Volume 706 Week 20 - Thursday 25 June 2015Text is incorporated into the Bound VolumeVolume 706 Week 20 - Thursday 25 June 2015[Sitting date: 25 June 2015. Volume:706;Page:4781. Text is incorporated into the Bound Volume.]Thursday 25 June 2015Mr Speaker took the Chair at 2 p.m.Prayers.VisitorsPacific Parliaments—Presiding OfficersMr SPEAKER: Honourable members I am sure that you would wish to welcome the Rt Hon Lord Tu’ivakano Speaker of the Legislative Assembly of Tonga; the Hon Dr Jiko Luveni Speaker of the Parliament of the Republic of Fiji; the Hon Niki Rattle Speaker of the Parliament of the Cook Islands; and the Hon Agafili Deputy Speaker of the Legislative Assembly of Samoa. I am sure that members would wish to accord them seats to the left and right of the Chair and that the delegation in the Speaker’s gallery be welcomed.The honourable Speakers accompanied by the Deputy Speaker and Assistant Speaker Tisch were accorded seats alongside the Chair.Business StatementHon CHRISTOPHER FINLAYSON (Attorney-General) on behalf of theLeader of the House: When the House resumes on Tuesday 30 June the Government will look to progress the New Zealand Superannuation and Retirement Income Amendment Bill the Environmental Reporting Bill and a number of other Committee stages on the Order Paper. The House will sit in extended hours on Tuesday 30 June effective on the morning of Wednesday 1 July to progress a number of second readings including the Hawke’s Bay Regional Planning Committee Bill the Te Hiku Claims Settlement Bill and the Te Kawerau ā Maki Claims Settlement Bill.Questions to MinistersEmissions—Government Responsibility to Reduce1.JAMES SHAW (Co-Leader—Green) to the Minister for Climate Change Issues: Does he agree with the decision of the Hague District Court that “The State must do more to avert the imminent danger caused by climate change also in view of its duty of care to protect and improve the living environment” and what steps will he take to ensure that the Crown isn’t open to similar litigation here?Hon Dr NICK SMITH (Minister for the Environment) on behalf of theMinister for Climate Change Issues: Our programme in New Zealand does have us doing more to reduce those risks. We introduced an emissions trading scheme in 2009 we joined the Global Research Alliance on Agricultural Greenhouse Gases and we reversed the decline in renewable electricity from the previous Government. I would also note with our Pacific friends in the House the $100 million that our Government has invested there in providing them with clean and affordable energy. This record and the fact that our Government has met our Kyoto obligations by a significant margin give me confidence that the risks of similar litigation here are very low.James Shaw: What does it say about the National Government and its climate record when a country with both lower emissions per capita and a more ambitious reductions target has been found in court to have failed its duty of care towards it citizens?Hon Dr NICK SMITH: I do not accept the member’s premise and I would note that the Netherlands has 10 percent of its electricity from renewable sources. Under this Government we have now got that figure to over 80 percent and I would urge the member not to run down New Zealand’s good record.Stuart Smith: What changes have occurred to climate change policy over the last year that will have a beneficial effect on New Zealand’s future emissions?Hon Dr NICK SMITH: The benefits of our emissions trading scheme are directly proportional to the carbon price. The original legislation supported by all parties in this Parliament allowed access to international units that after the global financial crisis became very cheap down to a price of only 10 or 20 cents. The Government’s decision not to allow access to these international units means that emissions from 1 January this year are now priced much more realistically and the current price is $7. This change provides a much stronger incentive to constrain future emissions.James Shaw: Will he stop using the fact that New Zealand has only 0.2 percent of global emissions as an excuse for a weak emissions reduction target given that a court has just ruled against the use of the same argument by the Netherlands which makes up 0.5 percent of global emissions?Hon Dr NICK SMITH: Our Government takes a realistic approach where New Zealand is doing and will do its fair share on climate change. The most challenging part for New Zealand which is unlike any other developed country is that 50 percent of our emissions come from agricultural gases—methane and nitrous oxide—and that is the factor that does provide New Zealand with a challenging circumstance because technologies do not currently exist that would enable us to reduce those emissions. That is why our Government is investing so heavily in finding the technologies to solve that unique problem.James Shaw: Given that New Zealand’s net emissions have risen by 13 percent since National came to power why should not young New Zealanders sue the National Government for jeopardising their future?Hon Dr NICK SMITH: Because the member’s figures are wrong. Let me put the record straight. New Zealand’s net emissions peaked in 2007. In 2007 New Zealand’s emissions were 84 million tonnes. The latest figure in New Zealand is that our net emissions are 70 million tonnes—that is 20 percent less than what they were under the previous Government at its peak.James Shaw: Does he agree with the Prime Minister’s statement yesterday that “Ministers … from time to time will certainly say that people are free to test their legal rights.” and will he be saying this to young New Zealanders who will be taking hope and inspiration from the success of their Dutch counterparts?Hon Dr NICK SMITH: In our discussions with young New Zealanders they want to have good jobs and they want to have a strong economy as well as also wanting a responsible policy on climate change. The great fear that young people should have is that if you follow the sort of extreme Green policies that that party advocates many of them would be out of work.James Shaw: Given that New Zealanders are crying out for real climate action will he now encourage the Prime Minister to accept our offer to work together on climate change solutions that New Zealanders want and deserve?Hon Dr NICK SMITH: This Government is always open to good practical ideas on how we can improve our environmental record but what we will not do is adopt some of the policies that the Greens have advocated that will come with huge cost and will put New Zealanders out of work.Economy—Performance2.TODD MULLER (National—Bay of Plenty) to the Minister of Finance: What reports has he received showing progress toward building growth across a range of sectors in the New Zealand economy?Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of theMinister of Finance: Statistics New Zealand’s latest GDP data release confirmed that the economy is continuing to perform well and grew 2.6 percent in the year to March 2015. A reduction in dairy production contributed to quarterly growth of 0.2 percent coming in at the lower end of market expectations. Dairy is important but it is important to remember that dairy exports make up only one-fifth of our total exports and are around 5 percent of the economy. The reality is that a large number of areas across the economy are growing—and growing strongly. For example the information and communications technology software services sector has been growing at a rate of 9 percent per annum since 2008 and now contributes 1.7 percent of GDP. Information and communications technology exports have grown at 14 percent per year over the past 6 years to exceed $930 million in 2014.Todd Muller: What other sectors of the economy have shown strong growth?Hon STEVEN JOYCE: Many of them actually. The Government’s programme of microeconomic reforms has helped to make it easier for New Zealand industries to grow. To take one example the wine industry now exports $1.37 billion up 8.2 percent in the past year. The kiwifruit industry has recovered well from Psa and it is booming at this point. High-tech manufacturing has grown from a $139 million industry 20 years ago to a $1.4 billion one in 2012. There is tourism which is now worth 7 percent of GDP. In the last year the accommodation industry saw its largest annual growth at 8 percent since September 1995. The Government’s economic reform programme and fiscal prudence is helping to keep interest rates lower and is creating the conditions in which businesses are more confident of investing and hiring more people.Todd Muller: How is this economic growth translating into more jobs for New Zealand families?Hon STEVEN JOYCE: The fundamentals for the economy remain sound. The outlook over the next 3 to 4 years is for moderate sustained growth of around 3 percent helping Kiwi families to get ahead. In Budget 2011 Treasury forecast that there would be 171000 additional new jobs created by June of this year. As at March of this year 194000 jobs had been created over that period so we are currently around 23000 ahead of that forecast with the current quarter to finish. A further 150000 jobs are expected to be added to the economy by mid-2019.Todd Muller: How do forecasts for higher incomes compare with expected cost of living increases?Hon STEVEN JOYCE: Average annual wages have increased by $5700 in the past 4 years. Treasury forecasts that they will rise by a further $7000 to around $63000 by mid-2019. If you take the 8-year period as a whole the average wage is expected to rise by almost $13000 or over 25 percent compared with inflation of around 15 percent over that same period. It is very important to achieve those numbers in order to stay on course and to continue to attract new investment around the country to build more and higher paying jobs and to really lift our long-term economic performance.Dr David Clark: When will the Minister accept that he is failing to achieve his own target of growing exports as a percentage of GDP to 40 percent that currently it has dropped to 27 percent and is projected to drop lower and that if he does not change his policy he will never achieve his goal?Hon STEVEN JOYCE: I am pretty sure that the member has heard before that that is a target set for 2025. If he comes back as an Opposition spokesperson for economic development in 2025 then he will be able to ask that question again. But to reassure the member in 2008 in nominal dollar terms our exports of total goods and services were $54.645 billion and this last year to March the figure was $67.49 billion—an increase of 24 percent despite some of the highest US dollar and Australian dollar exchange rates.Dr David Clark: You’re going backwardsHon STEVEN JOYCE: It is a 24 percent increase and the only definition of going backwards is if you turn around and put yourself upside down like Mr Clark does.Canterbury District Health Board—Financial Review3.Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Health: Does he stand by all his statements?Hon Dr JONATHAN COLEMAN (Minister of Health): Yes within the context that they were made.Hon Annette King: Does he stand by his statement made just 2 months ago relating to the Canterbury District Health Board: “there is plenty of money there in that huge budget that Canterbury has.”; if so why has he now written to the Canterbury District Health Board saying that the Ministry of Health is to undertake a financial review?Hon Dr JONATHAN COLEMAN: Well the point is that there is plenty of money. There is $1.36 billion that goes into that district health board. We have increased that by $254 million over the past 7 years—by $26 million this year. But at the moment the Canterbury District Health Board is saying that it is looking for some more money specifically for mental health services. The idea of a financial review is to help it to find it.Hon Annette King: Has he seen a recent Canterbury District Health Board presentation that shows that taking account of the additional Government funding received the Canterbury District Health Board has had to absorb around $80 million of expenses arising from earthquake-related costs mismatched elective funding and $10 million paid for the failed Health Benefits Ltd project?Hon Dr JONATHAN COLEMAN: I speak to the Canterbury District Health Board all the time and I have not seen that particular presentation. But what I can say is that tens of millions of dollars of extra support has been poured into Canterbury to support what was a very devastating series of events down there 5 years ago.Hon Annette King: Is he aware that the Canterbury District Health Board which the Auditor-General said was the best-performing district health board has said that the position that the Government has put it in will mean that it will be cutting services to the people of Canterbury as if they have not faced enough?Hon Dr JONATHAN COLEMAN: I do not believe that that is what it is saying but like all district health boards it has to make the best possible use of the money that it does have available.Hon Annette King: Is he confident that the information being provided to him by the Ministry of Health senior officials in relation to the Canterbury District Health Board’s financial position and the pressures it faces is not tainted by personal agenda and vindictive behaviour?Hon Dr JONATHAN COLEMAN: Yes.Hon Paula Bennett: What other statements does the Minister stand by?Hon Dr JONATHAN COLEMAN: I stand by the statement that under this Government the number of first specialist assessments has risen by 50000 compared with an actual cut of 7500 between 2000 and 2006. Equally I stand by the statement that under this Government the number of surgical operations has gone up such that there are now an extra 44000 operations per year compared with an actual cut of 2200 operations between 2000 and 2006. So in short this Government is delivering more; the other crowd delivered less.Hon Annette King: In light of the widespread knowledge of the dysfunctional relationship between the senior management of the Ministry of Health the National Health Board and the Canterbury District Health Board will he commit to an independent financial review of the Canterbury District Health Board; if not why not?Hon Dr JONATHAN COLEMAN: I dispute that there is a dysfunctional relationship there. Obviously you are always going to get people who will for whatever reason try to make trouble—Mrs King may well be one of those. But look the fact is that I have complete confidence in the ministry staff. They are doing a very good job. They are doing a very good job in helping the Canterbury District Health Board to turn round what is a pretty difficult situation.Hon Annette King: Well in light of that answer has he been told recently that senior executives of the Ministry of Health are lying to him and are bullying Ministry of Health staff chairs and chief executives of district health boards?Hon Dr JONATHAN COLEMAN: I know that some people would like to believe that that is the truth but it is completely false.Investing in Educational Success Programme—Teacher-led Innovation Fund4.MELISSA LEE (National) to the Minister of Education: What announcements has she made about driving innovation across the education sector?Hon HEKIA PARATA (Minister of Education): Tēnā koe Mr Speaker. I am pleased to announce that 41 projects have won funding worth a total of approximately $2.6 million in the first round of grants from the Teacher-led Innovation Fund. This fund is part of our Government’s $359 million Investing in Educational Success initiative and is aimed at developing innovative practices that improve learning outcomes. The first round of funding involves more than 80 schools as well as several early childhood centres. I look forward to releasing the detail of these successful collaborations in the next few weeks.Melissa Lee: How can schools participate in this initiative to develop innovation in their community?Hon HEKIA PARATA: The Teacher-led Innovation Fund is worth $10 million over 4 years and I encourage all schools that consider that they have innovative practice to apply for future rounds. It is open to primary and secondary teachers and State and State-integrated kura and schools and it is designed to encourage schools to look at different approaches to learning particularly for students most at risk of failing. This fund reflects our Government’s significant investment in keeping the best teachers teaching encouraging schools to work together and strengthening school leadership.Child Youth and Family—Response to Notifications5.JACINDA ARDERN (Labour) to the Minister for Social Development: What action does she expect to be taken by Child Youth and Family when there are 20 notifications involving just one family with as many as 10 referrals being due to family violence in the home?Hon JO GOODHEW (Associate Minister for Social Development) on behalf of theMinister for Social Development: Although I cannot speak about the specifics of this case that the member is referring to while it is before the courts in this type of situation I would expect all social sector agencies including Child Youth and Family to be working very closely together to ensure that there is a coordinated plan of action in place to resolve the issues in that family that is focused on keeping the children safe.Jacinda Ardern: Can she confirm that the current case in the media is not an isolated incident when more than 25 percent of notifications received by Child Youth and Family in April this year were for families who had already been investigated at least once in the past 12 months?Hon JO GOODHEW: Yes I can confirm that this case is not an isolated incident because I know that 147000 notifications were received by Child Youth and Family in the last year. Of those some 58000 were family violence referrals. I can also tell the member that when each one of these notifications was assessed by a social worker to determine the action that should be taken some 54000 required further action by Child Youth and Family. Of those 19600 were substantiated cases of abuse or neglect. I can tell the member those figures because this Government is taking action on many fronts to address what is a very large problem for our nation.Jacinda Ardern: What action does Child Youth and Family take when it receives one of the 58000 family violence referrals that come from the police each year telling the agency that a child is in a home where domestic violence has occurred?Hon JO GOODHEW: As I have just said each notification that is received by Child Youth and Family is carefully assessed by a social worker to ascertain what response if any is needed and how urgent that response should be. The notifications are widely varied. In some examples a neighbour may raise a concern about hearing raised voices next door. That of course is quite different from the family violence referrals that are received from police but each nevertheless is treated in the same way: assessed by a social worker to determine what action is taken.Jacinda Ardern: What percentage of referrals that the police—not neighbours but the police—send to Child Youth and Family are followed up on; and was the Waitakere Anti-violence Essential Services manager Tiaria Fletcher correct when she quoted research that found that only 15 percent of children with a family violence referral had received any kind of support or intervention from Child Youth and Family?Hon JO GOODHEW: The member appears not to be listening. I have already told the House that every single one of the 147000 notifications are assessed by a social worker to determine a professional determination of what action is required to be taken. I do not have a percentage for the 58000 family violence referrals that have further action taken.Jacinda Ardern: Which if any of the terms of reference for the review of Child Youth and Family allows her expert panel to make a recommendation that the Government increase Child Youth and Family’s resources so it can do more for the children who are being referred by police to it than just simply have their files assessed by a social worker?Hon JO GOODHEW: As the member is aware Child Youth and Family is currently under review. That is because we need to do more to protect our vulnerable children. Evidence that we are doing more should be Budget 2015 where an extra $58.6 million over the next 4 years was allocated to help vulnerable children. So we are not waiting for the end of the Child Youth and Family review; we are already injecting additional resources into the service—$8 million to meet demand due to the duration and complexity of interventions required for children and young people in State care. In addition Child Youth and Family was given an additional $3.3 million to allow it to meet the legislation changes—Jacinda Ardern: I raise a point of order Mr Speaker. I asked the Minister whether she could tell me which if any of the terms of reference—the specific terms of reference—allowed her Government-appointed panel reviewing Child Youth and Family to recommend that—Mr SPEAKER: Order! I listened very carefully to the question. I listened to the answer. The answer that was given which I think addresses the question was that more resources have been given. The Government is not waiting for the results of the review panel. If the member wishes to ask further questions she is welcome.Māori Television—Minister’s Involvement in Programming Decisions6.Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister for Māori Development: Does he stand by all his statements?Hon TE URUROA FLAVELL (Minister for Māori Development): Tēnā koe Mr Speaker. Kia ora tātou. Āe in the context they were given.Rt Hon Winston Peters: Does his statement “I deny absolutely any involvement in the changing of Hansard” mean that it is a strange coincidence that the Hansard Office with precise audio and video records should change the exact same word in the exact same sentence as he did when he made a personal explanation to the House yesterday?Mr SPEAKER: The Hon Te Ururoa Flavell in as far as he has ministerial responsibility.Hon TE URUROA FLAVELL: I stand by my statements and any issues in respect of Hansard should be referred to the Speaker.Rt Hon Winston Peters: I raise a point of order Mr Speaker. If he is going to put you into the debate that is where we were yesterday and with respect that is not an answer. I am asking him about his involvement not whether you were involved; we will get—Mr SPEAKER: Order! And the answer was given. He denies any involvement. So the answer has been given. Move forward with further supplementary questions.Rt Hon Winston Peters: Yes I will do that.Hon Paula Bennett: Hang your sign up and say no.Rt Hon Winston Peters: No no. He is smarter than you. He can answer better—Mr SPEAKER: Order! Can we just have the supplementary—Rt Hon Winston Peters: You are a bit thick actually.Hon Members: Oh!Rt Hon Winston Peters: Oh yes she is. Did he receive any advice or instruction from the Speaker before—Hon Maggie Barry: That member’s an expert in “thick”.Rt Hon Winston Peters: Oh we know who is the expert now—the “orange roughy”.Mr SPEAKER: Order! At this stage I am not going to rule the question out because I am quite keen for it to be answered but be very careful not to bring the Speaker into this debate. Let us have the question without the interjections coming from any side.Rt Hon Winston Peters: From whom did he receive advice or instruction before question time yesterday telling him to correct his statements in the House as stated by his Māori Party colleague Marama Fox when she said and I quote her: “He had to make the statement to correct the Hansard as per Speaker’s orders.”?Hon TE URUROA FLAVELL: I have no responsibility for my colleague Marama Fox and that issue was dealt with yesterday by my statement to the House.Rt Hon Winston Peters: I raise a point of order Mr Speaker. I asked from whom did he get any advice or instruction and he is not answering the question.Mr SPEAKER: No no. You then brought in a colleague and he referred to that part.Rt Hon Winston Peters: Point of order.Mr SPEAKER: Order! I just want to be clear because I do not want the member complaining about unfair treatment. I have dealt with the matter as to whether that question was answered. If the member has a fresh point of order I am only too happy to hear it but I am not prepared to relitigate the issue as to whether the last supplementary question has been addressed by the Minister.Rt Hon Winston Peters: I raise a point of order Mr Speaker.Mr SPEAKER: I think we have a fresh point of order.Rt Hon Winston Peters: We have a fresh point of order. I recited as evidence Marama Fox’s statement—nothing more than that.Mr SPEAKER: Order! I am going to have to ask the member to leave the Chamber. I just explained to him that I have ruled on that matter. Would the member please resume his seat. I have made a ruling. I said to the member I would not entertain under any circumstances further litigation and the member says “I am raising a fresh point of order.” I interpret that to be repeating and relitigating a decision I have made.Rt Hon Winston Peters: I haven’t got to it.Mr SPEAKER: Well that is the way I interpret it. If it is a fresh point of order and we are moving past the last supplementary question I am happy to hear it. But if when the member rises with a fresh point of order and I interpret it as simply another mechanism of relitigating what has already occurred then I will not hesitate to be asking the member to leave the Chamber for the balance of question time.Rt Hon Winston Peters: Point of order.Mr SPEAKER: A fresh point of order?Rt Hon Winston Peters: It is a fresh point of order. I quoted the statement and I seek leave now because it is in dispute to table it.Mr SPEAKER: Leave is sought—can I just so I am clear before I decide to put the leave can I be clear as to what the leave is that the member is seeking. What does he want to table?Rt Hon Winston Peters: I seek leave to table the evidence of the statement that he had made—Mr SPEAKER: Order! I now need the source and the date.Rt Hon Winston Peters: It is a media—[Interruption] No no. It is a media report of the exact comment and I can go to my office and get it for you now if that is what you want.Mr SPEAKER: Order! I do not need it because as I have told the member on many occasions the tabling of documents is to assist with providing further information. If it is a media report and if members are interested they can go and source it for themselves. So I will not be putting the leave.Marama Fox: Does the Minister have an opinion of how much of his valuable time has been spent defending baseless allegations of the past 2 weeks?Hon TE URUROA FLAVELL: That is a very good question. There is so much to do and there is so little time. I am anxious to get on with the huge amount of work that is ahead of us. It is sad that the Labour Party with other colleagues like the New Zealand First Party takes up too much time on baseless allegations that they have no proof of.Rt Hon Winston Peters: If neither he nor his office attempted to change the Hansard before question time yesterday why when asked—and here is the question: “Why did he change the Hansard before the statement yesterday?”