Retirement Villages Bill — In Committee Third Reading 
Retirement Villages Bill — In Committee Third Reading 
[Volume:612;Page:9415] 
Retirement Villages Bill 
In Committee 
Debate resumed from 12 August. 
JOHN CARTER (Senior Whip—National) 
: 
 I have not had a chance to discuss this matter with the other parties at all and they may well object. However while I know that some parties have different issues and one or two are not in support of the bill I wonder whether it would be helpful to the Committee to have just one wide-ranging debate in the Committee stage and I seek leave accordingly. If parties do not agree obviously they can oppose it. However I seek leave. 
DEBORAH CODDINGTON (ACT) 
: 
 I raise a point of order Mr Chairperson. I could not hear what the member said. Could he please repeat that. 
JOHN CARTER (Senior Whip—National) 
: 
 I sought leave to have one wide-ranging debate in the Committee stage for a considerable length of time so that we can debate the issues and pick them up as we want to rather than have a part-by-part debate. As I said I have not had a chance to discuss it with any other parties. If the member objects then obviously it will not happen and we will debate the bill part by part. 
The CHAIRPERSON (Hon Clem Simich) 
: Leave has been sought. Is there any objection to that course? There appears to be none. 
Clauses 1 to 78 and schedules 
Dr LYNDA SCOTT (National—Kaikoura) 
: 
 We are all pleased to see the Retirement Villages Bill in the House today. This bill has been awaited by the Retirement Villages Association as well as those people who currently live in retirement villages. Retirement villages have developed over the past 10 to 15 years as an excellent lifestyle choice for many New Zealanders. They give security companionship and support and a very large percentage of those people who have entered retirement villages are very happy with the services they have received. However the legislation that covers retirement villages has not been clear and concise and there has not been a specific Act of Parliament that has covered that industry and the people who live within it. While 19 to 95 percent of retirement villages are run extremely well and deliver a very good lifestyle for those within them there are a few as is always the case that do not provide the same level of service and care. 
 The Law Commission work on retirement villages signalled the need for a bill and when I became a member of Parliament I had a member’s bill that went into the ballot promoting the need for retirement villages legislation. That member’s bill had not been pulled out of the ballot before the Government was pushed to develop its own bill. Later this week under urgency we will debate the Intellectual Disability (Compulsory Care) Bill which has sat on the Order Paper year after year without being debated and it is pleasing to see that there is a commitment to getting this bill through the House. 
The concern from the Retirement Villages Association of New Zealand residents has been about having legislation that makes it clear when someone enters a retirement village exactly what that person is buying into. As a geriatrician I work with many people who have entered rest homes continuing care units and retirement villages. In the South Island there tends to be a combination of that style of home in which the three types of facility are together. In the North Island however there tends to be much more emphasis on larger retirement villages. Some of them have rest homes and continuing care units in order to market all-of-life cover but many do not. There is quite a variation between the North Island and the South Island. 
One of the concerns is that sometimes when people buy into a retirement village neither they nor their lawyer have looked clearly through the fine print and they have not understood what the implications are if they wish to leave a retirement village. The disclosure documents make it very clear to people what they are buying into. There are two types of village: one in which people have a licence to occupy and another in which people have a unit title. The “licence to occupy” concept is that people are buying into a lifestyle—especially if they are living on their own—where they have a call button assistance if needed protection and security maintenance gardening and the companionship of those around them. 
A lot of people have not understood exactly what they have bought into when they move into a retirement village. Grey Power has been particularly active in talking about the concerns that it has in cases when an operator may not have met obligations or the need for disputes resolution within a home. Sometimes there is one resident who makes it very difficult for other residents and often the disputes are between residents as opposed to the operator of the home. The village in itself has to be protected for all of those within the village so that it is a viable entity and unit as opposed to functioning for the needs or wishes of one person. Setting up a disputes resolution process has been very important. 
In addition the statutory supervisors which all of those retirement village members who were part of the Retirement Villages Association had will now be compulsory. Statutory supervision will represent the good of the village overall as well as the needs of the individuals who live within those villages. 
DAIL JONES (NZ First) 
: 
 We meet here in the Chamber on 21 October as far as Parliament is concerned—although other people might think it is 22 October—and we are debating the Retirement Villages Bill. This bill had a very long consideration by the Justice and Electoral Committee and I mentioned in the report-back debate that the drafting was about as fine as it could possibly be. I am disappointed that the Government has now issued a 15-page Supplementary Order Paper for us to digest and include in the bill under urgency. I wonder what consultation has taken place with regard to that Supplementary Order Paper and what opportunity all the submitters have had to consider it. I know that New Zealand First saw it for the first time when it was tabled in the House on 16 October. It is disappointing that we were not given the opportunity to discuss it any earlier. This is the first I have seen of it since that day which was a Thursday; being a Thursday it was easy to miss it until one got back to the House on the Tuesday of the following week. 
I take the view that the Government’s lack of consultation is totally unhelpful to those of us who were trying to be as helpful as we possibly could in the select committee in order to get this important legislation through the House. I note that the Bills Digest has been issued and I compliment the Parliamentary Library on the way in which it has prepared it. It has helped to clarify the major issues in the Supplementary Order Paper. Under the main heading “Main changes proposed by SOP” there is a section headed “What is a ‘retirement village’” which I think it is helpful to quote because this is one of the areas of confusion: “The SOP makes it clear that if one or more ‘residential units’ are located in a ‘rest home’ or ‘hospital care institution’ the only parts of that rest home or hospital care institution that comprise or are included in the retirement village are the residential unit or units themselves and the common areas and facilities within the rest home or hospital care institution (if any) to which the residents of the unit or units have access only by reason of their occupation right agreement.” 
The next section is headed “Certain residential units not retirement villages” and states: “The Bill describes certain types of habitation which are not retirement villages including residential units registered under the Unit Titles Act 1972 or owner-occupied cross-lease residential units.” I refer to cross-lease residential units because Mr Murray Smith made a big song and dance about a property that was comprised of cross-lease residential units which he thought might have a change in their status as a result of this bill. I questioned at the time and I question again his view of the matter. I would be interested to hear the outcome. 
The Bills Digest goes on to state: “The SOP makes it clear that it is ‘owner-occupied’ residential units registered under the Unit Titles Act 1972 which are excluded (as well as owner-occupied cross-lease residential units). Also excluded are ‘similar residential units’. The SOP qualifies this with the words ‘that are not intended to provide accommodation predominantly for retired people and their spouses or partners.’ ” A degree of uncertainty is starting to creep into this legislation. It is clear that a unit title property or a cross-lease residential unit is excluded. What is usually included in this type of legislation is what we call in the North Island in the Auckland area “licences to occupy”. They tend to get caught up in residential villages. Hopefully those practitioners will be able to understand the words referring to similar residential units “that are not intended to provide accommodation predominantly for retired people and their spouses or partners.” I will be interested to hear from the Minister in the chair Lianne Dalziel just how much consultation has taken place. 
The main controversial provision in this bill will be clause 29A “Occupation right agreement voidable”. It was included in the bill only by a majority of the members of the select committee. The reason why there was opposition to it is that clause 29A as introduced by the majority of the select committee creates uncertainty. There is an occupation right agreement and there are all the protections that are given now to the people entering into the agreement—usually the retirement village operator and the retiree. However the bill as it was reported back states in clause 29A(1): “An occupation right agreement entered into in contravention of section 17(3) or section 24(1) or section 26 or section 29(1) is voidable by the resident by notice in writing to the operator and to the statutory supervisor of the village (if there is one) given at any time within 3 years of the date the agreement was entered into.” That is obviously extremely uncertain. Who would go into business to provide retirement village facilities if the contract might be cancelled within 3 years? 
I am pleased with and I would like to congratulate the Minister on the amended clause 29A which is a vast improvement. It still is not satisfactory because I feel that if after all the protection that has been given under this bill a person is still not happy with the agreement there should not be the length of time that is proposed to cancel it. However the amendment on Supplementary Order Paper 157 provides: “(1) If an occupation right agreement is entered in contravention [the sections] in any substantial respect the agreement is unless it has been terminated voidable by the resident by notice in writing to the operator and to the statutory supervisor of the village (if there is one) given at any time within the prescribed period.” 
There is a very useful definition of “prescribed period” and I have to congratulate the draftsman on it. But there will be a problem as to what is meant by “any substantial respect”. Efforts have been made to define what is meant by these phrases but interpreting them will be difficult. The “prescribed period” will probably be the very important one and all practitioners will have to be very careful about setting the dates as to when the prescribed periods begin and end. When one goes into the lawyer’s office and signs the contract or when the contract is signed with the operator—the beginning—will be just as important as the end because one will not know when the period has expired unless one knows when it began. The prescribed period is the lesser of “(i) a period of 3 years after the date on which the agreement was entered into; or (ii) a period of 6 months after the resident knows or ought to know of the contravention:”. 
The difficulty in this entire area is that so often it is not the resident who complains because the resident has passed away; the argument is with the family. We try to do our very best in this Parliament but I think we are going overboard in so far as this legislation is concerned because this is a very difficult thing to deal with. For older people who cannot remember what they have done 3 years can be a very long time as we know from our own relatives. When we go to see our parents they say: “You haven’t been to see me for a long time.” yet we were there only the day before. It is a difficult piece of legislation and I think clause 29A goes a little bit too far even with the alterations that have been made. 
I conclude by asking the Minister at some stage to let us know what consultation has taken place. I do not intend to spend a terribly long time on this Committee stage. 
MURRAY SMITH (United Future) 
: 
 I am very pleased to see the Retirement Villages Bill coming back for its Committee stage and then its third reading. United Future has been pushing for this bill to pass through all its stages as quickly as possible. The Committee will remember that the second reading debate took place because United Future specifically requested it be included in the urgency held earlier this year and we have also been pushing for this bill to be included in this lot of urgency. We finally see very pleasingly that the protection this bill will afford residents in retirement villages is getting a bit closer. 
I note the commencement date is February next year for some provisions. That is good but in terms of the other work that has to be done with regulations being formatted it seems it may not be until August next year that the full effect and particularly the appointment of statutory supervisors will occur. So we are still some months away from seeing the full effect of this bill and the sooner we can see it the better. 
