entitlements. You can see by that work that there has been thorough consideration.I want to come first of all to clause 16 in Part 1 where the select committee has considered the fact that this bill broadens out eligibility to include the term “primary carer”. Of course before this the test under the law has had some constraints in terms of who is able to access parental leave provisions—biological mothers spouses partners and formal adoptive parents. But the term “primary carer” does broaden the eligibility to individuals who assume primary non-temporary responsibility for raising a child. I think we have to acknowledge that in New Zealand now in our modern family structures we do often have a range of arrangements when it comes to the care of a child and we do need to make sure that those who are in that primary care role are able to access paid parental leave provisions. I can think of some constituency cases where children have been whāngai-ed. It may not have been a formal arrangement but it makes sense for that individual for instance to be eligible for these provisions.In fact the research now tells us that although biological parents have a significant role—obviously and by default—actually the most important thing for a newborn is the ability to form a bond with a consistent primary carer in their life and the label of that carer is not the relevant part in terms of the relationship that that child is able to form with that primary carer. So I do think that the select committee was right to broaden out that term. We would not want to exclude individuals but we have to make sure that we are careful that it does not become so broad that we are including people who are for instance home-care providers. For instance the PORSE Networks of this world would not want to be eligible in that regard. So I think probably making sure that that is not the case is certainly advisable. It is those who have that permanent carer role.I want to come to the additional entitlement for primary carers of pre-term babies. Of course as Sue Moroney has already laid out the additional leave payment entitlement for primary carers of premature babies born before the end of the 36th week of gestation is a welcome amendment to this bill for all of the reasons that she outlined. Of course that was at the point where we realised we were not going to achieve 26 weeks. At that point it was about trying to have the maximum effect for those who needed it most. So it really was the politics of Opposition—recognising that there was a difference that could still be made for those who really needed it even if we were not going to reach our goal.Just I think for the sake of clarity it is worth pointing out the way that the select committee determined that entitlement that should be accessed which is set out in new section 71DA in clause 56 and then consequential amendments. The way that that is structured will “allow primary carers one week of pre-term baby payment for each week that their child was born prematurely (to a maximum of 13 weeks). The payment would end when the primary carer returned to work or at the end of the week that would have been the 36th week of gestation (whichever comes first).”I think it is really important to note that a parent who has a premature baby is much more likely of course to experience longer periods with that child in hospital. I had a friend not that long ago who experienced that exact situation and the absolute chaos that then ensued for that family—it was extraordinarily difficult to balance both caring and being present for that baby while it was in hospital with care arrangements for the remainder of the family who were at home. Under usual terms that would eat into the ability of that parent to then have that longer period post-birth with the usual paid parental leave provisions.This is a practical measure that can be taken to assist those families who are not experiencing the same start in life for their family and their new baby as those that are going full term. It acknowledges that those babies are at greater risk and that there is that additional pressure for those families. So I think it is an excellent amendment that we are seeing and once again I pay tribute to Sue Moroney in particular and acknowledge that the role of MMP sometimes—well not sometimes; it should be all the time in this House. It is the ability of individual smaller parties to recognise when there is something—regardless of the coalition or relationship they might have with the governing party—that deserves support on the merits of amendments that are put forward in this House regardless of which party produces them.It would have been helpful if that could have just been done at the time that the bill came forward in the name of the member that it came forward with. Putting those politics aside if that individual member thinks that it is a good idea it should be backed. Putting that aside we are now in a situation where we have the ability to support that collectively. I would not want to add up the number of families who have missed out because of that little bit of politics though because ultimately there will be a number who will not receive the assistance that this bill offers them because a party who has been named chose not to support it at the time that it came up but to wait. So that is a shame.But ultimately we celebrate the progress that has been made whilst continuing to advocate for what the international evidence supports—that is 26 weeks for babies. Twenty-six weeks for babies because they are the ultimate ones who will benefit from the ability of that primary carer to be there with that child. Ultimately we alwayssupport the idea of that being mum of course for breastfeeding reasons. That is why we have always pushed for 26 weeks but we acknowledge the range of circumstances that come into play such as whāngai adoption. So we are very supportive of those amendments.DENISE ROCHE (Green): It is a great delight to stand and take a call on Part 1 of the Employment Standards Legislation Bill the part that deals with paid parental leave on this International Women’s Day. I just also want to note that it seems incredibly appropriate that we are marking International Women’s Day with hopefully getting closer to the passage of this parental leave extension.The Green Party members are supportive of the provisions in this bill dealing with paid parental leave. We note that it increases paid parental leave to 18 weeks. Although our policy is to extend paid parental leave to 13 months we note that this is a step in the right direction and we are fully supportive of the 26 for Babies campaign that has arisen from subsequent members’ bills in the name of Sue Moroney. I want to pay tribute to Ms Moroney for raising the whole issue of parental leave in this House. I believe as do others in the House that it was her work with this member’s bill that meant that we have had a shift in the number of weeks that families are entitled to take with the birth of a newborn.I also want to acknowledge that it was her pragmatic approach to attempting to get her last member’s bill through the House that meant that she brought back to the House an amended bill that was to extend paid parental leave to families where there had been a multiple birth or a birth of a child with disabilities or a pre-term baby. It is great that the House has picked up the provisions around extending paid parental leave beyond the 18 weeks to those families where a pre-term birth has occurred and we support that totally. I will just put on record what that means. It means that if a family has an unexpected birth before 36 weeks’ gestation they can access a week for every week they are pre-term from then up to I think in total 13 weeks. It takes it to a total of 31 weeks if you include the 18 weeks’ paid parental leave.We are totally supportive of that but we are concerned that those who do have greater needs like families with multiple births and like families with babies born with disabilities are left out of this. So we hope that this will be addressed by the member’s bill that Sue Moroney is dealing with at the moment.We have had some concerns about the provisions in the Employment Standards Legislation Bill that were not necessarily part of the submission process—in fact I do not think anybody actually submitted on it in any great way. We are concerned about the whole area of keeping-in-touch hours. I do not really have a clear understanding of where that came from except that it was raised as a good idea. The concern we have is essentially that with those keeping-in-touch hours there could be a feeling of coercion on the part of the parent who is taking leave to actually come back to work when they do not want to.We acknowledge that the keeping-in-touch hours are just 40 hours that a parent can elect to go to work and that will not be taken off their leave provisions. However we are concerned that there may be coercion or a feeling of duty that compels a woman—particularly a woman—to go back to work. I know from my own experience of taking paid parental leave—way back in the day when it was quite an unusual thing to have—that you do feel there is a real necessity not only to stay in touch but also to make sure that your bosses do not forget you. I hope that things have changed in the 20 years since I took parental leave but sadly I am not sure that they have.We support the parental leave provisions in the bill. We absolutely support the fact that they have been extended to casual and seasonal workers as eligible employees as we believe that paid parental leave is actually a right that all families should be able to access not just those who seem to be in permanent paid work. I guess we will get on to hours of work in the next part of the bill. So we absolutely support that.We would actually support increasing paid parental leave beyond 26 weeks to 13 months. The reason for that is not only about the establishment of a bonded family and/or breastfeeding for the first 6 months but it also ensures that women are in a position to feel that they are able to take the proper amount of time off without stress and then be able to go back to work. Currently New Zealand is 24th out of the 25 OECD countries in terms of the paid parental leave provisions that we have. I believe that we should be investing in families. And if we want to compete internationally for a skilled workforce then we should be ensuring that we have provisions that encourage women to continue working and that protect their employment while they are on leave for an extended amount of time.I will leave my comments to basically this part of this bill at this stage. I just want to reiterate that although we support this we do have concerns about the keeping-in-touch hours. We can see how they could work in practice and positively in some cases but we are also concerned that there could be an element of coercion involved and people feeling like they have to stay in touch.All in all this is a step forward and we will of course support it. We wish it would go further and hopefully we will be back here soon—preferably before the next International Women’s Day—to actually achieve further extensions to paid parental leave.CLAYTON MITCHELL (NZ First): I rise on behalf of New Zealand First to take a call in the Committee of the whole House on the Employment Standards Legislation Bill talking about Part 1 and specifically the paid parental leave aspect. Look I was not here last week when we had the second reading but I did watch with great intent the speeches in the House that day and saw the solidarity that I thought that all parties had with regard to certain sections of this bill—namely Part 1 to do with that paid parental leave.I do not think there is a single person in this Chamber or around New Zealand who would not like to see this go through the House so New Zealand First does support Part 1 with the extension of paid parental leave from 16 weeks to 18 weeks. I think also around this country we would like to see a change in the breakdown and the disconnect that has been slowly coming into families because of families being forced back to work early and because of people needing to get themselves employed—gainfully obviously—and working to get some money in for their families. We would love to see them spend more time bonding and connecting with their family which this bill does go towards doing. I do not think it goes quite far enough but it is a step in the right direction and New Zealand First certainly supports that.There are a number of things in Part 1 that I think are also very commendable. Despite the fact that there is a lot of support in what has been said already I believe and New Zealand First believes that the keeping-in-touch hours is a fantastic methodology to enable career mums or dads or primary caregivers to ensure that they can fulfil the requirements in their roles whether they be professional or otherwise. It is not an onerous amount of time for a family—we are talking about 40 hours spread out over that 18-week period—and for those premature babies the keeping-in-touch hours are unavailable after the 28 days or the first month of that baby being born. So this bill actually enables the connection between the mother or the primary caregiver and her child which is absolutely essential. Certainly I just go back to saying that we need to be doing more to ensure that one income is enough to sustain a family so that we do not have this disconnect and this breakdown through society that is endemic and is the start of a pandemic if we do not address that issue but I digress.The second part which I think is also very good is the clarity and the discretion that is given around the definition of “primary carer”. This I think has tidied up some areas that have been a little bit ambiguous. It is allowing the parent whether it be the birth mother or father or whether it be a nominated person to be the primary caregiver for that child. I think it just gives some freedom for some of the different family nucleuses if you like that do not have the standard situation of what we would consider to be a normal family model. So giving clarity to “primary carer” here certainly does tidy that up and it gives some determination around it.The introduction of the premature baby allowance is I think a great step in the right direction. It is acknowledging the fact that the parents are under some stress when it comes to babies who come early unexpectedly and that some changes need to be made in their everyday lives to adjust for this baby who has popped out and said: “Hello I’m ready.” So to enable those parents to be given the pre-term baby payments as well as allowing them to spend some more time at home without that encroaching on to that 18-week paid parental leave is I think a very very good thing in this bill as well.The paid parental leave is great when it comes to including seasonal and casual workers. There is a need for casual employment agreements—and we are going to get to that as we get to Part 2 and Part 3. We have certainly got some Supplementary Order Papers and some amendments to put forward and we hope that they get supported. We would hope that we can get this bill 100 percent supported by New Zealand First and as it progresses through the Committee of the whole House stage we will certainly be having some discussions about that.I now get to an area that I have some concerns about. We are talking about clause 34 which inserts new Part 3A in the Parental Leave and Employment Protection Act which is about when it comes to negotiated carer leave. This is a final point that I am going to make with regard to primary carer leave and negotiated carer leave. When it comes to new section 30E “Grounds for refusal of request by employer” it sort of jumps out at me. It says here that “(1) An employer may refuse a request for negotiated carer leave only if the employer determines that the request cannot be accommodated on 1 or more of the grounds specified in subsection (2).” and the list in subsection (2) is: “(a) inability to reorganise work among existing staff: (b) inability to recruit additional staff: (c) detrimental impact on quality: (d) detrimental impact on performance: (e) planned structural changes: (f) burden of additional costs: (g) detrimental effect on ability to meet customer demand.”I think that would just about cover every single excuse that an employer could give to not allow the negotiated carer leave to take place. You have pretty much written a piece of legislation here it has been put in front of us and the employer has been given every single opportunity to say: “I’m sorry that leave is not going to be given.” I think that needs to be looked at.I look forward to taking further calls as the debate in the Committee of the whole House goes forward. New Zealand First does support the paid parental leave aspects in Part 1. Thank you.STUART NASH (Labour—Napier): It is a pleasure to stand and talk about this bill and I have not said that recently for a number of bills that have gone through this House because I think this bill makes a real difference to a number of people in society who need a little bit of a help up every now and again—not a handout but a help up. I take my hat off to Sue Moroney because she has championed this tirelessly against the odds and we are nearly there. We are not quite where we need to be at 26 hours.Hon Members: Weeks.STUART NASH: Sorry—26 weeks. We are not even close to where they are in Germany which has 156 weeks but we are slowly slowly getting there.One of the things I do like about the bill is the meaning of “primary carer”. I think well gone are the days now when the primary carer was thought of as the mother. It was the mother’s responsibility to do this that and everything else and the father did whatever fathers do like go out to work—that is an outdated model of my parents’ generation. I think now in this day and age when men and women are treated equally and there are a number of men and a number of women who play a very important role in a child’s upbringing it should not be primarily left to the mother. It has to be a discussion that is had within the family and whatever decision the family makes it is good to see that it is respected by law.The other thing I also like about this bill is it is not talking just about the mother and the mother’s partner or the mother’s spouse. Again we are talking about the 21st century reality where often aunties take the role of primary carer or grandparents and so they are also entitled to the leave under this bill which I think is good to see actually—it is good to see.I would like to talk about the keeping-in-touch days. The one thing I have just a slight concern about—I mean I understand it but I always have a slight concern and I will raise it here just as a point. In clause 55 subsection (2) of new section 71CE “Keeping-in-touch days” says: “An employee may perform 1 or more hours of paid work for his or her employer on a keeping-in-touch day …” if there is an agreement between the employee and the employer. What I would be loath to see is any pressure being put on an employee by an employer because it says in legislation that this is allowed to happen. I know there is no such word as “must” or anything like that; it is all about “may” and what is possible. In one respect it is good to cover off these situations in a bill to make sure there is no ambiguity—i.e. if a primary carer does go back to work for 1 day or a week or something like this then that does provide ambiguity if it is not dealt with in the bill—but conversely what it can do is it can set an expectation that an employee may feel pressured to have to meet.I just want to put that out there but again I think it is good to clarify this because it does deal with 21st century reality. I know that when my wife had my last two children she found this quite frustrating because although she obviously loved the children to death there were times when she did want to keep in touch but under the previous terms and conditions there was a lot of ambiguity that made it difficult to understand. I am pleased that that is there but I just do signal that—there is no doubt about that.Another thing that I am pleased to see—this is clause 68 new section 71N “Annual adjustment of parental leave payment rates”. What it does—which again is very important—is it outlines what will happen in terms of rate movements. What it says is that at 1 July—well there will be a percentage movement on which an adjustment is based. I quote from section 71N(2)(a): “the percentage movement on which the adjustment is based must be the annual percentage movement in the February average ordinary time weekly earnings (employees) immediately before the 1 July date …” butthe thing I do really like about this is that paragraph (b) says: “if … there is a downward percentage movement in average ordinary time weekly earnings … [then] no adjustment takes effect …”.In essence what it is saying is that if for some unknown reason the average employee earnings drop then we will not see a corresponding drop in the rates that caregivers on the 18 weeks’ leave will receive. I think that is really important because when you are planning to have a baby as many of us with families know it is quite an exhaustive process. It is not just about what we are going to do who is going to look after it; it is also about trying to budget. This is why I think this clause is most important. Thank you.POTO WILLIAMS (Labour—Christchurch East): I want to concentrate my call on the extension of eligibility around some critical areas: seasonal and casual employees whāngai adoptions Home for Life parents and also extending paid parental leave to parents who have children who are born pre-term. On that note I would just like to welcome the newest member of our extended whānau Baden Pekera who was born about 4 weeks ago at the tender gestation of about 35 weeks. I understand from mum that he is just about due to go home any day now.I bring Baden into the conversation because had this bill been passed earlier his mum Phoebe would have been able to take advantage of the fact that he was born pre-term and have an extension of paid parental leave for the weeks that he was pre-term. He was around 5 weeks pre-term so his mum would have had access to 5 weeks on top of the increased eligibility to 18 weeks.I think that is an important thing to talk about. It is very stressful giving birth in any situation. Having a baby is a big deal but when baby is not quite through all of the cooking that is required it can—Jacinda Ardern: Not quite baked.POTO WILLIAMS: Yes not quite done—a little under-baked. It is quite a stressful time for parents and for mums particularly—and to be able to have that extra support and to know that you can support your child your baby through to the period of time when they are ready to go home.I talk about my own experiences many many many years ago when my own daughter was born 7 weeks early. The stress that is placed upon new parents to support pre-term babies is quite significant. You are often very vigilant around being there because baby will be in hospital for some period of time until their bodies are developed enough to be able to cope with being at home full time without the support of medical staff and nurses. So it is quite a stressful time for parents.I know that in my own experience being mindful of my daughter being so pre-term that she had not developed the ability to suckle we were tube-feeding her for a period of weeks. I remember getting the call at 11 or 11.25 one night after I had gone home after a day at the hospital with her to say that the reflex had come on. So I dashed into hospital—I can see you nodding Dr Reti; you know what I am saying—to take advantage of the fact that she had reached a developmental milestone. That is often what happens with pre-term babies. They are not fully able to function completely independently of some intervention so it is really important for parents to have the ability to be there to support their babies until such time as they are well enough to go home and be cared for by mum and dad at home. So I think that is very important.The other aspect I want to talk about is whāngai adoptions. I am pleased to see that they are being recognised because within Māori and Pacific families they are a very normal way of ensuring that children have the opportunity to be brought up by people who may not have the ability to conceive children on their own. So it really provides that every child has a parent who is appropriate and can take over the care of those children.Within my own family there are many many occasions where whāngai has been used to support children who may have parents who are unable to care for their children or who may actually have a lot of children and want to just share the love a little bit. It is not unusual in Pacific families particularly for parents to have children specifically to provide for a childless couple.I know of one case in particular where a friend of mine had been in contact with a couple who had a young child. They were having some difficulty in raising the child. There were some external issues placing some pressure on the children. I remember her coming to work on a Monday morning and saying to me: “Yesterday I went to lunch and came home with a baby.” My first reaction was: “What are you doing at work?”