Volume 653 Week 10 - Thursday 30 April 2009 
Volume 653 Week 10 - Thursday 30 April 2009 
[Volume:653;Page:2777] 
Thursday 30 April 2009 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Business Statement 
Hon SIMON POWER (Deputy Leader of the House) 
: 
 Next week in the House priority will be given to the first reading of bills on the Order Paper and to the remaining stages of the Maori Trustee Amendment Bill. Wednesday 6 May will be a members’ day. 
Hon DARREN HUGHES (Senior Whip—Labour) 
: 
 Could the Deputy Leader of the House advise us whether the Government intends to introduce legislation relating to Auckland governance in the next two House sitting weeks and if so whether urgency will be used to progress that legislation either for its introduction and first reading or for its passage through all stages under urgency. 
Hon SIMON POWER (Deputy Leader of the House) 
: 
 Mr Hughes will be told all in good time. The Government’s business programme is being carefully crafted but if he has any information about further valedictories we may have to factor into it I would appreciate it if he would let me know. 
Questions to Ministers 
Climate Change—Offsetting Deforestation 
1. TE URUROA FLAVELL (Maori Party—Waiariki) 
 to the  
Minister for Climate Change Issues 
: Kua whiwhi whakamaherehere a ia ki te korero o Brian Fallow ara “i raro i te kaupapa kia topea nga ngahere paina me whakaritea ano tetahi ake tino kaupapa hei whai ake i te take e pa ana ki te ahuarangi i te mea ka pai tonu ki te taiao ki te ohanga ki te torangapu”; hoki mena kare he aha ai? 
[ 
Has he received advice about the comments made by Brian Fallow that in the case of deforestation “offsetting” is not only the principled thing to do to address climate change but “it makes sense environmentally economically and politically”; if not why not? 
] 
Hon TIM GROSER (Associate Minister for Climate Change Issues (International Negotiations)) 
 on behalf of the  
Minister for Climate Change Issues 
: No but we do not need advice from officials to know what our own election policy is which is that we have agreed to “[support] the implementation of a forestry offset scheme … subject to a full assessment of the costs involved.” This work is currently under way. 
Te Ururoa Flavell 
: Ki te Minita he aha tana mahi hei whakatau i nga whakaaro o nga kaihautu Maori i mua i te komiti whaiti i tenei wiki ae he whakaaro kotahi to ratou ko te Minita kia penei na; me aro ki nga nawe e pa ana ki te ahuarangi tuarua kaua ra e tukuna kia wahatia e Ngai Maori te nuinga o te nama?  
[An interpretation in English was given to the House.] 
[ 
What will the Minister do to assure Maori leaders appearing before the select committee this week that he agrees with them that climate change needs to be dealt with but the burden of doing so should not fall disproportionately on Maori? 
] 
Hon TIM GROSER 
: The Government intends that any amendments to the emissions trading scheme ensure that all parties including Maori face only their fair share of any burden that needs to be faced. 
Jeanette Fitzsimons 
: Does the Minister agree that if forest offsetting is to make sense environmentally it may be necessary to plant more land than has been cleared in order to compensate for trees growing more slowly on lower-quality land—in other words to offset carbon for carbon not hectare for hectare? 
Hon TIM GROSER 
: Yes that is certainly a valid argument. We are giving consideration to it. 
Te Ururoa Flavell 
: Ki te Minita e ai ki a Brian Fallow ki te tuki nga tiriti e rua pera ki to Waitangi me to Kyoto me whai mana ko to Waitangi ke; he aha to te Minita whakaaro 
? 
[An interpretation in English was given to the House.] 
[ 
What are the Minister’s views on the recommendation from Brian Fallow that in an area where two treaties collide—that is the Treaty of Waitangi and the Kyoto Protocol—the former must take precedence? 
] 
Hon TIM GROSER 
: The Government honours the Treaty of Waitangi and ensures that it takes into account all such commitments when entering any negotiation of international agreements—trade or climate change. 
Craig Foss 
: What is New Zealand doing internationally to ensure offsetting is incorporated in international climate change rules post-2012? 
Hon TIM GROSER 
: This is a high priority for our Government in international negotiations of the post-2012 rules and critical for land-based sectors. Land should be used according to its best use and the rules should in our view provide for as much flexibility as possible. Under this Government and the previous Government New Zealand has put forward a strong negotiating proposal based on sound science to allow offsets for plantation forests in any successor agreement to the Kyoto Protocol on the grounds that the climate does not distinguish between a hectare of plantation forest replanted on the same hectare as opposed to a hectare planted somewhere else. If our negotiating partners cannot agree to such a simple climate-change-neutral position it does not bode well for negotiations over far more difficult issues. 
Electorates—Funding 
2.  
Hon DARREN HUGHES (Labour) 
 to the  
Minister of Finance 
: Did Cabinet decide against following the recommendations of the Parliamentary Service Commission reached at its meeting on Thursday 9 April 2009; if so why? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes; because the Government decided to follow the recommendations of the independent 2007 Appropriations Review Committee. 
Hon Darren Hughes 
: Does he think it is appropriate to overrule the unanimous decision of the all-party Parliamentary Service Commission chaired by an independent person to achieve a result that predominantly benefits the National Party and the Maori Party by nearly $1 million a year? 
Hon BILL ENGLISH 
: The recommendations from the Parliamentary Service Commission were going to give the National Party and Maori Party even more advantage than this decision does. That is why we turned them down. 
Hon Darren Hughes 
: Can the Minister tell the House why National is so intent on feathering its own nest by increasing funding and pay in its offices while at the same time sacking public servants? 
Hon BILL ENGLISH 
: That is a bit rich coming from a member who was on a committee that put up a recommendation that invited us to feather our nest even more. So why is he now getting up to complain about National turning down that recommendation? 
Hon Darren Hughes 
: Is he aware that some general seats that are bigger than the Maori electorates miss out on his deal; if so did he consult the member for Clutha-Southland who campaigned for there to be one standard of citizenship? 
Hon BILL ENGLISH 
: I am not aware of the detail of that but I am aware that the 2007 independent review set up by the previous Labour Government recommended that electorates in excess of 20000 square kilometres in area be entitled to the services of an extra staff member. Of course that has upset the Labour Party because now that they have lost all but one of the Maori seats they do not benefit from it. 
Hon Darren Hughes 
: Can the Minister confirm to the House that his Government’s motivation for this move is to provide the Maori Party with payback for its support for tax cuts for the rich and for its agreement to oppose the entrenchment of Maori seats? 
Hon BILL ENGLISH 
: Let us just get this clear: the independent review under the Labour Government in 2007 recommended the extra staff member. The Parliamentary Service Commission on the urging of Labour recommended spending more money on more electorates and Cabinet turned it down because we thought it went too far. 
Hon Darren Hughes 
: Where in the appropriations review does it state that in addition to a third staff member being supplied MPs should get an extra $40000? 
Hon BILL ENGLISH 
: The Parliamentary Service Commission the Speaker and Cabinet have followed the recommendations of the appropriations review. We cannot help it that Labour lost the Maori seats so misses out. 
Hon Darren Hughes 
: When the Minister spoke last week about the constraints he is facing in putting together this year’s Budget did he mention that he was increasing funding by 55 percent for 10 MPs—eight of whom are from the Government including the member for Clutha-Southland? 
Hon BILL ENGLISH 
: The process that has been followed has been quite straightforward and transparent. As part of the confidence and supply agreement between National and the Maori Party the conclusions of the 2007 review were incorporated. The Parliamentary Service Commission then looked at the process and recommended that we spend more money on more National MPs. We said no. 
Hon Darren Hughes 
: Can the Minister of Finance just tell us how he is controlling Government expenditure by increasing the funding by 55 percent for 10 MPs eight of whom just happen to be from the Government? 
Hon BILL ENGLISH 
: That is the same question. The reason eight of the MPs happen to be from the Government is that Labour lost the Maori vote so badly that having held the Maori seats forever it has now lost all but one of them. If Labour ever happens to win back any of those seats—which I think is unlikely—it may well get the benefit of this provision for very large electorates. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I do this somewhat reluctantly but I think there is some obligation on you. I know we cannot debate the facts in answers but that member was in the House when all of the Maori seats were held by a party other than Labour— 
Mr SPEAKER 
: That is not a point of order. [ 
Interruption 
] The member must not interject on the Speaker; he should know that. 
Public Services—Commercial Risks 
3.  
AMY ADAMS (National—Selwyn) 
 to the  
Minister of Finance 
: What commercial risks does the Crown face and how do these relate to public services? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 In recent years the Crown has built up almost $30 billion worth of investments in financial markets. Gains and losses on these investments are eventually borne by taxpayers as we saw recently with the $300 million blowout in accident compensation expenditure. It is important that the Government monitor those investments closely and make sensible decisions about the risks it is taking with taxpayers’ money because when things go wrong those losses could affect the Government’s ability to continue to deliver public services. 
Amy Adams 
: How have returns on Crown assets this year tracked against expenditure? 
Hon BILL ENGLISH 
: For the 8 months ended February 2009 the losses on the Crown’s financial assets have totalled $9.848 billion relative to the projections made in the pre-election update—that is those assets have lost $9.8 billion in value in the time since September. The majority of this shortfall—some $5.5 billion—relates to losses in the New Zealand Superannuation Fund. 
Amy Adams 
: What would be the consequences if those losses were to recur? 
Hon BILL ENGLISH 
: The scale of those losses of almost $10 billion in 8 months is staggering. A recurrence of those losses in the future is an option that the Crown cannot really tolerate so the Government will have to make some sensible decisions that weigh up the balance of borrowing money to invest in still risky financial markets against the long-term benefit of the Crown’s continuing to build up its financial assets. 
Maori—Voice in Government Decision-making 
4.  
Hon MITA RIRINUI (Labour) 
 to the  
Minister of Maori Affairs 
: What steps is he taking to ensure that Maori have a voice in the Government’s decision-making processes? 
Hon GEORGINA TE HEUHEU (Acting Minister of Maori Affairs) 
: 
 The Minister along with all other Ministers who share this responsibility have taken great strides in ensuring that Maori have a greater voice in the Government’s decision-making processes. Across many steps the Maori voice is heard by the Government and is included in and informs decision making. The Minister and I believe that Maori need to be participants in decision making— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. This is probably a fairly obvious point of order. This is an answer on behalf of the Minister. A Minister acting for a Minister cannot say “the Minister and I believe”. She is speaking his words. 
Mr SPEAKER 
: I think the member makes a valid point. It is a shame to interrupt but it is correct. I ask the Minister to continue her answer on behalf of the Minister. 
Hon GEORGINA TE HEUHEU 
: Across many steps the Maori voice is heard by the Government and is included in and informs decision making. The Minister believes that Maori need to be participants in decision making not recipients of it. As the member who asked the question knows although Maori had no voice in the previous Government that clearly is not the case with this Government. 
Hon Mita Ririnui 
: If the Minister was serious as he claims about ensuring that Maori have a strong voice in the Government’s decision-making processes why did he and other members of the Maori Party sign a confidence and supply agreement with National promising not to pursue the entrenchment of the Maori seats here in Parliament? 
Hon GEORGINA TE HEUHEU 
: As part of the agreement between the Maori Party and National there are certain understandings that do not include the issue of the entrenchment. That agreement is available in public. 
Hon Mita Ririnui 
: How does the Minister on the one hand as Minister of Maori Affairs insist on including Maori seats on the Auckland City super council; and on the other hand as the co-leader of the Maori Party allow his right to pursue the entrenchment of the Maori seats in Parliament to be traded away? 
Hon GEORGINA TE HEUHEU 
: Quite easily. The Minister—[ 
Interruption 
] Quite easily. 
Hekia Parata 
: Tena koe e te Mana Whakawa tena tatou e te Whare. What outcomes have been achieved by listening to the Maori voice? 
Hon GEORGINA TE HEUHEU 
: The Minister has achieved impressive results in a short space of time. I can list them: economic workshop Job Summit—he being in charge of five streams—drivers of crime Treaty summits and Auckland governance. I could go on but I will not. 
Kelvin Davis 
: Will the Minister join Labour members on the hikoi to support Maori representation in Auckland later this month and will he encourage the Associate Minister of Maori Affairs and National Maori members to do the same; if not why not? 
Hon GEORGINA TE HEUHEU 
: That is a decision I am sure the Minister will take in good time. 
Hon Mita Ririnui 
: If the Minister of Maori Affairs is serious about supporting Maori representation will he pledge to support Labour in its pursuit to entrench the Maori seats and will he now put it on the public record that he and his Maori Party colleagues will vote in support of my member’s bill to entrench the Maori seats; if not why not? 
Hon GEORGINA TE HEUHEU 
: Since Labour never did it in the 9 years that it was in Government the Minister will take time to see what that party’s proposal is all about. 
Correspondence School—Board of Trustees 
5.  
COLIN KING (National—Kaikoura) 
 to the  
Minister of Education 
: What changes has she made to the composition of the board of trustees of the Correspondence School? 
Hon ANNE TOLLEY (Minister of Education) 
: 
 I have directed that three additional appointments be made to the board of trustees of the Correspondence School. Two of these appointments will be qualified people from within the school’s community including parents and caregivers and the third will be filled by a member of the school’s teaching or general staff. 
Colin King 
: Why has the Minister made these changes to the composition of the board? 
Hon ANNE TOLLEY 
: The Government believes that staff and school community representatives have valuable insights that can be used to drive good governance at the school. That is why we campaigned on a promise to include a staff representative and two school community representatives. This is the Government delivering on its promise to the Correspondence School community. 
Hon Chris Carter 
: What instruction did the Minister initially give the Correspondence School about the process it should follow for appointing a staff representative to its board? 
Hon ANNE TOLLEY 
: My recollection is that I asked it to conduct an election to appoint a staff member to the board. 
Hon Chris Carter 
: Did the Minister in fact instruct the Correspondence School to appoint a staff representative to the board of trustees rather than follow the process of electing a staff representative as required by the Education Act; if so did she do so because she was simply unaware of the correct requirement? 
Hon ANNE TOLLEY 
: My recollection is that I directed the board to appoint a staff representative by way of an election as per the Education Act. 
Public Service—Cap 
6.  
GRANT ROBERTSON (Labour—Wellington Central) 
 to the  
Minister of State Services 
: Is it Government policy to cap but not cut the core Public Service? 
Hon TONY RYALL (Minister of Health) 
: 
 No. It is Government policy to cap core Government administration. 
Grant Robertson 
: How does the Minister reconcile that answer with the statement John Key made to the Public Service Association before the election that public services would be capped but not cut by National; and will he be taking the Prime Minister aside to give him a bollocking for that statement? 
Hon TONY RYALL 
: Quite easily; no. 
Grant Robertson 
: Why is it acceptable for Ministers to hire 36 people being paid more than $100000 to work in their offices and to force departments to pay the cost of highly paid consultants who work directly for Ministers when the rest of the Public Service is being cut; or is it a case of one law for Ministers and one law for everybody else? 
Hon TONY RYALL 
: It is certainly my understanding that the National Government by way of example is employing fewer press secretaries than the previous Labour Government did. 
Jacqui Dean 
: Why is the Government capping the size of core Government administration? 
Hon TONY RYALL 
: Our priority is to grow front-line services that directly benefit New Zealanders. This will over time restore a better balance between the number of people working in core Government administration and the numbers working on the front line to support New Zealanders. 
Grant Robertson 
: Why did the Minister say on 26 March that a cap does not represent a cut to the Public Service when National has overseen nearly a thousand proposed job cuts in the Public Service with more to come; or is there no low that the Minister will go to when it comes to the number of public servants? 
Hon TONY RYALL 
: In the current economic environment it is entirely reasonable to expect that State services resources will move to the front line. Chief executives are making these decisions because they are realigning their organisations to the new Government’s priorities around improved front-line services and because like most organisations in New Zealand they are working towards living within their means. 
Grant Robertson 
: I seek leave of the House to table a speech given by John Key to the Public Service Association congress last year on 24 September in which he promises to cap but not cut public services. 
Mr SPEAKER 
: Leave is sought to table a speech. Is there any objection to that course of action? There is none. 
Document by leave laid on the Table of the House. 
Civil Aviation Authority—Accommodation Costs 
7.  
Hon TAU HENARE (National) 
 on behalf of  
DAVID BENNETT (National—Hamilton East) 
 to the  
Minister of Transport 
: What reports if any has he received on the Civil Aviation Authority’s accommodation costs? 
Hon STEVEN JOYCE (Minister of Transport) 
: 
 I have received advice that the Civil Aviation Authority has decided to move from its present accommodation in Petone to brand new premises in Wellington’s central business district just down the road from Parliament at the end of next year. The cost of the relocation will be about $8.5 million and will result in rentals much much greater than the current accommodation. This move was decided before the election and supported by the previous Minister of Transport in the previous Labour Government. 
Hon Tau Henare 
: What action did the Minister take after learning that the Civil Aviation Authority’s costs were going to increase so much? 
Hon STEVEN JOYCE 
: I told the Civil Aviation Authority that I felt that spending so much money on relocation and increased rentals was not acceptable. I have tested the options—to make changes to these arrangements or to not go through with this move—over a period of time with the chair of the Civil Aviation Authority. Unfortunately commitments have been made with the support of the previous Government that are unable to be changed. Roughly 90 percent of the Civil Aviation Authority’s revenue comes from industry fees and charges. I am not impressed that these costs are being incurred to this level and at this time when all New Zealanders are having to tighten their belts in the current global economic recession. 
Ministerial Services—Staffing 
8.  
CHRIS HIPKINS (Labour—Rimutaka) 
 to the  
Minister responsible for Ministerial Services 
: Does he stand by the statement made by his chief press officer that “We were looking for quality not quantity.” when it came to employing staff in the Beehive; if so why? 
Hon BILL ENGLISH (Deputy Prime Minister) 
on behalf of the  
Minister responsible for Ministerial Services 
: Yes. 
Chris Hipkins 
: How does the Minister justify the fact that the number of Beehive staff earning over $100000 has more than doubled since National took office especially given that his Government is sacking other public servants and refusing to give those who remain a pay rise; or is this just another example of one rule for National and another rule for everybody else? 
Hon BILL ENGLISH 
: The current Government is employing 20 fewer staff in the Beehive than the previous Government was and all of those staff are doing a great job. 
