Volume 613 Week 42 - Thursday 13 November 2003 
Volume 613 Week 42 - Thursday 13 November 2003 
[Volume:613;Page:10013] 
Thursday 13 November 2003 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Visitors 
Environmental Protection and Resources Conservation Committee People's Republic of China 
Mr SPEAKER 
: I have much pleasure in informing the House that members of the Environmental Protection and Resources Conservation Committee of the National People’s Congress of the People’s Republic of China led by the vice-chairman of the committee Mr Ye Rutang is present in the gallery. I am sure that members would wish that the delegation be welcomed. 
Business Statement 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 Next week in the House priority will be given to the Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill the Ngati Tama Claims Settlement Bill and the Children’s Commissioner Bill. If time allows bills available for first reading will be dealt with. 
Points of Order 
Moving of Closure Motion 
Hon PETER DUNNE (Leader—United Future) 
: 
 I raise a point of order Mr Speaker. It relates to but does not seek to relitigate events that occurred last night at the closure of the debate on the Smoke-free Environments Amendment Bill. As I say I am not seeking to relitigate them although there have been a number of messages received by my office today expressing dissatisfaction with the procedure that was applied. 
The point of order relates to Speaker’s ruling 53/6. I raised a point of order last night regarding that ruling because it states: “The closure must be moved by a member rising in the member’s place pursuant to the Standing Orders.” The ruling given by the chairman and upheld by you when you were recalled was that Speaker’s ruling 7/1 in effect overrides it and means that a member does not need to be sitting in his or her allocated seat but may sit in one of his or her party’s allocated seats for the moving of the closure motion to be valid. At the time I looked at Speaker’s ruling 7/1. I sensed you were not in the mood to take further debate on the issue at that time so I decided to raise it in the calmer atmosphere of today. If you look at Speaker’s ruling 7/1 you will see it states: “… the allocation of particular seats to individual members by practice of the House is left to the party leaders and whips …”. That does not imply that because someone is simply sitting in a block of seats that are allocated to that member’s party he or she is meeting the test of Speaker’s ruling 53/6—that a member must rise “in the member’s place”. It does not state: “in the member’s party’s place”; it states: “in the member’s place”. 
The reason I am raising the point of order is there are many times when a closure motion often on less controversial matters than the one dealt with last night is moved in this Chamber and I think there needs to be some clarity. If the argument is that Speaker’s ruling 7/1 overrides Speaker’s ruling 53/6 I say that clearly it does not. There should be a better reason than that. I am seeking a considered ruling from you on this point that can be applied to future matters so that we do not get into the sort of situation we ended up in last night. 
Mr SPEAKER 
: I thank the member for raising that point. [ 
Interruption 
] The member will please sit down. If the member reads the Standing Orders he will see that I can always hear a point of order; I can then rule straight away—which I can do here; it is one of the easiest ones I have ever had to rule on. A member does not have to be in his or her ordinary seat to move the closure. Acting whips often sit in another seat to do it. 
Hon PETER DUNNE (Leader—United Future) 
: 
 I raise a point of order Mr Speaker. With respect I say that that does not advance the situation. There is no ruling that you have been able to draw attention to other than perhaps the ruling you have just given that upholds that. I was seeking some explanation of the grounds on which the ruling is made. The explanation given last night does not on reflection appear to hold water. If you are making a new ruling that means someone can be sitting in a seat other than his or her allocated one I accept that but my point really asked what the authority was on which the ruling up to this point has been made. To date we have not had an answer. 
Mr SPEAKER 
: At the start of each Parliament once the Speaker is appointed he or she allocates seats for a particular party. Any member can sit in those seats and any member of that party can sit in any one of those seats at any time and can move any motion as required. That is not a new ruling; that is merely restating what is customary practice. 
Hon KEN SHIRLEY (Deputy Leader—ACT) 
: 
 I raise a point of order Mr Speaker. You may have noticed that recently the ACT party had occasion to relocate its seating in Parliament and as Speaker’s ruling 7/1 states indeed it is left to the party whips and/or leader to determine where those seat allocations may be. But having made those allocations there is a requirement for the whip or leader to notify the Speaker for practical reasons. The broadcasting people have to know where every person actually speaks from and therefore each individual does have an allocated seat in this House and it is only the party leaders and whips who allocate where it might be within the block. So I concur with Mr Dunne’s sentiment. There is a lot of confusion here and I do not believe that the ruling we had last night does cover the situation or explain it adequately. 
Mr SPEAKER 
: I think it does quite clearly. The allocation of seats within a party group is a matter solely for the leader of that party. As long as a member is sitting in that block there is no cause to question the right of a member to sit there. 
Ron Mark 
: Point of order— 
Mr SPEAKER 
: I have ruled on the matter and I do not want any further relitigation of it. 
Ron Mark 
: I will not take that as an intimidatory comment towards me— 
Mr SPEAKER 
: No it will not be and if the member makes that comment he leaves the House immediately. I have said I have ruled on that matter; I am not having relitigation. 
RON MARK (NZ First) 
: 
 I raise a point of order Mr Speaker. To help some of us and to prevent any possible misinterpretation by others listening that this may be a ruling of convenience—a misinterpretation we would not want them to gain—could you then please explain to me at a time that is appropriate when that Standing Order was first written into the Standing Orders of this House because since then we have had some changes in the way in which seats are allocated and the proportionality is determined; and precisely why was such a Standing Order deemed necessary if it were the intent that people could make their comments and move closure motions from any seat allocated to their party? It would seem that such a Standing Order was not necessary at all if that were its intent and purpose. 
Mr SPEAKER 
: What the member says is very interesting because that is precisely the point. There is no Standing Order concerned—none at all. There is Speaker’s ruling 53/6. In that Speaker’s ruling there is a figure of speech used and I have interpreted that as have other Speakers as meaning that any person who is in his or her allocated group of seats can speak from any one of those seats. 
RICHARD WORTH (National—Epsom) 
: 
 I raise a point of order Mr Speaker. What is the consequence of your ruling for the existing convention Standing Order or Speaker’s ruling requiring interjections to be generally made from the allocated seat of the interjector? It seems to cut across that clear statement of principle which we have so often heard you announce. 
Mr SPEAKER 
: It is not affected by it at all. 
Hon PETER DUNNE (Leader—United Future) 
: 
 I raise a point of order Mr Speaker. 
Mr SPEAKER 
: I am wanting to move on. 
Hon PETER DUNNE 
: I appreciate your wanting to move on and I am keen to do that too but I do need to have some clarification on just where we have ended up—and I am not challenging your ruling. As I understand it you are ruling that the phrase “in the member’s place” in Speaker’s ruling 53/6 means in any set of seats allocated to the party to which the member belongs— 
Mr SPEAKER 
: Yes. 
Hon PETER DUNNE 
: —and therefore the ruling given last night that the closure had been correctly moved because of the provisions of Speaker’s ruling 7/1 was in fact incorrect. It should have been because of the interpretation you have just placed in your capacity as Speaker and quite properly so on Speaker’s ruling 53/6. 
Mr SPEAKER 
: I ruled when I came back into the House that the motion had been properly moved and accepted by the then chairman of the Committee. 
Questions to Ministers 
Meridian Energy Ltd—Waitaki Catchment Legislation 
1. JEANETTE FITZSIMONS (Co-Leader—Green) 
 to the  
Minister for the Environment 
: Has she or her ministry received draft legislation from Meridian Energy Limited on the allocation of water in the Waitaki catchment; if so will this form the basis of Government legislation? 
Hon Dr MICHAEL CULLEN (Leader of the House) 
 on behalf of the 
 Minister for the Environment 
: Yes and no. 
Jeanette Fitzsimons 
: Will the Minister guarantee that this Government will never agree to Meridian Energy’s proposals which aim to turn 35-year resource consents to take water into permanent tradable property rights to a valued public resource and does the Minister agree with Meridian Energy that the Upper Waitaki River should be removed from the catchment plan because in its view it already owns all the water? 
Hon Dr MICHAEL CULLEN 
: Yes. The legislation will not provide for permanent tradable property rights and secondly of course the legislation will provide a framework for the allocation of water. The Government will not prejudge that one way or the other. 
Dr Ashraf Choudhary 
: What is the basis of the Government’s legislation for allocating the water in the Waitaki catchment? 
Hon Dr MICHAEL CULLEN 
: The Government is committed to an outcome that meets all needs—economic social and environmental—and that leads to a more strategic approach. The legislation is designed to provide a framework to ensure that the best decisions are made for using water in the Waitaki. 
Hon Roger Sowry 
: Why is the Government abrogating its responsibility to draft the legislation and instead getting Meridian Energy the one group that will benefit from this to do the job for it? 
Hon Dr MICHAEL CULLEN 
: The member should have listened to the primary answer which was brief and to the point. No the draft bill prepared by Meridian Energy does not form the basis for the Government legislation. It is being treated merely as a submission on the Government’s proposals. 
Hon Ken Shirley 
: With regard to the draft legislation prepared by Meridian Energy and also the Government’s own review of water allocation what options is the Government considering other than an administrative allocation based on first in time first in right as against a market allocation based on a tendering process and price? 
Hon Dr MICHAEL CULLEN 
: There is a huge range of options between first in time first in right and a pure market allocation. The Government will be in part of that last territory. 
Jeanette Fitzsimons 
: Is the Minister concerned that Meridian Energy’s behaviour is undermining the community’s confidence that the law will be applied fairly to all water users? 
Hon Dr MICHAEL CULLEN 
: The Government would be concerned if people believed that Meridian Energy was running this process. I have consulted the shareholding Ministers in Meridian Energy and they concur with me that in fact Meridian Energy will not be running this process. 
Jeanette Fitzsimons 
: Is this just a case of a State-owned enterprise getting too big for its boots or is the real problem a regional council that has never in 12 years developed a catchment plan for water allocation and a Ministry for the Environment that has just allowed things to drift? 
Hon Dr MICHAEL CULLEN 
: I think it is fair to say that the lack of development of proper water allocation plans is part of the root of the problems underlying how to deal with the Meridian Energy proposal. 
Auckland Growth Strategy—Transport Infrastructure 
2.  
Dr DON BRASH (Leader of the Opposition) 
 to the  
Prime Minister 
: Does she stand by her statement that: “Getting the transport infrastructure right is a critical component of all growth strategies for Auckland”; if so what proposals have been put before Auckland’s local authorities in the paper authored by officials and referred to in this morning’s  
New Zealand Herald 
? 
Hon Dr MICHAEL CULLEN (Deputy Prime Minister) 
 on behalf of the 
 Prime Minister 
: Yes. The Minister of Finance the Minister of Transport and the Minister with responsibility for Auckland Issues together with Auckland’s mayors and representatives of the Auckland Regional Council received a presentation last week from officials on the emerging findings of their work to consider how to fund investment in Auckland’s transport infrastructure. A range of possible options was presented and no decisions have been taken. 
Dr Don Brash 
: In light of the  
New Zealand Herald  
report which ties a proposed $430 million grant to 5 percent rate increases by Auckland local authorities can we take it that any essential Government funding for Auckland roads will be tied to a commitment to rate increases in Auckland? 
Hon Dr MICHAEL CULLEN 
: No. 
Lynne Pillay 
: Does the Prime Minister agree that extra revenue should go only to roads as advocated by the Employers and Manufacturers Association? 
Hon Dr MICHAEL CULLEN 
: Increasing roads alone is not a sustainable solution to Auckland’s transport situation. Scenarios modelled by officials all involve a mix of roading transport demand management passenger transport and a range of funding mechanisms. 
Dail Jones 
: How can the Prime Minister’s Government even contemplate another tax—a whopping 15 percent petrol tax at that—when it has a considerable surplus and is siphoning off something like $600 million to $1 billion every year from petrol motorists with no real justification and using it to fund other Government projects and to bolster its very substantial surplus? 
Hon Dr MICHAEL CULLEN 
: Firstly if the member had been present as a fly on the wall during the Minister of Finance’s first major Budget meeting yesterday morning he would not have asked that question about the surplus. Secondly the Government has turned down— 
Gerry Brownlee 
: That’s not an answer. 
Hon Dr MICHAEL CULLEN 
: Yes it is an answer to that question. The member did not listen. The Minister of Transport has ruled out a 15c petrol tax increase. It is interesting to note that the New Zealand First minority report on the Land Transport Management Bill proposed a substantial rise in petrol duty matched by a corresponding contribution from the Crown account. 
Keith Locke 
: Does the information in this morning’s  
New Zealand Herald  
that 40 percent of Auckland’s peak-hour traffic is education-related motivate the Prime Minister to prioritise spending on alternative modes of transport that are relevant to school pupils and students such as walking buses cycle convoys and public transport more specifically dedicated to education institutions? 
Hon Trevor Mallard 
: Get rid of the tractors. 
Hon Dr MICHAEL CULLEN 
: I assume that my colleague who interjected meant the sport utility vehicles that tend to clog up our present day roading systems during the peak hours for school traffic transportation. Clearly those are a part of the solution but it would be fairly heroic to assume that they will be a majority part of the solution to Auckland’s long-term roading and transport problems. 
Deborah Coddington 
: Regarding funding mechanisms for infrastructure is the Prime Minister prepared to give a categorical assurance to the country that as long as she is Prime Minister there will be no new petrol price hikes or new taxes on petrol? 
Hon Dr MICHAEL CULLEN 
: I am sure that that member in particular would not expect the Prime Minister to rule out any element of user-pays in the transport system. 
Larry Baldock 
: Will the Prime Minister give the people of Tauranga an assurance that if the Government adopts officials’ recommendation of a one-off contribution of $430 million towards solving Auckland’s roading needs then a similar proportional one-off contribution—which based on the population of Tauranga would be about 10 percent of that or approximately $43 million—would be allocated to Tauranga which is also facing a roading deficit complicated by the fact that it hosts the largest port in the country? 
Mr SPEAKER 
: The question was very wide of the mark. The Minister may comment briefly if he wishes. 
Hon Dr MICHAEL CULLEN 
: I cannot give that assurance in that form because I am advised by the Minister of Finance that while no decisions have been taken he is somewhat sceptical about a $430 million upfront contribution from the Government. 
Dr Don Brash 
: Does the Prime Minister admit that the biggest problem in dealing with Auckland’s traffic congestion problems is the Resource Management Act and her Government’s failure to fix the problems in that Act in the Resource Management Amendment Act this year and now the extended consultation required under the Land Transport Management Act rather than a problem of funding? 
Hon Dr MICHAEL CULLEN 
: No indeed a very clear conclusion the joint officials group exercised was that that was not the major problem. The major problem surprisingly—to the member perhaps as a recent arrival in Auckland—is the growth of Auckland and the lack of addressing those problems of growth over a long period of time. 
Foreign Affairs and Trade Ministry—Capacity 
3.  