. Over a period of time we negotiated how she would be able to take some time out to bond with this child. These are not unusual situations and it is good to see that Parliament has recognised these unusual perhaps ways of supporting families through whāngai adoptions. I am very pleased to see that as part of this bill.I just want to touch on in the rest of my call some of the issues that have been raised around keeping-in-touch hours. I completely concur with the concerns that have been raised. It is and can be a very very useful mechanism for working mums who have established careers to have an opportunity to maintain contact not only with the workplace but with any new workforce development or training or professional development that is going on and to maintain contact with new ways of working new technologies and new people even who may be starting on a team. So I think it is an important aspect.I do also mirror the concerns about who should determine whether a new parent should actually have the keeping-in-touch hours. There has been some concern raised about the issue that it is done by negotiation between employer and employee. But I am of the mind that really it should be at the choice of the employee if they wish to do that because there may be some things that happen within that paid parental leave time that may mean that they are unable to take advantage of the opportunities of these keeping-in-touch hours.So I am concerned around this particular aspect that we do not lose sight of the fact that paid parental leave is primarily around supporting parents to be at home to care for their children and that must be the prime reason that they are taking the leave. Any perceived pressure that may be applied by employers needs to be taken out of the equation by ensuring that the employee is able to direct that completely themselves.Just in saying that there are very useful situations when keeping-in-touch hours can be used and can be prescribed and I think that it is a useful mechanism to ensure that when that parent is ready to go back to the workplace they are as ready to pick up their work as they can be. Thank you.IAIN LEES-GALLOWAY (Labour—Palmerston North): It is a pleasure to speak in favour of Part 1 of the Employment Standards Legislation Bill and also to note my support for the amendment in the name of Sue Moroney which I am sure she is looking forward to addressing with a call shortly.I see these changes to our paid parental leave scheme as being the natural evolution of something that was initially 15 years ago—back in 2001 when it was first being debated by this House—a big bold and some would say scary new programme that did not have the universal support that it enjoys in the House now. When one is introducing big bold audacious new programmes such as this in the way that the Labour Government was back in 2001 one has to start somewhere and one has to start with a programme that is going to garner the maximum possible support. I note that back in 2001 it was not just Labour and the Alliance that voted in favour of paid parental leave; it was also the Green Party and the New Zealand First Party. It is pleasing to see that those parties have been consistent in their support for paid parental leave over the years.Naturally these programmes do evolve. Labour extended the availability of parental leave to 14 weeks. We extended it to self-employed people. We felt over the last few years that it really is time to extend the provision of paid parental leave out to 26 weeks. That is what the science tells us we should be aiming for at this stage and it allows for greater opportunities for the child and their parent who is usually mum but often dad or—as we are extending it in this legislation—other primary caregivers as well. That is important and the science tells us we should be doing this so it is pleasing that the Government has seen fit to do this. The other broad comment I would make is that the reason we are doing this now—and other members have noted this—is the very effective campaigning that has been carried out by the 26 for Babies campaign that has been carried out by the Labour Party and that has been carried out by Sue Moroney in making sure that paid parental leave remains on the agenda and that the need to extend both its eligibility and the period of time for which people can get paid parental leave remains on the agenda.This bill does a number of things. One thing that has not been addressed too much in the debate so far is that it extends the entitlement to paid parental leave to workers who are in more precarious employment arrangements such as casual agreements and seasonal agreements. That is important and we on this side of the Chamberabsolutely support that—we agree. That was a natural evolution that was probably always going to happen and it is about time that it did happen.It is particularly important that it happens in the context of what is happening in our labour market right now. Over 25 percent of the new jobs created since 2009 are in fact temporary work. They are casual they are part-time or they are zero-hour contracts—and we will get to that later on this evening—but they are not permanent part-time jobs. So as more and more of our workforce finds itself in that type of precarious work we have to ensure that these types of entitlements are extended to that workforce or otherwise what actually happens is we get a shrinking number of people who are entitled to paid parental leave and to other minimum entitlements in our employment law if we provide those entitlements only to people who are in that traditional form—that very good form—of work which is the permanent part-time role as opposed to the more temporary and more precarious types of work. I think it is important that we make this change now as we are seeing more and more people moving into those types of roles.Part 1 of the bill does also allow for more flexibility in the way that paid parental leave is taken—in particular the concept of keeping-in-touch days. I really like this idea. I like the idea that people who are on paid parental leave and who wish to be able to come back into work every now and again to keep in touch to attend training days or just to keep their working brains fresh and maybe even dare I say it have a break from the work that is going on at home because goodness knows I think everybody in the House would agree that actually the work that goes on at home is often harder than the work that goes on in the workplace. I think this is a very good idea. Sue Moroney has an excellent amendment that just tweaks those keeping-in-touch days to make sure that the legislation does not create a loophole and does not create an opportunity to exploit or to put pressure on workers. I think it is a good amendment. That is an excellent idea and is a good way to improve the flexibility of this scheme.We have heard a lot this evening about the extension of paid parental leave to the parents of pre-term babies. Again it is a very very good idea but let it not be forgotten where that idea came from. It came from the fact that Sue Moroney was prepared to do absolutely anything to get this House to support legislation that would improve outcomes for parents and babies. Even when this House was prepared to support 26 weeks for babies but the Government was going to use its veto power on that Sue Moroney said: “Look if we cannot get 26 weeks and if the Government is not prepared to agree to that let’s at least apply that to the parents of pre-term babies.” The Government was not prepared to do it when it was sponsored by a Labour member but it is prepared to do it as a Government bill—so be it. We will support it. We on this side are not quite as churlish as those members on the other sideare. It is a good idea and this Committee should vote for it and it does not matter whose idea it is.This is a good extension of paid parental leave as I said. I personally see it as being nothing more than a natural evolution of this scheme. We have had paid parental leave—it is 15 years since we first started debating the concept of having paid parental leave in New Zealand. It has gone from something that divided this House. It has gone from being something that the National Party and the ACT Party voted against to being something that we are all in agreement about. Sometimes you have got to have Labour and the parties of the left actually being prepared to be progressive prepared to be the ground-breakers on this and prepared to take the slings and arrows that will be hurled in our direction. We know that the conservative parties always catch up on this and now it is great that this House is working in a united fashion to extend these provisions of paid parental leave. There is more work to do. We will get to 26 weeks eventually—not tonight but we will get there eventually—and this is a good step along that path.The CHAIRPERSON (Lindsay Tisch): I am going to hear Sue Moroney who has got an amendment. I will hear Sue Moroney.SUE MORONEY (Labour): Thank you Mr Chair and in fact I do intend to speak to the two amendments that I have brought forward under Part 1 of the Employment Standards Legislation Bill. I was hoping and waiting really for the members on the Government side to get up and talk about how important paid parental leave is to them but I think their silence on this shows that what we have been saying on this side of the Chamber is absolutely true—they have been forced down this path. It is not something that they would have naturally come to by themselves without an awful lot of pressure going on.So it is all kudos really to the people who have made submissions the people who have signed petitions and the people of New Zealand who have really got in behind understanding what a wise investment it is in this country’s future if we put a little bit of taxpayer funding into supporting those early months of a baby’s development. New Zealanders absolutely get this in a way that the Government does not really—we get to save money. The rest of us as taxpayers stop spending money on the bad outcomes on the bad stuff—on the children being admitted to hospital unnecessarily on the children going through remedial education processes unnecessarily and on building more and more prisons unnecessarily. We can stop spending money on all that bad stuff if we get this right. The Government is not quite there yet but look it is making a good impression of it.I have two amendments. The first is to do with—the first one I want to address at least—these keeping-in-touch hours. I have got to say that there is a bill in my name that is similar but not the same. Obviously it extends paid parental leave to what it should be—26 weeks—so that is the first difference in it. But the second one is that it introduces a concept like keeping-in-touch hours but it calls it work-contact hours. I have got to say that the title “keeping-in-touch hours” just seems a little icky to me. It just feels—you know going back to work and the touchy-feely thing—a little biticky. But anyway that is what it is called in this bill and the concept I do agree with if not the title that those members have given it.However I think it does need some protections around it. This is the ability for parents—mostly women in fact—to go back to work during the course of their paid parental leave period and to not suffer the consequence that they would today of actually having their paid parental leave payments stopped. That would be the impact if a woman today was on paid parental leave and she went back for let us say a training day. Maybe there is a training course that has become available in her workplace that is a once in a lifetime or a once-a-year opportunity and she does not want to miss out on that and she goes back and she is paid for the time that she is there for that training course which is up to 40 hours under this provision.I want to ensure and the Labour Party wants to ensure that it is at the worker’s request at the employee’s request and at the mother’s request because it is the mother—or the parent who is on paid parental leave—who we believe will make the assessment as to whether it is in her best interests the best interests of her family and the best interests of the child. Because that from the Labour Party’s perspective is the lens through which we see every piece of policy and every piece of legislation: is this in the best interests of the child?We firmly believe that what the bill currently says is that it is just by this mutual agreement between employee and employer. In the real world what we know is that the power imbalance that exists between employee and employer is such that we could see the occasion when this might be forced upon the parent where the parent does not want to go back and do those keeping-in-touch hours but the employer puts a lot of pressure on. Those of us who have been working parents know the guilt that is already associated with being a working parent. It can be very difficult at times. You sometimes feel that you are not doing 100 percent what you need to be doing at home and sometimes you do not feel that you are doing 100 percent what you need to be doing at work.So in this environment with that guilt that already exists we in the Labour Party believe it needs an additional protection. The amendment that we are proposing—and we look forward to other parties supporting this—is not a hard thing to do but it is the right thing to do. It is to ensure that the application for keeping-in-touch hours comes from the parent because we know that they are going to be the person in the best position of the decision making that is going to have the best interests of their child at heart and that is what is of most importance—[Bell rung] Mr Chair.The CHAIRPERSON (Lindsay Tisch): I am going to call Stuart Nash.STUART NASH (Labour—Napier): Sorry Sue.Sue Moroney: That’s all right. It’s OK. I’ll get another one.STUART NASH: Yes I am sure you will. I would like to reiterate a little bit of what Sue Moroney is talking about—the keeping-in-touch days—because I think that employees need to be very careful about how this is managed. I am talking about new section 71CE in clause 55. It is called “Keeping-in-touch days”. What it actually says is and I am going to quote new subsection 71CE(3) “An employee is treated as having returned to work”—and this is the important bit—“and all parental leave payments received by the employee in respect of a period after the date on which the employee is treated as having returned to work are recoverable … as an overpayment …”. It talks about what constitutes having returned to work. Paragraph (b) of new subsection 71CE(3) talks about if the person on paid parental leave: “performs more than a total of 40 hours of paid work for his or her employer during a period of paid parental leave.”The reason I want to highlight this is where the person on paid parental leave says to their boss: “Look I’m going to be away for 16 weeks and we know this but what I will do is when the baby’s asleep I’m going to check my emails. I’ll just check them once a day so I keep in touch and if anything important comes in then I’ll forward it on. Well I will do the responsible thing.” If a person on paid parental leave checked their emails for just 1 hour every day then after 8 weeks they would have worked more than 40 hours a week probably unbeknownst to that person—because they are trying to do the right thing—and probably unbeknownst to the employer as well. They would come back after 16 weeks and they could well get a knock on the door saying: “I’m sorry. We’ve just checked the records and you have worked more than 40 hours during this period. We note this from the employer’s records and we note from the email transactions. Therefore we see this has occurred.” and the employee now owes 8 weeks’ back-pay.I just want to reiterate that that 40 hours is up if the person on paid parental leave works only 1 hour a day. Even if they decided to work just 4 hours a week—you know which is not much at all—that is 10 weeks. So there is a little bit of a fish-hook in here for those who are conscientious who want to do what is right for the company and want to do what is right for the employer and who say: “Look I am just going to check my email.” So the person on paid parental leave needs to understand that in effect if they take the full 18 weeks which is about 2 hours a week that is all they are allowed to work—2 hours a week. Anyone on paid parental leave does need to be aware of that because if they work over those 40 hours over that 18-week period then they will receive a knock on the door because they will be deemed to have gone back to work.The thing about this is not only will they be required to pay back all the money they have received when they were on paid parental leave but also they will not have been receiving any income when they had believed in their minds that they were on paid parental leave if you know what I mean. I can just see a couple of situations where the potential could be catastrophic to say the least.There is one other thing that I would like to query and I am not too sure why this is here. This is new subsection (6) in section 72B as inserted by clause 76(2). What it actually says—it applies to the armed services—is: “This section applies to a member of the Armed Forces as if the member of the Armed Forces were an employee of the Chief of Defence Force”—yes it makes sense—“except that a member of the Armed Forces may not succeed to the member’s spouse’s or partner’s entitlement to [paid] parental leave.”The way I am reading that—and I may have this wrong because I was not on the select committee—in this case obviously is if a woman gives birth then her partner or her spouse is not allowed to colloquially sub into that. I am not too sure why that exists. I think that maybe if someone is on active duty and they want to get out of active duty then they would make a call on this and that may create problems but I am not too sure whether there are—well I can think of circumstances where that may be the case. The Minister may have something to say on that but it just seems a little strange that the men and women who are actually putting their lives on the line to keep New Zealand safe are not actually entitled to the requirements under this bill.PEENI HENARE (Labour—Tāmaki Makaurau): Tēnā koe Mr Chair. I rise to take this short call during the Committee stage on the Employment Standards Legislation Bill. I am reminded of a great piece of work done throughout the 1980s that led to Pūao-te-ata-tū. I have spoken about it plenty of times in this House. Pūao-te-ata-tū refers to matua whāngai and I think the great thing about some of the amendments that have been made to this particular bill really are in the vein of matua whāngai. However through the wise words of my colleague Jacinda Ardern I do want to put to this Government that well if these kinds of changes can be made around the definition of a “primary caregiver” perhaps adoption laws in this country can be reviewed—looked into—so that perhaps the term “matua whāngai” can apply there around the primary caregiver.But to the bill the meaning of primary carer—and in the Māori and Pacific Island communities that I represent in Tāmaki Makaurau it is well-known that it does take a village to raise a child. In this particular amendment it is fantastic to see that we will be able to stretch what that means out of the realm of the traditional which Mr Nash has spoken about regarding mum and dad. In the nature and the make-up of family today we find in a heck of a lot of Māori families that I speak to and indeed that I belong to that there are step-parents and there are other caregivers in that family—grandparents aunties uncles—who play a pivotal role in raising the children for the future.I will take this opportunity to quote the Rt Hon David Lange and his work—which I am sure Jacinda Ardern is familiar with—around the Before Five policy in which he talked about how improvements in this sector are an investment in the future. That is exactly what this particular piece of legislation is. To that one I want to congratulate and echo the sentiments of my colleagues and congratulate Sue Moroney on the fine piece of work that she has done in advocating for the needs of parents and families.I turn to section 30H in new Part 3A inserted by clause 34 which provides: “(2) The employee may refer the non-compliance with section 30D—(a) directly to mediation;”. This is a new provision in this bill that I think is a step in the right direction. I think it is a good thing. We know just how often and how much the labour inspectors in that particular sector struggle just to make sure that there are a lot of employers out there who do comply with the laws that we set here in Parliament. Although I applaud this step in the right direction to make it possible to go towards direct mediation or to a labour inspector we will be keeping a keen eye on this particular Government and the resources it gives to ensure that it is able to enforce that and that it is able to give the capacity to those labour inspectors to those people and to the arbitration courts and processes so that these provisions can be carried through to the letter of the law as stated in new section 30H.I think it is a good move in so far as that it is not always just about the employee. We are considering the employer here. Quite often there does not need to be the intervention of a labour inspector. Maybe that particular employee and employer feel that they are in a position and in a healthy working relationship where they are able to deal with it themselves. I think that is a positive move in the right direction but I do want to reiterate that we will be keeping a close eye on the capacity issues so that the labour inspectors and—I was about to say the labour department—all of those who are involved in the mediation processes do actually receive the support and the resources from this particular Government to make sure they can do that.Just to close this particular part of my contribution on what will be a long evening I do want to say that although we applaud these particular changes in Part 1 we have said—and we maintain this view—that tinkering around the edges is not going to solve the problem. Although we applaud the move to 18 weeks’ paid parental leave we will be looking at making sure it is extended to 26 weeks when we can. We will be keeping an eye on this Government. Kia ora.Dr SHANE RETI (National—Whangarei): I move That the question be now put.CHRIS HIPKINS (Labour—Rimutaka): I am very pleased to take the first of what I am sure will be many calls in this debate on the Employment Standards Legislation Bill and particularly the part that deals with paid parental leave. I want to strongly support all of the comments that have been made so far that support the extension of paid parental leave. I particularly want to turn my attention to the typescript amendments tabled by Sue Moroney that deal with the length of time that paid parental leave is provided for.We in New Zealand as a result of this bill will have 18 weeks of paid parental leave. That puts us on a par with Australia but still well behind many of the countries that we would normally compare ourselves to in terms of social support provision. Many people might look at this and say “Eighteen weeks. Gosh that’s a significant improvement on the 12 weeks that it was when it was