—did his Māori Party colleague Marama Fox not deny the change but answered “He corrected what he meant to say.”?Hon TE URUROA FLAVELL: In respect of the first part of the question that issue was dealt with yesterday. The record was corrected in the House by me.Rt Hon Winston Peters: What on earth did he mean when he said yesterday in this House that one of the things he did discuss with the chief executive of Māori Television was “100 million engagements per week”? What was that about?Hon TE URUROA FLAVELL: As I pointed out in question time yesterday it comes straight from a draft statement of intent for the Māori Television Service for 2015-18 and I am happy to table that in a short space of time.Rt Hon Winston Peters: Can he confirm that Mr Maxwell and he are close friends so close that when Mr Maxwell’s appointment as Chief Executive Officer of Māori Television was being questioned he was the only member of Parliament to put out a press release defending him and when Mr Maxwell was welcomed on to Te Puea Marae he was the one not the Minister in charge standing beside him at that day?Mr SPEAKER: In so far as there is ministerial responsibility the Hon Te Ururoa Flavell.Hon TE URUROA FLAVELL: The good thing about me is I have got many friends. One of my friends once upon a time was that member whom I took on to Moerewa marae to represent the National Party once upon a time. That is the width and the breadth of the friendship that I have. [Interruption]Mr SPEAKER: Order! The House particularly on my right-hand side will now settle.Hon Paula Bennett: He can’t remember.Rt Hon Winston Peters: Is it not a fact—where you are involved you are 100 percent right. Is it not a fact that one of the reasons he saw Mr Maxwell on 20 May was to discuss programme content and panel composition because he could not face a debate with me—[Interruption] That is right; wait for it—and that leaks from Māori Television will confirm that?Hon TE URUROA FLAVELL: I again reiterate that I did not discuss any issues of the content of that programme with the chief executive. That is fact and I put it on record in Parliament. The second part is that on the same day that the request was made my office agreed to be on the panel that was set out so I do not see what the problem is. Move on.Rt Hon Winston Peters: Why does he think he can make denials that are demonstrably untrue such as no discussing of content when the chief executive officer has confirmed it and Māori Television is now leaking like a sieve?Hon TE URUROA FLAVELL: If he has that information I am happy to respond to it but at the moment based on yesterday’s discussion we have confirmation that Māori Television gave a directive some 5 or 6 days after that panel—Ron Mark: And you changed it.Hon TE URUROA FLAVELL: It changed it 5 or 6 days after the event. If there are things—talking about being demonstrably wrong and accusations if there is one person who is doing it it is that member right now.Rt Hon Winston Peters: I raise a point of order Mr Speaker. I seek some guidance from you. If it is right for a member to get up on a question that has been approved by your office to say it was all answered yesterday then that surely cannot be allowed. We are entitled each day to answers to the questions put that day.Mr SPEAKER: Order! I am not sure exactly what the point of order is. The member has asked a very general question—[Interruption] Order! He has asked for some guidance. I am happy to give it to him. He has asked a very general question and then followed with a line of supplementary questions. My duty and responsibility here is to judge each one of those answers as to whether it has addressed the question. I am quite satisfied that in each case it did.Hon TE URUROA FLAVELL: I seek leave of the House to table the draft statement of intent for the Māori Television Service for the years 2015-18.Mr SPEAKER: On the basis that it is a draft and therefore has not been published I will put the leave. Leave is sought to table a draft statement of corporate intent for Māori Television. Is there any objection? There is none. It can be tabled.Document by leave laid on the Table of the House.Tourism Sector—Visitor Numbers and Spending7.SIMON O’CONNOR (National—Tāmaki) to the Minister of Tourism: What reports has he received about the increasing number of tourists visiting New Zealand?Hon PAULA BENNETT (Associate Minister of Tourism) on behalf of theMinister of Tourism: Here is some good news. The tourism sector is in great shape with more people visiting New Zealand than ever before. What is even better is that they are continuing to stay longer and spend more. Recent reports show international visitor numbers were up 7 percent to 2.98 million for the year ending May 2015. That is the highest-ever annual total. Estimated international spend was up 21 percent in the year ending March with good growth across most of our markets including a 61 percent increase in spend from Chinese visitors.Simon O’Connor: How is growth in tourism contributing to our export markets?Hon PAULA BENNETT: Tourism is a major export-earner for New Zealand making up 15 percent of our total exports. In the year ending March tourism exports were worth more than $10.3 billion which is more than our meat exports our wood exports and our oil exports. This is up from $9.8 billion in 2011. Total international tourist spend is expected to reach $11.1 billion by 2021.Simon O’Connor: How is the growth in tourism benefiting the regions?Hon PAULA BENNETT: More good news: tourists are coming not just to the main centres. They are visiting towns and regions which are also benefiting from the growth in numbers. Almost half of the $7 billion spent by international visitors in the year ending March 2014 was spent outside Auckland Wellington and Christchurch. For example international tourism spend in the Otago region has shown a cumulative annual growth rate of 4.7 percent since 2009. The Waikato and Taranaki regions saw estimated total spend from international visitors of $408 million and $57 million respectively for the year ending March 2014.Health Ministry—Climate Change8.KEVIN HAGUE (Green) to the Minister of Health: What has he instructed the Ministry of Health to do to prepare New Zealand’s health services for the impacts of climate change?Hon Dr JONATHAN COLEMAN (Minister of Health): As with any public health issue the ministry is well aware of my expectation that it understands the risks and prepares to respond to any emerging health issues. In respect of climate change the Ministry of Health is taking a wide range of preparatory steps from preparing for extreme weather events to reviewing water safety plans and helping to detect exotic mosquitos.Kevin Hague: Can the Minister then explain why an Official Information Act request to the ministry revealed no correspondence at all between the Minister and the ministry concerning climate change?Hon Dr JONATHAN COLEMAN: Well the point is that the ministry is so well informed having read the 2013 Gluckman report on New Zealand’s changing climate and oceans which noted the possibility of increases in the likelihood of mosquito-borne vectors establishing in New Zealand and increases in the number and severity of extreme weather events that it has taken the initiative and just got on and done it itself.Kevin Hague: Which of the predicted serious health effects on New Zealanders caused by climate change is he most concerned about: water-borne diseases such as giardia and salmonella; tropical diseases such as malaria or dengue fever; or something else? What specific actions has he taken as Minister to avoid those?Hon Dr JONATHAN COLEMAN: I think the things we should be concerned about are things like increasing incidence of diseases like salmonellosis and cryptosporidiosis which in warmer climates do start to increase. But of course the ministry has the expertise to gear up for that. It is doing that. It has also developed a series of environmental health indicators and it is undertaking surveillance to detect and gather evidence on the potential effects. So look we have got a lot of expertise in there. We have got 1150 people and some of them are working on these things that you are very very concerned about.Kevin Hague: Does the Minister agree with Associate Minister of Health Peter Dunne who said in a February 2015 speech that an outbreak of dengue fever in New Zealand brought about by the effects of climate change could conservatively cost $250 million and cause the deaths of one in 100000 people exposed to the disease?Hon Dr JONATHAN COLEMAN: I have not seen those figures but I am sure Mr Dunne was basing them on reputable research. As I said in my substantive answer and subsequent supplementary answer the ministry has been working on mitigating the increased likelihood of mosquito-borne diseases of which dengue fever is one.Kevin Hague: In the face of these serious predicted health consequences of climate change what representation specifically has he made to his Cabinet colleagues to call for at least a 40 percent reduction on 1990 emissions by 2030 as called for for example by the New Zealand College of Public Health Medicine?Hon Dr JONATHAN COLEMAN: I have been so busy dealing with the Southern District Health Board increasing the number of elective surgeries—Hon Annette King: Oh he had nothing to do with that.Hon Dr JONATHAN COLEMAN: —increasing the number of appointments reading these letters that Mrs King is sending me and preparing for the launch of the under-13s free GP visits on 1 July that actually I have not got around to doing that sorry.RON MARK (NZ First): I seek leave of the House to table a series of tweets dated 24 June 2015 between media and Marama Fox one of which says that the Speaker ordered Te Ururoa Flavell to change his Hansard.Mr SPEAKER: I am going to put the leave and the House will decide. Leave is sought to table those series of tweets. Is there any objection? There is objection.United Nations Framework Convention on Climate Change—Government Response and Progress9.Dr MEGAN WOODS (Labour—Wigram) to the Minister for Climate Change Issues: Does he intend to create a low-carbon development strategy or plan as per the 2010 United Nations Framework Convention on Climate Change agreement of which New Zealand is a signatory; if so when?Hon Dr NICK SMITH (Minister for the Environment): on behalf of theMinister for Climate Change Issues: New Zealand’s strategy includes the emissions trading scheme the Global Research Alliance on agricultural emissions our incentives for electric cars our home insulation programme our 90 percent renewable electricity goal and our afforestation grant scheme boosted by $23 million in Budget 2015. This Government favours practical programmes to reduce emissions over idealistic strategies. I note for instance the previous Government’s strategy of New Zealand being carbon-neutral but during 1999 to 2007 net emissions went up by 28 percent.Dr Megan Woods: How does he plan to meet his Government’s target of a 50 percent reduction in greenhouse gas emissions by 2050 with no low-carbon strategy or plan and no plan to create a strategy?Hon Dr NICK SMITH: I am far more interested in actual programmes that will deliver real reductions in emissions than the sorts of idealistic strategies that we had for 9 years when emissions went up in net terms by 28 percent. That is why this Government includes an emissions trading scheme something the previous Government talked about for 9 years but we did—things like the likes of the renewable energy target where we went backwards under the previous Government but are now are up to 80 percent and are on target to reach 90 percent renewable electricity; things like our electric car programme; and things like the work of Jo Goodhew around the afforestation programme. All of those programmes are real and will make a positive difference.Dr Megan Woods: Will he consider the appointment of a depoliticised independent body such as the one in the UK that has responsibility for carbon planning and budgeting and an actual plan of how to meet emission reduction targets?Hon Dr NICK SMITH: I think I have set out a very clear active plan of what this Government is doing around climate change. In my view having some sort of cross-party think scheme was the sort of approach that occurred under the previous Government when emissions grew very rapidly.Joanne Hayes: How does this Government’s actual record on emissions compare with that of the previous Government since the Framework Convention on Climate Change was signed?James Shaw: I raise a point of order Mr Speaker. I understand that that supplementary question is designed to enable the Minister to attack the previous Labour Government and would contravene your ruling the other day.Mr SPEAKER: I do not agree. It is perfectly in order for a current administration to talk about records of a former administration and put that in context. [Interruption] Order! I am on my feet. That has always been the case. The point I know that Mr Shaw is referring to is that when I detect that it is simply an attack question rather than an attempt to balance in terms of current emissions versus earlier emissions I may well intervene. But in this case I do not see any harm in comparing a current record with a previous record.Hon Dr NICK SMITH: Emissions are reported internationally in both net and gross terms. Gross emissions went up 10 percent under the 1990s National Government. They went up by a further 13 percent under the previous Labour Government and they have gone up by 3 percent gross under this Government. Net emissions went up 1 percent during the 1990s National Government. They went up by 28 percent net under the previous Labour Government and net emissions have dropped 11 percent under this Government. These actual emission records show that this Government’s climate policies have been much more successful.Dr Megan Woods: Given his previous answers on his Government’s reliance on the emissions trading scheme and the carbon price does the recent increase in the price of a few dollars outweigh the previous collapse in the carbon price when his Government took office from over $25 to in the 10c; and if success is being measured by the change in the price of carbon does this make the last Minister Nick Smith a failure?Mr SPEAKER: The Minister may answer either of those two supplementary questions.Hon Dr NICK SMITH: The legislation that was first introduced to this Parliament by the member’s colleagues provided for the New Zealand emissions trading scheme to be opened to international units. After the global financial crisis the international carbon price collapsed and that meant under our scheme or your scheme. Then this Government—this Government—took a decision in December 2 years ago to close off the New Zealand scheme to international units and that meant that from 1 January this year the carbon price has lifted from 20c to approximately $7 and that makes the scheme more worthwhile.Dr Megan Woods: How does he plan to meet emission reduction targets when his Associate Minister in an answer to a written question as the Minister of Transport stated that he was unable to answer because he did not know the meaning of the term “emission reduction target”?Hon Dr NICK SMITH: I am sure that will be a misrepresentation of the Minister of Transport who today is taking another positive initiative around transport with the Prime Minister and I would look at his record around the incentives for electric cars that have been introduced by this Government. I would look at the billion dollars that has been invested in terms of the electrification of Auckland rail. I would also look at initiatives like afforestation and other programmes by my colleagues which show that this Government’s climate change policies are far more credible and are actually working.Chief Victims’ Adviser—Expressions of Interest10.JONO NAYLOR (National) to the Minister of Justice: What progress can the Minister report on the role of the Chief Victims Advisor?Hon AMY ADAMS (Minister of Justice): I am pleased to advise that last week I called for expressions of interest for the newly created role of Chief Victims’ Adviser to the Government. The Chief Victims’ Adviser position has been created to provide independent advice to the justice Minister about victims’ experiences in the justice system. They will ensure that the victim’s perspective is at the heart of the advice that I and other Ministers receive in the development of policy affecting the justice sector. This will complement existing lines of advice including victims’ advocacy groups and Government officials and will improve the information that Ministers have available when making decisions on how we can best support victims.Jono Naylor: How does the Minister foresee the Chief Victims’ Adviser operating and what sorts of skills is she looking for in this role?Hon AMY ADAMS: The role of the Chief Victims’ Adviser to the Government has been created initially as a 2-year fixed-term 0.3 fulltime-equivalent role. The adviser will need to be someone with a good understanding of and links to victims’ networks. We are looking for someone who can connect effectively and sensitively with those who have experienced first-hand the trauma that crime creates for victims. They also need to be someone who can take those views and experiences and convey them effectively through the systems of Government at different levels and who can build relationships across the justice sector. The application process is currently open with information on the Ministry of Justice website. Applications close at the end of next week and I would encourage those who think that they can fill this important role to put themselves forward for consideration.Free-trade Agreements—Saudi Arabia Negotiations and Al-Khalaf GroupMr SPEAKER: Question No. 11 the Hon David Parker.Hon DAVID PARKER (Labour): I raise a point of order Mr Speaker. I seek leave to carry my question over to another day given that the Minister who was at the select committee this morning—Mr SPEAKER: Order! The latter part only damages the point of order that is made. Leave has been sought to transfer this question to the next sitting day. Is there any objection? There is. [Interruption] Order! I have called the Hon David Parker.11.Hon DAVID PARKER (Labour) to the Minister of Foreign Affairs: Does he stand by all his answers to written and oral questions regarding the multi-milliondollar payment to the Al-Khalaf Group and the model farm in the desert?Hon PAULA BENNETT (Minister of Local Government) on behalf of theMinister of Foreign Affairs: Yes within the context in which they were given.Hon David Parker: Given that the Minister claims the previously undisclosed $4 million initial payment to Al Khalaf was justified to settle his $20 million to $30 million legal claim did he receive any legal advice from Crown Law or his own ministry as to whether Al Khalaf had any legitimate claim?Hon PAULA BENNETT: It is my understanding that that was a contract for services and I cannot answer the question on legal advice because I do not have it with me.Hon David Parker: I raise a point of order Mr Speaker. [Interruption] My question—Mr SPEAKER: Order! I am just going to call the member. I have been waiting for the noise to settle down on my left. The Hon David Parker a point of order.Hon David Parker: My question is not what the legal advice is; my question is whether he received any legal advice as to whether the claim was legitimate.Mr SPEAKER: And I heard the answer. The answer from the Minister answering on behalf of the Minister was “I cannot answer that.” Further supplementary questions?Hon David Parker: I raise a point of order Mr Speaker. The Minister is answering on behalf of the Minister. She should be in a position to answer that question. It is germane and central to the issue.Mr SPEAKER: Order! The member may hope so but on this occasion as I have said I think last week at a time when another member is answering on behalf of a Minister I would actually prefer that if they do not have the information they are upfront in saying that rather than trying to stumble with a guess that then proves to be inaccurate. If a Minister has come to this question and has not got the answer and says “I have not got that information.” that addresses the question.Hon PAULA BENNETT: I raise a point of order Mr Speaker. I may have an answer here that might help further if that is of interest to the House.Mr SPEAKER: Well I think on that basis the best way forward is that I will invite the Hon David Parker to repeat the question.Hon David Parker: Thank you Mr Speaker. Given that the Minister claims that the previously undisclosed $4 million initial payment to Al Khalaf was justified to settle Mr Khalaf’s $20 million to $30 million legal claim did he the Minister receive legal advice from Crown Law or his own ministry as to whether Al Khalaf had any legitimate claim?Hon PAULA BENNETT: The answer I have here on behalf of the Minister is that I am advised that the Ministry of Foreign Affairs and Trade’s legal division provided advice on issues relating to the food security partnership but I cannot answer further on what the member asked.Hon David Parker: I raise a point of order Mr Speaker. That does not address my question at all.Mr SPEAKER: Order! No. It does not answer the question to the member’s satisfaction—that is accepted—but it certainly addresses the question.Hon David Parker: I raise a point of order Mr Speaker.Mr SPEAKER: No. I am going to give the member—[Interruption] Order! The member will resume his seat. I have ruled quite categorically that that question has been addressed. Taking further points of order relitigating that leads to disorder. It means that I have to deal with that far more substantially. If the member has further supplementary questions he is welcome to raise them or equally [Interruption]—I had not quite finished—if the member wants to raise fresh points of order that are genuinely fresh points of order that is also acceptable.Hon David Parker: Is it not the real reason that the Minister has refused to answer oral questions written questions and select committee questions on this very issue that he never got that legal advice but to concede it amounts to an admission that he misled his Cabinet colleagues?Hon PAULA BENNETT: I refute all of the question from the member.Hon David Parker: Is the reason the Minister is now talking about general trade risks rather than Mr Al Khalaf’s legal claim that in truth these payments were to advance the free-trade agreement and trading with Saudi Arabia?Hon PAULA BENNETT: Certainly the truth that I have seen is a mess that was left by Labour which this Government has had to pick up and actually fix so that we are in a position where we can discuss trade with that partner.Hon David Parker: Is it not the real reason that he continues to pretend the $4 million payment to Al Khalaf was to settle the non-existent legal claim because otherwise it is even more obvious that the multimillion-dollar payment was a facilitation payment which in other jurisdictions is called a bribe?Hon PAULA BENNETT: The assertions from the member are wrong and incorrect. What the Minister of Foreign Affairs has done is exactly what this country would expect of him which is to step up in the best interests of New Zealand and actually fix a mistake that was put in place by a previous Government.Hon David Parker: Was the Minister surprised that the select committee chair this morning allowed him to make his self-justifying pre-written assertions about his past conduct and then ruled Opposition questions about the past out of order and blocked Opposition members getting to the bottom of this matter?Mr SPEAKER: Order! That is a very marginal question. The essence of it is was the Minister surprised by such alleged action? I will allow the Minister to address that.Hon David Parker: I raise a point of order Mr Speaker. You seem to be casting aspersions on my question—Mr SPEAKER: Order! I am very inclined to deal with it in the way that I have the option of doing. That was a question that was not according to the Standing Orders. It was full of allegation imputation etc. throughout that question. I decided to be generous to the member and allow the Minister to address it and we should continue with that but if that is going to be an issue I would not have much hesitation of ruling it out in the first place.Hon David Parker: I raise a point of order Mr Speaker. You obviously were not at the select committee because there was nothing in my question that is contentious.Mr SPEAKER: Order! I was definitely not