Chris Hipkins 
: How does the Minister justify the employment of private purchase advisers in ministerial offices who are handpicked by the Minister of Finance to effectively act as spies for him in Ministers’ offices given Ministers’ earlier claims that the Government was reducing expenditure on the number of core Government administrative staff; or will he admit that the Government is simply using smoke and mirrors to hide the fact that it is feathering its own nest? 
Hon BILL ENGLISH 
: The use of purchase advisers has been very successful for two reasons. The first is that when the National Government came in and discovered that such a mess had been left behind by Labour we needed the assistance of people who could take an objective view. The other reason is that the previous Government had run a brutal command-and-control regime out of the ninth floor and therefore no one in the Public Service could make a decision. 
Chris Hipkins 
: Can the Minister assure the House that the engagement of purchase advisers in ministerial offices at the direction of the Minister of Finance will comply with all Public Service requirements for the contracting of staff and that these contractors will be covered by the  
Public Service Code of Conduct 
; if not how does he reconcile that fact with the National Party’s manifesto promises of “Restoring Political Neutrality” and to “Ensure that public service departments are not used for party political gain.”? 
Hon BILL ENGLISH 
: Yes. 
Chris Hipkins 
: I seek leave to table a letter from the Minister of Finance to Ministers instructing them on the engagement of purchase advisers. 
Document by leave laid on the Table of the House. 
Environment Court—Increase in Filing Fee 
9.  
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Minister for the Environment 
: Does he agree with the Royal Forest and Bird Protection Society regarding the increase in the Environment Court filing fee from $55 to $500 that the fee increase of over 900 percent will act as a barrier to representation in the court by parties with a legitimate case and will reduce access to justice; if not why not? 
Hon SIMON POWER (Deputy Leader of the House) 
 on behalf of the  
Minister for the Environment 
: Although the Minister supports the Royal Forest and Bird Protection Society in its work he does not agree that the increase in the filing fee will act as a significant barrier to representation in court. The fee was last increased to $55 in 1988 from the previous rate of $50 which was set in 1978. That puts it way out of line with the current District Court filing fee of $140 plus a daily hearing fee of $750. The proposed fee for the Environment Court will still be lower than fees for the District and High Courts because the Environment Court will not be charging daily hearing fees. 
Dr Russel Norman 
: If the Minister does not agree with the Royal Forest and Bird Protection Society does he agree with the statement made in 2004 by the National Party’s then environment spokesperson Dr Nick Smith that a proposed increase of the same fee to just $245 “cannot be justified”; if so how can he justify doubling the fee now? 
Hon SIMON POWER 
: Yes the Minister agrees with the statements made by the Hon Dr Nick Smith when he was the Opposition spokesperson on the environment because the previous Government planned to increase the Environment Court fees to $245 for filing plus a hearing fee of $445 per day totalling a minimum daily fee of $690. 
Dr Russel Norman 
: Is the Minister aware that 90 percent of cases that are filed with the Environment Court do not actually go to a hearing but are resolved at mediation and that hence increasing the fee from $55 to $500 simply to get through the door of the Environment Court will knock out most small environment groups which will not be able to come up with $500 to access even the mediation provided by the Environment Court? 
Hon SIMON POWER 
: The Minister is aware of the assertion to that effect made in a submission by the Royal Forest and Bird Protection Society but he does not agree with the conclusion. 
Dr Russel Norman 
: Does the Minister agree with the same Dr Nick Smith when he also said: “Middle-income Kiwi battlers will be hardest hit by these high charges which will become a barrier to access to justice.”; if so why has he already doubled this high charge—which Dr Smith railed against 5 years ago—simply to get through the door of the Environment Court? 
Hon SIMON POWER 
: I believe I explained to the House the discrepancy between those two figures in an answer to an earlier question. The member might be interested to know that the advice I have to hand is that the Ministry for the Environment also operates the Environmental Legal Assistance Fund for not-for-profit groups to advocate for the public interest in resource management cases at the Environment Court and other courts. The Royal Forest and Bird Protection Society itself has had five applications to this fund approved since January 2008 totalling I am advised $147000. 
Dr Russel Norman 
: Is the Minister aware of the Cabinet paper from the Ministry for the Environment that shows that 90 percent of cases are resolved at mediation—the figure is not just in someone’s submission—and does he not agree with the statement from the same Dr Nick Smith that the solution to frivolous appeals does not lie in making it too expensive for the average family to actually get through the door of the Environment Court so that they can access mediation? 
Hon SIMON POWER 
: The Minister can advise that his colleague the Minister of Justice has no information to hand on that particular question but if the member puts a written question down to the Minister I am sure that he will answer it. 
Dr Russel Norman 
: Does he agree with the accusation made by Dr Smith in 2004 that “The Government giveth with one hand and taketh away with the other.” and is it the case that National complaineth loudly with one mouth when in Opposition and maketh worse decisions when in Government? 
Hon SIMON POWER 
: Yes the Minister does agree with the statement made by the then Opposition spokesperson on the environment the Hon Dr Nick Smith because he saideth it in a most helpfulest way in that context. 
Charles Chauvel 
: Is the Minister aware that the Local Government and Environment Committee has referred the question of the fee increase to the Regulations Review Committee; and in light of that referral would he be willing to undertake to the House to put the increase on hold until such time as the Regulations Review Committee had had a chance to scrutinise it? 
Hon SIMON POWER 
: The Minister is aware that that referral has occurred and he is not going to prejudge the outcome of that committee’s work. 
Employment—Local Initiatives 
10.  
JO GOODHEW (National—Rangitata) 
 to the  
Minister for Social Development and Employment 
: What is the Government doing to create employment opportunities at a local level and particularly for young people? 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 The Government and the Mayors Task Force for Jobs signed a memorandum of understanding to tackle common issues around unemployment. This extends the relationship from the way it was previously; it makes it meaningful. It is a memorandum about how we will support our young people in unemployment and it extends into other areas. It is another initiative that comes out of the Prime Minister’s Job Summit. 
Jo Goodhew 
: What is the Government doing to help medium-sized businesses that are struggling to keep staff? 
Hon PAULA BENNETT 
: Last week we announced an extension to the Job Support Scheme for businesses with 50 to 100 staff—another Job Summit success story. This extends the scheme allowing companies to operate a 9-day working fortnight in an effort to save jobs. Now an additional 2000 firms and 140000 staff are eligible. 
Jo Goodhew 
: Has the Minister had any updates on unemployment figures? 
Hon PAULA BENNETT 
: Next week the household labour force survey announcement will give an official rate of unemployment. However latest unemployment benefit numbers paint a gloomy picture. Numbers on the unemployment benefit were up by 95 percent in March over the same month last year and we expect that the figures will get worse. But I can say that Work and Income is doing an outstanding job at triaging people through and I think that number would have been a lot higher if it were not for the work the department is doing. 
Hon Trevor Mallard 
: How can the Minister reconcile the approach to job creation with the Government’s decision to dismiss nearly 1000 public servants? 
Hon PAULA BENNETT 
: There is no dismissing of public servants. My own department has been doing a value-for-money process that was started by Labour 2 years ago. In briefing the incoming Minister it looked at some changes it could make. I think I would like to thank the previous Government for starting that process that we can now follow through. 
Dr Rajen Prasad 
: What importance does the Minister place on the 2008 New Zealand Skills Strategy and what is she going to do to implement its recommendations in order to enhance the real employment opportunities for young people? 
Hon PAULA BENNETT 
: With the Skills Strategy this Government is looking at some of those initiatives that fit in the current situation. We are in a very different time from what we were in just 1 year ago. This Government is fully committed to upskilling our workforce and upskilling those who find themselves unemployed. We are dealing with the now and with the future and we will be doing that very conscientiously. 
Government Spending—Policy 
11.  
JOHN BOSCAWEN (ACT) 
 to the  
Minister of Finance 
: Will he be reversing the cycle of ever-higher Government spending an ever-rising tax burden and mounting inflationary pressures which occurred in the 9 years while the Hon Dr Michael Cullen was finance Minister and which put so much pressure on household finances in New Zealand; if so when? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The member is right to point out problems that existed in the New Zealand economy well before the global recession took hold. Those pressures are fairly embedded in the economy because of almost a decade of misdirected policy from the previous Government. Yes we will set out to reverse that cycle starting with the Budget to be delivered on 28 May. 
John Boscawen 
: Will the Minister attempt to fix the Working for Families scheme which properly reduces the burden on families but which—like much else Labour was responsible for—is incompetently designed leading to effective marginal tax rates for households of 53 to 59 percent and therefore— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. Do I need to make it clear what the point of order is or will you act? 
Mr SPEAKER 
: Yes I would appreciate it if the member could. 
Hon Trevor Mallard 
: The Standing Orders and Speakers’ rulings make it clear that questions should be succinct and not contain unnecessary controversial matter; this does. 
Hon Rodney Hide 
: The simple requirement is that oral questions be factual. I think that everyone accepts it as a factual statement that Working for Families which was designed by Labour was incompetent— 
Mr SPEAKER 
: That goes beyond the point of order. The point of order made by the Hon Trevor Mallard is a perfectly valid point of order. However if I were to enforce that in every supplementary question I would be intervening on well over half of them. I invite the honourable member to continue his question but he should be a little careful about making assertions about other parties’ policies. 
John Boscawen 
: I will try to be succinct and I will summarise it by saying this. Is the Minister of Finance prepared to rework the Working for Families scheme so the high effective marginal tax rates of 53 percent to 59 percent which currently destroy any incentive to get ahead financially are reduced? 
Hon BILL ENGLISH 
: The Government has made it clear in recent months that we intend to leave entitlements such as Working for Families in place because we believe that people need a sense of security in the middle of a tough recession. 
Hon Clayton Cosgrove 
: Can he confirm that from 1999 to 2008 gross Government debt was reduced from 36 percent of GDP to almost 17 percent of GDP that for the first time in New Zealand’s history the Government accounts reached a net positive asset position and that the unemployment rate dropped to 3.4 percent the lowest rate in 21 years? 
Hon BILL ENGLISH 
: I can confirm that the previous Government squandered the opportunity of a generation. New Zealand will— 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. I asked a specific question as to whether he can confirm factual statistics—that those statistics are correct. I did not ask him about anything else. I asked whether he can confirm for instance that debt went down and unemployment went down. Those are very specific points but he started waffling on about something else. 
Hon Rodney Hide 
: The Hon Clayton Cosgrove has been here long enough I believe— 
Hon Member 
: Too long. 
Hon Rodney Hide 
: —perhaps too long—to know that he cannot expect a yes or a no as an answer. He can put a question and the Minister is entitled to answer it. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: No I have heard quite enough on this. When the member asks a question as to whether the Minister can confirm something he invites the Minister to confirm a range of things that he may not have expected. If the member wanted information on those specific issues he should have asked the Minister exactly what was the outcome on those specific issues. I would have made sure he got a specific answer. But when he seeks an opinion it is standard practice that the Speaker cannot be responsible for the nature of that opinion. 
Hon BILL ENGLISH 
: I can confirm that the previous Government squandered the best 10 years that the New Zealand economy will see in a generation. 
Hon Clayton Cosgrove 
: Does he agree with Moody’s one of the credit rating agencies that assess New Zealand’s sovereign credit rating that looking at gross debt is “too simplistic” and that a much more sound approach “requires an examination of the whole of the government’s balance sheet and therefore of the government’s net worth.”? 
Hon BILL ENGLISH 
: I can confirm that. If the member reads the Budget carefully he will see that the Government is moving in the direction of a much more sophisticated assessment of the Crown’s liabilities. 
John Boscawen 
: Does the Minister realise that the effective tax rates that flow from the Working for Families scheme mean that the after-tax real return is now zero and worse still negative and that at a time when households are desperately trying to rebuild their financial position should this not be addressed as a matter of urgency? 
Hon BILL ENGLISH 
: I cannot confirm those details. With any kind of system like Working for Families there is inevitably the result that people face high marginal tax rates. Unfortunately the only way to fix that is to take some money from them and the Government is not planning to do that in the bottom of a recession. 
Young Offenders—Boot Camps 
12.  
JACINDA ARDERN (Labour) 
 to the  
Minister for Social Development and Employment 
: Does she stand by her statement aimed at those who presented to the Social Services Committee yesterday that “Critics of so-called ‘boot camps’ have missed the point” and that they have “misled the public”; if so why? 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 I certainly do stand by my statements. That new member may not realise this but her Government spent the past decade missing the point for these young people and misleading the public about trying to stop youth offending. 
Jacinda Ardern 
: How does she justify her claim that groups like Barnardos Unicef and the Families Commission misled the public when their submissions on her proposed military-style training programmes were based on evidence unlike the Minister’s policy which is based on a political agenda? 
Hon PAULA BENNETT 
: Actually I did not say that those groups had misled the public. I said that actually the Opposition had and the media had and that it was time the public heard the true story. I am not prepared to walk away from young people who need assistance to get back on track. Quite frankly if we keep on doing what we are doing their numbers will just increase. This Government will not stand by and let that happen. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. We have just heard two answers from the Minister. In her first answer she said that she stood by her comments and in the second reply she gave she said that oh no she was not talking about people in the original primary answer. She said she was talking about a third group: the media. How can those two answers be consistent— 
Mr SPEAKER 
: The member cannot use a point of order to question the quality of a Minister’s answer. Further supplementary questions are available to the member who asked the questions in order for her to pursue any inconsistencies she may see in the answers. 
Jacinda Ardern 
: How does she reconcile her statements with those made by the Prime Minister at the launch of Fresh Start that he would use “the most advanced expertise in youth offending and rehabilitation that New Zealand has to offer” when experts such as Dr Ian Lambie Professor John Werry Professor David Fergusson Principal Youth Court Judge Andrew Becroft Unicef Barnardos the Families Commission and the New Zealand Council of Christian Social Services have all spoken against her proposals and had their views dismissed? 
Hon PAULA BENNETT 
: Actually those groups have stood up for the mentoring programmes that this Government is introducing. Actually those people have stood up and said that they support the parenting orders that we are putting forward which will make a difference in the families of those young offenders. Actually those people have stood up and said that they support the drug and alcohol rehabilitation that will be attached to these programmes which will turn these young offenders around. Yes it is hard but we will stand by turning around the lives of these young people. 
Jacinda Ardern 
: Does the Minister stand by her claim that it was the media and not the submitters to the select committee yesterday that were misleading the public when she stated in her press release yesterday: “The criticisms aired by several groups at the Social Services select committee today show fundamental misunderstandings of the Government’s … programme”? 
Hon PAULA BENNETT 
: It sounds as though they misunderstood not that they misled which is the point that I was making. 
Jacinda Ardern 
: How does she reconcile her criticism of those who dared to express their opinions on her bill which is apparently beyond reproach with her own criticism of Government policy on Greater Auckland governance? 
Hon PAULA BENNETT 
: I would like to make it clear that people are entitled to an opinion. It will not affect their funding which is something that the previous Government held over organisations on a daily basis. They had to agree with the Government or their funding was gone. 
Simon Bridges 
: What trends has the Minister seen on violent youth offending over the last 10 years? 
Hon PAULA BENNETT 
: In the years 1999-2000 young people aged 14 to 16 years committed 3301 violent offences. In 2007-08 a staggering 5029 violent offences were committed by this same age group. Under the Labour Government violence by 14 to 16-year-olds increased by a staggering 52 percent. We want these young people to graduate to a fulfilling life not to a life spent in jail. 
Questions to Members 
Questions Nos 1 and 2 to Member 
Questions by leave postponed. 
Question Time 
Hon SIMON POWER (Deputy Leader of the House) 
: 
 I raise a point of order Mr Speaker. Far be it from me to raise this matter as I have been here only a short period of time compared with yourself but I want to make sure that you have not left out any questions. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 You will be aware Mr Speaker that when the Standing Orders changed—I think in 1996 or possibly before then—we moved away from a strict 45-minute period in which not all the questions were asked to a system where all of them were asked and at least attempts were made to answer some of them. Some of us used to enjoy the old system where questions were left never to be asked but I can remember Jenny Shipley being very very worried about one regarding the elasticity— 
Mr SPEAKER 
: I think the House has heard enough on that point of order. 
Protected Disclosures Amendment Bill 
Third Reading 
Hon MAURICE WILLIAMSON (Minister for Building and Construction) 
 on behalf of the  
Minister of State Services 
: I move  
That the Protected Disclosures Amendment Bill be now read a third time 
. It would be appropriate for me to restate that this bill is to strengthen the current purposes of the Act in promoting the public interest by facilitating the disclosure and investigation of serious wrongdoing in or by an organisation and by protecting employees who in accordance with the Act make such disclosures. The bill has two parts. Part 1 contains amendments to the Protected Disclosures Act 2000 and Part 2 contains a transitional provision. 
In December 2003 Trevor Mallard the then Minister of State Services tabled a report in the House on the Act’s first few years. Prepared by Mary Scholtens QC the report concluded that the Act had not been used a great deal and it had not always been used well. Without a central coordinator the range of appropriate authorities to which employees disclosed was confusing. Some disclosures fell between the gaps in the jurisdictions of those authorities. Ms Scholtens also referred to a strong perception among some of those consulted on the Act that the identity of a whistleblowing employee would not be protected. Ms Scholtens concluded that the Ombudsmen could assist whistleblowers coordinate referrals between appropriate authorities and guide and review the Act’s operation. The bill gives the Ombudsmen that enhanced role. It also picks up on a number of other recommendations designed to improve the Act’s protections and processes. 
The bill was considered by the Government Administration Committee which recommended two minor changes. The first is the insertion under clause 6 of a new section 6C(2): “An organisation is not required to comply with a request made under subsection (1) if it is not a public sector organisation.” The amendment is designed to make it clear that a private sector organisation is not obliged to comply with a request from the Ombudsmen for information about the organisation’s internal procedures. New sections 15 to 15E are substituted in the bill under clause 8 and the second amendment is that section 15E(3) is amended to include section 30 of the Ombudsmen Act. Including a reference to section 30 makes it an offence to refuse to provide to an Ombudsman the information specified in section 15E. This applies to only public sector organisations. The change is designed to enhance the workability of the section by providing a deterrent to a person who without lawful justification or excuse fails to comply with a lawful requirement of an Ombudsman. 