introduced.” but it is still a drop in the bucket compared with the historical levels of family support that we used to supply in New Zealand. I think that is one of the things that we often forget—that the welfare system in New Zealand has evolved and changed significantly over quite a period of time. Compared with the level of financial support that families in New Zealand used to get 18 weeks of paid parental leave is not actually that generous. We could provide a heck of a lot more.I support the amendment to change it to 26 weeks. Why 26 weeks? Well let us look at what parents are asking for and let us look at the benefits to the child of extending it to 26 weeks. One of the first things I attended as a member of Parliament relatively early on was a presentation by the Brainwave Trust. I am very interested in the educational implications of paid parental leave. The Brainwave Trust did some fascinating presentations on attachment theory—which I can see Paula Bennett is nodding her head towards me about. One of the things it showed was that if a child develops a positive attachment to a parent or somebody else early on—very early on—and it is a stable attachment then the child’s likelihood of succeeding in education and not ending up in some form of delinquent behaviour later on in life or ending up in prison is significantly increased. It is in those first critical years of a child’s life that the attachment is so vital. They are developing the fastest that they will ever develop their brains are at their most active and that attachment is so vital. So by extending paid parental leave to 6 months—26 weeks—we would really promote that and really foster that.I think there could be no better investment if you consider that in the short term it might cost more money but in the long term it is potentially going to save us a lot of money. It would improve educational outcomes. It would decrease the cost of social services which we spend money on to mop up the failures that we have. Let us prevent the failures in the first place. Extending paid parental leave to 26 weeks just makes financial sense.Then we think about what parents are asking for and what indications there are that parents would like to spend more time with their kids. One of the things that has interested me is the huge growth in early childhood education in the home-based area. What that says to me is that parents are looking for something else other than wanting to put their kids into childcare centres full time. I think one of the drivers behind the growth in home-based early childhood education is that parents would rather be staying at home with the kids themselves but because of the financial decisions they have to make they are not in a position to do so. Extending paid parental leave to 26 weeks would I think help to address some of that.I still think 26 weeks is not long enough. If you look at some of the other countries—I mean let us look at the UK. It is 39 weeks in the UK. Let us go to Germany. It is 156 weeks in Germany. When you think about it we are talking about 18 weeks under this bill and we are talking about a very modest increase under the proposed amendment put forward by Sue Moroney that would extend it to 26 weeks. No it is not going to happen all at once. The amendment staggers that increase. It says that from next year we would move up to 22 weeks’ paid parental leave and then from 2018 we would extend it to 26 weeks. I think that is a very financially responsible decision. There is the fiscal headroom in the Government’s accounts for this if you believe what Bill English says. He has allowed for fiscal headroom for future spending. It could be done within the existing Budget constraints. So there really is not in my view a reason why we could not extend it to 26 weeks’ paid parental leave when we consider the enormous benefits that might come from that. I have yet to meet a family who would not like to spend more time with their kids when they are very young. Why would we not do this?The CHAIRPERSON (Lindsay Tisch): Sue Moroney has two amendments. I will hear from Sue Moroney.SUE MORONEY (Labour): I did want to take the opportunity to speak to the second of my amendments which I did not get around to in my last call. It is in fact the amendment that Chris Hipkins has just addressed and he has done so very well.It is the view of the Labour Party that it is financially affordable and in fact a financial necessity for this country to extend paid parental leave to 26 weeks. As Chris Hipkins has pointed out my typescript amendment does not attempt to do it all in one hit but takes a fiscally responsible way of staggering the implementation so that we know that it is affordable.Yes on this side of the House I think we do have agreement that 26 weeks’ paid parental leave is the least that we should be doing. For the Labour Party we do see the sense in extending paid parental leave beyond the 26 weeks but what we know is that 26 weeks is what is affordable right now. We know that. We know that because yes the Prime Minister has confirmed that in Budget 2016 there will be an additional $1.5 billion of new spending. What better provision on which to spend a tiny proportion of that $1.5 billion of new spending—which National has already committed itself to—than getting it right in these early months of a child’s life.You know this is where the Kiwi Dream starts. It starts when these children are born. If we get it right then not only is it the correct thing to do but it is actually the economically smart thing to do: investing in families and taking that financial pressure off those families by allowing them to focus on the needs of baby and not have to think about getting back to work before they are ready to making sure that they do not suffer financial stress as a result of that and making sure that they can focus on building that attachment that the Brainwave Trust has done some excellent work on informing us about.When I had my children there was no availability of paid parental leave. My children are just 18 and 16—that is how recently it is that this country started to understand about the importance of paid parental leave. So it is a relatively new phenomenon for us but we cannot pretend and we cannot un-know what we now know. Back in the day we did not necessarily have the research that told us exactly how important this is but the Government knows because it too has had the presentations from the Brainwave Trust and other very good organisations that have done research in this area that states that the brain development that is occurring in those early months is the most critically important brain development. That is what is going to give that child our fellow citizen the resilience that he or she needs for whatever may come at them in life. That is the way that we make sure that we do not continue to spend money on bad outcomes as we are as a country at the moment.So I want to fully recommend that the amendment in my name that extends paid parental leave in two tranches to 26 weeks be accepted across the board. I hope that the Government will not continue to play political games over paid parental leave and actually does the right thing when it comes to this amendment coming up for voting. It does so in two tranches. It does so by increasing paid parental leave next year on 1 April to 22 weeks and then finally in 2018 to 26 weeks. It is done deliberately that way because we want to ensure that it is affordable for the country. And I take the lead from a country like Ireland because Ireland already has 6 months’ paid parental leave. But you know that country came out of the global financial crisis in much worse shape than New Zealand. What was the first thing it said it wanted to do? It made a commitment to extend paid parental leave to 12 months over the course of the next decade. So that is the sort of thing that progressive countries do.I like to think that New Zealand is progressive although at the moment we sit 26th equal in the OECD when it comes to duration of paid parental leave. That is not acceptable in my view. We can do a lot better than that. And you know for goodness’ sake we have only just caught up with Australia. We used to be ahead of Australia in this field—we used to have 14 weeks’ paid parental leave when it had none. Now we are dragging our heels a couple of years behind them by getting to 18 weeks.I am pleased that this bill does get us to 18 weeks on 1 April. But we can do an awful lot better and we should and we have the opportunity to do that.SARAH DOWIE (National—Invercargill): Thank you very much for the opportunity to rise and take this call on Part 1 of the Employment Standards Legislation Bill. And it is very much a pleasure because of course this part primarily extends paid parental leave from 16 weeks to 18 weeks in April this year.I understand that the Labour Opposition must beat its drum and say that paid parental leave was its idea and that it is pushing the Government to accept this change but I want to put it on record that there is support on this side of the House for paid parental leave and that when you are in Government you do have to balance competing priorities under different portfolios and you have to be fiscally responsible. The Government has looked at this and in a very considered way decided to extend paid parental leave to 18 weeks and I am sure given the benefits of paid parental leave—it gives more time to mothers and primary carers to bond with baby and it allows time to increase the probability of success in breastfeeding and all of those wonderful things that are associated with raising a child and increasing that bonding process—that it will continue to be on the minds of Government members. But we will look at that in consideration of balancing our competing priorities and will continue to govern this country in a responsible way.I want to turn particularly too to the extension for mothers and primary carers of pre-term babies which is something that is dear to my heart obviously as the mother of two premature children. That extension will be a very good help given the hurried nature of having a premature baby. You are not expecting it of course. It happens all of a sudden and rarely are you prepared for a pre-term baby. In fact I was myself seen as a high-risk fast cooker of babies in my time and so by the time my second came along at 36 weeks I was somewhat more prepared. But it still is a shock even if you are waiting for it and to have that extra financial support will be of great help when you are in places like neonatal units trying to balance getting things ready for when you bring baby home and dealing with the emotional stress of medical conditions or whatever it is that you are dealing with when having a pre-term child.So the extra financial support of an extra week of payment for each week prior to the 37-week gestation mark that the baby is born prematurely is going to be an extreme help for those families who have pre-term babies as well as the extra extension to 18 weeks for those with a more normal birth at post - 37 weeks. It will certainly help families get that extra financial support and help baby during that time.The other thing that I think is fantastic about this part is the keeping-in-touch hours. I am a strong advocate for keeping-in-touch hours—40 hours to allow employees to stay in touch with their work their place of work and their career to keep their hand in while they are on paid parental leave. It really plugs the gap to allow people to come back to work. There has to be mutuality obviously between employer and employee but it allows those primary caregivers to stay in touch with their career and maintain confidence in their role.There are lots of different times that the keeping-in-touch hours would be brought into play—for training extra data entry or handing over a case. In my case in a prior life to being a politician obviously I was a lawyer. Sometimes you do need that ability to go back into work for a short time to hand over a case that may have raised its head and that you had not prepared for prior to leaving to have your baby. And especially in the case of having pre-term babies the—Su’a WILLIAM SIO (Labour—Māngere): I want firstly to congratulate my colleague Sue Moroney on championing this issue because her championing of this issue with the wider support of the New Zealand community has enabled this debate to be here right here and now. It has forced this Government to recognise that there is a need and therefore it was important the work that Sue Moroney did.Yes we applaud the Government and I think many New Zealanders will think “Eighteen weeks OK. We accept that.” but the reality is we do need to look long term and recognise that this is not something to be playing politics with. This is something that is important for our country going forward.I want to refer my comments to clause 4 in Part 1 with regard to the purpose. The amendment that is in this part of the legislation basically just deletes a couple of words and replaces them. I want to say—and I was not part of the discussion—that I think we have missed an opportunity. I do not know whether the Minister for Workplace Relations and Safety would agree but I just felt that there should have been a complete purpose clause written in this piece of legislation as to why it is important for this Government and future Governments to entrench paid parental leave.You see most young people today will not know that this is a basic human right. It is an internationally recognised human right. Article 25 of the Universal Declaration of Human Rights makes reference to the right to a standard of living adequate for the health and well-being of workers and families. Subclause (2) of that article says: “Motherhood and childhood are entitled to special care and assistance. All children whether born in or out of wedlock shall enjoy the same social protection.” So I think there should have been a specific purpose emphasising the reason why this Government has deemed it necessary to have paid parental leave. I think that is something that we probably need to work on because I think many many young people do not yet realise that this is a basic human right for the protection of children and the protection of women as well. I think it is timely that it has been raised on International Women’s Day.I want to refer the Committee to the regulatory impact statement at page 6 where it makes reference to the benefits of why it is important to have paid parental leave. It will “reduce long term fiscal costs (for example costs that may arise from poorer health and social outcomes)”. I will give you an example: 2 weeks ago Caden Wong Singh turned 1 year old. His mother was forced to go back to work—they literally cannot have just one person working to sustain and support their family with rent etc. Caden is my grandson. A couple of weeks ago I saw Caden and he had some sores around his cheek that concerned me. When I asked his mother what had happened it occurred at the day-care centre where Caden was left by the mother who goes to work.I make that point as an example—most mums would want to be able to stay home and take care of their children. It is to the benefit of our country if we have mothers staying home to support the raising of young children for as long as they can. Everybody benefits from it. This is not about how much it is going to cost the country; this is about the benefits that arise if we are able to protect women and protect children long term.Another benefit according to the regulatory impact statement is that it enhances the retention of skills and institutional knowledge if women are protected and know that they can take time off have the time to have their child have the time to recover from giving birth to a child and know with confidence that they can return to the workforce. That does not only benefit women; it benefits the workplace by retaining the skills and institutional knowledge that that business requires. Another benefit that is recognised is reducing recruitment—MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): Tēnā koe Mr Chairman. Tēnā tātou katoa. It is my pleasure to take a short call on the Employment Standards Legislation Bill and like all speakers we are talking about Part 1 here. We have obviously pushed for more than 18 weeks but here we are passing a piece of legislation that is lifting paid parental leave from 16 to 18 weeks. For many of us in here it is just a commitment that we have to keep pushing for that particular commitment from this Government. I want to draw your attention to the commentary in the report back by the Transport and Industrial Relations Committee where in the introduction it says: “The overarching policy goal is to make workplaces fairer and more productive for both employers and employees.” I would say that there is not anyone in this Committee who does not support workplaces that are fairer and more productive for employees and employers. I guess the question is one of balance.My short contribution on ensuring that we meet this overarching goal is reflected in new section 30B—and if I have got time down to new section 30F—inserted by clause 34 in Part 1. That is where we talk about the mechanics of how an employee or a caregiver goes about applying for the leave the process that they need to adopt the time they need to get their request in and then the role of the employer to either approve it or not approve it and the reasons why an employer will decline. When I read through new section 30B particularly subsection (3)(a) it talks about 3 months prior to the date of delivery. The negotiated carer would require 3 months before the expected due date. Then we go down into subsection (3)(b) where it says that in all other cases it is 14 days prior. Essentially I am flagging that probably we need some more clarification of when the 3 months apply and when the 14 days apply just so that we are very clear as to when things need to be triggered. I will just leave that there. Maybe the Minister can clarify when 3 months apply and when 14 days apply.If I go to new section 30C I look down and it talks about what is required in writing: the employee’s name the date and then a statement in respect of care for the child during the specified period and the period that entitles the negotiated caregiver to parental leave payments. I guess that calls to mind the question of what happens in a shared leave application. This part here I thought would actually talk about potentially the option to have shared leave. It may be somewhere else in the bill but it does not speak volumes in that part.I move to new section 30E and it talks about grounds for refusal and that is where in subsection (2) it specifies all the reasons why an employer can refuse the request for a caregiver to take leave. It is listed there: “(a) inability to reorganise work … (b) inability to recruit additional staff: (c) detrimental impact on quality: (d) detrimental impact on performance: (e) planned structural changes: (f) burden of additional costs: (g) detrimental effect on ability to meet customer demand.” I guess it goes to the point that my colleague Peeni Henare talked about and that is the resource to ensure that these points on which an employer can refuse an application for leave are actually monitored and monitored fairly so that an employer does not invent a reason to inhibit or decline a paid parental leave application. When I look at that the question is who would monitor that and who would ensure that an employee’s request for leave is treated in a fair way.When I go down to new section 30F it talks about the employee not being able to challenge once the employer has made their determination. Again as I stated at the start of my contribution it is ensuring that the workplaces are fair and accountable and that everyone is given a fair go. These clauses particularly throw up a whole lot of questions.Dr SHANE RETI (National—Whangarei): I move That the question be now put.A party vote was called for on the questionThat the question be now put.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Motion agreed to.The question was put that the amendments set out on Supplementary Order Paper 154 in the name of the Hon Michael Woodhouse be agreed to.Amendments agreed to.The question was put that the following amendment in the name of Sue Moroney to clause 55 be agreed to:in new section 71CE(2) replace paragraph (a) with the following new paragraph:the employee has requested to perform paid work on a keeping-in-touch day with the agreement of the employer; and.A party vote was called for on the question That the amendment be agreed to.Ayes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the following amendments in the name of Sue Moroney to clause 65 be agreed to:add the following new subclauses:(2) In section 7IL replace “18” with “22”.