at the select committee. [Interruption] Order! Now I will invite the Minister to complete the answer.Hon PAULA BENNETT: Thank you Mr Speaker. I am seldom surprised these days at the inane questions that come from the Opposition whether it be in a select committee or in this House.Financial Services—Legislative Review12.TODD BARCLAY (National—Clutha-Southland) to the Minister of Commerce and Consumer Affairs: What steps is the Government taking to improve financial advice laws?Hon PAUL GOLDSMITH (Minister of Commerce and Consumer Affairs): The Government is reviewing the laws that regulate financial advisers and how they give advice to ensure that they are working well for New Zealanders. We want to make sure that New Zealanders can access good quality financial advice that is tailored to their needs and it is time to take stock and identify where our laws can do better. This review is aimed at identifying opportunities to limit complexity to balance regulation against benefits and to ensure that appropriate levels of consumer protection are in place. The Ministry of Business Innovation and Employment is currently consulting on an issues paper that will inform this review.Todd Barclay: What questions does the issues paper address?Hon PAUL GOLDSMITH: The issues paper asks a number of key questions such as whether people feel they have access to good quality financial advice and whether they understand how advisers are regulated. Also we want to find out whether the complexity of the regulations has prevented people from considering advice and whether compliance costs have made advice less accessible. We encourage all those with an interest in this issue to get involved in this process and to have their say. It is important that we understand the industry’s perspective and the needs and expectations of consumers when seeking financial advice. Consultation on the issues paper closes on 22 July after which an options paper will be produced for public release.Taxation (Land Information and Offshore Persons Information) BillFirst ReadingHon LOUISE UPSTON (Minister for Land Information): I move That the Taxation (Land Information and Offshore Persons Information) Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill. At the appropriate time I intend to move that the bill be reported to the House by Monday 17 August 2015 and that the committee have 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 191 and 194(1)(b) and (c).This bill will authorise some of the measures announced in Budget 2015. The package of measures will ensure that people buying and selling residential property for profit including overseas buyers and short-term speculators pay their fair share of tax. It will not unfairly impact on New Zealand owner-occupiers who have worked hard to buy their family home but it will help enforce the perfectly reasonable and fair expectation that anyone who has obligations to pay tax in relation to their property should pay that tax. That is in fact the current tax law and it applies equally to New Zealanders and overseas buyers. However this law has been difficult to enforce and that is what we are here to change.This Government is committed to ensuring fairness by pursuing those attempting to avoid paying tax. This bill will give the Inland Revenue Department the information it needs to enforce the rules. From 1 October all offshore investors and New Zealand residents buying or selling property that is not their main home must provide a New Zealand IRD number as part of the land registration process. If a person is resident for tax purposes in another jurisdiction they will also have to provide the tax identification number or TIN issued to them by that country. This will help the Inland Revenue Department identify people who are trading property for the purposes of making gains in the New Zealand market and it will allow us to provide information to overseas tax authorities in line with existing New Zealand legislation ensuring taxpayers’ compliance with tax obligations both in New Zealand and overseas.Under this legislation conveyancers will collect tax information from purchasers and vendors of property as part of the conveyancing processes prescribed by the Land Transfer Act 1952. Property vendors and purchasers will be required to provide their IRD number and if applicable the equivalent overseas IRD number and in doing so prepare and sign a statement affirming that the information they have given is correct. Conveyancers will be required to provide this declared tax information before certifying the property transfer. Conveyancers will not be required to certify the accuracy of the information provided. The onus will be on the purchasers and vendors to provide accurate information.Although those buying or selling their main home are exempt from the tax information requirement the legislation will require trustees to provide the trust’s IRD number. People have a choice regarding whether they hold property through a trust and we think it is preferable from a simplicity and integrity perspective that trusts always provide an IRD number. All of this tax information will go to Land Information New Zealand or LINZ which in turn will provide the information to the Inland Revenue Department. Tax information provided to Land Information New Zealand is personal information. It will not form part of the land transfer register administered by Land Information New Zealand and individual taxpayer information will not be publicly available.However the bill does make provision for the publication by Land Information New Zealand of aggregated information relating to the tax residency of persons undertaking property transactions—for example statistics describing the relative number of transactions by persons who are tax resident in other countries compared with those who are not. This will not be the same as a register of foreign ownership because there are many New Zealand citizens who are tax residents of other countries but they are not foreigners. But the collated tax residency information will provide a useful additional layer of information to inform debate about property ownership in New Zealand.We are serious about these measures and for those who knowingly supply false or misleading tax information there will be stiff penalties. Under the bill it is an offence to intentionally provide false or misleading tax information. Any person convicted of this will be liable for a fine not exceeding $25000 for a first-time offence or $50000 for subsequent offences. Regulations will be made to describe land transfers and parties that are exempt from providing tax information in addition to the main home tax exemption. Such exemptions will be made only where the requirement to comply is impractical or involves high compliance costs or where there is a low risk of tax avoidance.Here is another key point: this legislation will mean that before being issued an IRD number offshore persons will need to have a New Zealand bank account. This means that any offshore person looking to obtain an IRD number will first be subject to New Zealand’s anti - money-laundering rules. To prevent offshore individuals from circumventing the rules by using a New Zealand company or trust the offshore person definition also includes look-through rules from the Overseas Investment Act to treatas offshore New Zealand trusts or companies that are owned or controlled 25 percent or more by offshore individuals. The bill also obliges a person other than an individual to provide a bank account number in the event that they become an overseas person at a later date. That prevents a situation whereby for example shares in a New Zealand company with an IRD number are sold to an offshore person to avoid the application of the rule.This Government is committed to ensuring fairness by pursuing those attempting to avoid paying tax. The public will have an opportunity to comment on the legislation through the select committee process. However in order to have this regime in operation by 1 October a shorter than usual select committee time frame is necessary.In particular it is imperative that we align the implementation of these measures with the brightline test announced by the Government in Budget 2015. The brightline test will require income tax to be paid if a residential property other than the seller’s main home is bought or sold within 2 years. The brightline test will apply to properties bought on or after 1 October. The early report-back date will ensure that we can have in place the regulations that are necessary to support this legislation by 1 October. As I mentioned a moment ago these regulations will describe land transfers and parties that are exempt from providing tax information in addition to the main home exemption.The measures being introduced by this bill will assist with the enforcement of tax compliance rules without unfairly impacting investors buying with a long-term view of renting their property to tenants or New Zealand owner-occupiers who have worked hard to buy their family home. I commend the bill to the House.Hon CLAYTON COSGROVE (Labour): I will say from the outset that the Labour Party will support this bill to the select committee. But could I just point out that if there was ever an example of a Government dragged kicking and screaming to the point of reality where it had to do something—no sorry not do something but be seen to do something—in respect of corralling property speculation this is it. The truth about this is that this is a total rush job. I will provide a bit of evidence of that. The first is that the Minister Louise Upston who is putting forward this bill was not involved in any of the actual policy development. How do we know that? Because she was not told until 28 April which is when she said she was told about this proposal verbally and it was announced on 17 May. We know this because she said that in answer to a parliamentary question. The question read: “Was she”—that is the Minister—“made aware prior to its announcement that the Government was going to implement new IRD number requirements for non-resident purchasers of New Zealand homes if so on what date and how was she informed?”. The answer: “I was informed of the proposals verbally on 28 April 2015.” This was a hash job and I have got to say that I do feel a bit sorry for the Minister Louise Upston. It is sort of the Nick Smith effect. You know there is somebody else who is carted in—even Todd McClay; same deal—to be the person with the shovel following the elephant trying to clean the mess up.The second evidence of a hash job and a rush job is if you look at the regulatory impact statements. The Inland Revenue Department says it was unable to estimate compliance costs or consult with potentially affected parties because of “time constraints”—that is this Government has done nothing about an overseas buyer register for years and now panics at the last minute because it has got to be seen to be doing something because of the sustained pressure provided by the community and this Opposition to alert these people to the housing crisis that exists and the speculatory impact in relation to that housing crisis. The feet of the Government members are finally put to the fire so what do they do? They rush this out—they rush it out. We will support it to the select committee because we have maintained that there should be—for instance dealing with the overseas buyer issue—a register of overseas buyers. But we want to make sure it is real and it is effective.But of course the Minister gets up and perpetuates the myth in respect of what is a register. You know it looks like a register it sounds like a register and smells like a register; therefore it is a register. But she perpetuates a myth of course that was first kicked off in the select committee last week by the Minister of Revenue. He said that this is not a register. He said: “It is a collection of information.” So it is not a register; it is a collection of information. I suppose if we look at the Oxford Dictionary we could call it a database we could call it a record we could call it an inventory—we could call it anything you like. But I have got to say that the average Joe out on the street who is an intelligent human being as they are will see it for what it is—it is a register. I just say to the Minister: look give up. Why have this paltry argument? For years the Government has said it was too expensive. In fact it was Nick Smith the fiasco Minister the “Minister of Fiascos” who said that a register would be a “distraction”. Well let us call it a collection of data. He said that a collection of data might be a distraction that would cost “mega-millions” without doing a thing to tackle housing inflation.He went on in his own inimitable and stable way to say the following: “This is just about politics. It would be a waste of public money when we would be trying to work out whether it was 1.2 percent or 1.4 percent.” Then we have the Prime Minister who said: “We are not hostile to the idea of a register. We just don’t think it takes you very far.” So calling it a register or collection of information or something else—I mean Minister fair go. I know that you have been dropped in it. I know that you were told at the last minute that this was going to happen. They said: “Louise step up to the plate. We need you to take one for the team. We need you to take a hit.” I feel sorry for the Minister because this is becoming a pattern for Todd McClay for Peter Dunne for the whole Government for Nick Smith—including the people of New Zealand. But let us call it what it is. I am pleased that Government members finally have had the road to Damascus experience trying to dress it up as their own idea and they are actually going to monitor and have a register of foreign buyers so we can ascertain some evidence around this even though it denied that.The Inland Revenue Department makes another series of interesting recommendations—and I will be interested in how the select committee deals with this. For instance it recommended to the Government that it not exempt main homes from the register—that is the “register”—because it would not reduce compliance costs for purchasers of a main home as almost all would have a New Zealand Inland Revenue Department number anyway. So for example a person could buy a main home and then a few months later make it not into their main home but the Inland Revenue Department number has no way of tracking this. So I will be interested in the select committee process to actually tease that out. The bill says that a person selling their third main home in a 2-year period would have to provide an Inland Revenue Department number on sale. But that is going to be very hard to police if the number is not collected at each sale of the main home I would have thought.I am sure Chris Bishop who is a pretty intelligent bloke and sits on Finance and Expenditure Committee will be able to get up and rebut all of the points I have made and provide an answer to a pretty practical question which that is. But that provides again evidence of a bill that has been rushed that has not been thought out and that has just been hashed together because the Government has to be seen to do something.It is interesting that the Minister talks about the brightline test and a 2-year hold on property. Well if you have a look in Auckland the number of those who sell property inside the 2-year bracket equates to 15 percent if you have a look at the publicly available figures. What the Government has done with this is somehow proposed to the New Zealand people or built up the perception that if you do not get in by 1 October the brightline test of course comes into play but then after the brightline test 2 years and 1 day the perception is that it is all free and it is all dandy when the reality is that the basic intent test—the intent test for instance that has existed since time immemorial—will kick in after that 2-year period.I ask the Minister a couple of quick questions. If a person buys after 1 October and says to their lawyer: “Well we want to buy a second property in Queenstown. Why? Because at some stage in the future I might move from Auckland to Queenstown and get a job or retire there or my partner might want to go there and move town.” Then in 2 years and 1 day they sell the property and the Inland Revenue Department comes and knocks on the door balaclava-clad. It is going to knock on every door of people in the country with thermal imaging equipment or whatever. It is going to knock on every door and say: “You sold that. What was your intent?”. The seller says: “Well my intent was to move down there.” The Inland Revenue Department says: “Well you haven’t moved down there. OK. Why?”. The seller says: “The wife changed her mind.” or “The husband his mind.” What is the Inland Revenue Department going to do then? It is going to take every New Zealander to court to try to prove that their intent was otherwise?Alastair Scott: No they’re not. Read the legislation.Hon CLAYTON COSGROVE: I would argue basically having talked to some tax experts—not the vintner at the back—that you could actually shoot peas through the Government’s proposed brightline test and its 2-year hold. Coming back to this particular bill we will support it to the select committee. We actually want to see the detail. We congratulate the Government on finally—finally—actually admitting that there is a need for an overseas register. We think there are a number of holes in terms of the overseas register and the domestic requirement and we do have sympathy for the Minister who is proposing this given she was told a week or so beforehand. She has been told to come down here take the hit and argue that a register is not a register; it is a collection an inventory or a set of data. My advice to Louise Upston is to raise the white flag and let us get on with trying to produce a decent bill out of this rushed and hashed sort of cosmetic performance that the Government has put on for us today.DAVID BENNETT (National—Hamilton East): It is great to follow from that bush lawyer Clayton Cosgrove who tells us everything about the taxation system which we had no idea of! I just want to go back to a moment in Labour’s history. There is a moment in Labour’s history that everybody should be aware of when they look at this debate and this is a moment from last year actually—18 November. It is a very very important date for the Labour Party.I just want to read a couple of quotes. The first quote is: “I’ve made a judgment that the superannuation policy and the capital gains tax policy have been problems for us and are two reasons why a lot of people have not voted for us and therefore we need to review them.” That is the first quote. The second quote from the same person is: “We will have a review process. We will go through that. I will argue my case in the forums of the party but my firm view”—that is his firm view—“is that we should not go into the 2017 election with those policies on our slate.”That was Andrew Little on 18 November. That is why the Labour Party does not know what to do with this bill—because the Labour Party members previously had been talking about taxing property. They wanted taxes on all kinds of properties for anything and everything and now when it comes to actually looking at doing some constructive legislation in this area they do not want to be part of it because Andrew Little has pulled away from that. They know that Andrew Little does not want this legislation and so the Labour Party is trying to get out of it. This legislation is actually really good for New Zealanders. It is good for the tax system and will provide more information—Hon Clayton Cosgrove: I raise a point of order Mr Speaker. It is a simple matter of information. We did say we are supporting the bill. The member may want to listen to us.Mr DEPUTY SPEAKER: It is not a point of order.DAVID BENNETT: That is the bush lawyer’s attempt at being funny but about all he can do is raise points of order because that is all he knows. It is a great thing when you get the Labour Party members having to raise points of order because that shows that they do not understand what is going on. They have to resort to points of order to try to get their message through.This bill is actually quite good for our tax system. It brings in two of the Budget property tax proposals that will come into effect. The first is that buyers and sellers of property will be required to provide their IRD numbers at the time of the property transfer. That means that those who are tax residents in another country will also have to provide a tax identification number from their home jurisdiction and there will be an exemption for New Zealand residents’ main home. That basically covers most New Zealand purchasers who will be purchasing their main home but if you have got subsequent purchases or if you are an international purchaser you will have to provide some form of identification whether that is a New Zealand IRD number or a tax identification number from the home jurisdiction.The second thing that this bill does is ensure that our anti - money-laundering rules apply. We will require overseas people to have a New Zealand bank account to get a New Zealand IRD number. This will also apply to New Zealanders who have been out of the country for 3 or more years. So effectively this is an attempt to get that money to go through get transferred through a New Zealand bank so there is a record there. That will enable us to be able to delve more deeply into the source of that money should there be any issues around money-laundering.Further legislative changes are also in the pipeline and the Government is to soon release a public consultation document seeking views on the introduction of a brightline test on 1 October this year. Under this new test gains from residential properties sold within 2 years of the purchase will be taxed. Unlike what the previous speaker Clayton Cosgrove said there will be people who will try to gain from any tax system as you would expect but there is a set rule—Phil Twyford: That member knows all about that.DAVID BENNETT: —and that 2 years is the set rule. What did you say?Phil Twyford: That member knows all about that.DAVID BENNETT: No I do not know all about that and that member better watch what he says because that member would have no idea about the tax system either. This is the member who actually is Labour’s housing policy spokesperson. Why did he not lead off this debate? [Interruption] If housing is so important to the Labour Party why are you not leading off this debate? This member would have no idea of housing and so I would like to see him in this debate come out with the Andrew Little policy around housing as well. That would be lovely to see.Mr DEPUTY SPEAKER: Let us get back to the bill.DAVID BENNETT: Yes. Under this new test gains from residential properties sold within 2 years of purchase will be taxed unless the property is the seller’s main home as we talked about before—that is the main exemption for New Zealanders; if it is their main home they will not be taxed or of it is inherited from a deceased’s estate or is transferred as part of a relationship property settlement. So that covers the examples where there may be inherited property or there was a relationship breakdown.Most people in New Zealand do the right thing—they pay their tax. This legislation will not have any impact on them because there is already a test out there in our tax system around the intention of purchase. If you intend to purchase and sell within 10 years then that is taxable. That is something that has been around forever and a day. Many New Zealanders pay their tax under that system quite conveniently and they do it without any pressure. There are some whom the Inland Revenue Department has to pressure to do so and it investigates them but this bill will give a very sensible rule a very open and just rule so that people know that if you buy or sell within 2 years then you can look forward to being under the tax system. That is what you would expect because if you had a long-term purchase intention—Iain Lees-Galloway: Two years and 1 day isn’t that long to wait.DAVID BENNETT: Two years is what?Iain Lees-Galloway: Two years and 1 day isn’t that long to wait.DAVID BENNETT: Two years and 1 day—so that is the Labour Party trying to game the system. That is what it does. It will try to game the system. But for anything under 2 years you would expect to pay the tax because your intention would not necessarily have been to hold that property long term and that is no different from the current system now whereas if you have an intention to sell then you would be taxable within 10 years. So this just puts into the market a time frame that makes it very obvious that if you buy or sell within 10 years then you are within the legislation and therefore are more likely to be treated as taxable.The tighter tax rules are also expected to take some of the heat out of the Auckland market. We hear stories constantly about people buying and selling properties in very short periods of time to make exponential profits.Phil Twyford: It’s called a housing crisis. I have yet to hear those words tumble from the member’s mouth.DAVID BENNETT: The member who could not actually do the first speech for the Labour Party is interrupting again. It would be great to see that member do a speech and actually say what he thinks rather than what the other members are telling him to say.This bill includes those two measures that we have already talked about which will help the Inland Revenue Department enforce tax obligations. When the property is transferred the Inland Revenue Department number will be collected by conveyancers provided to Land Information New Zealand as part of the conveyancing process and then forwarded on to the Inland Revenue Department. As part of that process the conveyancing of any property there will be that