The Ombudsmen will be authorised to provide information and guidance to public or private sector employees on using the Act at any time not just on request. For example the Ombudsmen will advise on what serious wrongdoing is and on whom to complain to. This should provide a filter for misguided disclosures as well as encourage whistleblowers to throw light on serious wrongdoing. Public sector organisations are required to have internal procedures on how disclosures must be made to them and how such disclosures will be investigated. The Act requires that whistleblowers must first disclose in accordance with their employing organisation’s internal procedures. Complying with internal procedures can be difficult if there are none in that operation. Section 6C empowers the Ombudsmen to request the internal procedures and related information from an organisation concerned. As a result organisations may be encouraged to have a good effective protected disclosures policy in place. Employees’ confidence should also increase if they know what the employing organisation’s internal procedures are. 
The Ombudsmen will have new powers to review and guide a public sector organisation’s investigation of whistleblowing under section 15B. The power to guide investigations is facilitative rather than directive and the power will be activated either on the organisation’s request or at the Ombudsman’s discretion. This should help prevent disclosures of serious wrongdoing from circulating around various agencies without resolution. 
Currently the Ombudsmen may make reports to Parliament under section 29 of the Ombudsmen Act. Section 15C of the bill specifies a number of matters on which the Ombudsmen may report about the exercise of their powers under the Protected Disclosures Act. The list includes the number and types of inquiries made to the Ombudsmen under the Act. This list is designed to provide Parliament with more information on how the Act is operating and on how the Ombudsmen are carrying out their powers. These new sections just described come with information-requiring powers conferred by section 15E(3). The Ombudsmen will be able to require information from public sector organisations in keeping with current limits on their investigative jurisdiction. Private sector organisations will not be required to comply but will be encouraged to do so. There are inbuilt protections from the misuse of such powers already in the Ombudsmen Act and in the bill. 
Under section 15A an Ombudsman will be able to take over a public sector organisation’s investigation of serious wrongdoing alleged against it. The trigger is that the Ombudsman considers that sufficient progress had been made by the organisation and the whistleblower consents to the takeover. The Ombudsman may also investigate in conjunction with that organisation. In addition the Ombudsman will take on a coordinating role under section 15 in relation to protected disclosures that have already been made to another person or body. Again this applies only with the whistleblower’s consent in exceptional circumstances such as urgency. An Ombudsman may refer on the disclosure to an appropriate authority or to a Minister to investigate. Alternatively she or he may investigate when the matter relates to a public sector organisation. 
The bill extends the Act to a wider range of people and bolsters the Act’s protections. The term “employee” will include volunteers who work for no reward. Board members and members of local authorities will be able to whistle-blow under the Act and both groups will be “employees” for the purposes of confidentiality of identity immunity from liability and anti-victimisation protections in the Human Rights Act. Contractors are already covered under the Act. 
Even with the Act’s protections whistleblowing carries some personal risk to employees but silence is not in the public interest. Measures in this bill are designed to give more substance to the Act’s protections which include the Ombudsmen assisting organisations to keep the confidentiality of disclosures the expansion of the Act to protect volunteers of information in support of an existing disclosure of serious wrongdoing the expansion of protection to people who reasonably but mistakenly believe they are disclosing serious wrongdoing the declaration as unlawful of agreements that seek to contract out of the Act and the clarification that disclosers are not excluded from the Act merely because they do not refer to the Act by name when disclosing. Further technical non-compliance with the Act’s processes for whistleblowing will no longer prevent an employee from coming within its protections. 
I thank members of the House for their support for this important legislation. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 It is an honour to follow on from Mr Williamson who has been known to make the odd disclosure from time to time. I am sure he appreciates the spirit behind the Protected Disclosures Amendment Bill. This legislation was brought in by the previous Labour Government and we are very pleased that the National Government has picked it up in the absence of any new ideas from that side of the House. 
We remind ourselves too that the original Protected Disclosures Act was brought in by Labour in 2000. It followed a period of time in the 1990s when there were concerns about the ability of people in the public sector—and also in the wider private sector—to be able to blow the whistle when they saw serious wrongdoing. We think of the case of Neil Pugmire and Lake Alice Hospital which was obviously a very difficult time. The original Act was brought in to make sure that people could make those kinds of disclosures without fear of anything untoward happening to them. But as with much new legislation the Act needed to be reviewed and Labour reviewed it after it had been operating for a couple of years. As Mr Williamson said the Act did not lead to the number of disclosures that people thought it would. It became clear after the investigation that was undertaken by Mary Scholtens that this was an Act that people were unaware of. They did not know the processes for how they could make a complaint under the Act. In fact generally it was not operating as well as people would have liked. So these amendments in the Protected Disclosures Amendment Bill are the result of that review. 
The bill essentially addresses three issues. The first issue is the lack of good or accurate information about the Protected Disclosures Act. New section 6B inserted by clause 6 deals with this issue so the Ombudsmen are now empowered to provide information and guidance to employees about their rights. That is very important. Not everybody knows what they are allowed to do in terms of blowing the whistle particularly when there are people working at different levels of an organisation who may never get to see the internal procedures that are around in that organisation. In hospitals or district health boards there are a lot of different people in those organisations at different levels. This bill will enable the Ombudsmen to provide guidance and that will do two things: it will weed out some complaints that perhaps should not be taken under the Protected Disclosures Act but it may also shed light on those complaints that would not have had light shed on them were it not for a guiding hand. So that is an important role for the Office of the Ombudsmen and I am glad that better information will now be provided to those who wish to complain. 
The Ombudsmen now have an obligation to report on disclosures under this Act in its annual report each year from now on. That is important too because it means that the public at large will have some idea of how many disclosures are being made and the extent to which any further changes might be required to the Act. So the office has an enhanced role there. It also has an enhanced role in terms of making sure that the public sector itself is working through this Act appropriately. For instance the Office of the Ombudsmen can request the internal procedures of an agency or department and make sure it is meeting those procedures. The Ombudsmen can support the development of procedures if that is necessary to make sure that whistleblowers have good procedures that they can work under. 
But perhaps the two most significant things that the Ombudsmen can do are review and guide specific investigations and ensure that investigations can be taken over if that is necessary. That is quite a large extension of the role of the Ombudsmen but it is known that from time to time departments will shuffle around complaints—complaints that perhaps cut to the heart of some of the business of those agencies—and there will be delays that are unacceptable for members of the public at large and also for those who are complaining. So sections 15A and 15B inserted by clause 8 enable the Ombudsmen to take over an investigation in certain circumstances. 
I think it is important to go back to the original Act to see what those circumstances might be. Those circumstances are firstly where an organisation has simply decided not to investigate a matter and the Ombudsmen believe that it should be investigated; secondly where the investigation has not taken place within a reasonable time after the disclosure was made; or thirdly if the investigation has simply not taken up a specific matter within the complaint that the Ombudsmen believe should to taken up. That is a very necessary protection because from time to time organisations will perhaps try to sweep things under the carpet and we need to make sure that the Ombudsmen have those powers. 
All of that represents a considerable extension in the powers of the Ombudsmen and in the Committee stage of the debate I raised the issue with Government members of whether the Office of the Ombudsmen would be sufficiently resourced in order to take on those additional roles. It would be fair to say that what we have seen from the National Government over the past few months is a series of cuts into the Public Service and into agencies that we would normally think the National Government would not be interested in cutting into. The Inland Revenue Department is a good example. It is similar to the Office of the Ombudsmen playing a very critical role in our Government system yet the National Government has decided to cut 250 jobs out of that department. 
Hon Ruth Dyson 
: I thought it wasn’t cutting any jobs? 
GRANT ROBERTSON 
: No that is the situation. National said it was just a cap on numbers but in fact it is a cut in that case. On this side of the House we are looking for an assurance that the Office of the Ombudsmen will be sufficiently resourced to undertake those additional roles. Both sides of the House acknowledge that those are important roles and we need to ensure that the Ombudsmen have those resources. I have little confidence that the National Government will provide those resources and some fear that in fact there will be cuts in offices like the Office of the Ombudsmen over time. I would hate to see that happen and the Act would not be able to operate in the way it is envisaged if those resources were not there. 
The other critical aspect of the bill is the extension of the definitions of who comes under the Act. Essentially the definition adds in those people who are volunteers in an organisation. The bill captures people who for instance are members of boards such as district health boards. In the Committee stage last night there was a long debate which was introduced by Jacqui Dean about the Otago District Health Board and the situation where clearly there was some serious wrongdoing and unfortunately the person was able to get away with it for a long time. Then the person who was informed and who was able to deal with the problem and ensure that things got back on track—the chair of the board Richard Thomson—was sacked. 
Hon Ruth Dyson 
: What for? 
GRANT ROBERTSON 
: Well that is a very good question. What was he sacked for? Tony Ryall who is the Minister in charge of this bill—although we have not heard him speak on it throughout this debate—sacked the chair for essentially political reasons. That is what it was; it was for political reasons. That is not exactly an analogous situation but in time there will be a need for people who are members of boards to be able to disclose—particularly given a Minister who seems intent on stamping his political agenda all over the important policy area of health. There will be people involved in the health sector who want to make sure that they have the ability to have their voice heard if they see wrongdoing and that they will not be removed—sacked from a board—as Tony Ryall has done. They want to have the confidence that they are protected to make those kinds of disclosures. I do not have confidence that without this Act the National Government would protect people in that situation. 
The other extension in this bill in the definition of who is covered is a widening of the definition of “public official”. So “public official” now means anybody working in a public sector organisation. Once again we can see why an extension like this is needed. We have already seen Murray McCully Minister of Foreign Affairs attack the actions of an independent official—Joris de Bres Race Relations Commissioner—because Mr de Bres went of his own accord to Geneva to the United Nations racism conference and spoke out there as he should as an independent person only to be bullied by Mr McCully and to be accused of all manner of things. Unfortunately the public of New Zealand were left believing that perhaps Mr McCully did not realise or appreciate the independence of that position. So it is a good thing that this bill extends the provisions of the Protected Disclosures Act to people who work in the wider public sector organisations because I have no doubt that with the agenda of the National Government to slash and burn its way through the Public Service many people will seek to blow the whistle. This bill and this Act will protect them in doing that and that is a good thing. Labour supports this bill. 
JACQUI DEAN (National—Waitaki) 
: 
 I rise to support the third reading of the Protected Disclosures Amendment Bill. The Act was reviewed in 2003 yet here we are in 2009 only just addressing the third reading of the bill. I say thank goodness for a National Government because it had the guts and the drive to pick up this bill which under the previous Labour Government had languished on the Order Paper. That Government did not have any particular drive to address the issue of protected disclosures and what a shame that was. While that massive fraud was happening at the Otago District Health Board for all those years since that 2003 review what a shame it was that the Labour Government of the day did not have the fortitude to bring forward the amendments to the Protected Disclosures Act. That may well have made it easier for somebody—somebody—to speak out and make a disclosure about the fraud that was happening right in front of his or her very eyes. Somebody must have walked through the car-park of Dunedin Hospital and the Otago District Health Board and seen the Lamborghini and somebody must have wondered: “How can a chief financial officer employed by a district health board under a Labour Minister of Health possibly afford the Lamborghini in the car-park? How can he possibly afford the large boat that is seen steaming out of Otago Harbour on its way to Moeraki and beyond?” Had there been these amendments to the Protected Disclosures Act then maybe—just maybe—somebody might have gone to the chief executive and said: “I think we have got a problem.” 
That did not happen so I am pleased to see that under a National Government we have brought forward the third reading of the Protected Disclosures Amendment Bill. And to address the issue brought up by the previous speaker Grant Robertson who seems to have intimated that the chair of the Otago District Health Board was sacked just because the excellent Minister of Health Tony Ryall needed a scalp I tell members that the National Government demands accountability. Somebody had to be responsible. Somebody had to be held accountable for the greatest fraud in New Zealand in a district health board. What are the implications? Here is what matters in this debate: what are the implications of that fraud? The implications of it are that a number of my constituents failed to get their operations—they failed to get those hip operations they needed so badly; they failed to get their cataract operations they needed so badly. These are the people who live in Oamaru. These are the people who live in Ranfurly. These are the people who must travel to Dunedin Hospital and to the Otago District Health Board to get their operations. They could not get them. A number of operations were not performed because of this large massive fraud. What did the previous Labour Government do about it? 
Hon Tau Henare 
: Nothing. 
JACQUI DEAN 
: So here we have finally the third reading of the Protected Disclosures Amendment Bill. 
As I have said this bill gives effect to that review of the Protected Disclosures Act which was done in 2003—almost beyond living memory as far as I am concerned because it was such a long time ago. This amendment bill provides additional powers to the Ombudsmen. It provides additional powers for the Office of the Ombudsmen to request information because what we must have in a protected disclosure situation is good clear important information. One of the amendments makes it clear that this information can be requested from both public organisations and private organisations and it gives powers to the Ombudsmen to coordinate cross-agency activity. That is of the utmost importance if a whistleblower—and I will address that term in a moment—is brave enough to step up to disclose some information. It is vital that disclosure is backed up by the powers of the Ombudsmen to get some good clear cooperation and some good clear information. 
The bill widens the definition of who is a public official and who is considered an employee. Under this bill a volunteer or a member of a local authority will be regarded as an employee. It is important in this debate to think about the person who is making the disclosure. Under this bill that person is termed a whistleblower but the whistleblower is a person who has seen something within his or her voluntary organisation has seen something within the board on which he or she sits or has seen something within a district health board or private organisation. Whistleblowers do not like what they see and they do not like what is going on around them—something being done either by someone further up the organisation like a manager or by a co-worker—which is even more difficult—or even by somebody subordinate to them. Amongst all the discussion and all the political point-scoring we must remember those people because we call them whistleblowers but they are people who have a hard decision to make: “Do I turn a blind eye to this and pretend it is not happening because if I do say something I might get into trouble?”. Imagine what it must be like to hold on to that information knowing there is something very wrong fraudulent or bad going on. Imagine what it must be like making the decision to say something. 
That is why this amendment bill is so very important. It simplifies it gives comfort to people who feel strongly enough to do the right thing and in effect to blow the whistle on wrongdoing. This bill allows whistleblowers to continue to receive the protection of the Act if they believe on reasonable grounds that the information provided relates to serious wrongdoing even if this belief is found to be mistaken. I think that is a very critical part of this amendment bill because somebody may have gone home having seen a document or read an email and may not be sure about revealing the contents. It is in the public interest that that person has the comfort and confidence to say something; this provision in the bill makes that possible. 
The other provision in the bill is that a process need not be faithfully followed for a whistleblower to enjoy protection under this bill. For example getting back to the Otago District Health Board had somebody said something about the fraud being perpetrated on the district health board and gone to the wrong person one not prescribed in the company policy if materially the complaint had been appropriate then that minor detail would not have mattered. I commend this bill to the House. I believe it provides streamlining. I believe it provides encouragement to people who feel they have information to impart that is in the public interest. I commend this bill to the House. 
Hon DAVID PARKER (Labour) 
: 
 The member who has just resumed her seat Jacqui Dean said that she could not remember back to 2003. Sadly she cannot even remember back to last year because the perpetrator of the fraud at the Otago District Health Board was never the chief financial officer as she just told the House. He was the chief information officer. He ran the board’s computer system not its finance. 
Jacqui Dean 
: Oh! 
Hon DAVID PARKER 
: Jacqui Dean says that is a minor detail but that sort of detail is important. She fails to remember not just what happened in 2003 but also more recent events. She also omitted to tell the House that the Protected Disclosures Act which was passed by the Labour Government in 2000 conferred protection— 
Jacqui Dean 
: I raise a point of order Mr Speaker. The member has pointed out that I made a mistake in my previous speech. 
The ASSISTANT SPEAKER (Eric Roy) 
: What is the point of order? 
Jacqui Dean 
: The point of order is that I wish to correct what I said in my speech because I have obviously made a mistake. 
The ASSISTANT SPEAKER (Eric Roy) 
: Under which Standing Order is the point the member is seeking? 
Hon Trevor Mallard 
: The Standing Orders are very clear on this. If the member wants to make a correction it can be done at the end of the speech. She cannot interrupt it. 
The ASSISTANT SPEAKER (Eric Roy) 
: Sorry; I just did not pick up the point of order. Yes a point of misrepresentation should be made at the end of the speech. That is the convention. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. First of all there is no such thing as a point of misrepresentation and I do not think the member raised that. I think she wanted to make a correction which is something that should be done at the end of the speech. 
The ASSISTANT SPEAKER (Eric Roy) 
: We are clear on that. 
Hon DAVID PARKER 
: Thank you Mr Assistant Speaker. The other point that Jacqui Dean failed to point out to those who are listening to the debate is that were it not for the legislation that the Labour Government passed in 2000 there would have been no right for the people employed by the Otago District Health Board to make protected disclosures. Throughout the period of the fraud by Mr Swann they had that right but sadly no employees availed themselves of it. 
We also heard from Jacqui Dean that she could not understand why the Labour Government having passed this good legislation in 2000 and having conducted a review of it in 2003 did not give more priority to this amending legislation. 
Jacqui Dean 
: Well obviously they didn’t. 
Hon DAVID PARKER 
: It is clear that we did not give more priority to this amending legislation because we had other more important priorities. We had more important priorities and I thought that I would run through some of them. During that period of course the Labour Government placed a greater priority on extending the generosity of the Working for Families tax package which extended generous tax relief—or more generous tax relief—to many many hundreds of thousands of families in New Zealand. That measure is worth an extra $80 to $100 per week for them and it lifted 130000 children out of poverty. The Protected Disclosures Amendment Bill is important. This Government would not have proceeded with it and the previous Government would not have introduced it were it not important. But it was not more important than the extension of tax relief that lifted 130000 children out of poverty through extensions to the Working for Families legislation. That is why we put that legislation ahead of this legislation. 
We also decided that KiwiSaver was more important than this legislation. KiwiSaver went some way to addressing the problem that New Zealand has with low levels of private savings and it did this by way of tax credits to the employee and tax credits to the employer. We knew as a Labour Government that that scheme was more important than the Protected Disclosures Amendment Bill and that is why we gave that legislation priority. It is interesting that National thought on one level that KiwiSaver was more important than this bill but National’s response was to cut KiwiSaver instead of building on it. We know that all of the people in New Zealand who are in KiwiSaver and who have had a tax cut under National are worse off because the losses they suffer under the KiwiSaver cuts cost them more than the benefits they got under the tax package. 