(3) In section 7IL replace “22” with “26”.A party vote was called for on the question That the amendments be agreed to.Ayes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendments not agreed to.Part 1 as amended agreed to.Part 2 Amendments to Employment Relations Act 2000Hon MICHAEL WOODHOUSE (Minister for Workplace Relations and Safety): I am pleased to take the first call on Part 2 of the Employment Standards Legislation Bill. This is the part that among other things goes to the heart of much of the debate that has been going on around this bill pretty much since it was introduced and that is in the matter of zero-hour contracts. I am very pleased and appreciative actually to note that for all the hyperbole around the concerns about the clauses and the various amendments we have actually landed in a place that I think and I hope the majority of the Committee can support.There are a number of people who I think can take credit for that—and I know that there will be a number of people who will claim credit for that but the people whom I want to acknowledge in my first intervention in the Committee stage are actually the officials because they will not say it and they write my speeches and they never mention themselves. It has been a notoriously challenging task to take what we know in principle—and what I think we can all agree on is that the concept of zero hours and those punitive elements of provisions that were creeping into our employment relations landscape should go. The question is what words we use in the legislation to give effect to that that are effective without having unintended consequences and I can tell the Committee and those listening that I have spent countless hours with officials and with others to ensure that we get that right.I acknowledge also the Transport and Industrial Relations Committee as I did in the second reading and others including the New Zealand Council of Trade Unions and Mr Lees-Galloway for working towards being as close as we can get to that common goal. I think we will all agree that there were punitive aspects of employment agreements that needed to go. I just want to put on record my thanks to the officials for the work that they have done.One of the difficulties that we did have through this process I think was in coming to a shared understanding about what zero hours actually meant because it has no formal legal definition—it is not set out in any statute. It is a nomenclature that has crept into a lot of Western jurisdictions particularly the United Kingdom and certainly more recently in New Zealand. So I think it is important at least in framing the debate to inform the Committee of what I think we are talking about when we talk about zero hours.I want to acknowledge Dundas Street Employment Lawyers which in my searching on its website came up with the most succinct definition of what I think we were trying to deal with here. I am paraphrasing from its website effectively in having no legal definition but what we tend to talk about is the engagement with an employee without any reciprocal guarantee of work. In many cases those employees are required to be available for work. I will come back to the question of availability soon. But it is the lack of that mutuality of obligation that is the most punitive aspect of zero-hour agreements. It is the quid pro quo that if I do not commit why should the other party?Too many examples were being brought to the attention of unions and MPs where there was no obligation on the employer to commit any number of hours but an expectation that the employee be available for work often to the exclusion of other opportunities to seek work elsewhere. Apart from being pretty poor and stupid this was actually bad for business in my view. These were businesses that had extremely high levels of turnover as a consequence. As one who has had to run an organisation that has quite uncertain throughput and a 24/7 operation I know it is not that easy but it is not rocket science to roster a workforce that has the right mix of full-time part-time and casual staff and other staff who can be available if necessary in an emergency without resorting to these.So it was with that in mind that we came to what I think was a very strong start point with the bill as it was introduced—and even stronger when it came out of the select committee—but there were still concerns and I acknowledge those concerns. For all of the noise around the fact that there were some who claimed that we had not removed zero hours but rather we had entrenched them—for all of that I did not think we were that far away. I do want to acknowledge the Council of Trade Unions and the Labour Party members of the select committee who were prepared to work together to come to an arrangement that I think strengthens the bill even further.I want to come to the issue of availability because Mr Lees-Galloway does have an amendment to the bill that reflects the question of availability and effectively what it does is it says that an agreement should not have an availability provision unless there is a commitment to hours. Just to reframe that the zero-hour agreements have two dimensions: one is the lack of a commitment to hours and the second is the expectation to be available with no compensation. So when the bill came back out of the select committee it had the second part.I would suggest that at least one of the limbs of those two things needs to be fixed in order to get rid of the zero-hour agreement. So for example it is possible to have a casual employment agreement. Regardless of concerns about the casualisation of employment that some hold I still maintain that casual employment agreements have a place in the employment relations landscape. On the other hand it should not be an expectation that someone on a casual hours agreement be waiting by the phone—that is the availability expectation. The bill as it came out of the select committee allowed for there to be no mutual commitment of hours but it did say that if you want your staff member to be available there has to be a compensation for that.Mr Lees-Galloway’s amendment which I am sure he will speak to—and I do not want to steal his thunder on this; I just want to put on record my views on it—did I think eliminate zero hours. If one of the things that we needed to do was to take away one of those imbalances then effectively requiring the employer to compensate for being available even if there were no hours of commitment in the agreement did that. However I was open to the view that a minor change to the availability provisions that says you can have an availability provision only if there is first a commitment of hours still preserves the goal that we are trying to do and may strengthen it at the margins—I am not convinced but I do not think it harms things. So for that reason the Government is prepared to support Supplementary Order Paper 155 in the name of Mr Lees-Galloway.There are some other changes minor changes—again I think at the margins—that provide better clarity around what the expectations are for reasonable notice for example. This has been another area of complexity because both the availability provision and the reasonable notice provision for cancellations need to make sure that we do not in our efforts to eliminate these punitive aspects of employment agreements have the unintended consequence of ruling out that which is necessary and appropriate in our employment landscape.For example in terms of the emergency helicopter ambulance pilot we do want that person to be available. We do not want him or her to be actually deployed but we should compensate that person for being available. The New Zealand Police obviously needs availability provisions for things like the armed offenders squad and Special Tactics Group and so on. So to suggest that we could get away from the availability and on-call provisions which are an important part of our industrial-relations landscape is not I think what anybody would want. What we have to make sure is that in framing these availability provisions we do not leave ourselves with unintended consequences.I just wanted to put on the record what my understanding of zero-hour agreements are. I am very happy to have that elaborated on or nuanced from other members of the Committee. But I remain convinced that this will eliminate those quite punitive aspects of agreements that are known as zero hours. I think that will be good for employees. It will actually be good for employers too—those who may have been a little lazy in their rostering practices. I think the effect of this and I expect and hope the effect of this will be more in the prevention than the prosecution because this will prompt those who have been a bit tardy with their rostering practices and a bit lazy in their expectations on employees to be more diligent. It is not rocket science; it is good business practice and I think that is what we have got here.IAIN LEES-GALLOWAY (Labour—Palmerston North): Before I embark on my contribution to Part 2 of this bill can I also like Minister Woodhouse make a couple of acknowledgments. The first is to the Unite union. If it were not for the Unite union this issue would not be a political issue. We would not be considering this issue this evening. The second is to the Council of Trade Unions which was there at the beginning of this legislative process and which has been an enormous source of information and knowledge and support in the period of time between the select committee consideration and now and before the select committee consideration as well.Assuming all goes well tonight and going by Minister Woodhouse’s comments it sounds like things are going to go well tonight I look forward to the opportunity to make a few more acknowledgments during the third reading. Can I also acknowledge the officials. The Minister is absolutely right—they have worked extremely hard on this legislation and ought to be acknowledged for that.I have a definition of a zero-hour contract. It is not unlike the Minister’s. It is “a permanent part-time agreement with no fixed hours”. “Permanent”—i.e. not casual. It is permanent in that the employee does have to come to work when they are told to come to work by the employer. “Part-time”—not full time. “No fixed hours”—no guarantee of work. That I understand is the term that was actually used particularly in the fast-food industry for what we term a zero-hour contract: a permanent part-time agreement with no fixed hours. The result of that is people are literally stuck at home waiting for the phone call and then must go into work when the phone call comes.The result of that is people cannot plan their lives. They cannot get a loan from the bank because they do not know how much income they are going to have. They cannot get hire purchase agreements to buy a fridge or a bed or anything else like that. They cannot join sports clubs because they do not know when they are and are not going to be at work. They cannot be available for their children sometimes—you know if their children have got a sports game on a Saturday morning but they are suddenly called into work or likewise if the children have got a school play or something. Zero-hour contracts just stop people being able to live an ordinary decent life. That is why we have got to get rid of them and that is why I am so hopeful that tonight will go well and the result will be that we will get rid of them.There is certainly a difference of opinion about how significant the changes are that we are talking about making tonight. The Government says they are minor. I am less convinced about that. To start with I would like to go to the first change made on my Supplementary Order Paper 155 which makes changes to new section 67E in clause 87 because this is what changes this bill from a bill that entrenches zero-hour contracts to a bill that eliminates zero-hour contracts.I understand—I absolutely understand—that in the public’s mind that is a difficult concept. It is that a bill that we have been saying—and we are quite right in saying this—entrenches zero-hour contracts could actually be changed significantly by changing only a couple of clauses and be changed so significantly that we actually do a 180-degree turn and end up with a bill that eliminates zero-hour contracts. It might be difficult to believe—I can barely believe it myself—but it is true and that is what this amendment will do.So the issue we had with new section 67E when it came back from the Transport and Industrial Relations Committee was section 67E(2) which said “an availability provision may relate to—(a) all work performed under the employment agreement;”. In other words all the work you did under that employment agreement would be subject to an availability provision. In layman’s terms you could be on call all the time with no guarantee of work. That is a zero-hour contract. That is the very definition of a zero-hour contract. That was the fatal flaw in the legislation and that is the bit that we have desperately wanted to change.The other changes are important—there is no doubt about it—but the change to section 67E(2) is the linchpin. Without that none of the rest of it really matters all that much but with that it changes the context for the rest of the bill and it changes the context for the rest of the amendments that are proposed both by the Government and by the Opposition. So this is the important one. For everybody out there who desperately wants Parliament to eradicate zero-hour contracts this is the one that changes this bill from a bill that entrenches zero-hour contracts to a bill that eliminates zero-hour contracts.Instead of the availability provision relating to all work performed under the employment agreement the availability provision may in my Supplementary Order Paper “only—(a) be included in an employment agreement that specifies agreed hours of work and that includes guaranteed hours of work among those agreed hours;”. It also must relate only “to a period for which an employee is required to be available that is in addition to those guaranteed hours of work.”What does that mean in real terms? It is the classic on-call situation that most people in this Chamber will have experienced and a lot of workers have experienced. To be asked to be on call—because that is essentially what an availability provision is to be asked to be on call; in other words when the phone call comes you have to go to work—can happen only if you have guaranteed hours in your employment agreement. So you will have your guaranteed hours and then in addition to that you may be on call.In my younger days I worked at a medical laboratory. I worked a shift during the day and every fortnight or so I was on call overnight. I got an allowance for being on call because you do have to put your life on hold. You certainly cannot drink and you cannot go and play a game of football or whatever because the phone call comes and you have to go into work. If you went into work then you got paid for the actual work that you did. That is a situation that we recognise well and that is what is now going to be the case under this availability provision.So people have previously been required to be available with absolutely no guarantee of work; now if you are required to be available that comes only on top of guaranteed work. That eliminates zero-hour contracts when taken in the context of all the other provisions that are included in this legislation.In the time I have remaining in this call I want to address a question that I have been asked and I really want the Minister to address this one as well. The question that I have been asked is: what is to stop an employer giving someone 1 guaranteed hour and then putting them on the availability clause for the rest of the time? It is a fair question and we have to answer that. The answer to that comes in new section 67E(3B)(c) which says an employer must have regard to “the proportion of the hours referred to in paragraph (b)”—which is “the number of hours for which the employee would be required to be available”—“to the agreed hours of work.” So it would be disproportionate for someone to have 1 guaranteed hour and 39 hours when they have to be under an availability clause.Obviously what is reasonable will have to be tested but that would be disproportionate. That would be an onerous contract. Let this Committee be clear: that is not what we intend at all. If a judge has to look back at this debate and has to figure out what our intention was I want it to be absolutely clear: we do not intend that employers would be able to give people a very small number of guaranteed hours and then require them to be available for a much larger number of hours. The weighting should be such that the majority of time is guaranteed and a few hours—the fewer number of hours—are under the availability provision.That has to be our clear intention from this Committee and I really want the Minister to contribute at some point in time this evening to make it clear that that is the Government’s view as well because without that really we are potentially window dressing. We really need to ensure that that intention is the case. I am confident that it is the case; I just think we have to be absolutely clear in this Committee that that is our intention. Mr Chairman—The CHAIRPERSON (Hon Chester Borrows): No you’re right.IAIN LEES-GALLOWAY: I thought you were going to cut me off there for a second Mr Chairman.So there are certainly other aspects of Part 2 that I am very keen to speak on but not being able to see your clock Mr Chairman I have got no idea how much time I have left—1 minute OK. Well I will talk briefly to the cancellation of shifts because that is the other thing that my Supplementary Order Paper does. Actually you need some bits from my Supplementary Order Paper and you need some bits from the Government’s Supplementary Order Paper 154 to deal with the cancellation of shifts issue completely. But what we do not want to have happen is the situation where employers can cancel a shift at the last minute. That was another aspect of the whole zero-hour contract regime that was inequitable and it was exploitative of workers.We want to make it absolutely clear that workers must have a reasonable period of notice for cancellation and if they do not get that reasonable period of cancellation then compensation must be paid. Furthermore that notice period of cancellation must be included in the employee’s employment agreement so they know up front what the situation is and what the period of cancellation is and that must be a reasonable notice period.Hon MICHAEL WOODHOUSE (Minister for Workplace Relations and Safety): I do promise the Committee that we will not turn this into the “Lees-Galloway-Woodhouse Show” but Mr Lees-Galloway has raised some very important points that I think probably bear addressing now and that will help frame the rest of the debate on Part 2. Actually in doing so my view is that in starting his intervention he suggested that new section 67E(2) inserted by clause 87 was so so important because without it we would entrench zero-hour contracts and he then went on to explain why that was not the case. I will explain what I mean because he has actually raised a very important concern that some listening will have which is that if we came out of the select committee with a bill that allowed people to have an availability provision but no commitment of hours why is it such a big improvement to have the commitment of even 1 hour of work and a provision for an availability of hours? Why does that make such a big difference?He did allude actually to the answer to that question because it is not appropriate—and he did not do this—for anyone to read the amendment in his Supplementary Order Paper 155 in isolation from two or three important clauses in this bill. With respect Mr Lees-Galloway actually articulated the position of the bill without the amendment implying that the availability provision would not be without fetter and that is simply not true. There is no expectation that somebody should be available without other things happening and I want to go through what they are.Firstly in new section 67E(3)(a) an employer cannot just make an employee be available. They need to have reasonable grounds to do so—genuine reasons based on reasonable grounds. I would suggest that saying “I might be busy on Friday night or I might not.” is not reasonable grounds because that is actually what has been happening particularly in the hospitality industry. Then he went on to quite rightly point out the key to this regardless of his amendment which is new section 67E3(b) which states: “the availability provision provides for the payment of reasonable compensation to the employee for making himself or herself available to perform work under the provision.” It has to be in writing—that is what new section 67E(3A) says underneath it. It is not enforceable unless it is agreed in advance. That too is a significant change. These are all changes the select committee has made to strengthen the issues around availability.Then Mr Lees-Galloway quite rightly points out the issue of proportionality and that is the key to this around the guaranteed hour question. There will be a concern perhaps from union members and delegates that there is a risk that an employer makes a commitment to 1 hour of work and then has an availability provision. Firstly it has to be on reasonable grounds. I cannot imagine for the life of me how that could be reasonable but it would be open to them to demonstrate that. And secondly it has to be compensated for. But thirdly as Mr Lees-Galloway says it has to be proportionate. So it is simply not lawful once this bill has passed to say: “I will give you 1 hour but you have got to be available for 39 hours.” Even if that compensation is reasonable it is not proportionate and therefore it would be ruled unlawful under the Act when it is passed.So I think that is really important. I do not want to labour the point about availability or about whether this is a big change or a small change because I think we are going to get over the line anyway but I do encourage members when they are considering these clauses—these crucial clauses—to look at them holistically both with the reasonableness the proportionality and the requirements to compensate for availability and now Mr Lees-Galloway’s expectation that it should be a mutual commitment of hours.I will just finish what I hope will be my last intervention—unless there are some quite specific technical questions—which is around the cancellation of shifts because I think this is a very important issue that requires in advance again there to be very good reasons. We have worked quite hard again with officials to make sure that although we do not prescribe every situation where that might be appropriate we do give broad guidance not just to the employers but to employees as well about when it would be appropriate in the circumstances. I am thinking about the horticulture industry where weather disruptions are pretty normal but the key to this is actually the commitment of hours. So with the cancellation of a shift if you have a mutual commitment of say 16 or 24 hours they would then have to be automatically put into the next day if you have got a commitment to work those hours of a week. There is also a requirement for compensation even if they are extra hours.The CHAIRPERSON (Hon Chester Borrows): I call Grant Robertson.GRANT ROBERTSON (Labour—Wellington Central): Thank you—Hon Ruth Dyson: Good choice.GRANT ROBERTSON: —yes and thank you to my colleague Ruth Dyson for that support. Can I also begin my contribution with some acknowledgments. I am not a person who has been on the Transport and Industrial Relations Committee or been close to this bill but I do want to acknowledge my colleague Iain Lees-Galloway for the work that he has done from our point of view on the Opposition benches on this issue.We went into this discussion deeply worried that we had a piece of legislation that was going to entrench what all of us know have been some of the most discriminatory and exploitative practices that I have seen after hearing from people coming into my office and I am going to return to a couple of cases in a moment. To now be sitting here tonight with a piece of legislation that will effectively outlaw those contracts I think is a real achievement and I want from our side to acknowledge Iain Lees-Galloway for that.I also want to acknowledge the Minister for Workplace Relations and Safety for that because I think the Minister has entered into this in the spirit of trying to find a way through getting rid of those most exploitative of practices. So I want to acknowledge the Minister for doing that as well. As he has noted what is big and what is small is often in the eye of the beholder—maybe a topic the member knows about; I do not know—but it is a change that we think is important and valuable on this side of the Chamber.I want to talk about the same clauses and I do not think there is going be any difficulty in a number of members talking about these same clauses because they are the critical clauses within the bill. It is within clause 87 around the topics of availability and cancellation of shifts. My colleague Iain Lees-Galloway said that his definition of zero-hour contracts was “a permanent part-time position with no fixed hours”. I think that is a nice clear concise definition. But for me it is the people I have met who have been in these circumstances who define what a zero-hour contract is. I have two cases that I have dealt with and I want to use them to explain what I think is being changed here and why I think it is important particularly in new section 67E(2) set out in clause 87 around availability of hours.A young woman who is a retail worker—or who is actually a student but was a retail worker over the last two summers—found herself in the position of being on call. It was precisely like the point that Mr Woodhouse made just before where the reasonable assumption of her employer was: “I might be busy or I might not be busy but I want you to be ready at a moment’s notice for me.” This person who wanted work over the summer period who needed work over the summer period and was struggling to find it accepted a contract that quite frankly she should not have. Had she had advice from a union right off the bat she probably would not have either but she did—this woman did do that.She found herself in almost exactly the position we have just been discussing in the last two interventions of being told to come in the employer would let her stay for about an hour sometimes if it was not busy and—this is literally true—if it was raining or if there was a forecast of rain she would be told to go home because people would not be coming out to shop. That is as bad and as ridiculous as it got for that worker.My understanding of reading the availability provision here is of the vital importance of the linkage between availability and guaranteed hours. Agreed hours of work and guaranteed hours—that is the absolutely critical connection that has been missing. The ability of an employer to exploit a clause that did not link those two things together is the concern that we have had on our side of the Chamber. I take the point that there will be some employers who have just been a bit slack. They have not really tightened up on how to do this. That is a fair comment. Unfortunately as we always find in employment legislation there is that very small minority of employers who actually do this deliberately. They go out of their way to find the loopholes and exploit them and exploit the employees who work for them. We have to have law that stops that.It is not about judging all employers as being bad—it is not; most employers want to do the best by the workers in their firms—but we have to make law that deals with those who have the worst intent. It is the sad thing. It is about what we have to do in this House