LUAMANUVAO WINNIE LABAN (Labour—Mana) 
 to the  
Minister of Foreign Affairs and Trade 
: What action has been taken to strengthen the capacity of the Ministry of Foreign Affairs and Trade to promote New Zealand’s economic and security interests? 
Hon PHIL GOFF (Minister of Foreign Affairs and Trade) 
: 
 Following a recent capability review of the ministry’s needs and resources Cabinet has agreed to inject significant additional resources into the Ministry of Foreign Affairs and Trade. This will result in further funding this year of $6.22 million rising to an extra $22.77 million a year within 4 years. This will allow the ministry among other things to further promote New Zealand’s trading opportunities to strengthen cooperation with regional partners on security issues and to improve consular services to New Zealanders. 
Luamanuvao Winnie Laban 
: What sorts of things will this additional funding allow the ministry to do that would not otherwise have been possible? 
Hon PHIL GOFF 
: The problem the ministry had is that while more and more was being asked of it funding cuts and economic constraints in the 1990s had run down its capacity to effectively promote New Zealand’s interests internationally. That is well documented in annual reports in almost every year under the last Government. The new funding will help with things like better meeting staffing needs helping skill-training capacity particularly in language training delivering information technology requirements helping exporters in traditional and emerging markets and helping ordinary New Zealanders requiring consular assistance. 
Simon Power 
: Does the Minister agree with former New Zealand Ambassador to the US Denis McLean when he said recently: “We need to think about our shared strategic interests with Australia much more than we do”; if so how is this Government strengthening New Zealand’s capacity on security interests specifically with Australia? 
Hon PHIL GOFF 
: This Government has done an enormous amount to improve its strategic relationship with Australia. 
Richard Worth 
: What? 
Hon PHIL GOFF 
: If the member is so ignorant that he asks “What?” I wonder where he was when the war was happening in East Timor in the Solomon Islands and in Bougainville. Clearly there has been close cooperation between the two countries. Of course as Richard Worth knows—because he pointed out how the defence forces had been so run down under his own party in power—we have done a lot more to put funds into the defence forces. 
Child Youth and Family Services Department—Child Abuse Investigations 
4.  
Dr MURIEL NEWMAN (ACT) 
 to the  
Associate Minister for Social Development and Employment (CYF) 
: Can she give an assurance that the 2760 cases of potential child abuse that required further investigation at the end of September were dealt with within the required time frame; if not for each category of criticality how many were not dealt with within the required time frame? 
Hon RUTH DYSON (Associate Minister for Social Development and Employment (CYF)) 
: 
 I am advised that the required time frames for response were not met for each of the four categories as follows: critical 2.9 percent relating to three cases; very urgent 3.4 percent relating to two; urgent 56.9 percent; and low urgent 49.5 percent—a total of 2630. These figures are all improvements on both the previous quarter and the previous year despite significant increases of 8 percent in notifications. 
Dr Muriel Newman 
: Does the Minister find it acceptable that 2630 cases of potential child abuse have not been investigated in the correct time frame by the department and what responsibility does she take for that failure? 
Hon RUTH DYSON 
: No “acceptable” is not a word I would use to describe my reaction to the unallocated cases. That is why in the financial year 2002-03 we invested an additional $12.184 million of new money; and in the financial year 2003-04 an additional $13.164 million of new money. In addition in 2002-03 the department reprioritised resulting in a saving of an additional $8.18 million specifically targeted to deal with the increased volumes of notifications. 
Rodney Hide 
: I raise a point of order Mr Speaker. That was a long answer. The second part of the question specifically asked the Minister what responsibility she accepted for that matter. She did not address that part. I accept that that might be her choice but is it a safe assumption that she accepts no responsibility? 
Mr SPEAKER 
: That is not a point of order and the member knows it. 
Georgina Beyer 
: What is the Government doing to ensure the department has the systems and resources so that it can meet the required time frames for dealing with notifications that require further action? 
Hon RUTH DYSON 
: In line with the baseline review recommendations the Government is investing up to an additional $127 million to ensure the department has robust systems and resources required to meet our expectations. Priorities for the department include employing additional social workers and developing strategies to better manage demand and workloads. 
Katherine Rich 
: Why is it that in September 57 percent of all urgent notifications of abuse or neglect were not dealt with within the prescribed time frame of 7 days and only half of all urgent notifications of abuse and neglect were dealt with within the prescribed time frame of 28 days? 
Hon RUTH DYSON 
: It was through a combination of insufficient staff and not-as-efficient work to manage demand as I would expect. 
Ron Mark 
: In the light of those failures was any payment made to the previous chief executive of the department who resigned her appointment in the wake of the review of the Department of Child Youth and Family Services; if so how much was the payment and why was it made? 
Hon RUTH DYSON 
: If the member is referring to any payment attached to the actual resignation and departure of the chief executive the answer is no. 
Sue Bradford 
: Can the Minister give an assurance that the department now has systems in place so that when a second notification is received about an existing case it will be dealt with urgently and taken seriously no matter at what level the original notification was assessed—even at a very low level? 
Hon RUTH DYSON 
: No I cannot give a categorical assurance that that will happen in every case. 
Judy Turner 
: In the light of yesterday’s revelations that the department’s social workers did not follow established procedures and practices in the Jetson/Aplin/Howse case is the Minister confident that an increase in social workers who admittedly are likely to be graduates with limited experience and knowledge of the department’s policies and procedures will be able to reduce the number of unallocated cases and those of lower criticality ratings which are not being addressed within the required time frame? 
Hon RUTH DYSON 
: Could I firstly correct the member. It was one social worker who had not complied with the policies and procedures of the department. Yes I am confident that the clear message that has been given both by me as Minister and by the acting chief executive about the need to comply with agreed policies and practices—that is it is a mandatory requirement—will be complied with by both existing and new social workers. 
Barbara Stewart 
: With the department having 2760 cases of potential child abuse requiring further investigation as at the end of September and that waiting list not having been reduced or cleared has consideration been given to creating a task force of suitably qualified professionals to work on the elimination of this backlog? 
Hon RUTH DYSON 
: I think that the response from the department is far more practical. Rather than create a task force it is trying to attract the staff in order to deal with those calls. 
Judy Turner 
: Does the Minister agree that an immediate increase in the resourcing of the Social Workers in Schools programme so that a social worker is present at every decile 1 and decile 2 school would give children a voice while they wait for a department social worker to have the chance to attend the long waiting list of cases with low criticality ratings; if not why not? 
Hon RUTH DYSON 
: I strongly support the retention and expansion of the Social Workers in Schools programme. That is not the only way we will be able to further support the addressing of the problem. However I certainly support the suggestion made by the member. 
Barbara Stewart 
: How does the Minister intend to forecast the level of resources required to address the level of child neglect and abuse in this country and is she confident that more funds will be sufficient to safeguard against any further systemic failures of the Department of Child Youth and Family Services? 
Hon RUTH DYSON 
: In answer to the latter question first it was very clear from the recommendations of the baseline review that putting more funding into the department on its own would not solve the problem. The resources need to be backed up by improvements in the management systems and infrastructure of the department and further funds were required as well. The Government has supported that total package for delivery. In terms of predicting future notifications frankly that is one of the biggest challenges we face. The increase I mentioned in answer to the primary question of 8 percent was not anticipated. I certainly hope our systems can improve our forecasting in the future. 
Dr Muriel Newman 
: Does the Minister accept any responsibility for the fact that 2630 cases have not been investigated by the department within the statutory time frame? 
Hon RUTH DYSON 
: That is an agreement I signed with the chief executive. It is her responsibility to ensure that the department delivers on that agreement. I accept totally the responsibility that goes with the privilege of having a ministerial portfolio. 
Dr Muriel Newman 
: I seek leave to table a news report from today that shows that an agency in Hamilton that deals with at-risk children has had its funding stopped by this Government this week. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is. 
Workplace Learning—Government Initiatives 
5.  
DAVID BENSON-POPE (Labour—Dunedin South) 
 to the  
Associate Minister of Education (Tertiary Education) 
: What progress is being made in expanding opportunities for learning in the workplace? 
Hon STEVE MAHAREY (Associate Minister of Education (Tertiary Education)) 
: 
 In a continuing sign of New Zealand’s increasing commitment to work-based training the Government’s Modern Apprenticeships programme has reached its end of 2003 target of 6000 trainees 3 months early. Modern Apprenticeship numbers have grown rapidly over the last year and by September 2003 6073 Modern Apprenticeships were in place. 
David Benson-Pope 
: Can the Minister advise any details of who the 6000th Modern Apprentice was? 
Hon STEVE MAHAREY 
: No specific person has been identified as the 6000th Modern Apprentice. However one of New Zealand’s oldest apprentices who has just started on-the-job training is clearly struggling with his first unit standard. The  
Waikato Times 
 reports that listeners needed a strong cup of coffee to avoid nodding off during the first public outing from trainee Brash. 
Mr SPEAKER 
: No that was out of order. I ask the Minister to withdraw and apologise for that comment. It had no relation to the original question. 
Hon STEVE MAHAREY 
: I withdraw and apologise. 
Child Youth and Family Services Department—Masterton Team 
6.  
KATHERINE RICH (National) 
 to the  
Associate Minister for Social Development and Employment (CYF) 
: Why did the roopu team in the Masterton office of Child Youth and Family Services have a 36 percent higher caseload than the other team in the office? 
Hon RUTH DYSON (Associate Minister for Social Development and Employment (CYF)) 
: 
 I am advised that in November 2001 which is the period that I understand the member is referring to there was a significantly higher number of notifications than usual. The service delivery unit manager had established a third team had recently employed two social workers with a caseload of 11 each and was in the process of employing a supervisor. Work distribution was undertaken to address the imbalance referred to in the member’s question and I am advised that currently the team’s workload is well within the average. 
Katherine Rich 
: When the Commissioner for Children’s report into the Aplin and Jetson girls’ deaths highlights problems of insufficient support and resource for the roopu team does she support the department’s dismissal of the commissioner’s recommendation “to review the effectiveness of roopu teams and the resourcing training and professional support of those teams.”; if so why? 
Hon RUTH DYSON 
: No I would support the revisiting of that recommendation. 
Moana Mackey 
: What is the Government doing to ensure that caseloads are allocated effectively? 
Hon RUTH DYSON 
: The Department of Child Youth and Family Services is developing a national caseload management tool to manage caseloads for social workers that will factor in not only the number of cases but also the complexity skills and experience of staff. That tool will help ensure that cases are allocated consistently and equitably. 
Ron Mark 
: Can the Minister tell the House whether the social workers who were responsible for the case management of the Aplin and Jetson girls have resigned or been dismissed and further were any payments made upon the termination of their employment; if so how much were those payments and for what reason were they made? 
Hon RUTH DYSON 
: I am unaware of any details relating to the latter questions but in relation to the primary question the social worker concerned has resigned. 
Dail Jones 
: I raise a point of order Mr Speaker. It is customary for Ministers to say that they will supply other information at a later date. Can we have an undertaking from the Minister that that information can be supplied at a later date? 
Mr SPEAKER 
: That is up to the Minister. I do not judge the quality of the answer. 
Sue Bradford 
: Is the Department of Child Youth and Family Services currently undertaking work to develop both the management and social work practice capacity of those involved in the roopu teams? 
Hon RUTH DYSON 
: I understand that the department has not focused either of those two priorities at the moment specifically within the roopu team. But as a result of the discussion that has been generated from the Commissioner for Children’s report that will be under consideration. 
Katherine Rich 
: Why was the Masterton office not being closely monitored by the chief executive given the restructuring that was going on and the several high-profile child deaths in the Masterton area? 
Hon RUTH DYSON 
: Significant additional support and resourcing had in fact been allocated to the Masterton office and it is irresponsible for the member to imply any deficiency in response from the chief executive to the earlier tragedies. Direct support was given from head office and from other regions to ensure that the Masterton staff were properly supported and resourced to carry on their work. 
Katherine Rich 
: When the roopu team in Masterton overseeing the Aplin and Jetson sisters’ cases had a caseload 36 percent higher than the non-Maori case team managed files of greater complexity and had a key leadership position in that office eliminated does she accept that as a result of Labour’s restructuring front-line staff on that team were on a hiding to nothing? 
Hon RUTH DYSON 
: No. 
Government Information and Services—Internet Access 
7.  
Hon MARK GOSCHE (Labour—Maungakiekie) 
 to the  
Minister of State Services 
: What reports has he received regarding the use of the Internet to gain access to Government services and information? 
Hon TREVOR MALLARD (Minister of State Services) 
: 
 The Government web portal will celebrate its first birthday tomorrow. The portal now has some 5500 local and central government services and information resources listed. It receives some two million hits a week—a figure that has been climbing steadily since the launch of the portal. 
Hon Mark Gosche 
: What types of information are people accessing through the Government web portal? 
Hon TREVOR MALLARD 
: Every day the portal transfers more than 1 gigabyte of information. I am informed that that is the equivalent of 260000 floppy discs per year. The top 10 most requested search items from the portal are laws job vacancies tax immigration education business health Maori employment and government. What people have not been able to access is when the only person opposite with a good understanding of information technology issues is to be promoted back to the front bench where he belongs. 
Sentencing—Public Expectations 
8.  
RON MARK (NZ First) 
 to the  
Minister of Justice 
: Does he have any concerns that sentencing of offenders is presently not meeting public expectations; if not why? 
Hon PHIL GOFF (Minister of Justice) 
: 
 The referendum in 1999 showed clearly that the New Zealand public at the time believed that the justice system was not meeting expectations. At that time 92 percent of New Zealanders voted no confidence in 9 years of neglect in terms of the sentencing laws by National Governments and the National – New Zealand First Government. Since then however there have been major changes in sentencing laws parole laws and victims’ rights laws. Recent changes for example have attracted support from even the most strident critics of the sentencing laws. 
Ron Mark 
: How would public expectations be affected when the system allows a person convicted of manslaughter and subsequently placed on home detention to be able to set up a P manufacturing operation use gang members to distribute the product intimidate his neighbours have unlimited visitations from gang and prison associates at all hours of the day and night start a relationship with a known female drug dealer and finally die of a drug overdose; is that the Minister’s idea of a home detention system and a justice system that the public can have faith and confidence in? 
Hon PHIL GOFF 
: As the member knows I cannot comment on a specific judge’s ruling in a particular case. However I can tell that member that the penalty for pushing methamphetamine now that it is a class A drug has become a lifetime sentence. If the prosecution—usually the police—does not believe a sentence is long enough it can appeal the sentence. 
Mita Ririnui 
: What responses has the Minister received from sentencing lobby groups to the changes in the legislation introduced this week? 
Hon PHIL GOFF 
: A wide-ranging and positive response. For example I received an email from the Sensible Sentencing Trust warmly congratulating the Government on the Parole (Extended Supervision) and Sentencing Amendment Bill. I also saw comments from the Safe Network which treats sexual offenders and it was also strongly supportive of the proposed new legislation. However I have to say that there has been the usual whingeing and whining from a few Opposition members. 