transfer of information so that the Inland Revenue Department has the information to then record it. People who are tax residents overseas will also be required to provide that.When we look at offshore persons as defined in the bill they need a New Zealand bank account before getting an Inland Revenue Department number. That is important as we want to make sure there is no tax evasion and as it is a predicative offence for money-laundering we have got to be careful that we have rules around that so that we can give the enforcement agencies the most strength that they will need to enforce the rules around money-laundering. That will bolster the effectiveness of both the tax system and also the anti - money-laundering regime.This bill is an important part of an approach to taxation in New Zealand. It is not a great change from the system that already exists in the sense that if you buy or sell a property within 10 years and your intention was to sell then you are taxable. This provides a test that is easy and convenient and it is something that all purchasers will be well aware of. If you buy or sell within 2 years then you will automatically be considered to have the intention of resale basically and therefore that would be taxable.The test itself when it comes out in October will be interesting in terms of how it will be done. There are always opportunities within the tax system where people try to take advantage of it but a set date of 2 years gives guidance to New Zealanders that buying or selling within that period of time will inflict some taxation. It also creates the information that we will have on overseas purchasers and it will help to counter any money-laundering. So this is an important piece of legislation. It is contrary to Labour Party policy. Labour is supporting it only as far as its referral to the select committee. We look forward to Labour members having a moment of change of heart and actually supporting it all the way through the House. Thank you.PHIL TWYFORD (Labour—Te Atatū): It is always a pleasure to follow the member David Bennett. He is a man whose rhetorical skills allow him to make even a taxation bill coma-inducing. I want if I could to begin by just putting on to the record some words of welcome to the eight members of the Myanmar Young Leaders Programme who are in the gallery today and will be around Parliament for a couple of days this week. They are eight young leaders who have come from various backgrounds in Myanmar who are in New Zealand for a 6-month period learning about our democracy and our system of government. Many members around the House today have interacted with them and spent time with them. So I want to welcome those visitors and say how pleased we are to have them here in the New Zealand Parliament.The Taxation (Land Information and Offshore Persons Information) Bill applies the 2-year so-called brightline test that the Government announced as one of its two Budget housing policies. What it does is it requires anybody who buys and sells a residential property within a 2-year period to pay income tax on it. Furthermore it requires all purchasers of residential property including offshore speculators to provide the Inland Revenue Department with a New Zealand bank account and to register with the department and get an IRD number. I think it is a curious thing for a Government that has spent the last few years denying denying denying—first that speculators are even a problem in the Auckland housing market and secondly that offshore speculators are even worth gathering information on.I have lost count of the number of times I have stood in this House and heard the housing Minister Nick Smith get up and say: “Oh it’s the oldest trick in the book—the oldest trick in the book—to blame the foreigner.” I cannot count the number of times Nick Smith has said that in rubbishing the views of 85 percent—according to the most recent opinion survey—of New Zealanders who think that offshore speculators should not be allowed to buy residential property in New Zealand because they are driving up house prices out of the reach of ordinary New Zealanders. This Government has been in denial complete denial that it is even a problem. Government members have stood here in this House and accused us on the Opposition benches of xenophobia because we have had the audacity to suggest that offshore speculators should not be allowed to buy and sell New Zealand homes for capital gain and make a profit—make a killing—at the expense of young hard-working Kiwi first-home buyers.It has been very clear not only to us but to the rest of New Zealand that this National Government stands fairly and squarely on the side of speculators both domestic and foreign. It does not stand on the side of hard-working young Kiwi first-home buyers. We have heard the most incredibly litany of excuses Mr Deputy Speaker. I agree—it is funny. I cannot believe the Government policy. I share your mirth.Mr DEPUTY SPEAKER: Do not bring me into the debate Mr Twyford.PHIL TWYFORD: All right—thank you Mr Deputy Speaker. I will not. We have heard Nick Smith say that a register would be a distraction that would cost mega-millions without doing a thing to tackle house price inflation. And yet as my colleague Clayton Cosgrove points out the requirement for offshore speculators to register with the Inland Revenue Department and provide a bank account is as the Minister himself has conceded all about gathering information. What is that if not a register? The Minister of Finance is on the record saying that the point of this policy is to gather information. After Government members had rubbished the idea for 2 years and had said consistently in this Parliament that foreign speculators are not a problem we got this very curious backflip in the Budget with the announcement of this policy and this bill.So why I hear members ask did the Government do such a backflip? Well it is a very consistent pattern that we have seen time and time again from this Government. It denies and denies and denies it is a problem until the polls get to a certain point and Steven Joyce says to Cabinet: “Look we better do something about this. The overnight groups are pretty worrying on this. Clearly we’re losing support in Auckland.” In fact we know that 85 percent according to the most recent poll—the most recent poll says that 85 percent—of New Zealanders want to see foreign buyers banned from buying housing in New Zealand. So deny deny deny the polls get to a certain point and then the Government does a little backflip but it is just the bare minimum to make it look as if it is doing something—just the bare minimum.Denis O’Rourke: Not even that.PHIL TWYFORD: No not even the bare minimum. How would you describe it?Denis O’Rourke: I would say it was utterly inadequate.PHIL TWYFORD: Well it is. It is completely inadequate. In fact the Government’s own senior tax adviser John Shewan was in the paper a couple of days after this policy was announced saying it would not do a thing to deter speculators and it would not have any impact at all on Auckland house prices—Todd Barclay: I’d believe him over Denis O’Rourke.PHIL TWYFORD: —which by the way Mr Barclay went up $115000 in the last 12 months on your Government’s watch. That is $115000. The average Auckland house price is now in the region of $830000. Under this Government the dream of affordable homeownership has completely gone down the gurgler. It is gone. It is a “gone-burger”.So the question is—as inadequate as this bill is as hopeless as it is—whether this bill will make a difference. After all we are voting for it so it is a fair question to ask whether it will make a difference whether it will have any impact. I have already quoted John Shewan one of the most senior tax advisers whom the Government usually listens to saying that it will not have much impact. Based on Treasury analysis from the last 3 years our modelling shows that at best the so-called 2-year brightline test will capture about 1000 speculators. It will pull 1000 speculators into the Inland Revenue Department’s dragnet. The same modelling suggests that it might bring in $18 million—$18 million—in extra revenue. That is pathetic given the tens of thousands of houses that are sold every year in Auckland. It is a tiny fraction. So I think you have to conclude that it will not do much but it is better than nothing—but not by much. It is better than nothing but not by much. On those grounds we will support it because at least it is something.Why does this matter? Why is it an important issue? Why do 85 percent of New Zealanders think that this is a problem and that the Government should regulate to ban offshore speculators? The reason is that the Auckland housing market under this Government has been allowed to get completely out of control. The other day I learnt about a house in Massey in west Auckland that was bought 4 months ago for $385000. The purchaser slapped a coat of paint on that house and sold it 4 months later for $588000. That is what is happening every day in the Auckland housing market. The census data showed there were 22000 houses vacant on census night. If you take out the houses that were in between tenants if you take out the houses that were in the process of being bought and sold on that night that would mean that there were about 15000 to 16000 houses vacant. These are what Aucklanders call “ghost houses”. I am not talking about Nick Smith’s ghost housing policy; I am talking about ghost houses that are lying vacant in Auckland because the speculators many of them offshore simply cannot be bothered renting them out to tenants because they are making such a killing under this National Government just by sitting on those houses for capital gain. That is how bad it has got in Auckland.I want to point to a story that appeared in the New Zealand Herald this week reported on by Anne Gibson. The pre-eminent international Chinese website Juwai.com markets international real estate in countries like New Zealand to Chinese investors. Juwai.com reported that based on the Chinese Government’s progressive dismantling of foreign exchange controls which is something the Chinese Government is committed to doing—has already begun and is committed to doing over the next 10 years—it predicted that $15 billion of Chinese investment will be heading the way of the New Zealand real estate market over the next few years. New Zealand is set to get more than 3 percent of all the Chinese investment. There is a tsunami of Chinese investment coming into the Auckland real estate market. This Government is in denial. This measure will not make the slightest bit of difference but we will vote for it going to the select committee because at least it is a tiny step in the right direction.JAMI-LEE ROSS (National—Botany): If Phil Twyford thinks that a speech like that is going to help him fill the deputy leader’s spot in the Labour Party I would suggest he actually does a Next Magazine NZ photoshoot in black and white polka dots because he would probably have more chance of getting there if he does that.I am happy to stand on behalf of the Government as a National member of Parliament to support this bill because it sits alongside a whole suite of measures that this Government has to try to tackle housing affordability and assist New Zealanders to get into their first home. The Opposition is trying to make big speeches about this bill and say that it will do nothing and that it is not going to help Aucklanders get into homes or help New Zealanders get into homes at all. The fact of the matter is that this is part of a large number of changes. In fact it is not a new tax that the Government is considering. It is in fact an enforcement and a clarification of existing tax rules. This bill allows the Inland Revenue Department and Land Information New Zealand to provide greater clarification and to enforce in a much better way the existing tax rules that are in place. When Opposition members want to stand up and say that this bill will do nothing—one they are false; and two when they do look at this bill they must look at it in the context of all of the housing changes this Government has been making and will continue to make to make housing more affordable for New Zealanders. I have to say that whenever I listen to speeches from the Labour Party about housing I am left wondering what they actually stand for. Does the Labour Party actually ever offer any policy? Does the Labour Party actually ever offer any solutions to those who are looking to buy their first homes or to those who are looking to see housing become more affordable in Auckland?On Tuesday night next week I am going to be very proud to stand alongside Nick Smith in my electorate when he talks to first-home buyers about initiatives this Government has under way to support first-home buyers and help them get into houses. I would like to hear Phil Twyford actually offer solutions. I would like to hear Clayton Cosgrove do something other than his grumpy old man routine and actually talk about solutions for New Zealanders. The only solution we have heard from the Labour Party was to build 100000 houses at a cost of $300000 a house when the cost of buying a section in Auckland is more than the cost of the house it was proposing to sell to people. Labour also likes to attack the Government on our plans to open up Crown land for housing development in Auckland. But if Labour members felt they could identify and build 100000 houses in 10 years how were they expecting to do it? They cannot stand on the one point and say that they oppose the Government opening up Crown land for housing but at the same time say that they were going to offer and build 100000 houses themselves. It simply does not add up.I am glad that the Opposition is supporting this bill. It should support this bill because New Zealanders do want to see greater clarification around the existing tax rules. I have to say though that when Opposition members say that we have done nothing to try and tax speculators they are again wrong because in Budget 2010 the Government allocated $33 million to the enforcement of the existing tax rules around property. That $33 million investment in greater enforcement has actually led to a quarter of a billion dollars in additional tax coming in and off the back of that the Government has also allocated a further $30 million in Budget 2015. So absolutely we believe that those who are property speculators and are not complying with their tax obligations should be targeted. That is exactly what we are doing. Alongside the enforcement measures that we are taking we are also making it easier for New Zealanders to understand the rules and ensure that they are complying with them. The brightline test of 2 years which will enable New Zealanders to know exactly when they are trading property within that 2-year period will help them ensure that they comply with their tax obligations. This bill which provides the ability and also requirements on top for New Zealanders to provide better information is important.I would like to say to Mr Phil Twyford that there is something I do want to stand alongside with Nick Smith and also support and that is the fact that Phil Twyford is actually xenophobic when he goes out into Auckland and whips up the anti-foreign sentiment. He did not like the Minister talking about him and his views as being xenophobic but he should not be ashamed to be called xenophobic because that is what he actually has been doing. Labour members would rather go out into Auckland and go and harass my constituents—harass my constituents—who just want to go about their own business and buy and sell properties. Labour wants to target those people. That member wants to harass anyone who does not look like him and say that they should not be purchasing properties. When he does go out to the media and he does go out and talk to Aucklanders and tries to whip up the anti-foreigner sentiment he forgets that New Zealand and Auckland is such a multicultural place. The reason why he is doing this is that it is cheap politics. He has got nothing else to talk about—The ASSISTANT SPEAKER (Lindsay Tisch): Come back to the bill.JAMI-LEE ROSS: Labour should actually be supporting the initiatives we have got under way.This policy change and this bill will actually help us to ensure that we can enforce our current tax measures and that we can ensure that those who wish to property speculate—there is greater enforcement around it. It stands alongside our special housing area policies which are leading to tens of thousands of houses being built in New Zealand. It stands alongside the HomeStart scheme which is seeing 90000 New Zealanders being able to get and access a deposit to be able to afford their first homes. It stands alongside our scheme such as opening up Crown land to develop on and it stands alongside schemes such as those that we have in Tāmaki to build 7500 houses on properties that currently have 2500 houses.We are a Government that is doing what is necessary to help New Zealanders get into their first homes. House prices doubled under Labour in the time it was in office. Labour members cannot claim to be holier than thou and say they have all the answers when their track record is so poor. New Zealanders know that we are working on this issue and we are tackling it. New Zealanders know that housingwill over time become more affordable for them. We are standing behind first-home buyers. We are working to assist them.Dr RUSSEL NORMAN (Green): I rise on behalf of the Green Party to speak on the Taxation (Land Information and Offshore Persons Information) Bill. The Green Party will be supporting this bill as weak as it is because it is a very very small step in the right direction. The problem that this bill and a number of other Government policies are attempting to grapple with is what is going on in the housing market but in particular what is going on in the Auckland housing market. So I think it is important to get a few facts on the table about what has happened in the housing market.In terms of median house prices in Auckland in 1999 when the previous Labour Government came to office the median house price in Auckland was $230000. When it left in 2008 basically it was about $450000. So it is certainly true that there was a very significant increase in house prices during that period—about $220000 or nearly a doubling. It was a very significant problem and the Greens spoke out about it at the time and the key problems around it. However what we have seen since then is that although prices stayed flat for a little bit they have since accelerated dramatically from $450000—the Auckland median house price when this Government into office—to now about $750000.So what we saw under the Labour Government was an increase in the median house price of about $220000 and what we have seen under National is an increase in the Auckland median house price of about $300000. It is a dramatic change in housing affordability in New Zealand because of course salaries have not increased to keep up with those kinds of increasesby any stretch of the imagination. But perhaps just as significantly in the last year we have seen a $125000 increase in the median house price in Auckland. I mean that is a dramatic change. A $125000 increase in the median price for a house in Auckland in 1 year is an incredible change; it is about a 20 percent increase. This is a housing market that is completely out of control. This is a market that is completely on fire and it is a danger to our economy and it is a danger to our society.The reason why it is such a problem is that it is driving up the price of housing whether you are buying house or whether you are renting. If you are not facing the full increase yet in the cost of your rental you will in time or people will in time face the increase in their rentals. Rents are already going up but they are going to go up further because of the big increase in prices. It also means that people are spending more money on housing whether it is on rent or whether it is on a mortgage. They are having to spend more money on housing and they have less money for all the other things that are expensive.It is driving financial instability. The Reserve Bank has identified as have the OECD and others what is going on in the completely insane Auckland housing market as one of the key reasons for concern in terms of financial instability in New Zealand at the moment. Of course it is keeping interest rates higher than they need to be because the Reserve Bank is worried that if they drop the OCR—the official cash rate—it will fuel the insane fire that is going on in Auckland in terms of housing prices. This bill in its own small way is an attempt to deal with that.We know that the drivers of what is going on in the Auckland housing market are pretty straightforward and have been well established for many years. They are similar to the drivers that happened during the last insane period 2002 to 2007 and so they have not really changed that much though perhaps the different elements have changed. The first driver is the tax-free gains. Basically because we do not have a capital gains tax on investment properties it means you can make tax-free gains. The Government is introducing some measures to try to place some limits around that with this 2-year rule and it will have some effect but it is pretty marginal. So the tax-free gains on investment properties will remain in terms of pushing up demand.The other part of the demand side is coming from migration. There is a big surge of migration into New Zealand a lot of which is actually not particularly within the ability of the Government to control because it is caused by a lot of New Zealanders and Australians who have rights to move in and out. So there is not so much the Government can do about that.Then in terms of the demand side we have the offshore demand. This has been a problem in the past but it is now a really really big problem. This bill in its own way tries to deal with some of the offshore demand by requiring foreign buyers to actually give their identity essentially and have a New Zealand bank account and a New Zealand tax number. So there are certain measures within this bill to try to deal with this but there is no way that this bill is going to deal with the huge surge in demand coming out of Mainland China.The previous speaker Jami-Lee Ross said it was xenophobic to identify the big surge in demand coming out from Mainland China. That is just ridiculous. It is just a straight analysis. Normally I would not quote Fran O’Sullivan because although Fran I think is a person of integrity I disagree with her on many occasions. What she said was that what is happening now is that as the Chinese Government lifts some of the restrictions on capital outflows there is a huge surge of demand coming into the Auckland housing market. And it is not just Auckland; it is going on all around the world and it is coming out of Mainland China. The estimate is somewhere around over $10 billion in the years ahead in terms of the demand side for property in New Zealand particularly concentrated in Auckland in New Zealand.So we are seeing this huge surge on the demand side of the equation in terms of offshore demand for housing in Auckland. That is one of the key drivers and this bill really is not going to deal with this problem because it is of a massive scale. The Financial Times now says that Mainland China is the biggest of the foreign buyers in the US market the UK market and the Australian market. The Financial Times is not renowned for its xenophobia—quite the contrary. Fran O’Sullivan is not renowned for her xenophobia—quite the contrary—and neither are the Greens; we take a global perspective. And when you take a global perspective you can see that there are very large capital flows going into housing markets in Australia New Zealand the United States the United Kingdom and Canada and that a big part of it is coming out of Mainland China. That is just the reality of it. That is why Hong Kong has introduced restraints on the capital inflow from Mainland China into the housing market in Hong Kong. Singapore has done the same and Australia has done the same. All around the world everyone is trying to grapple with this problem and in its own small way this bill does a tiny tiny bit to try to address that as well but there is so much more that needs to be done.Then there is the lack of supply. The Government has talked a lot about the lack of supply and it is a fair point. There is a need for more supply. But let us just be clear: there is no way you can beat this thing by increasing supply. It is just not possible. The kind of huge surge in the demand side that is coming into the housing market in Auckland will not be beaten by housing supply; you actually need to place some constraints on demand and particularly the offshore demand. You certainly cannot beat it on the supply side through urban sprawl which is the Government’s strategy. If you think you can outrun this demand-side surge and that you can outrun it on the supply side through more sprawl in South Auckland on the urban fringes you are kidding yourself. You cannot build enough houses fast enough to beat this thing and to outrun the demand side. It is just not possible. I think you do need to increase supply but in different ways to what the Government thinks.In terms of the solutions we do need restrictions on foreign buyers. The Greens have been saying this for a decade. It is pretty plain; everyone says it now because it is very plain that what is happening is this huge offshore demand going into the Auckland housing market. It is not just a New Zealand problem; it is a global problem. It is just the reality of the world we live in now. China has a heap of capital. There is a bunch of people in China who fair enough are looking for safe investments in housing and other markets. That is a perfectly reasonable thing