What else did we think was more important than advancing the Protected Disclosures Amendment Bill earlier? We cut the corporate tax rate from 33 percent to 30 percent and we put that ahead of proceeding with the Protected Disclosures Amendment Bill. I again suggest to the House that that was the appropriate priority. 
What else did we do? We thought that it was more important to progress legislation in the area of the sustainability issues facing the world than to progress amendments to the protected disclosures legislation. We proceeded through some very difficult and hard-fought legislation that was very important not only to New Zealand’s environment but also to the world environment. I refer to the pricing of greenhouse gas emissions through the emissions trading scheme which gives an incentive to business to reduce emissions rather than increase them. 
I do not resile from the fact that we gave all that legislation priority over this legislation. Indeed for the period that I was the Minister of State Services I was happy for those things to be given priority over and above this legislation. 
I am happy that the National Party in Opposition also recognised the wisdom of this legislation. Probably that was because the Government Administration Committee that considered it had those intellectual giants that the National Party was then more populated with including Brian Connell who was on the select committee making sure that this legislation was as good as it could be. He was most ably assisted by the other Einstein of the National Party Sandra Goudie. I am so pleased that through the good services of those members of the National Party we had support for this legislation and I thank them for it. Without it this legislation would perhaps not be back here. 
I return to the substance of this legislation. This bill improves the ability of those who suspect or allege wrongdoing to bring it to the notice of the other people in the Government who have the responsibility to sort it out. It has a history. Back in the 1990s Neil Pugmire lost his job as a consequence of making a disclosure of serious wrongdoing in his organisation. We thought that the injustice he suffered ought not to be visited upon other people. 
This bill improves the legislation in a number of ways as Mr Williamson and Grant Robertson have already summarised. It extends the role of the Office of the Ombudsmen so that the Ombudsmen can tell people how to go about this process without getting themselves into trouble. That is a very good thing. The bill makes the legislation more workable. It also—this is important—enables the Ombudsmen to take over inquires where they are being ignored by the responsible organisations or where organisations have deliberately on some occasions frustrated the purpose of the complaint by excluding an important part of the complaint from the inquiry that is being conducted. I hope that both of those powers will need to be used only rarely. 
I hope in most situations that a whistleblower having brought things to the attention of senior people in an organisation could rely upon that organisation to do the proper thing as Richard Thomson did at the Otago District Health Board when matters came to his attention. And I hope that when people in an organisation investigate it is not just the whistleblower but also those more senior people in the organisation who deal responsibly with the alleged wrongdoing who are protected and that they are not cut off at the knees in the way that Richard Thomson was by Tony Ryall. 
Jacqui Dean 
: Not true. 
Hon DAVID PARKER 
: Again we have Jacqui Dean not remembering that it was a chief information officer rather than a chief financial officer. Not only is she acknowledging that she cannot remember things that have happened since 2003 but also she is now denying that Richard Thomson was sacrificed by Tony Ryall for political ends despite the fact that Richard Thomson could have done nothing more than he did because he knew nothing of the wrongdoing until it was brought to his attention. When it was brought to his attention it was he who dealt with it transparently who ensured that the offender was through the police brought to justice and who brought an end to that terrible financial fraud that was being perpetrated by Mr Michael Swann. For that Richard Thomson was thanked by being removed as chair of the district health board. That is hardly the way that one would encourage organisations to deal properly with wrongdoing when it comes to their attention. 
On behalf of the Labour Party I am happy to indicate that we will be supporting this legislation at its final vote. 
KEITH LOCKE (Green) 
: 
 The Green Party will be supporting the Protected Disclosures Amendment Bill. It is a step towards making the public sector more accountable and it is a part of good governance. I do not want to just go over the points that the Green Party made in earlier speeches on this bill. I thought it would be good to put my speech in a broader context of why the public sector should provide an example of good governance for the community and the private sector. It seems to me that there are three aspects to good governance in public sector organisations. The first is that we have good and well-oiled procedures particularly to prevent financial mismanagement and wrongdoing. The second is that we need transparency and thirdly we need the provision provided in this bill for whistleblowing. 
It is interesting to read the annual report of the Office of the Ombudsmen—there is a nice picture in there of David McGee one of the Ombudsmen who is our previous Clerk of the House. On transparency it says “In recent years we have observed an increasing tendency on the part of some agencies and some Ministerial offices to ignore the provisions of the Official Information Act 1982 (OIA) in terms of the timing of their responses to requesters.” It says later that it has been “observed that in certain sectors a regrettable tendency to ‘game’ the system seems to be emerging in order to delay responses until the currency of the complainant’s interest has passed.” So there is work to do regarding transparency. 
I take the point the Minister made in introducing the third reading: the private sector is not required to comply with this whistleblowers’ legislation but will be encouraged to do so. When I was thinking of the private sector I thought particularly of the world financial crisis that is upon us. A lot of that is a result of a lack of good governance in terms of a lack of proper procedures a lack of proper transparency and no whistleblower provisions of any consequence. 
It was interesting that on 3 April the OECD said there was $11 trillion parked in tax havens which is more than 10 times the total amount committed by the G-20 leaders to revive the global economy. When we are looking at the lack of good governance and proper whistleblowing we see that the financial system of the world is very much uppermost in our minds. In this list of 39 countries that are not fully compliant with international tax standards there are two places that are part of New Zealand: Niue and the Cook Islands. In the Pacific more generally there are Vanuatu and Nauru. So we have a little way to go in bringing the rest of the Pacific into line with international tax standards. When we look at rectifying the world financial crisis and see about $11 trillion parked in tax havens we see that the annual tax being dodged would solve a lot of the problems of the developing countries. They are dodging probably $200 billion or $300 billion in tax. 
I think this is important when we look at bringing the world economic crisis down to our own financial collapses particularly those of the finance companies. At the present time Rod Petricevic and four others from Bridgecorp are before the courts for making false statements. What was the problem there? Clearly there was a problem with the proper procedures being followed there was a problem with transparency and to relate to this bill directly there were no proper provisions or openings for whistleblowing. Bridgecorp had quite a lot of employees. It must be the case that many of those employees knew what was going on but they did not blow any whistles probably because they were concerned about what would happen to them their employment and their careers. 
I think this bill is important for the Public Service though it applies as previous speakers have said not only to people employed directly by the Government but also to people on boards and volunteers in the public sector. It is important for us to provide a model for the private sector to follow. I think it is also an indication to those who think that privatisation is the way to go and that private companies are more efficient and more transparent etc. that in fact society is moving in the opposite direction. It is the public sector that is providing the example in respect of this whistleblowing legislation and other measures; we have to drag the private sector along behind us. 
We have seen what has happened in previous privatisations—for instance New Zealand Rail where the people who took over that company in 1993 virtually stripped it by not putting in any money to repair the tracks and by taking out as much money as they could in dividends. We are still trying to recover from that situation. The Government has quite a big task to put the required money—and it is needed—into redeveloping the rail system. 
The Green Party does support this whistleblowing legislation. It is good that the Ombudsmen are going to be involved and working alongside people who perhaps do not quite know where to go and are a bit intimidated by the people immediately above them. In terms of the procedures in the original Act those people are supposed to report through the line of command but their grievance might be in relation to someone immediately above them and they may want to go around that person. The Ombudsmen will help them to do that. The Green Party is fully in support of this important legislation. Thank you. 
JOHN BOSCAWEN (ACT) 
: 
 It is a pleasure to stand and take a call on this occasion particularly for me personally because I have been ill on my back for the last 3 days and sadly had to listen to Dr Cullen’s valedictory last night from the comfort of my living room in Auckland. So it is good to be back in the Chamber. 
Before I address the Protected Disclosures Amendment Bill I wonder whether I might have the House’s indulgence to acknowledge the fact that I along with four of my colleagues have just returned from the Speaker’s tour with the Hon Dr Lockwood Smith—a tour of 5 days in Japan and 5 days in Viet Nam. I had the privilege of travelling with Nicky Wagner Dr Ashraf Choudhary Raymond Huo and of course Dr Lockwood Smith. I think the trip was an outstanding success and I believe huge credit goes to Dr Smith. During the course of our very many meetings with members of the Government of Japan and in Viet Nam it was very obvious that Dr Smith’s experience—first 6 years as a Minister of Education and then 3 years as an Associate Minister of Finance—was absolutely invaluable in our negotiations and meetings. 
We met with the President of Viet Nam who was—and I will keep this brief—second only to the chairman of the Vietnamese Communist Party and Mr Trong the chairman of the National Assembly of the Socialist Republic of Viet Nam. In Tokyo we met with the Minister of Finance Prime Minister Aso and also Speaker Kono the Speaker who invited us to Japan in the first place. 
I was not intending to take a call on this bill but the last two speakers have urged me to my feet. I had said to my colleague Mr Flavell of the Maori Party that I would not be speaking. But what did Mr Parker say? After getting up and justifying the fact that the Labour Government had done nothing with the Protected Disclosures Amendment Bill he went on to talk about and list the things that Labour had done. He said that Labour had introduced Working for Families. That was the subject of a question that I put in the House this very afternoon. Working for Families imposes on working families a marginal tax rate of between 55 percent and 60 percent. If Working for Families recipients want to improve themselves by working overtime they will be penalised with tax rates of 55 percent to 60 percent. I say 55 percent to 60 percent because that is the rate that applies to most Working for Families recipients. Sadly for recipients earning between $10000 and $20000 the rate is actually over 100 percent. Under Working for Families people earning between $10000 and $20000 actually lose every single cent of any extra income they earn. For those earning between $20000 and $80000 the marginal tax rate is 55 percent to 60 percent. So Working for Families is a classic example of a scheme that was very badly designed. 
I also refer to the fact that the marginal tax rate— 
Chris Hipkins 
: I raise a point of order Mr Speaker. We are on the third reading of the Protected Disclosures Amendment Bill. Thus far I am not sure that the member speaking is aware that that is the bill that is being debated. Although we expect a reasonably wide-ranging debate on a third reading the points that the member is raising are not related in any way shape or form to the bill. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: The member has made a good point. I say to the member speaking Mr Boscawen that he is 3 minutes and 20 seconds into his speech and he has mentioned the bill in passing once. I suggest that he now having made some preliminary comments brings himself to the bill. The third reading is about the bill; it is not a wide-ranging discussion on a member’s recent Speaker’s tour or party policies on other matters. We are now discussing the Protected Disclosures Amendment Bill. 
JOHN BOSCAWEN 
: I did not want to leave the comments of Mr Parker unchallenged. Before I come back to them I will address issues in this bill. 
I thought it was particularly interesting that the speaker from the Green Party Keith Locke referred to the problems with Bridgecorp and other finance companies. I think it is important for people who disclose this sort of information to have protection—I believe that. In the course of the research I have been doing on the collapse of finance companies I was given the minutes of a directors’ meeting of a particular finance company. The minutes said quite bluntly that 80 percent of the company’s money was coming from elderly widows and that that was the market it was targeting. The minutes stated that advertising had to be directed at that market and referred to television advertisements that addressed particularly that market. I wondered what the typists and secretaries—those people who typed and read that information—thought about the company they worked for. That company went out and deliberately targeted elderly widows because that was where its money was coming from even though it knew that it might not be able to pay back the money. Those minutes went on to record the fact that there had been discussions with the Securities Commission that were of a minor nature and of no concern to directors. In essence they were a record of the fact that the management had reported to the directors that they did not have to worry about the situation as they had not been caught and that they could go on with what they were doing. 
I totally support the Protected Disclosures Amendment Bill. The ACT Party will be voting for it. Just before I sit down I note that Mr Parker boasted about the very many things the Labour Government had done rather than passing this bill. One of the things he did not boast about was purchasing the railways. That was a great thing the Labour Government did! It purchased the railways which probably cost the taxpayers of this country in excess of $1 billion. Thank you. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 A kia ora koe kia ora tatou katoa i tenei ahiahi. Exactly 1 month ago my colleague Rahui Katene stood during the second reading of the Protected Disclosures Amendment Bill and spoke of the concepts of accountability transparency and credibility as being at the core of this legislation. I thought that a good place to start in the third and final reading would be to remind ourselves of these core values. 
I am told that perhaps the most explicit proof of these core values is the way in which New Zealand’s ranking in Transparency International’s Corruption Perception Index is maintained or improved. In 2006 New Zealand’s score was 9.6 on a 10-point scale meaning that it ranked first-equal with Finland and Iceland as apparently the least corrupt country in the world. Mind you I do not know whether I would say that too loudly this week in Christchurch where close to 470 workers were purged into limbo-land and are now waiting to see how they will fare from the collapse of clothing maker Lane Walker Rudkin. Maxine Gay the secretary of the union’s clothing and textile section did not muck around or mince words. She stated: “Hundreds of jobs are at stake and we are sure that poor management is at the heart of the problem.” I am not about to move into the dangerous territory of perhaps suggesting that the operations of Lane Walker Rudkin were corrupt but there is little doubt that the company has been unprofitable and it has been forced into taking on greater amounts of bank debt. 
As I understand it Lane Walker Rudkin would not have been affected by this bill; Business New Zealand took care of that. I believe this to be the case because the Employers Federation and the Manufacturers Federation—now amalgamated to form Business New Zealand—recommended in their public submission on the bill that any references to the public sector should be omitted from the bill. That advice which was taken up in the bill was that the role of the Ombudsman was primarily to investigate complaints against public sector organisations not private sector organisations. As I consider the fate of the people who were working in the textile industry I wonder how their interests would have been protected if serious wrongdoing was evident. How would these employees have been looked after while they watched yet another company collapse from poor management? 
It is a most appropriate time to be reviewing our international status as one of the least corrupt countries in the world. Is it true that we are a pure and green haven of peace in which corruption has no place or is our corruption-free status more a reflection of what we measure? Perhaps a stronger barometer of public opinion might be gauged from the casualties of the finance company collapses that Mr Boscawen often refers to. 
Many people have looked on with amazement at the directors of companies who have carried on with their exclusive lifestyles having ripped off ordinary New Zealanders. I wonder how for instance the 17000 investors in Hanover Finance can reconcile the extravagant international birthday party of co-owner Eric Watson with the small matter of a debt of $553 million owed by the company. According to estimates research shows that the amount of white-collar crime is approximately four times that of benefit fraud. 
One can only wonder why we do not have the same enforcement mechanisms and policy focus in relation to these offenders as we do when the debt is owed to the Crown in the shape of Work and Income. We spend very little time discussing organised white-collar crime and I have to wonder why. How can we accept that some offenders through the resources they have at their disposal are able to drag out cases ad infinitum in order to continue to enjoy luxurious lifestyles financed by the proceeds of their greed? 
In the course of researching this bill I came across a letter from a former detective by the name of Tata Parata of Stokes Valley here in Wellington. He stated no doubt tongue in cheek: “Maori offenders should wise up and seek a better return for their criminal pursuits. Why are white-collar individuals with dollar sign profiles able to whisk easy money from gullible folks for returns that fail to materialise?”. I find that pretty fascinating. Corporate corruption and wrongdoing is of interest in this bill only if it occurred in the public sector. This bill is focused purely and squarely on how to ensure the better protection of whistleblowers who have laid complaints of wrongdoing against public sector organisations. 
I want to make it clear that despite my concerns about the exclusion of private sector organisations from being obliged to comply with a request for information about their internal procedures the bill is still a very good bill. It is a good bill in terms of clarifying issues of interpretation and inconsistency which have got in the way of the proper use of the legislative procedures. 
We in the Maori Party believe it is right and just that those who blow the whistle should be entitled to receive the protection of the Protected Disclosures Act 2000. If we are to engage and encourage people to come forward to provide information of serious wrongdoing then they need to know that they are safe to do so. Once the whistle has been blown it is too late for an organisation to suddenly realise that its internal procedures are lacking. Individuals need to know that their identity will remain confidential and that transparent procedures and consistent practices are in place before they put pen to paper. Individuals need to know there will be an appropriate authority to respond to their disclosures and that if their complaints go to the Ombudsman they will be managed in a professional and sensitive manner. 
The Maori Party is pleased with the amendment that affects section 30 of the Ombudsmen Act making it an offence to refuse to provide to the Ombudsman the information specified in that provision. We support the extension of human protections to those making disclosures of serious wrongdoing. They must be protected and they must be able to provide free and frank advice. The Maori Party supports this bill and we support it in the name of human rights. 
JOHN HAYES (National—Wairarapa) 
: 
 Thank you for the opportunity to speak on the third reading of the Protected Disclosures Amendment Bill. I particularly commend the comments from my colleague in the Maori Party Te Ururoa Flavell and endorse them. I rise in support of this bill. Like my colleague from the Maori Party I too listened to the comments of David Parker and his justification for his party’s non-promotion of this bill. 
I commend Tony Ryall and the Government for introducing this bill and progressing it. In doing so we are promoting the public interest for two reasons. This bill will facilitate the disclosure and investigation of serious wrongdoing in or by an organisation. I will shortly come to a set of circumstances that may explain the reasons why Labour was very keen that this bill would not be introduced during the last Parliament. Further the point of this bill is to protect employees who in accordance with the Act make protected disclosures. 
Simon Bridges 
: Was it David Shearer? 
JOHN HAYES 
: No it was not David Shearer but we could go there. 
The bill was considered by the Government Administration Committee and it recommended two changes. The first was the insertion of a new section 6C(2) inserted by clause 6 which states: “An organisation is not required to comply with a request made under subsection (1) if it is not a public sector organisation.” The amendment is designed to make clear that a private sector organisation is not obliged to comply with a request from the Ombudsman for information about the organisation’s internal procedures. 
Although I support the bill I have a concern. 
Chris Hipkins 
: Just the one? 
JOHN HAYES 
: Yes just the one. My concern is this and it applies in Ms Dyson’s part of the world. If a public entity for example a regional council were to own all the shares in a limited liability company would this Parliament expect that organisation to behave with moral integrity? I think the answer to that question would be yes. 