Hon Tony Ryall 
: Now that the Minister has heard yet another example of an offender on home detention being completely free to break the law what protection will be provided to New Zealand children by putting an electronic bracelet on a paedophile under his proposed law under the exact same circumstances that this offender has been? 
Hon PHIL GOFF 
: New technology means that— 
Hon Tony Ryall 
: Aw! 
Hon PHIL GOFF 
: I have not even started the answer and already that member is whingeing and whining. 
Mr SPEAKER 
: The member has asked a question. He will listen to at least a couple of sentences before there is any comment. 
Hon PHIL GOFF 
: Electronic monitoring means that a person can in the first 12 months of supervision be required to stay within his or her home and the authorities are immediately notified if the offender has left home. Additionally with global positioning satellites we will be able to track people wearing electronic bracelets and that will create the near-certainty of conviction for any offending that the offender may do in the future. 
Ron Mark 
: Bearing in mind that that person was on home detention and that it did not need global positioning satellites for people to know he was at home what is the point of having a system of home detention where there is obviously no supervision; and when will the Minister amend the law to ensure that neighbourhood consent is a prerequisite before a residence is approved for home detention purposes bearing in mind that the Minister may have many home detainees who are drug dealers murderers rapists and now paedophiles? 
Hon PHIL GOFF 
: Of course under the law front-end home detention can be offered only to somebody sentenced to less than 2 years’ imprisonment. Under the law as well the judge must first decide that it is appropriate to grant it and further under the law the Parole Board must then agree to it. Under the legislation introduced this week the member will be aware that there is a further tightening of judges’ ability to refer cases for home detention to the Parole Board. Contrary to what the member says—and the member before him—electronic monitoring gives the authorities the absolute ability to know that those persons are within the confines of their homes where they are required to be. 
Stephen Franks 
: Should the public have expected that when the Minister pushed through the Sentencing Act as many as 26 so-called home detainees at a time could be floating around for up to 7 weeks at a time without electronic bracelets but with official approval; and what does he think of the justification offered by his colleague the Minister of Corrections for not warning the neighbours which was that: “The monitoring contractors are trained to monitor offenders and react to any instance of non-compliance. Members of the public are not.”? 
Hon PHIL GOFF 
: I am not aware of the particular circumstance the member is talking about but if he is talking about a situation where a sentence has been deferred pending the application for home detention to be heard then the new legislation also requires that tight bail provisions be established for those cases. 
Hon Tony Ryall 
: Further to the Minister’s answers to supplementary questions how exactly will global positioning satellite - monitoring alert authorities that a paedophile is at home molesting a child as has just happened? 
Hon PHIL GOFF 
: A person who is at the serious end of offending and who under the previous inadequate laws was not given preventive detention can be required to have 24/7 supervision in which case an offender like McIntosh as soon as he picks up the telephone and tries to contact a child—which is contrary to the requirements of his supervision order—can be as he was detected. He was charged and convicted and awaits sentencing. That is how it works. It has been quite effective. 
Hon Tony Ryall 
: I raise a point of order Mr Speaker. I draw it to your attention that my question was very specific. Based on the impression of an expert understanding of the global positioning satellite system that the Minister tried to portray earlier in this question I specifically asked him how exactly a global positioning satellite - monitoring system which indicates only where the person is—that is all it can do—will tell authorities when a paedophile is molesting a child at his or her home as has just happened. 
Mr SPEAKER 
: I will ask the Minister to comment further. 
Hon PHIL GOFF 
: What I thought the member would take from that answer is that the requirements relating to supervision under the legislation introduced are that it can be electronic monitoring or it can be 24-hour 7-day-a-week supervision by another individual in that household. The Parole Board will make a decision as to which is more appropriate. [ 
Interruption 
] That question is a bit rich coming from that member when there was no supervision at all after 9 years of a National Government that did absolutely nothing. 
Mr SPEAKER 
: There was far too much interjection and there was far too much comment from the Minister. 
Hon Member 
: He was provoked. 
Mr SPEAKER 
: I do not care. The member will be provoked outside in a moment. 
Ron Mark 
: I seek leave of the House to table a letter received in my office outlining the circumstances described in my question of a person who died at home of a drug overdose whilst on home detention. 
Mr SPEAKER 
: Leave is sought to table the letter. Is there any objection to that? 
Hon Phil Goff 
: No. 
Mr SPEAKER 
: There is no objection. When the member said “No” I presume that he meant that there was no objection? 
Hon Phil Goff 
: No there is no objection. I hope it is more accurate than the member’s last one. 
Mr SPEAKER 
: The Minister is trifling with me. I asked whether there was any objection. It requires only one person to say “Yes” not everybody to say “No”. There is no objection. The letter will be tabled. 
Document not tabled. 
Customs Service—Drug Seizures Auckland International Airport 
9.  
H V ROSS ROBERTSON (Labour—Manukau East) 
 to the  
Minister of Customs 
: Is he satisfied with the performance of the New Zealand Customs Service in relation to drug seizures at Auckland International Airport? 
Hon RICK BARKER (Minister of Customs) 
: 
 Yes I am. Customs Service staff at Auckland airport are doing an excellent job. Last month staff intercepted 1.2 kilos of heroin at the airport with an estimated street value of $4 million. The heroin was located in the shoes being worn by and carried in the luggage of a traveller from South Africa. Intelligence suggests that its ultimate destination was Australia. We have the sharp eyes and the instincts of our experienced Customs Service staff to thank for the seizure and I am sure our colleagues across the Tasman will be grateful for that. 
H V Ross Robertson 
: Did the Customs Service make any other significant seizures at Auckland International Airport in October? 
Hon RICK BARKER 
: Customs Service officers also intercepted 3.2 kilos of ephedrine a primary precursor used in the manufacture of methamphetamine. The ephedrine was concealed in tins of baby food formula in the luggage of two Thai male nationals who are both residents of Auckland. The interception resulted in both men being charged with the possession of a precursor substance and with intent to manufacture a controlled drug. To date this year the Customs Service has seized 776900 tablets of pseudoephedrine or the powdered equivalent ephedrine from 374 interceptions. 
Shane Ardern 
: In the light of the Minister’s answer when will the Minister keep an effective list of all methamphetamine precursors imported and make that list available to all appropriate Government departments? 
Hon RICK BARKER 
: I have not quite got the sense of the question. [ 
Interruption 
] 
Mr SPEAKER 
: A member is about to leave the Chamber. The Minister is perfectly entitled to have a member repeat a question and I do not want any silly nonsense like there has been today. I ask Shane Ardern to repeat the question. 
Shane Ardern 
: In the light of the Minister’s answer when will the Minister keep an effective recorded list of all methamphetamine precursors that are imported and make that list available to all appropriate Government departments? 
Hon RICK BARKER 
: As I understand it there is an effective list. The trouble is that some people tell fibs. 
H V Ross Robertson 
: Why are these recent seizures important? 
Hon RICK BARKER 
: These recent seizures are important because they show that the Government investment of an extra $1.9 million into drug intelligence and drug enforcement at the border is working very very effectively. 
Shane Ardern 
: In the light of the Minister’s answer earlier on I seek leave to request the Minister to table that list as an official document as the Minister has used it in his answer. 
Mr SPEAKER 
: No the member cannot ask anybody else to table anything. What a Minister chooses to table is his or her own business. 
Hon Roger Sowry 
: I raise a point of order Mr Speaker. The Minister gave an answer to a question in which he said he understood there was such a register. Members on the Opposition side of the House have certainly never seen such a register nor has anyone heard of it. I invite the Minister to go and check after question time perhaps because I suspect that he will have to come back to the House before the end of the day to correct his answer. 
Mr SPEAKER 
: If he does he will. All I thought the Minister said was that he understood there was a list. Of course he did not quote from it. 
Traffic Infringement Notices—Quota 
10.  
Hon TONY RYALL (National—Bay of Plenty) 
 to the  
Minister of Police 
: How does he explain his statement that “Police do not have a quota of tickets they’re supposed to give out every hour. There is no such quota.” with his answer to a written question stating “A minimum expectation is one enforcement action (not being a warning) for every hour of patrol.” and with media reports of orders to issue three tickets an hour and orders to ticket at least one motorist every hour? 
Hon GEORGE HAWKINS (Minister of Police) 
: 
 The police are expected to enforce the law. That is their job. An expectation of one enforcement action for every hour of patrol is a work performance management measure. 
Hon Tony Ryall 
: Why is the Government maintaining this current traffic policy when even though the New Zealand Police has issued a record number of speeding tickets this year—nearly 1 million—the number of crashes is up the number of injuries is up and the number of road-toll fatalities is up? 
Hon GEORGE HAWKINS 
: We are following the same rules that have been there since before the merger of Ministry of Transport traffic officers and the police in 1992. Overall the road toll may be up so that member should be supporting the police giving out as many tickets as they do when people speed. 
Martin Gallagher 
: Can the Minister spell out to this House how long there has been a requirement that officers involved in traffic duty in this country actually do their job? 
Hon GEORGE HAWKINS 
: In one guise or another there have been performance management measures for the police even before the merger of the Ministry of Transport traffic officers with the police in 1992. In 1997 a performance agreement between the then Minister of Police and Commissioner of Police required the commissioner to provide district performance statements on contacts per hour for doing what had always been done. It is a pity the member cannot remember that. 
Ron Mark 
: Does the Minister therefore concur with the comments of his colleague the Minister of Transport on 3 June this year who said: “The most convincing argument supporting the police enforcement of speed limits is the declining rate of death and injury from road crashes.” and “Let me state quite clearly there is no quota of tickets that police must meet” when police are required now to issue 30 percent more infringement notices than last year and when police officers are telling members of Parliament—these are general duty officers—they are being ordered to issue one ticket per hour regardless of the importance of other duties they may be trying to perform— 
Mr SPEAKER 
: That is sufficient for that question. The member has already had too long for it. 
Hon GEORGE HAWKINS 
: The commissioner requires that his staff do not just sit on the road in patrol cars but that they enforce standards in speed reduction and restraint wearing as well as in terms of trauma-promoting offences. That is why they are employed. 
Dr Muriel Newman 
: Does he accept the findings of British research which concludes that speed cameras are a failure—they do not deter drivers from speeding they are remarkably unsuccessful at saving lives and they may well cause accidents of their own; if not why not? 
Hon GEORGE HAWKINS 
: I think that there are all sorts of theories about ways in which speed cameras are effective or ineffective. The best thing is for people not to speed and get caught by them. 
Hon Tony Ryall 
: Why does the Minister support lowering the speed camera tolerance when it is not those speeds that kill—even his own Government’s figures show that three-quarters of fatal accidents and 85 percent of crashes happen below the posted speed limit? 
Hon GEORGE HAWKINS 
: That is not the Government’s policy and it probably will not be the Government’s policy. I think this is really a performance issue and that is why that member has gone from place eight on the National benches down to 15. 
Ron Mark 
: Can the Minister give the House and the people of New Zealand an absolute categorical assurance that hidden speed cameras will not be used in New Zealand and specifically that the police are not now working on an Australian model whereby speed cameras may be hidden inside rubbish wheelie bins for example? 
Hon GEORGE HAWKINS 
: If the member wants an answer to that he should ask the Minister of Transport. It is my opinion that hidden speed cameras are not as effective as having the highly visible highway patrol that this Government introduced with tremendous success. 
Hon Tony Ryall 
: Has the Minister seen the information that shows that 30 percent of his high-profile highway patrol’s time is spent behind a desk doing administration work and has he seen the latest survey printed in the New Zealand Police Association magazine that shows that 71 percent of New Zealand police officers operate a traffic ticket quota system which he has denied in the House? 
Hon GEORGE HAWKINS 
: I can say that we most certainly get various reports from the Police Association but the reality is that the police have a work performance which means they should be issuing tickets for “speed reduction or restraint wearing or trauma-promoting offences.” This Government is not responsible for the journalist not understanding that or the Opposition member not understanding it. 
Hon Tony Ryall 
: I seek leave to table two documents. The first is the result of a UMR Insight research survey which shows 71 percent of police officers believe they operate a traffic ticket quota system and 82 percent say it is having a negative impact on policing. 
Document by leave laid on the Table of the House. 
Hon Tony Ryall 
: The second document is an official document from the Government that shows that 75 percent of fatalities do not involve a vehicle travelling over the speed limit. 
Document by leave laid on the Table of the House. 
Hon George Hawkins 
: I seek leave to table the Land Transport Safety Authority survey for 2003 which shows that 92 percent of people responding to whether the police were putting enough effort into catching road criminals and safety matters were in favour of more effort or the same level as there is now. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is. 
Prostitution Reform Act—Territorial Authority By-laws 
11.  
LARRY BALDOCK (United Future) 
 to the  
Minister of Justice 
: Is he satisfied that the territorial authority by-law provisions of the Prostitution Reform Act 2003 are being implemented to achieve the aims of the Act; if so how? 
Hon PHIL GOFF (Minister of Justice) 
: 
 I am advised that some territorial authorities have already moved to create by-laws while others have taken no action at this time. The Prostitution Reform Act gives local bodies powers to regulate location and to control or prohibit signage relating to brothels. It is up to the local authorities to determine what by-laws are appropriate after consultation with their communities. 
Larry Baldock 
: In light of the fact that over 80 percent of submissions to the Auckland City Council favoured either the restrictive by-laws proposed or an even tougher approach will the Minister concede that the very provisions he had inserted into the law are being used by the public to signal that they do not want any kind of liberalisation of brothels or prostitution law; if not why not? 
Hon PHIL GOFF 
: No. What it shows is that people wanted what I put into the Supplementary Order Paper which is the ability of territorial local authorities to keep brothels out of areas where patently it is inappropriate for them to be. 
Russell Fairbrother 
: Is there provision in the Act for review of its operations if any aspect of it is found over time not to be satisfactory? 
Hon PHIL GOFF 
: Yes. The author of the bill put such a provision into it—that is to provide for the establishment of a Prostitution Law Review Committee to monitor the way the Act is working and report back to Parliament within 5 years. Any problems with the way the Act is working can be picked up by that process. I have sought and received from the whole of the House nominations for membership of the committee and I hope to finalise its membership by the end of the year. 
Sue Bradford 
: What steps if any is the Minister taking to ensure that all local authorities understand the legal implications for them of the Prostitution Reform Act? 
Hon PHIL GOFF 
: The law is set out clearly under the Act. It is not for me to give legal advice to local authorities. They are well equipped to seek that advice for themselves and have to operate under the processes set out under both this Act and the Local Government Act. 