Looking at Supplementary Order Paper 157 and particularly looking at issues with regard to the statutory supervisor’s role I have a number of comments I wish to make under those categories. Firstly I welcome the change to clause 13(2)(c)(ii) which now provides that a statutory supervisor does not have to certify that financial statements comply with the Financial Reporting Act but simply has to state that they comply “to the best of the supervisor’s knowledge and belief”. That was a concern for statutory supervisors. It arose from discussions I had with statutory supervisors on the bill and its format. I am very pleased to see that the Government has agreed to change that provision to lower the threshold that statutory supervisors need to comply with. Otherwise statutory supervisors would have had to inspect financial statements and go through effectively an audit before they could say they complied—as opposed to “to the best of the supervisor’s knowledge and belief”. That would have added significantly to their costs and that extra cost would have been passed on to retirement villages and then on to residents. 
I also allude to Supplementary Order Paper 129 which I have lodged which would add a clause 41B. This was another change that was keenly sought by the statutory supervisors. In essence the clause provides that certain disputes that are notified to the operators—in particular ones that affect a significant number of the retirement village’s residents or the general operation of the village or the operator’s rights and obligations under the deed of supervision—have to be notified to the statutory supervisors. Not all disputes have to be notified. The wording of the amendment on Supplementary Order Paper 129 has been phrased so that not every dispute needs be notified to the statutory supervisors but only those of some significance. Obviously the statutory supervisors’ role is to protect the interests of the residents as a whole and therefore if a dispute is lodged that affects a significant number of the retirement village’s residents the statutory supervisors ought to be aware of that. The amendment I have lodged does not say that the statutory supervisors have an automatic right to get involved; nevertheless if they see something happening and have a feel for what is happening in the village they can take appropriate action if they feel that intervention is necessary. Surely at the end of the day that is the role we ask the statutory supervisors to fulfil. 
Clause 41B also covers the general operation of the village and again the statutory supervisors are in a position to oversee the general operation. If the supervisors cannot get prior warning of disputes arising by getting notification of those disputes at the earliest possible time then that will fetter their obligation to do the job they are employed to do. 
The third area is where the operator’s rights and obligations under the deed of supervision have been affected by the dispute. The deed of supervision is the key document that the statutory supervisors are obliged to look at and take cognisance of when dealing with operators. 
Hon LIANNE DALZIEL (Associate Minister of Justice) 
: 
 I particularly wanted to follow Murray Smith to thank United Future for requesting that this bill be dealt with within the urgency motion. I also thank Mr Smith for his very helpful contribution not only on the Justice and Electoral Committee which was very ably chaired by my colleague Tim Barnett but also in assisting the Government in developing a Supplementary Order Paper to deal with the matters he has just addressed. The Government is very happy to support those amendments in respect of the involvement of the statutory supervisors. 
I should say by way of a little bit of background in the Committee stage that it was actually in my previous capacity as Minister for Senior Citizens that I introduced this bill and now I take it through its Committee stage and third reading as Associate Minister of Justice. It was interesting to reflect back over the last few days on the original letters I received when I became the Minister for Senior Citizens and the kinds of examples that were given to me of people who really had no idea of what they were signing up to. The tragedy was that many of those who signed up to entry into retirement villages had actually taken legal advice before they put their signatures on the bottom line. Unfortunately what we discovered pretty soon was that in fact a number of lawyers had no real understanding of the whole concept of a licence to occupy and that a large number of people living in retirement village complexes from one end of the country to the other thought they owned a piece of property that they themselves could sell. I tried to encapsulate the burden placed upon those people in a simple phrase so that I could communicate it to others as I spoke at meetings around the country and the very point I made was that by investing in a retirement village one is not buying property one can sell. 
What is so good about this legislation is that all that information is explained in plain language upfront so that right at the very outset people know they are not buying property that they can sell. They know they have a licence to occupy and they know what monies will be deducted from their investment should they leave the retirement village or with regard to their estate should they die. I think Dail Jones made some very good points. He is right that many of the debates that have occurred in terms of retirement villages have not occurred with the individual who entered into the agreement; but with the family who has inherited the estate of someone who has passed away. 
I wanted to clarify matters in respect of Supplementary Order Paper 157. A lot of the provisions are minor technical amendments and I think the member would agree with that. But I take on board his comments in respect of clause 29A and refer him to new subclause (5) which will provide the clarity he is seeking: “For the purposes of this section a contravention of a particular provision is a contravention of that provision in a substantial respect if—(a) the contravention involves a significant detriment to the resident; or (b) the contravention is otherwise material and is not solely technical or minor in character; or (c) the contravention involves deliberate misconduct on the part of the operator.” With that clarity in the legislation I do not think the clause itself will have much difficulty in being interpreted. It is not intended to catch technical and minor defects in approach or contraventions of the particular provision; it is designed to catch material breaches that have an impact on the resident—particularly if there is deliberate misconduct which would not be excluded either. 
I wanted to acknowledge the work of the Justice and Electoral Committee. The select committee has played an amazing role in hearing submissions. Often it has been a case of trying to balance competing interests. We have had Grey Power representing consumer interests on one side of the equation and the Retirement Villages Association on the other. I have seen the competing interests try to find a workable solution that works on both sides of the equation—a position of balance. I congratulate all members of the Committee on their contributions on this important legislation. 
Dr LYNDA SCOTT (National—Kaikoura) 
: 
 I am pleased to follow the Associate Minister of Justice Lianne Dalziel because I also want to congratulate the Justice and Electoral Committee and particularly the National and ACT members of that committee who made a substantial improvement to this bill. 
National members still have some concerns especially about the increased compliance costs that will be imposed on villages. We have looked at the consequences of those compliance costs. The likely compliance costs of smaller operators in particular are of concern. In my member’s bill facilities of up to six units were exempt. But in the Supplementary Order Paper that the Minister has introduced coverage has been expanded under clause 6 to include stand-alone residential care facilities and hospital care institutions providing care for older people if two or more residential units in those complexes offer occupancy in return for capital sums. This clause basically captures all the alternatives—unless someone happens to have a granny flat. All of those are included in this bill. 
We have to ask who will pay the price. Who will pay the cost of the statutory supervision of the disputes resolution process and of the regulations that come under this bill? There will be increased compliance costs. That must be recognised and it was a concern to National. National feels that this Government has put a huge number of increased compliance costs on businesses in our communities and does not take this issue seriously enough. 
But the select committee did make a lot of substantial changes. Grey Power gets representation from the small number of people who are having problems not from the 99 percent who are not having problems. Because of that it wanted to look at the buy-back provisions. The Minister mentioned that one is not buying a property especially in the case of a licence to occupy; when one moves into a village one is buying a lifestyle. There has been a lot of concern about the fact that if when somebody dies the house is not sold on ongoing costs are incurred. If the village is being developed the new units often are the ones that get sold and the unoccupied units do not. So there was a marked amount of debate about that buy-back clause. The Supplementary Order Paper makes some changes. I think a balance has been obtained. People need to realise that the situation is fine while we are in a buoyant housing market—as we are at the moment when there are people on waiting lists to get into retirement villages—but if the market turns down it will be a different issue again and people will once again be waiting to sell. 
As well the changes to clause 27 mean that someone who moves into a village can exit within 15 days. I can remember that the husband of a patient I had looked after who had died suddenly was pretty sad and depressed and he went into a village when he was still quite a young man and did not need to make that sort of lifestyle choice at that point. As he got better he wanted to be able to exit. Now there is the ability to have what is called a cooling-off period in order for people to confirm their decision to live as part of a village. Some people have called retirement villages lifestyle villages and that may be quite a good change of name because people are buying into a lifestyle. But it does not suit everybody and if someone wants to exit during that 15-day cooling-off period then clause 27 states that he or she can do that. 
The words of clause 29A(1) have been changed to include the phrase “in any substantial respect” with regard to grounds for voidance of an occupation right agreement. If someone signs up to an agreement generally that is totally legally binding. In this bill there is now a cooling-off period and otherwise to void the agreement there has to be contravention “in any substantial respect”. That change of wording means it is a little bit harder just to exit. If people decide in that cooling-off period that they do not want to live in a village even though they have signed all the forms to purchase into it then they get a refund of their capital sums only. The cost of any goods and services used is not refunded. 
STEPHEN FRANKS (ACT) 
: 
 The dumping of 14 pages of a Supplementary Order Paper with 10-odd pages of new technical clauses is quite a blight on the pride that Parliament might otherwise have wanted to feel in responding to all those submissions from Grey Power. This process involved the Justice and Electoral Committee doing what some members felt was an excessive amount of investigation with an excessive amount of care about the actual words and what the effect of the intentions as translated might be. Many of the words being changed or replaced in this Supplementary Order Paper were words that the committee agonised over—I think that probably is the right word. Now explanation is completely absent for many of the ones that look technical. 
I take a simple example. A provision had been substantially modified to try to exclude parts of rest homes from what would otherwise be retirement villages or hospital care areas. It has now been replaced by new words that might or might not achieve what people submitting to the select committee wanted. It might or might not achieve a sensible purpose but this House will vote on it without any opportunity of knowing. I would ask the Minister to explain that and many others of these but it might be unfair. We cannot really engage in a dialogue because we will not get the time to do it. There are things that simply puzzle me and I do not believe that is the right way to approach a document that was given such close select committee scrutiny—whether welcome or unwelcome. 
 Although I am told this is a wide-ranging and general debate on the whole bill I am concerned that during this time we will slide past what look like simple wording changes. Those changes were presumably proposed by officials who I believe always had the earnest desire to make the bill work for people in retirement villages but—to be quite frank—did not seem to me to have the technical knowledge that enabled them to know whether their preferred wording was properly translated into legal effect. 
I am concerned that the changes which look so technical will be more like own goals of the kind that we identified in the bill. For example the bill started out simply stating that some rights of secured creditors would expire upon registration. The select committee received submissions on that from the Law Society and some secured creditors. They made us realise—those of us who did not already see it—that simply doing that to a secured creditor was firstly a major breach of a rule-of-law principle and bad in principle and secondly would make lending for retirement village purposes unattractive. Once the Government shows that it is quite willing to override contractual rights and simply replace existing rights with what it feels it would like to see were it standing in the shoes of the parties the industry knows that it can happen again. It is notice to the industry that if it lends to a retirement village and the retirement village gets into difficulties then the Government might well respond to the clamour to rewrite the deal in a way that a lender would certainly find expensive. 