It is in that context that I support the bill and draw the House’s attention to a situation that has arisen in Canterbury around the Canterbury Regional Council headed by one Sir Kerry Burke. Sir Kerry Burke and his band of merry councillors saw fit to own a trading organisation called Target Pest Enterprises Ltd. This company was placed in receivership by the 100 percent shareholder of the company Environment Canterbury or ECan. That is fine except that the regrettable arrangement is that ECan is now refusing to honour payments to creditors totalling around $7.5 million including its own debenture of $1.5 million. The point of this is that one of my constituents in Masterton a small-business man is facing bankruptcy because of the activities of the regional council and its not doing the right thing. 
The problem is this. ECan—essentially Sir Kerry Burke—has decided to stand behind the limited liability arrangements and leave the Target Pest Enterprises directors to face the music. But the plot thickens. There is another Government-owned entity called AgriQuality—now known as Asure New Zealand. During the life of the last Parliament headed by the Labour Government—a great friend of Sir Kerry Burke—this Government entity was authorised to buy a million dollars worth of shares in Target Pest Enterprises. Five months later and the day before the Canterbury Regional Council put its entity into receivership Asure New Zealand sold its million dollars worth of shares back to Target Pest Enterprises Ltd for the princely sum of $1. In 5 months the Government entity Asure Quality managed to lose $999000 of taxpayers’ money. 
Hon Maurice Williamson 
: That’s an outrage. 
JOHN HAYES 
: Of course it is an outrage and that is why this bill is so important. It is so important that we get this passed. 
Despite this there were concerns over the solvency of the business and those concerns had been expressed since 2004 by another Government entity called Audit New Zealand. I contend to the House that this wholly owned subsidiary of the entity headed by Sir Kerry Burke traded recklessly and possibly illegally. The actions of ECan through this period resulted in losses to small businesses and ECan acted and continues to act in a manner contravening its responsibilities under the Local Government Act. 
How do members suggest that I can assert that? Let me draw the attention of the House to a letter to a company called Forest Green Ltd at “27 Normanby Road Mt Eden Auckland” dated 30 November 2005. In part the letter states: “Target Pest has a significant loan with the ASB bank and we also lease many Quad motor cycles from Dave Anderson Motorcycles neither of whom have written Target Pest or ECAN guarantees and are satisfied with the Local Government Act protection. The ASB bank would definitely not loan money to Target Pest without this protection. I am very sorry that I cannot provide the written guarantees we discussed however I hope the Local Government Act satisfies any concerns.” Clearly it did not satisfy any concerns and my constituents are being stretched out on a long piece of wire because it is very easy for the councillors on the Canterbury Regional Council to hide in deep ratepayers’ pockets while it tries to screw the little guys who are being taken to the wall because of the insolvency promoted by the Canterbury Regional Council. 
I think hiding behind a limited liability company is unacceptable behaviour by a local body and that is why this legislation is so fundamentally important to the business people of New Zealand. That is why I stand here in full support of this legislation. 
The second area where a minor change to the Act is being made is in new section 15E(3) inserted by clause 8. The legislation is being amended to include section 30 of the Ombudsmen Act including a reference in section 30 that makes it an offence to refuse to provide to an Ombudsman the information specified in new section 15E. It applies only to public sector organisations. I am very hopeful that my reading of the legislation is correct and that it will stop what has happened in Canterbury where the Canterbury Regional Council is hiding behind a limited liability company pretending there is no issue sending small people to the wall and hiding behind the deep pockets of ratepayers to pay endless lawyers in order to avoid its moral responsibility to do the right thing. 
I publicly ask this House to call upon the Canterbury Regional Council and Sir Kerry Burke and to say: “Look we expect you to do the right thing. If your council has owned this company you cannot hide behind the limited liability legislation. You should do the right thing and pay your creditors including the creditors in my electorate who are owed some $750000.” If it is good enough to pay back the ASB Bank because its accounts are held by the Canterbury Regional Council then it is also good enough to do the right thing and to— 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: I regret to advise the member that his time has expired. I draw the attention of members to a ruling by Speaker Algie in 1961 that members must confine themselves to the general principles of a bill as it has emerged from the Committee. We have now had two speeches that have gone well beyond that and I indicate to the House— 
John Hayes 
: Point of order— 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: Excuse me I am just ruling on this matter. I ask members to be mindful. There is no problem about members making comments to the side in support of the bill but when we get speeches that are entirely about matters completely outside the bill I tell members that in future I will in fact haul them up and direct them back to its contents. 
JOHN HAYES (National—Wairarapa) 
: 
 I seek the permission of the House to table a letter from Paul Ash chief executive of Target Pest Enterprises to Forest Green Ltd dated 30 November 2005. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: Leave is sought to table a letter. Is there any objection? There is no objection; the letter may be tabled. 
Document by leave laid on the Table of the House. 
Hon PETER DUNNE (Leader—United Future) 
: 
 I raise a point of order Mr Speaker. I am grateful for your reference to Mr Speaker Algie’s ruling in 1961—Speaker’s ruling 116/7—but I also note Speaker’s ruling 118/3 by Mr Speaker Kidd in 1998 where he makes a comment to the effect that “if a bill was taken part by part thereby generalising discussion in committee it follows that debate on the third reading will be somewhat broader.” On the face of it that ruling could be seen to be in conflict with the provisions of Speaker’s ruling 116/7 and indeed also of Speaker’s ruling 117/3. It may be time for you Mr Assistant Speaker to make a more considered ruling about where Mr Speaker Kidd’s ruling sits in relation to the earlier ruling. It has certainly been my long understanding that the Algie principle is the one that applied—that the third reading debate was a very limited debate about the bill as it emerged from the Committee of the whole House—but it could be argued that Mr Speaker Kidd has broadened that definition somewhat and I think it might be timely for you to give some consideration to the relationship between those two rulings and whether Mr Kidd’s ruling overturns the earlier one or is subservient to it. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: I thank the member for that and I will certainly give consideration to a considered ruling. But I think Mr Kidd would be amazed to find that his ruling was interpreted as allowing debate on some itinerary of global travel by a Speaker’s tour a company collapse somewhere and goodness knows what else that we have had thrown in. A third reading is about the bill and the bill itself but I will take the member’s advice and bring back a ruling. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I am happy to take a call on the third reading of the Protected Disclosures Amendment Bill. As I said in some of my earlier speeches fundamentally this bill is about power the abuse of power preventing that abuse or where it occurs at least disclosing it. I want to canvass some of the issues I raised during the Committee stage—to sum them up as provided for in Speakers’ rulings. 
Since the completion of the Committee stage an issue has arisen that has relevance to this bill. This bill extends the protection of the Protected Disclosures Act to contractors. We had an interesting new example of contractors revealed in the House this afternoon and that is the purchase advisers employed by the Government in Ministers’ offices. Those people are being engaged as contractors rather than as public servants because the Government said earlier in the year that it was going to pay its press secretaries and political advisers more but it would employ fewer of them. So as a way of getting around that they have contracted in these purchase advisers. They are making the Government departments pay for them— 
Hon Ruth Dyson 
: What? 
CHRIS HIPKINS 
: That is right. They are making the Government departments pay for them for their political advice in order to get around their earlier commitment to have fewer people working in the Beehive. Of course we now know that they will actually have more people working in the Beehive and they will get around that commitment by making them contractors. These contractors because of the changes to the Protected Disclosures Act will now be covered by this legislation. 
It is interesting is it not that these purchase advisers are effectively going to be spies for the Minister of Finance because it is on the Minister of Finance’s instigation that these purchase advisers are being engaged. He wrote to departments instructing them—he did not just ask them to consider it—to engage these purchase advisers and he even went so far as to tell them how much they were to be paid and gave them a list of the names of the people they were to engage. It raises a whole lot of questions around the political neutrality of the Public Service which the National Party of course said in its pre-election manifesto that it would defend and restore when the Minister of Finance can now instruct a department to employ purchase advisers who will not be accountable to the chief executive they work for. They will answer only to the Minister they will be paid for by the taxpayer and they will not be subject to the standards of conduct and ethics that a normal public servant is. That is outrageous because it is political abuse. 
These purchase advisers will be covered by the legislation and I want to talk a little about what that might mean. They will be covered so they themselves will be able to make a protected disclosure. So if in the course of their razor gang slash-and-burn exercise—which of course is what we know the Government is employing them to do—they uncover some wrongdoing they will be able to make a protected disclosure. We support that and we welcome it because it is important that people working in Government are able to make protected disclosures to reveal wrongdoing where it occurs. The fact that these purchase advisers will be on contract makes them no different; they should be able to make a protected disclosure. 
But staff who are subject to their prying and their prodding should also be able to make a protected disclosure about them because those people are not going to be subject to the code of conduct for public servants. They will not be prevented from engaging in the party political activities that a public servant is prevented from engaging in because they will not be covered by the Public Service code of conduct. So if a public servant wants to raise a complaint about abuse of power by one of those purchase advisers engaged because Bill English told Ministers that he wanted them to be engaged—and he wanted them to be engaged because he does not trust any of the Ministers he works with—that public servant should be able to make a protected disclosure. It is interesting to note the list of Ministers who do not have purchase advisers. The brat pack—or the two remaining members of it—for example do not appear to have purchase advisers. Bill English clearly trusts those. Paula Bennett has to have a purchase adviser— 
Hon Ruth Dyson 
: At least one. 
CHRIS HIPKINS 
: She may well require more. If public servants are concerned about the abuse of power by one of these purchase advisers they will be able to make protected disclosures under the Protected Disclosures Act because one of the big changes is that contractors are now going to be covered. I think that is something we would welcome. 
We should consider in the context of the legislation some of the issues that a public servant may wish to raise because the Public Service needs protection now more than ever. With the slash-and-burn going on within the Public Service at the moment there may well be—and I suspect there will be—a lot more reason for public servants to want to make protected disclosures. When the Public Service is cut to the bone then the accountability and the checks and balances are stripped away in a money-saving exercise. Therefore the potential for the abuse of power is significantly increased so a public servant may want to make a protected disclosure. 
Another issue is that there may be a temptation to cover up mistakes made in the Public Service because of a chronic lack of resourcing or lack of funding. In the health sector for example where the National Government’s razor gang are going through and stripping funding and resourcing out there may well be instances where public lives are put at risk— 
Hon Ruth Dyson 
: Elderly people. 
CHRIS HIPKINS 
: —particularly in the aged care industry where people are dealing with very vulnerable older people and the public servants involved need to know that they can make a complaint and that they are not going to lose their jobs. Of course there are other examples of people who need some protection under this legislation and one of the things that this amendment bill does is to extend the protection of the Protected Disclosures Act to the chairpeople of boards. We know it is important that board people have protection under this National Government as well. Look at the case of the Otago District Health Board where there was a revelation of wrongdoing which National members have talked about. But they do not talk about the guy who fixed it who was the chair of the board and who got sacked for his troubles. National members did not like him they did not like his politics so they just sacked him. That highlights a weakness with the Protected Disclosures Act—although it protects the disclosure itself it does not protect the people who are then responsible for fixing the problem. A chairperson who uncovered some wrongdoing and wanted to make a protected disclosure would be covered by the protection of this legislation. On the other hand if somebody else made a protected disclosure and the chairperson who had been unaware of the situation then fixed it the Government will sack him or her. Because that is what this Government does; if there is any wrongdoing this Government always sacks the people who fix the problem. 
Hon Ruth Dyson 
: Bizarre. 
CHRIS HIPKINS 
: It is completely bizarre. 
I will talk about some of the other people who might be covered by the Protected Disclosures Act. I talked a little bit about ministerial office staff and the fact that they could be covered by this. For example if a Minister travelled to India to promote his or her own business interest using a diplomatic passport to do so or failed to disclose that a company he or she was associated with was being investigated by the Serious Fraud Office and a whistleblower in his or her office wanted to raise a concern about that that person would be protected by the Protected Disclosures Act. 
Hon Ruth Dyson 
: That’s going to be helpful. 
CHRIS HIPKINS 
: That will be helpful because these are matters of public accountability: it is public money and it is about the abuse of power. People should be protected if they are going to disclose such matters. Of course the problem is that even if that kind of abuse of power is disclosed this Government does not do anything about it. Even when John Key says three times that the Minister is on his final warning he still does not get sacked. Even when John Key gives him a “bollocking” in public and calls him “stupid” he still does not get sacked. I am of course talking about Dr Richard Worth who abused his position to promote a business in which he had an interest. Yet this Government and this Prime Minister are not doing anything about it. 
Labour supports the enhanced provisions of the Protected Disclosures Amendment Bill. In fact we introduced them. This bill is yet another bill that was introduced by the previous Labour Government—the National Government cannot seem to come up with any of its own. Government members are too busy flying off around the world feathering their own nests and promoting their own business interests to come up with any legislation of their own. I look forward to a day when we can stand up and debate in this Chamber what the National Government wants to do rather than going back over the legislation introduced by the previous Labour Government. It is good legislation so I commend it to the House but I would like to see some evidence that this Government is actually doing something. 
KANWALJIT SINGH BAKSHI (National) 
: 
 It is my honour to stand in support of the Protected Disclosures Amendment Bill. The bill is designed to give Ombudsmen an enhanced guiding reviewing and investigating role in relation to the disclosure of serious wrongdoing with the Office of the Ombudsmen facilitating a collaborative cross-agency approach. When the Protected Disclosures Act 2000 was reviewed under section 24 of the Act in 2003 it brought to light some evidence of delays inconsistencies and other difficulties in using the legislative procedures properly partly because whistleblowers and some organisations were unsure how to go about them. The review also noted that there has been a degree of confusion about various definitions a lack of communication with whistleblowers a lack of confidentiality and protection of identity and the lack of appreciation that Ombudsmen can assist. 
This bill gives the definition of “employee” to include former employees homeworkers contractors and people concerned in the management of the organisation. The definition of “public official” is a person who is an employee of a public service organisation or is concerned with the management of a public service organisation. Is there any protection for mistaken judgment of serious wrongdoing? This bill states that if a person believes on reasonable grounds that the information is about serious wrongdoing but his or belief is mistaken then the disclosure will not lose the protection under the Act. The bill also provides many procedures and technical amendments to enable the Ombudsmen to better exercise power under the Act. This bill redrafts and clarifies the power of the Ombudsmen to request and advise. 
The Ombudsmen can also ask for information from both private and public sector organisations. We believe that both public and private sector workers have the right to certain protection. Certainly there is no protection available to an employee who discloses in good faith in an appropriate manner a serious wrongdoing nor is there any general statutory immunity for civil or criminal liability. It is important that the employees of all organisations—private or public—are in a position to make protected disclosures about serious wrongdoing in or by their organisations; not to make this protection available to employees of private organisations is condoning wrongdoing in the private sector and could be putting the public at risk. 
National supports the broad approach of the Protected Disclosures Act and supports any efforts to improve its operation and administration. National accepts that with the better tools available through the amendment Government agencies should be able to respond in a more coordinated and effective manner to holding the Government to account. Protecting whistleblowers is not just a matter of legislative change; ongoing operational improvements are also important. We recognise that when a law is changed there are important changes to the process that then make the legal changes relevant. We recognise that silence is not in the public interest. We want the public to have confidence in the process of making protected disclosures. I stand here to support the bill. Thank you. 
Hon RUTH DYSON (Labour—Port Hills) 
: 
 It gives me great pleasure to speak in the third reading of the Protected Disclosures Amendment Bill which is another Labour Government bill. It is delightful to see the National Government yet again supporting legislation from its predecessor in Government. One does wonder what we would be doing if Simon Power were not in the House and we got to the end of all the Labour Government bills that have been brought forward into this Parliament. All we have seen is the former Government’s bills and Simon Power’s bills. I am glad that Simon has been so diligent and shown that at least somebody in that Government can do some work. 
In fact it was so obvious during the second reading of this very bill that it was a Labour bill. The National members got up and started claiming credit for this amendment bill then we realised that David Parker’s name was still on the bill. They had not actually got round to taking David Parker’s name off the bill during the second reading. Either way it is good to have cross-party consensus on a Thursday afternoon for protecting these improvements to the original legislation: the Protected Disclosures Act 2000. 
The bill does four very straightforward things: it makes it easier for whistleblowers to bring serious concerns of wrongdoing to light which is a very important provision; it makes it easier for organisations to investigate those concerns and allegations effectively; it enhances the role of the Ombudsmen; and it extends the definitions of “employees” to include volunteers and also as my friend and colleague Chris Hipkins pointed out to include the new Public Service - paid contractors who are acting as political advisers in the offices of National-Act Government Ministers. They are political hacks appointed by the Minister of Finance through the Minister’s office and paid for by the Public Service. This amendment legislation will now cover them as well. This bill is well worth supporting not just because of that latter provision that I mentioned but for many reasons. I commend its speedy progress to the House. 
SIMON BRIDGES (National—Tauranga) 
: 
 It is very good that I rise to speak on the Protected Disclosures Amendment Bill; I am very excited about it. It is a great bill. I was not going to be allowed to speak but I persuaded the National whips to let me because there is so much to say about this bill. It really is an important part of the democratic jigsaw puzzle that makes up this country. The bill is all about being an open and transparent country not a country that hides behind things and lives in the shadow of fear. I strongly disagree with David Parker’s earlier comment that the previous Government had so many more important bills than this one to speak on and to push through this House. The Protected Disclosures Amendment Bill is important. It deals with significant improvements to the protected disclosures regime that this country has had since 2000. The bill is all about improving that regime. 
In this contribution to the third reading I want to firstly talk about the background to the Protected Disclosures Act 2000 and this amendment bill and secondly deal with a few miscellaneous comments made by members earlier particularly by Labour members. It seems to me that they are talking of conspiracy and secret agendas on National’s part. That is absolute rubbish. Thirdly I want to speak to the broader context of this bill and what has been happening internationally on the issue of protected disclosures or whistle-blowing as it is known in this country and in many others in the Western World. Finally if there is time I would like to speak on the substance of the bill and its various clauses. 
Chris Hipkins 
: That’d make a nice change. 
SIMON BRIDGES 
: Do not worry; I will get to Mr Hipkins. 
Hon Tau Henare 
: Master Hipkins! 
SIMON BRIDGES 
: Master Hipkins! The background to the Act as I understand it arose out of the Neil Pugmire saga in Wanganui. He was a little like his name—a pugnacious man. He stood up and was counted and eventually as a result of that case we got a good law in 2000. 