Larry Baldock 
: Does the Minister concur with the Act’s sponsor Tim Barnett that the aim of the law is harm minimisation for prostitutes or does he agree with the approach of Auckland City Council now supported by over 80 percent of Auckland’s public that it is harm minimisation for the public? 
Hon PHIL GOFF 
: Yes I agree that the purpose of the Act is harm minimisation and that anybody who did not believe that prostitution existed under the old laws had their head in the sand. Anybody who did not believe that gangs were responsible for running escort agencies under the old law as the police reported to the select committee also had their head in the sand. I believe this Act will help in many ways but obviously we want to make sure that it does what it is intended to do. 
Larry Baldock 
: In light of the fact that brothels may set up and operate without a licence until 1 July 2004 does the Minister concede that the continued delay in the establishment of the Prostitution Law Review Committee whose first task is to investigate exactly how many prostitutes are operating in this country means that it may miss that important baseline in its research and therefore be unable to establish in future whether there has been an increase in prostitution as a result of this law change? 
Hon PHIL GOFF 
: No I do not have that concern but I want to see the committee set up as soon as possible. I have invited the member’s party United Future to make nominations but I do not think I have received any. 
Larry Baldock 
: I seek leave to table the nominations that we have submitted. 
Document not tabled. 
Upper Hutt Schools—Governance Policy 
12.  
DEBORAH CODDINGTON (ACT) 
 to the  
Minister of Education 
: Does he stand by his statement in today’s  
Dominion Post 
 that he would consider “governance-type arrangements” for Upper Hutt schools; if so why? 
Hon TREVOR MALLARD (Minister of Education) 
: 
 Yes because I am a caring Minister who listens to submissions including those from my very good colleague the local member. This Minister has also initiated legislation to accommodate that sort of change. 
Deborah Coddington 
: What is the difference between schools in Upper Hutt and Pungarehu School in Opunake given that the Minister dismissed a proposal for shared governance from parents there; or are there different rules for parents from Labour electorates and parents from Opposition electorates? 
Hon TREVOR MALLARD 
: The submission I received from the very good local member who has been representing the people of Taihape is for a similar type of arrangement. That is also under consideration. 
Jill Pettis 
: Could the Minister outline what changes have been made under this Government to the use of savings generated by school network reviews? 
Hon TREVOR MALLARD 
: Under this Government savings generated from network reviews are reinvested in the schools affected. The money is invested in extra teaching and learning resources improved information technology facilities additional sports and cultural resources—and Opunake people are very pleased with what is happening there—and enhanced transport assistance. This contrasts with the policy of the previous National Government which snatched any savings back into central government coffers. 
Simon Power 
: Will the Minister apply the same process to Upper Hutt schools that he did to Taieri schools about which David Benson-Pope as reported in the  
Taieri Herald 
 on 4 November commented: “I have a degree of sympathy for people’s feeling that their time was wasted. They went into the process with commitment and open-mindedness” followed by: “The Minister of Education Trevor Mallard tried to involve the community to a greater degree which backfired”; if so why? 
Hon TREVOR MALLARD 
: I think I will follow some unusually sage advice given by Nick Smith which I quote: “The fundamental problem is that we have more schools than the number of pupils justify and nobody wants their school to close. Education is about children not buildings. Half-empty schools are in nobody’s best interest.” 
Hon Brian Donnelly 
: What is the Minister’s reaction to inflammatory letters sent by a member of this House to each of the schools under review suggesting to communities that rather than engage in constructive debate about the rationalisation of resources for the future they should take militant action to retain the status quo? 
Hon TREVOR MALLARD 
: People have choices and that may be the choice that some people make. Responsible members of Parliament—and I think that includes Mr Simon Power in the Taihape review; certainly Mr Paul Swain in the Upper Hutt area and Mr Mark Peck in Invercargill—have worked with their communities. They have developed best options and presented them to me. That system works whereas Deborah Coddington’s contribution to the printing and publishing industry does not work at all. 
Metiria Turei 
: Does the Minister agree that the reviews in Upper Hutt South Canterbury and other places are contrary to the Government’s regional development policies—a view raised by the Greens in July this year and recently confirmed by the Minister for Economic Development; if so will the Minister now take a holistic economic view of the process which includes the cost to families and the environment of increased transport demands and the significant loss to regional economies of driving families away into towns to be closer to their schools? 
Hon TREVOR MALLARD 
: I think the answers are no no and no. Can I explain that the strength of rural schools and schools in provincial towns is really important to me and I do not like to see them drifting to death as was the policy of the previous Government. 
Bernie Ogilvy 
: Will the Minister consider using some form or combination of a private-State or private-public partnership of school experts to support his governance-type arrangements; if not why not? 
Hon TREVOR MALLARD 
: Boards get massive amounts of extra resources as a result of this process and it is up to them to make choices about who they engage in that area. The member should talk to his colleague Murray Smith who was hissed and booed off the stage at Upper Hutt when he tried to make this issue political on Tuesday night. 
Hon Brian Donnelly 
: Is it not the case that by yielding to the demands of the New Zealand Educational Institute for gilt-edged staffing ratios for small primary schools the Minister has priced them off the market thus forcing him in his finance role to shut many of those same schools down? 
Hon TREVOR MALLARD 
: No that is not the case. I am of the very firm view that the 3 half-days that teachers in sole-charge schools get for support so that they can do their jobs as principals and we can get some extra one-to-one help for kids in those very small schools is an excellent investment. There are some areas including Cattle Creek in the Hon Jim Sutton’s area where it is just absolutely vital to have those small schools. 
Simon Power 
: I seek leave to table the comments of David Benson-Pope in the  
Taieri Herald 
. 
Mr SPEAKER 
: Leave is sought to table those comments. Is there any objection? There is. 
Dog Control Amendment Bill 
Third Reading 
Hon CHRIS CARTER (Minister of Local Government) 
: 
 I move  
That the Dog Control Amendment Bill be now read a third time 
. I am pleased to have the opportunity to present this bill to the House. It is a further milestone in meeting the changing expectations we have about what is and what is not responsible dog ownership. That much of the bill reported back from the Local Government and Environment Committee was unanimously supported shows there is clearly widespread political support to do more to improve dog control. 
Following a series of particularly vicious dog attacks that occurred last summer Parliament referred back to the Local Government and Environment Committee the Local Government Law Reform Bill (No 2). This bill was principally about eliminating American pit bull terriers. The House gave the committee the power to consider and adopt new amendments relating to the care and control of dogs. The Government for its part provided the committee with a broader set of proposals to consider than those in the original bill. Collectively those proposals aimed to improve public safety from dog attacks. 
City and district councils are at the forefront of dog control. We must provide them with the right tools and powers to ensure that as far as possible dogs with the potential to be aggressive are kept from doing harm and that their owners have a clear understanding of their responsibilities. This bill does that. For those owners who will not take their responsibilities seriously this bill will give them some sharp reminders. 
The bill is not about preventing people from owning and enjoying dogs. New Zealand has a very high rate of dog ownership and people have kept and enjoyed dogs for generations. While most dogs are well behaved just about any dog can be dangerous given the wrong set of circumstances. There is also a growing expectation that it is not acceptable to let dogs wander unattended or to encourage them to act aggressively especially when in public or around children. Increasing pressures on our public spaces mean we all need to take more care when dogs and people mix. 
This bill will give councils more tools to deal with owners who need reminding of their responsibilities. Councils will now be able to classify dog owners as probationary or disqualified depending upon the situation rather than having to go through a probationary step first. This means that councils can more effectively deal with the serious offenders the first time rather than waiting for them to offend again before taking action. For many owners whose dogs end up in places they should not be or cause problems the answer is sometimes simply better education about their dog or their obligations. Councils will now be able to require such owners to attend an education programme or dog obedience course. We are also requiring councils to review their dog control policies with greater emphasis to be put on public safety. This means in general dogs will need to be kept on a leash when in popular public places especially where children are playing. Recognising the pivotal role of councils in dog control this bill for the first time will create a specific obligation for all councils to report on their dog control activities in a common way. While of course all communities face different circumstances this measure will help enhance accountability and provide essential core information about dog control throughout the country. 
The penalty for owning a dog that causes serious injury is increased from a maximum fine of $5000 to a maximum fine of $20000 and/or a term of imprisonment not exceeding 3 years. This will send a very strong signal that owners must take care to make sure their dogs cannot do serious harm. 
One of the few contentious proposals put forward by the bill was that of universal microchipping. I would like to thank New Zealand First and members of United Future for their support during the Committee stage to provide for progressive microchipping of all dogs. I acknowledge that some groups have doubts about microchipping. However once microchipping is in place I believe we will very quickly see its practical benefits. I do not believe it will be an expensive exercise for dog owners. I note again that this view is also supported by the Royal New Zealand Society for the Prevention of Cruelty to Animals the New Zealand Veterinary Association and the New Zealand Kennel Club. 
For 20 years our society has agonised about what to do with fighting breeds of dogs. This bill finally does something about it. People who own American pit bulls Japanese tosas Brazilian filas and dogo Argentinos will have to muzzle them while they are in public. Importation of any more of these breeds will be prohibited. Judging from the letters and emails received by my office this move has widespread public support and I note that the Committee stage of the bill demonstrated the idea that it had universal political support in this House. 
Finally I would like to thank all of those involved in developing this bill particularly my parliamentary colleagues on the Local Government and Environment Committee. I would also like to take this opportunity to pay particular tribute to Carolina Anderson and her family particularly her father John Anderson. The Anderson family has shown real courage in campaigning for better dog control. In doing so they have turned a tragedy into a positive benefit for New Zealand society. Thank you for those efforts. I commend this bill to the House. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 Thank you for the opportunity to speak on what was the Local Government Law Reform Bill (No 2) which is now known as the Dog Control Amendment Bill. The National Party is supporting the main thrust of this bill which focuses on increased owner responsibility clamping down on irresponsible owners and better nationwide enforcement. 
However National is absolutely against universal microchipping of dogs. We believe that a very arrogant Labour Government and a very arrogant Labour Minister—along with some somewhat sycophantic members of New Zealand First and that other party—have agreed to allow this to happen over and above the advice of the Local Government and Environment Committee. After all the Labour Government has done nothing about dog control for 4 long years despite this bill being on the Order Paper since 1999 and despite statistics clearly showing that over the last 10 years there have been 300 serious dog attacks per year in New Zealand of which most are perpetrated on children and of which a large proportion are preventable. Not only that; thousands of dog attacks are recorded through the Accident Compensation Corporation and many thousands more are not recorded at all. 
Undoubtedly the crisis that finally jolted the present Labour Government into action was caused by several serious attacks in south Auckland and then the very awful attack on Carolina Anderson on about 31 January. I too join the Minister of Local Government in complimenting her father on the tremendous amount of work he has done to galvanise action on 
this bill which will receive its final reading this afternoon. In his submission to Parliament it was pointed out that despite the owners of that dog failing to call the dog off giving a false name failing to come forward to the police etc. under the present Dog Control Act they faced a maximum fine of $5000 and 3 months in jail on the charge of possessing a dangerous dog. Clearly in terms of the severity of what occurred it was very inappropriate. He went on in that same submission to state: “In light of the spate of dog attacks in New Zealand and the hideous impact this is having on many sectors of the community but especially children our friends and our many supporters in the community we urge the Government to make an urgent revision to the Dog Control Act.” It was in that context that finally the Labour Government decided to do something. 
I must say the select committee members worked well together. There was good collaboration and most of the positive parts of the bill were worked out in a spirit of inter-party collaboration and support. However what did emerge was that the Labour Government must have some sort of innate predetermined genetic disposition to carry out inane megalomaniac centrally controlled command activities like building fences all over New Zealand and universally microchipping dogs. It just cannot help itself. The Minister of Local Government certainly falls into that category and undoubtedly it seems as though he must fall into line with the Prime Minister’s commands. I noticed the other day at a function for the President of China which was held in Auckland that the President wore a very splendid Western-style suit but our Prime Minister managed to deck herself out again in an equally magnificent brown Mao Tse-Tung – type outfit that would be the pride of any foot soldier in that socialist country. 
Rodney Hide 
: It was amazing! 
Dr PAUL HUTCHISON 
: It was amazing! This dog control legislation gave the Prime Minister and Chris Carter the opportunity to expand their socialist claims to include building fences all over New Zealand that would be better than the Great Wall of China. Fortunately the good sense of the select committee finally managed to put them down on that one. However they sprang back when it came to microchipping dogs. 
I note the Minister was saying that in a few years’ time New Zealand will be glad that all our dogs are microchipped. Well let us just have a look at what Federated Farmers said today—and their members have in the order of 150000 working dogs. They said: “We urge you to oppose compulsory microchipping for the following reasons: no cost-benefit analysis of this proposal has been done …”. The Minister might say that yes a cost-benefit proposal was done; well we saw a cost of $12 to $20 per microchip but nothing accurate about the cost of insertion. After all there are 500000 dogs in New Zealand to be microchipped. It is a significant amount. Federated Farmers also say that microchipping will not prevent a single dog attack. They are absolutely right in that respect. After all we want to prioritise what will be most effective in preventing dog attacks and this inane effort by the Minister to universally microchip certainly will not do that. Federated Farmers also say: “This will impose an additional substantial annual cost on the owners of the 150000 New Zealand farm working dogs for no benefit.” I absolutely agree with that. 
Undoubtedly there are some good aspects of this bill and that is why National has been supporting it. For instance there is the duty of territorial authorities to adopt a policy on dogs and formulate a best-practice guideline that is available to all territorial authorities—I certainly hope the Minister will take that seriously and will make a commitment to ensure that those best-practice guidelines are available—and the fact that territorial authorities must report annually on dog control policy and practice. We learnt there is considerable variation around the country in terms of the way in which dog laws are enforced. It is very important to have both best-practice guidelines and indeed uniform enforcement around the country. We think it is absolutely right and proper that there are increased penalties and also that dog control officers have the right to pursue a dog on to a property after a serious attack and even into a house in outstanding instances. 
Undoubtedly owner education incentives for good owners and the regulations regarding probation and disqualification are right and proper. But there is no doubt that the majority of New Zealand dog owners—as I said before there are estimated to be 500000 dogs in New Zealand—are responsible. The whole focus of this bill must be on zoning in and clamping down on those irresponsible owners and decreasing preventable dog attacks. At the end of the day when I go to the park with my children or to the beach I want them to be safe. Only the other day when I was in Glendowie in Mr Speaker’s electorate with my children I looked furtively at a very large dog whose owner had left it not properly attached to a seat in the park. I thought that if that dog gets off and goes for my children it will be an awful nightmare for me—the sort of nightmare that parents right around this country are conscious of. What we really want this bill to do is ensure that owner responsibility is encouraged. We must clamp down on irresponsible owners and achieve universal enforcement of the law around the country. 