The consequences are obvious. I believe that these provisions will put retirement village lending in the same category as farm lending. From having been on the board of a very profitable farm finance company I know that there is a persistent premium on lending to farmers that can be explained only by the fact that farmers gang up when there is a mortgagee sale and therefore make it hard to exercise the lender’s security. That persistent premium costs New Zealand farmers many millions a year. We used to think that somewhere around half a percent per year could not be justified for any reason of practical security that farms were good security in terms of the underlying asset value that their cash flows were usually there and that they could usually work their way out but it was persistently more profitable to lend to farmers— 
MIKE WARD (Green) 
: 
 In an earlier speech I spoke of my disquiet at the idea of retirement villages. I spoke of the undesirability of monocultures of any kind whether human animal or plant. They tend to be prone to predators and disease. I am not sure that retirement villages are prone to disease but the fact that we have a bill like this in front of us certainly indicates that they are prone to predators. That people choose to live with a whole lot of other people of a similar age is a little strange as well but clearly they do. Society has changed and too many of us have too little time for too many of our old folk. This bill clearly recognises that older folk choose to live with other older folk in villages and attempts to put in place a measure of protection. 
The provisions I will briefly speak about are those that simply spell out the conditions of occupancy so that older folk know what the conditions are regarding the security of their tenure and the security of their investment. The elderly are likely to live much longer these days. Statistics tell us that they live longer and die more quickly. They could be in retirement for 20 30 or more years and it is as likely that they will want to change homes as the rest of us. When they do it is important that their investment is protected and that they can make those changes easily quickly and safely. The Greens will be supporting the Retirement Villages Bill and I have been pleased to speak briefly on it. 
Dr LYNDA SCOTT (National—Kaikoura) 
: 
 I draw the Committee’s attention to a survey done by John Bell who is a senior lecturer in marketing at Otago University. It was a survey of the satisfaction of residents with retirement villages. In that survey only 1 percent of retirement village residents were dissatisfied with their retirement village. None were extremely dissatisfied while 34 to 55 percent respectively were satisfied or very satisfied with it and a further 10 percent had no view on the issue. I think that shows us that those people—following on from the last speaker who made a few disparaging comments about living in monocultures—who buy into retirement villages are pretty happy. 
It is a bit of a shame that the ability of retirement villages to offer integrated care has been reduced. As I said before retirement villages in the South Island tend to have rest homes dementia units and continuing care units. I remember that years and years ago my grandmother went into a unit in a retirement village. When she fell and fractured her hip she went into the rest home and then when she had a series of strokes at the age of 95 she went into the continuing care unit. The integrated care model allowed her to stay in a place she was familiar with and with staff she was familiar with and to stay within the whole concept of that home. That type of care has been reducing because under this Government rest homes and continuing care units have had their prices held for nearly 5 years. It has become much less viable to deliver those services so a great number of retirement villages are no longer following an integrated care model. That is a shame especially when we continually hear Ruth Dyson talk about integrated care. That system was being delivered and had been delivered for a long time in New Zealand. It is a shame to see it reducing. 
I believe that this bill will make it more difficult to develop and buy into retirement villages. The cost—and we have heard from the ACT party about the financial implications—means that there is likely to be some limitation now on the sale development and expansion of retirement villages. I guess that is a price to pay for ensuring that residents have protection and understand what they are buying into and for that protection to come under one piece of legislation. 
Grey Power wanted the Retirement Commissioner to appoint the statutory supervisors who will act under the legislation but I was pleased that was not taken up because it is the owners and operators who will have to pay for those services. It is appropriate that statutory supervisors work in the type of situation where they are responsible for residents and for handling disputes but also have an obligation as well to the operator of the village to maintain the village and ensure it can continue as a whole. I think that for most people who came to the Justice and Electoral Committee it is a balancing act between the concerns of residents that we heard about from Grey Power and those that we heard about from people in the retirement villages industry. 
The Minister mentioned the disclosure document which will make it very clear what someone is buying into. I do not think that issue has had any effect. People are happy with their villages and they know what they are buying into. As I said before certainly in the North Island there are waiting lists to buy units at many of the villages at this time. People have not been concerned about having knowledge about what they are buying into and about the financial implications if they leave early—within the first 4 years when there are quite high depreciation costs. What often happens is that elderly people have a lot of equity in their homes. They may not have a lot of cash but they have a lot of equity in their homes. If they can sell a large home and buy into a village it frees up capital for them to buy a new car travel or go overseas. At times when they buy into a village the price they would pay for a 2-bedroom unit would be less than they would pay for a similar stand-alone unit down the road. That frees up some capital for them so the quid pro quo is being able to free up that capital. 
DAIL JONES (NZ First) 
: 
 When I began discussing this matter earlier today I indicated that it was a great shame that this legislation has been thrust upon us in this way with 13 pages of amendments in Supplementary Order Paper 157 that we have not had an opportunity to consider fully. As we go through the Supplementary Order Paper more things come to our attention than ever before. 
We can look for example at the disputes procedure under this legislation. This is one of those areas about which there was great contention before the Justice and Electoral Committee. People wanted to make sure there was a good disputes procedure. We spent a tremendous amount of time on trying to be fair to everyone with regard to the disputes procedure and now we have interference by the department and we are told by United Future in the decisions made by the select committee. I think we all know that United Future has had a good deal to say about the bill already at the select committee. 
I look at clause 48(1) and new subclause (1A). Clause 48 sets out that a hearing must be held and subclause (1) states: “In the course of conducting a dispute resolution the disputes panel must hold a hearing”. Subclause (1A) which we inserted at the select committee states: “The parties to the dispute are entitled to be present and heard at the hearing.” Now the Minister has put in an amendment to insert new subclause (1AA) in clause 41. It states: “Nothing in subsection (1) enables a resident to give a dispute notice concerning any health services or disability services or any facilities to which the Code of Health and Disability Services Consumers’ Rights under the Health and Disability Commissioner Act 1994 applies.” 
Really I think the Minister is starting to curtail the rights of the individual resident. There may be areas in which the resident does want to have a dispute with the people about matters in the Code of Health and Disability Services Consumers Rights and why should that not stay in the legislation? Why must a measure be inserted in the legislation by the Minister without any proper discussion with the select committee? If there were areas in that code that did not come within the contemplation of the legislation then clearly the referee or the party considering the dispute would not hear it. Here we have matters that should have been put to the select committee but were not and now they are being dealt with by way of a clause inserted by the Minister. 
I also look at clause 48A(2). In that particular clause inserted by the select committee there is a provision that if a panel refuses to hear or continue to hear a dispute that is without prejudice to the right of any party subsequently to begin proceedings in respect of the subject of the dispute in a court of law. That clause has been deleted. That is extraordinary. Is the Minister saying that with the subsequent clauses that are there there is no longer any without-prejudice right to commence proceedings in a court of law? Maybe that is stating the obvious and did not have to be in the bill in the first place which should have been made clear to the select committee. But why delete subclause (2) and put in its place a provision that states: “If the panel refuses to hear or continue to hear a dispute under subsection (1)(b) the panel must refer the dispute to the nearest District Court for hearing.”? What if the parties do not want to go to the District Court for a hearing? Here they are having the District Court imposed on them. That will mean more costs for the resident and more costs for the operator. 
This measure is another classic example of more compliance costs being imposed on people by this Labour Government and we are told by United Future and Murray Smith who says he has had a big hand in the Supplementary Order Paper. We know that United Future and the Labour Party support more compliance costs. Why require people to go to the District Court as is proposed here? The amendment states the panel must refer the dispute to the nearest District Court for hearing. That is appalling. I am sure that the reason the select committee did not take that view is that it would be totally wrong. We put in more discretionary provisions when we did the legislation rather than this compulsory provision which is so much a feature of the way that Labour a socialist party looks at things. Labour believes in compulsion in making people do things rather than have discretion whereas the New Zealand First Party—and I am glad to be disassociated from the National Party and the ACT party as Lynda Scott disassociated us from National—believes in discretion being given to people. The National Party members may not support discretion. They may support the compulsory view and that is their affair. 
MURRAY SMITH (United Future) 
: 
 I will answer some of Mr Jones’ comments by telling him that when I looked through Supplementary Order Paper 157 in the name of the Hon Lianne Dalziel I had a similar concern to his which I raised with the officials. But they pointed out to me quite rightly that clause 48A(2) refers only to refusals to hear a dispute under subclause 1(b)—that is the referee believes “that the dispute should be heard by a court of law;”. That is the only circumstance when the referee has to refer a dispute to a District Court and it seems to me to be quite appropriate that if the parties go to a disputes tribunal and the referee believes the dispute should be heard by a court of law he or she then refers it to a court of law. Obviously the parties can withdraw at any time. 
But I come back to my point in new clause 41B on Supplementary Order Paper 129 in my name. I know that when I first proposed that at the Justice and Electoral Committee albeit admittedly at the eleventh hour the advisers had some reservations about that and I would like to express my appreciation to the advisers and to the Minister as well for the very good working relationship we have had with regard to this bill. I have enjoyed working with them and I have enjoyed working with the Hon Lianne Dalziel. That has continued a very good relationship that we have had over the past year or so. I thank the advisers for their willingness to sit down and go through points with me humour me with regard to some of the questions I had consider some of the things I said and review their position. 
In that light I also mention to the Committee that I have tabled another amendment to clause 21(4)(b). In my view it does fulfil the intention of the select committee which was not clear in the bill as reported back and that is that the right of security holders to continue to have their priority right and not to consent to the registration of the retirement village and the subrogation of their rights below the rights of residents is limited to the security right that they had on 31 December 2002. The amendments have made it clearer that the security interests that continue to be secured relate to the sum that was secured on 31 December 2002 and not to any increase in that sum. The amendment that I have put forward would also limit it to the rights that the security holder had as at 31 December 2002 to avoid a situation where the security holder could increase those rights to the detriment of residents after this legislation comes into force. I thank the advisers for being prepared to consider that and be favourably disposed towards it. So I will be moving that amendment as well as the amendment in new clause 41B. 