The Act was a good start and it was a good step down the road. I accept that the previous Labour Government reviewed the Act in 2003. It asked Mary Scholtens a prominent Wellington QC to do the review. That review established quite clearly the need for improvements in relation to the legislation we already had. It was interesting that her report made it quite clear that the Act was a relatively underutilised and little-known law. This bill before the House is an improvement. I hope it will see protected disclosures made more often in a safer and more open environment. Nevertheless even if we do not see a greater pick up in the number of people coming forward with complaints of serious wrongdoing this kind of law performs an important symbolic role in our nation. At the very least it gives people the ability to stand up and be counted in their workplaces when they see serious wrongdoing. 
As I said there was a review and then we went through a slow select committee process. 
Todd McClay 
: It was a very good select committee. 
SIMON BRIDGES 
: The member sitting beside me makes a good point. The Government Administration Committee was chaired by Shane Ardern— 
Todd McClay 
: All powerful. 
SIMON BRIDGES 
: —a great MP a great farmer and a Kiwi battler. The deputy chair was Darien Fenton. I do not know Ms Fenton well but I understand she is a good member. The other members were Brian Connell Harry Duynhoven Sandra Goudie and the Hon Dover Samuels. So it was a high-powered first-class select committee. I give credit where it is due: Labour introduced this bill and started the process but now it is National that is closing the deal and is bringing this good law to its rightful place. 
As I said before I note some of the contributions made to the debate particularly by Labour members. We have heard from Grant Robertson who has again as he did in the Committee stage gone on about job cuts. I admire the way that in every single speech that member makes in this House no matter what it is on he links the issue back to job cuts in the Public Service. 
Chris Hipkins 
: Because there are so many of them! 
SIMON BRIDGES 
: Then we heard from Chris Hipkins who continued the Labour Party fetish with the bureaucracy and the Public Service. [ 
Interruption 
] You know it is a fetish. I do not deny in any way that the public sector in this country is significant and makes a valuable contribution to this nation but I say to Chris Hipkins and Grant Robertson that they ignore a lot of other people in this country. Maybe that explains why Phil—“Phil-in”—Goff is at 3.7 percent or whatever it is as preferred Prime Minister because he and the Labour members forget the other people. 
They forget the hairdressers; they forget the teachers; they forget the mechanics; and they forget the plumbers in the provinces. The National Government will not do that. This bill applies to many others other than just the public sector that Grant Robertson represents. 
We have had some valuable contributions. Keith Locke presented a thoughtful set of arguments. Te Ururoa Flavell a colleague of mine from the beautiful Bay of Plenty made a valuable contribution. John Hayes made some important points in a quite hard-hitting speech. But I am disappointed that all the Labour members can do is continue their fetish with the bureaucracy and the public sector to the absolute neglect of anyone else in this country from Cape Reinga to the Bluff. 
As I turn to the context of this bill I say that we are not the first and we will not be the last nation to bring in a protected disclosures regime. This House—the thoughtful members like Te Ururoa Flavell and Maurice Williamson who is sitting next to me—will I am sure be interested to know that many other Western nations have brought in very similar legislation. It started in America in California with the interesting case of Jeffrey Wigand who was the inspiration for the character in the movie  
The Insider 
 with that great Kiwi actor Russell Crowe who I hear Chris Hipkins styles himself upon. It was about some classic whistle-blowing where companies knew the addictive nature of and the carcinogenic ingredients in cigarettes and Jeffrey Wigand had the courage to stand up and be counted. Subsequent to that event California and then a host of other states in the United States introduced protected disclosure laws. We have seen that in many other nations around the world and there is similar law throughout Europe. I brought that to the attention of this House as it is an interesting trend that the Western World has embarked upon. 
Finally this bill does two very important things. It enhances the role of the Ombudsmen. In essence that is a very important thing. It allows those Ombudsmen— 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: I regret to advise the member that his time has expired. 
Bill read a third time. 
Student Loan Scheme (Repayment Bonus) Amendment Bill 
First Reading 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Student Loan Scheme (Repayment Bonus) Amendment Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be referred to the Education and Science Committee that the committee report finally to the House on or before 30 July 2009 and the committee have the authority to meet at any time while the House is sitting except during oral questions during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 187 and 190(1)(b) and (c). 
The student loan scheme was introduced in 1992 to make it easier for people to gain access to tertiary education. It allows tertiary students to borrow money to pay their fees and provides help with living costs for some of those students. Repayments for people who live in New Zealand are based on an individual borrower’s income after graduation. Although there have been some major changes since the scheme’s introduction the fundamentals of the scheme have remained largely the same. It would be fair to acknowledge however the increasing concern across the political spectrum and the wider community about the mounting level of student debt and whether it will ever be repaid. That concern led the previous Government to introduce the policy of interest-free student loan repayments for borrowers resident in New Zealand and led the National Party at the last election to commit to a repayment bonus scheme to incentivise early repayment. 
The current student loan scheme is administered by a number of agencies including the Ministry of Education and the Ministry of Social Development. The Inland Revenue Department is responsible for the collection of student loan repayments. Most repayments are made through the PAYE system by means of salary deductions. 
Since the scheme began nearly 800000 people have taken out a student loan. Today with over half a million borrowers and a nominal value of about $9.6 billion the student loan scheme represents a significant Crown asset—one that has to be managed in an efficient and cost-effective manner. 
One area of concern is that since the introduction of interest-free student loans in 2006 the number of voluntary repayments has been decreasing with borrowers tending to take longer to repay their loans in full. Not surprisingly this is because paying interest on the loan balance has been a big incentive to repay the loan as early as possible. Faster repayment of loans is of benefit not only to the individual borrower for obvious reasons but also to the Crown because the longer borrowers take to repay their loan the more expensive that borrowing becomes to the Crown. 
This bill introduces an incentive for faster repayment in the form of a 10 percent bonus for borrowers who voluntarily make extra repayments that total $500 or more in a tax year. Voluntary payments totalling $5000 for example would attract a bonus of $500. All borrowers including those overseas will be eligible for the bonus provided they meet all student loan obligations and have a loan balance with the Inland Revenue Department of $550 or more at the beginning of the tax year in which they make the extra payments. The bonus will be credited to their account at the end of the tax year. For those people who want to pay off their loan in full using a one-off payment the maximum bonus payable will be one-eleventh of that balance. For example if that balance is $1100 the borrower will make an extra payment of $1000 and the maximum amount of the bonus will be $100. 
Once enacted this bonus scheme will take effect from 1 April this year. The bonuses will be credited to borrowers’ loan accounts after 1 April 2010. This means that crediting will be retrospective for those who repay their loans in full before enactment and before the necessary systems changes have been made. Because there is no time limit on entitlement to the bonus borrowers who may be in a better position to make extra payments later in their working lives will be able to take advantage of the incentive when it best suits their financial position. 
I believe that the measures contained in this bill will provide a useful and welcome incentive to people who want to pay off their student loans early. I therefore commend the Student Loan Scheme (Repayment Bonus) Amendment Bill to the House. 
Hon MARYAN STREET (Labour) 
: 
 It is a pleasure to speak on the Student Loan Scheme (Repayment Bonus) Amendment Bill because there are a number of points in the bill and in the Minister’s introductory speech that I think need challenging. I thought the Minister would have understood the difficulties this bill presents. At first glance the bill looks like the usual efforts of National to support the well-off. If someone with a student loan pays $500 extra off his or her loan above the minimum requirement in any tax year that student gets his or her loan total abated by 10 percent of the extra money that was paid off—for example $50. The extra payments that qualify must be $500 and above. 
The Government says that its purpose is to encourage student loan borrowers to make extra repayments to repay their loans faster. It looks like a typical National Government bill which advantages those who can pay extra and disadvantages those who cannot. But it is on closer examination clearly a con. Why would anyone go for a 10 percent discount when the loan is attracting no interest? Any students from wealthy backgrounds who in practice would be the only ones with the resources to increase repayments would also be the ones most likely to have access to financial advice. This advice would point out to the students very quickly that they are better-off investing any extra money elsewhere and keeping their interest-free loan in its current state. So why would the Government introduce such a measure when it will not work for the less well-off which is to be expected from National but it also does not work for the better-off which one might have expected from National? 
There are two possible answers to that question. The first is that the National Government did not realise what it was doing in which case it was stupid. The second answer is that the Government knew exactly what it was doing but wanted to deflect attention away from a real agenda in the tertiary education portfolio therefore making the Government duplicitous. In that case the Government would be doing what it has done before and that is telling only half of the story. 
Just as an example from another portfolio we might recall announcements about improvements in health reforms in the National Party manifesto last year but the big missing feature which Tony Ryall at that time blurted out was that National’s intention was to lift the cap on general practitioners’ fees. He was very quickly slapped back into line for releasing something that National did not intend to release at that time. I use that as an example because I suspect that that is exactly what is happening in this case. 
It is time to remind people that National when last in office did the same thing to students. Back in 1990 it promised to scrap Labour’s student loan policy in its entirety but it failed to announce that it would be replacing it with a harsher one. What could the hidden agenda be? What could the real agenda for the tertiary education sector be? One possibility is that National might reintroduce interest on student loans because this bill makes sense only if interest is being charged on student loans. 
Another thing that National might do is lift the cap on student fees. It could consider doing that. Another thing it might consider is to stop the indexing of features of the student loan system such as the thresholds for loan repayments which are currently linked to the consumer price index and the movement in that. The Government could choose to take away the consumer price indexation and impose a freeze which as everybody knows with any increase in the CPI amounts to a cut. National consistently opposed every single measure the Labour Government took over the last 9 years to improve the affordability of tertiary education. It now quite frankly beggars belief that it would offer a discount for early payment of an interest-free loan without also having a secret agenda of reintroducing interest because that is the only circumstance in which such a bonus would make sense. 
Labour’s history in this area is to make the student loan scheme and more generally the funding of tertiary education more sustainable more reliable more stable and more predictable. This bill as it stands could be more correctly entitled the “Saving Incentives Bill” because it makes no financial sense to pay off more than is required of a loan that is generating no interest. Borrowers would be better off putting their extra dollars if they have them into an interest-bearing savings account for a deposit on a first home. When we take into account years of saving interest on that and compound interest on that we see that it makes more sense for those who leave university or a tertiary education programme and go into the workforce to put any extra money they have into an interest-bearing savings account for any other purpose than paying off an interest-free student loan. If they already have a house then they could pay more off their mortgage or anything else but the way this bill is structured makes no financial sense. If the Government has not been stupid about this bill the only alternative is to conclude that it has in fact been duplicitous. Labour opposes this bill. 
Hon ANNE TOLLEY (Minister of Education) 
: 
 I rise to support the Student Loan Scheme (Repayment Bonus) Amendment Bill. The bill contains measures that will provide incentives for student loan borrowers to make voluntary repayments to help them repay their loans faster. 
I cannot believe my ears when I sit in this House and listen to a Labour Opposition spokesperson exhorting the students of New Zealand not to pay off their student loans. The Labour Party talks about being the party of students but its members cannot get past the politics of voting for something that will help students pay off their debts sooner. In fact those members are standing in the House and telling students not to pay off their loans earlier. I am looking forward to going on to university campuses and telling students that Labour members stood in this House and would not support a bill that was designed to help students pay off their loans earlier. I am also looking forward to going out to the taxpayers of New Zealand who are providing those interest-free loans to students to help them get an education to say that the Labour Party believes that students should not pay off their loans and is not interested in any measures to help them pay off their loans faster. My email has run hot since this policy was announced with students saying that the scheme is fantastic and asking when it starts and when can they pay off their loans and get their 10 percent bonus. 
The student loan scheme helps students to pursue their education and life goals by removing some of the financial barriers to tertiary study. If those Labour members do not understand that students are concerned about their ability to pay off their loans then those members are out of touch. I cannot believe that after an election campaign in which that party constantly talked about duplicitous hidden agendas—and the public profoundly rejected all that and voted in the National Government—we have here a little bill that does an awful lot for students to help them pay off their loans but Labour is not backing it. 
Access to high-quality tertiary education enriches people’s lives and increases their employment prospects. It strengthens our economy by helping to build New Zealand’s skills base and that is all the more important at a time of economic recession. It is important that we keep our graduates here in New Zealand and contributing to our country and this Government is determined to put measures into place that can help them do that and pay off their loans. We are keeping our promise to students to help them retain those interest-free loans and this policy is a way of encouraging them to pay off their loans faster and enable them to participate and contribute to New Zealand’s society and economy. 
This Government is concerned especially at this time of economic recession that the interest-free policy has removed a strong incentive for borrowers to make extra repayments on their student loans. But the Labour Opposition of course supports that—“Don’t pay it back.” they have said; “Why would you pay it back?”. Since the introduction of interest-free student loans the proportion of repayments that the Inland Revenue Department has received from borrowers has declined. Students are listening to the Labour Party and they are not paying off those student loans. But we are keen to see those people pay off their loans as early as possible so that they then have more freedom in their lives to make those major life decisions that the previous speaker Maryan Street was talking about such as buying a house. 
The other thing the Labour Party does not seem to be in the least bit concerned about is that the cost of the student loan scheme to the Government has increased markedly in recent years as a result of non-repayments. The longer borrowers take to repay their loans the more expensive the borrowing is to the Crown. At the very time when we are concerned about the borrowing of the Crown that party is voting against a bill for political and ideological reasons rather than supporting early repayment methods for student loans. The current cost of every dollar of future lending is 39.15c; in 2002 the cost of every dollar lent was 23c. So this repayments bonus aims to address those issues by providing an incentive for faster repayment shortening repayment times and reducing the costs to the Crown. Students all over the country are delighted and have sent in messages expressing that and asking when they can start repayments. 
The Minister of Revenue in introducing the bill laid out the design parameters for it. National members believe that we have more than kept our promise since we went on the campaign. This bonus scheme is more widely available now than when it was promised prior to the election so we have over-delivered on that promise that we made to students. 
The scheme is now available to overseas-based borrowers as well as to domestic borrowers. During the election campaign we talked about only domestic borrowers but overseas borrowers in fact take even longer to repay their student loans and are more likely to have overdue repayments than are domestic borrowers. So this bonus will encourage faster repayments and greater compliance from people overseas who have loans. Large student loan balances are often perceived by expats as a reason to delay coming home to New Zealand or to refuse to come home at all. So this policy will give them the opportunity to pay off that debt quicker and hopefully to remove that barrier. 
In addition to that when we campaigned we talked about making a one-off payment of $500 on top of the normal repayments but now we have decided that we will spread that $500 over the year; on a weekly basis that is $10 a week. We will build that $500 extra and qualify borrowers for the basis— 
Hon Trevor Mallard 
: You’ll be ripped off more easily. 
Hon ANNE TOLLEY 
: That is less than a packet of cigarettes. I am not sure how much beer that will buy—I doubt that it will buy very much—but $10 a week is not a lot to save and that brings in a whole group of other students who might have found it difficult to make a lump-sum payment of $500 but who can now spread that over the course of a tax year. This is an example of the Government listening—listening—to the people out there in the community who wrote to us expressing concerns about having to find that lump sum of $500 and we have found a way to expand the range of borrowers who can take advantage of it. 
I turn to the third area where we have extended this policy. During the election campaign we talked about an eligibility time for the bonus of 10 years. We have decided that eligibility will not be limited to the 10 years as we originally stated so that means that the bonus will be available to those who are able to make those extra repayments later in their working lives for one reason or another. It is estimated that the measures in this bill will encourage about 14700 more borrowers to make those additional repayments of $500 or more on their loan. 
Hon Trevor Mallard 
: How many? Sorry can you repeat the figure? We couldn’t quite hear it. 
Hon ANNE TOLLEY 
: Certainly I am happy to repeat that. We believe that this bill will encourage about 14700 more borrowers to make additional repayments of $500 or more on their student loans. We estimate that this measure will reduce repayment times of those who take up the bonus by 1.5 years and we believe that it will decrease the upfront cost of new lending to 39.4c. How could anyone vote against that? The only reasons people could vote against a bill like that which proposes that scheme for the benefit of student loan borrowers and for the taxpayer in New Zealand would be ideological reasons. It would be because they just could not bring themselves to vote for something that National is proposing. 
In summary I tell the House that the measures in this bill aim to encourage more people to make extra student loan repayments over and above their compulsory obligation. Shorter repayment times will mean that New Zealanders will be debt-free earlier and the costs of the student loan scheme to the Government will be reduced. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I am caught betwixt and between things here. I cannot tell whether the Minister of Education is as financially illiterate as she pretends to be or whether she is a wolf in sheep’s clothing. I cannot tell which it is. Frankly I am very disappointed in the Minister of Revenue— 
Hon Anne Tolley 
: Whenever you lose an argument you resort to bullying. 
Hon Member 
: Calm down. 
Hon TREVOR MALLARD 
: No I will work my way through this situation slowly for the benefit of the Minister. 
I want the Minister to assume that someone has an income of $50000 a year and that that person is a new graduate with a $50000 loan. That person’s normal repayments would be $5000 a year—10 percent of his or her income. If for example that person could afford to pay another $1000 a year—we will keep the numbers nice and round—he or she would have a couple of choices. That person could take advantage of the scheme in year 1 and get a 10 percent additional bonus payment. Paying an extra $1000 would mean there would be a $100 bonus so an extra $100 would come off his or her loan. Or the person could choose to put the $1000 into the bank earn 7.5 percent for example—we will ignore the tax and ignore the facts that obviously the interest would compound and that the tax that came off it would be a factor. But if we ignore both of those factors after 10 years that $1000 would be worth $1750. 
I ask the Minister what sort of education system for tertiary students we would have if the graduates of that system chose to take the $100 discount instead of the $750 that they could apply at the end of their loan in order to pay it off. It is a matter of basic maths and basic logic and I am saying to National members that it makes no sense at all for any student other than a student who is in about the last 18 months of his or her loan repayment period to take advantage of this scheme. At any point earlier than that the student would be better off by putting the money into an interest-bearing account. 