DAVID BENSON-POPE (Labour—Dunedin South) 
: 
 I am pleased to rise in support of this legislation. I would like to add my thanks and congratulations to those who have put such a considerable amount of time into the drafting and processing of the law and the hearing of submissions. As we all know this issue is far from simple. As the Minister of Local Government said in his introductory comments it is an issue that this House has ignored for some time rather than dealing with it. It is certainly an area that has seen renewed public calls for action so I think the community should be largely very pleased that this bill is having its third reading today. 
I was one of a large number of members from all parties in the House who had the opportunity to talk to Mr Anderson when he visited us nearly a year ago to discuss the issue. Those who were present would all acknowledge that seeing the photos of his daughter certainly focuses the mind on the issue. 
I am very pleased that this legislation has taken the form it has. The only disappointment for me in this debate is the irrational material that is currently being distributed by some—not all—branches of Federated Farmers. I am delighted to learn today that their own Bay of Plenty branch has come out against the more extreme statements from its head office and is now claiming that it supports the microchipping of all animals. For those in the rural sector it is also important that wild animals can be properly identified and the damage they do sheeted home to those responsible. I am pleased to support this very important public safety measure. 
JIM PETERS (NZ First) 
: 
 I rise to speak in the third reading of the Dog Control Amendment Bill as a sycophant. I am part of a caucus that discussed the issue robustly several times and might I say in reference to the previous comment with some expertise on farming matters. I myself have expertise not only with regard to dairy farming but also dog breeding. We brought quite a number of informed members and informed comment to our thinking on this bill. However if we are sycophants in the minds of other parties on our right then so be it. I am not about to change their thinking. 
However I do want to say that this bill could have been titled differently. It could have been titled the “Dog Control and Dog Administration Amendment Bill”. If it had been then some of the attendant issues that are with us today might not have caused so much recent concern. The focus of material on my desk and my emails has been solely upon the issue of whether this legislation would prevent aggressive dog attacks. To my mind and to the committee's mind that obviously was an issue. Obviously it was an issue in the 1990s causing a decade of work from 1991 to the present with regard to dogs and dog control. 
However the other issues that go with that such as the role of councils dog rangers enforcement officers dog owners dog breeders and veterinarians who are attendant on the dog industry are also matters that form the components of this legislation either in a major or minor part. Therefore it is just a wee bit unfortunate that so much attention has been placed upon control. The overall intention of the committee was to find an appropriate balance between the rights of dog owners and the right of everyone in the community to feel safe in the presence of dogs. 
I believe that the committee reached a very sound common-sense approach to the problem. It may be that the Minister’s opening comments at the start of the year showing the extent of his concern were perhaps a bit draconian. But that was understandable against the background of the issues that were with us over the Christmas break—and by the way since then. However in the submissions made to the select committee we have advanced in very quick time. The Minister can take credit for what in my short time in the House has been a very very speedy response from the start of the year to submissions to deliberation and now we are in the final stage of legislation that on 1 December will be law resulting from those submissions that were made at the time. 
 The framework as I said was related to aggressive attacks injuries and death in the case of some earlier attacks and more recently this year focus upon a death at Ruakaka. So the issue of dog control became too coloured with the aggressiveness of dogs rather than looking at the whole issue of how dog–related matters were administered in the community how registration was provided for and more recently the actual cost of that registration particularly because most councils have—and we applaud that—a user-pays policy. Most of the dog control issues in councils are controlled by the ability of responsible dog owners to pay for the total services of councils. I suggested the other day that in the very near future there may be a common-good factor that should come from rates for a time at least if the community is going to be so concerned about dogs in our society and particularly with regard to the time to implement a proper and appropriate process in regard to microchipping. But that is for councils to decide. 
The Local Government and Environment Committee response as I said was basically one of common sense. I therefore just want to take us through one aspect that has been covered and that is the aspect of microchipping. The committee found at the time that although there was not perhaps a case for universal microchipping there certainly was a case to take a segment of those dogs that were classified as dangerous menacing and impounded to be microchipped. That was the committee’s mind. We also heard from submitters who did support the compulsory microchipping of all dogs. Why? They supported that because of the attacks upon livestock and other issues. I was very fortunate to have been a principal of a school with an outstanding dairy and sheep farm for some years. The record that we had for 2 months and this was 5 years ago was 23 dogs shot on our farm for worrying sheep—a loss of almost 80 lambs and ewes. That is a huge cost. That sort of experience was also relayed to us by one of the submitters at the committee. He came from the Opotiki district and was a former chairman of the county council. He had worked in that district over some years to see whether microchipping was feasible. 
The veterinary society in that district worked with him and they took advice from Australia particularly from the two states where this measure is working. They arrived at our committee in no doubt that microchipping was an answer in the rural sector. It is not the answer to dog control in the sense of aggressive attacks but it certainly is a very very feasible answer with regard to registration. New Zealand First’s submission stated and I still believe that it is possible that the collar measure could be replaced by the chip. But that is a matter that is obviously for local authorities the Minister and the Department of Internal Affairs to decide. 
Microchipping is a pragmatic issue. There is a time factor—1 July 2006. There is a long lead-time to get the technology right to improve on the method used in Australia and the technology used in the veterinary clinics of this country. Microchipping is also as we have already heard in earlier stages of the legislation an issue that needs to be faced with regard to a very credible ISO base. I want to plead again with the Minister and the department that the issue of a distant scanner will become a very very important issue if this is to come into operation in 2006. 
The last issue in respect of microchipping is this. I have heard comments about microchipping as have other members of this House; the issue is quite simple. Unless one’s dog is born before 1 July 2006 one is not affected. I have been quite amazed by some of the emails I have had and comments made in the last couple of days about the fear in the community. But there is no need for fear; this is a considered measure by the Minister and his department. We support the ability in a pragmatic way for the Minister to develop this matter which as I have said is supported by a considerable number in the rural community. I was at the Waimate North show on Saturday. I spoke to farmers there. Not one of the farmers I spoke to echoed the comments made in the emails from various branches of Federated Farmers. 
In conclusion this bill sets out higher penalties with regard to infringement offences and fees and it sets out more strenuous requirements with regard to the ability of enforcement officers to act. But above all the bill leaves with territorial local councils the discretion as to how this measure should be implemented and allows in the graduated strength of their bylaws for discretion at almost every point. The audit of councils’ annual plans is included for the first time and that will be easily achieved because the policies that the councils have with regard to dog control will be very clearly enunciated in their annual plans. 
Above all I wish the Minister and his department well. There is the issue of microchipping which is yet to be firmed up in the public’s mind but it is worth a go and I commend the bill to the House. 
MIKE WARD (Green) 
: 
 Dog attacks are dreadful and it is totally reasonable for people to seek action from Parliament to make sure that all that can be done is done. But it needs to be pointed out that most attacks are by dogs that are known by the people who are attacked and attacks on strangers happen not because of inadequate law but because of law ignored or law inadequately enforced. I commend David Parker and members of the Local Government and Environment Committee. If a bill like this can be enjoyable the experience of working with people in a cooperative fashion is an enjoyable experience and there was a great deal of cooperation in this committee. 
Good law reflects and supports good behaviour. This law is a mixture of carrot and stick of incentive and disincentive. The messages that came through loud and clear from the submissions was that overwhelmingly the majority of the 500000 dogs in New Zealand are unlikely to offend. They are owned and cared for by responsible dog owners. This legislation has been tempered by the need to ensure that members of the public are kept safe from dangerous and menacing dogs by ensuring that they are muzzled neutered and kept on a lead or behind a fence and to do this without penalising the good dogs and the responsible dog owners. 
There is the possibility of incentives by way of reduced registration fees for owners who can demonstrate that they know how to look after their dogs—that is by attending puppy school going to a dog obedience classes with their dogs and so on. The ability to prevent irresponsible dog owners from keeping dogs for up to 5 years is strengthened. This is not a new requirement. Reports that the owners of the dog that attacked Carolina Anderson have been observed since their conviction with a dog on the same reserve where the attack occurred suggests that some local authorities need to enforce more rigorously the bans on owning dogs. The reporting procedures for local authorities will hopefully ensure that they are more likely to enforce the provisions knowing that they are more readily able to be held accountable. 
I mentioned earlier that the bill has been tempered by the need to protect against dangerous dogs without penalising the good dogs or the responsible dog owners. There are two areas in the bill where we believe that measures most certainly do or in some cases could catch the responsible along with the irresponsible. The first is in the case of breed-specific bans. The Green Party has no issue with bans on dogo Argentino or the Japanese tosa or the Brazilian fila. These dogs are so few in number that neutering and the ban on imports is likely to ensure that they are unlikely to be a problem and will not be here for very much longer if there are any here. We are concerned that the ban includes American pit bull terriers—a breed that is notoriously difficult to identify and indeed the description of the pit bull terrier that is included in the bill shows that the size differential is such that if applied to other breeds it could see judges confusing cocker spaniels with Afghans or springer spaniels. The size differential is huge. 
We are afraid that the ban is likely to undermine the reasonable caution that should be exercised around all dogs or that it will create unnecessary fear around some breeds that bear some resemblance to pit bull terriers like Staffordshire bull terriers which have a reputation for being pussy cats. We have been comforted by the indication from the Minister that the criteria for adding new breeds to the banned list will be rigorously applied and that a single attack by one of a breed will not result in muzzling and so on on all specimens of that breed. We recognise that the inclusion of the American pit bull terrier reflects a concern about a range of dogs bred for fighting but we believe that these dogs are likely to be caught by the provisions on dangerous and menacing dogs. 
Our deeper concern however is over the issue of microchipping of all dogs. The committee carefully considered all of the submissions but in particular those of the local authorities and decided “Yes” to microchipping dangerous dogs menacing dogs problem dogs and dogs that had been impounded for a second time; and “Yes” to allowing individual local authorities to microchip all dogs if they believed that that would best meet their needs. The Greens’ attempt to add hunting dogs to the list of chipped dogs so that the owners of escaped hunting dogs could be held responsible for attacks on farm animals and wildlife was not supported by the committee. Those dogs will now be chipped. We hope hunters who lose their dogs will be more diligent in their efforts to recover them. 
We were disappointed that the Minister was unwilling to isolate the Supplementary Order Paper amendments that related to microchipping from the others in Part 5. It was a measure of my inexperience that I did not vote against all of the Supplementary Order Paper amendments for that part of the bill. It made little difference to the outcome. Clearly New Zealand First had indicated its willingness to support the Government. 
We remain unconvinced of the necessity for microchipping the 450000 dogs that are unlikely to bite or cause a problem in order to catch or protect against the 50000 dogs that may. While the cost of chipping all dogs registered after 2006 is nowhere near approaching the figures that some have suggested recently there can be little justification for doing that whatever the price in the light of the deeply held concern by many responsible dog owners since chipping will serve no useful purpose for most people or their dogs. The Minister said that the chipping is necessary for the national register. Clearly current registration details will be entered into the national register. As it is likely to be some time beyond 2016 before all dogs in New Zealand are chipped a national register is perfectly viable without compulsory chipping. 
The same arguments hold true for the viability of purchasing equipment for the identifying of microchips. If local authorities believe it is necessary to chip all dogs to make their equipment viable then they are able to make that decision for themselves. The committee suggested that that was OK. Clearly many do not think it is necessary. In view of the likelihood that most dogs will never come to the notice of dog control officers and hence never have the transponders run over them the measure is likely to undermine support for legislation that demands wholehearted buy-in from all dog owners. 
While the legislation strengthens the power of local authorities and dog control officers the measures to encourage dog owners to learn how to manage their pets in ways that minimise their risks will help to reduce those risks. Providing public education on what to do and what not to do around dogs will also help people but children in particular to keep themselves safe. 
The committee were accused—as politicians frequently are—of not listening. The changes to the fencing provisions are a testimony to the fact that the committee heard the many submitters. 
This is not a bad piece of law. There are bits of it we disagree with but it is our fervent wish that it does keep New Zealanders safe. It recognises too that for many people dogs are their only companion and for all dog owners are a very important part of their families. This law seeks to protect against dangerous dogs but recognises the importance of dogs in the lives of many New Zealanders and we support it. 
Hon KEN SHIRLEY (Deputy Leader—ACT) 
: 
 We in ACT believe that this is bad legislation and we will oppose it. It is legislation that has been driven by reaction and by emotion rather than cool thought. I have to say that the Minister is particularly guilty of over-reacting and bringing to this House very bad legislation. We have a parallel situation with gun registration in that this Government has simmering away a proposal to register all firearms. We know that it does not work. We know from the experience all around the world that it does not work. 
 I put it to members that the Government is just waiting for another unfortunate incident such as a tragedy like the one at Aramoana or Raurimu—the Dunblane equivalent—and then it will rush legislation in riding it through on a wave of public outrage and emotion. That is exactly what happened with this dog control legislation. It was on the legislative programme simmering away on the backburner. We had a spate of very unfortunate incidents that were absolute tragedies in themselves but this Government went to the lowest common denominator and brought in sweeping legislation. 
That is the point. It goes to the philosophical divide. Government members believe in big government and they believe in control. They believe in more regulation at every opportunity with the State increasingly telling people families and communities how they should live their lives. They do not respect freedoms. They do not respect personal responsibility. This legislation is right up there in terms of that philosophical divide. This legislation represents big government big control and prescriptive law. 
We know that about 300 serious dog attacks occur every year in New Zealand. That is bad and we certainly should be working to reduce that incidence. However with a population of 4 million people and about half a million dogs it is not surprising. Domesticated canines have been living with people for 100000 years—we have evolved together in many respects. Comments have been made about the incredible bond between man and dog. The comfort and security and enjoyment that many people get from their dogs is part of being human actually—and there is 100000 years of evolution backing it. 
With this bill we have the State stepping in with incredible controls. In some of the measures first proposed by the Minister every property was going to have to be fenced from the street right to either the front door or the back door. Even people on rural farms with homes 500 metres from the street were somehow going to have to have a narrow fence-way to protect anyone who might want to come along with registered mail and knock on their door. What a silly silly Minister! He lost that one at the Local Government and Environment Committee. I was a member of that select committee and I concur with other colleagues—the committee was a cooperative one and we did some good work. The bill is significantly better than it was but that still does not make it good. 
The bill the Minister brought to Parliament was a shocker. It was atrocious. It was one of the most appalling pieces of State-control legislation that I have ever seen come before Parliament. So we had the nonsense of the “build the fences” situation and then the issue of microchipping. All the evidence was against microchipping. It did not make a lot of sense. Apart from that the cost is phenomenal. I heard the Minister on the wireless this morning trying to excuse it away. He said it would not be $70 or $100; it would be very cheap and efficient. He told us that his Department of Conservation put little microchips into kiwis and it does so very cheaply. The fact is that the chip costs between $12 and $20—that is established and I do not think anyone disputes it. To engage the services of a veterinary scientist we would be talking about—[ 
Interruption 
] Many will. Fifty dollars to microchip an animal would be a reasonable price. With half a million dogs in the country that is $25 million of dead-weight cost that this Government— 
Hon Chris Carter 
: What’s a decimal place between friends! 