I had concentrated before on the statutory supervisor’s role and another provision that statutory supervisors I spoke to were concerned about was in clause 77. They thought that provision would put too much of an onus on retirement villages to have to prepare two sets of accounts when in situations where there may be only one retirement village one set of accounts is quite adequate. Again I am pleased to see that the Minister has been prepared to adopt an amendment that would give more flexibility so that two sets of accounts are required only if the statutory supervisor or failing the statutory supervisor the person who is now named as the registrar of retirement villages deems that two sets of accounts need to be prepared. I think that that flexibility is a mark of this bill and is further enhanced by Supplementary Order Paper 157 so that there are greater discretions to try to minimise the costs. 
One area that I do have some continuing concerns with is in schedule 2. It concerns the change that has been made to the select committee’s recommendation so as to provide that an operator does not have to notify residents or consult residents if the operator is putting the village on the market. It seems to me that that is potentially problematic because very often the first that residents will know that something is afoot is when they are told by somebody else that the village is on the market because it has been advertised. I think it would be a backward step for any operator not to consult residents before doing that because it is likely to be quite destabilising for residents to suddenly find that their village is on the market. 
STEPHEN FRANKS (ACT) 
: 
 I have an amendment I should speak to lest I not get the opportunity later even though it comes late in the bill and there are other matters I would rather address. The amendment I have put forward is one that is mentioned by the Justice and Electoral Committee in its report. It was one that the committee had drafted as a proposal. The words I have put forward are those that the parliamentary counsel had proposed at least in terms of the substantive paragraphs that would require the Minister to take into account two considerations when looking at a code. The considerations are essentially the barriers to entry that can be created by a code that suits the big end of town—the sorts of operators who will end up having the time and resources to put into the negotiations with the Minister that this bill envisages. This bill codifies industry capture. 
Earlier the National Party quite properly pointed out there are waiting lists for entry to these villages at the moment. We know that the increasing prices represent a desire to be in them. The best way of dealing with waiting lists in any kind of business is to increase supply and lower costs. The committee recognised that the code would be the focus of the 60 percent of the industry that is covered by the professionals the big companies or those who can easily afford to cover compliance costs. The smaller entrants the new entrants the charities and the iwi groups those who are not sophisticated and experienced in this area will be most adversely affected if the code becomes cumbersome or overly prescriptive or if it stipulates an excessive manning or “womanning” level at night excessive nursing levels security fences and many other things—all the other things that add to costs and drive out new entrants. Therefore the committee at that stage considered that the bill should record that the Minister ought to weigh against the representations from the big end of town the concerns that would exclude the builder who decides to run a spec and have a crack at it. It is that type of builder who keeps pricing pressure on the big operators. It is the prospect of those kinds of new entrants that will ultimately control whether there are excess profits at the other end of town. 
Unfortunately the officials recommended strongly against that. The reasoning I thought was absolutely unbelievable. I did not expect to see advice as bluntly in the pocket of the industry as the advice that the committee was given. The officials urged against including a requirement that the Minister think about barriers to entry—and I will read the words: “To effectively constrain the Minister to approve only a code of practice that does not act as a barrier to persons of modest means gaining access to accommodation in retirement villages is not appropriate. This is because in spite of the broad pricing variations in the retirement village market people of modest means are already excluded. It is not the purpose of the retirement villages legislation to widen the range of retirement living options for people of modest means.” 
Hon Brian Donnelly 
: This is the Labour Government? 
STEPHEN FRANKS 
: This is the Labour Government. We have just heard in a very fine speech from the National Party that only 1 percent of people polled in retirement villages do not like them and want to complain. The Government says openly that it is not passing this bill in order to expand the range of retirement options for people of modest means. The officials’ conclusion was that it should not be a requirement for the Minister to take into account the effect of code requirements on a group of people for whom retirement village living is not currently or in the foreseeable future an affordable option. 
The whole purpose of considering a code against the prospect of industry capture was because there is a continuum. At the bottom end there may be retirement villages that offer the very bare minimum but that bare minimum may be far better than where prospective residents are now living. For example it is highly unlikely that at present they will have any security or any on-call care. The risk of gold-plating the code was something the committee was alive to. The committee tried to respond to it and to our absolute astonishment the Minister’s officials told us that it was not something we should take into account and it certainly was not something the Minister was planning to take into account. 
I ask this Committee and I ask the Minister who may well have been very busy and not aware of what was being said on her behalf to take that issue into account. 
JOHN CARTER (National—Northland) 
: 
 I want to make a contribution to the bill for a couple of reasons. One is that I am a trustee of the Kerikeri Village Trust and I have taken a bit of an interest in this legislation. I want to make one or two comments. First I would like to compliment the Justice and Electoral Committee on the work it has done on this bill. I have observed the bill going through and note that the select committee has addressed a number of issues that were initially of concern. I congratulate the Minister the select committee and indeed Parliament on the work they have done in addressing some of those concerns. 
An issue that has been addressed already is that this bill—and there is no way to avoid it—will impose compliance costs that will obviously impact on the viability of retirement villages and the like. That is unfortunate and I am sure better minds than mine have endeavoured to find a way to achieve what the bill is trying to achieve without adding costs. Unfortunately I cannot see a way around that. Imposing a regime that will put on some costs is one of those conundrums we get into in trying to lift standards or in trying to make sure that there are consistent standards. 
The issue I want to talk about in particular is the matter that appears on pages 16 and 17 of the commentary on the bill with regard to the sale and disposal of units. It is not specifically in the bill itself but I understand it will be part of a code that will be drafted up. One of the issues talked about is the steps that can be taken if a person wants to sell his or her unit for whatever reason. There is a 3-month step a 6-month step and a 9-month step but I understand that after the 9-month step the disputes panel depending on how the code is drafted might well have the right to insist that the retirement village purchases back the property. Someone who is more familiar with the bill than I am may correct me if that is wrong. 
I can understand why we might put that in the bill but there is a dilemma in it. For example the Kerikeri Village Trust is a community trust not a profit-making organisation—it puts all its resources back into the trust. It has a bare minimum of charges just so it can survive and be viable. If it is likely that a retirement village has to buy back the property we might well end up putting at risk community enterprises such as the Kerikeri Village Trust. Perhaps the Minister can indicate whether that is so because I can sit down if it is not. I do not want to carry on debating the matter but I just urge caution: if the disputes panel has the authority to force an organisation such as the Kerikeri Village Trust to buy property when it might not be able to financially then that will cause the trust some difficulty in operating because it does not have that flexibility in terms of the way it has structured its finances. Our whole purpose is to provide a service for the community. We do it for the community we are a non-profit-making organisation and the system we have works. We do not have a slush fund with which to buy a whole lot of property. 
Sitting suspended from 1 p.m. to 2 p.m. 
JOHN CARTER 
: Over lunch I had the opportunity to discuss with the Minister the matter I was debating. She told me that the code that will be put in place with regard to the sale of property will not be compulsory in the sense that retirement villages will not be forced to sell although— 
Hon Lianne Dalziel 
: The disputes panel will have the power. 
JOHN CARTER 
: Yes the disputes panel will have the power under certain circumstances to require retirement villages to purchase but—[ 
Interruption 
] The Minister explained to me there are things like if they had not been intending to sell etc. and obviously we will need to go into those details. But there was also an understanding of the pressures that could be put on a place like the Kerikeri Village Trust. One makes the assumption that the code will be flexible enough not to put at risk the likes of the Kerikeri Village Trust. But in a case where the owner of a retirement village is not playing his or her part of the game then it might well be that we see the compulsion invoked. 
DAIL JONES (NZ First) 
: 
 I want to refer again to the Supplementary Order Paper—the one we have only just had the opportunity in the last few days to consider—and in particular to the “Registrar of Retirement Villages” provision. 
First if I could just touch on the matter that Mr Carter the senior National Party whip mentioned. Obviously if the code of practice created provisions that were far too onerous lawyers would find it difficult to advise clients to enter into retirement village contracts. I would expect that no disputes panel would suggest that a retirement village be forced to buy a unit and have to raise money to buy it. I would expect that the code of practice would have to be drawn up extremely carefully to make sure that the remaining residents of a retirement village were not made to pick up a burden that would make their situation intolerable. 
Looking at the “Registrar of Retirement Villages” provision in the proposed amendments to the bill once again I have to ask why that provision was not made known to the select committee. Why were the Justice and Electoral Committee not given the opportunity to discuss these matters? It is a clear example of this minority Labour Government aided and abetted by United Future not being willing to consult. After all we hear so much about this minority Labour Government wanting to consult with people and yet that provision was not put before the select committee. The way it has been drafted the ministerial officials and suchlike could quite easily have put it forward. Instead we have been given more bureaucracy in the shape of yet another Government official—a Registrar of Retirement Villages. Who will this person be? 
Hon Lianne Dalziel 
: It’s the Registrar of Companies—as it reads at the moment. 
DAIL JONES 
: “Deemed to have been appointed … in accordance with this section” but have members read the explanatory note? OK the position will initially be held by the Registrar of Companies but who will hold the job after that? If the Minister would only read her explanatory note to the fullest rather than briefly she would understand my concern. That person will initially hold the position so someone else will hold it afterwards. Is this another job for the girls? Even the Minister herself does not know what she has done. Is this job for the likes of say Susan Bathgate created in respect of retirement villages? [ 
Interruption 
] The senior Government whip clearly does not know what is in this legislation. 
The Minister herself has not read the explanatory note; she has only read a few words but not the rest of it. The New Zealand First Opposition has had this amendment for only a short while but knows more about what is in it than the Minister does and she is the one who is accepting responsibility for it. New Zealand First asks whether this is another Susan Bathgate amendment with the likes of her being appointed to this position? That is clearly what can happen so far as the information in the bill is concerned. We have every right as an Opposition to raise these issues. 