for them to want to do but it has huge impacts on our housing market and it has huge impacts on the affordability of housing in our country and the financial stability of New Zealand.We need a capital gains tax on investment properties—a proper one. It is not very complicated. Every other OECD country has one. We also need to deal with the issue of supply. What we need is quality medium-density housing with good public transport walking and cycling. The Government’s idea that it can beat this thing through subsidised motorways and subsidised urban sprawl where we have all these houses built on the urban fringes—which the Government thinks will somehow beat the demand side—is wrong. It has not worked anywhere in the world. It is not going to work in Auckland. It is a failed strategy.We actually need a compact urban form. Auckland needs to go up not out. That is just the reality and the sooner we admit that and face that the better we will be. The Government’s attempt to sprawl Auckland and force it out by sprawling and more sprawling will not solve the supply side.The final thing I would like to say is that we need to ask ourselves what the purpose of housing is. Housing is not just a place to make money. It is where people live. It is the collective responsibility of the people in this House to make sure that decent housing is affordable that it is quality that it is energy-efficient that people can afford to live in it—it is not just the cost of building it; it is the cost of running it—and that the transport costs associated with it are not unbearable as they are with the urban sprawl motorway strategy of the Government where you have to drive your car for miles to get to your job.It is about saying that housing is a market—and we do need to consider it as a market—but that it has these other social purposes as well and Government policy needs to reflect that. This bill is a tiny step in the right direction but the issue around housing and housing affordability and particularly housing quality and compact urban form is one that the Government has completely failed to get its head around.DENIS O’ROURKE (NZ First): As we know this bill focuses on getting better information from all people dealing in land especially overseas buyers and that is a good thing. New Zealand First welcomes it. We will support the bill as far as the select committee at least. The bill inserts two requirements into the Acts it amends: one for a New Zealand IRD number and another for an overseas tax number for those who are currently tax resident in other jurisdictions. The IRD number does not apply to a New Zealand individual buying or selling their main home unless they are selling their third main home within a 2-year period. It should include that information from the first home because it is just information. It does not actually affect anyone purchasing or selling homes in itself. It needs to be complete information and so that needs to be changed in the bill and I hope it is during the select committee process.This process is easy. It is not an expensive process. As we know the information will be collected from property vendors and purchasers by conveyancers who will then provide it to Land Information New Zealand who then pass it on to the Inland Revenue Department and to the Government generally. That is a far cry from what Nick Smith used to say about all this being far too expensive and far too difficult to do. Now we see the Government doing it and that is good. The turn-round is fine; as long the Government keeps adopting New Zealand First policy we will be happy. But this measure will provide a mechanism only for collecting the information during the conveyancing process. It will not form part of the land transfer register and it will not be publicly available. It should be publicly available; there are not any reasons to prevent that that I am aware of. We all should have access to that information to the raw data to produce and use the statistics to inform the public about what is going on.New section 156F added to the Land Transfer Act by clause 4 permits the Chief Executive of Land Information New Zealand to release or give tax information to any person who requests it provided that the information is given in aggregate form only and in a manner that prevents any person estate in land or transaction from being identified. They should be able to do that as of right. It should not require discretion on behalf of the Chief Executive of Land Information New Zealand. There is no need for the protection provided as landownership is a public information right and privacy is simply not relevant.This bill and the information it will cause to become available are what New Zealand First has been asking for for several years. It creates in fact a register of overseas ownership which is what we have been asking for and it would be that in everything but name—everything but name—if it were publicly available which it needs to be. It is necessary for the public to know the scale of the impact of overseas buyers of homes and farms whether as part of immigration or by overseas speculators. For housing we know that at least 9 percent of the demand is from net migration and that is from an independent source in the book which many of you will have read Generation Rentby Shamubeel Eaqub. It is a good book that I hope the people opposite will take notice of. It is significant.He says: “A 100000 population increase in 1961 would have needed just 15900 homes while today it is 25600 and that is of course because of differences in residential densities.” In his conclusion on the effect of buyers from overseas he says: “Some of the strong growth in housing demand in places like Auckland is coming from changes in net migration.” and he says: “Given that between 2012 and 2014 the demand for housing rose from around 9000 units to some 25000 to 30000 net migration must have increased the housing demand significantly.” So that gives us an indication of the scale of the issue which this Government is doing nothing about. New Zealand First has always said it is a significant issue and National has denied it and continues to deny it. But it is in fact actually undeniable now and the vast majority of the people out there in the public actually know that.This bill is a minor step in the right direction to uncover the facts about overseas buyers and homeownership. New Zealand First will support it. It will not be enough. The Government needs to acknowledge the problem of overseas ownership and net migration and not just tax issues. Then it needs to curb immigration and prohibit overseas ownership of homes and farms altogether. As well it needs to make sure that people pay their fair share of tax whether they be in New Zealand or overseas. The tax administration amendments are wider than just tax compliance in land dealings. They are intended to promote the enforcement of tax obligations of offshore people generally. In essence a person that is not a citizen or permanent resident will be an offshore person and subject to the bank account requirements. It introduces a 2-year brightline but we think that 2 years is far too short. We know what will happen. Very little will happen in fact. People will just wait out the 2-year period. Easy to do—such a short period so it will really in the end have little or no effect. Nevertheless New Zealand First supports it as a small step in the right direction but it is a minor measure and much more is needed.In fact taking the larger view if the Income Tax Act were properly enforced and were broad enough a capital gains tax would never be needed in this country. It is high time that the income tax rules were generally reviewed to catch everyone who uses homeownership for a business purpose. They do not do that; that is a big defect in the system in New Zealand. This Government has been far too slow about all this and it leaves a massive gap that actually encourages speculation and nobody should be surprised as a result by what is happening in Auckland with house prices.Although these measures in this bill are good as far as they go the point is they do not go nearly far enough and I have indicated already where the Government needs to go next. New Zealand First now waits for those next steps to be taken. Information alone is valuable but not enough. Overseas ownership needs to be prohibited. Current overseas ownership needs to be properly and fully revealed and not protected in the ways that I have mentioned. Most of all I believe the Income Tax Act net needs to be broadened. If that happens everyone would then pay their fair share of tax. Ultimately the need to curb the increase of house prices and to broaden the tax rules are what the process should be all about. This bill takes an extremely minor step in the right direction and it is actually a shame that the Government does not have the guts to adopt the rest of New Zealand First policy.CHRIS BISHOP (National): Clearly with Ria Bond’s move from the backrooms of New Zealand First into the front lines the research unit quality has declined. Contrary to what the previous speaker Denis O’Rourke just said this bill does not actually introduce the brightline test that has been talked about on investment property sales. It does not do that. That has been signalled but that is coming in a consultation document later. So nice try Denis. Read the bill better next time or get your staff to read it better.This is a good bill can I say. This is a good bill and an important bill. It is slightly mistitled though I have to say. It is titled the Taxation (Land Information and Offshore Persons Information) Bill but it really should just be titled the “Make Phil Twyford Really Really Really Really Angry Bill”. In fact I may well move an amendment at the Committee of the whole House stage for that very purpose.I want to talk about the context in which the bill arrives at the House before I move on to the substantive parts because the context is important. I think actually despite the heat and the light—mainly heat—that comes from members opposite on this issue I actually think there is reasonable consensus in the House that we have a housing affordability issue in this country and it is something that we need to deal with. There is actually consensus on that. There is actually also consensus on why we need to deal with it. It is an equity issue for New Zealanders because homeownership is important particularly for young New Zealanders and National is the party of homeownership and backs getting Kiwis into homes.There is also an economic effect and as Phil Twyford rightly points out—Phil Twyford: Lowest homeownership in 60 years.CHRIS BISHOP: Listen up Phil. I am actually complimenting you—at the start of my speech anyway. There is actually an economic effect from the housing issue that we have which is that interest rates are higher than they otherwise would be and arguably there is a financial stability effect as well if you talk to the Reserve Bank of New Zealand. One of the things that often does not get mentioned is the effect on the Government’s books of house prices rising very quickly. As Russel Norman rightly pointed out that does flow through to rents eventually and that is an effect on the Government’s books through income-related rents and of course the accommodation subsidy. So there is actually consensus that we need to do something about this issue.And if you actually look at the issue there is reasonable consensus about some of what we need to do. For example we need to free up more land supply—there is reasonable consensus on that. Actually despite the anger and the fury and the venom directed by Mr Twyford and members opposite towards my colleague the Hon Nick Smith on the issue of better utilising the large amounts of Crown land that the Government owns in Auckland for housing actually the Labour Party agrees with that because its KiwiBuild policy is predicated on that exact point. So there is consensus about better utilising Crown land. There is consensus about freeing up land supply.And we even heard from Russel Norman that he now accepts that supply is an issue—that this is fundamentally a supply and demand problem. We did actually hear some sort of concession on that. He says: “Well we just need to increase density inside Auckland.” I would say that is true. We do need to build up but we also need to build out. It is a little bit ridiculous that New Zealand is one of the least densely populated countries in the world. We do not utilise as much land as we could do. There is no reason why we cannot utilise more land and that is exactly what the Government is trying to do through our special housing areas. It is within that context that this bill is advanced and it is an important context.Also before I move on I want to mention the Productivity Commission report that was released the other day. It was actually a very very useful study and one that I think is going to illuminate the debate about housing in New Zealand for years to come and it was actually good to see some acknowledgment by members opposite of the comprehensive nature of that report when that came out. I have to say it was a little bit in stark contrast to the response from Carmel Sepuloni to the Productivity Commission report about services which was to sort of go back to trite clichés about neo-liberal dogma and vouchers and that sort of thing. So it is good to see the Labour Party actually endorsing some rational economics for once. It is within that context that the bill has been brought forward.It is an omnibus bill—slightly unusual for New Zealand legislation that it is an omnibus bill but introduced under the Standing Order 263(a) I believe. There are two important things that Mr English signalled in the Budget that this bill implements. Firstly buyers and sellers are being required to provide IRD numbers at the time a property is transferred and that tax information is to be collected by conveyancers and provided to Land Information New Zealand as part of the conveyancing process and then forwarded to the Inland Revenue Department. People who are tax resident in another jurisdiction will also be required to provide their foreign equivalent of an IRD number. That is the first change.Secondly the bill requires offshore persons defined in the bill to have a New Zealand bank account before they obtain a New Zealand IRD number. This ensures that offshore persons are subject to our anti - money-laundering rules. Tax evasion as my colleague David Bennett rightly pointed out—he is no longer in the Chamber unfortunately but as he rightly pointed out—tax evasion is a predicate offence for money-laundering. So having greater certainty of the identity of the taxpayer will bolster the effectiveness of the compliance system as well as the anti - money-laundering regime generally. Of course people who are not offshore persons buying or selling their main home will be exempt from having to provide that tax information and that is to protect families in their main home.Denis O’Rourke: It doesn’t do that. It doesn’t do any such thing.CHRIS BISHOP: These changes are useful changes. They will improve the information that the Government has and they will improve the compliance that people have to make with the Income Tax Act 2007. People often forget—including Mr Denis O’Rourke and members opposite—that the current Income Tax Act 2007 contains provisions that impose income tax on certain property transactions. But we are concerned that compliance in particular by non-residents is relatively low so that is the context in which this bill is being introduced and will be examined by the Finance and Expenditure Committee.As a member of that committee I am looking forward to examining that bill in detail. Often with tax bills they are reasonably complex. They are technical in nature. In fact on the Finance and Expenditure Committee we are dealing with a current bill that deals with the cashing out of research and development tax credits which is highly complex. We have gone through that bill in quite some detail and I am looking forward to doing so on this bill as well.You often hear a lot of anger and venom from members opposite about housing in this country. Phil Twyford is probably the worst offender but we are still waiting for Phil Twyford to apologise to this House and actually to the social housing sector as well for misleading the social housing sector before the election. Phil turned up to the Social Housing Annual Conference and told them that the Labour Party was committed to income-related rents to capital grants and to stock transfers—to stock transfers. He is grinning away. Now he turns up in the House and he rails away about privatising social housing and privatising State housing. Well the Labour Party before the election was committed to stock transfers. He said that “we know that you can build good quality homes at affordable prices and you can leverage private sector investment.” Well when is Phil Twyford going to stand up in this House and apologise for misleading the social housing sector? I am awaiting it with bated breath but I do not think it is going to happen.Where is the Labour Party when it comes to these sort of tax policies? Having taken a comprehensive capital gains tax to the 2011 election and to the 2014 election and having been comprehensively drubbed where is it now on capital gains? Well we do not know. It is pretty clear that Phil Twyford wants to introduce a comprehensive one but his leader won the leadership—with four of his colleagues voting for him—on the basis that the Labour Party would not have a comprehensive capital gains tax. So the Labour Party is completely all over the place on this issue. We are looking forward to the next speech from the Labour Party which will no doubt announce a different policy altogether on property taxation or property more generally.This is an important bill. It does make small changes. They are technical. They are important for the Government’s wider programme of improving housing affordability in this country. Because of that I commend the bill to the House.Mr DEPUTY SPEAKER: I call Julie Anne Genter. This is a 5-minute call.JULIE ANNE GENTER (Green): I rise to speak on behalf of the Green Party. We will be supporting this bill. I think the best way to characterise it is too little too late. It is a move by the Government slightly in the right direction and we are very happy to see that but fundamentally it is not going to be enough to deal with the out-of-control housing crisis in Auckland which is posing great risks to our economy to the stability of our financial sector and also to our ability to ensure that every New Zealander has that fundamental right to have access to a warm healthy dry home and not just any home—not a home in the middle of nowhere—but a home where they can access education jobs and recreation as part of a neighbourhood.I have heard the Government members admit that there is a housing crisis in Auckland and my colleague Dr Russel Norman outlined just how much house prices have increased in recent years under the National Government. I would say that what the situation in Auckland demonstrates is that National has really lost touch with ordinary New Zealanders and that it is failing to lead on the issues that are most important to New Zealand. It is particularly failing to deal with the long-term issues. Its thinking is very much: “How can we please voters in the short term?” but it is absolutely failing to deal with the long-term issues like climate change and inequality both of which are affected by housing policy and tax policy.Government members have mentioned that they would like to hear solutions so I would like to outline the Green Party’s solutions to the housing crisis which would also help reduce the growing wealth inequality in New Zealand and would also reduce climate pollution which is essential if we want to survive and thrive in the future. It is very very simple. Firstly we have to deal with the demand issue. I know that the Government likes to pretend it is entirely an issue of supply but if you listen to the Reserve Bank the OECD Westpac or any number of bank economists they will admit that it is a demand problem—it is not just the Green Party recommending that we deal with the demand problem. We know that it is a demand problem because 41 percent of new house sales in Auckland are to investors not to first-home buyers. So when you have nearly half of your house sales going to investors there is clearly a demand problem and as the Reserve Bank pointed out what we need to do is close the tax loopholes on housing.There is no reason why income from house price increases should not be treated like any other income. People who go out there and earn a pay cheque pay tax on their earnings. If you are very very rich and you can buy and sell houses at your whim and make hundreds and thousands of dollars in short periods of time why should you not pay tax just like the people out there working hard 40-hour weeks for their pay cheques—probably more than 40-hour weeks really? So closing the tax loophole on housing—that is a recommendation from the OECD the Reserve Bank Westpac and the Green Party has been calling for it for a very very long time.My colleague pointed out the impact of capital flowing in from overseas and particularly from Mainland China. Making that statement is not a statement of xenophobia. We are not opposed to immigration; we are just acknowledging that if you have got capital flowing in from overseas and there is no limit on who can purchase property here in New Zealand it has an impact on the value of house prices. Again we know this because in Auckland the ratio of median house price to income is now at eight. There are only about six or seven cities in the world where it is higher than that. The highest is Hong Kong where it is 12:1. Virtually every city where the ratio is higher is one that is seeing massive inflows from China so that would be Sydney London Vancouver and Singapore and all of them have taken steps to try to curb the negative impact of these capital inflows on their housing markets and it is absolutely legitimate to do that. As an immigrant to New Zealand I can say that the Green Party is not against immigration but if you are going to buy a property here in New Zealand you should be a resident or citizen and that is what the Green Party would ensure.There is a lack of protection for renters here in New Zealand and that impacts the demand. One of the reasons why there is such huge pressure to buy homes is that you have no security of tenure and there is no requirement for landlords to ensure that the places they are renting out are actually warm healthy dry and energy efficient. If we fix that problem it affects demands at both sides. It gets out those lazy landlords who are just sitting there waiting for capital gains who are not willing to look after their properties—they get out of the market—and it takes the pressure off people looking to buy houses because they have more security renting.There is a supply issue but of course the Government’s approach of deregulating and reducing environmental protection and planning and greenfields is not going to solve the housing affordability problem; it just means that we are going to end up with a lot of low-value housing far away from jobs which is going to increase pollution and it is going to increase costs to households. The Productivity Commission draft report made a number of recommendations that reduce the barriers to a compact city. The Green Party has been advocating for those measures for a very very long time. The Green Party has the smart innovative solutions that are going to deliver for New Zealand affordable housing action on climate change and a happier healthier lifestyle and it is going to be better for our economy.Mr DEPUTY SPEAKER: I call Peeni Henare—a 5-minute call.PEENI HENARE (Labour—Tāmaki Makaurau): One of the favourite pastimes of our beautiful country is sitting by the fire playing Monopoly on a cold winter’s evening. By the sounds of the kinds of policies and the kinds of bills that the National Government is currently putting through it is clear that the Government is playing the game of Monopoly with the Kiwi dream. What it is doing basically is saying to all Kiwis—to all Kiwis who aspire to the Kiwi dream—that there is “no passing Go”.Can I pick up on one of the points made by the member across the House Mr Jami Lee-Ross about having no ideas? Well it is quite the contrary; we do have some brilliant ideas and what we are growing tired of is sharing those ideas only for this Government to take them and turn Coke into Diet Coke or the Kiwi dream into a nightmare. So the point of this actually is to ask what the full plan of this Government is to ensure that Kiwis can have affordable homes and live the Kiwi dream. I mentioned in my maiden speech in this House that I was afraid that the backyards of our homes in Tāmaki-makau-rau would be turned into the playgrounds of land speculators and foreign investors. Well this particular bill here is a Clayton’s attempt at trying to curb that offshore investment in properties in New Zealand which has driven up the house prices in Tāmaki-makau-rau as all of my colleagues on this side of the House have mentionedalready.Tāmaki-makau-rau as you will be well aware Mr Deputy Speaker is obviously a big city and it does need to grow but I do want to pick up also the point of the member Dr Russel Norman who talked about urban sprawl. At the moment I am reminded of a group that goes by the acronym “SOUL”—Save Our Unique Landscape—which because of the haphazard approach of this Government to housing development is currently fighting a battle in Auckland Tāmaki-makau-rau near the airport in fact in the hope of trying to save its community; a community that has been forgotten by this Governmentfor a long time now. The Government is now looking just to run the community almost