Hon KEN SHIRLEY 
: OK even if the amount is $2.5 million that is still a lot of money. It is dead-weight cost. It does not produce any wealth. It does not give anybody greater security. It is just dead-weight cost from the bureaucrats from the regulators and from the State controllers. 
The other point is the breed-specific nonsense. Again all the evidence from around the world is that breed-specific selection for dogs is a nonsense and does not work. Successive Governments in this country have rejected it on that basis. But oh no this Minister and this Labour Cabinet could not resist it. Here was a vehicle of control. They were going to seize upon it and legislate for it. United Future has already made some very good points about the American pit bull breed. One cannot distinguish between them. One cannot breed select and the Minister has been unable to convince anyone of how it will happen. It is against any advice he was received and that is very very unfortunate. 
Some things in the select committee were very humorous. The Minister with his definition of working dogs in his original legislation had not even excluded farm dogs and there was a requirement that all dogs that were not working dogs would have to be on leashes. The only working dogs were to be those that worked with the Customs Service the police and the Army. All working dogs connected with Government departments were given an exemption but the poor old farmer with a mob of sheep out on the road in Canterbury somewhere would have to put all his sheepdogs on leashes. That would have been a very interesting exercise in itself but that is the sort of nonsense this Minister and the Labour Cabinet bring to the country. 
But we still have in this legislation at its third reading stage—at a point where it is about to pass into law—the statement that a dog owned by a person and known to have attacked any person or any stock or poultry or property of any kind from here on in must not be allowed to be at large or at any public place or private way except when confined completely within a vehicle or cage or muzzled and controlled on a leash. It states: “to have attacked … property of any kind”. How many members in this House have reared a puppy? How many can say that a puppy has chewed a shoe? A shoe is “property of any kind”. So an innocent little puppy may chew up a shoe as a puppy is wont to do and be in breach of this legislation. It will have to be on a leash and muzzled. 
 That is extraordinary legislation and it is a recipe for increasing social conflict and pitting neighbour against neighbour. This legislation can be used by malicious and vindictive people to get at their neighbours who might have a puppy or a dog next door. It is bad legislation. It is foolish legislation. ACT will not be supporting it. On behalf of all dog owners and all sensible rational people who still have common sense in this country we say that this is bad legislation and that we are against it. 
LARRY BALDOCK (United Future) 
: 
 First I commend the Minister of Local Government for bringing what has become I believe very good legislation back to the House. He is to be commended for that. I also thank David Carter who chaired the Local Government and Environment Committee and all the other members of the committee for the very cooperative way in which we have worked. The officials also need to be thanked for their work in making a great many amendments to the original legislation before us including some of the major changes made at the last minute in the Committee stage. 
When I first began on this process earlier in the year some colleagues advised me that dealing with dog legislation is always a lose-lose situation so I embarked on it with some fear and trepidation. It is very difficult when one is dealing with people’s pets to come up with legislation that will please everybody but I believe we have done an excellent job. Most of the feedback we have received so far has been very positive. People have been very pleased that parts of the bill have been taken out and that a large number of amendments have been made to the Act that will make it even more effective. 
I begin by concentrating on some of the positive initiatives in the bill. First of all we give increased powers to dog control officers for enforcement and for education. That is very important. The dog control officers are the front-line people dealing with dogs in our communities and they need to be supported with good legislation and more powers so that they can do their jobs effectively. This bill allows them to go on to private property to apprehend misbehaving dogs which is an important step forward. It also gives them powers to provide food and shelter for dogs that have not been taken care of and I think all of us are pleased with that provision. We have retained the probationary owner category so that dog control officers can work with offenders to help them learn to be better owners. I believe that most of our dog control officers are working positively with people and helping them to become better owners rather than penalising them unnecessarily. Probationary training will be mandatory under this legislation which is a good step forward. 
There will be much tougher penalties for offences against the Act and real and workable infringement fees. The national database for tracking all dogs will be a real asset in the tool bag of our dog control officers. It will ensure that dogs with dangerous histories are not lost from the records if they travel between regions and we welcome that addition to this legislation. There will also be better public safety which is the primary focus of the legislation. Tough new public safety criteria for council by-laws will result in many communities in dogs being required to be leashed in publicly frequented places particularly children’s and family areas. I am pleased though that we did not take the position of requiring all dogs to be leashed at all times. Councils in particular approached us and asked us to leave it up to them to decide. We found I think a reasonable and common-sense compromise in requiring people to carry a leash with them. 
Councils are now to be accountable for their enforcement of dog control laws. We have given them the tools. It is now up to them to make sure their neighbourhoods are safe. One of the important features of the legislation too is that councils must report on an annual basis regarding what they are doing in their communities to enforce the legislation. That makes them accountable not just to central government but to their local communities because individuals in the community will be able to monitor what their dog control officers are doing. That is the key to the success of the legislation. 
There is a new category of “menacing dogs” for dogs displaying threatening behaviour or dog breeds or types of the schedule 4 variety that need to be muzzled in public. I believe that is not too onerous a condition to place upon dogs that we know are capable of inflicting serious injury on people if they attack. As I have said in other speeches it is not like some overseas legislation such as that in England under which one is banned from owning a dog of a particular breed. It simply means that people will have to muzzle those dogs when they take them out in public. Those four classes of dog that are inherently dangerous are banned from importation and that is a sensible step. We do not want to see those other three breeds—which could cross-breed and become a problem—follow the example of what has happened with the American pit bull. 
We have reasonably strengthened the fencing provisions without going to the length of the ludicrous requirement to have fencing to the front door as was in the original bill. People should have the assurance that they can pass by other people’s properties without having dogs come out on to the street. Even if those dogs do not attack it can be a very nerve-racking and frightening experience and the requirement that councils can place upon people to fence their properties will be useful in that regard. 
All dogs are capable of being man’s best friend although I personally prefer to have a wife in that regard. Whether they are small or large dogs people can become very attached to dogs as pets. If as a result of the passing of this legislation there is a trend over time for people to shift away from the American pit bull – type dog and the larger attack-type dog and begin to choose something a little less aggressive as a family pet then the legislation will have been doing its job in that regard also. The point that needs to be made—which the speaker before me missed—is that when it comes to American pit bulls dog control officers do not have to identify the breed. We understood that that is difficult. That is why we have allowed for a category of “type of dog” which makes it much easier. If it looks like a pit bull— 
Hon Ken Shirley 
: Smells like a pit bull. 
LARRY BALDOCK 
: —and if it smells like a pit bull it will probably bite like a pit bull. Therefore it is reasonable to ask the owners of the dog to muzzle it when they take it out in public. 
 Some initiatives in the bill that United Future takes particular pleasure in are that firstly there will be a national database from 2006. It will be not just for microchipped dogs but for all dogs that have been registered because that will be useful for dog control officers as I have said before. Secondly irresponsible owners convicted of offences and given destruction orders under the Act will have to provide death certificates to prove their dogs are deceased—not just hidden away or loaned out temporarily. I am told by dog control officers that that is a real problem. An owner is given a destruction order and the officer going to look for the dog is told the owner has taken the dog into the bush and shot it but in actual fact the dog appears in another municipality or community somewhere else and still is a problem. Territorial authorities will have the power to impound dogs charged for dangerous offences while their owners await prosecution proceedings. That I believe is an important improvement to the 1996 Act because it will keep dangerous dogs off the streets while that prosecution is going on. As I said earlier the audit process has become compulsory for councils and will add great weight to the responsibility of councils or great motivation for councils to enforce this law effectively. 
I want to make some final comments about the issue of microchipping and what costs that will bring to dog owners. It has been suggested in some press releases in the last couple of days that a registry would result in costs of something like $25 million. I just cannot believe that. Research into that issue was done very carefully. One of the things the microchip registry was compared with was the national vehicle registry and it was claimed that it cost $25 per vehicle to maintain a registry on an annual basis. So I asked our researchers to look into that and they found that it cost $24.8 million for the Land Transport Safety Authority to maintain its database. Considering that the cost is spread across our country’s 2.9 million vehicles and that most vehicles are registered twice a year the cost would really amount to $4 per vehicle per registration. To suggest that the cost is $25 is stretching the truth considerably. 
The estimates regarding the cost to owners of microchipping dogs are also incorrect. They include the assumption that vets would be the only ones to install the microchips and we have made it very clear to the Minister in our support for the legislation that installation of them must be open for competitive pricing. Dog control officers can do it and private contractors will also be able to be engaged to make sure no one has a monopoly on installing the chips and therefore keeps the price very high. It seems reasonable that when taking a pup at age 3 months for its vaccination the chip could also be implanted then if the owner wanted a vet to do it and that would not mean an additional or separate consultation fee. 
I commend this bill to the House. 
A party vote was called for on the question  
That the Dog Control Amendment Bill be now read a third time. 
Ayes 109 
New Zealand Labour 52; New Zealand National 27; New Zealand First 13; Green Party 9; United Future 8. 
Noes 7 
ACT New Zealand 6; Independent: Awatere Huata. 
Bill read a third time. 
Subordinate Legislation (Confirmation and Validation) Bill (No 2) 
Second Reading 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I move  
That the Subordinate Legislation (Confirmation and Validation) Bill (No 2) be now read a second time 
. The bill confirms and validates 14 Orders in Council made under nine Acts. 
The bill was referred by the House to the Regulations Review Committee on 28 August 2003 and the committee called for explanations from the five departments administering the orders. The committee was satisfied with the responses and reported to the House on 24 October 2003 recommending that the bill be passed without amendment. I am grateful to Mr Richard Worth the chair of the Regulations Review Committee and to the members of the committee for their succinctness of process and report. I am appreciative also of the support from all parties following discussion through the Business Committee that the remaining stages of the bill will proceed this afternoon. It is an illustration of the capacity of the House to treat sensibly a straightforward and non-controversial measure. 
Four of the 14 orders apply to movements in the consumer price index and two of those concern increases to social security benefits and allowances and to war pensions and allowances. A third adjusts the excise on tobacco products and the fourth increases the maximum rate for funeral grants—perhaps there is some connection between those two orders. Another three of the orders prohibit imports or exports. Two of those relate to Patagonian toothfish and the other to dogs of specified dangerous breeds. One order provides for the recovery by the Ministry of Agriculture and Fisheries of related costs from the export of live animals and germ plasm. The final order removes a requirement relating to the taking of packhorse rock lobster. 
RICHARD WORTH (National—Epsom) 
: 
 As has been indicated National supports this bill. It might be fairly said that this is not bowel-gripping legislation; it is technical and formal. The purpose of the bill is to confirm and validate subordinate legislation made under the various Acts the Hon Dr Michael Cullen has described. 
 Clauses 4 to 10 confirm and validate certain subordinate legislation that will lapse unless it is confirmed or validated by statute. The subordinate legislation referred to in clauses 4 to 7 is confirmed and the subordinate legislation referred to in clauses 8 to 10 is both validated and confirmed. Clause 11 from a lawyer’s perspective is interesting in that it provides that the validations effected by clauses 8 to 10 are for purposes only of preventing expiry of the enactments and not to cure any invalidity that may exist. Finally clause 12 repeals the Subordinate Legislation (Confirmation and Validation) Act of the previous year. 
As the Hon Dr Michael Cullen has said the legislation was referred to the Regulations Review Committee—one of the finest committees I would say in the entire Parliament. That committee asked for the views of the relevant Government departments and they provided those views which were found to be in order—certainly to the satisfaction of the Regulations Review Committee. The only other matter that I would raise is that this type of legislation perhaps should be reviewed as to the necessity for it. It may very well be that other mechanisms can be more usefully employed and that the time of Parliament need not necessarily be taken on confirming and validating provisions. That said National supports the speedy passage of this bill. 
DAIL JONES (NZ First) 
: 
 New Zealand First supports the passage of this bill. I find the Regulations Review Committee to be quite an interesting committee despite other members’ views of a committee that may have a look at 450 regulations a year. It meets at 8.30 in the morning on a Wednesday almost every week that Parliament is sitting. As usual with the excellent support staff that the Regulations Review Committee has this matter was very carefully considered by the members. I would like to express my thanks to the staff for their assistance on this matter and on other matters and also to the other members of the select committee who worked together very well on various issues. We support the rapid passing of this bill. 
Bill read a second time. 
Third Reading 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I move  
That the Subordinate Legislation (Confirmation and Validation) Bill (No 2) be now read a third time 
. 
Bill read a third time. 
Personal Explanations 
World Trade Organization Meeting Cancun 
Hon PETER DUNNE (Leader—United Future) 
: 
 On 19 September 2003 I addressed this House about the World Trade Organization meeting at Cancun. I made certain allegations about reports of Professor Jane Kelsey that were cited from this House. My comments about Professor Kelsey were incorrect. I accept that Professor Kelsey was present at the meeting’s press centre each day and that she attended various briefings and press conferences throughout the Cancun meeting. I also accept that Professor Kelsey’s reports were based on substantive information and that she did not make them up. I regret the incorrect comments. 
Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill 
Second Reading 
Hon Dr MICHAEL CULLEN (Minister of Revenue) 
: 
 I move  
That the Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill be now read a second time 
. The Finance and Expenditure Committee has considered the bill and reported it back to Parliament making a number of recommendations on the proposed legislation to ensure it works as intended. 
One of the major features of the bill is the introduction of GST reforms resulting from the Government’s extensive review of the legislation. The bill introduces a reverse charge mechanism to remove a distortion in favour of imported services which at present do not attract GST. New Zealand service providers who must charge GST on services supplied in New Zealand face therefore a competitive disadvantage as a result. 
The committee has recommended a change to improve the consistency of treatment for branches and subsidiary companies. This will ensure that the reverse charge applies in all cases where imported services are consumed within New Zealand. It has recommended narrowing the scope of the reverse charge so that the supplies of an imported service that would be zero-rated had it been made in New Zealand and consumed overseas will likewise be zero-rated. This will ensure that the reverse charge does not tax consumption overseas. 
The committee has also recommended changes to make it simpler for recipients of imported services to claim import tax credits and to ease the introduction of the new measure. Another major reform introduced by the bill is the alignment of the GST treatment of the financial services sector with that of other sectors. When GST was introduced financial services were exempt because of the difficulty of including them within the rules. This means that the finance sector cannot recover GST on purchases relating to the supply of services to other businesses which is a distinct advantage for the sector. The proposed solution is to make financial services supplied to the registered businesses subject to GST but to zero-rate them. This means that financial services will still not attract GST but providers of those services to other businesses can recover GST on related purchases. To reduce compliance costs the committee has recommended that providers of financial services be required to elect into the new arrangement rather than elect out as originally proposed. This means that participation will be voluntary rather than mandatory which will save time and money for those providers who do not wish to take advantage of the change. 