Clearly there will be more compliance costs. Who will pay for this registrar? It is another job for the boys and girls. Someone will have to pay for it and it will be the elderly people going into the retirement villages. Clearly the Minister has not thought of that. The Government does not set up a new position unless more money has to be put forward to pay for it. The regulations will set up requirements: more costs for the elderly more costs for the children to worry about as the elderly people are in a retirement village. Seemingly unbeknown to the Minister that seems to be the situation here—more bureaucracy and overall more compliance costs. 
This minority Labour Government loves imposing more compliance costs on people. Here we have another official and clearly that will mean more charges more letterheads more application fees for the registrar more regulations put out on behalf of the registrar and the person to whom he will delegate more charges for filing annual returns more charges for filing particulars of rest homes and retirement villages and who is living there. 
This Minister has not grasped what is in the bill. Clearly she could not even begin to grasp the consequences of what is in the bill. It is a great shame that the Justice and Electoral Committee was not given the opportunity to discuss this matter in the many months that this bill was before that committee. Then the Minister would have been better informed and the committee would have had the opportunity to point out to the Minister the error of her ways. 
MURRAY SMITH (United Future) 
: 
 I rise again to correct my colleague Dail Jones. I note his comment that he believes that he and his party know more about this bill than the Associate Minister of Justice does. I have worked closely with the Minister I have also worked with Mr Jones on the Justice and Electoral Committee and I find that the Minister is totally competent and in charge of what is happening and knows exactly what she is doing. I commend and support her for that. 
In terms of the change that he alluded to from the Registrar of Companies to the Registrar of Retirement Villages to me it makes a great deal of sense. When I talked to people from one statutory supervisor firm and told them that was one of the changes being made on the Supplementary Order Paper they thought it was an excellent idea and were strongly complimentary of it. Some flexibility is provided within the Ministry of Economic Development in terms of how that particular position is filled and who fills it. I think that is a very good idea. 
Obviously at the beginning of the consideration of the bill the select committee had to address whether the registrar would be the Registrar of Securities or the Registrar of Companies. The Registrar of Securities did not want to do it although there is a lot in the bill that is security related. There was some question whether the Registrar of Companies was the best person; some people felt the Registrar of Companies was not necessarily the best person. So we have a situation where there is some fluidity. The Registrar of Companies was prepared to do it and we welcomed the fact that the Registrar of Companies volunteered to take over when the Registrar of Securities did not want to do it. But now we have built-in flexibility that enables this matter to be dealt with by another body if that is more appropriate without the Act having to come back here to be changed. 
In terms of consultation well I have consulted the Minister. I question whether Mr Jones even tried to contact the Minister’s office to ask to be consulted and to discuss the bill. My advice is that he did not. He can hardly complain that he has not been consulted about it if he has not even asked to be consulted about it. 
When I spoke previously I talked about the amendment on Supplementary Order Paper 157 to clause 1(b)(i) in schedule 2. The amendment takes out the provision that the select committee had put in that the operator ought to consult the residents before putting the village on the market. I suggested that it would be quite disruptive of residents if they learnt through a third party that the village was on the market rather than hearing it directly from the operator. I discussed this with the Minister in our very good consultation. The industry’s concern was that if its members were trying to negotiate a private sale—that is non-public—the fact that the village was on the market could have a detrimental effect on their bargaining ability. I think that is a worthwhile consideration. My only concern continues to be that if the fact that the village was on the market became public and the residents did not know about it first that would be quite disorientating for them. It is important that all retirement village operators are very cognisant of the fact that they need to keep the residents as informed as possible to avoid a situation where they have lots of complaints and lots of criticism. It is in their own interests to do that. 
 When I was talking to a statutory supervisor about the situation I found there is still concern among at least some statutory supervisors who operate in this area about the exemption requirements. They are particularly concerned that if exemptions are able to be given and if any retirement villages gain exemptions then that will put a bit of pressure on the residents not to complain because the operators can say: “If you make a complaint you’re likely to cause us to have to appoint a statutory supervisor. That would mean we’ve got far greater costs and those costs will be passed on to you.” There is a bit of danger that granting exemptions could backfire on residents and put them under undue pressure. 
It was the view of the company I spoke to that there would inevitably be some consolidation of small villages particularly ones run by church bodies so that they effectively were combined into one larger entity that was more able to meet the requirements. However it is my view that at least at the early stages an exemption requirement is necessary because there will be a transition period and even if there is some aggregation to make it economic to comply then at least there will be time for that. 
DAVID BENSON-POPE (Senior Whip—Labour) 
: 
 I move  
That the question be now put 
. 
STEPHEN FRANKS (ACT) 
: 
 Given that this is my last call I will try to address clauses that have not been touched on clauses that in fact probably no one in this Committee has even noticed other than the Minister. 
For example I take the amendment to clause 37 on Supplementary Order Paper 157 which states: “(1B) A deed of supervision must contain all information and other matters or provisions that are required to be included in it by regulations made under this Act.” Suddenly in effect the industry has been nationalised. It is true that the drafter has throughout the bill regarded the operators as if they were rapacious landlords when in fact in a number of villages the operators are in economic terms the residents themselves collectively. The operator may be a charity the operator may even be a separate party but by the way that the villages are set up the operator is the residents collectively for many purposes. If the operator incurs costs if the operator has extra trouble if the operator finds it much harder to deal with a troublesome resident and if the operator has to spend time reassuring the Minister or the registrar ultimately that cost will fall back on the residents. So in effect they are being potentially inflicted with the costs of the competence or incompetence with which this industry is now to be regulated. By a simple piece of drafting of an amendment to clause 37 after the select committee hearings the Minister has become able politically to decide the terms of the contract between the supervisor and the village. 
That is not a neutral change. The Minister will of course now be embroiled through the regulators in any disappointment that residents feel. That is the classic means by which lowest-common-denominator regulation starts to become gold plating. Ultimately it becomes oppressive and damaging to the interests of those in the villages those in the industry being regulated. The supervisors will now be required to jump hurdles created by the response to the circumstances of the last problem in the industry—not the problems that it would be most rational to deal with. They will not reflect solutions that over time have evolved as the best mix in regulation between the pressure to ensure that no one can ever complain and the pressure to make sure that precautions do not cost more for the people at the bottom end of the market. The mix will now depend on what is needed to cover the Minister’s back because a power becomes a duty and a power is certainly a political exposure. If the Minister has not stipulated a deed of supervision with all the things that are a defence against political criticism then she will get political criticism. It will not be rational. It will not take into account the fact that a little change here or there might shut out the 5 percent of people who otherwise could afford to get into a retirement village. 
The effect is that this Government which pretends to act for the people who cannot look after themselves is taking the best-equipped 4 percent of our elderly population and gold plating facilities for them. It is giving them a protection that most of them already have. They are in perhaps the most desirable form of retirement living for many despite the Greens’ view that it is a monoculture. The Government is now saying that it will make them more privileged. It will expend its political time and energy and its regulatory resource on making those people even more privileged. It does not matter to it that a whole host of people will be shut out at the bottom end. The Government will pull up the drawbridges. The personal liabilities it will put on operators will discourage the next group of church trustees who decide to have a crack at it. It will discourage the iwi who thinks it might be a good idea to put three or four units together until it is told by its lawyers that it has to learn how to comply with an elaborate code and meet the requirements of a deed of supervision that is properly related to villages of hundreds of units. 
The effect of this is that this industry will become politically directed not market directed. The explosive growth in it has been precisely because it has not been growing along the lines of some politician’s best idea. Indeed in this industry the New Zealand pattern has evolved quite differently from patterns overseas. It has elements of life insurance and elements of property investment. The fact that people do not get back the full amount they put in has been a source of grievance and it is sensible for the Minister to have come up with a scheme where there will be a form of disclosure that should make it a little easier for people to know that the industry is not pure property investment and does have elements of life insurance. 
All of that could have been done without the Minister succumbing to the pressure and the temptation to become the dictator of the industry rather than the sunlight agent—the agent ensuring that there was proper disclosure and treating elderly people as if they could be trusted to make their own decisions. Our elderly now become the only class of competent adult New Zealanders who are not allowed to make the bargains for their homes that everyone else can make. They are the only class who can no longer front up and sort out for themselves what they think is the optimum mix of protection and investment. It will now be prescribed by the Minister and prescribed according to a code proposed by the big end of the industry—that is by the major operators who have a very obvious interest in what they call keeping up standards which is code for keeping out those who would bring competitive entry. 
Hon Lianne Dalziel 
: Cowboys! 
STEPHEN FRANKS 
: The Minister does not have the faintest understanding that competitive entry is the willingness of people to come in at the bottom end of an industry and challenge it with a new idea. This Minister calls those people cowboys. Are the people who decided to build kaumatua flats cowboys? What about the people from the Dutch community who decided all those years ago to create out of a combination of the Unit Titles Act which did not contemplate it and some other pieces of law a form of communal living that no bureaucrat could have prescribed? The Minister is now going to prescribe through the deed of supervision exactly how the risks will be allocated and there is no risk that is carried without a return. If the supervisors are made responsible—as was included in this bill when it started out—for acts over which they have very little control they will stipulate more control. Instead of the operator being able to sort out what best appeals to people who want to buy units it will have to sort out what gets past the regulator. 
This of course is the same Minister who is now holding up the Stock Exchange as she decides with all her wisdom what the rules ought to be between the Stock Exchange and companies. That is a relevant other example. This Labour Cabinet has a new power to tell the Stock Exchange what its rules should be. This Minister is now giving herself through a Supplementary Order Paper that the Justice and Electoral Committee never saw the power to tell this industry what the pattern of risk will be and she is refusing to accept a provision from Parliament that would at least direct her to take account—and that is all it was—of the potential cost to the people who will be shut out of these gold-plated villages. The drawbridges have been pulled up and the security fence has gone in. The staffing requirements will be set at a level that amateurs simply cannot match unless they are inside the industry. 
This Supplementary Order Paper has many provisions that probably have the same effect. The Minister chose not to highlight that particular clause. The explanatory note did not mention it as far as I can see. It is a major change in the relationship between statutory supervisors those they are supervising and the operators. The operators are the promoters who ensure that we cut down the waiting lists for these villages that the National Party mentioned. Those waiting lists will be cut down only by the villages being made more expensive and people being rationed out of them or— 
Dr Lynda Scott 
: Or more access. 