from time to time and tonight is one of those examples.So new section 67E(2) in clause 87 is the provision—I do agree with my colleague Iain Lees-Galloway—that makes that connection and makes it understandable I think for people. I do take the point the Minister has just made which is that the employer has got to have a good reason—[Bell rung] Mr Chair.The CHAIRPERSON (Hon Chester Borrows): Grant Robertson.Hon Ruth Dyson: Mr Grant Robertson.GRANT ROBERTSON: Ha ha! That is good. There was so much competition I am so pleased you chose me Mr Chair. The employer must have a good reason for requiring the employee to be available for work and I do respect the fact that those two things go together. So the availability clause is not only about linking the guaranteed hours and the availability provision but also about making sure that the employer has that good reason.That will be tested I suspect in time but I think we have heard already in the debate tonight from the Minister and my colleague that the intent of what is being put on the table here is that it is quite a high threshold. I just want to reiterate that the point the Minister made is a very accurate one about—you know the employer says: “I might not be busy.” I think we have got to make the point that that is actually not going to be acceptable in the future and that is a very very good thing.I want to talk in the second part of my call about the question of cancellation of shifts. This relates to a different area of where someone came to see me which is around the area of home care and those people who have contracts to do home care. The example that was given to me was around what happens to a home-care worker when the person whom they are looking after spends time in hospital and what are they contracted for. This will be an interesting case to follow through over time with this new law because the current status of the home-care worker if the person whom they look after is taken into hospital under emergency circumstances is that that worker is not paid. That is actually a direct result of the contract that is awarded to the provider who then passes it on to the person who delivers that care.The person who came and saw me about that really was struggling to make ends meet because our home-care workers are paid so poorly but she was finding that the inconsistency of income and the cost on her was very very high and what that fundamentally comes down to is a question around the cancellation of shifts. I am not pretending today to say I know exactly what the outcome will be for that worker but what I can see in the new section 67G in clause 87 and the various amendments to it from both the Minister and Iain Lees-Galloway is that there is now a much more clear process and a series of steps that should in most good contracts—and that will be the critical element for the case of the person I was dealing with—be able to eliminate people being exploited by cancellation of shift issues.So let us be clear: we have not gone through this yet so far. The new section 67G now reads that “(2) The employer must not cancel a shift of the employee unless the employee’s employment agreement specifies—(a) a reasonable period of notice that must be given before the cancellation of a shift; and (b) reasonable compensation that must be paid to the employee if the employer cancels a shift of the employee without giving the specified notice. (3) In cancelling a shift of the employee the employer must—(a) give the employee the notice specified in the … agreement …; or (b) if that notice is not given pay the employee the [specified compensation].” That is a critical change. It is a change that puts in place a regime that means there can be none of the last-minute cancellations because the weather changes or whatever else it is. We will find that as this goes through I am sure in the cases that will come we will understand what “reasonable period of notice” is and what “reasonable compensation” is but those words are critical in avoiding those problems.So when we put together the availability provisions and the issues around cancellation of shifts we cut to the heart of the big problems that the Labour Party had when this legislation came forward and that was why we were concerned that it had actually become a charter for zero-hour contracts rather than the other way round. I respect the Minister’s different point of view on that but that is certainly how it felt from our side.These provisions mean that as a Parliament we are making a very important statement tonight about what constitutes decent work in our country and that means a lot to those people who work in the hospitality industry and the service industry in particular. They do important work for us. We hear a lot from the Government at the moment about the importance of tourism and about how important tourism is. These are the people whom tourists see. If they feel that they are valued—if they feel that they have got decent work that they have got guarantees that they will be valued and their contribution will be valued and that they will be paid properly—they will be even better ambassadors for our country. In the same way those who work in the service industry looking after older people and looking after the disabled—these are the people whom we charge with looking after the most vulnerable in our society and we are giving them a chance at decent work tonight.JONATHAN YOUNG (National—New Plymouth): Before I make my contribution on Part 1 of the Employment Standards Legislation Bill I also would just like to acknowledge the work and the support of the officials not only to the Minister for Workplace Relations and Safety but to the Transport and Industrial Relations Committee as we went through the process of analysing this bill and heard from submitters from right across New Zealand—employers and employees. I was away when the second reading was heard last Thursday so this is my first opportunity to speak after the select committee process. I just want to acknowledge the members of the committee both from this side of the Chamber and from the other side as well as we have worked to come to a place where we want in particular to protect some of the more vulnerable employees in our country.I want to speak just briefly on the definition that has been articulated here this evening. I think the member opposite Iain Lees-Galloway made the comment that a zero-hour contract was a permanent part-time contract with no fixed hours. I would like to add to that as well because I believe that a zero-hour contract is more than that. It is a permanent part-time contract with no fixed hours and a requirement to be available to the exclusion of other employment opportunities. We need to understand and recognise that right across this Committee every single one of us opposes that definition of what it is. As we went through the select committee process the very principle of this bill that it sought to strengthen was the mutuality of obligation. If there are contracts with no fixed hours that are permanent and part time but have the requirement that the employee be available to the exclusion of other employment opportunities then that is not a mutual obligation committed by the employer to that person.As a committee we looked at these measures and we came back and as the Minister has alluded we strengthened the obligations of the employer and some of these have been spoken about this evening. They have been such that the employer must have a genuine reason based on reasonable grounds for including an availability provision in a contract. In fact if they do not even put an availability provision in an employment agreement they cannot ask a worker to do such. The availability provision provides for the payment of reasonable compensation to the employee for making himself or herself available to perform work under the provision. It is good that we are going to come to an agreement through all of this with the different Supplementary Order Papers that are coming through. I believe that as the Minister and other speakers have said if there are agreed hours and guaranteed hours it is going to do no harm and potentially good in terms of this bill.What I am saying is that all the work that we did in the select committee process that is now in the billin clause 87 new section 67E(3B) and (3C) onwards in terms of putting far greater obligations of reasonable compensation means that an employer cannot expect somebody to be available without a mutual obligation towards that person and that there would be compensation—and reasonable compensation—made available if they ask that employee to do that work. Then the number of hours for which the employee would be required to be available would have to be proportionate to the agreed hours of work. All of these measures are there. They are strong measures and I believe they are achieving some really good outcomes in this area which we understand is called zero-hour contracts.My view is and I am sure that as we come through this whole process of working through the Supplementary Order Papers we will come to a happy place of agreement. We will see that there will be minimum standards of employment that are reflected in what is written even now in the bill before the Committee and then the added Supplementary Order Papers will add to them as well. We will see that there will be opportunities for people to work with flexibility—with the employers; with employees—but that there will not be that ability for the vulnerable to be exploited. I believe that that is a good thing and is a thing that members in this Committee would all agree with. Thank you.JACINDA ARDERN (Labour): I want to start in a similar vein to my colleague Grant Robertson. I remember watching some time ago a long form interview with Minister Michael Woodhouse around zero-hour contracts and I did at that time detect a genuine concern about what was happening in the labour market. But of course it was our role as the Opposition to make sure that any expressed concern was translated into very explicit legislation and that is where I join my colleagues in highlighting again the really important role that the Opposition and particularly Iain Lees-Galloway has played in making sure that we allow not one crack of light to be available for zero-hour contracts to remain in New Zealand legislation.On first blush that is exactly what this bill did initially allow. It allowed enough loopholes to remain so that zero-hour contracts as we know them would still exist in New Zealand but this of course was the vehicle we needed to use. If we had simply voted against the bill we would be leaving the situation to hang and that would mean that those contracts would still exist as they do now. So we were as constructive as we could be through this process and Iain has done a fantastic job of getting us to the point where with the support of the Minister we now have amendments on the Table that will bring these contracts to a close. So Iain that is fantastic work but obviously having the Minister come on board with that has been critical to this process as well and we acknowledge that.I want to come back to some of the really excellent points that have been made in the regulatory impact statement around the clauses in Part 2 particularly around new section 67C “Agreed hours of work” in clause 87. It is quite difficult to size the number of employees who will be directly affected by this clause but in the regulatory impact statement the officials have made an attempt to size the problem. We do know as has been touched upon that those workers most affected by new section 67C are likely to be those who are working in the service sectors—so the retail trade accommodation and food service sectors. There are 314000 people roughly working in those industries. We can drill down a little bit further than that though. The centre for labour employment and work found that 61 percent of the collective agreements in the food retailing sector did not state ordinary weekly hours of work—61 percent of collective contracts in that space. So that gives an indication of the scale of use in particular service sectors.The reason we should be doubly concerned by that of course is the level of vulnerability for people who are working in those sectors and the regulatory impact statement touches on that. But what baffles me is that although we are talking about retail trade and particularly food retailing there is a certain level of predictability around those sectors in terms of demand.I myself have worked in that sector. I was a checkout operator for a number of years. We knew when the busy times were and anyone in this Committee who has been to a supermarket in Auckland on a Sunday knows there is a certain level of predictability around trade in that sector. I would say the same for the food retailing business particularly fast food. Again I had the dubious honour of being a worker at KFC for about 6 months. Interestingly I was not employed directly as a KFC worker but I was a contractor who job-trained people with intellectual disabilities. So I was there at KFC to job-train a young man with autism. I was in that place long enough to know the predictability of trade in that sector as well. So you cannot tell me that it is impossible to give a certain degree of certainty for workers in those industries and that is obviously what this legislation will now require and that is absolutely reasonable but why is it that we are seeing that happening in these particular sectors?Why is new section 67C so necessary to weed this out in those particular sectors? Well I think what is interesting—and it is brought up in the regulatory statement—is the use of part-time employees over casuals as a way of securing employees. So it is a way of putting dibs on individuals and securing them for your business but then giving them really uncertain shifts and hours. All that does of course is shift the uncertainty from an employer who has the ability to make greater judgments about those ebbs and flows for their business and who is obviously in a more powerful situation than the employee—it shifts that risk from the employer to the employee who is the more vulnerable in those situations absolutely. Of course where there are extremely tight margins or where there is extremely tight competition in a sector that is where we are seeing these contracts being used and that is utterly unfair because that is where the power imbalance is so strong.So in the regulatory impact statement around the problem definition I believe the officials are absolutely right to say that the root cause of this problem is an inherent power imbalance but even having said that to claim that where there is a more powerful employee—that is such a subjective thing to determine whether an employee has the power to push back on an employer around guaranteed hours. It is very hard to distinguish when someone is in a situation where that is going to be an easier position to negotiate from. That is why regardless of the sector and regardless of the power relationship it needs to be removed because it is inherently unfair—it is inherently unfair.I think it is also useful though that the problem definition around why we have come to the point of having new section 67C is fleshed out even further in paragraph 18 of the regulatory impact statement. To anyone who has not read it I really recommend it. It talks about the fact that actually this becomes problematic for the labour market generally. A labour market is not able to function efficiently if employees and their extra capacity are locked into an arrangement with a singular employer who then is not giving guaranteed hours. That may—and I would be interested in this because I am not sure whether it is true. To what extent is our increasing figure of those who are under-employed courtesy of this kind of practice in the employment market?Of course the figure that we see for the underemployed which is growing is people who would like additional hours but who cannot find them in the market place. To what degree are those people unable to find those additional hours because their employment arrangement basically means that they are unable to go out and seek that additional work? They are locked into an arrangement that gives all of the power to an employer which deems them unable to fill the unknown quantity of work because they are essentially constantly on call without any compensation for that. So if we did not have new section 67C redrafted the way it is it would contribute ultimately to a labour market failure.But I do think it is also interesting to see that there has been some analysis to say that these unfair provisions have been used in place of proper due process where an employer has performance issues. So instead of sitting down and working through those performance issues and using the process that is set out in legislation employers were using these powers that essentially pushed people out of work without having to go through due process. Another reason—because it was never the intention of this Parliament that rather than have due process someone would simply be forced out in almost a pseudo-dismissal process.Another point that I think is really important to make is the impact that this will have currently on people who have an interface between their work hours and their income support from Work and Income and who have such uncertainty about their work. How do they get their income support from Work and Income if that is required to be topped up when they have that level of uncertainty?Many of us will have seen this in our offices. I have had an individual come to me at one point who had total uncertainty around their hours—absolute uncertainty. The hours for that individual were not guaranteed and they required a top-up from Work and Income. Work and Income told them to quit—it told them to quit. That is what that individual employee was eventually driven to do because they could not support themselves and Work and Income found it too difficult to work around the uncertainty of their contractual arrangement with their employer.That is the flow-on effect of legislation that we are amending today and why it is so important. Absolutely we support it.SUE MORONEY (Labour): It is a pleasure to rise and take a call on Part 2 of the Employment Standards Legislation Bill. It is kind of hard to take this call without starting it off by saying “Well we told you so.” because on the Transport and Industrial Relations Committee we on the Labour side tried very very hard to convince the National Party members. We hoped that they were talking to the Minister for Workplace Relations and Safety at the time to actually do the right thing and tighten up the provisions so that zero-hour contracts were gone from legislation. I think Minister Woodhouse to be fair if that was just a small amount of distance then we ought to have been able to sort it at the select committee. It should not have been reported back to the House needing all these Supplementary Order Papers that were negotiated afterwards if in fact it was just a small divide.The truth is that the things that have been subsequently agreed to make all the difference in terms of a level of job security and the ability of people to have certainty over some guaranteed hours of work. Having the provision in here to have guaranteed hours of work is no small matter for those people who have been sitting on these zero-hour contracts with no option otherwise. For them to have guaranteed hours of work that will be proportional to the hours of work that they are to be available for is the crux of the matter. That makes all of the difference in terms of how vulnerable they are their ability to plan their ability to be involved not just in paid employment but also life—because that is important as well—and their ability to be able to go to a bank and talk about their guaranteed hours of work and to talk about what their salary will definitely be as a minimum every week or every fortnight.Those things matter. They make a big difference to people’s ability to be able to participate fully in society. For the Labour Party having people being able to participate fully in their society is a very important thing. In fact we go further than that and say that we want everyone to have access to the Kiwi Dream. Certainly sitting at home waiting for the phone to ring because that is your only opportunity of getting any income at all that week is not elevating for this country.In fact I will just say very honestly to the National members that they are lucky that they had Iain Lees-Galloway to be dealing with over this to help them through it because Iain Lees-Galloway tried that once before with the Health and Safety in Employment Amendment Bill. The Government failed to take our advice on that count and that turned into a complete and utter shambles. So perhaps those members learnt something through that exercise but I am going to say that they are very lucky that they had Iain Lees-Galloway to work through this issue with. Of course I have been one of the other two members from the Labour Party on that select committee. I am still in the “never trust a Tory” category after having been done over by them once when I took them at good faith around paid parental leave so they are very fortunate indeed to have Iain to be dealing with.The loopholes that have been used by—and I will call them lazy employers—lazy employers to not roster work appropriately and therefore give people some certainty and some security will be closed down by the provisions that we are recommending here for Part 2. Should those lazy employers—well you know that is probably being nice about them actually because there are lazy employers. Sorry I will start from the big group. The big group is the good employers actually who understand that people’s livelihoods and the way they earn those livelihoods is a huge part of their lives but it is part of their lives and they have another part of their lives as well. Most employers get that.In fact the fascinating thing about the select committee process was when employers came to do their submissions. I have got to say almost all the questioning of those employers was happening from the Labour Party side of the equation to find out exactly what was going on. Those employers—almost all of them told us that actually they did not need zero-hour contracts. They did not want them.Phil Twyford: They didn’t like them.SUE MORONEY: They did not like them and they do not need them. They said “What we need is the ability to have a permanent workforce for the work we know is permanently available. We need the ability to have fixed-term contracts for the occasion when there is a particular project that we want to take on or there is a seasonal need for increased work. And we need the ability for properly casual work to”—I was going to say “to deal with the peaks and troughs” but it is actually the peaks that is the reality—“to deal with the peaks.” That is what they said they needed. Those are the good employers.What was surprising about that in a good way was that the employers who were most clear about that were the employers from the home-care sector which a few of my colleagues have raised already. They could have been the employers whom we expected would need the maximum amount of flexibility in their labour market but what they have learnt over the years is that if they require that level of flexibility from their employees they end up not being able to guarantee getting the quality work done that they need for their clients. So they have gone through a process with unions and are working out how to actually maximise the most guaranteed hours that they can for their workforce and I commend them for that.But we did have the odd employer who came in—and the one that sticks in my mind I have got to say and perhaps it is because I did once work for them a long time ago in the past is McDonalds which said that it did not use zero-hour contracts. But what it ended up describing to the select committee—under intense scrutiny from the Labour Party I have got to say—and in fact what it was using was the definition of zero-hour contracts that both sides of the House have used which is permanent part-time work with no fixed hours.Jonathan Young: And?SUE MORONEY: Despite the fact that it knows—end of story. Despite the fact that it knows that its restaurants are going to be open