out of its own homes and to build a whole heap of new homes with no clear plan to allow our people Kiwis and also the people of the community of Ihumātao into those homes. This of course is of concern to me.I want to talk a little bit about the Inland Revenue Department’s position on this particular bill. My colleague the Hon Clayton Cosgrove spoke about this and about the Inland Revenue Department’s advice on this particular billa little bit earlier. In respect of one of the problems and we have noticed it with a series of fumbled passes by the Inland Revenue Department the department rightly points out the difficulty of being able to enforce or police what this bill is intending to do regarding a register—and let us face it that is what it is: a register of offshore investors or property-buyers in this country. Although the department mentioned that it would be relatively easy to police this here in New Zealand one of the fears—and it is a reality—isabout its ability to enforce this law offshore for those people for whom this particular bill is intended. This is not only an uphill battle but also a near impossibility. It is these kinds of things that raise concerns on this side of the House. It also adds to the conversation that this matter has been poorly consulted on by this Government. We have already heard on that side of the House that it hopes that as this bill progresses it will get the opportunity to hear more on it. Well my thinking is: why does National not do the homework properly first so as to ensure that it does not waste the precious time of this House?Having said that Labour will be voting for this particular bill now and encouraging it to go through to the select committee. I want to encourage one and all to make sure that they have their voices heard on this particular bill and that they tell this Government that it can no longer play Monopoly with the future of this country and with the dreams of our people here in New Zealandto own a home particularly of our young people. Kia ora.ANDREW BAYLY (National—Hunua): It is a pleasure to be talking on the Taxation (Land Information and Offshore Persons Information) Bill. This bill provides wide-ranging measures and controls to ensure that people involved in land transactions are well informed of their obligations and responsibilities. Its provisions give the means for all transactions to comply with our tax laws which should result in improving the fairness in the property market. I do want to note that it is part of a much wider range of packages that the Government has been introducing to address housing issues and to make sure that Kiwis can buy their own home get it and get on the property ladder. Those measures include the HomeStart loans package a valuable contribution and a very generous package that the Government has introduced. It is going to also include the Resource Management Act reforms that will be introduced during the term of this Government. Also significant work has been done around increasing the housing supply including the 84 special housing areas that we have got in Auckland which is a particular area of interest.I do also want to reiterate some of the points that I have said in this House before: in my very own electorate in the Hunua electorate I can point to 10000 sections coming on to the market over the next 6 years so the substantial effort that have been made to address the housing supply is just one of a number of measures that we have put in place. Just turning to the bill I think this is a very smart piece of legislation. First of all it reinforces the tax obligations that people buying and selling properties need to adhere to. Secondly it deals with the perception which has been perpetuated by the Opposition that wholesale numbers of foreign people have been coming into New Zealand and buying and selling our properties. All they have talked about is how we should be putting in place a register but these measures that have been introduced today are much more comprehensive than that. The objective of this bill is essentially confirming the value that this Government places on homeownership and creating the right environment for people to own a home and to build strong communities.As we have heard earlier this year the Government will introduce a brightline test really to just confirm those tax liabilities on residential homes particularly when they are resold. The gains from residential properties that are sold within 2 years are going to be very clear—crystal clear in fact. Unless that property is the seller’s main home; or secondly inherited as part of a deceased estate; or thirdly has been transferred as part of a relationship property settlement—commonly referred to as a divorce—then if you sell your home within 2 years at that point it is assumed that you are essentially a trader. So we have clearly separated out areas that we believe there should be no tax paid on the residential property and that is fair. But if you do not fit within those three criteria then you will be subject to tax changes and in my personal view I believe that is a very balanced approach. The objective of course is to ensure that tax on property is paid when it is effectively due and also to ensure that property speculators are actually paying their full amount of tax. These brightline tests will obviously be subject to review by the select committee but that clarity in my view is absolutely essential and will be a key element of its success.I just want to note that this requirement to pay tax particularly if you are deemed to be a trader is part of the existing tax rules. I have heard some of the Opposition members claim that it is a new tax and all that sort of stuff. It is not. The corollary is that if you buy and sell shares on the stock exchange you are also subject to the same tax rules. This is what we are trying to do around housing. The bill will obviously assist the Inland Revenue Department to reinforce tax obligations. First of all if you are a buyer or a seller you will be required to provide an IRD number at the time of doing the property transaction. This will be part of the conveyancing process so it will involve an independent part of that process and those details will be forwarded to the Inland Revenue Department. Tax residents from another country will also be required to provide a foreign-equivalent of their IRD number and I think that is a very smart move. But I just do note that if you are a New Zealand resident buying and selling your main home or buying what you intend to be your main home you will be exempt from that process.Secondly offshore persons will be obliged to have a New Zealand bank account and you have to do that prior to getting an IRD number. That is a wonderful second part of what is being proposed because not only will that deal with the international anti-laundering laws that New Zealand is a party to but it will really start to bite in terms of making sure that we have got appropriate information on those foreign people buying New Zealand residential homes. I do not know when you last opened a bank account but interestingly I asked someone this morning to just—The ASSISTANT SPEAKER (Lindsay Tisch): Can I just remind the member that the member is bringing me into the debate all the time. It is best to use the third person by saying “When one opens a bank account” or “one does something” as opposed to saying “you”. I have not opened a bank account recently.ANDREW BAYLY: Thank you Mr Assistant Speaker. So if one opens a bank account it is very very difficult and it takes some time. When you go into the bank not only do you have to provide a photo ID or a passport but also you have got to provide in many cases some form of proof of residential address such as a New Zealand utilities bill. Getting the bank to capture that information is the way to make sure that with regard to people who want to get round the system and not be part of the New Zealand laws that information is automatically accounted for and captured by an independent body. The bill also ensures that we deal with people who are essentially cash buyers coming into the New Zealand market who may not want or need to borrow money. It circumvents that by forcing them to actually open a bank account. The other part of it is that there is a requirement for those people to actually get an IRD number and until that information is provided to the bank the bank assumes that you are on the highest tax rate. I also note that the Minister talked about investigating the introduction of withholding tax on people selling property for non-residents. I think that that is another important thing that the select committee will turn its mind to.I want to now just talk about the areas where the exemption will not apply and that is if the home is being bought by a trust or even if a New Zealand resident or someone like that has been acquiring homes but buying and selling them two or three times during the course of the initial 2 years. Those are not grounds for exemption under these rules and this will ensure that overseas buyers and speculators are again captured by the provisions that have been proposed under this bill. A part of the measures also deals with the issue of trusts. Obviously there is concern about not only New Zealanders but foreigners using trusts to hide their interests. As we heard from the Minister today if you use a trust you will be required to provide your IRD number and if anyone holds an interest of 25 percent or more in that trust and they are a foreign resident then they will be automatically captured under these rules. I am glad that the Minister has been proposing that and also what she talked about earlier—that it is easier to set up a trust than to subsequently vest that into new ownership and if there are any subsequent transactions again that is going to be captured in this bill. Again those are excellent provisions.The last thing I want to turn my mind to is the Land Information New Zealand requirement. That is an important further step in capturing that information and having an independent party to record that information. To me this bill is an excellent start towards dealing with this whole issue. I commend the bill to the House.Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman): Given the splits and divisions in the National Party I am amazed that this bill has actually got this far into the House. Given the level of property ownership across the National Party there must be many who have been uneasy about bringing this bill to the House. The reality of the property market is that the highest common denominator drags up the value for everyone else. “Everyone else” in this case is the poor New Zealanders who are trying to get on to the property ladder in Auckland and simply have not been able to afford to do so.This is not a “road to Damascus” but rather a “street to Damascus” piece of legislation. It is hardly a bandage; more like a band-aid for a major issue facing not only New Zealand but Australia Hong Kong and Singapore who have all moved to make significant changes in legislation to stop what they see as a flood of foreign investment into their property markets. Well this is the best that the National Government can do.It cannot even decide whether it is for a register of foreign investors or not. We have got the Prime Minister on record saying things like “We are not sort of absolutely resolute that it’s such a terrible idea. We just think that we have fairly good information already.” But then we are told that this piece of legislation is actually not for a register but it is for gathering information: “It’s quite a tricky thing the register. It’s not quite as straightforward as people think so we’re not afraid of a register.”—that is the Prime Minister. Is it for registering foreign owners of property in this country or is it not? It is a pathetic piece of legislation but in the absence of anything else the Opposition will support it to the select committee.The Government is trying to portray this view that it has got new-found empathy for poor New Zealanders trying to have a home. These are Kiwis who need who deserve and who want a home—somewhere to bring up their families in security. The laws as they are around rental properties and the exposure that those people have from landlords who want to flick on their property means that we have over 50 percent of the people in Auckland living in rental properties and living in insecurity. That is not good enough. The Labour Party was founded on the basis that we put people into secure homes and offer them a job and some security for the future. This bill is pathetic.As I say it must have been an interesting caucus trying to work out whether it should put this bill up or not given the statements of denial time and time and time again from Ministers across the House—they do not need a register; they do not need to address the issue. If there is one person or perhaps two people who should be credited with this piece of legislation one is Phil Twyford who has been pushing and pushing—Hon Maurice Williamson: So it’s Phil’s pathetic legislation?Hon DAMIEN O’CONNOR: —and the other person is Fran O’Sullivan. Fran O’Sullivan very clearly laid it out in a column yesterday in the New Zealand Herald—and clearly the National Party members have probably read this. Even Mr Williamson would have read this. I mean she is quite—asking the question of whether we are prepared for the new wave and it is only just the new wave of $6.6 trillion in the hands of Chinese investors who want to go out around the world and invest in property. That is $6.6 trillion. It has been estimated that we might get 3.3 percent of that and that is $11 billion coming into New Zealand that is likely to further overinflate the property market without any guarantee—any guarantee—of new homes and houses being built.This is a dilemma of monumental proportions and the Government has put up a band-aid piece of legislation.In Australia they have moved in Hong Kong they have moved and in Singapore they have moved to protect their people. We are not xenophobic on this side of the House but we are patriotic. We are here for Kiwis. We are not picking on the Chinese other than to say that due to their hard work and organisation—I have to remind people that it is not a capitalist country over there; it is a communist one actually. Due to their success they have trillions of dollars of capital that they want to invest. The question is: will that money coming into New Zealand help Kiwis or not? Does Mr Williamson think that we need a register or not? What do his people in Auckland think about having to compete with foreign money when they go to an auction to try to buy a home for their family? That is what it is about. So what we have got here is a piece of legislation that moves towards a register.The question I have of the Government and it will be asked in the select committee I am sure is will this be extended to farmland? Will this be extended to farmland? Because the Government has put up the argument time and time again that it is far too complex. Oh we cannot have a register. It would be too costly. Well I say to the Government that if it got a PC with a bit of grunt it could have a register of all the foreign-owned properties up and down this country both residential and commercial and farmland as well.There have been pathetic excuses. Why? Because the Government’s mates the funders of the National Party the real estate agents and the people who have been doing very very well out of this have not wanted to move in this area. As that investment comes in it drags up the value of the property market. There is not much more in the way of new houses and new capacity coming on stream at the bottom of the market. The developers who we are told want to rush out and build more houses have a vested interest in slowly developing the properties that they have not to flood the market with properties to ensure that there is indeed an ongoing shortage and people are forced to pay more and more. If it is the foreign investors who come in and help prop up that valuation it is at the expense of ordinary hard-working Kiwis who want to have a home.We will as I say support this legislation to the select committee but I could go back to some wisdom as I said from Fran O’Sullivan who must take some credit. Her timing was perfect. She put the column out yesterday and we have legislation in the House today. But I have to say that it is my colleague Phil Twyford who has been pushing the Government who has been holding its feet to the fire and who has been pointing out to the public of New Zealand that the status quo is simply unsustainable. Can I quote Fran O’Sullivan who has not been a great fan of Labour but who does put up some very honest opinion: “Almost to the point of absurdity the NZ Government has been careful not to single out Chinese investment.” The only reason I refer to it is the quantum of investment dollars sitting there looking for a home. We will have a register or whatever the Government wants to call it for all foreign investors and that is the way it should be. But let us not be naive about the amount of money that wants to come to a country that does not have an effective capital gains tax and that leaves the door open because it does not have a proper register of ownership. That is why the Government should move and take some real action to protect New Zealanders and their families.The Labour Party will support this legislation to the select committee but I can put on record the fact that we will scrutinise every part of it to try to ensure that what is passed is effective in protecting New Zealanders young Kiwis and their dream that they too can one day own their own home because if we do not take more moves if we do not do anything effective then we will be flooded out by a wave of foreign investment. We only have to go to Australia or to Hong Kong or to Singapore to ask them why they have made these moves and implement in a similar way protections for us. We are not xenophobic but we are patriotic.ALASTAIR SCOTT (National—Wairarapa): I was a little surprised to listen to the contribution of the last speaker Damien O’Connor and hear his rail against foreign capital given that he has been around long enough and should know that this country is desperate for foreign capital. But that is another story—that is another story. Today I would like to talk about the bill before the House the Taxation (Land Information and Offshore Persons Information) Bill.This bill is not a silver bullet. This bill does not bring in a register. This bill is part of a comprehensive housing package that enables and encourages homeownership which is so important to the people of New Zealand. It increases the equity and the fairness around taxation. It is part of a suite that is reducing demand. This bill focuses on the demand side of the housing market and we also have a suite of policies that increase the supply side. Those are the two things that matter. Those are the two things that determine the price of a house: the aggregate demand and the aggregate supply. One of the things we have done to date despite the Opposition’s assertions that we have done nothing is that we have introduced 100 special housing areas across the country including 84 in Auckland—Phil Twyford: How many houses?ALASTAIR SCOTT: There are 40000 new homes and sections as part of those special housing areas. We have almost doubled the number of housing consents since 2011. We have increased the building work to over $14 billion. That is 21 percent up on last year so things are heading in the right direction. There are eight housing accords agreed with local councils—Auckland Council Christchurch City Council Wellington City Council Tauranga City Council Western Bay of Plenty District Council Queenstown Lakes District Council Tasman District Council and Nelson City Council. There is plenty of action there is plenty of initiative there is plenty of policy which are all contributing to the housing issue. Ninety thousand people are expected to benefit from the KiwiSaver HomeStart loans scheme. An increase in another part of the policy is the KiwiSaver access to the $20000 maximum grant. That is a relatively new policy. Those in KiwiSaver are able to access and withdraw their total amount including the tax credits but excluding the $1000 kick-start. So there is a lot going on in this housing space. The Reserve Bank of New Zealand is also contributing by introducing loan-to-value ratios which will affect the demand side. That is part of the demand side. It is not Government led; it is Reserve Bank led.From the other side we have a lot of criticism but no real alternative policy except of course for the KiwiBuild programme—the KiwiBuild programme that is going to solve the country’s home-supply issue. Apparently 100000 homes will be built by a Labour Government. Where will it build them? How will it build them? Who will pay for those 100000 houses that are proposed in the KiwiBuild programme? They will be designed by Grant Robertson to his liking and the colour scheme no doubt will be chosen by Phil Twyford. Such is the central control of these people over here because they are sanctimonious in that they do not understand that those in the private sector are quite willing and able and capable of choosing where they want to live how they want to live and the design of the house that they want to live in. In previous contributions Mr Robertson has even suggested that the Government’s Superannuation Fund get involved in the New Zealand housing market and build some of those houses. Of course it would just be a disaster having Mr Robertson involved in the governance of the Government’s Superannuation Fund which is already well weighted into the New Zealand market and of course giving an outstanding performance. In fact it is the highest performing Government superannuation fund on the planet. Imagine if Grant Robertson got hold of it—just imagine.The Greens’ option is also to create a fund to subsidise young people who would like to build their first home in Meadowbank Ponsonby or Parnell. But who would be paying for that? Who would be subsidising those first-home buyers in Auckland? Well I tell you that asking Wairarapa taxpayers to fund a housing scheme suggested by the Greens to allow first-home buyers to build houses in Auckland would be offensive to them.This bill strengthens existing taxation law. Just to clarify for Mr Cosgrove’s benefit what the existing law says it says that if you purchase something—whether it is a house or in fact anything as my colleague Mr Bayly pointed out like shares or widgets—for the purpose of resale that profit or loss is assessable. So that is the current state of play. The example Mr Cosgrove gave of an Auckland family buying a place in Queenstown with the intention of moving down there but who for some unforeseen circumstance was not able to go to Queenstown demonstrates his total lack of understanding of what the current legislation is. It is the intention at the time of purchase Mr Cosgrove; that is key. So this legislation strengthens what is already current legislation. It does this because the current legislation is difficult to measure. It is difficult to gauge what people are doing without the available information. It is an honesty system. The taxation system in New Zealand is based on trust and of course people abuse that trust at times.This legislation is aimed at strengthening the ability of the Inland Revenue Department to capture what is trading income. So first of all the legislation is proposing that the IRD number is collected and notified when the sale or the purchase of a house takes place. Second the bill requires offshore people to have as well an IRD number a bank account. This will strengthen the laws that already exist around money-laundering and that is a good thing. There will be exemptions. The family home is essentially exempt—unless of course that family home is sitting in a trust in which case it would not be exempt. The home exemption falls away if the family home is purchased and resold purchased and resold more than a couple of times. That is because that family home is not really there for the purpose of living in as a family home; it is obviously there for the purpose of trading and should therefore be captured by the bill.There are further developments in the pipeline including the brightline test. Some of the Opposition members suggest it is in this bill. It is not. There is a brightline test assuming a 2-year period is the appropriate period of time to hold a home before it is taxable. There are withholding tax proposals coming forward later on this year. This bill strengthens the existing law. It clarifies the assessability of income that is already determined in the Income Tax Act. It tightens law around money-laundering. I look forward to supporting this bill and supporting further legislation around withholding tax and the brightline 2-year determination. I support this bill and commend it to the House.Bill read a first time.Bill referred to the Finance and Expenditure Committee.Hon LOUISE UPSTON (Minister for Land Information): I move That the Taxation (Land Information and Offshore Persons Information) Bill be reported to the House by Monday 17 August 2015 and that the committee have 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 191 and 194(1)(b) and (c). The measures introduced by this legislation are to be implemented by 1 October 2015. To ensure the legislation can be passed through all stages by 1 October a shorter-than-usual select committee process is necessary.As I said during my speech this bill will authorise some of the measures announced as part of Budget 2015. This package of measures will ensure that people buying and selling residential property for profit including overseas buyers and short-term speculators pay their fair share of tax. In particular it will be