Further GST remedial amendments have also been incorporated into the bill since its introduction. One clarifies that the financial contributions made to local authorities under the Resource Management Act and the Local Government Act are subject to GST. The second amendment clarifies that late payment penalties imposed on unpaid rates under the Local Government (Rating) Act are exempt from GST. Another clarifies that the transportation services supplied to non-residents for the movement of household goods into New Zealand are zero-rated for GST purposes. 
 To turn briefly to the administration of GST a further late addition is a common-sense amendment to simplify the process for businesses to deregister for GST. Another feature is an anti-avoidance measure—the deferred deduction rule—intended to target aggressive tax arrangements that offer investors more in tax deduction than they invest. The arrangements typically involve loans and investors are not at any real risk of having to repay. The solution proposed in the bill is to defer tax deductions on loans that meet certain criteria. The Finance and Expenditure Committee has recommended changes to the proposed legislation to target this better. It has recommended narrowing the definition of “promoter” thereby removing some of the uncertainties associated with a wider definition and further limiting the types of arrangements that it might apply to. The committee also recommended clarifying a number of points relating to the consolidated approach to measuring the total cost of property held by investors and associated persons. 
The bill introduces legislation enabling employer contributions to superannuation funds on behalf of people earning less than $38000 a year to be taxed at a lower 21 percent rate—the marginal rate that applies to tax on incomes below that level. The measure was designed to reduce the overtaxation of the retirement savings of lower-income employees and to remove a disincentive to saving for retirement. I shall introduce a Supplementary Order Paper to the Committee of the whole House to address concerns expressed by the select committee about the overtaxation of contributions when the employer contribution plus the employee’s salary are more than $38000 a year. In such circumstances all the contribution is taxed at 33 percent in the bill as reported back. To deal with this concern I propose to legislate so that specified superannuation contribution withholding tax is calculated only on an employee’s salary or wages thereby eliminating the potential for overtaxation. This approach will lead to some under-taxation which may also be a concern. Therefore I have asked officials to monitor whether the option is abused when it comes into force and if so whether the Government will need to reconsider its position in that respect. 
The bill also repeals the income tax exemption for the investment earnings of sickness accident or death benefit funds because it is inconsistent with Government policy for the taxation of savings and insurance. There have also been concerns that the exemption has been exploited in schemes marketed to high-income people to reduce the tax that they pay. The select committee has recommended a separate exemption for those funds that have the required mutual characteristics of friendly societies which are exempt from income tax provided they meet certain criteria. 
The select committee has recommended including in the bill a remedy to a potential problem in relation to qualifying trusts. It has recommended a change to the definition of qualifying trusts to enable a non-qualifying trust to become a qualifying trust retrospectively. It will ensure that income tax obligations including use-of-money interest and penalties are satisfied. This will prevent beneficiaries of trusts from becoming subject to disproportionate penalties as a result of a proposed Inland Revenue Department interpretation on the tax treatment of trusts. 
This is an omnibus bill covering a wide range of often highly technical topics so I cannot cover in the time available all the bill’s contents and all the changes recommended by the select committee. I have concentrated on the latter and have not described other important reforms proposed in the bill. One of these is the legislation bringing into effect New Zealand’s part in the landmark agreement with Australia to remove a tax impediment to trans-Tasman investment. The bill makes it possible for Australian companies to enjoy New Zealand’s imputation credit rules while corresponding legislation has been enacted in Australia. Submissions on the bill made small technical suggestions but the reform was welcomed by all. Many would like to see it go further to full streaming and I am sympathetic to that position but the Australian Government is not prepared to proceed that far at this point. 
To conclude I thank the select committee for its careful consideration of this often difficult bill and I commend its report to the House. I apologise to the member following me but I have people waiting in my office for a meeting that has now been adjourned for some 20 minutes. 
JOHN KEY (National—Helensville) 
: 
 I rise on behalf of the National Party to support the Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill which as the Minister quite correctly pointed out is an omnibus bill covering no less than five important parts of tax legislation that govern the New Zealand tax scene. In particular they are the Income Tax Act the Tax Administration Act the Goods and Services Tax Act the Student Loan Scheme Act and the Personal Property Securities Act. In the time available today I want to address four of the key elements of this legislation in particular the trans-Tasman imputation situation—or the triangular tax treatment undertaken by this bill—the reverse charge on imported services as they relate to GST the zero rating of supplies of financial services and the specified superannuation contribution withholding tax. 
Before I do so I turn to Part 1 which is the only part that National vigorously opposes. This is the part that sets annual rates of income tax. I draw attention to the fact that this part confirms the move undertaken by the Labour Government when it first came into office to regrettably lift the top personal rate of taxation to 39c in the dollar. When that move was taken the Crown argued that it would affect just 5 percent of New Zealand taxpayers. The Crown will now note—as we note—that it affects no less than 19 percent of all full-time taxpayers. One in five of all full-time taxpayers is caught by this top personal rate. 
What an anti-growth policy that is! It is not something fiscally required by a Government that is babysitting one of the largest surpluses we have had in some time. This Government is not using this wonderful opportunity—which it describes as cyclical not structural—to do anything to grow our economy. This is simply a Government with no fiscal requirement that has used this bill to reaffirm what we all know is an envy tax. Were the Government to come to its senses and drop this despicable envy tax it would cost no more than $95 million per 1c. It could rapidly move down to a rate of 33c in the dollar—the rate that the fine National Government from 1990 to 1999 had in place—and that would cost the Crown no more than $570 million. What a wonderful incentive it would be to entrepreneurs and risk-takers and hard-working families up and down the country to see their efforts rewarded by that. 
While the Government was at it it could take a moment to also lower the company tax rate which it is affirming in this bill at 33c in the dollar—a rate no less than 3c higher than the Australian tax rate. It makes us uncompetitive with Australia our major trading partner and for just $420 million we could have the same tax rate as Australia. So for $1 billion—only one-fifth of its cash operating balance of $4.8 billion or about a fifth of the operating balance excluding revaluations and accounting changes at $5.6 billion—the Government could deliver some very fine tax measures to this country. But alas I fear we will have to wait for the introduction of a National Government in 2005 before that takes place. 
Hon Chris Carter 
: More likely 2065. 
JOHN KEY 
: No 2005 will be the date when the National Government will introduce those kinds of changes if not more sweeping pro-growth policies. 
I want to take a moment now to talk about the trans-Tasman imputation situation addressed in the bill. This provides changes to the law that address what is known as triangular taxation where New Zealand residents investing in an Australian company—a company that pays fully franked dividends—do not enjoy the full franking of those dividends and have to declare them on their New Zealand tax return and pay tax on them. The bill allows on a proportional basis for that situation to be addressed. It also allows companies in a group structure to move imputation credits around that structure again to the benefit of shareholders. These are positive moves that were undertaken by a National Government and completed with the good work of our friend Peter Costello in Australia. 
As the Minister quite correctly pointed out those moves simply do not go far enough and when back in Government we will be pushing for another step forward in that process. Australia is clearly a very important market to New Zealand and harmonisation of tax treatment between the two countries is vital to allow New Zealand companies to enjoy greater access to the far deeper capital market in Australia. I might add that one of the important aspects of this triangular tax treatment will be in respect of private venture capital or private equity where previously people have been quite badly caught. 
I want to talk about the reverse charge on imported services. This is the situation where previously imported services were not subject to goods and services tax because at the time of implementing GST it was deemed that that was too small an amount. It has really been undertaken for two reasons—first to align New Zealand with other OECD countries and second for reasons of competitiveness. It was seen to be unfair to New Zealand companies to be competing with offshore suppliers who were not subject to GST. 
I might note though that this presents quite an interesting situation for a New Zealand individual who will have to pay GST—even if he or she is GST-unregistered as an individual—for income or imported services over $40000. It will require that person to send that cheque off to the Inland Revenue Department. I hope this important element of the bill gets the media attention it deserves; otherwise I fear that New Zealanders who for instance employ a foreign architect to build a new home for them pay over $40000 and do not recognise the GST proportion of that will be caught. 
I want to move to the zero rating of financial services. Again when financial services were introduced they were exempt from GST. It is an industry I know something about and have very fond memories of. The problem with exempting those services is that when they are in the supply chain they have a thing called “the cascade effect” where by being essentially exempted the GST on inputs can no longer be recovered. The problem then is that cost can only be passed on through prices and rightly so the bill addresses that by zero rating them as opposed to exempting them. 
Before I close I want to look at the deferred deduction rate which is the point the Minister raised about targeting aggressive tax arrangements that offer investors more tax deductions than they would have invested. I simply note that closing this loophole could again have a positive impact on the Crown—estimated at anywhere up to $450 million. As members may recall $450 million is very close to the amount that New Zealand companies are overtaxed compared with their Australian counterparts. I would like to think that with this windfall that they might enjoy the spoils of $450 million that they will look wisely on the companies of New Zealand and therefore pass that benefit on post-haste to flow through the community. 
Very finally I want to talk about the specified superannuation contributions. Previously these were being held at a rate of 33 percent which was a 6 percent deduction or discount for those on the top personal rate but it overtaxed others and deterred them from saving. New Zealand has a significant savings problem which is well recognised. The superannuation fund created by Dr Cullen is one of the great con jobs of all time. It will pre-fund superannuation only $1 in every $7. It will not fix the problem. It is one of the wonderful signs that the spin-machine works but the reality does not so anything we can do to fix savings in this country is appreciated. That is why National will be supporting this important legislation. 
CRAIG McNAIR (NZ First) 
: 
 In speaking on behalf of the New Zealand First Party and my New Zealand First colleagues on this bill I first speak in relation to the part that confirms the annual income tax rates for the 2003-04 year. New Zealand First wants to convey its disappointment in this Government for not taking more initiative in the area of taxation. New Zealand First’s long-term objective is that New Zealanders should pay less tax and everybody knows that is our view. But having said that we believe that the Government’s No. 1 priority should not be to reduce taxation but to reprioritise its social spending so as to place greater focus on the real needs of New Zealanders. The Government should do that rather than spending the income it receives from taxpayers on its politically correct agenda—such as legalising prostitution abolishing the Privy Council and so on. 
New Zealand First does not believe that taxation cuts as advocated by National and ACT are the immediate answer for New Zealand. There are very important issues in this country that need to be addressed first—such as poverty up in Northland and elsewhere. Dr Brash’s 1980s policy of taxation cuts for the rich is worse than having no solution at all for our problems at this point. The real solution does not lie in just keeping the annual taxation rates as they are in this bill but in providing taxation incentives for research and development and also for exporters for example. National and ACT members when speaking about this legislation including the National member who has just resumed his seat have said that a reduction in income tax rates will improve the economy. Whereas Labour believes that keeping the status quo is satisfactory New Zealand First says that as a country we must think outside the square and look at taxation incentives for exporters and for research and development and so on. We should not always be talking about either keeping the annual income tax rates as stated in this bill or reducing income tax; rather we should be thinking outside the box. We all know that exporters are most affected by a rise in the value of the New Zealand dollar and therefore we believe as a party that taxation incentives for that group are one way of stimulating growth in this country. 
Although New Zealand First has concerns about the annual income tax rates we applaud other parts of this bill and commend the Government in respect of them. We commend the taxation advisers and others for their hard work and advice and thank them personally. We thank the officials from the Inland Revenue Department and Treasury for their advice. We especially thank Terese Turner specialist taxation adviser to the Finance and Expenditure Committee because she was informative and is very knowledgeable on the subject. As I said we applaud other parts of the bill—such as those allowing the zero rating of business-to-business supplies of financial services and reforming the imputation laws to reduce the double-taxation of trans-Tasman investments as part of an agreement with Australia. That is the main thing. The bill changes the imputation laws to address the problem of triangular taxation which John Key was talking about. That involves the double-taxation of certain trans-Tasman investments. It allows Australian companies to allocate imputation credits—for New Zealand tax paid—to their shareholders in proportion to their ownership of the company. I note that that arrangement is reciprocal and requires both countries to pass the relevant legislation. It is a very positive move overall as far as trans-Tasman imputation is concerned. 
The introduction of a deferred deduction rule in order to combat aggressive taxation arrangements is a positive move and so are the progressive rates of specified superannuation contribution withholding tax on an employer’s contribution to match the employee’s marginal taxation rate. New Zealand First also applauds measures that provide community trusts with an income tax exemption. Clauses 5 and 17 contain provisions giving the community trusts that were established under the now-repealed Trustee Banks Restructuring Act an exemption from income tax. That exemption will apply from the 2004-05 tax year. Any distributions made by those community trusts will still attract income tax when appropriate. Submitters generally supported that proposal which was something that New Zealand First was looking for. It is intended to reduce compliance costs for those community trusts and we are in favour of anything that can reduce compliance costs. 
I thank you Mr Speaker for allowing me the opportunity to speak on this bill. As I said New Zealand First supports most parts of the bill but we are disappointed in the Government’s lack of vision with regard to taxation. 
ROD DONALD (Co-Leader—Green) 
: 
 The Green Party will be supporting this bill through to the Committee stage and indeed to the third reading. We have been pleased to support this bill from the outset. As I said in my second reading speech the bill includes a significant victory for the Green Party—a hard-won long-fought victory. Dr Cullen is not known for his generosity but in the end he had to concede that the change to the top marginal taxation rate that he introduced in the year 2000 had led to an incentive being made available to top-income earners in this country—those people earning above $60000 a year—to save for their retirement. That incentive was that the taxation rate for superannuation savings remained at 33 percent. That automatically gave those who are most well off a real incentive to encourage their employers to offer superannuation rather than salary as a way of boosting their total remuneration package because at the same time it increased by 6 percent the amount of money that those people were able to keep from their employer’s subsidy. 
At the same time that he made that taxation change Dr Cullen refused to bring in a variable rate for the superannuation withholding tax. In other words he kept it at 33 percent. So not only did that mean there was an incentive for those people who earn above $60000 a year but it meant that a penalty remained in place on the savings of those people who earn less than $38000. [ 
Interruption 
] I can understand the member’s concerns. It is rather distracting to be almost placed in the position of being Her Majesty’s loyal Opposition. However I think at least New Zealand First is present to wear that mantle. Anyway I will go back to the topic at hand. I am sorry listeners. We are speculating about whether a coup is taking place at the moment but I am not meant to comment on the absence of members from the House so I shall not do so. As there are no members from the party here to question me in their absence— 
Hon Paul Swain 
: Not allowed to comment on them but every National Opposition seat is vacant. 
ROD DONALD 
: That is a point well made. The chief Opposition whip has leapt to fill the breach as it were. I am glad that he is here because I am about to praise the National Party for its support during the Finance and Expenditure Committee’s consideration of this bill. However before I get there I shall finish outlining the landscape as it were. 