There is one exception to that. I remind members that details of this exception come from the same member and the same sources from which I heard about Cabinet’s decision to reverse the tax changes which has now been more or less publicly announced by the Prime Minister. About a month ago I commented on that issue in the House. It was denied at the time but now of course it is accepted that that will happen. The same source—and I will make it very clear that it is not a Treasury source—has indicated to me that Ministers have Treasury working on papers to reverse the interest-free component of the student loan scheme. Treasury is currently working on papers to reverse the interest-free part of the student loan scheme. 
I tell the Minister of Education that if she has taken that decision or intends to take that decision then this legislation makes sense. I ask the Minister to deny that to me in the House. No she declines to deny it. The Minister of Education will not deny the fact that Treasury with the assistance of the Ministry of Education is working on papers—or may have completed the work by now because I have had the information for a little period of time—in order to reverse the interest-free student loan policy which was very heavily criticised by the current Prime Minister at the time when it was promoted and introduced. We will note we will put it on the record and we will make it absolutely clear that Anne Tolley was in the House. She was challenged to deny that that work is going on and she declined to do so. I will give her some credit for that because she is a basically honest Minister. But she is not very financially literate nor is she very good at deceiving people because she could not really explain why National was ripping off students in a way. Anne Tolley is not very competent but she is basically honest. She knew she could not deny that that work is currently going on within the Government. 
I will go back to the point I was making before I was diverted by Anne Tolley and I will address the Minister who is in charge of this bill the Hon Peter Dunne. I know that he is financially literate so I challenge him by way of interjection or response if he wants to to correct me on the logic of the assumptions I have made that people would be better off if they do not make extra repayments. No? There are some behavioural assumptions; for example the assumptions that people could put the money into the bank and leave it there or could pay it off their mortgage. The best possible thing they could do would be to pay it off their mortgage rather than pay it off their loan. But working on the assumption that people are able to put their money in the bank and leave it there for say a 10-year period and have the interest compounding they would be much better off under that year-by-year repeat return on their investment than they would under the one-off return that would occur as a result of using this scheme. 
I leave it to the Minister in charge of the bill to indicate whether I am wrong. He will not do that either because again he understands the position in this case. He is honest and has integrity in these matters. I admire him for his flexibility in working with a number of different parties. I know that even in the time of the previous Government the Hon Peter Dunne was involved in introducing or changing legislation that he was not particularly keen on. He may or may not be keen on this measure. I do not know his real position on interest-free student loans; it is not something I am familiar with. But I think I have gathered over the years that at least politically he was not prepared to oppose them. In this particular case I admire him for swallowing the rat—the dead rat—and being the person who has introduced this legislation. 
There is not a lot of point in going through the details of this bill. I think it was one of a number of National’s policies. I accept what the Minister of Education says; this was the National Party’s policy. No the guts of it were clearly spelt out before the election. It was criticised as being a rip-off at that stage. I think I was involved in drafting some things and certainly Pete Hodgson made some comments on the policy at the time indicating that intelligent graduates—intelligent former students—would not use the policy. The National Government has delivered; in fact it has over-delivered. It has made it easier for people to be ripped off by doing the repayments on a weekly basis or on a $500 basis rather than on an annual basis. It has to be $500 a year. The Government has made it easier to be ripped off because one can do the repayments on a weekly basis on a PAYE basis rather than on a one-off payment basis and it has extended the net to people who are overseas. 
I might say that is the bit where there is some logic because people who are resident overseas are still subject to the interest I think on the loans. The Minister of Revenue is agreeing with me. People who are overseas would be the group where there could well be some logic at some point in applying this measure because they would have the compounding effect of the reduction in the principal and therefore they would not have interest compounding over a period of time on their loan. Probably mainly because of tax factors that could well be something that would be of benefit to them rather than having the money in the bank and having the interest accumulate over time. I thank the Minister of Revenue for his nod on that particular matter. 
This is a sneaky little bill. It is designed to rip off people who have been students and I think that we do not have 14700 graduates of tertiary institutions who are stupid enough to be ripped off in this way in New Zealand this year next year or in any other year. 
JOHN BOSCAWEN (ACT) 
: 
 I intended to respond to the comments of Maryan Street but I will take even more delight in responding to the comments of Mr Mallard. Before I do so let me briefly explain to members of the public who are just joining this debate by way of television what this bill proposes to do. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I think you are probably aware that this member is a relatively new member. We cannot refer to people who are outside the House and are listening in the gallery watching the debate on television or listening to it on the radio. 
JOHN BOSCAWEN 
: I am happy to learn the rules of this House from Mr Mallard a member whose ability and experience I respect. 
The way that the Student Loan Scheme (Repayment Bonus) Amendment Bill operates is that it provides an incentive to people to reduce their student loan debt. Essentially it says that if students pay off a sum of $500 or more in excess of what they are required to do then they will get a 10 percent discount. They will get a 10 percent bonus and it will be an incentive for them to make that payment. That is the simple essence of what this bill does. 
When Maryan Street rose to speak she talked about that being a very foolish thing for them to do. Let us say a person makes a payment of $1000; then he or she would get a $100 reduction. Maryan Street argued that rather than making that payment they would be far far better off keeping the money and earning interest and in that regard she is absolutely right. 
What particularly interested me about Mr Mallard’s contribution is that he went on to illustrate that point in even more detail. He is absolutely right. He invited the Minister of Education to confirm that she is working on papers that will roll back the interest rate scheme but she was not prepared to do that. Mr Mallard then called on Mr Dunne. He said that Mr Dunne is a man of intellect of financial ability and he invited him to dispute his calculation. Mr Dunne was not prepared to do that. I say to Mr Mallard that I regard myself as a person of some intellect and of some intellectual ability when it comes to numbers. If you want to have your calculations confirmed I am happy to do them for you. You are absolutely correct. 
Mr DEPUTY SPEAKER 
: The member knows he cannot bring the Speaker into the debate. 
JOHN BOSCAWEN 
: I am sorry Mr Deputy Speaker. I was referring to you and I should have been referring to Mr Mallard. 
Mr Mallard is absolutely correct. The assertion he gave was an example of a person who intends to make a payment over a long period of time. Mr Mallard gave the example of 10 years. He illustrated that if the loan is to be outstanding for 10 years the person can make a one-off payment and get a $100 benefit or the person can put that money in the bank and—for the purposes of simplicity I say to Mr Mallard as he did—excluding tax on the interest and excluding compounding interest that person can earn $700 by banking the money. Alternatively he or she can have a one-off $100 benefit. I am happy to confirm to Mr Mallard that he is absolutely right. 
But the interesting point is that Mr Mallard also went on to say that it makes sense to make that payment only in the last 18 months. Again he is correct. If a student is coming up to the end of his or her repayment period then Mr Mallard is absolutely right. Eighteen months out from the time when a person expects to repay his or her loan that person should take the money out of the bank stop paying tax on the interest and pay it off the loan. 
Now let us go back to what Maryan Street said. She said that National opposed every single measure that Labour introduced to make education more affordable. Well was it not right to do so? I do not know about National opposing every single measure but National was absolutely right to oppose the policy of interest-free student loans. If we want an illustration of that all we have to do is listen to the debate. Maryan Street and the Hon Trevor Mallard have made it absolutely patently clear to the members in this House and to the people of New Zealand why it is an absolute rort to have interest-free student loans. 
Mr Mallard talked about graduates. He said that we do not have a decent education system if graduates cannot not work out after they graduate that they should not pay off this money. Well it is worse than that. Under the previous Labour Government’s interest-free student loan scheme—introduced as a bribe to try to get the Labour Government re-elected in 2005—it does not apply just to graduates. It applies to all university students. The very simple mathematics that Mr Mallard has illustrated this afternoon shows why it will be absolutely foolish for every single student of every tertiary institution and every parent of every student not to borrow the absolute maximum. That is what the previous Labour Government did in 2005. It incentivised every single parent. I notice that Mr Mallard is sitting there with his head hanging low. He was happy to comment on what the Minister of Education said but he is not prepared to deny his assertion. 
The reality is that the Labour members are sitting there knowing that every single student was incentivised to borrow the maximum amount possible. It is actually worse than that. I believe I heard Mr Mallard say that Mr Key opposed this policy when it was introduced in 2005. The tragedy about this policy is that in a desperate attempt—and I acknowledge it was desperate—National was prepared to put aside its principles and agree with them. In 2008 National went into the election campaign promising not to roll back the scheme. 
So National and Labour are both saying that we should have interest-free student loans. We will incentivise every single parent not to make a contribution to their children’s education. If they want to make a contribution to their children’s education they should put the money in the bank earn the interest or pay off their mortgage. They should do all the things that Mr Mallard so simply outlined this afternoon. 
I stand as a representative of the ACT Party. In 1984 just on 23 years ago Government expenditure per person in 2009 dollars was $11500 across the country. Ten years later in 1995 Government expenditure per person was $11300. It was $200 less. In other words there had been no increase in Government expenditure between 1985 and 1995. If we fast forward to 2009 we see that Government expenditure is $18800. It is a full $7500 higher over the last 14 years of combined Labour and National Governments. 
I would argue that we have had a huge amount of poor-quality expenditure. Students have been incentivised to borrow the maximum they can to pay their tertiary education fees. The only positive thing I have heard about in the debate this afternoon is Mr Mallard’s secret source who is now telling him that the National Government looks as if it will wind back the interest-free student scheme. Thank goodness for that because up until this afternoon I thought that the ACT Party was the only party in Parliament that had the courage and the honesty to say what the situation actually is. 
If the National Government wants to roll back the interest-free student scheme I say that that can not come fast enough. The Labour Party has pointed out why that patently should be the case. It is even more important because as Mr Mallard said Mr English is already back-pedalling on the tax cuts that National was elected to implement. If there was ever a need for those tax cuts it is today. There is a need to trim poor-quality spending. Mr English refers constantly to the entitlement society that Labour paraded but what we need to do is get rid of interest-free student loans and provide incentives. Maryan Street talked about affordable education. Why did we not just reduce student fees? We should have simply reduced university fees. If we want to make tertiary tuition cheaper and more affordable for families it is simpler to reduce student fees. Thank you Mr Deputy Speaker. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Deputy Speaker. Kia ora tatou. From having listened to Mr Boscawen deliver his korero I can very much appreciate a lot of the sentiments he expressed in the House today in terms of the bigger picture. The Maori Party is interested in kaupapa that allows more Maori people to enter into the tertiary sector and some of the ideas he has suggested about student loans and so on ring a bell. However I bring another perspective to the issue and it is a personal view in respect of the difficulties that many families face in terms of student loans and I hope it might paint a picture as to where the Maori Party wishes to head with this albeit that this the first reading of the bill. We will be supporting the bill at this stage pending other information and we look forward to the debate. 
I have five children three of whom are living a life influenced by the reality of a student-loan debt that has yet to be repaid. If we are to believe the analysis of the New Zealand Union of Students’ Associations it tells us that the average student debt is now something around $28800. For the Flavell family that equates to a burden of about $86500 so we are not talking small money for some families. Except for just one of my children after 7 years of tertiary education their loan has already topped $60000 so obviously we do not fit the average profile. As if that is not bad enough the data tells us that the burden is on an upward roll. The average student debt has risen by 54 percent since 2004 and I understand that it is now a staggering 147 percent higher than in 1998. There is a possibility that these costs will cripple the nation if they continue. They are huge issues of economic and social importance that are critical to an investment in the leaders of tomorrow. 
This Student Loan Scheme (Repayment Bonus) Amendment Bill amends the Student Loan Scheme Act to create incentives for student-loan borrowers to pay loans back. It is in that respect a response to the policy problem of the high debts being incurred by our student population. Over 60 percent of all students face high debt—a threshold that has remained relatively constant since 2004. 
What do we mean by high debt? Some 26 percent of students owe more than $15000 in debt before they even start looking in the job market. To some of us $15000 may not sound much but for students like my children it is a hell of a lot on top of things like food transport accommodation living expenses and general bills which are all expenditure items that in their own right have increased dramatically in the last 5 years. In just one area—the price of food—we might get a glance at the impact of rising student debt. According to the food price index the price of food rose by 22 percent in the 5 years from March 2004 to March 2009. No one in this House would deny that the cost of petrol for example has jumped a massive 39 percent in the same period and that has obviously taken a huge toll. 
So with all due respect this bill is very much a small drop in the bucket when one looks at the big picture and we really must look at the big picture. For the average student there will be very little capacity to make additional repayments and thus receive any kind of bonus under the scheme. 
The crucial information missing from this bill is as it stands what it would take for the average student to make additional loan repayments. What are the real costs of income tax GST mandatory student-loan repayments credit card debt KiwiSaver rent increased food and petrol costs and any savings to be made for a first-home purchase or maybe planning for children? For the average student there will be very little capacity to make additional payments and thus receive any kind of bonus under this scheme. 
I will make a point about the relationship of student-loan repayments to any other additional loan repayments. The issue of student debt cannot be seen as one of only student-loan repayments. The average debt of students has now forced the student population to look elsewhere for borrowings. We see a large increase in other loans including loans from parents and personal bank loans. The proportion of students with bank overdrafts has risen by 19 percent in the last 5 years and there has been a 32 percent increase in the amount owed on credit cards. When we consider this sort of information it is as if we can feel our pockets emptying pretty smartly especially when we consider our own children. I come back to whether this bill is the answer. 
The trouble with the bonus scheme concept is that it targets only income earners who are graduates earning at the sufficient level. The Union of Students’ Associations suggested that it really benefits only those who are already in a quite well-off position—the privileged few who will now get a 10 percent discount for early payback. We in the Maori Party are interested in another concept called “pay forward”: what is the investment we are making in the leaders of tomorrow? How will we ensure that those who are already facing disproportionately high levels of student debt—Maori Pasifika women—are also able to benefit? I ask what we are doing about them. 
If we look at just one part of the picture—that is Maori who studied for level 1 to 3 certificates—we get a sense of the scope of the problem. Nearly 70 percent of Maori who studied for level 1 to 3 certificates without completing and over 50 percent of Maori who studied at diploma and bachelor level without completing had made no progress in repayments 5 years later. A big factor in the lack of this repayment is basically low income especially income around the student loan repayment threshold. The average income for Maori who studied for level 1 to 3 certificates was just above the repayment threshold. The inequalities are entrenched with the average income for Maori with level 1 to 3 certificates being notably lower than for non-Maori with the same level of qualification. 
These are complex issues; issues that require a far more comprehensive and sophisticated response than simply a 10 percent bonus on repayments and what that can achieve. Although a scheme is a good idea it is a bare minimum and it will certainly not be effective in addressing the real underlying barriers to participation in tertiary education that we in the Maori Party are particularly interested in. 
We are certainly interested in the recommendation from Te Mana Akonga the national Maori student body which provides representation for all Maori student ropu at whare wananga nationwide. Te Mana Akonga has recommended that the preferred option is barrier-free education. By this it means that universal student allowances would be set at a living level a fee abatement scheme would be in place and every effort would be made to make it easier to invest in education. 
I would draw the attention of the House to the very useful piece of research from Raymond Torres published in November 2008 that concludes that social development is a powerful generator of productivity that leads to economic growth. If we are thinking of the future it will be education and health that will lead us out of the economic recession and it is in this respect that we must take up the opportunities to help address the harsh repayment obligations already confronting most loan borrowers. With such tough economic times we have to agree with Sophia Blair from the New Zealand Union of Students’ Associations who stated: “Helping to address the massive amount of student debt held in our communities is a key way the Government could choose to support families through this recession.” 
We will support this bill at the first reading because even a little drop in the ocean is a help we say but we are also putting on record our view that we must start thinking creatively and proactively about how we address the drivers of debt once and for all. We will be interested in the debate as it goes through the various stages of approval. Kia ora tatou. 
ALLAN PEACHEY (National—Tamaki) 
: 
 What an interesting debate we are having late on a Thursday afternoon when our thoughts really are turning to getting back to our electorates and families! Who would have thought that a bill as simple as the Student Loan Scheme (Repayment Bonus) Amendment Bill would become one of the defining points between what those of us on the Government side of the House believe and what those retrograde socialists over there believe? Who would have thought that members of Parliament representing the Labour Party— 
Hon Trevor Mallard 
: That’s specifically for me—for the electorate committee. 
ALLAN PEACHEY 
: —and I have Mr Mallard very very much in mind—wanted to define a very simple bill in terms of old-style class warfare? 
I believe that members of the electorate listening in to this debate will begin to realise just how irrelevant the Labour Party has made itself to the future of New Zealanders. What do we have over there? We have some very very young extremely left wing and naive new members of Parliament and we have a couple of beaten old warhorses who now have to live with the knowledge that they failed so badly in Government. If I were Mr Mallard I would not want too much attention drawn to my record of imposing mediocrity on the New Zealand schooling system. 
But let us just get back to this bill—a very simple bill. It is straightforward and logical. All it says is that if people do the right and decent thing and pay off their student loan—or part of it—early they get a 10 percent bonus. The bill goes right to the very heart of what the National Party believes in: individual responsibility. If students have borrowed the money they pay it back. It is an initiative and a reward for hard work. It was interesting to hear one of the former Ministers say in his speech earlier on that the bill is not good for poor people and it is not good for rich people either. What a load of nonsense! If members listened to what Mr Mallard said—and I wrote it down because I did not want to forget it—they would have heard him say it was a “rip-off”. 
Hon Trevor Mallard 
: Yes it’s a rip-off. 
ALLAN PEACHEY 
: The students are getting “ripped off”. 
Hon Trevor Mallard 
: No the graduates. 
ALLAN PEACHEY 
: The graduates are getting “ripped off”. 
Let us think about that idea for just a moment. If people borrow money they pay it back. That is the ethical decent thing to do. We all know that the easiest way to get ahead in this country is to get out of debt so anything that facilitates our young people in particular to get themselves out of debt a little more quickly is good for those young people good for graduates and good for New Zealand. I am actually appalled to hear what the socialist members of Parliament are saying—and they are socialists; maybe they need to go back and read Karl Marx again to remind themselves of what they actually believe in and get a bit of consistency into their argument. 
Who would have thought that a Cabinet Minister from the previous Government would get up in this Chamber and tell people not to pay back their loans but to use them to buy houses or cars instead? That is where this side of the House is so different from that side. The ethical thing to do—and dare I say it the decent New Zealand thing to do—is to pay back the money. 