important to align implementation of these measures with the brightline test announced by the Government in Budget 2015. The brightline test will require income tax to be paid if a residential property other than the main home is bought and sold within 2 years and the brightline test will apply to properties bought on or after 1 October. The early report-back date will allow us to put in place regulations that are necessary to support this legislation by 1 October. These regulations will describe land transfers and parties that are exempt from providing tax information in addition to the main home exemption. Such exemptions will only be made where the requirement to comply is impractical or involves high compliance costs or where there is a low risk of tax avoidance.PHIL TWYFORD (Labour—Te Atatū): I did not hear in that contribution from the Minister for Land Information any kind of convincing explanation for why the select committee period for this bill should basically be cut in half. This isa bill—in spite of the fact that it is a bill that is disappointingin its potential impact as we have been saying for the last couple of hours of the debate—that still has some complexity. I would have thought that this bill deserves and needs proper scrutiny and review at select committee. Other than the Government’s bad planning I have yet to hear any reason why the select committee process should be cut in half. Unfortunately this is typical of this Government riding roughshod over the democratic process and particularly over the importance of select committee scrutiny of its bills.We saw the same kind of contempt for process this morning in the Vote Foreign Affairs and Trade estimates hearing when we saw basically collusion between the Minister and the committee chair—The ASSISTANT SPEAKER (Lindsay Tisch): Order! This is a very narrow debate—the member will sit—and I will refer the member to Standing Order 290(3). It says there that “Any debate on the question for a motion under this Standing Order is restricted to the special powers or instruction set out in the motion. It may not extend to the principles objects or provisions of the bill to which the motion relates.” so talking about the select committee process is not part of this debate.PHIL TWYFORD: Thank you Mr Assistant Speaker. What I would submit is that by cutting the select committee review period in half what the Government is doing is denying a lot of people—members of the public who have a big interest in this bill and the issues that this bill purports to address—their opportunity to have a proper say; there is no doubt about that.Think about the people who will have strong views about this bill. There are approximately 300000 people who own rental property in this country. They are going to have a lot to say about this bill. Almost every city and region around this country has a branch of the Property Investors Association. They will all have strong views about this. Think about the real estate companies—Barfoot and Thompson Harcourts Harveys—or somebody like Shamubeel Eaqub the eminent economist who recently published the book Generation Rent explicitly dealing with the kinds of issues that this bill purports to represent. He is the kind of expert opinion the select committee should be getting in to submit on this bill—and in fact organisations like Generation Zero which is an articulate voice for the interests of young people in this country who feel themselves shut out of the property market because of the rampant out-of-control speculation.These groups want to see a bill that actually has some real impact on property speculators. They are going to want to come along and they will have things to say about this bill. I have no doubt in my mind that they will have views about whether or not simply requiring property purchasers and offshore speculators for example to provide a bank account number and register with the Inland Revenue Department constitutes in itself a substantive serious and credible response.We have seen far too much poor legislation rushed through this House. And what happens? Every time it comes back to this House and we have seen that in the last day or so with the exclusive economic zone legislation that Nick Smith made a complete hash of. This House at huge taxpayer expense has to come back and clean up the mess that is left by legislation. It is my fear that this bill has been so rushed—it was a last-minute cobbled-together poll-driven panic before the Budget and we know that because Louise Upston did not know about it until a few days before the announcement. The Minister who is responsible for shepherding this bill through—and it is her officials who will be responsible for servicing any of the work that is done on this bill as it goes through the select committee process—did not even know about it until a few days before the announcement. So she had no say in it. It was imposed on her as a panicked political measure and I think that this House deserves better.This is an issue as so many people have said in this debate that people feel incredibly strongly about all over New Zealand: the fact that we have a housing crisis that is out of control. It is of intense public interest. So for the Minister to stand up and say that this taxation bill deserves only half the normal period of scrutinyis I think shabby.In spite of the fact that we have argued consistently that this is a half measure and we have quoted the commentators and the analysts who have said publicly that they do not believe it is going to make much difference to the problem of property speculation there are issues of some complexity in the drafting of this bill. You only need to look at what the Inland Revenue Department said. These are matters of complexity that go right to the heart of the fact—The ASSISTANT SPEAKER (Lindsay Tisch): You can mention that but you cannot get into the detail of the bill. That is the point that I made earlier.PHIL TWYFORD: OK I am just saying that the Inland Revenue Department the Government’s own advisers on tax matters recommended—and I want to quote what the Inland Revenue Department said about it because these are the very issues that will have to be dealt with at the select committee—to the Government that it not exempt main homes from the register because it will not reduce compliance costs for the purchasers of a main home as almost all of those people will already have an IRD number anyway. What the Inland Revenue Department said is that it would make the rules more complicated for purchases and conveyances and create loopholes. So for example a person could buy a main home—The ASSISTANT SPEAKER (Lindsay Tisch): Order! I have explained to the member that there is a truncated report-back period. You were doing well up until you started to get into the detail of the bill. That is what you cannot actually get into. It is a very restricted debate and that is really where you need to focus. It is limited in its content and you need to concentrate as you were doing on the reasons and the pros or cons for a truncated report-back period. You cannot get into the detail of what is in the bill and what the Inland Revenue Department is saying.Hon David Parker: I raise a point of order Mr Speaker. With respect I agree that you cannot discuss the pros and cons of the detail of the bill but you can discuss that the bill is so detailed that it ought to have a proper select committee process.The ASSISTANT SPEAKER (Lindsay Tisch): I agree with that. That is why I said to the member that in his first 8 minutes he has been on track and that he must relate it back to the motion and the reasons and the pros and cons for the select committee process being truncated. When you start to specifically get into what the Inland Revenue Department is saying it is fine to say that the Inland Revenue Department has concerns and so on and that is the reason why you need to have a longer time for people to have the opportunity to submit. That sort of thing is fine but you were starting to get into the detail.PHIL TWYFORD: Actually in what you just said Mr Assistant Speaker I think you have accurately summarised my argument. What I was simply seeking to do by quoting the Inland Revenue Department was to make the point that my colleague the Hon David Parker underlined and that is that there are matters of complexity in this bill that mean that it is not justifiable for the Government to cut the normal select committee period in half.The Inland Revenue Department has made a number of comments in the regulatory impact statements that suggest that the select committee will have some serious work to do. The Government made some choices as it scrambled together this measure in the few days before the Budget announcement but it is clear that some of those choices were arguable. There are a number of issues that the Inland Revenue Department has advised the Government on which I was just beginning to relay but the Government chose not to accept the Inland Revenue Department’s advice. For example the Inland Revenue Department said that the requirement to have a New Zealand bank account to obtain a New Zealand IRD number is unnecessary for individuals and of limited benefit because the Inland Revenue Department already has the power to require that.I am not arguing the pros and cons of the bill. I am simply saying that there is sufficient complexity and matters of real debate and argument contained in this bill so that it is going to take weeks and weeks of proper select committee scrutiny to tease these matters out. Expert advice will be needed and there is no question in my mind that not only members of the public and organisations that have a keen interest in fixing the housing crisis and dealing with the scourge of property speculation but also those with expert opinions—tax lawyers and tax advisers—will want to come in and have their say. We have had enough in this House of Ministers like Nick Smith rushing half-baked measures through. We need good thoughtful ordered approaches with real solutions to the housing crisis and we deserve a better select committee scrutiny than we are being given.JAN LOGIE (Green): The Green Party although supporting this bill again also shares Labour’s view in that we do not support the truncation of the select committee process. Our understanding is that these set time frames we have for the consideration of legislation are there for a reason. They are not dependent on the bills or the need of the Government; they are there to ensure proper scrutiny and the ability of New Zealanders to be able to properly with warning participate in this democratic process. Those principles stand in the instance of this piece of legislation. This is not as has already been outlined the smallest piece of legislation that has ever been in front of this House. It is not a piece of legislation without complexity. We support it but we support good legislative process and scrutiny as well.It has already been indicated to the public and to this House that there are some concerns about this piece of legislation and based on those indications we believe that time must be given for the public to be able to choose whether to participate and to comment—and for the full range of people too because organisations often are very busy and individuals are very busy and very pressured in their lives these days. Giving people a short time frame often means that they cannot participate because they just cannot make time to make it happen in that shortened period. We believe their voices are important.We want this House to make the best possible legislation particularly when it is legislation we are being told is a critical component of helping solve our housing crisis. We need to get this stuff right. We need to make sure that people are involved in ensuring we get the right decisions and the right laws. So although we support the legislation we do not support a shortening of the select committee process.TRACEY MARTIN (Deputy Leader—NZ First): I rise to make a small contribution on behalf of New Zealand First. We cannot support the shortening of the democratic process with regard to input by the citizens of New Zealand into a bill particularly a bill as substantial as this.As has been mentioned already by other Opposition colleagues it has been suggested by the Government that this is part of a silver bullet solution to quite a substantial problem facing the New Zealand public. With regard to that we believe that it is easier for the Government to shift its implementation date than to actually suggest that the citizens of New Zealand shift their whole lives to fit their democratic rights and democratic opportunities into a shortened period of time so that it suits the Government.It also in our view smacks somewhat of arrogance or a suggestion that Government members already think they have got it right and so there is no need to listen to people that they go through the motions but there is really no need to listen to the people out there in New Zealand who have a vested interest in this legislation. It is their legislation. It is their law. We merely sit here for a short period of time and participate in bringing forward these ideas. So from the New Zealand First perspective we absolutely cannot support any shortening of the democratic process particularly around something as important and as vital as this piece of legislation.Does the bill really do what the Government says it is going to do? Is it really an answer in any way shape or form to a crisis that we currently face? I think Jan Logie made a particularly good point in terms of the shortened time period. Organisations are working out there now to just survive in this environment let alone be asked to stop everything and hurry up and submit on this bill if they want to because the Government has a 1 October implementation date which it wrote into legislation and it now needs everybody else to hurry up and get there.The individual citizens of New Zealand work from day to day. They actually have lives and things they are doing that they are being asked to put on hold to participate in this process. We need to give them an appropriate amount of time to do that. So again New Zealand First would suggest—along with all other Opposition parties I am picking—that the Government allows the process that has been set down quite rightly and with very valid reasons to take its course as opposed to attempting to shut down any debate from the New Zealand public and keep it quiet so that the Government can push through what it thinks is going to hide in our view what is really going on out there. Kia ora.Hon DAVID PARKER (Labour): There exists already within the Standing Orders the right for the Government to truncate to less than the normal 6 months the period for report back from the select committee. We are having this special debate today because the Government is truncating the report back to an unusual and normally unreasonable extent. The reasons why the Standing Orders were changed with unanimous acclaim across Parliament in order to have this sort of debate when that happens is because it means truncating one of the few protections that we have in our unicameral parliamentary system against rushed and inappropriate legislation being passed. We have one House of Parliament. We do not have an Upper House that considers legislation again as most Western democracies do including Australia Canada Great Britain and the United States to name but a few. We are more reliant upon the processes that we run through this single House of Parliament than are other countries that have more than one House. That is one of the reasons that lie behind this rule.Why do we have these rules? One of the greatest protections against inappropriate change by Government that we have in society is actually time. Once civil society sees the detail of a change that is proposed it takes time for it to get its head around the change and to respond to it. So you have to give civil society time to come up with its views on whether what is being proposed is good or bad and on how it might be improved. The normal select committee process which allows 6 months then results in select committees normally giving submitters 6 weeks after the date of advertising to reply with their written submissions on the legislation. So there is normally 6 weeks of advertising in all the major daily papers.What happens in that 6-week period? And why is it 6 weeks? Generally it is 6 weeks because most—not all but most—of the most valuable submissions that come to select committees come from reputable organisations that are themselves representatives of large groups of interested New Zealanders. Those organisations are volunteer organisations generally; they are not paid bodies. They are bodies like the New Zealand Law Society the Institute of Chartered Accountants of New Zealand and the Child Poverty Action Group. All of these groups and the people who provide the services and write the reports that are going in as submissions are volunteers normally and are doing so in their spare time.Not only that normally they are organisations that are responsible to membership-based organisations and so they cannot just do things off their own bat; they have to seek the authority of the organisation that they are representing. Often these organisations meet only monthly. So the organisations need a month to make a decision and at least 6 weeks including that month in order to go through their normal monthly cycle to decide to make a submission and to decide what should be in the submission. If you do not allow that 6-week period following advertising you are effectively severely frustrating the ability of civil society to participate in the law-making process. We all I think on all sides of this House agree that select committees make for better legislation as a consequence of those processes. So when we have the Government truncating these processes that is actually what it is attacking. It is attacking the democratic process of making good legislation in a country that already has very scant protections because of its unicameral Parliament where just about all of the power is already held by the executive wing—the Government wing—which controls the agenda and can push things through if it wants to.Against that background I have to reflect on whether this is an appropriate case for truncating those time frames given the consequences that I have outlined. That is why the Labour Party opposes this severe truncation not just the shortening of the process  which can happen within the Standing Orders but also because it breaches a rule that this Parliament agrees is the standard rule. That means that we should have this debate. That is where we do actually have to come back not to a debate about the merits of this bill but to a debate about the complexity of this bill and the issues that it addresses.This bill changes fundamentally the rule about whether you should tax capital gains on housing. It introduces some arbitrary periods. Will submitters want to get their heads around the issue of whether there are some important tax principles being changed; and if they are being changed whether they are being changed properly? Whether they are in favour of those changes or opposed to those changes they should have time to get their heads around whether they are right. This is a fundamental change. The Labour Party might say that it disagrees with the detail of those changes compared with how the Government sees it but I think that we would both agree that they are actually very significant and complex changes. So that is one area that submitters should really have the full amount of time to get their heads around and submit on.Then there are the questions that Government members raised about what they say is the sophisticated way the bill deals with the issue of trusts. From our experience in this House with the register of pecuniary interests that we have to comply with we know that the rules around trusts are still not right. Even after those rules those laws that apply to us as parliamentarians have been around for over 6 years now I think—it is probably 9 yearseven—and with many iterations actually they are still not right. I would like to think I know a bit about—Jono Naylor: Something.Hon DAVID PARKER: —about something including about trusts and in the example of our pecuniary interests we have still not got that right in terms of who effectively exercises control of trusts and that includes the people who have got the right to appoint or change trustees. We have not got that right in our own rules. I doubt that we have got that right in this legislation. I do know that because I have not had time to consider this yet but by God that is an area of complexity that we have not been able to get right for ourselves after 9 years. Yet we are expected to believe that everyone will get their heads around this that the Government through the Inland Revenue Department has got it right first time and that that line has been drawn properly. Well I think that is another example of complexity that deserves further consideration.The changes relating to the Land Transfer Act: I am someone who has called for some time to use the point of control that arises when you cannot take title to a property—you can take equitable title but you cannot take legal title to a property—until you have transferred it at the Land Registry Office. You can impose rules on lawyers to say that they cannot transact anything until they are certifying that something is being done. So I have long thought that with that right and the documents that surround the sorts of notices that are given to the valuation department and the rating authorities there is an opportunity there to gather data. I think that there are some practical ways there to gather data. But are we going far enough? Again it is an appropriate question: are we doing it properly and are we going far enough? My understanding is that there is a proper argument to be had that we need to measure what is already in overseas ownership not just what those purchases that are transacted after the date of this legislation are going to be so that we have a decent idea of what has already happened.There are proper more fundamental debates to be had here in a country that has moved to the point where more than half of all people over the age of 15 now live in rented accommodation. There is a proper debate to be had from people who are worried about this as to whether this is an adequate response. Those people should have time to form a view and make submissions. Then there are all of the issues around details. Even if the policy is right is the detail implementing the policy properly? We see time and again where that goes wrong. Obviously if this was not a rushed initiative as other people have said this would have been introduced at the time of the Budget because it was the most significant announcement at the time of the Budget. The fact that it was not introduced at the time of the Budget is because it was not ready. We had all sorts of other less relevant information passed under urgency. It shows it was not ready. It is rushed; therefore the dangers are even higher than they normally are. This select committee period ought not to be truncated.CHRIS HIPKINS (Labour—Rimutaka): I am very happy to take a brief call on this referral motion—a debate that we have in Parliament relatively rarely these days and I think that is a good thing. In fact up until 4 years ago we never would have had the debate on these matters. I think it is important when they do come up that we canvass whether in fact it is valid to have an earlier report-back date but also whether the powers that a select committee is being given—because in addition to truncating the report-back date this motion also gives the committee additional powers—it is worth us considering whether those additional powers are warranted.I was involved in the review of the Standing Orders in 2011 which made this change to the Standing Orders. A lot of thought was given to whether these motions should indeed be debatable. I want to quote briefly from the report as to the reasons that change was made because I think they summarise some of the arguments against voting in favour of the motion: “The truncation of the select committee process can have serious implications for legislative quality and confidence in the legislative process. … [I]t also affects the public perception of Parliament especially when submitters are required to prepare submissions in a short time and hearings are compressed.” That was the unanimous view of the committee so it was not just one party arguing it; that was the view of the whole Parliament—that we wanted to avoid wherever possible the truncation of the select committee process. The report goes on to say that although 6 months is the default it can be reduced to 4 months without debate—but the report did not want 6 months to necessarily be a constraint either. That was actually the finding of the report: that the select committee process should take as long as the select committee process should take.What is important in that is that we do not have a minimum select committee time frame either. So although a bill is referred to a select committee by the House there is absolutely nothing to stop that committee reporting back early where the legislation can be adequately dealt with in a shortened period of time without the need for the House to mandate that it must report back within a shortened period of time. As my colleague David Parker has pointed out this bill has some complexity and so it should take the time that is necessary for it to deal with those issues. It can report it back early now without the need for this referral motion if it finds that in fact it does not need any additional time.The Standing Orders Committee noted that the Government should exercise due restraint when considering the