for a certain number of hours that they are going to be open on certain days and that there will be a minimum number of employees it needs to staff those restaurants on those days and in those hours that they are open for it would not even guarantee those permanent shifts as being available for employees. That keeps people vulnerable—that keeps people vulnerable.People listening to this debate may be starting to get concerned about the complexities of some of the amendments that are being made. I have a simple message for those people: join a union—join a union. That is the best way to get job security because it is the unions that will be able to negotiate their way around all of these issues. It was the unions that raised the zero-hour contracts issue at the outset and so that this Parliament could deal with them. In order to get work that is decent work that people can have certainty about where they will know that they will get the good provisions negotiated into their employment agreement for availability and for cancellation of shifts join a union. That is going to be by far and away the best way that people can make sure that this piece of legislation works for them.I want to put on record that the position of the Labour Party is that we believe that this will deal with the zero-hour contracts issues because it guarantees people minimum hours of work. That is incredibly important. That will change this situation for thousands of these workers. I also want to put on record that should those lazy or unethical employers find loopholes around that Labour will find those loopholes and it will close those loopholes if they ever present themselves. So that is the commitment that we give from this side of the House.People might be surprised to learn of the types of submissions that we heard on Part 2. They might be surprised to learn that yes it was some of the hospitality sector and some of the accommodation sector employers who came to see us but it was also lawyers. We actually had a submission from a female lawyer who told us that she was on a zero-hour contract. She described the situation as one with lots of law graduates looking for work where employers were taking advantage of that situation by using the skills experience and the education that the graduates had invested in for themselves. Graduates were using their law degrees but employers were not prepared to give them permanent hours of work even though those permanent hours existed. We have got more work to do on this.CLAYTON MITCHELL (NZ First): I rise on behalf of New Zealand First to take a call on Part 2 of the Employment Standards Legislation Bill. I just want to start my contribution by saying that there have been a large number of fantastic contributions in the Committee tonight. I do have to say I had a smile on my face on the news tonight with regard to the Māori Party Labour and the National Government all trying to take credit for fixing this problem up. In actual fact credit really needs to go to the people of New Zealand who have clearly stated that they actually want zero-hour contracts removed from legislation and not to have them legitimised. So well done New Zealand—well done for speaking up. I would also like to take the opportunity to thank a number of the people from the New Zealand Council of Trade Unions which has worked with New Zealand First along with some of the other parties to come up with better ways of addressing some of these problems particularly around zero-hour contracts.I have to say just finishing off what Ms Sue Moroney has just been speaking on about one of the submitters who came into the Transport and Industrial Relations Committee to talk to us about her concerns—what Ms Moroney was saying was not actually 100 percent correct. It was actually a casual employment contract that the submitter was on which was turned into a zero-hour contract. She was basically in a casual employment agreement with a law firm and as a very intelligent woman who is a solo mother looking after her young people she found herself exposed to being vulnerable in that there was no guaranteed number of hours and she was pretty much just a casual—as and when required. It just shows the vulnerability of even our educated sector because we stereotype people so that if they are vulnerable they have got to be uneducated or they have got to have low-earning jobs but that is not the case.So my question to the Minister in the chair Mr Woodhouse—if you could indulge us to stand up and take a call on this I would very much appreciate it—is what are we going to do about the people who are vulnerable under casual employment agreements? Because we understand that in a modern-day workplace the importance of having casual agreements—we understand part-time and we understand full time. We have heard the commendable result in today’s discussion with regard to the outcome of getting rid of zero-hour work contracts and to that end New Zealand First is in a position of support—so that has changed from where we have come from. But we are still very concerned about the involvement of casual employees being exploited not through zero-hour availability clauses but through just being sort of as and when needed and as required.As we step into Part 3 I would urge you to take a look at Supplementary Order Paper 150 put forward by New Zealand First with regard to that because we believe that that will clear it up. We have support from Labour—it has been given to me today that it will be supporting it—the Greens will certainly support it and we would love to see Government support for that because it is very important. We will get to that in a moment but Minister if you could explain what steps the Government is going to take to indemnify if you will those vulnerable workers under casual employment agreements.I could not speak more positively than on this change—this much-needed change—in our working environment. I think we have seen over the years a direction that is getting towards having a better working place where there is a balance for workers and bosses employers and employees—whichever way you want to say that. A real balance of relationship in any relationship—whether it be a personal relationship a supporting relationship or one with a friend but certainly in an employment agreement—is when both parties have equal power. I think what this employment agreement amendment does is it actually restores the balance of power for the employees to empower them to be able to stand up and rightly say: “This isn’t fair. I am not happy about that.” That takes me into some other parts of the bill because I do not want to readdress what has already been strongly spoken about which is the removal of those zero-hour contracts.What I also think is that Part 2 has got some very very positive aspects and one is that the inspectors and the individuals now have the power to enforce. Once it was just down to the labour inspectors; now individuals can actually take umbrage and take action towards an employer if they feel there has been some injustice or an imbalance in their agreement. I think the higher penalties that have been put forward are another huge incentive for employers to act more responsibly in their working environments towards their employees—those penalties for an individual are now going to be up to $50000 and for a body corporate up to $100000 or three times the amount of money that has actually been sought or lost by the employee. I think those are certainly some good punitive penalties coming through there.We have got declarations of breaches in new section 142B in Part 2 of the bill and compensation orders made by the court. What I like to see are these banning orders that have been brought into Part 2 with some very very hefty penalties of $200000 if there has been a breakdown and a continual abuse of these parts. The parts around the requirements to keep records are I think very very important and I do actually look to support the Greens’ Supplementary Order Paper 151 with regard to that because even salaried workers can find themselves in a position where they do a little bit extra here and they do a little bit extra there and all of a sudden it becomes normalised—it becomes just what they have always been doing. So for salaried workers there is a potential loophole there coming from employers not keeping a record of the hours that they work where the employer could actually take advantage of them. We do support the fact that all records of employees should be kept and should be available for scrutiny to make sure that there is not a disadvantage for anybody salaried or otherwise. It is not an onerous expectation.I also like the fact that there is no ability to indemnify the employer by insurance to let them get away with malpractice of employment. I think that as opposed to parts of the Health and Safety Reform Bill which did not allow this to happen this is a completely different situation where I think it is necessary to take that availability to indemnify themselves with insuranceaway from employers. Again another part of Part 2 that I think speaks very very strongly of the new direction is the inability of employers to take unlawful deductions from employees. We have heard many many cases where staff have had deductions taken whether it be a restaurant worker with a table doing a runner or whether it be a fuel station worker—or a petroleum dispenser as they like to be referred to—where somebody has run off without paying and then those deductions have been taken away from their wages which is unreasonable. Certainly this new piece of legislation addresses that.I would also like to say to wrap up my contribution that Part 2 shows some very very positive changes. It has certainly been a long time coming and we look forward to Part 3 and a contribution from the Minister in the chair himself with regard to casual employment and how that is going to minimise any exploitation of those workers. Thank you.Dr DAVID CLARK (Labour—Dunedin North): It is a pleasure to rise and speak to the bill before us. I want to start first by congratulating my colleague Iain Lees-Galloway on the excellent work that he has done in getting this bill across the line. It speaks to basic Labour Party values of course. The course of action needed was clear. But actually it is often hard to achieve the kinds of things we would like to achieve from the Opposition benches.I got a little taste of that with my Mondayising bill to Mondayise Anzac Day and Waitangi Day which became law eventually but against the Government’s will. When the Government did not want to make those changes it took a great effort to get the smaller parties together to recognise the importance of making the change and perhaps even more important than that to get the public of New Zealand behind a change and to enable them to understand the complex laws that get put through Parliament in a way that boils it down to the basic stuff.What we have got here in terms of zero-hour contracts has been put out there into the wider realm and 56000 people I understand signed the petition to bring an end to them. Iain Lees-Galloway has led that work and we now have this positive change before us. So I congratulate him and others who have worked towards this end.How does this come to pass? How does it come to pass that we are in a world where we have this kind of insecure work? There were submissions made to the Transport and Industrial Relations Committee. I have flicked my eyes over a couple. I have also seen the submission which people carried and used as a resource from the Council of Trade Unions on vulnerable work. Part of it is of course around the fact that we live in a globalised economy. Labour’s Future of Work Commission project is designed to deal with the issues that that presents in terms of shifting to a higher value diversified economy; the research and development tax credits that we know would make so much sense for our economy; the investment incentives to grow businesses that are in the weightless sphere; and capital debt.But I come back to this particular aspect in terms of the zero-hour contracts that are no longer going to exist as a result of the excellent Supplementary Order Paper in the name of Mr Lees-Galloway. That is there to protect the downsides of globalisation which we know will be there in the transition to this higher-value economy that we want to have. It is to look after the vulnerable workers to make sure that those who are in the position that they cannot negotiate against a global trend are protected. So in the Supplementary Order Paper there is a very clear set of provisions that will be put into law to make sure that those people are protected that the vulnerable workers are looked out for and that decent wages and decent working conditions can be guaranteed over time.Let us face it. Nobody wants their kid or their workmate or their family member to be on a contract where they cannot guarantee to pay the rent or the power or for the food every week. Nobody actually wants that for anybody they care about. I do not believe that the majority of New Zealanders want that and that has been shown in the incredible support for these changes that have been brought through in Part 2 of the bill in the wider social movement that has supported that and in the support within this House eventually for getting rid of zero-hour contracts.So again my congratulations to Mr Lees-Galloway. His Supplementary Order Paper amends clause 87 to ensure that there are guaranteed hours to start with to make sure any contract that has flexibility within it does actually have those guaranteed hours. You cannot start with zero hours guaranteed. And then if you are going to have some on-demand aspects of a contract the employer is now required through the changes being proposed to be specific about when and how those changes would take effect. So they cannot just pluck something out of mid-air. They cannot pluck something unreasonable out of mid-air.Most employers we all know and would acknowledge in this House would not do that. This legislation like much of the legislation we put through this House is designed to guard against the worst abuses that can happen when employers who are not good employers and often are not very effective or profitable in their businesses resort to the weaknesses that they can see in order to make ends meet. That ends up harming people and stopping them meeting their ordinary everyday commitments such as their ability to commit to a mortgage. We know we have got the lowest homeownership rate in New Zealand since 1951 and that problem is just getting worse every year. It is because of labour provisions like this that people cannot commit to that future expenditure. That is why this Supplementary Order Paper from Mr Lees-Galloway is so important.The second thing his Supplementary Order Paper does is ensures that there are genuine reasons. There must be reasonable grounds for having an availability provision at all in an employment agreement. So they have to meet a test of reasonableness. They have to have specific provisions. There cannot just be provisions that they can vary. They must specify why and for how many hours. That is clearly specified in Mr Lees-Galloway’s Supplementary Order Paper. The third thing that is very clear to me is that a shift cannot be cancelled at all unless the employee’s agreement specifies it. It must be done with a reasonable notice of cancellation.STUART NASH (Labour—Napier): First of all I would like to congratulate Iain Lees-Galloway on the fantastic work he has done on standing up for those who do not have a voice who are disenfranchised or who are unable to stand up for themselves—I say very much congratulations. The interesting thing is I put a post about this on Facebook. There was one negative comment. The reply to those comments from a whole lot of different people was astounding. The reason I say that is that you do not have to be on a zero-hour contract to think that they are simply unfair. I think the foundation of New Zealand is built on fairness. We do not like to think that we are being treated unfairly; nor do we like to see others being treated unfairly.Back to the bill. I would like to talk about clause 83 which amends section 3. Replaced section 3(a)(v) inserted by clause 83(1) states: “by promoting mediation as the primary problem-solving mechanism other than for enforcing employment standards;”. I am a huge fan of mediation for a number of reasons. It saves costs. It saves time. It does not clog up the courts. It is non-binding. It is different from arbitration. Arbitration is binding; mediation is not. So if you really do not like the outcome there are other remedies you can seek. But it is an incredibly effective way to solve disputes and nip them in the bud.But one thing I would like the Minister in the chair to talk about is how this is going to take effect. We have a very effective organisation within the Ministry of Business Innovation and Employment and it is called Employment Mediation Services. The problem we have is that on 1 December last year Employment Mediation Services put out a proposal saying it was going to restructure: “The location of our offices does not always correspond to where the demand is which means we are unable to respond to regional challenges over time.” The thing about this though—at the moment there are mediation services in Auckland Palmerston North Dunedin Hamilton Christchurch and Wellington. These are widely used. It shows that clause 83 is actually very relevant because mediation services are a very important part of the whole employment process.But what the proposal put forward by Employment Mediation Services outlined was that it is going to do away with the Palmerston North office it is going to do away with the Dunedin office it is going to do away with the Napier office and it is going to centralise these services in Auckland Manukau Hamilton Wellington and Christchurch. In terms of mediation let me outline the importance to the regions of effective mediation. In Napier for example in 2010 there were 256 mediation cases heard. In 2014 there were 332. In Palmerston North last year there were 232 cases heard Hamilton 615 Dunedin 266 and in Auckland there were 1541 cases heard. The point I am making here is that mediation is an incredibly important way to resolve disputes between employers and employees. This is not always an employee with a grievance against an employer. It can be that an employer has a grievance against an employee. Either way we need to retain these mediation services in the form and the locations they are in at the moment.According to the Ministry of Business Innovation and Employment website the restructuring was going to be known in mid-March 2016. If I look at my watch mid-March 2016 is about now. So let us hope the Minister for Workplace Relations and Safety can actually tell us what is going to happen to Employment Mediation Services especially in light of this. And this is the first clause in the amendment to the Employment Relations Act where it talks about promoting mediation as the primary problem-solving mechanism—the primary problem-solving mechanism. And what the initial proposal put out by Employment Mediation Services said was that it was going to contract services out. So this was a further hollowing out—The CHAIRPERSON (Hon Trevor Mallard): OK I am now going to interrupt the member. He has been very repetitious when he is not being irrelevant. So I want to encourage the member in the 10 seconds he has got left to try to stay within the rules.STUART NASH: Thank you Mr Chair. I suppose—and you are right Mr Chair I have been repetitious but the reason I have is that I want to make a very clear point: mediation services are vital not just in the big city centres but right across the regions.CATHERINE DELAHUNTY (Green):Tēnā koe Mr Chair. Tēnā koutou e Te Wharenui ko tēnei pō. I really want to congratulate the people outside this Chamber tonight as well as the people inside this Chamber who are making this work. I want to stand up for the value of organised labour because without the organisation and the challenges put out by the people on the streets through this campaign I doubt that we would be here tonight. So I think it is a matter of congratulations due to the organised labour to the union organisations that took this to employers and said before it even came to Parliament: “We don’t need this in this country; this is not what we’re about.”And so Part 2 is an example of sensible policy responding to the leadership of the people on the streets. For example when the Unite union went to Restaurant Brands and said to them “This is not good. We do not need these multinational food chains to take advantage of vulnerable workers.” it was actually really encouraging to hear Russel Creedy say that when the union approached the company about providing better certainty over working hours he immediately saw that change was needed. So to quote him: “Having permanent staff who stay with us—loyal long tenure—is part of a successful business model for our industry”.So that is leadership on both sides: the people who organised the workers and approached the unions and then went to the employers and got that kind of buy-in and then there are the people who have had to go further. For example although Burger King and Restaurant Brands which owns KFC Pizza Hut and Carl’s Jr—I do not know these companies because I do not eat this kind of food—actually they were good but McDonald’s was a problem and Wendy’s was a problem. There had to be protests and demonstrations. There had to be an international day of strike action by fast-food workers. And that is a tribute to the fact that people need to be organised.One of my fears about this country is that young people do not understand at the moment what a union is and do not understand the value of it until they have an experience like this. Many young people are responsible for this bill and for Part 2 because they got involved they stood up for themselves and they pointed out that being on minimum wages with uncertain hours—people who walked into these places coming to all shifts but not given any more hours. These people stood their ground protested loudly and slammed zero-hour contracts. So they helped us do the right thing.We do not live in this magnificent moralistically pure ethical bubble where we make great decisions on behalf of the country. That is actually not how change happens in this country. It happens because people will not be silent because organised labour will represent them because they join unions and because they stand up.I also want to pay tribute in part particularly to the work that a number of people across the Chamber have done on the Transport and Industrial Relations Committee but also to Denise Roche for putting up her earlier member’s bill which had some very clear provisions related to Part 2 that again were a serious contribution that needs to be acknowledged. It would have guaranteed employees a contract with fixed minimum hours for employees who are in the practice of working regular hours after a period of 90 days of work unless the employee opts out of the arrangement. Notice where the power lies: it lies with the employee having the ability to opt out.Denise’s bill which she withdrew when she saw that the Minister for Workplace Relations and Safety was making public statements in support of getting rid of the zero-hours contract bit of this bill also had a part in her bill that said “remove the ability from employers to put in exclusivity clauses in casual contracts which forbid workers from seeking other employment from other employers.” And I have heard good speeches tonight from right across the Chamber about why that is anathema. And so all credit to Denise Roche and to everyone else who put up Supplementary Order Papers but also put up bills during this process in response to the great work of the people on the streets saying: “This is not good enough.”I just want to make the hair stand up on your head or the back of your neck or wherever a bit. In the United Kingdom where this legislation went through some time ago the Office for National Statistics said that last year the number of people reporting they work on contracts with no minimum hours has risen to 744000. It has increased by almost a fifth in the last year spiking concerns that employers are turning to this arrangement to cut back