STEPHEN FRANKS 
: —having more access or more supply and it is not available here. I think the National Party spokesperson on the elderly although not a member of our committee has hit the key problems with this bill very very well. I know that National will vote for this legislation because of the good parts of it and there are good parts in it but ACT cannot support the bill in this form simply because it encourages this kind of imperialism by Cabinet. 
The question was put that the following amendment in the name of Murray Smith to the amendment to clause 21(5) set out on Supplementary Order Paper 157 in the name of the Hon Lianne Dalziel be agreed to: 
to add the words “(being a right provided in that security interest as at 31 December 2002)”. 
A party vote was called for on the question  
That the amendment to the amendment be agreed to. 
Ayes 69 
New Zealand Labour 52; Green Party 9; United Future 8. 
Noes 48 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8. 
Amendment to the amendment agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 157 in the name of the Hon Lianne Dalziel as amended be agreed to. 
Amendments as amended agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 129 in the name of Murray Smith to insert clause 41B be agreed to. 
Amendment agreed to. 
The question was put that the following amendment in the name of Stephen Franks to clause 65 be agreed to: 
to amend clause 65 by inserting the following new subclause: 
(1A)The Minister must take into account in considering any draft code for approval: 
(a)the need to ensure that the requirements of the code are not so onerous as to act as a barrier to persons of modest means gaining access to accommodation in retirement villages; and 
(b)the need to ensure that the code is sufficiently flexible to permit the operation of villages with a range of pricing structures and a range of services and facilities offered to residents. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 48 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8. 
Noes 69 
New Zealand Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
Clauses 1 to 78 and schedules as amended agreed to. 
Bill reported with amendment. 
Third Reading 
Hon LIANNE DALZIEL (Associate Minister of Justice) 
: 
 I move  
That the Retirement Villages Bill be now read a third time 
. This is important legislation and it is long overdue. As members of this House will now be aware it provides protection for people who choose retirement village living and builds on the recommendations of the Law Commission. The provisions of this bill will have the effect of addressing a legislative mismatch that has exposed many older people and their families to unnecessary distress. Until this legislation is enacted there is little in law specifically to protect the rights and various interests of older people living in a retirement village apart from the securities legislation that covers it now and clearly was not designed for the purpose. 
At its best retirement village living can provide a wonderful lifestyle and a sense of community with as much personal privacy as people want. But at its worst a choice to buy into a retirement village can result in a feeling of being trapped—a tragic way to spend one’s retirement years. I accept that most operators run good villages and most residents are very happy with their choices but there are cowboys in the industry and this bill is designed to ensure that no more cowboys are able to enter the industry. If the cowboys who are there now are put out of business then I say that is a jolly good thing. 
But we need to put in place provisions that will limit risk protect interests and promote good practice. I know that the ACT party believes that everyone can protect his or her own interests and should be left to do so. It is not my experience of reality. I think if Stephen Franks had read letters from widows who felt like prisoners because they could not move out of the place they were stuck in then maybe he would have been prepared to rethink what I can only describe as the modern-day equivalent of the Flat Earth Society approach. 
Ignorance creates risk. This bill mitigates that risk. It is true that risk will never be completely removed but what we have done with this bill is ensure that no one can enter into an occupation-right agreement without being provided with information relevant to making an informed decision. An operator must disclose information relating to entry residency and exit costs. An intending resident cannot enter into an occupation-right agreement unless he or she has obtained legal advice. 
Good relationships between residents or between residents and village operators cannot be legislated for but can be promoted. This bill provides for operators to operate a complaints facility and for a formalised dispute resolution process involving independent dispute panels whose members are pre-approved by the Retirement Commissioner. 
 This bill also includes a provision requiring a village operator unless exceptional circumstances exist to appoint a statutory supervisor which ensures that the financial stability of a village is monitored. Another form of external oversight will be provided through the Retirement Commissioner who will have the role of reporting on and monitoring the effectiveness of the Act. 
Another key component of this legislation is that it will compel compliance with an industry-wide code of practice. The matters the code of practice must cover are prescribed but the specifics of the code will in the first instance be generated by the industry and other stakeholders which I personally believe is a much greater protection than that offered by the amendment proposed by the ACT party which was voted down in the Committee stage. Stakeholders will be invited to submit draft codes for consideration and the Retirement Commissioner will publicly invite submissions on them. On the recommendation of the Retirement Commissioner the responsible Minister will approve a code that has effect as a regulation. The decision as to who the responsible Minister will be has not been made yet. That is my response to New Zealand First members who think I cannot read a bill when obviously I can. 
Dail Jones 
: Absolutely right about that one. 
Hon LIANNE DALZIEL 
: Yes but the responsible Minister will be driven off who the registrar is which I would have thought would be obvious to anyone. Through the formalised processes set in the bill the code will be able to be refined and adapted so that it remains a living document throughout its life. 
This legislation is eagerly awaited by many people living in retirement villages and it has been well supported by people within the retirement village industry. To those who say we should simply have picked up the Law Commission’s proposed bill and put it into effect I say that that would have satisfied no one. It would not have satisfied the retirement village industry or people living in retirement villages. This is much better legislation. 
I appreciate the work and effort that have gone into producing the bill. I thank the Justice and Electoral Committee; the village operators the village residents the Retirement Villages Association Grey Power Age Concern and other interest groups; individuals including Leo Steele a Christchurch lawyer with a passion in this area second to none; and all the members of this House who have contributed to the fine-tuning of this long-overdue bill. The Justice and Electoral Committee’s comprehensive consideration of the bill resulted in recommendations that in my view will improve the effectiveness and workability of the provisions. The bill as amended in the Committee stage now strikes an optimally effective three-way balance between promoting the individual rights and interests of residents protecting the collective interest of residents and recognising the needs and interests of the retirement village industry itself. It is often difficult to get a balance but I believe that we have achieved that here today. 
In closing I thank my officials the people from the Office for Senior Citizens within the Ministry of Social Development who are here in the House this afternoon. I acknowledge they have done a great thing in bringing this legislation together. I know that it is a hard ask for a ministry that is not resourced like the Ministry of Justice is to deal with this kind of legislation. 
Stephen Franks 
: They’d muck it up even worse don’t worry. 
Hon LIANNE DALZIEL 
: It is extremely unhelpful that the ACT party has made some very unpleasant comments about officials who have worked exceptionally well and hard to try to get a balance in a very difficult situation where it is hard to get a balance between competing interests. I pay credit to those officials in this House. I believe that it is the height of rudeness to try to undermine the effective working of the public service but we have come to expect that from the ACT party. 
I am proud of this legislation. It has been a long time coming. It will be welcomed by all quarters of those interests that we have been seeking to protect. I commend the bill to the House. 
Dr LYNDA SCOTT (National—Kaikoura) 
: 
 The National Party will be supporting this bill. It was one of the first things I got really involved in when I became a new member of Parliament. The Law Commission report was produced in 1996 as I remember and it identified problems that had the potential to escalate within an industry that had grown over the previous 10 years. 
Retirement villages shortly to be renamed lifestyle villages are certainly an excellent choice for many New Zealanders who want security a call system to have the grounds maintained—especially an elderly woman living on her own—to know that they have companionship and to know that they are in a community where they get support. In days gone by people used to go into rest homes. They used to drive to the door. Rest homes had to have a large number of car-parks but not any more because these days people go to a rest home in an ambulance. There is a lot of work done to keep people in their own home and retirement villages offer a very good lifestyle option. 
But the Law Commission did identify that there was a need to protect residents and to protect the industry to some degree. I came to Parliament in 1999 and one of the first things I did in 2000 was to turn the Law Commission report into a member’s bill. I had quite a lot of debate with the statutory supervisors. I looked at the compliance costs of legislation such as this. There are some small homes around New Zealand. I think of some of the church homes some of the kaumatua flats and some of the places that have developed in especially the South Island where there might be a rest home a dementia unit or a hospital with six seven or eight flats or houses around it that are sold. That is quite different from the very large complexes of retirement villages where there are hundreds of houses. I felt that those with up to 6 maybe 12 flats or houses should be exempt. The major compliance costs that come with this legislation will pose a huge burden on places like that. As Mr Franks was saying before that will really limit access which will be to the detriment of some of those smaller lifestyle options. 
I believe that having the member’s bill in the ballot did push the Government to speed up the development of its own legislation. The select committee did work to improve the legislation. I think the second select committee after the last election did a very good job as did the officials to ensure that we had workable legislation that balanced those risks between the needs of the residents the collective needs of a village and the ability for new players to come into the market. We see that there have been some substantial changes to the bill for the good. 
The Retirement Villages Association has always had a code of rights. The association developed basically to ensure that its members had a very high standard. It did a market research survey of retirement village residents’ satisfaction and found that only 1 percent of village residents were dissatisfied with the village. But Grey Power hears from that 1 percent and I heard from that 1 percent when I was a geriatrician and working in the aged-care sector. There were a few examples of people who did get trapped in villages and did not enjoy being there. There is now a cooling-off period. People who move into a retirement village have a certain time in which they can change their mind about it. Even though they might have signed up to a legal contract they may exit without harsh provisions being applied. 
There is also a disclosure document to protect residents’ interests. It makes it very clear what a person is buying—that one is buying a licence to occupy not buying a piece of land and a unit. A person is buying a licence to occupy a house in a village and that is a lifestyle choice. When people know what they are buying into generally they are a lot happier. They know the financial implications if they leave and if they should by misfortune die their families know what they bought into and the financial implications of that. There is that need to protect residents. 
There is also a need to protect the collective interests of residents because most of the disputes in retirement villages are between residents. Noise pets cars and all sorts of things come up as problems when people live next door to each other. There is a disputes resolution process in the bill. It was felt that it would be very expensive if the statutory supervisors were involved in that process so there are two levels of that process: a complaints facility which one hopes will be able to deal with the local little problems of people living next to each other; and the more major disputes resolution process which the Retirement Commissioner has input into by way of appointing the disputes panel. 