truncation of the select committee process and the reason these motions are debatable now when they previously were not is forexactly that reason. If it takes up additional House time then it is going to discourage the Government from using them and that is important.The other point that I want to make is around the powers that the select committee is being given. One of the powers that it is being given if this motion is passed is the power to meet while the House is sitting. My colleagues Phil Twyford and David Parker have talked about the complexity of the bill and the need for people submitting to be able to get their heads around the bill before they put their submissions before the select committee. There is also a need for the members on that select committee to be able to get their heads around those issues of complexity as well—Hon David Parker: And time for submissions.CHRIS HIPKINS: —and time for them to adequately hear the submissions that are sent before them. The power to meet while the House is sitting actually in my view makes the select committee process much more complex and much more complicated for the members and it does actually in some ways inhibit the ability of the members to constructively engage because it means that they are going to be balancing other priorities. Members will find themselves having to speak in the House leaving select committees and coming and going from select committee hearings.One of the things that I find select committee submitters do often complain about is that they feel like they were rushed through the process and they were not actually listened to and I think that that is heightened where they see members coming and going from the meeting during the time that they are making their submissions because they feel that they are not being given the respect that they deserve. I actually think that is a valid criticism. When select committees meet while the House is sitting the odds of that happening are much higher than if the select committee meets during its regular time. I think that there is a case for that to happen sometimes and we do that regularly with an extended sitting of the House where we are doing Treaty settlement bills for example but those bills are non-contentious in the sense that they are well supported around the House and so we will allow select committees to meet during that time because we can arrange for the swaps and so on to happen so that the select committee work is still covered.Again it is not a case of saying it should never happen but we should be very cautious about hearing controversial issues in a select committee—and this will almost certainly be controversial—when the House is sitting and when members have other work responsibilities that they are trying to balance. It will infringe upon their ability to adequately engage with the detail of the submissions and the detail of the legislation—which of course I am not going to go into here because I am not allowed to—but you know it is important that the members of the committee do engage in the detail and do get their heads around it and that is why making sure that they have adequate time to do that is very important.I want to finally quote again from the Standing Orders Committee in concluding my remarks because I think that this really sums up the nature of the whole issue: “Reducing the number of bills that are subject to shorter deadlines for select committee consideration will be an effective way of enhancing legislative scrutiny and thus improving the quality of legislation in New Zealand.” We have a job as members of Parliament to scrutinise the legislation that comes before us. Truncated select committee processes are a barrier to that happening. We also have a responsibility to ensure that the legislation is quality legislation lest we find ourselves back here as we regularly have in recent times correcting legislation that was pushed through in a hurry that was not done properly that did not get the scrutiny it deserved and that therefore stood in need of correction. We can avoid those things by making sure that we follow the principle that the Standing Orders Committee was articulating of giving the bills all of the scrutiny that they deserve and that means not truncating and constraining the power of the select committee but giving it the time that it needs.A party vote was called for on the questionThat the Taxation (Land Information and Offshore Persons Information) Bill be reported to the House by Monday 17 August 2015 and that the committee have 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 191 and 194(1)(b) and (c).Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 53New Zealand Labour 28; Green Party 13; New Zealand First 12.Motion agreed to.Harmful Digital Communications BillThird ReadingHon AMY ADAMS (Minister of Justice): I move That the Harmful Digital Communications Bill be now read a third time. Cyber-bullying is a real and growing problem. It is not a minor issue confined to a small number of people. One in five New Zealanders aged 13 to 30 have experienced harmful communications on the internet but actually victims can be found across all age groups. We need to do something to stem these new and insidious threats. This bill will help stop cyber-bullies and reduce the devastating impacts their actions can have by simplifying the process for getting abusive material off the internet in a quick and proportionate way. These proposals empower victims by providing a quick low-cost and effective way to right the wrongs done to them.We live in the digital age of the internet where smartphones outnumber people and every day we are spending around 6 hours connected at home or on the go. Social media has fast become one of our top sources of information and a single post or a tweet can be shared around the world thousands of times and across millions of screens within seconds. To give you an idea of the speed and reach of the internet the infamous Ellen DeGeneres multi-celebrity selfie at the 2014 Oscars was seen by 32.8 million people on Twitter in the first 12 hours alone.It has been said that every 2 days we create as much information as we did from the dawn of civilisation up until 2003. These digital technologies allow New Zealanders to connect and interact in new and exciting ways and they are changing almost every aspect of our lives. On the whole they present us with a tremendous opportunity to share ideas knowledge and experiences with other people anywhere in the world.But there is a dark and sinister side to the internet. Some people use communication technologies such as email text messaging and social media to intimidate others spread damaging or degrading rumours and publish invasive and intimate photographs. These are rapidly cheaply and anonymously disseminated to huge audiences. This must stop. Whether it is in the schoolyard the workplace or at home bullying anywhere is intolerable. But the reality is that the digital age has allowed the reach and impact of bullying to increase dramatically. Harmful digital communications are not confined to one place or time. They can spread anywhere anytime to any audience and they can last for ever. This means victims are forced to relive the attack again and again leading to an almost endless cycle of re-victimisation. Digital communications have unique characteristics and require a targeted response. That is why we are introducing specific legislation to deal with cyber-bullying.There are heart-breaking stories from around New Zealand of young Kiwis in particular making tragic choices in the wake of severe cyber-bullying. In 2009 Rotorua schoolgirl Hayley-Ann Fenton took her own life after receiving what the coroner described as “extraordinarily abusive text messages”. Stephanie Garrett was also 15 years old when she died in Palmerston North in 2013 having been bullied online in the days leading up to her death. These deaths were a tragedy and they were completely preventable. A recent study of 18000 children from years 5 to 13 found that 31 percent believed cyber-bullying was a problem at their school. Last year Barnardos in Canterbury saw a 70 percent increase in calls to the 0800 What’s Up helpline where children were in imminent harm with cyber-bullying cited as being behind many of the calls.Across Parliament we can all agree that there is real significant harm that can be caused through digital means. It is a new threat and it is a very real very serious threat that Parliament has to respond to. I want to applaud those parties here today who are supporting this legislation. I want to commend the constructive way in which parties across this House have dealt with me on this bill. New Zealanders can feel assured that their Parliament has nutted out the ins and outs of this bill to the fullest extent and its wide support showcases how Parliament can come together to work on important issues.The Government tasked the Law Commission with taking a comprehensive look at this issue. Its findings confirmed concerns held by New Zealanders that efforts to remove abusive material from the internet under existing laws are often difficult drawn out and costly and there are limited sanctions available to aid such efforts to hold offenders to account. So Parliament decided to act. This legislation tackles cyber-bullying head-on. It sends a clear message to cyber-bullies and puts on notice anyone wanting to use the internet to spread abhorrent abuse or material online. It will deter prevent and mitigate harm caused to individuals and it simplifies the process for getting abusive material off the internet quickly and effectively while respecting free speech rights.To achieve this purpose the legislation introduces several important measures. Firstly it creates new criminal offences to deal with the most serious of harmful digital communications. It makes it an offence to send messages and post material online that deliberately sets out to cause and causes serious emotional distress and those offences are punishable by up to 2 years’ imprisonment or a maximum fine of up to $50000 for individuals or up to $200000 for companies. It also creates a new offence of incitement to commit suicide which would apply in situations where the person does not actually attempt to take their own life. If convicted an offender may be sentenced to up to 3 years in prison. The new offence recognises the distress caused by provoking others to commit suicide and highlights that the consequences of this kind of harassment are too serious to ignore. These new offences send a clear strong message that serious and harmful instances of online bullying and harassment can be criminal behaviour and where appropriate those who torment others can and will be held to account.During the passage of the bill significant attention has been given to the criminal aspects of the legislation but as I have been at pains to point out the vast majority of measures are in fact focused on making sure victims can get quick and effective help. These measures seek to empower individuals and change online behaviour.Under this legislation an approved agency will be appointed to resolve complaints about harmful digital communications. The agency will provide timely and effective assistance to victims and it will use informal means such as negotiation mediation persuasion and education. The approved agency will have a statutory function of raising awareness and educating the public including providing information to schools to help educate students and upskill teachers. It will provide online safety advice and education to the general public and it will collaborate with service providers and agencies both here and overseas to better achieve the purpose of the legislation.Education is certainly part of the solution but victims of cyber-bullying also need real effective mechanisms to remove abusive material and prevent its spread and the bill provides proportionate and effective remedies. For thorny complaints the legislation gives the District Court new powers that will provide a speedy efficient and relatively cheap avenue for dealing with serious or repeated harmful digital communications. In such cases the court will be able to order a broad range of remedies including ordering the taking down of the material ordering that a correction or apology be issued or ordering the release of the identity of the source of an anonymous communication. `Another core measure is the introduction of a safe harbour which provides online content hosts with a simple optional process for handling complaints. Where followed this allows people to easily and quickly request the removal of harmful and unlawful content posted by others and for hosts to avoid liability for that content. The safe harbour is based on personal responsibility and fairness. The author or creator of the allegedly harmful or unlawful content should be responsible for that content and be given an opportunity to respond to the allegations. Once the bill is enacted different measures will come into force at different times. The new offence provisions and the safe harbour provisions will take effect immediately. The approved agency and the District Court orders will be up and running within 2 years of enactment.Concerns that the Harmful Digital Communications Bill will limit the rights to free speech or expression or prevent genuine media reporting are simply unfounded. Much has been made of the potential impact of this legislation on the freedom of speech. It is worth remembering that from the outset the freedoms we enjoy are not and have never been absolute. You cannot scream “Fire!” in a crowded theatre nor should you be allowed to abuse someone online incite people to kill themselves on social media or share revenge porn with the world and claim that is your absolute right. There can and there should be reasonable limits where demonstrably justified in a free and just society.While seeking to prevent and to reduce harm to individuals the Harmful Digital Communications Bill takes great care to safeguard freedom of expression. For example before a court can order a take-down order it must take into account factors such as the public interest and the truth of the statement. The court must also act consistently with the rights and freedoms contained in the New Zealand Bill of Rights Act. This includes acting consistently with freedom of expression.This bill is world-leading. The bill will give victims of cyber-bullying quick and practical measures to stop and take down abusive material. The purpose of the bill is to deter prevent and mitigate harm caused to individuals and it simplifies the process for getting abusive material off the internet quickly and effectively while respecting free-speech rights. I welcome the bipartisanship the House has displayed in supporting this legislation and I absolutely commend it to the House.CLARE CURRAN (Labour—Dunedin South): Well in 2015 almost all of us are online. We are as a population increasingly spending more time online. We as a population are increasingly using these things mobile devices and the average age of usage of these devices is decreasing. In fact I read a piece of research today that said that in the Netherlands 78 percent of toddlers and pre-schoolers are online. I think that is quite sobering when you think about what the implications of that are for the coming generation. As our usage is increasing though so are the issues of bad behaviour online and as the Minister of Justice has just listed there have been some very high-profile cases of cyber-abuse and cyber-bullying in our own country in recent months and in recent years. Those have occurred on mediums such as social media such as Twitter Facebook and Instagram on blogs in comments on news sites on sites such as TradeMe in the commentary and forum sections. They include things such as the high-profile Roast Busters case the Charlotte Dawson issue of harassment online and the behaviour of bloggers such as Whale Oil. They include things like putting intimate photos online embarrassing photos—pack behaviour which has driven people to self-harm or contributed to self-harm. So there is no doubt about those things. There is no doubt about the fact that harm is being caused and everything that the Minister mentioned in her speech around the issues that are arising and are growing in momentum is important. I do not think that anybody in this House would disagree with that. The big issue is what you do about it whether the policy is right and then whether the detail of the legislation that is being put in place is right—and that is where Labour has had its concerns. In 2012 the Law Commission reported to Parliament that the laws needed changing and that more New Zealanders had experienced harmful communication. So the Harmful Digital Communications Bill was drafted as a result. We supported it at its first reading. When it came back from the select committee we had enough concerns to raise those concerns in the House and not to support it. We have subsequently decided on balance to support the legislation but we have very significant concerns with the legislation. We believe that it will end up back in this House for amendment sooner rather than later and we have committed to review it. It attempts to do a number of things. As the Minister set out it creates a civil enforcement and a criminal regime. It creates an approved agency as the first cab off the rank—the first port of call for people to go—which is a good thing. It creates a place for people to go to get more than advice—to actually get a process a mediation process a place for victims parents and teachers to go particularly.It creates a safe harbour as the Minister set out. This is one of our main problems with this bill though. I have heard this described in the last 24 hours as a result of the amendments that the Minister has put forward on the safe harbour provisions as being a mish-mash or even a dog’s breakfast. This is one of the areas in this legislation where we have real concerns about how effective it will be. We are concerned that it actually may make the problem worse. The Minister talked about how quickly online information can travel around—go viral as we say in the cyber environment. A piece can actually have a much bigger impact on somebody whether it is a photo a claim a very harmful threatening communication to somebody or whatever it is. It can actually go viral and the length of time that it is allowed up can actually have an exponential effect and create more harm. The safe harbour provisions in this piece of legislation actually create quite an extensive length of time. Our concern is that 48 hours is the first block of time when the victim complains and the complaint has to be put to the person who put up the offending matter. That 48 hours can go past before anything can actually be done about the complaint and then another 48 hours may pass before the piece of information is actually taken down. That is actually 4 days and the Minister talked about how much damage can be done in an hour so we have some significant concerns about it. We do not think that it is actually going to have that effect. The other thing about the safe harbour provisions is that they do not state precisely the scope of the protection from legal liability for the internet service provider for the online content host which is how it is described in the legislation. It does not actually spell that out. It also will allow a person who claims reputational harm to make a complaint which could result in a takedown or what is being called “disablement” in the legislation even though the usual path to follow would be that of defamation. The question is would a takedown have an impact on a measure of damages? I do not think that this legislation considered that. I do not know whether the officials properly considered it. In fact the whole process was rushed through the select committee and then we had a substantial set of amendments plonked in the House this week as an attempt to try to redress some of these issues. My concern is that they have actually made them worse. The takedown regime allows for the removal of certain content without the consideration of whether or not it amounts to a harmful digital communication. That in essence amounts to a form of censorship by complaint without consideration of the substance of the content. We are getting into detail here but the detail is actually the important part of the legislation. It might be that you have the intent to do good. This piece of legislation is an example of the Government wanting to do something about a problem. It is a good intent and it is an intent that everyone in this House has but actually what has come forward in the legislation may actually make the problem worse down the track and that is what we are concerned about. We are also concerned about the criminal penalty that is being created which applies only in the cyber environment and which has the potential to criminalise young people. We believe that that is a serious problem because it applies only in the cyber environment and is not comparable in the physical environment and because it may apply to young people. We believe that more thought needed to go into that. The definition of harm is very broad: it is “serious emotional distress”. That is going to have to be tested in the courts to see what it actually means.There is no public interest defence that raises threats to freedom of speech which is the other side of the coin to cyber abuse and there is no exemption being made for media. So in essence we are reluctantly supporting this legislation. We believe that it is going down the path of legality rather than addressing core issues that are largely facing young people. The voices of young people are missing in this piece of legislation. We believe that the Minister has closed her ears to the practical concerns and principled arguments around the matters that I have raised today. I know that there are more issues that have arisen in this piece of legislation but some of these are really fundamental issues. How long is it going to be before we have a court case where a cartoonist and a news media outlet are before the courts because a case has been taken using this legislation for severe emotional distress caused to a religious group or a person who feels offended by that? How long is it going to take before there is a 14 or 15-year-old who has been hauled before the courts? Those are the things that we are concerned about. We are reluctantly supporting this bill.JONO NAYLOR (National): This is always an interesting time of the day to have to rise and start to take a call knowing full well that somewhere along the line in this speech the bell is going to go and you are going to get told to sit down. But I will start anyway because I am sure I will get to finish my speech at some later date. It would be great to live in a society where we did not need legislation like this. It would be great if people could behave appropriately but while we have still got vindictive or stupid or even naive people out there who are behaving in a way that is harmful to others we need to have legislation in place to protect people from that type of behaviour.I just want to focus on that a little bit. We have been talking a lot about young people I know with regard to this. It is incredibly widespread. Studies have shown that perhaps up to one in five high school students has experienced cyber-bullying at some point in their high school years. It is an incredibly high statistic. Some of that is vindictive. Some of that as I said is just stupid on behalf of the perpetrators and sometimes it is just naive. Some people argued that this is a very heavy-handed way to deal with some of that behaviour.However when you look at the results of this kind of behaviour we can look at the number of young people for whom it leads to truancy perhaps because they do not want to go to school and face their peers because of something that has been posted on social media or the level of anxiety that that starts to lead to or worse still levels of depression self-harm and as we have already heard referred to a number of times in the House tonight young people even getting to the point where they take their own lives. It is very easy for us to keep talking about young people. I know of the high-profile case of Charlotte Dawson who took her own life. It is tragic that there are older people as well who are facing this. Although we are talking a lot about young people I think we need to make sure that we do not forget older people as well.As I said because of the consequences of this kind of behaviour it is critically important that we do take it seriously. It is critically important because social media is incredibly powerful in the number of people whom it can reach so quickly. Although this is not to demonise social media; in fact it can be a very positive thing. I know that a Facebook page I set up this week has built to about 8000 people liking it and one post reached 142000 people. So it is incredibly rapid the way these things can work. I know my colleague Chris Bishop took a photograph of a note that he wrote to the Hon David Parker and suddenly that has ended up with 22000 people seeing it as well. So this does spread and we need to make sure that while we do not demonise social media we do need to ensure that we are taking appropriate steps where it is negative to not having such a bad thing. In fact you might say that the vibe of the message is important. Quite often it is not just the specific things that are being said but it is the vibe. It is the kind of message that is being created for young people and the effects that it has on them.It is often heard around this Chamber as we have been debating this through the Committee of the whole House—The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to leave the Chair.Debate interrupted.The House adjourned at 6 p.m.