workers’ pay and conditions. So it is great that these Supplementary Order Papers on Part 2 will not allow this to happen.DENISE ROCHE (Green): It is my pleasure to take a call on Part 2 of the Employment Standards Legislation Bill. I have no doubt that the Minister for Workplace Relations and Safety when he first mooted this bill was absolutely genuine in wanting to address the whole issue of zero-hour contracts and the other areas of employment where workers were being exploited. Other people have spoken about those things like where garage attendants were having to pay when people had run off with the petrol without paying for it and it had come out of their wages. All those sorts of issues were indicative of an industrial relations environment where the power was skewed towards the employer where the protections that had been built up over generations through the union movement had basically been eroded. We know that the employment relationship is not an equal relationship; this is acknowledged in the Employment Relations Act itself. I believe the Minister in his absolute genuine attempts to want to address those inequities and I applaud him for it.I also like others in the Chamber before me want to acknowledge those who have worked on this bill particularly the officials and particularly the work that they have done in the last week which must have been at times quite demanding. But particularly I want to acknowledge the union movement. The Unite union was one of the first unions to take on the campaign around zero-hour contracts and it did this with its members in the fast-food sector. It was their work highlighting the impact on everyday working New Zealanders who were guaranteed no hours whatsoever who had to sit and wait to be contacted by their employer who could not pay their bills and who could not plan their lives. It was their work in highlighting this—and I might add John Campbell on one of his last shows—showing the public of New Zealand that this kind of bad treatment of employees happened right across New Zealand. I believe that is what sparked this whole movement towards shifting this Government to a situation where it decided that it had to—it absolutely had to—take some action to address what is essentially incredibly unfair action from employers.I just want to talk in detail about Part 2. In the second reading when this bill came back to the House I said that this bill was a different beast from what had been introduced in the first reading and it was. In the Transport and Industrial Relations Committee there had been great arguments some fantastic submissions—particularly the 10500 written submissions from working people right across New Zealand—good submissions from employers who also said they do not want zero-hour contracts. During the select committee process we did actually manage to strengthen the clauses in the bill around compensation for shift cancellations and around notice but actually Iain Lees-Galloway was correct in his statement earlier tonight that when this bill came back to the House it did not actually address zero-hour contracts; what it did was enshrine them in the legislation.So it is incredibly heartening to see and to hear Minister Michael Woodhouse say tonight that he will support Supplementary Order Paper 155 from Iain Lees-Galloway which does actually put in place a guarantee of minimum hours. It goes hand in hand with the other provisions in the bill around notice compensation and proportionality—that is the number of guaranteed hours versus the number of hours that a person may have to be available. And that deals with the whole issue of exclusivity: the whole situation where a worker an ordinary working person may have no guarantee of hours but may also be prevented from finding alternative work which leads to all sorts of difficulties as you can well imagine.The commitment to guaranteed minimum hours is a major step forward and it is the crux of destroying any attempt to legalise zero-hour contracts. I also want to address some of the issues that are in the Supplementary Order Papers particularly in the one that I am putting forward Supplementary Order Paper 151. One of the issues that did concern me was around the availability of hours for workers on salaries—and I was concerned about this during the select committee process as well—and that is that within the bill as it came through to the Committee of the whole House salaried workers would have been able to be on call for a non-specified number of hours and not receive compensation within their whole salary payment. I do not think that is reasonable because it puts them into a situation where they could be working many many many hours beyond what they had signed up to do.We have seen exploitation of salaried workers time and time again in the hospitality sector in particular where I think it was the Masala restaurant that employed a whole bunch of migrant workers on salaries. They were working 70 to 80 hours a week and they were on call for extra hours and actually the hourly rate turned out to be around about $2 an hour. This was for a whole pile of workers who worked there. So I was concerned about the whole protection for salaried workers which is why I have also put up a Supplementary Order Paper in Part 2 and I think in the next part as well.I think we have to recognise that the industrial relations scene has shifted significantly since this National Government has been in power. We have seen more and more and more cases and every MP—on this side of the House at least—will be able to give you examples of ordinary working New Zealanders who have been exploited at work; who have not been able to pay their bills because they have had illegal deductions from their wages or they have had no guarantee of hours; and who have been told by Income Support that the job offered to them despite having no guarantee of hours was in fact a job which took them off their numbers and so made their statistics look a lot better.I think we have to recognise that in this business in this House our duty is to provide laws that are for our most vulnerable and that is what industrial relations law is about. There is already flexibility within lots of legislation around industrial relations which enables things like casual workers permanent part-time workers and fixed-term workers as well as being able to be on call. We have had that throughout our industrial relations systems for decades and decades and decades and it has been tested in our industrial relations legal framework. The rise of the zero-hour contracts that we have seen over the last 10 years has been because employers have felt that they could get away with it. That has been led by the Government and its attitude to legislation.I want to thank the Minister for stepping back and stepping up for the most vulnerable here but we all have to recognise that power is never handed over voluntarily. It is the fact that there are thousands and thousands and thousands of New Zealanders who have supported this that has shifted you into the right place and we thank you for it.Hon DAVID CUNLIFFE (Labour—New Lynn): I appreciate this opportunity to take a brief call on the stuff that is at the heart of this Employment Standards Legislation Bill and that is the stuff on zero-hour contracts. I want to reflect on the changes that have been achieved: firstly what they are why they are bad news and how this bill as amended seeks to make sure that they never darken the doors of our employment relations again. It is well known I think by people out there that zero-hour contracts are iniquitous because they are unbalanced. The employer can require an employee to be available at any time and the employee has no guaranteed hours of work and that is a completely unsatisfactory state of affairs. It reduces the employee to the stuff of an object and that is not OK in this country.One little example on the boundary of my electorate is Kelston Girls’ College which tells me on this International Women’s Day that its absenteeism has gone through the roof because of casualisation of labour meaning that parents cannot plan their household stuff so children are required to stay home to look after the elderly. Casualisation is bad enough; zero-hour contracts make that even worse by making it a completely unbalanced employment relationship.I want to acknowledge Iain Lees-Galloway and the Labour team that have worked constructively with other parties on this bill. I think it is no secret that the stuff that is at the heart of this is the fact that the Government has moved because it had to because minor parties came to our position which was very clear: that the original draft of this bill did not deliver on the Government’s stated commitment to outlaw zero-hour contracts. We will not actually know until the third reading—the end of the Committee stage—whether in fact the fine print measures up but we will be watching like hawks.In particular there are three things that we are concerned about: firstly we want to remove the ability of employers to put people on contracts where they are on call with no permanent hours. Being on call can be fine in some contexts provided people are fairly remunerated and the stuff that goes with that. Secondly employers should not be able to cancel shifts at the last minute. The idea that an employer can simply cancel a shift when they like should not be normalised in law. Thirdly where practical hours of work should be included in the stuff of employment agreements so that people can plan their lives with some security. Zero-hour contracts are an unmitigated disaster.This set of changes that has been negotiated by my good colleague Iain Lees-Galloway centres on new section 67E inserted by clause 87—the availability clause. The clause when amended by Supplementary Order Paper 155 will end zero-hour contracts. The amendment is absolutely vital because it changes the bill from being one that entrenches the ability to write zero-hour contracts to one that effectively outlaws them—and we hope for good.That means that an employer can no longer demand that the employee be available all the time without giving them guaranteed hours of work and what is really important—and it will need to be tested in the courts we recognise that—is that there are provisions for the reasonable stuff of compensation to be paid when somebody is required to work. Secondly it means that the employer must have a good reason for requiring the employee to be available for work in the first place. That cannot be to the point of changing shifts at the last moment without paying reasonable compensation. The notice period for changes or cancellation of shifts must also be reasonable—an objective test in the courts—and crucially must be included in the employment agreement. So it is now much clearer in the law that having agreed hours in an employment agreement is an expectation that will be upheld by the courts.There are other clauses that contain vital stuff for this bill records relating to minimum entitlements in clause 84 “4B Employer’s general obligation to keep records relating to minimum entitlement provisions”. The employer has an active obligation to keep records and stuff that allow and require those records to be bona fide to be categorical and to be on the record so that there is nowhere for the employer to hide. It reminds me of one time when I was holding the immigration portfolio and we were looking at people rorting the system with foreign fishing crews and somebody’s employment records were on a computer that just happened to jump overboard off the ship.KRIS FAAFOI (Labour—Mana): It is my pleasure to speak to Part 2 of the Employment Standards Legislation Bill. I have got in my hand here one piece of A4 paper with two sides to it. It is probably one of the most important pieces of paper that we have got in this House for workers this year. It is Supplementary Order Paper 155 in the name of my colleague Iain Lees-Galloway. The first two of his amendments to Part 2 have been well traversed the functional one being one of the changes to clause 87 that provides for a new section 67E(2) which many of my colleagues on this side of the Chamber have spoken about. Basically that does away with zero-hour contracts. I do not want to concentrate on that one but I do want to speak to the third and the fourth amendments on Supplementary Order Paper 155 that Iain Lees-Galloway has put forward in his name.I think it speaks to one of the concerns that the member from New Zealand First Clayton Mitchell raised in his contribution earlier on in this debate in that the fact that we have got a clause that does away with zero-hour contracts is good—technically we cannot do that—but it also I think tightens the noose to prevent employers from essentially doing the same thing by any other means.The part of Supplementary Order Paper 155 that I want to first look at is again a change to clause 87. The amendment replaces new section 67E(5) with a new passage that says: “an employer and an employee who is remunerated for agreed hours of work by way of salary may agree that the employee’s remuneration includes compensation for the employee making himself or herself available for work under an availability provision.”That is one way that I think Supplementary Order Paper 155 is very pragmatic in the way that it is saying: if you are a salaried worker and you have got guaranteed hours but you are expected to be available then we can work that expectation of availability into your salary. Rather than wait for it to come along later we are going to make sure it is dealt with at the very beginning of your contract that you sign with your employer and we are going to work some more money into your contract to make sure that you are compensated for if you are made to be available and you are not asked to work in those hours.Again I think that is one really good way that Iain Lees-Galloway has protected workers from not being I guess—for want of a better term—screwed by their employers by another means. We have taken away that main clause that says that we will do away with the zero-hour contracts but there is not another loophole that the employer can go through to not pay that employee as much money if they have been asked to be available during other hours but they are not actually either warned that they are going to not work during those hours or compensated during those hours. So that is one way that I am really happy that Supplementary Order Paper 155 protects the workers out there.The other amendment I want to talk about in Supplementary Order Paper 155 is the one that amends new section 67G. Please bear with me because I am going to read it out. I think people at home would want to hear this because the concern as we have heard in this House around zero-hour contracts is real. I had one father call me on a Friday night worried about his daughter and the unfair practices of her employer at the time which was a shop not too far away from here. If anyone wants to have a juice it is TANK down on Lambton Quay. He was really concerned about the practices of that employer just down the road from here. He was saying: “It is not fair that my daughter is asked to be on call and given close to no hours of availability. How is my daughter expected to work if she does not know when she is going to work or how much she is going to get paid?”.I think that the new provision that Iain Lees-Galloway has got within Supplementary Order Paper 155 new section 67G(2) and (3) will speak directly to the concerns of that parent. He was not actually from my electorate. He called me—I do not know how he got hold of my number; he was outside of my electorate. He just wanted to make sure he could speak to someone to tell someone in this Parliament how outraged he was that his daughter was being treated this way. I think that that is fair that he did that and I am glad that his voice is being heard. I am glad that Iain Lees-Galloway has worked on those concerns.I want to talk about new section 67G(2) and (3) because to do so hopefully will put that father at ease as he may think that there is another loophole within this legislation that will disadvantage his daughter.DAVID SEYMOUR (Leader—ACT): Mr Chair thank you very much for your patience and indulgence. I think it is a sad thing that these Supplementary Order Papers we are debating tonight and these changes to clause 87 are built upon sadly a falsehood.I want to join with my colleagues who say that it is lamentable that we see employment arrangements with enormous power imbalances in New Zealand: people who find that their options for jobs that people offer them that they can do are very limited and on the other hand employers who find that there are conversely quite a large number of people who wish to do the jobs that they are offering. That does lead to the situations that we have heard about tonight and that have been reported widely in the press. If we were to very quickly try to diagnose why that is we might say that it relates to first of all globalisation the collapse of communism better technology bigger economies of scale in various industries and much more competition for jobs around the world—and low-skilled jobs in particular.Let us be very clear that if we accept that diagnosis nothing in these Supplementary Order Papers is going to change that basic balance between the number of jobs that the people we have all been talking about have at their availability and the number of people whom employers find trying to get those jobs. In fact sadly this particular series of Supplementary Order Papers around clause 87 is actually going to further restrict the range of jobs and opportunities available to precisely the people whom so many have stood up tonight to try to defend.It is sad because there will be a couple of winners from the Supplementary Order Papers being debated tonight. The first are the people who have stood up and lauded often in a sort of circular way themselves and those who have helped them get this particular series of changes over the line politically because although the conditions faced by the people they purport to help will not fundamentally change the people championing these changes of course will no longer have to worry about the circumstances they have lamented tonight. They will not exist anymore because this House has used its power to ban them. So bully for them. Will they not feel better about themselves for having done it!The CHAIRPERSON (Hon Trevor Mallard): The member will resume his seat when I stand and I am now going to ask him to address the part and the amendments thereto. This is a detail discussion not a broad discussion.DAVID SEYMOUR: I would conclude my statements because I think I am being as specific as I need to be about these particular clauses except to say in reference to the debate that we have heard throughout this evening that there are real uncertainties about what will be a reasonable basis for cancelling a shift for instance. I hope this is being specific enough now Mr Chair. Several members many in favour of the amendments have gotten up and said: “Well of course that will have to be addressed by the courts and interpreted by the courts.” We may ask what a reasonable level of proportionality is between guaranteed hours and hours where the worker is required to be available.There is another set of winners from answering those particular questions who I am sure are popping champagne corks all over New Zealand tonight and those are the employment lawyers who will tell you that new rules always mean new opportunities to help their clients. Not only will they benefit from the uncertainty that those proposed amendments introduce but they will introduce a dead-weight loss of uncertainty into the New Zealand labour market once again that is most concentrated on the employment opportunities of the very people that these amendments were designed to help.So it is a sad day first of all for the problem that the amendments sought to solve but also and all the more so for the ineffectual nature of the amendments and the dead-weight costs that they are going to introduce into New Zealand’s labour market by introducing new uncertainty sadly all necessitated by a political cop-out. Thank you.IAIN LEES-GALLOWAY (Labour—Palmerston North): It has been a while—thank you Mr Chairman. I would like to speak to a clause that I actually do not think has been addressed in the debate at all so far this evening and that is clause 86A of the bill—not something that is going to be amended by any of the Supplementary Order Papers this evening. What clause 86A does is it amends section 65 of the Employment Relations Act which relates to the form and content of individual employment agreements. It amends section 65(2)(a)(iv) which says that an individual employment agreement must include “an indication of the arrangements relating to the times the employee is to work;”. That is a very weak statement about having the actual hours that the employee is going to work included in their employment agreement.Going back to when we first were trying to think of ways to address the issue of zero-hour contracts some amendments around that particular clause of this bill were actually what we initially started working with. What clause 86A does is it actually adds some new words to that clause so it will now read that the individual employment agreement must include “any agreed hours of work specified in accordance with section 67C or if no hours of work are agreedan indication of the arrangements relating to the times the employee is to work;”. That is considerably stronger than what we have in the current legislation although if I had my way we would probably strengthen it a bit more than what we have got.What we have now got is a much stronger indication—really a much stronger hint to employers—that the default position in employment agreements ought to be that hours of work are included. The hours of work should be agreed between the employer and the employee and those hours of work should be included. Later in the bill new section 67C(2) in clause 87 says that “hours of work includes any or all of the following: (a) the number of guaranteed hours of work: (b) the days of the week on which work is to be performed: (c) the start and finish times of work: (d) any flexibility in the matters referred to in paragraph (b) or (c).”I think about the dispute that is going on between Bunnings and its employees who are members of the FIRST Union and that is all around this matter. It is something I guess finer than the zero-hour contract issue: it is the issue of being able to mutually agree what their days and hours of work and their start and finish times should be. What Bunnings wants to do is basically to be able to dictate what those are. At the moment that is mutually agreed between the employer and the employee; Bunnings wants to shift that balance of power to the employer and away from the employee.Although these changes in the legislation certainly take us in the right direction and give a much clearer indication to the employer that those hours of work—those start and finish times—and the days of work ought to be in the employment agreement it does not say that they must be. In fact actually the amendment that I would have liked to see would not have said that they must be but that where practicable they should be to make it absolutely clear that that is the default position for employment agreements particularly individual employment agreements. Collective employment agreements will have this sorted because unions will bargain that for their members. It is the individual employment agreements where people are having to bargain for themselves that really concern me. Although this is stronger—and I am pleased to see any strengthening no matter how incremental it is—we could have gone further.I will be watching very closely to see what the impact of the changes introduced by clause 86A will be: how those actually work out in practical terms and how they are implemented. Certainly if we do not see the response from employers that I am sure the Government also hopes to see from these changes then we need to look at something a little bit stronger than what we have in there.I would also like to just briefly speak to Denise Roche’s Supplementary Order Paper 151 because I think Denise Roche is the only person who has spoken to her Supplementary Order Paper so far.JONATHAN