National has been concerned about some of things that are included in the bill such as the broad discretionary powers of the disputes panel around delays in the sale or disposal of units. That was one of the things that Grey Power brought up. There is concern that when somebody wishes to exit or has exited a retirement village or someone has died and that person’s family wishes to be able to access the estate the unit can take time to sell. It is not such an issue at the moment because we have waiting lists for a lot of the villages and there is a very hot property market but in a situation where that is not the case—and we have seen that many times in New Zealand—some of the units can sit around for 2 or 3 years and take a long time to sell. 
It would be of concern if the disputes panel could force buy-back. It would jeopardise the village as a whole and that must be taken into account. There is the individual’s need there is the need of the village as a whole and there is the need of the people—the developers of retirement villages—who have invested their money time and effort in developing this industry and supplying people with this lifestyle choice. It is a matter of getting that balance right. National members support the changes that have been made to the bill because we feel that a lot of those changes make that balance much clearer and better defined. 
But the National Party is still concerned about compliance costs and the fact that there are no exemptions for any of the smaller homes and retirement villages. We will also probably see a lack of new investment. It will be harder to enter the market and to exit the market as well under this legislation. The code of residents’ rights has also caused us some concern because it has not been specified and identified but the Retirement Commissioner has an obligation to keep an eye on the implementation of this bill and to monitor that code of practice. All in all we support the bill. We hope it will improve the functioning of all retirement villages in New Zealand. 
DARREN HUGHES (Labour—Otaki) 
: 
 I rise to take a short call in support of the third reading of the Retirement Villages Bill. In doing so I want to welcome this legislation which is in the final stage of its passage through the House. It is good legislation that covers a new type of accommodation in which a number of New Zealanders are choosing to live. About 26000 people already live in retirement villages and there is strong growth every year. My constituency of Otaki has the highest number of people over 65 of any constituency so there are lots of retirement villages and I know what an enjoyable way of life that can be for people. I assume I myself will end up there one day; some other members may precede me. I notice Mr Dail Jones speaking; I understand that he is a member of the residents’ committee of a retirement village in Auckland. The Minister Lianne Dalziel has done a great job on this bill ably assisted by the officials who were very helpful to the Justice and Electoral Committee as well which was chaired by Tim Barnett. I think we reported back a good piece of legislation which I very much support and I look forward to people in my electorate enjoying the fruits and benefits of it. 
DAIL JONES (NZ First) 
: 
 New Zealand First supports the Retirement Villages Bill and has done all the way through. As an Opposition party we have highlighted some of the problems associated with the bill. 
One of the greatest problems arises at this very moment at 2.45 p.m. on what is actually 22 October when we should be having question time and Ministers should be being put under pressure. Instead this Government has decided to take urgency has refused to let us have question time and has refused to allow for example my colleague the Rt Hon Winston Peters to put this Minister Lianne Dalziel under even greater pressure as he invariably does. It is not surprising that the Government prefers to have debate on the Retirement Villages Bill at 2.45 p.m. rather than question time. That is the sort of problem we have in the House. 
David Benson-Pope 
: We would love to have question time. It’s those evil people in ACT. 
DAIL JONES 
: The senior Government whip can only berate me as I try to make the constitutional point that now should be question time. 
I come to the bill. I draw to the attention of the National Party spokesperson that she seems to be slightly confused about clause 27 “Cooling-off period and cancellation for delay”. She has given the impression that there is a very lengthy period for cancellation when under clause 27(1) “An occupation right agreement must contain a provision allowing a resident … to cancel … by notice given not later than 15 working days after the agreement is signed” rather than the many many months and years that she was talking about. She is confused about the difference between the ultimate cancellation in clause 29A that I referred to earlier and the right to cancel the contract in the first 15 working days. 
I had an email from a gentleman about this particular issue. I made the point that no lawyer would allow a client who was selling property to let a buyer into it until the buyer had approved the contract and in this case until the 15 days had expired and the money had been made available. One will not be able to go into a retirement village then at some distant time in the future cancel the contract just like that. It will not work like that in so far as the Minister hopes and in so far as this legislation is concerned. If an elderly widow sells her unit in a retirement village to another couple who are coming in that couple have 15 working days in which to cancel as set out in the legislation. She will make sure that that time has gone by that the contract is settled and that she has got the money before letting the buyers move in. Any lawyer who allowed his or her client to let someone in without having got the money and an unconditional contract would very soon be sued for negligence. So there is some confusion about clause 27(1) and a purchaser of an existing unit taking possession from the vendor. 
As for the abuse by the Minister of those in the industry—she referred to developers as cowboys—I say New Zealand would not have got anywhere if people had not come out here and run dairy farms taken the risks involved and got involved in speculation with property building putting in railways and the like. For the Minister to abuse people who have had the courage to spend the many millions of dollars involved in creating a retirement village by referring to them as cowboys is totally unnecessary. She should be ashamed of herself. It is clearly a hangover from her former life as a trade union official. That Minister cannot help but abuse people out there who are in business trying to make a dollar and putting their money on the line by keeping on referring to them as cowboys. It is interesting that she could not name even one. If the Minister thought there were cowboys in this industry she should have named at least one. I challenge the next Labour speaker to give me the name of one cowboy in this industry. This Labour Minister in this minority Government hates business. This Government cannot stand business and it keeps accusing and vilifying the people who go out there and run risks as cowboys. It is totally unnecessary. It is one of the reasons why business and people generally will have nothing more to do with this minority Labour Government. 
What is good about the bill? I speak as a lawyer who has looked at many of these agreements and advised many people on them. Essentially the ultimate thing that is good about the bill is that there is a firm set of rules that everyone—the buyer the operator and the seller—has to follow. If all the rules have been complied with no one can come back and say: “Why didn’t you tell me such-and-such?”. Nowadays an agreement for someone to move into a retirement village will include all the things that are referred to in this legislation in one way or another. It will go on for about 40 pages. All that most members of the public want to know when they walk into a lawyer’s office carrying a bundle of 40 pages is where to sign. They do not want the lawyer to take an hour and a half to explain the documentation to them at a cost of $300 to $400 an hour. All they want to know is where to sign and that is the problem lawyers have today. One cannot blame people for saying: “We don’t want to spend $600 or $700 on you; we don’t want to pay for your building. We just want to get into our nice retirement village unit.” 
This bill imposes a mandatory provision for all concerned. The procedure must be met. Whoever gives advice to the buyer must go through a certain procedure and must certify it as required by this legislation. There is protection for everyone. As someone who has been involved in the industry I see that as the most important aspect of this legislation. There should be certainty in the future. 
I immediately refer to the clause I raised earlier clause 29A “Occupation right agreement voidable”. A bit of conflict is created here. It provides that an occupation right agreement entered into in contravention of certain sections only can be voidable. Care has to be taken in giving advice on this particular legislation in so far as that matter is concerned. I commend the officials as I did in my speech in the Committee stage and the Minister. They have tried to improve clause 29A. I was not happy with that clause. The amendment makes it much more satisfactory but I still think it will make a lot of money for lawyers as the matter goes to court and efforts are made to define for example the meaning of: “For the purposes of this section a contravention of a particular provision is a contravention of that provision in a substantial respect if—” paragraphs (a) (b) or (c) take place. Unfortunately there can be a great deal of nit-picking in this area. 
I have expressed my concern and disappointment at being confronted by the 15 pages of Supplementary Order Paper 157 dated Thursday 16 October 2003. Here we are still on 21 October according to the calendar and debating this issue when most of us would have seen this Supplementary Order Paper probably only on Tuesday of this week. As an Opposition we now have to try to have a good look at all these various amendments to see whether we should agree with them. Generally this is a satisfactory bill and we know there is a good intention behind all these amendments but I have been critical of them in the Committee stage as I have already mentioned. 
I am critical of the fact that a Registrar of Retirement Villages is to be appointed at this late juncture without proper discussion in the select committee. I am concerned that this bill will increase compliance costs in many ways. It will increase bureaucracy and there is the aspect that here we have again the appointment of a registrar for the benefit of a Minister. As the explanatory note states: “The position of Registrar of Retirement Villages will initially be held by the Registrar of Companies but the location of that office will be able to be changed to a different department of State if that is considered desirable:”. Who knows what sort of department of State this particular Government may set up? After all it has abolished the right of appeal to the Privy Council on a vote of 63. What can it do that is as bad as that? Well I suppose it can keep on trying for the next couple of years. I can see the Government appointing one of its friends to be the Registrar of Retirement Villages if it possibly can. 
Generally we all hope that people who move into retirement villages benefit from this legislation and there is an opportunity for that to happen. I wish everyone who is moving into retirement villages the best. I understand that people of Mr Darren Hughes’ age probably will be looking to do that when they are about 95 or 100 because they might live to be 115. I dread the thought but that is something Mr Hughes can look forward to in the future. 
STEPHEN FRANKS (ACT) 
: 
 The benefits of this bill will become evident to a number of people quite promptly. There will be an improvement in disclosure I am quite sure. There will be some improvement in the standardisation. There will be someone whose business it is to try to ensure that codes are comparable and I have no doubt at all that there will be a broader consensus developed within the industry on the way in which a standard agreement goes and what the variants on it might be. 
It may also be the case that there will be individual complainants who will find the new disputes procedure very helpful. There may be operators who wonder why they did not have a formal disputes procedure in place before because they find it works with common sense. There may well be people who find they will get a more prompt courteous and fully cooperative treatment from the operators when they try to sell out because there is now a more clear sanction where operators are dragging their heels and not advancing the exit of a resident who wants to go. 
I believe there will be intending residents who will benefit from the certification by having their lawyers realise that describing the patterns of rights and responsibilities in an occupation right agreement is a technical matter. There will be lawyers who have thought they could do it in the past who in future will say: “This is a matter for specialists. This is an area that now requires a formal certification. You had better go off and get someone else to do it or go to the specialist in our firm.” and that may all be sensible and beneficial. It may well be that there are people who are saved from making a mistake by the cooling-off period if they sign up then talk to their families realise that it does not suit and pull out within the stipulated 15-day period. All of these things are helpful or potentially helpful. 
It is possible that the proposed increases in ongoing disclosure with the right to be informed or the consultation requirements will help. It may be that the registrar of retirement villages—this new quango that is being established without any prior examination or any justification for it in terms of a policy background—will do something to stop some fraudulent or foolish statutory supervisor disputes panel operator or other participant in the future. 