We were very pleased when this bill did come to the House. While it did not go as far as we wanted and extend the 6 percent incentive that wealthy employees get across the board it did at least remove the disincentive that middle and low income employees have faced for years. The superannuation contribution of their employers has been taxed at 33 percent whether or not the employee is paying a marginal tax rate on his or her income of 21 percent or even 15 percent. We were pleased that the Government at least agreed to bring in a variable rate of specified superannuation contribution withholding tax although it is not as progressive as we would have liked it to be. 
During the consideration of the bill we were pleased to persuade the Minister of Finance to make the taxation rates truly progressive by introducing a 9 percent rate for the savings of people who were earning less than $9500 a year. One may say that there are very few of those people or that somebody who earns that amount of money would not be in a position to save for his or her retirement. However some people who are second-income earners in a home are members of a superannuation scheme and they were being penalised by the old taxation rate. Dr Cullen has very generously conceded that he will lose about a million dollars in taxation revenue a year in order to bring in some equity in that regard. 
In looking at this bill I need to say that we believe that it is a case of the cup being half full. We really think that a little bit of Christmas cheer from Dr Cullen would fill the cup right to the top if he extended that 6 percent taxation incentive right across the board and delivered it to the very people who voted for the Labour Party at the last election. I think the most extraordinary thing about the bill that is being reported back today is that it does not offer the same incentive to middle and low income New Zealanders that it offers to high-income New Zealanders. Maybe that is an example of where the Labour Party is currently trying to position itself. It thinks it has middle and low income New Zealanders in the bag so it is now concentrating on looking after those who are well off. 
Perhaps an equally significant positioning statement is that the National Party was the only party to support us in proposing an amendment at the select committee to bring in the 6 percent concession right across the board. Perhaps National saw the advantage of appealing to middle-income New Zealand by giving those people a serious incentive to save for their retirement. Whatever National’s motive was John Key does deserve my appreciation for supporting that amendment and I would like to acknowledge National for voting with me on it. I observe obviously that other parties that I thought might have supported such a move such as the United Future family-friendly party did not back that particular proposal. However I remain optimistic about that amendment and I will be moving a Supplementary Order Paper during the Committee stage in this House to introduce a proper taxation incentive for New Zealanders to save for their retirement and particularly for employers to provide subsidised superannuation for their employees. 
Employer-subsidised superannuation is I believe the next and best step forward in New Zealand. We have to reduce the decline in the number of working people who are members of superannuation savings schemes. The Government Actuary reported for the year to June last year that only 243000 people were members of employer-subsidised schemes. That is 65000 workers fewer than 12 years ago. I hope that the new Government move to introduce subsidised superannuation for public service employees will help to reverse that decline but it is not a very generous start. The subsidy is only 1.5 percent in the first year and 3 percent in the second although I gather that the Government is talking about staging it up to 6 percent over time. I guess that is all dependent on the Government being re-elected at the next election and perhaps even beyond that. 
 One of the problems we face with this Government is that it rammed through the New Zealand Superannuation Fund which is putting aside about $1 billion of our taxes a year most of which will end up in the very volatile and fragile overseas sharemarket but at the same time Dr Cullen cannot find a few more millions of dollars to increase the subsidy that is to be provided to public servants. Instead he is planning to offer only $19 million in the first year and $32 million in the second year. That is a very small fraction of the $1 billion that he is sending off shore. Dr Cullen could easily afford a 6 percent subsidy straight off and equally if he had accepted our amendment to bring in the 6 percent concession right across the board it would have cost him only about $77 million a year for current employees—hardly a big cost. But I guess Dr Cullen has to preserve his reputation for being rather Scrooge-like. We hope that we can persuade other parties in the House to be more generous to working New Zealanders and to recognise the value of encouraging them to save for their retirement. 
We also hope to tempt other parties in this House to support an amendment that we will be putting up with regard to the annual taxation rates. We have long had the policy that the first $5000 of income should be tax-free in New Zealand. That would have most benefit for people on low incomes by putting more money automatically into their pockets rather than making them have to go through the process of claiming for a rebate. And it would help to alleviate much of the child poverty that exists in this country by assisting low-income families to get a better level of income which would enable them to cope in today’s society. But it is not just low-income people who would benefit from that amendment. Of course making the first $5000 of a person’s income tax-free would carry across all income brackets including that of the likes of my colleague Mr Shirley who I know will support me when he speaks following my speech. So the amendment is fair to that extent. But it is also of course more progressive than the provision we have now and it would mean that proportionally those on a low income would end up being far better off than they are at present. 
That contrasts with what the United Future members proposed at the select committee—or I should say they did not propose it at the select committee because it was not in the form of an amendment but they wanted to state it in the form of a minority report. It was a bit like having a bob each way by saying what they would like but not being prepared to actually put it up to the House. The United Future members wanted to deal with the taxation-creep issue. We seriously looked at putting up an amendment to see whether United Future would support its own policy but we decided on balance that it was far better to put the focus on those right at the bottom and bring a provision that the first $5000 of income be tax-free rather than to deal with taxation creep. But perhaps again Mr Shirley may like to help United Future out by putting up an amendment to see whether United Future is prepared to vote for its own policy. 
For now we look forward to the Committee stage of this bill and look forward to support for our amendments from right across the House. We hope in particular that National will maintain the support it gave us at the select committee. 
Hon KEN SHIRLEY (Deputy Leader—ACT) 
: 
 I feel that Mr Donald was trying to give my speech for me. He was certainly trying to anticipate what I might be about to say. ACT will be supporting this bill at the second reading. I note in particular that it confirms annual income tax rates for the 2003-04 year. I would just like to comment on that; other speakers particularly Mr Key have already done so. 
We must remind ourselves that one of the first things this Labour-led Government did upon coming to power was to increase the top tax rate in this country. It created a massive distortion in doing so. The tax rate went from 33c to 39c. Do members remember Labour’s promise? It promised that no increase in tax would affect more than 5 percent of the population. Its calculation at the time was that indeed 5 percent of the population was affected by that increase—that is the 5 percent earning over $60000. But we now know that through fiscal drag 19 percent of the population is in that category. Labour has broken its promise—19 percent is now affected by that top tax rate not the 5 percent that it promised. That is one of its most basic breaches of promise. What is almost worse is the way that it has done it. It has done it through fiscal drag—that old fiscal drag. One does not see it; it is out of sight sneaky and very very bad indeed. 
What is also extraordinary is Labour’s lack of understanding. It does not understand the difference between taxation and revenue. What we certainly appreciate in ACT and certainly what most enlightened economists and economies around the world now appreciate is that once one’s taxation rates are up above 20 percent one is actually damaging the economy. A Government does not have any money. The only money that a Government has is the money it takes off people off families out of communities and out of business. What is the assumption behind a Government taking that money? That it needs it because it can spend it more wisely and do more good for the community and the population than would be done if it were left in the pockets of families and communities. Who really believes that bureaucrats and big government spenders like the Labour Government here in Wellington are better stewards of one’s money than one would be? Does anyone actually believe that when we look at the appalling waste of expenditure that Governments get involved with? 
In relation to this bill the point is this: one can actually reduce taxation and because one then has a more efficient economy have more people working and therefore more people paying tax. A Government can get more revenue off a lower tax rate than will happen under the ideology of this Government which increasingly just wants to put up taxes. That is why ACT has consistently campaigned for lower taxes for all workers: because it provides the incentive for able-bodied people to get off benefits and work. It provides the incentive for them to earn and they then spend and pay more GST and income tax. Lower income tax can actually give Governments more revenue. 
But no this Government just wants more control; it puts up taxation because it believes that it can spend the money more wisely and demonstrably it cannot. It wastes so much money. This Government is a big-spending Government and a big waster. All of that waste carries an opportunity cost that reduces the prosperity and wealth of this country. It is not Governments that generate wealth; it is business people through their own initiative running businesses earning income producing goods and providing services. That is what produces wealth. [ 
Interruption 
] Mr Benson-Pope from Dunedin who is trying to interject does not understand that. He has been a bureaucrat all his life. All he knows is tax and spend. All he understands is tax and spend. Certainly the people of Dunedin have very little respect for that member. 
We had an extraordinary speech from Rod Donald of the Greens. I would like to remind the House of the lack of logic in his speech. He said it is very good that the top marginal tax rate is 39c and that the rate that the superannuation funds pay is only 33c because that actually provides an incentive to save and to put money in superannuation. But what he is really saying is that people make those decisions only when they are forced by the State. Surely if we left the tax rate at 33c people would make those decisions of their own accord. The biggest problem for people saving in this country is that they are paying too much money in tax to this Labour-led Government which wastes their money and throws it away on all manner of spurious appalling expenditures that are not properly audited or accounted for. The Government just throws away taxpayer’s hard-earned money when that money could be generating wealth creating more jobs and creating prosperity for the country. 
Mr Donald totally contradicted himself. He thought it was great that we should have lower taxes to enable people to pay into superannuation funds. I agree with him but the same principle applies and that is why we should have tax rates at about 20c in the dollar. That is why ACT says we should have a tax cut for every worker; the workers will then be able to save more afford health-care and afford all manner of other things instead of the Government taking the money taking the choice away from them and promising that the Government will provide only to have the Government fail to provide or provide a very inferior service. 
We actually experienced something quite significant here. I think Mr Donald revealed today that he is almost at the level of Economics 101. He is almost on that first step of understanding. That has to be tremendous. Instead of his voodoo economics of tax and spend of the more one taxes people the better it is and of the more control the State has the better it is through his speech today he has finally revealed that he is beginning to understand that it is not Governments that create wealth but individuals through their own efforts and communities creating services providing services and creating goods and products. That is what creates wealth not Government spending. 
Let us hope that this Labour-led Government in the limited time it has left in office will come to that realisation and will finally reduce the top tax rate from 39c in the dollar. There is no reason for it. It has destroyed the New Zealand economy it destroys proper incentives and even the Government’s own policies are revealing that it cannot sustain it. 
GORDON COPELAND (United Future) 
: 
 I have pleasure in rising to speak to the second reading of this bill. There are many things in this bill that will be to the overall benefit of New Zealand taxpayers and as a centrist moderate and business-friendly party United Future has been happy to lend its support to new rules surrounding the GST zero rating for supplies of financial services the trans-Tasman imputation rules the closure of loopholes relating to aggressive tax arrangements that offer investors more tax reduction than the money invested the income tax exemption for community trusts the alignment of taxation on employer contributions to superannuation funds with the marginal tax rate of the employee clarification of GST relative to local bodies and the lowering of compliance costs. All these are worthwhile initiatives and for that reason we will support this bill through all its remaining stages. 
However it is also true that United Future has expressed a minority view to the effect that the income tax bands confirmed in this bill should have been relaxed to take into account the effects of cumulative inflation since the rates were richly established on 1 April 2000. Inflation in New Zealand is measured by the movement in the consumer price index. Accordingly when inflation moves up all New Zealanders recognise that this signals a corresponding movement in the average level of prices for goods and services in our economy. It is perhaps not quite so widely understood however that the increase in the consumer price index is also a measure of the reduced purchasing power of the New Zealand dollar over the same period. 
This can easily be illustrated by an example. If goods cost $100 at the beginning of the year and the consumer price index and thus inflation is 4 percent during the year then at the end of the year to purchase exactly the same quantity of goods the taxpayer will need to have $104 in his or her pocket. Accordingly as all taxpayers know if inflation goes up by 4 percent they will need to have a increase in their pay packet of at least 4 percent in order to maintain purchasing power parity and a consistent standard of living. 
I set out these basic economic fundamentals so that people can clearly understand that if that goal is to be achieved namely the mere maintenance of a consistent standard of living during a year then it is also necessary to adjust the tax bands themselves for the effects of inflation. Unless this is done the income retained by all taxpayers earning $9500 or more after they have settled their tax bill will be worth less at the end of the year than the comparable figure was at the beginning notwithstanding the fact that they have received a wage increase equal to the rate of inflation. 
 This is because in a progressive tax system the tax that people are paying has increased by a percentage greater than the rate of inflation—a situation that is typically referred to as “fiscal creep”. Fiscal creep has already been mentioned by my colleague Ken Shirley. It is not an honest straightforward tax increase that has been brought to this House in an open manner and debated but it is a tax increase nevertheless. It is these economic fundamentals that lead United Future to the strong conviction that the tax bands reaffirmed in this bill at their current 1 April 2000 levels should have been adjusted at 1 April 2003 as follows: the 15 percent low-income rebate level from $9500 to $10000; the 19.5 percent rate from $38000 to $42000; the 33 percent rate from $60000 to $65000; and the 39 percent rate from above $60000 to above $65000. 
The Government’s failure to make these adjustments results in the overtaxation of New Zealanders in the following amounts: for those earning between $9500 and $38000 $60 a year; for those earning between $38000 and $42000 $300 a year; for those earning between $42000 and $60000 $600 a year; and for those earning over $65000 $900 a year. 
Those figures may seem relatively modest but with 2.7 million taxpayers in this country they represent cumulatively an overtaxation of $400 million a year. 
Hon Ken Shirley 
: How much? 
GORDON COPELAND 
: The figure is $400 million a year. It represents funds that will be held back by this Government and that in our view properly belong in the pockets and purses of New Zealand taxpayers and their families. Even then the Government might argue that those sums are relatively small but we in United Future do not think one can honestly argue that $400 million is a small amount. Certainly Dr Cullen in his recent announcements has regarded a figure of that size as being a massive amount—an amount that he would not dream of putting back into the hands of the taxpayer. 
In any event United Future believes that this is a point of principle. The Government itself has pledged not to increase tax rates. It did that on its pledge card. In reality if it persists in its failure to adjust the tax bands for inflation it is allowing such increases to occur simply through fiscal creep and its own inaction. This is wrong in principle and United Future will continue to draw to the attention of the New Zealand electorate the Government’s inaction in that regard. 
In my closing comments I want to respond to Craig McNair and to say why then we are not voting against the bill. I will give him the response I have given consistently to everybody else who has asked that question. It is as simple as this: during the last election we said that if we were elected and were in a position to do so we would work with the largest party elected into this Parliament. That was the democratic wish of the people. That party was the Labour Party. We entered into a supply and confidence agreement with the Labour Party and under that agreement which we are not about to welsh on we will give support to the Labour-led Government on confidence and supply until after the next election in 2005. 
That is our pledge and we are not about to go back on it. But it does not under the same agreement prevent United Future from bringing this kind of point to the attention of the electorate and also to the Government as a challenge. If the Government does not listen then we will note very very clearly to the electorate in 2005 that on this point we believe the Government is erring. It is failing New Zealanders and it should act at the next opportunity which I believe will be the 2004 Budget to put this matter right. If it does not then rest assured that I will be making exactly this same speech again next year only then instead of the figure being $400 million it is likely that we will be talking about $500 million or more. 
Bill read a second time. 
The House adjourned at 5.13 p.m.