YOUNG (National—New Plymouth): I would like to just address some comments to Mr Clayton Mitchell’s Supplementary Order Paper 150. I believe as a member of the Transport and Industrial Relations Committee—The CHAIRPERSON (Hon Trevor Mallard): No no. I do not think you want to yet. I think you want to wait until we get on to Part 3. All right?JONATHAN YOUNG: Right. Thank you.IAIN LEES-GALLOWAY (Labour—Palmerston North): I would like to speak to Denise Roche’s Supplementary Order Paper 151 because I do not think anybody other than Denise Roche has had a chance to speak to her Supplementary Order Paper. I particularly want to speak to her proposed amendment to clause 89(2) which is to delete new section 130(1C).Section 130(1C) has to do with the wages and time record-keeping. Keeping good wage and time records is really important particularly for people who are salaried and whose salary is effectively very close to the minimum wage because if those people end up working more hours than their employment agreement indicates that they are supposed to be working there is a very real risk—and this does happen—of people actually ending up earning less than the minimum wage. They work more hours do not get any more pay for it and end up earning less than the minimum wage.I appreciate that there are amendments in the bill that are designed to address this issue but Denise Roche has raised the issue of section 130(1C) which says that “an employee’s usual hours include any reasonable additional hours worked in accordance with the employee’s employment agreement.” So that is actually leaving the door open a little bit to saying that an employee’s usual hours actually include any reasonable additional hours—just a few extra hours here and there and they are reasonable and they probably often happen or they often happen under certain circumstances. It does just leave the door open a little bit to the exact kind of exploitation that the Minister for Workplace Relations and Safety and the Government are trying to clamp down on with the other parts of clause 89. So I agree with Denise Roche and Labour will be voting to support the deletion of section 130(1C) from clause 89.It seems contrary to the purpose of clause 89 to have section 130(1C) included in there. Yes that probably means a little bit more record-keeping for some employers but I think it is the kind of record-keeping that is actually valuable from the employee’s point of view because it is the kind of record-keeping that helps us to prevent exploitation of workers and I think that is worth doing. I appreciate that getting the words right around this has again been something that the officials have taken great care over: to make sure for instance that for the chief executive officer of ANZ—who let us face it is nowhere near in danger of being on the minimum wage—there is not loads of record-keeping having to be done around his or her hours.But we do need to make sure that the people whom we are trying to support—the people who we are trying to make sure are prevented from being exploited—are genuinely protected and that we do not leave loopholes. Let us face it. What we are doing with Part 2 of this legislation is closing a series of loopholes that were exploited by bad employers and resulted in zero-hour contracts.So let us not leave any more loopholes. We sometimes do that by error but in this case we have noticed one and we can get rid of it. I will certainly be supporting Denise Roche’s Supplementary Order Paper in that regard.BRETT HUDSON (National): I move that the question be now put.The CHAIRPERSON (Hon Trevor Mallard): No I did not hear it—there is no point in moving it if no one else is going to call. I am going to put the question anyway.The question was put that the amendments set out on Supplementary Order Paper 154 in the name of the Hon Michael Woodhouse to Part 2 be agreed to.Amendments agreed to.The question was put that the amendments set out on Supplementary Order Paper 151 in the name of Denise Roche to clause 87 be agreed to.A party vote was called for on the question That the amendments be agreed to.Ayes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendments not agreed to.The question was put that the amendment set out on Supplementary Order Paper 151 in the name of Denise Roche to clause 89 be agreed to.A party vote was called for on the question That the amendment be agreed to.Ayes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the amendments set out on Supplementary Order Paper 155 in the name of Iain Lees-Galloway to clause 87 be agreed to.A party vote was called for on the question That the amendments be agreed to.Ayes 120New Zealand National 59; New Zealand Labour 32; Green Party 14; New Zealand First 12; Māori Party 2; United Future 1.Noes 1ACT New Zealand 1.Amendments agreed to.Part 2 as amended agreed to.Parts 3 to 5 schedules 1 to 6 and clauses 1 and 2The CHAIRPERSON (Hon Trevor Mallard): I now want to seek the leave of the Committee to consider the following three parts and the preliminary clauses as one question. I will allow members to go across the range of what is left and the preliminary clauses but as part of that leave if we start voting by 9.55 p.m. we will continue and finish all of the votes. Is there any objection to that process? There appears to be none so the question now is that clauses 1 and 2 clauses 114 to 136 and schedules 1 to 6 be agreed to. I will put the votes separately.CLAYTON MITCHELL (NZ First): I note that we have only about 20 minutes to talk to this and so I had better get cracking because there is a lot to be said and to be fair I would like to hear some of the contributions including from Minister Woodhouse with regard to casual employment. I believe that Jonathan Young is also going to be speaking on it.Our amendment which introduces casual loading into this agreement is I think vitally important and it is one that actually covers off one of the loopholes or unintended consequences that we are seeing happen time and time again. We have gone through the zero-hour contract provisions. We are specifically talking about those people who are on casual employment agreements.As I said earlier on we had a number of submitters submitting with regard to how they were adversely affected when it comes to having uncertainty with their work conditions. The one situation I raised was to do with a lawyer who was on a casual employment agreement who was finding it difficult to make ends meet because by the nature of the employment it was very casual.What we are proposing here under our amendment is to put a casual loading on to any casual employment agreement. What we have come up with is an amount of 19 percent. The breakdown of that 19 percent casual loading comes down to a 4.4 percent loading to look at the Holidays Act with regard to statutory holidays. We have a 1.6 percent loading which is in actual fact a loading because that is relating to bereavement leave and sick leave. Of course if you are employed part-time or full time you would not necessarily be available for those provisions after 6 months of employment so we are looking to pay that in advance.Then we are looking at 8 percent holiday pay which of course is not actually a loading; it is what you are entitled to regardless. But paying this upfront actually works towards also looking after the interests of the employer who does not need to keep the records and have these accumulated fees paid out to staff who are genuinely employed in a casual agreement. So that worker would have that 8 percent paid up front also.To round that off which gets us to 19 percent is a 5 percent loading. So if you looked at it collectively you are talking about a 6.6 percent loading which is a 5 percent loading for the casual employment aspect of Supplementary Order Paper 150; 1.6 percent which is to do with bereavement leave and sick leave; and then of course everything else you are entitled to.What we are trying to say here and what it will clearly remedy is the fact that if people who are employed casually are going to be paid a premium the employers are incentivised to get that casual employee on to a permanent contract either part-time or full time. If they decide to do that and if they can manage their rostering system to allow that to happen there is no penalty for them. They will simply go straight on to a part-time or a full-time contract which will give them an idea of having certainty around the hours that they are going to get. They will still be entitled to their KiwiSaver provisions.We hope that this amendment gets support throughout the Committee because it does tighten up the final aspect in relation to the casual employment agreements creating a loophole to somehow potentially allow those zero-hour contracts or uncertainty of hours in an employment agreement. I would like to hear from other members in the Committee and so I will wrap it up there. Certainly with regard to support we would love to see that happen. Thank you.JONATHAN YOUNG (National—New Plymouth): Mr Chair I understand that everything in politics is a matter of timing! I would just like to address Mr Clayton Mitchell’s comments and thank him for his contribution and also thank him for his contribution in the Transport and Industrial Relations Committee and I believe as I said before that as a member of the select committee he warrants a response. We have had many people speak on this bill in the Committee and particularly those members of the select committee have brought some thoughtfulness to it.In terms of Supplementary Order Paper 150 which the member has been talking about and has presented right now the proposal was intended to create a loading on any casual employment giving benefit to the workers and an incentive to the employer to move the employee on to a part-time or full-time contract. As he listed it off that loading equates to a 19 percent increase on the average hourly rate: 1.6 percent for sick and bereavement leave 4.4 percent for statutory holidays 8 percent for standard holiday pay and a 5 percent casual loading.It is not intended in this bill to dispense with casual agreements. Some people may not like them but casual agreements have their place in the job market. As we heard from many submitters casual agreements work for many people. It is also important to understand that casual employees already have an 8 percent loading for holiday pay. If the employee’s work is so intermittent or irregular that it is impractical to provide 4 weeks’ holiday then holiday pay is paid at no less than 8 percent of gross earnings.Sick leave and bereavement leave are also an entitlement. An employee has an entitlement if they have completed 6 months’ continuous employment with the employer or if they have worked at least 10 hours a week on average and no less than 1 hour each week and 40 hours each monthover a 6-month period.If a casual worker is an employee who is required to work on a public holiday that must be stated in the agreement. If they work on a public holiday they receive time and a half. If they do not work on a public holiday but the day would otherwise be a working day then they are paid for that day.What I am saying is that many of these loadings that the member has presented in his Supplementary Order Paper already exist in employment law so essentially what he is adding is the 5 percent casual loading. The reason why with due respect we are not supporting his Supplementary Order Paper is that his 5 percent casual loading might actually be an incentive for employers to have more casual workers rather than to bring them on into permanent part-time or full-time work. We just wanted to make it known that that was our view and we thank the member for his contribution.IAIN LEES-GALLOWAY (Labour—Palmerston North): I think the comments from the previous two contributors to the debate raised the issue of casual work and the casualisation of the workforce.I agree with a comment the Minister in the chair made some time ago which was that casual agreements do have a place in the overall framework. In fact when employers came to submit on this legislation many of the employers—perhaps after a little bit of questioning from the Labour Party—agreed that if they have got permanent agreements casual agreements and fixed-term agreements then there was no need for zero-hour contracts. And it is great because we are not going to have zero-hour contracts but we are going to have permanent agreements casual agreements and fixed-term agreements. Only one of those is defined in our legislation.This is actually a debate—this is a live debate about whether it would be a good thing or a bad thing to define casual and permanent agreements in the legislation and to perhaps tag to those casual agreements some casual loading of the type that Clayton Mitchell is proposing with his Supplementary Order Paper 150. I do not want to necessarily express a firm view one way or the other on that except to say that it is a live debate but I do see some merit in defining casual agreements. I think that by defining casual agreements we would deal with a lot of the issues that Clayton Mitchell is trying to deal with by including the loading.One thing that the loading does—or at least it is one thing that is the intention of including the loading—is for it to be a disincentive. It is not intended to be an incentive to put employees on a casual agreement but actually it is intended to be a disincentive to employers to put people on casual agreements or to at least make them stop and think about whether it is in their best interests to have people on casual agreements or whether they would be better off having them on a permanent part-time agreement with guaranteed hours. Obviously there are other aspects to the loading as well that Clayton Mitchell has raised in terms of equity such as just what casual employees are entitled to and we already have that 8 percent loading recognising annual leave.I think there is a lot more to it and that may very well be one of the next things this House needs to think about such as permanent agreements being for permanent work—so where work is permanently available that should not be provided through a casual agreement. I also think that there is a lack of understanding amongst many employers about what the appropriate use of casual agreements is. Although we have case law and although we have a degree of advice from the Ministry of Business Innovation and Employment we do not have them in law and that makes it very difficult for many employers to actually use them properly.We are going to support the New Zealand First proposal. I suspect it is not going to get up tonight but this is an issue we have to come back to. I am very keen for members from around the House to address some of these broader issues around casualisation and how we make sure that the range of employment agreements that we have available to us are being used properly.I just want to make one last comment since we are ranging over all the remaining parts which includes the title. The title of this legislation is the Employment Standards Legislation Bill. That seems a very bland title for a bill that extends paid parental leave eliminates zero-hour contracts—after we have finished here tonight—and improves employment standards. Of course that is actually because this started off dealing only with employment standards. After the Labour Party and Sue Moroney and the 26 for Babies campaign ran that wonderful campaign the Government realised it had to act on paid parental leave. And after the Unite union and the New Zealand Council of Trade Unions and the Labour Party and other Opposition parties ran our campaigns around zero-hour contracts the Government realised it had to act on that too. It threw those two issues into this legislation hence the Employment Standards Legislation Bill deals with those.Do you know what? We are happy. We are going to be celebrating after tonight. We have made huge advances tonight. We have also identified the next tranche of work that this House needs to consider in employment relations and I hope that the cordial approach that we have built around employment relations might continue and we might actually start to reverse some of the damage that has been done in recent years and make some real progress.ANDREW LITTLE (Leader of the Opposition): I feel privileged and honoured to take a call on these final concluding stages of this piece of legislation. The Employment Standards Legislation Bill is vital in a world and in a labour market when actually standards minimum standards and the idea of certainty are becoming rare commodities for far too many workers. The idea now that we have a provision that makes it very clear for workers that they cannot be compelled into an agreement that tells them they must be available or must be at work with no guarantee of any work at all—the fact that that has now gone when that was endorsed in the earlier draft of this legislation is a welcome development in this legislation. So I think the Committee tonight—although I would never suggest it congratulate itself—can reflect well with the rest of New Zealand that it has done its job of reflecting the sorts of standards that New Zealand would expect in our employment legislation.The same can be also said for the parental leave and employment protection parts of the legislation—now having provision for parents whose child is born prematurely so that they can have some certainty for themselves that those entitlements will be available for them.This draws on work that members on this side of the House have done. These are basic things that working New Zealanders once upon a time expected—took for granted perhaps. Now we live in an age when for a lot of working people the idea that they not only have standards but have the means to enforce them is becoming something that is out of their reach. So I think it is a great moment for this House that we take this legislation which started its life in an inferior form and through the good work of MPs—certainly on this side of the House and indeed in the whole House—and have now arrived at a bill that is in a shape and we can proudly go out to all New Zealanders and say: “This seriously starts to set good minimum standards.”The provisions relating to the requirement for employers to keep a record of minimum entitlements for their employees—I in the early part of my professional life learnt how to conduct a wages and time book inspection which is something that you do not hear much of these days. In fact I am not sure even labour inspectors know how to do them. But the idea now that employers know that they have to keep a record of employees’ minimum entitlements and the extent to which their employees are getting them I think starts to turn the clock back which we had seen ticking in the last 30 years and the idea that it is OK to talk about minimum standards—this bill now reflects that.Let us acknowledge and let us celebrate the work that has been done. The Minister has worked very hard obviously with members on this side and with no less a personage than Iain Lees-Galloway to produce a piece of legislation about which everybody in this Committee can leave tonight and say “The New Zealand Parliament has done its job and the interests of working New Zealanders are once again proudly at the forefront of doing something progressive and constructive and beneficial” which stands in stark contrast to much other employment legislation that has passed through this House in recent years.I conclude by saying to all members in this Committee who have been part of this very important debate—some would say struggle—that we now have a piece of legislation that is palatable and we can look in the eyes of all New Zealand working people and say: “This is good.”DENISE ROCHE (Green): I want to talk to Part 3 of the bill and in particular to Supplementary Order Paper 150 from Clayton Mitchell which I thoroughly agree with and the Greens will be supporting. The reason we will be supporting it is that earlier in a different part of the debate the Minister for Workplace Relations and Safety talked about mutual obligations and mutuality between employer and employee. One of the concerns that we see arising around the casual workforce is the overuse of casuals and the undercutting of permanent paid staff in the workplace because casuals are being used. That was the concern with zero-hour contracts as well before we eliminated them tonight.The effect of this Supplementary Order Paper would be that anybody who is employed as a casual would actually have a loading on top of around 19 percent. In my original member’s bill where I talked about this I actually talked about a loading of time and a half which is a substantial increase. It is probably more than what is actually prevalent in the Australian workforce of casual workers where they do frequently have a loading of 25 percent or more.Clayton Mitchell’s Supplementary Order Paper actually says that if you are a casual you do not get bereavement leave you do not get holiday pay you do not get sick pay you do not get KiwiSaver—there is a whole range of rights that other workers get that are basically stripped away from these workers which essentially puts them into a cheaper category of work. That is another incentive if you like for employers who may be unscrupulous to want to overuse those casual workers. If you put a loading on their hourly rate and have that defined in legislation then what you have is a disincentive to use casuals.I think that if we are looking at wanting to create a society where everybody gets a fair go where people can earn enough to live on then we need to be looking at the hours of work and how those hours of work for ordinary working New Zealanders play out. Casual work although it is obviously useful particularly in those peaks—and I think previous speakers on this side of the Chamber particularly Sue Moroney have talked about the ability for most industries and most workplaces to be able to predict the amount of work that is happening and so you can top that up with casual workers. That has been the standard practice for decades and decades. What we have now though is a situation where the overuse of casuals can actually undermine and does undermine permanent employment.The casual workers themselves are worse off than any other worker. It is also harder for them to actually fight for their entitlements because of the very nature of being casual. These are the vulnerable workers whom I think we should talk about. Thank you.The question was put that the amendments set out on Supplementary Order Paper 154 in the name of the Hon Michael Woodhouse to Part 3 be agreed to.Amendments agreed to.A party vote was called for on the question That the amendments set out on Supplementary Order Paper 150 in the name of Clayton Mitchell to Part 3 be agreed to.Ayes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendments not agreed to.Part 3 as amended agreed to.Part 4 agreed to.Part 5 agreed to.Schedules 1 to 3 agreed to.The question was put that the amendment set out on Supplementary Order Paper 154 in the name of the Hon Michael Woodhouse to schedule 4 be agreed to.Amendment agreed to.Schedule 4 as amended agreed to.The question was put that the amendments set out on Supplementary Order Paper 154 in the name of the Hon Michael Woodhouse to schedules 5 and 6 be agreed to.Amendments agreed to.Schedules 5 and 6 as amended agreed to.Clause 1 agreed to.The CHAIRPERSON (Hon Trevor Mallard): I am ruling out Sue Moroney’s amendment to clause 2 because it was contingent on an amendment that was lost being passed.Clause 2 agreed to.The Committee divided the bill into the Parental Leave and Employment Protection Amendment Bill the Employment Relations Amendment Bill (No 3) the Holidays Amendment Bill the Minimum Wage Amendment Bill and the Wages Protection Amendment Bill pursuant to Supplementary Order Paper153.Progress to be reported presently.House resumed.The Chairperson reported the Employment Stands Legislation Bill with amendment and divided it into the Parental Leave and Employment Protection Amendment Bill the Employment Relations Amendment Bill (No 3) the Holidays Amendment Bill the Minimum Wage Amendment Bill and the Wages Protection Amendment Bill and reported no progress on the Building (Earthquake-prone Buildings) Amendment Bill and the Health (Protection) Amendment Bill.Report adopted.The House adjourned at 9.59 p.m.