All of these things are possible but I say to members that all these things come at a cost. Most of them could have been achieved without the size of cost that this bill will impose on the elderly of this country. Most of them could have been achieved by standardising descriptions and by providing a code that required operators to clearly identify when they were departing from it so that the intelligence of elderly people was not insulted. People would still be left with a choice whether they wanted the gold-plated regime that a politician might think they ought to want and they would still be left with the possibility of patronising a scheme proposed by the local amateur. Ultimately all the regulation in the world does hardly anything in terms of increasing human happiness in these areas compared with anxious promoters and operators who are trying to grow their businesses in a competitive market. They need to keep thinking of better ways to satisfy the customers. They need to keep thinking of better ways to find a niche of new groups who they can help into this kind of collective living. 
Unlike the Greens I believe this kind of monoculture—as they described it—is if it is chosen exactly what people like living in. If elderly people want to live with others of their kind of their age and of their range of interests it should not be confined as the officials set out to confine it to the top 4 percent in assets and income of our elderly. It should be available to just about anyone because quite frankly the retirement village concept should be cheaper to live in when all costs are taken into account than the current arrangements for many people who are trying to keep up houses that are too big for them and trying to maintain themselves often using public services with visiting nurses and others who have to come and look after them or at least look over their shoulders. 
 Retirement village living should not be confined simply to those who have more than modest means. I think that the most disgraceful part of this bill was the Minister’s mockery of the idea that when she approves the code she should have to take account of the desirability of removing barriers to entry and ensuring that the code does not become a set of drawbridges to be pulled up in order to keep out everyone other than the rich. 
The disclosure requirements did not need to be mandatory. The code of residents’ rights does not need to be the product of those who are already the insiders in the industry. There are many elderly who by themselves or with advisers are fully competent to decide whether they want to go into a village that does not necessarily have all the bells and whistles that someone will decide ought to be in a code of residents’ rights. This bill says that there will clearly be two classes: those who can afford the gold-plated version and those standing outside the security gate who are in their own homes probably with no security no comfortable neighbours and no ensured services simply because they cannot bridge that difference between say the $150000 and $160000 or between the $100 a fortnight and $130 a fortnight that might be the effect of this bill. It might well be that we see this bill in hindsight as the bill that tailed off and capped the rate of growth of retirement villages. 
It is sad to be forced into the position of voting against a bill that has so many fine objectives so much thought and so many provisions that could have been admirable but I have to vote against it essentially to record that this Parliament should not proceed to legislate on matters it knows virtually nothing about. It should not be legislating to hand a rule-writing power to the insiders in the top half of the industry. It should not be empowering or requiring a Minister to respond to political pressure when we have a market here that is far more likely to satisfy the needs of New Zealanders than any amount of top-down prescription. 
When I look at what this might have been and what we have ended up with I am reminded of why ACT and people like myself come to Parliament. I have seen the way regulations are used for purposes opposite to those intended. I know that the officials and the Minister were contemptuous of the idea that older people were best serviced by having a whole range of people trying to get into this industry—seeing a quick buck and trying to get in—because it is that kind of pressure that makes sure the incumbents cannot exploit super profit. 
It is that kind of pressure— 
Hon Lianne Dalziel 
: Oh leave the officials alone. 
STEPHEN FRANKS 
: I say to the Minister that it is either she or the officials. A 10-page Supplementary Order Paper coming out with a whole lot of provisions that the select committee had already looked at says that either the Minister suddenly changed her mind or the officials had not given the bill proper concern during the really dragged-out consideration we had. The officials took a view that they were not there as the committee’s officials which is proper. They were the Minister’s officials and they were unable to explain quite a few of the things they were doing. 
Hon Lianne Dalziel 
: That’s right. Blame me. 
STEPHEN FRANKS 
: I say that you should have appeared— 
Mr SPEAKER 
: Not me. The Minister should have appeared. 
STEPHEN FRANKS 
: With respect the Minister should have appeared and not left it to the officials. 
This bill takes choices away from old people. It patronises old people. The retiring elderly are the only class of adult New Zealanders who cannot choose what kind of property rights they want to buy. 
MURRAY SMITH (United Future) 
: 
 United Future is very pleased to see the passing of this bill and its third reading today. We want to thank the Government for responding to our call that the bill be given urgency during this urgency period so that it could go through the Committee stage and the third reading and be sent on its way to come into force in the quickest possible time. I am disappointed that the ACT party is the only party unable to support the bill. I hear what Mr Franks says—he made very valuable contributions during the select committee process—and I hear some of the dangers he talks about. However very clearly on balance this is a very good bill. It provides a balance between market forces and the necessary statutory control. 
Retirees and their families are often in a vulnerable position. Retirees investing in their final homes are often in a difficult situation. It is an emotional situation for families and a situation where larger villages in particular have a power imbalance and are able potentially to rip off retirees and their families just because of their greater knowledge of the situation and because of the unique situation and construct that retirement villages provide as compared to ownership of one’s own house. 
Formerly the protections provided were really through the Securities Act and as a lawyer I know the huge amount of paperwork that used to be involved concerning retirement villages. I tried to wade through the paperwork and then explain to potential residents just what was involved. It was not always clear and transparent. This bill will provide far more clarity and transparency specifically directed at the retirement village situation rather than at the broader securities regime that exists currently. 
The balance between market forces and statutory controls is necessary. In my second reading speech for the benefit particularly of Mr Jones who had not heard of any cowboy operators I referred to a retirement village in Petone that I have been directly involved with known as Jackson Mews. In my second reading speech I made reference to the fact that the residents had had extraordinary difficulty in getting the operator Mr John Gilbert even to respond to the queries they had. I promised in that speech to report back to the House what happened particularly following Mr Gilbert’s promise that he would respond to queries within 7 days and would meet with the residents. I am pleased to say that at least he met with the residents. There was a strong turn-out of residents who expressed their strong disgust at the way that he was operating. Unfortunately it appears that Mr Gilbert cannot see beyond the dollars involved in his investment and he is unable to understand the residents’ point of view. For him this is his village that he developed and effectively he seems to see the residents as guests. He cannot understand why they should be making waves including making waves publicly about the running of the village because all it does is undermine everybody’s investment. We hope that with the passing of this bill and the appointment of a statutory supervisor he will be forced to come to the position of having to address these issues and address them through the disputes regime that is there. 
The statute will provide a framework—and only a framework—within which retirement villages will operate. I guess one of the cautions about the bill is that a huge amount of ministerial discretion is provided for the village through Orders in Council and other regulations. There is considerable scope here for a very interventionist approach which I think would be both unwise and unnecessary. There needs to be a balance between control and the allowance of some flexibility within the market. Mr Franks has referred to the danger of over-intervention by the Government and over-control of this sector which I think would be to its detriment. 
There are two matters particularly that come to my mind in respect of this level of control. One is the new provision in the Supplementary Order Paper for the statutory supervisor to enter into a deed of participation with the operator and the other is that the requirements of the deed of participation will be set out by regulation. It seems to me that statutory supervisors know what they are doing and if they have to be appointed and the operator has to appoint them the statutory supervisors will provide deeds that will adequately enable them to fulfil their responsibilities. I question whether the Government needs to tell statutory supervisors what ought to be in their deeds. Maybe there is some room for standardisation but I would have thought that that would have developed through the market anyway as statutory supervisors colluded to compare notes and come up with what they needed. They are experienced in the field. That is just one example of a signal that the Government may want to be too hands-on here. 
I was also critical in the select committee and continue to be critical of the provisions of clause 26 which require lawyers to certify that they have explained to residents the general effect of the agreement and its implications. As a lawyer I almost took offence at the provision stating that the explanation required to be given must be given in a manner and language that is appropriate to the age and understanding of the intending residents. I see that as an insult to the legal profession because lawyers already do that. That is their job and their trade and to be told in legislation when there is no evidence whatsoever that lawyers are falling down on the job in any respect in this regard is a little like telling them how to suck eggs. Nevertheless the provision is there and I do not think it needs to be there to do the job. 
I referred to exemptions during the Committee stage. The danger is that exemptions will backfire on residents by putting them in the situation where if they are in an exempted retirement village they can be faced with being threatened that if they stir up trouble that will effectively mean the exemption will be lost at extra cost to the village and extra cost to all the residents. I can see a situation where an operator could put pressure on residents by saying that if they make a complaint then all their fellow residents would have to pay the cost of it. I hope that when the Minister draws up the criteria for exemptions under clause 75B they are very tightly controlled. I think she could include some provisions to provide more balance. One might be for the registrar of retirement villages to chair the annual general meeting—or provide someone to chair the annual general meeting—where an exemption is granted so that an independent person can get a feel as to whether residents are being heard and whether there are some genuine complaints without having to go through a formal process of complaint. Certainly I think the registrar would have to take a greater interest in villages with exemptions than in those with a statutory supervisor appointed which is really what this provision is getting at. 
Possibly the bill should also be used in a transitional fashion. Some smaller villages should be encouraged to amalgamate with other villages—it could happen where a church ran a number of villages—to get that economy of size so maybe exemptions can be looked at as a transitional measure to ease villages into a more satisfactory set-up. Mr Franks was certainly concerned about the impact that the bill might have on lower-level operators and that if it is too draconian and standards are set too high then the whole industry will effectively be left to the major players and small people will not be able to get into it. I think it is a danger that the Minister needs to weigh very carefully and be conscious of. 
It will be nearly a year before the full regime is in place. It will be interesting to see how it develops. Anything new has to have a settling-down period but generally it is a good bill. The officials have spent a lot of time on it. The select committee spent a very constructive period of time listening to submissions and developing the issues and have obviously made a lot of changes that I think have been very positive. I think we have had the advantage of a Minister who is knowledgable and is concerned to weigh up competing interests and provide some sort of balance. Many aspects of the bill will provide a far better environment. United Future is very pleased to see the bill go through its the third reading and finally come into force as law. 
A party vote was called for on the question  
That the Retirement Villages Bill be now read a third time.  
Ayes 108 
New Zealand Labour 52; New Zealand National 27; New Zealand First 13; Green Party 9; United Future 7. 
Noes 7 
ACT New Zealand 7. 
Bill read a third time.