Members opposite want to use the phrase “rip-off” but if one thinks about it one will ask who is actually getting ripped off. When a student borrows money to fund his or her education he or she is not borrowing money to have an overseas trip buy a car or contribute to a mortgage on a home; he or she is borrowing that money for the purposes of an education. How dare the members opposite say that graduates will get ripped off if they pay off their loans early? An individual can never ever be ripped off when he or she pays back debt. I want to stress this point. It does not matter whether an individual borrows money that is interest-free or is paying interest on it; one of the keys to prosperity is paying off debt as soon as possible. 
I reflect on my own electorate of Tamaki and particularly Glen Innes. It should not even be safe for me to walk in Glen Innes such has been the Labour control of that community for so long. But now increasingly residents are turning against their own and voting for me. Why? Because they have come to the realisation that the sort of socialism that the party opposite advocates—as it has in this House today—does not hold the key to the future of their children and young people. The debate this afternoon has demonstrated to New Zealand how far to the left and how far away from reality that party has moved and we will see that happen more and more. 
Let us just focus on the purpose of this bill and the values that are contained within it: for graduates to pay off student loans quickly and sooner than they might otherwise have done. The incentive is there a 10 percent bonus but in actual fact—[ 
Interruption 
] I am listening to Mr Mallard and I would be very very happy to match my majority against his any day. There is a 10 percent bonus for doing the right thing the decent thing the ethical thing—the New Zealand thing. I certainly do not want our young graduates thinking in terms of how they can rip off the taxpayer. The party opposite gave young graduates plenty of advice as to how to take advantage of other New Zealanders. But the interesting thing is that our young people do not actually want to do that. They know they have been given a huge step-up courtesy of the taxpayer to get their education. What really reassures me is the knowledge that our young people want to pay back the money they have borrowed. They want to pay it back as quickly as they can. They do not want to take advantage of the taxpayer. Above all else they want to do something that Labour will never understand which is to do the ethical decent New Zealand thing. 
STUART NASH (Labour) 
: 
 I stand here to speak against the Student Loan Scheme (Repayment Bonus) Amendment Bill. To tell the truth it is interesting—but predictable—that Labour MPs are the only ones standing up here to represent the views of the vast majority of hard-working New Zealanders who at this point in time are looking at ways of getting ahead—even keeping afloat. It is amazing to hear the former headmaster of one of our large State schools— 
Allan Peachey 
: Largest! 
STUART NASH 
: —largest State schools sounding so financially illiterate. What was Mr Peachey teaching his students there? It is amazing. The people of New Zealand are certainly not being represented by the current Government. Mr Peachey lost his touch before he even found it. 
It is like National’s tax cuts where $300 million tax cuts—or one-third—went to the top 3 percent of taxpayers. I ask Mr Mallard whether I got that right. Did one-third of tax cuts really go to 3 percent of taxpayers? That is nasty. That is hardly fair. Did I also hear right that if someone earns $40000 or less and has children he or she got no tax relief—nothing from the National Government tax cuts? That is not fair at all. 
It is like this bill. This bill is not aimed at ordinary Kiwis who forwent income to better themselves in tertiary education so as not only to enhance their own employment opportunities but to build on the nation’s competitive advantage of an educated workforce. I tell Mr Flavell that Sophia Blair said that “National’s voluntary repayment scheme [is] no bonus for most”. Goodness me! After listening to Mr Boscawen whose ideas were actually backed up by the Maori members raving on about the virtue of interest on student loans I worry—the virtues of interest on student loans? I assume that Mr Hide who is privy to Cabinet deliberations— 
Hon Trevor Mallard 
: Probably not actually. 
STUART NASH 
:—yeah probably not—has told the honourable member Mr Boscawen that this policy will reintroduce interest on student loans. I ask Mr Hughes whether I heard that right. Is that what he was talking about? 
Hon Darren Hughes 
: You heard it right. You heard it here first. 
STUART NASH 
: Goodness me! Labour has already rewarded those people burdened with student debt by removing interest on student loans. 
Hon Trevor Mallard 
: I’m just going to interject on the member. Richard Long had it in his column the other day. 
STUART NASH 
: Well we will get to Richard Long. I tell members that a very good friend of mine who is now a hard-working general practitioner in this wonderful Labour-held city of Wellington felt that he had an albatross around his neck and when Labour told him he would not have to pay interest on his student loan any more his decision whether to go overseas or stay in New Zealand was made. He stayed. He is now making a contribution in New Zealand as a medical doctor working with ordinary Kiwis because of Labour’s interest-free student loan legislation. 
Now we are at risk of having that legislation repealed. Shame! That man’s story is not unique to the thousands of New Zealand students all around the country with loans. Mr Peachey knows that well. 
Allan Peachey 
: Walter Nash would be turning in his grave. 
STUART NASH 
: Walter Nash is dead! Things are going well for students with loans because they are not paying interest. When I read with dread and loathing that a former chief of staff of the National Party— 
Allan Peachey 
: Walter Nash would be turning in his grave. 
STUART NASH 
: If Walter Nash were to hear that any Government would reintroduce interest on student loans and burden a generation with such debt he would rise from his grave come back into this House and tell that member off. 
When I heard Richard Long moot the idea of getting rid of interest-free student loans I thought: “Wow imagine that!”. Imagine the National Government getting rid of interest-free loans and going back to the days when students paid horrendous interest as the price of bettering themselves personally intellectually and professionally. [ 
Interruption 
] I tell Mr Quinn that Mr Long was one of National’s advisers. When I bought my first home I tacked my student loan on to the end of my mortgage because the interest I was paying on my student loan was higher than my mortgage rate. 
Hon Trevor Mallard 
: That would be right. 
STUART NASH 
: The interest on my student loan was higher than the market interest rates. I ask Mr English whether that is the future. Will that be a nasty surprise in the Budget? That will please the men and women of New Zealand! Imagine a Budget that removes promised tax relief and reintroduces interest on student loans—nasty. 
As mentioned this bill is aimed at those same individuals who gained the most from National’s tax policy. Is that what Mr Key meant when he said that those who receive tax cuts should donate them to charity? Is this bill another measure to favour the financially literate friends of the National Party? As my colleagues have pointed out this legislation will cause that number to dwindle even further. 
Let me tell members something about Kiwi student loan holders. A 2006 Statistics New Zealand publication entitled  
Student Loan Borrowers 1997-2004 
 stated: “Those who had studied at honours level or higher in their last year of borrowing had higher rates of full repayment … than average. … This could be attributed to higher levels of qualification leading to higher incomes. … This leads to faster rate of repayment.” Also the rates of full student loan repayment were highest for engineering and related technology courses. Funny that! I assume those graduates earn the most money. 
Students enrolled in food hospitality and personal service courses had the highest median amount of student loan. Those are not the jobs that bring in the huge dollars. Why does National not do something for those workers and reinstate Labour’s tax relief package? A quarter of student loan borrowers in 2005 were enrolled in society and culture courses. Are we saying that those graduates do not deserve any form of tax relief? Maybe they are the very lucky ones whose parents were in the top 3 percent of earners who received 30 percent of the National Government’s tax cuts. Nasty very nasty! 
The majority of borrowers identified themselves as European or Maori; however those who identified themselves as Pasifika people borrowed the highest amount. The number of borrowers at level 4 certificate was 6½ times more in 2004 than in 2007. Let me tell the members in this House that the statistics show that those most in need of student loan relief are young women especially Maori and Pasifika who have completed either bachelor or a level 1 to 3 certificate and who have studied at a private training establishment. I ask Mr Peachey whether this bill will help them. It will not at all and he knows it. 
Who will this bill help? I can tell Mr Dunne that it will not help those who need it. But then again none of his legislation has. I find it very difficult to believe that Peter Dunne once a Minister outside Cabinet in a Labour Government has such elitist philosophies at this time in the economic cycle. In fact I have an idea for him. Instead of this type of tax measure how about directing money into retraining for those whose dreams and aspirations have disappeared in the puff of redundancy? Why does Mr Dunne not do that? How about suggesting that to Mr English? 
I tell Mr Dunne of my real concern about how the Inland Revenue Department will be able to administer this bill given that National has cut 250 jobs from that department. Two hundred and fifty jobs from the Inland Revenue Department—and I hate to think what Mr Coleman is going to do to the Broadcasting Commission. It is going to have jobs slashed. Oh no! National says it is not going to sell Television New Zealand—this term. That is right! An accountant friend of mine phoned the Inland Revenue Department 2 days ago to organise payment for tax relief and he was told that he could not be dealt with for another 45 minutes and staff would phone him back. Yeah right! The old saying: “Don’t call us we’ll call you.” takes on a whole new meaning. I ask Mr Dunne again how the Inland Revenue Department will administer this bill with 250 fewer jobs. 
In conclusion I speak against this bill because it is inequitable unfair and not targeted at those people who really need the student relief package. This bill is also—I ask Mr Quinn to listen to this—a prelude to the reintroduction of interest on student loans. Mrs Tolley could not deny that Mr Peachey knows that Mr Boscawen signalled this and the Maori Party backed us. I will say that again: this bill is a prelude to reintroducing interest on student loans. I say to Mr Dunne that that is nasty. 
We on this side and all those hard-working Kiwis we represent had hoped that the honourable Minister who worked as the Hon Dr Michael Cullen’s junior would have seen some of Dr Cullen’s social democratic philosophies rub off on him. We had hoped that Mr Dunne might have developed a conscience and put forward a bill to help all those people with student loans and not a bill that is a prelude to the reintroduction of interest on student loans. That Minister is a true Tory. That Minister has shown his true colours. This is a true right-wing bill and heaven help that National Government when interest on student loans is reintroduced as this bill has signalled. Thank you. 
COLIN KING (National—Kaikoura) 
: 
 It is with some disappointment that we had to tolerate the presentation from the previous speaker Stuart Nash. When he first came to the House he could not control himself. He leapt to his feet and told us that he was the most qualified person in the House to speak on anything to do with education because he was engaged in a masters’ degree in education. That must count for something. 
Stuart Nash 
: I raise a point of order Mr Speaker. I did not actually inform the House of that. I said that I had been— 
Mr DEPUTY SPEAKER 
: No that is not a point of order. That is a debating point. 
COLIN KING 
: My apologies to the member over the other side if I did misrepresent what he was qualified to do. 
However I want to say how passionate we are on this side of the House to ensure that we streamline the process for people to pay off their student loans. The purists might talk about the best economic way forward but I remind those members on the other side of the House that 28.3 percent of people are still paying significant amounts off their student loans. The members on the other side can call them whatever they wish to. From that point of view it may be a reduced field of support but it is wonderful to see that opportunities are being offered by this side of the House. When we start talking about the Student Loan Scheme (Repayment Bonus) Amendment Bill it is quite important that the select committee address the issue. It is effectively around the Student Loan Scheme Act and a new section 45. Did I hear the Minister correctly that the report back date was July the— 
Hon Peter Dunne 
: 30 July. 
COLIN KING 
: OK so that is what we should be aiming at. When we look at the Government initiatives so far we have talked about improving literacy and numeracy by introducing standards. We have looked at the way we can improve the teacher registration the vetting of adults in unsupervised situations the introduction of trade academies and now we are looking at improving and creating incentives for people to repay their student loans. 
When we stop and think about the student loan we see that it was introduced in 1992 it was introduced by the National Government and at that particular time we had one of the very worst levels of engagement around tertiary education. We now find ourselves at the other end of the scale whereby we have one of the better levels. I took the opportunity to look up the University Students Association’s website. It is with huge concern to see those numbers rolling over and a total student loan debt of close to $10 billion. 
Quite often we hear from the other side of the House from members who have been here for many years—say 15 to 20 years—that they got a free tertiary education courtesy of the taxpayer. The point I would like to make is that what we have done around the student loan scheme is broaden out an enormous opportunity to people who otherwise would be shut out of tertiary education. That is something I have had to change my view on. As I have been a person who has not actually been involved in a student loan and have not undertaken exceptionally high levels of tertiary education—I backed myself and I made my living with my hands—I have had to review my thinking because today is not what it used to be. Today it is very important when our children leave school in year 13 that we have got them up to a threshold where they have high standards of literacy and numeracy so they can make a choice about where their career pathway will take them. 
I want to make the point which is quite relevant to the Student Loan Scheme (Repayment Bonus) Amendment Bill that there is an old argument about public good versus private good. That means if you support the idea that all students should have free education at tertiary institutions— 
Mr DEPUTY SPEAKER 
: Order! 
COLIN KING 
: Sorry my apologies. Whoever supports that idea deems that free education at tertiary institutions is appropriate and that the public good is being served by the taxpayer who therefore should pay the entire amount of tertiary education. If one backs the side of the argument that says tertiary education is solely for private good then really one is saying that people should be able to make a choice around their education in such a way that it aids them to empower themselves to a level whereby they are able to make a commercial decision and be able to repay the student loan. 
Effectively at the moment we are sitting in the middle of this way. We see that there is public good and that there should be private good. I think during the economic times of today with regards to tertiary education student loans and the like we will see far more considered measured managed and focused decisions around careers. From that point of view I believe that we are living in a time that is far more sensible and more balanced. What I saw from my own observation was that young people at school-leaving age maybe 18 years were not too sure of where they wanted to go as far as a career was concerned or what they might want to do after school. So these people defaulted into further training and so on. Quite often it was university because that is where their buddies went. One cannot blame them for that because it was part of the transition process and that is always the hardest part of life. 
If we apply these thoughts to the student loan scheme we see that people have large debt. They have quite a lot of costs. We see that over a period of time virtually 600000 to 700000 people have entered into student loans. A lot of those loans are being paid back. The student loan scheme will not get to the stage where it will actually flatten out and the amount owed start to slowly reduce until about 2014. Interestingly it was early on before the interest-free side came in that the loans were taking up to 9 years to repay. That time has now been reduced to 7 years. We like to think we will see some greater improvement in that. 
It is with some fear and trepidation that members of select committees receive bills that are referred to them. It is very important that we do this work effectively because the Minister will be relying on us to send the bill back to the House for its second reading. He will want to make sure there are no loopholes in it so that it cannot be defrauded. That is why it is very appropriate that payment regimes have to be locked in very seriously so that there is no way such things as money paid to students from StudyLink will qualify for bonuses. Effectively we want to see this worked on to improve those people’s opportunities to clear their debts. When they do so they will be able to take on a loan in a commercial discipline and really contribute to the nation with the quality of their education. 
It is a pleasure to stand and support this bill. I believe that the 28 to 29 percent of people who are conscientiously reducing their student loan debt will be encouraged to take advantage of this measure. We look forward to supporting this bill and returning it to the House for its second reading. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 Let us be clear what the Student Loan Scheme (Repayment Bonus) Amendment Bill is about. This bill is a precursor to the abolition of the interest-free student loan policy. That is exactly what this bill is about. We know that the National Party did not support interest-free student loans. National members hated that policy when it was introduced and we know that they cannot wait to get rid of it. They would not be introducing this bill into the House unless they intended to get rid of interest-free student loans. 
As long as we have interest-free student loans this bill does not make any sense because under this bill graduates would be better off to leave their money in the bank earning compound interest until they were close to repaying their total loan then make a lump-sum payment at the end. The bill does not necessarily discourage early repayment but it certainly does not encourage it which is what the bill purports to do. This is another half-baked half-thought-out on the hoof election policy from the National Party. We know that it will not work because why would anybody go for a 10 percent discount when his or her loan already attracts no interest? Students from a wealthy background who in practice would be the ones with the resources that make them more likely to be in a position to take up such an offer would also be likely to have the financial skills needed to work out that they would be better off if they invested their money elsewhere and kept their interest-free loan in its current state. 
This bill will not work. There is no evidence to suggest it will work and we know that it is a stalking horse for the abolition of interest-free student loans. We know that because one of the National Party’s chief cheerleaders Richard Long a former National chief of staff— 
Hon Darren Hughes 
: He used to run the show. 
CHRIS HIPKINS 
: —in fact he was one of the “Hollow Men”—said in his column that National should do away with the interest-free student loan scheme. He urged National to break many more pre-election promises and he said: “National may have promised not to privatise in the first term but it could probably get away with the partial sale of selected SOEs … It could axe superfluous bureaucracies.” 
Hon Darren Hughes 
: Like press secretaries! 
CHRIS HIPKINS 
: Maybe or those private purchase advisers that National has just engaged. Here is the kicker: “It could remove Labour election promises”—even though the National Party had promised that it would not do so—“such as interest-free student loans.” 
We know as my colleague Trevor Mallard has revealed that Treasury is working on policy documents that would do just that. The National Government has Treasury working on doing away with interest-free student loans. Why would the Government do that? 
Hon Trevor Mallard 
: They didn’t deny it at all. 
CHRIS HIPKINS 
: It was put to Anne Tolley and she did not deny it. It was put to Peter Dunne that graduates would be better off to leave their money in the bank rather than to pay off their student loans early and he did not deny that either. 
Clearly there is an agenda here that those members want to get rid of the interest-free student loan policy. We know that because John Key did not support it in the first place. In November 2005 when Labour was passing the interest-free student loan policy he said of it: “What a cost to the country! What an unaffordable and irresponsible cost to the country!”. That was what all the National members said. We know that they want to get rid of it. John Key went further than that. He called it “rushed and reckless thrown together in desperation”. He then turned around and said that he actually thought it was quite a good idea he quite liked it and he was going to keep it if National won the election. But we know that National never had any intention of keeping that promise. When it comes to tertiary education National is not very good at keeping its promises. 
Let us go back further. There are two very good examples. I have to be very careful not to bring the Speaker into the debate but I recall that in 1990 a certain former National Minister travelled the length and breadth of the country saying he would resign unless National abolished student fees. And what happened? National increased student fees. There is already a history. Let us go back to 1996 when National members travelled the length and breadth of the country with New Zealand First and said they were going to introduce a universal student allowance. Did they do that? No—we are still waiting. Instead they tried a little sleight of hand and tried to rename all the other funding that went into tertiary education as a “student allowance”. They thought that students would be stupid enough to think that it was an allowance. Of course students were not getting a cent extra. In fact they were paying massively higher fees and interest on their loans even while they were studying under the last National Government. Even when students were in a position where they could do nothing to repay their loans they were paying interest under the last National Government. 
Debate interrupted. 
The House adjourned at 6 p.m.